The Free Financial Advisor

You are here: Home / Archives for Personal Finance

Holiday Saving & Spending

by Leave a Comment

With the holidays quickly approaching, I think it’s time we discuss proper spending and saving for this time of year.

The holiday season is a special time of year that brings together family and friends to share a special day with one another.

That said, it also brings along expenses. Buying gifts, food, and for some, plane tickets. What can you do to help save money during this time of year? Let’s find out.

Save!

Your holiday spending plan should start on January 1st. Set up a recurring transfer from your checking to your savings account.

Start with an amount that’s realistic. Personally, I do a weekly transfer. $10 per week. Multiply by 52 and we get $510 (technically) for holiday spending.

Another way to boost your savings is to start with one dollar amount, say $5, and increase it incrementally throughout the year.

There are a ton of savings challenges out there. Check this one out!

Start early

When buying gifts, a lot of people wait to buy big items on Black Friday or Cyber Monday. Regularly marked down items are priced relatively similar to those items that go on sale after Thanksgiving.

Save yourself the hassle and stress, and buy items throughout the year.

Make a list

Create a list of the people you want to buy gifts for. After that, assign a dollar amount to that person. This is how much you will spend on each person.

Here’s an idea for next year. Make that list right away and add it up. Whatever the total is, that’s how much you need to save for your holiday budget.

Another point I’d like to make. If your list is long and the total $ spent is high, you might want to consider removing some people from your list.

I know this might sound harsh, but you don’t have to buy them something. Maybe bake some cookies for those you won’t buy gifts for.

Use tech to your advantage

There are so many apps and programs out there that can help you save money. A few of my favorites are Coupons.com and Gas Buddy.

For online shopping, there are browser extensions and apps like RetailmeNot and Honey that find coupon codes for you.

The link below is an article about 7 different apps that can help save you money during the holidays.

7 Best Apps for Holiday Shopping

Track your spending

There’s no better way to gauge outgoing cash flow than tracking your spending. When you track your spending, you not only figure out how much your spending, but on what.

Better yet, use that list you created earlier and record what you spent on them. It keeps you honest and gives you a “checklist” so you don’t buy for someone more than once.

Make gifts

Handmade gifts are so much less expensive than store-bought gifts (most of the time). Also, in my experience, they are more appreciated than purchased ones.

Take a skill or craft you enjoy and make something special for someone.

Holiday party alternatives

There’s a large number of things you can do instead of your normal holiday party. For one thing, if you do have a party, make it a potluck! Everyone brings a dish so the financial burden of preparation doesn’t fall on one person.

Take the family sledding. Start a Secret Santa. Go for a walk/drive through a neighborhood and admire all of the Christmas lights.

One thing I found when researching for this article that moved me was volunteering at your local food pantry. Serve and set up a meal for those in need.

Treat yourself

There’s one other person I want you to put on that list. Yourself. We bust our backs trying to make a living, and often, we think about treating everyone else, but not ourselves.

This year, do something for yourself. Buy that thing you’ve wanted or take yourself to dinner. Whatever #treatyourself looks like, do it. You deserve it.

Related reading:

Does Money Reduce Your Holiday Cheer?

How To Cut Your Spending

Read More:

What Is The 2023 Walmart Holiday Schedule?

Can You Afford Not To Use Index Funds?

by Leave a Comment

One of the most popular investment vehicles in use today is the index fund. Recently, the assets under management in the index fund category surpassed that of which is managed in active mutual funds.

That said, what is an index fund? How did it come about? What are the characteristics of an index fund?

What is an index fund?

In its simplest form, an index fund is a passively managed mutual fund that tracks an index. It started out by tracking the S&P 500 and for a long time, that’s all these funds tracked.

Now, there are index funds for anything. The DJIA, biotech sector, micro-cap stocks, the list goes on and on.

In terms of stock market history, index funds aren’t old. The first index fund was created by Vanguard in 1975.

Through the late seventies and into the eighties, the index fund failed to catch on. It seems that only in the last decade or two, index funds were recognized as compounding machines and grew in popularity.

So what’s the big deal? Why are these investments so popular? What are the advantages and disadvantages?

Pros

  • Low maintenance – Similar to a target-date fund, in the sense that you can invest a percentage of your portfolio in a single index, and leave it for an extended period of time. However, these funds won’t reallocate and shift from stocks to bonds, that’s on you.
  • Low cost – Most index funds are low cost. I’m talking about the general funds that track large indexes. It also makes a big difference if the fund is with a big fund family or not. The big fund companies have more capital and more products, so they can offer for less. Also, as a general rule, the more specific an index gets, the higher the expense ratio.
  • Participation in the broad market – you have the chance to grow your principal (original investment) by participating in the potential growth of the stock market

Cons

  • Concentrated index – most index funds are market cap-weighted, which means the larger companies make up a greater portion of the index. That provides you less exposure to smaller companies AND can leave you concentrated in one industry. Four of the top five companies by market cap are tech companies.
  • You ride the index up, and down. When the stock market tanks, there’s no protection if you invest in an index. For example, during the Great Financial Crisis, the S&P 500 lost 55%. The Vanguard S&P 500 index (VFINX) lost 55% from peak to trough.

Commonalities with active funds

Active mutual funds and passive index funds do have similar characteristics.

  • Potential growth – Each of these has the chance to grow and compound over time. History shows that passive has a leg up in this category, but a portfolio manager of an active fund could outperform the index
  • Target date funds – I briefly mentioned these before, but you pick a date in which you plan to retire. For example, 2040. You would then pick a 2040 target-date fund. At this point in time, the fund would probably be allocated 80/20, stocks/bonds. As we get closer to 2040, the fund will progressively shift its allocation more towards bonds.

What I think about index funds

I’m a big fan of index funds, especially for the general public. Fees, over the long-term, are really good at eating into your returns. Selecting low-cost index funds reduces your fee exposure.

That said, I’m also a believer in active management. When the economy is booming like it has the last 10 years, index funds will win almost every time. However, when the market finally turns over, that’s where an active manager can set themselves apart.

Related reading:

The Pros and Cons of Index Investing

The Different Between Mutual Funds and ETFs

Fees and Why They Matter

Anxiety, Depression, and Money

by Leave a Comment

Levels of anxiety and depression seemingly climb every day. This week, we are covering a different subject. It’s incredibly important, personal, and relevant.

I want to go over my personal struggle with mental illness, the things that I use/do to help, and how I figure out when I need help. Towards the end, I’ll tie in some instances of how your finances can impact your mental health.

My diagnosis

I have anxiety and depression. I was diagnosed earlier this year. Once you can put a name to how you’re feeling, your eyes open.

When I was diagnosed, it forced me to look back on my life and I realized that I’ve had this for a long time. Mannerisms, behaviors, etc. all made sense.

With the diagnosis, however, came a new challenge. How do I treat this? How do I cope?

How I feel

At the time of writing, not great. I call these, funks. A funk means I’m depressed. Reluctant to hang out with friends and family. Reluctant to talk to anyone. I just want to be alone.

That said, the funks don’t usually last long. My current one is going on for four days.

The question I often ask myself when I’m in these funks is, is this the depression or my current situation that’s causing this? The answer is both, but is one playing a bigger role than the other? That question will never have an answer because there is no way of knowing.

What I do

There are a few things that I’ve started to help cope with anxiety and depression.

  • Exercise – You have to. In my opinion, this is the most important thing you can do for your mental health.
  • Talk to someone – I go to therapy every three weeks. When I started, I was going every other week, but I got to the point where I felt good enough to wait one more week. It’s also a good idea to have a “person” you can go and vent to. Get it off of your chest.
  • Journal – Before I go to sleep, I review the day to see how I felt throughout and try to figure out why I was feeling a certain way. I also list a few specific things I was grateful for.
  • Medication – I’m on an anti-depressant, which has helped, but I also think I need to change this up. Talk to your therapist and/or psychiatrist to get this figured out.
  • Meditation – I don’t have a formal mindfulness practice. Mine is centered around movement and breathing. Specifically, I do Tai-Chi every morning. It has helped tremendously.

When to get help

I have a very obvious line in the sand for when I need to get more help.

When I’m depressed and in a funk, I know it’s only temporary and will get better, but if I ever think that it won’t get better, that’s the sign.

That’s when the thought of suicide can become more prevalent.

Finances

There are a few examples when your finances can hurt your mental state.

  • Too much debt – If you are in a hole and can’t see a light at the end of the tunnel.
  • Feeling like you aren’t where you thought you’d be.
  • Making just enough to pay your bills, with very little, if any, leftover.
  • Investments – having an emotional attachment to your portfolio is never good. In this case, I usually recommend people ask themselves two questions.
    • What type of portfolio allocation will help me meet my goals?
    • What type of portfolio allocation will help me sleep at night?
    • The right allocation is usually somewhere in the middle, but it’s a good idea to backtest the allocation to see what you are really comfortable with.

Related reading: The Psychology Of Money, The Questions You Need To Ask Yourself

My pledge to you

Whether it’s finance-related or not, I’m here if any of you need to talk. Below you’ll find my email.

Email

Mental illness is a big problem in this country and around the world. If you or anyone you know is struggling, utilize the resources below!

Suicide Prevention Resources

Finding Help

Remember, you are never alone. There is always, ALWAYS, someone that wants to help.

New Social Security Legislation

by Leave a Comment

We finally have a little movement on Social Security reform! Sometime this fall, the House will introduce legislation and hold a vote in order to keep the Social Security Trust Fund solvent through this century.

What is Social Security?

Social Security is a benefit program introduced during FDR’s presidency. You pay into the program via payroll taxes, commonly referred to as FICA, and then receive a specified amount during retirement.

Social Security also provides disability payments for those who can’t work, as well as spousal benefits for widows/widowers.

The calculation that determines your monthly benefit takes into account your 30 highest-earning years, with at least 10 years, or 40 quarters, needed to qualify.

If you are short a quarter, a year, or more, SSA uses $0 for that period of time, which can drastically reduce your monthly benefit.

That’s enough about the nuts and bolts, let’s dive into the current program, followed by the new legislation.

How healthy is the current program?

It depends on how you define healthy. Currently, the Social Security Administration is paying out more than it’s taking in.

Social Security has a reserve fund that they go to in order to make good on payments. That reserve fund is set to run out in 2035. Now that does not mean that Social Security is doomed!

If nothing is done, the reserve will run out and then benefits will have to get cut. Most calculations are saying a 15%-25% reduction.

The current set up for Social Security is like this:

  • People born before 1946 – Full-retirement age (FRA) is 65.
  • People born between 1945 and 1965 will see a 2-month increase in their FRA each year with the cap at 67.
  • Anyone born after 1964 – FRA is 67.
  • Current FICA taxes are 6.2% for employees and 6.2% for employers.
  • Maximum taxable earnings – $132,900 – Anyone who makes more than that does not pay FICA taxes.

Full retirement age (FRA) is the age you must attain in order to receive your full benefit. If you apply early, your benefits are reduced, and if you put off receiving those benefits, you’ll get more.

With that said, let’s get into the new legislation.

Proposed legislation

There are four parts to this new law, which is called the Social Security 2100 Act.

  • First change – FICA is going up to 7.4% for employees and 7.4% for employers
  • Second – Maximum taxable income is going up to $400,000
  • Third – Benefits will see a 2% increase
  • Four – SSA will use a new index to adjust benefits for the cost of living

My thoughts

This has been a long time coming. The Federal Government desperately needed to act in order to ensure Social Security would be here for the coming generations.

While I like the changes that have been proposed, I have two things I want to gripe about.

One, the 2% bump in benefits was not necessary. Though the Cost of Living Adjustment (COLA) has been minimal in the last few years, it still exists. Benefit recipients will continue to see an increase in benefits.

Two, they did not address the retirement age. As I mentioned, the current FRA is 67. With current life expectancy nearing 80 and improvements in medicine coming every day, this should have been increased, as well as the age cap for collecting benefits.

You have to take benefits when you turn 70, whether you want to or not. If we are living longer, FRA and the age cap should go up. Either way, I’m glad we’re starting to see movement on this front.

Here are some sources and some related reading:

Social Security 2100 Act

Social Security History

Future Financial Status of the Social Security Benefit Program

When Should I Take Social Security?

Will Social Security Run Out Of Money?

Tips for Avoiding Social Security Disability Denial

Impeachment And The Stock Market

by Leave a Comment

The talk of impeachment is flooding the headlines, so we’re going to explore it, how impeachment proceedings took place in the past, what happened to the market with each instance, and what you should do with your money/investments while these events transpire.

What’s the process?

The first step in any impeachment proceeding begins with a formal inquiry. This is done by the House of Representatives, and that’s where we are at this point in time.

During the inquiry, the evidence is gathered by the house to help make their case. Once they’ve gathered everything they needed, they take a vote.

If that vote passes, it goes to the Senate. They, like the House, review the evidence and take a vote. If the Senate’s vote doesn’t pass, then the President may be acquitted, and things end there.

What history tells us

There have been three impeachment inquiries, with only one actual impeachment.

The first was Andrew Johnson in 1868. The second was Richard Nixon in 1973. The third was Bill Clinton in 1998.

Which one was impeached? Bill Clinton. However, the Senate acquitted him and he was not removed from office.

When Andrew Johnson went through the impeachment process, the stock market (yes there was a stock market back then) really didn’t do anything, finishing that year up 1.5%.

During the impeachment proceedings with Nixon, the United States was in the middle of a recession. From the initial inquiry to the day he resigned from office, the S&P 500 fell about 30%.

With Clinton, however, the economy and the stock market were in the middle of an expansion. From beginning to end, the S&P 500 gained about 28% during his impeachment process.

What history tells us is that the period surrounding the impeachment will lead to greater volatility, but the long-term direction of the market is determined by fundamentals.

Be mindful of the headlines

The current impeachment inquiry with President Trump is dramatically different from the other three.

  • The internet makes updating the public instantaneous
  • Algorithmic trading can be programmed to execute orders when publications mention Trump, impeachment, etc.
  • We’re in the middle of a trade war with China, so uncertainty at home (U.S.) puts Trump in a weaker position to negotiate. What’s more, if impeachment looks more and more likely, Trump may be inclined to make a deal to help his case…even if it’s a bad one.

What should you do?

That depends. If you have 15+ years until you need to access your investments, I would tell you to do nothing. If you’re in retirement or it’s right around the corner, however, I would think about being a little more conservative.

When you grow more reliant on your retirement savings, your primary objective must move from capital appreciation to capital preservation.

I’ll link to several resources that should give you more guidance about retirement planning by age, investing in volatility, and more information about what’s been discussed here.

Related Reading:

Why Asset Allocation Matters

How To Invest In A Volatile Market

How Does Trade Policy Affect Me?

The Questions You Need To Ask Yourself

Our New Low(er) Interest Rate Environment

by

With the talk of interest rates and recession in the headlines, I figured it was a good time to check-in, and give a little update on interest rates and how lowering them can impact the economy, issuers, and investors.

Why is the FED cutting?

Basically, the FED is cutting to extend the current economic expansion we are in.

The fundamental reason behind that is lower interest rates encourage corporations and consumers to spend more.

For two reasons.

One, they get paid very little, in interest, to put their money in the bank. And two, they are able to borrow money at lower rates.

Current income needs

People who need income, retirees, for example, invest their money in income-producing securities. Often times, those securities are fixed income instruments, like bonds.

Bonds pay interest on a semi-annual basis. The higher the credit quality of the issuer (company or government entity) the lower the payout. The inverse is true for a low credit quality issuer.

It’s the ever-present adage in investing, more risk equals more potential for reward.

When interest rates continue to creep lower, then those people start to make different choices.

What people are doing now

People are getting paid less, in interest, to invest in high-quality debt issuers, so they’re getting riskier. Meaning, they are investing that money with low credit quality companies and/or government entities.

Their risk of not receiving interest payments and getting their principal (the initial investment) back goes up.

The FEDs tool kit

I’ve touched on this point a few times in the past, but I’m going to hammer it home.

The Federal Reserve, essentially, has two tools. Lowering interest rates and buying Treasuries. Lowering interest rates promotes spending and buying Treasuries provides liquidity.

Because they are lowering interest rates during an expansion (whether we are still in one or not is debatable, but let’s say we are for the sake of argument), they are, effectively, removing the number of tools they have available.

When the next recession comes, my fear is they won’t be able to do enough to help us out of it.

Corporate debt

Currently, the amount of corporate debt in the market is the largest in history. Additionally, the amount of debt that’s rated BBB is also the highest in history.

BBB is the last rung on the investment-grade scale. Investment grade is anything BBB and above.

That’s a problem for basically one reason. When a BBB rated issuer gets downgraded (to BB) they are classified as junk (high-yield). When that happens, they need to tighten up their debt and improve their balance sheet. This means less borrowing and less spending.

It’s a dynamic that feeds itself. The issuer is downgraded, they spend less, GDP gets weaker, more corporations follow suit, and here comes the recession.

Investors

Once the corporate (high-yield) debt pops, issuers of debt will have trouble meeting their obligations. They’ll start to default, and their investors will be left high and dry.

Conclusion

This post is not intended to scare people, it’s to inform.

One last point. Because interest rates have been so low for so long, there are economists/academics that think the lowering of interest rates won’t actually help.

Related Reading:

Interest Rates And Trade

What Is A Bond?

Why Do Interest Rates Matter?

 

 

*The opinions and forecasts expressed are those of the author, and may not actually come to pass. This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan. Past performance does not guarantee future results.

What To Do About Debt Collectors

by

Debt collectors can be a real pain in the rear. They’re relentless, they can be rude, and they can be scamming you!

In this article, we’ll learn what to do when faced with debt collection.

Background information

It’s not really important to know how debt collection works, so I’m just going to give you a brief summary.

Wherever your debt originated from, they will get to a point where they’ll no longer “chase” after you for payment. They will sell the debt to a collector. That collector will try to get you to pay, and you might pay some, but whatever is leftover, they’ll sell to the next debt collector, and so on.

Get information about debt

Debt collection agencies have to send you a report, on paper, listing how much you owe and to whom. They have to send it to you within 5 days of speaking to you. Before you exchange any kind of information, have them send you that report.

Odds are, if you don’t get that report, you probably don’t owe the collector for the particular debt they were calling about.

Keep records

Whatever system you use, whether it’s paper or paperless, keep good records. Especially, anything finance related. If you have documents that show what debts you owe, then you know a call from a collector is a scam.

If you do get a call from a debt collector, take copious notes. When they called, what their name was, to what debt they are referring to, and so forth. If they pursue legal action, having notes and records at your disposal should help your case.

Fight the claim

If you think a debt collector is trying to scam you, write them a letter explaining yourself. You can also write a letter asking them to stop calling you. By law, they need to stop if you ask (see below).

What they can’t do

  • Using rude or threatening language
  • Continuing to call even after you told them to stop
  • Calling before 8 a.m. or after 9 p.m. unless you agree
  • Calling you at work if you have asked them to stop
  • Talking to anyone but you or your attorney about the debt
  • Misrepresenting the amount of your debt
  • Falsely claiming to be an attorney or law enforcement
  • Falsely claiming to be a credit bureau representative
  • Threatening to sue unless they actually plan to take legal action
  • Threatening to garnish wages or seize property unless they actually intend to do it

Negotiate your debt

If it turns out the call from a debt collector is legitimate, negotiate with them. Start off the negotiation saying you’ll pay a low percentage of what the debt is. For example, 15%. They’ll inevitably come back with a higher number.

I’d advise you to have a “ceiling” in mind. A number you are unwilling to go above. In the end, they’ll take something rather than taking you to court (which, honestly, they still could).

Share very little

Don’t give out your information. Upon doing research for this post, one source said that it’s okay to give them your address. I guess this can be up to the person on what information they give out, but I’d tell you not to give them anything.

If the debt they are calling about is legitimate, they should have all of the necessary information. They got a hold of you after all, right?

As they say in poker, keep the cards close to your chest.

Conclusion

At some point in your life, hopefully not, you’re going to get a call, email, or text from someone trying to scam you.

In this day and age, a lot of the people that do this are “good”. When I say good, I mean skilled. They know what to say and what tricks to play.

Similarly, if they continue to do something, as to say they continue with a particular schtick, it’s because it works. That’s why that Nigerian Prince tactic still exists. Because people fall for it.

Trust nobody is a pretty dramatic statement. I’d rather use trust, but verify. Another way to look at it is being skeptical. If it sounds fishy or too good to be true, it usually is. Trust your gut.

Related Reading:

What You Need To Know About Bankruptcy

Filing a Chapter 13 Bankruptcy

How To Pay Off Credit Card Debt

How Does Trade Policy Affect Me?

by

With talks of trade and tariffs filling headlines, I thought it fitting to explain what these terms actually mean and how they affect our economy.

Trade

In its most basic form, trade is the exchange of goods and services. What we’re talking about, however, and why this article is so relevant, is global trade.

The current “trade war” between the U.S. and China is about “unfair” trade (so President Trump says). Now I’m not debating as to whether trade between our two countries is fair or if I agree with his use of tariffs, I’m going to explain why this all matters.

China and the U.S. are complete opposites when it comes to trade. China is a net exporter and the U.S. is a net importer. China exports more than it imports and the U.S. is the reverse of that.

China is able to produce goods at a much lower cost because their cost for labor is so low. The U.S., on the other hand, is more costly to employ workers.

Tariffs

President Trump is utilizing tariffs to do two things. One, he’s trying to keep people employed domestically, instead of companies shipping jobs overseas.

A tariff increases the overall price of a good. By doing this, it gives employers an incentive to keep jobs in the U.S. because the money they save by shipping jobs abroad is reduced or taken away.

Two, he wants to reduce our trade deficit. Remember the U.S. is a net importer. By slapping tariffs on Chinese goods, it encourages U.S. consumers to buy products from U.S. manufacturers. Thus, fewer imports from China.

Theory vs. Practice

In theory, this sounds like a great plan, but in practice, however, it’s the consumer that pays the price.

When a tariff is used, the exporting country doesn’t see any taxes or penalties. The end result is an increased cost for each product.

For example, if you bought a pair of headphones for $100 and the electronics that make up those headphones are the recipient of a 15% tariff, those same pair of headphones now cost $115.

Now here’s where things get a little more complicated.

China’s Response

China has retaliated with tariffs of their own, but what they’ve also done is manipulate their currency.

You may have seen that in the news a few weeks ago when President Trump labeled them a currency manipulator.

When Trump put tariffs on Chinese goods, China reduced the value of its currency compared to the USD (U.S. Dollar).

This counteracts the effect those tariffs have.

Why It Matters

One, the markets hate uncertainty, so the more this is dragged out, the less likely we are to see an agreement between the two countries. Uncertainty leads to volatility, volatility leads to selling, and selling leads to declines.

Two, through the use of technology and more efficient supply chains, our planet has become very interconnected.

Global trade is a great thing. Each country has its strengths and weaknesses. When countries can focus on their strengths, we can produce more of something for less cost, and then trade with each other. Everyone wins.

Protectionism

This trade war does the opposite. It’s reducing everyone’s willingness to work together by creating a protectionist environment.

A protectionist mentality favors home country and doing business only in your home country. That restricts global trade and the exchange of goods.

The goal here is creating a fair trade agreement that benefits the global economy and (now) minimizes damage to individual economies.

What You Can Do

The most challenging part about this whole situation is we don’t know what’s going to happen. If a deal gets done, the market will like that, but if a deal doesn’t get done, I see a stock market decline in our future.

How do you prepare then? My best advice is the same as the advice I usually give, allocate according to your risk tolerance and time horizon. Those two things should dictate your investment strategy and whether or not you should be concerned with the outcome of this trade war.

Further reading:

Interest Rates and Trade

Why Asset Allocation Matters

Trade, Interest Rates, and Australia

Questions You Need To Ask Yourself

My Thoughts On The Market

 

Please be advised: Everything written in this article is for informational purposes only and should not be taken as investment advice. Opinions are my own and do not reflect the opinions of this publisher or my employer.” 

Inexpensive Fall Activities

by Leave a Comment

With Fall quickly approaching I thought it’s fitting to write an article about the (inexpensive) activities you can partake in that won’t break the bank.

Below you’ll find a large number of fun things you can do when the leaves start to change.

  1. Go for a hike – Depending on where you go, this can be free! If the hike takes place in a state park, there might be a small fee. Regardless, a hike is a great way to spend time, get exercise, and experience nature.
  2. Pick pumpkins – This is an autumn staple! Go to your local pumpkin patch and pick out your favorite pumpkin. Then figure out what design, pattern, or face you’ll carve into it and go to town!
  3. Have a picnic – Ingredients for sandwiches, potato salad, chips, and a dessert item. What else could you need? Through in an item from below (scenic drive) and a nice spot to set up, and you’re good to go! Inexpensive and relaxing.
  4. Apple orchard – Go apple picking! Gives you a great excuse to go outside, walk, and hand-pick some healthy food for yourself. A typical orchard operation will charge you $1.25-$2.00 per pound.
  5. Local festivals – Most of these are free or cheap to attend, with most of the cost coming from the games and events you participate.
  6. Maze – Many of the fall festivals will have a maze. These are typically made from hay bales. Additionally, farms that have pumpkins to be picked sometimes have a corn maze and/or hayrides. I have one of those near me and it was a ton of fun, and cheap too.
  7. Football games – Local high school games are really exciting to watch. They’re inexpensive to go to, they usually have good food, and you get to show off some hometown pride. Added bonus, you could have a promising player on your team or one on a visiting team to watch. I don’t know about you, but watching a special talent is…well..special!
  8. Haunted house – I’m partial to the scary stuff because I’m into things that frighten me, but haunted houses are awesome. Yes, some are quite lame, but when they’re done right, it’s exhilarating!
  9. Sit around the campfire – This is an incredibly relaxing activity. Sitting around a fire with your family and/or friends, roasting marshmallows, and making smores – can’t get much better. Costs nothing more than marshmallows, graham crackers, and chocolate!
  10. Scenic drive – For me, there aren’t many things that can beat a scenic car ride (the previous item does). Especially in the fall. Trees change colors, there’s a slight nip in the air, and it just smells like autumn.
  11. Scary movie marathon – I understand that scary movies aren’t for everyone, but if you have a few and invite people over that bring additional movies, you can make a long and scary evening out of it. If you don’t have scary movies, go to your local library and check some out. It’s free!
  12. Make collages with leaves – This could be a nice, little craft you can do as a family. Especially if you have young kids. They love getting messy and creating with their hands. They can also have a ton of fun jumping in leaf piles before you pick the leaves out for your collage.
  13. Ghost hunting – Seriously. In doing research for this post, this actually came up, and it surprisingly checks out. There are a number of apps available. 

All-in-all, autumn is my favorite time of year. I love the weather, the leaves changing, and all of the fun things you can do. I recommend doing at least one of these activities in the next few months!

Different Ways To Think About Money

by

Your money philosophy and how you think about your finances make a big difference in the decisions you make.

Whether you’re just starting your financial journey or you’re well into it, it’s a good idea to take a step back and define that philosophy.

Money is a tool

Sure, there are monetary goals you would like to achieve. For example, $1 million nest egg has long been touted as the number you need to hit for a comfortable retirement, but hitting, somewhat, arbitrary numbers aren’t everything.

Money is a tool. If used properly, you really can achieve financial success. Taking the money you’ve saved and putting it to work for you is a very simple, yet effective way to use it.

Another monetary tool is a credit card. Credit cards offer a variety of reward programs, like travel miles, cashback, among others. Additionally, it enables you to build and strengthen your credit report.

It is important, however, that if you are using a credit card, you must do so responsibly. Accumulating credit card debt can really set you back, financially.

Related reading: A Deep Dive Into Credit Cards

Focus on the solution, not the problem

Often times, we focus too much on the issues with our finances. I have too much debt, I have too little saved for retirement, or my expenses are killing my ability to save.

Instead of focusing on the problem, focus on what can be done to fix it.

If you have too much debt, develop a plan to pay it down. If your retirement savings are low, figure out how you can increase your savings rate. Expenses hurting your ability to save, cut your expenses.

“Whatever the problem, be part of the solution. Don’t just sit around raising questions and pointing out obstacles.” Tina Fey

Related reading: How To Cut Spending

Money using emotional bandwidth

It is true that money is relatively important. I say relatively to try and redirect to my first point when I mentioned that money is to be used as a tool.

It affords you food to eat, clothes to wear, and a place to live, among other things. If your basic needs are met and future goals are being worked towards, you have to try and stop worrying that you don’t have enough.

This is extremely challenging to do because we, as a society, are so fixated on money and material items that money can buy. It also doesn’t help that comparing ourselves to others is essentially baked into our DNA.

Believe me, I know that learning to stop worrying is incredibly difficult, but retraining your brain to view your finances differently can be extremely liberating.

Related reading: The Psychology Of Money

Think long-term

To be a successful investor or to be able to financially plan effectively, you have to think long term.

The market is going to have its ups and downs. As an investor, it’s important to ride out those down periods and continue to invest. If you have 15+ years until you need that money, you should be able to recoup your losses.

With regard to saving, I typically take the “bucket” approach. I have three buckets, short-term, medium-term, and long-term. Be advised: the following is how I define these time horizons.

  • The short-term bucket is for items under 5 years away. For example, when I want certain debts paid off or a down payment for a house.
  • Medium-term is anything 5-15 years away. The main one in this category is my son’s college savings.
  • Long-term is retirement savings, exclusively.

Related reading: How To Make Long-Term Investing Decisions

Buying experiences versus buying stuff

Money to a certain extent can buy happiness. As long as it’s being spent on experiences rather than stuff.

Memories with family and friends, visiting different destinations and attractions are the things we’ll cherish most.

Stuff breaks and toys are outgrown. What people won’t forget, however, is the time you spent with them.

Make that a priority. I know, as a fairly new parent (my son is almost 2), that I am constantly aware of how finite time is and that I need to make the most of those moments I spend with him.

The way you think about money pulls weight in how you use it. When creating a financial plan, I would prioritize figuring that out. How you think can lead to how you act.