Reflections on Finance
Finance is a taboo topic - at least in my family.
Whether it is cultural or pride, we (my parents and I) would refrain from discussing this "sensitive" topic outright.
As this year is coming to a close, I needed an avenue where I can jot down the things that have happened. I don't want to miss out on recording the changes. Perhaps it may be helpful to whoever is reading this rant but I think it's more for a selfish purpose. I struggle with worry and anxiety, and at times it feels like these negativity is eating me alive. There have been sleepless nights and times when I felt helpless over the things that are outside of my control. But I have experienced freedom and deliverance whenever I reflect back on the times God continually pulled through even when there seems to be no hope. I needed this or else I will fall back to that loop of sin and helplessness. I felt that my relationship with God has been rocky as I struggle to let go of control and I need Him to deliver me once again.
Back in the fall of 2018, I remember being frustrated at my parents for keeping the state of their finances hidden. We were about to go on a 2-week family trip when my sister and I discovered how they struggled just living month to month. Knowing this would've costed us the trip but it was too late to cancel, we went ahead with the mindset that we want to bless our parents and spend time with them. Time is precious and we don't often travel together just like we used to when we were kids. And I was glad that we went ahead with it, as we still have plenty of stories to share and laugh over. It was a blessed time together. From that point on, it seemed as if God conducted a financial audit in our family. Here are the topics that were uncovered:
1. Student Loan
After finishing my graduate school back in 2016, I had accumulated $15k of student loan debt. I found myself back in Vancouver, slowly chipping away this amount until I am debt free since late 2018. I could not have done this with the help of my sister and I thank God for her.
However that's not the whole picture in our family. My parents also have accumulated student debt from the past when they enrolled in a program to switch into a health profession. I am thankful that my dad was able to complete his debt in early 2019. After some research into my mom's workplace benefits, I was able to find a program where her employer would help her student loan by contributing a % of the amount she is paying towards her retirement savings. She is now enrolled in the program, where she only needs to pay a minimum monthly repayment for her loan, while her employer helps match that amount in her retirement account. Praise God for this.
My personal thoughts on student loan is that it felt freeing to know that I have not accumulated anymore debts (other than this loan, I've never had any outstanding credit card debt). I know some people would pay the bare minimum since the interest rate is pretty low but knowing that I have 0 amount owing provides a peace of mind personally. Also it's important to do my research on ways to mitigate the owed amount, whether it's Repayment Assistance Plan, grants, or a workplace benefit, there are alternatives to do just that.
2. Life Insurance
Monthly premiums on top of monthly mortgage payments were hurting my parents' finances. They had no budget to begin with but after calculating the net amount of the income they received and expenditures, the negative always shows. This prompted my sister and me to look over each expenditure that was coming out of my parents' pocket. Lo and behold, monthly insurance premium was a big part of that.
There was a lack of communication over the benefits of these insurance and we made the decision to pull our parents out from their contribution. Consequently, they were able to pull out the accumulated sum they have contributed throughout the past years (which actually helped pay down other debts like student loan and car financing). We transferred the amount over to their Tax free savings account and RRSP.
The biggest reason for stopping my parents' life insurance was their original intent for enrolling. When you're a parent with young kids, they want the insurance if something happens to you, their dependants are covered and can move on through life. Now that my sister and I are able to receive our own salary, it doesn't make much sense for them to continue their contribution especially when it's hurting their financial health.
3. Car Financing
We have two cars in our family, one has been paid off completely whereas the other was still refinanced. We had around $18k left and a 4.98% interest (yes it's high). Thankfully, through the premium sum, my parents were able to pay that off.
The biggest lesson that I have learned here is the power of negotiation. My parents didn't think much when they were handed a high interest amount when purchasing a car. I'm not sure why they didn't shop around other rates. I am thankful that I am currently living in a city where there are alternatives to owning a car. It may seem inflexible at first but the amount that you save is substantial (think car insurance, gas, repairs/ maintenance). However, if I am forced to buy a car I would refrain from buying a new model. Look for one that's old (Japanese models tend to be more durable) and from what I have seen, you can get one for approximately $5000.
4. Budgeting and Automation
Our family never really budgets and even to this day, they still have taken budgeting very loosely. I am grateful that I stumbled across Mint, the budgeting app. After trying it personally, it has truly changed the way I perceive money. I love how it provides the transparency of where my money is coming from and going. I decided that it was The Tool that I can use to better comprehend my parent's finances - as it was a black box to all of us. It was not an easy feat to implement. One big challenge was one of the primary banks that my parents use (HSBC) was incompatible. Even today, I still need to manually input individual transactions into Mint to better capture my parents' financial status. I don't mind. With the app, I was able to identify unnecessary expenditures that my parents can eliminate (for example, magazine and Sirius XM subscriptions). Together, we were able to come up with specific figures to budget in various categories (Food, Transportation, Bills/ Utilities, etc) and have conversations when a category was overspent. Various trends of expenses and earnings are also visible through the app, which can help us better prepare for some situations. As an example, October can be a costly month as it is the time where certain annual fees, such as house insurance and cars, are due. Knowing this trend help our family to prep for that month, either by lowering budgets in certain categories or generating extra income to compensate.
The addition of Mint is still new and I could sense that my parents have mixed feelings about it as it is monitoring all of their transactions. And even though Mint has been helpful, it can also become a slippery slope to me personally. It's easy to feel controlled in some way by the budgeting figures and to be emotional when overspending happens. This is an active prayer for me to not let it become an idol in my life that affects my relationship with my family. For that reason, I have uninstalled Mint from my own phone (since I could conveniently access it via mobile) and one of my resolution is to logon to it over a bi-weekly period. I don't want to get obsessed over the little things that I miss out on how my parents are giving their best effort in practicing something that they aren't used to, which can also feel uncomfortable at times. I want to celebrate in the little wins, knowing that they are willing to change because they love my sister and me, and to not forget the bigger picture that God is the one who is in control of all circumstances.
5. Mortgage
God has blessed me to become a blessing for my parents. I am positioned in way to allocate an amount each month to contribute to my parents' mortgage prepayment. With my sister's help, we were able to help lower their mortgage amount this year. This is truly His favour and blessing that I tend to overlook. I know that my dad has been stressed out by mortgage in the past, and I am thankful that God has extended His favour for our family financially this year.
Final Thoughts
I don't know what 2020 may bring but just reflecting on all of these aspects that God has blessed my family and me gave me confidence that He will continue to lead us. We may not have it all together but through trusting Him in those gaps provides me with the assurance that He is in control.
In the Old Testament, when Israel was journeying to the promised land, there were certain moments where God commanded them to put up an altar or some kind of monument in a place of significant event, such as crossing the river Jordan or saving them from a plague. He commanded them to do this so that future generations can reflect and remember His provision and protection, how He is still present with them in the midst of uncertainty or silence. I wish for this blog entry to serve the same purpose. Knowing myself, I am certain there will be times when I forget what God has done for me in the past or I am feeling that God is distant from me. May this post be a reminder that no matter where I am at or any adversaries/ seasons I face, God is present and is for me.
Whether it is cultural or pride, we (my parents and I) would refrain from discussing this "sensitive" topic outright.
As this year is coming to a close, I needed an avenue where I can jot down the things that have happened. I don't want to miss out on recording the changes. Perhaps it may be helpful to whoever is reading this rant but I think it's more for a selfish purpose. I struggle with worry and anxiety, and at times it feels like these negativity is eating me alive. There have been sleepless nights and times when I felt helpless over the things that are outside of my control. But I have experienced freedom and deliverance whenever I reflect back on the times God continually pulled through even when there seems to be no hope. I needed this or else I will fall back to that loop of sin and helplessness. I felt that my relationship with God has been rocky as I struggle to let go of control and I need Him to deliver me once again.
Back in the fall of 2018, I remember being frustrated at my parents for keeping the state of their finances hidden. We were about to go on a 2-week family trip when my sister and I discovered how they struggled just living month to month. Knowing this would've costed us the trip but it was too late to cancel, we went ahead with the mindset that we want to bless our parents and spend time with them. Time is precious and we don't often travel together just like we used to when we were kids. And I was glad that we went ahead with it, as we still have plenty of stories to share and laugh over. It was a blessed time together. From that point on, it seemed as if God conducted a financial audit in our family. Here are the topics that were uncovered:
1. Student Loan
After finishing my graduate school back in 2016, I had accumulated $15k of student loan debt. I found myself back in Vancouver, slowly chipping away this amount until I am debt free since late 2018. I could not have done this with the help of my sister and I thank God for her.
However that's not the whole picture in our family. My parents also have accumulated student debt from the past when they enrolled in a program to switch into a health profession. I am thankful that my dad was able to complete his debt in early 2019. After some research into my mom's workplace benefits, I was able to find a program where her employer would help her student loan by contributing a % of the amount she is paying towards her retirement savings. She is now enrolled in the program, where she only needs to pay a minimum monthly repayment for her loan, while her employer helps match that amount in her retirement account. Praise God for this.
My personal thoughts on student loan is that it felt freeing to know that I have not accumulated anymore debts (other than this loan, I've never had any outstanding credit card debt). I know some people would pay the bare minimum since the interest rate is pretty low but knowing that I have 0 amount owing provides a peace of mind personally. Also it's important to do my research on ways to mitigate the owed amount, whether it's Repayment Assistance Plan, grants, or a workplace benefit, there are alternatives to do just that.
2. Life Insurance
Monthly premiums on top of monthly mortgage payments were hurting my parents' finances. They had no budget to begin with but after calculating the net amount of the income they received and expenditures, the negative always shows. This prompted my sister and me to look over each expenditure that was coming out of my parents' pocket. Lo and behold, monthly insurance premium was a big part of that.
There was a lack of communication over the benefits of these insurance and we made the decision to pull our parents out from their contribution. Consequently, they were able to pull out the accumulated sum they have contributed throughout the past years (which actually helped pay down other debts like student loan and car financing). We transferred the amount over to their Tax free savings account and RRSP.
The biggest reason for stopping my parents' life insurance was their original intent for enrolling. When you're a parent with young kids, they want the insurance if something happens to you, their dependants are covered and can move on through life. Now that my sister and I are able to receive our own salary, it doesn't make much sense for them to continue their contribution especially when it's hurting their financial health.
3. Car Financing
We have two cars in our family, one has been paid off completely whereas the other was still refinanced. We had around $18k left and a 4.98% interest (yes it's high). Thankfully, through the premium sum, my parents were able to pay that off.
The biggest lesson that I have learned here is the power of negotiation. My parents didn't think much when they were handed a high interest amount when purchasing a car. I'm not sure why they didn't shop around other rates. I am thankful that I am currently living in a city where there are alternatives to owning a car. It may seem inflexible at first but the amount that you save is substantial (think car insurance, gas, repairs/ maintenance). However, if I am forced to buy a car I would refrain from buying a new model. Look for one that's old (Japanese models tend to be more durable) and from what I have seen, you can get one for approximately $5000.
4. Budgeting and Automation
Our family never really budgets and even to this day, they still have taken budgeting very loosely. I am grateful that I stumbled across Mint, the budgeting app. After trying it personally, it has truly changed the way I perceive money. I love how it provides the transparency of where my money is coming from and going. I decided that it was The Tool that I can use to better comprehend my parent's finances - as it was a black box to all of us. It was not an easy feat to implement. One big challenge was one of the primary banks that my parents use (HSBC) was incompatible. Even today, I still need to manually input individual transactions into Mint to better capture my parents' financial status. I don't mind. With the app, I was able to identify unnecessary expenditures that my parents can eliminate (for example, magazine and Sirius XM subscriptions). Together, we were able to come up with specific figures to budget in various categories (Food, Transportation, Bills/ Utilities, etc) and have conversations when a category was overspent. Various trends of expenses and earnings are also visible through the app, which can help us better prepare for some situations. As an example, October can be a costly month as it is the time where certain annual fees, such as house insurance and cars, are due. Knowing this trend help our family to prep for that month, either by lowering budgets in certain categories or generating extra income to compensate.
The addition of Mint is still new and I could sense that my parents have mixed feelings about it as it is monitoring all of their transactions. And even though Mint has been helpful, it can also become a slippery slope to me personally. It's easy to feel controlled in some way by the budgeting figures and to be emotional when overspending happens. This is an active prayer for me to not let it become an idol in my life that affects my relationship with my family. For that reason, I have uninstalled Mint from my own phone (since I could conveniently access it via mobile) and one of my resolution is to logon to it over a bi-weekly period. I don't want to get obsessed over the little things that I miss out on how my parents are giving their best effort in practicing something that they aren't used to, which can also feel uncomfortable at times. I want to celebrate in the little wins, knowing that they are willing to change because they love my sister and me, and to not forget the bigger picture that God is the one who is in control of all circumstances.
5. Mortgage
God has blessed me to become a blessing for my parents. I am positioned in way to allocate an amount each month to contribute to my parents' mortgage prepayment. With my sister's help, we were able to help lower their mortgage amount this year. This is truly His favour and blessing that I tend to overlook. I know that my dad has been stressed out by mortgage in the past, and I am thankful that God has extended His favour for our family financially this year.
Final Thoughts
I don't know what 2020 may bring but just reflecting on all of these aspects that God has blessed my family and me gave me confidence that He will continue to lead us. We may not have it all together but through trusting Him in those gaps provides me with the assurance that He is in control.
In the Old Testament, when Israel was journeying to the promised land, there were certain moments where God commanded them to put up an altar or some kind of monument in a place of significant event, such as crossing the river Jordan or saving them from a plague. He commanded them to do this so that future generations can reflect and remember His provision and protection, how He is still present with them in the midst of uncertainty or silence. I wish for this blog entry to serve the same purpose. Knowing myself, I am certain there will be times when I forget what God has done for me in the past or I am feeling that God is distant from me. May this post be a reminder that no matter where I am at or any adversaries/ seasons I face, God is present and is for me.
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