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Pandemic Week 2

March 28, 2020

We are still safe and fine.

It truly has been a joy to spend extra time with LO, especially just as her vocabulary and personality is exploding. It can be tiring, but it is also wonderful to have so much extra time with her. To prepare for the quarantine, I selected a few new toys for LO, and we’ve been doling them out. Some neighbors gifted us a used IKEA play kitchen their kids had outgrown, which has been a hit. I purchased a water table with an expiring store credit, but it hasn’t been nice enough to break it out yet.

I’m a person who does better with some predictability, so I put together a schedule for weekdays. LO is too young to entertain herself, so T and I divided up childcare responsibilities during the hours of 8 am – 5 pm, taking care to deconflict our meetings and other commitments. Assuming LO naps 1.5hrs/day, we each get ~26 hours of work during this time block. Adding in evening / weekend work I can hit my target of 32 hours. I plan to use paid leave to cover the rest, although it is unclear if that is necessary since I am salaried exempt. My deadlines aren’t moving, so I’m stressed about that, but 40 hours is not going to happen, at least not if we are in this for the long haul. We take from 5pm to 7:30 pm as family time, which is also when we get basic daily chores done (cook dinner, dishes, dog walking, baths). It’s been working OK. We are a little flexible with the schedule, but it is a great starting point.

People have started actually turning the video feature on during some of our work meetings in order to try to enhance connection and maintain some culture. There seem to be varying levels of understanding about having a small child at home and trying to work. I know I’m not the only one, so it is surprising how the issue still seems to be somewhat unspoken/hidden so far – at least on one of my projects.

We were able to get grocery delivery, including whole milk for LO. I have mixed feelings about relying on delivery services and the workers – but ultimately it seemed like the best choice at the time. Many items are still sold out or low stock, but we have what we need. Instacart workers are planning a strike, and I support that choice. Companies need to pay the workers better, even if they just pass the costs onto the end customer.

Our net worth is plummeting, just like everyone else’s net worth. We’re buying into the market through our monthly paycheck retirement contributions. We are still millionaires. That would be a sad benchmark to dip below, even if meaningless, so I am sort of aware of it.

Daycare charged us for the 2.5 weeks closure during March, then suspended tuition for April until they reopen. At first I was relieved, but am also having second thoughts. Staff are working from home on a limited basis (professional development) and using a special extra paid leave – but the extra leave is limited to about 3 weeks. Due to their association with one of our employers, we know they won’t go out of business. So far, staff are being paid… But I’m not sure how long they can pay staff. Anyway, we’ll see how long the closure lasts, and if this policy holds. I also can’t really see paying for 6+ months of childcare I can’t use, but maybe it would be the right thing to do. I really don’t know.

The news is infuriating, watching the government propose actions to help corporations while leaving little for individuals. Maybe they landed somewhere sensible – I haven’t looked into the details of what was passed. The one-time cash payments for many are good, but the enhancements to unemployment seem more critical. There are no perfect solutions, but there has to be something more sensible than off-the-rails capitalism and little protection for the average worker.

I seriously wonder if America will come through this. No matter what actions are taken, this pandemic will result in both severe economic costs and lives lost. It will be easy pit sides against one another: one saying the economic cost of countermeasures was too great, and the other saying the loss of life was too great due to government inaction. We can expect bad actors to take this as a convenient opportunity to further manipulate public emotion to destabilize our country. We need to stay aware of this.

Now that it has been nearly two weeks, I’m getting a little cabin fever, despite our multiple walks daily. I’m sure I’ll be fine, but it is definitely different.

February Wrap Up

March 24, 2020

This post was hanging out in my drafts since March 4th and I’m just now getting around to publishing. I don’t have time to analyze my spending, so I’m just going to publish without that data for the month, and won’t update my sentiments about COVID to be current with the times.

Net Worth and Money News

Like pretty much everyone else, my net worth fell this month. It was only about a 4% drop (at the time I did my spreadsheet). I also like to look at it in months. We are back to the same net worth we had about 2.5 months ago in early/midDecember, which doesn’t seem so terrible.

We did our taxes! Well, so far just our federal taxes.  I did them first in TurboTax (without paying) to get a sense for what my refund should be. I didn’t want to pay TurboTax for a number of reasons (not just the $140 they wanted), so I tried FreeTaxUSA. I couldn’t get FreeTaxUSA to accept a backdoor Roth IRA for both T and I, though the first one seemed to be handled properly. Since I couldn’t get that done correctly, I did not file with them, but I took the PDF of the completed forms the software generated, and used that to help me navigate the Free Fillable Forms from directly from the IRS. In that software, I basically copied the FreeTaxUSA output to help me along. Finally, I added two Form 8606 to capture the backdoor Roths. It was a bit painful to enter everything three times, but I didn’t pay anything, I was able to e-file. We are getting a fat return in the first week of March! I just have to remember to print everything out, because apparently the IRS will purge data in the system in October.

Spending Bullets (excluding childcare, mortgage, property taxes and car/home insurance):

  • This section isn’t done for this month. Maybe I’ll update retroactively someday.

House Projects

I was out of town a bit, leaving T with less time than usual to work on house stuff. The gutters got cleaned and some minor landscaping efforts began, but nothing big happened this month.

Work

This month had my first overnight work trip away from LO – actually two of them! They were both extremely valuable from a work perspective for two totally different areas of my career – but it was tough being away. LO got sick during my second trip, so that was especially hard on T since we usually share the load when the kid is sick and take turns staying home.

In part due to the travel, I’m way behind where I want to be at work on my new project. We have a milestone this months, and a Big Deal milestone this summer, and a pile of work to get done before either of those things.

Other life stuff

LO continues to add words, and it is so much fun to watch her vocabulary develop. Some of her current frequent words: Moon, eye, trees, outside, ear, all done, more, car. She still loves the word “teeth” and is thrilled to start the teeth brushing process each night… yet it always devolves into tears after the toothpaste has been consumed, then again sometimes if we take her toothbrush. We have been able to get her to give it to us more often lately.

Coronavirus concerns in the US have started to boil over, and I’m appropriately concerned. Or maybe too concerned or maybe too unconcerned – it is really unclear what the appropriate level of concern is. It appears to be already out there in my community, hiding under the surface with many people having mild symptoms, and it is going to grow over the coming weeks. We won’t really know until more people are tested, and they aren’t testing people with mild symptoms and no travel history to impacted areas. Anyway, we have toilet paper, coffee, tylenol, and a bit of extra food to get us through, and doing our best to practice proper hygiene. (Have you ever tried to get a 1.5 year old to not touch their face?)

Lock down update

March 19, 2020

How are you all doing???

Like many families, we are now staying home except for essentials, and working from home while caring for our kid. This is a county requirement, but was already our plan.

We are doing OK. Our incomes are secure in the near term (probably through the year). In the longer term, this could affect my job/income, but I’m not sure yet. T should be OK. This is huge, and I’m grateful. The market is obviously nuts, but I’m calm about it. Everyone is healthy. Well, LO and T had minor colds that appear to be lifting. And, no new germs are likely to be acquired!

Daycare is closed. We are super lucky that both of us can work from home and pull off juggling childcare and meetings between the two of us with some working after bedtime and on weekends. I haven’t figured out a long term schedule. I’m likely going to use one day per week of paid leave. Eventually, we’ll need to hire someone (if/when that is allowable) or find some other solution. We can’t do this indefinitely. We pay for care because we don’t want to live like this (and because LO has so much fun and learning there).

Officially, daycare is closed for 3 weeks, but I am starting to wrap my mind around the likelihood of it being significantly longer. They sent out something to the effect of “though our contract states that closures don’t affect billing, this is extraordinary we’ll have to figure this out.” I’ve heard some thoughtful friends share that people who aren’t losing income should continue to pay as many service bills as they can (activities, housekeepers, etc.). I agree, to a point. I’m moderately fine with paying for a closure on the order of 2 – 4 weeks, but I’m uncomfortable with paying for months and months when no care can be provided. (I am sure they won’t expect that.) The monthly cost is too huge, the missing service is too important to live without. But, I want the staff to be paid. So, we’ll see what happens.

We are also concerned about LOs development. Stay at home parents usually take the kids out on play dates, library time, etc. We can’t do that. In the short term, no big deal. In the long run, it will be hard if she misses out on the social and developmental aspects of childcare. I realize she is not very old, but what should I be teaching her? I’m sort of glad she isn’t older, because she would have higher learning requirements. She also hopefully will not remember this tough period.

We are mostly introverts, so the isolation hasn’t been so bad. (It’s only been 4 days.) We’ve been taking several walks a day, which is typical due to our dog. We wave and occasionally chat with our neighbors from a distance on the street. The neighborhood e-mail list is cheery and full of generous offers of help.

We are considering how to support local businesses and people whose incomes have already been reduced. Our charity strategy may be revisited to target more local needs and less social justice effort. It isn’t a great thing.

I hope you are all staying safe and isolating or practicing extreme social distancing. I hope you and your loved ones are healthy, and can weather the upheaval that is being thrown at us.

Belated January Wrap Up

February 19, 2020

Net Worth and Money News

Our net worth ticked up again, hooray! It rose about 1.8%. I’m front loading my retirement again, and switched T’s as a percentage of his income. That will ensure that a bunch of savings come out when he gets summer salary.

I discovered we’d been grandfathered in to Capital One 360s old savings account, and the rate had plummeted. I moved everything over to an account getting more interest.

I hope to do taxes next month, and my goal is to do it without TurboTax. In past years, we waited until too close to the deadline and got frustrated enough to just pay for TurboTax. It isn’t even really about the money, it is about not wanting to support the tax prep software industry. Our taxes are not totally trivial, but they are something two educated people willing to put in a bit of time can handle.

Spending Bullets (excluding childcare, mortgage, property taxes and car/home insurance):

  • Monthly spend (excluding some major categories): $2046, which seems very low for us!  
  • Highest single transaction that hasn’t been featured in a previous month: $217.05 at IKEA for toy storage, a lamp, and a few other miscellaneous items.
  • Most annoying expense: $140 for a “dig proof” dog bed. We had an incident with a Roomba freaking out the home alone dog, and he started freaking out in his crate and digging up his bedding. He got over his neurosis, but we did end up with a new bed.
  • Expense that brought the most joy or utility:  $14.19 for a poke a dot book that LO is OBSESSED with.
  • Donations (for accountability): None this month, will have to roll over into next month.

House Projects

I feel like January was mostly just a struggle to keep our house in order. I can’t remember any improvements, but I’m sure T did some maintenance tasks here and there.

Work

I’ve been at this job 5 years. It has had ups and downs, but in general, it is a really good fit.

I regularly feel out of my depth, including right now on this new project. We have the most amazing project manager, who not only is extremely effective at his job of project managing, but also could do probably 30% (or more!) of the jobs on the team, many of them better than the person actually assigned to the job. This includes my job. I mean, obviously he can’t do ALL THE JOBS at the same time, and the idea is that he may some day retire and the rest of us will have to rise to attempt to fill his shoes. . . But it is a little disheartening to know that he could just do everything I’m doing, and he could do it faster and better. It is also good, because he knows what I should be doing and can help if I’m stuck. I think this type of manager is not the norm, and I am lucky to get to work with him. But that also makes it hard/impossible to impress him!

Other life stuff

My dad is temporarily in the area again working for a few months, and mostly driving me and T crazy. He stayed with us for about 2 weeks, then stayed with my uncle for a bit, and just now found his own temporary place. Now that he has his own space, I hope we can enjoy the luxury of getting to spend time together on a more regular basis. My house is just too small for hosting long term guests, unless perhaps they were an extremely conscientious and quiet guests (he’s not).

LO is doing so well, and is so much fun! She has started talking a bit. She has started climbing on everything (eek!). She is a happy little kid, and we are so lucky to have her. The one nap schedule is working out fantastically for our family, although she occasionally takes 2 naps if we have car time.

January links and snippets

January 29, 2020

Links:

A reminder to myself to to keep investing in long bull markets – they can last a really long time!  Anyone who pulled out of the market after the big dip in December 2018 missed out on big gains in 2019.

The existential dread of Mini Brands.   You can buy (tiny) branded plastic junk, wrapped in more plastic. Have we reached peak consumerism? This concept makes me feel a little sick.  I have heard that when you have kids, plastic junk just starts flowing into your life, and it is really hard to stop it. 

I had missed this post from October on GRS, where Jacob Fiske Lund of Early Retirement Extreme gave an update on the past years of his life.  I used to comment on his blog (and vice versa, at least before he became popular).  Despite generally not wanting to make the same choices as he did (RV life, etc.), I very much admired his logical and determined approach, in addition to the way his mind worked and his writing style. It was a pleasure to read this update!  I also read the comments, and thought this response from Jacob was also true:  “The sudden popularity of the FIRE-movement has resulted in […] people jumping into w/o thinking about why they’re doing it; basically treating FIRE as a product they can consume to become happy.”

For parents of babies: Complaint to HR

Snippets: (A snippet is a thought that I might have expanded on and turned into a blog post, had I wanted to spend more time blogging.)

I performed a few unnecessarily financial calculations.

1) Having a second child would delay our FI (w/house but not health care) by 9-12 months. This number is (lots!) smaller than I expected, but (as usual) it is a simplified calculation.

2) Our house in a high cost area delays FI by at least 5 years.  This wouldn’t be solved by renting, it is driven simply by our desire to live in a high cost area. Yikes.  A lot of this is driven by the maintenance budget I hold, which is perhaps more generous than it needs to be.

3) My estimated social security earning will increase by about $1.2k/year for each year worked in the next 5 years, then about $800/year for 5 years, then $600/year for 10 years.. then even less than that. This assumes the current rules apply and I begin withdrawals at full retirement age.

4) The cost of me being a stay at home parent would be approximately $75k+/year, calculated as Gross Income – Childcare – Taxes Saved (estimated). Our taxes saved aren’t as dramatic as some families since I shelter a large fraction of my income already.  This is just the in-the-moment costs, not the salary growth, not the retirement growth, and not the benefits.  (We mostly use T’s benefits anyway.)

I calculated this after reading a post where a SAHP came up with a significantly lower estimated cost for his/her family.  It obviously depends heavily on the earning potential. Also, the assumptions on how much a SAHP can save the family, outside of childcare, seemed inconsistent with my experience, as a working parent who doesn’t hire things out. Would I really have more free time to optimize spending/finances/household if I was a SAHP? Parenting a young child is pretty consuming.

So… this is a cost I’m unwilling to take on until we are significantly closer to financial independence. The cost of reduced hours/reduced salary is something I’d consider, but it isn’t compatible with my job & child care options right now

Parenthood: One year and beyond!

January 19, 2020

Here are some updates about life with LO these last several months.

Personality / Milestones

On her first birthday, LO took her first wobbly step.  From there, she quickly gained skills as a walker / runner, and is always on the go.  She is still her usual zany and sweet self.

At 15 months, her vocabulary is limited, although she has a wide range of babbles and words are emerging. Her first word was probably Dada, but it is unclear at what point she was using in context, rather than babbling.  She also has been saying “this?” and “that!” for a long time, and also “dog”.  She babbles mamamama, but doesn’t use it to refer to me.  She now says “cheese” and a similarly sounding “shoes” and “trees” and “teeth” in context.  Also, “moo” for cows and “sssss” for snakes.  She’s working on identifying body parts and can point to many (foot, nose, eyes, ears, etc.).

Some mini tantrums have started, especially when we remove items from her possession, or other random toddler reasons.

She is really into peek-a-boo, getting pushed around on her little car (or pulled on a blanket or in a box or whatever – just zooming around), and climbing into boxes and other containers. She got a lacing toy for Christmas and is pretty obsessed with it.

This will sound a little silly for such a young kid, but we started a tumbling/gymnastics “class” with her.  It is very cute, and it was honestly more so we could have a parent/kid activity to do together since most of that stuff is during the work day.

Childcare

Daycare is still amazing and great.  The ratio is low, the teachers are experienced and caring, and I have basically no complaints about it. LO gets so much out of it, and has so much fun.

When they sent out pricing updates for next year, they benchmarked themselves against some other local centers, and I was shocked to learn that you could indeed spend EVEN MORE (20%+ more!) than we are spending for full time infant care. The only other centers I had looked into were slightly less expensive than ours, but I guess there are some very fancy options!

Eating

She’s almost entirely self-feeding, and eating a lot of what we eat.  We help out with utensil use.  She’s a picky eater sometimes, other times she’s not.   We just keep feeding her things in hopes she’ll eat them.  We also rely on daycare to feed her a variety of foods, and fall back to some “toddler food” staples at home. I had an idea that our toddler would eat what we eat at a young age, but reality is a little different.  We try.

Routines & Sleep

Just after 11 months, she started routinely sleeping through the night (ceased waking around 4-5 am to nurse).  Hooray!  After her first birthday, we dropped down to two bottles (during the work day) to use up the remaining frozen breast milk, then switched to cows milk in cups.  I quit pumping within a week of her first birthday, and my supply quickly diminished.

After the new year, we moved to a one nap schedule at home and at daycare. She’d started refusing one of her naps each day at home, so the timing was good. It is going pretty well so far, but we’ve had occasional issues with early wake ups.

Co-parenting

With nursing ending, this has felt relatively balanced to me.

T is a morning person and is almost always the one to get her from her crib.  Usually, he hands her off to me after a diaper change, so he can finish/start making coffee. Sometimes, the coffee is done and I help with breakfast or get showering. We kind of wing the morning routine, for better or worse. We trade daycare drop-off and pickup, depending on what makes sense for that day’s obligations. Sometimes T is able to work from home for half of the day, otherwise I come  back and walk the dog at lunch – just like I used to. Weekends we both spend a lot of time chasing her about and playing with her.  Each day isn’t always equal, but in the long run, we both do a lot of child care and both take care of a lot of other responsibilities.

Do we need life insurance when we are on our way to FI?

January 7, 2020

We each have modest life insurance through our employers.  With T getting tenure, the likelihood of no longer having access to that life insurance is low.  It is a little less sure for me.

If I were to pass away, T would get all of my retirement accounts. Unfortunately, retirement budget really wouldn’t change significantly. We share a home, we share a car.  He’d need less food and such. Assuming I die while employed, he’d get a life insurance payout sufficient to pay off about half the remaining mortgage balance, and about $20k/year until LO turns 18. Regardless of whether I’m employed at my current employer or not, he’d also get about $27k/year in social security survivors benefit until LO graduates high school. Conclusion:  While I’m employed at my current job, I feel comfortable that LO and T would be taken care of.  If I was no longer employed at my job, they’d still be fine, although it would be nice to have given T more of a head start on the mortgage pay down.  He can meet his bills without me (esp. assuming SS survivor benefit to help with childcare costs), but he wouldn’t be able to save aggressively.

If T were to pass away, I would get a life insurance payout that could pay about 60% of the remaining balance on the mortgage, and a similar $20k/year until LO turns 18. His social security earnings history is not as strong as mine (grad school), so I estimate the survivor benefit for LO to be at about $14k/year until she graduates high school  Conclusion:  This is probably fine too, although savings progress would be a bit stalled while LO is not yet in school.  Again, it would be nicer if the mortgage could be vanished.

As our financial position continues to improve, the need for life insurance will continue to decrease. Still, we aren’t quite in a place where I’m comfortable saying we don’t need it.  We are most vulnerable right now, when LO is young and needs full-time and very expensive childcare. It wouldn’t be a financial disaster if one of us passed away, but it would not be ideal. I’m comfortable with relying on job-based life insurance for T, but I worry slightly about doing the same for myself. The ideal situation would be for the survivor to be able to eliminate the mortgage entirely, which basically puts the survivor at FI status (pending market corrections, etc.).

Based on this, I’m going to shop for a 10 year term insurance for both of us, separate from our jobs. A quick estimate shows that I should be able to get $500k of coverage for around$200/year/person, which seems worth it.  We could also consider dropping the supplemental life from our work policies (but probably wouldn’t).  I expect we’ll be legitimately FI within 10 years, and don’t expect we’d need life insurance after that point.  Am I wrong?

Any recommendations on how to evaluate and purchase life insurance?