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Saturday, May 12, 2018

10 Things That Shaped My Frugality and Financial Outlook

In my day to day life, I naturally gravitate toward frugal options. I prefer to make a meal at home rather than eating out. I prefer to buy store brand options for most things. I love hitting sales in the produce section. My idea of a great family vacation involves camping in a national park, particularly when we have a free national parks pass. I love digging for bargains. I love the lack of stress that comes from not having any debt and earning more than we spend and having some money in the bank.

But what made me have that mindset? What kinds of things shifted my thinking in that direction? Obviously, at other points in my life, I was much more of a big spender. What brought about that shift?

I started making a list of the factors that made me frugal. I realized pretty quickly that some of the elements really did pre-date my turnaround – the foundations for the change were in place even as I was spending big. However, it took a few more elements for everything to really click into place.

So, without further ado, here are ten things that shaped my sense of frugality and my overall financial outlook, in roughly chronological order.

My parents

This story really has to start with them.

My father was a “jack of all trades” kind of person. He worked most of the time in a factory making construction equipment, but he was often laid off from his job, particularly when I was younger. To keep things afloat for our family, he seemed to constantly have all kinds of side gigs going on. He was an avid gardener, with gardens on an incredible scale for an individual person. He was a small scale commercial fisherman. He raised small amounts of livestock – pigs, chickens, goats, and rabbits. He did all kinds of odd jobs, from small car repairs to welding to foraging for things like fungi and wild ginseng. He always made sure that there was food on the table, a roof over our head, and clothes on our backs.

My mother was a stay-at-home mom and a frugal powerhouse. Her goal was to seemingly spend as little as possible in a given week so that we’d have money available when bigger moments came around. She did this by constantly doing things to cut our spending. She would do laundry and hang it out on the line in any and all weather short of a downpour or freezing temperature. We virtually never ate out and often had meals centered around what came out of the garden or the deep freezer or what was on sale at the grocery store. She was an avid reader, but we didn’t go to the book store for books, we always went to the library.

They each set financial examples for me, but in different ways. My father showed me the value of having a lot of skills and a lot of different income streams. If one faltered, you could always pick up another if you had a wide range of skills. My mother showed me the value of frugality and watching where pennies went.

Those values were embedded deep in me. In some ways, my years of “big spending” were something of a rebellion against them and an attempt to explore other avenues, but the underlying values were still there.

Growing up lower middle class

As you might guess from the above story, we didn’t have a lot of money when I was growing up. I think lower middle class is a decent description of our average financial state, though it varied a bit (both upwards and downwards) during my childhood and teen years.

Most of the people I went to school with had substantially more family income than my own family did. They always had things that I wished I could have. They went on trips and participated in things that were simply not things we could afford.

Even given that, I still had a really good childhood. My memories of childhood are almost entirely good ones. We didn’t travel much, but I remember a lot of camping trips and a lot of evenings doing things together as a family. We didn’t have lots of stuff, but we always had what we needed and we often had at least some of the things we wanted. We didn’t have an amazing fancy house and it didn’t have a ton of space, but it kept the rain and the cold out.

If my childhood taught me anything, it’s that you don’t really need to have a lot of money to have a good life. All you really need is enough clothes to keep you warm, a roof over your head, food and water in your belly, something to engage your mind and body, and good people in your life for friendship and guidance. That’s all children really need. That’s all people really need. Everything else is just extras.

The Tightwad Gazette by Amy Dacyczyn

My aunt subscribed to this newsletter after hearing about it on the Donahue show that she watched faithfully. She received it in the mail on a monthly basis when I was in high school and she’d leave the newsletters out on her side table for anyone to read in a nice neat stack.

I remember leafing through them at the time and finding some of the ideas pretty creative, and I remember thinking to myself that it was interesting that people who had the financial means to buy pretty much whatever they wanted would actively choose to do these things. Some of the articles in the Gazette touched on that idea, linking the idea of frugality to having minimal money worries and a lot of freedom in terms of lifestyle choices.

Those articles came into my life when I was first really beginning to understand that people might not necessarily choose to invest their lives in chasing the standard American dream and might want to chase other dreams that might center around other life ambitions. At that time, I secretly dreamed of becoming a novelist, and The Tightwad Gazette really planted the idea in my mind that a person could actually pursue such goals without falling entirely into the “starving artist” trap.

I didn’t see frugality as a tool with which to build the life you wanted until I spent a few afternoons reading a pile of those newsletters. Before that, I perceived frugality as something one did out of necessity, not out of choice. It’s actually a useful tool no matter what your life situation.

My best friend, girlfriend, and eventual wife Sarah

Sarah and I were friends in high school, but we didn’t start actually dating until we ended up attending the same college. Neither one of us knew anyone when we started – there were no pre-existing social networks for either one of us aside from each other – so that gradually pushed us closer and closer together.

Sarah is the one person in my life that I’ve never felt that I had to impress. I could completely be myself with her and never feel like I had to be something else. Most of my best memories of our years as friends and our later years when we were dating were of incredibly simple things, like just watching movies or going on walks or things like that.

When you couple that sentiment with her natural inclination to enjoy the simpler things in life and my own upbringing, we often found ourselves enjoying simple things, and we still do.

My first forays into frugality and fixing our finances were strongly supported by her, and it was through that process that we rediscovered a lot of the things that we enjoyed doing together that we had replaced due to having money. We started making meals together again. We started going on a lot of walks together again.

It was because of that shared history and our shared comfort level and our open conversation that we were able to make that financial turnaround happen.

Titan by Ron Chernow

For a long period in my life – most of the 2000s, actually – I devoured biography after biography. Politicians. Artists. Businesspeople. Religious leaders. Cultural icons. I was hungry to learn about the lives of those who had accomplished big things.

My big goal with each biography I read was to intentionally pull out one or two things that meaningfully applied to my life and then spend some time trying to meaningfully apply it.

During that period in my life when I was just starting to be more open about turning my financial ship around, I happened to be reading Titan by Ron Chernow. Titan is a biography of John D. Rockefeller Sr., the founder of Standard Oil. He pulled himself up from nearly nothing to build one of the largest companies in the world.

The big element I took away from this book was Rockefeller’s insistence on keeping track of every single penny in not only his personal life, but in his businesses. He kept a ledger of every expense and every dollar brought in. His success was in no small part built upon careful tracking and careful consideration of every single dime.

I attempted this practice for a while. It was really my first attempt at keeping track of every dime that I spent. What did I learn from it? Well, when I actually went through those expenses at the time, I couldn’t help but conclude that I was spending way too much.

One might think that this experience alone would have shaken my financial path of destruction that I followed in my early adult years. It didn’t, but it certainly unsettled things and it likely helped set the stage for things to come. Plus, I think it’s somewhat responsible for my continued use of spreadsheets and You Need a Budget for tracking my expenses, even to this day.

Camping and hiking

When Sarah and I were first married, our vacations were elaborate. In the first few years of our marriage, we traveled to London, to Edinburgh, to Vegas, to Seattle, to Mexico City. We stayed in nice hotels and enjoyed ourselves.

However, one vacation in particular really stood out as memorable. For a good week, we camped on Mount Rainier and in Olympic National Forest. The two of us just stayed in a tent and did a ton of hiking and talking and exploring.

After that trip, we both realized how much we loved camping and hiking. They’re really inexpensive hobbies (once you have some basic gear) and they provide the backbone for really inexpensive getaways. Plus, there’s a certain DIY element to those kinds of experiences.

Since then, our travel has been more and more directed towards camping and hiking. In the past decade, we’ve spent our summers in countless state and national parks, exploring trails and building campfires and just enjoying nature. I’ve come to enjoy camping and hiking as incredibly relaxing and renewing experiences.

Camping and hiking, more than anything else, taught me that I don’t need to spend thousands of dollars to feel relaxed. I can find it anywhere if I just open my mind and heart to it.

Benjamin Franklin by Walter Isaacson

I read this biography of Benjamin Franklin while my wife was pregnant with our first child, and as with the many other biographies I read, I tried to take something out of it that I could use in my life.

Here, the lesson I took away is that a person could consciously work on their virtues and actually practice being a better person. There was a section of Isaacson’s biography covering Franklin’s years as a printer in Philadelphia that discussed how Franklin used a little pocket notebook to work on the virtues he desired for himself that he felt he was weak on. I actually wrote about this process not long ago on The Simple Dollar.

I tried doing this for a while as I finished up Isaacson’s biography and tackled Franklin’s own autobiography and found it to be pretty challenging, but in a good way, one that makes you feel like you’ve actually pushed yourself in a better direction. I’ve revisited this practice over the years in various ways.

So, what does that have to do with shaping my frugality? Well, frugality was literally one of Franklin’s thirteen virtues. I remember finding the practice of that virtue to be easier and more meaningful than I expected at the time, which I believe really set the stage for the financial direction that was to come.

Becoming a parent

In late 2005, Sarah and I became parents for the first time. For the first time in my life, I felt wholly responsible for the well being and safety of another life. My son’s life was completely in my hands. His well being and growth was in my hands. What was I going to do?

I was absolutely scared to death by the prospect of parenthood. I felt like I could barely manage my own life, let alone take on the responsibility of raising a child. This shift in perspective largely occurred during Sarah’s pregnancy – prior to that, I thought I was ready to be a parent, but as those months passed, it became clear to me that I wasn’t ready and that I could barely manage myself.

Those first few months of parenthood were a major adjustment. I began to really feel the weight of how the things I was doing during his infancy were going to shape him. He needed to be held and loved. He needed to be fed. He needed to be warm and safe. He needed to hear my calm and happy speaking voice.

Along with that, I needed to consider his future. What was his childhood going to look like? His teen years? What about growing up and leaving home, something I had done myself not too long before that? I was now going to be the parent in those roles, not the kid. How would I ever be ready?

That experience of parenthood gave me a lot of food for thought that weighed heavily on my heart and eventually led right to the doorstep of my financial epiphany.

Julius Rock from Everybody Hates Chris

At the time when our first child was a baby, one of the better sitcoms on television was Everybody Hates Chris, a sitcom based on the troubled teenage experiences of comedian Chris Rock. It was one of those shows that manages to bridge the gap between funny and genuinely thoughtful and I found myself watching it regularly.

The character that stood out to me on the show was Julius Rock, the father of the main character. Julius was a solid, level headed, and reliable father and husband, portrayed with a lot more respect than many sitcom fathers, at least in my eyes. He worried a lot about his family and made a conscientious effort to be involved in their lives.

One of his biggest quirks, however, was his strong frugality. He was extremely, extremely careful with his money and his family’s money. He carried it over the line to “cheapness” sometimes, but quite often, it was clear that he was trying to be careful with his money so that his family could always be sure to have a roof over their head and have what they needed.

Julius Rock had a profound impact on my consideration of what it meant to be a father and a husband, in the sense that part of that responsibility was to make sure that my family always had what they needed, even if it were sometimes at the expense of what I wanted.

Your Money or Your Life by Joe Dominguez and Vicki Robin

When I finally hit financial rock bottom, I already had most of the pieces in place to carve out a better direction for my own life, but it was Your Money or Your Life that truly kicked it into high gear.

My initial move when I realized that I needed to turn my finances around was the same as it always was when I hit a problem in life or a subject I didn’t fully understand: I started reading. I went to the library and checked out tons of books on personal finance.

Your Money or Your Life clicked like no other book did. It drew upon all of those pieces that were already in place in my life and gave those pieces a shape and a worldview that I didn’t quite have before I opened that cover. It really was a framework for a lot of elements already present in my life and it pointed me in a new direction, one that eventually led to The Simple Dollar and debt freedom and potential financial independence from work in the reasonably near future.

I really encourage you to read my series on the book, where I dig deeply into the impact this book had on me.

Final Thoughts

As I look back over my life, I realize that I spent most of it assembling the pieces of my frugality and financial outlook, but I didn’t put them all together in a sensible way until after I had been married for a few years and had a child. Before that, I stumbled through life without any real financial direction; it took those life changes and the ability to put all of those ideas in a real framework for things to change for us.

What are the pieces that make up the puzzle of your financial foundations? What brought you to the point where you’re reading this article and thinking seriously about your finances? Perhaps most importantly, how can those things keep you moving forward?

Good luck.

The post 10 Things That Shaped My Frugality and Financial Outlook appeared first on The Simple Dollar.

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Friday, May 11, 2018

A Kitchen Full of Projects

As you walk through our kitchen, one thing you can’t help but notice is that there are usually a lot of food-related projects that are almost always ongoing.

In just a cursory glance at our kitchen right now, one would find a small batch of homemade peach cider in the process of fermenting, a batch of homemade kombucha that’s also in the middle of fermenting, a jar of homemade preserved lemons, a bunch of home-canned items in the pantry, a ton of little jars of various seasoning mixes in the pantry, several full meals made in advance in the freezer, and some homemade bread dough rising in a bowl. This isn’t an unusual state of affairs.

Why do this? Why not just buy these items at the store? Doesn’t it take a lot of time and energy?

There are several reasons why we spend time and energy on food related projects, actually.

First of all, the homemade version of anything is almost always substantially less expensive than the same item in the store, often enough to produce a pretty impressive savings per hour of effort. I can make $15 worth of kombucha (at the cost at which it’s sold in stores around here) for about $1 worth of tea and sugar. The cost of a loaf of bread from scratch is about a quarter of the cost of a similar quality loaf of bread at the store. Preserved lemons consist of a few lemons, some salt, and a jar left in the fridge for a while – literally a few pennies for an amazing condiment, compared to the dollars that a smaller jar of preserved lemons costs at the store. Homemade cider consists of chopping up and boiling fruit for a while, then letting it cool, adding yeast, and waiting – a dollar or so for what would cost quite a bit in the store. All of this stuff saves money compared to the cost of buying a comparable item at the store.

Second, most of these tasks boil down to mixing together a few ingredients and waiting, so the time commitment is minimal. I’ll often make a batch of bread dough while doing dishes, since most of it is dumping four ingredients in our stand mixer bowl and letting the kneading hook knead it, which happens while I’m loading the dishwasher. I then just sit that bowl out with a towel over it to rise, come back a while later, shape it into a loaf and put it in a loaf pan (takes about 30 second), come back a while later, and pop it in the oven. It’s not hard.

Preserved lemons? I cut up some lemons. I added some salt. I pushed them down in the jar and latched it. I put them in the fridge. Now I have preserved lemons for the next year, perfect for things like marinades and potato salads.

Cider? I cut up some fruit (usually just cutting up extras when I’m making a fruit salad or slicing apples for dinner or something), add enough water to cover the fruit pieces, and let them all sit in a slow cooker for eight hours until the fruit is complete mush. I strain off the solids, add a bit of additional sugar and some yeast, and let it sit for several days in a jar with an air lock while it ferments. When it’s done, I pour it into a bottle and stick it in the fridge until we want to drink it.

Extra meals in the freezer? I just make two or three or four simultaneous batches of the supper I’m making anyway, get them all to the point where they’re ready for final cooking, and freeze the extras. Two days before we’re going to use one of the extras, I move it to the bottom of the fridge. That’s literally it.

Most of these tasks take a minute or two, then you just leave things sit for a while, then take another minute or two. Some of the others are just done in parallel with other things I’m already doing. I usually just add those tasks to the list of things that ordinarily need to be done in the kitchen, like meal prep or doing dishes.

Third, the homemade version is often better in most regards than the store-bought version. For starters, I have far more control over the ingredients. If I want a stronger ginger flavor in my cider, I add more ginger. If I want more peach flavor, I use more peaches; if it’s overwhelming, I’ll add a bit of water to cut it down next time. If I want it less salty, I add less salt. Like garlic? Add more garlic to your seasoning mix. You get the idea.

The homemade version is usually healthier without sacrificing flavor, too, because you don’t really have to worry about something being “shelf stable” for a long period of time and you don’t have to include unhealthy ingredients if you don’t wish to do so. For example, I don’t care if my homemade canned pickles slightly discolor over time – they still taste the same – so I don’t have to add a bunch of funky ingredients to make them look appropriately “pickle green” on the shelf. I don’t have to add preservatives to my bread that I just made because it’ll likely be eaten in a day or two.

Third, the more frequently I do things in the kitchen, the easier it becomes to do pretty much anything in the kitchen. I’m no longer intimidated by anything I might do in the kitchen, and part of that is the result of simply doing lots of things in the kitchen.

The first time I made a loaf of bread on my own, it seemed like a ton of work and I made a huge mess. The next time was almost as bad. The time after that? Pretty bad, too. But by the time I got to loaf 100, it was easy – I can do it quickly with minimal mess. I often make bread while I’m waiting for water to boil for tea or something like that, with all cleanup handled except for the dough hook and the bowl before the water boils. Not only that, I’m way more confident about things like making pizza dough or making breadsticks or making rolls.

This is pretty much true with the first time I made anything in my kitchen. The first time I made a seasoning mix, I had stuff all over the place. I eventually learned a few simple tricks for making it easy and now there’s not even a speck left behind. The first time I made homemade beer, our kitchen looked like a war zone. Now I can have the fermenter put away and the kitchen spotless in minutes.

Things just get easier the more you do them, and eventually the savings and the higher quality makes the process of trying to make something at home seem like a better deal than buying it at the store because the time and energy investment gets so small. It just takes practice.

Finally, I let it become a hobby. At first, I really pressed into the kitchen because the idea that I could save a lot of money through home food preparation was so prevalent in the things I was reading at the time, but as time went on, I actually grew to appreciate it.

For me, the turning point was the first time I prepared a really really good meal, one that felt like it was at least as good as what I would have had at a restaurant and paid several times as much for it. I wanted to recapture that feeling as often as possible. It became a goal for me.

As I got better and better at it, through sheer practice, I began to turn out good meals faster and faster, and I began to desire to experiment a little. I could buy some craft beer… but maybe I could just make it, and make a raspberry chocolate stout that focuses on the dark chocolate flavor. I could buy some preserved lemons for this salad… but maybe I could just make them and add just a bit of heat by putting a pepper in there. This seasoning is good, but it could use a bit more garlic… maybe I could just make a batch of seasoning just as I like it.

The end result of all of this is a kitchen full of projects, a surprisingly small food bill for the relative quality of our diet, and a surprisingly little amount of time spent in the kitchen that isn’t purely fun.

How can you get started down this path? You can do it by making simple meals and food items that you like on your own from basic ingredients. Do you like coffee? Figure out how to make your own cold brew – you need almost no equipment to make good coffee. Do you like scrambled eggs? Make scrambled eggs frequently. Look at these tasks not only as a food preparation task, but as a way to build skills so that every time you do this in the future is easier.

After you start feeling more confident in the kitchen, start making more and more things. You can move from buying burritos at Taco Bell to making a simple burrito at home with canned beans to making grilled burritos at home with beans you cooked yourself, sour cream, cheese, a bit of guacamole, and a bit of oil in a skillet. Follow recipes, figure out what seasonings you like for your regular meals, then make seasoning mixes that match exactly the flavors you want.

Just keep trying stuff. It’ll seem hard at first, with a lot of work and some likelihood of messing it up. That’s okay. Once you build the needed skills, everything gets easier and the realm of possibility gets wider. You’re making better/healthier/tastier things and you’re making them faster with less cleanup. You’ll also find that an awful lot of food tasks involve simply starting something and leaving it for a long time while you go off and do other things, so it doesn’t eat up nearly the time you imagine that it does.

The best thing you can do is get out there and try. Try making a meal. Don’t grumble about it being hard or how big the cleanup is. The thing is, each time you do it, it gets easier and the cleanup gets easier and the result gets better. The challenge is to keep going back until it becomes the easy, tasty, healthy, cheap, and obvious choice most of the time. Before you know it, you’ll have a kitchen full of projects, too.

Good luck.

The post A Kitchen Full of Projects appeared first on The Simple Dollar.

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Thursday, May 10, 2018

The Huge Expense of Cultural Norms

Having a big wedding. Going out to the club with friends routinely. Exchanging gifts at Christmas with extended family. Going out for dinner routinely. Driving a shiny new car. Living in a bigger house than necessary (or even homeownership in general). Going out for drinks routinely. Wearing makeup and/or jewelry. Watching television.

Chances are that you subscribe to at least some of these cultural norms in America, and there’s a good chance you can name a lot of people in your life that subscribe to virtually all of these practices.

What do all of these things have in common?

First of all, they’re largely considered cultural norms in America. At the very least, you’re considered normal if you partake in them – no one is going to think your behavior is strange or unusual in the least if you do these things.

For many, it can feel as though you’re not viewed as normal if you don’t participate in these activities or have these things as personal goals. Often, there are small social pressures applied to encourage you to do these things; sometimes, in the case of things like weddings, the social pressure can be pretty large.

Of course, the other element these things have in common is that they’re all incredibly expensive. They’re either big expenses on their own, like the big wedding or the big house, or they’re little expenses that repeat so frequently that they add up, like going out to eat all the time.

Over and over again, people find themselves spending tons of money to live up to those kinds of cultural norms. We all have a desire to fit in and one of the ways we can easily do that is by subscribing to many of the things that other people around us seem to be doing so that we naturally have things in common with them. The problem is that many of those things that we see and adopt are really expensive things.

Almost every cultural norm that I listed at the start of this article – the big wedding, going out to clubs, going out to eat, going out for drinks, having a big house, having a nice car, exchanging gifts, and so on – is expensive. You might find one or two of them to be personally enjoyable, but it’s likely that you see a lot of them as either a tolerable convenience or an obligation that you feel like you have to live up to.

Here’s a big secret: you really don’t have to live up to expensive cultural norms. If you don’t want a big wedding, don’t have one. If you don’t want to go into deep debt for a car, don’t. If you don’t want the pressures and costs of homeownership, don’t. You do not have to do these things.

Of course, for many, that’s easier said than done. Social pressure might not always be an obvious thing, but it’s there and it can really squeeze you. Sometimes it’s tight and it can push you into a quick, rash decision, like when your friends are nagging you to go out for an expensive dinner that you can’t really afford. Sometimes it’s less tight but constant, like the sense that everyone you know is buying a home of their own while you have the same old apartment.

Here are seven strategies for overcoming those kinds of pressures to adopt expensive cultural norms.

Strategy #1 – Stop Worrying About What Other People Think

If you want to improve your financial state, there’s almost nothing you can do that’s more important than this. You absolutely have to stop worrying about what other people think. Instead, re-center your life around what you think and what you value, not what the people around you think or value. Live your life and make your financial choices in accordance to what you care about, not what the people around you care about.

People often interpret this idea in strange ways. For example, this doesn’t mean you should become an antisocial jerk. Instead, in terms of interacting with other people, you should strive to be the person you would want to interact with. Be the person on the street that you wish was the person on the street. Be the friend you wish was your friend. Be the coworker you wish was your coworker. If you stick to that (and have any interest in having positive relationships with family, friends, community, and coworkers), you really don’t have to worry about what others think of you.

If you truly stop worrying what other people think, one of the biggest drives for keeping up with expensive cultural norms just goes away. For example, if you think that giving expensive gifts to extended family members is a stressful misuse of money but you still love all of those people, talk to them and find different ways to express that love. Have a giant potluck dinner that’s low-key and less stressful instead of a big holiday gift exchange, for example. Choose a place to live according to what you need, not according to what you think Aunt Thelma might think about it. Does Aunt Thelma have to live there? Is Aunt Thelma going to actually think about your residence for more than five seconds of her life? No and no. Don’t waste your time and energy and money worrying about it one bit.

Strategy #2 – Figure Out What You Want, Not What Your Family/Friends/Culture Wants

This whole process begins with figuring out what you actually want without the pressure of your culture and the people around you. If you truly throw off the weight of worrying about what other people think… what exactly are you left with? What is it that you want?

For example, once I really stopped worrying too much about impressing other people, I realized that the thing I wanted most in life was a low stress day to day life with time available to engage in my hobbies and passions and really strong relationships with my family members and core friends with a positive role in the community. That meant stepping back a little from devoting all of my energy to building my businesses. That meant spending less money on shorter term desires. It also meant spending almost no money on impressing other people, since they had very little to do with achieving what I wanted.

What is it that you want?

This is actually a pretty difficult question to answer. Many books have been written on addressing this very question because it’s not something that comes easy to most of us.

For me, the answer really came from asking one question as seriously as possible. Let’s assume that your life goes pretty well (but not unrealistically well) for the next few years and let’s also assume that you’re surrounded with people who are supportive of whatever you might do. If those two things were true, what would your ideal typical days look like? What would a good work day look like? What would a good “off day” look like?

Turn that question over in your mind for a while. Come back to it over the course of several days. Then, start asking yourself what kinds of things would have to be in place to make that life exist, particularly in terms of things you can control (or mostly control). Would you have to have a firm financial foundation? Would you have to have low stress?

Those are the things you should be filling your time with and working on. Even if they don’t lead exactly to the picture you have in your head, it’s likely that they’ll lead to somewhere you want to be in life.

The surprising thing I’ve found is that for myself and most of the people I know, actually making progress on those things is usually very inexpensive (or even directly financially beneficial) and deeply satisfying.

Strategy #3 – Stick with Low Cost and Comfortable Cultural Norms

An important thing to remember is that not all cultural norms are expensive. Many of the common things people share aren’t expensive at all – many are completely free. Those are things that you shouldn’t drop and should actually try to emphasize a little, especially if you find personal value in them as well.

For example, one of my favorite ways to connect with friends is to simply sit down and have a nice dinner with them, full of conversation and laughter and decent food and maybe some wine and lots and lots and lots of lingering at the table and a slow progression through the meal. This used to be fulfilled by the expensive ritual of going to restaurants, but we realized that we could capture the same exact thing at a tiny fraction of the price with regular potluck dinner parties. The host plans a simple meal that doesn’t require them to live in the kitchen and requests a simple side or beverage or something from everyone who shows up. This allows everyone to laugh and linger for as long as they want without any pressure at all from the restaurant or waitstaff. It’s actually a better experience, all told.

When my wife and I got married, one of the few things we did was choose to have a smaller and simpler wedding. We actively sought friends and family to help make it something special, requesting help as our wedding gift rather than an item. In the end, that’s what made our wedding special – it intimately involved a lot of our separate families coming together. That didn’t cost much, but it definitely hit a cultural value.

If you’re struggling with this, always ask yourself, “Why are people doing this?” There’s usually a reason behind almost everything that people do, and if you dig into that reason, you’ll find that you can often have the core element behind it without spending money. Why are we having a big wedding? It’s to celebrate a big occasion with friends and family. Why? It’s the people. So make it about the people, not about the accoutrements. Focus on the real value behind what you’re doing and you can usually get right at that core value without spending much money and while retaining an awful lot of that cultural norm.

Strategy #4 – Set Meaningful Long Term Goals and Make Achieving Them a Priority

People often ascribe to things like the “American dream” of having a marriage and a house with a yard and two kids and a dog because it’s a set of big goals that’s presented everywhere and thus really easy to adopt. There’s a lot of cultural reinforcement of those goals and if you don’t already have your own plan, it’s usually easier to just lock onto those and follow the rails.

The thing is, for a lot of people, that “American dream” doesn’t bring a joyous and fulfilling life. It does for many, but not nearly for everyone. Plus, it’s an expensive dream. To be able to afford that life today is beyond the means of a lot of Americans, and even some of those who can grab it can only do so by leveraging a lot of debt and squeaking by.

A much better approach is to step back and define your own big life goals. What is it that you want out of life?

Again, the practice of stepping back and asking yourself what your life would look like if you had supportive people and relatively good outcomes is a good practice. What does a really great life five or ten years from now look like for you if you assume that the people in your life are supportive of the things you want to do and you have reasonably (but not exceptionally) good outcomes for things outside of your control? Now, what do you need to do in the next five or ten years to put yourself in position to have that life? Those are your long term goals.

Now, what can you do to achieve them? Put those long term goals front and center. Many people will have goals that involve building strong life relationships. Many people will also have goals that involve building a firm financial foundation. Aside from that… it could be anything.

The thing to remember is that when you work on and achieve those goals, they’re usually going to be helpful no matter what you end up wanting in a few years. Sure, your desired destination might change, but most worthwhile goals you set while working on reaching that destination will be helpful no matter what you do. A good financial foundation will almost always help. Strong relationships will almost always help. Things like impressing random people on the street? Not so helpful.

The key thing here is to focus on what you want. Where do you want to be? Center on that and drive for that.

Strategy #5 – Stick To Your Guns…

There are going to be lots of temptations along the way. There are going to be lots of nudges to move in a different direction, to adopt everyone else’s goals, to do what everyone else wants you to do.

Don’t fall into that trap. Stick to your big goals and the life you want.

The most successful practices I’ve found for helping with this is to really understand what I want and be able to explain that in simplest terms to the people in my life who are trying to nudge me a different way. I try to explain what I want out of life and how what I’m doing is taking me there in the simplest way possible.

For example, you might say that I’m driving this old vehicle because, frankly, it still runs well and gets me to where I want to go, and I want to instead use that money to get my house paid off early. If you say that when someone is nudging you about replacing your car, that’s a reasonable answer. Just nodding your head and saying nothing won’t make the nudging go away, nor will a combative response, nor will criticism of their goals. Just state what it is that you want and how you’re achieving it.

Don’t let other people persuade you away from the big things that you want. There’s often a big desire inside of us to subscribe to cultural norms and to please other people. The path you’re following, when it doesn’t follow the obvious path, isn’t always clear. The best counter you have is simplicity and clarity. You are doing X to achieve Y, and it’s very rare that Y is something objectionable. If the connection between X and Y is clear, that’s usually more than enough ammo to stick to your guns.

Strategy #6 – … But Find Ways To Compromise

Sometimes, however, compromise is needed. The trick here is to find what’s in common between your plans and their vision.

This happened a lot during our wedding planning. The various interested parties had all kinds of recommendations for what our wedding would look like, mostly in line with their vision that they had in their head.

Sarah and I stuck to our plan, but rather than having conflicts about it, we sat down and actually talked to everyone about what they pictured our wedding would look like, and then we pointed out how many things our visions had in common. Most of the people present were the same. The locations were mostly the same. The general structure of the ceremony was the same. The people involved were largely the same. The only pieces that were different were things like decorations in the reception hall, and in the big scheme, those were really small things. Our approach was to say, “That’s a great idea!” a lot to the things that they were saying that fit well, so that on the specific handful of elements where we disagreed, there was still a strong sense of compromise and working together.

You’ll find by taking this approach of looking at all of the elements in common and putting emphasis on them, and then perhaps compromising on low-cost elements, you can end a lot of conflicts that people might have. Look at all of the stuff you have in common rather than dwelling on the things that are different. Trust me – spending most of your time brainstorming on how to make the things you agree on as awesome as possible will make the things you don’t disagree on seem minor in comparison, especially when you compromise a little on the lower cost things.

Strategy #7 – Define Your Own Culture

Remember earlier when I talked about setting long term goals with the assumption that you’re surrounded by supportive people who either share what you’re aiming for or at least are supportive and understanding of it? That’s what I mean by defining your own culture.

You should make a conscious effort to fill your life with a variety of people who share at least some significant set of values with you. You don’t have to share all values with everyone in your life – that’s probably not a good thing, either – but being in constant conflict with the people in your life isn’t healthy and it isn’t conducive to you achieving the things you want for your own life.

Make a conscious effort to cultivate friendships and relationships oriented around being supportive of each other and positive about each other’s efforts and goals and steps. If you have a friend or family member who is always rather negative about you and what you’re doing, consciously choose to minimize that relationship (not eliminate, just minimize). If you have other friends who always seem really supportive of your efforts, genuinely listen to you, and are often helpful, maximize those relationships by consciously spending more time with those people and actually listening to them and being supportive of them as well.

It is good to sometimes have gentle disagreements with people, because disagreements usually lead to better ideas. The difference between a disagreement between supportive people and disagreements between negative people is that supportive disagreements are couched in the idea that you’re truly trying to find the best possible outcome, whereas negative disagreements are centered around changing the other person’s mind and actions by any means necessary. Gentle, constructive disagreements with supportive people are fantastic – I have them regularly with my friends. Destructive disagreements are best avoided and I try to minimize relationships where they occur.

Final Thoughts

The key thing to always remember is that you don’t have to be steered by what other people seem to expect from you or what you feel like society wants you to do. Even though those forces can be very powerful, they often can steer you down a lane that’s incredibly expensive and not really in line with what you want out of life. Stay in that path for too long and you find yourself financially trapped in a life that you don’t really want to live.

You are far better off avoiding expensive cultural norms that don’t match what you want out of life all the way along than following that path and finding yourself stuck in a moment that you can’t get out of.

Not only that, by avoiding expensive cultural norms that you don’t value, you’re going to have a lot of resources left over for the kind of life that you do value. Let that vision of life be your guiding light.

Good luck!

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Why You’ll Never Buy Another Credit Score

The world of credit scoring is, by nature, an ever-evolving one. FICO scores were first introduced to lenders in the United States nearly 30 years ago, in 1989. A little over a decade ago, in 2006, the three major credit reporting agencies (CRAs) themselves – Equifax, TransUnion, and Experian – created the VantageScore credit score.

FICO and VantageScore represent the two most common brands of credit scoring systems. Each brand has numerous generations of their credit scoring models (think 1.0, 2.0, 3.0, etc.). When it comes to FICO, in particular, there are also a number of credit score variants such as mortgage scores, auto scores, and bankcard scores. Between all of the different FICO and VantageScore scoring models, you have several dozen different credit scores commercially available.

Of course, the number of credit scoring models that are commercially available isn’t the only thing that’s evolved in the world of credit scoring. There has also been a major shift over the past three decades in the availability of credit scores to you, the consumer.

A Chronology of Credit Score Availability

There was a time just a few decades ago, around 1991, when FICO branded credit scores became available at all three credit bureaus. At that time, the only people who purchased credit scores were those who worked at banks and other financial institutions. Then, in the mid-1990s, the usage of credit scores grew again when both Fannie Mae and Freddie Mac endorsed the use of FICO scores for evaluating residential mortgage applications.

By 2001, FICO scores became more readily available to consumers themselves with the launch of myFICO.com, FICO’s consumer division. However, although myFICO.com did provide consumers with an avenue to access their FICO scores, they weren’t given away for free — they were fee based.

And for many years, the fee-based options for credit scores increased in number. More recently, however, the trend has been toward more accessibility for consumers. In fact, there are many places where you can now access your credit scores completely free. So, credit score availability has come full circle, from a product available only for lenders to a fee-based product sold to consumers to a free product given to consumers under certain conditions.

Where to Get Your Free Credit Score

There are a number of places where you can get your credit scores at no cost. Here are a few of the more common options.

Your credit card issuer: FICO’s Open Access program, launched in 2013, allows credit card issuers to share the FICO scores they use for credit decisions and risk management purposes directly with their customers. According to FICO, more than 100 financial institutions currently participate in the program.

If your card issuer is among them — including Discover, Barclaycard, Citi, and Bank of America – then you may be able to access your free FICO credit score from at least one of the three credit bureaus, as often as once per month. Other credit card issuers, including Chase and Capital One, offer cardholders their free VantageScore credit score.

CreditKarma: One of the most popular websites in the consumer space where you can access free credit scores is Credit Karma. On their website, you can currently access your credit reports and scores (VantageScore 3.0) from TransUnion and Equifax, completely free of charge. (Experian reports and scores are not available, however.) Credit Karma gives away free scores in exchange for the opportunity to advertise offers from a variety of financial partners to their registered users. There are several other similar websites — commonly referred to as “freemium” sites — that will give away credit scores to their registered users, while offering add-on purchases.

Mortgage applications: When you apply for a mortgage loan, you have the right to see all the credit scores the mortgage lender saw. This is called a Credit Score Disclosure notice. And, if you’re denied credit by a mortgage lender or any other lender, then you’re entitled to what’s called a Notice of Adverse Action, or informally, a denial letter. Denial letters now must include the actual score that was used by the lender as the basis for their denial.

So while it’s still possible to purchase your credit score, it’s getting less and less necessary to do so – and that’s good news for consumers.

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Wednesday, May 9, 2018

Good.

One podcast I really enjoy listening to is the Jocko Podcast, which is hosted by Jocko Willink, a former NAVY Seal. The focus of the podcast is on leadership and personal discipline – how to handle big challenges and getting through hard times.

As with most podcasts, I don’t listen to Jocko to agree with everything he has to say and parrot his ideas. The same is true with most websites I visit and books I read and so on. Instead, I listen to extract one or two core ideas I can build on in my own life.

One idea that has stuck with me for a long time is the idea of “good”:

To summarize, the core idea here is that when something in life doesn’t go the way you want it to go, don’t react with anger or sadness or frustration. Accept that it happened and recognize it as an opportunity to get better. In the process of getting better, other doors will open and you’ll be more prepared to deal with what’s behind them.

Let’s break that down into a few pieces.

Things Are Sometimes Going to Go Awry

Things are always going to go awry in your life – little things and big things alike.

Little things are overcome pretty quickly and often teach a really simple lesson. When I spill coffee or cut my finger, it’s usually because I was rushing through a task when I should have been taking my time and focusing on the task at hand. Lesson learned, right? No big loss, but it’s still a teachable moment for myself.

The big things that go awry, though – those can really hurt. Your car breaks down. Your business fails. You don’t get that job you want. You get fired. You get sick, or a loved one gets sick. Your house burns down in a fire. Those things are going to happen in life, and they’re going to have a negative impact on you.

That’s not easy. It never is. Sometimes the world just punches you in the gut and there’s nothing you can really do about it.

You Choose How You Respond to Those Events

The thing that’s often overlooked is you are the one who decides how you respond to such events. When an unfortunate event happens, it’s up to you whether you get angry or get sad or get frustrated in response to an event. You control your emotional response to things.

If you let yourself fall into a pit of anger or sadness or frustration and find yourself looking for things to blame for this bad event, you’re taking home the wrong lesson.

Instead, when something bad happens to you, stop and breathe for a second. Don’t let negative emotions drive you. Don’t start tossing blame around. Accept that it happened, then move on to the real questions that matter.

What Can You Learn? What Can You Improve?

After something bad happens, ask yourself what you can learn from this negative event. Focus mostly on yourself. What did you learn about your preparation for this event? What did you learn about how you handle yourself in difficult situations? What did you learn about how such events should be handled? Where did you fall short of where you could have been?

Take the answers to those questions and turn them around. What can you improve? What skills do you need to get better at? What personal characteristics can you improve? What can you do to ensure you have the resources you need next time?

Yes, other people may be at fault when things go bad, but you can’t change the faults of other people. You can only change your own faults. You can only improve what it is that you bring to the table for next time.

Every time you fail, you’ve basically given yourself a list of things that you could have done better. Take advantage of that and make yourself better, even if it wasn’t wholly your fault.

This is called an after action report, and I find that an after-action report is an incredibly valuable practice to add to your life as something to do when things go awry. I do them regularly in my personal journal when I’m reflecting on something that didn’t go right.

A good after action report consists of four pieces. First, describe what actually happened in sufficient detail. Next, describe what I wish had happened in sufficient detail. Then, list the things that are different between those two pictures. Finally, transform that list of differences into actions that you can take in your life to make those differences become a reality.

Be Ready for the Next Door

If you take that concept to heart, you’ll spend time improving your situation. You’ll improve your skills. You’ll improve your strengths. You’ll find ways to cover your weaknesses. You’ll collect the resources you need for the next time.

Eventually, another disaster will happen. Another door will open. When that happens, you’ll be ready for it.

Example: A Personal Finance Disaster

That kind of talk sounds good in theory, but what does it actually mean in practice? I’ll give you an example from my own life.

Several years ago, before my finances were in good shape, I went out to my car to go to work and the thing just wouldn’t start. I kept turning the key and nothing – the starter had failed.

My credit cards were maxed out. I had some money in checking, but I needed it for bills. I knew I would have to call someone to come and get this car and get it fixed, but I wasn’t even sure I could pay the tow truck.

I was frustrated and angry and I blamed the car. The car was junk! Why would it do this to me? I sat there angry at the car, angry at my job because I had to go into work, angry at everything. I was looking for things to blame besides myself.

I didn’t have the maturity then to stop and put my emotions in check. I didn’t reflect on the pieces that were actually my fault. I didn’t do any kind of after action report.

At least, I didn’t do those things right away. As time passed and I began to turn around my financial life, I started looking back at things that had gone wrong in my recent past and I remembered my car not starting.

I reflected on it. What did I do wrong? Well, I probably didn’t keep up with maintenance on that car as well as I should have. I also didn’t have an emergency fund to handle minor crises like that one. I also responded to the failure of the starter with a big emotional outburst that just wasted a bunch of time and energy to no good end.

How could I actually achieve those things? I could stick to a strong maintenance schedule with my vehicles – this might not prevent everything, but it’s definitely going to reduce the likelihood of breakdowns. I could build up an emergency fund to handle these kinds of situations. I could learn how to get control over my emotions by studying things like stoicism and learning how to meditate, which would enable me to handle such crises much more calmly and smoothly.

I started doing those things. I started sticking heavily to the maintenance schedule on our vehicles. I started building an emergency fund. I studied stoicism and started practicing meditation and journaling.

What happened next? Our next vehicle ran and ran and ran for more than a hundred thousand miles thanks to good maintenance. When it finally didn’t start in our driveway, I handled it calmly and just paid the bill and got it fixed as efficiently as possible.

As bad as it was that my car didn’t start that day before work, it was actually a good thing. It gave me the opportunity to learn and to improve myself and to be ready for the next thing that would happen. By learning from that crisis (and from other things in my life), I built an emergency fund and started practicing better vehicle maintenance and started building better emotional control in frustrating moments.

Was that initial car breakdown my fault? No, not really, but there were still things I could have done to reduce the likelihood of such an event and to make the impact less devastating. While the initial car breakdown itself was bad, it did teach me some lessons that put me in a better place so that such breakdowns were less likely and that I would handle them much better.

I’d call that good.

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Tuesday, May 8, 2018

Life First, Money Second

What do I really want out of life? What kind of life do I really want to have, starting today and moving forward?

Over the course of my adult life, I’ve basically been on a constant journey to refine my answer to those questions. I went gradually from having no impression of what I wanted out of life at all, to some broad brushstrokes, to gradually filling in more and more detail until I really understand what it is I want from life.

What I’ve come to realize is that the less clear I was about what I wanted out of life, the harder it was to live in accordance with any sort of financial principles in mind. If you don’t have anything you’re working for, it’s easy to just spend that money as it comes in on whatever will bring you the most momentary happiness.

But I’m getting ahead of myself here. First, let’s take a walk down memory lane to look at how my life perspective has changed and how that influenced my finances.

The Early Years – No Life Vision, Rampant Spending

During my early adult years, I had no real concept of the future whatsoever. I understood at least that I would eventually get old, so I was smart enough to start contributing to my retirement plan at work as soon as I got my first “real” job, but aside from that? The future was a blank slate.

I might get married, and I did eventually. I might have kids. I might own a house. But in terms of the kind of day to day life I really wanted? I didn’t really have any idea. I mostly mimicked what I thought other people my age did.

I did have a sense that I wanted to build a career of some kind on the career path I was initially on, but I didn’t really have any sense as to what that really meant beyond “work hard at my current job and look for the next step up.”

In short, I had no real vision whatsoever of what the future would look like beyond the broadest of brushstrokes and no sense of the kind of day to day life I wanted to lead.

Without any sort of sense of what I actually wanted out of life, spending on whatever interested me at the moment became the default setting. I wasn’t really working toward anything, so the call of momentary desires was quite loud. If you don’t have any kind of long term goal or life ambition or sense of the kind of day to day life you’d really like to have, spending on today seems mighty compelling.

Unfortunately, that kind of attitude leads right into debt. If you don’t have any sense of the future or of the life you want, it’s incredibly easy to fall into the notion that your “future self” will take care of it because that “future self” is a complete blank slate. As far as I could tell at that point, that “future self” would be making very good money but, at the same time, that “future self” really didn’t have a life because I had no vision or ambition for the future.

What happened? I spent and I spent and I spent some more, and I dug myself into a giant financial hole. In terms of my day to day life, I had no vision of the life I wanted for myself, so there was really not much else to do other than to spend that money.

The Financial Turnaround – Broad Brushstrokes for Life, Tight Control on Spending

What happened? Two big things. I got married. Then, I had a child.

Both of those things were part of my big but not well considered plan for the future. I did want to get married at some point, and I did want to have children. I just didn’t think about those things too much until they happened.

Even having a child wasn’t an immediate trigger for change. Sure, like almost every parent, I was almost overwhelmed by the responsibility of it, but I didn’t really think about the long term future of it at first. Instead, I was focused on the routine of changing diapers and rocking the baby and holding the baby and so on.

As time went on, though, I began to realize that if I kept on my current path, my child wasn’t going to have the best childhood. We lived in a tiny apartment with a bunch of credit card debt and student loan debt and car loans hanging over our heads. The idea of actually having a home where our child could go play in the yard was far off in the vague future. The idea of paying for all of their upcoming expenses? No idea how I was going to do it.

This all came to a head one night when I was realizing how precarious our financial situation was. We had received some bills in the mail that we couldn’t afford to pay – not even the minimum payment. That night, my infant son couldn’t sleep and so I spent a few hours rocking him and thinking about his future and my own.

The next day, I woke up groggy after getting very little sleep, but I had the first real detail of the life I wanted for my future in my head. I wanted my child to have a childhood without worry, or at least as close to that as I could approach within what I could control.

That became my focus and, after some really fruitful conversations with Sarah, it became her focus, too. We wanted to build a great childhood for our son and get him off on the right foot in life.

What did that entail? What was our game plan? First and foremost, it involved getting rid of all of this consumer debt. Then, it involved finding a family home in an area with families at least somewhat nearby. It involved saving for his college education so that we could pay for at least some of it right out of pocket.

Those were tangible things that we could do that were directly tied to what we wanted out of life. For the first time, we had part of the big picture for our shared life in place, and for the first time, we could tie that big picture to what we were doing in our day to day lives.

That was transformative and fairly intoxicating. I dove deep into personal finance books and started trying every tactic I could find. We basically eliminated our non-essential spending in very short order.

Very quickly, those debts started to melt away, and we learned quite quickly that debt had been putting a lot of “background stress” into our life. We didn’t actively realize it, but being in debt had made both of us anxious and stressed out about almost everything. As the debt receded, so did a lot of that stress.

Reflection and Growth – Filling in Life’s Picture, Careful Spending Choice

Eventually, we paid off all of that consumer debt. This took about fifteen months or so. I started writing about this change on The Simple Dollar when we were part of the way through paying off that consumer debt. We then bought a house and took on that mortgage, which we paid off in about four and a half years. Along the way, we had two more children.

As all of this went on, I started spending a lot of time reflecting on what I really wanted out of life. If I drew a picture of my ideal life in a few years, what would it look like?

What I came to realize is that most of the elements of that picture that excited me and really mattered to me weren’t really financial in nature. They didn’t involve buying things. They didn’t involve shelling out cash for big experiences.

I wanted low stress. I wanted my basic needs taken care of – basic clothing, a roof over my head, and so on. I wanted my children to feel secure and happy and to be on a path to becoming strong and independent people. I wanted free time to explore my interests and hobbies. I wanted a strong marriage with my wife. I wanted strong relationships with each of my children – warm parent-child relationships, not friendships. I wanted a handful of close friends with whom I had great relationships. I wanted to feel good and healthy when I got out of bed each morning. I want work that’s fulfilling. I want those things to be secure and stable as possible, protected from the vagaries of employment.

And I still want all of those things.

For me, those are really the elements of the life that I want to live. If I have those, then life is honestly pretty good.

Having an amazing house would be fine, sure, but it’s extremely secondary to those other things. The same with having an amazing car or going on amazing trips. Everything else I could think of that a person might want out of life was secondary to those things above.

So I made them secondary. Very secondary.

When my mind wanders onto an expensive purchase, or even onto too many inexpensive purchases, I ask myself whether or not those things trump the main things I want out of life. If I can’t make a strong case, then I put off that purchase.

Money exists to secure the life you want to live. So, what kind of life do you want to live?

I don’t have the answer to that question, but I do have a few elements I’ve picked up over the years that might help guide you to your answers.

The Rule of Everyday Life

First and foremost, I found that if I aim for the best possible day to day life several months down the road, things tend to click into place pretty well. What would be the best average day I could have in six months to a year?

Well, for me, it would be a low stress day. I’d wake up feeling great. I’d spend some quality time with my family. I’d spend some time on my hobbies and some time on work that was meaningful and interesting to me. I’d go do something active, like getting some exercise or at least going on a long walk. I’d get a few things done that had been on my mind lately. I’m closer to other big goals than I am right now – things like my children’s full independence. To me, that’s a pretty good day.

Then, I tweak it a bit. In order to have that kind of day on a regular basis in six months, what do I need to be doing right now?

I need to have financial security so that the stress level stays low and that I maintain the daily freedom to do most of those things. I need to be healthy, so I should eat well and get some real exercise today. I need to work on my relationship with my wife and my kids and make sure that’s healthy.

In other words, the best way you can spend a day right now is to fill it with things so that your ordinary days are as good as possible six months to a year from now.

For most people I’ve talked to, securing those good days in the future involves good personal finance practices on at least some level. That ideal “ordinary day” often takes financial health for granted, but the only way you get that financial health is by practicing good financial habits today and moving forward.

The exact elements of this are going to vary from person to person. What you want out of an ordinary day in the future might be different than what I want. However, I’m willing to bet that there’s a good chance that whatever it is you want, it’s going to be more likely and more secure and lower in stress if you have your financial house in order.

The Rule of Big Splurges

Many of us have visions for the future that involve at least some big splurges. Maybe you envision buying a house or going on a big trip. My vision for the future for my family involves going on at least one international trip when my children are older – and, ideally, two or three.

If you have that big splurge in your future, answer this simple question: what am I doing today to secure that big splurge so that when I do dive in, it doesn’t disrupt my life and put me in stressful financial handcuffs?

Let’s say that in the years 2021 to 2024, our family was going to go on three different international vacations together. (This is purely hypothetical – my guess is that this actually doesn’t happen.)

What am I doing today to secure those vacations so that when we do them, it doesn’t disrupt my normal day to day life (described earlier) and put us in financial handcuffs and, even worse, add some stress to those trips when I want them to be low in stress and purely enjoyable?

The answer’s easy: I save for it. We’re already putting money away in a savings account solely for that purpose. We’re ideally shooting for one trip to Asia and another to my wife’s ancestral family home, and we’re considering one more. However, we want to be able to just pay for those trips out of pocket without disrupting anything else in our life and without putting us in any sort of financial handcuffs, and the only way to do that is by saving a little now, each month, until it arrives.

Figure out what big things you have coming up and start saving for them now. That way, when they do come around, they don’t disrupt the other elements of your life. They don’t put you in financial handcuffs. They don’t add stress to the equation.

The Rule of Freedom

Underneath all of this is the core idea that maximizing personal freedom and choice is the best goal for a joyful life for most people, and the most powerful way to support that freedom is to have a firm financial foundation under you.

I’ll give you a concrete example: careers. It was only through having a good financial foundation under our feet that I could consider changing to a full time writing career from my previous full time career in a research environment. Financial security enabled a career option that would have never existed before.

Furthermore, our financial security makes it possible for us to survive a sudden unplanned career shift. Let’s say, for example, that The Simple Dollar suddenly went offline and my other writing opportunities disappeared and I had to find a new career path to follow. I could do this on my own terms, without real worry, because of our financial foundation. I would have the time to shore up my experience in my earlier career path and go back to that work, or try out a new endeavor or two. It’s not a complete panic situation if I were to lose my job.

This doesn’t mean that I am “free” to spend money hand over fist every day. I certainly could do that. However, I recognize that all it would provide for me is a short burst of immediate pleasure that would rapidly fade, but it would bring financial challenges and stress with it and those would last and last and last. Sure, I can go splurge like crazy. I can go buy whatever my heart desires. Yet, if I did that, that initial burst of pleasure would fade fast and I’d be left with a strictly worse version of my everyday life with less personal freedom and fewer options. That splurge better be quite worth it, which is why I’m slow and careful with my splurges.

Splurges simply aren’t worth undermining the day to day life I want, at least not for me. They fade too fast and leave too little behind.

Final Thoughts

One of the biggest lessons I’ve learned over the last ten or fifteen years of my life is that establishing a daily life that I’m really happy with, one that fulfills me while also building toward the big things I really want in life, is paramount. The thing is, that daily life really isn’t very expensive at all.

Money’s role in that everyday life is in washing away stress, opening opportunities, keeping those opportunities open, and protecting against disruption. If you’re using money just to add more and more unimportant little pleasures to that daily routine, you’re still left with the stress and the lack of opportunity. I’ve been there – it’s not a tradeoff I’m happy with.

Financial security and consistent good financial choices provides a foundation for the life you want to live, but it is that life that comes first. However, the things that make life great can’t be bought. Money can only help extend your options.

Life first. Money second.

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Is It OK to Share Your Netflix Account? The Legal Lowdown on Log-in Sharing at Nine Popular Services

Like millions of people across the globe, I save money by logging in to Netflix with a username and password shared with me by friends or family. Recent polling of Netflix users showed that 12% of their total viewers are not paying for the service, and it could be costing the company over $500 million per year in revenue.

Ethically, this presents a tricky issue. I used to work in the entertainment industry, and I want all my old friends and coworkers to stay employed. If no one pays for content, people are going to stop making it. At the same time, artists are usually paid based on how many streams and downloads their content receives. Whether I’m logged in legally to Spotify or not, if I listen to The National’s latest album on repeat for five straight hours, the band will get some money they otherwise wouldn’t have received.

Another problem is that the practice of sharing logins is technically illegal. Thankfully, the law is vague, confusing, and very unlikely to be enforced. Each company has a different way of dealing with the issue, with most of them choosing to turn a blind eye to login sharing or, at worst, limiting concurrent streams as a de facto enforcement.

At first, it’s confusing why companies like Netflix would be okay with losing out on hundreds of millions of dollars in subscription money. But we have to keep in mind that these executives aren’t dumb. Most of them are playing the long game when it comes to getting us to part with our money.

If new people are watching Netflix, they have a chance of becoming new fans and subscribers, who will bring more people into the network down the road. Also, more users equals more people who are exposed to advertising, which is still the engine that keeps much of the entertainment and media industries afloat. If I click on an ad and buy a product while using my friend’s New York Times subscription, that’s still a good thing for the Times and the advertiser.

To try to get to the bottom of what’s allowed and what isn’t, I decided to analyze nine of the most popular media subscription services. I tried to find out everything I could about both their official policy and their unofficial stance on sharing login information. That way, we can all be informed about their current policies.

Netflix

Official policy: Not allowed to share. Their terms of use document states that “the Account Owner’s control is exercised through use of the Account Owner’s password and therefore to maintain exclusive control, the Account Owner should not reveal the password to anyone.”

If you want to have multiple people use one Netflix login, you should buy their premium plan, which allows you to watch from four devices at the same time.

Unofficial policy: Share away! Netflix CEO Reed Hastings is notorious for caring very little about the sharing of login information. As long as you aren’t selling your password, you can probably share without fear of retribution. Some people think the company might start cracking down when the sharing of passwords starts affecting their bottom line, but no one is sure when or if that day will come.

HBO Go / HBO Now

Official policy: You can share login information with three people in your household, but sharing with outsiders is frowned upon. They make this clear on their help page, stating, “Your sign-in credentials shouldn’t be shared with anyone outside your household. For security reasons, the number of simultaneous streams is limited. If there are too many streams happening at once from your account, you’ll get a simultaneous streams message.”

Unofficial policy: Andy Samberg famously gave out a working HBO password while hosting the Emmys, and HBO loved the publicity. They were one of the first major subscription providers to come out and say that they don’t mind when their customers share login information. Their CEO went so far as to say they’re in the business of “making addicts,” so the more viewers they get, the better.

Similar to Netflix, the sense around the internet is that if sharing starts to impact their revenue too much, they might initiate a crackdown.

Hulu

Official policy: Share, but be careful? It’s a little confusing. According to their terms of use, “You are responsible for all use of your account, including use of your account by other members of your household. By allowing others to access your account or to create profiles within your account, you agree to be responsible for ensuring that they comply with these Terms and you agree to be responsible for their activity using the Services.”

It seems like you can share, but if anyone does anything nefarious on your account, it’s on you.

Unofficial policy: Go ahead and share. The internet is filled with stories of people who share Hulu accounts without issue. I’ve used shared Hulu accounts and I know many others who’ve done so as well. Cracking down does not seem to be a priority for the company.

New York Times Digital

Official policy: You can share with one or two people in your household, but not beyond that. They use some harsh language to get their point across in their terms of service, stating, “You are responsible for all usage or activity on your NYTimes.com account, including use of the account by any third party authorized by you to use your login credentials. Any fraudulent, abusive, or otherwise illegal activity may be grounds for termination of your account, at our sole discretion, and we may refer you to appropriate law enforcement agencies.”

Unofficial policy: It seems fine to share. I scoured the web and found no instances of the NYT team punishing anyone, and I know several people who share their passwords without repercussions.

Furthermore, if you open a private browsing window, you can usually read their content freely without having to worry about going over the 10-article-per-month limit.

Washington Post Digital

Official policy: This one is confusing. Their terms of service states, “Each login is for a single user only. You are not allowed to share or disclose your login credentials with any other user or person. We may cancel or suspend your access to the Services if you share your credentials.”

That’s certainly a straightforward no. However, each subscription comes with a bonus subscription, which can be shared with one other person. I’m not sure why they don’t just let people share their main subscription, as it would appear to accomplish the same thing. But hey, I guess that’s why they pay Jeff Bezos the big bucks.

That all being said, the Post allows free access to many students, teachers, members of the military, and government officials.

Unofficial policy: They are not actively pursuing those that share login credentials. The Post’s tech guru Geoffrey Fowler even wrote an article titled, “You don’t have to feel guilty about sharing your TV log-in,” so it would be pretty hypocritical of them to crack down. Also, as with the New York Times, using a private browsing window will usually allow you to read their content.

Wall Street Journal Digital

Official policy: I think the the WSJ takes the cake for most confusing policy. Here it is, from their subscriber agreement: “Only one individual may access a Service at the same time using the same user name or password, unless we agree otherwise.” (Emphasis is mine.)

Wait, what? Unless they agree otherwise? That seems so… casual. I was not able to find any concrete information about how you get their agreement. If you want to share your account, it wouldn’t hurt to write a nice letter to their support staff or to tweet at their social media manager.

Unofficial policy: If you have a shared password, you should be able to use it without issue. That is, unless you share it with 1,051 people, in which case you will get caught.

Amazon Prime

Official policy: You’re not technically allowed to share outside of your household. That being said, the Amazon Household plan allows for sharing with up to 10 people, which is by far the biggest group sharing officially offered among these subscription sites.

Unofficial policy: You can share, but they’ve made it very inconvenient to do so. In the past, you could share your benefits with another person as long as you knew their email address and birthday. Then, they could each use their own Prime account. As of 2015, they changed it so that each person you share with will have access to your buying history and credit card information. That makes it a lot less appealing.

So, if you’re going to share, it better be with someone you really trust!

Apple Music

Official policy: Their terms of service state both that “you may use the Services and Content only for personal, noncommercial purposes” and “you can use Content from up to five different Apple IDs on each device.”

So, no sharing with those outside the Apple ecosystem, but you can share your account with up to five others if you buy a family plan.

Unofficial policy: I wasn’t able to find anything concrete about whether they pursue those who share their logins, so my default assumption is that they don’t. That being said, they make it pretty much useless to share your account with multiple people, because you can only stream from one device per logged in user at any given time.

Spotify

Official policy: Not allowed without a premium plan. Their terms and conditions state that you are forbidden from “providing your password to any other person or using any other person’s username and password.” If you want to legally share with up to five people, however, you can purchase their premium plan.

Unofficial policy: As with Amazon Prime, sharing is possible, but logistically it doesn’t make much sense. As I’ve learned the hard way, Spotify’s technology is very good at booting you if someone else with the shared password starts streaming from their phone. There is no wiggle room.

Summing Up

Sharing subscription passwords is potentially unethical and, in most cases, technically a crime. But it’s highly unlikely you’ll face any repercussions if you do so, and you’re hardly alone: A 2014 poll by Consumer Reports found that 46% of streaming users shared an account with someone outside their household.

It all comes down to what you value and, frankly, how much money you’re willing to spend on subscriptions. While I take advantage of free music streaming sites and the surprising array of digital content on offer at the library, I hope to get to a point where I pay a fair price for all the other stuff I use, too. But in the meantime I’ll just be thankful to have generous friends.

Related Reading:

The post Is It OK to Share Your Netflix Account? The Legal Lowdown on Log-in Sharing at Nine Popular Services appeared first on The Simple Dollar.

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Monday, May 7, 2018

Questions About Life Insurance, Selling Books, Energy Drinks, 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. Term life insurance decisions
2. Buying the family home
3. Selling books for money
4. Investing in individual companies
5. Alternatives to stock investment
6. Assistance for ill pets
7. Personal finance and maturity
8. Math on energy drink habit
9. Frugal eating is unhealthy
10. Hand soap suggestion
11. Body weight exercising
12. Ethics of pricing mistake

During the first couple of weeks of nice weather each spring, I practically live outside. I spend ten times as much time outside in the spring than I do in the winter.

Of course, this always coincides with high pollen counts, which means that I’m usually whacked hard with the allergy hammer. Stuffy nose, red eyes, a vaguely sore throat – it’s what life is like for me at the start of spring each season.

I can’t wait for allergy season to be over, but I’m also not staying inside for it, either.

On with the questions!

Q1: Term life insurance decisions

I am a 34 year old female and was given a $500k term life insurance plan as a perk in my previous job. I am no longer with this job and am trying to decide if I want to take over the plan ie: pay my monthly premiums. I am about 10 years into a 20 year plan and, since beginning this plan, I have been diagnosed with an autoimmune disease. I am still, and should continue to be, in really good health as I was diagnosed early, but I worry any future life insurance plan with come at a much higher premium due to my health condition. Obviously this plan is going to expire in 10 years anyway. I also don’t have children – not sure if I’m going to. I’m not married but am in a relationship. I don’t have any huge expenses that would need covering at this point. What would you do? Any alternatives you might recommend?
– Tammy

Does your current relationship seem strong enough that marriage seems like a high possibility? If so, I’d take over the policy. If not, and you think it’s more likely you will remain single without children for the next several years, then the policy probably isn’t worth it.

Life insurance beyond the cost of a funeral is really only worth it if you have dependents, and right now you don’t have any. If you get married, you might have a dependent some of the time, depending on career choices, but that person might also be fully independent on their own; the risk is usually enough to make a low cost policy worthwhile.

I would simply evaluate your relationship with this person. What is the honest likelihood that this relationship results in marriage and children? If it’s pretty low, I wouldn’t keep the policy. If it’s high, I’d keep the policy.

Q2: Buying the family home

I live in our family home, co-owned with two other siblings. I will soon be faced with the decision to either purchase the entire house, or force a sale and buy something else. The house is paid off, and I have paid for maintenance and taxes etc. for the past 20 years, so my portion will be enough to fund a down payment on another residence. The dilemma is to stay or go. The house is old and needs some repair (think roof, electrical, etc), but it’s definitely livable and I am comfortable here. But having a chunk of cash would mean the freedom to find something more updated or maybe even in another area of the country. I’ve been weighing this for quite a long time and would appreciate your input.
– Jana

This comes down to what you want more than anything else.

If you are happy living in that house – you like the location, you have work nearby, you like the house itself – then there’s no reason to move. Just stick with it. You’ll save on all of the costs associated with moving, if nothing else.

However, if you’re unhappy with some element of the situation, enough so that you want to completely change it, then sell and move, whether it’s to stay in the area or move to another area.

This isn’t really a financial decision. This is a “what do you want from your life” decision. I can’t answer that for you. You have the resources right now to explore a few different paths. Which one looks like the best fit for you?

If you’re not sure, trust your gut instinct on it. If your gut is telling you to move on, move on. If your gut is telling you to stay put, stay put.

Q3: Selling books for money

Please do a column on how to get money for books. I’ve hauled bags full of books to used books stores and come away with hardly anything. Not worth gas money and time to get there. Would post some on amazon but fear it’s too complicated. Maybe you could present it more clearly? Or just say, haul them to Goodwill and forget it. But on tight budget and every little bit helps!
– Annie

The best way to get rid of gently used books that still have some value is to sell them on Amazon. If you have a lot of them, you can actually have them handle all the shipping for you using the Fulfilled by Amazon program. This will get you the most return on your books, but it will take quite a bit of time to deal with all of the packaging and shipping and so on, and you won’t get much for old dusty paperbacks (a few pennies for ten minutes of effort isn’t worthwhile, but a few dollars for ten minutes is).

For lesser value books, consider having a yard sale where you not only sell the books, but other stuff you have around the house. In the past, we’ve found success at initially listing books at a certain price – say, $1 each – and then gradually lowering the price throughout the weekend, down to $0.50, then $0.25, then two for $0.25. The advantage here is that the work is minimal – you just put them out on a table, they disappear, and you have money.

Almost every other tactic I’ve found for actually turning books into money doesn’t really work all that well. There are some specific situations where it can work, like when you’re reselling a textbook or something akin to that, but those are unusual.

Q4: Investing in individual companies

Can you guide me to invest my money in trusted reputable companies?
– Stan

I generally do not advocate for individual investors investing in the stocks of individual companies unless they are doing it with money they can easily afford to lose without strongly affecting their financial future.

The reason is the risk-reward ratio is too high. While you can earn a really good return sometimes by investing in an individual company, you can also lose everything, even when investing in what appears to be very stable companies. That’s not a financial path that the vast majority of Americans can afford because they simply don’t have the financial foundation in order to be able to weather losing a significant investment.

Given that, I can’t recommend investments to my readers that involve genuine risk of losing a significant part of their investment in an irrecoverable fashion, which is what investing in single companies is like. Instead, I usually push people toward index funds, which spread out the risk – if one or two companies die, it’s not the end of the world.

Another reader, Kenny, has a great follow up question to this.

Q5: Alternatives to stock investment

I just read your article on the 12 things you need to know before investing in stock. in the article you have also stated some other ventures one can invest in. Just want to know from your own opinion what is the best avenue/channel to invest.
– Kenny

There are many, many things that a person can invest their money in besides stocks. Stocks just get all of the attention because they’re flashy, honestly, and because some people perceive stock values to be an indication of the health of America’s economy.

You can invest in real estate, either by buying undeveloped land and holding it or developing property on that land (for rent or to sell), or buying developed properties that you can rent or lease and sell later on. You can invest in bonds of all types – bonds are essentially how businesses and governments borrow money for big projects. Those two types of investments have a risk level that’s often less than stocks, though the long term average annual return might not be as high.

If you’re seeking more risk – and I would only do so if you can afford to lose all of the money – you can invest in all kinds of things. You can be an angel investor for companies. You can invest in collectibles. You can invest in foreign currency. You can invest in cryptocurrency. All of those things come with different levels of risk, but many are much higher than investing in stocks.

To recommend something would require a deep understanding of your own financial state and risk tolerance. However, there are a lot of options out there beyond stocks.

Q6: Assistance for ill pets

Is there such a thing as pet financial aid or assistance for people living with disabilities and low income? My pet dog, Bellas, was just diagnosed with a crushing disease. For now and for the rest of her life, she has to be on medication. The medication is $130 monthly. After two weeks, she has to take more lab tests and blood work to see if the medication is working. The total cost of the procedure is $500 and they have to do four tests per year.
– Molly

There are a lot of organizations that offer financial assistance for low income pet owners who are struggling to provide adequate care for a pet. However, most of them are state-based organizations, so you’ll have to look for one in your area.

To get started, here’s a giant list of such organizations.

Here in Iowa, we have the Brown Dog Foundation, for example, which helps out people in your exact situation. However, BDF only serves Iowa, Illinois, and Tennessee.

Q7: Personal finance and maturity

Not only are our young people uneducated on finances, they simply don’t care about it and that’s the bigger issue than the education part. I’m a 47 yr old male married to a women with two kids from her previous marriage. One is 24 and one is almost 28. They both dropped out of high school and both have petty jobs and are struggling and broke all the time. Not my problem. Just mentioning to them to get a second job is crazy talk in their minds. I bought my first house when i was 20 yrs old with no financial help from anybody. These two think I’m crazy when i talk about sacrifices with money and discipline and working hard. They think they are so smart when all I see is ignorance. The consequences of financial neglect will eventually take it’s toll on them and i refuse to bail them out. Nobody bails me out. This is just a tiny view of what’s taking place here and in other families as well. It’s very unfortunate that these young people are so blind. I’m just glad i can see. What a very long road of regrets for not listening to someone who knows the path to avoid living in poverty for simply being lazy and not willing to LISTEN.
– Andrew

Where you see ignorance, I see immaturity and different values. I see kids who haven’t had a reason to do any of the financial stuff in their life aside from some older people preaching at them. They do not see a better life for themselves through that second job, not one that they would value more than their current life, that is.

You can’t expect someone with a different value set to listen to you when you think of them as “blind” and “simply lazy” and that they think they are “so smart” when you see them as “ignorant.” That feeling seeps through into the conversation, and no one is going to listen to someone who thinks of them that way. Would you? If someone came to you with a tone that would come from their impression of you as a blind and lazy and ignorant person who thinks they’re smarter than they actually are, would you even listen to that person for a moment?

It might feel good to vent against their perceptions, but doing so isn’t going to get them to change. They’re going to look at you as the crazy ranting stepdad until the moment comes in their own life when they internally feel the reasons for saving and preparing for the future. Maybe it will happen. Maybe it won’t. In either case, if their impression of you is someone who ranted at them for being lazy and ignorant, they’re likely still not turning to you.

Some people are born with it. Others grow into it. Some never do.

Your best route is to shut your mouth, be successful on your own, and let them sink or swim on their own. If they realize they need help, they’ll look for it. If they’re not looking for help, all the preaching in the world isn’t going to make a difference.

You can lead a horse to water but you can’t make him drink. Your email sounds like you are trying to kick and shove the horse toward a lake while shouting at it and it keeps running away from you. Don’t waste your energy until the horse is actually thirsty.

Q8: Math on energy drink habit

My husband drinks like 4 Monster energy drinks a day. He buys them by the case, drinks one before work, takes two with him, and drinks another when he gets home usually.

I’ve been trying to tell him that this is really expensive but he says they’re like less than $1 each. How can I spell out the math to him that this is a problem? I am having a hard time with the math and want to get it straight.
– Olivia

I looked around for prices on energy drinks and one of the best ones I could find was $32.98 for 24 cans. Most energy drinks, even in bulk, seem to be notably more than that.

If you divide $32.98 by 24, you get a cost of $1.38 per can. You’re charged sales tax on those cans, so let’s add another 7%, giving you $1.48 per can.

If he drinks four cans a day, that’s $5.92 a day. If he does this every single day for a 30 day month, that’s $177.60. For a 365 day year, that’s $2,160.80. Yep, two grand a year on energy drinks.

This doesn’t even include the long term health cost of drinking that much energy drink. It will have lasting health consequences if you keep that up for the long haul, and that will have financial consequences.

Q9: Frugal eating is unhealthy

I can’t believe you suggest being frugal with your food. There is nothing more valuable than your health and putting cheap garbage into your body is dangerous and expensive long term.
– Anna

I… don’t think you’ve been reading The Simple Dollar for very long. I am personally a vegetarian, and while I don’t advocate for vegetarianism on the site, I do advocate for including many more fruits and vegetables in one’s diet.

My typical starting suggestion for being frugal when eating is to eat at restaurants less and eat at home more. I tell people to make a meal plan based on the fresh produce and other fresh items that are on discount this week in their grocery store flyer.

Most of the “staples” I encourage people to eat are straight-up plant products, like rice and beans. I don’t encourage people to eat things like ramen noodles or frozen prepackaged foods – they may be cheap, but they’re expensive over the long term.

In short, being frugal with your food money doesn’t mean eating off the dollar menu at McDonalds or eating a steady diet of ramen noodles, at least not on The Simple Dollar.

Q10: Hand soap suggestion

Saw your comments about buying hand soap in bulk and refilling smaller containers. One thing you might want to try is castile soap. We use it in foam hand soap pumps at our house. We fill up the soap dispenser 1/4 full with castile soap and then fill it to about 3/4 full with water. This makes great foamy hand soap. Castile soap can be expensive but you have to water it down or else it’s really strong and this works great in a foam hand soap dispenser.
– Daniel

This is a good idea. Castile soap works really well as a general cleaner, but it can be expensive and when you dilute it down to the point where it’s not so strong that it almost damages things, it’s very watery, which can make it hard to use.

Of course, “rather watery” is almost exactly what you want in a foam hand soap dispenser. It’s almost perfect for that!

I haven’t fully run the numbers yet to figure out if this is cheaper than buying bulk hand soap and using normal dispensers, but I will say that my back of the envelope math puts them in the same ball park.

Q11: Body weight exercising

How do you do body weight exercising to stay in shape?
– Alex

It should be noted here that the reason I do a lot of body weight exercising is because I have somewhat specific goals for what I want to accomplish.

First, I want a lot of core strength, mostly for balance and martial arts. I am less interested in huge biceps. I don’t need to bench press a couch. Second, I’m interested in cardio health so I can keep up on long hikes and when participating in some sporting activities like kicking a soccer ball around – in other words, I want to either be doing stuff I enjoy or doing stuff that translates to a better time doing things I enjoy. Third, I just want to be generally healthy.

No matter what you do for exercises, you should define some specific goals as to what you want out of them.

So, what do I do? I basically stick to a bodyweight regimen that’s focused on core strength and upper leg strength and balance and stretching. Lots of planks and push-ups and crunches and things like that for the core, and things like squats for the legs. I do some stretching and balance exercises like a very slow side kick. I do some cardio stuff, too, but honestly, a rapidly paced core exercise workout leaves me panting like a dog.

You may have different goals – muscular arms or being able to run long distances or something like that.

Q12: Ethics of pricing mistake

Recently, the grocery store in my town had a pricing error that I noticed. A huge package of 160 diapers was on sale for $2.99. I bought three boxes and used coupons and walked out of the store with almost 500 diapers and paid less than $2 total. The cash register lady thought something was wrong but didn’t call the manager or anything.

I got home and felt bad about this. Did I rip the store off? Is it okay to tell my friends about it?
– Danielle

This is a sticky area. First of all, stores have no legal obligation to stand by an erroneous price unless you can show it was intentional deception. This really looks like an issue where something should have been $29.99 or something instead of 2.99, where someone misplaced a decimal, so it probably was an error and you’d be hard pressed to claim they were deceptive. If it was a mistake, they’re well within their rights to notice that mistake and correct the price, which may have happened had the cashier called her manager. Most likely, the manager would have allowed your purchase and then had someone clear those items off the shelves until the issue was fixed.

Now, what should you do as a customer? If this is a store you’ve frequented and they’ve treated you well in the past, you should probably tell the manager about it. This type of issue can actually end up really hurting the business, as they’re losing $27 on every box they sell until the price is fixed. You expect honest pricing from the store, but you shouldn’t expect them to just give you stuff.

In your shoes, I don’t think you did anything wrong. If the store is a place you shop at regularly and this seems way out of line, I would probably give the store a ring and ask to talk to the manager. If this isn’t a store you shop at regularly, I’d probably just say nothing. If this is a store that’s constantly engaging in loss leaders and other such marketing tricks, this very well might be legit and it’s fine to tell your friends about it. In any case, I don’t think you did something wrong by taking three boxes to the checkout and paying what they charged you.

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 Life Insurance, Selling Books, Energy Drinks, and More! appeared first on The Simple Dollar.

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