The Moment I Realized I'm Smarter Than My Parents

Just when I think my parents are starting to get it, they go and do something monumentally stupid. Yesterday my dad told me that they'd just put in an air conditioner for $16,000, courtesy of a loan from the electric company. He was so excited to tell me all about their "great" interest rate.

You know what a "great" interest rate is, Dad? ZERO.

That's what I should have said. Unfortunately I'm only quippy after twelve hours of thinking about it. I did tell him that the definition of "not being able to afford it" was that you couldn't pay cash for it. He said, "Oh, I see," in a condescending tone that told me if he'd been standing next to me he would have patted me on the head.

The stupidest part of the whole thing is that they probably won't hardly use the thing. They live in the Seattle area. No one there needs an air conditioner. They've lived in the same house for over 20 years, and they never needed an air conditioner before. What kind of logic suggests that they would need one now, and need it so badly that they had to get a $16,000 loan to get it? It defies the imagination.

That puts their debt up in the neighborhood of $50,000, not counting the stuff they've co-signed for me and my sisters or the mortgages on their house and rental property. They're just completely in love with debt. I so SO do not understand it, and I'm to the point now where I think they may never learn.

The thing that really grates on me about this is that I've been sending them money by the truckload lately, and they're just taking it and throwing it down the drain at payments for crap they don't need. I know I owe them the money - it was never really mine to begin with, and they can do what they want with it - but it frustrates me to no end to know that I'm sending thousands of dollars to people who are going to piss it away. The next thing I know they'll decide that they "need" new car smell in their life.

Good thing Battlestar Galactica is on tonight. I need something to distract me.

Why 33 Cents?

Yesterday my mom called and asked me why I'd sent her $419.33. I wondered how she could possibly forget that I owed her almost $10,000 and was paying it back, but I answered that it was her payment for the month. She said, yes, but why 33 cents?

Apparently she still hasn't grasped the concept of "every penny counts". I've told her how I'm snowflaking everything I save/earn and giving it to her at the end of the month, but apparently she didn't think I really meant everything. Like, to the penny.

Overall though, she's been doing better at paying attention to finances and paying off debt. She started listening to Dave Ramsey on the radio, and I think hearing it from him rather than me has helped a lot. She's called me a couple of times to ask a "what would Dave do" question and tell me she's going to revisit her bills and she if they're paying for things they don't use, so I know she's thinking more about finances and taking steps in the right direction. She didn't jump in wholeheartedly from the beginning like I did, but everyone's different, and she's picking things up slowly but surely. Hopefully one day she'll call me with a question or comment about paying cash for a car.

*Sigh* Mothers are so hard to train.

Money Won’t Solve Everything – Sometimes You Need Someone to Care About You

My grandma has the beginnings of Alzheimer’s, so she often says funny things that don’t make sense or tells the same story several times in one day. It’s a sad disease, no doubt, but Grandma is just so darned happy-go-lucky that we can’t help but find amusement in it. My family often jokes about the things, but in all seriousness, her situation has gotten me thinking about things I haven’t thought much about before.

In my mid-twenties, I haven’t thought a lot about my old age. It’s just too far away to comprehend right now. Between my grandma and the financial thinking I’ve been doing lately, however, I’ve realized that I will eventually get old, so I’ve started to plan for retirement.

I’m not married, but even if I do get married someday, I will probably not choose to have children, so there’s one question on my mind that all of the financial planning in the world can’t answer. Who will take care of me when I’m old?

We’ll all need someone to take care of us. I’m not talking about the care that a nurse or other professional would provide. I’m talking about someone to listen to us tell crazy stories or remind us which relatives have passed away. My mom, my dad, my sisters and I provide this type of care for my grandma. We call and visit, and we’re there for her for the little things, like hugs and picnics and jokes we’ve heard a million times.

With all that’s been going on with my grandma, not long ago I asked my ten-year-old niece if she would take care of me when I’m old. I was half joking, but she happily agreed, and told me that she would pick out my home and listen to me tell the same stories over and over. Lord only knows what life will bring on over the next 40 or 50 years, but it’s nice to know that someone will be looking out for me when I need it the most.

What about you? What questions have you been wondering about lately? What issues do you have that money won’t solve?

Parents and Finances: What Do I Say?

I mentioned last week that I had a frustrating financial conversation with my mom over the holiday weekend.

A little background:
My parents have always been okay with money. They make about $75k a year between them, they have no car payments, their mortgage is only about $850 a month (with 8ish years left), and they have enough saved for retirement, but they have $35k on a HELOC. After listening to me ramble about personal finance like it was going out of style, a couple months ago my mom asked me to show her how my budget worked and how to set one up for herself. The first thing I did was ask her to think about what was important to her and what goals she wanted to set, but she sort of dismissed the idea and just wanted to do the budget. I walked her through the rest of the process and I've been giving her advice little by little (when asked) ever since.

Then this weekend she asked me about her savings accounts at credit unions. She has two savings accounts at two different credit unions, but doesn't use or need them for anything specific. She puts $25 a month in each of them to keep them active so that if they have an emergency and need to buy a new car, they can get a good rate from the credit union.

Basically she wanted to know if $25 was a good number to put in there, but there were so many things wrong with the whole scenario, I hardly knew where to start. All I could think was, EMERGENCY THAT WOULD FORCE YOU TO BUY A BRAND NEW CAR ON SHORT NOTICE????? Are you kidding me??

Of course I didn't say that. I tried to be polite and tactful about pointing out that she not only didn't need to buy a brand new car, but that she also didn't need to get a loan for one, and that there was no emergency that would FORCE her to do this, but the conversation quickly devolved into pointless arguing. Mom said that "at their age" they would never buy a used car again, and I said that the entire point of any of this was to not go into debt. I told her I couldn't understand what kind of emergency she was even talking about. She said a car accident. I said that's what insurance is for. She said they won't pay enough to cover a new car. I said they don't need a new car, and the argument went in circles from there.

I don't know if I'm not explaining things right or if she's not listening to me, but somehow the message is not getting across. I kept obsessing about this conversation for the next few days, trying to figure out what to say to her.

In the end I think the root of the problem is priorities. She and my dad have not sat down and figured out what their financial priorities are. They say they want to retire early, remodel their house, and buy a new car or two, but they already have $35k in debt. At the rate they're paying it off, they'll finish the same year they want to retire, and that's without buying any new cars or remodeling the house. If they do everything they're talking about but don't give up anything else to do it, they're on pace to be in debt when they retire, and I can't figure out how to get them to see that.

It's very frustrating to have them ask for my advice and then not take it. I know that I can't make them change their behavior, and that they're predisposed not to listen to financial advice from their daughter, but I don't want to give up trying to help them. I'm going to visit again for Christmas in a couple weeks, and I'm sure personal finance will come up in a conversation at some point. I want to say something that will spark a realization, but I don't know what that is. Any suggestions would be greatly appreciated.

Time Flies When You're Not Spending Money

Whew! Where did the week go? I spent Thanksgiving weekend at my parent's place, and I thought I would have time to post while I was there, but intentions got me nowhere. Things were hectic (but fun) and being away from home put me off kilter. I'll be sure to let you guys know before I leave the next time a take a trip so I don't leave you hanging.

I still feel like I'm playing catch up after being gone. I looked at my budget last night, entering a few receipts from my trip and finalizing the numbers on some of my variable bills. I feel like I've spent a ton of money lately, but that's mostly because I've been buying Christmas presents.

Besides gifts for other people, I did a really great job of staying on budget over the weekend, especially on Black Friday. I ended up not spending a dime on sales that day because there wasn't anything I was particularly interested in, but I did still go so I could keep my mom company in line at 3 a.m. There were a couple of things that I might have bought in years past, but they were more than I'd planned to spend, and I didn't really need or want them that much anyway so I resisted. Now I'm really glad I did because I can snowflake that money to my debt.

I did have one frustrating financial conversation with my mother that will probably merit it's own post, but all in all it was a good trip and I'm glad to be back.

Two Reasons Why My Frugal Self Will Still Participate in the Black Friday Madness

This year will be my first Black Friday as a frugal gal on a budget. You might think this would deter me from participating in the usual madness, but no. Here’s why.

Family Fun and Togetherness
There’s nothing like sitting on cold concrete in the middle of a line wrapped around your favorite electronics store at 3 o’clock in the morning to bring the family closer together. Black Friday has become a tradition in my family over the last few years, and I really look forward to it. We plot out a game plan the night before and then attack the sales like a well-oiled machine. The real challenge of the whole experience is attempting to retain some sense of dignity as we (politely) shove our way to the goods among the throng of frantic shoppers.

Great Deals
There are the usual deals on big ticket items like video game systems, big screen tvs, and computers, but my favorite Black Friday items are the simple pleasures. There are always a few small gems to be found for the best price of all: free. I’ve gotten lots of paper, CD-Rs, DVD-Rs, jewel cases, and small electronic accessories like microphones and thumb drives over the years. It can be a bit of a hassle to obtain them, and sometimes they aren’t items that I really need (this is how I came to own a purple lava lamp), but spending time with my crazy family makes it all worth it.

So this Friday I'll be lined up outside a major electronics store to score some sweet deals on free stuff and gifts for the holidays. The only thing I'll wish is that my family had flown South for the holidays, rather than me flying North; 3 a.m. is a lot colder in Seattle than it is in LA.