Category Archives: finance tips

Maxing Benefits

If you are fortunate enough to be employed with benefits, now is the time of year for annual enrollment. While beneficial in theory, actually making the most of your benefits can feel like a daunting propositions. There’s a bureaucratic learning curve at the very least.

First, you may have different health plans to compare…which spouse’s plan is best for your family finances? What are the co-pays and deductibles? How much will that add to your monthly expenses? What’s the minimum out-of-pocket and maximum?

Next, you have to learn the acronym lingo for tax free spending accounts: 

  • FSA – Flexible Spending Account
  • MERP – Medical Expense Reimbursement Plan
  • DCAP – Dependent Care Assistance Plan
The use-it or loose-it nature of the FSA program presents a fortune-telling conundrum of choosing how much to contribute. For families one of the big questions is, will you have a new baby in next year? This is especially challenging for family’s planning, but not yet pregnant. With our Girly, we were newly pregnant when we enrolled in benefits, and maxed them out assuming that we would have another hospital birth. When we opted to plan a home birth, it turn out that I had to find creative ways to spend almost $4k on medical needs. I was very happy to learn postpartum massages were covered!

There are a couple of new things this year. Come January, most over-the-counter drugs and medical supplies will no longer be reimbursed. This is going to be a big change for us, since we currently use this kitty for everything from diaper creme to sunscreen.

Another new change to my program got me pretty excited…you know those Windows invention commercials that show ordinary people with their super model double claiming brilliance for various ideas? Well, I’ve been saying for years that I wish there was a way to issue a FSA debit card and not have to waste a lot of time and energy submitting claims. Apparently someone listened, because I’ll soon have my very own Benefits MasterCard to use at the doctor and pharmacy. Brilliant, not that I can take any credit. 

For the dependent care plan you’ll note that it’s only “assistance” not reimbursement for child care. The maximum allowance is $5k per year, $208.33 per pay period and we can only dream of the day when we no longer need to siphon so much for our paycheck for child care. I’ve heard from Mamas with older kids to keep in mind that summer camps can get quite expensive, and as long as they aren’t overnight they can be reimbursed. Although this can be a little hard to predict a year ahead.

Have you been successful in maximizing your benefits?
What are your strategies?

Sustainable Family Finances
The story of a family creating an abundant and sustainable life.

Get a Financial Life

You may be surprised (or not) to learn that Hubby doesn’t actually read my posts on a daily basis. But after five months of hearing my “tip-tapping” almost every evening, he’s grown supportive on this blog endeavor. I’m pretty sure it’s because he has seen how committed I am to reaching our family’s financial goals and making sustainable progress. He’ll be the first to say that we continue to make our mistakes, but the important part is that we are learning and sharing about it.

So, I was pleasantly surprised when Hubby found me a resource book at the library,  Get a Financial Life: Personal Finance in Your Twenties and Thirties. Yes, it does date us, but I am still in my early thirties whereas Hubby as entered his fourth decade. Even though much of this book covers the financial basics, it is gratifying to realize that we actually have been doing more right than wrong with our finances. I’ll share my thoughts on the financial advice outlined in the handy crib notes section:

  1. Insure yourself – We’ve made a point of building professions in fields that offer ample health care, and in fact I get $62.50 a month to opt out of double coverage.
  2. Pay off your debt – Aside from using credit cards to earn points and miles, we’ve never had credit card debt beyond the monthly balance. It’s not as hard as it seems – just don’t buy things you can’t afford – if you haven’t seen it, check out the hilarious SNL skit.
  3. Contribute to a retirement savings plan – We both take advantage of our employer retirement plans. Although we admittedly both really hit our professional stride in our early thirties, so we weren’t the ideal financial early birds.
  4. Build an emergency cushion – Our emergency fund has teetered over the years, depending on various needs. It certainly took drastic dips with each house purchase, but we’ve managed to achieve our goal of rebuilding by saving our tax refund.
  5. Consider investing in stocks and bonds – We’re not there yet, not a stock or bond to our name. Although I do have my eye on Portfolio 21.
  6. Find out your credit score and improve it – Our credit scores has almost always been gleaming, but there was one slip up…you know those clothing store credit cards, they’re pretty easy to forget about, especially when you move. Just make sure you limit them (preferably eliminate, because too many cards can lower your score) and you won’t have to learn the hard way.
  7. Think about buying a house – We’re on our second house, and thankfully managed a smooth transition between an ideal starter house and our dream family home. It did take sacrifice, and we were probably able to buy them by virtue of not spending our extra cash on too much much stuff. You also have to keep in mind that houses are a big responsibility to maintain, so make sure you’re ready to do the work or have the funds to hire professionals.

In conclusion, this post makes us feel very grown up…a.k.a. old.

What are your experiences with these financial tips?

Sustainable Family Finances 
The story of a family creating an abundant and sustainable life.

Google Docs Sharing

Documents may not be so inspiring, but they are oh so practical. In the new year I’ve become a huge fan of Google Docs. I feel like I’ve turned a new leaf in terms of my financial organization, and Google Docs become favorite tool. Being able to share a common document to share is pure genius, even if you just want to share it with yourself on multiple computers. Hubby and I finally have some key documents handy. It’s also been very helpful for sharing info with my Sis regarding the blog admin.

One of my first tasks in getting a handle on our finances was to create a document that lists every account we hold, including account number, password/login, and web page.  I have to admit that up until recently I would repeatedly forget my login/password, and feel feeble and foolish every time. During my first maternity leave I would have placed a bet that my accounts had been flagged “lady who can’t seem to remember anything!” I feel so much relief knowing that I have the info at my finger tips and don’t have to waste my time with the hassle of resetting passwords. Plus, I shared it with Hubby via Google Docs, so now we both have all the info to deal with our finances (I’m sure glad that I didn’t get hit by a bus before drafting that doc! 😉

I created a handy document for “Home Carbon Stats” that includes all the standard info asked on carbon footprint surveys. It makes it much easier to fill them out and to make sure that my results are consistent. It will also help for longer term tracking.

I’ve also uploaded our 2010 Family Goals, which include our finances, recreation, community volunteering and home improvement goals.

I also got a tip from a co-worker Mama recently who has created lists for each of the grocery stores she visits for specific items, like Costco  and Trader Joe’s.

I have two more documents that I’ll share more about later this week, one called “Wish List” and one called “Neighborhood Places.”

Do you use Google Docs? Let me know if you have tips of your own.

Sustainable Family Finances 
The story of a family creating an abundant and sustainable life.

College vs. Retirement

Which should you choose to invest in first, college savings or retirement?  How do you evaluate the perks and pitfalls?

Like many parents we’ve wanted to open college saving accounts since our kiddos were born, but it just hasn’t happened yet. Our two biggest reasons have been the fact that I’m still paying on my own college loans, and our expensive child care tab.

So, we’ve been telling ourselves that as soon as our child care costs go down we’ll open accounts, and this month our tuition was reduced by $120 when our BigGuy moved up to the Older Preschool class. So I’ve been researching my options (the first month of “savings” is going to dance and swim classes).

Most states have 529 plans, and the beauty of the Oregon College Savings Plan is that you can start with as little as $25 and contribute as little as $15 per pay period per account. There are also 15 different investment funds to chose from and plenty of other tax perks. The calculator is pretty nifty, but also scary to see how much its going to cost.

But like most financial decisions, life really isn’t that simple. With Obama’s new student loan policy offering more tax benefits to parents, I’ve been wondering whether it even makes since to save for college. According to my employer calculations, for every $100 I contribute to my retirement it will only draw about $60 from my paycheck. While there are many tax benefits for college savings, it’s not clear to me if they can actually match that rate. Plus, whether retirement or college savings, there’s risk of loosing out like many have in the recession. We can just hope that once the economy has recovered it will be more sustainable all the way around.

So, back to the question, would it pay off to put more into our retirement and let that fund grow so that we have more of income available once college time arrives? I’ve heard multiple times that you can’t get a loan for your retirement, but it also feels kind of selfish to talk myself out investing in our kiddos’ future.  I haven’t made my mind up about which path to take (or both) and would love your comments.

Do you have a college savings plan? 
Or are you maxing your retirement first?

Sustainable Family Finances 
The story of a family creating an abundant and sustainable life.

Small Loans = Big Impact

I’ve been intrigued by micro-lending since I first heard of the Grameen Bank‘s innovative social entrepreneurial work. The concept is pretty simple, small loans can make the difference between poverty and prosperity for people around the world, especially women. Micro-loans typically have low default rates, as recipients respect that this is a business venture and not a charity. When I first learned about how they worked, I immediately wanted to invest in hard working families across the globe.

So, I was really excited to learn that a couple from San Fransisco figured out how to make small lender-to-recipient loans possible. Kiva’s web site is very straightforward and explains the whole process, but the best part is that they share stories of the people seeking loans and you are able to connect with them via the web and track their progress and repayment. You can choose projects in almost any field and any country. Check the video out for yourself:

Literally little by little small loans are making a big impact around the world.

Will your family consider investing in a micro-loan? Please share your story!
Use this link to lend your first $25 through Kiva for free!

Sustainable Family Finances 
The story of a family creating an abundant and sustainable life.