Graduated Learning: Life after College

I got my degree, I got a job…now what?

Announcing The Middletons! October 22, 2018

Filed under: Personal Finance — Stephanie @ 8:50 pm

Logo for The Middletons

I was excited to hear about the new website, The Middletons. It’s a go-to site for personal finance content for folks with mild-to-moderate incomes!  You’ll find the best articles, podcasts, and other resources for the middle class.

But one big question being asked: what makes someone “middle class”? Everyone seems to have their own definition. I listened to @stephonee from Poorer Than You (and one of the creators of The Middletons) in her interview on a recent podcast from His and Her FI and she said that one definition that they’re going by as a “middleton” is 2/3rds to 2x of median income.

This got me thinking: am I middle class? Are the Money Middletons for me?

I think when I first got out of college in 2006, I sat nicely in their key demographic. I was a SINK (Single Income No Kids). My starting salary at the startup was $55k. I was starting out with debt (student loans) and no real savings and needed to find out how to pay off those debts and start saving.

If you’ve followed my blog for awhile, you know that I started exploring all the things one “should” do when trying to balance a middle class income with daily financial needs/wants and obligations while also planning for the future.

12+ years later, I’m fortunate enough to be in a much different place. I’m married with two kids and my husband and I have both increased our salary through hard work. And over the years we’ve managed to save a lot of money and pay off a lot of debt (my student loans are gone, and my husband just has a tiny bit left). Our expenses are much higher now (mortgage and childcare) compared to the super cheap rent we had when we lived with a bunch of roommates.

But weirdly, I feel like my mindset is still a lot like what it was back when I started out.  I still worry about having enough money, I still look for ways to save money on my day-to-day expenses and bigger purchases.  And I want to make sure I’m making the right financial choices.  But I acknowledge that I’m lucky enough to have a higher income (and more savings) than a lot of other folks.  Plus I still feel a bit lost about what I’m supposed to be doing NEXT.

I’m looking forward to seeing all the content that The Middletons will be sharing!  I hope you’ll check it out, too!

What would you consider to be middle class?  Do you think you’re in that group?

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Reading Books: The Index Card October 8, 2018

Filed under: Books,Personal Finance — Stephanie @ 9:57 pm
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(Disclosure:  The Amazon links to books in this post are Amazon affiliate links.  You can read more about this on my Disclosures page)

I’d been meaning to check out The Index Card: Why Personal Finance Doesn’t Have to Be Complicated for quite some time. I’d heard about it awhile back from a bunch of different sources (most likely a Marketplace podcast). I really enjoyed Helaine Olen’s book, Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, about the personal finance industry, so I wanted to check out this book she co-wrote with Harold Pollack.

I really liked the way the book walked you through steps to get your finances in order and on the right track.  The book was inspired by the realization that most money advice could fit all on one index card.  You can see the original photo of the index card here.

If the entire premise is that all you need to do is follow everything on the index card, how is there an entire book?

Each chapter goes into detail about each piece of advice. There are anecdotes from the authors about why each step is so important (or what happens if you don’t follow the advice!) Each new chapter builds on what you (hopefully) started in your own life from the previous chapter.

They cite lots of references and provide some good resources where you can find even more information.

I read this as an ebook I got from the library. Which made me realize that ebooks should have a way to share updates alongside the original text. Besides urls that might change or disappear, there are facts and recommendations that change. For example, they mention the myRA as an option for saving for retirement. But the government decided to phase out this option.

I highly recommend reading this book! Whether you’re just starting out and trying to figure out how to get a handle on your personal finances, or if you have been focusing on your finances for a while and just want a refresher (and to make sure you’re not forgetting something!), you should check out this book!  As someone who has been thinking about personal finance for over a decade, I found this book really helpful for reminding me why I started on this path in the first place.

Now I’m looking for a good follow-up book to read: what do you do after you’ve gotten your finances started on the right track? Share your suggestions in the comments!

This book is one of many personal finance books that were recommended recently on Marketplace.  Definitely check those out, too!

 

My Maternity Leave, second time around September 15, 2018

Filed under: Personal Finance — Stephanie @ 9:57 am

I wrote about what maternity leave was like for me last time. I had big plans, and then most of them didn’t happen.

Well, for some reason, I ignored how last maternity leave went and assumed I’d get a lot more done this time.

Nope.

I had big plans this time around to sort through paperwork and get rid of lots of stuff. I figured I’d read a lot and bake a lot.

But my first month of maternity leave had me pretty much always in pain. I had to have a repeat c section due to regulations at my hospital, and recovery from my second c section was just so much slower than my first. I’m not sure if that’s typical, or maybe it’s because even though I tried to take it easy, it’s hard to when you also have a toddler running around.

Luckily we had family come out to help, and my husband had stored up a bunch of PTO so he was able to take off for the first 4 weeks to help me out.  This was way better than for the first baby, where he only was able to take about a week and a half off before going back.  We also had some friends come by to visit and bring meals.

Once my pain lessened enough, I did start going for some walks around the block. At some point I pushed myself too far and tried to do too much (ran too many errands) and ended up getting mastitis. But rest, extra nursing, and an antibiotic cleared it up.

I did use my maternity leave as an opportunity to fit in all my doctor’s appointments. It’s so hard to find the time when I’m working! So, besides my follow-up appointment with my Obgyn, I scheduled my yearly physical, met up with my GI doctor, and checked in with my ENT. And it worked out well that my ENT was able to schedule my long overdue sinus surgery. After years of sinus infections and other breathing issues, it was time to deal with my nose. And so one week before going back to work, I had the surgery. Luckily my parents came back out that week to help out! I wouldn’t have been able to properly recover or even take good care of my baby if they hadn’t come. One other bonus to scheduling surgery then (besides still being off and getting a chance to recover) is I took advantage of my health insurance plan: I already hit the deductible from having the baby, so everything else after was a reasonably low deductible (plus at this point I’m pretty close to my out-of-pocket maximum, so anything else I need this year won’t cost us much more!)

Those 12 weeks of maternity leave went by so fast. Now both kids are at daycare all day, and I’m back at work trying to make pumping work again this time around. So far the pumping is going all right. I hope I can keep up with pumping as long as I did last time (past my first child’s first birthday).

How do your ideas of parental leave compare to reality?

 

We skipped past the starter home June 27, 2018

Filed under: Boston,Personal Finance,Uncategorized — Stephanie @ 9:53 pm
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2016 was a big year for us.  We had our first child!  And then later that year, we bought our first house!  We’d been “seriously” house hunting for about a year. At the beginning of our search, we had a vague idea of what we wanted: something closer to work, in a good school district, with a garage, a yard, and enough rooms for a growing family. As we went to more and more open houses, we got a better idea of what we wanted. A family room right off the kitchen so we could entertain guests or have kids play nearby while we were in the kitchen. We also wanted a big enough kitchen to host my famous fondue parties 🙂 After an inspection of one house we almost bought that showed high levels of lead all over the place, we realized we also were only going to look at houses built in or after 1978 to avoid any lead paint issues.

Of course cost was a big factor as well. We were originally pre-qualified for a mortgage WAY more than we ever wanted to spend, just based on credit scores, income, etc. So we pared down choices to a more comfortable price range far below that amount. We had to keep in mind that our monthly payments would include the actual mortgage payment as well as money for escrow to cover property taxes and homeowners insurance.

We did consider first buying a “starter home” or a “fixer upper” but realized a few things: we are not super handy, and aren’t good at picturing a hypothetical home based on the current condition of a “fixer upper”. Plus we were already expecting our baby when we started seriously looking for a house, so trying to deal with renovations while pregnant/with a newborn was not something we wanted to do.  And most of the fixer uppers were still quite expensive as-is!  Also, we knew that if we went with a small home to start, we’d probably want to or need to move to a bigger house within a few years. And so a few factors related to buying a new house a few years down the line became clear:

1. The housing market in the Greater Boston Area is so hot that it’s hard to buy a house if you have any sort of contingencies. That could include getting a mortgage, wanting an inspection, or having to sell a house first. We were still renting, and so we were in a much better position than anyone else who might have to sell their house first. So the next time we’d buy a house would be while also already owning a house, which would make us less desirable to sellers.

2. Costs associated with selling/buying/moving are not negligible. And with every move, you inevitably have more stuff you’ll need to move, so it’s more expensive. Closing costs when we bought this house ended up being significant, so trying to sell a house only a few years later means you might lose money even if you sold it for more than you bought it for.

3.  Even with the recent boom in house prices, we had no guarantee that our house would go up in value enough that we’d make money on the sale.  And keeping in mind point #2, it’s possible we’d lose money on the whole deal.  Regardless of if you think a house is an investment or not, this would make a starter home for us a risky short-term investment.

So, we bought this house.  We like it a lot!  We plan on sticking around in this house for a while.  Sure, there are some small fixes our home inspector found that we’ve been working on, and we have plans this summer to upgrade our heat/hot water system (they’re at the end of their useful lives) and add a generator (after dealing with multiple power outages since we’ve moved in, due to various rain/wind/snow storms).  But we don’t have plans to do any major renovations any time soon.

I would have loved to have started with a smaller, cheaper house, but our needs and the housing market meant it didn’t make emotional or financial sense.

How did you decide if/when/what to buy? Or are you still renting (out of choice or necessity)?

 

I finally opened a 529 account! April 13, 2018

Filed under: baby,Personal Finance — Stephanie @ 9:12 am
Tags: , ,

I’ve been thinking about how I’ve slacked off on various money related things these days.  I’ve set so much on autopilot (which is good, for savings, paying bills, etc.) but then I sort of forgot to check in on or change anything.  Which meant that, when my daughter was born, I didn’t bother opening up any savings accounts for her.  This seems sacrilege for someone who had been obsessed with being so on top of thing with personal finance for so many years!  I think I let my confusion about the process get in my way of just doing it.

So, one day, I tweeted about how I still hadn’t opened any savings accounts (specifically a college savings account) for my 2+ year old daughter, seeking out advice and pointers.  A few recommendations came in that we should go with Vanguard, and Chief Mom Officer sent me a link explaining the Massachusetts-specific 529 option (part of a bigger site that gives explanations of all the 529 options).  I even came across this great introduction for college savings options from the SEC.

But the one thing that really kicked me into high gear was the pledges from @LazyManAndMoney,  Evan (@MJTM), and Stephanie Kibler (@stephonee) each for $25 if I opened up a 529 within 3 days.  FREE MONEY?  I’m in!

I checked out the Vanguard site for what options were available.  Turns out you can technically open a 529 from any state, but you’ll only get extra tax benefits (like deducting your contribution amount from your state taxes) if it’s YOUR state. (You still get the regular tax benefits of tax-free growth of your investment and tax-free withdrawal for qualified education expenses).  The main option from Vanguard appeared to be The Vanguard 529 Plan (sponsored by Nevada).  I’ve always heard good things about Vanguard, and I liked the looks of their low-cost fund options, but I was a little taken aback by the initial $3000 investment requirement.  Though they point out that if you want to still invest with Vanguard but start with a lower initial investment ($25) you can open an account with College Savings Iowa 529 Plan.

So, after looking over the options from Vanguard, we ended up going with the option from Fidelity for Massachusetts (our state of residence).  It allowed us to start with a low initial investment of $50 (just to get things started), and we can do automatic investments of $15 per month or $45 per quarter.  My husband and I are still talking about how much we want to set up for automatic investments, but it’s good to know we don’t have to start with a ton of money right at the beginning.  Plus, we get to deduct the contribution amount from our state taxes (which doesn’t amount to much, but, hey, every little bit counts!)

So, we opened an account!  And funded it with the initial $50.  And will sit down this weekend to discuss exactly how much to contribute each month.  AND!  My twitter friends stuck by their pledges and sent $25 each!  Now I have to figure out how to transfer money from PayPal into the 529…

Have you started saving for your kids for college?  Why or why not?  What did you end up doing?  I look forward to hearing your feedback!

 

 

 

The childcare decision revisited March 9, 2018

When we had our first child, it was pretty obvious that we’d both keep working.  I took the full 12 weeks of maternity leave allowed through FMLA, then headed back to work.  As I’ve mentioned in previous posts, I came back to work part-time, with a flexible schedule that allowed me to work however much I could each week as long as I worked a minimum number of hours.  This definitely helped with my transition back to work, especially when I was still breastfeeding/pumping, and even now when trying to juggle the life of a working mom along with sharing the daycare pickup/dropoff responsibilities with my husband (especially when he has a business trip and I have to do both dropoff and pickup!)

We found our daycare with help from my Employee Assistance Program, who helped narrow down choices to nearby options that had openings.  The daycare center is very conveniently located relative to both our jobs, and we’re really happy with the care and education she’s gotten so far.  And she’s happy, too!

Of course, the one thing we’re less happy about?  The cost.  Daycare is EXPENSIVE.  And I know this cost often weighs on people when making the decision:  should a parent stay home?

As I mentioned in my last post, we’re expecting again (due late May/early June) and so the discussion came up again.  Should one of us stay home?  Or should we keep paying for childcare, now for two kids?

I have plenty of friends who have chosen to be stay at home parents, for both financial and personal reasons.  They’re awesome people, and I think they made the right choice for their family.

But for us, for now, we will follow the theory that childcare is an investment.  A quick calculation shows that childcare for two at our current daycare is about 25% of our combined full-time salaries (gross pay).  Of course, after taxes and healthcare, and acknowledging that I’m only currently working around 75% of full time (so I only get paid around 75% of my salary) the percentage of take-home pay (net pay) creeps much higher.  And of course, this year, with me going on maternity leave (which is not all paid, and when paid, is not at 100% pay), and probably dropping my hours back down a bit to accommodate my pumping schedule, we will probably be spending quite a lot of our income on childcare.

But we both see good futures in our jobs, and know that leaving the workforce entirely, even for a few years, could have significant impacts on our careers.  Being away from our careers for an extended amount of time will make it harder to “get back in”, if we haven’t been in the industry for a few years.  And once the kids are in school, we’d want to be back at work, anyway.  And as this great article points out, there’s more than just the lost wages when leaving a job for a few years.  You miss out on 401k contributions (yours and your employer’s, and any of the growth from those contributions), some of your potential social security benefits, and all the raises you would have gotten.  And, with our other big expense (mortgage) it also makes more sense to have two salaries, even if one (mine) is less for a little while from maternity leave and reduced hours (as mentioned above).

On top of all the financial reasons, it’s also a personal reason.  If I’m being honest, I don’t think staying home with my kid(s) is the best choice for any of us (parents or kids).  I’ve seen how exhausted I can get from just a single day taking care of my daughter (on a day she’s sick, or daycare is closed, or my husband is gone for a weekend day for work) and I can’t imagine being able to do this every single day, especially now with an infant set to enter our lives in less than 3 months.  And my daughter benefits greatly from being among her peers, and learning every day from people who are actually trained educators.  She gets variety every day in fun (and educational) indoor and outdoor activities.  I don’t think I could offer that level of education and fun every single day!

Yes, my husband could be the one to stay home instead, as he somehow manages to survive the day better than me when he’s home alone with our daughter all day, but as mentioned above, we see other benefits to having our children attend daycare.

And of course, we could seek out a less expensive option.  Either a nanny or finding a cheaper daycare center.  But most centers around here are around the same price, but less convenient to get to which means it would still mean less time one of us could spend at work to take care of pickup/dropoff on time (which at least for me, means less pay, so that defeats the purpose of finding a slightly cheaper location).

I know everyone’s situation is different, and I wouldn’t dare judge people on whatever decision they made for childcare.  I just wanted to share how we came to the decision to continue with daycare.

I’d love to hear from you on your childcare/work situation, and how you came to that decision!

 

 

 

 

I’m still here February 21, 2018

Filed under: baby,Personal Finance — Stephanie @ 8:03 pm

Cue Elaine Stritch.  I’m still here.

I know my blogging has been pretty sparse, which I could blame on chasing around a toddler, but I’ve been pretty bad at maintaining this blog for years.  I’m not ready to throw in the towel just yet, as I’ve got a lot of personal finance stuff still to think and talk about.  I just need to get back into the habit.

I have a pretty long/epic blog post in the works where I want to talk about how having a bunch of life changes all at once (we had a baby AND bought a house all in one year) can really throw money (and life) into chaos.  And to top it all of, we’re expecting again (yay!) which means that’s a whole new level of money (and life) chaos to consider.

So, I’m still here.  I’m usually tweeting rather than blogging, so that’s the better way to know what’s going on in my life.  But I really do want to get back into all these money (and life) discussions!

So, don’t worry. I’m still alive.

 

 
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