Tuesday, February 10, 2015

Rare Personal Finance

Lets get all the disclaimers out really early in this post...the only C in my name is Cherrstrom.  I'm not a Certified Public Accountant (CPA), a Certified Financial Analyst (CFA), or a Certified Financial Planner (CFP)...the only C is my last name, nothing behind. However, I am a person.  I am a person who eats up financial information, who loves investments, loves her own personal finance, loves planning and executing on the plan...and adjusting when the plan doesn't work.  My husband and I play the role of controller and CFO very well.

So don't read this as financial advice on what to do, I am just telling our story of what we did, and what we struggle with and think about today.

Rear-View Mirror  Finance

The moment our sons got diagnosed with Hunter Syndrome, the medical meter started running like a taxi stuck in traffic.  You could just hear the click of the meter, copay, copay, copay, copay, copay, coinsurance, coinsurance, satisfied deductible, out of network, in network, major surgery, major surgery, copay, copay...in the beginning we had one $25 co-pay a week.  It only took a month of that to really sit up and notice something had to change.  You could bring in more money, which is good, or you could lower your costs.  In addition to medical, we had to live a normal life too.  Educate our children, our home wasn't keeping up with the growth of our family, we needed food, clothes, you get the picture.  We took a hard look at ourselves, and thought about how we could stretch or change what our picture looked like at that time.  We made hard decisions.  We cut things, and made major life changes.  Huge.  Moving to a lower cost location.  Seriously, it's public record.  We expanded our living space by 2x, and reduced our mortgage by more than $100,000.  

This is old news. We already covered this change here: http://raisingrareboys.blogspot.com/2014/03/why-we-live-in-cleveland-part-i.html and here: http://raisingrareboys.blogspot.com/2014/03/why-we-live-in-cleveland-part-ii.html

It wasn't an original idea.  I kept seeing people get tired of paying housing costs in say Boston, or San Francisco, and I saw these people relocate to Texas as an example.  I call myself a "Financial Anthropologist".  I love to study people's moves and really figure out what is happening behind the scenes.  For example, if you're wearing Prada every day, I try to figure out whether you're putting that on your credit card or if you're really paying for that...don't be afraid to hang out with me I don't have x-ray vision, and sometimes I am not right but I like to observe, think, and apply.  It's fun!

The word medical also became a regular entry in our family budget. Back then we used Quicken, and I think a really lame spreadsheet.  We looked at our costs, and forecast what we could and put aside for medical expenses.  We also looked at medical spending accounts, and participated for a while but got bogged down with too much activity trying to use the card to get reimbursed or submitting paperwork.  It was too cumbersome and difficult.  The dependent care spending accounts also felt like double dipping, money would come out of your paycheck, you'd pay the daycare, then there would be a lag to reimbursement.  It was just too hard and hurt too much. So we stopped participating.  

We always made saving for retirement a priority, investing, and saving for college.  We started 529B (college savings accounts) at birth for each child. 

We really didn't take many vacations, most were staycations which were really just fine. We never felt penalized.  Never felt like we couldn't do something, that we we're lacking anything.  Never negative feelings of being deprived.  We "invested" lots of money in our kids like good, doting parents. Some were wise investments, and some were just pure unadulterated fun, like Jack's 3 year old bday party, I went a little crazy planning that party! You have to live a little.  We were pretty happy and really elbows deep in making things work.    


I am a crazy, finance app eating machine.  I've tried Mint, eh it was cool for a while but I dropped that after a bit.  I eat up everything I can get my hands on. I use You Need a Budget, http://www.youneedabudget.com/ .  Found this little beauty from a Money Magazine article.  If you use it, you need to take their training, or you may totally mess up your finances.  Take the training, it's good stuff.  I am a tax-maniac, still do my own because when we had an accountant I asked too many questions and irritated everyone.  So I just threw up my hands, and I do them myself.  It's nice because there's nothing like taxes that gets you really close, down and dirty with your money.  You roll around in your adjusted gross income, and know your deductions by heart.  You inspect everything.  It's a nerd's paradise, and I love my independence but it's not for everyone.  

Medical is clear and understandable now.  Occasionally we hit a road bump where we didn't know to plan for something major, like hearing aids, etc., but that's one thing I learned you have to be forgiving.  You're going to make mistakes; bad purchases, not budgeting right, an unforeseen expense, stuff happens and you need to adjust and move on.  Move on quickly too, no sense in wallowing, I don't own a time machine to reverse what was done.  

We do a lot of monthly set it and forget it stuff.  Our boys college funds get a fresh set of dollars every month, we also do a year end, we want you to go to Harvard contribution.

We also gave money like crazy to charity this year.  

We can still improve but we've hit a nice cruising altitude for now.  I hope soon to learn to stop complaining about the grocery bill.  

Looking Forward  

This is the hard part.  The future has the hardest of questions.  

Hard Question 1: Should we even be saving for college?  

Hunter Syndrome carries a death sentence.  Now, there's a lot going on to treat, extend life past the first and second decade, and  improve the quality of life.  Gene therapy is on the near horizon, and could be as close to a cure as we get but it's not in our hands right now.  Medical research requires lots of money, lots of money.  

So should we be pouring our money into college funds, when some psychologists are quick to tell us our son won't go to college, or should we pour our money into medical research?  

We choose college.  The small funds we put into those accounts won't make much of a dent in the medical funds needed to really get research and progress off the ground.  We choose college for now. We also believe that they will go to college.  We believe that in our hearts, brains, and wallets.  So we're backing that for now.  

 Hard Question 2: Should we sacrifice our retirement for their lives?  

We've saved hard for retirement because we've always loved investing.  Large amounts of money are needed to save our boys.  Should we withdraw from our own retirement funds to help save their lives?  Everything and everyone screams no, but why not think about it?  People finance their houses with their retirement funds, fund additions, fund their kids college, why not fund life? 

Are we going to really enjoy being retired if our children have passed away?  I'm thinking no. 

Experienced voices will say, you need to save more, your kids may live with you forever.  For now this is a question, without an answer or an action.  

Hard Question 3: How do we fund raise and do it efficiently and effectively?

I don't want your money.  I want you to give me your money when I sell you something you want like awesome golf apparel, you get something you really want like tickets, you get a chance to win something, you get to participate in a road race or a golf outing, or when you really, really want to give me your money.  I think day and night about how to fund raise.

You may even get a survey from me about some ideas we've been exploring, and are ready to put into motion...and the survey is funny.  There's so much support for local charities, and for local people who come from your community...and we want that type of fund raising.  Did you know that I recently read that golf has poured over $2B into charitable giving, and many funds going to local charities? So that's what we're after, fun and effective at saving kids lives.  Many things require thousands from us personally to set in motion, and I am pretty certain that if an honorary PhD was ever given out for being the Dr. of Party.  I would receive it.  If I started party planning then, all of my financial preaching should be thrown out the door because boy can I throw a great party with lots of money.  That however doesn't work.  I like the idea of venture philanthropy.  I like the idea of offering returns on things, and running fund raising like a business.  We often also try to figure out if we could save as much as an event may yield but it's really beneficial to gain funds that add and grow to our own contributions.  I think we've reached some answers here, and will share more.

Hard Question 4: Do we have everything in order and is there any more we can be doing? 

We never stop asking these questions. They'll never have answers.  We run through the usual list.  Is our life insurance set properly to safeguard our family?  Is there any way to build a better emergency fund?  You get the gist but we regularly question decisions we've made and sometimes we switch directions or stay the course.

So in closing, if you're wearing Prada or afraid to see me at a party, sorry.  In sharing, we hope you benefit in some way.