Protecting Your Family’s Financial Future


I know that talking about money and economics is quite the departure from my regular post topics. However, I have been so inspired by the book Aftershock (Wiley, 2011), that I wanted to share what I have learned.

This book resonated so deeply with me as Peter and I struggle to get our finances together.  I read it last Thanksgiving.  Actually my Dad was reading it and then I took it over and devoured it.

I am pretty lucky. I come from a financially blessed family. I am no Paris Hilton, not by any means, but I never lacked for anything. And honestly, I have also never lacked for anything I needed in my married, adult life.  My parents have always financially been there for me, if we got into a pickle, and my husband earns a good living — they work him to death and he should be earning more, but I know it could be a lot worse.

Even though I am lucky in that way, from the moment I graduated college I was determined to become financially independent. I want to be in a place where I am not financially dependent on any man, whether it is my father or my husband. I am nowhere near where I thought I would be by 30, but I am on my way, and I have learned a lot about money and investing during the last 12 years since moving out on my own.

After reading the Aftershock, I emailed the authors and to see if I could get a private consultation and get more questions answered.

One of the authors, Cindy Spitzer, a mother of three teenagers, responded and was happy to give me a consultation in return for mentioning the book on this site, which was awesome, since I was going to promote it anyway!

I really wanted to share with you what I learned because I figure a lot of people are in the same shoes as we are. New parents, stressed to the max, trying the best they can to make the best financial decisions in order to protect the financial future of their family.

Once you have a kid, the realization of how much money it takes to raise a family can be very overwhelming. Before reading the book, I had a lot of anxiety about how we were going to make it all work. After reading the book and talking to Cindy, I feel like we have a solid plan in place.

The coming Aftershock economy will be an economy we have never seen before. The days of mindlessly putting money into a 401K and seeing a good return in 30 years is over.

O.V.E.R.

Instead of rising investments, we are experiencing a series of popping bubbles, what the authors call a Bubblequake, which will be followed by a destructive aftershock causing a domino effect of economic problems around the world and serious financial challenges in our own families.

The days of buy-and-hold or “set it and forget it” investing are over. The current and future investment environment requires active management. That means if you have a 401K or a family trust, it is now going to require very, very diligent care. If you have substantial assets, you need to get yourself a damn good financial advisor, someone who understands the macroeconomic changes that are occurring and can help you protect your assets and even set you up for the potential profit from these dangerous times.

Here is Cindy’s advice, especially for young families like us:

  • Cut spending and live within your means.
  • If you can, get out of debt (other than your home mortgage).
  • Refinance all adjustable-rate mortgages and other debts to low, fixed interest rate loans. As inflation and interest rates go up, you will be paying back these fixed-rate loans with cheaper and cheaper dollars.
  • Unless you plan to stay in your current home for a decade or longer, you are better off selling you house now than trying to sell it later.  Home prices are only going down, not up. So unless your house is your dream house that you never want to leave, SELL.
  • Contribute no more to your 401K than is necessary to get the employer match, if that is an option. In this scenario, it’s free money, so even when the stock market crashes you will still be ahead.
  • If possible, convert inactive 401Ks to IRAs so you can have more investment options.  Most 401Ks don’t have many good choices.
  • Do not save for college for your kids or invest in 529 plans.  They won’t be worth much later.  Focus on getting out of debt and building your savings.
  • Build up an emergency cash fund to cover at least six six months’ worth of expenses.
  • Buy gold. Yes, gold will eventually be a bubble, too, and will also eventually pop, but for many years gold has risen while the dollar declines and the stock market and other bubbles pop. Unless you have substantial assets and can afford to buy 10-ounce gold bars (currently at about $16,500 each), plus pay for protective storage in warehouse, you can just buy a safe for your home and begin buying one-ounce gold coins. Even if you cannot afford that now, you can just stash a little cash in an envelope from time to time and when you have enough go to your local coin shop and buy a gold coin or two. Even if it takes a year or longer to save up enough to buy just one gold coin, someday you are going to be very, very glad you did!

If you would like more information, you can buy or borrow the Aftershock book and visit the book website at www.aftershockeconomy.com, where you can sign up for a two-month free trial to receive their newsletter and live conference calls.

You can also contact Cindy Spitzer at (443) 980-7367 for a private consultation by telephone as I did, or find out more about active investment management based on the ideas in Aftershock.

Has anyone read this book? What ideas are you implementing first?





About the Author

Hiya! I'm Stephanie. Mama and Baby Love is all about helping mothers on their own personal health and healing journey and enjoying life along the way. You can learn more about me and what I'm all about. Sign up for my newsletter for more tips, info and inspiration!

Comments

  1. Stephanie,
    This is all great stuff! I happen to work for a “damn good financial advisor” and I’ve worked in the financial industry for about 8 years now. We specialize in retirement planning and all of the information you shared is right on. It is amazing how lucky all of our clients are that are around 70+. Most of them worked at their jobs for 30+ years and have pensions on top of their social security payments. Even their spouses get pensions even if they never worked at the company themselves!!! You are right, GONE ARE THOSE DAYS! People our age and younger will be lucky to get social security. My husband and I are struggling with this right now as well. We had just started to get things caught up after having our son and, as I mentioned the other day, we are expecting #2. The stress of finances is weighing very heavy on us right now. It is no fun! I don’t know how we will be able to afford two kids in daycare full-time, especially when the infant rate is much higher than toddler rates. But conversly, I don’t know if we can afford for me to work part-time either. I’m the main bread-winner for the family which isn’t easy. We are chipping away at debt and don’t have much of a savings in place. Oi. I need a drink! Oh yeah, I can’t have a drink for a long, long, time. :( Anyway, thanks for sharing. Like I said it is great info and very important for people to know!

    • Yup, it’s a whole new ball game for people our age. Sink or swim time. Have you ever thought about doing a nanny share? Depending on your area, a good nanny is pretty close to the price of two kids in day care. And if you found one other family to share, then the costs could be greatly reduced but still giving the nanny a well deserved good salary.

      • Hmmm… I never thought about that! Would we have to find another family with two kids as well? Do nanny’s care for 4 kids at once? Is a nanny the same as in-home daycare where you still have to pay full price even if you go on vacation or if your baby isn’t there for a chunk of time? My mother-in-law is a teacher for a year round school so when she is off track she is able to watch our son and we are able to pay a much, much lower tuition while he isn’t going to daycare. That is one perk of our daycare…

        • I would say four is the max, but you could find another family with just one child and prorate it to make it fair.
          I mean you could probably negotiate anything with a nanny, is this economy. But when I was a nanny, I got paid two weeks vacation. I 2 or 3 sick days over a 3 year period.

  2. I am looking forward to reading this book. I love your advice about working from home and trying to earn a living while still raising little ones. Thanks!

  3. Kristine Pavelchak says:

    This was a great post. I work in the financial industry and just because I work in it doesn’t mean I do everything right, I try but I need to be better. My husband and I live with very little debt, just my car payment and our home mortgage which is manageable, thank god. We didn’t buy that huge house that we initially wanted, just a simple cape that we worked on with our own hands and paid cash for every renovation we did. We have 2 boys, a 1 year old & 2 1/2 year old and we spend quite a bit in daycare a month! Every week we write a $350 check (I have our 2 1/2 year old with his grandfather 1 day a week which is a great savings!) I was just thinking about what I will be doing with that $ when even just one is out and in school. I cherish these years and days I have with my boys and to be honest that we don’t have allot of $ in an emergency fund is a bit scary but at the same time paying for daycare, diapers,etc soaks up allot! So I live in the mentality that what we are doing right now works for us, pay cash for everything we can, pay down our one car payment as quickly as possible and continue to put $ away in the 401K. Oh yeah…did I mention that my husband started his own business 1 year ago? He is doing very well so far, he owns his own plumbing business but it’s such a start up that we haven’t even gotten into the retirement savings part of all of it…yikes! If I think of it all I get overwhelmed, I just like to think things will smooth out over time, this is all such a crazy time in our lives and if I let it get to me I will miss what is really important, my healthy children that bring a smile to my face every single day. I just keep chugging away, clipping coupons, saving quite a few bucks there, cooking at home freezer meals (how I found your wonderful site looking for new ideas!), and I refuse to give into the lavish things I really want, like fancy purses, or new furniture for my home. I just make do with what I have and to be honest, I like how I have become savvy! I need to implement more cuts to our budget that is for sure and this post is a great reminder of things I should be thinking about and planning on taking action on. Thank you!

    • Good for you!!

    • Kristin that’s a really good reminder–I get so caught up sometimes in wanting the beautiful wardrobe or new purse or new furniture…those things aren’t even eternal! It’s great to hear when other ladies are trying to buckle down and do the right thing financially too!! Stephanie, that book looks really interesting–going to have to check it out!!

  4. My husband is a financial advisor, but thinks different than many. That list is exactly what he has been saying for the past couple of years. It is interesting because the normal thoughts (old school if you will) are still so predominant that these thoughts presented here could be considered radical by some. They make sense to me.
    Great site!

  5. Haha, add me to the list of wives with a financial advisor for a husband :)

    I just bought your cookbook last week, and spent the weekend making up meals. Food is our biggest budget drain. I got enough food for 12 meals for $120!! Even if we do these 2-3 nights a week it will be a huge savings for us (and great for our waistlines too). We are buckling back down to pay down debt aggressively (over $7,000 paid off so far this year!) and we just put our house on the market. We need to find a place where we can grow our family over the next 10 years (I don’t think our 2-br bungalow is going to cut it).

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