The Mom Weekly Volume 10: September 26, 2023
I know that I talk a lot about the good money decisions Dad & I have made over the years. But honestly, a lot of those were due to our general frugality and saver mentality, more than any intentional “good decisions.”
But since about 2013, I’ve turned toward being very involved in personal finance, trying to actively max out retirement accounts, optimize our money, understand where our money goes, and begin planning for the future. I am grateful that I started down that path, because knowledge of our finances went a long way towards making them better. And you all know many of the wins, because I’ve shared them!
I thought it would be helpful to list some of the mistakes I’ve made. This isn’t to criticize myself—that’s what I have kids for, after all, LOL. But just a few:
Mistake 1: Cashing out a retirement account early in my career
I cashed out a retirement account when I left my first post-college job to go to grad school. I had to pay taxes on the amount that year, and I have no idea where that $1,000 or so went, but if I had just left it there, it would be worth more than $0 today.
I don’t even think I necessarily “should have” rolled it over into an IRA and had it grow all these years. If I weren’t going to do that, here’s the mistake: that I didn’t use the money for anything memorable.
If I would have intentionally used that money for something—like a trip, or a special piece of furniture for my apartment, I would still remember and get enjoyment from that. But I don’t have any idea of where the money went, so it feels wasted.
A brief digression to explain
Here’s a story to explain what I mean about spending intentionally: One of your cousins recently thanked me for giving her advice about where to store the savings she had to pay off her student loans during the federal student loan pause. I advised her to stash it in a high-yield savings account, such as Discover or Capital One. The current interest rate at both is 4.3 percent—so great!
She took my advice, and she was able to use the interest to use as her “wedding fund” to travel to friends’ weddings. (And she kindly sent me fancy chocolates as a gift for my advice).
an intentional way to spend money: send fancy chocolate bars to a favorite aunt
Great move #1:
Listening to my advice, haha. But seriously, putting into effect a plan for her money, based on solid advice and doubtless her own research.
Great move #2:
Intentionally using the extra money (the interest produced) for a specific purpose—in her case, wedding travel & gifts — and enjoying it guilt-free. That is something I have not been as good about over the years, and I’ve tried to work on.
Back to my mistakes….
Mistake #2: Spending money on “things”
I spent way too much money on “things” when I was younger. Don’t get me wrong, I still spend plenty of money on things. But younger me was much more prone to actual shopping. The second ever IKEA that opened in the US was in Woodbridge, VA.
And when I lived in DC, I used to go there a lot, and buy various things. Some things I needed, like bookshelves, and some things I didn’t need, like the various tchotchkes they sell.
Also, that IKEA was near an outlet mall, and I would go through the Gap Outlet, and various other store outlets. I remember I enjoyed getting a “bargain” on clothes, most of which I don’t remember and didn’t need.
If online shopping had existed back then, I’m sure I would have been prone to overspending there as well. I wish I had given myself a certain amount that was okay to spend, and then not feel bad about it. Instead, I just spent whatever. I never went into debt, but I wasn’t very intentional about it.
I’ll stop here. Some of the other mistakes I want to write about might implicate Dad as well, and I don’t want to tell anyone else’s story, even if it’s the story of both of us. There’s no need, as I have certainly made plenty of mistakes by myself!
But as the headline said, by keeping our overall expenses low, and steadily contributing to retirement accounts and avoid debt, the mistakes don’t matter as much.
Remember how much I love you,
Mom
An interesting read: Financial Conversations to Set Your Marriage Up for Success
Based on today’s topic, this article from The White Coat Investor is a helpful read.
Full disclosure: Dad & I didn’t have these kinds of in-depth conversations before we were married. And I think one of our mistakes was not having enough financial conversations through the years.
Before we were married, I do remember sharing my long-held belief of paying off credit cards in full each month. And when we bought our first house, I remember both of us being committed to getting a mortgage far below what we could “afford.”
I guess my advice on this would be to always be learning about financial things and talking about them together, and to always be open to changing your opinion. I certainly have over the years!
An interesting listen/watch: Joby Aviation Flying Taxi
Aunt S asked me to find this article in the WSJ, so I shared this gifted version.
She saw several of these crafts flying low near her last week. It’s like the Jetsons coming to live. Then I thought, it kind of looks like a helicopter—how is it different? Well, take a few minutes to watch the video in action from the company’s home page. Very cool! Especially the intriguing “script” on the video itself to explain the craft’s qualities.
An action item: Practice intentionality with money
I think most of you have high-yield savings accounts. Take a minute to look at the total interest that you have earned this year on those accounts. It’s surprisingly high this year, compared to the last few years, when interest rates were so low.
How can you intentionally allocate that money so you will remember it?
The “practical” move would be to allocate it to student loans or something similar, but I encourage you to assign it to something fun. That could be a weekend trip, or a goal to eat at x number of cool restaurants before the end of the year. And then enjoy that without concern for other goals, because you’ve made that the goal for “this money.”
What are you doing this weekend?
As every week: Now that it’s Tuesday, what are you planning for the weekend? I’m going to suggest trying to cover four “F”s to get ideas flowing:
*faith—when are you going to Mass?
*friends—what friends will you see or connect with?
*food—any fun recipes you plan to try, or restaurants you plan to visit?
*fun—anything interesting you are going to play, watch, or do this weekend? Now’s the time to think it through, and put it on the calendar (even informally).