Posted by Tim Stobbs on August 5, 2008
Well a while back a reader, Colleen, left a very interesting comment about how PF blogs change her life.
Just wanted to say thank you! Yours was the first PF blog that I ever read. Started back in January of this year. Don’t roll your eyes but it has literally changed my life. For one, it has started me on a personal finance craze. My financial knowledge has ballooned, I am hugely aware of being a consumer, I strive for a simpler life (important with three young kids), we save 53% of our net income (including paying down our very accelerated mortgage but not including our defined benefit pension contributions), we have no debt outside our mortgage.
I am amazed at how far I have come in such a short period. You were the start of this path.
Right now, I am struggling with the decision to not go back to work after my maternity leave is up. Before I never would have thought of giving up my pension. I really like my job but don’t love it. I love being with my kids. I love not being dependent on a job. I love the simple things. I love being able to contemplate not going back to work because I don’t have to. I don’t have to go back because I changed our views of money and how we handle it.
…… All because I read a blog.
So out of interest I contacted Colleen to get some more details on here story. What follows in that interview.
Tim: How have blogs changed your life and what do you think caused that change?
Colleen: Reading financial blogs has a) given me the confidence to take over my personal finances, b) given me the inspiration to adjust our dreams and c) somehow made me desire a simpler life and shun consumerism
a) Recently we relied on a financial planner. Intuitively, this did not make sense to us since we care more about our finances than anyone else, but we did not feel that we had the expertise. Sure we read some finance books. I actually enjoyed the material very much. But, the books always came to an end. We’d close it up and put it on the shelf. Blogs continue and evolve… just like our finances. The particular topic of the day may come to an end but the discussion continues if you want it to. I gave up having these types of discussions with my friends (too young I guess) or coworkers (the older guys who seemed to know what they were doing) but they did not have the same interest and just seem to fly by the seat of their pants. It sounds corny, but with blogs I can sit down with a cup of coffee and meet up with my four or five favourite guys who are quite a few pages ahead of me. And this is where I like to be. When I am stumped, I feel confident that I can send you an email, hoping it will be interesting enough to be picked up. Then I will be presented with, probably several, different view points that I can consider.
b) Prior to PF blogs, I had never really considered retiring ‘earlier’. We saved in RRSPs, RESPs and by accelerated mortgage payments. But this was mostly because we are supposed to. We never analyzed our financial picture, we just saved money for ‘retirement’. Retirement was of course, when our pensions kicked in. This is age 53 for me and 48 for my husband (military). The RRSP money was always to use sometime during that time as well. It never occurred to us that perhaps we should retire ‘earlier’ since we thought we were already retiring ‘early’. Now that has all changed as well, . I wish it had happened earlier though. We will be 38 and 39 this year and have made some good financial decisions (through sheer luck I sometimes think) but if I had known then what I know now……. Oh, where have I heard that before? Now we save over fifty percent of our net income and are almost finished our mortgage. After that, we plan to move our focus to unregistered investments with the same savings. No matter how much I read about personal finance I cannot look at my mortgage as ‘good debt’, but I also know I have to do what makes me feel better, so I have been favouring paying off the mortgage over investing outside an RRSP.
c) I’m not sure how this one happened. Could be from having three little kids but most likely it happened by osmosis from you PF bloggers. Somehow, I want to minimize the footprint I make on the world. We always recycled and turned off lights when we left the room and we were never gadget or electronics people. But now, I am profoundly aware of the disparity between western lifestyle compared to most of the rest of the world. And I am not interested in participating in widening the gap. I don’t think I’ll ever make it to anything close to being truly green or anything like that but I do influence my family and indirectly my friends. And I get some peace from understanding this.
Tim: What is the most important thing you have learned from a blog? Why?
Colleen: I think the most important thing I have learned from blogs is that a strong knowledge of personal finance doesn’t come from reading two or three really good books on PF. There is no ‘text book’ answer of what is right for me. I can now recite the five most important things to do in order to have good finances and have implemented them all. But aside from waiting, what now? PF blogs kind of show the ‘big picture’ a little better then a book. Sometimes your own personal progress is a little too slow to appreciate the principals of good financial management. Or you just don’t know if you are really on the right track. I can look at my net worth or make a bar graph to look at but maybe I have missed something. You guys ramble on about these doubts that probably hit all of us. You guys sort of put it all in perspective.
Tim: Have you reached a decision to not go back to work after your maternity leave? If so, why? If not, what do you find is the hardest part of the decision?
Colleen:I have decided to return to work after maternity leave. Mostly because of a novel I had recently finished that was still fresh in my mind at a military function we had to attend. The book was about a ‘stay at home mom’ who worked her butt off at home right into her kid’s teenage years. She provided an efficiently run household where everything magically happened, amazing meals and baked goods, clean clothes, spotless environment, there for everybody all the time. Then her husband left her and her teenage kids and soon to be ex husband were so proud of how she finally ‘got a job’ and was ‘out in the real world’ ‘doing something important’. This theme was not as blatant in the book which was an enjoyable read. Shortly after, I was having a conversation with a female Major at this dinner. She worked part time in the military until her kids went off to school. She is the Director of Music for the Governor General’s Foot Guards Band and plays a large role in the Army Band (or maybe the CF Band overall). Anyway, these bands have played all over the world and are present at all kinds of important ceremonial functions throughout Canada. As the Director she has a very large social role at these functions and has frequently met the Prime Minister and Governor General as well as the Queen. She has also been paid for this job the whole time. Yet her kids, who are in University now, still refer to it as a ‘hobby’ and roll their eyes when her obligations conflict with their visits. Most recently she got a phone call from one of them because she was watching her mom on the news with Prince (William or Henry – whoever visited Ottawa recently), “mom, that’s sooo cool”. These two things really hit a sensitive spot with me. I don’t love my job. I like it more than a little but I wish I loved it. But I do have a really cool job, especially in the eyes of children. I know my kids would really love having me around all time when they are young. But I want them to be proud of me when they are teenagers and not have to wait until they have kids of their own to realize what I did as a stay at home mom. If I could take a few more years off and return to my job, I would in a heartbeat. Unfortunately, this type of leave is not permitted for a year let alone two or three. I would have to reapply for my job and probably would not meet the physical requirements at the point.
Tim: What is your dream for your retirement?
Colleen:Previously, our retirement plan was based on an Unreduced Pension time line. That is age 53 for me. This would provide 60% of my best five years of earnings as a pension. My husband at age 48, would be able to retire with 50% pension. We always thought he’d stay in an additional five years to bring that up to 60% so we’d be retiring around the same time. Now, we’re planning on reversing that. I will take a reduced pension when he retires at 48. With our new timeline, we have a bit of a crick in our plan. We want to do some extensive travel in our first several years of retirement and have a sailboat fund earmarked for that. Our dreams of sailing in the Caribbean never had (and still won’t have) a ten year old boy staying at home with a relative so he can go to school. So we have not worked out the new details of that part of the dream. Perhaps several small trips throughout the year or longer summer sailing vacations so we can become circumnavigatable sailors. All this renewed talk of retirement dreams has actually brought us to a crossroads. My husband has in his head that in retirement he’ll read an interesting article in the Travel section of the Saturday newspaper and then decide he wants to go to that place despite the cost, 5 star and all. I have advised him that my ‘best value’ hunting is so ingrained that it will last far into retirement. I don’t think I will ever have the desire to throw my money away like that. We have compromised in theory. He can have one trip per year like that but it comes out of a fixed ‘crazy trip budget’ and if he depletes it in one shot because he wants to spend a month on a mountaintop in say Tahiti then we won’t fund it from other travel earmarked money. I was slightly stunned when this issue came up and am not really satisfied with our compromise. But it is his money too… I guess.
Tim: Thanks for your insights Colleen and best of luck.
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