Saturday, September 23, 2017

Straight Talk on 10 Common Personal Finance and Career Issues

In a typical week, I hear from 20 to 30 readers by email or social media. Typically, the 12 most interesting questions make it into the reader mailbag.

What about the other 10 or so questions?

The honest truth is that most of those other questions boil down to the same handful of questions, over and over, with minor variations.

Today, I’m going to answer the 10 most common issues in the most straightforward manner that I can. Before I get started, though, two caveats:

One, your situation might seem special, but it usually isn’t. The core principles of personal finance and careers come around again and again because they work in almost every situation. Your situation is rarely an exception. People often want to believe that their situation is an exception because they want it to be an exception, one that will let them violate common sense. Almost always, it isn’t.

Two, most of the solutions I’m focusing on are things you can actually do to fix your problem, and many of those solutions are in your head. Mindset is a huge part of personal and professional success. Again and again, you choose how you tackle problems. You choose what aspects to dwell on and which ones to gloss over. My answers are all focused on two areas: action and mindset.

Let’s get started.

I Hate My Job

Here’s the truth: Most people hate their job sometimes. You don’t get paid for everything to be fun time all of the time; if it were fun time all of the time, it would be a hobby and you’d do it because it was fun.

Most jobs have a mix of good things and bad things. For one, you’re getting paid – that’s always a plus. You often have some tasks that you don’t mind doing and maybe even a few that you find interesting or enjoyable, and you probably have some coworkers that you don’t mind interacting with. On the other side of that, you’re spending time working that you might be using for other things. You might have some problematic coworkers. You might have some tasks that you don’t really enjoy.

The problem is that people tend to start dwelling on the negative parts of things and let them amplify until they drown out the positives. You can’t stand two out of 10 of your coworkers, but your mind keeps dwelling on that poison pair. You hate some of your work tasks, but they only take up an hour of your day if you compress them all together instead of dwelling on them.

So, people spend their time stewing over one or two coworkers and end up feeling like they hate all their coworkers, when many of them are perfectly fine and some of them might even be nascent friends. People put off and stew over a few tasks they really don’t like and the dread of those tasks poisons the whole day.

Want to know three big tips for not hating your job?

One, avoid people you don’t like. Just don’t spend time around them. Don’t eat where they do. Don’t engage in projects with them. Don’t worry about them. Let them do their thing and you do yours. Instead, focus on the people you do like. Consciously spend more time with the pleasant people at work. Eat with the quiet but friendly person in the break room. Try to get involved with projects with more pleasant folks.

Two, do all of the tasks you hate first thing in the morning. Do them as soon as you get there, and buckle down and focus until they’re done. That way, the dread of those tasks doesn’t poison the whole day. It’s 9 AM and that nasty task is already out of the way!

Three, recognize that everyone else feels these things, too, and if you hate your current job, it’s likely you hated other jobs and will hate future jobs unless you change. You decide whether you let a few difficult tasks or a bad coworker poison your entire work mindset or not. That’s your choice. It has nothing to do with the bad elements, because every job has bad elements. If you hate this job, it’s likely you’ll hate your next job, too. Rather than fixing the job, fix the hate.

Yes, there are some jobs that really are poisonous, but the reality is that most jobs aren’t that way. They’re just jobs. Jobs aren’t going to be purely fun – they’re going to have rough moments. However, jobs often have a lot of good things going for them, too. Focus on the good things – decent people, tasks you don’t mind doing, decent pay. Let the good things be your guide.

What you’ll find is that if you don’t dread your job, you’ll probably perform better there and build better relationships, and that will do nothing but help your career.

I Want to Buy a House or Car That I Can’t Afford

Don’t buy that house or car you can’t afford.

If you budgeted a certain amount for a car or a house purchase and you’re trying to find some excuse to make it okay to spend more, the truth is that the only person you’re letting down is your future self. You’re handcuffing your future self by saying, “Guess what? You’re going to be throwing money hand over fist into this car or house? Say goodbye to a lot of the perks of your life!”

The only sensible way to shop for a major expense like a car or a house is to figure out how much money you can afford to spend first, before looking at anything, and then use that as a filter to see what you can even bother looking at. If you don’t like what you see, then keep saving.

Guess what? There are always going to be nicer cars and nicer houses than what’s in your price range. The people that manage to swing those nicer cars and nicer houses are sacrificing other things in their life – they’re tied to a high-pressure career or have huge expectations on their shoulders or are facing a hidden mountain of debt.

Don’t put yourself there. Don’t burden your life with an expense you can barely carry. You’re signing yourself up for a lot of misery by doing it.

Don’t ever buy that house or car that you can’t afford. It is a giant mistake.

I Want to Lend a Friend or Family Member Money

Don’t lend money to friends or family members.

I don’t care how much they need it. I don’t care how much you want to help.

No one likes their lender. No one feels happy warm positive feelings about making a mortgage payment. No one feels strongly affirmed in a relationship when the person lending them money insists on payment. No one feels great hanging out with the uncle that they “forgot” to pay back.

Debt between friends and family members is poison. It will haunt you forever unless they happen to miraculously subscribe to the perfect expectations you have for them in your mind – and they almost never do, if they’re in a situation where they’re borrowing from family members.

If you really, really, really want to financially help someone, make it a fully no-strings-attached gift that they never, ever have to pay back. Ever. This isn’t a secret hidden loan. This is a gift. They never have to pay you back.

That way, there is no burden of expectation. There is no relationship on the line. There is no family tension involved. Yes, you’ll be out that money. That’s okay.

My Friend or Family Member Won’t Pay Back the Money They Owe Me

Either forgive them the debt or kiss the relationship – and possibly other relationships by domino effect – goodbye.

Right now, you’re speaking like a lender in a situation with a bad borrower. You’re not speaking like a friend or a family member.

You have to decide, right now – are you a lender interacting with a borrower, or are you a friend interacting with a friend?

You can’t have it both ways. One relationship is borne out of love. The other is borne out of contractual obligations. Love and contractual obligations don’t mix.

You can pursue this debt doggedly and probably eventually get paid back, but if you do that, you’ll almost assuredly have done irreparable damage to the friendship because you acted like a lender toward a bad borrower and that’s not an act of friendship.

On the other hand, you can just forgive the loan entirely and maintain the relationship. You will have learned something about that person, of course, but that doesn’t exclude a good friendship or familial relationship going forward.

You have to choose. It is exceedingly rare to have it both ways in a situation where a friend or family member is failing to pay you back in the expected way.

Are you a lender? Or are you a family member/friend?

I Can’t Afford to Pay My Bills

There are many, many paths to this conclusion. They all boil down to one thing.

You are spending more than you earn. You have to stop that.

“But I can’t!” Yes, you can. You’re just refusing to even consider a lot of the moves you might need to make to put yourself in a position where you’re spending less than you earn.

Sell your house and move to a small rental. Sell your car and buy a used beater. Eat all of your meals at home. Ditch home cable/satellite and internet. Ditch your cell phone.

If you’re reading those things and thinking, “I’m not going to do that,” then you’re choosing to stay in a situation where you can’t afford to pay your bills.

There is no magic recipe. There is no magic solution. The only way you can keep your bills paid is to spend less than you earn, and the only way to get there quickly is to make some major cuts to your spending. (You can also earn more money, but that generally takes more time as it often involves a job hunt and probably a career reboot.)

If you think that you “deserve” certain things, think again. No one “deserves” a nice house. No one “deserves” a nice car. No one “deserves” an iPhone with unlimited data. People earn those things. They’re perks. If your perks are keeping you from keeping your bills paid, then you’re going to have to dump some perks.

“But that sounds miserable!” It might be miserable, but, again, it comes down to mindset. Are you looking at and obsessing over the things you don’t have, or are you appreciating the things you do have? Are you depressed because you don’t have a mansion, or are you glad that you have any roof at all to keep the rain off your head? Are you depressed because you don’t have a shiny new car, or are you glad that you have the means to get around at all? Are you sad because you can’t afford exorbitant treats and trips, or are you happy because you just made some killer scrambled eggs for yourself?

Is the glass half empty or is the glass half full?

If the glass is half full, not being able to pay your bills is an easy problem to solve. You cut a lot of stuff, sure, but you get your bills in order. There’s a positive thing there.

If the glass is half empty, then the solution to your problem isn’t in the dollars and cents. It’s in your head. Once you learn to appreciate your situation as it is, then solving that problem is easy. If you can’t stop thinking about what you don’t have, then the problem will always be hard.

I Am Panicking Because My Credit Cards Are Maxed Out and I Can’t Get a New One

This is something of a cousin to the above question, except this person is often in a situation where they have the resources on hand to right their ship, but they’re just treading water and probably have a pretty bad credit rating.

Generally, the people in the “I have six credit cards that are all maxed out” situation are people who are otherwise in really good financial shape but have lost all grip on their day-to-day spending habits. Their household income is often really high and they’ve gotten so used to having plenty of money that they begin to charge things to the credit card without thinking about it and soon… boom. They’ve got a handful of maxed-out cards and don’t know what to do next.

I’m honestly stunned how often I hear some variation on this story.

The solution here is simple: get back to basics. Stop using plastic for purchases entirely until you get those bills paid down and get back in touch with the realities of your financial situation. Live entirely out of your checking account, and do it after paying all of your bills and making a big extra payment to the credit card with the highest interest.

Many people in this situation are often married and are not exactly making their credit card situation clear to their spouse. You have to come clean. Yes, it’s going to be hard, but if your debts are so bad that everything is maxed out and you’re juggling cards, you’re going to need help fixing things.

Sit down with your spouse, reveal everything, accept that your spouse is probably going to be pretty upset with you, and then work together to build a plan to fix it. Here’s my guide to creating a debt repayment plan that will work. I should know – it’s how we went from five figures in credit card debt and a bunch of other debts to complete debt freedom with a fully paid-off house.

I Need a Financial Advisor

Unless you are incredibly wealthy, a financial advisor serves solely to excuse you from having to learn about your finances and investments yourself. Everything you really need to know about managing your money and investments, up to the point of being exorbitantly rich, can be found at your local library and online, for free.

It’s even more troubling than that, though. If you’re trusting all of your finances to a financial advisor without thoroughly understanding what their decisions are, you’re placing most of your financial future in the hands of someone who you hope will have at least a little of your best interests at heart. Many – but not all of them – do.

Without knowing your finances yourself, without knowing your options, you have no way of knowing whether or not that advisor is making good choices on your behalf. Of course, when you actually invest the time to know your own finances and know your options, you’ll realize that you don’t actually need an advisor at all for anything beyond a simple second pair of eyes to check your work (a quick session with a fee-based financial advisor is the right path).

Do you need a financial advisor? My guess is that if you’re writing to The Simple Dollar, the answer is almost definitely no. You might need a lawyer, though, if you’re concerned about legal implications, but if you’re just concerned about making good financial and investment decisions, the best thing you can possibly do for yourself isn’t hiring an advisor.

It’s learning.

Head down to the library, get some books on investing, and start reading. Educate yourself. Become the master of your own destiny. Put your money someplace safe while you’re learning, like a savings account, and then make moves when you begin to understand them.

Not only will you feel far better about your finances, you’ll also avoid the cost of a financial advisor almost entirely for the rest of your life.

Nothing beats education.

I Want to Get Married but My Partner Has Very Different Financial Values Than Me

So, here’s a quick lesson about marriage. There are really only three things that matter: mutual love, mutual respect, and open communication. People with drastically different values can make a marriage work if they communicate.

What you have in this situation is two people with very different financial values. Typically, one person is fairly frugal and a saver, and the other person is a spender and doesn’t really worry about it at all.

If you have mutual love, mutual respect, and open communication, you can overcome this. You can figure out a solution that works for the two of you, where each of you compromise a little bit to find something in the middle that both of you can live with.

In the end, a lot of marriage is compromise, and compromise is the end result of a mix of love, respect, and communication. When you throw a problem into a batch of love, respect, and communication, you get good compromises.

So, ask yourself this. Do you feel completely comfortable talking about this difference in values between the two of you, and does your partner feel completely comfortable talking about it, too, without holding anything back? Do you have enough respect for your partner to understand that they have somewhat different values in this area than you and that they don’t have to completely change for you, and they have the same feelings back?

If you feel hesitant to say anything other than an unquestioned yes to those questions, then you need to very, very strongly question whether or not you should get married.

Remember, it is very possible to love a person deeply, but also recognize that there are differences between you that make it impossible to build a relationship together that will stand the test of time. That’s okay. What’s far worse is to try to force a lifelong commitment into a relationship that isn’t built for it, because it will eventually come crashing down in an incredibly painful way.

I’m Already Married and My Partner Has Very Different Financial Values Than Me

What do you do if you’ve already made that commitment and then you recognize that you and your partner have very different financial values?

Well, most of the above still applies.

Do you feel completely comfortable talking about this difference in values between the two of you, and does your partner feel completely comfortable talking about it, too, without holding anything back? Do you have enough respect for your partner to understand that they have somewhat different values in this area than you and that they don’t have to completely change for you, and they have the same feelings back?

If you do, then sit down and talk about it. Wrap this difference in values in a warm cocoon of communication, love, and respect and you’ll find yourself with a solution fairly quickly.

If you don’t… then there are deeper relationship issues going on than money issues. There’s a trust and a respect issue there, and it’s one that you’re going to have to solve before you can address money issues.

Those types of deep wedges – trust, respect, communication – are very difficult to correct. They can be fixed, but they take a real commitment from both sides that the relationship is worth it and that they’re willing to work for it and make changes within themselves.

Honestly, if that’s the path you’re going down, you need to be looking at a counselor who can actually help fix your marriage. Those types of issues are beyond the scope of a personal finance site.

I Want to Be a Stay At Home Parent

This is a surprisingly frequent issue that comes up in reader questions. A person is suddenly looking at the possibility of having a child in a much more serious way than before and that person has come to the realization that they want to spend that child’s earliest years at home with them. Many parents want to bridge the gap between birth and entry into school; some may want to homeschool after that, while others may simply want to spend the first year or two at home.

My answer to this is simple and direct: Can you live on your spouse’s paycheck? If yes, then you can do this. If not, then can you and your spouse work together to develop a lifestyle that works on just one paycheck?

The ability to be a stay-at-home parent is a real perk for many people, a huge positive. It can even be a pretty big positive for the spouse that’s still working, because it means that the child is in a very safe and nurturing environment.

However, that big positive comes with a drawback: less household income. There is no magic way to slice this. If one member of the household stops working, there is going to be less money coming in.

So, what can you do? You prepare. You start changing your lifestyle now so that you know what it is like to live on one paycheck. You move, if necessary. You try living on just one paycheck, and use the other one entirely to secure and stabilize your finances by building an emergency fund, paying off debts, paying off student loans, and so forth. If stay-at-home parenting is really something you want to do and you’re both on board with it, start now. Start before that baby is ever on the way.

Another tip: When you have a child, whether you’re a stay-at-home parent or not, familial support is golden. It has incredible financial value. It saves on a lot of supplies, as you’ll probably have access to hand-me-downs and doting relatives. It saves on child care, as you’ll often have free babysitting available. It saves on de-stressing, as you’ll have people to talk to and offer suggestions. It helps immensely, in ways that you won’t think of or see until after the child is born. So, if you’re considering children at all, consider whether it makes sense to be near family.

Sometimes, these preparations will be enough. You’ll realize that you can make this work and you can be a stay at home parent. Sometimes… it won’t be enough. You’ll find that there are some things you just can’t decommit from, whether it’s your house or aspects of your lifestyle or something else. That’s okay, but it should come with the recognition that you’re swapping stay-at-home parenthood for those things that you won’t give up. Recognize what things you’re really comparing and make sure you’re okay with your choice.

Final Thoughts

I really enjoy writing the Reader Mailbag columns each week because I’m constantly reminded of the human side of personal finance. It really isn’t just numbers. It really isn’t just formulas to follow. It’s about lives and the choices we’re constantly making to shape them.

More than anything, the mailbag shows me that people all over the world, from all walks of life, have a lot of similar concerns. They’re concerned about the people that they love the most. They’re concerned about what their future holds. They worry about their work. They worry about their dreams and whether they’ll be able to achieve them.

When I write the mailbag, I love highlighting stories that are, on the surface, very different, but when you start looking deeper, you realize that there’s a lot there that seems familiar. We all want better things, for us, for our families, for our communities, and for the world. We all have fears and worries and hopes – some are different, of course, but a lot are very, very similar.

We’re all just people.

When you go about your business today, look at the people around you and think to yourself that a lot of those people have or have had financial worries and thoughts a lot like your own. They may feel frustrated in their jobs. They may be wondering whether their relationships and families and friendships can stand up to financial pressures. They may yearn for things that are just out of reach. They may be worried about their immediate future or their long term future.

Just like you.

Have a great day.

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6 in 10 Americans don’t check their credit report regularly – which is a bad idea.

To check your credit report, or not to check your credit report – that is the question. And for 59% of Americans, the answer is not to check your credit report, or at least not check it often, according to the results of a national survey of 1,000 people released in August.

The survey revealed that only about four in 10 (41%) of Americans actually check their credit report once a year or more often, which can be a mistake. Your credit report is a huge source of information on how to improve your credit score, as well as a great way to keep an eye out for signs of identity theft.

If you’re among the six in 10 people who aren’t checking your credit report regularly, here’s what you need to know:

What is a credit report?

A credit report is a detailed statement of your credit history. Reports are generated by and provided to lenders by one of the three major credit bureaus – Experian, TransUnion, and Equifax. Your report will contain information including:

  • Identifying information
  • Credit accounts
  • Credit inquiries
  • Public records and collections

Everything except for your identifying information is used to generate your credit score – a three-digit number to help lenders identify your creditworthiness based on where your score falls within a set range.

Why is a credit report important?

Your credit report is important because it’s used by lenders to make financial decisions about you. The information provided on your report is what determines your credit score. If you’ve ever opened a credit card, taken out a car loan, applied for an apartment to rent, and so on, then you’ve had someone check your credit score and run a credit report on you.

That’s why it’s so important that your credit report is up to date and accurate. If you aren’t checking your credit report at least once a year (which is free to do), then how do you know everything is correct, and you’re getting the most favorable terms?

Or, how do you know that someone hasn’t opened a couple of credit cards in your name and gone on a spending spree? Your credit report will show any and all accounts that are open in your name, as well as any companies that may have inquired about your credit report. If you see something you don’t recognize, you can dispute it (more on that later) or take steps to protect your identity.

You may think checking your credit report doesn’t matter if you already know you have bad credit or no credit history, but it’s still important. Understanding your relationship with credit and then taking proactive steps – such as using a credit card for bad credit responsibly – will help improve your score. For instance, if you look at your report and see you often miss deadlines, you can sign up for payment reminders or set a calendar alert.

How do I get a free credit report?

To request a copy, visit AnnualCreditReport.com – the only authorized website – or call 1-877-322-8228 and provide your identifying information, such as name, address, Social Security number, and birth date. You can request a free copy of your credit report once every 12 months from one or all three of the credit reporting bureaus. This means you can get one every few months or all three at once depending on how often you’d like to check it.

How do I dispute a credit report error?

If you find an error on your credit report, you can dispute it by contacting both the credit reporting company and the organization that provided the information (i.e., your loan lender). The Federal Trade Commission recommends that you submit a letter in writing with copies of your documents via certified mail.

Credit companies must investigate any disputes brought up to them and then inform you of the decision in writing. Additionally, information providers who continue to report disputed items must notify the credit reporting company about your dispute. Information that is found to be incorrect or incomplete must be updated or deleted from your report. If a dispute is not resolved, you can request that a statement of dispute be included in your file.

Your credit report is an important source of information to both you and potential lenders. That’s why it’s important to join the 41% of Americans who check it regularly to ensure that everything is accurate and complete.

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Friday, September 22, 2017

The Little Things

Here’s a list of wonderful things I noticed yesterday that cost nothing (or next to it):

Waking up naturally, without an alarm clock going off and forcing me awake.

Feeling the warmth of my youngest son in bed next to me, still sleeping peacefully after he climbed in during the night after a bad dream.

Running my tongue along the smooth surface of my freshly-brushed teeth.

Tasting my latest batch of cold brew coffee, made from freshly ground beans that went straight from the grinder into the filter and left to steep in the fridge for about 20 hours before serving it.

Seeing the look of delight on my youngest son’s face when I shook up the last little bit of milk in the milk jug and added some milk foam to the top of his glass of milk.

Reading my daughter’s earnest answers on her application for a student council position.

Watching my children dart across the yard to the school bus, backpacks firmly in place on their backs, waving ahead at friends that they see already waiting for the bus.

Feeling the gentle soreness in my hips and back after a lot of exercise yesterday.

Meditating for what was supposed to be ten minutes, but not hearing the “finish meditating” tone on my computer and realizing that I had just meditated for about twenty minutes, and then feeling really good for some reason.

Feeling the nice strain in my legs when I stretch them out in various ways.

Feeling the crunch of the first bite of an apple.

Diving into a one hour writing block, then looking up at the clock to find that two and a half hours have passed and I’ve managed to complete a ton of writing.

Listening to an episode of one of my favorite podcasts while walking around my neighborhood and then thinking about that episode after it stopped playing.

Seeing a smile of appreciation from a neighbor down the block when I helped her set her trash can back up and refill it after a dog apparently dug into it.

Feeling the warm feeling of sunshine on my arm when the sun came out from behind a cloud when I was on my walk.

Smelling the aroma from a crock pot full of soup as I came back home from my walk.

Taking that crock full of soup to a youth group’s evening event, so they’ll have something to eat, and swapping a few humorous stories with the event’s organizer.

Reading a paragraph that I had just written that absolutely nailed what it was that I wanted to say.

Hearing the joyful barking of our family dog when the dogs from next door came out in the yard to play with him.

Reading a thoughtful Facebook message from a reader.

Having a long conversation with my sister-in-law about her career path.

Completing an article that I’m really happy with and feeling that burden lifted from my shoulders.

Seeing my email inbox reach zero … for the moment.

Exchanging good-natured insults with a group of friends that get progressively more creative (and funnier) as the day goes on.

Being surprised when my oldest son walked in the door after school as I had completely lost track of time.

Watching my daughter talk to her pet toad like an old friend.

Reading the conclusion to a really good book I checked out from the library that left me thinking for the rest of the day and is still dancing around in my mind.

Taking a quiet picture of my three children piled together side by side on the couch, each of them reading a book.

Petting our family dog and then watching him gently roll over onto his back to have his belly rubbed.

Having a thoughtful conversation with my mother about the decline of American malls and whether anchor stores really have any purpose any more.

Playing a board game with my oldest son and seeing his eyes glow when he revels in his victory.

Working with my youngest son on his math homework and realizing that he actually knows all of it already but that he wants to do things this way because he loves math and he loves spending time with his dad in appreciation of something that he loves.

Dancing with my daughter in the kitchen to a song from my high school years, laughing when she calls it “an oldie,” and then suddenly not laughing when I realize she might be right.

Getting the kitchen really clean.

Seeing my wife come in the door after work, telling her she looks beautiful and giving her a little kiss, and seeing her still blush a little at those words, even after all those years.

Playing a game of chess with my youngest son and watching the look on his face as he puzzles through why I seem to be just letting him take my queen, and loving the fact that he’s aware enough to realize it’s a trap and insightful enough that he’s probably well down the road to figuring out why it’s a trap.

Reading a great article on the intellectual impact of smartphone use on young people.

Watching my daughter pull out a pencil and start free-sketching on a piece of paper and within ten seconds pull off a perspective trick that’s far beyond anything I could pull off and make that trick look utterly effortless.

Feeling surprised when I realize that the children actually did a really good job of cleaning up the living room, far above what I had expected from them.

Planning a dinner party with an old friend and realizing that they’re perhaps even happier to see us than I am to see them.

Taking potatoes from our garden and immediately washing and slicing and grilling them, wrapped in aluminum foil with a bit of butter and chives and salt.

Hearing my oldest son’s tale at the dinner table about losing one of his last “baby teeth.”

Having a long dinner table conversation about the unusual behavior of a child at school, trying to help my children make sense of it in a positive way, and realizing that they do feel some empathy for this child, even in his strangeness to their sensibilities.

Practicing some of the trickier moves from taekwondo with my children, who are far more practiced at them and can do them with ease.

Having a long conversation with a couple of friends that stopped by.

Learning a high-five sequence from my daughter, something that apparently she does with her friends at school.

Reading a bedtime story to my children, another chapter in a grand adventure book checked out at the library.

Plotting an after-school project with my two sons before I turn off their light in their room.

Planning out the rest of the week and realizing that things are quite doable and a lot of things are actually ahead of schedule.

Feeling warm water run across my sore back and hips and knees, and scrubbing them down with an almost hot washcloth in the shower.

Sitting with my wife at the kitchen table, debriefing the day and holding each other’s hand before we go to bed.

Running my hand along my wife’s side as we’re both beginning to drift off to sleep.


Yesterday, I decided to write down everything that happened that brought genuine happiness or joy in my life. Virtually all of it was free. Virtually all of it is listed above.

Life is abundant with joy if you just look for it. It bursts out of all of the little things almost constantly. Life offers up this rich abundance of good things without even needing to spend a dime. It is truly limitless in its beauty.

The world provides more blessings than we’ll ever need, without ever opening our wallets for anything beyond the bare minimum. The only trick is opening our hearts to it.

Have a wonderful day.

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Thursday, September 21, 2017

Why You Shouldn’t Shy Away from Credit Cards

Anywhere you look, you’ll find financial horror stories about people who found themselves deep in credit card debt. They tend to highlight factors that contributed to their plight like the relative ease of making charges with a credit card and how paying the monthly minimums didn’t help. The truth is that credit cards are a tool for building good credit and making purchases. And, just like any tool, they can be misused and that’s when trouble starts. The fact of the matter is that credit cards are far more valuable than they are dangerous and the relative safety of a debit card is no substitute for the importance of good credit.

Credit cards vs. debit cards

In a recent personal finance study, over 2,000 U.S. adults were asked about their primary payment methods for everyday purchases. Of all of the takers, more than 2 in 5 Americans said they primarily used debit cards for their everyday purchases. That was 44% of the people surveyed while only 34% said they primarily used credit cards.

Perhaps most interesting is that almost three-quarters of the people who claimed to use debit cards (71%) said that they had also been in credit card debt. And the real kicker: 1 in 4 of the Americans who took the survey believed that purchase activity on a debit card actually impacted their credit history.

The debt deal breaker

The results of the survey speak volumes when it comes to why so many Americans prefer debit cards. Unlike credit cards, your debit card is running off money that you actually have in a checking account. This makes it a lot harder to go off spending money that you don’t have. But is fear of debt really a good justification to avoid all the value that credit cards can bring?

Simply put: no. The value of having good credit and all of the opportunities it presents more than outweighs the potential for falling into debt. On The Simple Dollar, we’ve spoken a lot about credit card debt and how to get out from under it. When you get right down to it, the potential for debt should not be a deal breaker for those shying away from credit card use. Part of having good credit means learning and developing responsible credit card use.

And for anyone who thinks their dreams of building good credit are dashed by bankruptcy: there can be life after bankruptcy.

Why good credit is so good

Unfortunately, for the survey-takers who thought they were impacting their credit history by using their debit cards, that is roundly false. While you can swipe a debit card the same as you would a credit card, at the end of the day, the purchases made do not factor into a good credit history. And you need good credit, which is why you need to use a credit card.

You can think of a credit history like a resume of your spending habits. It’s your reputation for handling money and paying back what you owe. Whether you’re trying to put a down payment on a nice, fancy car or get approved for a lease on a swank condominium, your credit history is one of the biggest deciding factors.

And, in order to have good credit, you need to use a credit card. Now, we’ve talked a lot about how to build good credit. It obviously doesn’t mean you should be living beyond your means, but in order to amass a decent credit score, you need to prove you can be trusted with the freedom of a credit card. You can’t do any of that with a debit card, unfortunately.

Credit cards are your friends

At the end of the day, how you choose to make your everyday purchases is up to you. However, understand that by deferring to debit cards, you severely limit your opportunities down the road. While credit cards present the potential risk of credit card debt, it’s not a guarantee and is easily remedied with responsible use. Plus, the value that having good credit can bring more than makes up for the possible risk.

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The ‘Drops in a Bucket’ Mindset

“Don’t you ever get tired of just saving money?”

“Why don’t you just live a little? You have money in the bank and can afford it!”

I’ve heard these things for many years from my own internal voice of conscience. I’ve also heard variations on it for many years from different people in my life.

I can afford this little treat for myself, so why not indulge? It’s just a little thing in the big scope of things, so it doesn’t really matter, right?

This is actually a fairly compelling argument on the surface. Splurging on a $10 treat does in fact seem pretty tiny in comparison to the amounts one would need to retire early – $1 million or so, at least. $10 is less than what most people earn in an hour of work, while $1 million would take most Americans 15 years to earn. $10 doesn’t seem like much, but for many people, $1 million seems like a huge sum. How can $10 possibly have anything to do with $1 million?

Drops in a Bucket – Literally?

Over the summer, I was trying to illustrate this concept to my children. I took two buckets into the backyard. One bucket I sat under a water spigot, which I turned on just enough so that a drop of water would fall out every few seconds. I then went around to the spigot on the other side of the house, turned that spigot on to drop water every few seconds, and then sat the bucket nearby not catching the water.

The first thing I told them was to imagine that bucket as a big life-changing goal that they want for themselves. “When this bucket is full, you might never have to work again for the rest of your life. When this bucket is full, you’ll have a fifth dan black belt in taekwondo. When this bucket is full, you will have earned a Ph.D. in your area of interest.”

At the first spigot, the one where water was dripping into the bucket, I told them to imagine each drop going into that bucket as being a dollar saved or a practice session complete or a study session complete. A drop represented a dollar put into the bank. It represented a 30-minute taekwondo workout. It represented a 30-minute study session.

At the second spigot, the one where I just let the water drip on the ground, I told them to again imagine each drop as being like a dollar or like 30 minutes of free time. When it drops on the ground, that means you spent that dollar on something forgettable or you spent that time watching a random show on Netflix. Sure, it might be fun, but within a few seconds, that drop is gone. It’s absorbed into the landscape of everyday life.

After that, we spent a few hours doing other things. I know we went on a bike ride and did some cleaning in the house. I had set an alarm on my phone to remind myself to look at those buckets in about six hours, so when my alarm beeped, I gathered the children and we went out there to look.

First, we looked at the empty bucket. The ground was damp, but nothing had really changed. It was still the same old area.

Then, we walked around to find the other bucket. It was mostly full with water. Drop after drop, our goal had been mostly achieved. Again, things were largely the same over there except now there was a mostly-full bucket on the scene, a major life goal almost complete.

Those drips and drops of dollars saved and practice sessions and study sessions added up to a major change.

The Reality of Drops in the Bucket

Of course, the reality of building toward huge goals is different than this analogy. In the real world, each and every drop in the bucket is a decision point. Our lives do provide us with a steady trickle of money and time, but as it comes to us, we decide how to use it.

$10 comes along. Are we going to put it in the bucket, or are we going to spend it on a coffee and a bagel?

Half an hour comes along. Are we going to use it studying for our goal, or are we going to use it to watch SportsCenter?

The real challenging part is this: Making the short-term choice – spending the money or time on something fun – isn’t inherently the wrong choice all the time. I might be choosing between spending half an hour with my oldest son playing a game together or spending it exercising. I might choose between spending $10 on lunch when I’m going out with a friend or putting it in the bank.

Those choices are hard ones. They’re all hard ones. It’s a seemingly endless sequence of judgment calls.

What we do, then, is create shortcuts for ourselves. We try to reduce that judgment call down to instinct or to very simple thoughts so that we’re not paralyzed with indecision.

The problem is that when most people trust their instincts, they end up going for the short-term benefit. At our core as humans, we’re short-term thinkers. We’re thinking about how to acquire short-term food and shelter and comfort, just like our ancestors on the savannah. We don’t instinctively consider our lives 10 years from now. We might consciously think about it, but it’s very hard to instinctively consider it.

So we end up wasting a lot of droplets on short-term things, and then we wonder why it seems like our bucket will never fill up.

The people that succeed in life are the ones that figure out how to get most of their droplets in the bucket. The people that run in place seem to mostly have their droplets fall to the ground.

From Droplet Waster to Droplet Collector

The key question, then, is how does a person move from being someone who lets most of the droplets fall to the ground to a person who collects more of their droplets in the bucket?

In other words, how do you move from using your time and money mostly on short term pleasures toward using your time and money for achieving long term goals?

I’ll be honest – I don’t have a perfect recipe for this that works for everyone. What I do have, however, is a recipe that works pretty well for me. It’s not an absolute shift, mind you, but when I use these tactics in my life, I find myself unquestionably putting more of the drips and drops of my life into my various buckets, and letting fewer of them just fall to the ground, wasted.

Here are the strategies that really work well for me.

Articulate clear long-term goals for myself and develop clear plans for those goals. There’s a giant gap between daydreams and goals.

Daydreams are vague ideas of things you might like to achieve in the future but aren’t really taking any sort of action towards. Thinking about how you want to lose weight or you want to save for retirement is nice and pleasant, but it doesn’t achieve anything. It’s just empty thoughts if you don’t carry it forward with action.

A goal, on the other hand, is something that’s concrete and tangible. Not only is it a true promise to yourself, but it’s also a way to turn a vague daydream into something clear and specific to work towards.

Most of the time, I’m working on several goals for myself at the same time, spread across several areas of life. I almost always have some kind of personal growth goal going on. I usually have a fitness goal going on. I usually have a hobby-oriented goal or two.

These are (typically) are big goals, ones I won’t achieve quickly. They’re going to require consistent effort over time. Things like building a 12 month emergency fund while saving 12% of your income for retirement or reaching a target body weight or achieving a black belt in taekwondo or running a 20 minute 5K are things that are possible, but they’re not easily achieved in a day. They take time and consistent effort – lots of droplets in the bucket, in other words.

I usually define and refine goals for myself using the SMARTER rubric. SMARTER goals are made up of seven parts:

“S” is for specific, which means that a good goal is very clear on what you’re trying to achieve. It’s not enough to say you want to get better at something or you want to save money. You need to state exactly what you want to be able to do or exactly how much you want to save.

“I want to save money” isn’t specific. “I want to save $500,000 for retirement before I reach age 55” is very specific.

“I want to get in better shape” isn’t specific. “I want to run a 5K in under 20 minutes” is very specific.

“I want to lose weight” isn’t specific. “I want to lose 100 pounds” is very specific.

“M” is for measurable, which means that it’s extremely easy not only to determine if you’ve achieved the goal, but how much progress you’ve made toward that goal. This usually means identifying your goal in terms of a number that you can work toward.

“I want to save enough money to retire on” isn’t measurable. “I want to save $500,000” is measurable.

“I want to feel more fit” isn’t measurable. “I want to earn a black belt in taekwondo” is measurable.

“I want to learn more” isn’t measurable. “I want to read and understand Bertrand Russell’s History of Western Philosophy” is measurable.

“A” is for achievable, which means that it’s realistic for you to be able to do this with sustained effort. You might have a goal that will cause truly amazing things as a consequence, but the goal itself ought to be reasonably achievable.

“I want to run a three minute mile” isn’t achievable. “I want to run a 20 minute 5K” is achievable for most healthy people.

“I want to save a billion dollars” isn’t achievable for the vast majority of us. “I want to save an amount equal to ten times my salary” is achievable for most of us.

“I want to read every great book about the Civil War” isn’t achievable for the vast majority of us. “I want to read Shelby Foote’s Civil War trilogy carefully while making notes” is definitely achievable.

“R” is for relevant, which means that the goal is in line with things that you want out of life. This should be centered around something you want, not something you’re doing to make someone else happy.

“I want to save for retirement” isn’t a relevant goal if you never intend to retire. “I want to plan for financial independence as early as possible so I can control my career and time choices” is a relevant goal.

“I want to earn a black belt in taekwondo” isn’t a relevant goal if you’re just looking to improve physical fitness. Instead, look for a goal very relevant to your own personal fitness goals – if you intend to lose weight, then choose a goal centered around fat burning and not a mix of focusing and flexibility.

“I want to read this really challenging philosophy book” isn’t a relevant goal unless you have a deep interest in philosophy. Instead, choose learning goals that are oriented around your personal curiosity, not some vague idea of what will make you seem “smart.”

“T” is for time-bound, which means that you’re committing to completing your goal within a certain time frame. Without some sort of time boundary, slow or even nonexistent progress toward a goal becomes acceptable. It also helps you break down the goal into smaller pieces that lead to the goal within your timeframe.

“I want to save $500,000” isn’t time bound, but saying “I want to save $500,000 before I turn 60” is time bound.

“I want to earn a black belt” isn’t time bound, but saying “I want to be ready to test for my next level of belt at every testing interval until I reach black” is definitely time bound.

“I want to read Shelby Foote’s Civil War trilogy” isn’t time bound, but saying “I want to read Foote’s trilogy by the end of the year” is definitely time bound.

“E” is for evaluate, which means that, on a regular basis, you step back and reconsider your goal and what you’re doing to achieve it. Do you still want this goal? Are the steps you’re taking toward it working?

I’ve found that a weekly reflection on my ongoing goals is perfect for this. I simply sit down and go through my list of ongoing goals. Am I still engaged with this goal? How did the past week go?

“R” is for readjusting, which means that you’re making changes to your goal or to the steps you’re taking toward that goal based on evaluation.

If you decide that you’re struggling with a goal, spend some time considering if it’s the goal itself or the route you chose to get there, and then adjust accordingly and re-evaluate later.

The truth is that SMARTER goals are really useful for me in terms of achieving long-term things because they do a great job of translating that long-term thinking into short-term action. I find that a really good goal-oriented planner, like the Full Focus Planner or the SELF Journal or the Panda Planner, work really well for this. (I’ve used many such planners in the past and am currently using the Full Focus Planner… perhaps at some point I’ll do a comparative review.)

Setting a great goal that leads perfectly into daily action and re-evaluating it regularly is a really big part of moving your life’s droplets into big goal buckets, but there are other strategies that are key, too.

Automate a lot of long term financial goals, which takes a lot of day-to-day money decisions right out of one’s hands. I’ve found that simply automating a lot of my financial transactions goes a very long way toward achieving financial goals.

Whenever income arrives in my checking account, a number of automatic things occur. Some of it is shuffled off to investments. Several bills are automatically paid. A little bit is pushed into savings to continue growing my emergency fund.

The small amount that’s left is just money that can be used for more flexible purchases, like food and household supplies (and hobbies and entertainment). In general, I can spend that money fairly freely because I know my financial goals are taken care of.

If you have long term financial goals, you can easily direct the droplets of your income into that long term goal by just automating things. Take the daily decisions completely out of your hands. Trust in automatic transfers and bill pay to ensure that the bills get paid and that your investments grow. It’s easy – most such transfers require little more than filling out a form, and then you just forget about it and they happen automatically, either on a particular date or in response to a deposit in your account.

Use “time blocking” to ensure that one is using a lot of my day effectively, and use those blocks to take daily steps toward your goal. Time blocking has been an absolute godsend for me over the past year. It’s helped me keep pace with a lot of different long term initiatives and projects I had for myself.

All you do is make a schedule for the upcoming day, but you block out time for everything. Don’t leave even a spare hour – if you want to have some breathing time, literally block out time for it.

I literally block out all twenty four hours, including sleeping time, and then I do my best to stick with those time blocks throughout the day. I block off time for work, time for personal goals, time for exercise, time for household tasks – you get the idea. I also block off time for hobbies and for “unwinding.”

What ends up happening when I follow this time-blocking routine is that I end up staying on task a lot more during time blocks because I know I have that unfettered free time and hobby time to look forward to. If I know I have an hour later on where I can just devote all of it to something fun, it becomes a lot easier to stay on task right now and do something tough. This enables me to keep making progress on a lot of goals, even when things are busy.

Use downtime, particularly at the start of the day, to reflect on your ongoing goals, particularly ones that require mindfulness throughout the day. It’s never a bad idea to start your day with a review of your goals and a simple reflection on what you can do today to move forward on that goal.

In other words, start off your day with the simple question of how you can put a few more drops into the big bucket of each goal in your life, rather than letting those drops just spill out on the ground.

Sometimes, the goals you have require ongoing behavioral change. Maybe you’re committing to not spending money that you haven’t planned for. Maybe you’re committing to a calorie control regimen. Maybe you’re simply trying to kill online spending. Those goals are perhaps the most important ones for daily review – or perhaps even more frequent than just daily reviews.

Some Final Thoughts

If you dig through the above suggestions, you’ll probably get a picture of how I strive to put more drops in the bucket than forgotten drops on the ground. I develop goals for myself using the SMARTER rubric, break them down into things I can do each day to get there, automate as much of it as possible (particularly with finances), reflect each day on my goals, and then reassess everything each week and see if I’m still headed where I want to be going.

It sounds like a lot of work, but when you come out of a week where you’ve really managed to hit your stride on a lot of things in your life and you can really feel those drops hitting the bucket and moving you in the right direction instead of letting money, time, and energy go to idle waste, it really feels worth it.

Becoming the person you want to be really comes down to making sure the drips and drops of time, money, and energy in your life go somewhere useful, and this is the most effective recipe I’ve found for it.

Good luck in getting your own drops to fall in your buckets!

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Frugal Flu Fighting: Affordable Ways to Avoid Influenza

The flu isn’t just a cold. It’s a serious health issue that can be fatal, especially if a secondary infection like pneumonia sets in.

According to the Centers for Disease Control, the number-one way to protect yourself is to get a flu shot. While not a 100% guarantee, it’s still your best line of defense. The immunization has about an 80% efficacy rate in people under age 60, and works about 50% of the time for those older than 65. Not foolproof – but better than nothing.

Note: Some people don’t trust the flu shot. However, this article will address other, non-vaccine-related options for avoiding this potentially serious disease.

What does the flu have to do with frugality? Lots. The medical costs alone – doctor’s appointments, medicine, hospitalization – cost consumers an estimated $4.6 billion per year, according to the National Institute for Occupational Safety and Health.

The disease results in more than 111 million work absences each year, NIOSH reports. Those who’ve used up their sick days (or never had any to begin with) due to a previous illness, chronic health problems, or just taking time off to care for a sick child simply won’t be paid if they don’t go to work. People who work part-time jobs with no sick days would also have to ask themselves, “How many no-salary days can my emergency fund cover?”

Or suppose your supervisor was already peeved because you’d used all five of your sick days. A case of the flu could keep you out for five more. Should layoffs become an issue, whom do you think the boss will choose: the person who calls in sick a lot or the person who never misses a day? (While some illnesses and conditions are protected under the Family and Medical Leave Act or the Americans With Disabilities Act, employers are often free to terminate an at-will worker if he or she is chronically absent.)

If you have a family, you might need to turn to takeout food if you’re too run down to cook. Even if you’re not the one who does most of the cooking, your spouse or partner might be too busy taking care of (and worrying about) you to keep things humming in the household.

About that family: How guilty would you feel if someone else gets sick because you didn’t make time to get the flu shot? Children – particularly those who are under six months of age – are in a high-risk group. If your baby is too young to be vaccinated, imagine the fear and anxiety of watching your infant be racked with fever, pain, and respiratory distress.

The flu feels horrible. A former co-worker pooh-poohed the risk as well as the severity of the disease — until he got it, that is. He ran a high fever and hurt all over, including the worst headache he’d ever had – one that he couldn’t get away from, no matter how many painkillers he took.

“I wasn’t afraid I would die,” he said. “I was afraid I wouldn’t die.”

You don’t want that. Nor do you want to infect anyone you love. Get the shot!

How to pay less for a flu shot
1. Got insurance? The Affordable Care Act made the vaccination free to anyone with insurance. If you’re on Medicare you can also get vaccinated at no charge.

2. Do an online search for “free flu shot 2017.” County health departments, houses of worship, medical clinics, Women Infant Children nutrition program centers, and other locations near you might offer gratis vaccinations. Or call 2-1-1 and ask about free treatment in your area.

3. Look for a federally funded health center. Since care is provided on a sliding scale basis, you may pay little or nothing for the vaccination. Or visit the National Association of Free & Charitable Clinics home page.

4. The Vaccines for Children program provides free immunization to youths under the age of 19 if they’re un- or under-insured, eligible for Medicaid, or are American Indian or Alaska Native. While some doctors will charge to administer the shot, you cannot be turned away if you’re unable to pay that fee.

5. If you don’t have insurance and no free shots are available in your region, do a little price-matching. According to 20SomethingFinance, the best prices are likely at Costco and Sam’s Club. (You don’t need to be a member.)

Still not convinced? Try these tactics.

No flu shot for you, huh? The second-best defense is a good offense. There are plenty of free (or cheap) precautions you can take:

Wash. Your. Hands. You can’t know who opened the door or pushed the shopping cart just before you did. That person could have been as healthy as a horse or as sick as a dog. Someone in your workplace or even members of your own family might be incubating the flu; according to the CDC, you can be contagious before symptoms emerge.

Thus you should wash your hands regularly to increase your chances of staying healthy. Supermarkets have taken to putting antiseptic wipes next to the carts; use them, especially during flu season. Carry a small bottle of alcohol-based hand sanitizer with you in other situations.

Don’t touch your face. You probably have no idea how often you touch your eyes, mouth, or nose throughout the day – and all three places are a straight shot for the flu virus to enter your body. Become conscious of this habit, and work to change it.

Consider a face mask. Fun fact: Someone who is contagious with or has the flu can infect people up to six feet away. If you take public transit or work in a crowded environment and flu is reported in your area, you might want to wear a face mask. Some people would feel silly doing this. But maybe it’s better to be a little self-conscious than to be sick.

Clean up shared equipment. Advice from the CDC: “Frequently touched surfaces should be cleaned and disinfected at home, work and school.” Another former co-worker brought antiseptic wipes to clean the phone and keyboard he and other employees used by turns. He never seemed to get sick. Maybe he just had a strong constitution, or maybe it was his cleanliness that kept him healthy.

Get enough sleep. Sleep deprivation won’t do your immune system any favors. Social media and the shows in your DVR queue can wait.

Eat a nutritious diet. Among other things, focus on lean proteins, plenty of fruits and vegetables, and whole grains. While some people believe that certain foods will boost your immune system, American Dietetic Association spokeswoman Dr. Christine Gerbstadt says that excellent overall nutrition will enhance your body’s ability to fight off infection.

And if you do get the flu?

Here’s hoping you don’t. But if you develop flu-like symptoms, visit a doctor promptly. Antiviral medicines can reduce the severity of the disease, and they work best if administered within 48 hours of the first symptoms.

(Those symptoms, according to the CDC, are: fever, cough, sore throat, stuffy or runny nose, headache, fatigue, and muscle or body aches. Vomiting and diarrhea may sometimes be present, usually in children.)

After that, stay home. Knowingly exposing co-workers to this disease is just plain wrong. Besides, the more you rest and take care of yourself, the faster the flu will fly. Generally it takes about anywhere from five days to two weeks to get better. Until then, stay in bed or at least lie down on the couch.

Stay hydrated by drinking a lot of water, juice, and tea (but no alcohol). If you run a fever, a drink like Powerade or Gatorade can replenish electrolytes.

Acetaminophen, aka Tylenol, can help both with the fever and the wicked ache. The generic version works just as well and costs less. Cough medicine, antihistamines, and decongestants can reduce other discomforts; check the labels to make sure they don’t interact with any daily medicines you take.

It’s essential that you take only one medicine at a time that contains acetaminophen; too much can cause permanent liver damage. Many popular over-the-counter medications contain it. If the medicine you take for flu symptoms has acetaminophen, make sure your other meds don’t.

You can’t guarantee that you won’t catch the flu. You can take steps to avoid it. Take the illness seriously, lest it take you down.

Related Articles:

Veteran personal finance writer Donna Freedman is the author of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” and “Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition.”

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Wednesday, September 20, 2017

The Soup Stockpile: An Easy Route to Having Tons of Convenient Freezer Soups

The past few weeks have been incredibly busy for our family. Not only has Sarah returned to teaching from her summer break, our children have also returned to school and several fall activities have begun. On top of that, a particularly nasty virus of some kind flashed through our family, bringing a consistent set of symptoms and knocking each family member (except me, somehow) out of commission for a few days. The lazy days of summer are long gone.

Because of that rapid change in daily routine, it has become more and more difficult to consistently get a family meal to the table for dinner each night. We often fall back to relying on very simple staples that Sarah and I can prepare almost on automatic – things like spaghetti with marinara sauce and steamed vegetables or slow cooker lasagna.

Perhaps the most efficient solution to this problem of all, however, are frozen soups.

In our deep freezer, we have a bunch of soup containers, each containing about a quart of soup. By simply reheating two of those containers, we provide a nice bowl of soup to each family member, which can be complemented with a sandwich or a breadstick or some other similarly simple accompaniment, something that we can prepare during the few minutes while the soup is reheating.

This is a fantastic solution on a lot of levels.

First, homemade soup is pretty inexpensive. You can prepare homemade soup at a very low price, as most of the ingredients are things like beans, rice, and raw vegetables. Even in soups that use meat as an ingredient, you’re actually using a relatively small amount. The ingredients just don’t add up to a big expense.

Second, most homemade soups reheat extremely well. The main problem with most reheated food is that it gives off moisture and that some of the solid elements break down a little bit. Neither of those issues are really a problem for most soups. Furthermore, frozen meals that are later thawed and heated often meld their flavors together, which usually helps soups. There’s a reason people often prefer chili reheated, after all.

Third, reheating a soup is about as simple as you can get for family meal preparation. Seriously. If you remembered to pull a container out of the freezer that morning, you literally put the ingredients of that container into a small pot or saucepan, put it over medium heat, and let it warm up, stirring it every once in a while. Meanwhile, you can set the table and take care of other tasks. Even if you forgot to thaw it during the day, you can quickly thaw it in a microwave. There’s almost no effort in bringing a container of soup to the dinner table.

Fourth, the original preparation (and storage) of the soup is pretty easy, too. It’s not very hard to make a big batch of homemade soup, from which you can not only feed your family dinner but also package up a container or two of soup for the freezer in the future.

So, how do you pull all of this off? It’s actually pretty easy.

Make Soup in a Slow Cooker (or Otherwise)

The first step, obviously, is to make some soup. You can use pretty much any recipe that you like, as almost any soup is freeze-able. The key is to make sure that you make plenty of the soup. Make a double batch, if possible.

But how do you make a big pot of soup and cook it if you’re busy? It’s easy. Just put all of the heavier ingredients in a slow cooker in the morning – things like potatoes and carrots and meat – and season it appropriately and add the liquid. Turn it on low and leave it cooking all day. Then, when you get home, immediately add softer ingredients – you can leave them out so that it’s easy to do when you get home. Add things like pasta or tofu or kale at this point. Then, turn it on high and then just serve it half an hour or an hour later – you don’t have to do anything else.

That basic structure works well for almost every soup known to man. We use it for everything from chili and stews to curry soups and bean soups. As long as you just put all of the dense ingredient and the liquids in the slow cooker in the morning, leave it on low all day, then add the softer stuff as soon as you get home, it’s ready to serve an hour later or so. It’s easy.

Save Your Leftovers in Freezer-Safe Containers

When you’re done with eating soup from the slow cooker for dinner, you should have a lot of leftovers. Hopefully, you filled that slow cooker high, so there’s plenty remaining!

All you do at this point is fill up a freezer container or two with the remaining soup. Personally, we use these reusable containers that can go from the freezer to the microwave to the dishwasher without any problems. We bought them as a bulk purchase (24 of them) a while back and they work like a champ.

So, grab one (or two) of those containers and fill it up with soup, leaving about an inch or so of air at the top of the container. Put a lid on it and stick it in the fridge.

The next morning or evening, when the soup is nice and cold, burp the container by just opening it enough to let air in or out, then put a piece of masking tape on the container. Write what kind of soup it is and what day you made it on the label, then pop it in the freezer. You’re done. That’s it.

When You Need an Easy Meal…

Whenever you need an easy meal in the evening, something that can be prepped in just a few minutes, just grab one (or two) of those soup containers from the freezer the night before or even two nights before and put it in the refrigerator. (If you forget, don’t sweat it.) Having the soup thawed when you get home makes it even easier to get it to the table.

So, you come home, you have a container of thawed soup in the fridge. Just pull out a saucepan or a small pot, pour the soup in there, and heat it on your stovetop over medium heat, stirring it whenever you happen to walk by. When it’s bubbling, it’s ready. That’s it – homemade supper is on the table.

What if it’s frozen? That’s easy, too – just thaw it on the low setting in the microwave until it’s mostly liquid (you’ll want to stop the microwave and stir it regularly when doing this), then put it in a saucepan or a small pot on the stovetop over medium heat. Stir it whenever you walk by, then when it’s bubbling, serve it. That’s it – homemade supper is on the table.

If you used the recommended containers above, cleanup is easy, too – you just put the saucepan or pot along with the soup containers in the dishwasher and then they’re ready to be used again.

Some Soup Ideas

Honestly, almost every soup or stew or chili variant you can think of works well with this strategy. I’ve tried it with slow cooker chili, creamy potato chowder, minestrone, white bean stew, and others; my wife’s made chicken curry soup and beef stew this way, too.

You don’t just have to use slow cooker recipes, either. Most soup recipes work fine in the slow cooker provided that you just save the softer ingredients for the last hour or so.

You can, of course, also prepare a big pot of soup without the slow cooker if you’d like, on a lazy afternoon, and just save the leftovers, too.

Other Things to Serve

We have soup with a lot of meals this time of the year because it’s so convenient and so inexpensive. Having things on hand to serve with it, though, can require a bit of creativity and preparedness.

Our default pairing is to have soup, salad, and sandwiches. While the soup is heating, we make a few sandwiches and prepare a salad for everyone to share. The salad and sandwich are served on a plate alongside the soup bowl.

Sometimes, I’ll make breadsticks to go along with it, baking them in the oven or even cooking them in advance and storing them. You can find premade breadsticks at the store, but it’s not hard making them – you just need a simple bread dough recipe and then, when the bread is done, you form the bread into breadstick shapes and bake them on a baking sheet. They turn out wonderfully.

A final trick we use is to turn it into a bit of a “soup bar,” where we put out a lot of things one might want to add to their soup – things like diced green onions, crackers, cheese, bits of diced ham, and so on. This lets everyone “personalize” their soup a little and also bulk it up so it feels more like a hearty meal.

Final Thoughts

I’ll be perfectly honest – without soups in the freezer, we would likely fall back on prepackaged meals some nights, which are quite a bit more expensive, or else we’d order delivery or takeout, which is a lot more expensive.

This simple soup routine saves us a lot of money during the busy times, because it means that we’re having a very cheap dinner – soup – instead of a far more expensive dinner. It works because it almost completely eliminates prep time in the evenings, making it very manageable even on the busiest nights.

If you find yourself with crazy evenings on a regular basis, consider this “soup stockpile” strategy. It’ll save you a ton on food spending while still giving you a delicious home cooked meal when you want it.

Good luck!

The post The Soup Stockpile: An Easy Route to Having Tons of Convenient Freezer Soups appeared first on The Simple Dollar.

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Nine Things We Look for When Buying Rental Property

When my husband and I bought our first rental property in 2007, we barely knew what we were doing. We saved up a large down payment and qualified for a mortgage, then stumbled through the rest of the details without much outside help. Eventually, we found what we thought was a good property for the local rental market. Fortunately, our offer was accepted and we found renters right away.

A few years later, we turned our then primary residence into our second rental at the same time we upgraded to a larger home.

This means that, by the age of 30, we had two rental properties. While we mostly just “winged it” – especially at first – I’m happy to report that we did things mostly right. We bought properties that were in good shape and profitable, and we have managed to keep good renters over the years (with only one big exception). We paid off one of our rental properties earlier this year, and should pay off the other next year.

Our experience as landlords has not been perfect, but I think we did pretty well for people who didn’t know a lot when we got started. Thank goodness for Google, because that’s where we found out nearly everything we needed to know about taxes, writing a lease, insurance, and potential legal issues to be aware of.

With our second property on its way to being paid off, we’ve thought a lot lately about purchasing a third rental home in our area. While our other two rentals are in my hometown of Greenfield, Ind., around 30 minutes away, we would like to purchase a rental (or several more rentals) closer to our current home in Noblesville.

There are a few reasons we’d prefer to purchase a third property where we live now, in Hamilton County, Ind. For starters, rents around here are higher, and rental units aren’t staying empty for long, per my research. Second, the job market around here is extremely solid – especially since we’re just a 30-minute drive from the Indianapolis metro area. Lastly, the schools in our area are great and rated at the top of our state school systems year after year.

In summary, our area isn’t just a great place to live; it’s also a great place to own rental property – at least on paper.

But, we don’t want just any property. And, truth be told, we’re not in a huge hurry. The housing market in our area has been “hot” for a while, so I could envision us waiting a year or more to dive in.

With that being said, here are nine major features we’re looking for in a new rental property:

#1: Profitable Rental Market

Obviously, the #1 factor we’re considering is profitability and the potential for long-term appreciation. Generally speaking, we follow the rule of thumb that rental properties should rent for at least 1% of their purchase price per month.

My goal is to purchase a single-family residence for less than $150,000 that rents for at least $1,500. After studying rents in my area for a while now, I can say with certainty that this is extremely feasible.

Let’s say we purchased a $150,000 property and put down 20%, for a total mortgage amount of $120,000. At 5% APR, the monthly mortgage payment for a 30-year loan would be around $644, including principal and interest, but before insurance and taxes. For a 15-year loan, which is likely what we’d choose, we would owe $949 per month in principal and interest. If our property taxes were around $250 per month and our landlord’s insurance policy was around $100 per month, our total housing payment would be around $1,200.

Since most single-family homes in our area rent for well over $1,500 per month, this means we could turn a $300 profit and pay off our home in 15 years or less. Of course, this all hinges on our interest rate, down payment, the purchase price of the property, and the variable costs of taxes and insurance.

#2: Simple Landscaping

Another factor we look for in rental properties is simple landscaping that doesn’t require a lot of upkeep for us or our renters. While it’s normal in our area to expect renters to mow the grass at the property they’re renting, you can’t really expect all renters to want to plant flowers or keep up with huge beds of plants.

Ideally, we’d like to purchase another property with simple landscaping made up of some bushes and rock or mulch. At the very least, we would want a property with the potential for low maintenance landscaping if we put in some work upfront.

#3: Three or More Bedrooms

Since we live in an area with lots of families with children, it only makes sense to buy a rental property that is marketable to as many families as possible.

Both of our existing rentals have three bedrooms, and that has made them an option for so many families we have barely had any vacancies over the last 10 years. When buying a new rental, I’d prefer to buy a property with at least three bedrooms, but I would be over-the-moon if we found an affordable four-bedroom home that met all our other criteria.

The more bedrooms you have, the more rent you can charge, and the broader your net of potential tenants becomes.

#4: Major Updates Completed

The reality is, most homes in our area within the $150,000-and-below price range need some work. So far, we’ve looked at homes with outdated kitchens, out-of-style bathrooms, and none of the modern upgrades you find in newer, more expensive homes.

Fortunately, all of that is fine with me. I would never put a new kitchen or bathroom into a rental home unless I absolutely had to. Generally speaking, the only upgrades we invest in are needed repairs, new floors, and new paint.

With that being said, I’m still looking for properties with at least a few major updates made. Homes with a newer roof or HVAC system are given priority, even if those components are a few years old.

Basically, what we don’t want is a home that will need a new roof, a new air conditioner, and a new furnace within the next five years. For me to consider a property with an old roof and old HVAC system, the house itself would have to be one heck of a deal.

While we do have an emergency fund for our rental properties, I don’t want to deplete it right away.

#5: Family-Friendly Neighborhood With Great Schools

Since we want a property that is marketable to families with children, the neighborhood is just as important as the home itself. While we live in a great area with plenty of nicer neighborhoods, I want to be picky about where the property sits and what amenities are available nearby.

If we could find a property that’s in a good neighborhood but also near parks, schools, and shopping, that would be ideal. Obviously, the more convenient a property is, the more people will find it appealing.

#6: Low Property Taxes

In the state of Indiana, property taxes are pegged to the gross assessed value of your property and tiered based on the type of property you own. What this means is, you’ll pay a maximum of 1% of your property value in taxes for your primary residence, a max of 2% for other residential and agricultural land, and 3% for other real and personal property. Basically, property taxes on rental real estate are capped at 2% of the gross assessed value of any given property.

That removes a lot of the guesswork of figuring out taxes, but I would definitely want to look at the gross assessed value of any property we considered – and the respective property tax bill – before I pulled the trigger. We all know that assessments can be strangely incorrect at times, and I want to make sure any property I buy has been treated fairly.

#7: Properties With Noticeable Upkeep

How a property has been maintained can make a big difference in the future costs of upkeep. Unfortunately, we have looked at homes that have had very little upkeep for years – and it shows. It’s never a good look when a home you’re visiting hasn’t had the furnace filter changed for years, or when the home’s siding is dirty, worn, or even falling off.

We tend to look for homes that have obviously been cared for, because a lack of maintenance could mean big repair bills for us down the line. While proper maintenance can be hard to detect, we’re looking for a home that has had its HVAC system serviced and cleaned regularly and is free from damage caused by water, wind, or dirt.

#8: Brick or Low-Maintenance Exterior

While one of our current properties was built with flawless, easy-to-care-for red brick, the other has old steel siding. I prefer brick hands-down, and I hate the fact we’ll probably have to replace the siding on the other property one day.

It looks fine right now, but we’ve had to fix a few of the pieces of siding into place over the years. And the way it looks, a big wind could likely blow some of it off!

Only time will tell, but I’d prefer a home with a low maintenance exterior that won’t cost us a bundle to replace later on. Not only is the mere thought of it a pain, but siding is expensive.

#9: No Water Issues

This is one lesson we had to learn the hard way. When we bought our second property and moved in, we ignored the fact that a small amount of water pooled in the backyard near the stairs of our deck. After turning it into a rental, the problem worsened and our renters started getting standing water in their yard for a few days after a big rain.

Eventually, we had to put in a new sump pump and a new drain beneath the house. We also put a French drain into the back yard that funneled water to the road in front of the house.

These two fixes were enough to remedy the situation completely, but they were very costly and the entire experience was stressful, too.

After enduring that ordeal for years, I am now extremely leery of water or any trace of water or water problems. Ideally, we want to buy a house that sits similarly to the one we live in – high up on a lot with excellent drainage away from the property. If a potential rental house has any inkling of water problems, you better believe I will run for the hills!

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.


What do you look for in a rental property? What would you add to this list?

The post Nine Things We Look for When Buying Rental Property appeared first on The Simple Dollar.

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Tuesday, September 19, 2017

How to Handle Your Finances During a Disaster

On The Simple Dollar, we’ve talked a lot about the importance of credit history and building good credit. It tends to look good on your history when you pay on time and more than the monthly minimum. But what do you do when disaster strikes, as in the recent hurricanes Harvey and Irma? How do you keep up with your credit card finances when you’re forced from your home in the wake of a weather catastrophe?

Well, there are a couple of things you can do during and before a natural disaster to keep up with your finances and avoid any nasty marks on your credit history. Here are a few suggestions:

During a disaster

It’s important to prioritize what finances need to be paid and which ones can wait. This might vary a little based on individual needs, but here’s a general idea of the things you should be considering during a weather emergency.

Contact your insurance provider

You’re going to want to get in touch with your agents on any insurance policies you’ve taken out that may apply to your predicament. This might give you some financial wiggle room when the disaster passes. If you are unable to work because your place of employment has been hit by the disaster, be sure to let them know.

Contact your creditor(s)

No one wants to get penalized for late credit card payments and you might have some room to breathe given the extenuating circumstances. Contact your creditor(s) to let them know the situation, and they may be able to work with you to prevent any negative impact to your credit score. In some cases, a lender can’t report any delinquent payments until a full 30 days after the due date. That doesn’t mean you should get into the habit of paying late.

Address utility costs

If your house is unlivable because of the disaster and it’s going to take some time to restore the property, there’s no reason you should be paying for utilities. Contact your utility companies and have them suspend or end your services until you can live in the home again.

Before a disaster

We don’t always know exactly how devastating a natural disaster will be until it actually strikes. However, thanks to advanced meteorology, we can often get a ballpark idea of when disaster will hit and we can plan accordingly.

Assemble a bug-out bag

Put together a small bag of necessary documentation, forms, and any additional proofs of your finances and insurance coverage. Having these documents on hand could save you some stress in the long run. It might also be prudent to make use of digital copies and cloud backup in case your computer or mobile device is lost.

Set up auto payments

There are lots of benefits to setting up auto payments on your credit cards and utilities. Probably the best one for this particular scenario is the peace of mind that you won’t miss a monthly payment. Even if a hurricane knocks out your internet or stops the mail, you’ll still be able to keep up with your payments.

Even with automatic payments, it’s still prudent to review upcoming payments. That way, you know exactly what’s coming due in the next 30 or so days.

Don’t put it off

When it comes to keeping up with your finances and paying your bills, one piece of advice is to pay these off as soon as possible. Don’t wait until the last minute. You never know when a disaster will strike and the last thing you want to deal with after the storm has passed is the financial fallout from late payments.

The post How to Handle Your Finances During a Disaster appeared first on The Simple Dollar.

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