Single Dads

Many moons ago when I first started the blog Single Dads, I wrote a post where I gave you a list that included a bunch of things that you could do immediately financially for your kids.  In the spirit of the immediate fix, I’ve decided to jot down a few things that you can do immediately if you are deciding about getting a divorce from the financial side.

Get a new checking account. Be honest and start thinking about your family’s shared cash. Is it possible that your soon to be ex will drain your joint accounts? If the answer is “maybe”, then you have a problem, especially if it’s a contentious situation. Get a new bank account.

Start looking at your credit card situation.  If you’re at all like me, you’ll find that you had a lot more than cash tied up in your ex - you’ve got credit tied up in them as well. Unfortunately, anyone will tell you that credit can be your death if things go sour.  Divorce is death on your credit.  I immediately stopped using my cards that I shared with the ex when I had that “feeling”. You should too, if you know what’s good for you.  You are going to need that money, probably to pay lawyers.

Closing vehicle loans.  Seriously, do you really want to haggle over who gets the SUV if the dreaded thing goes down?  How about do you want to haggle over the SUV loan?  Please.  Get rid of the payment if you can.

Those are just a few ideas.  You’ve got to consider wills, insurance, and other financial matters as well.  And most importantly, know where you are going to LIVE.  You need a place to hang your hat.

Not long ago, I took a position with another company for a day job, and honestly, I couldn’t be more pleased with my choice. I’m close to home and getting to my daughter or her school is quite easy, but these weren’t the primary reasons that I took the job. That got me thinking today.

If you’re a divorced parent looking for a new job for the holidays, or even just after the holidays, there are a few things that you should keep in mind for your hunt, besides just money.

1. Health Insurance

My new employer gives me the opportunity to cover my daughter as well as myself at no cost to me. This might be a benefit that you might be looking for as well - especially if you have an ex where the health insurance situation might be suspect. All kids need health insurance.

2. Life Insurance

Does your employer, or perspective employer, offer life insurance? In today’s times, you definitely, DEFINITELY need some life insurance, especially if you care about what might happen to your children were something critical to happen to you.

3. Family Friendly Policies

These have REALLY come in handy for me. My employer doesn’t mind me working from home, or taking time off for school functions. This can be a real boon for a divorced parent, as things tend to come up that you don’t know about necessarily until the last minute. Health situations, holiday parties, last minute pick ups, and other situtations can and will occur. How does your new employer (or old) look at these situations?

4. Other Benefits

Some employers offer benefits such as health savings plans, flexible transportation plans, and 529 plans directly deposited from your paycheck. Any or all of these can be a big help to a divorced or even NOT divorced parent. Does your prospective employer offer any of these or other less popular but just as valuable benefits?

Take a look at the full benefits offered by your prospective employer, and consider those before you make a leap into the unknown.

Priorities. When it comes right down to it, I have only three of note: first is myself, then is my family, finally would be work and friends. Why does this single dad mention that?

This single dad mentions that because at the moment, the my inner space is a touch out of whack. If you were wondering why I haven’t written as much lately, it’s not because of writer’s block; it’s because item no. 3 from above has finally begun to intrude on my primary concerns. In short, I’ve been a very busy dad lately, meaning, yes, I’m working too much.

I would imagine that this is a common problem with parents generally, and possibly single dads - especially, ones that are highly motivated by the thoughts of their children’ present and future - in particular. We must make money to pay for added responsibilities. Child support, alimony, clothes, health care… all of that costs money. Tack on other items like college planning, private schooling, and other optional items, and suddenly, it might never seem to be enough. So, if you’re like me, then you must work, and work like a dog sometimes, to pay for it.

Lately, though, I have been noticing little warning signs: not writing as much as usual, not sleeping as well, appetite fairly suppressed, and I realized that work and life are out of balance. I started writing on this website because it was something that I enjoyed, and because I wanted to leave my daughter little reminders of how I was thinking when she was a baby. That’s a me thing, and to shirk that in even the smallest thing means that am not looking out for myself. Hence, it’s time to take a step back.

Goodbye, part time job. Oh, how so painfully well I knew ye. Guess I’ll have to find some other way to drop a little extra in the college fund.

Come to think of it, I suppose that I just got my daughter a new pair of shoes last month, and they were pretty inexpensive.  I bet she’ll make the rest of the year just fine.

Tuesday is Finance and Family Day over at Zen Habits, and yesterday they did not disappoint with the article 10 Lessons to Teach Your Kids About Money.

I’m only now learning habits that I wish I had when I was entering adulthood. I think I’m not alone here, but if I had these habits when I was young, I’d be pretty well off now.

Because of that, I plan to teach my kids about money, to give them the value of money, to teach them skills and habits that will get them off to a good start, and to have them learn by doing, and from my example.

As I’m late in learning some of these things myself, I’m also starting late in teaching my kids these habits and skills. However, it’s better late than never. What follows are some of the things I’m trying or have planned.

The included list is pretty decent and covers most of the basics.  I would argue that some topics do require their own category, however.  For instance:

College loans must be paid back.  In high school, it seems like a good idea to go to the best possible school that you can and if you have to take out loans to do it, well, fine.  After college is over and those loans start coming due, that thinking gets turned on it’s head.  Had I the opportunity to do it again, I would have spent four years at a less expensive university instead of two, and wouldn’t have had those loans to pay.

College loans have a cost.  You just don’t see it until later.

Relish the power of compound interest.  Smaller children might not get this, but a little bit now goes a LONG way later.  Money in that cute piggy bank that your child loves adds up in the hands of the proper account.  Compound interest will (hopefully) pay my child’s college tuition.  Teach them that early.

Credit cards, while ubiquitous, can be evil.  The credit card companies really start the credit carousel in college.  Credit cards are everywhere, and to do a lot of things, they are absolutely necessary.  They represent power - and with great power comes great responsibility.  Teach your children to recognize this, and realize that the iPod that they so desperately want but can’t afford without a credit card really is NOT AN IPOD THAT THEY CAN AFFORD. 

I’m sure that I can think of more examples, but those little tidbits come to mind.

The news is full of information about the problems in the housing market, but the most interesting thing that I’ve read so far is something that I read in a recent article about the current crisis in foreclosures - that might have an impact on you, gentle and harried adults that you are (or might be):

According to the most recent foreclosure numbers released by the Mortgage Bankers Association (MBA), the U.S. is embroiled in the worst foreclosure crisis in recorded history. More than 14 percent of subprime borrowers are defaulting, and prime borrowers are beginning to follow suit.

MBA Report Summary

 

• The foreclosure rate recorded in the last quarter has increased beyond the highest point seen in the history of the MBA survey, which dates back to 1953.
• 14.82 percent of subprime borrowers are currently behind on their home loans.
• The highest percentage of foreclosures are on homes with 2/28 adjustable rate mortgages.

I found this on Homeguide123.  Shockingly, though, this is not the part that I’m referring to in the title.

These lines are the ones that shocked me.

‘Many blame subprime lending for our current real estate crisis, but rampant speculation, even by those with great credit, played a leading role,’ said O’Toole in a press release. ‘The subprime market took the first hit as those borrowers had the least to lose when they walked away. Now that nearly half of foreclosures represent non-owner occupied properties, it is clear that speculators are walking away too.’

It is true that non-owner occupied properties have been hitting the auction block in record numbers. Of the 9,477 properties auctioned in California last month, 44.3 percent of them were speculator owned properties.

Another shocker: 90.3 percent of the homes were bought or refinanced in 2005 and 2006.

90.3 percent of the homes were bought or refinanced in 2005 or 2006.

I rent.  I’m very glad that I do at this point.

Mid-2008 is sounding like a pretty good time to buy, however.

I haven’t done a post on finances for a while, so I took a look about during a particularly uninteresting television program today and was pleasantly surprised to find this article on cashing out of the rat race early.

NO, IT’S NOTyour imagination: You’re working too hard. Bucking the trend in most developed nations, the American workweek has been growing longer. We put in an average of 1,815 hours a year — longer hours than even the Japanese, who have a word, karoshi, for people who die from overwork. The extra labor often translates into bigger salaries and more-secure retirements, but it also pours fuel on a fire as old as work itself: the dream of cashing out early.

While there’s no way to quantify how many of us are eyeing the exits, evidence suggests that more people are taking the idea seriously. Books about early retirement are steady sellers, and virtual communities of would-be escape artists thrive on the web. Fortunately, it doesn’t take an enormous nest egg to fund a life-changing move. We interviewed financial experts and early retirees to find out how to get out while you’re young.

Credit SmartMoney with the article.

I have a theory.  In the face of the facts that credit has tightened to a size 0 and that in order for people to buy property they need to be prepared to put 20 percent down on property (according to my friends in the real estate industry), and given the fact that my girlfriend and I have several money making gigs between us and still couldn’t afford a decent house in our town (Denver), and then add the fact that property values are shrinking and my homeowner friends are beginning to panic, I’m starting to think that the true American Dream is not to own property.

In fact, the true American Dream is to NOT have to work.

With that in mind, I read the above article with interest.  I would suggest that if you are beginning to think that perhaps getting out of the corporate world and into quality of life is not all that bad of an idea, instead of waiting for some unknown wealthy uncle to die and leave you everything, take a look at the article.

I found it quite interesting.

I’m betting that you will as well.

…yes, that said Financial Quote of the Day.  Believe it or not, I’m not kidding.

Like many who have jobs and kids, I am one of those that actually has a 401(k).  Unlike many that have jobs and very young kids, though, I have taken the bizarre (and poverty inducing) step of actually starting a 529 plan for my little honey’s college education.  (more…)