Rachel: Hi, this is Rachel, and I'm delighted to welcome you to this episode of what the Finance? One of our strongly held values to What the Finance team is that our families come before anything else, which is why you'll be hearing a whole lot of my voice with our guests over the next few weeks.
Now, you can still chat with Cheyenne and I on our Discord server, Facebook, Instagram and Twitter. We are also reachable via email at what_the_finance@protonmail.com. There will be links to our online spaces in the show notes in the episode transcription as well.
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Finally, this episode was recorded on the lands of the Dakota class and seminal people. We recognize and support their sovereignty, express our appreciation for their stewardship of our natural resources, and seek to demonstrate our commitment to dismantle the systems of oppression that negatively impact our, uh, black and brown kin.
Rachel: All right, well, welcome everybody to this episode, the third of our season for what the Finance. Now, as our longtime listeners might know, Cheyenne is going to be gone for a few weeks and I am joined by Stephanie Hoffman, who's going to be spending a little bit of time in this episode just having a conversation about family finances and how you maybe approach finances, uh, with your spouse. So, Stephanie, welcome to What the Finance.
Stephanie: Hi Rachel, thanks for having me.
Rachel: So Stephanie, I guess just getting to know you a little bit more. Can you tell our audience a little bit about what you do professionally and anything else interesting about yourself that you'd like to share?
Stephanie: Sure. I'm a lawyer. I, um, work for an insurance company. I've been in practice since 2005. I'm married and I have two kids, ages 14 and 10. Um, I live in southwest Florida. And, uh, we bought our house in 2005 right out of law school because I was really worried about, um, how the housing market was going crazy then. And we've lived in it for 17 years and it's going crazy again.
Rachel: Isn't it really kind of one of those situations where the more things change, the more they stay the same?
Stephanie: Absolutely.
Rachel: So I know in my own journey, my spouse and I have been married for, um, coming up on twelve years. And also, uh, we both have advanced degrees but have, ah, not purchased a house. Because one of the things that has changed between 2005 and when, um, I finished my own graduate degree in 2020 is that now your student loans count in your debt to income ratio. And I have a graduate degree in the loans to prove it. So we're going to be renting for a while.
Stephanie: I wish I had known then what I know now, and I would not have bought a house then.
Rachel: And this is my perception as somebody who does not own a home, but I feel like just based on what I hear from people who are homeowners like yourself, there's never actually, uh, I mean, at least in the last maybe 1520 years, there's never actually been a great time to buy a house. Is that sense? Would you say accurate or no?
Stephanie: We bought this house thinking that it was going to be a place that we would just get established and then when we had money and time we were going to have kids in the future and we were going to buy a bigger house then because we would need it and we had surprise kids and then we never actually moved. So I would agree that it's kind of like having children. There's never a great time to do it. The time to do it is when you need to do it. And we needed to get out of an increasing rental market like it is now because I couldn't afford the uncertainty.
Rachel: Isn't that the truth? So I guess as I'm thinking through not just housing but um. Kind of like those early days with my spouse and I kind of try to figure out like as very young adults.
Stephanie: Like.
Rachel: How are we going to do this money thing. We really ended up combining our finances more out of a matter of practicality because when we first started renting. We still had to write a check. Like an actual paper check for our rent. I'm um, in my mid 30s, but I've talked to people now in their early twenty s and it's just like a blank slate across their faces when I tell them that I had to write a check. Like they have no idea what I'm talking about. And my spouse had a checking account but no checks and he wouldn't get checks. And so I went, well fine, if you don't want to get checks and we're just getting a joint account so that I can write a check for our rent. And that was kind of like and now we have a joint account and we just do everything jointly. And my kids are a little bit younger than yours but when it comes to paying for daycare and all that kinds of things, it just seems kind of like a mess, at least for me, to handle separate accounts. But what has your experience with that?
Stephanie: So we do the Yours, Mine & Ours Method. So we each have separate checking accounts that our paychecks get deposited into. And when I started working, I actually got a paper paycheck that I would have to take down to the bank and everybody at the state attorney's office got paid once a month in Florida. And so the receptionist would announce that our paychecks were in and there would be a mad rush to get the paychecks and then everybody would go run down to the bank and deposit them because we only got paid once a month and we desperately needed that money when it came in. But the digression um, so between the two of us, we have five checking accounts. Um, we each have a checking account, a savings account, and then we have a joint account where we each contribute money to pay the household bills.
Rachel: Okay.
Stephanie: It's been a work in progress over the years for how we separate our bills. Sorry about the dogs.
Rachel: That's okay.
Stephanie: Um, we try and check in about every three to six months to see what our bills are and how much money we actually need to pay to keep everything in balance. Um, it also allows for us to have a bit of fun spending money that the other partner is not looming over your shoulder and saying, why are you spending money on that for? My husband, his son is going to buy records. Mine is getting all the Starbucks. So he doesn't give me a whole lot of um he doesn't give me grief about two or three times a week that I'm going down and getting a $6 coffee. And I don't give him grief for getting a record or two or three a month. And then we can save money together. And I actually have a spreadsheet of all of our expenses that the entire family can see what I'm paying each month when the bills are coming due. Um, and it works out really well for us because then we know exactly how much we have coming in and how much is going out at each time. So we don't necessarily pay all the bills. We carry credit card debt and we don't necessarily pay off our credit card at once because we have unforeseen expenses come up, but we have a plan to pay them off and they are manageable the way it is.
Rachel: That's awesome. Within the personal finance space, I think that any type of debt really is viewed as the worst thing that you could ever possibly imagine having. You should never have debt for, I guess, depending on who you are, right. People go as extremist to like, you should buy your house in cash and you should pay for your college degrees in cash and you should never have a credit card, and it's the worst thing you can do. But, um, I think exactly like you're talking about, particularly when you're in a family, right? You have things that come up. Your spouse has things that come up. Like, your kids go, oh, hey Mom, I forgot that there's this field trip that you need to write a check for. Send cash or whatever. You can go into the parent portal and pay for this field trip online and you need to do it by tomorrow. Um, I'm kind of getting into that phase of life.
Stephanie: Exactly.
Rachel: It's kind of a necessity, in my view.
Stephanie: I had to buy two computers and a laser jet printer in the last three weeks. So it is surprises all around. And that's okay, we're going to pay off that debt in three months. We have a plan. We're carrying a little bit. It's not the worst thing in the world. I've come to peace with it. Having 25 years of student loan debt, there are some things that I'm just never going to pay off. That and we carry a mortgage, and that's a fixed expense that we're going to be paying for a long time. But I know exactly how much it costs. I know how much interest it is. Um, it's not going to change. So we can plan for contingencies right.
Rachel: Now, I'm curious if you'd be willing to talk a little bit about these quarterly meetings that you have to kind of go through to make sure that you guys are staying on the same page with what you're contributing to your joint account.
Stephanie: I am definitely the finance geek in the family. Um, I have to bribe my husband by taking him to, uh, the brewery down the street. He goes begrudgingly, but I make him sit down and listen to how much money that we're spending on our credit cards and what we are spending on. Because luckily, like American Express and Visa, uh, we have about five credit cards. They all tell us what the breakdown is and what we're spending. And if I notice that we're spending too much eating out, we'll readjust that and maybe plan to eat, do more dinners in or plan to eat at McDonald's instead of a slightly more expensive restaurant. So those meetings just go over what we're spending, what we will plan to pay for our credit cards each month to make sure that we are paying down whatever debt we're carrying. And so we're still putting in enough money. It's also a meeting to have us plan for our vacations or any, um, fun things that we're going to do over the next year so that we're saving appropriately so that we can go on those with minimal debt. We did just take an epic trip as kind of like a celebration of coba release over the summer, where we spent a lot of money driving around this country and having a wonderful time. So we had planned for that. We spend a little bit more money than we had wanted to, but that just means that we're going to scale back for the next six to nine months on any other crazy things that we would do, like go to Disney World for a day or two. That's not in the cards now.
Rachel: Right? My own experience is also that if you're having those meetings semi regularly, if one of you is starting to kind of chafe against what feels maybe unnecessarily restrictive, the other person could go, “Hey, hey, remember that we did this giant cross-country trip, uh, five, six, seven months ago? Do you remember that? That was fun. Yeah. This is the other side of the fun.”
Stephanie: Exactly. We each agree that we need to have something to look forward to so that getting through the month of us just going through the drudgery of day to day stuff is worth it. And something to look forward to could be something really small. Like we're going to go visit my parents for the weekend and go spend the day in Tampa, Florida, something like that. Uh, just having something small to look forward to takes the pain of saving out in those meetings. We also do discuss our savings for retirement. So I don't recommend just spending mad money on anything without saving for retirement. We both have 401 KS. We both do employer matches to the max. Like we're saving so that we can retire at some point in our lifetime.
Rachel: I mean, right, um, you know, when it comes to retirement. And we actually have an episode coming up on that pretty soon here. Um, so I'm based in Minnesota and I'm employed by the state and Minnesota is a pretty strong, uh, what should I say? Minnesota has a very strong labor union tradition. Um, and allstate employees are part of the labor union. Uh, and one of the things that goes into it is mandatory, uh, saving for retirement with employer matching, so I don't have to think about it at all. And, uh, I don't know many people who are to the point in their careers where I am, where they're saving, uh, 7% to 10% plus employer matching, uh, into their 401k. But I am, um, and I appreciate that because there's also a lot to think about, right. Like when you're talking about, uh, building your life and having the money that you want, if you can automate anything, you should do it just in my opinion. Yeah, it takes the edge off.
Stephanie: I'm so, um, going through a couple of recessions in my adult life. I'm so worried about automating everything. I have a lot of bills automated, but I still have things like my mortgage that I have to actually press a button so that it pays. And it's just because even though I've been working with this employer for almost six years and I've had steady employment since I graduated from law school, I'm always a little bit concerned that there's going to be one month when I just don't have any income coming in and all of my money will go away. I don't know where this paranoia came from, but it's definitely there.
Rachel: Right? Well, I know you just shared that you used to work at the state attorney's office there in Florida. Um, now this is just like me being nosy. So feel free to tell me if it's not in my business, but um is the state attorney's office in Florida also funded by, um, the legislature? Yes.
Stephanie: And I went for eight years without a raise.
Rachel: Mhm. I've worked for the state of Minnesota for my entire adult life. And there have been several times where our legislature didn't pass a budget by the deadline. Uh, and so I have actually had that experience as a state employee where, like, uh, no, there wasn't going to be any money coming in for two.
Stephanie: Or three weeks exactly.
Rachel: The legislature decided to play party politics with people's livelihoods. So I think it's fair, just for what it's worth, that you have that.
Stephanie: We all went through our own mini, um, recessions in our own livelihood, it sounds like. Yeah, I did have government shutdowns. Um, and since we were only paid once a month, um, it really hurt. There were times when I had, like, $20 in our account. Uh, but at least I still had healthcare paid for, for whatever it was worth.
Rachel: There's no food on the table, but you'll be okay if you break your arm, uh, or whatever.
Stephanie: Um.
Rachel: Uh, what a time this has been to kind of be coming up into, um, I guess, really entering adulthood and then being in that space in your life where people look at you and go, oh, yes, you're a real adult, and, you know, I can talk to you about saving for retirement, or it's okay to have a credit card to manage your family's finances. This is quite the time to do it. These last 20 years or so, um.
Stephanie: I was very lucky that my parents, uh, had a frank discussion about finances when I was growing up. So my parents showed me credit card bills and said, this is how much money they never told me how much money they made, which, uh, irks me a bit. Um, my kids do know that we make enough money to cover our bills, and I show them how much money my husband and I contribute to our finances. Um, but, uh, having them show me things like how to make a budget and how to budget the amount of money that you're saving and spending, and how to control yourself, and how to pay your credit cards when the bills come in so that you don't get late charges. Um, I really appreciated that, but, yeah, it is quite a time to be alive. Um, I like to joke that when, uh, people look for the adults in the room, and I always used to look around with them, and now they're looking at me because I'm too is there somebody behind me because I'm not an adult?
Rachel: Um, of course, we're not that far apart in age, but, um, I'm a big Star Wars fan. I was reading an article recently about Hayden Christensen because he reprised his role as Darth Vader for the Obi-Wan series. Uh, and he has an eight-year-old daughter, so he hasn't acted in Star Wars since his eight year old daughter was born. And I went, oh, I have an eight-year-old daughter. And then I read that. Um, he's 41. And I went, how do I feel about this? It's totally logical for somebody in their forty s to be my contemporary and yet there's all this social baggage of.
Stephanie: Being in your.
Rachel: Um like, my dad turning 40 and everybody going, oh, you're over the hill. And I'm like, well, now, as an adult, I can go, well, that was stupid. But it still is kind of back there, you know? And you're going, yes.
Stephanie: No.
Rachel: OK, this is it. People are looking for the adults here. Adult. And it's me.
Stephanie: I was blessed to turn 40, um, right as the pandemic was hitting. So nobody cared.
Rachel: That is a blessing.
Stephanie: It just slipped right by. And here I am, still existing at 42 and it's fine, right?
Rachel: Like, surprise, you're still here and you're doing great. Yes. No, I got the, um, braces I mentioned earlier. I got them right after I turned 30. I kind of went from people going, wait, maybe this lady, maybe she looks old enough to know what she's talking about. She's like, oh, wait, braces. No, this is very obviously a teenager. Um, and then we all had to mask up and it went right back to, wait, this lady looks like she's old enough to know what she's talking about. So I've appreciated that.
Stephanie: I definitely appreciate that. Well, I started going gray at about 25 and I have some gray Bride of Frankenstein streaks in my hair that come out from my temple. And they've been very useful to me as a trial lawyer because then people like, uh, a little bit further on into my career, people started taking me, um, seriously because I looked older than I was.
Rachel: Right.
Stephanie: I completely appreciate having other peers, uh, look to you as somebody with authority and just trying to look like you know what you're talking about.
Rachel: Right. Um, so my apologies. I kind of got us off track. They're just completely on my own. But I think just kind of closing us out as I think about things that I wish that I would have known early in my experiences of like, building a family budget. One thing that I wish that somebody would have very explicitly said to me was, you know that you're only going to get better at this with practice. Right. Because I often have the experience with people would go, oh, uh, well, I'm just not good with money. I don't know what to do. And so they wouldn't do anything. Of course, it turns out that managing money is a lot like any other skill. You just keep working at it and suddenly you find that you're good at it, just like being an adult. Um, is there anything that, um, you know now that you would like to share for other people to also know?
Stephanie: Not everybody enjoys talking about money. I do. I think talking about budgets and financing and things like that is fun. I work for an insurance company. I mean, this is the type of nerd that I am. Uh, but my husband hates it, and it's because of his family background. Um, he grew up not knowing if there is actually going to be food on the table. So him m talking about money is painful. And. Uh. It takes a lot of trust to be able to. Um. Discuss things like budgeting and owing money and planning for the future with a partner to know that there's not going to be judgment if you find out that there was maybe some credit card debt before you met. Or maybe there was. Uh. Even. Like. A default judgment in court before you met. Just so that you enter the relationship and then you continue the relationship with trust. That's why we have quarterly or so check in meetings to make sure that we're still on the same track and the same frame of mind in, um, where we want to go with the budget together.
Rachel: Uh I love that so much. Stephanie. Thank you very much. Uh, I appreciate your time this afternoon.
Stephanie: Thanks for having me. My pleasure.