Money In Polite Company: The Gift That Doesn't Keep On Giving

I love advice columns, and I love giving advice. I also love personal finance, and you might be surprised how frequently these loves of mine intersect. If you've got any money-related etiquette questions, sling 'em this way. But in the meantime, check out the following question from this week's Dear Prudie column at Slate:

Dear Prudence,
I spend a good amount of money on things (clothes, books, toys) for my niece and nephew. My intention was that they use them until they grow out of them, and then I would get them back for my future kids. Every time I give new items, I politely remind my sister-in-law that I would "please like this back." Since my niece was born three years ago, I have been given only one item back. I have since discovered that she sells most of the things her kids outgrow. I understand they need to sell them to afford new clothes, but I am not made of money, either. How do I remind her that I want things returned, other than writing "Aunty wants this" on each piece?

—Not Made of Money

My response: First of all, let's get the semantics straight. You are not buying things "for" your neice and nephew, you are buying things "for" your yet-unconceived children, and you are grudgingly granting permission for your neice and nephew to use these toys in the meantime. That's not very nice, and I don't blame your sister-in-law (or your brother, who you do not mention) for being confused. Further, since she (and hopefully he) is busy running around after their two children, keeping them from falling to wells and such, it's a bit much to expect them to take the time to puzzle out whether their kids actually received gifts or were just warehousing toys for your future offspring. Or are some of them gifts and some are loaners? Or are they all gifts unless you have a kid, in which case they magically become loaners? Or are they loaners that have become gifts, or--oh, nevermind.

There is no good way to insist that your brother and sister-in-law return the stuff you've bought their kids without looking like (and being) a boor. If you can't afford to spend this money, don't. And if you insist on buying things for your ovaries and breaking them in on your neice and nephew, build up a stash of Playthings That Live At Aunty's House. Your neice and nephew will have a whole new treasure trove of toys that will be inherently more interesting and exciting than anything that lives at their own home, and you will be able to keep tabs (and dibs!) on your babystash.

Quick Hits Tuesday 11 March 2008

Meg at The World of Wealth, posts about a Money magazine story that lauds a "Bachelor Dad" for getting up early, rushing around preparing his four children for school, and commuting a long distance for a paycheck ($156,000!) that doesn't allow his family much breathing room. Bachelor Dad (I imagine a cape fluttering in the wind and blue underwear worn on the outside) took a pay cut to be able to spend time with his children after his divorce, and for that he deserves major kudos. Because he's a man, you see. When women are stressed-out, strapped single parents, it's seen as normal, if unfortunate. Unless they are low-income or brown, in which case they get depicted as lazy or worse. But when men are single parents, they shit bricks of gold and deserve sympathy and adulation. Bravo, Bachelor Dad. Bravo. Seriously, mad props to any single parent, gender notwithstanding, but the bulk of my sympathy and admiration has been spent elsewhere, on the moms who have been doing this for years in the face of actual struggle (read: low wages) and outright societal scorn. Predictably, the yahoos come out of the woodwork asking why Meg hates teh menz for not sharing in the hero worship. Natch.

Mrs. Micah likes her reusable Diva Cup instead of pads or tampons. I can't quite remember when I switched to my Keeper, but it was at least by January 2005, if not earlier. It cost $25, which means at this point I've saved at least $70, and counting. In addition to the pros and cons she lists, I would add that it's much easier to travel with than bulky pads or a wad of tampons, and the reusable products are especially good for wilderness camping, when you have to pack out your own trash.

Grad Girl hearts Make Love Not Debt, and interesting insights are bandied about in the comments. So yeah, why is it easier to casually hook up than to casually discuss money with a date? I mean, I've done it in that order too, but it doesn't really make sense when you break it down like that.

Blogging My Way Out Of Debt: "That's why it's called Personal Finance, not Everyone's Included in My Finances." Heh.

Melissa from Queercents on the gender of money. See also Dawn at Frugal For Life on the same topic.

Xin Lu at WiseBread has a really strong post on how her Chinese identity has shaped her approach to money. I don't have much of my own to add, but I highly recommend that you click through. I wonder how my mutt/white background has shaped my own views?

Is there really a sea change in men's comfort with female partners who are breadwinners? MSN says yes.

Net Worth Not Impressive: My Coping Strategy

My net worth numbers have been sucking since the end of 2007. Completely crappy. I was getting a fair amount of motivation every month by watching that number grow, and now for reasons mostly not within my control (Hello, stock market! Meet the housing market!), that number has gone haywire, and I don't know when it will right itself. If I can't use net worth progress to track the incremental improvement that I know I'm making, what sort of benchmark am I going to use?

Why my net worth has taken a nose dive
From November 2005, when I started tracking my net worth, until December 2007, I was a freight train, a tigress, a perpetual motion machine, a number of really impressive metaphors. I increased my net worth by $107,822. I don't even know how to calculate the percentage increase because I started $46k in the hole, and high school algebra rules about multiplying and dividing negative numbers were a long time ago. But I know that's not shabby, considering that even at my most indebted that number includes home ownership and law school loans.

But 2008 is a different story. My retirement accounts are down--whose aren't? My debt load has gone up since the end of December when I had to replace my furnace, and I put that on a 0% card lest I chew through the bulk of my emergency fund in one go. I have the money to pay it off but I just don't want to until I've had a chance to rebuild my savings from that hit. But my savings are down, too, and this is truly a pisser. My savings account was nice and fat at the end of 2007, full of various subaccounts (emergency fund, vacation fund, wedding fund, etc.). But now the vacation subaccount has been liquidated to pay for the actual vacation, and the wedding fund is stagnant or even shrinking as I put money in every month only to take it out to pay for deposits on photography, ceremony venue, and the like. It's like pouring water into a bucket with a hole in the bottom. And I just got a notice from the county assessor that my home's assessed value for 2009 will be $18k less than it is for 2008. Even though I know my assessor's valuation is well below market value, that's the number I use for my net worth calculation because I'm conservative in most everything except politics, so that de-valuation will drag the net worth numbers down even farther.

So it's all treading water over here in Feminist Finance land, as far as net worth goes. I'm on target to max out my Roth 401(k) this year, and to once again have four months of living expenses in savings by the end of 2008, and to be able to pay for all of our wedding expenses in early 2009. But with the stock market in the toilet (despite periodic "rallies" like yesterday's, there's no putting lipstick on a pig) and the constant drain of wedding expenses that seem to accrue almost as fast as I save up for them, I can't count on any progress I make to show in my net worth numbers.

With all this going on, how can I track my progress?
What's a savvy woman to do? Throw up her hands and say, screw it, I'll keep on trucking and check in again in 15 months? Nay, gentle readers. I am far to goal-oriented for the ostrich strategy to work for me.

Debt Reduction
I'm going to continue my retirement contributions and direct deposits to savings as I have been doing, but for the next, say, six months, my primary interest will not be in tracking my net worth but in tracking my debt reduction. Since the targeted spending goals are what they are, and since I have zero control over the vagaries of the stock market or my housing valuation, my strategy is going to be to focus on the part I can control: debt repayment. Unfortunately, unlike with credit card debt, making big payments to these fixed-rate loans will not decrease my monthly debt obligations. But they will decrease my total debt load, which has a psychological, if not immediately practical benefit.

I have four debts: my mortgage, my home equity loan, my cosolidated student loans, and my American Express (the 0% card where my furnace expenses--and only my furnace expenses--are hanging out).* I do have other credit cards but those are paid off every month. All but the credit card are fixed rates, though there's a balloon payment on the home equity loan that will come due in September 2010. The home equity loan also has the highest interest rate of the three, at 6.25%. Due to those two factors, that's where I'm focusing my debt repayment energy.

To that end: My home equity loan, which started in Fall 2005 at $44,000, is now under $20k. $19,875, to be precise. Hooray for me.

Living Below My Means
I will also track the percentage of my gross income saved or invested (including extra debt payments), trying to keep that number above 50%. Between automatic retirement contributions, direct deposits to savings accounts, and the extra house payment Shiner contributes every month, I can usually hit this target. Sure, 32% of my monthly savings is earmarked for the wedding or for travel, but most of it is for emergency savings, and a 2008 IRA contribution (which I'll do in one or two lump sums for reasons I'm sure I'll post about later).

Keep Buying Low
Taking a cue from English Major, I am going to start tracking the shares I own in my retirement funds, rather than tracking the total value of those funds. I'm several decades from retirement. I'm not losing money so much as I'm buying low! I'm a freaking genius! Well, she is. English majors unite.

* I have the money to pay off the Am Ex and will do so at the beginning of May, three weeks before the 0% period ends. Three cheers for emergency funds.

New Retirement Plan Options

So my employer's 401(k) plan is changing administrators and changing fund offerings. This is good, in my opinion, as many of the new offerings are Vanguard funds. But since several of the funds I'm currently shoveling money into will be liquidated with any existing assets re-mapped to new funds, I've got to put a little thought into the new offerings before my next paycheck at the end of the month.

I am feeling crunched for time with work (we haven't even fully unpacked from the trip yet!) so I suspect I'll swap everything into the new Vanguard target fund option. But to make sure I'm not committing some gross retirement foul, bear with me while I talk this through a little. About half my money is in a Roth 401(k) and the other half is in a traditional pre-tax 401(k), since the Roth option wasn't available for the first fifteen months after I became eligible to participate. But the changes I make will apply to both types of funds, so I am going to ignore the tax status of the money, and talk about them all as part of one big pot.

So I am invested in five funds:
- a large cap growth fund (8.2% of my total 401(k) portfolio)
- a large cap blend fund (18.8%)
- small cap blend fund (27.1%)
- a second large cap blend fund (10.5%)
- a developed-markets international fund (35.5%)

All but the international fund will be liquidated and rolled over, though I have the option of swapping out the international fund, too, as part of a larger rebalancing.

The fund I'm eyeing up is the Vanguard Target 2045 fund, the latest target date my employer is offering. That fund breaks down like this:
- 71.7% total stock index fund
- 10.5% European stock index
- 10.0% bond fund
- 4.6% Pacific stock index fund
- 3.2% emerging markets index fund

I don't love the 10% in bonds, but honestly, the 18.3% in international funds is probably closer to where I ought to be for my personal comfort level, and the total stock fund means I don't have to think very hard about what sectors to invest in. Expense ratio of 0.19%.

So astute readers, any cautions for me? Pleas of sanity? Golden accolades? I'm about the pull the trigger.

We're Baa-aaaack

...from vacation, that is. Shiner and I are digging out, and are slowly reintegrating into our normal lives. And slowly catching up with skimming my Google reader. I have a February wrap-up to do, and some thoughts about vacation money, and an update on my Lenten Compact resolution, and questions about Eliot Spitzer ($5,000 for a night with a prostitute? Am I that sheltered? Did she do his taxes and tailor his suits as well?).. and, oh my! But I'm exhausted, and I have to watch the season finale of Project Runway, so these things will wait.

However, I do have some news that absolutely cannot wait. Shiner got a new job! I have posted about him looking for a new job in the private sector, but while we were on vacation he got an email offer with a firm he's really excited about. This means more pay, more experience, more action. It also means a whole new benefits package to navigate. Hooray, my favorite junior-varsity sport.