Feb 25, 2008

Woman in Charge: family finance for one day down the road

My mom never calls me to see how I'm doing. The only time I'll hear from her is to tell me that some show is on PBS that I should watch or that there's something else of interest to her that isn't really of interest to me at all, yet she thinks I should know about it anyway.

The last one of these conversations had to do with Suze Orman's book "Women and Money " that Oprah gave away for free (via PDF download) a few weeks ago. My mom e-mailed me about the book download and then followed up immediately when I called her later on that day "did you download the book yet?"

Ok, so Suze Orman's books and blab have provided me with some useful finance advice in the past. But at this point I know all the basics about finance and that I should save money and invest it as opposed to spend all I make.

My mom is so clueless when it comes to money. Part of it is a generational thing and part of it is a chosen "ignorance is bliss" ideology. She's always spent as if the bank account had no end. Now that I know how finances work, I don't really understand just how she did it. Even though my father made a good salary, it was only in the low six figures... which is a lot, but not nearly enough to spend the way she did, or so it seems. My mom would order things from QVC without worrying about the cost. Jewelry, mostly, although sometimes she'd buy appliances and things. She wouldn't go to the mall and spend like that, but because it was on TV she could. Well, that was her excuse.

Granted, she did work hard as a stay-at-home housewife for many years, and she deserved some of the finer things in life. She put up with my father who, despite being a good breadwinner, wasn't the best husband.

Now, though, my mom is in her late 40s and my dad is out of money for a few years. He retired early and his pension plan doesn't kick in quite yet. My mom doesn't get what having "no money" means. Well, that's mostly because my dad has kept her in the dark about our financial situation over the years. She doesn't know how much money he has in savings, or what that means for their retirement.

Knowing my dad, he has a good amount of money available for retirement. After all, he made a career out of designing pension plans for other workers. I'm sure his pension is solid, when he will get it. Still, it's completely astonishing to me that my mom has no idea how much money they'll have in retirement, or how much money they have now, other than "no money," which could mean just about anything coming from my father.

My situation is so much different. Sure, right now I'm at the very start of my financial journey and I'm just learning how to save and invest. Without being able to control the markets, even if I make all the "right" choices I might still end up back where I started or worse. But at least I feel that now I'm in control of my finances. I know that if I can save a certain amount per year and invest it, if the market goes along as expected over the long haul, I'll be able to save a certain amount of money for my retirement.

This makes me feel powerful. It also makes me focus just a little too much on money. Making money has become a bit of an obsession. As a freelancer, it's easy to sign up for one too many projects. Who needs sleep, right?

But the way I look at it, the more I can make today, the more I have to spend later on. That's true, regardless of what I have to do to get there.

Now, my boyfriend, he finally got himself a job and he's making money. He spends less than me because he doesn't have to pay rent (he lives at home) and he doesn't really buy many clothes. When he does, he doesn't splurge on designer anything. He still dresses nicely, but he has a very limited wardrobe. Two pairs of jeans, and a bunch of button down dress shirts. That's pretty much all he wears. Oh, and two sweatshirts from his college and some really old shirts and shorts that he'll wear to the gym and such.

His spending right now pretty much revolves around me. If we go out to dinner, he often pays. I used to feel bad about this, but now that all this saving money thing is a game, and as I'm paying so much in rent and clothes and products to look pretty (for him, mostly) I feel less bad about having him pay for food more often than not. Even though I'm "making" more money at my job.

My boyfriend is not at all interested in investing or finance. The other day I excitedly told him all about mutual funds and index funds and such, and he was bored to death. His mother has saved up enough money to send him to grad school one day which is, as far as I know, sitting in a fairly low-interest savings account right now. He makes money and although he spends a lot on us eating out and gadgets for himself, I'm sure he's still making more than he's spending right now. But he puts it all into his savings account.

I tried to get him excited about opening a ROTH IRA and told him about how hard it is to afford retirement these days, but he wasn't interested.

Now, if this is the guy I'm going to marry, which right now I think might be the case, I feel like I have a right to not only inform him of these options, but push him down the path of opening an IRA and starting to save for retirement.

I guess, in the long run, if only one person in my couple hood is going to understand finances and save for retirement, I want it to be me. I don't want to be like my mother, clueless and hopeless as it is. If I'm going to spend a lot of money, at least I want to have a solid grasp on what that means for my monthly contribution to my ROTH.

I keep telling my mom she should get a job. If she wants to keep living her lifestyle, it isn't so hard, even if dad says they're out of money. Get a part-time job and viola, some extra income which she can spend as she pleases. But she refuses, saying she's too busy. She's dealing with this whole fight with the school system about my sister's education (my sister has a learning disability and the school isn't giving her the appropriate accommodations) and otherwise she's too busy doing other things... like, oh I don't know, cleaning the house... no one in our house helps out with laundry or dishes, so that's all her. Still, I think she ought to get a job. My dad is retired now, he can start helping out with some of the chores around the house. If my mom was working, maybe he'd be inspired to do so.

In the meanwhile, I'm going to make sure that I know the nitty gritty of personal finance. Even if my significant other choses to remain somewhat oblivious to how he can save for retirement, I refuse to let life take me for an unfortunate ride.

For the past few years, my net worth has gone up and down between $25k and $30k. Right now I'm at about $27k. My goal is to stop going down, and to break that $30k by summer.



2 comments:

stackingpennies said...

My boyfriend isn't as obsessed with pf as me (but really, most people aren't), but he's pretty open to my suggestions. Too bad he doesn't make any money yet, so it's kind of a non issue.

In my family, my parents both worked, and my mom did the finances.

Dolly Iris said...

I feel you! I always try to get my guy into pf. It's one of my secret goals to get him to start both a savings account and his retirement savings this year.
I plan on marrying him and I want us both to be prepared for the future. You're right though.. can't wait for them to jump on board. We have to take care of ourselves first.

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