Tag Archives: finances

Retirement and Saving

I finally sat down and talked to my financial adviser yesterday (fancy speak for my best friend from high school who is a CFA), and he did not react well to the news that I’m not saving for retirement.  The conversation ended with me opening a Roth IRA at Fidelity, and a couple people asked me questions about it on Twitter, so I thought I’d explain my process a little bit.

Here’s the tricky thing about all financial guides directed to people in their twenties.  They tell you how to eliminate the credit card debt you inevitably piled up in college buying big macs and they teach you to start saving money towards a house.  They tell you to contribute whatever is left to your retirement account, preferably a 401(k) your employer matches.  (I have read this post on numerous personal finance blogs, but I’m open to reading other posts that say different things.)

I grew up in a relatively affluent area, and as such, I know a fair number of people in their twenties who are a) debt free and b) living comfortably.  Some of them have the luxury of living in a house their parent’s own, rent-free, some of them received an inheritance or a significant amount of money as a graduation present, some of them have simply been working since they were 16 and have saved a significant amount of money.  All of this is to say, there is very little advice for a person who is not currently in debt, and who either has a house, or has enough money to a house without needing to save for one, or has no interest in having a house.

There is a conception that has been promulgated recently among some of my friends that rich kids know what they are doing when it comes to money.  The truth is they don’t, because they’ve never really had to worry about it.  So let’s start with the very best advice I’ve received all year: retirement savings.

From what my high school friend tells me, there are basically three retirement options – an IRA, a Roth IRA, and a 401(k).  The difference between a Roth IRA and an IRA is that an IRA is taxed when you take the money out and a Roth IRA is that it is taxed when you put the money in.  So if you are in a lower tax bracket now than you plan to be when you retire, a Roth IRA is the way to go.  (This is how it was explained to me.  Please please please do your own research.  I am not giving you financial advice.)

A Roth IRA has income limits, which I am currently well below.  So a Roth IRA seemed like a no-brainer – so there are two remaining questions: where, and how much money do you put in?

There are a number of investment companies out there that do retirement accounts.  I went with Fidelity because my friend recommended it, based on the fact that I could invest with the S&P for free (I have zero understanding of what this actually means, expect a post on investment shortly once I’ve learned more about it).  I decided to go with Fidelity for the same reason that my parents both got iPhones.  It’s much easier to help somebody with a problem when you understand it, so since my friend invests with Fidelity, I can go to him for help in the future and he will understand it better than if I went with Vanguard (my second choice, as it’s where my husband’s accounts are.)

The second question – how much money do you put in?  My friend’s advice was that once I/we have a six-month emergency fund in savings, I should be maxing out my retirement funds.  You can put in $5,000 a year.  The minimum for Fidelity is $2,500.  The minimum for other companies is supposedly lower (one tweep said her minimum was $1,500 per year.)  The thing about retirement funds is it is incredibly hard to play catchup if say, you don’t start saving for retirement until you are 30 (this was the lecture I got today), but if you start saving now, even if it’s not very much, it will give you a boost for the future.  As a person who does not make much money currently, I know that I cannot count on having a large amount of social security earnings (if I can count on any), so saving for my future makes me feel better about it.

In case you are wondering whether you really need to save for your retirement, nursing homes cost about $7,000 a month.  Does anyone else have any tips or thoughts on investing and retirement funds?

 

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Decisions

I made a decision recently.  Which is that I do not want to go from my current job to a slightly-better job.  Which means not moving to another part time job just because it pays better, or moving to a full-time job with no benefits because it would be full-time and not part-time.  It means holding out, a little bit,   I made this decision for a few reasons:

1) I like my job now, even though it isn’t full time.

2) I would like those fancy grownup things like insurance and paid vacation time, and the sooner I start earning them, the better.   If I switch to another part-time job or a job with no benefits, I think I will have to work there for awhile to make another transition, which will set me back.

3) I am anxious for my “real life’ to start, and if I take another part-time or low-paying job, I will spend another six months trying to find another new job, and I’m pretty darn tired of job hunting.

I am aware that part of the nature of this market, and my career path, is that I will change jobs frequently, that I will face unemployment when grants end.  But the job that I have now is good experience, it’s a supportive work environment, and it’s interesting.  And I don’t really want my resume to reflect that I can’t hold a job for more than a couple of months, although I’m not sure if that is what an employer would see when they look at it.

Thoughts?  Are you also in limbo with job stuff?

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Commuting by foot and pedal

I usually walk to work.  One day last week, I felt really lazy and was also concerned about blisters (my Eccos are taking a long time to break in) so I took the bus.  And on Friday, I was rushing from a job interview to a client meeting, so I grabbed my bike and rode to work.  Walking to work and biking to work present a series of different challenges, so I’m going to take the opportunity to talk about them.

Walking to Work:

The biggest hazards of walking to work are blisters and getting rocks in my shoes.  I walk through a number of construction sites, which all involve opportunities to get small pebbles or other things in my shoes, which I then have to stop and shake out.  Blisters are a major problem for me, resulting in not wearing certain pairs of shoes to work.  So I wear either my old-lady shoes (which I have been assured by several people are not as bad as I think they are), or a pair of sneakers or my crocs flats or my rain boots, and then when I get to work, I change into a pair of Naturalizers I keep under my desk.  I decided on the first day of work that I would simply keep one pair of shoes at work, and then I could avoid having to bring a pair with me.  I don’t like the Naturalizers much and I can’t walk a mile in them, but they are perfectly comfortable for small amounts of walking, so they are good work shoes.  They have a slightly pointy toe and a one-inch heel, so they are the perfect shoes for keeping at my desk – they go with everything and all my pants work with the height of the heel.

I couldn’t find them online, but they are a little like these – but with a slightly more pointed toe and a buckle and no patent leather.  Really, the heel height is the only similar thing, and mine have chunkier heels.

Vanelli ShoesI refuse to wear a skirt with sneakers as I walk to work, so I wear my croc flats instead.  Sometimes the plastic gets irritating, but they are relatively decent shoes for the purpose of walking to work in them.

Other challenges include the heat.  It hit the 80s this week, and I found that walking to work in stockings is uncomfortable; as is walking to work wearing a jacket.  I brought one blazer to work which I’m now keeping at my
office, and will wear dress pants and t-shirts and then add the blazer.  Sadly, the blazer is definitely not a great one and I am looking to replace it, but the Porros are definitely tight financially these days, and I potentially only have this job for another month.

Biking to Work:

The biggest challenge of biking to work is wearing dress clothes.  I only have to ride a mile to work, and I really can’t come into the Courthouse wearing shorts and sandals and a t-shirt and change.  All of my work skirts are pencil skirts, which are really hard to wear on a bike.  So I need professional attire that won’t get caught in the chain and isn’t too sweat-inducing.  I have one capri-and-short-sleeved jacket suit, which works okay, but I can’t wear that more than once a week.  I think if I keep my job through the summer, I’ll be adding some trim, stylish, work pants to my wardrobe that can be worn on a bike.
Limited Drew Pants

And then the question is just shoes.  Since I need new summer sandals anyway, and want a pair that will be good for Wales, I’m going to get a pair of black keens and just change my shoes when I get into the office, or wear black flats.

The other challenge of biking to work is how to carry my briefcase.  For now, I’m clipping a shoulder strap from a gym bag to my briefcase, but I think eventually I’ll be in the market for something that might have a built in shoulder strap, something more like this, or a more feminine thing like this one.  But for now, I’m keeping this one because my grandma gave it to me and told me how proud she was of me.  So…yeah.

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Advocating for Myself

Today, as I stopped into my boss’ office to ask him a question, he was on the phone with a client.  He asked, “hey, Vado, want to do a rent escrow case?”  I said, “when?”  He said, “whenever.”  I said, “just so you know, I’m currently pretty much booked through June, and I’m not booking any more cases or clients until you know whether you’ll be able to pay me past then.”

My boss looked at me and nodded in agreement, saying that was fair.  I went back to the client that I was meeting with, executed her will, sent her on her way, then wrote five more will, power of attorney, and advance medical directive estate plans.  But I felt victorious.

When I was campaigning, we didn’t discuss whether I would stay on after the primary, and if I would be paid.  I stayed on, and never managed to have the conversation with the candidate over whether she would be paying me or not.  I made several passive aggressive comments about being a volunteer; she made several defensive ones about not having money, but we both danced around the issue and I came away from the experience feeling devalued and depressed.  It was my own fault for not placing enough worth on myself to demand payment, and I promised myself that I would not put myself in that situation again.

So I’m proud of myself for drawing the line.  The next step is going to be asking for a raise, if grant money actually comes through, but I’m really nervous about that step.  I feel like when a person asks for a raise, they must be willing to walk away entirely, because I fear that I would get shown the door if I asked to make more money.  I do feel that I should be making at least the standard salary for a 2L law clerk though, and I don’t think it would be unreasonable to call that salary discrepancy to my boss’ attention.

So here’s to advocating for yourself.  If you haven’t had the courage to try it yet, do it, I dare you.  It feels really good to say, “I am worth something.”

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