budgeting

Surviving the Cost of Kids

September 3, 2013

Surviving the cost of kidsJust like your body, your personal finances can be toned and shaped with some planning and steady work. In this guest article, Mill Valley mom and Certified Financial Planner™ Katy Song offers some workout tips to help you get your financial life in shape.

It is hard to save money when you have kids. The cost of full-time childcare so that both parents can work is astronomical. Adding to those fixed costs are all the extra expenses like activities, camp, baby supplies, toys, birthday parties and even an extra seat on the airplane while travelling. Having kids is expensive!

Once children get into public school, the big spending goes down. However, if you have more than one child full-time childcare expenses could endure for nearly a decade. These are supposed to be your prime earning years but all that extra cash was supposed to go to saving for college and retirement, not babysitting.

So how can you survive and save while your children are young? Here are my Top Four Action Items to get you saving during the cash crunch years of early childhood:

  1. Find cost effective childcare. The need for childcare varies widely depending on whether both parents work full-time and how much flexibility you have at work. A full-time nanny may cost $2,500 per month, while full-time pre-school will run you $1,900 per month. Co-ops are a cost effective option at a few hundred dollars per month. Figure out how much you can spend and what is right for your family. A nanny share is a great way to get the personalized care of a nanny at half the cost.

The Year of the Snake & Money: Slow and Steady Wins the Race

February 13, 2013

Year of the SnakeMarin Mommies presents another great article by Marin mom and financial planner Katy Song, CFP®.

The Year of the Dragon is coming to an end. Last year I wrote that it was to be a year of excitement, unpredictability and intensity. It was supposed to be a great year for innovative businesses and ideas. However, the Dragon could also cause you to spend more money than you should. Some astrologers even warned that HP would not do well in 2012; I think a 40% drop in stock price indicates that they were right! How did you do in the Year of the Dragon?

The Snake is considered to be lucky and means that your family will not starve. Those born in the sign of the Snake are supposed to be wise, intuitive, cunning and modest. So, what will the Year of the Snake and 2013 mean for your finances?

Here is some advice based on Chinese interpretations of the year to come:

  1. Pay attention to detail. The Snake is able to read very complicated situations quickly and in a controlled manner, which can be good for business. When signing any kind of documents, pay very close attention to the details. The Snake is cunning, and you can use this to your advantage by looking for loop holes that sway terms in your favor.
  2. Be focused and disciplined to accomplish your goals. A new-found ambition to greatness will inspire you to be all you can be and provide you with the follow through to actually achieve your goals. Steady progress is what the Snake is all about. The 2013 year of the Snake also supports added responsibility. (New baby? Promotion at work?)
  3. Watch your spending. This year you need to watch spending even more diligently since Snakes are inclined to spend money more quickly than earned. The Snake is materialistic and likes the best of everything. The Snake sees it, likes it and buys it. This can create tensions in personal relationships.
  4. Create a safe place from which to work. The Snake likes protection and needs to feel safe and secure to use its special analytical skills. This is the year to make headway in slow and methodical ways. As you focus, you will definitely accomplish things this year.

Back-to-School Money 101 for Parents

August 27, 2012

Manage finances with your partnerThe back-to-school season, be it pre-school or kindergarten, marks the end of summer and new beginnings. During this time of change it is easy to put managing your own lives on the back burner so that you can focus on helping your children transition smoothly. Before you know it, it is the holidays and you put it off even longer. The end result is that another year has gone by and you do not feel any better off than you did at the end of last year.

Do something different this year! Follow the three simple steps below from September through December and make the rest of this year count.

Step 1: Knowledge is Power. Just like when your children start school, the teachers want to know what they are capable of doing. Can they sit still for circle time? Can they follow directions? You need to know what you are capable of and where your money is at this point in time.

There are many free online personal finance resources to help you know where you are financially. For example, Mint.com, Personal Capital and Wikinvest are a few. These tools are very robust and can seem overwhelming. Tip: Decide what “your” goal is for using the online service. Is it tracking your expenses? Or is it getting a holistic view of several portfolios of investments? If it is for tracking your expenses, focus on that only (for now) until you have a good sense of where your money is going.

Look Out! Year of the Dragon and Your Money

January 18, 2012

dragonMarin Mommies presents another great article by Marin mom and financial planner Katy Song, CFP®.

For most of my clients, 2011 proved to be a year of getting on more solid ground (paying down debts, getting out of underwater homes, building up an emergency fund, and even taking a vacation). This was predicted for the Year of the Rabbit (2011), in which you were able to rest and have a little peace. Well, I hope you took the time to get prepared for the Year of the Dragon (2012)!

The Dragon is said to create excitement, unpredictability and intensity. This can bring out some wonderful behaviors like enthusiasm, but throwing caution to the wind can lead to unnecessary risks. Personally, I am ready for some excitement but want to steer clear of drama. So, what does this Year of the Water Dragon mean for your financial future over the next year?  Here is some advice based on Chinese interpretations of the year to come:

Want to Keep Your New Year's Resolution? Learn to Crawl Before You Run

December 26, 2011

New Year's resolutionsMarin Mommies presents another guest article by Marin mom and financial planner Katy Song, CFP®.

As a financial planner, I do a lot of “planning” for my clients all year long. Over the years I have learned what works and doesn’t work for making meaningful changes that stick. For example, cutting things out cold turkey doesn’t work. Long-lasting meaningful change needs to be progressive, which means you first need to learn to crawl, then walk, then run.

Whether your resolutions are financial or not, to ensure success in keeping these resolutions you need to plan ahead (before January 1st is optimal) and create steps that progress so that you build on your success over time to accomplish a larger goal. It is positive momentum from these successes that is going to help you stick with your resolutions throughout the year.

Here are some easy steps to get your progressive resolution plan in place:

Are Driving Costs Driving You Crazy?

October 4, 2011

Money down the gas tankMarin Mommies is presents another great guest article by Marin mom and financial planner Katy Song, CFP®.

When you think of how you want to spend your hard earned money, rarely do you think “I want to overpay for car insurance and spend $70 to fill up my tank!” Car related expenses are a necessity for most families, but there are easy ways to reduce these costs and make sure you are not overspending.

The rule of thumb for transportation related expenses is that they should not account for more than 10% of your gross income. Depending on your salary, this could be a really big number! For example, if you make $150,000 per year the “rule of thumb” says that you can spend $1,250 per month on your cars. This could easily cover gas ($350), insurance ($115), commuting ($50) and a VERY nice car payment. While this rule might make sense in other parts of the U.S., I believe it overstates what a family in the Bay Area should spend given our significantly higher home related expenses.

Cost of Food Eating Up Your Budget?

September 6, 2011

GroceriesMarin Mommies is presents another great guest article by Marin mom and financial planner Katy Song, CFP®.

One of the wonderful things about living in the Bay Area is the excellent food. But spending at great groceries stores, farmer’s markets and restaurants can add up each month. Food related expenses tend to eat up a big part of a family budget, and one of the most frequent questions I get from couples is “How much should we spend on food?”

My answer to that question depends on the family’s specific situation. Ask yourself the following questions right now:

  1. Do you know how much you spend on groceries, eating out, and coffee?
  2. Is buying organic a priority?
  3. Do you love eating out?

Answers to these questions will drive a big portion of your spending on food. If you cannot answer question #1, look at your spending for a couple of months and add up all the charges for grocery, eating out and coffee. Take the average of those months and decide if that number feels comfortable for your family.

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