Questions About Banks, 401(k)s, Old Microwaves, Audiobooks, and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Budgeting for “discretionary money”
2. Bank recommendation
3. Advantages or drawbacks to marriage
4. Buying a beginner bike
5. Finding a good campground
6. Spending less on food
7. Cosigning advantages on car loan
8. 401(k) contribution question
9. Risk of old microwave?
10. Do tiny houses make sense?
11. Checks and security
12. Library audiobooks

On Saturday, one of my favorite writers, Rachel Held Evans, passed away suddenly and unexpectedly due to an extreme reaction to an antibiotic. She was 37.

I could write several paragraphs here about how her books and essays had a big impact on me, and every word would be true. All four of her books had a real impact and they’re on my re-read list right now.

Perhaps more directly on topic for The Simple Dollar, however, was that she was a writer who died an unexpected and untimely death at an age very close to my own. It’s rather hard not to immediately transpose that sudden death into my own life.

What would it mean for my family and those who care about me if I took an antibiotic tomorrow, had a massive reaction to it, and suddenly died? What if I were driving home last night and a drunk driver plowed into my car and I suddenly died?

It is uncomfortable to think about such things, but they can happen. It is a reminder that we only get one life, and we shouldn’t leave unsaid words and unhealed wounds and moments of anger and frustration and damaged relationships hanging. Life is too short to be angry. Life is too short to let a hurt fester.

Life is also too fragile to leave your loved ones dangling without some kind of plan in place for them.

On with the questions.

Q1: Budgeting for “discretionary money”

The idea of budgeting for “discretionary money” or “hobby money” really clicked with me and it made budgeting make a lot more sense. My question is how do you figure out how much to budget for “discretionary money” each month? I feel like I’m just guessing.
– Jeremy

The first step you should take is to add up your discretionary spending from each of the last several months to get an idea of what you’re spending on those unnecessary things. Take an average of those months to see what you’re actually spending in an average month.

Then, chop off a small portion of that average, say 10%, and use that as your discretionary money budget. If you chop off a huge amount, say 50%, it’ll be quite hard to maintain it and your budget will likely fall apart.

So, let’s say you figured out that, of the money you’re counting as discretionary spending, you spent $300, $280, $330, $290, and $250 the last five months. That averages out to $290 a month. 10% of that is $29 and thus chopping off 10% leaves you with $261. That would be your discretionary spending budget for the month.

Q2: Bank recommendation

We currently use Chase for our savings and checking and they have no free accounts unless you have a Chase mortgage or maintain a daily balance of at least $15k. I’m looking for a free savings and checking account for my husband and I. We’d prefer a bank that has easy to use web UI, an app, and a decent domestic ATM network (at least in the Midwest).
– Carrie

I’d take a look at Capital One 360. They offer both free checking and savings and a pretty good web UI and app. I can’t judge whether they have any ATMs close to you, but they have a lot of them. You can use their ATM search to see if there are any surcharge-free ones near you.

Another option you may want to consider is your local credit union. They often offer most of the same features (at least, I know that two local ones near me offer those features) and by using a credit union, you can be pretty sure that at least some of the proceeds from your checking and savings money (which they can utilize to back up mortgages and so on) stays local.

So, I’d probably point you toward a local credit union, but if they don’t have everything you need, I’d look at Capital One 360.

Q3: Advantages or drawbacks to marriage

Assuming that there is zero intent to ever have children, are there enough financial advantages to overcome the drawbacks of getting married? Drawbacks that worry me include unbalanced and messy divorces, higher taxes (we make similar salaries), and money stress as most marriages seem to have a lot of money arguments from what we have been reading. If we don’t want to have kids, why get married?
– Adam

It’s true that a long term cohabitation offers many of the same financial benefits as marriage. It allows the partners to split many of the costs of day to day living – rent, bills, carpooling, and so on.

There are some financial advantages, though. One big one is that if one of you decides to go back to school or is unemployed for very long, being married and filing jointly will be a nice tax savings and you’ll be able to piggyback off of the other’s benefits. You’ll also be able to continue to contribute to a Roth IRA if you’re unemployed and your spouse isn’t. If one of you dies, the law looks favorably upon marriages in terms of who inherits your stuff; if you aren’t married, it can get really messy and will involve some court time.

My general belief is that the benefits of marriage without kids shines best when one partner is not employed, as there is a significant tax savings and benefits extend to the unemployed partner. Married couples find it a lot easier for one person involved to bounce to a new career because of it.

Q4: Buying a beginner bike

I live about 3.5 miles from my job. There is actually a biking/walking trail that covers most of that distance between home and work and I finally decided to start taking advantage of it. I walked to work almost every day for the last few weeks and decided to invest in a bicycle. I went to a bike shop this Saturday and the guy there just kept recommending bikes that cost more than $1000 which seems like overkill for a commute. Do you have any suggestions or guides for buying a first inexpensive bike (well, since junior high) for riding to work?
– Ed

I don’t even know what that person was recommending to you for more than $1,000. That seems drastically out of line for a first time commuter bike.

Honestly, if I were you, I’d look for a used bike for your first bicycle. Go to some used sporting goods stores in the area and to some bike shops and see if they have any used bikes for sale; you can also check local marketplace sites like Craigslist and Facebook Marketplace. You’re better off getting a used bike for $40 that will work for your commute for a year or two than investing hundreds in a bike at first.

The reasons are numerous. First, you don’t have any idea if you’ll stick to this plan, so investing hundreds in a bike is silly. Second, you don’t have any real idea of what you like and dislike in a bicycle, so investing hundreds in a model that you’re unsure about is also silly. Third, because this is all new to you, you have at least some likelihood of doing some extra wear and tear and minor damage to your first bike, so having an inexpensive one is good.

Get a cheap used bike. Ride it every day. Figure out what you like and don’t like. Get good at riding a bike again. Then, if you’re really into it, upgrade from there. If not, you’ve only sunk $40 (or whatever) into this.

Q5: Finding a good campground

How do you find places to camp that aren’t loud and overcrowded? We seem to be on a really bad run of camping, so bad that my wife does not want to camp this summer.
– Jerry

Honestly, my recommendation is to look at camping sites in a National Park or National Forest, if you can find one. In my years of camping experience, I’ve found that rangers in national parks do not put up with noise, and most people there get it anyway and don’t get noisy. They’re almost always really quiet. This is largely true of state and county parks as well, though I did have a pretty noisy experience once at a state park where the park ranger appeared to be partying with the other campers.

Private campgrounds are a really mixed bag. Many are quiet, but you’ll find some that seem to be hosting family reunions or something and they’re incredibly noisy with intoxicated partiers all night long. In general, I’ve found a lot more success on private campgrounds on weekdays rather than weekends – Friday night, Saturday during the day, and Saturday night seem to bring out the really loud and intoxicated people.

So, my advice is to try to camp in a National Forest or a National Park and if you can’t find a spot there, avoid private campgrounds on weekends unless you find a lot of online reviews making it clear that they’re very quiet.

Q6: Spending less on food

I saw your recent post that said an average family of four spends $650 a month on food. How is that possible? My husband and I struggle to keep our food spending under $1000 a month for just the two of us! Do you people eat garbage?
– Anna

If you take a look at the USDA food plan, the cost for a family of four with one child between 6-8 and another between 9-11 is $649.60 a month. That’s where the data comes from.

This is roughly in line with our own family’s food spending. We are a family of five with children in those ranges and another child a little older. We spend a little more than that, but less than $1,000 a month, on food.

We don’t eat “garbage.” Probably 2/3rds of what’s in our shopping cart at the grocery store is stuff from the produce section, as most of our meals are vegetable based. We buy lots of tomatoes, squash, lettuce, carrots, apples, bananas, and so on. We eat out maybe once or twice a month. Sarah and I usually eat leftovers from our dinner the night before (or two nights before) for lunch the next day.

There are three big differences that I notice when comparing our family’s food routines to the handful of other families that I know well enough to see how they regularly eat.

One, we don’t eat many convenience foods or prepackaged foods. We usually make our meals at home from several ingredients rather than popping a frozen meal in the oven or microwave.

Two, we rarely eat out. It’s just not something we do very often, and when we do, it’s usually for a special occasion or achievement or milestone.

Three, our meals at home aren’t elaborate. For example, tonight we’re eating a simple grilled meal of kebabs (pieces of chicken and vegetables through a skewer) and asparagus from our garden. Tomorrow night, we’re having a “spring chili” that’s basically a spring vegetable soup seasoned as though it were chili, along with some from-scratch cornbread. The night after that, our meal plan says we’re having pasta tossed with olive oil and vegetables (meaning we cook the vegetables in a pan until they’re just a bit blackened, then toss them right in with the pasta). Our meals at home are almost entirely plant-based.

Many of the families I know who have much higher food budgets than we do eat a lot of prepackaged meals, eat out or get delivery a lot, and when they do cook their own meal at home, it’s usually involving a giant steak or something. All three of those things are expensive.

Your food spending comes down to consistent choices above all else. If you consistently choose a $10-15 option for a meal rather than a $2-5 option, even if you do that just once a day, your food budget is going to be huge.

Q7: Cosigning advantages on car loan

I am 22/f and about to graduate. I went shopping for my first car and intended to buy a late model used as you have recommended before. I decided on a 2014 Toyota Corolla. I don’t have the money to buy it right away but I have a job starting on June 1 and I intended to finance it, pay it off, and then keep driving it until it needed to be replaced so I can buy my next car with cash, again as you recommended. The dealership said they would offer me a loan but that they could offer me a better rate if I had a cosigner. The guy was really friendly and patient with me and said they would hold the car for seven days which is something I’ve never heard of anyone doing. What are the benefits or drawbacks to a cosigner? I read several sites but they never seem to get a straight answer.
– Julie

For you, there’s basically no disadvantage to having a co-signer. For the co-signer, there’s a risk.

When someone co-signs on your loan, they’re basically saying that if you don’t keep making the payments, they’ll step in and make them, and that they’re liable in any situations where you don’t make payments. It puts their credit at risk and potentially means they may end up paying for that car even though they’re not using it.

If someone co-signs with you, they’re taking a financial risk in doing so. The dealer seemingly thinks that your credit and financial situation is marginal (probably because you have a limited credit history and want to borrow significant money) and just barely what they would be willing to lend money to, but the loan officer would vastly prefer to have someone else on the loan, probably someone with better credit, just in case. The willingness to hold the car for you is a nice touch, but not unheard of – they likely believe that you’ll be back to buy the car one way or another.

If you have a parent or someone else that’s willing to co-sign on this loan, even with the potential risk to them, you’re going to wind up with lower car payments, and that’s good for you. It just adds up to a financial risk with little benefit for the co-signers.

Q8: 401(k) contribution question

How much should I put into 401(k) each check? 29 male unmarried don’t plan to be.
– Dario

The simple answer is “as much as possible.” The more you put away now, the less you have to put away later and (potentially) the earlier you can retire and live off the money in your 401(k).

At the very least, if your employer matches your contributions, you really should be contributing enough to get every dollar of that match. If you’re not, you’re leaving money on the table.

I can’t really give you a more specific answer than that without having a full picture of your financial state. All I can say is that if you’re able to contribute to a 401(k), you’re not going wrong by contributing as much as you possibly can. There may be more optimal routes to retirement, but they start involving situational choices.

Q9: Risk of old microwave?

Are there any health risks with using an old microwave? My parents have had the same microwave since at least 1982 and I think since ’79 or ’80. It’s a huge box and kind of loud when it runs. Are there any health risks associated with it?
– Adah

First of all, microwaves are perfectly safe. All they’re doing is directing a beam of energy at food that causes the water molecules in it to rotate. It’s not creating radiation and there aren’t any long term health effects from anything that would leak out of a functional microwave. While I wouldn’t want to put some items into a microwave, I wouldn’t want to put some items into a fireplace, either.

Honestly, unless there’s some damage to the door or the seal around the door and the microwave works, I wouldn’t worry about it.

If you’re really worried about it, go down to an electrical store and see if they have a microwave leakage tester. This is a good one. It’ll tell you pretty quickly if there are any problematic leaks, but it’s pretty unlikely given that it’s really inexpensive and easy for microwaves to block microwave leakage. The risks involved are low enough that I wouldn’t worry about it – there are way bigger risks in day to day life than this.

If you’re thinking of buying a used microwave, the big thing you want to make sure of is that the seal around the door is intact and there isn’t any damage to the pattern on the glass on the front of the microwave.

Q10: Do tiny houses make sense?

I’m really fascinated by people building these tiny houses 100 to 200 square feet and living in them. They seem to be custom built trailers. What are your thoughts on them? Do they make sense?
– Anna

I think they do in certain situations. If you’re willing to be quite minimal about your possessions, then they’re a nice option. They’re not very expensive and very customizable, which is an advantage for some. They’re also easy to move – I’ve seen many that are basically built on a trailer that can easily be towed from place to place, which means that they would work well for a family that moved about frequently. They seem to be fairly popular among professional baseball players for that reason.

I would probably be hesitant to live in one if I lived in Tornado Alley. I’d also be hesitant to live in one if I had more than two adults and a child in one. We had an apartment that wasn’t much different than a tiny home when we were first married and we managed to make it work for one child, but we would not have done well with two or more children in that situation.

I think a very well built tiny home with a fairly typical layout is be a solid investment. If it’s a DIY project for a first time builder or if you’re using a strange layout, it might be hard to recoup your investment.

Q11: Checks and security

Are checks secure? My mom still pays all of her bills via check and I am wary about her sending out so many in the mail. They seem ripe for identity theft.
– Alicia

Checks are relatively insecure compared to many other payment options out there. The fact that it’s a paper document that includes your full name, your bank’s routing number, and your bank account number on it is enough to make it a fairly insecure way to share money. Even if you use permanent inks, the check still has information about you on it. Checks solved a particular problem in human history before the information age, but the flaws in checks are clearer than ever.

Obviously, online banking is a much more secure option. Your bank is giving you a platform for secure online transactions. We pay all of our bills online using online banking tools, mostly because of the security factor.

It’s not a bad idea to have a paper checkbook somewhere in your home for unusual situations, but if you have the ability to move to online banking, I highly recommend it for identity theft and personal security reasons. Checks are low hanging fruit for identity thieves.

Q12: Library audiobooks

Looked into getting some audiobooks from the library for a long trip but they’re all on CD and I don’t have a CD player in my car.
– Sam

There really isn’t an easy way to make this work if you have CDs and your car doesn’t have a CD player in it. Some newer cars no longer have CD players in them by default and the solutions for making it work are wonky and kind of expensive (requiring some sort of CD player and requiring your car to have an auxiliary port, or else a CD player with Bluetooth or a Bluetooth dongle).

Another option is to use software on your computer to “rip” the audiobooks, then transfer them to your phone or other device so you can listen to them in the car. This can be a bit of a hassle, but it’s free at least.

A final suggestion: see whether your library allows you to check out digital audiobooks via Overdrive. This way, you can check out audiobooks straight to your phone, then have your phone play them back either through headphones or through the audio system in your car.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

The post Questions About Banks, 401(k)s, Old Microwaves, Audiobooks, and More! appeared first on The Simple Dollar.

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I Live in a Small Town, Is Remote Working Really an Option?

It may seem ironic, but the fact that I live in a rural area, more than 30-minute drive from a city of any significant size, is one of the main reasons I originally started looking for a work-from-home position. That, and the desire for a more flexible, family-friendly position. Job Searching Many moons ago, when […]

The post I Live in a Small Town, Is Remote Working Really an Option? appeared first on The Work at Home Woman.

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Financial Planning When a Family Member Has Special Needs

Financial planning is daunting enough, but it becomes more complicated and critical when you have a child or family member with special needs.

Source CBNNews.com http://bit.ly/2Lz1p1o

Credit Unions vs. Banks: 8 Key Differences You Totally Need to Know About

Is Your Retirement Plan to ‘Just Keep Working’? Three Reasons You’re Taking a Big Risk

If your retirement plan is simply to keep working, you’re taking a very big risk.

You may think the solution to not having enough money to retire is to work beyond the traditional retirement age of age 65. Just remember that life is full of surprises, and not all of them are pleasant. Holding down a job as a senior citizen can be difficult. If you don’t save for your retirement, you may find yourself both out of work and short of money.

“It’s OK to plan to work past 65, but it’s reckless to not have a contingency plan in case you aren’t able to,” says retirement and wealth management planner Brandon Renfro. “You may not be the only one to pay the price for lack of planning either. You could significantly burden your loved ones who will be responsible for caring for you.”

If you’re not saving for retirement, you’re in good company. Northwestern Mutual’s 2018 Planning & Progress Study found that one in three Americans have less than $5,000 in retirement savings, and 21% of Americans have nothing saved at all for their elder years. That means they could survive only a few months on their savings, if they were forced to stop working.

What follows are three good reasons to prepare for your retirement, even if your plan is to never stop working.

1. You could experience health problems.

No one can count on enjoying good health indefinitely. Illnesses can strike anyone at any time. If you’re battling a debilitating condition, such as arthritis, heart disease, or cancer, working beyond age 65 may not be possible. You may be forced to retire early. When this happens, life is much easier if you’ve saved for retirement.

An illness doesn’t have to be catastrophic to sideline a career, notes Cynthia Corsetti, an executive coach and career transition expert based in Pennsylvania. Anything that interferes with your ability to perform in the workplace could lead to a job loss.

“It could be as simple as ‘I can’t sit at my computer eight hours a day,'” Corsetti says.
It’s not unusual for American workers to leave their jobs sooner than they anticipated. A 2018 Gallup poll found that the average retirement age reported for Americans currently out of the workplace was 61.

When workers are forced to retire before they reach Medicare-eligible age of 65, they typically have to pay for their own health insurance. Some may qualify for temporary coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

It’s fine to pursue lifelong employment as a goal. Just be aware that no one can depend on maintaining good health or having the opportunity to work indefinitely.

• Read more: The Truth About Your Future Self

2. You could face age discrimination.

Age discrimination is an unpleasant fact of life in the workplace. Older workers often find themselves with fewer opportunities to work or advance their careers. Worse still, they’re often the first to go when companies decide to reduce their workforces.

Craig Bolanos, a financial advisor in the Chicago area finds age discrimination to be “a cold reality.” He recommends that older workers recognize and plan for the possibility of being laid off or having their hours cut.

“A prolonged job search could result because of being ‘older’ and result in underemployment as a best case scenario,” he says.

In a 2018 national survey of adults age 45 and older by AARP, 61% of respondents said they had seen or experienced age discrimination in the workplace. Thirty-eight percent said age discrimination is common.

About one-quarter of those surveyed said they had heard negative remarks related to their age from colleagues or supervisors. Sixteen percent said they had not been hired for a job they applied for because of their age. Twelve percent said their age had caused them to miss out on an opportunity to get ahead at work.

3. Your job could disappear.

As the economy evolves, people often find themselves facing layoffs through no fault of their own. Older workers often are laid off because they’re earning more money than their younger colleagues. When older workers are laid off, it’s often difficult for them to find new jobs.

A data analysis reported in 2018 by ProPublica and the Urban Institute found that more than half of older U.S. workers are forced out of longtime jobs before they choose to retire. Once out of the workforce, older people rarely regain the income and job stability they lost.

More than one-third of people over 50 who experience involuntary departures go on to face additional layoffs, the analysis found.

According to a 2018 report from AARP, people age 55 and older who are laid off are more likely than younger workers to remain unemployed for 27 weeks or longer, which can put great stress on personal finances. Being out of the workplace for that long also makes it more likely that work skills will erode.

When displaced older workers do find new jobs, they often take pay cuts, says Steve Langerud, a workplace consultant based in Iowa. They often end up working part-time to receive benefits, such as health insurance.

• Read more: Will You Have a Job in 10 Years? Five Visionaries Weigh In

Planning for the unexpected

The best way to make sure you have enough money to carry you through your senior years is to save for your retirement now. It’s fine to plan on working beyond age 65, but no one knows when circumstances will compel them to end their career. The sooner you begin saving, the better off you’ll be.

“The steady earnings that many people count on in their 50s and 60s to build their retirement nest egg… often vanishes, altering expectations and creating economic hardship,” says Bolanos.

Saving for retirement is like buying an insurance policy. If you do keep working, you may never need it — but if your career ends unexpectedly, you’ll have ability to support yourself.

Read more: 

• Life Without Retirement Savings
• The $15 Retirement Plan
• Should You Count on Social Security as Part of Your Retirement Plan?

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Inspiration from Sathya Sai Baba, Stephen Fry, Son Volt, and More

Once a month (or so), I share a dozen things that have inspired me to greater personal, professional, and financial success in my life. I hope they bring similar success to your life.

1. Bob Dylan on regrets

“I don’t believe in regrets. Regrets just keep you chained to the past. You gotta make peace with the past. There’s no reason to regret it. You’ve done it, just make peace with it.” – Bob Dylan

A few weeks ago, I was digging through some very old journal entries, some of my oldest ones from the mid-1990s. I read an entry about an old friend of mine who passed away several years later. Our friendship had faded and I actually didn’t hear about his passing for a while, well past his funeral, and it filled me with huge regret when I heard about it and I actually felt some regret when I read this entry.

As I thought about him, I’m reminded of what one of the best people I’ve ever known, who I’ll call Tony, once said about friendships. He told me that some friendships are for a day, some are for a season, and some are for a lifetime. They all fill a need for us, but it’s okay for some friendships to only be for a day and it’s okay for some friendships to only be for a season. Just don’t let them end with a cruel word.

We were great friends at a key point in both of our lives and then our lives went in different directions. I don’t recall ever saying anything cruel or intentionally leaving him out; I simply moved several hours away and then, shortly thereafter, he moved away as well and we simply didn’t see each other any more.

I don’t regret letting that friendship end any more. Rather, I’m glad we were friends at that time when we needed that other person in our life as someone to hang out with and talk about the inherent difficulties of figuring out what came next in our lives. We both needed that, and then we didn’t, and that’s okay.

2. Son Volt – Windfall

This song comes straight out of that time period I wrote about above. This song, the entire album it comes from, and some of the albums of two closely related bands (Wilco and Uncle Tupelo) were the soundtrack of that period in my life.

Over the last few weeks, I’ve played so many of those albums over and over again, out of a mix of admiration of the beauty of that music as well as the way it can transport me to another place and time if I let it.

Music has an ability to do this. Art has an ability to do this. It’s somehow tied to feelings deep inside of us, and for me, this song taps into that sense of doing something familiar but knowing that the familiar is about to end. I think it comes both from the song itself and from the period of my life that I identify with it.

3. Sathya Sai Baba on when to speak

“Before you speak, ask yourself: Is it kind, is it necessary, is it true, does it improve the silence?” – Sathya Sai Baba

I’m trying to move in this direction with my own conversation, moving away from meaningless chit chat and trying to save my words for things that actually have meaning and are better than the silence.

The big challenge that I often have to overcome with this is that, for several hours a day, I’m mostly silent. I work from home, by myself, and there’s no reason to talk. Thus, when my kids and my wife get home, I’m anxious to simply communicate with another person and sometimes I’ll end up just talking for the sake of talking.

That’s a bad habit and I want to trim it out, so I’m focusing on being more purposeful with my words. Am I communicating kindness? Am I communicating anything useful? Am I communicating worthwhile information? If not, why speak?

4. The Five Minute Method

I’m not sure where I picked up this idea, but it’s something that I’ve done both consciously and unconsciously for years and it’s been particularly powerful as of late.

The idea is this: whenever there’s something you need to do that you really don’t want to do, agree to just do it for five minutes – literally setting a timer if you want – and then you can quit with no guilt afterwards. That’s it.

Don’t want to exercise? Agree to just do some exercise for five minutes. If your timer goes off, you can quit, or you can go longer if you want – in either case, it’s a win.

Don’t want to meditate? Set a five minute timer.

Don’t want to do that dreadful work task that’s hanging over your head? Set a five minute timer.

Don’t want to dig into that project that’s going to take all day? Set a five minute timer. Quit after the five minutes if you want. Do it another day.

This really works for me for some reason. Quite often, once the five minutes are up, I want to keep making headway on the project at hand anyway. If I don’t, I know I can quit with no guilt because I know I made just a little progress. It goes back on tomorrow’s to-do list.

Try it. Use it with every task that seems miserable in your life.

5. Aaron Sorkin on learning

“If you’re dumb, surround yourself with smart people. If you’re smart, surround yourself with smart people who disagree with you.” – Aaron Sorkin

This is spectacular advice. If you want to genuinely understand the world better, surround yourself with people who know things that you do not and learn from them.

There’s only one problem with this strategy: there are enough people in the world who are genuinely opposed to being exposed to new ideas that many people have their guard up and immediately get defensive when discussing ideas. If you ask a question, they assume they’re just being attacked by someone who isn’t actually genuinely interested in an exchange of ideas, but rather in just creating conflict and discord.

In other words, this approach does not work well online outside of specific, carefully moderated situations. It works best face to face, with people you’re interacting with directly and who you have some form of real life social connection with. It is that social connection that encourages those involved to put down their defensiveness and exchange ideas.

It’s why I go to meetups. It’s why I like to go to lectures and presentations when I can. It’s why I often have really deep discussions with friends I trust. It’s why I read books that challenge me. I don’t know a lot of things about the world, and even in the areas I do know well, I don’t know every perspective or idea. I want to know those things.

6. Thubten Chodron on creating habits for happiness

From the description:

Thubten Chodron is a Tibetan Buddhist nun, prolific author, and world renowned teacher. She is the founder and abbess of Sravasti Abbey, and co-author of a book with His Holiness the Dalai Lama. Want to be happy? Join Venerable Thubten Chodron to learn how. By becoming aware of how our actions affect those around us, as well as ourselves, she offers ways to identify and overcome our self-centered attitude that pretends to look out for our welfare, but is actually self-sabotaging and primes us to make unwise choices.

The core idea that she presents is that taking purely self-centered actions – ones where we don’t even consider the impact on others – rarely brings us lasting happiness. Rather, considering how the things we do affect others and filtering what we do to center more on things that benefit others and ourselves often becomes a source of lasting happiness.

Think about the things you do in a given day. How many of them are things that you do entirely because they benefit you? How many of those things are things that you’ve even considered in terms of how they affect people besides yourself?

Here’s a good practice: spend a day logging everything that you do. Then, a day or two later, go through that log and ask yourself how many of those things were done solely because they benefited you. Then, for each of those things, consider alternative things you could have done that might have been good for others, too, without shortchanging yourself (or only having a minor relative drawback for you).

I did this a week or so ago and I found a lot of little things that I could do differently. It was pretty surprising how I could tweak lots of little things in my life to be a little less self-centered without adding a whole lot of effort, and then doing things in the less self-centered way felt a whole lot better. For example, I redid my morning routine so that I could make a better breakfast for my kids; in the end, it didn’t cost me any time, but by thinking of things in terms of them, they wound up with a better breakfast most mornings that they could eat with their dad.

7. Malcolm Gladwell on self-contradiction

“If you don’t contradict yourself on a regular basis, then you’re not thinking.” – Malcolm Gladwell

It’s worth noting here that Gladwell is talking about contradicting yourself in terms of ideas, not in terms of behavior or lying about what you’re up to. His point is that if you’re actually thinking about an idea and turning it over and over in your head, your understanding of that idea deepens and your opinions on that idea likely change a little, and that results in your current views and comments potentially seeming hypocritical compared to earlier views and comments.

I think it’s good for society to move past looking at a person’s evolving views as being a bad thing. We should want people to turn over ideas in their head, understand them better, and thus evolve their views on those ideas. Sticking to the same ideas in the face of a lot of contradictory evidence isn’t a good thing.

It’s not hypocritical to change your views when you learn new information. A person who does this isn’t a hypocrite. Rather, they’re just being thoughtful.

8. Heath Ledger on happiness

“Everyone you meet always asks if you have a career, are married, or own a house, as if life was some kind of grocery list. But no one ever asks you if you are happy.” – Heath Ledger

This is a good point, but it’s also a difficult one. Having a conversation with someone about whether they are happy feels really awkward. Asking someone if they’re happy often opens the door to a conversation that most people don’t want to have even with people they’re very close to.

I’ve been turning this over in my head for a long time and lately I’ve moved to using a pretty standard conversation starter that I think hits on this in a meaningful way.

I simply ask people “What’s good in your life right now?”

If they don’t seem sure of what I mean, I explain it simply: “What have you done lately that you’ve really enjoyed? Have you read a good book? Watched a good movie? Spent time with someone cool? Finished off a big project?”

I find that almost everyone has something they can talk about here, and it’s usually something that gets them excited and positive and animated. Not only that, I learn about all kinds of interesting things, and I usually learn something pretty interesting about that person, too.

9. Introduction to Computer Science and Programming Using Python

This is the single best free introductory course to computer programming that I have ever found. If I were to point someone toward a resource from which they could learn the basics of computer programming without shelling out significant cash, this would be it.

The catch is that it’s an online course that runs somewhat irregularly. It’s often hard to catch it right when it starts – sometimes it’ll be in the middle of a session and other times it’s not running at all.

I’m mentioning it here because a new session of this class starts at the beginning of June. It’s completely free and it’s really, really good. This is highly recommended if you’ve ever wanted to dig into computer programming a little to understand what exactly it is. This is good teaching at its finest.

10. Jim Rohn on discipline and regret

“We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” – Jim Rohn

I have dropped this quote before in inspiration columns, but it has been incredibly powerful for me over the years.

In general, you have two choices most of the time. You can be disciplined right now, or you can have regrets later on. You can eat that unhealthy meal right now (no discipline) and suffer some negative health effects down the road (regret), or you can eat a healthy meal now (discipline) and be fitter and healthier in life (no regret). You can spend your money on something frivolous (no discipline) and then have to deal with financial difficulties later on (regret), or you can skip by most unnecessary expenses (discipline) and achieve your big financial goals (no regret). It’s true for many of life’s challenges – exercise, building relationships, and so on.

We always have a choice – discipline or regret. The catch, of course, is that discipline isn’t very painful at all – often just a little uncomfortable at the moment – while regret can be incredibly painful and long lasting.

11. My in-laws

My wife’s parents both recently retired. They spent the last decade or so really stabilizing their finances so that they could afford to retire and still enjoy travel and doing things with their grandchildren and having hobbies.

They visited us for the first time since they’ve both retired and I swear I could tell a difference with them. They both just seemed a little more relaxed, but at the same time, a little more interested in doing things. Often in the past, they would visit us and both seem a bit tired from their busy lives and would treat their visit as a mini-vacation of sorts where they could relax.

When they came up this time, they wanted to help us with a couple minor home improvement projects and they threw themselves into painting a room with gusto. They seemed upbeat and happy and possibly more energetic than I’ve seen them in a while. They talked about things they wanted to do in the very near future and seemed excited about all of it.

In other words, they’re doing exactly what I want to do when I retire.

12. Stephen Fry on depression

“If you know someone who’s depressed, please resolve never to ask them why. Depression isn’t a straightforward response to a bad situation; depression just is, like the weather.” – Stephen Fry

I’ve had periods of deep melancholy in my life that probably swung into mild depression, though I was never treated for it. I went through most of a year once where I had minimal motivation to do much of anything at all other than the absolute bare minimum. It took me a long time to climb out of that hole.

Lately, I’ve been watching a good friend of mine fall into that kind of depression spiral. He’s gradually become more and more withdrawn from me and from other mutual friends. He doesn’t respond to text messages or other methods of communication much at all. Even when I do manage to get him out of the house, he’s largely uncommunicative. I know from others that he rarely leaves his home.

I am really at a loss as to what I can do to help. In the end, I think the best thing I can do is to just keep inviting him to do things, keep sending him positive things about the things we’ve had a shared interest in, keep checking in and poking without actually talking about the elephant in the room that is depression. If he does decide to talk about it, I’ll just listen and empathize, but I won’t push him to talk about it. I want him to remember that people care about him without blatantly saying “people care about you.”

I miss him. I wish I had a magic way to help, but I don’t. Rather, I think the best thing I can do is to just not let that thread of connection between us wither and die, not push him to talk about the depression, but rather to talk about the positive things we share and if he decides to open up about it, I’ll just listen and be supportive and not try to jam my own experiences into it.

The post Inspiration from Sathya Sai Baba, Stephen Fry, Son Volt, and More appeared first on The Simple Dollar.

Source The Simple Dollar http://bit.ly/2DN6rRH

Manage Your Money, You Must: 10 Money Lessons We Learned from ‘Star Wars’

The Force will be with us — always.

Because “Star Wars” has embedded itself so deeply into our cultural DNA, it continues to shape the way we think about life.

Over numerous movies and assorted iterations, “Star Wars” has taught us about overcoming obstacles, about dealing with family drama, about friendship, about patience, about beating the odds — and even about money.

Because this is The Penny Hoarder, we’re especially interested in the part about money.

Even though the epic saga of Luke Skywalker & Co. played out a long time ago in a galaxy far, far away, the financial wisdom we gleaned from it applies to the here and now.

Now, prepare to make the jump into hyperspace! Here’s what we’ve learned:

1. Always Pay Your Debts — Or Else

Bingo. This is always the first one everyone thinks of.

Han Solo owes money to the giant slug-like crime boss, Jabba the Hutt. When he doesn’t pay up, Jabba sends bounty hunter Boba Fett after him — basically a debt collector with blaster pistols and green Mandalorian armor.

Instead of declaring Chapter 7 bankruptcy, Han ends up frozen in carbonite. Then Princess Leia, Luke, Lando and the iconic droids have to infiltrate Jabba’s lair to save him in a sequel.

Just like with Solo, the longer you don’t pay off your debts, the bigger the problem gets. The interest piles up.

Pro Tip

Credit cards companies charge compound interest. If you don’t pay off your bill each month, the company charges interest that is added to the amount you owe. Then that new total is charged interest.

Your first step should be to figure out what you’re dealing with. Map out exactly what kind of debt you have. For example, which companies do you owe money to? Are any of your debts in collections? What are your minimum monthly payments on each credit card or loan?

An easy way to start doing this is to sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It also offers tips on reducing your debt and raising your credit score.

2. Used Vehicles Offer the Best Value

The Millennium Falcon takes its share of verbal abuse in multiple “Star Wars” films.

“You came in that thing? You’re braver than I thought,” Princess Leia says upon first seeing the starship. And in “The Force Awakens,” Rey calls the ship “garbage.”

But the Millennium Falcon gets the job done. (Did we mention that it made the Kessel Run in less than 12 parsecs?) Turns out you don’t always need a shiny new vehicle.

Used cars are often a better deal than new ones. Consumer Reports recommends buying a car that’s two or three years old. For tips on buying a used car, go here or here or here.

You’ll need to take care of your ride, though. (The Falcon’s hyperdrive keeps breaking down despite Chewbacca’s best efforts in “The Empire Strikes Back.”)

According to a AAA survey, 1 in 3 U.S. drivers can’t pay for an unexpected auto repair. Consider creating an emergency fund with a high-yield bank account.

3. Negotiate the Best Deal You Can

Early in “A New Hope,” Luke and Uncle Owen are bargaining with some creepy little jawas over the price of some used droids.

When an R2 unit they’d just bought immediately breaks down, Uncle Owen aggressively questions the quality of what the jawas are selling: “Hey, what are you trying to push on us?”

The result: Luke’s family gets the best droid ever, R2-D2.

Negotiating isn’t just for markets and cars, any variable expense can be negotiated to a lower price — you just have to know what to look for.

4. “Do or Do Not. There is No Try.”

Yoda’s admonition to Luke in “The Empire Strikes Back” is probably the biggest zen moment in any of these movies.

As always, Yoda is right on target. You’re either going to do it, or you’re not. Don’t just try.

If you’re going to make financial changes, commit to them and be consistent. Don’t just try once or twice and then forget about it. Sticking to it is the key to success.

Pro Tip

Help yourself by making it harder to spend. Deleting your credit card number from your internet browser can create just enough of a hurdle to force you to pause before giving in to that impulse buy.

For instance, saving money is hard. Consider trying an auto-savings app like Acorns.

Once you connect it to a debit or credit card, it rounds your purchases up to the nearest dollar and funnels your digital change into a savings or investment account.

Because the money comes out in increments of less than $1, you’re less likely to feel an impact in your bank account.

5. Don’t Let the Little Details Blow Up On You

The Empire spared no expense on the Death Star, don’t you think?

You’ve got to figure that moon-sized battle stations capable of blowing up planets don’t come cheap (especially two of them).

But they overlooked that pesky little design flaw that allowed the Rebel Alliance to destroy the whole thing. Whoops!

Don’t neglect the details like that, because they’ll burn you. Don’t skimp on maintenance and repairs for big-ticket items like your home and car. If you blow that stuff off, you’ll just end up paying more in the end.

Another lesson from the Death Star: Don’t put all your eggs in one basket. The Empire sure had a lot riding on its supercool Death Star, didn’t it?

Don’t depend on just one thing. Diversify your investments. Here’s how one woman used an app to make sure her 401(k) was in balance.

6. Get Rid of Your Old Stuff

The “Star Wars” universe looks different than Star Trek and other sci-fi settings. “Star Wars” has that “lived-in” look — there’s junk everywhere. You know, just like your house.

And in the “Star Wars” movies, people make money selling that junk — just like you should.

In “The Force Awakens,” Rey is a scavenger on the planet Jakku, feeding herself by salvaging parts from ships.

On Luke’s home planet of Tatooine, those jawas we mentioned earlier appear to be scavengers, too.

Pro Tip

Letgo is an app that lets you connect with people who want your old stuff. It’s free to use — just snap a photo, upload your item and add a description and price.

In “The Phantom Menace” — hey, here’s our first and only mention of the prequels! — Qui-Gon Jinn and Obi-Wan Kenobi meet young Anakin Skywalker in a junk shop where he fixes things.

Meanwhile, here on our planet, a number of apps are making it easier than ever to sell your old stuff online.

To free up space and earn some extra cash, use apps to sell your stuff. Listing the right stuff in the right marketplaces means you’re more likely to sell it for the right price.

7. Beware of Scams. Know What Things Are Worth.

Toward the beginning of “The Force Awakens,” a hungry Rey nearly pawns the droid BB-8 in exchange for 60 portions of inflatable food. She’s sorely tempted, but senses something is wrong and backs off.

That’s the surest way to spot a scam: If a deal looks too good to be true, it probably is.

Whether you’re selling a droid or shopping for shoes online, you’ve got to watch out for rip-offs. Here’s how to protect yourself from imposter scams, credit repair scams, identity theft and senior scams.

As long as identity theft remains a huge problem you need to keep an eye on your credit and transactions.

8. Embrace the Gig Economy

When Luke and Obi-Wan need transportation to Alderaan, they basically catch an Uber. A space Uber. They pay for the Millennium Falcon to take them there.

Here on Earth, you can make like Han and Chewie in your Honda or Chevy by driving with Uber or Lyft and make extra money each week on your own schedule.

Pro Tip

In addition to age requirements for drivers, Uber and Lyft both have age restriction for your vehicle that are based on regulations in your city.

There are other entry-level ways to make money nowadays that you can do on your own time – and from your phone – thanks to the growing gig economy.

Craigslist is an easy place to sell your services under the “Gigs” section. Pay and tasks will vary, of course. And if you don’t trust Craigslist, check out TaskRabbit or Fiverr – to name just a few.

9. If the Deal Turns to the Dark Side, Cut Your Losses

Here at The Penny Hoarder, we’re always looking for good deals.

We’re always asking, Is this a good deal or not a good deal? And when we hear the words “deal” and “”Star Wars”,” we can’t help but think of Lando Calrissian in “The Empire Strikes Back.”

Lando … Lando did not get a good deal.

When Han, Leia and Chewie first turn up in Cloud City, Lando tells them, “I’ve just made a deal that’ll keep the Empire out of here forever.”

Of course, the deal involves betraying his friends. Later, Darth Vader menacingly informs Lando, “I am altering the deal. Pray I don’t alter it any further.”

Still later, when Vader threatens Lando further and mistreats his friends, Lando fumes, “This deal is getting worse all the time!”

That’s when he switches sides.

If you make a deal and the reality doesn’t match what you were promised, be prepared to walk away. Cut your losses and move on.

10. Sand People Always Walk in Single File to Hide Their Numbers

You see, from this we can learn that … no, no, wait. That’s not a good example at all. We learn no financial truths from that.

We’ve got nothing for you here.

Let’s try this instead. One of the most important lessons we learned from “Star Wars” is:

10. Make Sure You Have a Long-Term Plan

The heroes and villains of the “Star Wars” universe are seriously into some long-term planning.

Emperor Palpatine’s master plan takes several movies to unfold. After he reveals himself to be Darth Sidious and strikes, Yoda and Obi-Wan lay low for a couple of decades after the prequels, waiting for their chance to return the favor.

Of course, when we first meet Obi-Wan and Yoda, they’re chilling in a cave and a swamp, respectively. Apparently the Jedi Council didn’t have much of a 401(k) match.

The sooner you start saving, investing and paying down your debt, the better off you’ll be.

All told, that’s everything that “Star Wars” has taught us about money so far. Take it as you will.

Do, or do not.

There is no try.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. His “Star Wars”-loving co-workers helped out with this post.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

source The Penny Hoarder http://bit.ly/2JfIA0w

Make $50 – $150 an Hour Participating in Focus Groups

I remember the first time I got called to participate in a focus group. I was a sophomore in college and money was tight. It was for a radio station that had gathered my name from a sweepstake that I had previously entered. The 2-hour segment required me to sit a room and listen to […]

The post Make $50 – $150 an Hour Participating in Focus Groups appeared first on The Work at Home Woman.

Source The Work at Home Woman http://bit.ly/2qsYjg8

BOOM: Unemployment Hits 49-Year Low as US Employers Step up Hiring

U.S. employers added a robust 263,000 jobs in April, suggesting that businesses have shrugged off earlier concerns that the economy might slow this year and now anticipate strong customer demand.

Source CBNNews.com http://bit.ly/2PLipQs

Stephen Moore Withdraws from Fed Nomination After 'Unrelenting Attacks'

Conservative commentator and economic analyst Stephen Moore is out, President Trump announcing Thursday that Moore withdrew his bid to serve on the Federal Reserve Board.

Source CBNNews.com http://bit.ly/2LmvNw9

Minimizing the Expenses of Working from Home

Megan writes in with a great question:

Hi Trent! I am hoping your years of experience working at home can help out here.

My husband started a new job on January 1 where he works from home. We were excited for this change as we have a preschool aged child and the flexibility of his new position could really help out with child care. We were also excited about the big savings in commuting, food, clothing, and other work expenses.

It hasn’t quite worked out like we’d hoped, and we’re hoping you’ll have some good ideas with some of the problems we have run into.

First of all, Mark gets stir crazy most days working from home all day long. About every other day, he has to go somewhere and he usually winds up at a coffee shop or a restaurant where he orders several items throughout the day and ends up spending $20 or so just to have a table to work at. In the last few weeks we have looked at some coworking options but they’re all more expensive than we’d like. Ideas?

A related problem is that he really wants to get out of the house and do something when I get home and all I want to do is crash for a while. We’ve agreed to an arrangement where he goes out and does something a couple nights a week but then he’s spending money when he’s out. He usually goes out with friends that don’t have kids.

He’s gained about ten pounds since starting this new job. At his old job he walked around a lot during the day. They would have walking brainstorming meetings and so on. At home, he mostly just sits in a chair. What’s a good solution here?

This whole thing just isn’t working out like we’d hoped and I’m hoping you’ll have some ideas that can help.

I’ve tackled all of these issues over the years. Here are some of the solutions that worked well for me in terms of solving these problems.

For starters, cultivate a set of free places to work in the community. Where can you go with your laptop and work without having to buy stuff? I have a pretty nice list. I go to the library. On nice days, I go to a park near where I live and work in the shelter house. I go on campus at two different local colleges and find an empty table either outside or in pretty much any building. I sometimes work in a grocery store deli, where they really don’t care if I just sit and work – I do usually buy a refillable cup for water there for like $0.50, but the place is mostly empty all the time and they don’t mind.

I work in those kinds of places about twice a week, with the other three days spent at home. Even when I work at home, I don’t work in the exact same place all the time. I often work at my desk (more on that in a bit), but I also work in another room in our home with a lot of windows.

You’ll have to hunt down places in your community to work, but it’s worth the effort. Expensive spots like coffee shops and restaurants are the low hanging fruit, but they’re expensive. Put in the footwork to find the free places.

Another good strategy is to build up relationships with other people who work remotely in your neighborhood. This can be difficult if you don’t know anyone, but one way to do this is to see if there are any groups in the area for telecommuters and remote workers and get involved with that group. You can often find such groups on Meetup and sometimes through the local library, as I’ve seen a few libraries organize such groups. These kinds of groups are really helpful for support, for sharing locations for working, for strategies, and so on.

Another advantage to hooking up with a remote working group is that if you start building good relationships with people in the group, you may end up working at each other’s houses somewhat regularly. It’s pretty easy – you just go to another person’s house and work in their living room for the day and they fix you lunch, and then you reciprocate fairly quickly thereafter. It gives you a new environment to work in, gives you a free lunch (though you’ll reciprocate in the future), and gives you someone to eat lunch with.

Yet another advantage of getting involved in a group like this is that it can really take the edge off of that social itch. Mark may just find that if he finds some people to associate with during the day, it takes the social edge off of his day and he feels less inclined to want to go out in the evenings.

The weight gain is probably a mix of two factors: a more sedentary lifestyle and the convenience of food at home. These two factors were a real challenge for me for years, as I gained quite a bit of weight when I started working from home. I no longer commuted any further than a walk across the hall and there was a ton of food on hand all the time.

For me, the solution to this problem was to simply be more mindful of my diet and exercise. I tried out a number of diet modifications until I found a few simple rules that worked well for me (a mix of vegetarian and intermittent fasting). Basically, I very strictly count my calories before dinner, sticking almost entirely to fruits and vegetables, and many days that means just eating one meal before dinner, which for me is usually about 11 AM (a late “brunch”) along with maybe a piece of fruit in the morning, a piece of fruit in the afternoon, and some coffee and tea throughout the day.

I also started exercising, starting with simply doing bodyweight exercises at home. I have a routine of planks, push-ups, sit-ups, and other things that I do every day (or almost every day). I also joined evening taekwondo classes with the rest of my family – though it’s an expense, a martial arts class might be something that works well for Mark. My honest encouragement is to just try a lot of bodyweight exercises and try to find things that you enjoy that tackle all of your different muscle groups. I also started consciously going on a lot of walks, usually when I needed to think about a particular problem.

I’ve also switched to a standing desk and use it about six hours a day when I’m at home. A standing desk burns about 0.2 calories per minute of use compared to sitting, so if I’m standing at the desk for six hours, that’s 360 minutes of standing, which equates to 72 calories. It doesn’t seem like much, but if I do that for 50 days, that’s 3,600 calories, which is a pound of fat. Plus, standing rather than sitting for long periods reduces the chance of a bunch of severe ailments.

The point here is that he needs to think about his diet and exercise more than he once did. There are a lot of different strategies that might work for him and I can’t say which one will, but the most important thing he can do is to just keep it in his mind and try to make choices that are more in line with healthy living. He should keep trying things until he finds what works well for him, but this should be an ongoing search until he finds good solutions.

For me, the hardest adjustment to working from home was the gradual shift toward an expectation that I would always be at home and could handle all kinds of home tasks, which ate into my day. As frustrating as it might seem, he does need to set some firm work boundaries or else his stress level is going to skyrocket. Yes, he’s at home all day, but he’s working, just like you are. He just happens to not have an office and is improvising. That means that things that would interrupt your workday and leave you stressed will also leave him stressed. If you’re expecting him to do something during his workday, imagine what it would be like if he insisted that you do that very thing during your workday. You’d probably be stressed out by the request, even if you went along with it. Keep that in mind.

Working at home has a ton of advantages, but it’s not always easy. I found that physical health, a lack of social interaction, distractions, and a sense of being unappreciated were all challenges to overcome. They can be overcome, but you have to handle those things seriously.

Good luck!

The post Minimizing the Expenses of Working from Home appeared first on The Simple Dollar.

Source The Simple Dollar http://bit.ly/2GZZMph

Dear Penny: Should I Pay Off My Credit Card if That Means Saving Less?

Dear J.,

A new depressing stat seems to surface every day about how we’re all one check-engine light or root canal away from financial implosion. And with the scary numbers, the message is always the same: Just. Keep. Saving.

So I get why you might feel pressure to prioritize saving above any other financial goal.

But here’s what we often neglect to talk about when it comes to saving money: It’s entirely possible to save too much of it. If you’re charging basic needs like groceries to a credit card in order to save, it’s costing you money in the long term.

To understand why, let’s start with your last question: Is there a benefit to carrying a balance? In short, no. When you carry a balance beyond an introductory no-interest period, your credit card company is the only one that benefits.

There is a claim in credit card land that carrying a small balance from month to month boosts your FICO scores. But this is pure myth. One of the best things you can do for your credit score is to pay off your balance in full each month.

So while there’s no benefit to carrying a balance, there’s a high cost. Average credit card interest rates are more than 17%. By comparison, the average annual return for the S&P 500 when adjusted for inflation is just 7%. And savings accounts? They earn a pitiful 0.09% in interest on average nationwide.

That means every dollar you put on a credit card is costing you more than you’d earn if you invested it or saved it.

But the good news is that your commitment to saving shows that overall, you’ve got your financial act together. The fact that you’re saving so much suggests that you have room in your budget to cover your expenses and have money left over to save.

You don’t need to pay off your balance overnight, but your top priority should be to keep it from creeping any higher.

Start by figuring out exactly how much you’re earning, spending and saving each month. Since your combined spending and saving will probably be higher than your earnings, you’ll have to cut back until they’re equal.

Assuming you’re not spending money on a twice-daily UberEats habit, Tinder Gold, a Dog Lady subscription box or any similarly frivolous vice, you might need to cut back on saving, at least temporarily. And that’s OK.

Keep contributing to your 401(k) to get your company’s match. That’s a no-brainer, because it’s free money. But you might want to limit your contribution to that amount for now.

If you have a healthy emergency fund — three to six months of living expenses — consider using the amount you typically put in savings to pay off your balance. Or you could scale back on your Roth IRA contribution for now.

Remember: This is only temporary. But getting your credit card use in check now is one of the best investments you can make in your financial future.

Have a tricky money question? Write to Dear Penny and you might see your question answered in an upcoming column.

Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

source The Penny Hoarder http://bit.ly/2IY7O4o

60% of People Who Try This Raise Their Credit Score Within 6 Months

Have solar panels had their day in the sun?

Energy bills have been rising steadily and now cost an average of £1,137 a year. But what if you could generate your own solar power? We do the sums to see if it’s worth the initial outlay

There are currently 920,000 homes in the UK with solar panels installed, according to the Department for Business, Energy and Industrial Strategy (BEIS). It is also possible to store self-generated electricity in a home battery pack, reducing the need to buy it from the national grid even when the sun isn’t out.

Until 31 March this year, the ‘feed-in-tariff’, which was introduced in 2010, allowed homeowners to get paid a set rate for each kilowatt hour (kWh) of energy they created. They also received a set payment for electricity sold back to the grid. On top of this, they saved between £90 and £220 a year on their bills, according to the Energy Saving Trust.

These payments, which were guaranteed for a number of years, were a huge incentive for those looking to install solar panels and led to a big boost to the industry.

However, the feed-in tariff has been gradually falling. At the start of 2016, it fell from 12.47p to 4.85p per kWh, which led to a huge drop in demand, and now it has been axed for new installations.

The government is looking into replacing the feed-in tariff under its Smart Export Guarantee (SEG) although the consultation into this has only very recently ended, so the amounts are not yet known. Solar trade organisations are pushing for a minimum sum to be set, of at least 5p per kWh.

The move to replace the feed-in tariff has been slammed by the energy industry.

Toby Ferenczi, director of strategy at energy supplier Ovo, comments: “Successive, dramatic reductions in support for solar energy have destroyed a once thriving industry, and bizarrely leaves residential solar in the position where it receives less government support than traditional fossil-fuel generation or nuclear power.”

A spokesperson for BEIS says: “The feed-in-tariff scheme has overachieved on its original objectives, outstripping installation predictions by nearly 100,000 with over 830,000 solar installations producing enough power for two million homes.

“But it’s only right we protect consumers and adjust incentives as costs fall, with solar having fallen by 80%.

“Our Smart Export Guarantee will provide a viable framework for small-scale renewable energy generation, protecting consumers from unfair cost burdens and ensuring that generators are not obliged to export their electricity to the grid for free.”

Now, many homeowners will be asking themselves if solar is still worth the cost.

“Solar still makes sense for people who use a lot of power”

How much will it cost to install?

The big financial outlay with solar is installation. An average system of 4kWp [the kilowatt peak generated by solar panels] now costs £6,200, according to the Energy Saving Trust. This is around half of what it was in 2010, but still a significant sum.

Most people will need to pay this up front, though there are some financial incentives available. In Scotland, for example, Home Energy Scotland (HES) has offered interest-free loans of £11,000 for installations. The Scottish Government is considering plans for the HES loan for 2019-20, so it isn’t accepting applications, but you can register your interest by calling 0808 808 2282.

There are also collective purchase schemes available in which several households receive panels at once, which can cut the costs. In some areas of London, Essex and Suffolk, households have been able to have their homes fitted with panels for £3,200.

How much could you save?

Before buying solar power, you need to calculate how much you could save compared to the initial amount paid to see how long it will take to make your money back. Although the money made from selling excess energy back to the grid can be factored in, as it is still unclear how much this will be, it may be worth waiting until the government has confirmed this.

Calculating how much you can save will depend on how much energy you use and where you live. For example, a household in London with people at home during the day could save an average of £220 a year, while a household in Manchester with no one home until 6pm could save £85 a year, according to the Energy Saving Trust.

Over a lifespan of 25 years, this could equate to a saving of £5,500 and £2,125 respectively. While the London household has almost made back the initial cost, it would take the Manchester household 72 years to do this.

Leonie Greene, spokesperson for the Solar Trade Association, says: “Solar still makes financial sense for households who use a lot of their own power, such as retired people, small businesses who work from home or young families, and the greatest financial value comes from avoiding buying power from a provider.”

According to her estimates, the highest users who provide 80% of their own energy consumption could get returns in around 11 years. This includes the cost of replacing an inverter [an electronic circuit] after 10 years. If the rate of selling solar electricity is set at 5p per kWh, she says this could be cut to nine years.

What about storage?

A battery pack can keep around 80% of the electricity generated through solar panels. Without this, households need to use the electricity when it is generated or it will be fed back to the grid. Without a battery pack, households will only use around 60% of the electricity generated.

Battery packs have a lifespan of around 20 years and a small number of providers offer them, including Tesla and Solarcentury.

The savings generated by a battery pack will depend on the size of a house, the amount of energy it uses and the cost of the energy. However, as these packs are relatively new, there are significant upfront costs. For example, a Tesla battery costs £6,200, £1,700 for supporting hardware, plus installation costs of between £950 and £2,800.

When you buy a battery pack the only cost is the upfront fee. Tesla says customers don’t need to pay anything extra for upkeep of the packs during their lifetime, and the only thing they need to do is make sure it is kept free of debris. It says energy bills could be more than halved with one.

Are there other solutions?

There is a wide range of products available with more likely to be launched since Chancellor Philip Hammond announced in the Spring Statement that he wants to stop the installation of gas boilers for water and central heating in new homes from 2025 to reduce greenhouse gases and carbon emissions.

Examples include biomass boilers, which cost up to £15,000 for a household system and could save £225 a year on your energy bills, ground-source heat pumps, which cost up to £18,000 and could result in savings of £580 if replacing an old gas boiler, and air-source heat pumps, which cost up to £8,000 and could save £400 a year if replacing an old gas boiler. Costs could fall as these options become more popular.

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“We power two electric cars and our house for free in the summer”

Three-and-a-half years ago Anthony Wootton, 48, an energy consultant from Basingstoke bought a hybrid car for his wife. Now, he doesn’t pay anything for electricity in the summer, and their energy consumption has been cut by two thirds, thanks to solar panels and two battery packs.

“Before we bought the hybrid car it was costing £100 a week in petrol. Now the energy we create pays for the car.

“We had 4kWp of solar panels installed at a cost of around £200 excluding installation and last summer we created all our own electricity, apart from what I needed for my car – although I’ve also saved £7,000 a year on petrol costs.

“We then installed a Tesla powerwall battery and we now rely even less on the grid. After buying a second battery pack, at a cost of around £5,000 each, we now use an average of 22kWh of electricity a day in the summer and generate the same amount.

“My monthly energy bill from British Gas was £214.40 a month before we made these change and I’m now paying less than £100.

“Switching to solar power has been a huge saving for us. You need to have the money to pay upfront but also look at the long-term benefits.”

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“Our energy use is down 50%”

In 2011 Jill and Jonathan Barker, both 52, bought Middlewick Holiday Cottages near Glastonbury and upgraded their old energy system. They installed a biomass heater and solar panels and now use 50% less energy.

“When we first moved the electricity alone was costing around £20,000 a year, with a combination of wood burners, heating oil and LPG, as well as storage heaters.

“We first installed an industrial-size biomass boiler, then had 30kWp of solar panels installed, costing £195,000 for both, and our energy usage has now gone down 50%.

“In the summer, we use hardly any energy from the grid and that’s with all our guests staying”

“When we had our solar panels the feed-in tariff was already low. It’s gone down again but the cost of installing the panels has also fallen – we were first quoted £70,000 for the panels but actually paid around half of this.

“In the summer we use hardly any energy from the grid and that’s with all of our guests staying, some with electric ovens, hobs and showers.  It’s great to be able to see how much electricity we’re producing when the sun is shining and we’ve created our own standalone power station.”

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