A Look Back and A Look Forward

It's 2009.  Hard to believe, especially this year.  For some reason or another, December just seemed to fly by.  

Since it's a new year,  I thought I'd take a look back and see how I did with my goals, and set some for this year.

Overall, I think I did pretty good this year.  Here's a list of the things we did do:

1. Looking for an outlet for my thoughts and interest in personal finance, I started this blog, which I enjoy.  I didn't blog nearly as much as I hoped to and goaled myself to, nor have I finished the redesign and improvement of my blog page or publicized it as much as I would have liked to, but I still managed to blog a bit over 25% of the days this year.  

2. We built 3 of a planned 7-8 permanent garden beds, and started our first vegetable garden at our home.  It was hardly a perfect effort, due to rain, lack of energy and a lot of other factors, but it was a great start.  And those 3 beds will get planted while more are dug this year.

3. We rebuilt our savings rather significantly.  In 2007, after moving and taking on our renovations projects, our liquid savings hit a low of about a 1/2 month's worth of cash.  We've since almost hit a target of 6+ months of expenses, approximately 3 of which will get used up while I'm on maternity leave.  And then we'll start rebuilding again.

4. We started talking and planning more for the future, specifically around a downshift in 10 years.  While we haven't done much towards this goal besides work hard to build savings up, it's on the table.  Right now, between the fairly imminent arrival of baby MoneyPenny and the likelihood that I'm going to have to job hunt during my maternity leave, and may even lose my job as of January 31st, downshifting is on the back burner, but it is still high on the list of goals.

5. We accomplished a lot around the house.  We didn't tackle as much as we hoped to, but we did manage to knock off a few big-ticket items, such as replacing our electrical panel, taking down a dangerously unstable small barn on our property, replacing our bed and mattress, furnishing the nursery, and purchasing new basement windows.   We also replaced both our washer and dryer, and added a 14.8 cubic foot chest freezer.   Then there was the flatscreen TV that made it's way into our family room, which makes me cringe at the cost (our TV was dying, and my husband is one happy guy, so overall it was a good spend).  All of these things were paid for in cash.

6. I got pregnant, and we've funded my maternity wardrobe.  The big costs are still to come (college?) but that feels like a pretty big thing.  

7. We did all of the above and still accommodated my long work hours and work travel that adds up to over a month of the year away from home just traveling.  

So we did a lot...and that's not even including the day to day accomplishments, such as reducing the amount we spend eating out, heavily reducing our dry cleaning costs for the latter half of this year,  a road trip vacation in September, and having a much lower-key Christmas than usual.   

Where did we fall flat?  

1.  We spent WAY more on food than we should have.  A lot of that was me getting pregnant and having aversions and 'food moodiness' that had me indulging in whatever sounded good at the moment.  The CSA, while enjoyable, also had us expending money on food that we didn't consume and often didn't even enjoy - after all, there's only so many times a week I can eat kale and like it.    This year, we'll garden and supplement from the farmers markets for our veggies, only buying what we want and can use up. 

2. We didn't preserve much food either - a bit of salsa, some green and wax beans that got blanched and frozen, and some pesto.  For all the cost and effort, we definitely fell short of our goals in this area.

  

3. We didn't get to some projects, in part because we decided we were just too busy.  This is a mixed one, because while they were things we wanted to do, we also realized that between work, long commutes, house projects, and chores, we weren't having much fun.  And so we've spent more time relaxing in the last few months when we can.  Still, those projects are starting to bother us in their unfinished state.  

4. We were a little too surprised by certain expenditures.  I'm working on planning and researching better, so that we can estimate costs better.

So how did we do?  I give us a A-.  Not because all the goals got accomplished, but because those that did got accomplished in cash, while still meeting our savings goals.  We even managed to absorb some surprises into the budget without a blip.

So how does 2009 look?  From a personal perspective, pretty good.  We're finally going to get to meet Baby Moneypenny (in about 8 weeks, give or take), and we're both looking forward to that.  I'm looking forward to my maternity leave, especially after how much of my life I've given to work this year.  

From a financial perspective, not so secure.  In addition to burning through savings for a maternity leave, the economy is uncomfortably insecure.  We may have another month of unemployment for me (February) which we're waiting on an answer for.  While we're prepared for me to be out of work for a while, if it carries on too long things could get stressful.  

All that financial insecurity has made it hard for me to set goals for 2009.  But the point of goals is not to feel bad if you don't meet them, but to give yourself something to work towards.  So here's 2009.

1. To enjoy my maternity leave and our baby without stressing about money or finding a new job.  It would be so easy to fret the time away, but I'll never get it back, so I intend to revel in it.

2. To continue to focus what money we do have allocated for house projects towards infrastructure, such as wiring, insulation and so on.  These are things that will pay us back in the end.

3. To lose all the baby weight and get back into shape.  Once Baby MoneyPenny arrives, I need to find a way to work exercise and a healthier diet into our lives, despite the sleep deprivation and demands of new parenthood.  

4. To continue to work towards our long-term savings goals, as well as the smaller goal of eating locally and organically.  

We'll see how we're doing at a mid-year check in this June.  Happy New Year!

Preparing for Baby Part 2

Interestingly, this holiday season has provided me with more time at home than I can remember for a long time.  Usually December is a month of running from task to task, from Christmas shopping to baking to gatherings.  This year we've been remarkably light in the gatherings arena, and due to doctors appointments and one giant snowstorm, I've been at home - either working or not - quite a bit.  

While that hasn't meant that we're completely ready for either the holidays or the baby - heck, it doesn't even mean that the house is clean - it has meant that our lives seem to be moving at a nicer pace than over most of 2008.  I've had time to plan and cook more, and I've even, as late pregnancy makes me more tired, fit in at least one nap a weekend.  

But now that I'm 3/4 of the way through my pregnancy, a sense of urgency is starting to hit.  It's time to get everything ready for the baby.  Over the last two weeks we've picked out paint for the nursery, ordered the crib and bedding (mattress still to come), and begun taking care of key items like pre-registering at the hospital, thinking about pediatricians, and so on.  All in all, we've spent the bulk of our $1200 budget at this point, but kept very much on track.  So far we've purchased:

• A crib
  
• A glider with ottoman (every single parent we talked to raved about their adjustable glider.  Since agreement about baby gear is rare, we took this universal agreement as a sign not to be ignored)
  
• Paint for the walls and the ceiling - low VOC paint is more expensive, but worth it to not have the newest MoneyPenny inhaling volatile organic compounds in his or her new little lungs.
• Chair rail for baby MoneyPenny's walls - a cheap but classy touch to go with a two-tone paint job
• Baby bedding.  I skipped over the useless and not-recommended bumpers, and simply opted for a blanket, sheet and matching mobile.  Since we have curtains in the same fabric, which also matches the glider upholstery, that was enough.  For extra sheets, we've opted for plain ecru.
• Cloth diapers.  While we'll use chlorine-free disposables for the first week or two, while we get used to round-the-clock baby care, we've opted for cloth diapers from www.wildflowerdiapers.com in smalls for once baby hits 8 pounds
• A coming home outfit.  Okay, this didn't fall into the land of necessity, but I spent $14 on a cute little warm and fuzzy baby footed onesie to go over a t-shirt and diaper on the way home.  

What's still left on the list?  Aside from those items that are on our registry and we'll purchase after our shower if we still need them, like a travel system and carseat bases, only a plastic pail for soaking the diapers, one with a lid to ensure safety, some wood for shelving, and the aforementioned crib mattress, not much.  Now it's just time to get to all the projects.  

The big thing I want to accomplish, aside from having a functioning nursery before our newest family member arrives - this is more because I know for a fact we have more time and less sleep deprivation now, rather than because the little one will need it immediately - is to de-clutter the house.  For the most part, we keep the house reasonably neat.  But we have clutter that has bred in the corners of all rooms, and we're trying very hard to get rid of it, a bit at a time. 

De-cluttering doesn't have to be expensive.  So far, we've just bought 2 plastic storage tubs - one for baby things, and one for maternity and other clothes for me.  What it has meant is that we have had to pack some things up for later, heartlessly toss other things.  It's about spending time figuring out what use and purpose certain things have in our lives.  

How's it going?  Slow, as you can probably imagine.  But it is going.  

More updates to come later. 

Plan for the Worst, Hope for the Best

A recent article on MSN Money hit my philosophy on the nose.  In short, don't assume someone is at the wheel, steer your own ship.  Question assumptions, even if they are being made by some very bright people.  

Our current economic crisis is proof that all the brains in the world doesn't necessarily make you sensible.  Even Alan Greenspan expressed 'shock' that things turned out the way they did.  Really Alan?  Because speculation and over-leveraging of assets along with many, many bad loans is likely to turn out well?  

I wonder what planet he's been living on.  But this is true of a lot of my thinking about the economy.  NPR did a segment on a Massachusetts family worried about foreclosure - on a salary of $150k (keep in mind, in this high cost of living area, the average salary for a working couple is about $98k, and that still isn't a lot comparative to the costs of housing and other key items in MA) they had purchased a home for $640k with only $10k down.  And now that there were two children, they were shocked that daycare cost $3k per month.  

Now, just to provide some clarity, without any savings for retirement, $150,000.00 annual income works out to a bit under $8000 a month.  Just their mortgage alone, assuming it's a fixed loan with an approximate interest rate of 6% is about $3837 a month.  Yes, that's right - almost 50% of their take home. 

Add to that the $3000 in daycare payments - and really folks, if you think you are going to be a working parent, make some phone calls and find out the going rates now for your area - and they have used up basically all their income. 

And I haven't even added in food, possible car payments, fuel, heat, phones, dr. appointments and other bills.  Even if these folks are socking away money in pretax savings accounts for daycare and health care, and overtime makes up some of the shortfall, their ship is sinking. Sunk, actually, as they are also carrying tremendous credit card debt.

I'm a planner.  I realize not everyone is.  I wasn't, many years ago.  It was only once I learned lesson after lesson the hard way about money, often worrying about how to pay a bill or where money was going to come from.  I didn't come to my approach to money easily or quickly.  

But I have learned a few things over the years:

 Saving is more important than any acquisition.  It's the thing that allows you to sleep at night, even when bad stuff happens.  I recently learned that there's about a 60% chance that my client won't extend me into February (I am safely employed through January) because of budget cuts.  Was an extra month off before Baby MoneyPenny comes in the plans?  No.  But can we live through it with our savings just fine?  Yep.  It's not how I dreamed of spending our savings, but hey, that's life.  I can absorb the potential unemployment without batting an eyelash.  Not forever of course, but knowing that a job hunt at 9 months pregnant is unlikely to achieve much, I'm prepared and okay with the time.

We also could absorb the recent news that our mortgage bank had incorrectly assessed our escrow over the last year to the tune of $2100.00 - not exactly small potatoes.  We have a choice to either pay the balance immediately, make a partial payment and see our mortgage payments go up somewhat, or absorb it in higher mortgage payments over the next year.  We could do any of them but will probably go for the second option.  I'm cranky about it, but we can absorb it.

Budgeting and planning aren't always fun, but they are always worth it.  Just knowing approximately what we'll spend in a given month, including all the various expenses that pop up throughout the course of the year makes things saner for us.  Sure, it's annoying sometimes to sit and enter receipts into the budget, and sometimes we miss our targets.  But overall, we hit more than we miss, and it's kept our savings targets on track.  

Never assume someone is right just because that's the conventional wisdom.  I remember a conversation that I had with a good, very bright friend of mine.  Essentially the discussion was around the idea  - one that many people I've met believe - that if they go to college and get good grades and work hard, they will achieve financial success.  Quite frankly, that's a pile of bupkus. Going to college increases your odds in a job hunt, and working hard is great, but there's no guarantees about anything.  Ever.   

Over the last years, many new homeowners got told that they could refinance their incredibly expensive ARMs when the rates started to rise.  And then they couldn't....and fell behind...and got foreclosed on - and then it happened more and more, and the investment banks started to fall.  Nobody questioned what they were told, and as a result, they paid the price.  Don't believe everything you hear.  Question everything - even authority.  No one is infallible or can see the future.  

What goes up must come down.  If there's a huge price increase, there's likely to be a decrease - take recent gas price increases and rapid drops.  The fact that everyone closed their eyes to the housing bubble and was so startled when rapid decreases in value started to happen.  Um, yeah.  So next time someone tells you to jump in with both feet before you miss an opportunity, analyze the basic assumption that it is a) one you can't afford to miss and b) one you want in the first place.  

Be an opportunist.  While the points above may make me sound like a pessimist, quite the contrary - I'm a very optimistic person.  I am always looking for an opportunity - to grow, learn, increase my income.  And in chaos, like we currently have in our economy, there's a ton of opportunity.  It just requires creative thinking.  Contractors are reinventing themselves as green builders.  Information technology specialists are teaching themselves to become bridges between business requirements and the technology that gets used.  Look for areas where might provide value - and ask if you can.  One of my favorite quotes has always been by Thomas Edison "Most people miss out on opportunity because it's dressed in overalls and looks like hard work".  Don't miss out.  

You can't see the future, but you can sure as heck do your research.  If you know you want two kids, find out what daycare costs.  Or what you'll be able to manage for a mortgage payment on one salary.  Ask other moms what they spend on things.  And then live like you are in that position already today - to get a feel for how it will work out.  

Plan ahead a little - you'll be happier for it.  

http://articles.moneycentral.msn.com/Investing/Extra/the-10-worst-assumptions-of-2008

Proactive Spending in A Bad Economy

Okay, things aren't getting better in the economy anytime soon folks.   Sure, everyone knows this, but sometimes I'm not sure that people really know it, if you know what I mean.    What I mean is, we're not going back to business as usual.   Not for a long time.   I think 2009 is going to be a long, tough year for many.  

The company I consult for went through a round of layoffs this past week, and more are coming. So far I'm safe, but we'll see how that goes.  My current goal is to make it to my maternity leave in March, and I think that's a reasonably safe bet.  After that, I have some prospects.  Still, things are getting scary out there. 

A result of the shaky economy and all the job cuts is an absolute reluctance to spend on anything nonessential.  But there are some things worth spending on if you can.  I call it 'proactive spending', or spending money in order to save some or be prepared for the worst.

Here's our list.

1. Firewood and heating oil

We're heading into the coldest months of the year in New England, and ensuring we can stay warm is a top priority.  Right now, home heating oil is cheaper than it has been in a while, so we're making sure the oil tanks stay topped off.  Same for firewood - that's up in price, but we're ensuring we have enough to last us a long time.  

2. Car maintenance

This is something to stay on top of when you are currently employed.  We're making sure all our maintenance is up to date  - we always do, but now it's even more critical.  And keep that gas tank full too.  

3. Insulating supplies

We live in an old, drafty house.  No getting around it, there's a lot of heat waste going on.   So while we've cut back on home improvements, this is one area that's still getting funded.  4 new basement windows are at the top of the list - we can feel the outdoor air blowing through the current ones in one area of the basement.  I'd love to do the windows in our bedroom as well, but for now we'll just caulk and seal as best we can.  

4. The pantry

I'm an advocate of a stocked pantry.  Now is the time to fill the pantry, freezer and cabinets with a bit of a stockpile.  A while back, Liz Pulliam Weston on MSN Money wrote a great article about the emergency fund you can eat.  http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/TheEmergencyFundYou

CanEat.aspx

How much and what you stock is up to you.

5. Retirement

I hear from a lot of people lately the desire to stop putting money into the uncertain markets. But just don't listen.   Save as much as you can, as often as you can.  Don't ditch those pretax withdrawals or the employer match.   You have the opportunity to get good stocks cheap.  Find a good solid mutual fund by reading ratings at Morningstar.com and stick to it.  

6. Family gatherings

Christmas will be a little less generous this year, which is fine with me.  But we're still spending to see family (and friends!), even if that spending is more careful.  Relationships are worth it.  

Great Expectations

Sorry for the slow month, folks.  I've been on the road for work and working long, long days this month.  A few days at home for the holiday week has finally cured me of jetlag and general exhaustion.  It took some time for my brain to switch back to the 'on' position.  

It's the holiday season again.  I love the holidays.  Friends, family, good food, beautiful decorations...I love just about all of it.  But there are a few downsides that appear over the course of the season.   The expense.  The number of commitments that can spring up.  The pressure from those beloved friends and family members to meet their expectations.  It's easy to fall prey to a nice helping of stress and guilt.  So here are some ideas to help navigate the emotional minefields that the holidays can generate.

1. Gifts

We put away money all year long for Christmas gifts in the form of a 'Christmas club' at our credit union.  I strongly recommend this, even if it's just a few dollars a month - takes a huge amount of the sting out.  Still, it can be a big expense for us, especially because when the holiday season wraps up, we're involved in 5 - yes 5 - holiday celebrations (all but one is varying branches of family).  Gift exchanges have just gotten a little out of control for us, so much so that I was thrilled when my great aunt, who typically goes overboard with her generosity, announced she was only giving to children in the family, and my siblings and I decided to use the same approach.  Slowly but surely, both from other's actions and our own, we're trying to pare down the sheer number of gifts we give and receive.  

Instead, we're trying to give the gift of time and energy, by inviting friends over for dinner, doing an activity together, and so on.  The key here is talk early and often....and stand your ground when you make a decision about who and what to give. Change is hard for people, and opting out of a gift giving tradition or scaling it back may take time and gentle persistence to accomplish.  

So if you have always spent $100 a person and want to only spend $25, start talking about it in say, January.  And if there's a negative response, the best answer is "Of course, you must do what you want, but this is what I/we are doing.  I'm sorry you aren't happy about it, but this is the right decision for us".  And remind that person that the $ amount spent doesn't equal the amount of love you have for them.  

2. Time

I know I'm not the only one out there who has shown up for a family holiday function and received a guilt trip about not being around more, or staying longer.  Boy does that make the holidays extra fun, no?  While I typically come up with a fairly pacifying response, what goes through my head is more like "Oh yeah? Really?  Well perhaps you would like to maybe go to work for me for a few weeks, or come clean my bathroom so I have more free time!  Between errands, housework and commitments on our time, I can't even find time most weekends for a nap, or to just sit and veg out for an hour!  So thpppppt!"

Of course, saying things like that is completely nonproductive.  Most of the demands come from the sheer desire for more time with you, which means you matter quite a bit to that person.  So a gentle response of "Look, I know you would love it if we spent more time, but right now we're doing the best we can, and while you probably don't mean to make me/us feel bad about what we can give, that's what is happening, so I/we wish you could just enjoy the time we do have together."  This is one of those 'lather, rinse, repeat' statements that may need saying far more than once.  If that doesn't work, a more pointed conversation about how the guilt trips make you want to actually limit your time with that person and are completely counterproductive may be necessary.  Above all though, try not to feel bad.  Most of us have limited free time - there's nothing to apologize for if you don't have more to give.

3. Commitments

Yeah, so everyone and their grandmother's uncle's next-door-neighbor is having a holiday gathering, party, gift grab or potluck dinner.  Oh yeah, and then there's the work stuff - not mandatory, per se, but sure as heck expected.  The holidays start to seem like a treadmill you can't get off, and in your head runs the thought 'Great, so now I've made everyone happy, except I'm exhausted and miserable.  Bah humbug.'

There's a great response to this one "Sorry, I/we can't make it."  Simple, straightforward, and to the point.  No excuses for someone to poke at.  Pick and choose the activities to attend.  I set the expectations at work that I have a limited number of 'Kitchen Passes' to choose from - so if the after-hours gatherings are too frequent, I go to some, but not all.  After all, my home and husband are important too.  

Same with holiday parties.  This year we were invited to a neighborhood party - we would love to attend and meet some of the neighbors that we haven't met yet, but since it falls on the same day as I've scheduled my annual baking day with  good friend as well as a family dinner, squeezing in a 3rd event is just not possible.  So a polite decline along with 'but we'd love to meet you all, and hope we can find another time!' fits the bill.  It's true, too. 

It's very freeing to learn that you can, in fact, say no.  A holiday where everyone but you gets to be happy is no good holiday at all.  

4. Travel

Whether you live 15 minutes or 15 hours from your family, the travel question gets tricky.  I was 33 years old before I got to spend a Christmas day at my home and stay in one place the whole day (divorced parents and expectations of visits from grandparents and other family).  I remember all too vividly how awful it was to rush from place to place, trying to stuff in yet one more bite of my second Christmas dinner in 4 hours in order to please my parents or someone else.  Quite frankly, it sucked, and for years I hated Christmas - because again, it was about making everyone else happy at my siblings and my expense.  

So a couple years ago, my husband and I created our own tradition.  We'll travel for any other holiday, but Christmas is at home.  Whomever wants to come to us is welcome, be they family or friends.  I cook, we open gifts, all is well.   Is this a hard and fast rule?  Mostly.  We may consider the occasional not-at-home Christmas over the years, but we're not committing to anything, especially now with Baby MoneyPenny on the way.  If we do decide to, it will be the exception, rather than the rule.  I learned it was okay to make the holidays fun for me too.  

That's not to say that making extended family happy isn't important, or that no one should travel on the holidays.  Some people feel it isn't the holiday unless it's spent at Mom's or Grandma's or wherever.  Fine.  But do yourself a favor and limit it to one locale and one holiday dinner, unless you and all the other people in your immediate family (spouse and kids) absolutely and unhesistatingly agrees to do otherwise.  No one will die if you see them on the 26th instead of the 25th, or if you spend most of Chanukah lighting candles and making latkes in your apartment with friends.  Sure, change is hard, and it's important to be fair to everyone.

But that includes you too.  I once read the statement 'traditions are great, everyone should get a chance to make some', and I think it's a good way to look at things.  And if someone is mad at you for changing theirs, ask yourself why it is more honorable for them to be happy, even at your expense, than for you to be?  

I love the holidays - but in many cases that's because I've learned, over time, what I am willing and able to give.  Do I always get it right?  No (see the thing about the 5 holiday gift exchanges above).  But I try - to do it right for family, my spouse, and also myself.  I'll happily meet the expectations I can meet, but I've given up (mostly) on guilt for those I can't meet.    I hope you can do the same.

So enjoy those holidays.  And when someone asks you to bring cookies or an appetizer to a function, it's okay to buy them if you don't feel like baking.  

Or volunteer to bring the wine.  Unless you live in Sonoma, it's unlikely that anyone will expect you to have pressed the grapes yourself.  

 

About those HENRYs

Last week, CNN and Fortune Magazine, published a fascinating article about the 'HENRYs' - a demographic of High Earners, Not Rich Yet people.  These are folks with high incomes, sure - $250k to $500k, but interestingly, none of them consider themselves rich.

The article caught my attention on a variety of levels.  First, because it came out just a short time before election day, and something I hear over and over again is discussion about 'real Americans'.  This is often used in the context that both high earners, or those coastal-state latte drinking liberal elitists don't represent 'real America'.    And if they are one and the same, they certainly can't be 'real Americans'.  I'm not sure what that makes people who fit that bill, but we'll get to that in a minute.  

It also fascinated me, because, while not HENRYs, my husband and I do earn well above the median, and our habits were well represented in some of the featured families. In other words, our spending and lifestyle habits do somewhat mirror the HENRYs.  Not entirely - private schools are not on our list for one, but somewhat.  

Lastly, it's because of the label 'rich' and how I define it - not by earnings, but by net worth. This too, mirrors the HENRYs beliefs. So I thought I'd take some time to explore my thoughts on the article.

I'll start off by saying anyone in that earning category who describes themselves as struggling is not using their resources wisely.  If you can't make ends meet on $500k a year, you are probably overspending on big ticket items, like housing, cars, and so forth.  But there's a huge disparity, between what $250k can do for you in say, Moline Illinois, vs. Manhattan.  There's also far less likelihood that you'll make that $250k in Moline.  

So why don't these people think they are rich?  Top of the list is taxes.  As of 2006, the data cited in the article, a high wage earner in this bracket, who averages $287,000.00 a year gross pays $57k in federal taxes.  If you live in a state that also taxes income, take another 5-8% of that, or between $14, 350 and $22,960.  Add to that Social Security taxes, medicare taxes, and you are talking about $90,000 of that $287,000.00 average earnings gone before you see these folks see a paycheck.  Yep, almost a third of their average earnings goes out the door.  And in most cases, due to the AMT, or Alternative Minimum Tax, these folks never see it back, not even in the form of the deductions that so many of us view as standard to tax payers.  

So it's pretty understandable how the HENRYs get a little resentful when politicians talk about them paying more taxes.  After all, they pay a tremendous percentage more of their incomes in taxes than those 'real Americans' already.  And because the primary tax base is on income rather than net worth, folks like Ross Perot average just 7% of their wealth in taxes, vs. the 30+% cited here for these high earners.  In other words, we don't tax the rich in this country, we tax the high wage earners.  Warren Buffett keeps a huge part of his money safe, simply because he isn't pulling it out of investments.  

In fact via taxes, the HENRYs are subsidizing the lower earners in many government programs.  Is this fair?  Well, yes.  And no.  Barack Obama is right - when wealth is spread, everyone wins.  Rising tides, correctly managed, raise all boats.  Unfortunately, over the last 25 years the disparity in taxation means that the HENRYs have actually born a greater tax burden, percentage wise, than the conspicuously rich Paris Hiltons of the world.  

And that's just taxes.  Add to that the simple math that higher income earners often enter their fields after prolonged education, and there can be a fairly large bite of their income going to student loans.  If a law student graduates with $100k in loans, hardly unheard of, that's about $1000 a month just in loan payments.  

Higher earners also are often congregated in higher cost of living areas - those coasts full of us latte drinking liberal elitists.  This means that housing costs are higher, as are the costs of some things like child care.  In my area, near Boston, the monthly cost of  daycare runs about $1200-$1500 per child, and this is the average, not the high side.  For some folks with multiple kids, it can be cheaper to get a live-in nanny than to pay $3000 or more in daycare each month. And that federal dependent care credit is what, about $4000?  Gone in 6 weeks for a family with 2 kids in these areas.   

Let me also toss in another couple variables.  Sure, the HENRYs save a lot for education, especially college for their kids, as well as large amounts for retirement.  But they also can expect little back in the way of assistance - they will probably not be eligible for much beyond loans for college for their kids, and they plan for what my generation mostly expects - that Social Security and Medicare will be means-tested by the time they retire.  Meaning they will foot the entirety of their retirement by themselves.   

Because politicians and the media get a lot of mileage out of pitting the well-off against the not well off, and because there's no small amount of misunderstandings and even jealousy from the have nots to the haves, there's this idea that these people aren't 'real Americans'.  Real Americans, as we all know, wear flannel, drive tractors and pickups, and are the teachers, farmers, truck drivers, restaurant workers and small town people of our heartland.   Like Sarah Palin, right?  Except the little detail, oft overlooked,  that she, too is a HENRY.  

But where does that leave everyone else?  Let's be real here, a lot of people live on the coasts. Millions and millions of citizens. Are they not 'real Americans'?  Do they not pay taxes, raise families, work hard, donate their money and time, and vote?  I personally know quite a few people that fit the definition of HENRYs, or are close to it, and most of them work very hard indeed.   All of them love their kids, and want what's best for them.  And all of them do very much see themselves as Americans,  even if they don't regularly wear flannel.  

I know few 6-figure+ wage earners that don't work long hours, who aren't handed Blackberries to ensure they are perpetually accessible, and who aren't expected to be able to pick up and travel as required for work.  In other words, there's a trade off for that fantastic income.  Sure, they may be in offices with free coffee instead of working in the fields, but that's small consolation when you have a week full of meetings that force you to kiss your kids goodbye before they wake up and kiss them goodnight long after they fall asleep.  No one would pick that to be the case, but sometimes it happens.  And because HENRYs and similar folks are human, they just try to do their best.  I see a lot of them burn out trying to make it all work.  

I think the idea that these people aren't real Americans is pretty revolting, and does nothing but alienate neighbors and friends in a pointless class war where no one wins.  We, in our perpetual money hypocrisy in America, simultaneously celebrate the small business owners and dedicated who work hard to get ahead, and then resent the hell out of the fact that they did, in fact, get ahead.  

I think that the HENRYs have it pretty good.  Most of them aren't sweating next month's mortgage payment, or making a choice between gas to get to work and food on the table - and that makes them pretty blessed.  But I also think we need to stop seeing this group through rose colored glasses - they have some pretty big challenges too, and their taxes subsidize a lot of the support that those less fortunate than themselves receive.  

While there are people who struggle a lot more with many basic decisions, such as gas vs. food, or a parent sending a sick child to school because of a lack of paid sick time, and their needs must be addressed, the HENRYs aren't exactly popping out golden goose eggs that can subsidize all the lower wage earners needs.  We need to stop our regressive tax breaks to the truly wealthy to find some of the money that our federal government needs.  We need to get some of our corporations off welfare, and make them responsible for themselves.  We need to start looking at all our options, not just the easy targets who don't have the lobbyists to help them.  

HENRYs are that easy target.  They earn a bunch.  They don't have lobbyists and legal help to build them tax loopholes - they just aren't quite that rich.  They aren't the CEOs, they are the VPs. Or the men and women who employ some of those 'real Americans'.  

They are an integral part of America, and it's time we started treating them like it.

Want to meet the HENRYs yourself?

http://money.cnn.com/2008/10/24/magazines/fortune/tully_henrys.fortune/index.htm

Preparing for Baby Part 1

As I pass into my 23rd week of pregnancy, the need to actually prepare for Baby MoneyPenny's arrival has become more pressing.  

So far, we've managed to order a glider and ottoman (a must-have according to the many sleep deprived parents I've talked to, who have spent hours pacing with a fussy infant) for the nursery, and order some cloth diapers from wildflowerdiapers.com.  We did custom order the fabric and wood style for the glider, but the total additional cost off the base price was $7, so we figured we did okay.  

We still plan to paint the nursery, and we need some nursery furniture. While Baby Moneypenny will probably sleep in in our room for the first few months, it's my desire to have him or her in the nursery by the time I go back to work after 3 months of maternity leave.  Which means a crib will have to be obtained at some point.  

That, and we created a registry.  I always have mixed feelings about registries, including my own. They seem to have become a symbol of greed - 'buy me stuff!', and yet, true to the mixed relationship Americans have with money, "Where are you registered" is one of the most common questions I've gotten so far, and I often hear complaints about those who don't provide a registry to 'help people choose'.  So I compromise by putting nothing on our registry that we aren't ultimately prepared to buy for ourselves.  

So far, I give us a B+ on not succumbing to tons of marketing.  We have thus far avoided completely a bassinet or co-sleeper - the bassinet top of a pack 'n play will do fine, and only if it doesn't will we then go seek something else out - realistically we could always put a moses basket in the middle of our bed too, although I'm nervous of the baby in the bed with us.  I'm guessing we'll be inundated by cute clothes and toys, so we've skipped buying those, although we will probably pick something soft and cozy out for baby to come home from the hospital in, and a toy to have too.  Books are something we want to eventually accumulate a collection of, but based on my observations of neices and nephews collections, birthdays and holidays will cover a bunch of that, and then we'll add to their collection of things to read over the years.  

As for gear, there are things that are either needed or entirely useful.  A carseat &  stroller, somewhere to sleep, diapers, wipes, and so on.  A place to sleep.  Clothes.   Baby gates.  

What we don't need are items like an $800 stroller.  A decent, well rated travel system and a couple carseat bases will do just fine.  So we won't be the most stylish stroller-toting parents on the block...I'm comfortable with that.  Over the last month, I stopped a few moms to ask how they like their strollers and then Sander and I took a look around together.   We ended up picking a system that is sporty looking and handles well, but relatively inexpensive.   

Same with nursery furniture - there are sites that offer gorgeous cribs that can run into the thousands.  But a nice-looking, functional piece of furniture can be just as good, if not better, seeing as kids often practice teething on their cribs, so they can end up looking like hamster cages after a couple years of use.  

Ditto this philosophy on expensive little baby outfits and other baby accessories.   While they are adorable and tempting, and I don't know that I'll be able to completely avoid temptation after the baby arrives, I'm trying to remain practical.  

And then there's the mom costs.  Nursing-friendly clothes.  A pump, if one should so choose.  And all sorts of other gear, some of which is even a really good idea.  I resisted the idea of a pump, as they cost between $200-$300, until I was offered one free but for the cost of postage.  New hoses, etc to the tune of about $30 will make it good as new.  Some of my maternity clothes are also nursing clothes.  

Our biggest decision left is what to do about a crib and dresser.  We need one of each.  We've been offered a few used cribs, and are considering those as options, and we've seen some new that we like.  We have a tendency to like matched sets, so this is the one area where our frugality and practicality have been challenged.  Our solution has been to defer making a decision for right now - the reality is, we don't need it yet.   

It seems that this is one of the best things that soon-to-be parents can do - defer making decisions.  After all, we don't know yet what will work for this new person entering our lives, and if our child is anything like us, Baby MoneyPenny will have opinions of his/her own.   Sure,  we'll need some stuff up front.  We'll get some ourselves, and we'll register for the rest, and if we don't get what we register for we'll evaluate what we need and want as we go along.  In other words, we'll be fine either way.  

I'll add another update when we're closer - we'll see if the resolve to remain sensible holds.