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One family’s personal finance tale: year-end round up

Posted by admin on December 9, 2008 in Mom2KG Columns

My favourite columnist, Mom2KG, wrap up her year of blogging with a summary of what her family has learned about investing this year. We are also happy to announce that she is returning in 2009 to continue to share her story with us (I need a better brand for this column though. Thoughts?). Without further ado…

Twelve months of living and learning, on my own, from Mr. Thicken My Wallet himself, and from you. Thanks to all of you who read my trials and tribulations, offered support and posted thoughtful comments.

In a recent, old-fashioned, face-to-face with TMW, we decided I would keep posting in 2009, though perhaps expanding my purview into personal finance lawyers generally. Since I’m sure you’re all sick of hearing me whine about my husband’s ‘tude towards money (or, more accurately, my ways of spending it), this might be a welcome change. However, I’ll also keep you up-to-date on significant personal fiscal issues.

As a year-end wrap-up, here are the Top 5 Things I’ve Learned:

5. Personal Finance is not Easy

At the beginning of 2008, much of the personal finance “stuff” was low-hanging fruit, and seemed easy. The introductory books are written for anyone who can pass tenth grade, and they all seem to pick a mantra, and say it ten different ways. The mantras seem easy to implement but are hard to stick to in the long term. Things like “have a weekly meeting” and “keep track of your spending” sound doable, but are in fact hard to stick to. And, well, boring. My blog also focussed on a family’s journey, and it became very demoralizing for both my husband and I to have the same arguments every week, even as we made progress.

4. Personal Finance is not Hard

The low-hanging fruit noted above is a good 50-75% of what every person and family needs to do. Even implementing one or two good finance habits go a long way. How hard it is to read a blog or two a week? Or schedule quarterly meetings with your financial advisor? Or even save your receipts in one place? Not hard at all.

3. Personal Finance Yields Results

While my husband and I still have a long way to go on ever agreeing on a budget, we’ve seen significant returns on our 2008 plans. Perhaps most importantly, when the fall crisis hit, we were able to react quickly, diverting some investment income into mortgage prepayments. We have reduced our amortization period even further, and are now on track to pay the whole thing off before the term is up.

2. Personal Finance is Personal

I won’t take credit for this one. Many readers drummed this into me with comments over 2008. My personal finance advisor, even on his best days, can never care as much for my retirement plans as I do. So it’s up to us to review his work, research the markets and the products, and take charge of our portfolio.

1. Personal Finance is Long-Term

My husband dreams of living in poverty (yes, one last dig) for the next several years so we can retire super-early. Not my style, but we’re compromising. No matter how we slice it, we have a finite income and a finite amount of time to prepare for our future. Even if we accumulate some magic amount of money, we’ll still have to manage it appropriately in retirement. We are coming to the conclusion that this is not short-term pain for long-term gain. It’s a completely different animal, requiring constant, though not intense, care and attention, forever.

With that, happy holidays and happy New Year! Best wishes.