Family money

I have achieved two awesome milestones: (1) I know what our family assets and debts are (what we have, and what we owe). (2) I know our family's monthly/yearly income and expenses (where our money comes from, where it goes, and how much comes and goes each month/year). This is the first time I have ever known these things, which is embarrassing, but never mind that. I am incredibly satisfied that I know these things now!

I started this process because I inherited some money from my father, and I had some hopes and some fears associated with this inheritance. My hope was that we could afford to make some exciting new purchases: a rental property, or a new car, or solar panels, or... well, we had various fantasies. My fear was that we would spend all the money unintentionally, not even knowing where it went, and then it would be gone, and it would be saying goodbye to my father in yet another painful way. I felt very out of control of our money – I didn't know what we had or where it was going – and therefore I didn't know what to do. I didn't even really know what questions to ask.

I decided I wanted to consider hiring a financial advisor. I have friends who have a financial advisor and feel they have gotten great benefit from that, and other friends who feel it's a waste of money. I got some good recommendations and set up a free consultation. And what do you know: preparation for this consultation included documenting what we have. This was a fair amount of work, because it turns out our accounts are sort of all over the place – we have various checking and savings accounts, multiple retirement accounts, a bunch of insurance policies, and so on. But the financial advisor provided a checklist and a questionnaire, and that enabled me to get it all together. In the process, I found some money I didn't know I had! so that was rewarding. Most of the reward, though, was just the great feeling of knowing what and where it all is.

We did have an initial consultation with a financial advisor, and that was a hour very well spent in my opinion (especially because it was free). Without even doing an analysis he conveyed that we are nowhere near buying a rental property. He said, "What I see here is a wonderful opportunity to save," which I thought was hilariously diplomatic.

I learned that as part of his working with us, if he worked with us, he would be asking us to track our expenses to learn our monthly household cash flow. So after the meeting, I decided to just start on that on my own, and see how far I could get. I realized that if I knew our monthly expenses, I could designate an emergency fund containing six months' expenses, which would be a relief; then I'd know what we had "left," i.e., whether we have a pile of "other money" that we could spend on solar panels or whatever without jeopardizing our basic financial security. Also, if I knew our monthly expenses I could calculate the (monthly/yearly) gap between our income and expenses, which would address my biggest fear (that we are currently losing money without even knowing it).

I've tried to calculate our monthly/yearly expenses before and failed completely, because our expenses are so variable. Every month there's some one-time thing, and some expenses are seasonal (like summer camp), and it all just seemed practically unknowable. But I was energized by my good experience documenting what we have, and I decided I was not going to let this lick me.

The first step was to come up with expense categories relevant to our family. I started with some generic lists I found online, then spent weeks combing through our household transactions, adding and deleting and combining categories until it seemed like I had what I needed. It was important in our case to look at our paychecks, our bank statements, and our credit card statements (for multiple months), because different expenses show up in different places. And now I have it! I have about 12 major categories (such as food and education) and about 50 more detailed categories that facilitate tracking (e.g., groceries/restaurants, tuition for school 1/tuition for school 2/boychoir tuition/etc). This felt like a great achievement in itself.

The next step was to determine the amounts associated with each of these categories. Some were known exactly (tuition is the same every month), so that was easy. Some were variable but easy to average (the electric bill has accessible history). Many, however, were totally unknown to me. Groceries, for example, and entertainment activities, and vacations, and charitable donations, and after school care: I really had no idea of those amounts. So, courageously, I arranged to track these expenses continually and consistently over multiple months. I did this by systematically imposing my expense categories in Mint (all the stuff I need to track shows up there) and documenting the total in each category month by month, in a separate Excel spreadsheet. I did five months of this to begin with (from May to September). That's enough to see some patterns, like groceries. It's not enough for some seasonal categories, so the data is still noisy, but I'll just keep tracking and it will get better over time.

For the Big Moment, to see what everything adds up to, Dale and I sat down together and summed things up. It was exciting! My questions are answered! (With the above caveat about the data still being noisy.) How I love it when questions get answered. Avoiding reporting specific numbers (seriously none of your business), I can cheerfully report the following:

1. Our current expenses are a bit less than our income. Hooray for that!
2. We have enough cash on hand to designate an appropriate emergency fund. Yahoo!
3. There is not enough "other money" for any fantasy expenses. Oh well.
4. We are almost certainly not saving enough for retirement, though this needs more research. College is kind of okay.
5. Overall, our expenses reflect our values very well. We spend a lot of money on the things that we care about a lot. And we agree on those things, which is huge. Our values are perhaps a bit outside our budget, especially given the retirement situation, but it could be worse.

6. I do not currently feel a need for a financial advisor. I think I know what I need to know.

I am very curious to keep this up and see how things evolve as my data gets better!

Bread

I decided to try and make an everyday whole wheat sandwich bread. I used to do this in a bread machine, but my machine wore out, and I don't want to spend $300 on a new one, especially since the bread involved was not perfect (bread machines tend to make hard crusts). I make the best challah I know of, if I do say so myself; there's no machine involved and it's very easy. Five minutes in the morning, no kneading, let it rise in the fridge all day while I'm at work, braid it when I get home and bake for half an hour. Done. The long slow rise in the fridge substitutes for, and is better than, kneading. I would love to have something so straightforward for everyday sandwich bread.

I'm thinking maybe "kneading" in the food processor is a good start; Mark Bittman recommends it. I started with a King Arthur Flour recipe, but instead of the whole room-temperature rising-punching-rising-shaping-rising thing (which I cannot do while I am at work), I let it rise all day in the fridge. Sadly, this loaf did not rise one bit. The dough was approximately the texture of a sandbag. I rolled it out thin and baked it as flatbread instead. Could be worse.

I decided that part of my mistake had been following the recipe. Flours act differently according to the brand, the weather that day, etc. I know what bread dough should look like, and I should have known that that dough was too dry. My poor little yeasts had nothing to drink, and also they just could not blow up their little balloons in such a dense environment. So a few days later I decided to try again, still using the food processor but only adding flour until the dough was nice and shaggy wet like I know it needs to be. I happened to have a day at home (supervising kids who were off school), so I did the room-temperature rising routine. This bread rose eagerly (I probably let it rise too long while I was in a phone meeting) and stuck to the pan something awful. But it made great french toast.

Next I was ready to try the same recipe but (1) letting it rise in the fridge and (2) lining the loaf pan with parchment paper. This loaf was decent, both breadlike and tasty, but still too dense. See that craggy top? Those wrinkles should have risen into a smooth dome. Not making the grade for an easy everyday bread that outcompetes the one from the store.

I'm not sure what to try next. Maybe I should let it rise even longer in the fridge, like 24 hours instead of 12. Maybe I should let it rise in the kitchen after the fridge, and bake it when the kids go to bed, since I don't need it to be ready for dinner. Maybe I need a different recipe; some say a 100% whole wheat bread needs a sourdough starter. Or maybe I should borrow my friend's bread machine. 

My son the emotion Jedi

Me: I'm feeling kind of sad and nervous. I'm not sure why.
Jordan: I think I know what it is.
Me: Really? What?
Jordan: You're not smiling. Smiling actually makes you feel better. Try it, it really works.

He's right of course. And I could not help but smile every time I looked at him for the rest of that day.