But falling on your face is good for you

A few weeks ago, I was talking with an old friend who lives far away. My friend is the devoted dad of a lovely toddler (whom I'm ashamed to say I haven't met yet), and he and his wife are the proudest parents in the whole wide world. The most recent saga about the little lady was that she had spent a couple of weeks using a very common word incessantly, without any apparent effort to link it to anything she was feeling, wanting, or looking at. The parents puzzled over this for some time until it dawned on them that the word she was saying over and over was apparently a dogged effort to say her own name.

So what did these wonderful, attentive, and by no means rich parents do?

They enrolled their daughter in enunciation classes.

The kid is TWO. I don't know much about kids, but I'm pretty sure that any conversation I've ever had with a two-year-old is pretty much a guessing game all around.

After hearing about this, I was very interested to read this article about the backlash against overparenting. Apparently since the onset of the recent (or current, depending on your outlook) recession, a third of parents have cut back their kids' activities out of necessity and then discovered that it worked for parents and children alike.

According to the article, we got to the wonderful world of overparenting largely because of fear. Fear is hard-wired into the human condition because knowing when to be afraid kept our ancestors alive. In prosperous times when we don't have to worry about starvation or a war spanning the globe, we find other things to worry about, and not all of those things are necessarily things that should consume us with worry. Many of us (most of us?) worry anyway, though, because that's what's in our genes.

And thus, the helicopter parent was born.

In all fairness, I really don't know squat about raising kids, and I would never argue with certain things that take little effort and reap big benefits, like making kids wear helmets when they ride their bikes. Based on what I've seen and read, however, I've come to the conclusion that constantly hovering over kids is counterproductive for a vast array of reasons. From a practical perspective, it's expensive and it's not always easy to discern the relationship between the spend and the result. I mean, enunciation classes for two-year-olds can't be cheap, right? Vying to give kids the latest and greatest toys and gizmos to stimulate imaginative play also costs big bucks, especially when kids of a certain age will generally prefer the box.

From a child development perspective (and you know I'm really going off into the weeds here, since I have NO personal experience or expertise), I think overparenting makes kids less adventurous and more fearful. I also think that shielding kids from unpleasant consequences makes it more difficult for them to develop good judgment. I see a connection between hypervigilant parenting and both a sense of entitlement and a sense of powerlessness, since it's hard to be self-reliant with mom and dad swooping in every time something goes awry. In short, I've come to believe that overparenting robs kids of survival skills.

There's a simple remedy to the problems overparenting is creating for this generation of kids:

Just back off and let them learn about the world in their own way.

It's easy, it's cheap, and according to a growing number of advocates, it's just about the best thing you can do.

There haven't been too many silver linings in the recession cloud that I've seen so far, but I do think that having to slow down and back off of heavy kids' activity schedules and just letting them be kids is a positive outcome. I'm hoping it's one that outlasts the collective economic woe.

What do you think?

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Only a few more days to enter the f.z. custom thank-you card giveaway! With only a few entrants so far, your chances of winning are extraordinary. Enter today, and show everyone the love for free. The deadline for entry is noon EST on November 23.

Spreading the holiday cheer with a fabulous free giveaway

There's no excuse for not sending thank-you cards this holiday season, especially with this great new prize from Digital Room: One lucky f.z. reader will walk away this week with a FREE pack of fifty custom thank you cards with envelopes!

The cards are 7x5" (folded, that works out to 3.5x5") with plain envelopes, and shipping is free. I'm receiving a set myself for hosting the giveaway, and I'm already going through summer vacation pictures and pictures of my neighbor's cats to find something that really expressive.

To enter, simply leave a comment on this blog describing a little bit about who you'll thank over the holidays or in 2010 and for what. If you link to this contest on your own blog, leave a comment to let me know and you'll score yourself a second free entry. I'll draw a random winner on November 23, and you should have the cards in plenty of time for the holiday season.

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Good luck, and let's get those entries rolling!

Hammer time

Thank you so very, very much to everyone who expressed such kind thoughts on my last post. The outcome:

There was a massive layoff today.

I survived.

Most of my group didn't.

My SO didn't. His division was eliminated.

I'm very tired.

Giveaway post coming tomorrow, I promise.

The word "sever" is in there for a reason

SILVER SPRING, Md. -- Paul Joegriner hasn't worked since March 2008, when he was laid off from his $200,000-a-year job as chief executive officer of a small bank. But you wouldn't know it by appearances.

His wife, Marzena, shuttles their two young children to private school every morning. The family recently vacationed in Virginia Beach, Va., and likes to dine on Porterhouse steaks. Since losing his job, Mr. Joegriner, 44 years old, has had several offers. He's turned each down in hopes of landing a position comparable to what he held before.

The family's lifestyle over the past year and a half has been propped up by a $200,000 severance package and another $100,000 in savings -- funds the family has burned through rapidly. By Mr. Joegriner's own calculations, the family will be out of money in six months if he doesn't find work.

"It will be D-Day," he says. "But on the outside, no one has any idea that we're in trouble."

You can read the full article here.

If the excerpt above wasn't indication enough, the article is about people who lost their jobs in 2007 and 2008, received hefty severance payments, and started burning through them like nothing happened.

In rare cases, this works out. One friend was whacked six weeks ago with a six-figure payout. His first interview was two days later, and he starts his new job at the same salary and with greater growth potential next week. The severance from his prior job means that three college educations for kids ranging from kindergarten to junior high are pretty much paid in full. I almost wrote Most people ain't that lucky as my next sentence, but in truth I don't think luck had a lot to do with it. Instead, I think it was a horrendously bad decision made by one company turning into a ginormous talent windfall for another. Luck, in some benighted way, may have been responsible for my friend getting laid off, but it was his own extraordinary talent that got him a better job than he had before. My friend is the exception, not the rule.

Since I think things would play out far differently for many or even most of us, several things about the Joegriner situation jumped out at me.

--Paul Joegriner made $200,000 per year at the age of 44, but his total savings added up to only $100,000. The severance was probably taxed as ordinary income. If they're broke now, for the twenty months of Paul's unemployment to date their burn rate had to be around $10,000 per month, and that's without factoring in unemployment benefits. Paul Joegriner claims that he never craved a lavish lifestyle, buying suits off the rack and living in a relatively modest community. I read his story differently. His low savings relative to income and burn rate suggest to me that these people have been habitually overspending for a long, long time.

--While job-hunting, Paul Joegriner has actually received several job offers but turned them down because he either didn't like the pay or didn't like the job description. I suppose I can understand turning down the first job, but the second? The third, which just came in September, after eighteen months out of work and in an increasingly desperate financial situation? This seems slightly insane to me.

--Buying coffee out every day instead of making it at home? Really? Seems to me that if things are as desperate as the man says, this isn't a good way to blow $655 per year.

--This guy spent his entire career in banking, most recently as a chief executive officer. If he can't run his personal finances responsibly, what does it say about his ability to run a bank?

The take-aways I have from the article are pretty simple:

While you have a job:
Save, save, save. A cash cushion of a year's worth of expenses is by no means excessive.

Trim your lifestyle
This one's going to vary from person to person, but if you have less than a year's worth of expenses in savings, this is the time to ratchet down your standard of living and crank up the savings rate. If nothing else, if something happens to your income, a more modest standard of living beforehand means less adjustment pain afterwards.

If you lose your job:
Forget your severance; start severing
Cut your spending till it hurts, and then cut some more. It's better to shift into survival mode early, because you might be there for a while.

Be flexible
It's an employer's market. Salaries have dropped, and applicants don't get to pick and choose between opportunities anymore. I'm not saying that the first offer that comes your way is always the right one, but if you're out of a job, this isn't the time to be fussy with your expectations.

Let's hear some talkback: Do you feel sympathy for Paul Joegriner? Why or why not?

This topic has been on my mind a lot because the hammer falls at my workplace next week, and it's going to be ugly. There are no guarantees for anyone, including me.

My next post (hopefully this weekend) is going to feature a giveaway that's very timely for the holidays. In the meantime, however, good wishes for next week are always appreciated and will never go awry.

Branded

As a self-professed frugal person, I don't really like to think of myself as being particularly brand loyal. Brand loyalty has some positive connotations, like high perceived value in a product or strong perceived price-quality ratio, but I think it has many more negative associations, like the notion that buying certain brands improves status or reflects a willingness to hop on the bandwagon with whatever trend is hot at the moment. One common derogatory nickname for people who are extremely brand loyal is sheeple, on the grounds that blindly paying for brand names is more akin to sheep following the herd than actually thinking for oneself.

Whether I like to think of myself as being brand loyal or not, however, the fact remains that there are areas where I am, in some cases extremely so. Here are a few products where my brand loyalty goes off the charts:

Running shoes: Asics Kayano
I discovered Asics Kayanos ten years ago. The Kayanos were the first running shoes I ever had where I could run long distances and not develop black toenails (sorry, I know that's gross) because the toe box is larger than in the shoes I used to wear. I also found that I had fewer problems with shin splints and foot pain than I had before I switched. Asics hasn't changed the last significantly in the ten years I've been wearing the Kayanos, so I feel confident about waiting until the newest model comes out and then buying four pairs of the latest retired model at half price. They've always fit.

Running clothes: Moving Comfort, Adidas
Loyalty towards Moving Comfort sports bras is an easy one: The Cameo model looks good and doesn't rip up my skin on long runs. With other sports bras, it's been one or the other, but never both. Similarly, both Adidas tights and Moving Comfort tights and pants do something unbelievably flattering for my butt. I don't know how they do it, but I'm grateful all the same. I can usually pick up all of these things on sale out of season, which goes a long way towards keeping the costs down.

Suits: Tahari
Tahari suits tend to be either very, very nice or very, very fugly, with little in between. The nice ones in petite sizes usually work for me (see the butt thing above) with no need for alteration and no ghastly surprises in the mirror. Mother's Day sales are a great time to shop for women's suits, especially if I can score a Friends and Family card from someone.

Paint: Benjamin Moore Aura
When I painted my apartment last summer, I defaulted to Benjamin Moore paint mostly because it was highly rated and because I live within walking distance of a Benjamin Moore store and wouldn't kill myself hauling paint if I bought it there. I bought regular satin for the white walls and ceiling and Aura for the accent walls on the grounds that I was doing a significant color change and Aura doesn't require a primer. The Aura was amazing: Not having to put on a primer coat was a godsend considering how physically demanding I learned painting is, and I found that I made fewer mistakes, and the mistakes I made were (mostly) easier to correct than with the regular paint. This stuff is quite expensive, but in my opinion well worth it.

Those are just a few examples of my own brand loyalty. What are some things for which you're brand loyal, and why?

Anticipating the sting

Normally I get a nice little bump in my last five paychecks over the calendar year because I've already maxed out my annual FICA limit. That bump allowed me to sock away some extra cash in October and I'm expecting the same for November, but it turns out that I'm not going to be able to put away as much extra as I wanted without pretty much turning into Scrooge, because I have a bunch of different expenses all hitting at the same time. They include:

Doorman tips: $400
Holiday tips for building staff are customary and expected in New York. We have a small building staff, so I give each of them a holiday card containing $40 to $100. The porter gets the most because he does a demanding job heroically; the super gets the second most because I'm secretly not very impressed with him but at the same time need to be able depend on him to be responsive when I have non-emergency repairs. The doorfolk who are nice and friendly get more than the ones who sit there sullenly and don't make eye contact.

Food bank donation: $500
I raise money for the food bank from other people during the holiday season, so it's important to put my money where my own mouth is. This is a cause that really matters to me, so I consider it one of my fixed holiday expenses.

Other donations: $200
This is also the time of year that other people are doing fundraising, so I normally cough up $50 if it's a cause I believe in, sometimes less (e.g., a token $25) if I think the organization doesn't utilize its funds efficiently.

Homeowner's insurance: $250
Self-explanatory.

Passport renewal: $75
It's only once every ten years, but my passport expires in February so I'm already in the soup if I get asked to travel for work in the next couple of months. (We have a pretty strict travel ban on at the moment, so I'm not expecting it.)

Dentist: $200
Yay, I need another crown in December! I already maxed out my flexible spending plan, but about 70% will be covered by insurance as long as I don't get whacked in the upcoming layoff. If I do, this will cost a heck of a lot more.

Christmas gifts: $350
Ugh. I was almost entirely off the Christmas gift train for years, but I always give my mom restaurant gift certificates for Christmas and birthdays because she NEVER lets me pay when we go out. Beyond that, I need to get a couple of things for my SO and his kids. SO is good about agreeing on modest gifts, but he doesn't want to waive gift-giving altogether. I don't overdo gift-giving with his kids because I don't want them to see me as a gift machine or make either parent feel like I'm trying to compete, but there's no way I'd ever not give them Christmas and birthday gifts. Finally, I need to pony up something fairly respectable for SO's brother and his partner since they always include me in the annual family Broadway musical event.

Marathon travel: $150
Car rental, gas, meals, and hotel. I'm sharing a room with one person and pooling car rental and gas with three.

That works out to just about $2000, but there's not much I can do to bring it down other than skipping the marathon (not gonna happen), going completely bare-bones on gifts and doorman tips, and cutting out charitable donations. The FICA bump covers close to everything, but even if it didn't I've made my peace with it.

Do you have any special end of year expenses? What are they and how do you plan to cover them?

The healthiest sickie around

It's annual enrollment week at work, and I finally had time to sit down and read through the plan changes. At first I was really pleased: Despite all of the horrible things I've been reading in the press about skyrocketing employee insurance costs, the monthly cost of my plan isn't changing at all. Isn't that great?

And then I got down to the details.

The cost of generic medications is remaining the same, $10 a pop for a three month supply. For non-generics, however, it's a different story. Instead of paying a flat $45 for a three-month supply, employees are now required to pay a significant percentage of the medication's retail cost.

I'm on three generic medications and four non-generics which are still under patent, so there's no generic alternative. I phoned the pharmacy that processes my prescriptions to find out what the retail cost of the four non-generics is and found that my costs are indeed going up.

The magnitude of the increase relative to what I pay today?

More than four hundred percent.

Yeah.

I'm seeing a couple of different sources of irony in this situation. First, I'm lucky because I even have insurance, even though it's costing me more than two thousand dollars extra in 2010 just to get the same medication I take today. Second, even with the de facto salary hit I'm about to take, I'm also lucky to have a job right now.

Finally, you'd think that with seven medications, I'm probably a pretty sick person. Nothing could be farther from the truth: I have two auto-immune disorders that certainly could make my life miserable (the reason for three of the medications), but they're under control and most of the time I hardly even remember they're there. I also have extraordinarily sensitive skin that looks good because a few years ago my dermatologist hit on a combination of control meds (four in total) that works for me. My heart rate is 40, my weight is perfectly normal, and I'm running a marathon in a couple of weeks. If I'm sick, I've got to be the healthiest sick person around.

I've given polite but admittedly strained feedback about this change to my plan administrator, but I already know it's not going to do any good. In the meantime, I was looking forward to resuming online investing in 2010 after I top up the rest of my emergency fund, and I was even thinking about splurging on a little piece of jewelry if I qualify for the Boston Marathon in a couple of weeks. In the short term, I guess I'll be saving up an extra couple of thousand dollars to blow on medication instead.

For some well-reasoned and far more articulate thoughts on health care and health care reform than I can give you, I'd suggest stopping by my friend Shadox's blog. In the meantime, I don't recommend watching this if you get the vapors about crude language or gestures, but here are my thoughts on the matter, more or less:


What's your health insurance situation at the moment?