Her dilemma is nothing new to a military spouse…change.  EXCEPT this change is in the form of military retirement.

This is actually a BIG deal if this is the only life you know.

Don’t close your browser just yet if you aren’t part of the military lifestyle because what I have to say pertains to ALL of us, military and civilian alike.

My girlfriend had some valid concerns:

1. They will experience a pay decrease.
2. What if they can’t find other employment in middle age?
3. How will her husband be different without the job that defined him?
4. What if she gets what she always wanted?

Here’s what I told her:

Pay decrease:  Assess your debt level now before a change in pay happens. What can’t you live without? If you receive a pension, what is the amount you need to make up in a new job to maintain the standard of living you enjoy now.

Unemployment in middle age:  This is a very valid concern considering the current job market. I reminded her that he has over 20 years in the military with advanced degrees. She is employable in a field that is experiencing a shortage of qualified candidates.  Plus, I reminded her of #1.  How much do they actually “need” to make up the difference. What if the only job he could find is the Walmart greeter? Will that make up the difference?

How will her husband be different?:  Ahhhh….here was the actual crux of the matter. The rest was just “fluff.” The real looming crisis is how this would change the dynamic of who they are as a couple.

What if he never gets off the couch?

Very, very valid concern, in my humble opinion, and one we ALL will face someday.

Here’s the advice I gave:  talk.  I know it sounds trite to some, but it is nothing but.  If you don’t start communicating your fears and concerns ahead of the impending life change then you will be behind the 8-ball.

“He tells me my fears are unfounded or he tries to “fix” the problem.”  Well, then tell him that isn’t fair and you deserve a chance to speak your peace and to stop trying to fix the problem.

Trust me, girlfriends, I know of what I speak on#3. I love The Man very much and we will be married 19 years this September, but communication is our biggest challenge.  He wants to “fix” the issue and I just want to “vent.” He gets tired of talking about something and I can hash it out to DEATH! Poor guy HA!

If you feel your Man won’t listen at home, then schedule a date. Or schedule a marriage retreat. This is serious business. Your concerns are valid and you need a chance to be heard.

What if she gets what she has always wanted?:  This is a tough one because we all think the grass is greener in someone else’s yard. (Except for me because I have the greenest lawn on my street, kid you not. I take pride in my lawn. I think I am a guy deep down at times. One of my former assistants accused me of that years ago before I fired her….sorry I digress.)

Let’s play the “what if” game here.

• What if he sits at home and does nothing all day? Will that upset you?  Why?
• What if you get the dream job you always wanted?
• What if life doesn’t turn out the way you planned?

See, the reality is that life is NEVER what we think it will be, but we survive and thrive anyway.

I have faith that my girlfriend will come out on the other side of this life change as a force to be reckoned with and I can’t wait to see how she blooms.

This is the second installment of a series of blog posts about investing….the hows and whys. I originally posted  this series, with a few minor changes, at Daily Money Shot as a guest blogger.

I briefly touched on mutual funds in my last post, but let me put it in layman’s terms:

A mutual fund is a professionally managed portfolio of different equities, such as stocks, bonds and cash, designed to give a small investor the opportunity to invest in those equities with a small amount of cash. 

The mutual fund manager takes the money you give him/her and decides the best way to allocate those funds.

If you are in a bond fund, then the majority of your dollars will be allocated to bonds.

If you are in a large cap mutual fund, then the majority of your dollars will be allocated to large cap stocks ie. McDonald’s, Kimberly Clark, Caterpillar, etc.  (We will discuss “large cap” at a later time.)

Also, remember the manager will not be fully invested. They will keep some money aside in cash for various reasons…sometimes because they sold off a position and just haven’t re-invested the cash elsewhere yet.

Different investment vehicles

When I was recommending mutual funds to former clients some of them would get so confused that an IRA they were invested in was actually a mutual fund just dressed up into a retirement vehicle.  Are you confused by that too?  Well, let’s see if we can remedy that.

*Note: for the more advanced girlfriend out there, I do know there are retirement vehicles that aren’t mutual funds, but for my purposes I am sticking with this view. 

You can purchase a “regular” mutual fund.  There are tax implications with a “regular” mutual fund.  When the funds you invested gain in value, which is the goal hopefully, then you will pay taxes on that gain when you remove the dollars from the fund.

Also, you will receive a 1099-DIV from your brokerage firm if your mutual fund invested in any companies that paid out a dividend that year.  You probably didn’t receive a check for the dividend payout because more times than not someone advised you to check the box “reinvest dividends.”  It is a very common practice unless you need the dividend income to live on.  It’s also a great way to increase your portfolio value.

Now here is the confusing part, I think.  Your “regular” mutual fund is great for some medium-term goals, but if you have long-term goals, as most of us do, your advisor has probably suggested an IRA.  That is an Individual Retirement Account.  The money you put into that account is intended to stay there until you are 59 ½.  The IRS will penalize you if you remove it prior to that age, unless you qualify for one of their exceptions.  There are 2 types of IRAs, the Traditional and the Roth.

• The Traditional IRA lets you deduct your contribution off your taxes which means this type of IRA is “tax-deferred.”  Since you didn’t pay taxes on your contribution you will pay them later along with paying taxes on all the earnings on said money.
• A Roth IRA, on the other hand, is not deducted off your tax return.  All the money you put into the IRA and all it earns are tax-free.  The penalty applies to both the Traditional and the Roth if you take the money out prior to age 59 ½.

One thing to remember, an IRA is either yours or your spouses’ (if that fits), hence the term INDIVIDUAL.  Even if you don’t have gainful employment outside the home, but your spouse does, you are eligible to contribute to one. I mention this because a lot of my girlfriends tell me that they have their husband’s IRA. Not so. You may be the beneficiary, but you are NOT the owner.

If you happen to be lucky to work for a company that offers a 401(k), good for you and even better if they “match.”   A 401(k) is another retirement investment vehicle.  You contribute to your company’s plan. The dollars you put in are considered a salary reduction.  In other words, you don’t pay taxes on that part of your salary.  This is another tax-deferred plan.

The last retirement vehicle to discuss is the 403(b). I inadvertently called it a 503(b) in my last post.  I’m sorry about that.  Acronyms and numbers trip me up too.  A 403(b) is structured very similarly to a 401(k) but it is offered to certain employees of public  schools, tax-exempt organizations and ministers.

All of the plans have benefits and you can have more than one of them at a time.  They do have different contribution limitations though.  If you exceed the limits, you will be penalized so consult your advisor, the IRS, or shoot me a note and I can discuss this with you.

There are even retirement plans for the self-employed, but the above 4 investment vehicles cover most of the population and their options.

To summarize:  3 of the plans I discussed are tax-deferred because you get to deduct the contributions from either your salary or your taxes and 1 of the plans is tax-free because you don’t deduct the contributions.

The next installment will discuss the differences between the S&P, Dow Jones, & the Nasdaq…stay tuned!

We were so psyched that Bates and Anthony won, but then the Roller Derby moms spoke. Ugh!

“We are so much more than moms.”  ”We got our lives back.”

Hmmmmmm…..

I had to pause the DVR at the first quote to tell the littles that being a mom is a great and admirable job.

I paused again at the next quote, 3 secs later, to tell them they will encounter this attitude throughout their lifetimes.

One minute women are screaming to have children and the next they are lamenting the fact that children change their lives.

Really, girlfriends?  Aren’t there enough books out there in this day in age telling you that tidbit?  How did you miss the news??

And why the heck is being “just a mom” such a bad choice?  Don’t we want “the right to choose?”

Well, I choose this path so I would appreciate it if you would stop demeaning my choice. I don’t demean your choice.

And before you get your pretty panties in an uproar, let me remind you that I was the mom with a career for quite a few years. I get it. I wanted to set the world on fire too. Every hill was a battle to win or die on. I hear you roar. I really do.

Here’s the thing though, I have CHOSEN a different path…one that works for my family. I have CHOSEN to have more children and I feel I owe them the best of me. And the best of me isn’t working 50-60 hours per week chasing a buck. The best of me is not trying to beat the clock.

When did we decide that motherhood is such a miserable life choice?

Did you CHOOSE to have children?  CHOOSE to adopt?  Then why is it so bad to be known as their mother?

The Roller Derby moms on the Amazing Race spent the whole race telling us how they wanted their kids to be proud of them…until the end. Then they essentially flipped them their middle fingers and said “yeah, I don’t want to be remembered as a mom.”

Why not?

What does it mean to “get your life back?” Isn’t this the life you chose when you decided to create a family?  I am confused.

Even if you didn’t plan your pregnancy down to a science you still CHOSE to bring life into this world. Good on you. Now step up and let your kids know that you are happy to be “just their mom.”

I’m curious how many of you MOMs who “want their lives back” or don’t want to be “just a mom” would feel if your husbands said “I don’t want to be just so-and-so’s husband” or “I can’t wait to get my life back.” I don’t know about you but I would be hurt and upset. Think about the message you send to your kids every time you express those feelings. I know you probably don’t really mean those things and you would lay down your life for your kids, but why hurt them with your words.

I challenge you to revel in your motherhood today.

Happy Mother’s Day.

This is the beginning of a series of blog posts about investing….the hows and whys. I originally posted  this series, with a few minor changes, at Daily Money Shot as a guest blogger.

Like some of you, I didn’t know the first thing about investing.  All I knew was that my future husband went down to our local bank and opened an IRA (Individual Retirement Account) and I thought I should probably do that too.

The banker gave me some investment choices and I made my decisions based on those “stars.”  I even invested in the multi-national company that I worked for at the time.  They took $10 out of my paycheck every week to start my journey toward owning stocks.

Things changed for me, however, when I was finishing up my degree in business and I took a finance class.  I fell in the love with the concept of compounding interest…earning money on the interest earned.

The Birth of a Business

So let’s start at the very beginning of what I call the investing cycle…the birth of a business.  Most businesses don’t start out as large conglomerates.  Think Bill Gates and his garage here.  You (just as an example), and maybe a friend or 2, have an idea and decide to offer your product or service to those around you.  The idea takes off and more people want what you are offering.  You need a little more cash to either buy more supplies or to lease office space so you hit up Mom & Dad, your aunts and uncles, friends, neighbors, etc.  You ask them to loan you some money with the intent of paying it back with interest (more money than what you borrowed.)

Now the idea is really going and you know you need more cash for updated computer systems, maybe a truck, new tools, etc.  You get the idea.  You head to ABC bank.  They give you a loan (well, maybe not in this economy) and off you go to grow your business.

You are really cookin’ now!  And you need more money to hire salespeople, office staff, truck drivers, computer help, etc, but the bank isn’t interested in giving you more money.

So you reach out to what are called Venture Capitalists.  These are people or groups of people who are in love with your business.  They want to give you money.  Great!  The catch is that they want a “piece” of your business.  Let’s say they give you $200,000 to invest in the business but they want 25% of the profits.  So your business grosses (before taxes) $500,000 for 6 months, the Venture Capitalist takes their $125,000 in profits.

Make sense so far?

Your vision has changed and you want to go national with your idea, maybe even international.  Good for you and your success!

You decide you want to take your business “public” to raise even more money.  The Venture Capitalists aren’t going to be the only investors in your business any longer.  Large mutual funds will buy shares, as well as Mom and Pop.  You reach out to an investment bank to get your IPO (initial public offering) out to the public.  Once you are launched anyone can purchase a piece of your company.

And this is where “investing in the stock market” comes in for most of us.

We like a company or a product and we want to own a piece of it.  Most of us purchase what we think are pieces of companies through mutual funds.  Those mutual funds are dressed up into vehicles called IRAs or 401(k)s.  There are managers of those funds who decide which companies they want to invest in and what percentage of your money will go to each company.

Another example:  You give Ms. Money Manager of XYZ Fund $100 of your money.  Ms. Manager then invests in 10 different companies for you.   Now you “own” a piece of ten different companies THROUGH the mutual fund.  You don’t physically own the shares or the company.  Ms. Manager’s fund purchases pieces of the companies on everyone’s behalf and you purchase shares of the XYZ fund.  If you purchased some shares of your favorite soft drink company directly then YOU own the shares.

You still with me?

I think this is enough for you to chew on for now.

Not all businesses follow this exact trajectory, but it is safe to say a lot do.  I just wanted to give you an idea of the general process.

Next we will cover IRAs, 401(k)s, 503(b)s.  They sound scarier than they are.

As I always tell my girlfriends, you ARE smarter than you think.

We decided to become a 1-car family.

I know, scary sounding isn’t it?

I hope I can do it.

Why are we doing this nutty thing? 

• Our oldest child is moving away and wants to buy her daddy’s car.
• We have talked about simplifying our lives even further than we already do.
• The Man’s schedule is pretty flexible next year.
• To save money.

Let me clarify the last reason…this car is completely paid off and has been for quite some time. Saving money will result from not having to gas up said vehicle, not paying insurance, or any maintenance costs which are sure to arise.

As best we can tell we will save $150 per month between gas and insurance. We don’t normally budget car repairs at this point in our lives because our savings has enough of a buffer to withstand a repair.

I am expecting a small increase in gas costs to our current vehicle given this situation so I factored that into the savings.

Other expected positive outcomes

We are hoping that this will force us to be more conscious of our daily plans and force us to use our time more wisely.

We are also hoping for even more family time since 1 car means we have to travel together. As it stands now, we will sometimes drive to the same location in separate cars if one of us doesn’t want to be inconvenienced with staying longer.

And I think it will be good for us physically.  Right now I drive one of the kids to speech class that is less than a mile away. We could bike or walk realistically, but I don’t because driving is more convenient. Let’s face it, I am inherently lazy unless pushed.

Plus, I will feel better knowing that our oldest has a decent car to drive when she moves 1200 miles away.

Anticipated challenges

• Scheduling conflicts
• Resentment
• Feeling trapped at home

I think the resentment will tie in with the scheduling conflicts. I am old enough to know that everything may sound good until push comes to shove so I am trying to anticipate how this will play out.  I am expecting the worst in feelings and will be thrilled if I feel differently.

How you can help

Prayers,  and lots of them.

She has been training for quite some time and was very excited.  I was excited for her.

I posted the upcoming event on my FB timeline. I called my mother.  Everyone was anticipating pictures.

Unbeknownst to us, her trainer had a paperwork snafu and the horse my daughter usually rides was not allowed to participate.

The only option was a pony. Yep, a pony.

Some people don’t know the difference between a horse or a pony, but those that do know a horse is a horse and a pony is tiny in comparison.

I was shocked and a tad disappointed when the pony arrived and not the horse we were anticipating. How could I possible show a picture of my daughter riding a pony when I went on and on about her rodeo??

To be fair, the instructor did indicate via text that they were “loading the pony.” I didn’t give this a thought because truthfully I had never seen the pony and my daughter had never ridden the pony so I didn’t even know there was a pony at the stables.

Here’s the thing, though, my daughter didn’t care one iota that she was on a pony. She actually fell in love with the pony.

I was embarrassed.  She was riding the ONLY pony there. All the other kids were on full-size horses. She didn’t care.

There was one other parent who wouldn’t let her daughter compete on a pony. They left.

So here’s what I did, I bucked up and embraced the change because my daughter wanted to ride and she didn’t care what she rode.

Here’s the link to her ride.  I cry every time I watch it. The crowd reaction to her entry into the arena just warmed my heart. My daughter was so confident and proud of herself, how could I be anything but proud also?

So what does this have to do with money? A lot actually.  How many times do we make financial decisions based on what other people may say or think of us?

• Your car?
• Your house?
• Your furniture?
• How about your clothing?
• Your kid’s clothing?
• Hair?
• Nails?

All too often is probably the answer.  Instead of worrying about our financial house we worry that our friends and family are judging us based on what they see.

I know I am guilty of this.  I hope the rodeo incident will cure me of some of this.

She is a hoot and a wealth of knowledge. I love spending time with her.

She was telling me how she was annoyed that her bank issued her a revised 1099 and she had to get the local tax agency to file an amendment to her return.

I got nosy.  Yeah, I know, not a big surprise there, right?

I asked her how much she paid this agency.  She told me $300.

Holy Hannah!  Did I mention she is 93 years old?

I got concerned thinking they might be taking advantage of her.  I mentioned the VITA program and the TCE program offered through the IRS.

VITA=Volunteer Income Tax Assistance

TCE=Tax Counseling for the Elderly

I was relieved to hear that she knew about both programs.  Unfortunately (or fortunately depending on your perspective), she doesn’t qualify.

It seems my girlfriend and her late husband did well for themselves through the years.

I didn’t get THAT nosy though and given the generational gap she wasn’t inclined to disclose any further. It was all good.

What she did tell me was how she wishes they had spent more of their money instead of saving so much of it “for the future” and their kids.

I was surprised to hear this, but I can appreciate that statement.

She said there were many things she and her husband went without so that they could put money aside.

After much consideration I decided that this is an important enough topic to discuss.

How much is enough?

I blogged about this in an earlier post here, but it warrants a discussion again.

What is your “number?”  Your number and my number are probably totally different and the journey to get there will be different also.

• Do you want a mortgage-free home in retirement?

• Will you be paying for your child’s (children’s) college?

• Do you have a pension?

• Is travel in your future?

• Will you continue to work?

All of these things, and then some, are important factors to consider as you start saving and investing.

I would love to help you work through this process.  It is pain-free, I promise.  Just take the first step and send me a note to so we can get you started.

I was even proud to say that I don’t consign because I don’t have time.

Well, I gave that some thought and decided to give it a shot.

I started the process early though so it wasn’t a big scramble at the last minute.

I have a tote in the garage that I put the “too-small” clothes into and a box for the gently used toys.

So I hung the clothes, then input them into the online system, and I tagged them.  It wasn’t too time consuming or dreadful.

I tackled this a little at a time over a period of a month or 2 so it really was painless.

The beauty of consigning is that I got to shop early, plus I made 65% of what I consigned. Sweet! I usually give stuff away.

I dragged the littles along with me for our shopping trip. I usually do this alone but the oldest little is getting more and more particular about her clothes.

I found most everything I wanted, to include a $10 suit for the little guy. And I spent about $90 and change.

Here’s the best part, I earned $102. Woo-hoo!!  My kids are outfitted for the spring and summer at a wash.

Okay, just about. I don’t have shoes, but essentially shopping is a done deal. And everyone is happy.

I am already getting ready for the fall sale.  I love saving money.

The kids are so excited. They haven’t seen their dad in 9 months. Chew on that for a while.

I am filled with excitement, nervousness, and dread.

Dread? you ask.

Yep. Dread.

I dread the “expectation” of R&R.  The “expectation” of the fun-filled time we should be having.

Unless you have lived this lifestyle you will not understand so I will do my best to explain it to you.

I will use a recent post from my Facebook page as an example.

I posted that I purchased new light fixtures for my master bath and couldn’t wait for my husband to come home and install them before the painters arrived.

A very well-meaning girlfriend posted that I could install them myself. Why wait? Besides, we should be having FUN while he is home.

Now, I KNOW I can install the lights myself. After all I have done many amazing things while my husband is gone, but I am not interested in doing this.

This friend didn’t mean to stir up a hornet’s nest of emotion inside me, but she did nonetheless.

• Am I a “bad” wife for wanting my husband’s help with this?
• Should I let him have a full-on vacation and we get back to our daily lives when he is gone?
• What about ME??!!

Part of me feels guilty now that I have a to-do list for him to help me through.

And now I feel like I should justify it by saying it is not remodeling the bathroom or a full on remodel of any room…we are in need of a raised garden bed, bunkbeds need bunking, and the yard needs more TLC.

The other part actually feels resentful that I feel guilty.

I’ve been busting my hump back on the home front by homeschooling our 3 littles, taking care of both cars and a motorhome, saying hello to a new dog and goodbye to an old one, plus getting us through a broken leg incident.

There is so much more to cover, but you get the picture.

So cry me a freakin’ river that I am not planning FUN 24/7.

Another one of my girlfriends reminded me that my husband actually wants to feel “needed.”  She brought me back to a neutral place, thankfully because I was spiraling with feelings.

My husband and I discussed this very thing awhile ago.  He sees his role as the protector and provider of our family. And the way he shows his love is through Acts of Service.

Here’s the other thing about R&R that EVERY military spouse thinks about:

What if he/she leaves and I never see them again??

Ugh, right? Well, it is what we think about so maximizing our time is even more stressful.

So I am going to kick the guilt to the curb and let The Man take care of us for a couple of weeks. In turn I will provide him all his favorite meals.  That and a few other things wink, wink will make him happy.

Can you spell c-h-a-l-l-e-n-g-i-n-g?

So what do you do when your spouse or significant other doesn’t share your views on finances?

I think there are a couple of things:

1. Don’t nag. Seriously. This never works. It might even entice your partner to become spiteful.
2. Communicate your concerns. If you are the saver and would like to save more, suggest a visit to a financial planner/counselor. If that doesn’t work, let your partner know you are going to be putting “x” number of dollars aside into a savings or investment account. (you never want to have secret accounts)
3. Try to find a compromise. This doesn’t have to be an all-or-nothing proposition. If your spouse/significant other thinks putting $500 per month into savings is too much (i.e. not in the budget) then see if they will agree to half.

I have counseled many couples who do not see eye-to-eye on finances.

The Man and I certainly did not when we got together.

One incident in particular comes to mind.

We had a small farmhouse butcher block table when we married. I was wanting something larger.

We aren’t “traditional” dining room table people and all I wanted was a table that could accommodate a guest or 2.

I found one and fell in love.

The Man was on his first deployment at the time.

When he came home he was not happy that I had spent $1200 on a table.

He made snide comments about it for months. The straw that broke the camel’s back, so to speak, was a comment he made when his brother and sister-in-law were visiting.

I exploded.

• I was working full-time outside the home and making a considerable salary.
• We had money in the bank.
• We had food on the table.
• The bills were paid.

It wasn’t a Maserati for goodness sake. I probably said a few colorful words, knowing me.

When we discuss finances and our differences, that incident is our go-to reminder that sometimes we need to adjust our way of thinking, especially when you are married.

There are 2 sets of emotions that have to be considered at all times.

I still “worry” that I am making a decision The Man might consider foolish. He, on the other hand, has become so lax in his concern about money it is scary. I might have created a monster HA!

Not being on the same sheet of music financially is a leading cause of divorce in America.

Talk to your spouse.

And above all, remember why you fell in love in the first place.