Save for Retirement Week Oct 21 - 27

Here it is again. Save for Retirement Week.

You might recall, last year we were starting to look for a house to buy. Obviously, that didn't happen. Yet. And we're okay with that.

And here's why: a house is a place to live. It really isn't a very great investment. Sure you get to leverage other people's money (i.e. the bank) and there may be growth in your market, but there is a pretty big expense called interest. In addition, house prices average a much lower return than other investments. Not to mention property taxes, maintenance and improvements.

I recently heard that there is no economic advantage to owning a house. None. Zero. There is, however, a behavioral advantage. While owning a house does not necessarily make you richer, the act of paying down the mortgage so that at the end of 30 or 15 years you own an asset does. So, if you're a renter, but you don't want to end up like most, you need to make sure your behavior is like that of an owner.

When we've gone to look at homes, we've grabbed the disclosure forms and the financing information. You know the kind I mean, the ones that show how much the average electric bill, heating fuel, garbage, sewer, property taxes, etc. along with the monthly payment based on different downpayments and mortgages.

We've taken this information home, added a percentage for improvements and compared them to our current expenses. We are saving/investing the difference each month. Originally, we started doing this so that when we do buy a house our budget will shift easily to paying for all the expenses of homeownership. Now I know that this practice is actually protecting us from our renting selves as well. 

Of course, I've got no source for where I heard the above economic information. So, take what you will from it. Just don't forget to Save for Retirement!

Save for Retirement Week: Oct 16 - 22

Have you looked at your account statements lately? Read a good book about finances?
Did you know that the IRS raised the contribution limit to $17,000 for 401(k), 403(b), and 457 plans for 2012?

Take some time this week to look at your retirement savings picture.

What I am doing: I ran some retirement calculators and found that we are "done" saving for retirement. We don't believe it and won't stop saving (especially since Mr. X wouldn't mind an early retirement, like tomorrow), but I know that means we can start looking at other things to invest in. Like a house.

Last week we went house shopping and hope to get serious about buying something in the near future. Maybe. We've done this before so I'm not sure how serious we'll be.

Save for Retirement Week - delayed

Last week was Save for Retirement Week. I bet you all thought I forgot.

Mr. X and I happened to get our quarterly statements on Saturday, and we spent a few minutes together calculating our returns and reevaluating our approach for 2011.

Some people like to remind you to do your self-exam - I like to remind you to check your retirement accounts and see what's what, and really, it doesn't matter what week you do it.

Personal finance is just that, personal, so take some time to learn how to make your goals a reality whether it's reading a book, logging on to your online account statement or writing down a financial goal for the next year - go do it.

Imagine a Happier You

Deseret Media Companies recently kicked off a massive campaign to help women learn about money....and you know me, can't pass up the opportunity. The new website hosts daily financial challenges, has financial calculators, and a blog.

Imagine a Happier You will be selecting 3 women to receive financial "makeovers". IAHY will follow the women over the next year as they receive financial counseling and put the lessons to the test. The first blog post suggested that they hoped the makeovers would be similar to the popular show The Biggest Loser, where the pressure to lose weight in public is motivating.

Zions bank has even gotten in on it, sponsoring a free Smart Women, Smart Money Conference at the Salt Palace on August 19th.

I'm excited to see Imagine a Happier You, and hope that it changes the financial life of a few women.

More Financial Musings

A few months ago my Relief Society held a meeting about managing resources and staying out of debt. One member of the presidency had prepared a fantastic slideshow and presented beautifully the basics of financial planning. Following the meeting, I left the room with a friend who said to me, "Did you learn anything? I hate thinking about money and investments - I leave that to 'Joe' to figure out."

I was electrified. The hair on my arms actually stood on end. But in true Sarah fashion, I smiled and nodded, muttering something about "it's not for everyone".

Februaray's Visiting Teaching message is on managing resources and I loved this quote:

What skills do we need to help us become self-reliant? . . . In the early days of the Church, Brigham Young pled with the sisters to learn to prevent illness in families, establish home industries, and learn accounting and bookkeeping and other practical skills. Those principles still apply today. Education continues to be vitally important. . . .
"I asked several bishops what self-reliance skills the sisters in their wards needed most, and they said budgeting. Women need to understand the implications of buying on credit and not living within a budget."2Julie B. Beck, Relief Society general president.

A middle aged widow bore her testimony in church a few months ago. She was so nervous to do it that she read it. She pled with the congregation to please cross-train with their spouses. She expressed her frustration with learning how to use a snowblower, performing basic maintenance on her vehicles and home, and managing money.

This is a concept that I have tried to explain to Mr. X several times. There is absolutely nothing wrong with specializing in an area as long as the other partner has the skills and knowlege to complete the task on their own. In one of my college courses the instructor labeled such specialization as being co-equal rather than being co-dependent.

A wife who is financially co-dependent leaves all financial decisions up to her husband and accepts her household allowance without question or knowledge of the larger financial picture. Her husband doesn't believe she has the skills or ability to manage the family budget and so "protects" her from it. A wife who is co-equal, on the other hand, understands the financial situation, supplies input and another perspective to her husband, but may leave the day to day execution of financial planning to her husband.

Similarly, a husband who is co-dependent may be incapable of preparing a healthy meal. His wife believes he can't even put cereal in a bowl on his own. A co-equal husband knows how to prepare a meal to feed himself and other family members, but - depending on the division of labor - he may generally leave the management of the meal preparation to his wife.


Please don't leave all your financial decisions "to Joe to figure out", but counsel together to determine the best course of action for your family.

No One Cares More about Your Retirement Than You Do

Check out this great retirement post by Robert Brokamp of the Motley Fool. The post is at Get Rich Slowly.

National Save for Retirement Week Oct 18 - 25

Don’t forget this is National Save for Retirement Week. Do something this week to celebrate! Some ideas:

• Check your pay stub to see what, if any, is being put aside for retirement
  
• Find out what your plan options are and if there have been any changes since last year. Determine whether you should make a change for 2010.
  
• Pull out your latest plan statement and see where you are.
  
• Read a book about personal finance, preferably one which includes a section on retirement investing.
  
• Find out if your employer is offering any retirement/investment education this week (Alaska PERS/TRS is. Find out what’s available here)

Before anyone says, “But I’m a SAHM,” remember that 80% of women outlive their husbands – make sure you know what YOUR retirement will look like.