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May 2, 2016

When I’m anxious about something, I tend to pay more attention to our finances – especially when the thing I’m really anxious about has nothing to do with money. I had some self-induced work related anxiety this week, and to heck if I didn’t spend a lot of time thinking about personal finances! Anyway, here are some links from around web.

A beautiful post about bread.

Obama, out.

Many  middle class families can’t absorb a $400 emergency.  “Many middle-class wage earners are victims of the economy, and, perhaps, of that great, glowing, irresistible American promise that has been drummed into our heads since birth: Just work hard and you can have it all.”  While the author acknowledges his own financial illiteracy and poor choices, he points out that many others make similar poor choices, and it is very easy to do so.  What struck me was his comment that he “assumed [he] would always overcome any adversity, should it arrive”.  I, like many other pf bloggers, like to prepare for the worst.  When I get worried, I often have to tell myself that I probably can overcome adversity if I’m well-prepared, because I’ve done it before.

I recently watched The Big Short, and subsequently read a lot about the movie and the financial crisis, leading to this article about a programmer who went to jail for stealing code. While not a programmer, I related to his frustration that the jury could easily be manipulated since they don’t have the training to understand why he might have taken certain steps.  I very much related to his interest in the technology over the business problems, and admired his complete acceptance of his fate.

After refinancing my student loan with Earnest, I did some researching about SoFi in general. Some of the mortgage products they offer include 10% down (no PMI), various ARM options, and interest only mortgages.  This all sounds a little scary to me. Their target market is “High Earners, Not Rich Yet” (HENRY).  Other lenders are in this game as well.  I can’t find any useful information about what kind of rates they are offering (compared to normal banks) on their site, but I’m curious. I’m a little concerned about what happens when the tech boom weakens. How does their business model hold up?

I was skimming GRS in a moment of nostalgia/boredom, and came across a generally poorly written article that included this: “PayScale found that, even after adjusting for factors like experience, education and training, responsibilities, and company size, women on average earn 2.7 percent less than men. One reason is that the study found women are 2 percent less likely than men to ask for a raise.”  That 2.7% seems way lower than any numbers I’ve seen. I went to the source article (which I had to google for since it wasn’t linked in the GRS post), and this was a PayScale analysis done on salary profiles in their system with “proprietary algorithms” to analyze.  OK. Other googling came up with about 5-8% when you “control” for the same work. Freakonimcs had a great podcast on this, discussing that the lower pay tends to be correlated with “temporal flexibility”, which tends to fall on mothers.

An already popular post on how to avoid striving to meeting feminine expectations and to be a bit more selfish at work was a good read. I appreciated the comment where Grumpy Rumblings suggests reading “What Works for Women at Work”.  I skimmed the available pages on Google, and plan to buy it and read it.



May Money Updates

May 1, 2016

General Money Status

  • I have ~$5,000 in pending travel reimbursements from work (~$2000 submitted, ~$3000 that can’t be submitted yet). I’m allowed to get the tickets paid for directly, but I like getting the points/miles, so I usually don’t.
  • We’ve sent $25k in mortgage prepayments this year, but I consider that meeting last year’s $25k target, which I delayed.  Although these have a big impact, it feels like they should have EVEN MORE impact… But the way to make progress is to keep whacking at it.
  • I increased my 401k withholdings and will be done with this by August (no match to be concerned about).
  • We bought our December holiday flights home. We didn’t really save money, but we know we’re going and had a lot more choices in times/connections booking this early compared to August/September.
  • YTD net worth increase is 16%, most in retirement savings, some in home equity, some in cash.

Spending averages in Q1 (Jan – March):  I’d love to trend this data quarterly, but am not convinced I actually will get around to it.

  • Food, grocery + costco:  $426/mo average, less than 2014 average of $500/mo
  • Food, Restaurants:  $229/mo average, less than 2015 average of $335/mo
  • Pets: $128/mo average, less than 2015 average by A LOT
  • Clothes/Shoes: $158/mo average, more than 2015 average of $43/mo
  • Travel: $233/mo, mostly from January for non-reimbursable personal expenses during my work trip and personal travel following.

This tells me I should be careful with future clothing purchases (I bought a work bag that I’ve been coveting for ages), but that everything else is roughly on track.  Food spending is kind of cheating, because we both traveled for work more than average and had reimbursable meals. That won’t continue into the rest of 2016 at this level, so we should continue to be diligent, especially about restaurants/going out.

Notable expenditures in Q1 (Jan – March):

  • Gutter replacement for deck:  $1,000. We tried to DIY this last year, but ended up needing to call a professional in to get it right.
  • Used bike: $400.  This has been on the wish list forever, I finally found something that met my needs.
  • Dining room lighting:  $340.  No more crazy swirl track lights that I hated!
  • An extra $500 to my student loan, just because.

If spending continues on this pace, we will spend a total of $97k in 2016, compared to $105k in 2015 and $94k in 2014. (Spending includes regular mortgage principle payments, but not pre-payments.)

Earnest Student Loan Refinance

April 23, 2016

Note:  Just like all posts on this blog, this is NOT a sponsored post.  I’m sharing my positive experience and offering a referral code.

Unlike most personal finance bloggers I know, I still have student loans on the books and I’m not in a rush to pay them off.  I have cash on hand (and then some) to kill them, but I prefer to keep the cash on hand.  Extra cash is going to our mortgage. I had my loans set at $225/month with a 4.25% interest rate (fixed at the time of consolidation in 2007). At that rate, They would have been paid off in 3.5 years, and I would have paid $682 in interest over the remainder of the loan.  A couple hundred per a year in interest is in the noise of my overall financial picture, so I’m just not worried about it.

Enter Earnest. There is a slew of new loan companies on the scene offering competitive rates for competitive borrowers with non-traditional underwriting processes.  SoFi and Earnest are the more heavily advertised ones, and I got a rate quote from each.  Since Earnest let me choose my monthly payment amount & shorten my loan term, they were able to give me the best rate.  Everything went quickly and smoothly in the process. It was very much a Silicon Valley company designed for millennial who can’t stand bad web design, inefficient processes, or too many phone calls.  I got my rate quote within minutes, and the approval process was also very quick.

I now have a 2.15% variable rate loan for the next 5 years. If I continue with my $225/mo payments, they will be paid off in ~3.5 years with $320 in interest total. I chose a variable rate because if it ever gets undesirable, I can simply pay down the cash and clear the balance.  The required payment is $150/mo, which would result in them being paid of in 5 years with $488 in interest.  The savings is modest at this point, but there seemed like no reason NOT to do it.

$200 signing bonus: I followed a promo link to earn $200 cash back  (which  reduces my effective rate to about 1.3%).  Are you interested in refinancing with Earnest and getting a $200 bonus?  Follow my link!  Note that you lose federal benefits if you refinance, so if you plan on taking advantage of them, Earnest is not for you.  You also need to have good credit and generally be a low risk borrower, so they aren’t for everyone.

The future of student loans: A one-size-fits-all federal loan might make sense when we are 18 and in school, but I’m now a very low risk borrower.  There is virtually no chance I’m not going to pay my loan, but I’m still not in a huge hurry to do it.  It is nice that there are new options that recognize my low credit risk and reward it with a low rate.

The student loan system as it stands has major issues, and I applaud companies that are taking new approaches.  Yet, knowing that the point of federal aid is to give more people access to college, and knowing that, for example, SoFi started by offering loans only to Stanford business school graduates, there is a small part of me that wonders what the overall effect of companies like this will be. If more privileged borrows get favorable rates, doesn’t that imply that the more risky borrows will end up with higher rates to balance?    In the long run, will Earnest, Sofi, and similar companies skim off the high quality student loan borrowers, leaving more risky options to the government-backed programs? If the government wants to subsidized higher risks borrowers, they may have to do it in a more direct and transparent way.

Do you have student loans, or did you pay them off quickly?  Would you consider an alternative lender for a refinance?

What are you good at? And how does that hurt you?

April 22, 2016

Intent and Intense: As part of a review earlier this month, our team in general got extremely positive feedback along the lines of: it is great to see a group of such competent people explaining what they are doing, and that it all comes together. Along with that positive feedback was a warning that we were a very “intent and intense” team, and we should just be aware of that, and to make sure the people down the chain are being heard.

I liked that description, but understand the warning that goes with it. Like many traits, it is a strength that has a flip side.

A long-ago post on Ask A Manger got me thinking about talents, and I’d had half a post drafted for a while that discussed strengths and their associated weaknesses As I have matured in my career, it has been easier for me to pick out my strengths and figure out what types of roles I’m likely to excel in. I’m a big believer in strengths-based management, and mitigating your weaknesses.

Here is what I think are my top 3 professional talents are, and the other side of the coin that comes with them.

1. Talent: Picking out the key information that matters when making a decision or designing a system.  Similarly, listening to three paragraphs of information and distilling it into the two or three sentences that matter.

Associated weakness: I have limited patience for ramblers who won’t answer direct questions. My mind can wander if someone goes too deep into details that I have deemed irrelevant. Proofreading is the bane of my existence, so I try to avoid doing it.

2. Talent:  I’m good at accurately assessing situations and predicting eventual outcomes. I see things that others miss, and quickly do “if this, then that” logic trees in my head assessing the best and worst case scenarios (sometimes they aren’t different). I am good at predicting how various options are likely to play out, what is likely, what is possible. Sometimes I can use my insights to influence outcomes, sometimes only play defense.  I am good at planning contingencies. I’m rarely without a plan B.  If it becomes likely that plan A isn’t going to work out, I also will have plans C, D, and E.

Associated weakness:  Sometimes I trust this ability too much, and judge possibilities as unlikely before I truly have enough information to do so. I’m receptive when others point this out, but if no one is there to point it out, I may charge ahead believe something is a foregone conclusion – when it might not be. If I have considered a problem in-depth, I trust my judgement almost absolutely until new information is brought to my attention.

3. Talent: I have a strong initiative and willing to take ownership.  If you give me a task, I not only will do it, I’ll understand why I’m doing it, make sure that it is being done to my standards, and take care of any dependencies that are required for it to be a success. If something that affects my responsibilities isn’t being done, I’ll take it on if I can. This is a common trait of high performers, but after working with someone who simply didn’t take ownership or need to understand what he was doing, I felt the need to call it out as one of my an important talents. The person had other strengths, namely that he was very calm and agreeable no matter what the request. This is the one is most analogous to the “intent and intense” comment we received.

Associated weakness: I adopt problems that are not my own, resulting in stress that I don’t need.  I probably annoy people by occaisionally doing things myself rather than letting people do their jobs. For example, I spent 4 hours (7 pm until midnight) completely redoing something that a junior colleague had spent a not-insignificant amount of time on. I felt terrible about it – but we had a deadline, he had a other stuff to do, and the product he was working with couldn’t be adapted to meet what I needed. We had to start from scratch, but I wasn’t about to make him do it.  (A more effective approach would be to pay closer attention to progress so I could redirect much sooner. I overestimated his ability/intensity.)

What about you?  What are you good at? What undesirable outcomes go along with the things your best at? 

Closing thought: “We can’t take any credit for our talents. It’s how we use them that counts.” Madeleine L’Engle

March Wrap-up / April Goals

April 10, 2016

Net Worth: March was another great month for our net worth, mostly due to the markets recovering.  We’re up 5.4% for the month, and 13.3% for the year.  Most of the gains were in retirement this month, but YTD we also have gained in home equity due to the mortgage prepayments.

Mortgage:  I sent in the last of the $25k that was supposed to go last year.  I want to do another $25k using this year’s money. We’ve been in our house since September 2014 and managed to knock more than $50k off of the mortgage. A nice goal is to pay off $75k by September of this year (2 years in).

Vacation/Travel:  I booked my flights – we are going on vacation this summer!  Since I got a United MilesPlus Explorer card this year, I was able to book my ticket using miles.  We’re tacking this on to T’s work conference, so his flight is also covered.  I’m super excited, and it shouldn’t be a budget killer.

March travel was all work-related stuff, which included a trip to the city my sister lives in.  I extended my trip a few days and got to see my parents, both of my sisters, and my niece and nephew! It is easy and really fun to spend a long weekend there, and it honestly is a relatively inexpensive trip – even if work wasn’t covering flights.

Dog: We sent the puppy away for his first two overnights away from our home (except for his stay with his litter-mate over the holidays), and he did great!  He’s still a pretty high maintenance dog, but the sitters were former Vizsla owners who knew what they were in for.  They are getting their fresh baby puppy in a few weeks, so we like to think we gave them a little practice session for their future little monster! They refused our money, which was sweet.

The dog hasn’t caused us any unexpected expenses this year and hasn’t been to the vet. Yay! We are thinking of a training class soon to help us all get through doggy adolescence. He’s a good dog, but there is room for improvement.

Work was actually pretty good: March was one of the more satisfying months of work in a while. The new (very small) project kicked off, and I’m in a groove on the old project. I mean… there were tons of annoyances and things I should be outraged at, but I mostly didn’t get outraged and have been able to roll with it. (Annoyances are 100% driven by actions of our “partners” on the project, internal people continue to be great.)

We had a work social on Saint Patrick’s day – 4 p.m., beer, snacks, sunshine and good food. I caught up with some good people I hadn’t seen in a while (read: since project implosion).

I stopped by to update my “manager” on what I’ve been up to recently – we hadn’t spoken with in several months (hence the quotes around the title).  There is somewhat of a staffing issue on the horizon at my workplace, but I’ve done a good job at shielding myself from it. He was supportive of my strategy and plans, and we agreed I’d stop by again soon. Against my better judgement, I offered to help on future proposals if he hears about them. Lots of work, but lots of potential for reward.

April Goals:

We’re 1/3 through April by the time I’m posting this, and the first 2 weeks have a lot of work travel… so I’ll keep it short.

Take an anniversary weekend trip. We’re probably going drive North, which we had a super lovely time doing before we moved up north. In fact, it was on that exact road trip that we found out T got his current job (we spent 4/20 in Mendiciono county, which kinda made me laugh when I realized it).  I need to book this…

Other than that, work is unfortunately totally nuts this month, and I’m just going to try to keep on top of everything…

2016 Financial Priorities

March 19, 2016

In order of priority, this is where I’m shooting this year:

  • Retirement savings:  At minimum, each max out a 401k/403b at $18k  We’ve talked about whether this is enough, because I’m used to saving >20-25% of our income in retirement accounts. Yet, we both have pension accounts building (and pulled from our salaries to do so).  I think our retirement is on a fine trajectory. It is just that we have more than this singular priority right now.
  • Set aside 6 months  worth of my take-home pay in baby fund (assuming SDI): We are still in the planning phases for starting a family, but I want to get the money part squared away.  This is conservative since we could theoretically live without my salary – but having the cash there will be good for a variety of reasons.
  • 25k mortgage prepayment (on top of the 25k that was hanging out in cash earned last year).  I’d like this to be our baseline goal every year, with the option to skip it if we have a bad financial year.
  • More retirement savings: I don’t think we’ll get this far down the list, but if we accomplish all of these above, the rest would go into T’s retirement accounts.

I haven’t worked out exactly what is going to work out, which is why these are priorities rather than goals.  However, I’m pretty confident (based on right now) I can get through the first 2, and probably at least most of the 3rd.  Tallying up spending and expected income could come next month – but it is honestly a fair amount of work and the information won’t actually change my actions.  So it isn’t a priority.

Notable planned spending in 2016 includes the following:

  • Vacation to Europe this summer.  It is already March and we haven’t nailed anything down, but I’m fairly committed to making it happen this year.  Yay!
  • Dining room table: We aren’t getting the one I really want because I don’t want to spend that much.  We haven’t settled on the final choice, but even at a lower price point, it is an expense worth mentioning. Especially once you add the chairs.  We have a high top four seater that isn’t great for entertaining.
  • Patio furniture:  This won’t be hugely expensive, but it is on the radar.
  • Earthquake retrofitting:  For real, though.  This should turn out to be pretty reasonably priced (… for a house project, that is) after we take advantage of some incentives – but it needs to get scheduled.

I wanted to sketch out my 2016 goals, and that is it on the money side. Outside of finances, I want to do some trail runs, continue to roll with how things evolve at the job and be successful there, and explore our local area a bit more, and spend way way way less on dog expenses (so far so good!).



February Recap / March Goals

March 2, 2016

February Recap:

February was a fine month, despite starting off with T out of the country.

Work was OK.  The opportunity  (#3) mentioned here was confirmed, and is slowly ramping up.  I’m super excited about it for about 50 reasons.  I’m organizing the rest of my stuff in a way that I’m happy with, and now I just have to make sure everyone else is on board and happy too. I think we will get there.  The remote team role I signed up for involves traveling for ~1 week/month. In the short run, this isn’t a big deal (although I prefer being home, and I also do lunch time dog duty, so this impacts T.  We got a dog walker on an as-needed basis.). In the long, long, run, I have some worries. But I’m going to go forward in the direction that I think makes sense, and I have confidence that future-me will be able to figure it out if my worries materialize.

Our finances are in good shape.  We got our giant tax refunds, and sent it to various targeted savings, and mortgage prepayment. I adjusted our tax withholdings to a more appropriate level, and our cash flow is a lot better than last year.

I’m looking into a student loan refinance with Earnest.  Most people in my financial position would probably simply pay the dang thing off – it is a small fraction of our cash on hand.  But I don’t want to – so why not reduce my rate further? The savings are relatively small since I don’t have much left, but they are not insignificant and I don’t see any disadvantages of doing it.  I’ll write more about this once I’ve finished the process.

I signed up for the Chase United MileagePlus Explorer card. There was a $50 statement credit, waived fee,  and 50,000 miles with $2,000 spend (within 3 months).  The spend within 3 months wasn’t a problem since we regularly use our personal cards for booking work travel.  We obliterated our frequent flier mile accounts in 2015, but they were super helpful for last minute emergency trips back home.

My tiny goal list was not even obliterated.

  • Schedule a haircut.  Fail.  Why is hair such a low priority in my life?  Will do ASAP.
  • Send more to the mortgage (at least $10k).  Win.  Yes!  It is so fun to see the balance go down in such big chunks. I would like to send in $7k more this spring, which brings me to the $25k I wanted to do last year (but was too scared to follow through on).
  • Schedule our last big house project (this is on T’s to-do list).  FAIL.
  • Sketch out 2016 budget and goals/plans. FAIL.  I mean, I have plans and goals, but…

March Plans & Goals:

I have two work trips planned, a M-F in Colorado, and one late this month in Minnesota for two days for the new project.  Conveniently, my sister lives in Minnesota, so I’m going to get to see my family!  We’ve also been talking about a backpacking trip on a long weekend, and I think it is going to happen.

Here are my goals.

  • Run at least 6 times. I’m planning a short trail race in April – but I’m keeping running goals extremely low key right now.  I let the dog run with me a few times on trails, but we are less like the graceful pair in envisioned and more like…man-being-dragged-by-dog
    OK, not that bad, but he’s certainly not trotting along in a heel position.  We’re working on it.  With daylight savings time ending soon (right?), this gets easier.
  • February hold overs
    • Schedule our last big house project (this is on T’s to-do list).
    • Sketch out 2016 budget and goals/plans.
    • Haircut!

That’s really it.  If I can stay on top of work and get in a few runs and a haircut, we can call March a success.  Even better if we also do a backpacking trip!



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