Don’t Feed the Alligators

A Personal Finance Blog from a Small-Scale Landlord’s Perspective

Archive for January, 2009

Dear Daughter #2

photo figure credit: MITBeta

I already outlined a number of lessons learned since the recent birth of daughter #2, and I’d like to share a few more before I get back to more “hard core” personal finance topics.

Having been a parent for 2 years already, I thought I knew a lot about parenting.  I was right — I know a lot about how to take care of a newborn baby.  However, as it turns out I don’t know all that much about raising a 2 year old big sister.  So the next lesson that I would like to share is:

  • Big sister is harder work than the baby

Newborn babies are relatively easy to deal with.  They eat, they sleep, they poop, they burp, not necessarily in that order, but they do a lot of each.  When they cry it’s almost always because of one of those things.  You don’t have to convince them to do any of the above.  You don’t have to tell them why they are doing any of those things.  You don’t have to entertain them or worry that they’re pulling the dog’s tail.

Toddlers, on the other hand, are a different story.  I’ve had many people tell me that having 2 kids is more than double the work of one and that the older child is going to have jealousy issues with the younger one.  Boy, were those both understatements.  Actually, the two of them together haven’t been too bad in terms of work load (maybe ScrapperMom will disagree with me here…), but we totally underestimated how much jealousy there would be by big sister of little sister.

Even after getting Dear Daughter #1 excited about the imminent arrival of DD#2, it has still taken 3 weeks of daily convincing that having a little sister is a good thing.  #1 has had issues with: Mommy holding baby, baby sitting in “DD#1’s chair”, baby eating, baby going into the car seat, etc., etc.  We have finally worked through most of these issues, but in retrospect, I wish there was more we could have done to soften the blow to DD#1. I am very grateful for the thoughtful people who have brought gifts for baby AND big sister.  I would encourage those of you who might be about to have a second child to think long and hard about how it will affect your first child and try to take steps to avoid some of these issues, if that’s even possible.

Another lesson learned:

  • Overconfidence can be a problem

In Part I of this series, I detailed the case of the missing car seat bracket.  The full story is that I couldn’t remember how to put the seat in, and left it for the night before we needed to use it.  I’ve put that car seat in several times, and figured it would be easy, but it’s been over a year since the last time and I was a bit rusty.  This meant that it took me far longer to put in (even once I found the missing bracket) than I expected.

Another example is that when I went to give DD#2 her first bath it didn’t even occur to me that this could be difficult.  I got out the infant bathtub, checked that the sprayer worked, filled the reservoir with warm water, stripped baby girl naked, and then listened to her wail for 5 minutes (it seemed like 20).  I had forgotten that newborns generally can be bathed with just a cloth, and that until their cords fall off, that area should be kept dry.  For the next couple of days I was paranoid that I might have caused an infection at the cord base. To top it all off, when the bath was done we couldn’t even come up with an infant sized towel to wrap her in and wound up using receiving blankets instead. The second bath went a lot more smoothly.

The last lesson that I’ll share in this series is:

  • Don’t overdo it

On the 4th day of DD#2’s life, we completed the following marathon: went for a short visit to ScrappeMom’s cousin who lives almost across the street from the pediatrician’s office, took the girls to see the pediatrician, went to Grammy’s house, went to a wake, went out to dinner, back to Grammy’s to collect DD#1, and then back home.  This was too much to do, even though we weren’t exhausted when we got home.  We had a couple of other days like this, but not as bad, since the arrival of DD#2, but we have finally figured out how to take it a little easier.

I hope these lessons are of value to some reader out there, even if only for the comic value in our follies.  This weekend I will get back to the personal finance talk and to answering some outstanding questions posed by readers.  As always, we’d like to hear your feedback and you can leave your Comments below.

Little Feet

photo figure credit: MITBeta

As I exclaimed here, Daughter #2 was born at home last weekend.  This was a joyous experience for everyone involved, from ScrapperMom herself, to the doting midwives, to ScrapperMom’s parents, to me.  We’ve learned a number of lessons that we will take to heart the next time we have a baby.  Some of these involve the homebirth itself, some relate to parenting in general, some are financial and others aren’t. With that, this post will have its off topic points, but should contain enough finance related bits to keep everyone else interested.

ScrapperMom and I decided early in the pregnancy of Daughter #2 that she would try to give birth at home.  (Please let me know in the comments if you would like to know why we made this decision, and if there’s enough interest I will try to put together a concise, coherent post on the topic.)  Daughter #2 arrived about 9 days earlier than she was expected. Which leads me to lesson 1:

  •  Babies can come at any time. So be prepared.

A number of the problems that we have encountered in the first week of our daughter’s life can be directly attributed to lack of preparedness.

Example 1: ScrapperMom has been cooking extra food at nearly every meal she has prepared in the last month and freezing the extra.  This has left us with a freezer full of food that will help us eat well, frugally, and without much preparation time in the coming weeks.  The problem is that it takes several hours or days to thaw something out to eat.  So during her labor and following the birth, we kept running to the take-out menus to figure out where our next meal was going to come from.  Over $70 was spent, to feed all of the people here, on take-out food on the day our daughter was born.   (Thanks to my parents and in-laws for covering much of this cost.)  My mother-in-law hit upon a great idea the next day when she went out and bought a couple of pounds of cold cuts, rolls, chips, etc. — enough to last a few days and satisfy a number of mouths that came through the house during that time

Example 2: The car seat was not in the car yet.  In my scramble to put the seat in the car before we had to take the baby to the pediatrician’s office, I could not find a metal bracket that was required for the installation.  We have two bases for the car seat, and each has a place to store the missing bracket.  We need the bracket for only one of our cars, yet both of them were missing.  I considered running to Toys R Us to buy a new base for $25.  I figured that I could take the bracket out of the new base until I found one of ours and then return the base for a refund.  This is, perhaps, not the most ethical way to do things, but it was pragmatic.  Eventually I found one of the brackets on the floor of the car that didn’t need it and I was able to install the seat.

Example 3: When giving our daughter her first bath, we could not find the scrubby brush that we used on Daughter #1 at that age.  Nor could we find an infant sized towel.  All of these things were in a closest that ScrapperMom had planned to go through and clean this week, before the baby was due.  Since baby came early, I found myself standing there holding a reasonably clean, wet, crying newborn who I eventually wrapped in a couple of receiving blankets to dry her.

This lesson can be extrapolated to many areas of our lives, especially personal finance. Are you prepared? Do you have an emergency fund? Life insurance? Disability insurance?

Lesson #2:

  • You have to look out for yourself first.

Over the days immediately following the birth, I found myself playing host to everyone from the midwives to family and friends. Because the birth was in our house, I went into host mode. I realized only after the fact that they were all there for us, not the other way around. When people were in our house, I neglected many of the things that I should have been doing: laundry, dishes, toddler naps, doggie care, etc. I should have been more careful about not letting guests interrupt what needed to get done, because this just bunched all of these chores into a shorter period of time later (and left us with a surly 2 year old). Better yet, I should have asked these people to help me get these things done so that I could make sure that we all got enough rest after a busy few days.

We must also look out for ourselves when it comes to personal finance. No one cares more about your money than you do. We must manage our own retirement accounts, we must fund retirement accounts before college funds, we must be responsible for our own finances because no one else is going to do it for us.

I have several more lessons that we have learned that I will share in another post soon. Do you have any experience with home births or comments or questions about ours? We’d like to hear about it in the Comments section below.

Daughter 2Just a quick note to let you all know that Daughter #2 was born on Saturday, January 10, 2009 at home.  She came into the world at 2:52pm weighing 6lbs. even and measuring 18.5″ in length.  She was 9 days early, but mom, baby, and big sister are all doing great.  ScrapperMom had a great birth experience thanks to the help of 3 great midwives and the support of our families.

I’ve learned a lot of lessons about having a second child, some financial, others not so much.  But I hope to share many of these lessons soon when time allows.

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Holiday

Creative Commons License photo figure credit: muha…

Happy New Year to all!  As we close the chapter on one year and move on to a new one, I find this to be an excellent time to reflect on the state of life in general, and for the purposes of this blog, Personal Finance.  If you’re a regular reader of this blog you will know that I am a big fan of automating personal finance:

  • Our cash back credit cards get billed directly to our bill-pay account at our bank and the bank automatically pays the full balance every month.
  • ING and Vanguard both automatically withdraw pre-set amounts from our checking account monthly to cover various savings goals like increasing the size of our emergency fund, Roth IRA contributions, savings to cover annual payment to insurance, etc.
  • Bill-pay automatically pays all of our fixed monthly expenses like our mortgage, student loans, car loans, etc.

The only things that we ever have to really worry about paying on time are utility bills, gas and electric.

Given this level of automation, it’s easy to neglect our finances.  They’re not really neglected, but they’re not always getting the attention that they may deserve.  Sometimes we’re saving too much or too little.  Sometimes we’re spending more than we should and don’t realize it.  Sometimes we need to shift saving priorities because goals have been met or circumstances have changed.

I’m apparently such a work-a-holic that I had to take the last several days of the year off in order to burn, rather than lose, vacation time.  I spent the better part of one day and small parts of others catching up on our finances — a Personal Finance Holiday of sorts.  I’m not by far the first person to propose such a concept, and I’ve thought about taking a Personal Finance Holiday for a long time, but didn’t think that I had enough personal finance “stuff” to do to fill up a whole day.  Well, after neglecting to even open Quicken since mid-October, it turns out I did have a whole day of catching up to do.

Usually a Personal Finance Holiday is used to get going on all of the little things that you’ve been meaning to do, but haven’t found the time for (you have been meaning to do these things, haven’t you?):

  • creating a Spending Plan
  • opening a new Savings Account
  • starting an IRA savings account
  • buying life and disability insurance
  • opening a 529 account for your child(ren)
  • writing down or benchmarking your Personal Finance goals

Reading any of the myriad of Personal Finance books available can leave one overwhelmed by the number of things that you realize that you should be doing with your finances.  Taking a PF Holiday gives you the perfect opportunity to sit down and bang all of these items out in one shot.  It also gives you time when you would otherwise be unavailable to do all of the little things that might distract you from actually getting this stuff done, without feeling guilty about it: Can’t do it on Saturday because you have to spend time with the kids; Can’t do it on a holiday because you have to spend time with grandma; Can’t do it on a vacation day because you have to run all those other errands that you’ve been neglecting; Can’t do it on a sick day because, well, you’re sick (right?).

Maybe you’re thinking that you can’t possibly take a PF Holiday because you don’t have any vacation time.  Well, take it unpaid.  That’s right, it might not sound very frugal or financially prudent to do so, but let’s look at what a PF Holiday is worth:

  • If you use your PF Holiday to open an IRA and put just $100 per month into it, you’ll have $1,227 in one year at a modest 5% average return, and $15,528 in 10 years.
  • If you setup a disability insurance policy, you and your family will likely be able to maintain your standard of living should you become disabled.  If you can’t work for 10 years, this might be worth a quarter of a million dollars
  • If you set up an emergency fund, and use this fund instead of a credit card when a true emergency rolls around, you might save $1,400 in interest on that credit card.

If the average person makes $40,000/year or about $20/hour, then the cost of a PF Holiday on unpaid time is just $320.  It’s actually even lower than that since you won’t have to pay taxes on money that you don’t make (or conversely, if you had worked the 8 hours you would have brought home closer to $250).  So a small $250 investment could be worth tens or even hundreds of thousands of dollars over the next decade, and even more beyond that — perhaps even enough to vacation at the beautiful looking spot in the photo above!

In our case, we already have most of our Personal Finance stuff under control, or so we’d like to think, so the PF Holiday was used to catch up on what’s been going on, make sure that everything is going the way it should be.  It was also used to tweak and steer the various Personal Finance vehicles toward their respective goals.

Have you ever taken a Personal Finance Holiday?  Do you need to take a Personal Finance Holiday?  Do you have any new or redoubled goals for 2009?  Let’s hear about your experience in the Comments Section below!

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