Feeling like a jerk about money

If you will recall, DH and his family go on a family vacation each summer.

This year at the end of the trip, they talked about where to go next summer.

A first suggestion was an East Coast beach tourist destination (not Florida).

This year we paid for the house and our travel and a portion of the food.  DH’s parents mostly paid for the rest.  But the house was cheap because it just doesn’t cost much to Air BnB a house in a state capitol in the summer.  So total was something like $2,500.

East Coast tourist destinations are expensive and far away from the Midwest (except Florida, which is relatively cheap but still far away).

Another suggestion was a popular midwestern summer destination heavy on theme parks.  Some of us would fly but some of them could drive.  But the group houses there are expensive!  I don’t feel like we could foot the entire bill like we did this year, especially since we’d probably be staying longer than three nights.

Neither of DH’s siblings asked about defraying the cost of lodging this year.  We wouldn’t have let them contribute this year because it wasn’t a big deal, but if we’re talking about a more popular tourist destination, the price goes up.  BIL has a good union job with a SAHW and a house that’s bigger than ours (glassdoor suggests a salary ~$90K, but who knows).  SIL’s family makes over 100K now (she’s a teacher so her salary is public and MIL said her husband is now making more than she is with his latest raise– I am so crass!).  Of course, BIL has paid for his wife’s family to go with them on a second trip to Disney World.  SIL is financially supporting her husband’s family in many ways.  So income is not the same as disposable income.

DH had been thinking that next year they could all gather in BIL’s hometown, which is an hour or so away from SIL’s.  But it sounds like they want to do something more exciting.  Which means we have to think about how much of the cost we’re going to defray and what we’ll let DH’s parents pay.  And… I think it’s really unlikely that either DH or his parents will ask his siblings to contribute unless they decide to get separate hotel rooms instead of renting a house.  And I think it’s really unlikely that his siblings will even think of offering.

What is wrong with me that we can’t just give a gift without me expecting some gratitude or acknowledgement?  I think in this case, it really is the money.  We can handle nobody knowing or caring that we paid for a lot of this summer’s vacation and other previous summers, but once they start talking about more and more expensive places without chipping in (to be fair, DH’s parents do offer to pay for the entire thing and have paid for whatever we don’t pay for in the past, or to be more accurate, with the exception of this past year they pay and we contribute) it seems like a bit much.  We can fix that in the future by saying we can contribute X amount during the planning stage, so it’s unlikely to be a big deal going forward.  I don’t think DH’s parents would spend so much on one of these family vacations that it would jeopardize their retirement, so we shouldn’t be worrying about that possibility.

Anyhow, I feel like a jerk about money.  We do still make more than the rest of DH’s family.  If we don’t offer to contribute, DH’s parents will pay for everything.  As far as we know, they’re not in danger of running out of retirement money.  This shouldn’t be a problem.  And yet, I have to admit, I’m a bit annoyed.  But we will probably continue this way unless and until some negative change in DH’s job situation.

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Ask the grumpies: How will the Republican tax thing affect charitable donations?

FGA asks:

Because I no longer have mortgage interest as a deduction, it actually was better for me to take the standard deduction. My charitable contributions were no longer deductible even though it was many thousands of dollars. I am frankly worried about how this will Impact nonprofits moving forward. Grumpy thoughts?

It should discourage charitable giving because there will be fewer taxpayers who will find it in their interest to itemize, and also with marginal tax rates down etc. the savings for people who itemize will also be lower.  If you’re getting 25 cents back instead of 33 cents, for example, you might be less likely to donate.

I’m not a tax economist, but there are actual tax economists who have predictions, including this article from the Urban Institute/Brookings tax center that has estimates.

There are a few complications of course.  Fears of the future, beliefs about what the government is or isn’t funding compared to what needs funding, and just how the economy is doing will all effect giving, even in the absence of the tax cuts and job act.  Additionally, the increase in donor advised funds has made it more beneficial to put money in the fund all at once to get a tax break and then to hold onto it before disbursing as it gains money.  It made sense for a lot of people who were going to be losing their mortgage deductions to put money in DAF before the tax law went into effect.  I don’t know if that actually happened though.  I assume sometime in the next year or two academic economists will be trying to sort this all out.

I’ve certainly increased my charitable (and political) donations because of Trump, but definitely not because of any changes to the tax code– all of our donations are going in without any tax breaks.  Which does make it easier to donate to places that aren’t tax-exempt (political non-profits, for example).

What’s your shopping style?

There are a lot of ways that people shop.

Some people always have their eye out for stuff.  They’ll shop regularly and keep their eye on things that they want and wait until they’ve dropped enough in price to be worth buying.  They’ll know when the sales are and swoop in.

Similarly, some folks regularly visit yard sales and thrift stores and craigslist or ebay or facebook etc. to browse and buy.  Or they’ll browse freecycle or their local buy nothing group.

Other people will buy things strategically.  They’ll decide what they want and then shop for it.

Some people do a lot of research before buying, some people do enough research to satisfice, some people do no research at all.

Some people buy and return, others won’t return at all and will either hold on to a bad purchase or pass it along/donate it.

Some people are willing to pay full price if it’s what they need when they need it.  Others only buy when there’s a sale or a coupon or some other way of getting a deal.

A lot of these differences are differences about how money vs. time (and mental load) are prioritized.  If you’re really busy, comparison shopping and regularly browsing for sales and deals just isn’t going to be worth the time it takes.  If you’re strapped on money, you may be more willing to wait for a deal.

Another concern is ethics– it may be worth it to spend time shopping second-hand if you care about the environment.  It may be worth paying more for a high quality product from a country that does not exploit its workers.

And some people just enjoy the process of shopping.  Some people hate it!  Some people are fine with online shopping, others enjoy going into stores.  Some people have to see an item in person, while others are ok with buying online with limited information.

My shopping style is to put off buying something until probably after I should, and then buy a whole ton of stuff that I need all at the same time.  I don’t shop for fun except for books and fancy food shoppes in the city (including Whole Foods and Trader Joe’s– if we had a Trader Joe’s in town it probably wouldn’t be enough of a novelty to make it fun).  When I was in college I hung out with people who shopped for fun, so I did do some of the waiting for dresses to drop below my price point, but these days I buy clothing at whatever price it is set during my every other year outlet mall trip.  (When I do try to buy something online without my colleague-personal-shopper it usually ends up being ridiculous, except for shoes where I go to a fancy european store and let a shoe salesperson talk me into whatever type of shoe needs replacing.)

What is your shopping style?  Has it changed over the years?

Ask the grumpies: When to get a fee-only planner?

Ali asks:

When does it make sense to get a (fee only) planner?

Disclaimer:  We are not professional financial advisors.

I think the answer to this question is going to vary a lot.  I think most people don’t actually need one if they are making a reasonable amount and managing to put away 15-20% of their income away for retirement.  Those folks can just use a low-fee index-based target-date fund, continue paying down their mortgage (on schedule or early), and doing whatever system they use for budgeting shorter-term needs.  There’s just not much there that a financial planner can add that will be better than the basics, and unscrupulous folks can give so much worse advice (hence the (fee only) that you mention in your question).

People who are low income generally can’t afford a fee-only planner.

In some cases, I’m not sure if it would be better to get a financial planner or an accountant or lawyer who specializes in your particular problem.  For example, say your parents die and their finances are a tangled mess.  You might want a forensic accountant or to hire someone from a team that specializes in this kind of untangling (my mom says she plans to use Charles Schwab should my father pre-decease her).  Or let’s say you’re obscenely wealthy and interested in cheating the tax man– a tax attorney seems like the best bet for finding and exploiting loopholes.

Money Under 30’s perspective on this question.  Here’s smart-asset on the different kinds of fee-only financial planners.  Here’s the simple dollar’s answer to this question.

The Simple Dollar’s post seems the best of these three to me, though I have some commentary on it.

1.  I think that yes, it makes sense to hire a financial planner for a limited number of sessions (so not as a % of assets, and not as a retainer) to develop a retirement plan when you’re nearing or in  retirement.  They can tell you how to best withdraw your assets, any rebalancing you should be doing, and how to best deal with the spousal issues involved in claiming social security.  You can find all of this out yourself, but it’s complicated and is probably worth a $1K one time fee for many people.

2.  Starting a family– I don’t really see this as a good reason to hire a financial planner.  If you’re super wealthy, then you’re going to want to be talking with a financial lawyer to get trusts and things figured out.  The point that if you’re joining finances– that again seems like something you should be talking to a lawyer who specializes about.  I don’t think a financial planner will be much value added for most college savings plans either– $1K or more seems like a steep fee to be told which 529 plan to use and to put numbers into a “how much should I save” calculator for you.  The answers won’t be any better either.  Maybe if you’re high income there will be some good advice about how to game the system, but a financial accountant may be better able to help with that.

3. You’re a high earner.  A financial planner may be able to help… but a good accountant will probably be able to help more.

4.  Self-employed.  See #3.

5.  You have high net worth.  See #4.

6.  You have a specific planning need.  Maybe?  But again, having a child with long-term special needs seems more like a lawyer thing than a planner thing.  But perhaps a lawyer in conjunction with a planner (one to set up a trust, the other to talk about … how to fill the trust?  I don’t know.)

So… I guess my best suggestion is if you feel like you need one as you’re approaching retirement, go for it.  Don’t set up a long-term relationship where they get 1% of your assets each year though.  Just get things figured out.  For the other things, think about if you need an accountant or a lawyer instead.  And if you don’t know what to do or who you should hire for your specific situation, I think my first step after googling would be to make a bogleheads account and ask on their forums.  They seem to give really sensible advice, better than many financial planners, and it is free.

Grumpy Nation, have you ever used a fee-only planner?  Was it worth it?  When would it make sense to you to get one?

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Being asked for money

Although we have given money to family before, we’ve never been asked for money before.  There have been little things like school and other charity fundraisers and political candidates, but not requests for spending money.

Usually instead what happens is relatives will have had a tragic event and set up a gofundme or they’ll get married or buy a house or have a baby or we’ll hear through the family grapevine about some need and we’ll send a gift-card or a check or buy something off a registry.  We have also offered to pay full college expenses for the kids of one of DH’s relatives, though there’s not been much take-up of that.

Recently we got asked for a short-term (two week) loan from a low income relative, $200-$300 in exchange for a post-dated check to be cashed after the next paycheck (usually this relative is able to get an advance on the next paycheck, but the person able to do that was out that week).  There’s a long list of reasons why this relative isn’t quite making pay-check to pay-check ends meet, and they don’t have credit cards or the ability to borrow more from their house and I think it’ll be a few years before they can declare bankruptcy again.  There’s a lot of problems with previous mismanagement (and there’s still a heavy smoker in the family… but cigarettes are less expensive than Nicorette), but the big thing is really that there just isn’t enough income or opportunity.  When there’s overtime or side-jobs, they make it paycheck to paycheck, but when there isn’t they just run up perpetually short.  They’re reminiscent of delagar’s series on poor and middle-class in the US, but on the low end– the line between poor and lower-middle-class.  Usually they lean on other family members who are also low income (and get leaned upon by the same local extended family), but those sources, too, must be tapped out.

Obviously we’re not going to be dealing with loans to family, so this would be a gift.

We are of the minority in the US who can easily come up with $500 (or $400, or even $1000, depending on the study that you look at) on short notice.  So even with our extremely expensive summer (and even with me not getting paid over the summer), this is not a hardship for us.  We’ve certainly made enough mistakes this summer that cost over $500.

But it’s uncomfortable.  It’s uncomfortable because we remember times in the past when $100 was not a hardship, but still a sacrifice for us and sending $100 to buy groceries ended up becoming a game system for them instead (and DH wanted a game system but we didn’t feel like we could afford it yet… we were still saving up for a w/d).  It’s uncomfortable because this is a large extended family– one request from one person is not a big deal, but if word gets out…  It’s uncomfortable because $200-$300 isn’t going to really make any difference in the long run.  There’s still going to be that gap in income and expenditures and that gap is not going to shrink.

It’s uncomfortable because of what it means for the future.

Sometimes giving money makes things worse because it enables people to get into even bigger holes by taking risks they shouldn’t be taking (to take a previous real example, replacing an old car that ran just fine with an expensive new car that then got repossessed when they hit bad times).  And, of course, that makes us uncomfortable because it puts us in the position of feeling squicky about “worthiness”– who are we to judge, and yet… we don’t want to make things worse.

So we (mostly DH) made peace with all of this and said no problem, but that a check was unlikely to get there in time, what did they need the money for, gas and groceries or what?  And because it was gas and groceries for the week we sent a Walmart giftcard for $249 (since $250 triggers additional fraud protections) which was cancelled by Walmart’s fraud service team in the middle of the night anyway because I guess they caught on to the $250 minus $1 trick.  So we had to call up and get it reprocessed, which it is still (as of this writing) in the process of doing, but presumably it will be done before a check could have reached them.  So, if you are attempting to send a walmart card to a needy family in a short amount of time, maybe stick with denominations in the $100 or less range.  (If the money was needed for something else, we were going to see if hir bank took Zelle, or if we could pay a bill directly.)  We also sent a check for $50 in the off chance it can get deposited before the outstanding checks zie’s written overdraw the account.

Then the next question is whether to allow the relative to send a check that we then tear up or if we say not to bother sending a check.  DH is in favor of complete honesty, but I’m torn between 1. thinking how zie wouldn’t have a -$25 balance in checking right now if zie thought zie had $299 less in there and 2. knowing that a lot of people really hate it when checks haven’t been cashed because it screws with checkbook balancing and 3. knowledge that the belief that the check will eventually be cashed won’t last very long and might screw with mental accounting in the wrong direction later.  We will no doubt go with the honesty option, but perhaps not until after the check has been sent.

Do you get requests from family for loans or gifts?  How do you deal with them?

In which the contractors came and went: Step 2 of the kitchen process

white kitchen with green gingham wallpaper, crappy countertops, and lots of green gigham accents

Where we started.  We did paint over the wallpaper many years ago.

The contractors came.

kitchen getting ready for countertop removal with tools

DH put the blue tape over the sink to remind himself that the water is off!

They took off the old ugly countertop.

The sink area sans countertops. Back of a gentleman working on a countertop removal.

One of our big hopes was that they’d be able to keep our fancy glass cabinet/tea nook (formerly microwave nook). They were.

drawers with counterop removed, showing green gingham shelf liner. Impressively the board for the tea nook remains unscathed.
Then the started putting the countertop on.  This was one piece with no seam.

Here you can see the other part of the countertop came in two pieces.  They matched up the seam really well and you honestly cannot tell here.

Here’s it all together with the sink put in.

There’s another seam in the middle of the stovetop, but you can only tell if you specifically know to look for it.  After the countertop, they moved onto the stovetop, though they did not actually connect it.

The next day the plumber (eventually) came back and hooked up the stovetop for us.  (Note in this picture and the next two that there is a drawer that no longer closes.)

He also put the faucets and garbage disposal in.  (I vetoed a soap dispenser because I hate not being able to see if something is empty and I also hate cleaning soap dispensers, so they didn’t drill a hole for it.)

  Here’s how it looks now.

We’re not done yet.  We need to shorten or replace that drawer so it closes.  We need to replace the gingham knobs and get new shelf liner.  If it were just me, I’d go with brushed metal knobs and plain white shelf liner, but DH wants to be more interesting in our middle age and so we’ve ordered 14 sample knobs of various dark blue on ceramic from home depot ($51, but I assume we’ll be able to return the ones we don’t use) and a bunch of one dollar shelf liner paper samples from Houzz.  There’s also some gold accents we’d like to replace with brushed metal.  And that little water tap is dangerously powerful– if we had a party, someone innocently eating cheese and crackers would get drenched when someone else tried to get some tap water.   I haven’t done a full accounting of how much all of this has cost, but for posterity’s sake, I need to note here that the plumber did $400 of additional work (on top of the turn-off/hook-up fees), adding and replacing valves before the countertop people came in.

So this is not the last post– a future post will have a final picture with better lighting and no green gingham in sight.

What do you think, grumpy nation?