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Saturday, April 22, 2017

Eight Key Strategies to Help Keep Overbooked Families from Overspending

This time of the year, our family always feels incredibly overbooked.

Our three children are each in a couple of activities all throughout the year that are really easy to manage. Musical practice once a week paired with martial arts practice twice a week in the evenings isn’t a problem. I participate in a couple of community groups, as does Sarah. This is all easy to manage along with the normal routines of our life.

In the springtime, however, things get crazy. Our oldest two children are both fanatic about soccer and participate in two different spring soccer leagues. Our youngest child enjoys baseball and thus participates in a spring league for that as well. These leagues each involve multiple practices a week and at least one game a week per child.

(It’s worth noting here that neither Sarah nor I encourage these activities much at all. We let our children’s interests dictate the activities, keep the count relatively small, and, if anything, try to talk them out of stuff. These things are generated by their own interests.)

On top of that, Sarah is in the final crunch of the school year as a teacher. On top of that, our children usually have a number of “special days” at school during the spring, with things like vocal concerts and open house days to show off school projects. On top of that, I’m usually crunched myself as I’m usually preparing writing in advance of summer plans so that I can actually spend a week or two with my family without constant writing deadlines.

“Overbooking” is perhaps an understatement.

Because of this, we often find ourselves with overlapping time commitments and serious time crunches in the evenings. It is really tempting to rely on services and take-out foods and other conveniences that, on the surface, seem to save us time during the busiest moments.

What they really do, however, is allow us to fix poor planning at a cost. If we plan poorly, sure, we can fall back on some easy but expensive solutions, but those solutions cost us money and aren’t really perfect, either.

Instead, over the years, we’ve developed quite a few strategies to make all of this work without simply throwing money at the problem.

Here’s how we handle it.

Strategy #1 – Save “important but not urgent” tasks for the weekend, even if it feels awkward.
Our house gets messy during the week. Real messy. We’ll skip vacuuming for a few days. We’ll not pick up very well in the living room. We’ll let a few dishes pile up. We’ll fill up two or three laundry baskets of clothes without doing a load.

Sure, we could do those things now, but they’re not urgent tasks. They’re important, but they’re not particularly urgent.

When you’re in a time crunch, prioritizing the tasks that are both important and urgent becomes even more vital than before. Things like making sure a meal is on the table at a particular time or that you’re picking someone up at a certain time or that you have necessary equipment ready to go when people need them are “important and urgent” tasks. Vacuuming the living room carpet is important, but it’s not nearly as urgent as those things.

In other words, a big part of dealing with a time crunch is properly prioritizing things. I personally handle this by thinking about priorities when I’m actually running errands. While I’m running an errand, I’ll think about what actually needs to be done tonight in order to make things run smoothly tomorrow. When I have 15 minutes to spare, the task that comes first is making sure everyone is prepped for whatever happens in 15 minutes.

Sometimes that means that someone leaves an article of dirty clothing on the bedroom floor or that a plate sits in the sink for a while. That’s okay. Those things really can wait until you’re under less of a time crunch.

Strategy #2 – Prepare a lot of meals with the help of a slow cooker (or other prepare-ahead-of-time strategies).
Our single most useful tool for time-crunched periods is our slow cooker. It singlehandedly keeps us from spending a lot of money on take-out when things are in a crunch.

I’ll use this past Thursday evening as an example. One child had a piano practice from 4:30 to 5:00, then soccer practice from 5:30 to 6:30, then martial arts practice from 6:30 to 7:30 (this is far and away this child’s busiest day of the week – many evenings involve no activities). Another child had baseball practice from 5:00 to 5:30, then taekwondo practice from 6:30 to 7:30. A third child has soccer practice from 6:00 to 7:30. These various practices are spread across three different towns.

As you can see in that example, there’s basically no window for a full family dinner. When you add in the fact that one parent doesn’t get home until shortly after 5:00, there’s also really not much of a window to cook a dinner on the spot.

Our solution? Make a soup in the slow cooker with sandwiches for dinner. When a parent has time to eat with one or two of the children, everyone just grabs a bowl of soup out of the slow cooker and makes a very simple sandwich, which all takes about two minutes, and then they eat together. The soup can just remain on “warm” until everyone eats and an adult has time to store the leftovers. It’s a dinner that costs perhaps $1 per person. Compare that to the cost of getting takeout food.

Although the slow cooker is our most useful strategy, any strategy that involves doing most of the meal prep work before the crazy hours of the evening is a valuable one. We’ll pull a prepared meals out of the freezer (one we made the weekend before) and cook it in the oven for two hours, with the meal ready to eat at the time needed by the most people and the other members eating “leftovers” from the fridge, for example.

Strategies like this keep our food costs in check during the busiest times.

Strategy #3 – Make a thorough plan for the week and keep it in a central place where everyone can always see it.
At the start of the week – usually on Sunday afternoon – we take down the family whiteboard and write up a full plan for the week with as much detail as possible.

What events are on each day? What time are each of those events? WHERE are those events? Who needs to go and who needs to provide transportation?

I usually will write something like “5:30-6:30 – [Child] soccer practice @ [town] [field], cleats + w. bottle + shinguards, D: Trent, [child] also goes” as a single line under Thursday, for example. This tells me that there’s a soccer practice starting at 5:30 at a particular field, that I’m driving, that another child needs to go along, and that the child going to the practice needs cleats and shin guards and a water bottle. (I’ll also include meals on this plan, of course, and note the time it needs to be done and the preparer along with “SC” if it’s a slow cooker meal.)

The reason for doing this is to move as much of the active thinking required for the week to a time when there’s less stress involved, less urgency, and less of a problem created by remembering something at the last minute.

I usually move any events that directly involve me to my own personal calendar on my phone and add a notification so that I’m alerted well in advance of that event. That way, again, I’m not caught by surprise. I’m ready to go. My phone will beep at 4:30 telling me that I need to take a child to soccer practice in an hour and that I should probably leave at about 5:15, and then usually it’ll beep again at 5:00.

This takes some time, but it greatly increases the chances of busy evenings flowing smoothly, and it’s when things don’t go smoothly that we end up in difficult situations and throw money at a quick-fix solution.

Strategy #4 – Consider all supplies needed for the week on Sunday and get them all ready to go then.
This goes hand-in-hand with the scheduling above. Once that schedule is in place, we’ll go through and make sure that we have all of the supplies we need to pull it off.

Does everyone have their soccer socks? Cleats? Shin guards? Baseball gloves? Gear bags for martial arts?

Do we have all of the food items we need for those meals? This is basically the point at which we turn a meal plan into a grocery list and then go grocery shopping. What about other household supplies?

Does everyone have adequate clean clothes and outfits for the week? This ensures that there doesn’t have to be any laundry done until the weekend and there’s no last minute clothing emergencies.

We’ll even try to organize this to a small extent by making sure everything is in the right place. I often make stacks of outfits for myself for the week so when I get up on Tuesday morning, for example, I can just immediately grab the clothes I need right off of a stack of outfits already folded up and ready to go.

The benefit of this is that it reduces the chance of an unplanned bump in the road during a busy evening, because a bump in the road almost always leads to unexpected stress and unexpected costs.

Strategy #5 – Move as much effort as you can into time periods where you’re under less of a crunch.
If there’s something I can do earlier in the day when I’m on a work break that will save time later in the day, I tend to do it during my work break. I’ll do a load of dishes early in the day, for example, and let it run then. I’ll do the same with laundry. I’ll spend 20 minutes laying out everything that will be needed for everyone to go to their events later in the day, or have the kids do it right when they get home from school. I’ll fill up the slow cooker early in the day or put something in the oven to cook slowly in the mid-to-late afternoon.

The fewer “last minute” tasks that we’re facing during overbooked periods, the more likely those events are going to go smoothly. The smoother everything flows in the evening, the less likely it is that we’re going to run into some unexpected event that we have to throw money at to solve.

If you find yourself unable to do this in the morning, my suggestion is to just get up a little earlier and do a lot of these tasks before leaving for work. Start a load of dishes or a load of laundry. Put a meal in the slow cooker. Put out everyone’s gear for this evening, or make sure everyone has their gear ready to go.

Strategy #6 – Look at your social network for any opportunities for social cooperation.
Another great strategy is to look around your social calendar for people who have overlap with you and take advantage of that overlap. Can you alternate rides with someone else who has a child on a team? Can you synergize the trips by taking all of the stuff and people needed for several stops all at once? Can you squeeze in errands in the middle of a sequence of other things (if I have an item to get at the hardware store, for example, I often do it in the middle of busy Thursdays)?

For example, we alternate driving kids to martial arts practice with another parent, which means we have one activity per week that we don’t really have to worry about – our kids basically just walk out the door and go. In previous seasons, we found synergies that enabled us to share rides to and from a twice-weekly soccer practice. We switched to a music teacher recently that’s within walking distance of our house, so one of our children can just walk to a musical lesson.

Finding ways to minimize the amount that you’re driving in order to get everything done saves on gas, saves on wear and tear on your car, and saves on stress as well.

Strategy #7 – Eat healthy foods rather than junk.
Why is this important? The reason is that busy evenings utterly fall apart if someone gets sick. If one of the members of our family comes down with some kind of illness, it can utterly destroy the smoothness of our plans, and the best way to keep illnesses at bay is to eat healthy foods.

We make a conscious effort to include lots of vegetables and grains in every meal. I eat a vegetarian diet (due to advice from my doctor) and everyone else in our family eats a diet that’s led by fruits and vegetables. We chow down on carrots and apples and rice and beans and nuts and spinach and lettuce and kale and sweet potatoes and quinoa and tomatoes.

It’s actually quite easy to prepare meals with that in mind. I’ll often just prepare a quick salad on the side of whatever we’re having – I’ll take out some greens and toss them around with a bit of dressing and just serve it with whatever we’re eating, or I’ll include lots of vegetables in whatever’s cooking in the slow cooker, or we’ll eat a bag of steamed vegetables that were originally flash frozen. We’ll have bananas or an apple along with the meal, too. This adds almost no time to meal prep and moves some of our calorie intake away from unhealthy things and into healthier things.

In general, we try to avoid prepackaged foods unless we’ve really studied the labels and ingredients in them. I’d far rather hit the produce section or the DIY grain section or the refrigerator section of the grocery store than anything you might find in the middle.

The whole goal here is to put good stuff into our bodies so we’re less likely to get sick and have to deal with all of the challenges created by that – the expense of last minute changes in plans, the expense of doctor’s visits, the expense of cold remedies, and so on. The cost of not eating healthy blows away any extra cost that might come from eating healthy.

Strategy #8 – Prioritize sleep, even if it feels like things would be “easier” if you did stuff instead of sleeping.
If I have a choice between taking care of an “important but not urgent” task like vacuuming or sweeping the floor or doing a load of dishes versus going to sleep at a reasonable time, sleep is always the choice. The same thing is true if I’m choosing between watching a television show in a half-awake stupor or going to sleep. I choose sleep.

Why? An adequate night of sleep helps in countless ways in terms of making financially responsible moves.

For starters, if I have adequate sleep, I’m going to be well rested and simply make better decisions. I won’t be as prone to decision fatigue. I won’t feel the effects of stress as much as I might otherwise feel them. I will respond to difficult situations with a level head much more often. I’ll just handle a tight schedule more effectively and make better choices while doing it.

Another factor is that adequate sleep helps your immune system. You’re less likely to get colds, which make you a lot less productive and efficient and eat at your wallet in the form of cold remedies that get you through the day when you’re miserable.

A final factor: I simply feel better when I’m getting adequate sleep. I have stronger natural energy reserves and feel much more okay with tackling anything that comes my way. I’m far from alone in feeling that way.

If you find that your life is overbooked, don’t steal time away from sleep to “make up for it.” Treat adequate sleep as the vitally important thing that it is and put other less important and less urgent things aside. Don’t skip sleep to watch Netflix or to do a household chore that can easily be done on the weekends.

If you follow these strategies, you’ll find that periods of “overbooking” in your life fly by with far fewer expenses. You’ll spend less on gas (and car depreciation and maintenance). You’ll spend way less on food. You’ll spend less on cold remedies and treatments. You’ll be less prone to decision fatigue, so you’ll spend less on unnecessary purchases. You’ll also simply feel better along the way.

Good luck!

The post Eight Key Strategies to Help Keep Overbooked Families from Overspending appeared first on The Simple Dollar.

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Friday, April 21, 2017

How to Compare Banks and Credit Unions When Looking for a New Financial Home

Let’s say you’re moving to a new community and thus need a new home for your banking and checking services, or let’s say you’re in a situation where you’ve lost faith in your current bank and wish to move to a new financial institution. You need a new bank for your primary checking account and savings account.

If you’re in a city of any size at all, you’re probably flooded with banking options. There are likely several local banks with just a few branches. There are probably some local credit unions. There are probably a few regional banks that are quite popular in your state. You’ll also find some national banks, like US Bank, operating branches near you. Add those all together and the number of options is just staggering.

What exactly do you do? This is one of those “paradox of choice” situations where people can be almost paralyzed by the number of choices, or else they simply go to the first choice they find and go with it. (I have a friend that just joins whatever bank is closest to her new home whenever she moves – I mean, it’s a strategy that does make at least some sense.)

Here’s the catch, though: Choosing the right bank is going to have a pretty strong impact on your financial path over the next few years. A bank with stability, low fees, great customer service, and solid interest rates is going to leave a lot more money in your pocket than a bank with lots of fees, mediocre interest rates, and difficult customer service, on the order of hundreds of dollars a year. Making the right choice will have a real impact.

So, how do you figure out which bank is the right one? Here’s the strategy I used when switching banks in the fairly recent past.

Make a list of accessible banks and credit unions.

First of all, I made a list of banks and credit unions in my area to which I have reasonably good access. I consider having at least one branch that I go near in a typical week to be a good threshold here – if I have to go far out of my way to bank, I’m not interested. Physical access to a branch is very important for your primary checking account because if things go wrong, the ability to access an actual physical person that you can talk to face to face is vital.

Online-only banks do offer great services in some regards, but I would only use them for secondary banking purposes such as a savings account for a specific goal or as the accounts for managing a side gig. Being locked out of your personal checking account due to a bank error and not having a person to talk to face to face is not a position that I would put myself in. You can have a face-to-face conversation with a branch manager and see what they’re actually doing to resolve your problems, but you can’t really do that via an online chat with a remote customer service rep.

So, my first step is to simply identify all banks and credit unions that are within a mile or two of my house, my typical commute, and the places I shop. You can do this easily with Google Maps.

Check the basic facts of each one.

For each of those banks/credit unions you’ve listed, go to their website and find out a few facts about them.

Are their accounts FDIC insured? If they’re not, drop that bank from this list like a hot potato. FDIC insurance means that your accounts are insured against the bank’s failure up to $250,000, meaning that if the bank goes under, the first $250,000 of your balance will be returned to you. That’s a must. If a bank doesn’t offer this, run away from it.

What is the interest rate they offer on your usual savings account balance? Consider how much money you typically have in savings, then use that to identify your savings account rate for that balance. Multiply the two together to assess how much you’ll get in interest in a year. (It’s worth noting that this will vary as interest rates change over time.)

What is the interest rate they offer on your usual checking account balance? Do the same exact thing with the checking account, if their checking account offers an interest rate. (Again, interest rates will vary, but this is a good thumbnail sketch.)

What fees are charged on the accounts you expect to have with them? This will take a little more homework, as banks typically aren’t completely up front with all of the fees. Some of the ones that you can typically find with a bit of searching on their website are account maintenance fees, minimum balance fees, ATM fees, overdraft fees, returned deposit fees, and foreign transaction fees (if you ever travel abroad).

I’d suggest starting a document on your computer to keep track of this information as you go, so that you have a single central place with which to compare options.

Check out online discussions about the bank and get opinions from friends.

Once you have this basic information on several banks and credit unions, go online and find out about their reputation. Are there a lot of negative reports about the bank? Banking horror stories? Criticisms? Most banks will have one or two bad stories out there, often written up by people who have unrealistic expectations or are hiding key parts of their stories, but large quantities of bad reviews are a telltale sign of some problems that you want to avoid.

Poke around on their Facebook page, on Twitter, and in the archives of Facebook groups for your community. Remember, what you’re looking for is significant quantities of negative reviews, particularly ones where it’s not apparent that the bank or credit union did anything to fix the problems. Finding old reviews that are negative with more recent reviews that are positive typically means that the negative problems were addressed and aren’t worth worrying too much about.

At this point, a few financial institutions should be clearly ahead of the pack. Take those banks to your social network. Ask friends in the area what bank or credit union they use and what they think of your top candidates. Again, a single negative view shouldn’t shift everything for you, but consistent negativity should be a big warning sign.

Follow up with the top candidates.

What you’re looking for are financial institutions that excel in all of those areas – FDIC insured, local availability, good interest rates, low fees, happy customers. You’ll likely wind up with an institution or two or three that really do well with these factors.

When you’re trying to make a final decision, contact each bank/credit union. Stop by a branch and talk to an employee about their account offerings directly. The key thing to do on this final visit is to assess whether employees are immediately helpful when you go in the door of a branch, as well as filling in any information holes you might have. To be very specific, make sure you use this opportunity to go through the fees on the account. Are they fully open about their fees or do they try to be shady about them? Hit on all of the fees mentioned earlier: account maintenance fees, minimum balance fees, ATM fees, overdraft fees, returned deposit fees, and foreign transaction fees.

After this, you’ll probably have a top candidate and that’s the one you should go with. If you find yourself struggling between two or three really good options, I suggest going with the one that will likely put the most money in your pocket after a year (the interest you expect to earn minus the fees you expect to get hit with).

When I went through this exact process, it didn’t take long to find all of my arrows pointing at two particular local financial institutions, and it was stopping in the branches and asking questions that cinched my choice. I talked to a nervous cashier at one that seemed to be almost trying to hide fees, while at the other bank the manager came out and introduced herself and was incredibly personable and open with every fee they charged. I chose the second one, unsurprisingly, because I felt confident that if I walked in there with an issue, it would be handled smoothly and professionally.

Good luck! May you find a bank or credit union that meets all of your needs!

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The post How to Compare Banks and Credit Unions When Looking for a New Financial Home appeared first on The Simple Dollar.

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Thursday, April 20, 2017

Some Thoughts on Impractical Urges on the Path to Financial and Professional Success

Recently, Ayana Mathis published a wonderful article entitled On Impractical Urges. The focus of the article was squarely on the “cult of success” in America and whether or not a person’s background can alter their path to realizing their ambitions, even to the point that a person’s background can prevent them from even recognizing that it’s possible for them to have big ambitions.

“We have a cult of success in America. We believe that if we just work hard enough, we will achieve. It is certainly better to hold these beliefs than a fatalist vision of the world in which fortunes are determined entirely by factors outside of oneself (social position, nepotism, economic status, etc.). Nonetheless, there is something naive about our way of looking at things, and cruel too, in the way children can be cruel because they are too young to have anything but an absolutist vision of the world. It isn’t always true that failure has direct correlation to insufficient grit or ambition. […] The humbling, and unsettling, reality is that all obstacles are not surmountable. And in any case, is the sole objective of our lives the surmounting of obstacles so that we can come in first, like dogs in a race? This seems an impoverished vision of our human experience, more tragic and empty than any failure could ever be.”

Ayana was lucky. She was able to get past some challenges thanks to what seems like a wonderfully supportive family and a few key mentors. I, also, was quite lucky; I was able to get past some challenges thanks to a supportive family and a few key mentors.

In both of our cases, though, the path to our eventual destiny wasn’t very clear as we were growing up or even in our young adulthood. Many of the things that we eventually wound up aiming for were, at their start, impractical urges.

I look back at the 12-year-old me, carrying around a loose leaf notebook in which I found myself constantly adding to a horror novel, one that started off as a paragraph and wound up growing to incorporate all of my nightmares. The simple idea of this was an impractical urge. The adults in my life worked at one factory or another (when they weren’t laid off) or worked at a soul-numbing job in law enforcement – that is, if they worked at all. The other children played sports and, even at the age of 12, snuck off behind the school to drink and smoke. The idea that I would do anything with my life other than get a job for an hourly wage as soon as possible seemed utterly impractical.

“It’s like this: A door opens, perhaps just a fraction of an inch. There’s no telling if the door will open at all, or for whom, but if it does, you push push push until it is wide enough for you to squeeze through.”

I look back at the 18-year-old me, wandering alone across a college campus, completely baffled by the turn of events that led me there. A pair of scholarships fell out of the sky onto my lap, hoisting me out of my hometown and into a college environment, something that seemed beyond impractical just a year before.

What were my grand ambitions? I still didn’t have any. I majored in a field that seemed safe, one that seemed like it might lead to a job that made sense within the context of how I grew up. All other paths seemed impractical.

I paid for the first few years with scholarships, then the last couple out of pocket, without even really considering other routes. Why? It seemed like the practical path. All other paths seemed impractical.

After that, I mostly just focused on my main career. I didn’t really have any side gigs for a while, even though I had some ideas. They seemed impractical. I still wrote sometimes, but it seemed really impractical. I thought about getting in better financial shape, but spending money while I had it seemed like the practical thing to do.

I had impractical urges. I had impractical dreams. But I did what seemed to be the practical thing.

“Now we have arrived at the heart of the matter: the legitimization of desires. In order to write the novel, I’d had to first acknowledge that I wanted to write it, that I could and would write it. Why had it taken nearly forty years for me to understand that I had the right to my ambitions?”

It took most of a decade and a long stream of thoughtful mentors for me to realize that I actually controlled my life, that I didn’t have to follow the path of anyone else, in my finances, in my career, in my personal choices, in anything.

Being frugal seemed wholly impractical for someone in their twenties trying to launch a career. Being more responsible with my spending seemed wholly impractical for someone who was trying to seem “successful” to his friends and family. Investing a lot of money on side gigs, especially things like writing, seemed wholly impractical for someone trying to build a strong career in a completely different field.

Yet those urges kept pushing toward the surface.

The practical thing to do would have been to just follow the same path that others were on, to spend almost all of the money I earned, to buy the most expensive house I could afford, to buy or lease a constant run of shiny new cars, to throw myself deep into my career until I was either completely miserable or forced to change direction or (if I was really lucky) stumbled into something that clicked with me, to walk a financial tightrope, to have very little savings for the future, to look like I was successful to everyone taking a passing glance at my life even if I wasn’t. The practical thing was to go home dead tired every day and spend a few hours watching television or reading an endless flood of websites.

That’s what seemed practical, anyway. It’s what everyone else did.

The impractical thing was to buy a less expensive, smaller house. The impractical thing was to stop buying unnecessary stuff and to work to cut off my urges to buy such things. The impractical thing was to stop worrying about what other people thought of me and worry instead about what I thought of me. The impractical thing was to drive older cars (unless I absolutely had to). The impractical thing was to spend my evenings building a side business instead of watching television or going out.

That’s what seemed impractical, anyway. I knew almost no one who did those things.

Yet, over time, things shifted. I found myself doing more of the things that once seemed impractical, simply because they started to feel like the right thing to do. The list of homes we were looking at gradually fell in price until we wound up buying a house that cost half as much as the houses we were initially looking at, even though at first this seemed like were intentionally choosing to look at dumps. I stopped buying the latest gadgets and the sharpest clothes and I gave up on trying to “keep up” with coworkers, even though this felt really impractical for my career at first. I bought a used car off of Craigslist, which caused every “this is impractical” sense that I had to start tingling. I started spending evenings doing things like trying to improve myself or trying to start a side business or getting involved in the community, which seemed really odd when people were talking about last night’s shows around the water cooler.

Those changes seemed really impractical and even nonsensical at first, something that I really struggled to make sense of. Why was I suddenly starting to feel like these impractical things were the right thing to do?

I actually think I can pinpoint it down to one real shift in my thinking. I began to put a lot more importance on the long term rather than the short term, especially in terms of what made practical sense in terms of how to use my money and time and energy.

For the first three decades of my life, most of the things I did were done with a perspective that barely stretched past the next few weeks. If you take that perspective, most of what I did at that time made practical sense.

If you really don’t place much value on what happens to you beyond the next few weeks, why wouldn’t you spend everything you bring in? That’s honestly the sensible response in that situation. There’s no point in having money just sitting around if everything beyond the next month doesn’t matter at all.

If you really don’t think beyond the short term, the best way to appear successful in the minds of others is to buy status symbols – nice clothes, nice gadgets, nice cars. They are very effective at creating a short term impression of success. What creates a good long-term impression? Character. However, if you’re simply ignoring the long term, then it’s the short term things that seem practical.

If you really aren’t considering your long term life, then getting the biggest mortgage you possibly can for the biggest house that a bank will let you have is the smart choice. After all, you get to live in a gorgeous house – for now. The fact that enormous bills are going to roll in for the next thirty years or more – mortgage, insurance, property taxes, probably a homeowners association bill, huge utility bills – doesn’t really matter too much if you’re barely looking beyond the next month or two. What’s the best long-term solution? Buying a smaller home that you can easily afford. However, if the long term doesn’t matter much to you, the giant home seems like the more sensible option.

I can go on and on like this. Almost every significant use of time and money and energy during the first few decades of my life was tied to looking at things in the short term above all else. Things that maximized the short term seemed practical. Things that maximized the long term seemed impractical. When I felt the urge to do things that would take care of the long term – things like saving for retirement or writing or working on a side gig – they seemed like massively impractical urges and it took a lot of cajoling and reflecting to make them happen.

My idea of practical urges and impractical urges were entirely based around a short term perspective, one that was built into my head all throughout my childhood. As I was growing up, almost every adult example that I had in my life revolved around that kind of short term perspective. Everyone lived paycheck to paycheck. Everyone drove the nicest vehicles they could possibly afford, even if the payments were incredibly painful. Everyone invested tons of money in various visual status symbols, often oriented around hunting gear. People took their jobs seriously only if they saw a direct line to a promotion that could happen pretty quickly; otherwise, they slacked off. College’s only purpose was to get a better starter job and you really didn’t worry much there beyond the party coming up the next weekend. Anything long term was basically viewed to be completely impractical. No one saved for retirement. Almost no one had a real emergency fund.

Later on, though, starting sometime around the end of my third decade of life, that whole perspective began to shift for me. I began to look at everything in terms of how it would affect my life far into the future.

How could I build a long-term career that I really wanted to be doing twenty years from now? I could push through a miserable job if I never thought about the future, but the idea of being in an unhappy position for a long time seemed even worse. Thus, I started investing real time into side gigs that seemed enjoyable and some of them clicked. One of them – this very site you’re reading – wound up becoming my primary job. I’m genuinely happy (most days) to get out of bed and work on the latest challenges and I enjoy thinking about things far down the road. I stopped thinking about getting through today’s work and started thinking about meaningful work over the next ten or twenty years.

How could I build long-term relationships in the community? Flash might build short-term relationships, but long-term ones were built over time with strong character, so I began to value character over keeping up with the Joneses.

How could I raise my children to adulthood and not just take care of them for the next few weeks? I can easily get through the day with shouting and demands to get what I want in the short term, but to build my children into strong long-term people requires completely different approaches. I began to value building my children into strong adults over simply getting through the momentary parenting struggles.

As that change in values occurred, so did my sense of what urges seemed practical and which ones did not. It began to seem practical to spend less than I earned. It began to seem practical to build long-term relationships with people based on lots of real interactions and conversation rather than impressing them with a bit of flash. It began to seem practical to invest the time and energy to teach my children how to deal with their impulses rather than to push through a difficult moment. It began to seem practical to save for retirement. It began to seem practical to spend my evenings working on a side gig that I loved rather than watching the latest episode of The West Wing (not that there’s anything wrong with The West Wing).

In other words, as I recalibrated my values, my sense of which urges made sense and which urges did not began to change significantly.

Why did that radical shift occur? There were a number of changes that seem clear in retrospect.

First, I had a few really thoughtful mentors. These men and women came from very different backgrounds, different religious traditions, different nationalities, and had different expertise than I did, but all of them took the time to sit down with me and talk about the future and impart some ideas that served as food for thought for me. Their advice nudged me toward thinking about things in a different fashion and gradually led to a shift in perspective. Some of that value shift resulted from meaningful conversation from people I respected who took the time to talk to me and listen to me and share their wisdom.

I had children, which is itself a very long term commitment. It did not take me long to realize that short-term solutions rarely work well with children. Their interpretation of events is far different than mine; they interpret my short-term solutions to challenges as the most efficient ways to get what they want from life, for example. If you want your children to mature, you have to think long term with them or else the same challenges keep coming up again and again and again. The easiest short term solution is almost always a disaster in the long term when parenting and you’re almost forced to see it. When you begin to see it in one area of life and then start reflecting on other areas, that same pattern comes up again and again.

I started having long discussions about the future with my wife and, to a lesser extent, my closest friends, spurred on by those mentors and the birth of our children. Ideas that were once vague dreams began to be discussed in terms of what could be done to make them actually work. Things that didn’t help those dreams to occur were roundly criticized and taken apart. I began to really see how the short term actions I was taking were actually working against the long term goals that I was developing – raising independent and resourceful children, having a meaningful career, having strong lasting relationships with people that I could rely on over the long haul, and so on.

Before long, my short-term urges began to seem like the impractical ones, while the ones with a long-term focus began to seem practical. I honestly began to judge things not in terms of how the choice made today better, but how it would make my life (and the lives of those around me) better down the road. This is true for money decisions, career decisions, interactions with others, how I spend my time, and on and on and on.

The truth of the matter is that we all operate based on urges, and some of those urges feel more practical than others. That sense of what’s practical is based upon our values, and we can only really change those values with a lot of reflection and consideration. It is nearly impossible to find success when the instincts and urges that would lead you to success feel naturally impractical. You can go against the grain sometimes and force it for a while, but there will eventually be backlash.

So, what’s the take home advice in all of this? I’ll point to two things.

First, in whatever area you want success in your life, spend time regularly thinking about what you need to be doing today to make that happen down the road and about the things you’re doing that are working against that succes. Think about this, consciously. Talk about it with the people around you. Evaluate all of the things you find yourself doing, consciously or unconsciously, and ask yourself whether or not those things are really guiding you to where you think you want to go. If you find that you have this big goal in mind but your urges are pushing you elsewhere, then there is a disconnect somewhere, one that you’re going to have to resolve before you start really moving toward your goal. For example, if you think you’re committed to early retirement but find yourself constantly spending money on needless stuff, there’s a disconnect between your considered goals and your instincts and urges. You’re going to have to correct the things that are pushing those urges, and that takes a lot of time and a lot of reflection. There is no magic switch.

Second, at the end of each day, spend some time before bed thinking about the day that passed and whether you did things in accordance with what you want out of life. What did you do that was really in line with your big dreams? What did you do that didn’t help it at all? What can you do tomorrow to nudge yourself in a better direction? This type of constant, regular reflection and assurance that you’re actually working instinctively toward your goals is the single most valuable tool you have for getting your urges in alignment with your big picture. It’s not easy. It’s going to take a while. But it works. It shuts down truly impractical urges, elevates sensible urges that may seem impractical, and demotes those urges that seem practical in the moment but really aren’t. It’s a refinement of who you are, and it’s only through that kind of constant refinement that you can achieve the things you want to achieve.

Good luck.

The post Some Thoughts on Impractical Urges on the Path to Financial and Professional Success appeared first on The Simple Dollar.

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Is Pinterest the Enemy of Your Finances?

Earlier this year, my husband and I ordered a wooden shed for our yard. This decision took more than a year to make, mostly because we were hesitant to spend the money.

A convergence of events led us to pull the trigger. We had to take a few trees down for starters, so we lost some privacy (but gained a perfect spot for the shed). My husband also decided to set up his weight bench in our garage, which meant we needed more room for yard equipment and the like.

I thought buying a shed would be so simple at first. I would search for “sheds” on Google, shop around for the best deal, then settle on the nicest shed within our budget. Hopefully, a spring sale would help me save some money, or I could negotiate for a lower price somehow.

Unfortunately, shed shopping isn’t the walk in the park I thought it would be. Not only do you have to choose a size and style, but there are dozens of additional choices to make. Do you want a work bench? A loft? Which side should the door go on? What size windows? Do you want vents to the outdoors? Decorative gables? Built-in shelving? Architectural shingles?

After searching the web for a while, I somehow ended up on Pinterest — the glossy, photo-heavy social media site. And it was all downhill from there.

Shopping for ‘She-Sheds’ on Pinterest

While shopping for sheds online was boring at first, Pinterest has a way of bringing ideas to life. In place of the dull wood rectangles I’d been viewing on the websites of Home Depot and Lowes, Pinterest introduced me to intricately designed sheds with flower boxes, decorative dormers, and cutesy interiors. Suddenly I pictured myself on my shed’s front porch, slowly tilting back and forth in a rocking chair sipping iced tea.

Ultimately, Pinterest unveiled the idea of “She-sheds” – beautifully decorated garden sheds turned into relaxation stations for women. “I don’t need a shed,” I thought. “I need a backyard escape!” From there, I found myself sketching a full-fledged mini-house complete with a front porch, sitting area, and built-in bar. I was going to have so much fun!

Of course, it didn’t take long for reality to sink in. When I told my husband I wanted our shed to have a porch and an indoor bar, his face showed both shock and horror. Despite all my fancy ideas, our shed budget hadn’t changed.

Alas, I found myself back on the home improvement websites where I could shop for what we needed and nothing more. And eventually, we settled on a traditional 10′ by 16′ shed without any special features other than a few windows. And, you know what? I was fine with that, really. Because a regular ol’ shed was all we needed in the first place.

And, as my husband wisely reminded me, “We’re going to put our lawnmower in it.”

The Pinterest Effect on Your Finances

This is why looking to Pinterest for inspiration can be problematic. Whether it’s garden sheds, home remodeling ideas, or recipes, vivid Pinterest photos transform simple concepts into something more elaborate – and a lot more expensive.

Heck, try searching Pinterest for something as simple as “birthday cake ideas.” The recipes you’ll find require many more steps and ingredients than the average box cakes we enjoyed growing up. If you followed some of the birthday cake tips on Pinterest, you’d wind up buying a cartload of ingredients, pans, and supplies. And if your baking skills are anything like mine, you’d probably end up with a misshapen “Pinterest Fail” that looks nothing like the professional-quality photo anyway.

Scouring Pinterest for ideas is fun to be sure, but it can also set you back and cost you more money in the long run. Here are a few ways Pinterest can work against your financial goals:

Pinterest doesn’t let you shop for ideas based on what you can afford. Scouting for ideas on Pinterest is the ultimate way to “keep up with the Joneses.” But instead of trying to keep up with just your neighbors and friends, you get to compare yourself to anyone in the world with a Pinterest account, without even considering context or price.

Someone who posts elaborate “She-shed” ideas may borrow supplies or design for a living, for example. With Pinterest, all you see is pictures, designs, and ideas – you don’t see all the work that went into them. And you sure as heck don’t see what they really cost.

Pinterest can make you feel inferior. If you feel like you’re less than stellar at cooking or home decorating, Pinterest can make things worse. Many of the ideas on Pinterest are unrealistic for those of us who don’t cook, bake, or design for a living.

If you struggle to bake the perfect box cake, it’s doubtful you’ll nail a multi-colored unicorn cake with glitter frosting and an edible rainbow topper. You can try, but you’ll probably come up short – cue the disappointment.

Pinterest can make you desire stuff you never knew you wanted. My shed adventure is the perfect example of how browsing Pinterest can plant crazy ideas in your head. Before I searched Pinterest, I never knew sheds could offer expansive front porches, indoor seating areas, or their own craft area. If I hadn’t learned about these upgrades, I wouldn’t have wanted them in the first place – or missed them when we settled on a standard shed.

Don’t Let Pinterest Guide Your Spending Decisions

There’s nothing wrong with scouring the internet for awesome design ideas and inspiration, but it’s important to avoid letting those ideas guide your spending.

Now that I look back, I realize my backyard would look silly with a “She-shed” complete with a front porch, potted plants, and rocking chairs. Not only that, but it would have cost way more than I wanted to spend.

Just because something looks good on the internet doesn’t mean it’s realistic or attainable. The next time you search Pinterest for an idea, remember to take whatever you see with a grain of salt. At the end of the day, it’s up to each of us to decide what’s real, what isn’t, and what we can afford.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

Related Stories:

Do you ever shop for ideas on Pinterest? How do you avoid overspending?

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Wednesday, April 19, 2017

The Simple Secret to Sustained Financial and Professional Success

Over the last several years, I’ve paid off hundreds of thousands of dollars in debt and went from the precipice of bankruptcy to a path toward financial independence. I went from a career that depressed me to a completely different career that fulfills me. I did all this while undergoing major changes and challenges in my personal life at the same time.

How?

There is a secret to it. It’s one I’ve spelled out many times on this site, but never in such simple terms.

The secret is small disciplines, sustained over a long period of time.

It’s simply making a very long-term commitment to a handful of small changes to your life and sticking to them like glue. That’s it. Nothing more, nothing less.

The core of my financial turnaround came from simply deciding to stop spending money on wasteful stuff. I kept track of my expenses, figured out how much I was spending on things like food and beverages and hobbies, and put a monthly cap on those things.

My small disciplines are to keep nonessential spending – especially food and hobby spending – within a reasonable cap each month, to review my spending each month, and to make up for shortfalls and make corrections whenever the review isn’t up to snuff. That’s really been the core of my financial turnaround. I’ve sustained it for a long period of time.

The core of my career turnaround was to simply devote significant time and energy to a project outside of my normal job, a project that I cared about. You’re reading the end result of that project.

My small discipline was to spend a couple hours each and every day writing content for The Simple Dollar, no matter how tempting it was to do something else and no matter whether it seemed like The Simple Dollar was immediately successful or not. To do that, I gave up some television watching habits and a few other time-wasting routines in my life. I’ve sustained it for a very long period of time, and I’ve actually grown that time in later years as The Simple Dollar thrived enough to become my primary employment.

All of the success I’ve had in those areas of life have come from sticking to some simple rules like that, ones that are a bit more difficult than the path of least resistance but not disruptive or impossible, and simply hanging with those new rules for a long time.

As I’ve grown older, I’ve seen this phenomenon prove to be true in every area of my life. My marriage feels incredibly strong, but that’s because I have a small discipline of really devoting quality time to my wife each day, listening to her and helping her and showing her love through action. I feel like I’m successful so far as a parent because I do the same thing with my children – quality time for them each day, blocked off just for them. I’ve seen it in my physical health and my mental health and my personal development and my social life.

Simple, small disciplines, repeated over and over and over and over, with great consistency. That’s the magic.

Why doesn’t everybody do this, then? There are a few reasons that pop out immediately.

First, you typically don’t see a lot of immediate success. I didn’t see any real notable success from The Simple Dollar for many months, and nothing astounding for years. Sarah and I dated for more than six years before marrying. It took years to pay off all of our debts. The successes I’ve had didn’t come quickly.

Even more than that, it often felt like I wasn’t seeing much success at all in the early stages of those changes and new habits.

So, why did I stick with it if I wasn’t seeing success? I knew that I would eventually get to where I wanted to be if I stuck with those little disciplines. My trajectory was true, even if I hadn’t reached my destination yet.

Second, people don’t like to change or to give up little pleasures. Most of the time, when you make a change to your life to bring about some form of long-term improvement, that means that you’re giving up something in the short term to obtain it. It might be a bit of free time. It might be a bit of spending. It might be a hobby. It might be a favorite food or a beverage.

Whatever it is, there can be some negative feelings about that change. Even if you’re giving it up for something that will improve your life far more, people often still feel negatively about such changes.

Imagine, for example, that you’ve started counting calories. You have a family pizza night each Friday and typically eat three slices, but now you can usually only eat two slices and sometimes only one slice to hit your calorie target for the day. While you’re on the right path of making small sacrifices for a greater good, sacrificing that “family movie night” pizza treat can still feel pretty negative.

People don’t like to do that, and when it’s combined with a sense that the little changes really aren’t producing any sort of significant positive transformation in a reasonable amount of time, it can result in some serious negativity toward sustained change.

Third, most people try to follow the path of least resistance each day. Most people eventually fall into a routine that enables them to get the things done that they need to get done each day with a minimal amount of fuss. Almost always, small disciplines get in the way of that routine. It’s like putting some sand in the grease of life – even though the changes are tiny, you really notice them and not in a good way.

Small disciplines virtually always stand in direct opposition to the path of least resistance. They make what can seem like a challenging and very full day even more challenging and full.

Those three drawbacks consistently result in the failure of most people to find the sustained successes in life that they want. I’ve really only found a few things that overcome those challenges.

One simple tactic is to make reflecting on your day and on your long-term goals an every single day kind of thing. Put aside some time – on your commute or during your shower or whatever – to think about the things you’re trying to succeed at and the little daily steps you’re taking to get there.

“I want to be financially independent. What do I need to do today to move closer to that?”

“I want to take this big career step. What do I need to do today to move closer to that step?”

It’s also useful to reflect on the past day and the steps you took. Did you do things that will move you closer to your financial or professional goal (or any other goal you might have)? Did you do things that will move you away from that goal? Why did you do those things? What might you do better going forward?

Make that type of reflection into a constant daily habit. Keep your big goals in mind and constantly relate them to what you’re doing right now.

Another tactic I value highly is to focus on things that are entirely under your control. Getting the big promotion at work is, at least in part, outside of your control. You don’t make that hiring decision – someone else does. So, when you set something like that as your goal, you set yourself up for a significant chance of failure regardless of your efforts. That’s a mistake.

A much better approach is to set goals based on your own efforts and choices such that the natural results of those efforts will bring you toward the overall destination you seek. Using that career example again, if you spend every day at work doing things to maximize your career, you’re going to increase your odds of getting that promotion, but even if you don’t get that promotion, your door is open to a lot of great possibilities. However, those possibilities are merely a natural outcome of your actual goal, which is to put in daily effort to improve your career standing. Your goal is to make that daily effort; the career opportunities are just the natural result of those efforts.

Another worthwhile tool is to judge your success by your efforts, not by the results. Many people judge their relative failure or success by whether or not they see immediate results from their efforts. You will raise your net worth if you spend less than you earn every month, but you won’t radically transform things in a season. You will lose weight if you eat more calories than you burn each day, but you won’t radically transform your body in ten weeks.

Your success is actually judged much more by your ability to consistently complete the small disciplines you set for yourself. If those small disciplines are well thought out, intended to push you toward your bigger goals, and are mostly focused on your own personal choices and effort, you’re going to have results.

A final suggestion – review your goals and tactics regularly (but not constantly). Sometimes, you may end up choosing a small discipline that is producing results but not the results you’re hoping for. For instance, you might be producing extremely well in some respects at work, but the things you’re producing are actually just locking you into your current job. Ask yourself constantly whether the results you’re producing from your little disciplines are really bringing you to the big goals you’re seeking. If you find that they’re not doing anything at all, then consider changing those small disciplines.

You shouldn’t do this kind of reflection every day or every week or even every month, but perhaps once a quarter or twice a year. Succeeding at small disciplines will push you in new directions in life, but you need to give it enough time for those directions to become clear, and then you can step back and assess whether those are the directions you want.

In the end, almost all success in finances and in careers is produced by sustained small disciplines. It just takes time and patience and reflection to really see the results you want.

Good luck!

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Six Money Lessons I Learned From My Kids

While my husband and I have always worked hard, we didn’t really care about money until our late 20s. We felt the money we earned was there to spend, so we happily spent our paychecks and then some. And it never bothered us to make minimum payments on student loans, car loans, or credit card debt, either.

But then it happened: We got pregnant with our first child. In an instant, we started viewing the money we earned in a different light. Instead of thinking of money as a tool for pleasure, my pregnancy instilled a strong sense of duty. It wasn’t just me and my husband against the world anymore; it was us. And if we wanted a brighter future for our new family, we had to make our money count.

Money Lessons My Kids Taught Me

In a few short weeks, my oldest child turns eight years old… and what a journey it’s been. Both of my girls have taught this Type-A mom so much about life, including the importance of having fun and letting go.

But they’ve also taught me a lot about money – and not just how to spend, but why saving is more important than I realized. Let’s face it, some lessons can only be learned by doing – and there are a handful of lessons I only learned once I had children myself.

Here are a few money lessons parenthood taught me:

Lesson #1: Emergency funds become more important than ever.

Before we had kids, we never had a fully-funded emergency fund. We had savings, but our emergency fund was more of a “spending fund” since we used it as we wished. And when we had a real “emergency,” we just charged it on a credit card and paid it later. It wasn’t the most efficient method for handling life’s surprises, but we handled it fairly well.

These days, I can’t imagine not having three to six months of expenses designated for emergencies. And it’s just not about bills; it’s about peace of mind. Our kids are extremely healthy, but the medical bills constantly catch me off guard. For heaven’s sake, my daughter’s ordeal with swimmer’s ear cost us $300 in visits and prescriptions just last month!

Then there are all the other surprise expenses parenting requires – the birthday parties you forgot to buy for, the last-minute school supplies, and the dress clothes for fancy occasions. Plus, you still have the regular emergencies to plan for – the leaky roofs, surprise car repairs, dental work, and vet bills.

Now that I’m a parent, I rest easy knowing we have savings to cover practically any expense we couldn’t anticipate or plan for in our monthly zero-sum budget. Because, life happens… and kids just add one more element of surprise.

Lesson #2: You can’t ignore the future.

When we were in our 20s, we barely looked ahead more than a year. We planned vacations and halfheartedly planned to retire one day, but never took the time to envision what our lives would be like five, 10, or 20 years down the line.

But once we had kids, we started to think about the future all the time. And now that our children are ages 6 and 8, we realize that college is only 10 years away, and that so much will happen between now and then – expensive stuff, like sporting events, school outings and trips, and even prom.

We can’t start planning for everything, but we do plan to remain debt-free. And without the drag of debt, we should be able to afford most of the expenses that come our way.

And when it comes to college, we aren’t burying our heads in the sand there, either. When each of our children were born, we started saving tiny sums of money in individual 529 accounts. It started at just $25 per month, then grew to $50 per month… then $100. These days, we save around $5,000 per year to take advantage of our state’s (Indiana) generous 20% tax credit.

It may not add up to enough to cover all of their college bills, but I know saving for the inevitability of higher education is better than simply hoping for the best.

Lesson #3: Splurging can be a lot of fun.

Our initial plunge into frugality came with a ton of rigid rules. Because we focused on paying off debt for so long, we barely spent a dime on fun.

But having kids taught me to loosen up – and of course, it helps that we’re now debt-free. While we plan the bulk of our spending with a zero-sum budget every month, becoming a parent has taught me to live a little, too.

So yeah, we occasionally splurge on ice cream at the park or a few hours at our local Jump-N-Play. And yes, we travel quite a bit and take plenty of vacations with our kids – all with zero guilt.

Parenting taught us to put the important stuff first, which is why we max out our retirement accounts, save for college, and stick to a budget and spending plan every month. But with kids, you have to have fun sometimes – and fun isn’t always free.

Lesson #4: Our financial decisions can impact their futures, too.

Having kids not only made me focus on their future, but on our future as well. Over time, we’ve realized the decisions we make during their childhood can affect how they live as adults.

If we don’t save for retirement, for example, we could easily burden our children in the future. And if we don’t take care of our health, we have a better chance of relying on them to take care of us.

Having kids made us realize something important: that our savings and investing goals aren’t just for us – the effort is for them, too. So, we save for retirement like our future depends on it. Because it does. We also exercise, eat healthy, and do our best to take care of the only bodies we’ll ever have – not just for us, but for our kids.

Lesson #5: Money isn’t everything.

As someone who thinks saving and investing is “fun,” I tend to focus a lot of time and energy on our finances. My husband and I are the type of people who play around with retirement calculators instead of watching TV. We know the financial decisions we make more are important, and that the steps we take today can help us enjoy even more freedom and security in the future.

But, parenthood also introduced me to the other side of the coin. Even though money is important, it isn’t everything. Becoming a parent gave me a higher purpose; it gave me something to plan for – to live for. Most importantly, becoming a parent taught me to stop and smell the roses. It taught me to stare deeply into my children’s eyes for no reason at all – to grasp at the straws of their innocence and hold them close while I still can.

Becoming a parent helped me realize that money is nothing more than a tool, one that makes it easier to buy the life we want. We need money to survive, but we don’t need it to live. And when I’m with my kids, I want to live in the moment as much as I can.

Lesson #6: True happiness doesn’t come from ‘stuff.’

Here’s something I already knew, but it really sank in once I had kids: Money can’t buy happiness or love, and it can’t fill an empty heart.

My husband and I spent our early 20s spending with no purpose at all. We traded in our cars for the sudden rush of excitement we felt from buying something new. We constantly spent money on our house, trying desperately to make it a home. We bought clothes, toys, and “stuff,” hoping we would feel something – anything. And none of it worked.

Having kids reminded us that life is precious, and that the most important thing we had was each other. And there’s no greater reminder of how pointless “stuff” is than a smiling baby held snugly in your arms. Kids don’t need stuff; they need us.

Final Thoughts

People always say that children are expensive, and I totally agree. But I still believe – with all my heart – that having kids is the best money we’ve ever spent. Whether we’re forking over cash to take them to the dentist, pay for school supplies, or plan a fun vacation, it’s all the same to me. Every dollar I spend on them comes back to me tenfold in terms of happiness, contentment, and purpose.

And maybe that’s the biggest lesson of all – that some life experiences are worth having, no matter how much they cost. So, I’ll keep budgeting and saving and planning for their future and mine; I don’t regret anything since I chose to bring life into this world – or a single cent.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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What money lessons did you learn from parenthood? What would you add to this list?

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Tuesday, April 18, 2017

A Guide to Rucking, My Favorite Low-Cost Exercise Activity

Over the last few years, I’ve become more and more interested in improving my physical fitness. The reasons are simple. I want to live longer. I want to be able to participate in more active things with my children as they grow older, helping them to practice their sports and other activities without passing out in a heap. I want to feel better and more energetic.

I’ve tried a lot of different tactics with varying success. I’ve joined a couple of different gyms and gradually grew bored with each of them and stopped going. I’ve tried lots of different bodyweight exercises at home. I’ve tried some fitness videos such as P90X. Most things just didn’t click at all. I even tried hiring a personal trainer for a while. It was ridiculously expensive, and although it was somewhat helpful, I really couldn’t continue to justify the expense of it.

I felt stuck and frustrated. The only thing that worked well for me at all (other than shelling out a lot of money for that trainer for a short while) was a simple bodyweight “fitness ladder,” which was basically just a handful of exercises I could do rather quickly and then keep improving at them. Even with that, I would stick with it for a while and then back off. I also enjoyed walks – I always have.

So, what did I do?

I stepped back, looked at the course of my life, and asked myself, “At what point was I in the best shape of my life?” It was pretty obvious to me. My physical fitness peak was in my first two years of college. What was I doing during those first two years in college? The biggest thing that I did was walk between three and five miles each and every day with a loaded backpack, one that usually contained multiple notebooks and a couple of college textbooks.

I lived in a dorm in those years, and the dorm I happened to live in was about a mile and a half from the two buildings where many of my classes were. I intentionally scheduled classes over there so I would have all of my classes in that area back-to-back – or at least as close together as I could get with minimal gaps – to reduce my walk over there. In between any gaps, I’d go to the library and study, which was about half a mile from those classes.

So, on most days, I’d walk about a mile and a half to those classes, half a mile to the library, half a mile back to my classes, and another mile and a half back to my dorm. On top of that, I would often do some walking to other classes nearer to my dorm with a less-loaded backpack.

In other words, I was walking somewhere between 10,000 and 15,000 steps a day with some weight on my back. How much weight? I wasn’t sure, so I found a couple of old textbooks that were similar to the ones I had in college and I concluded that I was typically carrying somewhere around 20 to 25 pounds on my back on those walks, sometimes a bit more, sometimes a bit less.

So, what was I doing a lot of during the period in my life when I was in the best shape? I was walking a lot with weight on my back.

So, why not do the same thing today to get in better shape?

As I started to look into the concept (remember, I’m not 18 any more – I didn’t want to just throw 30 pounds on my back and walk for several miles without having some idea of doing things safely and correctly for maximum benefit), I quickly learned that exercising by carrying weight on your back is known as rucking. It’s a significant component of basic training in the military (often with very heavy backpacks), but it can definitely be used by anyone for fitness.

Why Rucking?

It turns out that rucking has become my favorite method of exercise, for several reasons.

First, it just builds upon something I already enjoy doing – going on walks and hikes. I go on walks almost every day around my neighborhood, and I go to parks a couple of times a week to walk on trails and do some light hiking. I get a great deal of enjoyment out of this, as it seems to clear my head and leaves me feeling really good when I’m finished.

Second, it’s incredibly inexpensive. I use an old backpack and a few objects of known weight along with some good shoes. That’s all I need. I’ve basically purchased nothing for this form of exercise. You likely already have this stuff in your home.

Third, it’s incredibly flexible. If I want easy exercise, I put just a few pounds of weight in the backpack and it’s barely noticeable, then I’ll walk on flat ground. If I want really challenging exercise, I’ll load that backpack down with weight and go to a very hilly area. I can adjust my pace as well, making it harder if I go faster and easier if I slow down. I can essentially do interval training by going really fast for short periods with a heavy pack, or I can do endurance-style training by going for several miles with moderate weight in my pack at a moderate pace. I can come home with just the gentle “feel good” of going on a nice walk or I can come home with a soaked shirt and that post-exercise cooldown feeling. It’s all about what I want that day. I can also do it whenever I want – at five in the morning or at three in the afternoon or at seven in the evening. I can do it for as long as I want – an intense 10 minutes or a gentle hour and a half or anything else. It’s just super flexible.

Fourth, it targets the fitness areas I want to target. I want to be in good cardio shape. I want a strong core. I want a strong lower back. Those are the things that rucking is good at. It won’t make my arms look super muscular, but I don’t care. It will build muscle in my abdomen and on my back and a bit on my upper legs, and that’s where a lot of my strength for day-to-day things comes from.

Finally, it gets me outside. I’m a firm believer in the power of getting plenty of fresh air every day and getting at least a little sunshine on your skin for the vitamin D benefits, if nothing else. I get hit hard with seasonal affective disorder in the winter and sunlight is the single most effective cure I’ve found. I feel better and sleep better with some significant outdoor time each day. Rucking gives me that.

It’s inexpensive, flexible, matches what I already like to do, and gets me outside. In other words, it’s just about perfect for me.

Getting Started: Your First Ruck

As I noted earlier, the only equipment you need for rucking is an old backpack, some heavy items, and some decent shoes for walking. There are a couple of optional things, too. Here’s what I use.

Good shoes: This is the foundation of walking or lightly jogging for exercise, regardless of whether you’ve got weight on your back or not.

A sturdy backpack, old or new: Your backpack is going to be carrying some weight, so you want one that’s sturdy, but there’s no reason to go buy a new one. If you have a reliable backpack around your home, just grab that one and put it to good use. If you don’t have one, shop around for a used one that has good stitching. I have a well-made canvas backpack that I use exclusively for rucking so I can leave weights in it (it’s different than my bag that I essentially use as a portable office).

You’ll want to adjust the straps so that it carries the weight of the pack as high on your back as possible without being uncomfortable. This usually means shortening the straps a bit from where people typically adjust them. Play around with the straps until they’re right for you.

Some weighted items: You’re going to want to put some weight in your pack. There are a lot of things that work really well here.

A great way to start out is to simply use water bottles, especially if you have a bunch in your pantry. A single 16-ounce water bottle weighs a pound, so you can put as few or as many as you’d like into your bag before you head out. The advantage of water bottles is that they’re so microadjustable in terms of their weight. The disadvantage, though, is that if you don’t stack them right, they can all bunch up in the bottom of the bag and throw off the weight distribution. In general, you don’t want all of the weight bundled up in the bottom of the bag. (I’ll give a tip to help with this in a bit.)

Another option is to use bricks. Rucking is a great use for a few leftover bricks from a home improvement project. A typical brick weighs around five pounds and is fairly dense, which is a good thing for rucking weights, and they obviously stack well for weight distribution. The biggest disadvantage of bricks is that they can have rough edges which can damage your pack, but that’s another disadvantage that can be mitigated (again, a tip for this is incoming).

A third option is to use old textbooks. You could literally pull out that old calculus textbook from college and toss it in there. They’re actually proportioned really well for rucking if you stand them vertically in your pack, as the weight is distributed vertically across your back instead of bunching up at the bottom. However, if you get sweaty and the sweat seeps into your backpack, you can really do a number on textbooks. The last thing you want is a sweat-soaked textbook!

If you want an expensive option, you can always buy a steel plate made for rucking. They make steel plates in standard sizes with the rough edges worn down to smooth angles. They basically solve all of the difficulties of the options above, but they’re definitely expensive.

Who wants expensive, though? There are a couple of simple things you can do to eliminate the disadvantages of those various items.

One thing you can do is to use duct tape to arrange small items into larger shapes. For example, you can take several water bottles, lay them flat, and then duct tape them together firmly into a flat “plate” that fits into your backpack quite well. If you take eight 16 oz. water bottles and lay them out in a flat shape that’s just a bit smaller than your backpack, you can simply tape them all together firmly and you’ll have an eight pound weight that’s distributed very well for your back. You can make multiples of these, too, or you can make them larger if you have a larger pack. You can always cut the tape later and use them for drinking.

To keep an item like an old textbook safe from sweat, wrap it in plastic grocery bags and then tape those bags with some duct tape. Just put a couple of layers of grocery bags around the book, then add several bands of duct tape to keep the bags secure. This will keep them free of sweat while maintaining the nice weight distribution of a textbook.

What about rough items, like bricks? Just stack them, duct tape them together thoroughly, cover them with bubble wrap, then duct tape the wrap. So, for example, you might take four bricks and make a stack of them, duct tape all of the bricks together (I recommend completely covering them in a couple of layers of tape to ensure that the rough edges don’t get through), then wrapping that stack in bubble wrap and taping the bubble wrap securely. This would create a weight that’s slightly more than 20 pounds and would sit very well in a backpack.

Strategies for Rucking for Exercise

So, you have a weighted backpack. Now what? Here’s what I do to take advantage of this weighted backpack for fitness.

First, figure out your paths. I’d suggest starting by figuring out some places that you enjoy walking without weights at all. Find several good routes that you’ll want to consistently walk and measure out their distance. Outside my front door, for example, I have a one-mile walk, a two-mile walk, a three-mile walk, and a five-mile walk, and I have a few consistent walks I like to take at some nearby parks, too. Some changes in incline and elevation are great for fitness.

I recommend your first ruck be with a low weight on a shorter path. Keep the weight around five or 10 pounds and don’t go on an exceptionally long trek with that weight on your back. It’s not that you won’t be able to handle it, but that understanding how rucking makes you feel and alters your pace with that added weight is important to understand.

What you’ll find (if you’re like me) is that rucking definitely impacts some muscle groups in surprising ways and the intensity of that impact (and the muscle groups affected) change based on the weight and distance of rucking. I found that with light weights at first, I felt the impact on my lower and middle back, but as the weights got heavier, I felt the impact on my abdomen and thighs. I also definitely found that the longer the distance, the greater the impact on my muscles.

What has worked well for me is shooting for a target distance first with a very light weight, then gradually upping the weight while continuing at the target distance. For me, that distance is three miles with some minor inclines throughout. When I significantly change things up (by going to a park with a lot of incline, for example), I reduce the weight rather than the distance.

So, here’s an approach you might take. Start off with just five or 10 pounds in your backpack and go on a one-mile walk or even a half-mile walk. Once that seems easy, bump it up by half a mile. Keep bumping it up until you’re going the distance you want to go without stopping.

Then, again, with that same relatively small weight, start working on your pace. I recommend shooting for a healthy walking pace. I shoot for about 15-minute miles. I’m definitely not running, but I’m not dawdling with my walking, either.

Once you can walk your target distance at your target pace without feeling miserable – for me, that’s a three-mile walk in 45 minutes – then slowly start increasing the weight.

I highly recommend bumping up the weight a pound at a time by adding 16-ounce water bottles to your pack. So, if you’re starting at 10 pounds, add a 16-ounce water bottle to your next ruck so that you’re now carrying eleven pounds.

Don’t increase your weight until you’re finding it pretty easy to ruck your target distance at your target pace. When you find that exercise to be pretty easy, then add a little more weight to your pack.

The nice thing about adding it a pound at a time is that when you reach a new round number for the weight you’re carrying, you can make yourself a larger, more standardized weight. For example, if you’re carrying 10 pounds, you can take two bricks, tape them together with a couple layers of tape, then wrap them in bubble wrap and tape it, as described above, then that’s your new standard 10-pound weight. You can just grab it and use it without thinking much about it.

Then, when you want to add just a pound to that, toss in a water bottle. You might find yourself carrying a 10-pound brick bundle and four water bottles, getting you real close to 14 pounds. Then, when you’re ready to add another bottle, you could just turn that two brick bundle into a three brick bundle and stop carrying the water bottles.

Or, for example, you might have a few old college textbooks that weigh 10 pounds each and another one that weighs five pounds. At first, you might just be carrying that single lighter book and a couple of water bottles, but you’ll reach a point where you toss the bottles and the light book and use one heavy book. Then you start adding a few bottles to that. Then eventually you replace the bottles and find yourself carrying a heavy book and a light book.

In my experience, you eventually start leveling out in terms of additional weight. You’ll start hitting a point where it is consistently challenging but not overly so, but you’re also not feeling like you should be adding more weight to the mix. Trust your body. Don’t add any weight or distance unless you’re dead sure that this is the right move, and make changes slowly.

At first, I found myself adding weight pretty steadily, but then the weight additions started coming more and more and more and more slowly, until I basically reached a point where I was feeling like the exercise was great without ever adding more weight. Since then – and it was a long while ago – I’ve added weight once.

What about the winter? I’ll fully admit that I don’t do this during the coldest parts of the winter. I don’t like going on long walks or jogs or much of anything outside when it is bitterly cold. What I did this winter to somewhat stay in shape for this was to do step-ups. Basically, I’d turn on something to listen to, then I’d find something that I could step up onto that would cause my upper leg to form a 90 degree angle with my stomach when I was stepping up. I’d do that a bunch on one leg, then the other leg, for a few steps. I’d do this with light weights on my back, too.

Doing this made it very easy to return to rucking in the spring, although I didn’t carry my full weight from the fall when starting again.

Final Thoughts

Rucking is, hands down, my favorite frugal solo exercise (playing soccer with my kids tops it, but that’s not exactly something I can do solo whenever I have a spare half hour). It costs basically nothing, gets me outside, and works cardio and the muscles I’m most concerned about without bulking up. It’s also super flexible – I can adjust it to whatever my goals happen to be. If I know I’m going to be hiking up hills a lot, I can ruck with a lighter weight up some hills to get in shape for it. Not only that, it gives me a chance to relax my mind while I’m doing it, with a podcast or an audiobook usually playing in my ear.

Give it a shot. Grab an old backpack, toss a few water bottles in there, and go for a brisk walk. See how you feel at the end of it – it’s like a little healthy bonus on top of a nice walk.

Good luck!

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A New Credit Score Is Coming: What You Need to Know About VantageScore 4.0

A new credit score will be finding its way to a credit bureau near you very soon.

VantageScore Solutions, a joint venture of the three credit reporting agencies (CRAs), announced that the fourth generation of its credit scoring software will be released in the fall of 2017. The new score has been aptly named VantageScore 4.0.

Why should consumers and lenders get excited about another new credit score — one that will stick to its existing range of 300 to 850?

For starters, this new credit scoring model is slated to get some very meaningful enhancements. New features include consumer friendly treatment of medical collection accounts, less reliance on tax liens and judgments, and the ability to consider trended data in the calculation of credit scores.

The Biggest Enhancement: Trended Data

As mentioned above, there are several meaningful changes being introduced with the release of VantageScore 4.0. Arguably the biggest breakthrough featured in the new scoring model, though, is the consideration of trended data and its influence over your scores. This marks the first time a tri-bureau credit score (one available from all three credit reporting agencies) will measure trended data.

What is trended data? Several years ago the CRAs began to include historical information about your credit card accounts on credit reports, and this information has been named trended data. Prior to the inclusion of this information, it was impossible to discern whether a consumer paid off their credit cards each month and used them again, or whether a consumer rolled an outstanding balance from one month to the next.

It was also impossible to know what someone’s balances and credit limits were in prior months. Once trended data was included on credit reports, lenders and credit scoring models could now access a consumer’s historical information for the previous 24 months.

VantageScore 4.0 is a big deal because it will be the first credit scoring model to harness the predictive power of trended data. Although trended data has been included on credit reports for several years, there have been no credit scoring models that considered the information.

Trended data is so predictive, in fact, that that consumers who do not pay off their balances in full each month are reported to be three to five times riskier than consumers who pay in full each month.

When and Where Will VantageScore 4.0 Be Used?

VantageScore’s newest model will not be commercially available until fall of 2017. However, even once the score is officially released, that doesn’t mean you’ll immediately begin to see VantageScore 4.0 whenever a lender pulls your credit in a few months.

It can take time for a new score version to permeate the lending environment. This is true for any scoring system, including FICO scores.

Although many lenders are certain to be interested in VantageScore 4.0’s improved predictive ability, it will still likely take some time before the model is adopted by lenders.

It’s extremely costly for lenders, not to mention time consuming, to convert to a new credit scoring model. Add to these obstacles the fact that the government-sponsored enterprises (GSEs) – Fannie Mae and Freddie Mac – currently mandate the use of a much older version of the FICO credit scoring model in mortgage loan applications.

Consumers, however, may be able to access the new VantageScore credit scores much sooner, even if lenders don’t adopt the new scoring model right away. Many online credit score providers such as Credit Sesame and Credit Karma have partnerships with credit bureaus that allow them to give away free VantageScore credit scores. And while I have no insider information on this topic, I do believe the new VantageScore 4.0 credit score will be available for consumers to see via one of these websites some time during 2017.

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Monday, April 17, 2017

Questions About Sneaky Fees, Upgrading, Lifestyle Inflation, Eating at Home, 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. Struggling while near financial independence
2. Sneaky fees from investment firm
3. Ailing mother and financial struggles
4. Service work for lifestyle funk
5. Depositing checks
6. Investing and market timing question
7. Landlord unexpectedly not renewing lease
8. Getting into home eating routine
9. Buy now or next model?
10. Encouraging frugality in teenagers
11. Net worth as family?
12. Retire tomorrow?

It’s raining, one of those short little light rains that sometimes happen when the weather is a lot warmer in the last few days than it has been for a while. The crashing of a heat wave.

I’ve spent a lot of time outside lately. I’ve wandered in the woods. I’ve went on long walks. I’ve worked on a spring garden, getting it ready for planting. I’ve played baseball and soccer and Frisbee. I’ve looked for hidden eggs and hidden a few myself.

Right now, I’ve got the window open and I can actually smell that fresh rain. To me, it’s the smell of life. It’s the smell of plants opening up to that water from the sky, drinking it all in, and preparing to grow.

I feel good. I’m a little sore here and there. I’m sipping some coffee. There’s a gentle moist breeze on my face. It’s really early but it’s still warm enough that I don’t feel cold. It feels like there’s a big breath of summer out there, but it’s not quite there yet. Things are in bloom.

I love the springtime.

Q1: Struggling while near financial independence

I am struggling with what I should do for the next phase of my life financially. I am a single 52-year-old mom with 5 kids under age 10. I have a job I love, but it is 40 hours and the option to go part-time isn’t really there but might be available down the road. I work for the state so I have a state pension. We are allowed to contribute to both a 401K and a 403B; so I have been putting away 24K in each for the last 2 years (48K before taxes). My mother left me stocks and savings bonds. I have some of my own stock investments, and I signed up for a private annuity a few years ago through Transamerica. These investments total just shy of $1 million. I have 18 properties, 4 are not rented (my personal residence and vacation places) the other 14 are rental properties. I own these free and clear. Conservatively, the are worth 1.3 million and general approximately 7,000K a month before expenses. I have a coin collection I inherited that was appraised at S20,000 a few years ago. I have approximately S100,000 in cash in my bank accounts, and i also have $300,000 in my fidelity retirement accounts and $190,000 in my 403B account.

I am also a COL in the Army reserve and have served 29 years. I will get a pension from them at retirement. Right now I am juggling my career, military, parenting and rentals. I am TIRED! A huge part of my questions why am I doing this. My mother died 3 years ago (I took care of her the last 6 years of her life) and she scrimped and saved, and basically passed her wealth to me and my 2 siblings. I did my taxes this year and had a huge hit. I had received 18,000 from due savings bonds, and the military gave me a $25,000 bonus, so between those things and doing 20K of overtime, I made about $150K. I had to pay the federal and fix the Roth I paid into last Spring since I was no longer eligible. I had decided to not work overtime anymore. I am due to max out of the Army in May 2018, unless I extend which I have toyed with.

My children all have 457 accounts for college with about 10k each. We live in a city that has Say Yes program so their college tuition is paid for if they graduate. This has kept me living in a modest house in the city. My home is a 3 bedroom and while it is congested, it feels like home to me.

I am afraid to change my work routines and I am not sure why. I sometimes feel like I am just repeating what my mom did, not using the money she saved. I would just like your advice. One thing I would like to do for both me and my children is dual citizenship to Italy, since we are eligible. I imagine this will cost between 10-20K. And a Disney vacation. I don’t spoil my kids and want them to learn life isn’t about possessions or money. Thank you for reading!
– Nina

According to my back-of-the-envelope calculations, you have enough wealth in assets and guaranteed income to easily retire provided your lifestyle isn’t extremely affluent. If you commit to a 2.5% annual withdrawal rate, or commit to mostly just living off of rental income (and put it all under a management company), you can basically just sit back and not work any more. You’re effectively financially independent, provided you don’t splurge constantly.

The question you should be asking yourself is what exactly you want out of life moving forward. What is the most worthwhile thing you can be doing with your time, given that you have no need to earn an income?

You sound like you have a strong work ethic but that you feel almost on the verge of burning out. You likely want to be doing something with your time, but you’re doing too much. You might want to start by stepping back from one of those major commitments you have listed. Maybe you could hire a management company and step away from the effort of being a landlord. Maybe now is the time to retire from the Reserve. Maybe you could step back from your primary career. You easily have enough assets and income to do any of those things.

My guess is that you don’t want to change your work routines because you have a really strong work ethic and it feels somehow wrong to not be busy. I can completely sympathize with that, but at the same time, what is the point of having so many assets if they don’t afford you the freedom to step back and focus on a small set of true key things in your life instead of running yourself ragged?

Q2: Sneaky fees from investment firm

I have just noticed a fee on my wife’s Merrill Lynch Simple IRA that I never noticed before it is an Advisory Program Fee. This seems to be for additional “services” they provide although I don’t know of any recent services they provide and most of the time her contributions just sit in a cash account earning and estimated annual yield % of 0.02. Overall I have not been very happy with Merrill Lynch but I’m unsure how to proceed. Is this advisory program something she can opt out? The fee seems pretty substantial 160.61 for March with a mutual fund rebate of (9.21). I really think we need to change the direction of her employee contributions and just contribute the amount that her company matches (3% I think) and then open a Roth IRA for her probably at Vanguard. If she can opt out of the advisory program can she decide how the funds are allocated or are they just stuck where they are? Any advise in the right direction would be appreciated.
– Fred

It looks to me that the Advisory Program is a default part of a Merrill Lynch Simple IRA in that you’re signed up for that right off the bat. It does appear to be something you can opt out of, but my guess is that you’ll be met with some resistance in opting out as it’s a way for Merrill Lynch to earn some easy money off of you.

It’s practices like this that give financial services a bad name. They’ll tack on fees for services that customers don’t even know about and will never use and wouldn’t even use even if they knew about it. They might mention it along with 89 other things when you sign up, but it’s rarely something that anyone will take advantage of or even need and it just becomes a drain.

My advice to all readers is to look over their statements from financial institutions very carefully and question any and all fees and whether they’re necessary and can be waived. Of course, financial houses do need to earn some revenue from the services they provide, but they don’t need to weigh you down with unnecessary services either.

Q3: Ailing mother and financial struggles

My husband and I are just starting to get our financial footing after several major financial mistakes which led to bankruptcy. We are living essentially paycheck to paycheck while we work on keeping up with bills and trying to make better financial sense of our budget. Here’s the catch – my almost 80-year-old mother with beginning dementia and advanced Type 2 diabetes is now moving in with us. She cannot live on her own as she “forgets” to eat or take medications, etc. Unfortunately, I learned my lack of financial knowledge from my parents. Mom won’t pay off a re-fi on her house until she is 101! We are moving her from her 50 years to a new state, etc. Do you have any recommendations for resources to deal with transitioning Medicare and coverage from one state to the next, trying to work with her mortgage company to do something with the house, closing and opening new banking accounts, etc.? Everything I can find is either Federal and is so general is it not helpful or strictly local and doesn’t cover the state to state aspect of the transition.
– Sara

Your solution for working with her mortgage company to do something about the house is likely to simply involve selling the house and using the proceeds to pay off the mortgage. This likely involves cleaning out the house after your mother moves, then getting a realtor involved to sell it, then using the proceeds to pay off the mortgage.

As for the other programs you mention, just handle them one step at a time. For a new bank account, select a bank in your area (perhaps your own, for convenience) and ask them for help in transitioning. For Medicare, look at a guide for transitioning to a new state, like this one.

In general, if you’re unsure what step to take next, talk to someone who is an expert on your situation. You should always start by communicating with whoever it is your mother will be doing business with in her new location and talk to them about transition advice. They’re usually much more likely to help than the people in the state you’re leaving because it amounts to acquiring a new customer.

Q4: Service work for lifestyle funk

Your advice to the guy (‘Craig’) spending way too much money in a post-divorce funk was just fine – but there is another way that might work better for him.

Service work. On the weekends he does not have his kids or on days after work if he is at loose ends, he can find a place to volunteer. All kinds of places need help but can’t afford it – from walking dogs at the humane society to driving for meals on wheels to building houses for habitat for humanity. If he has ties to a faith home, he can look there first.

And, on the weekends he has his kids, he can do them a favor by including them in his service work rather than spending a lot of money on them. He can involve them in helping out at a local shelter, picking up litter, mowing the lawn of a sick or elderly neighbor, or cutting down invasive species (honeysuckle is one in these parts) at local parks.

He can still do other things with his kids, but directing them toward service work will also help them through the divorce process. The very best way to feel better about your life is to help improve someone else’s.
– Jed

I completely agree with you in regards to the value of service work. Community service projects have been some of the most valuable things I have ever done in my life.

If you’re struggling to find meaning in your life, look around your community for a service project to be involved with. I highly recommend starting with a local food pantry if you don’t know where to start. They almost always need helping hands and they provide an invaluable service to the community. The realization that I was helping to make sure that many schoolchildren in my area had food on the table was incredibly powerful to me.

There are many such organizations in most areas and many of them probably fly right under your radar. Look into food pantries and soup kitchens and Habitat for Humanity and other civic groups like the Lions Club. If you’re lost, knowing that you’re doing something that makes the lives of others better can really bring some meaning to the table that may not have been there before.

Q5: Depositing checks

I have a 19th century problem – I get paid (sometimes) with checks, and need a prepaid debit card that will allow me to deposit them without a smart phone app (I don’t trust banks or their software on my phone). Seems to me any card that uses ATM’s (American Express Serve for example) should be able to do that, but no. Do you know of any card that has a non-smart phone way to deposit checks?
– Cam

Most prepaid debit cards don’t offer an easy way to deposit checks because the companies behind them are not really banks in the traditional sense of the word. They typically don’t have the processes in place to handle paper checks, so they simply don’t allow customers to do so.

In general, use of an ATM to deposit checks is a feature of a traditional checking or savings account through a bank or credit union. Companies that offer prepaid cards may have arrangements with certain banks or credit unions to use their ATM networks for withdrawals, but generally don’t allow for deposits.

What you’re hitting on is a limitation of prepaid cards as they currently exist. They simply aren’t as feature-rich as a checking or savings account at a bank or credit union.

Q6: Investing and market timing question

Would you recommend that I invest in the Vanguard low-fee index funds now? I know it’s a bull market right now and stock prices are high. They’ve got to come down sometime. On the one hand, I’m anxious to put my money in investments, because sitting around in savings at a 1% interest rate isn’t really getting me much. But on the other hand, I’m worried I’m going to put pretty much all my money into a stock market that’s likely going to come down from the high it’s at. Should I wait? Or what would your strategy around the timeline be?
– Sammy

I don’t believe market timing works unless you have a crystal ball that can foresee the future. The reason for that is that we never, ever know when an unexpected event is going to occur. When will the next huge industry-creating technological breakthrough happen? When will a major political or diplomatic crisis happen? When will a few large-scale investors read the tea leaves and get cold feet? Or when will they read the tea leaves and get excited about something?

The truth is we have no idea. No one does. The market has certainly gone a lot higher than this in the past in relation to general economic indicators, but it’s also been a lot lower. Even if it were at an all time high, that doesn’t mean that it’s necessarily headed straight for a drop.

Investing for individual investors should be centered around individual needs. None of us have the resources or the ability to invest in ways that might shift the market and we’re not able to predict the general future. However, we can predict to some extent our own future, so we should invest according to our own plans and our own sense of risk. If stock investing in general feels too risky for you, find other avenues for investing.

Q7: Landlord unexpectedly not renewing lease

My wife and I live in a house with an annual lease. For six years we’ve renewed the lease with no problem. This year, I didn’t get around to renewing it in Feb. or Mar. like I usually do and so when I called the landlord a few days ago he said that he thought we weren’t staying and had already leased the house to someone else. We’re basically out at the end of the month. This is very upsetting to both of us as we really like this house and have done lots of little things to make it our home. What can we do?
– Dan

There isn’t much you can do in terms of staying where you’re at. If the lease is ending and there’s no clause about renewing or continuing the lease, then the property owner has fulfilled his obligation to you. They can move on for almost any reason and usually have no reason whatsoever to tell you about it.

Most landlords do typically contact reliable tenants well in advance of a lease termination to either discuss renewal or to give some advance notice of ending the lease, but they’re generally not required to.

Start shopping around, in other words. If this landlord and/or management company didn’t handle things to your satisfaction, avoid them in the future and consider a negative review of their performance (but do take note of other things they may have done well – or not so well).

Q8: Getting into home eating routine

How did you establish a routine of eating at home? Husband and I trying to break habit of eating out or getting takeout each night. We do good cooking at home but then there’s a busy night and we immediately fall back into old routine of just getting takeout. How did you break this routine with two busy people?
– Tomi

Honestly, we used our slow cooker a ton. Whenever a night appeared to have any chance of being busy, we would prep a meal for the slow cooker before leaving for the day. That way, the meal was already done when we came home (or close enough so that all we had to add was pasta or some other simple ingredient and wait for just a bit longer).

We also kept a few very simple meals on hand to use in a pinch. We often fell back on very simple pasta meals and grilled cheese sandwiches with tomato soup, so we kept the ingredients for those things on hand.

We still use these tactics, to tell the truth. “Spaghetti night” is usually our fallback when things unexpectedly get busy. We always have a jar of pasta sauce, a box of pasta, and a bag of flash-frozen vegetables, from which we can put together a pretty decent meal in ten to fifteen minutes without much thought at all.

Q9: Buy now or next model?

Is it better to buy the current model of something now or wait until the next model comes out and limp along until then?

Cell phones for example. I have an older phone that is no longer capable of receiving OS updates. Trying to decide whether I should upgrade now or wait until the next round of models comes out so maybe the latest ones right now receive a price drop.

Thoughts?
– David

My philosophy is to keep using a device until it no longer meets your needs, then replace it with a device that seems to be a consensus quality choice for that type of item.

Take your cell phone. Is it no longer doing what you want it to do? When it ceases to be able to do those core functions, then replace it with a consensus “bang for the buck” phone and repeat the process.

Don’t choose to upgrade based on what’s on the market. Choose to upgrade based upon your needs no longer being met. Control your own destiny. Don’t let the market control it for you.

Q10: Encouraging frugality in teenagers

How do you encourage teenagers to be more frugal? My kids seem to have really expensive tastes and request that I buy all kinds of expensive foods and expensive stuff. They won’t even look at secondhand clothes stores and insist that I buy stuff at expensive stores at the mall. Getting tired of it.
– Terry

My approach in situations like this would be to buy them low-cost staple clothes, then give them a very small budget for items beyond that. Serve them simple meals that meet their nutritional needs and only go beyond that on your own terms because it’s something you like.

If you want to “treat” them, make it a rare occasional treat.

If they complain about it, show them some job listings, or come to some sort of agreement where they put forth effort to earn what you give them.

They’re teenagers. It’s time for them to start taking the yoke of responsibility for their lives. Cover their minimum needs and let them address things beyond that.

Q11: Net worth as family?

Is there a big or any real difference between calculating net worth for a family unit vs individual? All of our banking and budgeting is done on together on a family unit level so when I sat down to calculate our net worth for the first time, it was as a unit. However, all the literature seems be about individual net worth…
– Eileen

There’s absolutely nothing wrong with calculating net worth on a family level. Sarah and I do this, in fact.

The deciding factor on whether to do this jointly or individually, in my eyes, would be whether you consider your assets to be shared with your spouse or individually yours. Different marriages and partnerships operate very differently in that regard. I know some partnerships where the two members are completely individual in terms of finance, while others are completely fused with all assets shared.

Your net worth calculation should reflect the nature of the relationship you share with your partner.

Q12: Retire tomorrow?

Let’s say you suddenly had enough money to retire tomorrow. What would you do?
– Charlie

For me, enough money to retire early means that I have enough money in the bank to match our current income at a 2% withdrawal rate, plus enough money to fully pay for our children’s college educations and a starter home for each of them without touching the money needed for the 2% withdrawal rate. Anything less than that would probably not lead me to immediately retire.

So, what would I do if I had that? For starters, I would not destabilize my children’s schooling, so I’d not move anywhere. I do not feel I would be a good homeschooler, but I might consider looking around for the best possible school for my children. I am slightly biased against private and preparatory schools unless they have exceptional academic and social track records. I would probably move to another home, however, with more land on which to work on projects. I’d love to have a giant garden and a barn.

I would probably spend most of my time during the school year doing community work and trying to be the best possible parent. I would have a big winter garden – meaning I would plant stuff in the fall that would be harvested in the spring. I have a few creative projects I’d love to do that I don’t think will produce a whole lot of income, so I’d probably dive deep into them.

Our summers would be filled with adventures. We’d camp a lot. We would visit every major city in the US as well and travel abroad some, though we’d return to our home in the fall for schooling. I’d like to spend a few summers actually living in another country for a few months.

After the kids have grown up and left the nest, I’m honestly not sure what I would do. I would probably start a nonprofit that I’ve long thought about, but I don’t want to do it until I can truly throw a lot of myself into it without the commitment to parenting that I currently have.

It’s a fun thing to think about, but honestly, I do a lot of the elements of that dream in my life right now, so it just feels like a “more of the good stuff” kind of dream.

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 Sneaky Fees, Upgrading, Lifestyle Inflation, Eating at Home, and More! appeared first on The Simple Dollar.

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