Is Your Family Brunch-Close?

At a bed and breakfast in Asheville a few weeks ago my wife and I met a couple from Maryland, and over breakfast one morning we exchanged a CliffsNotes version of our lives: place of birth, occupation, residence, family members and the like. After learning that the couple’s daughter lived in New York, I said, “That’s not too bad. Fairly close to Maryland.”

“Yes,” answered the mother. “But she’s not brunch-close. People tell me how lucky I am that she’s not in California or some other state far away, but it’s not like we can get together for brunch on Sundays.”

Brunch-close. Precisely. That’s what I want. Instead, I have a daughter who lives five hours away, a son who lives six hours away, and another daughter who lives…well, a four-hour plane ride away (I’ve never gotten the gumption to drive to Los Angeles). The mother from Maryland’s point is well-taken; even five hours away is four hours too far to get together for a Sunday brunch.

I’ve lamented before that I raised three kids only to have them move away. Perhaps if my wife and I had refused to pay for out-of-state universities we’d have had a fighting chance, but we did well enough financially that we basically gave our children a green light to drift away, an irony that isn’t lost on me; I’d gladly reduce our 401k balance by half if it meant having our three children live nearby. Guess we mucked that one up!

The geographical distance between family members has other ramifications: it means we vacation less. When my wife and I lived on the east coast, we’d travel to Milwaukee, Chicago and Dallas regularly to see family, and with only two weeks of vacation allowed per year by our employers, that’s pretty much all we could do aside from a weekend camping trip. Now that our children have grown and moved far away, most of our vacation time is spent visiting our children in their respective locations.

Last week a friend of mine suggested that we meet some friends in Portugal next summer – a lovely idea. But we’re planning on visiting family in January (New York), March (Arizona) and April (Ohio), watching our son graduate from college in May (Ohio) and attending my daughter’s wedding in October (California), undoubtedly interspersed with other trips to see our other daughter (Kentucky). So sure, we can go to Portugal next summer, but it probably means we see our children less, a lousy trade-off to have to make.

I know. Such are the problems of a healthy, married, middle-aged white guy with solid financials. In the words of Joe Walsh from his classic song, “Life’s Been Good”:

I can’t complain but sometimes I still do

Yep. Nothing’s going to stop me until my kids live close.

Our Kids' Lives: Regimented and Expensive

I spend a boatload of cash each year for my son to do something I did for free as a kid. And it annoys the crap out of me.

On Facebook a friend of mine recently posted the following article from the Washington Post:  “I send my kids to sleep-away camp to give them a competitive advantage in life.” These kind of headlines are meant to elicit a response. One camp might be thinking, “Holy crap. I’ve never sent my kids to over-night camp. Could I be denying his opportunity to get into an Ivy League school?” Another camp might think, “You’ve got to be kidding me. Whatever happened to sending kids to camp so that they have a great time?” 

The content of the essay is more thoughtful than the headline, and the takeaway is this: some of the basic things we did as kids for fun may have been beneficial for us in ways we didn’t even know, and it might behoove us as parents to – as the author Laura Clydesdale writes – opt out of the "things-to-put-on-the-college-application arms race.” Instead of creating walking, talking resumes, why not nourish thoughtful, creative, independent human beings? That’s really the goal. The fact that a thoughtful, creative and independent human being will invariably have a competitive edge over robotic peers is icing on the cake.

Several years ago I read an excellent book called “The Last Child in the Woods: Saving our Children from Nature-Deficit disorder.” In it author Richard Louv creates a compelling case for allowing our children to break out of the regimented lifestyles we’ve created for our kids – much of it indoors – and instead give them more access to nature, which not only feeds a child’s development, but can also help alleviate symptoms of ADD, obesity and other widespread ailments of today’s children. Even something as basic is going camping as a family can provide a huge benefit for children, and ultimately provide a huge benefit for nature, as people who have a relationship with nature are far more likely to fight to save it. Time spent at a camp, where a kid can break away from wired worlds, take some time to reflect, and experience activities that are foreign to a life in the city or suburbs, can be as mentally and physically beneficial as it is downright fun.

Now, here’s my beef with all of this. Today, every activity our children are engaged in seems to be planned and administered by adults, and overnight camp is of course no exception. This also means it costs money.

My son plays drums in a band. I played keyboard in a band when I was a teenager. In my son’s band, adults pick the players, adults pick the songs, adults pick who plays on which songs, adults provide the equipment, adults plan the gigs and adults provide logistics. In my band, adults did nothing except provide a space for practice and offer an occasional ride. My son’s band costs me thousands of dollars a year. My band cost me nothing except an occasional headache as we tried to figure out the lyrics to songs pre-Internet.

I learned a lot by being in a band with other teenagers. I learned how to compromise, I learned how to not overplay (though this took several years), I learned about how to get along with different types of people, and I learned about my limitations as a performer, as a musician, and – at times – as a human being. My son has learned some of these things too, but nothing that he’s experienced can compare to sitting in a room with four other musicians and saying, “Okay. We need to learn thirty songs and find a gig so that we can play them. Ready?” There’s no doubt in my mind that my experience was richer and more developmental than my son’s has been.

Similarly, I never went to camp as a child. But I did ride my bike constantly, I walked my dog through the expansive fields behind the middle school near my home, and I played in numerous forests in my hometown, where I would make up games with my friends, climb trees, get into arguments, injure myself or others, and – on a particularly lucky day - discover a Penthouse that a classmate kept hidden in the hallow of a tree. Again, I did this for free. And as cool and rich as my children’s camp experiences have been all these years, I’m not sure the adult-supervised activities provided the same benefit as my independent ventures did.

What’s particularly problematic is this: unless you reach critical mass, “opting-out” simply means your kid spends time alone (which does have some benefits but also its limitations). I would like my son to quit his organized, adult-supervised band, but unless I can convince other parents to do the same, it will lead to a band of one. Not so much fun. Breaking away from regimentation only works when you convince others to do the same.

So what’s the answer? Well, I am going to make a concerted appeal to the parents of my son’s band to quit organized music and have our sons and daughters move forward on their own. Will I be successful? I kind of doubt it. But our kids know how to play their instruments, they know fellow musicians, and now it’s time to sink or swim. My son will be richer for it, and if I succeed, so will his parents.

Financial Advice for my Children

I’ve made a few (hundred) bone-headed financial blunders in my past, probably starting with my purchase of a poorly made Yes t-shirt in 1984, but I wish I could say my financial ineptitude ended there. Within the last two years I was late with a credit card payment (really dumb) and didn’t consider the tax implications of some of my family’s finances (also dumb, but more forgivable, unless you conclude that we should have hired an accountant years ago and called it a day). But of course blunders can be and should be avoided. Last week I wrote about the essay Neal Gabler authored in the May issue of The Atlantic, wherein he too admits to his financial gaffes, albeit in the context of a larger national epidemic of financial illiteracy. But here’s the thing: financial illiteracy isn’t a condition. It’s a choice, at least for those who know better (and Gabler certainly does). Yes, I’ve made my mistakes, but I’ve kept reading and over time have done less harm and more good for my family’s finances. 

(Of course, someone could simply argue, “You want to do good for your family’s finances? Get a fricking job!” Fortunately, my wife is not among those someones.)

But even those who've managed to do a fairly good job of staying on top of the myriad of investment choices, saving maxims and cryptic tax laws might find themselves doing a piss-poor job of passing on that education to their children. I’ve found that while my parents had good sense and certainly taught me the value of a buck, most of my education was self-initiated by way of living and screwing up royally from time to time. I would like to see if I can spare my children of too much learning by living, because it seems as though these days the stakes are a bit higher. Growth is down, good jobs are more scarce, college costs are higher, housing is through the roof. It’s all gotten a little more insane.

So, recognizing that I’m offering nothing new here that hasn’t already been stated countless times before, I offer my children my twenty pieces of financial advice.

1)      Become educated. Hey, some people might make fun of Suzy Orman, but the gal can teach. Clark Howard is also a personal favorite. There is a ton of material out there, whether on TV, radio shows, books, DVDs or simply the Internet. I started way back with the books The Wealthy Barber and The Millionaire Next Door and went on from there. Sometimes it helps to read a well-written book instead of plowing through dozens of articles on-line. Whatever method you choose, there is no excuse to be financially illiterate.

2)      Avoid dept.  Aside from a mortgage, a car, a personal business investment, and (maybe) higher education, never pay for something you can’t pay off at the end of the month. Never.  

3)      Start saving now, gradually building to an amount equal to six month’s salary for emergencies. Yes, it will take time to establish such a fund. Start saving now. Even setting aside a few hundred dollars a month for a while will be helpful. And don’t settle for the crap interest rates that your bank offers. Consider looking at online banking (Barclays is currently paying 1%) or joining a credit union. 

4)      Always pay off your credit card bills each month. Always. I’ve missed I think three in my life, and that’s three too many.

5)      Start saving for your retirement immediately. Parents, you can open up an IRA for your child and invest any money they make (and that you claim on their taxes), even if they personally keep what they earn. I opened up IRAs at eTrade for my daughters when they turned sixteen and managed to match what they earned for a couple of years. Now that they’re in college they certainly can’t afford to invest all they earn, but even a small percentage is preferable to nothing. Five percent would be a nice place to start. Once you have access to a 401K that has a company match, max out your 401k up to the point of the company match, and then invest the rest in a Roth IRA, if eligible.

6)      Once you do start saving for retirement, never, ever, ever (this is for you, Neil Gabler) take out money from your 401k for something as stupid as a wedding. By definition, spending a ton of money on a wedding, a bar/bat mitzvah, a confirmation or quinceanera is stupid. Paying for it with a 401K is beyond stupid.  It’s colossally moronic.

7)      Stop eating out so much. You have an oven and a stove. Use them. When you do eat out, if things are tight play it smart and don’t pay for a $10 martini. Go to BYOB places, or pack a picnic and watch a free concert in the park. You can live well without living like a king.

8)      Don’t indulge in every desire, and if you do want to indulge in something, have a plan. If it’s going to take six months of saving before you can buy that musical instrument or take that vacation, then save for six months.

9)      Try not to take any loans out for college, but if you have to, don’t graduate with more than $30,000 in loans, and I would argue that this should only be for majors that will definitely result in a good paying job. $30K in loans means $333 a month for ten years, before rent, before food, before insurance, before utilities, before anything else. That’s a lot of money if you’re intending to major in political science. I can’t recommended highly enough Frank Palmasani’s book Right College, Right Price and I wish many of the parents I’ve spoken to had read it before sending their kids to college that will result in a degree and $80,000 of debt. You’re not doing your kids any favors by having them graduate with whopping debt.

10)   Don’t buy life insurance unless you have people dependent on your income, but once you do have dependents, buy a long-term term life policy while you’re young and healthy.  Lock it in.

11)   Once you have a legal partner and/or dependents, suck it up and pay an attorney for a will.  Don’t leave the government in charge of your death and your assets.

12)   Don’t get divorced. Seriously. Yes, the idea of marriage being a financial partnership isn’t sexy, but if you can avoid leaving your partner, you’ll be way better off financially. Of course, if there’s abuse of any kind, get the fuck out. But if not, see if you can work it out.

13)   Speaking of marriage, don’t wait until the wedding day to find out your partner has $150K in debt (think it doesn’t matter, that love conquers all? Think again.) or wants to open up a pizza joint in Little Italy. For goodness sake, talk about some of this stuff while you’re deciding to spend the rest of your lives with each other.

14)   Budget. Back in the day my wife kept a written log in a notebook of various things we were saving for (a wedding – which we paid for – musical instruments, a down payment on a home, etc.). Of course, once I transferred this log into Excel it became my responsibility, so my next piece of advice is: don’t transfer your wife’s written log into Excel.

15)   Give to charity. You’ve got to be one sorry sack not to give some of your time and money to others in need. And I don’t mean donating your old clothing. I mean feeding the hungry, housing the homeless, protecting wildlife, teaching a child or an adult. Help someone other than yourself.

16)   Don’t lease a car and don’t buy a new car, at least not until you’re in good shape financially. You could consider leasing if you’re someone who truly gets pleasure out of having a new car and who wants one every couple of years. Most of us can get by without this.

17)   Speaking of cars, drive your car until it costs more per year to repair it than it does to buy a newer used car.

18)   And one more about cars – don’t skimp on the obvious: change oil according to manufacturer’s instructions, check brakes and tires regularly and stay on top of other maintenance issues.

19)   Of course, the same can be said for a home once you own one. Take care of it. That doesn’t mean indulging in additions and renovations you can’t afford, but at least maintain the property.

20)   Speaking of mortgages, when rates are low, lock in and pay the minimum. If rates go up at some point (and they will) lock in but pay attention and refinance when appropriate (and don’t pay for the refi). I refinanced I think seven times in nine years when we first moved to Illinois.

So there you are. I’ll probably think of another twenty in the next few weeks, but this is a good place to start. Children, read and take heed.