Archive for the 'Family' Category
Monday, May 7th, 2012
As new parents-to-be, we have been exploring our options for paid and unpaid family leave from work. This is not meant to be an exhaustive list, but I was pretty surprised by all the possible permutations that you could do. I would add that while knowing your legal rights is important, I also support the idea of working with your employer and co-workers to make the process easier on everyone.
Your Work Contract
Most employers offer their full-time salaried worker’s some length of paid maternity leave, and it’s usually spelled out clearly in the lawyer-ese language of your work agreement. A few employers even offer paid paternity leave. Making an appointment to discuss all your options with Human Resources can be time well spent. Keep in mind that you are subject to the laws of the state where you work, not where the company is based.
In addition, you may be eligible for a longer unpaid leave-of-absence. For example, a big company may allow you up to one full year of leave and your same job (or comparable) will still be yours when you come back.
Short-Term Disability Insurance
Depending on your insurance plan and local laws, being pregnant or taking time off to bond with a new child may be covered under short-term disability insurance. This means you may be eligible for an additional period after your paid maternity leave where you will get a disability benefit that is somewhere around 50% of your normal pay (subject to caps).
Family and Medical Leave Act (FMLA)
The FMLA entitles an eligible employee to take up to 12 workweeks of job-protected unpaid leave for the birth or placement of a child, to bond with a newborn or newly placed son or daughter, or to care for a son or daughter with a serious health condition. You may or may not be required to use up your paid vacation days first. To be eligible for FMLA benefits, an employee must:
- work for a covered employer;
- have worked for the employer for a total of 12 months;
- have worked at least 1,250 hours over the previous 12 months (~24 hours per week average); and
- work at a location in the United States or in any territory or possession of the United States where at least 50 employees are employed by the employer within 75 miles.
Under some circumstances, employees may take FMLA leave intermittently – taking leave in separate blocks of time for a single qualifying reason – or on a reduced leave schedule – reducing the employee’s usual weekly or daily work schedule. If FMLA leave is for birth and care, or placement for adoption or foster care, intermittent leave is subject to the employer’s approval. To get that permission, you should approach your employer in a way that suggests that taking the leave in chunks would disrupt the office operations less than taking all 12-weeks at once. For example, you may propose a 4-day workweek over a period of several months to a year, as opposed to leaving entirely for three.
State-Specific Family Leave Laws
Each state can have their own separate family leave and/or disability laws that may grant you more time and/or pay. Running a Google search for “[Your State] Family Leave Act” or “[Your State] Family Leave Laws” should locate the appropriate information.
Let’s take the most populous state and the California Family Rights Act (CFRA). Under federal law, any leave taken for a pregnancy-related disability is part of your FMLA 12-week limit. However, in California, an eligible employee who is disabled on account of pregnancy, childbirth, or related medical conditions is entitled to take Pregnancy Disability Leave (PDL) for up to four months. In addition to that, an eligible employee could then take 12 weeks of family leave to care for and bond with a new child under FMLA/CFRA. That adds up to a total possible leave of 7 months.
Sources: U.S. Department of Labor, CA Dept. of General Services, CA Fair Employment and Housing Commission
Wednesday, April 4th, 2012
The following is a guest post is from Elle at Couple Money. They live on one income, and have fun with the second!
When I read MMB’s questions about baby expenses, I shared a bit of our own experience with him. We are just a year ahead of him last summer we had our first baby, a little girl. It has been a wonderfully fun ride so far, with everyday bringing new milestones and challenges.
During the pregnancy my husband and I decided to track the baby expenses on Couple Money as we’re going through this process. We’re not the first parents to have questions about the finances of raising children, so I share our expenses and have asked others to give their input. Some wonderful bloggers have decided to join in the fun and share their own stories, tips, and advice on what works, what doesn’t, and what’s not worth stressing over.
Are Kids Really That Expensive?
For us, most of the expenses are just small bumps in our monthly budget. I think the main reason is that we made some financial decisions before we became parents that lent itself to reducing baby bills. For one thing, when we first were married we made it a family goal to keep all necessary expenses on 1 income. That allowed us to use the second income to pay down debts, save for goals, and invest for later.
Health Insurance and Doctor Visits
During the first trimester I was dehydrated enough that I needed to go to the ER to replenish; that was about $150 out of pocket. For the most part, though, my pregnancy had been uneventful. The health insurance policy we had when I was pregnant had a $2,500 deductible, so we saved a bit in our general funds to cover the deductible when our baby girl was delivered. Saving up to pay the bill in full allowed us to also get a 15% discount with the hospital.
Once our daughter arrived we quickly added her to my husband’s health insurance policy. That’s been the biggest change to our family budget – our premiums went up about $200/month for the family option.
No change in our housing bills. We bought our townhouse before we had our daughter. It had 3 bedrooms, so we converted the guest room into her nursery. We don’t have any plans on changing our location, right now we’re focusing on paying down the mortgage.
I know that for many parents daycare is a huge expense. From what I saw last year it was about $1,200/month for an infant. Right now I work from home and our daughter stays with me. While it has cut back on the hours I work, the savings from not having her in daycare offsets it.
Since we’re breastfeeding our food bill has increased just a bit to accommodate the extra calories I need to keep up. Since becoming pregnant, we changed our eating habits a bit. We’re focusing on making more meals at home and we a part of a CSA program with weekly deliveries during the part of the year. It’s been helping to keep groceries manageable and we’ve also discovered new recipes and dishes. Our daughter has baby food and some of what we’re eating in addition to breast milk.
Even before we found out we were going to have a baby my husband and I were saving up for the vehicle as we’re trying to avoiding taking out a car loan. However we saving up a bit more to purchase a family sized sedan, like a Sonata. Our budget is $10k for the next car. We have the money saved and we’re currently searching for a deal. It’s not an immediate need (tight fit in my Jetta, but fine), so we’re going to make sure we look around a bit before securing the next car.
The first 2 months our bills were higher than normal as we bought a few items we didn’t receive from the baby registry. We waited until our daughter arrived to see if we really needed them or if they were nice to have items. Fortunately most of the necessary stuff was already bought. After the first 8 weeks, our expenses have smoothed out.
We have received gifts from family and friends – both new stuff and gently used. We didn’t have to buy a baby swing, since a buddy’s son didn’t seem to like it. It was practically new and our daughter loved it.
Right now diapers are about $20/month give or take through Amazon Mom and they are delivered right to our door. We get her wipes through Costco where a huge box costs about $20 as well (lasts a couple of months). Any clothes that she needs we pick at Target, Old Navy, or the consignment store around the corner. That’s about $30/month.
Thoughts on Having Kids
This is just a snapshot of our family’s baby expenses. As our little one gets older we know things will change. I’d like to hear from you – what expenses to you have to cover for your little one? What has been the biggest unexpected expense? What’s been the best surprise?
Friday, March 23rd, 2012
After a long period of trying and a month before our planned IVF procedure, we recently found out Mrs. MMB was pregnant! We were being carefully optimistic so we kept things rather quiet until now. We just had another ultrasound at 20 weeks that indicated we were going to have a little girl. We are beyond excited.
Of course, this discovery has also opened the floodgates to baby shopping and Mrs. MMB is itching to start nesting. As this is our first child, we started reading a lot of books but are still rather lost.
For the parents out there… In financial terms, how was having a baby different than you expected? Did it cost more money than you thought? Less money (ha)? What items were really important to buy properly? What things did you buy that weren’t very useful? General advice, specific recommendations, whatever. I know you readers are quite smart, so I’ll take whatever advice you have to give.
I know that there are many other blogger with newborns, so I should look for some applicable posts as well. I noticed that we are about a month behind J. Money of BudgetsAreSexy. I already have a good amount of material simply about the costs of infertility itself. The level of assistance possible today is incredible, but it takes time, energy, and a lot of money.
Monday, March 19th, 2012
Bronnie Ware was a nurse who spent several years working in palliative care, caring for patients in the last weeks of their lives, and recorded her experiences in a blog. She wrote an excellent post about the most common regrets of the dying, which became so popular she expanded it into an entire book The Top Five Regrets of the Dying: A Life Transformed by the Dearly Departing about how we can live better lives by addressing these common regrets. (The blog post has been reprinted in various places, I found it in an AARP magazine.)
1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.
It seems natural that unfulfilled dreams would be the greatest regret. I still have plenty of things on my life To Do list. The key aspect of this regret is that it’s about failing to pursue their dreams, not the fact that they didn’t achieve them. Remember, the Declaration of Independence says we have the right to the pursuit of happiness, not actual happiness. Prioritize your actions in life.
2. I wish I didn’t work so hard.
Ware says it best herself:
All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence. By simplifying your lifestyle and making conscious choices along the way, it is possible to not need the income that you think you do. And by creating more space in your life, you become happier and more open to new opportunities, ones more suited to your new lifestyle.
3. I wish I’d had the courage to express my feelings.
My interpretation of this one is that you should not be afraid to cut out the negative influences on your life, and also be sure to nurture the positive influences. Life’s too short to deal with people that bring you down. Meanwhile, we should let the awesome people know how much we appreciate them.
4. I wish I had stayed in touch with my friends.
If I died today, this would be a major regret. Every time I move, I leave behind great friends that I lose touch with.
5. I wish that I had let myself be happier.
Happiness is a choice. I remember reading this concept in the bestseller Seven Habits of Highly Effective People by Stephen Covey. I prefer the phrase that life is a choice. Conscious living is pretty much the common base of any life improvement exercise, which includes all personal finance blogs.
Thursday, January 26th, 2012
You’re probably aware of the wonders of the Roth IRA and how it allows your money to grow completely free from taxes, even upon withdrawal. An added wrinkle is the lack of age restriction, so that even kids with earned income (wages, salaries, tips) can contribute to a Roth IRA up the lesser of their taxable income or $5,000.
Along those lines, I received a PR e-mail from a site called 1417power.com. The idea is that you pay them “tuition”, and in return they pay your kids official job income that makes them eligible to contribute to a Roth IRA. They claim to follow all applicable child labor laws for those aged 14 to 17 (thus the name). Your kids do thing like fill out marketing surveys, but you’re essentially buying them a job. Digging through their fee structure, roughly 50% of what you pay them is skimmed off to go to the site owners.
Naturally, my question was – why can’t I just do this myself? The idea of paying your kids to do things like babysitting, lawn care or landscaping work, or manual labor seems simple enough. However, this Fairmark article argues that paying your own kids for chores is usually not considered taxable income, so you can’t “switch it” to taxable income for Roth IRA purposes when it benefits you. I’m not completely convinced, but for the sake of argument let’s explore other options:
- Have the teenager earn money via traditional jobs like grocery bagger, cashier, food delivery, waiting tables, etc.
- The child earns income from other neighborhood families doing things like babysitting, lawn care, or painting. The pay rate would have to be at reasonable market rates. You could even work out a “I’ll pay your kid if you pay mine” agreement, if you find a like-minded parent.
- If you run your own business, you could pay the child for more clerical or administrative-type duties such as proofreading, delivering documents, or office organization.
- If the teenager is especially industrious, they could be doing more skilled work like graphic design or making iPhone apps.
There would still be some loss, as their gross income would be subject to payroll taxes like Social Security and Medicare, as well as a small amount of federal income taxes (less than 10%). But if your child has the discipline to not touch the money for decades, the tax-free growth could be enormous. You’d have to be comfortable with the fact that they could do whatever they wanted with the money at age 18 as they can withdraw the money after taxes and penalties.
The Parental IRA Match
Another move taken from this Forbes article for those that are already parents of teenagers with part-time jobs is to match their earned income. If little Jane earns $3,000 being a lifeguard, then let her spend her all or part of her take-home pay, but help her fund a Roth IRA to the full $3,000.
Effect on College Financial Aid
From my quick research, it appears that retirement accounts like Roth IRA are not considered an asset by the generic FAFSA form, but individual universities may deem them as a student asset. This could make for example 25% of the IRA to counts toward the student’s expected contribution, which doesn’t seem too bad.
Here’s a question for the parents out there – have you done anything along these lines? What did you do and why (or why not)?
Monday, November 14th, 2011
The late Randy Pausch became well known as a Carnegie Mellon professor who made a inspirational “last lecture” called Achieving Your Childhood Dreams (over 14 million views) after his diagnosis with pancreatic cancer. He later then wrote a book called The Last Lecture with Jeffrey Zaslow. As a former bestseller, you can now find copies on the cheap. It is a short and worthwhile motivational read. All the quotes are from the book.
Time is all you have. And you may find one day that you have less than you think.
One of the things I think about a lot more these days is legacy. As a human, I think most of us have a desire to outwit our own mortality.
What wisdom would we impart to the world if we knew it was our last chance? If we had to vanish tomorrow, what would we want as our legacy?
I think children help fulfill that need, as they allow a chance for a part of us to live on forever. For him, the Last Lecture itself was a legacy project for his family so that his young kids would know him better when they grew up. He also talked about his professional legacy:
Now a computer science professor at Washington University in St. Louis, Caitlin (oops, I mean, Dr. Kelleher) is developing new systems that revolutionize how young girls get their first programming experiences. [...] (You can keep tabs on their progress at www.alice.org.) Through Alice, millions of kids are going to have incredible fun while learning something hard. They’ll develop skills that could help them achieve their dreams. If I have to die, I am comforted by having Alice as a professional legacy
So his legacy projects were three things: his family itself, something for his family, and something to leave the world a better place. I think this is good framework for creating my own legacy.
Now how did he achieve those childhood dreams, as well as his legacy goals? More or less it was just hard work and persistence. What stood out to me was the idea that some things should be hard to achieve, and if you get it anyway you should be proud of it. Time spent complaining is time wasted.
The brick walls are there for a reason. They’re not there to keep us out. The brick walls are there to give us a chance to show how badly we want something.
…The brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people.
Pausch didn’t get there on his own, even with all the hard work. He showed gratitude to his parents, his wife, the professor that got him into grad school after he was rejected, his kids, and many other colleagues.
Tuesday, August 30th, 2011
Update: ThredUP is no longer a clothes swapping site, but you can get a free $10 credit towards your first purchase of clothing at the new store.
Kids grow. Clothing doesn’t. That’s the basis for a new swapping site called ThredUP, which I’ve seen in multiple news articles recently. Another similar site is Zearly, but it seems like they are on hiatus.
Got clothes that doesn’t fit any more? Box up about 10 items (tops, bottoms, dresses) that fit the same age level and gender. They send you free boxes, you print a prepaid postage label online, and have it picked up from home or drop off at the post office.
Want some cheap clothes? Browse other people’s boxes and pick one. There appears to be feedback rating system for users. Each box costs $15.95 ($5 + $10.95 shipping). Some boxes have toys and books as well.
I don’t have kids, but I think I would definitely try this if I did, especially for babies and younger ones. At about $1.50 an item (regular price), it seems like a reasonable system. Any users out there?
Sunday, May 15th, 2011
Capital One 360, with their popular 360 Savings Account, has just launched a Kids Savings Account specifically to help children learn to save and manage money. Here are the ways that the Kids account is similar to the Adult version:
- FDIC-insured savings account.
- No fees, no minimum balance requirements.
- Pay interest, currently 1.00% APY.
- Kids can log in and check their balance at any time with their own personal customer number and PIN.
Here are the main ways that the Kids account is different to the Adult version:
- Kids cannot move money, only check balances.
- Adult must sign in with their own separate customer number and PIN to transfer money in and out.
- When the kid turns 18, the account will automatically convert to an adult 360 Savings Account.
I’m not sure how I feel about this account. I think I’d rather have kids using paper money that they can touch, and let them visit a human teller to deposit and withdraw money. Seeing the interest accumulate online would be nice, but the small 1% rate of growth right now might be discouraging. That said, everything is so digital now. I’ve met 8th graders that know more about Facebook and editing digital videos on YouTube than I do.
Tuesday, March 15th, 2011
I am currently reading The Art of Non-Conformity by Chris Guillebeau (review coming shortly). In one of the early chapters, he talks about an exercise where you write out how your perfect, idealized day would go in great detail, hour-by-hour. I’ve read about this method other places, but never actually write it down. As I go into it, I found myself getting really into it and making several changes throughout today. Here goes:
I wake up, naturally, after 8 hours of sleep. Many people don’t need that much sleep, but I do. I love waking up naturally, but will set an alarm as a backup, because… I have to wake up the kid(s) and get them ready for school. I still don’t have kids, but I really want them.
I make their lunch, and perhaps drop them off at school in my 10-year old Honda if it’s close enough. I take the dogs for a walk in the neighborhood park. I then do my exercise for the day. Most days it will be something active and fun, like swimming, bicycling, tennis, or running. To mix it up, sometimes with a buddy or group. Swimming in open water is fun, since I live by the ocean.
Morning to Early Afternoon
I shower and change into shorts and a t-shirt. I work at home and live in a temperate climate, so that’s what I wear every day. At the computer, I check the morning’s e-mails and do some work. Work consists primarily of reading books and online articles from thoughtful authors (not 24/7 cable news or superficial fluff), and then researching and writing on topics like personal finance, nutrition, web design, or graphic design. I actually only do specific jobs for clients occasionally, because I’m tired of dealing with customers. Writing is so much less stressful. I might also run a small e-commerce website, but nothing that requires constant attention. Part of the year, I teach something small at a local community college.
I only work 4 hours a day. I can do this because I’m smart with money and have saved up a big chunk. Mrs. MMB works half-time as well, still 9-5 downtown, but only 2-3 days a week. With a relatively simple lifestyle, our income still pays the bills with a little left over. Our portfolio is left to grow for “advanced” retirement once the kids are in college and Mrs. MMB quits completely around age 50. I feel like I’ll be doing something that earns income until at least 60.
I work until a late lunchtime, and then I take the dogs for another walk. If Mrs. MMB’s not working that day, we do this together. She loves to garden and much of our food comes from there. Some days, we walk to a local eatery with the dogs and dine al fresco.
I wait for the kids to come home from school or pick them up. We ate some snacks, then I help them with their homework. Next up: sports, 4-H, girl/boy scouts, or science club or whatever fills up the afternoon. I love being able to spend time with them. We shop every day at a local market for ingredients for that night’s dinner, before the after-work rush. Did I mention I never have to go to Costco or any megastores on the weekend?
Dinner is a family affair. Once a week, the grandparents come over for dinner or we go over to their place, since we live in the same city. After dinner and homework is finished, perhaps a DVD or pre-planned TV viewing. I could say “NO TV!!!”, and I’d still like to severely limit TV viewing in the house, but do think there is good content out there. Why not watch it together? Otherwise, we might play a board game or learn about that year’s Big Adventure. I am not a fan of video games at all, unless educational and done well.
I used to worry that once I had kids, I wouldn’t be able to travel anymore. However, I’ve been learning about parents who take their kids traveling around the globe for a year or longer. I don’t think that’s my style. I’d rather visit one single country/region for an entire month during the summer. I call it Big Adventure. Renting a house or apartment for the entire month would be more economical, and we could use that house as a base. During the rest of the year, we could research the country’s language and culture to plan out activities.
After the kids go to bed, I’ll probably be exhausted as well. If not, I’m sure I’ll poke around the internet some more before I pass out.
How would your perfect day go?
Monday, January 17th, 2011
If you’re looking for a inspirational book to read for the new year, consider this one, but read on to see if you like what you’ll learn. In Talent Is Overrated, author Geoff Colvin explores what makes world-class performers different from everyone else.
What is the key to great achievement?
- Hard work?, or
- Innate talent?
Talent vs. Practice
One area where we often give the credit to talent to is musicians. Look at the “kid genius” Mozart, who famously composed his first piece at age 5. Well, Mozart started learning music at age 3 from a pushy composer father who loved to teach (and likely helped write many of his early works). He had been working at music for over 10 years by the time he wrote anything that was widely acknowledged to be of special quality.
In a separate study comparing music students enrolled in elite music schools with those in regular public schools, it was found that the average number of practice hours need to reach the same level of skill was the same for all students. Sure, the students in the elite group were often practicing 2 hours a day vs. only 15 minutes a day for the other kids. But no matter how you clocked those hours, quickly or slowly, nobody got there without putting in the same amount of hours.
Next, let’s look at sports and Tiger Woods. Woods was a prodigy, but he was also an only child to a army-trained teacher/father who started him playing golf at a mere 7 months old. He was playing and practicing on a real golf course by the age of two, and throughout his career was known for his intense practice habits.
The fact is, that almost every study that has looked for evidence of the sort of genetic edge that we call “talent”, has failed to find it. Instead, they find that without exception, every single top achiever has put in thousands upon thousands of hours of practice into their field. In addition, the amount of skill is almost directly proportional to the amount of hours put into it. Terms like the “10,000 hour rule” (as noted in the book Outliers) or the similar “10-year rule” have been created to describe how long it takes before true mastery is achieved.
But wait, lots of people do the same thing, every day, for years. Why aren’t they all awesome? Researchers have also found that “practice” is too vague of a word. Instead, what creates excellence has been termed “deliberate practice”. Deliberate practice is not just hitting through a bucket of golf balls every day.
Read the rest of this entry…
Tuesday, August 3rd, 2010
Here is YASAH – yet another study about happiness. Reader RJ sent this to me via this CBS Marketwatch article, but I highly recommend reading the actual study titled Meaning Really Matters: The MetLife Study on How Purpose Is Recession-Proof and Age-Proof [PDF].
Done as a follow-up to a previous similar study based on the research of Richard Leider, they expanded their targeted group to 1,675 people of ages 25-74. In it, they again found the following common components essential to living “the Good Life”:
- Respondents define the Good Life in terms of the three Ms: Money (having enough), Meaning (time for friends and family), and Medicine (good physical and mental health).
- Living the Good Life is highly related with having a sense of purpose and this in turn is interrelated with “vision” (having clarity about the path to the Good Life) and “focus” (knowing and concentrating on the most important things that will get you to your Good Life).
- Meaning, closely associated with the importance of family and friends, remains the primary component of the Good Life for all age groups, despite instability in financial and other aspects of their life. People plan to spend time with family and friends above all else, regardless of age.
The problem is that there are often so many things in the present distracting and overwhelming us, it can be hard to maintain that sense of purpose.
Wednesday, April 7th, 2010
The Ohio CollegeAdvantage 529 Savings Plan is again offering a $25 refer-a-friend bonus if you open an account and deposit at least $25 by June 30, 2010. You can be a resident of any state, and there are no application or annual fees.
Rated a Top 529 Plan by Morningstar
In a recent article The Best and Worst 529 College-Savings Plans by Morningstar, the Ohio CollegeAdvantage plan was rated in the top 5 plans:
Features they liked included having a wide variety of investment options (including active/passive, multiple age-based options, and even ultra-safe CDs), as well as low total expenses. In-state resident can also deduct up to $2,000 of contributions per year, with excess carryover allowed.
My Personal Experience
So far, I am quite impressed with the Ohio plan. The website itself is functional and fast, there are a variety of investment choices (cash, index funds, active funds), they are upfront with the fees, and the expenses are very competitive – either the lowest or near the lowest in the nation. There are no inactivity fees, minimum balance fees, or other bogus fees.
I have gotten the $25 bonuses plus several referrals, with no complaints from the people I referred. I have also started an auto-debit from my checking account for $50 a month. Right now, half of my 529 is in the Vanguard inflation-protected bond fund. This is an investment option that is unavailable in most state plans. I did an analysis of conservative inflation-linked 529 investment options here.
I feel that since college is only at most 18 years away with a big lump-sum payment, I would prefer less volatility while marching towards that goal. This is in contrast to saving for retirement, where I currently have 35 years until I turn 65, and hopefully another 20 years after that as well.
Referral Bonus Instructions
Currently the newly referred person gets $25, and the referring person gets $50, and I’d love for you to help fund my kid’s college dreams. Here’s how:
- You can enroll online or via mail. The online process was quick and easy, and I didn’t have to mail in anything.
- The first step is to input your personal info and choose a login/password. Next, you’ll verify your e-mail and complete the application.
- After that, you’ll choose your funding amount and select an investment fund. Your initial deposit must be a least $25, and is funded using the account/routing numbers of your bank account. At the bottom, you will need to enter a referral code to get the bonus. Enter 2439350.
- In 1-3 days, your initial deposit will be taken from your bank account, and in 5-7 business days you will get your $25 bonus. The $25 will be deposited directly into the 529 account, and will be invested in the same thing as your initial deposit.
If a child has two parents, one parent may sign-up and then refer the 2nd parent to get another bonus, while both can list the same child as the beneficiary. If your child is not born yet or does not have a Social Security number yet, you can choose yourself or another family member as the beneficiary, and then later on fill out a Change of Beneficiary form.
Here is a screenshot of me getting my $25 bonus successfully and as promised: