Category Archives: Yippie

The Financial Realities of Retirement

When you begin your first job, retirement seems so far away. It is easy to think that there are more priorities for your money than starting to save for a time so far head. Your immediate priorities may be to begin to pay off your student loan or buy your first automobile. As time goes by there is real estate then perhaps the costs of raising a family? Sometimes you might wonder whether there will ever be a time when you have a surplus at the end of each month when all your bills are paid. There is a time, however when you should sit down and think about how you are preparing for future retirement.

Set out the Picture

When you do that, you need to write down details of all your assets. It is obvious that you will include positive balances in any bank or retirement account. You may no longer have the equity in your real estate that you thought you had when the recession came along. However you need to include that equity, but it is important to be realistic. If you have investments, gold or silver or even valuable paintings you need to include these as well.

It is crucial that you take account of your financial liabilities including any personal loans, mortgages, and insurance. If you have Private Mortgage Protection (PMI) you should ask yourself whether you really need it; you certainly shouldn’t if you have paid off the bulk of your mortgage. That money could be better spent going into your retirement provisions.

Anything Obvious?

Once you have written everything down there may be some obvious courses of action. If you are carrying significant credit card balances and therefore paying a large amount of interest every month, you should be able to make savings. Today’s online lenders will listen to reasonable applications for loans. They are likely to approve an application if the applicant appears capable of making the installment payments throughout the term of the loan.

Obviously, if you earn more money each month, you will be able to put more way for the future. There are other ways to create more money by reducing your spending. You may always have had a new auto every few years. It is worth thinking whether you really need one so regularly. Indeed, used cars that have a good service record may be the answer without compromising on quality.

Urgency

The closer you are to retirement the more urgent is the need to plan. Some people are quite rightly nervous about the prospect of not working and having enough money for a comfortable life. If they have lived in the same neighborhood for years then moving out of familiar surroundings is difficult. However, there are good reasons to reduce monthly bills once regular income has dropped.  A smaller home is often the answer to the problem. Some people take the view that retiring in a nicer climate makes sense. It is not always wise to pick a regular holiday destination; living in such places full-time is different. However, it is certainly worth thinking about where to live in retirement and the financial implications involved.

Just Think Things Through

Everyone looks forward to a long and happy retirement. It does cost money to live in retirement. In some ways, it can be more expensive to live after finally finishing work and retirement. It’s not quite like being on permanent holiday, but it is possible to spend more during a day in retirement than when you were working full-time. As the years go by, life expectancy has increased. It is difficult to know how much money you will need to live in your later years because you will not know how many you have got.

That is all the more reason to think about doing as much as you can during your working life to provide for those later years. There is advice available, but ultimately it is down to the individual to decide the best way forward. What is certain is that it is far better to pay off any debt that is incurring high interest than to struggle on. If that means taking out a loan and dispensing with credit cards, then so be it.

Talking about Earth Day with your kids

I’m blown away by a video that poet and rapper, Prince Ea, did for Stand for Trees. It is quite simply the most poetic expression of pure truth, here on Earth Day 2015. I hope you’ll take a moment to watch this incredible call to action…then continue the conversation in the comments.

I showed my kids the video this morning, and I think they were really moved. I realized recently that I’ve been so wrapped up in raising three kiddos and launching my part-time businesses that I haven’t really had “the talk” with them about environmental issues and my previous (and now regenerated) passion for sustainable living. I’m sure there are more conversations to follow, but this was a good starting place for a conversation.

After twenty-five years of calling myself an environmentalist, I’m finally ready to take my sustainability commitment to the next level. It’s unconscionable not to at least give this planet our best try, and I actually think it will be inspiring to create a “global warming of our hearts.” I know my kids would love to be part of the solution and have bright and shining spirits to share with the world. This is just the beginning, a new leaf.

I wasn’t familiar with Stand for Trees, but there website is really impressive and there programs and impacts are explained very clearly. They seem to have a really savvy approach. I’m hopefully they will be part of the solution. Green Empowerment, the non-profit organization Miel leads, is another group poised to make a powerful positive impact on our planet. Their work is already underway, we just need to support them.

So, I’m committing this Earth Day 2015 to offset my family’s carbon footprint 100% by 2020.

Sorry, but I’m not ready to apologize.

What are you going to stand for?

How will you offset your impact and work together to fix this thing?   

With light and love,

Darcy

Dream Job for Half Your Salary?

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Would you take your dream job for half your salary? Say you spent your entire career dedicated to a vision. You worked hard and were paid well. You loved what you did. In my case I traveled to some of the most dangerous places on earth and worked on incredible projects that literally saved peoples lives.

When I left Portland for DC just over a decade ago, I had a vision to return as the Executive Director of an international nonprofit organization. When I finally decided to take the leap out West, I was delighted to find the job advertisement for the ED role at Green Empowerment. It was a perfect fit. All I had to do was beat out the several other hundred people who thought they were also a great for the job. I’d done the same before.

I knew the salary would be lower than what I was making in Washington, DC. It is Portland after all. Plus a much smaller non profit. I had already learned the salary scale from someone I had connected with during the interview process, so when I got the initial call back and heard that the salary range was between $60k-$70k, I said without hesitation that I could work with that.

After a long interview process, with external pressures around needing to have the job offer in hand to close the deal on our place in Portland as initially scheduled, I took the offer of $62k with the caveat that my salary would be raised as the organization’s budget grew.

The thing is, this meant that I took an effective cut of half my salary. I was making $109k, plus an additional 13% towards retirement, so a total of $123k annually.

But, heh? This is my dream job after all. It shouldn’t be about the money. 

That’s all well and fine, but there is still the inevitable clash of reality versus dream. While I couldn’t be happier with my position with Green Empowerment, it seems that several months in, the crunch is being felt. When I initially moved out from Washington I had to pay for the expenses related to our move, so I wasn’t as focused at the time on day to day budget aspects.

Now the reality is starting to sink in. I now make less than I did in my late twenties. I have more responsibility than ever, but have regressed ten years when it comes to my salary.  While my salary has been cut, trimming my lifestyle and fixed expenses takes some adjustment.

Would you do it? If you could do what you love and make a difference in the world, would you do it for half the money? I think of all the entrepreneurs out there who go out on a leap of faith, often with no real income to speak of, and know that I will continue to adjust and make it work.

Thanks for any comments on whether you’d take a cut in salary for your dream job.

Cheers,

Miel

7 Tips for First Time Homebuyers

3e2f5f558c9d443b8748b3b0a47d9f2ePurchasing your first home is one of the most exciting, yet terrifying, times of your life. Most likely, this is the most amount of money you’ve ever spent, by far. Buying a home is not an easy process, as many first-time buyers will come to find out. In order to make the process as smooth as possible, take into account these 7 tips when buying your first home.

Be patient. Homes may come and go very quickly, especially if you’re buying in a seller’s market, where bidding wars may even take place. While it’s easy to get emotionally attached to a home, especially as a first-time buyer, do your best to be patient and have confidence that the right house will come along.

Know beforehand what you can afford. What you can afford and what you may qualify for can be two very different numbers. Prior to shopping for a home, decide in advance how much you are able to spend per month and what type loan you’d prefer to have. It’s very easy to get swayed in the moment, so think long and hard about how much you want to spend before looking at houses.

Comparison shop for the loan. Your home loan is probably the largest amount of money you’ve ever borrowed. Make sure you get the best interest rate and the best terms by shopping around at different banks, credit unions and lenders. Don’t forget to online shop, too. A home loan through Newcastle Permanent, for example, offers awarding-winning packages to suit a variety of buyers.

Decide what you want in a home. It’s a good idea to make a checklist of all the “must-haves” for your first home, and then be flexible. You may be able to get a good deal on a home that doesn’t meet all of your criteria but can be changed to your liking down the line. Have a general idea of what you want but be willing to stray from your desires if it positively impacts your finances.

Think long-term regarding your home. You may only be planning on staying in the home for a few years, but what if the market goes down and you find yourself upside down in your mortgage? Since predicting the market can be an impossible task, think of your home as somewhere you will be for the long-haul. Decide how this affects what you want to spend, the location and what you’re not willing to budge on.

Look at the entire cost of the home, not just the loan. There are factors to consider other than your monthly principal and interest payment, including home owner’s insurance, HOA fees, cost of heating and cooling, distance to work, any repairs that need to be done and more. Mortgage payments tend to be lower than rent payments, which can make owning a home enticing to many if they haven’t considered all of the outside factors, including maintenance.

Put at least 20 percent down. While there are a variety of loans that do not require a 20 percent down payment, it’s in your best interest to put down as much money as possible. This greatly increases your chances of qualifying for the loan, it eliminates the need for private mortgage insurance (PMI) and it gives you instant equity in your house.

While buying a home for the first time seems fun and exciting, there are many details that need to be figured out beforehand. By keeping a level head and not letting your emotions get the best of you, you will find a home you love that suits your needs for the long-term.

Gratitude unlocks the fullness of life. It turns what we have into enough, and more. It turns denial into acceptance, chaos to order, confusion to clarity. It can turn a meal into a feast, a house into a home, a stranger into a friend Melody Beattie

No matter what your spiritual beliefs, the holidays can be an opportunity to refocus on what truly matters to your family. It’s also a good time to set some gift guidelines for yourself and your extended family, then practice being grateful for whatever you receive.

Create Traditions of Thanks

This year we’ll have a record number of people at our holiday gathering, and are excited to start some new family traditions. Here are some ideas we’ll be using:

  • Thanksgiving Tablecloth – Take a simple tablecloth or sheet, make a creative grid with fabric markers, then let the kids/guests sketch out their thank yous, leaving room for future years.
  • Cupboard Collage – Make a collage on the inside of your pantry to note everything for which you are thankful. You can incorporate cards you have received.
  • Community Gratitude Tree – Work with your family to make colorful gratitude cards for each other, then tie them in a streetside tree. Share your gratitude by leaving out some extra supplies for them to add their own gratitude notes. (Depending on the weather we might make one inside…)
  • Manifestation List – Rather than a wish list, create a manifestation list to note what you would like to bring into your life, whether it be money, joy, relaxation, or something you have always dreamed of.

Practice Gratitude

One of the ways we like to remind ourselves of all I have to be thankful for is by writing personal thank-yous for any occasion that warrants one. Sending your appreciation via email can do the trick, but don’t underestimate the power of personal mail. Plus, kids learn gratitude by watching us practice it.

In our experience, giving thanks on a daily basis is the best way to expand your abundance perspective. Your acts of gratitude can be big or small, personal or public, but the key is to act. A purse-sized notepad does the trick just fine, or you can log on to gratitudelog.com. We are most thankful this year that Miel’s family has recently relocated to Portland after more than a decade in Washington, DC.

Happy Thanksgiving!

Darcy