12 Month Sabbatical – Update on my Microfinance Adventure

Best advice I ever got was an old friend of mine, a black friend, who said you have to go the way your blood beats. If you don’t live the only life you have, you won’t live some other life, you won’t live any life at all. That’s the only advice you can give anybody. And it’s not advice, it’s an observation.

– James Baldwin quote on Brain Pickings

It’s Actually Happening! Update on my Microfinance Volunteer Adventure

James Baldwin’s observation applies perfectly to the next chapter in my life. As I alluded to in my previous post on Microfinance ($2/day) and on the one announcing my career change (aligning your spending) I am making major changes in my life. Part of my inspiration for this definitely comes from Mo, a good friend who moved to Turkey to become an English teacher and who now lives in Japan. She has documented her travels over at Travels of Mo. The other part of my inspiration is listening to my inner curiosity more closely.

How I Found Costa Rica and Agreed to It

I’m planning on quitting my job and potentially being unemployed for a 12 month sabbatical. I lined up a microfinance institution (MFI) volunteer opportunity in Costa Rica through NGOAbroad and am scheduled to start in October, five months from now. When I first found this opportunity it felt too good to be true. Costa Rica is expat heaven, a tourist destination, and has a great medical system. For a moment I wondered whether I would actually have anything to contribute because the country is doing much better than others in South America. Continue reading “12 Month Sabbatical – Update on my Microfinance Adventure”

How Do You Live on $2 a Day? – How the World’s Poor Manage their Finances

According to Portfolios of the Poor written by a leading group of researchers, 40% of the world’s 7 billion people live on less than $2 a day. What makes matters worse is the irregularity of their income. If they knew they were going to earn $2 every day it would be possible to build a budget around it. But they don’t know. During harvest season they may have plenty to eat and even be able to save. At other times they may have to live on one meal a day and borrow to make ends meet. How can someone deal with those massive changes in income? To make things even more dire are expensive emergencies, such as an illness, a burial, or a whole host of other things. Continue reading “How Do You Live on $2 a Day? – How the World’s Poor Manage their Finances”

Existential Money Questions – It’s More than Just the Numbers

I was trying to figure out potential financial topics to write about so I searched online for common financial questions. I found technical questions like the ones below from Investopedia:

  • How do you file IRS Form 709?
  • Are student loans amortized?
  • Am I losing the right to collect spousal Social Security benefits before I collect my own?
  • Is it a good idea to add a reverse mortgage to your retirement strategy?

I found credit related questions answered by a financial planner over at Business Insider:

  • What’s the best way to increase my credit rating so banks are knocking at my door with awesome offers?
  • Any tips on negotiating a lower interest rate?
  • Is it better to pay off your entire monthly balance, just the minimum, or somewhere in between?
  • Is it true you can negotiate a “pay off amount” with your credit card company if you can’t afford to pay down your whole balance?

And here are a few more interesting ones from Fox Business:

  • Should I change from monthly mortgage payments to biweekly mortgage payments?
  • Should I co-sign for a loan, and can I protect myself?
  • If my retirement accounts are fully funded, how should I invest the rest of my cash?

But it was difficult to find questions like the ones I ask about money and finances. I think my questions are probably more like social science research theses than blogging friendly questions. For example, I often wonder about the questions below:

  • How do I reconcile the fact I want more and the fact that by being a citizen of a developed country I have more than 80% of the world’s population?
  • Why would someone tie themselves to a job they dislike with golden handcuffs like a new car every year and a mortgage that keeps them up at night?
  • Is it possible to use capitalism in a way that doesn’t destroy the environment and ourselves in the process? Maybe it’s something along the lines of B Corporations, which aim to benefit the shareholder, employee, customer, and community.
  • Why do women earn less? Why does asking for a review feel more difficult than giving a professional presentation completely naked?
  • How is longstanding wage stagnation related to Trump’s election?

After my quick web search I am happy to say that the internet has space for me. I am here to discuss they many existential money questions I have. In How To Read a Book the authors state that the big questions are not really answerable. The answer lies in the discussion itself. By talking about the issues we can outline where we stand.

So let’s talk about money. Do you have any existential money questions?

Sufficiency and your True North – Celebrating Enough

The Soul of Money by Lynne Twist is not your typical personal finance book. It does not go into how to get out of debt or where to put your retirement investments. Instead, it is a thoughtful book that reminds us that we already have enough. We have probably all heard that the endless pursuit of more does not lead to an enjoyed life. It only leads to a need for more. The issue for many of us is that we forget this simple idea, especially when we listen too closely to the consumerism in society. Twist shares her transformation away from the mindless pursuit of more towards a more aligned lifestyle for herself and her family. Continue reading “Sufficiency and your True North – Celebrating Enough”

Giving Back – Being Charitable is one of the Best Uses of Money

Personal finances encompass your entire relationship with money, that includes giving to charity. We all routinely receive requests to be charitable. Most of us probably contribute to causes we believe in, even if it’s only sporadically. According to Charity Navigator in 2014 total giving was $300 billion, or about 2% of US GDP. This is the equivalent of the GDP of all of South Africa in 2009. That’s impressive. We give so much each year that we could fund an entire country with a population of 49 million people. You can find a detailed report of what charities we give to here.

Why do we give?

Simply put, we give because it feels good to spend money on other people. Eric Baker’s article What’s one way where money definitely brings happiness? shares the psychological benefits of giving. The article describes a survey conducted by the Harvard Business Review on people’s happiness after receiving a profit sharing bonus from their company. They found that those who spent the bonus on charities or gifts for others showed increased happiness for longer than those who only spent it on themselves or bills.

Giving to others not only makes us happier, but it has a host of other benefits:

  • Charity as a way of leaving a legacy
  • Charity as a way of building community
  • Charity as a way of providing social welfare
  • Charity as a way of creating meaning in your life
  • Charity as a way of creating change in the world and shaping society
  • Charity as a way of showing gratitude and cultivating a feeling of abundance

I did not begin to give until I developed a budget with my mentor and she suggested I consider giving back a set percentage. Her reasoning is that over time my financial situation will improve and I will be able to give more. I started by giving 0.5% to the church I attended at the time. Just as my mentor predicted, that percentage has increased as I have paid off debt and my income has grown. I now contribute to that same church even though I no longer attend, as well as NPR, and a local volunteer organization.

I followed my mentor’s suggestion because I trusted her judgment and wanted to emulate her. Growing up my family did not contribute to charities, so this was not something I had ever thought about before. I found that giving when I felt like I had nothing to give really did create a sense of abundance in me. Even though at first I was only giving a tiny amount, I felt all of the psychological benefits.

I recently received a contribution request from a program I was a part of in college. I’ve given to them before, but this time they were asking for a larger amount and for multi-year commitments. Their request made me take a second look at my giving. I was happy to find that there is space in my budget to give more. Anyone who has ever realized that they could support something that gave to them knows how satisfying giving can be. This college program taught me how to work in corporate America and gave me the confidence to do so.

Although my family did not give routinely to charities, they did model other types of charity. I remember one instance when a man came to my grandmother’s house in Mexicali, Mexico and she had a set of clothes set aside for him. After his short visit Grandma told me he had recently been deported from the US with only the clothes on his back. He was now trying to decide whether to sneak back into the US or return home to his family in southern Mexico. Either way, his options were grim. He could risk his life to find work or he could go home and struggle to makes ends meet with his family.

In one short generation so much changed in my family. I grew up seeing poverty, but I never experienced it myself, although both my parents did. It is a miracle that my father experienced hunger as a child and that I am now at the other extreme where I can actually give back. No wonder I feel startled to realize that I now give back in a structured way with recurrent payments. Had it not been for my mentor’s encouragement, I may never have begun the practice of giving on a routine basis.

In addition to giving money we can also give time. Volunteering is a great way to build relationships and create more purpose within one’s life. In a way, giving time can be more costly than giving money. Money is a replenishable resource; you can make more of it. But time is finite. When you dedicate time to something that time can never be replaced. As a kid I was a very active volunteer because I love talking with people and being of service. Now that my life has gotten busier I’ve moved away from giving time to giving money.

An additional benefit of giving is the resulting sense of community. When we give to a cause we believe in we feel connected to it and are more likely to encourage others to check it out. This also gives us a sense of a bigger purpose in life.

When you are just getting started figuring out your personal finances, giving may seem like a distant concern. For a while you may not be able to give money or time, but you can always donate old items to charities, or at the very least you can plan to give one day. Simply imagining what you would like to contribute to will give you a greater sense of direction.

Take a look at your giving habits and determine how much you already give. You may be surprised at the amount. If you like, you can begin to grow that number or you can plan to one day grow the number. Before you do decide to give make sure that you have a livable budget. If your budget does not give you enough space to live comfortably it will be difficult to give on an ongoing basis.

Also, remember to give because you want to and can do so. Some of us may be tempted to give in order to show others that we are doing well or because we feel we should. I suggest you be very clear on your motives for giving; otherwise down the road you may even resent the organizations that you give to. Just like with everything else, moderation is key.

Do you remember the first time you realized you had enough for yourself and to give away? What was that like?

International Women’s Day

My office is celebrating International Women’s Day next week and I am very ambivalent about the whole holiday. On one end, it’s nice to be celebrated, on the other, I’m uncertain about what we’re celebrating…

This holiday has been recognized in some fashion as far back as 1907. The United Nations declared it an official holiday in 1975. The movement was initiated by labor parties to improve the working conditions for women. To this day the celebration continues to be focused on women who work outside the home. At one point the holiday was actually known as “International Working Women’s Day”. Throughout the past century the holiday was very heavily celebrated in communist and socialist countries, this makes sense since that type of government extols the virtues of the proletariat. After the fall of the Soviet Union some countries abandoned the practice, although since then many have resumed it.

A part of me feels uncomfortable with “International Women’s Day” because it casts women as oppressed, as victims of society. This may be true for many women across the country and the world, but it does not ring true for me or many of my college-educated friends. Or at least it doesn’t seem to be true. How can we know whether there is economic parity without access to our coworkers’ income? In a Huffington Post article First Lady Michelle Obama says it’s hard to think about salary and remember the pervading wage gap when taking a new job. All I can see is that I am doing much better than my mother was at my age or than my cousins back in Mexico. All I know is that I feel free; I am financially independent of a man, that’s much more than my mom or my grandma had at my age.

This feeling is best described by Virginia Woolf in “A Room of One’s Own” when she describes the freedom she felt after receiving an annual stipend from an inheritance:

“No force in the world can take from me my 500 pounds. Food, house and clothing are mine forever. Therefore not merely do effort and labour cease, but also hatred and bitterness. I need not hate any man; he cannot hurt me. I need not flatter any man; he has nothing to give me. So imperceptibly I found myself adopting a new attitude towards the other half of the human race.”

A Room of One’s Own by Virginia Woolf

When I first read A Room of One’s Own I felt so excited to recognize that I have the freedom Woolf talks about. I felt excited to be part of progress as a woman who was enjoying freedoms that would’ve astonished the women of 100 years ago. I am a single woman in my late twenties, daughter of immigrants with my own apartment and car. I remember reading this passage to my mom with so much pride and happiness. I shared with her that my fridge was not working and that I had the money to buy myself a new one. A few years ago a broken fridge would have been an emergency, but at this time it felt gratifying to see that my well stocked emergency fund was serving its purpose. My mom laughed and agreed, she also suggested I start building myself a vacation fund. I am building a life that combines pleasure, meaning, and using my strengths; according to positive psychologist Tal Ben-Shahar these are the key ingredients for happiness. I do not spend time and energy resenting men or those from more privileged backgrounds than my own. At the same time, I acknowledge how lucky I am to have been born in the US and not in Mexico, where I would have had a lot less opportunities.

Secular Saints Virginia Woolf Candle
Secular Saints Virginia Woolf Candle

Everyone is blessed with self-agency. We can all decide what we focus on, be it inequality or gratitude for what we do have. This is different than complacency or being a doormat. A few months ago I had to go against my nature and repeatedly ask my manager for an overdue performance review along with a salary review. It felt very uncomfortable to have this conversation and respectfully persist. I would not have done it without the encouragement of a very good friend and mentor. My mentor is a woman who has done well for herself in her career in corporate America.

I once complained to her that I had not received a raise in the 18 months I had been in my position. She pointed out that the fact I was not getting a raise was not personal, rather it was a result of me not asking for it and that most companies do not actively try to increase their expenses. Whether it was right or wrong of my company to postpone my performance review was irrelevant. I needed to stand up for myself. Maybe I felt so uncomfortable having this conversation with my boss because I am a woman, but maybe this conversation is difficult for everyone regardless of gender. I am the first one in my family to work at a corporation, so I am very grateful to have met a mentor to help me navigate this area of my life.

In the not too distant past women were much more openly excluded from economic self-sufficiency. In the first chapter of A Room of One’s Own Woolf compares a lavish meal at the men’s college against a meager one at the women’s college where she was to present a lecture. After dinner she points this out to her host who shares with Woolf the difficulties of raising funds for a women’s college. Men are not too interested and most women have no money to give. Especially since married women in the UK were not allowed ownership of their own money until 1870. That is a mere 146 years ago. True, at the rate we’re going we many not reach parity for another 117 years, but today there are countless women like myself enjoying financial self-sufficiency. It is the kind of self-sufficiency that Woolf describes as essential for creativity. It is definitely not perfect, but it’s progress. Just like I take it for granted that a married woman can own her own property I hope to see my daughter, or at least granddaughter, take it for granted that she will earn equal pay for equal work.