PHILADELPHIA — A study released Tuesday at Life Sciences Pennsylvania’s annual conference, Life Sciences Future, shows Pennsylvania’s life sciences industry has been advancing at a steady rate and generated more than $88.5 billion in total value to the state in 2016. Through increased federal funding, patent applications, and entrepreneurship, Pennsylvania maintains a lead over much of the rest of the country in terms of research and development (R&D), [...]
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الثلاثاء، 19 سبتمبر 2017
How to Handle Your Finances During a Disaster
On The Simple Dollar, we’ve talked a lot about the importance of credit history and building good credit. It tends to look good on your history when you pay on time and more than the monthly minimum. But what do you do when disaster strikes, as in the recent hurricanes Harvey and Irma? How do you keep up with your credit card finances when you’re forced from your home in the wake of a weather catastrophe?
Well, there are a couple of things you can do during and before a natural disaster to keep up with your finances and avoid any nasty marks on your credit history. Here are a few suggestions:
During a disaster
It’s important to prioritize what finances need to be paid and which ones can wait. This might vary a little based on individual needs, but here’s a general idea of the things you should be considering during a weather emergency.
Contact your insurance provider
You’re going to want to get in touch with your agents on any insurance policies you’ve taken out that may apply to your predicament. This might give you some financial wiggle room when the disaster passes. If you are unable to work because your place of employment has been hit by the disaster, be sure to let them know.
Contact your creditor(s)
No one wants to get penalized for late credit card payments and you might have some room to breathe given the extenuating circumstances. Contact your creditor(s) to let them know the situation, and they may be able to work with you to prevent any negative impact to your credit score. In some cases, a lender can’t report any delinquent payments until a full 30 days after the due date. That doesn’t mean you should get into the habit of paying late.
Address utility costs
If your house is unlivable because of the disaster and it’s going to take some time to restore the property, there’s no reason you should be paying for utilities. Contact your utility companies and have them suspend or end your services until you can live in the home again.
Before a disaster
We don’t always know exactly how devastating a natural disaster will be until it actually strikes. However, thanks to advanced meteorology, we can often get a ballpark idea of when disaster will hit and we can plan accordingly.
Assemble a bug-out bag
Put together a small bag of necessary documentation, forms, and any additional proofs of your finances and insurance coverage. Having these documents on hand could save you some stress in the long run. It might also be prudent to make use of digital copies and cloud backup in case your computer or mobile device is lost.
Set up auto payments
There are lots of benefits to setting up auto payments on your credit cards and utilities. Probably the best one for this particular scenario is the peace of mind that you won’t miss a monthly payment. Even if a hurricane knocks out your internet or stops the mail, you’ll still be able to keep up with your payments.
Even with automatic payments, it’s still prudent to review upcoming payments. That way, you know exactly what’s coming due in the next 30 or so days.
Don’t put it off
When it comes to keeping up with your finances and paying your bills, one piece of advice is to pay these off as soon as possible. Don’t wait until the last minute. You never know when a disaster will strike and the last thing you want to deal with after the storm has passed is the financial fallout from late payments.
The post How to Handle Your Finances During a Disaster appeared first on The Simple Dollar.
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Need Help With Your Rent? Enter This Contest to Win $12K in Rent for a Year
I’m not one to really play the lottery, but on occasion, I dream about what it’d be like if I scored a random windfall.
Other times, I fantasize about how life would be if my essential expenses would just disappear.
Like, what would I do if I didn’t have credit card and student loan debt to pay off?
What if I didn’t have to bother with the cost of groceries or meals out?
What if I didn’t have to pay rent?
Well, one lucky individual will be able to see that last wish turn into reality. Apartment Therapy is teaming up with 9JKL, a new comedy premiering this fall on CBS, to sponsor a sweepstakes to win free rent for a year.
The prize money totals a single payout of $12,000, which breaks down to $1,000 for your monthly rent bill — not factoring in the taxes you’ll pay on your winnings, of course.
The storyline of 9JKL centers around a main character named Josh Roberts, who lives in an apartment wedged between his parents’ and brother’s apartments, which is too close for comfort when it comes to dealing with their meddling ways. (I bet he wishes he had free rent for a year.)
The show’s executive producer, Mark Feuerstein, stars as Josh and based the comedy on his experience living in a New York apartment next door to his parents — a situation many millennials can relate to (though we may be actually living with our parents, not next door).
Entering the free-rent sweepstakes is easy. Just go to this site, enter your name and contact information and agree to the official rules. Apartment Therapy will automatically subscribe you to its giveaway alert emails — which means more opportunities to snag freebies in the future.
The contest ends Oct. 2 at 11:59 p.m. EDT, so don’t forget to enter before then. One winner will be selected at random and notified using the contact information provided.
Good luck!
Nicole Dow is a staff writer at The Penny Hoarder. Free rent for a year sounds awesome to her.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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Stream the Rest of MLB Season for Just $4 (it’s Free for College Students!)
If you’re a Major League Baseball fan, and I most definitely am, this is a great time of year. OK, not if you’re pulling for the Phillies. But if your favorite team is still in the hunt, every game from here on out is exciting and critical to its playoff hopes.
But what if you don’t live anywhere near your team? I’m a Minnesota Twins fan who’s happily transplanted to Tampa Bay. While that doesn’t mean I’ve abandoned my Twins, it does make it hard to see their games.
The coolest product out there to help in this situation is MLB.TV. It’s a streaming service that allows you to watch every single MLB game or, if you prefer, just your own team’s games.
If you haven’t tried it, now is the time because MLB.TV has one heck of a deal for the remainder of the season.
Watch the Rest of the Season on MLB.TV for Just $3.99… or Free!
You can now sign up to get MLB.TV’s premium package for just $3.99 for the rest of the year. That means you can watch every single MLB game for less than four bucks. At the beginning of the season, the rate for the full season was $112.99, so this is quite the deal.
If you’re a college student, the deal is even better. Thanks to a partnership with ID.me, college students can get the rest of the season on MLB.TV for free. Yep, not one cent of your beer… er, gas money, will go out the door.
What’s great about the premium package? If your team is in a blowout game and a scrolling headline tells you a stud pitcher is just three outs away from a perfect game, you can switch to that game. You can even choose whether you hear the home or away team’s announcers.
Most teams have a dozen or more games left on the regular-season schedule. MLB.TV says you can stream up to 190 games through the rest of the season, which is a little over two shiny pennies per game (or free if you’re still hitting the books).
Of course it’s more fun to go to the game, but that can get expensive. There are ways to head out to an MLB game on the cheap, but if you can stream it for next to nothing, how can you beat that?
Tyler Omoth is a senior writer at The Penny Hoarder who loves soaking up the sun and finding creative ways to help others. He can’t wait for the Twins to beat the Yankees in the wild card. Catch him on Twitter at @Tyomoth.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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Save $20 on Aldi’s Crazy Low Prices With Instacart in These 3 Areas
What’s not to love about Aldi?
The prices are great. And there’s even a refundable 25-cent cart deposit system that helps prevent rogue shopping carts. That’s superhero stuff right there.
But what if you don’t like to go to the store — even Aldi? Well, now you’re in luck. You can get a nice discount and have your Aldi groceries delivered right to your door if you live in one of a few lucky areas.
Save $20 on Aldi Delivery With Instacart
If you live in Southern California, Dallas or Atlanta, you may already know that you can get your Aldi groceries delivered by Instacart. If you haven’t signed up for Instacart yet, you can get your first order delivered for free.
If that’s not enough to entice you, Aldi will give you $20 off your order of $35 or more when you have it delivered. Remember, this only works for people in Southern Cali, Dallas and Atlanta. To find out if your local Aldi is participating, simply check out the front page of your store’s weekly ad.
Add promo code ALDIDELIVERY when prompted to get the discount.
If you’ve never shopped at Aldi, you should really check it out. There’s a reason it has a raving fan base. If you don’t want to bring a quarter to get your shopping cart, just try it out through Instacart and kick your feet up while you save energy and money.
The $20 off deal is good through Sept. 30.
Tyler Omoth is a senior writer at The Penny Hoarder who loves soaking up the sun and finding creative ways to help others. Catch him on Twitter at @Tyomoth.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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Aldi Continues Its Hiring Blitz This Thursday with Job Fairs at Florida Stores
If you walk into any Aldi in Florida on Thursday, Sept. 21, there’s a chance you could walk away with a job that pays as much as $59,000 a year.
Yes. You read that right.
As part of its massive U.S. expansion, Aldi is hosting hiring events at every single Florida location this week. The company plans to fill more than 500 positions with what it’s calling a hiring blitz.
We call it a golden opportunity at a beloved grocer.
Aldi Is Filling a Variety of Jobs All Across Florida
Aldi is looking for store associates, shift managers and manager trainees at each and every one of its 112 stores in Florida.
Associates can expect to make between $11.50 and $12.50 an hour, while shift managers can pull in $16 to $17 per hour, according to an Aldi news release. Manager trainees average between $49,920 and $59,000 a year with the opportunity to make up to $90,000 as a store manager.
There are some sweet perks, as well.
If you work more than 25 hours a week, Aldi offers health insurance and dental coverage. And every employee can participate in the firm’s 401(k) program. (If you happen to land one of these jobs, here’s everything you need to know about a 401(k).)
The hiring binge dovetails with the company’s nationwide expansion, which is bringing a cheaper option to penny-pinchers across the country and adding more than 25,000 new jobs by 2022.
It’s a win-win all around.
Here’s How to Snag a Job At Your Local Florida Aldi
On Thursday, walk into any Aldi in Florida between 7 a.m. and 5 p.m. Click here to find your closest location.
The company is looking for people with a high school education or GED. Retail experience is a plus, but not required.
For manager trainees, management experience is preferred. All hires should be able to lift 45 pounds and be available to work between 6 a.m. and 11 p.m. every day of the week.
There will be a background check and drug screening. So Florida Man probably won’t be making an appearance.
Aldi not your thing? (How dare you!) Check out The Penny Hoarder Jobs page on Facebook for plenty of job opportunities.
Alex Mahadevan is a data journalist at The Penny Hoarder. As a bonafide Florida Man, he’s allowed to make Florida Man jokes.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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How to Teach Kids About Money, from Toddlers to Teens
The world is beginning to embrace the idea of a cashless economy, and it’s raised some interesting questions about how we impart financial knowledge to our children.
A 2015 financial literacy assessment by the Programme for International Student Assessment (PISA) found that just under 80% of young people aged 15-24 made payments online. And a 2015 Standard & Poor survey found that only 57% of U.S. adults were financially literate, with a solid understanding of key concepts like inflation and interest.
That’s a troubling combination.
But the 2017 Parents, Kids, & Money Survey conducted by T. Rowe Price found that parents who discussed financial topics with their kids were more likely (61% vs 41%) to have kids who say they are smart about money.
“Young People still need to be taught the basics,” says Dan Kadlec, contributor to TIME Magazine and Rightaboutmoney.com. “Live within your means, pay yourself first, save 15% of what you earn. These are timeless values that technology can help with – but only once you understand the need and set a plan into motion.”
With Generation Z – also known as Digital Natives – beginning to come of age, it’s time to combine tried and true financial wisdom with modern solutions to teach our children how to survive, and even thrive, in a world without cash.
Table of contents
Introducing money: Ages 3-6
How people spend: Ages 6-10
Introducing consequences: Ages 11-13
Building wealth: Ages 13-15
Preparing for the real world: Ages 15-18
Entrepreneurship: Age 18+
Introducing money: Ages 3-6
At this point in your child’s cognitive development, he or she should begin to understand the concept of counting, so it’s the perfect time to introduce them to the general concept of money.
During these initial lessons, we recommend holding off on abstract concepts like credit and sticking to physical dollars and coins. “Forcing children to pay cash makes them feel an immediate connection between their spending and their budget,” says Walt Gardner, Reality Check blogger at Education Week. “It also tends to impress upon them the importance of saving.”
According to Tracie Fobes of Penny Pinchin’ Mom, “The reason kids love coins is that it feels more real to them. They can slide the coins into their piggy banks. Not only that, but when you use coins, you can start to teach them how to add them to total another value. For instance, you can teach your child that ten dimes are the same as one dollar.”
There are four essentials your child should learn at this young age:
- Earning
- Spending
- Saving
- Giving
Earning
Of course, your 3-year-old can’t work a job to earn money, but they can earn an allowance by completing simple chores, like making their bed or cleaning their room. Be sure to tie their allowance to completing every chore. If they’re not 100% done by the end of the week, they don’t get paid.
Spending
Learning how to spend responsibly empowers your child while honing decision-making skills. Kids tend to consider their spending choices more carefully when they’re spending money they’ve earned, as opposed to money they’ve been given. But when your child purchases something, make sure they know they’ve earned it. Whatever the purchase, it belongs solely to them.
Saving
As your child begins to earn their own money, they’re going to learn that some items are more expensive than others and that people must save what they earn to reach larger goals. If they’re impatient to make a costly purchase, offer them extra chores or agree to match a certain percentage of their earnings if they save. (But don’t bail them out or offer more money for the same effort.)
Giving
Introducing charitable habits at an early age can be rewarding for both you and your child. Giving to charity is shown to have pleasing effects on the brain, just like the knowledge that your child is happy. Teach your children to give 10% of their money to help others, and it’s a habit they’ll keep all their life.
There’s one more benefit to introducing finances at a young age: learning core math skills. Says Nancy Phillips of Thewelaway.com, “Learning to divide up earnings in cash when they’re young gives [children] practice doing everyday adding, subtracting, multiplication, division, and percentages: mental skills many children and teens aren’t effectively learning anymore.”
Apps that can help
There’s a whole slew of apps dedicated to introducing numbers and mathematics to kids, but one of my favorites is DragonBox Numbers. The app combines brightly-colored characters and engaging games with Cuisenaire Rods (a classic math education tool) to give kids an understanding of fundamental mathematics without the need for memorization.
If you’re looking to emphasize your child’s financial knowledge instead, check out Savings Spree. It’s an addicting, vibrant app designed to show children how quickly costs can add up, reinforce saving, and introduce the idea of unexpected costs.
How people spend: Ages 6-10
Beginning at age 6, children begin to understand cause-and-effect relationships, and that changes the way they perceive money. By this point, your child can probably see that:
- Money is directly tied to items
- Parents work for money
- Money is spent differently (smaller items, like a book, may only require one purchase, while larger items, like a house, require multiple payments)
- Some purchases are made without physical money
Maybe your child has gone on a few playdates and has noticed that other families have bigger houses and smaller cars, or vice-versa. This can lead to some difficult questions. It’s possible to answer those questions head-on, while building on your child’s financial knowledge.
Introducing differences between types of spending can help children gain an understanding of how others spend their money, while laying the groundwork for building budgets in the future:
- Goods vs. services
- Needs vs. wants
- Short-term vs. long-term goals
Goods vs. services
Money isn’t always spent on physical items (goods); sometimes it’s spent in return for another’s efforts (services), and it’s important for children to understand the distinction. With more abstract goods and services made for the information age, such as apps and streaming services, the line between the two may blur. Use your child’s passions to illustrate the difference: If your child loves games, explain that the game itself is a good, while the developers that made it provided a service.
This is a good time to introduce your child to the concept of work – that people get paid for creating goods and providing services. It’s also an opportunity for your child to get to know you a little better. Explain what you and your partner do to earn money.
Although you should give your child an annual raise in their allowance, if they want more, you can consider complicating their chores and paying them more money as a result. “In addition to handling cash for wants,” says Lena Gott of Whatmommydoes.com, “you can also let them do budget-related household tasks, like planning a week’s worth of meals and actually shopping for the groceries while sticking to a grocery budget.”
Needs vs. wants
“Emotion is the real reason most consumer purchases are made, and vendors know that,” says Nancy Phillips. Ads are becoming increasingly personalized, and it’s crucial to establish a distinction between emotional purchases (wants) and necessary ones (needs) as soon as possible. If you’re comfortable with the concept, show your children some of the bills you pay monthly, and establish that even the house they live in isn’t free.
It’s also a good time to teach your children that different families have different needs. For example, larger families may need bigger houses and cars.
Short-term vs. long-term goals
Explaining to your child that you make monthly payments towards the cost of a house is a great way to introduce the idea of expense, and of short-term vs. long-term term goals. If your child has something expensive on their wish list, establish that it’s a long-term goal, and encourage them to save up.
Bobbi Rebell, author of How to be a Financial Grownup and of Bobbirebell.com, offers the following example: “I ask my 10-year old: Do you want to buy a snack after school, or do you want to take a taxi and have a snack at home? Or maybe we should just save the money, and we can use it for an activity we are saving up for?”
Apps that can help
We’re about to dive into the world of digital currency, so now’s a good time to bridge the gap between the physical and the abstract. Using allowance apps like iAllowance while still distributing their allowance in physical money is a great way for your child to make the connection that the numbers on the screen represent real value.
iAllowance helps children set their money aside for specific goods and services that they want, while parents still maintain full control. Once you feel your child is ready, you can make the switch to digital currency.
Introducing Consequences: Age 11-13
When a child reaches his or her tweens, they begin to develop a sense of reason, long-term consequences, and complications, transforming from emotionally-driven to rationally-driven decision making. At this age, a child begins to desire independence, spending more time with their friends instead of their parents. Tweens spend about six hours on average consuming media, and financial peer pressure is a very real force. “Once they are old enough,” says Bobbi Rebell, “hand over the phone to let them pay for things digitally (with your supervision).”
Once your child has a firm grasp of the basics, it’s time to finish the transition into the cashless world. But don’t just introduce e-commerce apps like PayPal or Venmo. Use this time as an opportunity to expand their financial knowledge to include long-term consequences:
- Credit
- Debt
- Interest
- Budgeting
- Identity theft
Credit
According to the BusyKid Blog, it’s a good idea to “use the mentality that if you can’t afford to pay cash, you can’t afford it. If you do choose to use credit cards, make sure you’re paying them off in full each month.” There’s plenty of ways to introduce kids to credit without putting their financial future (or yours) at stake.
If you’re looking to establish a strong credit score for your child, consider making them an authorized user on your credit card. Parents still retain control over the account, and some cards offer spending limits for authorized users. You’ll be able to see all the purchases your child makes and follow up when reminders are needed.
“One thing that works to teach kids is to create your own ‘debit’ card,” says Tracie Fobes. “You can pay your kids an allowance on their card and have them record the balance – without handing them cash.”
Be sure that your child makes payments at the end of every month. If your child ever goes over budget, then take what’s owed out of their allowance apps – with a little interest (more on that later).
Debt
Kids growing up today will come of age in the shadow of The Great Recession, so they’re actively aware of debt: Generation Z holds the lowest average credit card debt of all current generations. But when it comes to keeping track of spending habits, there’s still a generation gap. “If you are over 40,” says Dan Kadlec, “you were taught that the best way to restrain and track spending was by using cash and saving the receipts. Spending cash was painful because you had to part with the physical currency and felt the loss.”
If you have firsthand experiences with debt, don’t feel embarrassed to bring them up to your child – your knowledge is more valuable than the abstract concept of owing money. If your child is an authorized user on your credit card, utilize your credit card company or bank’s app to keep an eye on your child’s spending habits – and consider setting spending limits if your bank allows it.
Interest
Any lesson on interest should boil down to one concept: Interest means that money grows in value over time. As a result, interest can be your best friend or worst enemy – because both debts and savings (when placed in a bank) accrue interest.
Don’t throw out those allowance apps just yet. Instead mix them with credit card or bank apps to keep track of how much money your child currently has, while showing how much they’ve spent. Treat allowance apps like a personal bank account. If your child saves his or her money, consider matching it to an agreed-upon percentage.
Conversely, if your child overspends on a credit card, and/or fails to make payments before the month is up, take the payment out of their account, along with a little extra as interest. Then follow up with a conversation to drive the lesson home.
Budgeting
Keeping track of your expenses and learning how to plan for your future is a tenet of financial literacy. With extra money from chores and gifts accruing interest, it’s time to take stock of your child’s spending habits and compare them to the short- or long-term goals they have. At this age, all your child’s spending goals should be want-based, so it’s a great opportunity to teach them about monthly profits and losses without harsh consequences.
Utilize allowance apps or old-fashioned (by information age standards) database software such as Excel or Google Sheets, and break the budget up into four categories: income, savings, spending, and goals. Review the budget with your child regularly and determine whether they have more money in their account (profit) or owe money (loss) at the end of each review.
But most importantly, let them fail. “Help them save towards things they really want, and let them make mistakes – they will blow their money on dumb stuff and regret it!” says Phil McGilvray of Grandma’s Jars. “Whatever you do, don’t bail them out. Once they get into their mid-teens, you must give them bigger opportunists to manage money and fail.”
Identity theft
One last stop before they log on. Protecting personal information is as much a part of financial literacy as is spending and saving. Your children may have a device that you can’t control: one-third of all middle and high school students can access a school-issued mobile device. Chances are, your kids are more tech-savvy than you (yes, even at this age), but there are still steps you can take to help them protect their identity online.
Keep an eye on your child’s social media accounts, but also explain why popular services like Facebook and Instagram are free – namely, the process of data mining. Make sure their phone’s geolocation is off, and know if their posts are geotagged. Inform them of the dangers of sharing personal information while on public wi-fi. Lastly, check out the security pages of popular e-commerce apps like Venmo and PayPal.
Apps that can help
Bankaroo offers a virtual bank designed exclusively for children. It’s like an enhanced allowance app: Parents have full visibility of their children’s finances, can set goals, and can enter in a set amount for annual allowances. But parents can also match a percentage of their child’s savings, ensuring that their money earns interest. There’s even a school version, made just for teachers.
Beat the Thief, designed by the Center for Identity at the University of Texas at Austin, is an engaging game that teaches kids the essentials of how to protect their identity online. Points are earned by sharing information safely – but give away personal info, and a cartoon burglar creeps closer and closer towards your home. Once he’s in, it’s game over.
Building wealth: Ages 13-15
When tweens turn into teens, they begin to grasp abstract concepts and develop a sense of long-term consequences. Teens also hone memory and the capacity for reason, while actively beginning to distance themselves from their parents. Your child is going to start identifying more with their friends and other social groups, so it’s the perfect time to let them spread their wings.
Introduce the following financial concepts to reinforce your teen’s independence, and help them find a financial identity outside of your watch:
- Work
- Banking
- Investing (bonds vs. stocks)
Work
Your child has a concrete understanding that money comes from hard work, but until this point, they’ve only earned money through chores, while their parents are watching over them. Finding a job separate from parental control reinforces a sense of responsibility in teens, and it looks great on a college application.
Teens don’t necessarily have to work on their feet: Freelancing sites like Fiverr will allow teens to join at 13 years old, although sometimes parental consent is necessary. (It’s also worth mentioning that these sites issue payment via e-commerce apps, so if you haven’t gone over identity theft with your child, be sure to do so.)
Once your teen has some money of his or her own, it’s time to open their first bank account (if you haven’t already).
Banking
Contrary to common belief, banks aren’t going anywhere anytime soon. 84% of bank customers ages 18-34, including millennials, have visited a teller at least once in 2016. Even if banking ultimately becomes a purely digital experience, it’s essential to understand exactly who is keeping your money safe.
You may have brought your child with you to the bank before, and now’s the time for them to open a separate (but monitored) account for their savings. Many banks have accounts exclusively tailored to kids, and as we’ve reported, a good bank account for kids should meet the following criteria:
- No minimum balance requirement
- No monthly maintenance fees
- Online account management
- A high interest rate for savings (the best offer 1% or more!)
When choosing your bank, consider opting for one with a local branch so you and your child can visit and ask questions if need be.
Investing
At this point, your children understand how to earn and save money, budget for the future, and keep their savings safe in a bank. Now it’s time to teach them a little risk. Keep the lessons simple. People have two options if they want to invest their money – bonds and stocks.
Present bonds as the safer option. You’re essentially giving the government a loan to be repaid later. The rate of return isn’t high, and it takes more time for bonds to accrue any real interest. But, short of the government defaulting, there’s far less risk in bonds than there are in stocks. Edward Jones keeps an up-to-date chart of current bond interest rates.
Associate stocks with higher-risk, higher-reward scenarios. Purchasing stocks means purchasing small shares of a company, where the value of the stock depends on the health of the company. Be sure to hammer home the buy low, sell high mentality, allow your children to make small investments, and allow them to make mistakes.
Apps that can help
It’s likely your local bank has an official app, with the ability to track your child’s spending habits. Many banking apps will also send alerts if your child is spending too much, or if they’re running low in their account. You’re able to have as much or as little oversight as you desire on your child’s spending.
When it comes to investing, the Acorns app is one of the best introductions there is. According to Dan Kadlec, parents and teachers must “embrace new tools like Acorns and other savings apps if they want to remain relevant.” Acorns is a micro-investing tool: connect a credit card, spend like normal, and the app will automatically invest any spare change from each purchase (rounded up to the nearest dollar). Your teen will be able to choose between different classes of stocks or bonds, with minimal financial risk.
Preparing for the real world: Ages 15-18
Mid-to-late teenagers can process complex problems and fully imagine the future consequences of their actions. By now, your child has a solid foundation of financial literacy — from the essentials to more complex ideas of growing wealth. It’s time to talk about the biggest expenses they’ll likely ever have (barring children of their own).
Per a report published by Pew Charitable Trusts in 2015, approximately 80% of Americans “hold some form of debt, whether mortgages, car loans, unpaid credit card balances, medical and legal bills, student loans, or a combination of those.”
With college on the horizon, have a discussion with your children about taxes, good vs. bad debt, and how handling them responsibly can empower their financial future.
Taxes
If your child is working a part-time job, then they’ve already run into taxes. They may or may not understand the basics – that their money is going towards state and federal programs. What’s more important is to teach your children how to file their taxes.
There’s plenty of tax apps on the market, many of them provided by name-brand accountancy firms like Turbotax and H&R Block, but even they can’t cover all the basics. If you need help teaching your teenager about taxes, the IRS has a student portal designed to help total beginners understand the hows and whys of taxes.
Good debt
Good debts are essentially long-term investments in assets that increase a person’s overall net worth, such as:
- Student loans
- Mortgages
- Car payments
As Forbes reported earlier this year, mortgages and student loan debt are still the largest and second-largest consumer debt categories, respectively. The good news is that current high school students are taking loan debt seriously, displaying a willingness to take gap years to earn money or attend less expensive community college programs to earn college credit.
When it comes time to take out a loan, do your homework with your teen – there’s a wide variety of student loan options, and a variety of lenders with strong web and mobile presences, offering competitive rates. Once you’ve found the lowest rate, be sure your teen doesn’t accept any more than they need to. They’ll be paying it back with interest just as they’re about to start their career. And of course, encourage them to make payments on time.
While mortgages are just a blip on the horizon, you’re still able to impart the same basic knowledge gained from finding the best student loan: Do your homework, find the best rate, and always pay on time.
Debt doesn’t care about flash, so when your teen is looking for their first car, make sure to ask the question: new or used? Newer cars depreciate more quickly but are more reliable, while used cars cost less but could require costly maintenance. Kelley Blue Book is still the definitive voice in new and used car pricing, an essential tool when shopping for a new car.
Bad debt
Whereas good debts are assets, bad debts are liabilities. They aren’t investments, and not paying them off can have serious consequences on a person’s credit history:
- Credit card debt
- Payday loans
- Car payments
- The unforeseen
Your teen likely understands that they should only get as many credit cards as they can pay off at the end of the month – but sometimes unexpected expenses can push us over our card’s limits and past our payment dates. Once they’ve missed a payment, not only does their credit score suffer, but the card’s APR kicks in, meaning they’ll have to pay even more due to interest.
Teach your child to avoid payday loans if at all possible. Payday loans are notoriously predatory, and their APR is far too high. Teens should only ever consider a payday loan if they face a truly desperate situation (and in that case, you may want them to come to you first).
Car payments are a grey area between good and bad debt. Car loans actually count as a liability against a person’s net worth. New cars depreciate by 10% the minute you drive off the lot, and by a minimum of 10% annually after that. It’s better, financially, to try to keep a well-working car for as long as possible, or to only opt for a new car when you’re sure you can pay for it.
Unforeseen expenses include medical emergencies, maintenance for cars and homes, rising bills, and unemployment – all things your child should take into consideration before making major purchases.
Credit scores and credit reports
This is the last step in building a foundation for financial literacy. Now that your child understands the concept of credit, you can introduce them to FICO.
If your child’s been making monthly payments towards a credit card, then he or she should have a starting credit score, and paying off student loans and credit scores can help. Contrary to popular belief, it’s possible to check your credit score without harming it.
Once you see your child’s credit score, you can explain what goes into determining it:
- Payment history
- Amounts of debt
- Length of credit history
- New credit
- A mix of credit card and loan debt
If your child’s credit score is low, it’s because they haven’t established much financial history yet. Make the connection between paying off good debt and building credit. The low interest rates that come with good credit will make future loans easier to pay off and can result in big savings on a car or home loan.
Apps that can help
The MyFICO app is a popular choice for checking credit scores regularly. It offers up-to-the-minute information, plus alerts about credit changes or identity threats.
PCMagazine calls Mint “the best personal finance software hands down,” and it’s not hard to see why. Setup is simple, and users get a comprehensive view of their finances in seconds. Your child will have to connect a few accounts, but almost immediately, Mint will provide a thorough analysis of his or her finances. It’s a great tool for identifying spending trends and spotting opportunities for improvement.
Entrepreneurship: Ages 18+
Many believe that the essence of financial literacy is to instill fiscal security for their children in the future. Wise practices and conservative choices can give your adult children the ability to weather difficult financial times on their own. But there’s another benefit: confidence.
Once someone has a comprehensive understanding of the way personal finance works, they’ll have the confidence to make bolder moves when they’re older. Even Warren Buffett teaches children about the connection between financial literacy and starting a business. And he’s admitted that kids today know more than he did growing up.
That’s a good sign.
The post How to Teach Kids About Money, from Toddlers to Teens appeared first on The Simple Dollar.
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These Strategies Can Keep Money From Running Dry at the End of the Month
When you live paycheck to paycheck, the end of the month can be a tough time. (Case in point: the way we celebrate those months with an extra Friday — woot!)
Regardless of when or how frequently you’re paid in the month, those last few days can get tight. You’ve poured all your money into monthly bills and expenses, and now next month’s rent is right around the corner.
We know you’re doing your best to budget with what you’ve got — but what happens when that’s not enough?
How to Make Extra Money to Boost Your Bank Account
When you can’t stretch what you’ve got any further, get creative to add money to your bank account.
Here are some clever ways to bring in a little extra cash so you’re not running out of money at the end of the month.
1. Look for Money in Hidden Places (Not the Couch Cushions)
We’re not saying you should stop digging in couch cushions for loose change — just expand your search a little.
Items you would normally throw away could be worth a few bucks that’ll pad your bank account each month.
Look how this guy made $1,500 in a year collecting aluminum cans from his company’s break room. That’s a spare $125 a month!
Here are seven more wacky things in your trash that could earn you cash. For example, did you know you could find a website dedicated to selling your used moving boxes? What a great way to reduce waste and make money!
Finally, here’s a fun secret our readers love. The $1 bills in your wallet could be worth thousands of dollars. Just check for these sought-after serial numbers.
2. Save Your Shopping for When Everything Is on Sale
Do you waste money impulse shopping? You could save a lot — without giving up those purchases — by buying only when they’re on sale.
Enter Shoptagr, a mobile app and browser extension that keeps an eye on prices for you.
It lets you save items from over 1,600 online retailers to a single wish list. Then it notifies you in real time when an item goes on sale. Shoptagr will even watch items in a specific size and color, so you don’t have to settle for second best just to save money.
Online shopping prices are constantly fluctuating. Make sure you’re not overspending just because you’ve got an itchy “buy now” finger.
Here’s the link to sign up with Shoptagr.
3. Turn Your Spare Room Into Cash
Have a spare room? Might as well use Airbnb to make some money with it.
If you’re a good host with a desirable space, you could add hundreds — even thousands — of dollars to your savings account with Airbnb.
Taking a few simple steps can make the difference between a great experience and a less-than-satisfactory one.
Here are a few tips:
- Make your space available during high-demand times in your area. Think: concerts, conventions and sporting events in your area.
- Be a good host, and make sure your place is stocked with the toiletries you’d expect at a hotel — toilet paper, soap and towels.
- Be personable. A lot of travelers turn to Airbnb for the personal touch they won’t find at commercial properties.
Here’s the link to sign up as an Airbnb host.
(Hosting laws vary from city to city. Please understand the rules and regulations applicable to your city and listing.)
4. Get a Refund for Things You’ve Already Bought
Can’t hold off on that purchase for a big sale? Do the next best thing: Buy it now and get a refund next time the price drops.
Your secret weapon here is an app called Earny. It scans your emails for receipts, looking for online purchases from participating retailers like Amazon and Target. Then it tracks competitor prices for items you purchased and gets you money back when it finds a better price.
Earny takes advantage of retailers’ price-match policies to negotiate a refund on your behalf. So you don’t have to do anything — just wait for a notification that you’ve earned cash back.
You’ll get a refund via your original payment method, store credit or a check in the mail, and Earny keeps a 25% “success fee,” only when it saves you money.
5. Earn Cash Back on Everything You Buy
Make sure when you spend money you’re at least making something back in return. With a cash-back credit card, you can do just that.
Try, for example, the Barclaycard CashForward™ World Mastercard®. With this card, you can get 1.5% cash rewards on every purchase — no restrictions. You can also snag a $200 bonus if you spend $1,000 within 90 days of opening the card. Oh, and there’s no fee.
You can redeem your rewards every time they reach $50 — plus, you’ll get a 5% bonus towards your next redemption. So, if you spend about $1,000 a month on the card, that’s an extra $200 a year.
Check out this list to explore more cash-back cards with no annual fees.
6. Earn Rewards for Shopping With Any Debit or Credit Card
There’s a new rewards platform on the market. Drop is a financial tech company that rewards you for your purchases.
As a Drop user, you’ll link your credit and debit cards. When you make a purchase with a participating retailer — like Walmart and Starbucks — you’ll automatically earn points.
You can cash in your points for gift cards to popular retailers like Amazon.
It’s the ultimate loyalty card — without the card.
Penny Hoarders must use a special code “backtoschool”. You’ll automatically score 5,000 points, which is equivalent to $5.
7. Eliminate Your Hidden Expenses
We all sign up for stuff. Sometimes it’s easier to put subscriptions on a recurring payment and forget about it — looking at you, Netflix.
From entertainment to razors to toothbrushes to magazines, we’re all about the set-it-and-forget-it convenience of the subscription model.
But that “forget it” part can end up costing you a lot of money.
To keep track of everything you sign up for, check out an app called Trim. Once you sign up and connect your bank account and phone number, it analyzes your transaction history for recurring payments.
Trim lets you know when it finds a new subscription and helps you cancel any you don’t want to keep. This is a good time to rethink that gym membership you haven’t used since January.
To get rid of it — sans judgment from that buff guy at the front desk — sign up for Trim here.
8. Earn Extra Money in Your Spare Time
Need a fun, flexible way to earn money while also meeting lots of new people?
Try driving with Lyft!
Demand for ridesharing has been growing like crazy, and it shows no signs of slowing down. To be eligible, you’ll need to be at least 21 years old with a year of driving experience, pass a background check and own a car made in 2007 or later.
We talked to Paul Pruce, who’s been driving full-time with Lyft for over a year. He earns $750 a week as a driver.
Best of all, he does it on his own time. You can work days, nights or weekends — it’s up to you!
Since it’s simple to switch between apps, many Lyft drivers also sign up as a driver partner with Uber.
As an Uber contractor, you’re responsible for setting your schedule and motivating yourself to work — no one is keeping tabs on you. Your earnings will be calculated by adding a base fare, plus time and distance traveled after your pickup, and Uber charges a service fee (20-35% depending on your city).
If you want to give it a try there are a few things to keep in mind. You must be at least 21 years old, have three years of driving experience, have an in-state driver’s license, a clean driving record and be able to pass a criminal background check.
9. Sell Your Stuff
When you’re short on cash, start looking to the back of your closet and in the depths of your attic or basement. No, you probably won’t find cash hidden there (bonus if you do!). But you’ll probably find a bunch of things you don’t use anymore.
A lot of people see this clutter and start plotting a garage sale to earn extra money. The prospect is tempting — but a garage sale might not be worth your time.
Try these alternatives to sell your stuff online or in town to earn more money with less hassle than hosting a full-blown garage sale.
Apps like Letgo and Decluttr make it super easy to sell your stuff without sitting in the front yard and dealing with strangers all day.
Good luck Penny Hoarders — we really hope these tips help you keep from running out of money!
Advertiser Disclosure: Many of the credit card offers that appear on this site are from credit card companies from which The Penny Hoarder receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). We do not feature all available credit card offers or all credit card issuers.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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Dude, This Company Will Pay You to Hang Out in Hawaii and Post on Instagram
When was the last time you felt truly, totally, radically stoked?
Are you often stoked? Are you easily stoked? Are you one of the most stoke-able people to ever exist on this Earth?
Then dude, did we ever stumble upon the job opportunity for you.
The World Surf League is looking for someone who is “both extremely stoked and leisurely” to be the head of the newly-created Department of Stoke and Leisure.
That’s it. That’s the whole job.
OK, so there are a few more relevant details (like the fact that you’ll be in Hawaii). But I’m not kidding — that’s still sort of the whole job.
(But if this one’s not for you, check out our jobs page on Facebook to find something that is.)
What the Ambassador of Stoke and Leisure Will Do
As the Ambassador of Stoke and Leisure, you’ll be in charge of two “ultra-important” things: being excited about whatever is happening at any given moment and “chillin’ the most.” (Which is just a fancy way of saying stoke and leisure, duh.)
You should probably have (although I guess it’s not required) a long-standing passion for all things surfing, because you’ll need to make the most of an all-access pass at the World Surf League Championship Tour when it lands in Oahu, Hawaii in December.
This means you should be easily excited (or stoked) about pretty much everything in the world of surfing, including acai bowls, palm trees, coral reefs, sunsets, “not working for The Man,” coconuts — all of it should get you stoked.
You should have a general thirst for adventure — and you have to be one of those people who can’t have those adventures without Instagramming every. Single. Thing. You. Do.
You’ll snap pics of everything you see and experience that gets you excited, including waterfalls, cliff jumps, famous people, parties, fruity drinks, volcanoes and the occasional jet ski ride. Then you’ll upload them to the ‘gram, caption ‘em and watch the likes roll in as your ~stoke~ grows.
The listing doesn’t say exactly how much this gig pays, but the whole job sort of reads like a paid Hawaiian vacation — so a paycheck might just feel like an added bonus.
If you think you have what it takes to simultaneously be both the most stoked and the most leisurely and can showcase that on your social media from a hammock on the beach, go here to apply to become the first ever (probably) Ambassador of Stoke and Leisure.
P.S. If I had to give you a definition of this job in layman’s terms, I’d say “you’ll be a hype-man whose job is to document and promote a surfing competition on Instagram by capturing and posting the most scenic, exciting and fun aspects of the ultimate Hawaiian experience.”
But also, if I had to give you a definition of this job in layman’s terms, I’d say this probably isn’t the job for you.
Grace Schweizer is a junior writer at The Penny Hoarder.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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How to Enjoy an Expensive Hobby without Overspending
A few days ago, I was cleaning out the garage when I found my old set of golf clubs.
Now, for those of you who aren’t aware of the full story of my financial turnaround, I used to be an avid golfer about a decade ago. I had a group of friends that I went golfing with a few times a week and I was constantly upgrading my golfing gear. It was an expensive hobby, to say the least. I bought balls, tees, new clubs, and other items all the time, and then there were the green fees and the cost of snacks and drinks and then a few drinks in the clubhouse afterwards… and I was doing this a few times a week.
When I realized I needed to start turning around my financial situation, I made the decision pretty quickly that I needed to take a break from some of my expensive routines, and golf was one of them. I basically gave up golf cold turkey, only playing occasionally with family after that. I sold a few of my more expensive items, stuck my remaining golf balls into my golf bag, and basically just sat it off to the side so that I’d have enough gear to go golfing with my father-in-law every once in a while.
The golf clubs have sat in my garage, basically unused, for most of a decade now. I’ve pulled them out a few times, but they’ve mostly become a relic of an abandoned hobby.
I looked over my clubs a bit. I checked the side pockets and found plenty of tees, new balls, and a few old balls in there. I took out a club and gave it a few practice swings.
As I thought about it, I couldn’t help but wonder whether or not golf is a hobby that could fit into my life today. Could I really enjoy such an expensive hobby? I don’t particularly want to jump back into the golfing hobby, but could I make the expense of it work within a frugal lifestyle?
What about other expensive hobbies, like photography? Can such a hobby be deeply enjoyed if you’re a frugal person?
I still have one somewhat expensive hobby: home brewing. I also have a couple of hobbies that can be expensive if you’re not careful. When I think about more expensive hobbies than my own, I realize that most of the principles I use to keep these hobbies in check would work for more expensive hobbies, too.
Here are a bunch of strategies for enjoying an expensive hobby while still keeping your finances quite healthy.
Rule number one: if you’re not doing it with cheap equipment, you won’t be doing it with expensive equipment. If you tell yourself, “I would do X thing if I had the right equipment,” the truth is that once you’re past a short honeymoon period, you won’t actually do that thing, even if you have all the equipment in the world.
If a hobby is something you’re really into or passionate about, you’ll find yourself doing it to the best of your ability with whatever equipment you have. You’ll take a putter to some place with really short grass and aim at a target. You’ll take a driver to a driving range. You’ll use your smartphone to set up great photography. You’ll find ways to do whatever it is you’re excited about with whatever you happen to have on hand.
If you’re not drawn to that hobby in that way, then you shouldn’t be investing money hand over fist into it. An amazing camera won’t suddenly make you into a photographer; you’re either into photography with a cheap camera and have designs on upgrading, or you’re not really into photography at all and just appreciate that it’s kinda cool when other people do it.
Don’t dive into an expensive hobby unless you love it so much that you’re already trying to do it with whatever you have on hand.
But what if you do need at least a little bit of basic equipment to start? Start off with low end inexpensive gear and used gear and use it until you can clearly explain what doesn’t work. If you’re really passionate about cooking, you’ll want to cook with two knives, a cutting board, and three pots that you bought at Goodwill. If you’re really passionate about photography, you’ll want to take photographs with your smartphone.
The thing is, it’s only through using that low end gear over and over again that you can really figure out why you need to upgrade anything. You’ll start to see how this low end gear really isn’t meeting your needs and you’ll see how specific upgrades can help you enjoy this hobby more deeply.
Take my own home brewing hobby, for example. My first batches were made in a stock pot that we already owned and in a cheap food-grade plastic five gallon bucket with a vent hole on the top that I bought at the store, along with some cheap grains and about $8 worth of additional items from the local home brewing store. That’s it. It was about as bare bones as possible. I only started switching items out when I began to notice issues or things that I wanted to do that I couldn’t pull off.
Pair an expensive hobby with cheaper hobbies. If you’re into photography, pair it with a cheap hobby like walking or low-intensity hiking. If you’re into backpacking, pair it with something like reading books from the library.
That way, not all of your hobby time is channeled into something that constantly draws you to spend more and more money.
Apply a strict budget to your hobby from day one, and plan out how you’re going to use that budget to maximize your hobby fun. I have a hobby budget each month that I divide amongst my various hobbies. That hobby budget has a firm cap, so what that means is that I have to think ahead a little bit as to how I’m going to spend that hobby budget.
I usually plan out what purchases related to hobbies that I’m going to make this month, sometimes very specifically and sometimes with a bit of flexibility. So, I might say “This is the month I’m going to buy a new mash tun for home brewing,” and then also have extra money for serendipity when I’m visiting other hobby stores or sites. “I can spend $XX on other things as they come up this month.”
(A mash tun, for those interested, is a container that one uses to treat hops with hot water when making an ale; it generally requires insulation and is often done, for small scale home brewers, by modifying an insulated water cooler.)
If I do this kind of planning each month, I keep my hobby spending in check (mostly – my biggest bugaboo is ordering Kindle books without reflecting on it, honestly, which is still a trick for me). I often plan a few months ahead with regard to this spending, which is helpful in other ways that I’ll mention below.
Regularly reflect on how high of a priority this hobby really is in your life. Sometimes, things you’re really passionate about fall into decline. They slip from being a deep passion into being a routine, and when that happens, you stop doing it quite as often and you might find yourself doing other things during windows when you would have been enjoying that hobby. Instead of photographing, you leave the equipment in your closet and go on a hike without it, for example. Instead of making another home-brew batch, you spend the afternoon playing a board game or reading a book.
It’s okay for such change to happen, but be mindful of it. Don’t keep spending money as though an expensive hobby is still a high priority for you if it’s actually not. Be honest with yourself – it really is okay to not be as passionate about something as you once were, and it really is okay to find new passions and interests. The key is to not keep throwing money after a declining interest.
Upgrade your gear slowly, only when it makes sense. When you’re really into a hobby, it can be extremely tempting to just want to upgrade all of your gear as soon as possible, improving it as soon as you can possibly articulate a reason why.
Don’t do it. Not only is such a move disastrous for your budget, it’s also not a great move for your hobby as a whole.
Instead, upgrade one thing at a time. Improve that one thing, then engage in your hobby several more times and see how that one improvement changes things. If I buy a mash tun, for example, I might make several batches of IPA and that new process will really help me reflect how much I really need a ten gallon carboy or how much I really need a triple-clad cooking pot. If I just go buy everything, I’m not really considering what upgrades are truly worthwhile and which ones might not be all that important.
Do plenty of research into upgrades. If you decide to upgrade something, like buying a new photography lens or picking up a new golf club, do plenty of research into that upgrade. Know exactly what you’re buying, how it will work for you, what size is best for you, and where you can get that item at the best possible price.
This synergizes really well with the type of longer-term budgeting I described earlier. By planning ahead for future months with regards to budgeting, you give yourself a nice window with which to do research into particular purchases. I might be planning on buying a mash tun in December and have budgeted $100 for it; if I can find a really good plan and assemble one for $80 in gear purchased in December, I’ve saved $20 for other hobby purposes. Plus, I have time to think about whether or not this upgrade really makes sense.
When you do upgrade, choose high quality items that match what you need. You’re far better off slowly upgrading your entry level gear to truly high quality gear than taking a bunch of middle steps along the way. If you buy one piece at a time, carefully research it, and choose an option that’s going to last for a very long time, you’re going to eventually wind up with a great set of equipment for your hobby.
For example, let’s look at my home brewing hobby again. I started off with all entry level stuff, but as I replace items, I’m going for individual high quality replacements rather than moving everything quickly to mid-level items. I’m going a step at a time so that I know what I’m buying and I can replace the individual items that most need replacement. Also…
Make sure to maximize the resale value of the items you buy when upgrading. You’re far better off buying something for $200 that you can resell for $180 if you take care of it than buying something for $80 that no one will want to buy for more than a pittance. If you do decide to exit the hobby at some point, having gear that you can sell to recoup most of, if not all of, your money is the best way to go.
In general, mid-level stuff doesn’t have all that much resale value. It does the job well, but it tends to wear out and not attract much interest from serious enthusiasts. What will attract their interest is top gear, and for that stuff, if it’s well maintained, you’ll get a good return on your money.
Plus, there’s also the factor of the “second upgrade.” If you upgrade from entry-level to mid-quality and you stick with the hobby, you’ll eventually find yourself wanting to upgrade to the high end version, at which point you’re stuck with a mid-grade item that you have no use for and can’t resell for much.
For me, this is further incentive to slowly upgrade items to truly good versions of that equipment within my hobby budget. If I were into photography, I’d vastly prefer to save for a few months to buy a truly great lens rather than buy several mid-grade lenses one month. I’m more likely to be able to recoup my value from that one lens later on, plus I know I’ll never have to upgrade it again further down the road.
Don’t be afraid to look for used versions of high quality items when upgrading. In general, people who own high-end versions of hobby equipment take really good care of it. A photographer with a $400 lens is going to take care of it. A pen enthusiast with a $500 fountain pen is going to take care of it.
That’s why it often makes sense to buy high quality items used from other enthusiasts who may be downgrading or getting out of the hobby or selling a few items in a pinch. You generally won’t get a huge discount doing this, but the item you get will be in extremely good shape and it’ll be an item that you’ll someday be able to sell for almost as much as you put into it.
Maintain any equipment you buy for your hobbies and make such maintenance part of the hobby routine. If you own high end equipment, take care of it. Keep those lenses stored properly and cleaned properly. Clean your home brewing gear thoroughly and store them in a dry place. Clean and properly pack your camping and hiking gear. You get the idea.
Yes, this takes a little time, but if you’re passionate about the hobby, it’s often enjoyable time. I enjoy doing things like organizing board game boxes or cleaning up my home brewing equipment. It lets me think about the tasks that I’ve been doing and also reminds me that I’m putting things in position so that this gear will last and also so that I’m ready to go the next time I dig into this hobby.
If a hobby involves routine paid experiences, make the “regular” experiences as low-end as possible and spread out the high-end events. Golf is a great example of what I’m talking about here. It can be tempting to always go to the nicest golf course around, but it’s actually a terrible idea for your wallet and also, believe it or not, for your long term enjoyment of the hobby.
A much better approach is to become a regular at the cheapest course around. Play most of your rounds at that cheap course, where you can feel more comfortable trying new things and honing your game, and save rounds at the nicer course for special occasions. If there are opportunities for cheap or free rounds, take advantage of those, too.
The best part? You’ll find that you really appreciate the occasional nicer rounds. They’re not routine. They’re special. Because of that, they stand out in your mind and you really savor them.
Get involved in local groups who are involved in the same hobby and learn from their experiences. If you’re really into a hobby, look for a local group related to that hobby and get involved with it. Such groups attract enthusiasts like bugs to a UV light. Surrounding yourself with enthusiasts enables you to have a lot of sources for socializing, for advice on how to improve within the hobby, and also opportunities for buying (and selling) high-end used equipment (as noted earlier). You can often find such groups virtually on Facebook and face-to-face groups via Meetup.
This can be a double-edged sword, of course. Such groups can often encourage a spending impulse and a desire to toss money into a hobby, especially at first. Keep it in check – stick with your budget and consider your purchases carefully. Look for discount opportunities within the group, such as discounts for group members and individuals selling items to each other.
The key behind all of this is one simple thing: keep your spending impulses under control. Expensive hobbies can result in financial disaster if you approach them with an impulsive mindset. Don’t allow yourself to spend much at all on the hobby without a bit of planning and consideration first. Shop around, know what you’re buying, and make sure that it fits into your overall budget before writing a check or swiping a credit card.
If you can keep yourself doing that, you can enjoy an expensive hobby on a frugal budget. You might not have everything you want immediately, but you’ll have abundant opportunity to learn about and grow within the hobby.
Good luck.
The post How to Enjoy an Expensive Hobby without Overspending appeared first on The Simple Dollar.
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Fund Briefing: Technology funds
These changes also provide opportunities to make money within some of the fastest growing companies around the world, according to Adrian Lowcock, investment director at Architas, the multi-manager investment company.
“Technology can be used to either disrupt existing markets or create new markets and new demand,” he says.
Many technology companies spend a fortune on innovating, just to stay ahead of the competition, he points out. But the increased interest from investors has driven share prices up to levels, which assume success is guaranteed.
“For me, that is a concern as no company has a monopoly on predicting the future with any degree of certainty,” he adds.
“Overall, I think the key is still stock selection as just because it is technology doesn’t mean it will be successful.”
Despite the prominence of technological change in our lives, the IA (Investment Association)Technology & Telecommunications sector is relatively small. It consists of just 17 funds with a combined investment of £2.1 billion, according to IA figures.
Although this is a relatively modest amount – especially compared to the £167.2 billion that has been invested in the IA UK All Companies sector – the figure represents a 50% increase over the £1.4 billion level it was a year ago.
The reason more isn’t invested into these funds may be partly historical as investors have had a troubled relationship with this area since the dot.com boom of the late 1990s, where money was ploughed into the new breed of companies that promised bumper profits.
The valuations of these firms subsequently rocketed, but there was very little substance behind many of the business models and the tech bubble burst in spectacular fashion, wiping millions of pounds off the stock market.
Understandably, such experiences have influenced investor thinking, acknowledges Patrick Connolly, a certified financial planner with Chase de Vere.
“Many suffered significant losses after investing near the top of the market and watching as prices went into freefall,” he says. However, times have changed and today’s technology funds are more likely to be filled with established companies, such as Apple, Microsoft, Alphabet (Google), and Samsung, than many of the dot.com companies from that period.
“This should provide a less erratic journey for investors, although those in technology funds must still expect a high degree of volatility,” adds Mr Connolly. “It’s also difficult to spread risk by investing in more than one such fund as many of them hold the same underlying stocks.”
One of the best performing sectors during the past few years has been IA Technology & Telecommunications, with the average fund in this area having returned 75% in the three years to 1 August 2017, according to Morningstar data.
In fact, only the IA Japanese Smaller Companies sector, with its 80% average return, has performed better over this period. When you consider there are more than 30 different sectors, this is encouraging. However, it’s still important to do your research as not all funds perform the same. Before committing your money, it’s essential to understand how the portfolio invests, whether it has any biases, and how the manager has performed over different periods.
Illustrating the importance of this approach is the fact that investing in the best performing funds in this sector would have given you a return of 35% over the past year, while the worst performing portfolios have only nudged up around 5%.
Darius McDermott, managing director of Chelsea Financial Services, suggests performance has been particularly challenging for actively managed funds in this area that have more restrictions than the index-tracking portfolios. “Some of the biggest tech stocks – such as Apple – represent more than 10% of the index,” he says. “The active funds aren’t allowed to own any more than 10% of a single stock, so they are always underweight, even if they like the company.”
Of course, you don’t need to buy a dedicated technology fund, points out Chase de Vere’s Mr Connolly.
“We prefer to get exposure to these areas through more broad-based funds, which will include technology alongside other sectors to spread the risk,” he explains. Meanwhile, Chi Chan, European equities portfolio manager at Hermes Investment Management, looks to related areas, such as retail.
“Businesses that are effectively evolving their product offering and user experience are capturing increasing market share,” he says.
He cites ASOS, the fashion retailer, as a prime example. “The company has pioneered online logistics so that customers can receive orders within 12 hours, an astonishingly rapid turnaround,” he says. “It has also invested heavily in building customer allegiance.”
Fund to watch: AXA Framlington Global Technology
The aim of this fund, which is run by award-winning fund manager Jeremy Gleeson (pictured above), is to provide long-term capital growth from investing in technology companies.
The portfolio, which was launched at the height of the tech-boom in the late 1990s, invests in a broad cross-section of companies and sectors.
This is one of the reasons it’s the preferred fund in the sector for Darius McDermott, managing director of Chelsea Financial Services.
“The fund invests in all sizes of technology companies around the world, and the manager prefers to fi nd new technology stock ideas rather than old commodity companies,” he says.
Its largest geographical allocation is the 88% in North America – unsurprising considering this region is home to so many up-and-coming technology companies.
There is also more modest exposure to emerging markets, Europe excluding the UK, Japan and the United Kingdom, according to the latest fund fact sheet.
As far as sectors are concerned, internet software and services has the largest share at 23%, followed by 21% in software and 20% in semiconductors (a chip that goes into products such as mobile phones) and related equipment.
Its largest stock positions, meanwhile, include Alphabet (9%), Apple (8%), Facebook (7%), Visa (4%), and Cisco Systems (3%).
Quick guide: Is this area right for me?
Consider investing in technology funds if…
- You are confident companies will invest more in technology
- You believe technology is going through an exciting development period
- You are willing to have at least some of your money in higher-risk areas
How much should I invest in this sector?
- Low-risk investors: 0%
- Medium-risk investors: 2%
- High-risk investors: 6%
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True money stories from smart people Who really wants to retire anyway?
Would you like to retire at 40? It’s easy. Spend nothing, stay indoors, eat baked beans and save water by crying into the toilet cistern so you won’t need to flush. Do that for 10 years and you can keep yourself in Saga holidays and Stannah stairlifts for the rest of your life.
Easy. Why didn’t we all think of that? Well, one man on a recent Channel 4 programme, did – retire at 40 I mean, not cry into his toilet. He achieved this by investing 75% of his income every year. Bully for him, but you can’t help wondering if it’s really worth being a Billy-no-mates for a decade or so just to earn yourself the right to sit at home and watch Jeremy Kyle all day.
Still, at least it shows that it’s possible for ordinary people to retire like footballers, while you still have the energy to go wild in Magaluf. No waiting around for the state pension to kick in.
It’s certainly something I’m planning. I’m expecting a retirement full of hot toyboys and cruises round the Med. Incredibly, these are not catered for on the state pension. Who knew?
On BBC Breakfast News recently, I was explaining why the state pension age for 39- to 47-year-olds was being put back from 67 to 68. It’s because we’re selfishly living longer and drawing pensions for many more years than was originally expected. Short of putting something in everyone’s tea at age 75, the government has to take action now.
The howls of rage on Twitter and in my inbox were deafening. “Shame on you Jasmine,” said scouser Chris Tinsley describing national insurance as “an insurance policy for retirement”. He continued: “Raising the eligibility age should not be a financial option by people [ie, the government] who have mismanaged the fund. People like me who have paid into this scheme from our weekly wage in the belief this will support us as we get older should not have to work longer to access what we are rightly due.”
Eh? ‘Mismanagement’ of pension funds? What funds? Does he not know that the state pension is basically a Ponzi scheme where ‘investments’ made by today’s workers are handed straight over to current pensioners?
Fraudster Bernie Madoff would be impressed at how easily we have been made to believe – without it ever being said – that our money was being invested for us in a gold-plated fund that magically produces near 20% returns to turn our meagre monthly contributions into guaranteed, liveable income for the rest of our days.
Others took my side, though. One reader, Brian, commented: “When I looked at retiring, I got a print-out of my national insurance contributions (NICs). Over 39 years, I had only paid in just under £60,000 (does not count employer contributions), and for the past 10 years I had earned more than £50,000 a year.” Brian has enough NICs to qualify for the full state pension, worth £8,296 a year. But he says: “If I get at least £5,500 for 11 years, that would be more than I paid in… not counting the other benefits the money paid for.”
Exactly. Those who say that “we’ve paid in and should have what’s rightfully ours” have not calculated how much they have actually put in to see what (of other people’s money) they really get back. Many also conveniently forget the other benefits national insurance entitles us to, such as unemployment benefit, maternity allowance, bereavement support and more.
So it really is time that we took things into our own hands – whatever age we are – and put as much as possible into our own ‘cruises-round- the-Med’ fund (so much more better-sounding than a ‘retirement fund’).
We need to be more like MoneyMagpie stalwart Tira Shubart, who says she is putting off her state pension age by a year in order to get a higher payment, and who, at 61, has just started a new training business in Africa. “I calculate my age in Centigrade rather than Fahrenheit,” she explains, “which means I won’t actually retire for another 30 years. Go me!”
Jasmine Birtles is a financial journalist and founder of MoneyMagpie.com. Email her at columnists@moneywise.co.uk.
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