Reminder: If you have kids, you need a will

If you don’t care about what happens to your assets after you die, you probably don’t need a will.  Your stuff will be apportioned out in accordance to state laws and people will get what they get, including the government.

But if you have kids, you need to make sure they’re taken care of.  Even if you don’t have much of an estate you need to make sure that if you die unexpectedly that the powers that be know where your kids are going to go.  So they don’t have to enter the foster care system.

You may be thinking, but I have a spouse, if I die or if they die then it’s obvious that the kids will just go with the other spouse.

That’s fine, but what happens if you both die at the same time?  Say you’re in a car accident together.

You need a will.

The will needs to say who is going to take care of your kids and who is going to take care of your kids’ money.  (Which they will presumably get because you and your spouse had life insurance, right?  If you have kids, you probably need life insurance!)

If you have pets, you may also need a will depending on what the people in charge of your estate would do if you died without a will.  At the very least, stick a note in their vet records saying who will take care of your pets should you be gone (and make sure that person agrees!), especially if said person is not your next of kin.  If you don’t have people you can trust, this random website says that a will may not be enough.

Do you have a will?  

It is appliance breaking time!

In the past month:

Our brave little toaster that could (purchased probably for $10 fifteen or more years ago) no longer reliably keeps the lever down.  Sometimes it does if you hold it down long enough, but sometimes I just cannot get it to engage.  So we went on wirecutter and ordered their best rated toaster from Target ($30).

Our refrigerator fan started making chunking sounds again, which usually means it is going to need to be replaced soon.  I swore the last time this happened we would replace it and then *buy a new refrigerator*.  But it’s stopped chunking so we didn’t replace the fan.  But who knows how long that’s going to last.  (Estimated cost:  Who knows!  But probably closer to $2000… which is crazy since our first refrigerator was the cheapest full-size refrigerator at either Lowes or Home Depot almost *20* years ago… currently that’s still under $500.)

Our dishwasher has a new and different problem.  It’s definitely hitting the “planned obsolescence” stage.  This time there’s some kind of spring on the door that has failed and the door can either be all the way open or all the way shut and doesn’t gracefully move between the two states or have the ability to stay slightly open like it used to.  We have no idea how to fix this and even looking into it was pretty gross because the area where the door hinges is corroded and just plain icky.  DH is making noises like it might be time to get a Bosch, though we are definitely willing to wait until they are easily available and we don’t have to worry about people in our house.  It’s on the horizon.  (DH is also willing to put up with this for two years and just sell the house without a dishwasher.)  Somehow it is easier to replace an engine than it is a spring.  (Estimated cost for a new dishwasher ~$1000.)  Update:  After some research, it wasn’t the spring, it was the thing the spring attaches to.  Cost to replace:  $40.

Our microwave has started shutting itself off for safety reasons if we microwave too many things in a row.

It’s hard to know what annoyances we should put up with and what we should just spend the money to replace.  Replacing things also often comes with its own frustrations and annoyances since new things don’t always work and lemons are a pain in the rear to deal with.

Not an appliance:  Our fences are falling apart and last year the HOA made it clear that they’re in charge of the stone (which isn’t falling apart) and we’re in charge of the wood.  DH called 4 places and nobody returned his calls.  Then we got an email from the HOA (to everyone, not just us) saying that fence repairs needed to be made so DH was like, Help we need a fence repair place, do you have any suggestions.  So he got 3 suggestions and called the first two and they came out right away to look at the fence.  And… then they disappeared and we never got estimates.  So now we’re not sure what to do.  I mean, call that third company, but after that.  DH has already walked all over the neighborhood and gotten the names and numbers off actual fences.  He thinks they’re just busy what with Weather and almost our entire HOA fencing needing to be replaced and so on.

On the usefulness of concrete numbers

This post was last modified in 2011!  We’re digging into the deep history of drafts to bring you things!

Remember when our personal finance Mondays were hardcore personal finance?  And not just updates on our own personal finances?

Sometimes it’s hard to visualize what numbers are when the information you are given is in percents, even if you’re good at math.  APR and APY aren’t the same thing.   Amortization, or how loan repayments are structured can make a big difference on the effects of paying off a loan early.

APR doesn’t take into account compounding.  That is, it doesn’t take into account the idea that if you don’t pay off all your interest each month, some of that interest becomes principal and starts accruing interest of its own, compounded monthly.  APY does take that into account.

When we’re talking about prepayment for revolving loans like credit cards or cars it gets even more tricky because the interest is generally calculated every month based on how much you owe at that point in time and you’re usually paying some required amount in addition to the prepayment.

Auto loan at 5% APY => each $1000 you prepay at the beginning of the year is $50/year you’re not paying in interest.  At 5% APR, that’s going to be a bigger difference.  How much bigger?  Well, you could put the numbers into the compound interest formula, or you could go online and plug into a debt payoff calculator and just look at the numbers to give you a realistic idea of how much you’ll be saving each month or each year or the life of the loan or how much more quickly you will retire your debt.  There are a lot of different calculators out there, each one giving you different inputs and outputs, so you may want to play around with different ones.  Here’s one from nerd wallet.

These numbers are different if you’re talking about something structured like a mortgage.  They’re amortized differently.  For that a spreadsheet is useful.  The way mortgages work, the percent doesn’t directly translate with prepayment savings the same way that it does with a credit card or auto loan. Prepayments early on are worth a lot more than prepayments later.  This is because when you pre-pay a mortgage, your monthly payment does not change, instead the term of your loan changes.  You’re paying your loan off earlier, not changing the amount paid each month.  Additionally, you cut more months off with early pre-payments than you do with later pre-payments because pre-payments pay down principal and early in your loan, you’re mostly paying back interest, not principal with your regular payments.  With later pre-payments you’ve already paid off most of the interest and your regular payments are mostly attacking principal.  In order to truly understand the percent savings from prepayment, it is helpful to use a mortgage amortization calculator or spreadsheet. We like the one from get rich slowly.

Looking at the actual dollar amounts can also tell you that something isn’t worth doing because it saves/makes less money than you initially thought it did.  Like that $1K Chase bonus that was really less than $600 when all was said and done, and not worth the hassle of opening and closing accounts and back again.

Has looking at the concrete numbers ever gotten you to change your mind?

What we’re doing for summer: update

The other week we asked you all what to do with our kids for summer and you had some great ideas.

DC2 recently had spring break while I didn’t.  This reminded us that zie reallllly needs more mental stimulation and interaction than what we can provide.  Basically by Wednesday DC2 starting talking and didn’t stop until school started again on Monday.  School has been online all year and it has been great– it keeps DC2 entertained, talking with classmates, and mentally stimulated so we can get normal amounts of interaction at lunch and after 5pm when I stop working for the night.

Meanwhile, we’ve been getting ads for online college credit classes for DC1.  I was irritated to find out that my uni lets high school students take classes during the school year but not during the summers!  What is UP with that?

But there are plenty of programs willing to charge $4K-$6K per 3-4 credit hour class to take either their own special classes for high schoolers, or in the case of Wisconsin-Madison, anything that they’re offering over the summer.  Right now we’re leaning towards C++ at Georgetown, though it is tempting just to do the C++ Coursera not for credit.  We’ve also been considering Intermediate Spanish courses and academic writing.  Vanderbilt has an interesting mentorship program that isn’t for course credit that DC1 may apply to, but zie hasn’t decided yet.  Even though there are a bunch of schools DC1 can’t go to because they require people to be 16 (and zie is only 15), we’re no longer super worried that zie will be doing nothing over the summer.

But, back to DC2 because while DC1 may need to do something this summer for hir own needs *I* need DC2 to do something for *my* needs.  I looked up online summer camps and was a bit overwhelmed.  It’s hard to tell what is any good and what is a for-profit scam.  I did see that the science museum in the nearest city has something, but it is only an hour per day so I wasn’t sure that was going to be enough.  The descriptions for that camp also sounded a bit like they needed more parental involvement than we really want to give.

Then one of our friends who grew up in the midwest recommended NIU– that’s one of the regional universities in Illinois.  Apparently they run some really great summer camps for kids each summer and this year they’re all online this summer, unlike all southern camps that are mostly back in person this year.  An actual university and a personal recommendation?  I will take that.  And it looks like each one is around 4 hours online, with some being 4 hours straight and some having a break in between for projects, which is pretty similar to DC1’s online schooling this past year. They also seem to know what our rising 5th grader will enjoy.  The only thing that sucks is that there’s no creative writing week for 5th graders.  (DC1 has moved on from Bad Kitty fan-fiction to epic fantasy.)

So we did the jigsaw puzzle work with the different options (5th graders are eligible for both elementary school and middle school camps and several camps conflict and several repeat) and signed DC2 up for most of the summer.  There’s about 2 weeks on either end and two weeks sometime in the middle of summer that are unaccounted for, but we can figure that out later or take an actual vacation.  All told it will cost ~$1000 give or take.  But well worth it if it means I can finish an email without being interrupted 5 times.

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I guess I will front-load DC2’s 529 too?

Previously we decided to stop contributing monthly to DC1’s 529 and instead invest a lump sum equal to what we would have invested each month in the time before zie graduated high school.  Once we knew more about hir college plans, we could adjust.

DC2’s 529 we kept investing in monthly as before.  I guess we’d decided not to because we were expecting to pay for DH’s relative’s son’s college.  But he didn’t go to college in the end.  And I was completely wrong about the stock market– I always am!  The stock market is unpredictable.  It’s irrational!  Especially when we have such huge income inequality.  (We will be paying for 2 years of DH’s relative’s daughter’s college though, tuition and fees but not living expenses– she’s recovering from being sick taking this semester off and plans to finish her remaining two community college courses in the fall, then transfer to a state school as an English major.  Hopefully that will actually happen.)

Right now we have too much in cash savings.  Even with the 12K gone for our annual IRA Backdoor Roth conversion.

We could also use a little bit more monthly cash flow to help me with accounting given DH’s continued unemployment.  Another $750/month wouldn’t go amiss, especially since my health insurance costs have gone up $300/month putting DH on the plan and switching from the  the Traditional 403(b) to Roth 403(b) (now that Trump is gone, I’m more willing to pay taxes now) is taking more money out of my take-home pay.

So we could do a lump sum in DC2’s 529 equivalent to what we would put in between now and when DC1 graduates from high school (or some other target date) and then stop contributing until we know what DC1’s college plans are going to cost.  DC1 is currently a second-semester sophomore so two full years would be $750*12*2 = $18,000 and then $750 a month additional for however many months more we want to add.  If we do that, our savings account will drop to a more reasonable level– a standard academic emergency fund (3 months summer salary + 1 month for emergencies) and a little bit more.

Now I just need to get around to actually doing this.  (Which is why this post has sat in drafts for a while.)

If DH suddenly gets employed before I get around to doing this, I might not?  But I don’t know if that is going to happen or not.  After the four interviews last week I’m not sure that there’s anything obvious to set in motion unless we are willing to move.

 

Update on DH’s job hunt

So… about two weeks ago, DH had finished a Coursera and done some exploration of using newer technologies on actual data and decided it was time to actually start applying to companies.  He applied to three (one through a head-hunter that contacted him) and immediately got three interviews.  Then one of his former colleagues who left the company (something about living in Europe) asked him to apply for their company (which just bought a company in the US) asked him to apply to their company sort of out of the blue and that resulted in a fourth interview.  He’s also been talking with friends and colleagues and alumni from earlier times in his life and getting advice and requests for his resume and stuff.  (One guy was like, you must apply for our company, but then DH looked at their job openings and didn’t know what a lot of the words meant, so, he was like, I didn’t see anything that fit but here’s my resume.)

The head-hunter job moved the quickest and did a programming interview last week after the first screen.  And DH was like, I am not going to be able to optimize a sort– I just have not done that kind of thing in at least 10 years.  And the screening programming interview turned out to be asking him to manipulate strings in C++ which… he uses macros for because he’s not just out of college and he hardly ever has to do, and never has to do for work and would never have to do on the job he applied for.  So it’s a very easy task, but he wasn’t able to remember all of the commands he needed in the time allotted.  There was also a sort-optimization problem.  So he was basically like– if they care about this then I don’t want to work at the company because their hiring process is stupid and geared only towards recent grads even for these upper-level positions.  If they don’t care about this, then we will see.  (DH did write me a very nice string manipulation program in C++ back in grad school to help me with my dissertation.  But now he does things like that in Python because apparently it is easier.)  The head hunter wants to have a call with him on Monday (today) to talk about it.  DH is not enthusiastic about this call.

A place one of his former colleagues is working that he’s worked with before was excited about him until they found he lived in a state where they don’t have any current employees.  They said their policy was to only hire people from states where they had at least 5 employees because they didn’t want to deal with the tax hassle unless it was worth it.  They’d thought he lived in the same state as his former coworker.  But look them up again if we move to this list of like 7 states (including MA and DC).  So that was kind of a bummer.

The third place said they weren’t interested in a remote worker for their specific group, but would shop his resume around to other groups.  (And if we ever move to Boston…)

The company his former colleague is at seems like a great fit in terms of the company is basically doing what he did in his last job, but has actual products, which makes DH happy.  He has a technical screen today, and it’s supposed to be on [words related to programming DH actually does as a grown-up], so hopefully that would go well.  He’s a bit bummed out about the previous “coding challenge” where he didn’t finish all of the strings manipulation tasks and not remembering how he did amazingly on the coding challenge for his last job.

So that’s where we are now.  I don’t know what next steps will be.  I hope today’s programming interview goes well because DH seems excited about this particular job and he knows he likes working with at least one of their current employees!

 

RBOC

  • Our credit union started charging $2/mo for paper statements and other paper communications.  Ugh.  Of course, DH notes, they expect all communications with us (including opting out of binding arbitration) to be sent to them via paper.
  • We had Weather that caused vaccines not to be given out for almost a week.  So I suddenly got called up to get a last minute vaccination(!)  When I put myself on the list there were *at least* 20K people in front of me and only ~10K first vaccines had been given out, so I think they must have blasted tens of thousands of people on the list to get a slot before a batch of vaccines expired.  The national guard guy at the entrance would not keep his mask on– either his nose was showing or he was *taking it down to talk to people*.  He was surrounded by other national guard and red cross and so on, so I don’t know what was going on there.  The entire process, including waiting for 15 min at the end took 30 min.  Well, parking took longer, but part of that was me being an idiot.  So… I got my first shot!  Pretty much a month before I thought I would.  Hopefully that national guard dude is not a super spreader, though I assume he must have gotten covid earlier (given his cavalier attitude and the fact we’re in the South) and hopefully still has some immunity from that.  There were also a lot of noses showing among older gentlemen.  I really should have double masked… I’m not sure why I didn’t.
  • Our tax refund this year again went directly into estimated taxes for next year.
  • Last week DH decided to start tapping networks and applying for jobs.  So he applied to three jobs and has three interviews set up now, though one of them is a second stage coding interview since that company set up the first two screening interviews last week (first with a head hunter, second with actual people at the company).  He’s being upfront about us not wanting to move until DC1 has graduated high school.
  • If DC1 weren’t going to be a junior next year, I think we would move for a job for DH.  I would probably take unpaid leave and then go on the market.  I haven’t been very happy with my current situation– basically I was promised a monetary chair something like 7 years ago, but then it was given to someone who had an outside offer instead (fair) and then after zie left for another outside offer it wasn’t given to anybody for years because one of my colleagues sued about how chairs are given out.  Then two colleagues who were hired and got tenure after me and have worse per-year records, lower quality publications, fewer single authored publications, and so on, were given chairs over me because they have higher *google scholar counts* which sure, they got their PhD before I did so their first publications were before mine and have had more time to get citations (and the difference is *not that big*– per year out I have more).  Then the one who does zero service in the department and often cancels class and doesn’t answer her emails, skips P&T meetings when we are voting on tenure without an excuse, signs up for and then skips meeting with job candidates without saying anything, never answers service-related emails, etc. etc. which often results in me doing more service and getting emails from her students since I teach the other sections of her core classes, got a *second chair*.  And I am ready to move on.  I’m done.
  • Though the first straw this past year was when one of my colleagues told a student to report me to the associate dean for partisan speech in class (they were trying to not talk about the midterm review by talking about the first presidential debate and someone made a both sides comment and I said I hadn’t watched the debate but all the commentary I’d seen said it was one sided).  Then the associate dean called in three *random* students from my classes to cross examine them on how awful I am.  Then he reported to the dean who brought it up with one of the students.  Then it went down to the department head who had a fully garbled conversation with me that included asking me if I’d told an entire class that a student had had covid (when I was not aware if this student had had covid).  At which point *I* scheduled a meeting with the dean and associate dean and was like WTF, what is GOING ON.  And found out all of the above and the dean gently told the associate dean that calling in 3 students for an off-handed comment is probably not a great idea.  Did I mention that the colleague who told the student to report me just moved into the office next to mine?  Anyhow, I apologized to the woman who people had said I’d said she had covid after I figured out where that came from (she has a very cute sneeze), and emailed the man who had talked to the dean and associate dean to assure him that I rubric everything and was worried about how he’d checked out of class since that day.  They were both horrified that the associate dean had called them in and said neither of them had reported me or wanted to make a big deal of anything.  Then before I could tell my department chair about the above, it was announced that my colleague had been granted a second monetary chair on top of the first, and the department chair decided who got those chairs so I no longer want to talk to hir.
  • We also want to move to a blue state.  I think I’m at the point where I would be willing to exchange snow for people generally caring about other people.  The Trump presidency and the pandemic have made it much harder to pretend that a lot of people living in our state aren’t as horrible as they actually are.  Yes, they may be brainwashed sheeple, but I’d rather that the brainwashing be in favor of helping others and not so destructive.  I am especially worried about DC2 growing up in this environment.
  • But if we moved earlier, DC1 would have a transition the year that grades count the most and zie would probably end up struggling in classes zie hasn’t been prepared for because middle school is so bad.  Additionally it would be more difficult to get national merit because the cutoff would be higher.  And zie would lose geography diversity points from certain colleges.  It’s only two years, surely we can wait.
  • Though part of me is like, wouldn’t 2 years of high school with a decent English program be worth something?  Not enough I think to make up for the potential negatives.  And there’s no guarantee that other places have decent English either, just different English.
  • And of course, nobody will be hiring for a while and there’s no guarantee anybody will be hiring for me.  So I’m not sure what I’m going to do.  I don’t know what I would do with myself or who I would be if I left academia.  I have no other identity.  It doesn’t bother me that my identity is so wrapped up with my career.  But it would if I had to leave it, even if I were making more money.
  • My department head watches Fox News and before the pandemic frequently stopped by my office to tell me what a horrible economist AOC is (she’s not, that is my official stance as an economist– she is not stupid and she definitely understands labor economics and public finance, she’s just not a libertarian).  The person who got the two chairs is in the same field as the department chair and recently coauthored a paper with my department chair.
  • The colleague who turned me in to the associate dean teaches national security economics but I suspect he is pro-Trump, which seems like… bad for national security.  He’s definitely very in favor of our congressman who voted in favor of sedition.
  • A big reason that I think I need to leave is that I do not like being a person with anger.  I’d rather just remove myself from the situation.  I don’t want to talk to people or fight about this, I just want to go someplace where I don’t know that people watch Fox News (or better, they don’t!) and I can get back to thinking about my work instead of being full of resentment.

Consulting for family?

My sister wanted her boyfriend to hire DH to do some part-time consulting for his business (basically he needed two of his machines to talk to each other, if I understand correctly).  Ultimately DH didn’t because the rate offered was low and would have just been taking out of unemployment AND DH wanted to spend his time upgrading his machine learning and [something directly related to his specific skillset that is easier to do remotely than are his other specializations] skills before tapping his job application networks.

But we thought maybe it wouldn’t be such a great idea anyway and could lead to hurt feelings.

What do you think?  Should family members hire each other for projects?  Have you seen it go well or poorly?  Do you mix business and family?

Ask the Grumpies: How much should one give to charity?

Jess asks:

How do you decide how much to give to charity? I’m not religious so I’ve only heard of the 10% tithe recently and it seems like so much! At the same time, I know a “could” afford to donate 10% while still saving 15% as recommended, so is it wrong not to do so? I am very young (25) and the idea of compound interest has been hammered into me, plus I am reasonably confident I will be taking a pay cut in about a year to switch industries (into one that is better for the world) and move cities, so it feels safer to save a lot while I can.
Right now I’m donating about 2% through automatic monthly donations and so far in 2020 have donated about 2% in one-off donations. I expect to donate more this year given the many extenuating circumstances. Any advice is welcome!

There’s no hard and fast rule about how much you should give to charity.  In fact, in an ideal country, you wouldn’t have to give *anything* to charity because the government would be collecting taxes to take care of needs.  But, we don’t live in an ideal country and really, no country has figured everything out.

There are a couple of things to keep in mind though.

1.  Take care of yourself first.  Keep saving 15% for retirement!  Also make sure that your emergency fund is full, that you’ve got plenty of insurance, and that you have a plan to save for big goals like cars or houses (or job changes) etc.

2.  Just like the tax system, it doesn’t make sense for everybody to donate the same percentage to charity.  Richer people should be donating more to charity and lower income people should be donating less.  We explain why marginal tax rates make sense here, complete with a diagram that we stole with attribution from someone else.  But the main idea is that for people who have lower income, 10% is a huge cut in their ability to meet their needs and wants and is a drastic decrease in their utility (aka happiness).  For a billionaire, 10% leaves them with 90% of their billions, which is still more than any reasonable person should want.  They only get a small decrease in their utility.  Because that 100th yacht just isn’t that exciting.  (And honestly, we’d be better off if evil billionaires would stop getting their jollies by buying politicians and screwing with civil society.)

So… there is no right answer.  Only you can decide.  But as you make more, you should up your % donated, not just the dollar amount.  As you make less, you should cut it.

On top of that, some people have charitable giving plans where they figure out how much and where they will be donating in advance.  Other people (like us) tend to be soft touches and tend to donate based on whatever makes the hurting hurt less, and donate at any point in time based on our finances when we’re asked or read a sad news article or etc.  The former is probably a better way for the charities and a better way to live life, but the latter is how a lot of people do it, which is why we get so much junk mail and so many emotional appeals.

We just did our taxes, and gave about 1.5% of our income to actual 501c3 organizations, but we gave a TON more to political organizations which are not tax deductible.  Does that count as charity?  I tend to think so because I have a strong belief that government should be providing public goods and not, you know, separating children from their families and putting them into concentration camps.  $ to Stacey Abrams will have saved a lot more lives than money to pretty much any charity I can think of this past year.  Not to say that donating to 501c3 charities isn’t important, but political action and political donations are not wasted efforts or wasted money if your end goal is to make the world a better place.  They’re just not tax deductible.

Grumpy Nation, how do YOU decide how much to give to charity?  Has this varied over your income/life?

I lost my indoor glasses and bought some more online

(Not  a sponsored post)

I’ve been having to use glasses sometimes to read the monitor, which is irritating and not a thing I used to have to do.  Since the pandemic, my two newer pairs of glasses have been hanging out in each of our cars (since I’m no longer legal to drive without glasses) and I’ve been using an old prescription for working at the computer.

A few weekends ago, my old glasses just *disappeared*.  I hadn’t left the house. Nobody had left the house!  But they’re just gone.  We did a thorough search of the house (including the kids) and it’s been weeks and they’re still missing.  Just *poof*.  Gone.

My other back-up pair has lenses that are so scratched that I’d rather just squint.  And of course, DH has a different prescription.

So… I ended up going to zenni optical and buying a couple more pairs of glasses.  To be honest, they’re not as good as my lenscrafters glasses, which tend to be perfect (whenever I need a new prescription, I wait for a conference and go to the same place I went in graduate school!)… I don’t think I get the pupil distance quite right.  But they’re cheap!  About $12 for no frills all told, and $31 all told if you include fancy add-ons like blue screen blocker.  And they’re not terrible, especially if I get a pair that I can perch closer to the tip of my nose when using the computer.

I did determine this time around that you can subtract 3 from the pupil distance to get something more optimized for computer use.  So I put in an order for a pair with a slightly varied pupil length and blue blocker ($28).  It hasn’t come yet, but I need a Monday money post, so… But my hope is that it’s just the pupil length that hasn’t been quite right, since that doesn’t come with the prescription but is something needed when buying glasses.

Anyhow, getting a pair of glasses at lenscrafters is at least $100, sometimes closer to $200, not including the prescription.  With zenni optical, I can afford to make mistakes and try out different things.  Especially during a pandemic where I can’t really go to an expensive place and get fitted anyway.