Tuesday, February 15, 2005

February is finance month

I have been meeting with four friends to talk about household finance. We all have kids, so this meeting is five women and eight of our eleven kids — try that in an office!

I think we all have a slight sense of panic around our finances, even though it doesn't appear that anyone is sinking. I know I feel out of control of our finances, and now that we have a family, it matters a lot more. When I was single, or when we were married without kids I always had the sense that we could recover from any financial setbacks (as, in fact, we did). In a pinch, we could live with our parents. That no longer feels like an option, and so knowing how much we earn, how much we spend, and how much we save seems important.

My friend Carrie did an excellent job of putting together an agenda for our three meetings. The first meeting we talked about our systems — where we have our accounts, how we spend money (cash/debit card/credit card/checks), how we keep track of money, how we know when we're in financial trouble, and whether we have a budget. It turns out that none of us has a budget, although we all have a sense of how much we spend in various broad categories. We have a variety of systems. Two of us use Quicken (older versions, though) and do some online bill paying. Another has a spreasheet that she uses to track spending in a variety of categories (it takes a fair amount of hand calculation using checkbooks and credit card statements, and she’s usually months behind). One (who owns and rents apartments) has a fairly comprehensive manual system with good filing. The last system is all manual with less overall tracking.

One issue that comes up for all of us to one degree or another is how our approach to personal finance differs from our husbands', and how to talk about finance. There are the wives who want to pinch pennies and the husbands who don't want to talk about it. There are the husbands who wants to retire in five years (at thirty-something) or are simply happy with very little and the wives who wants to spend "normally" (my designation, not theirs). I imagine few couples are totally in sync about money, and it can be an anxiety-producing topic, which makes it a mine field in a marriage.

These meeting have helped me to talk with my husband about money. Actually making changes is more difficult. I recently gave up one of two days of babysitting a week. I’ve had the arrangement for years, and in previous years I used the time to do paying work. I’m no longer working much. Also, the sitter doesn’t take the baby, so I wasn’t really gaining “free” time. The kids adore going to the sitter, so cutting it out entirely didn’t feel like a feasible option. I’m hoping my husband can find a similar small, relatively painless change to make in his spending. Although we do okay from month to month, I’d like to save a little more – mainly for trips in the future, but also for any large home repair bills, and for down payments on new cars when the time comes.

I’m trying to find “enoughness” around many aspects of money. I’d like to keep enough records and do enough analysis to know where we are financially. I don’t have the time to track every penny, and I’m not convinced that the time it would take would be worth it to us. I want “enoughness” in our planning – I’m not convinced we need a budget per say, but I do think we need some way to be sure we don’t overspend on a regular basis. I try to find “enoughness” in my purchases – I like to end up in the middle. So my grocery budget is in the middle compared to my friends’. When I buy something, I don’t buy the cheapest or the most expensive, but try to end up somewhere in the middle. For instance, my new digital camera (good, but not the SLR I yearn for), my PDA (about $100), and my sewing machine (it does embroidery, but I got it used for under $1000). I’ve read Your Money or Your Life, and I admire the approach, but I’m not sure I want it for myself. Or maybe it’s that I’m almost positive I could never persuade my husband to do the program. At any rate, in my book, it’s more radical than the middle ground I seek in my financial affairs.

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