Money

My Money Moves

A leopard linen midi dress from Zimmermann, now 60% off, a pretty silk DVF dress, now $350, a draped navy trench from Vince, now 50% off, a great turtleneck sweater from Veronica Beard, now 50% off, and a pretty Altuzarra dress, now 70% off,

A few weeks ago, I mentioned I was putting together a money post. I’m nervous writing about finance – I always wonder if I should put one of those disclaimers at the end that I am not a professional and I don’t know anything, etc! As I mentioned earlier, while I manage our household finances, in the past few years, in that two under two kids period, I’ve been pretty remiss in checking on the state of the union as it were, making sure our finances are clean and efficient. I recently started to get a handle on everything and I thought I’d share some of the “money moves” (yes what a cheesy title) that I do to try and be responsible…again, this is just my own experience. And I’d love to hear your money moves too!

All right, so let’s go! I…

…pay an extra mortgage payment a year. To be honest I’m unclear as to the financial benefits of owning versus renting and putting the down payment in an S&P index and all that kind of stuff – I think you can easily rathole based on what assumptions you are using for return, how to value utility for ownership versus renting, etc. Also I know that an extra mortgage payment could be invested in the S&P blah blah versus being used to pay down a mortgage. But for me, there’s a certain security in working to pay down your mortgage…I don’t go at it aggressively but an extra payment a year makes me feel good.

…use a 529 plan. Well plans, one for each of my kids. I was really lazy about this and didn’t do it until my son turned two. That’s two years of missed tax savings! Of course there are advantages and disadvantages and the money is less flexible stuck in the account – but something to think about, if you have kids and think you might want to help them pay for college. They’re more flexible than you think and if you have no state tax advantages (my situation in California) you can use any state’s. And after opening them, and making contributions, I’m less stressed about how to manage college costs down the line (which are crazy??). I meet a lot of people who have 401ks but no 529s, simply because you have to open the 529 yourself. If you’ve been thinking of it, do it! Or at least research, it’s easier than you think.

…consolidated my savings accounts. For a long time I had a lot of various savings accounts. I had them with Capital One, which makes it super easy to open them, and so I had one for travel, emergency, taxes, preschool, all kinds of stuff! It’s a funny system I started in college and kind just kept rolling with. But honestly it was getting so unwieldy and I realized that with all these small account balances, I wasn’t getting higher interest rates. Which didn’t matter earlier, when rates were so low, but now they’re actually higher. So I consolidated a bunch of my accounts, now have a higher interest rate (seriously, if you haven’t checked in the last few years, they’re decent now!) and now it is also easier to keep track of our accounts. As a side note, I’ve actually begun to park some cash in T-Bills as well, because the return is decent.

…invest! I do invest. I actually love it. I have made some mistakes and learned a LOT but it’s the sort of education I don’t think you can get, unless you actually invest yourself. I encourage you to try if you haven’t already, just a little bit (I know the markets are choppy). Maybe start with an index fund? Only if you can risk some of the cash, of course. Honestly, some of the benefit for me has just been in curtailing my shopping – like, if the market is down, I always ask myself: am I going to still want this X,Y,Z in a year and not wish I had just bought some stock? Which if I’m lucky, will have increased in value, and which I won’t take a ~75% hit on when I sell it on The Real Real?

And finally…

…I go easy on myself. Everyone makes mistakes. Including with money. Believe me, I’ve had some major misses. For some reason it’s really easy to go hard on yourself with financial mistakes – I think maybe because the repercussions are so easy to understand and quantify. I used to be really hard on myself – when I didn’t get the promotion, the job, made a bad investment. Over time, I’ve learned that mistakes are unavoidable and to try and take everything as a learning experience and move on. After all – we want to build financial security so that we can be happy right? And carefree…so there’s nothing productive in beating yourself up for past mistakes. Everyone makes them! So let’s all be kind to ourselves.

Also, I just have to note that I know that I am privileged – I received an early financial education, I’ve had a lot of advantages. I want to state that, because a lot of what I list above may not be immediately feasible, for reasons outside of someone’s control. But I still wanted to be transparent, about some of the financial related steps that I take, in case that is helpful for any of you. I think women should talk more about money. Again I am in no way a professional, these are just some things that have worked for me, that I’m actively doing, to try and have a responsible future.

All right…now enough on me, what are some financial moves you make?

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11 Comments

  • Reply
    Diane W
    June 17, 2019 at 7:33 am

    Years ago, I was shopping for a baby gift and trying to goose something both practical and cute at the same time. Then, knowing that the baby would be receiving many gifts such as mine, I stopped and thought about it. So, I decided to give the baby a check to be put towards it’s future education. That has become my standard baby gift. Yes, it’s more than an outfit would cost, but it’s not going to break the bank…..I feel good about it and it’s always appreciated. Depending upon the circumstances, I also do the same on holidays and birthdays while children are too young to really understand, as they don’t seem to miss more toys. When they get to the stage where they understand gifts, I try to give experiences. I don’t see it so much as a gift but as an investment in a child’s development. I know all this is common practice among many people, but for those of us who do not have children of our own, I do think it’s easier.

    I will admit that when I gave a high school graduate a “tech warranty” on his first car (used, but new to him) I had some real doubts. But later, when it was needed, I was glad I’d done it. Plus, his parents were thrilled.

    • Reply
      Katherine
      June 17, 2019 at 9:02 am

      You are a HEROINE to all parents for doing this, seriously! I think all parents would prefer cash, or a college contribution! Asian culture is more like this. We get sooo many toys and would every parent would prefer something less tangible but what can you do? What I think is funny is grandparents/relatives who bemoan how many toys kids have nowadays yet still want to buy lots of gifts!

  • Reply
    Min Ju
    June 17, 2019 at 11:59 am

    Hi Katherine! Thank you so much for doing a money post. I don’t comment often but talking about money is my jam. I too am not a finance professional – an engineer turned PM in San Francisco who knew nothing about money until I started earning money and currently have a side hustle of creating a community of kind & relatable people to talk about money.

    As far as money moves go for me-
    * I too make extra mortgage payments. Striving for 1+ / yr. We’ll see how long it lasts given that I’ve only owned my house for one year and am childless for now. As for buy vs rent – imo it is irrelevant unless the person has a defined time horizon for how long they will stay in the house (for me that is indefinite) OR it is an investment property
    * Direct Depositing my earnings into separate accounts has been great for “stash and forget” mentality. I direct deposit a chunk of my salary to 1) an acct for mortgage, 2) an acct for paying monthly spendings like cc, utilities, etc, and 3) savings. From savings I have a monthly auto withdrawal into schwab for auto purchasing shares of S&P 500 fund, a small amt into Robinhood where I can play with individual shares, and another small amt into Ellevest for robo-investing.
    * I found that setting financial goals with a time horizon is so much more useful and actionable than a vague goal of “saving money.” I.e. I want to save 200k for remodeling, save 50k for wedding, etc.
    * Current obsession: learning about taxes and real estate investing.

    Katherine do you robo-invest ? Have financial planners? Or prefer DIY approach?

    Thanks again for the money post. Look forward to hearing from other readers!

    • Reply
      Katherine
      June 17, 2019 at 4:50 pm

      Thank you for sharing! All of these are great tips and I love your side hustle! I do not robo invest except for the 529 plans – I’m pretty manual. I don’t have planners and DIY.

  • Reply
    Teresa
    June 17, 2019 at 4:31 pm

    Long time reader – very infrequent commenter (this may be my first)! I worked as a public school teacher in a major urban area with a high cost of living and didn’t earn much money. I could choose to invest in a TDA available to teachers with a guaranteed 7% return rate OR live without apartment-mates. Well, I consulted my parents’ financial adviser to make sure what I was reading was accurate, lived with an apartment-mate, funneled away the highest percentage of income I could afford to save & have a nicely growing nest egg to show for it. I also quit my job and am back in school for a Ph.D. in a field with a gross shortage of post-graduates – and salaries to match the shortage 🙂 I live off my stipend and am treating the TDA fund like it doesn’t exist. The plan is to never touch it and leave it for my nephew, who has special education needs.

    • Reply
      Katherine
      June 17, 2019 at 4:49 pm

      This ENTIRE comment made me smile, it just got better and better. I’m thrilled for you and thank you for sharing (and commenting for the first time!)

    • Reply
      Diane W
      June 17, 2019 at 6:28 pm

      Every special needs child should have an auntie like you!

  • Reply
    Nvie
    June 18, 2019 at 5:32 am

    I’m so glad that I bought my husband’s share of our previous condo unit, purchased under our names with all the legalities, at least I have a place of my own in case anything happens to our relationship. Our current place is of course all his. I have invested in some shares before I had kids and they have mostly gone up more than double. Also I pay myself first before all the other bills, I have one account which my salary goes in and the other a savings account. I’m happy to pay myself first and at least I have some money for extras, holidays, unexpected large purchases etc.

    What I could have done, invest in more shares, buy less bags and shoes.

  • Reply
    Anna
    June 18, 2019 at 8:56 am

    Thank you for posting about this! I’m dying to know how you invest haha! Please share more, even just a few pointers to get started on.

    • Reply
      Anonymous
      June 18, 2019 at 2:55 pm

      I concur with the comment above. We would love to know which stocks have worked for you. Did you buy Amazon or Google stocks years ago? Or do you usually go the more conservative route of mutual funds?

      I commend you for paying more every year on monthly mortgages. Mortgage is not cheap in Los Altos!

      • Reply
        Katherine
        June 19, 2019 at 7:20 pm

        I don’t do mutual funds but do have a mix of index. For individual securities I mainly do blue chip/big companies where I use the product – apple, nike, mcdonalds, wells fargo (not a winning one), etc. Mortgages everywhere are hard!

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