February 2010

We saw our Money Guy last week which was mostly depressing because there’s not a lot to talk about these days.  He suggested that when i’m back to work we should figure out a real retirement plan for us.  He said, you know, like decide what age you would like to retire and we can figure out a plan around that.

Boy that inspired some deep thinking.  Because the first thing i thought, like probably everyone does, is that i want to say “take this job and shove it”, retire early and take those month-long trips to exotic destinations.  But I also have an infant in the house which means realistically I’m on the Freedom 95 plan. 

Honeybunny asked me, can you retire when you still have kids in the house?  I’m like, I dunno, what do growing boys need besides lots of food and a bedroom?  It’s conceivable that if they go to university in Halifax they could live at home.  And I’d love to help them out that way but maybe I would need a job just to cover the Costco food bills.  I can’t think that far in advance.  I can’t imagine Leo forming words yet, let alone studying Anthropology.

And then I think about work and I know I’ve been away from it for  a while on maternity leave, and heck maybe that gives me perspective, but I kind of like it.  I’ve always enjoyed what I do.  Sure there are nutty days and crazier managers and intense situations but isn’t that life?  If I found the ideal retirement cottage on the beach thinking I’d just ridded myself of crazy managers forever, wouldn’t I just discover that my new neighbour is as crazy as a bag of hammers?  That’d be just like life right?  You never avoid the crazies forever, you think this is a free ride

The other questions I ask myself are – am i healthy at 65? Am i doing a job i love? Can i follow my interests like i would in retirement? Does my job allow me flexibility to travel? Maybe not the exotic month-long trips, but what about a well-planned 2 week trip, would that be enough?  If yes to all those, why rush to retire early?

And I look at my family.  My Grandma Fox for example, was a hard-working woman.  She did her part to run the farm when my Dad and his 5 brothers were growing up because there was no shortage of work before handy things like electricity.  She had her own business after the kids left home, she ran a diner in a small town in BC.  Then she went to Vancouver and became a practical nurse, worked for years at the Vancouver General.  Then at 65 they told her to retire and she wasn’t ready.  So she used her nursing skills and worked night shift at a Seniors home near Granville Island. 

She didn’t have a touchy-feely bone in her body and we used to laugh at her stories of helping the seniors get up in the morning before her shift finished.  If someone didn’t want to get out of bed because they were feeling lousy or depressed she’d say, Get outta bed!  No one cares that you’re feeling sorry for yourself, get up!  That wasn’t the funny thing, the funny thing was that these folks were usually 10 years younger than she was.  She worked there until she was 75 and then they told her to retire.  At 80 she took up painting because she was bored.  She lived to be 94.

And just to remind me that Grandma Fox is not an anomaly, my Dad is in his early 70s and is also still working.  He stopped for a while after his first retirement but now he’s on his 4th or 5th career.  And guess what, he mostly works night shifts.  The best part about his job is that it funds month-long exotic journeys.   He and Mom have been to places I haven’t even gotten interested in visiting, yet.

So maybe I don’t get to choose to retire.  Maybe it’s in my genes to keep working until they kick me out.  Maybe my boys will be able to live at home and enjoy huge Costco-provided meals until they have their PhDs.  I’ll warn them that their mission is to find the perfect job they can do until they’re 75.  And to feel free to change careers until they do.  And better yet, it should be something they enjoy doing at night.

So I’ll tell my Money Guy that we don’t need to make retirement plans.  I’ll be too busy working.

A lovely quote from the Dalai Lama I noticed in my friend Rosie’s blog:

“I am nothing special,” the 14th Dalai Lama said, “but I’m warm hearted, and my mental state is quite calm.  Real healing power is a compassionate heart.  It reduces stress, and blood pressure, improves digestion, allows one to sleep soundly.”

My friend is in the midst of making a decision about moving to another place.  And I’ve been watching my own reactions to it, pretty entertaining stuff.  Because of course I’d miss her like hell but I’ve also been reacting to it from the belief that there’s a right way to make the decision.  Thinking, here are all the ducks that *should* be a row before a decision like that is made.  It’s like I believe there’s a perfect way to make a big decision.  What a load of horse puckies. 

And it’s funny because I’m one to talk, I’ve moved cities on a flyer.  Before I came to Halifax I’d visited all of once.  And look how that turned out?  Still here, still lovin’ it – but I want to continue loving it with my friend.  So I realize I’m being over-protective which is cute and annoying, especially for her I’m sure.  It’s also making me examine this knee-jerk response about there being a “right” and “perfect” way to do anything. 

I’m reading an odd book called the Disappearance of the Universe and came across this:

Do not feel bad when you temporarily lose your way….The myth of living a perfect life in terms of behavior is self-defeating and unnecessary.  All that is necessary is to be willing to receive correction….The jet airliner is always going off course, but through constant correction it arrives at its destination.  So will you arrive at your destination.  It’s a done deal; you couldn’t screw it up if you tried.  The real question is, how long do you want to prolong your suffering?

It’s true, there are so many choices we make every day.  You make a choice and then another one.  There is plenty of opportunity to adjust.  And adjust.  And adjust.  And sometimes making what appears to be a “wrong” choice can turn out well in the long run. 

I moved to Halifax to continue a relationship with a guy and then bailed after a year of living here.  I felt completely unmoored.  I didn’t know what to do.  I didn’t want to move anywhere else but hadn’t been here long enough to feel at home.  Moving here didn’t feel entirely wrong – I loved being near the water, I had a funky downtown apartment,  a decent job and the start of some good friendships.  But I felt so unsettled that it didn’t feel entirely right either. 

But over time it changed.  This is where I met HoneyBunny and I wouldn’t have met him if I lived anywhere else because he’s not going to leave.  He knows a good spot when he finds it.  So are there really any “bad” decisions?  Or decisions that just haven’t played out yet.  Or decisions we haven’t learned a lesson about yet. 

I should have learned from my move here that sometimes decisions are neither right or wrong, they can feel both and you just have to let them run their course.  I’m getting to learn that one all over again.  Which seems to be how the best lessons come to me – repeatedly.   So I’ll stop being so protective of my friend, keep my mouth shut, be supportive and tell her how much I’ll miss her any chance I get.

I’ve been thinking more about finances since writing  this post and I even read a money book too.  I’ve been self-reflective about money since I’m on maternity leave and not making a real pay cheque.  I’m thinking back to how I was living when I was blissfully unaware of any existence other than having money dumped into my account every two weeks. Lately I’ve been thinking back to my history with money since I started working for the Man. 

I lived slightly beyond my means for a long long time.  There was always a balance on my credit card, sometimes a big one, sometimes less, but that interest just kept being piled on.  It was HoneyBunny, who’s much better with money than I am, who challenged me to get rid of it once and for all.  And I knew it made sense number-wise to not carry a balance but I didn’t realize how it would make me feel.   I liked buying stuff and I didn’t like the thought of  “depriving” myself of all the awesome things I “deserved” and figured that that justified the debt.

But you know how the skinny chicks say that “nothing tastes as good as skinny feels”?  Well the money version is that “nothing you can buy feels as good as debt-free feels”.  It was like a load came off my shoulders I didn’t even know I was carrying.  I hadn’t realized that credit card debt was one more thing to feel responsible for.  It was something that needed to be done,  and feel a little bad about.  But I paid it off and the tension was just gone. 

And I saw clearly all those times I bought something and thought it was amazing and then by the time the credit card bill came in and I didn’t have the money to cover the purchase I wondered why I bought it at all because I didn’t think it was so amazing anymore.  And felt lousy because I couldn’t pay my bills.  I was the queen of consumer and debt remorse. 

So after being debt-free for a while I realized that I got a perverse pleasure in *never* giving the credit card company money for interest.  Sure, they still got their annual fee, and it’s a good one because I collect travel points, but never any money for interest.  Take that Royal Bank!

The biggest change I made was putting a stop to impulse purchases.  I worked across the street from a mall at the time and I’d go there when I had time to kill or just needed to wander at lunch.  It’s funny how the simplest money strategy is to find something else to do than shop.  Because  I would inevitably find things I’d want and I’d get excited.  The case of the gimme’s would be overpowering and I couldn’t whip my credit card out fast enough.  So I stopped. 

I decided that even if it meant taking a special trip back to a store the next day I would put 24 hour mental hold on whatever I was yearning for.  And I discovered that most of the time  the next day rolled around and I didn’t even remember that gotta-have-it potential purchase.  It couldn’t have been that great right? That one strategy saved me so much money and also kept my closet from over-flowing. 

But I’ve realized that since becoming debt-free I plateaued and stopped trying to improve my financial situation even more.

The money book I read was one by Dave Ramsey and he features people in the book who have a household income of  say,$45,000 who pay off mountains of debt, some of them twice their income.  I was reading and wondering how they do that.  Well, in small increments over a long period of time with incredible focus and persistence, that’s probably how.   *So* impressive.

He lays out his suggestions for financial wellbeing, paying off debt, building the security fund of 3-6 months of expenses because life happens, the college fund for the kids, the insurance, not necessarily in that order.  And HB and I are generally good on all that stuff, we pretend to be responsible.  The security fund is gone right now  because I’m on maternity leave but it’s been put to good use and we’ll build it up again when I get back to work.  Having a security fund is another thing that makes me feel really good. 

So Ramsey’s next step after all that is paying off the mortgage and then the step after that is having buckets of money around that you can give away and have fun with yourself.  That sounds like a place I want to get too.  But I realize I’ve gotten stuck about the mortgage.  I have been ok with frittering away small amounts of money because as long as I have it and I’m debt-free and have money in the bank, why not.  I “deserve it”. 

In other words I’m right back to justifying my purchases the way I did when I had credit card debt.  But come on,  if I know how good being debt-free feels I can only imagine how good being mortgage-free would feel.  Like 10 times better or something right?  Can you imagine actually owning your whole house and saying “nyah nyah nyah” to your bank?  Wow.  Financial Nirvana.

But the trap I get stuck in is thinking that the mortgage is too big.  I mean, it’s not big for a city mortgage, but it’s a good chunk of money.  So I figure, why bother.  Buy a t-shirt instead, it woudn’t make any difference anyways.  But logically I know that any amount of money I put on the mortgage goes right on the premium which means the bank can *never* charge me interest on it ever again.  It’s another chunk of my house I own.  Sure, a small chunk, but better mine than theirs.  Regular mortgage payments are always a mix of premium and interest, quite a bit more interest for the first decade or so.  Have you looked at those charts of how it breaks down?  They’re very good for the bank, not so much for us.  So putting extra money on, no matter how small is really powerful.

So I ask myself, why is paying my mortgage any different than what the amazing people in Ramsey’s book do who doggedly pay down huge debt over years?  I’ve been operating on the belief that debt is bad but mortgages are a fact of life, so who cares.  I guess I want to start to care.  It’s my new goal.  I read somewhere that 95% of people never put extra money down during the life of their mortgage.  So it seems I’m not the only one who has seen their mortgage as something they live with – forever.  But I want to change that.  So that one day – it won’t be soon and that’s ok – I can experience financial nirvana.