Loading...

Saturday, March 25, 2017

The Power of the Spice Rack: How Simple Spices, Aromatics, and Other Simple Additions Can Transform Bland Staples Into Amazing Foods

I am a huge advocate for making low cost meals at home. It’s been one of our biggest money savers over the past several years, trimming our cost per meal for our family well below $1 per meal, which means we can feed a family of five for about $400-450 per month, and we do it with delicious foods that we all like and still afford to eat out or get takeout every once in a while.

A big part of that savings comes from simply using staple foods as often as possible. We use rice and beans and eggs and peanut butter and pasta and low-cost produce for many meals – you can see a full list of the low cost staples that make up the backbone of our diet. However, on their own, those foods can be pretty bland. Plain rice? Plain beans? Yeah, not exactly the most flavorful or exciting foods in the world.

The trick, of course, is to season them well with herbs and spices when you’re cooking them. Salt can make almost everything that’s not sweet taste better, of course, and black pepper helps with most things, but those two just scratch the surface of what you can do with a good selection of herbs and spices.

The problem, of course, is that it’s often hard for someone new to the kitchen to know what spices to use with what foods. If you season something the wrong way, you end up with something that can be less than appetizing. What can a person do?

Honestly, I started figuring out the mystery of flavoring foods by simply trying lots of simple recipes at home and seeing what I liked. I picked up a bunch of cookbooks full of “simple recipes” that mostly revolved around cooking and spicing one or two key ingredients appropriately and I noticed what was tasty and what wasn’t. Based on that, I have a good idea of how to add herbs and spices to various staple foods to make them quite tasty.

Still, it would have been useful at that earlier point to simply have a thoughtful guide as to how to season many staple foods in a way that I might enjoy rather than having to make lots of recipes and trial by error. What do I add to rice to make it flavorful? Beans? What can I do with peanut butter? What can I do with leafy greens?

It’s easy to find long lists of herbs, spices, and other flavorings, and what you can do with them, but today I’m going to give you the reverse. I’m going to list a bunch of staple foods you can buy really inexpensively at the store and give you several options for adding flavorful items to them. In most cases, all you have to do is cook the item and add the suggested spice when cooking or at the end of the preparation.

Not all of these will click perfectly with your taste buds, of course, but trying them out is so incredibly simple and most of them will result in a pretty tasty experience, giving you another low-cost food you can add to your repertoire.

Beans

Beans come in a wide variety of shapes and sizes, but most maintain a simple earthy flavor that, although I love it on its own, can prove to be a bit on the bland side. I vastly prefer cooking dry beans at home on my own. Here are some herbs, spices, and other seasonings you can add to amp up beans.

Salt Salt can bring beans to life and can help with almost anything else on this list. Add salt to taste by mixing them into the beans if you’re doing it early on in the process if you’re boiling dry beans yourself. Typically, canned beans are already salted, but trust your own taste buds.

Onions and/or peppers, chopped and sautéed Just chop up some white onions and peppers of almost any kind – bell peppers if you don’t want anything too spicy or your hot pepper of choice if you do want some heat – and cook those chopped vegetables in a skillet with a bit of oil until the onions are beginning to turn brown. Then add a bit of water to the hot skillet and dump the whole mix right into the beans. You can do this after the beans are finished cooking to make the liquid between the beans much more flavorful, or you can do it early in the cooking process to put some flavor straight into the beans (though you’ll lose a lot of flavor when you strain the beans). With canned beans, you can just mix this in afterward. I usually use about an eighth of a small white onion and about half again as much diced peppers per cup of beans.

Chopped garlic or garlic powder Heat some chopped garlic in a saucepan or skillet for just a minute or so, or add a spoonful or two of garlic powder. I suggest going light with this at first and then adding it slowly until it tastes right.

Cilantro To some people, cilantro tastes citrus-y. To others, it tastes like soap. If you’re on the citrus side of the equation, half a teaspoon of dried cilantro per can of beans (or a quarter teaspoon per cup of cooked beans) or a tablespoon of fresh cilantro will add a nice citrus-y fresh flavor to the beans.

Cumin Cumin is a wonderful addition to beans if you’re going to use them in a soup or as part of another dish (such as enchiladas). Add half a teaspoon of ground cumin per cup of cooked beans and you’ll have some great earthy flavor that makes the entire dish taste deeper and more full-bodied.

Cayenne or chili powder Both of these are ground peppers that add “heat” to beans. You should add both of these to taste, as different people have different levels of heat and chili flavor that they desire. These are great if you intend to make a spicy dish or you’re making chili.

So, for example, let’s say I’m cooking beans for a black bean “chili” recipe. I’m going to add a bit of salt and ground black pepper, chopped white onions and peppers, some chopped garlic, some cumin, and some chili powder and a bit of cayenne right into the beans along with a bit of liquid and I have the backbone of my soup right there. If I’m making enchiladas, I’ll probably use some cilantro and maybe a bit less cumin. If I’m making a white bean soup, I’ll just use the onions and peppers, the garlic, and the cumin and skip the other stuff.

Rice

Rice is something of a blank slate, even more so than beans. You can add almost anything you want to it to make it delicious.

Broth If you’ve cooked anything flavorful recently, save the broth from whatever it is that you cooked and use it to cook up the rice. You can save soup broth or broth from cooking a chicken or you can even make your own broth/stock by boiling vegetable scraps or bones and saving the liquid. Salt and pepper in the broth brings out even more flavor.

Soy sauce Just a bit of soy sauce in cooked rice makes all of it taste amazingly flavorful. It’s much easier to acquire than the ingredients that make it up, too – it’s a great “flavor simplifier.”

Curry powder Curry powder is just a convenient mix of several spices – curry leaf, coriander, turmeric, cumin, fenugreek, and chili peppers, with some variants having things like ginger, garlic powder, mustard seed, cinnamon, and other things. You can honestly use any of the basic ingredients in curry powder to liven up rice, but the mix that is curry powder really does a good job.

Onions and/or mushrooms and/or peppers, chopped and sautéed The strategy here is much the same as it is above, with adding peppers and onions to rice. Just add a bit of oil in the pan, toss in these ingredients over medium-high heat, and cook them, tossing them around until the onion is just turning a bit brown. Add a bit of liquid to the hot skillet and add it straight to the rice, mixing it around in there. You’re going to make all of the rice have a wonderful flavor that you can happily eat just on its own or you can serve along with almost anything.

Salsa The ingredients in salsa are almost all perfect for rice seasoning, so why not just mix salsa straight in there? Tomatoes, cilantro, onions, peppers, lime juice, cumin, peppers – they’re all good with rice, and salsa is just a mix of those things.

Cinnamon and sugar This one is near and dear to my heart because it was something my mother used to fix as a snack when we had extra rice when I was a kid. She’d simply take a cup or so of rice, mix in half a teaspoon of cinnamon and what seemed like a tablespoon of sugar, and warm it in the microwave for a sweet snack. You could use it as a side dish as well, or just sprinkle the cinnamon and sugar on top of warm rice.

Leafy Greens

First of all, let me state that you can flavor leafy greens with almost anything you can imagine and it will probably be interesting and tasty. However, there are a few general guidelines that will guide you toward something flavorful for your leafy greens.

Simple dressing Just mix four parts olive oil to one part white vinegar or red wine vinegar. That’s it. Into that, you can add all kinds of things, then toss the mix with the leafy greens to make a tasty salad.

Things you can add to simple dressing include pureed berries, a small amount of sugar, salt, garlic powder, pepper, thyme, basil, oregano, celery powder, and parsley. Be very careful with mixing sweet and savory ingredients together, as you can result in some questionable flavors. I suggest trying just one or two ingredients at a time and seeing what you like.

Heating the dressing is also often very tasty, as it changes the texture of the leafy greens.

Fresh fruits You can toss small fresh fruits with almost any leafy greens to add some sweetness and flavor variety to them. You can mix anything from berries to mandarin orange slices to bits of apple to greens. You can also squeeze citrus fruits and add their juice straight to leafy greens, along with the zest of their skins.

Peanut Butter

Most people see a jar of peanut butter and think of the traditional standby that is the peanut butter and jelly sandwich. Don’t get me wrong, I love a good PB&J, but there are many other interesting things you can do with peanut butter.

Soy sauce I’ll mix about two teaspoons of soy sauce with a cup of peanut butter and mix it in with some pasta for a very simple and amazingly flavorful meal. You wouldn’t think this would work, but it actually works really well with the slight sweetness of the peanut butter playing off of the strong savory soy sauce and the texture of the pasta. It’s delicious!

Small fruits, nuts, and seeds Just mix a ton of small fruits – preferably dried ones, like raisins or dried cranberries – and nuts and seeds in with a bit of peanut butter until they all just stick together and you have yourself a simple snack bar. You can use almost anything here and it works – I recommend flattening out this mix, cutting it into bar shapes, and storing them in the freezer individually wrapped with cling wrap.

Cocoa powder You can turn peanut butter into a peanut-butter-and-chocolate dream by just adding a bit of cocoa powder to it. You can overdo this really easily, so just use a little bit – like a half a teaspoon of cocoa powder per cup of peanut butter – and then slowly move up from there until you find the right balance of texture and flavor.

Chicken

Chicken is incredibly inexpensive and reasonably flavorful on its own, but it also meshes so well with so many different flavorings and spices. You can do all kinds of things with chicken! Here are just a few examples.

Garlic You can use garlic powder or minced garlic, but all you have to do is mix it in a bit of olive oil with a bit of salt and pepper and then spread it all over the chicken before you cook it, whether you grill it or bake it or use other methods. It’ll imbue a wonderful garlicky flavor right into the chicken.

Oregano This will add a bit of “Italian” flavor to chicken. You just do the same thing as you would do with the garlic – mix it with a bit of olive oil and coat the chicken. You can even let it rest in the olive oil with oregano for a while to soak in the flavor.

Rosemary Rosemary always adds a bit of lemony flavor to anything, at least to my taste buds, and that flavor also pairs well with chicken. Again, a bit of olive oil, a bit of rosemary, a bit of salt and pepper, all mixed together and coated on the chicken.

Mustard powder (with honey) For a different approach, try mixing a bit of mustard powder in with some honey and very lightly coating chicken pieces with it. In this case, you wind up with a sweet and spicy glaze on the outer surface of the chicken with a bit of the sweet and sour soaking in through the chicken juice. Again, this is recommended if you grill or bake the chicken.

Chili powder A light dusting of chili powder that’s stuck on the natural moisture of the surface of the chicken creates a great flavorful outer layer, and some of that is absorbed into the meat itself by the chicken’s natural liquids. Spread this on and cook as you will.

Eggs

Eggs are one of my favorite foods of all time. I love poaching them, scrambling them, frying them, hard boiling them, soft boiling them. I love just eating them with just a bit of salt and pepper on them and I’d never get tired of them. However, there are some simple things you can do to add even more flavor variety.

Chili powder Sprinkle some chili powder on an egg as you’re cooking it or on a hard-boiled egg afterwards to add a great kick of spice and flavor to the finished product. Again, amounts vary according to individual taste – try adding a little this time, then gradually kick it up until you find the right level for you that isn’t overpowering.

Tarragon I love adding tarragon – whether fresh or dried – to scrambled eggs, as it adds this tiny subtle bittersweet flavor that just adds something amazing to eggs when used in small amounts. I love putting a few dashes of tarragon into scrambled eggs along with some salt and pepper.

Chives Chives go great in scrambled eggs as well, adding a bit of an oniony flavor to the eggs. We’re lucky enough to have a great patch of chives behind our house which we use heavily throughout the growing season and chives are almost a constant in our scrambled eggs.

Dill and paprika I like using these two together with a light dash of each on a hardboiled egg or mixed together with the yolk to make a simple “deviled egg.” They just add a wonderful zest to the flavor of egg yolk.

Thyme A bit of dried thyme adds a wonderful earthy flavor to eggs, so I like to sprinkle a bit on top of a fried egg as it’s cooking when I know I’m going to pair it with something like toast with butter. Thyme just wonderfully complements a fried egg, in my book.

Sweet Potatoes

Sweet potatoes are one of my favorite low cost secrets from the grocery store. I love baking sweet potatoes, mashing them, and cutting them up into strips and coating them with a bit of oil to make “oven fries” by baking them. Of course, a bit of flavor never hurts…

Oregano Whenever I cut sweet potatoes into strips for “oven fries,” I coat them in just a bit of oil, then cover them with salt, pepper, and oregano and then bake them until they pass the “taste test.” I like them when the outside is almost crisp but the inside is soft; baking at 350 F for 45 minutes to an hour i what you’ll want to do. When they come out of the oven, they’re so delicious that almost no one in the family can keep themselves from grabbing one or two.

Cinnamon You can bake a sweet potato just like a normal potato and you can even do it in the oven, but when you get it out, cut it open, put a bit of butter in there, and sprinkle a bit of sugar and cinnamon on top. It complements the sweet potato flavor with some wonderful sweetness that’s just amazing as a slightly sweet side dish or even as a dessert.

Maple syrup You can also make mashed potatoes out of sweet potatoes by boiling them until they’re soft then simply mashing them with a mixer or a ricer. The secret, however, is to mix in just a little maple syrup at the end, adding a wonderful maple flavor to the whole thing. Putting a scoop of that on your plate, with just a bit of butter on top, is just amazing.

Final Thoughts

It only takes a little bit of flavoring to turn a boring, cheap staple into something delicious from your chicken. Just add a spice, some herbs, a simple sauce, or an aromatic vegetable, and you’ve turned your simple cheap staple into something wonderful.

Better yet, once you have a sense of what many of the basic items do to the flavor of the staples, you can start mixing and matching what you like. It becomes fun and quite easy to make delicious meals at home with just the cheapest staples and a few seasonings.

Good luck!

The post The Power of the Spice Rack: How Simple Spices, Aromatics, and Other Simple Additions Can Transform Bland Staples Into Amazing Foods appeared first on The Simple Dollar.

Continue Reading…

Friday, March 24, 2017

Thoughts Become Desires

One of my biggest work distractions is looking at interesting websites, particularly ones that I think will help improve my life (this might sound an awful lot like you at the moment). Quite often, I’ll stumble across an article that will talk about a particular book or a particular app or a particular item that really seems to click well with what I’m doing in my life, and that article sets my mind in motion. I’m suddenly thinking about something that wasn’t on my radar at all, and if I think about it for too long, I’m suddenly making a case for buying it.

A few weeks ago, I was at a store that sold a lot of pretty high quality do-it-yourself kits. Many of them were focused on hobbies and tasks that I basically never really considered before, but I brushed by most of them without much of a second glance. What did attract my attention was a calligraphy kit, which they had set up for people to try. I had never even attempted calligraphy before, but I had quite a bit of fun following the instructions and spelling out my name and I couldn’t help but think of some really neat projects I could do if I mastered this skill. Suddenly, there was a thought in my heat, one that quickly started to turn into a desire.

It happens over and over again, in my life and likely in your life. For any number of reasons, something you never really thought about before is brought into your attention. Most of those things just slide off of you, but some of them catch in your thoughts, and they come up again and again in your thinking. Soon, those thoughts become desires and you find yourself wanting something that you weren’t even aware of yesterday.

Thoughts become desires.

This is something I’ve struggled with for a long time, all the way back through my entire adulthood. I have a strong imagination, one that easily visualizes a lot of scenarios in which I could use a particular item or technique. The first time I saw a truly good smartphone, my mind reeled with the possibilities for weeks. I actually made a list of more than 100 smartphone apps I’d like to see (almost all of which now exist, unsurprisingly). Whenever I walk into a bookstore, I don’t see just one book I want to read – I see hundreds and the challenge becomes ignoring the ones that most draw my attention, because I can imagine myself enjoying multitudes of books in pretty much every section. Whenever a hobby begins to really click with me, I visualize many, many enjoyable experiences down the road and those visions include enough details to include a lot of gear that I become suddenly convinced that I must have.

Overcoming this tendency of my thoughts running wild and turning into expensive desires has been a real challenge. I’ve only really come up with a small handful of things that work in terms of keeping these desires at bay so that they don’t transform into expenses that I don’t need in my life.

Asking “Why Do I Want This?” and Repeating the Question

Whenever I find myself desiring something, I simply ask myself “why do I want this?” If I can’t answer that question, I don’t buy it. Then, whenever I come up with an answer to that question, I ask myself “why do I feel that way?” and then I keep repeating that question.

Eventually, I end up coming around to some sort of sense of personal inadequacy. My desires are usually founded in some sense that my current life is somehow not up to snuff and the desire I have is usually perceived as some way of fixing it. I’m patching some hole in my knowledge or I’m making up for poor choices in terms of my time use or something like that.

The solution, then, is to directly attack that flaw. Rather than focusing on the desire, I intentionally focus on fixing whatever flaw I’ve discovered and I find that when I address that flaw specifically without throwing money at it, the desire usually goes away on its own.

Postponing Action

A second strategy that I find invaluable when putting desirous thoughts to bed is to simply postpone taking action on that desire. When I desire something and want to spend money on it, I postpone it for at least thirty days if at all possible. There’s almost nothing that I desire that I can’t agree to postpone for a while.

Almost always, when I decide to postpone a purchase, anything that isn’t a truly, deeply held desire fades away pretty rapidly. Often, I don’t even remember the desire thirty days later.

What I do is pretty simple. I just mentally agree that I won’t buy the item for thirty days. If the item is still in my head after a few days, I add it to a list with a date that’s about a month or so in the future, which can give me the sense of “taking action” on it. When I do that, I look at all entries that are past the date and, perhaps unsurprisingly, I almost always delete those entries.

Why? Over the course of a month, those desires just fade away. They seem so urgent right now when the thought is fresh in my mind, but when I don’t buy it and I go on with my life, I think about other things and unless that desire is really meaningful, it fades. Eventually, it vanishes.

So, if I can simply get myself to agree in the moment to put off the actual choice to buy, that desire often becomes nonexistent on its own, which means that it was a pretty good choice not to spend the money! If something actually is important to me over a period of time, I can always still buy it later.

Focusing Intentionally on Things Money Can’t Buy

Another valuable strategy for keeping my mind from wrapping around desires is to intentionally spend my time and focus on things that don’t encourage spending money. I read a book. I go on a hike in the woods. I play a long board game I already own. I play soccer with my kids. I pray. I meditate. I write in my journal. I study something.

Those activities force my mind to focus on different things. I think about nature. I think about big ideas. I think about strategy. I think about the details of my life. I think deeply about my stances on the issues of the day.

When I intentionally move my mind onto topics that aren’t going to lead me to building up the desire to buy things, I find that any desires I have hanging around simply fade away over time… and new ones don’t come in to replace them.

This goes directly hand in hand with the final strategy.

Limiting Media Consumption

By this, I mean that I make a conscious effort to minimize the time I spend watching television and other videos and reading low-quality articles and social media. I enjoy entertainment as much as the next guy, but I make a strong effort to choose things that won’t persuade me to buy things or ignite desires or bring me to poorly-founded conclusions.

If I’m too tired to read a thoughtful article, then it’s time to go to bed. If I just want to be entertained, I turn on a comedy routine or a well-regarded movie – for example, have you actually watched all of AFI’s 100 greatest movies? I’ll read a well regarded book or an article from a writer or a publication that I really trust (and there aren’t many of them). Those things alone provide more entertainment than I’ll ever need.

I’m also slowly cutting all social media out of my personal life, though I still do use it for professional purposes like communicating with readers who send me individual questions.

Why make these choices? Social media, television, and low-quality articles seem to do little other than to drive desires and emotions. I’m left either feeling upset or feeling a strong desire for something I didn’t have just before I started reading – and that desire usually isn’t a useful one, either. There are too many good options available to me that I feel I have the freedom to choose things that don’t inflame my desire to buy more things and spend more money without giving up any quality of life.

Final Thoughts

Thoughts left unchecked become desires, and the wrong desires left unchecked become expenses. Avoiding that pathway is a challenge, but when you find ways to reroute your thoughts and your desires in new directions, you can find yourself with a deeply fulfilling life without the need to open up your wallet in the face of every desire you can conceive of.

When you do that, it becomes a lot easier to build the type of financial independence that you want.

Good luck!

The post Thoughts Become Desires appeared first on The Simple Dollar.

Continue Reading…

Thursday, March 23, 2017

The Dirty Dozen: My Twelve Biggest Financial Mistakes of the Last Ten Years and How I Wish I Had Done Things Differently

When I write about my own personal finance experiences, it’s easy to report on the things I did well. Writing about the good moves makes a lot of sense, after all. Those are the moves that resulted in a clear-cut personal finance gain without a lot of sacrifice, and those are the moves that really are well worth sharing.

The problem with sticking to that approach is it creates the utterly false impression that my life is one long series of financial success stories, that everything I’ve touched (especially since my financial turnaround) has been golden.

I’ve made many financial mistakes in my life. Many of them have happened even after I “turned my financial ship around.”

A few years ago, I wrote an article about my fifteen biggest financial mistakes, listing errors I made mostly before my financial turnaround. Today, I want to focus on the errors I’ve made since my financial turnaround.

Some of these won’t seem as big as my pre-turnaround mistakes – and they’re honestly not. I’m not doing things like maxing out credit cards any more. We have basically no reason to be in debt any more. However, these mistakes are still real and still quite costly.

They’re mistakes I’ve either worked hard to correct in very recent years or am still working to correct right now.

Let’s take a look.

Mistake #1 – I didn’t have a firm grip on my hobby spending

This is easily the single biggest mistake I’ve made in the last decade. I’ve simply spent too much money on personal hobbies.

This really boils down to a series of small mistakes that merge together into one big problem. One issue is that I often convinced myself that hobby spending was actually another kind of spending and would shoehorn it into our budget. I identified things like Netflix essentially as utilities, for example. Another issue is that, while I had a budgetary limit on how much I should spend on hobbies each month, I went over that limit quite often. A third issue is that I just didn’t make wise choices when it came to hobby spending and I often spent money when I already had things that fulfilled that need.

What have I been doing to squelch these bad routines?

I’ve gone on some “no hobby spending” diets and thirty day challenges, where I didn’t spend a dime on anything that was largely for me (I left things like Netflix in place because the whole family uses it), which works well.

I adopted some rules in which I capped the size of some collections. For example, I adopted a “one in, one out” rule for my board game collection, in which I have to get rid of a game before I can add a new one. I have done the same thing for other collections, such as notebooks, where I have to use one up before I can get a new one.

I’ve also moved to collecting experiences with as many of my hobbies as possible. I’m working on “collecting” every single hiking trail at all of the state parks in Iowa. I’m “collecting” geocaches. I’m “collecting” books I’ve read and board games I’ve played. This shifts the focus to experiences rather than stuff.

Mistake #2 – I didn’t think about a long-term vision regarding where to invest and save our money

When we first paid off all of our debts, I basically just switched the amount we were using for our debt payments toward an investment system that made sense at the time and I basically just let it sit. I’m a big believer in a “set it and forget it” investment philosophy and I took that fully to heart.

The problem was that the idea I had in that moment, while it was made up of good investments, didn’t really reflect any sort of long-term vision. I was basically maxing out retirement plans and then putting the rest into 529s and taxable accounts because it seemed like the straightforward thing to do, but it was not the best thing to do for my future.

What I should have done – and what I finally got around to doing – is to spend some serious time thinking about my goals and how those goals translated into specific saving and investing tactics. That’s the real way to do things.

Notice that I didn’t say that I needed to specify a goal. Specifying a goal wasn’t the problem (at least, not here… we’ll revisit this shortly). The problem was translating that goal into something meaningful that I could take financial action on. Instead, I just went with a “one size fits all” investment plan.

Mistake #3 – I spent several years focused on a financial goal that I knew was fading away

For many years, I operated under the belief that Sarah and I were saving up to buy a nice country house. We both grew up in a rural area and in various ways longed to return to that kind of setting. Our current house is on the edge of a small but rapidly growing town, one that may be subsumed by a larger city eventually but, for now, is a bedroom community populated by a lot of people who commute to their jobs, and we both felt like we eventually wanted to be more rural.

Of course, things change. We began to appreciate the advantages of where we live right now. We built strong relationships with our neighbors. I have a good friendship with a couple of our neighbors and a growing friendship with a couple more, and I’d describe myself as a good positive acquaintance with our other neighbors. Our children have tons of friends in the area. It’s quiet and there’s very little crime because the local police department is on the ball.

Over time, we began to realize that we’re pretty happy where we are, at least for the foreseeable future. Sarah and I might someday move elsewhere, but if we do, it will likely be to a smaller home, not a larger one, which means that our focus on that big goal of buying a big country house was misplaced at best.

Mistake #4 – I didn’t plan ahead well enough for a career switch

Several years ago, I pretty abruptly switched from a full time career in a research field to a full time career as a writer. I was growing frustrated with some aspects of my job, but the big frustration was simple absence from my family. I had this growing sense that I was missing out on my children growing up, which was really amplified by the fact that I missed my son’s first steps while on a work trip and I heard his first attempt at saying “dada” over the phone.

That feeling of guilt drove me to make a very rash career decision. I was not ready to make the switch to being a full time writer, but I was flush with the sense of our recent financial successes when I made that decision.

I was incredibly lucky that the whole thing didn’t just backfire in my face. Looking back, I see how easily things could have gone south in the first few months. By some miracle, they did not and things worked out. I should not have relied on “some miracle” for the success of my career and my family’s financial stability going forward.

The thing is, had I just been a little more patient with my primary job, I could have made the transition much easier and less painful. What I lacked was patience. Simply sticking around my previous job for another six to twelve months would have made it possible for me to make that transition much more smoothly, with the groundwork laid for more income streams.

Speaking of which…

Mistake #5 – I didn’t establish more income streams very quickly

One of the most important elements of financial stability, in my book, is having multiple streams of income so that everything doesn’t fall apart if you lose your job or if a side gig fails. For a long while, I had all of my eggs in one basket – this website.

The problem was that I convinced myself that I actually had several streams of income. I had several different agreements centered around The Simple Dollar that brought me revenue, but they all relied on the same thing: continuous additional content for The Simple Dollar and a continued readership. I convinced myself that those different agreements were really different income streams, when the truth was that they were effectively the same income stream. They all lived and died by the existence of this site.

In the last few years, I’ve worked to build other streams of revenue for myself and my family. I’ve built some standalone websites and some other things that provide at least some revenue for my family and I’m hoping to soon reach the point where any income stream can go away and it won’t really adversely affect my family.

I just should have done this sooner. It was a big risk for my family for me to not do so.

Mistake #6 – I often assumed bills were auto-paying correctly without verifying it

This bit me more than once. I would set up an online bill pay or auto payment for a particular bill and then assume that every payment was going through without really thinking about it. A few of the companies I dealt with seemed to switch computer systems or banks at some point and then would fail to make a withdrawal and then ding me for a late payment.

In each case, I was able to figure out what was going on and spend some time on the phone to get all of the late fees waived, but it’s far easier just to check and make sure that bills on auto-pay are actually getting paid each month. It takes just a minute or two, compared to the hours I’ve spent on the phone dealing with these issues.

Even worse, this could have cost me a lot of money in late fees and other expenses had I not caught them, had I not spent that time on the phone, and had I not had customer service people who were willing and able to remove the charges.

Mistake #7 – I used weak passwords for online accounts

Over the course of a few years, I had several key online accounts hacked, not because I got phished or gave away the password, but simply because my password was either guessed due to it being leaked or because it was a weak password to begin with. In a couple of cases, these accounts were financial in nature, which cost me some money in one case and caused me a ton of time in another.

Since then, I’ve adopted a much stronger password policy. I’ve enabled two factor authentication on as many of my accounts as I can. I have a monthly password change policy on every account of any importance (I keep a list of them) – I do this on the first of each month. I use a simple algorithm for my passwords so that each account has a unique password based on the current month, year, and domain name, so by simply knowing the simple algorithm, the current month, the year, and the site, I have a unique complex password.

(I know people are going to ask about the algorithm, but it goes something like this: I add the number of the month to the year and put that number in a long string that includes the name of the site, along with a symbol or two. So, you might use a password that starts with “$”, is followed by the year plus month number, followed by a “%”, followed by the name of the site with the first letter capitalized, followed by a “X”. This gives you a password for, say, Netflix, that goes like “$2021%NetflixX”. That’s not anywhere close to my exact password algorithm, but that gives you the idea.)

I haven’t had a key account compromised in the four or so years I’ve been using this password system. That’s saved me a lot of headaches, and it’s a system I wish I had in place since the start.

Mistake #8 – I experimented with individual stock investing

For several years, I tinkered with investing in individual stocks. I mostly invested in large US companies like Coca-Cola, Verizon, DuPont, Apple, and Google, so the investments were pretty stable, and I did it following the advice of a bunch of books I was reading at the time.

While I didn’t lose a ton of money – by simply sticking to huge, safe companies with a giant market share, I largely avoided that – I did see a ton of volatility in each of the stocks while I owned them. Individual companies would rise or fall 40-50% in a year, which was an incredible roller coaster, and it often seemed that those rises and falls were unrelated to anything I could really track.

The thing is, not only were the investments really volatile, I spent a lot of time studying them. I would try to figure out why the stocks were rising or falling and sometimes it was clear, but at many times, it wasn’t clear at all. It felt like something “insider” was happening with the stock that I wasn’t privy to.

Eventually, I got out of it. It quickly became clear to me that without the research tools available to large scale investors, it was pretty hard to gain any sort of advantage in investing. I lost some money in the process, but it wasn’t a major loss. What I really regret is the time I essentially wasted on it when there was a much better investing strategy right in front of me – simply investing in index funds would have meant a lot less headache, a lot less time, and likely more money in my pocket.

Mistake #9 – I overspent on the fledgling interests of my children

Sarah and I are both strongly committed to maximizing our children’s educational opportunities, but we also try really hard to give them large blocks of unstructured free time so they can figure out how to manage their own time smartly and creatively. For us, this means really encouraging independent interests that they can follow on their own.

The problem has been that, in some cases, we’ve invested money in helping them pursue fledgling interests, only to watch those interests die off pretty quickly.

We’ve purchased particular art supplies, musical instruments, and model-making supplies that our children have dove into with gusto, only to find themselves burnt out on the interest after a relatively short while. The interest then turns into a conflict, where our children’s hearts are going in a different direction.

What we’ve done recently is have our children sign agreements when they want to pursue a particular interest where, if we invest in those interests, they agree to follow through with a passion to some extent with some consequences if they don’t. For example, we are considering buying one of our children guitar lessons, but doing so will involve a commitment of a certain number of months of lessons and home practice.

Mistake #10 – I bought too many Kindle books out of convenience

I’m an avid reader. I devour at least a book a week and often more than that. I get a lot of books from my local library, but that doesn’t always sate me, especially when I’m traveling or when I hear about a great book, especially at night.

What makes this worse is that I really like using my Kindle. I received one as a gift for my birthday a couple of years ago and I find it to be so convenient and easy on my eyes. I can read and read and read and read on it, and I love having lots of books with me on the go.

The problem, of course, is that it is so easy to order books on the Kindle. If I’m reading a series and I finish one, I can get the next one with just two button pushes. If I’m interested in a topic, I can get a highly recommended book on that topic so quickly.

This is actually one area I’m still struggling with. The most successful tactic I’ve tried is to simply remove my credit card from my Amazon account. This makes ordering everything from there more difficult, but it makes it much harder for me to impulsively buy a Kindle book.

The goal, of course, is to train myself to not order books impulsively. I allowed myself to become used to ordering books on impulse and that became a very expensive routine.

Mistake #11 – I didn’t sign our youngest child up for college savings right away

With our first two children, I signed each of them up for a 529 college savings plan as soon as humanly possible. In fact, I actually started their plans before they were born, naming myself as a beneficiary and then changing that beneficiary upon their birth.

With my third child… well, I let that detail slip through my fingers.

For the first few years of his life, he didn’t have a 529 plan like his siblings did. Even though it’s easy to sign up for one, I kept putting the task on the back burner. I kept finding other things that needed to be done and prioritized them instead.

When I finally got around to signing him up for an account, in order to balance things out, we set up double contributions for him, which we intend to stick to for several years until his savings are in line with his siblings.

In the long run, this will cost us money, because we’ll have to contribute more than we would have had we signed him up as soon as he was born. That’s because we missed out on the investment gains from his earliest years and will have to make them up out of pocket.

Mistake #12 – I haven’t done enough to teach my children the basics of personal finance

Don’t get me wrong – personal finance is definitely a subject that I’ve addressed with my children. I think they have a stronger understanding of basic money issues and money management than most children their age.

However, I just don’t feel as though I have done enough to really ingrain good money practices into their head so that they don’t make the same mistakes I did. In fact, I have this gut feeling that they’re going to repeat my mistakes during their college and post-college years.

It really is challenging to teach financial lessons to children and pre-teens and I know that many lessons become easier as they become teenagers. What I really need to do is ramp up their financial education in the coming years, especially for my oldest child as he approaches the teen years. I plan on opening up some of our own finances to him and having some real heart-to-heart discussions so he can see what the real world is like and outline some of my own decisions I’m making right now to him.

Will it work? It’s hard to tell. It’s a step that my own parents never really took with me, so I’m hoping it makes a difference. I will say that, other than a good tendency to save up when there’s a goal in mind, my own children don’t seem to have strong financial sense yet, and it’s on me to build that in them.

Final Thought

My financial mis-steps these days aren’t as severe as they were when I was in my early professional life. I’m not drowning in debt (thankfully). I’m not spending more than I bring home.

However, my financial life is still full of mistakes and things I need to correct.

For me, the underlying principle of my financial life – and every other aspect of my life – is simple. I want to be better today than I was yesterday. If I can achieve that over and over in my life, my life will gradually become better and better.

That means being honest with myself about my own mistakes and mis-steps and looking for ways to improve them. There’s still a lot to improve, just from this list.

Don’t be afraid of your own mistakes. Look at them honestly. Don’t run away from them. Ask yourself what you can do to fix them.

Make today better than yesterday. Make tomorrow better than today. You’ll never regret it.

The post The Dirty Dozen: My Twelve Biggest Financial Mistakes of the Last Ten Years and How I Wish I Had Done Things Differently appeared first on The Simple Dollar.

Continue Reading…

Seven Ways to Stop Wasting Money on Your Job Search

How much does it cost to find a new job? A lot of it depends on your industry, job level, and how long the process lasts. According to Jobvite’s latest data, it takes an average of 28 days from application to hire – but that’s assuming you get that all-important first call for an interview. In addition, the higher up the corporate ladder you go, the longer your job search is likely to take. C-suite executives should expect an average of five interviews per opportunity, Jobvite says, while associates and assistants might only endure three.

Either way, the longer you spend job hunting, the more money you’re prone to spend on stuff like looking sharp and commuting to interviews. Other costs add up, too: Hire a resume writer or career coach, and you can add hundreds (possibly thousands) of dollars to your tab. Even smaller fees, like upgrading to a premium LinkedIn account, will cost you.

But when you’re looking for work, of course, you’re probably not in a position to throw money around. And the more cash you can keep in your bank account, the longer you can hold out for the job of your dreams. Here are a few expenses you can skip and ways to save money during your search, without negatively impacting your job prospects.

1. Cut the dry cleaning.

Unless you work in finance, you probably don’t have to wear a suit to work anymore. Why spend your job interview looking like your mom dressed you?

Appropriate interview attire in 2017 runs more toward “fancy business casual” – in other words, no jeans, no t-shirts, and nothing you’d wear to clean out the garage. For most people, this means clothing you can wash at home, which is a whole lot cheaper than professional dry cleaning. Just don’t forget to run the iron over that button-down, and you’re good to go.

2. No crazy gifts for hiring managers.

We get it: You want to stand out from the competition. But there’s a good way and a bad way to do that.

The good way? Creating an interactive ad for yourself when you’re applying to a digital marketing agency. The bad way? Anything that makes you look like a crazy person.

“We had one applicant arrive unannounced at the office with a cherry pie she had baked that morning,” Carolyn Turner, a business coach in Portland, Ore., told CareerBuilder. “She explained that she wanted to stand out from all the other applicants — which she did, but just in a scary, stalkerish kind of way.”

Skip the stalker gifts; save the cash. No one expects to get your resume printed on dozens of chocolate bars.

3. Don’t buy software you can get for free.

When you’re desperate for a change – or a source of income after a layoff – it’s pretty easy to convince yourself that paying for that fax software or productivity app is a reasonable expense. Then you get hired, and never use it again.

Before you buy, do your research. Chances are, there’s a free (or very cheap) version out there that will accomplish the same thing. Trent compiled a helpful list of free, open software a few years ago.

4. Skip the premium social network accounts and job sites.

A Premium Career account on LinkedIn will run you $24.99 a month (billed annually) after a free month-long trial. For that, you get job insights that compare your qualifications to open roles, salary data, featured applicant status, and three free InMails to recruiters or employees at your target employer. You also get to see who’s looked at your profile, which is fun in an old-school social media way.

But do you need it? Probably not, especially if you’re just starting out your job search and haven’t spent the time optimizing your free profile yet.

The same goes for paid job search sites. Chances are, you could get the same services for free on Monster, Indeed, SimplyHired, and others. Plus, you’re vastly more likely to get your next job through networking, anyway. One recent survey showed that up to 85% of jobs are filled that way.

So by all means, beef up your professional profile, and expand your network by connecting with former colleagues and other people you know. But don’t feel like you need to pay for the extras.

5. Stop going on job interviews for gigs you don’t want.

You can’t avoid every useless job interview, but you can start getting tough with yourself about figuring out what you want – and what you don’t want – in your next job. Interview practice is all well and good, but it’s also important to respect everyone’s time (including your own).

What does this mean? Well, if you hate working for startups, don’t be lured by stock options and free cereal into an interview that will lead to a job you hate. The opposite is also true: if you can’t stand hierarchy, don’t squeeze yourself into the corporate mold, just to tell yourself you’re trying. Also, pay attention to signs that the company isn’t right for you: If they cancel multiple interviews, you’re not dealing with respectful potential colleagues. Ditto if they’ve been late to previous meetings.

Bottom line, sometimes it’s not worth the bus fare. Learn to recognize that, and you’ll save yourself money, time, and aggravation.

6. Use your network instead of a career coach.

Networking can help you find job leads, but it can also help you prepare to land gigs once you hear about them. The catch: You have to be willing to ask for – and take – constructive criticism.

If you can stomach that, you’ll have no problem finding folks in your field who will tell you what you need to do to get from where you are now to where you want to be.

What might surprise you: Most of them will probably be pretty kind about it. Everyone loves being asked for their expert opinion.

7. Don’t forget that you can deduct some job-hunting expenses.

Some of your job search expenses may be tax-deductible. The IRS has a handy guide to help you find out if your resume costs, travel expenses, and other costs related to your job search are covered.

Related Articles:

The post Seven Ways to Stop Wasting Money on Your Job Search appeared first on The Simple Dollar.

Continue Reading…

Wednesday, March 22, 2017

Looking for New Work? Five Key Things You Can Do Beyond Sending Out Resumes and Applications

It’s an almost automatic response. You need a job, or you’re unhappy at your current job. What do you do? You start applying elsewhere. You look up online job listings. You fill out applications. You send out resumes and cover letters.

While that’s definitely a key step in the process, you’re often just tossing your resume or application into a pile with a lot of other resumes and applications. The question isn’t whether you apply, but how exactly you’re going to rise to the top of that pile.

The truth is that most of the time, it is the factors beyond the resume or application that causes yours to rise to the top of the stack. The factors that set people apart and line them up for interviews comes from the extra steps that people take.

If you want to get a new job beyond an entry-level position, you have to bring something more to the table. Here are five additional things you should be doing to bring that “something extra” into the mix.

#1 – Go to meetups and trade shows
If there are any meetings or shows related to your career in your area, go to them. Go to all of them. If you don’t even know where to start looking, a great place to start is to use Meetup and go to anything that is related to what you want to be doing next in your career.

The goal of these meetings is threefold. First, you can actually learn some things about your career path that can prove useful, both at your current job and where you might be going next. Second, regular participation in a group related to your career can make for a good entry on your resume.

The third reason is perhaps the most valuable one, though: it provides you with an opportunity to meet people in your area in your professional field. Meetups and trade shows are loaded with people in overlapping careers from a wide variety of employers. It’s those people – and those potential relationships – that will help you find an open door to the next step in your career.

#2 – Join a trade association related to your career
If your career path offers a trade association of any kind, become a member of that association. Usually, this will give you access to a publication, meetings for that association, and perhaps most useful, a job board.

Those benefits provide most of the advantages of going to meetups and trade shows in your area, as discussed above, and trade association membership is definitely worth a resume mention.

Trade association job boards might not directly lead you to a job, but they often provide a place to find jobs that aren’t posted on all of the normal job outlets. Often, they’re looking for people who have a trade association membership as a prerequisite, one that you meet, so the membership is directly giving you a path to additional job options.

#3 – Do volunteer work
There are few better ways to meet a wide cross section of big-hearted people in your community than through volunteer work. You’ll meet and get to know people from a wide variety of career paths and backgrounds and they’re all predisposed to think positively of each other because you’re all spending time doing charitable things.

Such civic-minded groups are often full of people who want to build a better community for everyone – and they’re also full of people who do want to connect with each other as part of building that community. A community is made of people, after all, and those groups are often the backbone of it. You’ll find yourself building great resume material, building connections with pillars of your community, learning new skills, and making a ton of good personal and professional connections, all while doing something great for your community. Civic groups and volunteer groups are wonderful tools for anyone wanting to build a lasting career or business in a local community.

You can get started by joining a volunteer or civic group in your area. Look at groups like Habitat for Humanity for starters, and also take a look at the civic groups mentioned on your community’s website, such as the Lion’s Club.

#4 – Get active in social media in a professional way
Many career paths offer thriving online communities where people are constantly exchanging ideas and discussion topics in an effort to improve themselves, build strong professional relationships, and carve out a name for themselves. It’s incredibly worthwhile for you to get involved in those groups.

On social media, your ideas rule. It’s a fast-flowing exchange of information and ideas, and when you can contribute in a useful way by answering questions and contributing value to discussions, you tend to raise your profile and build followers and connections. Jump on there, look for professional conversations you can add to, and dive in. Take note of people you see frequently sharing good ideas and build up a connection with those people.

Twitter and LinkedIn are great places to start. Twitter is best for conversation and sharing ideas with a broader audience, while LinkedIn is useful for finding connecting with people you may somehow already be associated with.

#5 – Follow up with the people you meet
The first four steps in this process are going to introduce you to a lot of people who are in your field or in related fields. Those people are often going to be the difference maker when it comes to getting a good job.

When you meet someone who seems interesting at a meetup or a trade show or a volunteer activity or on social media, follow up with that person. Exchange contact information with them, then jot down a reminder of why you should follow up with that person.

Then follow up. Send that person a message related to the reason you intended to follow up with, then keep that exchange going. Don’t be afraid to ask this person, after a few exchanges, whether or not they know of any job openings that you might fit well.

Final Thoughts
You can have all of the skills in the world, but in the end it’s relationships that often make the difference in terms of getting your resume noticed. The key to getting a great job, then, isn’t just sending out your resume (though that’s important) and it isn’t just having a great resume (though that’s vital, too), but it’s having lots of relationships that can help you get your foot in the door.

Every career step I’ve taken has been aided by a professional relationship of some kind. My academic advisor in college got me my first job that had anything to do with my career path. My supervisor at that job essentially took me with him when he switched jobs. My mentor at that job ended up hiring me himself, and then when that contract was about to run out, I was hired by another group that I had built a relationship with while working for my earlier mentor.

Yes, at each step, I had the skills I needed for the next step in my journey, but without strong professional relationships, I would have never been able to progress in my career path. It is those relationships that make all the difference when you’re taking a step forward in your career. Those relationships will push your resume to the top of the stack. Those relationships will open doors for you.

It’s up to you to step through it.

The post Looking for New Work? Five Key Things You Can Do Beyond Sending Out Resumes and Applications appeared first on The Simple Dollar.

Continue Reading…

Three Big Mistakes Students Make When Accepting Financial Aid

I graduated college with $145,000 in student loans. The worst part about it? I was willfully ignorant about the amount I borrowed. It would all be paid off by Future Me, right? Besides, not once during my economics courses was there a discussion about the adverse effects of high student debt. How bad could it be?

In a word: devastating.

A recent study from the nonprofit group American Student Assistance recently took a look at the effects of student loan debt on young adults. The results are troubling. Among those with student loan debt:

  • 56% worry about repaying their loan either all the time (26%) or often (30%);
  • 40% report that worrying about their student loans has impacted their health;
  • 61% have considered getting a second job to help pay off their student loans; and
  • 54% of young workers report that right now, paying off student loans comes first, and they will put off saving for retirement until later.

So, how do high school students make smart choices about college that won’t leave them struggling under a large debt burden? Maybe a better way to think about it is in terms of what not to do. I spoke with Kevin Fudge, director of consumer advocacy and ombudsman at ASA’s Center for Consumer Advocacy, about three big mistakes that college-bound students make when it comes to accepting financial aid.

Mistake #1: Accepting Too Much Financial Aid

Accepting too much help might seem like an oxymoron at first. Why wouldn’t you accept every penny of aid that a school offers?

Because, Fudge says, “Even with a so called ‘full ride’ scholarship, you can still be eligible for up to $5,700 in aid per year. If you take the max every year, you’re going to end up almost $23,000 in debt,” despite going to school for free.

It comes down to the huge difference between scholarships and loans. Colleges can be somewhat cagey with this concept, because all the money they offer is lumped under the generic catch-all category of “aid.”

As Fudge bluntly puts it, “Aid is a bit of a misnomer. Keep in mind that you’re on the hook for every single penny you take out that is not a scholarship or grant.”

This may be a new concept for some college hopefuls; I know I had never considered it. I thought if you got a full ride, you were guaranteed to graduate debt-free. It’s critical for students to understand the nuances of their aid packages.

Imagine this scenario: You’re considering two comparable schools that cost $30,000 per year.

  • School A offers you a yearly aid package of $25,000.
  • School B offers you a yearly aid package of $15,000.

At first glance, School A seems like the better choice. But, you might dig deeper and discover that School A offers only $5,000 in scholarships and grants, while $20,000 of the aid package is comprised of loans. School B, on the other hand, is offering $12,000 in scholarships and grants, plus $3,000 in loans.

So, while you’re not receiving as much “aid” from School B, you are actually being offered substantially more in total scholarship money, which don’t have to be paid back. Assuming the schools offer a comparable education, it would make more sense to select the smaller aid package.

These sorts of distinctions are why it’s so critical to understand the nuances of your financial aid package.

Furthermore, when extra aid is offered to low-income families, it creates a particularly tricky conundrum. On the one hand, a college degree can open up a lifetime of higher pay. At the same time, low-income students may feel like they need to stretch themselves even further to earn one, and risk ending up deep in debt with no degree to show for it. “The student has zero ability to pay, but has the option of taking out $20,000-plus in loans,” Fudge says. “It’s a flaw in the system.”

So, how do you mitigate the risks of taking out too many loans? It comes down to treating your college choice the same way you would any other large purchase: You have to try to take the emotion out of it.

“Have a budget in mind, the same way you would if you were shopping for a house,” Fudge says. “You don’t want to get emotionally attached to marble countertops and overpay for them when house shopping. Similarly, you don’t want to overpay for a school because it has pretty brick buildings. Stay true to your principles and don’t get swayed.”

The psychological hurdles are huge, but not insurmountable. As with budgeting for anything else, it’s important to set realistic goals and stick to them.

Mistake #2: Underestimating the Total Cost of Your Loans

“Students always need to consider the overall investment in their higher education, not just the first-year costs,” says Fudge.

A common mistake is to calculate what sort of financial aid package you’ll be receiving your freshman year, and then to extrapolate those numbers going forward. This can lead to misunderstandings in figuring out what your payments will be on a yearly basis.

For one thing, prices can go up while you’re in school. Let’s say you plan on paying for $10,000 a year yourself, and taking out loans to cover the rest. If first-year tuition is $20,000, and you take out $10,000 in loans, don’t assume you’ll be taking out a total of $40,000 in loans over four years. By your third or fourth year, tuition could be up to $25,000 a year or more, leaving you on the hook for thousands more dollars a year.

What’s more, it’s important to consider the cost of interest on your student loans. As expensive as the sticker price of college already is, you’ll be paying even more than that if you end up taking years or decades to pay it all off.

Finally, remember that scholarships will often list their total award amount, rather than their yearly amount. That means a $10,000 scholarship might not pay you $10,000 per year, but actually $2,500 per year spread out over four years. “Unless you thoroughly understand your financial aid offering, yearly costs can be easy to miscalculate. Also, remember that scholarships can be both one-time and renewable,” Fudge says.

Calculating total costs is made more difficult by the fact that there is no uniformity when it comes to college aid letters. Often a “President’s Scholarship” will mean different things from different schools, for example, and carry a different award amount.

It can’t be stated too many times: Read and digest the entire student aid package from each and every school you are considering.

Mistake #3: Putting Too Much Faith in a School’s Financial Aid Office

The people working in a university financial aid office are supposed to be your go-to resource for figuring out how to pay for college – and often, they can be helpful to that end. Unfortunately, their advice can sometimes be influenced by their more primary goal: increasing enrollment, even if it means saddling students with a lot of debt.

Rather than blindly take the financial aid office at its word, Fudge advises a more holistic approach to figuring out how much aid you can take on.

“The most important part is having a budget and sticking with it,” he says. “Beyond that, talk to current college students and recent graduates about their experience. Parents who talk to other parents, or students who talk to recent alumni, are the best equipped to make these tough decisions.”

Furthermore, there are tons of free resources available to help students make student loan decisions; a good first step is to start with your state board of higher education. Regardless, Fudge recommends seeking help from a neutral third party. “Sometimes, both your high school and your prospective college won’t be working with your best interests in mind,” Fudge says.

As with any other financial decision, the only person who will always have your best interests in mind is you.

Summing Up

Thoroughly read your financial aid documents, consult with independent experts, and talk to people who have been down the same road. If you take the time to do those three things, you’ll be well prepared to avoid financial aid pitfalls.

Remember: Once you get into debt, it’s ugly. Student loan debt is a giant gorilla that jumps on your back the moment you graduate. It can weigh you down, demand constant attention, and grow bigger the more you ignore it.

Once you know what’s coming, you can fortify yourself by becoming strong enough to bear the burden while simultaneously ensuring you have less weight to carry. You want your hard earned money going toward your retirement, not toward feeding a hungry, angry ape.

Related Articles:

The post Three Big Mistakes Students Make When Accepting Financial Aid appeared first on The Simple Dollar.

Continue Reading…

Tuesday, March 21, 2017

Putting the Checklist Manifesto to Work for Better Financial and Personal Habits

checklist manifestoSeveral years ago, I read a wonderful book called The Checklist Manifesto by Atul Gawande. I thought highly enough of the book after reading it that I wrote an article about it for The Simple Dollar, but what I didn’t realize at the time was that this book would subtly stick in my head like few others that I’ve ever read in my life. Several years later, I still see this book resonating for me in the personal, financial, and professional choices I make.

So, let’s start at the beginning?

What Is The Checklist Manifesto?

The Checklist Manifesto is a book by renowned surgeon and writer Atul Gawande about why he uses checklists for many of the procedures he follows in his work and in his life. When he has a task before him, he often breaks out a checklist that he follows step by step to ensure that the task is done well.

Many of the examples that Gawande uses in the book come from his career in surgery, where he uses checklists to make sure that surgical prep is done correctly and that medical procedures are done well, but he also uses them in many other aspects of his life as well.

If you’re having some difficulty with the idea, think of using a recipe to cook a meal. When you’re using a well-written recipe, you don’t have to think about what’s next. Instead, you just follow what’s written and focus on executing those steps as well as possible.

Gawande is a pretty renowned author at this point, having written many articles for a wide variety of publications (his articles about the surgical trade for The New Yorker are very well known and respected). He’s published several books besides The Checklist Manifesto, too – I’ve personally enjoyed Complications and have both Being Mortal and Better on my (lengthy) to-be-read list.

What’s So Great About a Checklist?

The advantage of a checklist is that it separates the thinking process that goes into defining how to do something in the best way from the actual actions of executing that something. This enables the person that’s actually doing the task to focus on the task itself, rather than thinking about and trying to remember each step in the task.

A checklist is thus broken down into two parts.

The first part is the actual creation of the checklist itself. It’s time spent thinking through the exact details of a procedure to make sure that it’s being done as efficiently and correctly as possible in order to get the best results possible.

The second part is the execution of the items on the checklist. This is when you’re actually doing the procedure as defined by the checklist that you thought about earlier.

Sometimes, you’ll bounce back and forth between the two, especially at first as you hone that checklist and ensure that it’s as good as can be.

Thus, when you reach a point where you have a trusted checklist in front of you, you don’t have to think about the steps in the procedure any more. You don’t have to waste brainpower or focus thinking about what the next step is or whether you’re missing anything or whether you’re doing it right. You just trust that checklist. You focus on doing each item on the checklist to the best of your ability, then you move on to the next one. You don’t have to waste brain space on thinking about the next task, remembering it, wondering if you’re forgetting anything – all of that is gone. You just follow the checklist.

Using Checklists in Real Life

The ideas in The Checklist Manifesto percolated in my head for a few years. I thought about the book fairly regularly and re-read it a time or two.

Eventually, I started applying it.

Over the course of several months, I sat down with my journal and developed checklists for several things that I do regularly in my life. I made a “weekday wake-up” checklist. I made a “grocery trip” checklist. I made a “after school routine” checklist. I made a big handful of checklists for my professional work.

At first, I thought this was kind of a lark, just to play around with the idea. I didn’t think I’d actually use them that much.

What I discovered was that this whole process was more valuable than I thought.

First of all, by thinking about ordinary things that I did in my life as a “checklist,” I really began to look at the steps involved with a certain seriousness. As I developed those checklists, I would start by thinking about the ordinary way I did things, but as I actually wrote down those steps, I would ask myself if those steps really made sense. Did it make the most sense to do things this way? Or did it make more sense to do things in a different order or with different steps involved?

Second, when I actually made a “good” checklist – one that I was happy with – I wanted to actually use it. I recognized that the revised process that I’d developed for the checklist was usually at least a little different than how I normally did things, and I also recognized that I felt that there were real improvements, so I actually wanted to do the task according to my new checklist.

Third, I often discovered flaws in my checklists, which sent them back to the drawing board. As I tried using them, I’d find that I missed some important step or I did some things in the wrong order, and that would push me back to an editing process. I quickly learned that the “good” checklist I’d developed on the first attempt was usually quite good in some respects and a failure in others, so it needed to be revised.

Fourth, those revisions often unveiled even more improvements that I hadn’t previously considered. I found that when I revised the list and tried it again and revised it again, I was gradually moving toward a much better way of doing something in my life. Whether it was something as simple as defining how I buy groceries to something as complex as my professional workflow, the revision cycle almost always made the process better.

Fifth, by the time I actually had a lean, mean final checklist, I wanted to use it. I discovered along the way that by doing a procedure by following a checklist, I could focus on just doing all of the steps well, so that’s what I started doing. As a result, I use checklists for a lot of things these days, checklists that I’ve honed over the years for common things.

A Checklist Example – Buying Groceries

To see how all of this really works, I’ll start with a very practical example that we all use in our financial lives: buying groceries. I have a pretty slick checklist that I use whenever I’m planning a run to the grocery store, so I’ll walk you through that checklist.

Here’s the whole checklist, for starters.
– Download grocery flyers for Fareway and Hy-Vee
– Make a list of all on-sale produce and staples
– Look in pantry and refrigerator for items that need to be used and add to list
– Write out calendar for upcoming week and list events
– Mark days for slow cooker and fast recipes and days where we have to rely on a meal from the freezer (and note taking that item out of the freezer two days before)
– Search for recipes using ingredients and time constraints
– Add recipes to calendar in appropriate places
– Fill in breakfast and lunch and snack options for each day, one at a time
– Make grocery list of missing ingredients from recipes
– Eat something
– Pick up reusable bags and freezer bags
– Go to store with list and shop

At the end of this checklist, I’ve produced a weeklong meal plan and calendar on our whiteboard and have the ingredients on hand to make all of it.

This checklist took some revision. I learned through revision that eating something late in the process, but before I actually went to the store, was invaluable at keeping impulse buys at bay. I learned through revision that including details, like remembering the reusable bags, is important because it’s something that I should do but often forget, as reusable bags never rip or fail when grocery shopping and they tend to keep groceries in better shape on the way home. I learned through revision that our family dinner is really the centerpiece meal of our day (since we can usually all sit around the table together for that meal) and that the other meals can be filled in with simple items or leftovers, so I plan accordingly for that by starting with the main meal and then filling in the others afterwards.

I actually use this checklist every time I decide that a grocery shopping trip is in order. I have it on my to-do list as a recurring event each Friday and I usually allot about 90 minutes for the whole process. When it comes up, I simply grab the checklist and start working through it.

Practical Use of the Checklists

So, how do I actually do this? How do I put checklists to practical use in my day-to-day life?

First of all, when I’m developing a checklist, I usually do it in Evernote. My absolute first draft is usually in my personal handwritten journal, but then I move it to Evernote when I’m actually making the checklist and revising it and seeing if it works.

Having it in a digital format that’s easy to access anywhere is really valuable for me, because I can just try it anywhere that makes sense just using my phone and I can edit and update it on my phone or at any computer. That’s convenient.

Second, when I’ve revised the checklist to the point that I really trust it, I print it off and make a laminated copy of it. I keep the note in Evernote for future reference and for times that I don’t happen to have the laminated version, but I usually rely on laminated versions of checklists that I actually check off with a dry erase marker. I keep these in a pile in my office.

Third, I have many of the checklists stored in my to-do list manager as templates. This enables me to just copy that template wherever I need it so that I can just start that process using my normal to-do list manager (I use Todoist as of this writing, but I change sometimes).

There’s one final big question that people always ask that really needs addressing.

Why Invest the Time to Use a Checklist for Ordinary Things That Are Routine?

For a lot of people, the idea of using such a checklist for ordinary life tasks seems completely different than what they’re used to and perhaps a little alien. Does someone really need a checklist for the grocery store trip?

That’s exactly how I felt until a few years ago when I began to realize how often my grocery store trips were imperfect in some fashion.

I’d forget to eat a snack before I left, so I’d get to the store and be hungry and buy a bunch of impulse stuff.

I’d forget to include snacks on my grocery list and not realize it until I got home, which meant that my kids would probably end up eating something subpar after school or not have granola bars for their backpacks.

I’d forget the reusable bags and find myself using flimsy plastic bags and then one of them would inevitably rip and I’d have apples rolling all over the back of my car, leaving some of them bruised up and then thrown away.

I’d forget to plan for lunch on that holiday from school and thus have to scramble at the last minute to come up with something to feed a horde of hungry children.

I’d forget to complete my grocery list in some way and then find myself ad-libbing in the store, tossing unplanned stuff in the cart that was probably unnecessary.

All of those things cost time and money and frustration, too. All of those things are completely avoided with a trusted checklist. If I can remember just one thing – “if I’m going to the grocery store, use the checklist” – each time that a grocery store trip pops up as a task to take care of, I don’t forget those things.

So, there’s two big reasons why I actually use the checklist idea.

First, as I’m actually making and honing the list, I usually figure out ways to improve a normal routine that saves time and money. I make that routine much better through a series of revisions to the checklist as I’m defining it. Those revisions always save time and money.

Second, when I have a finished list, if I just let myself trust that list instead of my own instincts, I move through it quickly and don’t forget anything important along the way. I find that if I just thoroughly trust that list, I’m not thinking at all about what comes next on that list. I think just about the task at hand, I’m focused wholly on finding recipes, not on remembering to grab reusable bags on my way out the door on on remembering snacks for the band trip on Tuesday. This not only makes the process move more smoothly from beginning to end, it actually makes the process faster than ever.

For a long time, I figured that I would just abandon actually using the checklists once I had a smooth procedure that I had down cold, but I actually found that I still like using it, even though I can list off the items on most of my lists off the top of my head. It’s because I can trust the list and then focus entirely on the task at hand and not have to try to remember or think of the next step at any point. Even with the most frequently repeated tasks, a checklist still saves money and time.

Do I use checklists for everything? No. I use them where they make sense. For a while, I overdid it and had checklists for all kinds of things, but I found that once I thought through the process a few times, I didn’t really need a checklist. Right now, I have a “wake-up checklist” that I do in the first hour each morning, an “after school checklist” that I do after each school day, a “grocery store shopping checklist,” about five more personal ones, and about ten different professional ones. They’re the ones where I’m glad to have a checklist to offload some of my thinking.

Final Thoughts

The Checklist Manifesto is one of the most influential books I’ve ever read in terms of my thinking and life planning. I’ve come to use checklists in my personal and professional life to make things more efficient in terms of both money and time. Checklists have made many of the things I do ordinarily every day much faster and much more likely to result in the success that I desire, which usually means more money in my pocket.

If you take nothing else from this post, take this: it is well worth your time to rethink the way you do ordinary routines in your life. Break them down into little steps and think about whether those steps make sense, whether new steps make sense, or whether a new order makes sense. Assemble a better procedure and then consciously try it out for a while. If you move on to using a checklist, that will probably be helpful too, but simply improving your routines a little bit will pay huge dividends of money and time going forward.

Good luck!

The post Putting the Checklist Manifesto to Work for Better Financial and Personal Habits appeared first on The Simple Dollar.

Continue Reading…

Three Things Nobody Tells You About Your Credit

If you’re like most Americans, you probably learned absolutely nothing about credit as a part of your high school or college education. As a result, many young adults enter the “real” world grossly unprepared when it comes to their credit management skills. This is very unfortunate since credit can have such a profound impact on your financial well-being and success.

So how are we learning about credit? Unless you were lucky enough to have a loved one teach you — or wise enough to research and study the topic for yourself — it’s normally all about trial and error. Even if you have taken steps to educate yourself, credit is a broad topic and there are many myths and unknowns. Here are three things you may not have realized about your credit:

The Accuracy of Your Credit Reports Is Your Responsibility

You certainly have the right to expect your credit reports to contain accurate information. In fact, you are conferred this right, among many others, in a federal consumer protection statute called the Fair Credit Reporting Act. Yet while you have the right to expect credit report accuracy, the only person who can really verify that accuracy is you and you alone.

When the credit bureaus receive information about you from a lender or other data provider, they generally have no reason to doubt the information’s accuracy. Once the information is received, the credit bureaus will load it into their credit file system and it will ultimately appear on your credit reports. This means that an incorrect account, wrong balance, or invalid late payment could potentially show up on your credit reports without your knowledge.

Furthermore, the credit bureaus themselves make their own mistakes from time to time. In fact, the Federal Trade Commission estimates the existence of over 40 million mistakes present on the credit reports of U.S. consumers.

Credit reporting mistakes happen. This is a fact. Undetected mistakes can remain on your reports, damaging your credit scores and potentially making it difficult or impossible for you to qualify for new financing. It’s up to you to routinely check your credit reports for and to alert the credit bureaus if you discover a mistake. You can check them for free, right now, at www.annualcreditreport.com.

You Shouldn’t Focus Solely on Your Credit Scores

You read that right. Yes, of course your credit scores are important. Credit scores can impact your ability to qualify for a loan, a credit card, and can even have an influence over your insurance premiums. However, if you’re working to improve your credit, then focusing solely on your credit scores can be a mistake.

Between VantageScore, FICO, and the countless other non-branded credit scoring systems in use today, there are hundreds or thousands of three-digit combinations commonly referred to as credit scores. You’ll never see them all, and you’ll drive yourself crazy chasing them around. If a lender pulls your credit scores today and you check them online 20 minutes later, it’s almost guaranteed there will be some difference between the sets of numbers you receive.

Instead of focusing on your credit scores, you should shift your attention to your credit reports.

Although hundreds of credit scores are commercially available, the good news is that every one of those scores is based on the same information – the data contained in your credit reports. Establishing positive credit management habits such as paying off your credit card balances in full each month, making all payments on time, and only applying for credit as really needed, should ultimately begin to help improve your credit scores no matter who is pulling them and what brand they’re using.

Paying Off Negative Accounts Won’t Undo Their Damage

When most consumers set out to try to rebuild their damaged credit, they start by trying to pay off or settle old derogatory accounts. Yet, as of now, paying off defaulted accounts will not erase the negative impact which the account had on your credit in the first place, nor will it cause the account to be removed.

I qualify that statement with “as of now” because some time in 2017 a program called the National Consumer Assistance Plan, or NCAP, may alter what negative information will remain on consumer credit reports.

Credit scoring models like VantageScore and FICO were originally designed to pay attention not so much to the balances on your derogatory accounts, but the fact that a negative occurred at all. As a result, paying off that $2,000 defaulted credit card account probably will not lead to a higher credit score. You may ask “why?” The answer is that credit scoring systems are not designed to predict the likelihood that you’ll default for a certain amount of money, but are designed to predict the likelihood that you’ll go seriously delinquent on any account, regardless of the amount.

Related Articles:

John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. He has written four books on the topic and has been interviewed and quoted thousands of times over the past 10 years. With time spent at Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.

The post Three Things Nobody Tells You About Your Credit appeared first on The Simple Dollar.

Continue Reading…

Monday, March 20, 2017

Questions About Retirement, Cookbooks, REI, and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Upside down on older vehicle
2. Buy house now or later?
3. REI annual dividend question
4. Common knowledge versus perspective
5. Parents without any retirement planning
6. A very hard choice
7. Retiring with less than $3M
8. Eating in airports
9. Side gig brainstorming
10. Unwanted storage locker contents
11. Value of cookbooks
12. Whiteboard uses

Yesterday, I spent several hours doing a “spring cleaning” of the garage. It’s still not in tip-top shape, but at least now you can access everything in there.

Our garage isn’t heated, and during the winter months, it often becomes a clearinghouse of “things to deal with later,” which means that there eventually comes a day in the early spring where those things to be dealt with later have to be dealt with.

Thankfully, that means that such things get done on a nice spring day where it’s a pleasure to be outside. It just looks overwhelming when you open up that garage door and realize the number of things to be done.

Q1: Upside down on older vehicle

My boyfriend is a sales rep and spends the day seeing clients. According to company policy, his vehicle must be above a certain price point (currently $26k) and because of the equipment he must have on hand, it needs to be an SUV type vehicle. He averages 35,000 miles each year. He does receive a monthly travel stipend to cover expenses (car payment, mileage, insurance) however, it’s not quite enough to cover the entire amount.

He currently has a 2012 Honda Pilot with 162,000 miles. He is considering trading it in because of the high mileage but he is upside down in the vehicle.

Because of company requirements, I don’t ever foresee a time when he would not be upside down on a vehicle but we’re not sure what the solution is.
– Lisa

With those kinds of requirements, you’re basically forced into a pretty rapid replacement cycle on an expensive vehicle. There’s nothing you can do about that.

The thing is, if you buy such cars used, you’re going to be at the trade-in point within just a few years. Even buying such a car new will put you at the trade-in point in five or six years. That’s just due to the requirements of that job.

So, what can you do about it? For your immediate problem, you have to throw every dime you can to get out from under this upside down loan. At the very least, when you get rid of this car, the remaining loan has to go away, and the only way you’re going to get there is with some belt-tightening on your spending.

For the next car, get one with a very short term loan – as short as possible. That means high payments, of course, but that’s the only path you really have to avoid being in a constant underwater situation with the job requirements involved. Once you pay off that car, start socking away an amount equal to that car payment into savings and try to hold out on a replacement. Ideally, you’ll be able to pay for most of – if not all of – that replacement in cash.

Q2: Buy house now or later?

My wife and I currently own a 2 bedroom house and have a one year old daughter with our second baby due in July. We want to upgrade to a home more suitable for a larger family but have a pretty large amount of debt. Our original plan was to pay off debt completely (with the exception of our mortgage and auto loan) and then sell our house and use the money we make from the house as a small down payment on the next house.

With that said, we are also concerned with all the “experts” expecting interest rates to go higher. My question is, would it be smarter financially to continue paying down our debt and miss out on lower interest rates or would it be a better idea to sell the house now and purchase our next house before rates go higher but still have our debt?

Our debt is as follows…

Mortgage: $218,000 (could sell for $260,000)
Auto Loan: $26,000
Student Loan: $8,000 @ 5%
Personal Loan: $5,000 @ 10%
Credit Card 1: $7,400 @ 0%
Credit Card 2: $2,000 @ 0%

– Mike

Never, ever make a financial move you’re not equipped to make right now out of some fear of “higher interest rates” predicted by “experts.” Don’t buy that house until your financial situation is ready for it.

But what about “higher interest rates”? Here’s the thing – if mortgage rates go up, then it’s going to have a large cooling effect on house prices. People can only afford so much for monthly payments and if interest rates go up, that doesn’t mean monthly payments on new mortgages are going to rise to match. What it means is that housing prices are going to drop somewhat to make up the difference.

Housing prices are so high right now because they’ve adjusted to handle 4% mortgages. Current prices can’t and won’t hold if mortgages are at 6%, because people won’t be able to make the payments. Prices on almost all houses will drop at that point.

Q3: REI annual dividend question

I got about $24 for my annual REI dividend. I used to shop at REI regularly for hiking stuff but now I have pretty much everything I need. What’s a smart way to use it?
– Tony

For those unfamiliar, the outdoor supply store chain REI offers a “dividend” program to its customers if they become members of their coop. Lifetime membership in the coop is $20, but REI often offers special programs where you get a $20 coupon if you buy a membership, so it’s essentially free.

The big perk of this membership is that they give you an annual “dividend,” which usually amounts to store credit equal to 10% of the amount you spent there in the last year. This would mean, of course, that Tony is sitting on $24 in store credit at REI without anything he really needs or wants and is unsure how to spend it.

The first thing I’d point out is that REI’s dividends don’t expire until just after the new year two calendar years after you receive it. So, if you have a 2017 dividend, it doesn’t expire until January 3, 2019. You have plenty of time to decide what to do with it.

If I were you, honestly, I’d just let it ride for a while. Do your usual outdoor stuff this year and watch for something that you might need, particularly an item that you use up or break. Use that credit to replace or replenish that damaged or used-up item.

Q4: Common knowledge versus perspective

I first started reading The Simple Dollar back in 2008 and 2009. A friend sent me a long list of money saving tips from the site and I really got some use out of them. Back then, I hated your articles that weren’t specifically practical. If it didn’t include things to do to save money I skipped them and thought they were a waste of time.

I just realized that now I am the complete opposite. I hate the specifically practical articles and skip them and I like the ones that are about psychology and philosophy and setting goals.

I think it has to do with maturity. At first all I cared about was things I could do right now to make my situation better and I really didn’t think beyond the bills at the end of the month. If I could pay them everything was good. Now I want to build a life where I don’t think about bills ever again and you just have to think differently.

Thank you for writing both kinds of articles and stuff in between to guide me through that journey. You have a reader for life!
– Tim

I don’t think it’s a matter of maturity so much as it is a matter of time that you spend thinking about personal finance. The more time you spend thinking about it, the more that the basic money saving tips seem almost obvious. They jump out at you. You also begin to realize that when you do those things, you end up with more money left behind and you begin to think about what to do with that money.

That’s not a maturity thing, really. That’s just about consistent focus. That same exact thing happens when you focus on anything for a while. One of my closest friends is a pastor and has studied the bible for many, many years. When I ask her what stands out to her when she reads some scripture, she’s thinking about things in a completely different way that I do, but when she starts talking about it, I realize that she’s completely just assuming an understanding of things I’m just now discovering for the first time.

For most people, the first time they focus on money is in a moment of need and they’re focused on tactics that get them out of that moment of need. For some, that’s enough, and that’s okay. For others, there’s a desire to replicate that success and see where it leads, and I think it eventually leads to a more philosophical approach for everyone.

I try to write articles that hit every step in that journey, from practical tactics to save money on your food bill and how to escape from near-bankruptcy due to your debts to philosophical approaches to building the life you want and altering your mindset, and everything in between. I don’t always succeed in that regard, but it’s something I think about every day when I write and every time I brainstorm article ideas. I wish I could magically help every single person in the world achieve whatever their financial goal is, whether it’s just being able to pay the bills this month or achieving financial independence, whether it’s being able to buy their kid the thing they want most for their birthday or having a secure retirement, whether it’s being able to figure out why they never have any money left over or figuring out what career would bring them more personal peace and security.

We’re all on a journey. The journey isn’t the same for everyone, and we’re all at different stages, too. Hopefully, everyone can find something that helps them take that next step.

Q5: Parents without any retirement planning

I’m hoping you can help me give my mom some financial advice. She and her husband have always been awful with money. She’s 66 and collecting social security after barely working enough in her life to even qualify. My step dad is 56 and I doubt that he has a penny saved toward retirement. He works a very physically demanding job that he won’t be able to continue doing as he gets older. My mom inherited about $150k from her aunt who passed away recently, and she’s asking me what to do with it. I’m pretty savvy when it comes to my family’s financial planning, but I don’t know what to tell someone who is in/close to retirement and doesn’t know whether they’re investing for the long or short term. I’ve toyed with the idea of encouraging her to put it towards paying off her mortgage, bringing the total they owe down to about $90k, but I don’t know if that would be her best bet. Any thoughts?
– Kevin

First of all, both paying off the house and putting it away for retirement are good moves. Neither one is a misstep. What you’re essentially asking is what the “better” of the two moves is, and that’s very difficult to tell without a crystal ball showing us the future. Since we don’t have that, we have to guess.

Given their situation right now, my feeling is that the best thing that could be done with the money is to put aside enough for a few months of living expenses in a savings account somewhere, to be used only when your step dad loses his job and has to either fully retire or find other work, and then use the rest to pay down that house.

The best thing that could be done for them before your stepdad retires is to eliminate as much of their debt as possible so that their monthly bills are as low as they can possibly be when retirement comes around for them. Saving for retirement won’t increase their monthly income enough to cover a house payment.

Q6: A very hard choice

I am struggling with the pros and cons of a disruptive expense and I hope that you’ll shine some light on this.

My older sister and I have talked about going to France together for many years, since we were little girls in fact. We wanted to spend a week in Paris and then a week touring wineries together.

As dreams like that go, it didn’t happen. She got married, then I did. We sometimes go on vacations together but nothing outside of places we can both drive to.

My husband and I are on a very strong financial path. We have no debts, about $180K each in retirement savings, and about $100K in additional savings. We spend far less than we earn and intend to retire somewhat early. We are both in our early 40s.

A few weeks ago, my sister told us that she has stage IV breast cancer. She’s 48 years old and her husband is 47. She estimates that she has about nine months to live, of which six will be pretty healthy.

My husband immediately said that we are going to go on the trip to France as soon as humanly possible and that we’re paying for the whole trip. I was okay with that until I began to see how much it would cost. To do things in the way we’ve always talked about and paying for all four of us would eat up a significant portion of our additional savings and almost definitely postpone my future plans.

I feel like my practical and sentimental sides are at war here. I don’t want to lose my sister. Aside from my husband she is the best friend I have ever had. I also don’t want to lose the future I have planned with my husband that we have been working on for so long.

What should we do?
– Mary

You go on that trip, no question. That’s the entire point of saving for the future. If you don’t do this trip, you will regret it for the rest of your life. This is one of those key life moment things.

I normally offer the sanest, most down-to-earth financial advice around, but the entire point of following such practical financial advice is so that when life puts you in situations like this, you can simply do what your heart is telling you to do. And I can tell from this note that your heart needs this trip. Go. Have the time of your life. Laugh with your sister and go to fifteen wonderful little Parisian cafes and drink too much wine in Burgundy and see the most beautiful things you’ve ever wanted to see together. Do it while she can still do it with as much health as possible.

You can make up that savings later on. Yes, you might have to work another year. Guess what? That year is well worth it in comparison to the feeling of leaving something like that undone in your life. This is one of the big things that you can’t skip.

Go. Call your sister now and tell her that you’re doing this, no arguments. Start getting the time off from work now for all of you. Get on a plane, go, and forget the rest of your life for two weeks. This is something your sister needs and something you need, too, and something you will be glad you did every single day for the rest of your life.

I changed a few details of the above letter to obscure some privacy aspects, but left enough intact for the core of the story to be clear and for my answer to perfectly match the original question.

Q7: Retiring with less than $3M

I am 29 years old and make $45,000 per year. I have been playing around with retirement calculators and I am trying to figure out my target number that I would need to retire. My math is that it is somewhere around $3 million. However I talked to my older brother about this and he says I am insane and anyone should be able to retire on $1 million. Thoughts?
– Jim

I think you’re both right and that you’re merely talking about different timelines. Your brother isn’t factoring in the 36 years of inflation that will happen between then and now.

Right now, a person should be able to retire on $1 million with a modest lifestyle. I would happily do this. However, 36 years from now – when you are 65 – $1 million won’t cut it. We will have gone through 36 years of inflation and the purchasing power of a dollar will have declined.

If we assume 3% inflation, $1 million today is worth the same as $2.9 million in 36 years in terms of purchasing power. The lifestyle that a person could have today with $1 million in retirement is about the same as the lifestyle that a person in 36 years would have with $2.9 million in retirement.

It’s pretty obvious here that the “$2.9 million” matches up to the $3 million you’re talking about, while your brother is spot on with the $1 million today.

Q8: Eating in airports

How do you keep food costs low for a family of five in an airport? About once a year we fly across the country to visit family and the food costs add up so fast! We flew back in December for a week and wound up spending more than $200 on food!
– Jeremy

I have flown with my children just a couple of times, but each time Sarah and I planned ahead for food. We simply packed a whole lot of inexpensive snack foods and water bottles in our carry-on bags.

Before we left each time, we packed five empty water bottles, a few small flavor additives for the water, several simple sandwiches (I think they were peanut butter and banana), a bunch of granola bars, some applesauce packs, and some cheese sticks and cured meats. We basically filled up one pocket of my backpack with these items. We filled the water bottles at a water fountain after getting through security.

Then, whenever a child indicated that they were hungry, we gave them one of the items in there. Whenever someone was thirsty, they grabbed their water bottle and had a drink.

We probably had $20 in food items in the backpack when we left and the items got us through two flights (with a layover in the middle) without buying any more food (the flights we’ve done were from Des Moines to Seattle).

Just pack a lot of little snacks that people will like and that can be stored at room temperature, and don’t forget plenty of empty water bottles.

Q9: Side gig brainstorming

Really inspired by your article on side gig business planning! Great stuff and has inspired me to think about my own ideas! How do you pare down a big list of side gig ideas before writing full plans for each? I have a list of 25 or so ideas and not sure how to cut them down!
– Susan

My first pass would be to eliminate anything I didn’t feel very passionate about. Often, it’s passion for some aspect of the side gig that will get you off the couch and working on the project.

My second pass would involve initial clarity about what you’re going to make and how you’re going to sell it. If the path isn’t quickly clear to you, eliminate that idea.

My third pass would be to trim any ideas that rely much at all on the performance and choices of others. If it relies a lot on some kind of gatekeeper – like someone at a publishing house deciding that your book is awesome or someone at a record company signing your act – then I’d skip that one. Stick with ones where as much of the project is under your control as possible.

Q10: Unwanted storage locker contents

When my grandfather died, we put all of his possessions into a storage unit with the intent of going through them later in the summer once the house was sold. Well, as things happen, the stuff has been sitting there for two and a half years. I just got another bill for the storage unit and I talked to my relatives about it and none of them wanted to do anything with the stuff. They all said it was mine. I don’t really want any of it either. What’s the best way to just get rid of the stuff?
– Sara

If you just want to get rid of the stuff, just post on Craigslist that you’re giving away the contents of a storage locker from 9 to 10 AM this Saturday and give the address and locker number. Show up there about 8:30, unlock it at 9, and get out of the way. After an hour, there won’t be much left. People will take practically anything if it’s free.

You might want to do a “first pass” through it first to see if there’s anything you’d really want to keep or anything that might have significant value that you’d want to handle selling on your own.

If you’re wanting to make maximum money off of this… you’re going to be investing a lot of time, and unless there’s a bunch of treasure in there, it’s not worth the time. You’re probably better off just doing a first pass, then unlocking the door and letting people have at it.

Q11: Value of cookbooks

What are your thoughts on the value of cookbooks in an era where there are millions of recipes online? Are they still worthwhile?
– Andrew

I think that a well-curated and well-written cookbook, especially one with technique and other ideas beyond mere recipes, is incredibly worthwhile, at least as compared to the value of a random recipe from a site like AllRecipe. Many of the recipes on those types of recipe clearinghouses are of questionable quality.

That doesn’t mean that every cookbook is great. It just means that great cookbooks still have a role.

I often find myself buying cookbooks at yard sales and the like. If it doesn’t click with me, I’ll pass it on, but I’ll be the first to admit that I have a pretty healthy cookbook collection.

In general, I view cookbooks as reference books and I don’t mind having reference books around. There still isn’t a digital version of a good reference book that matches the convenience of having a cookbook with a bunch of bookmarks in it spread out on a table as I make dinner.

Q12: Whiteboard uses

You have mentioned before that you have a whiteboard in your kitchen. What do you use it for? Meal lists?
– Stephen

We have a large whiteboard on a wall right next to our kitchen. On that whiteboard is a meal plan and rough calendar for the week.

On Saturday or Sunday, Sarah or I will plan out the coming week on the whiteboard. We’ll basically just make a weeklong calendar and in each day slot, we’ll mention what we’re having for dinner that night along with everything that’s on our family calendar for that day/evening, along with any special meal prep notes or other important things that need to be remembered on that day.

We basically live by this whiteboard during the week. Sure, this could be done electronically, but this format enables everyone in the family to see it easily and use it without worrying about apps or calendar syncing. It just works well for us.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

The post Questions About Retirement, Cookbooks, REI, and More! appeared first on The Simple Dollar.

Continue Reading…


Loading...


Loading...

Latest Bla Bla's on Fun2Sh

Popular Bla Bla's

Powered by Blogger.
Copyright © Funtoosh Blog