Money Isn’t Everything! These Values Matter

Money Isn’t Everything! These Values Matter

According to my grandmother, “Poor or rich, money is good to have.” We need money to pay our living expenses and support who and what we care about most. Raising a family or taking care of our parents requires funds for health care, education, and the opportunity to enjoy the beauty of life. It can help us make a difference in the lives of others through giving.

Without money to pay our bills or invest, we may fall short of achieving our life’s goals and having financial security, independence, and freedom.

Money Isn’t Everything!

Money isn’t everything. It has its limitations. Obsession over money and wealth is unhealthy, mainly when it controls your life. It may prevent us from ever being satisfied with our life by continually needing to compare ourselves to others. Money matters because it is the tool we need in the absence of bartering. However, many things are more valuable and can help us achieve our full potential. Focus on those values that make you content. Review the values listed on Maslow’s hierarchy of needs. Self-actualization is the pinnacle of our self-fulfillment needs.

As individuals, we each have our list of personal values that give meaning to our lives. These values shape our personality, behavior, and attitudes. How often do we reflect on those traits that make us who we are? It is an excellent exercise to do to make sure you are going in the right direction. Since we serve as role models for our children, we need to be sure we send the signals we want them to see. They are worthy of us doing a check on our values and beliefs, which make us tick.

What We Value, Besides Money


1. Time Is A Precious Resource

Time is money, but it is so much more. If there is inequality in money and wealth, we have the same limited time. You can’t borrow or lend time at any cost. Anyone who loses family and friends knows the tragedy of time running out.

You can’t buy time unless you can pay someone to do a task for you, which may temporarily free you to do other things. But you can’t buy time in a permanent sense, no matter how much money you have.

Time is our most precious resource. As such, spend your time with people you most enjoy being with or doing what you most desire. Don’t waste your time; use it in productive ways.  Think in terms of daily accomplishments and whether you have achieved what you wanted to do. Like money, invest your time meaningfully. Find ways how to improve your time management skills here.

2. Manage Your Energy Wisely

Somewhat related to time is how we manage our energy. Energy affects our physical, mental, emotional, and spiritual well-being. We all have limits to what our mind and body can do. What is personal energy or power? It is the amount of effort or strength you are willing to devote to people, things, or challenges in your life.

There are people in our lives who are delightful. We get a good boost from spending our time and energy with them. Other people may deplete our energy through negative behavior or attitudes. In this challenging year, the pandemic has weighed on our lives by making it difficult to see our friends and families. We may have saved time and energy by working remotely, but we lost the uplift from seeing people in the office. Indeed, driving to work may give us the power of the bridge, separating our home from our jobs.

3. Your Health Is Our Vital Asset

We can’t take our health–physical, mental, and emotional-for granted. Yet, we often do this by not taking as good care of our body and mind as we can.  What is your health worth? Like time, it is priceless and precious. Eating healthy, daily exercising, and getting a good night’s sleep shouldn’t be hard to do. They are good habits to incorporate into your mindset. Even short daily movements have helped me loosen up considerably.

Recently, I complained to a friend about being more stressed about more things lately. He recommended several meditation sessions to try out. A few of the sessions were particularly helpful, so I work on those. Changing up your routine with good habits can be stimulating. 

I look forward to reading at night, playing music that fits my mood, and understanding my emotions better.

4. Family,  Friends, And Community

“First be a person who needs people. People who need people are the luckiest people in the world.”

Bob Merrill, lyricist Sung by Barbra Streisand

We need our family and friends for their love, affection, companionship, and to validate us. I come from a tiny family where friends were family and family were friends. The pandemic experience has required us to social distance for safety reasons. However, we have grown tired of this pandemic and staying apart from people we love. Human beings just don’t enjoy isolation. We thrive when we are with other people who are essential in our lives. They contribute to our sense of belonging, comfort, and self-worth and add to our lives’ meaning.

Community And Colleagues

Apart from family and friends, it is your community and your neighbors. Community is where you live and your colleagues at work. Work and community are spheres where you may meet new friends. We recently moved from a big city to a small town. We changed communities just before the pandemic is the ideal time for you to meet new friends. Our kids are fortunate to have met and formed relationships with good friends when they were at school. Those relationships have carried over to online and social media.

5. The Right Life Partner

Choosing the right partner you want to spend your life with is easier said than done. Only after years together can you look back and say you are fortunate to find someone to be with until you are old and gray. When you are in your 20s, how do you know if you both have the same interests, intellect, and standards?

You don’t. However, by loving one another and finding someone with who you can connect easily, learn from, trust, respect, and grow, you have the making of the right life partner.

My Life Partner

Speaking of myself, Craig and I connected instantly in what feels like a lifetime ago. We have similar interests, enjoy each other’s company. Challenges are in every relationship but knowing how to deal with each of them matters. Craig has always been my incredible support, and we both learn from each other when we have different interests or opinions. I feel lucky that we have built a tremendous enduring bond that has remained strong through the high demands of having active teens and two dogs.

6. The Virtues of Work

“Choose a job you enjoy doing, and you will never have to work a day in your life.”

Mark Twain

It has been my great fortune to find meaningful work most of my career. Every individual should explore what kind of work they most enjoy doing. For some, it is working with their hands to craft a tangible product. Many feel rewarded by helping others, while a significant number prefer making lots of money to afford a luxury lifestyle. To each, their own goals and road to success.

I have always found challenging work to be enterprising and energizing. Working has allowed me to grow my knowledge and skills outside of my home. With so many people unemployed these days, I feel blessed to have a job that will enable me to teach remotely. The virtues of working are plentiful. Work adds meaningful dimensions to your life besides compensation. I have learned new skills, expanding my knowledge, cultivating my career and reputation. Read more on the virtues of work here. 

7. Love of Learning

“Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.”

Henry Ford

By being a lifelong learner, you can look at the world with fresh eyes. Learning can be formal, informal, or casual. You don’t have to learn in the classroom to pick up knowledge. Most of our education comes from outside of an academic setting. Picking up new information or realizing an original thought can give new highs and optimism. Whether you are learning for a career, hobby, or personal growth, never stop learning. There are only benefits to be found in lifelong learning.

Keep your brain healthy by find activities you enjoy and challenge yourself. There are so many resources and ways to learn. I have overcome some of my anxiety by improving how to cook, updating my tech skills, working on crossword puzzles, writing better, reading books I may have shied away from, and more. Chess is one of those games that I have genuinely wanted to learn how to play.

The Queen’s Gambit

I was fascinated by watching The Queen’s Gambit recently. Netflix’s series is a story of an orphan, Beth Harmon, who aspires to play chess in the male-oriented competitive world of the 1950s and 1960s. I played chess (poorly) with anyone who would play with me (only my brother) when I was in grade school. However, I would watch these intense chess players while strolling through Washington Square Park in New York City. It was so cool! Playing chess may have eluded me, but it has always sparked my interest in learning.

8. Protect Your Reputation

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Warren Buffett

Buffett’s quote on reputation is priceless. Your reputation is your brand, whether it is for a business or you. I cannot understate the importance of how you are regarded by your social circles, at work, and in your family. Reputation is your character and quality as judged by people. It forms the basis of respect and the currency of your worth. Cultivate traits like honesty, integrity, honor, and strong morals that should be in the workplace and your life. Manage your online presence for the quality of your character you are conveying.

The ruin of your reputation usually comes more quickly and efficiently than its establishment. It can be due to a lapse of ethical conduct or doing something legally questionable. Don’t post on social media without considering potential negative ramifications.

Rule of Thumb For Questionable Posts

If you are unsure, use the rule of thumb for questionable posts. That means first considering what others–friends, family, colleagues, your current or future employers–may think.

Words, photos, videos, or anything that are reflections of you and your values may last in cyberspace for all time. Protect your reputation carefully but not at all costs, which may make it harder to restore. Even now, you may already have some questionable items that may cause harm to you in the future. For example, you may want to pull that drinking contest you won with a trophy filled with bourbon, even if it is a relic of your past.

9. Experiences Over Possessions

Having experiences top buying things most of the time for me. Unique experiences tend to be more memorable and pleasurable. Traveling by camel in the desert, ziplining, and whitewater rafting bring tremendous rushes to our adrenaline. 

Studies have shown experiences bring people more happiness than do possessions. In their 2014 study, psychologists Matthew A. Killingsworth and Thomas Gilovich found it wasn’t just the experiential purchases (money spent on doing) that provided more joy than material possessions (money spent on having). The joy of waiting in line for the experience gave participants enduring pleasure as well as consumption. Millennials are known for their preference for spending on experiences, but boomers also favored experiences in this study. 

In a 2018 study with the Center For Generational Kinetics, Expedia found 74% of Americans prioritize experiences over products. Travel tops the list of experiences that make us happy the most. Of course, these results were before the pandemic when we were able to take trips. As a result of the pandemic, experiential purchases such as traveling, concerts, and movies, have declined. No doubt, the experience economy and sharing it with others has suffered as well.

10. Find Your Passions

Passion is a powerful emotion defined as a strong feeling of enthusiasm or excitement about doing something. Your passionate interests maybe those areas of topics, skills, or activities that excite you. Being passionate is often beyond a mere interest in something and can be an internal energy source. Like experiences, you are more engaged and engrossed in the activity or learning more about it.

Finding your passion in your job or career can motivate you to improve your performance. You don’t need to work in a position that directly aligns with your interests, but there could be an overlap between your work and other activities. Being excited about interests outside of work has its benefits. It allows you to develop new skills, meet new people, and expand your personal growth in a more balanced way.

For many years, I collected coins as a hobby, starting with Indian Head pennies, which led to my interest in the history of Native Americans, which I still am engrossed in today. Later, my husband and I became serious collectors of 18th Century American furniture and art, learning about American history.   I am always fascinated to know what passions other people have in their lives.

11. Gratitude and Empathy

“He who receives a benefit with gratitude repays the first installment on his debt.”


Expressing our thanks to all those we love and appreciate can help us live better lives—both the givers and the receivers of our gratitude experience many advantages. Our happiness rises, we feel healthier, stress declines, and it helps us cope with a range of negative emotions. Gratitude is our moral barometer and, when genuinely given, boosts our energy. Expressing gratitude is good for our finances as well.

Gratitude has been studied extensively in the past two decades. As such, gratitude is a “gateway’ to other positive emotions– joy, pride, motivation, and wonder.

A Shared Role In Our Brain

Gratitude is on par with empathy. Empathy, a relatively new term, is defined as the ability to understand and share another’s feelings. Having the ability to understand and share the feelings of another is empathetic. Scientists have linked gratitude and empathy because there is an exact role played by each in the medial prefrontal cortex  (MPFC) part of the brain. That part of the brain helps people set and achieve goals and contributes to a wide area of functions.

Feeling grateful and empathic are enduring values that produce benefits for the giver and receiver.

12. Financial Security

Sooner or later, I wanted to get back to money as the value we share with those mentioned earlier. Achieving financial security provides peace of mind when your income can cover your expenses; after having saved for emergencies and your retirement. Financial security requires adopting good habits that can support your lifestyle while you work toward financial goals. Becoming financially secure means not worrying about credit card debt because you pay your bills in full and will not pay interest charges. 

The importance of feeling financially secure allows you to have flexibility and freedom to control your life. Financial security means different things for different people. For me, it means working at a job for less pay but feels more rewarding when teaching college students. I feel fulfilled at the prospect of sharing what I know with others. Being able to schedule my time better helps me to face the needs of my family better.

Final Thoughts

Money isn’t everything, but it matters when you don’t have enough to pay your bills. Besides money, there is much to value in our life. We should protect, honor, cherish and nurture these values for giving meaning to our lives.

Thank you for reading! If you found this of interest, please share it with others. Consider subscribing to The Cents of Money and receive our weekly newsletter.







A Letter To Young Investors On This Market Frenzy

A Letter To Young Investors On This Market Frenzy

Dear Young  Investors,

This stock market has been fascinating, exciting, and mesmerizing, but I fear a trainwreck is coming. When GameStop’s stock value rises to $34 billion from nearly $279 million a year ago, and its fundamentals are still weak, this move is not rational. I want you to understand why and I have tips to share to minimize risk. There appears to be no reason for this stock to climb as it had. None of the analysts or the company management are signaling a positive change.  

 Market frenzy is not new, but the Reddit forum, Wall StreetBets, and its influential power are a way of making recommendations. This new tactic may pose significant risks, not just to the hedge funds but to the marketplace itself. Already we have seen fallout such as Melvin Capital. This hedge fund lost 53% from its short-selling in January. They are a professional firm that should understand the perils of short selling.

My sympathy and concern lie with the young and inexperienced investors. They may lose their motivation to invest for lack of trust in the financial markets. I applaud the higher participation of young retail investors and hope for their investing success. We explain what is happening and provide helpful investing rules and tips to minimize risk later on in this letter.

Higher Retail Participation

 I have a gray hair or two, but in my experience, I have not run across the message board and retail traders recommending aggressive purchasing several out-of-favor stocks (GameStop, Koss, AMC, American Airlines) to the moon. Social media’s influence on the financial markets, specifically Reddit WallStreetBets, and now the more than six million members, powered several stocks–Bed Bath & Beyond, Koss, GameStop, AMC–to extraordinary heights as these companies’ fundamentals remain poor.

The Reddit forum peppers its board with new Wall Street lingo. Terms like “yoloed a stock” translates to  “you only live once.” It means that you should make a significant investment in that stock. For more on traditional Wall Street jargon, you can read our post here.

Who would have thought we would see such volatility in Gamestop and other stocks as retail traders rage against hedge funds in positions of the longs against the shorts, the traditional vs. new breed in this David vs. Goliath saga. I am sure some institutional investors are riding this horse alongside the retail traders. 

Is there stock manipulation in this activity? Stock manipulation occurs when there is artificial inflation or deflation of security prices for personal gain.  I don’t know that anyone would be surprised if that is happening. I am sure the SEC, and its eventual head, Gary Gensler, are watching closely. 

How Will This Market Frenzy End?

Who or what is responsible for the market frenzy, and how will it get back to normal, if ever? We have seen this story with different stock names before, and we will see it again. It will be a learning experience. There will be books to explain it with hindsight and at least one movie to entertain and educate us. “Wolf of Wall Street” will pale next to this new story.

I will try to explain what is happening and make sense of it, although it is a moving picture. I will always encourage you to understand the stock market, its risks, and how to reduce them. You need to invest responsibly. Investing remains the best path to wealth.

In recent years, the industry changes have seen new entrants like Robinhood enabling young and inexperienced retail investors to access the financial markets. Is Robinhood the villain or the victim? They have had to raise substantial capital to facilitate activity.

Increased retail participation is a good thing, but investors need to understand the market risks and use financial discipline. 

As an investor and an ex-Wall Streeter (I was an equity analyst at Drexel Burnham and UBS), I have seen my share of events (e.g., Long Term Capital, dotcoms, WorldCom, and subprime mortgages) that caused extreme market volatility. Financial markets are regularly subject to volatility, but the (GameStop) frenzy seems quite different and more extreme. People always get financially hurt, sometimes devastating so and this time will not be an exception.


The astronomical rise to an irrational high of $483 (thus far) in GameStop (GME) in January 2020 was surprising given its rational $4.21 stock due to its poor fundamentals. Comparisons to Blockbuster in the then-emerging Netflix era are apt. GameStop, brick & mortar retail business selling video games and consoles during COVID, is not a recipe for success. My teen son downloads his games now. GameStop was once our favorite destination, but that was years ago.

A year ago, the shares traded at $4.21 per share with a $279 million market cap. With its fundamentals declining, GameStop has been a target for short-sellers, notably by hedge funds. Reddit forum has driven stocks to record levels initiating short squeezes (explained below) on institutional investors. Quotes from WallStreetBets are helpful to understand the movement to affect stock prices. 

This frenzy is more significant than the GameStop action, which has spread like a contagion to several other stocks, including AMC, Bed Bath & Beyond, American Airlines. Stock and options traders, many Robinhood customers, have collectively used their influence via WallStreetBets, a Reddit forum, to support GME’s price.

Since the start of 2021, GME has been hugely volatile, going up 600%. According to S3 Partners, short-sellers have lost $5.05 billion, resulting from short squeezes. Let me explain these terms, so you can better understand short-selling and short squeezes.

Short Selling And Short Squeezes

Traditionally, when you buy a stock, you hope the stock up above your purchase price, and you have a profit. Short-selling is a bet that the stock will decline, and you will buy the shares by borrowing the shares, speculating you can buy them at a lower price in the future. It is an advanced strategy and should be done only by experienced traders who will hedge with call options.

A short squeeze occurs when a stock, like GME, rises sharply, forcing short-sellers, who expected GME to fall, to have to buy shares to minimize their losses. If many traders are doing the same thing, it places upward pressure on the stock price.

Hedge funds heavily shorted GME. Its short interest was $5.51 billion, up from $276 million a year ago. The percentage of GameStop’s float (e.g., regular shares available to trade) sold short was 139.57%! That is an obscene number. The GME situation is ongoing, pinning the WallStreetBets traders against hedge fund companies or David against Goliath (the hedge fund companies). The facts are not fully known.

Even My Daughter Gave Me Advice

What was scary for me was a conversation I had with my daughter, Alex, this week. Alex is bright, a terrific student, but she doesn’t know much about the stock market or care. She surprised me when she asked if I owned any shares of GME or any of the pumped-up stocks. When I assured her that I didn’t, as she turned from me as if I were a loser, she said, “But, Mom, you could have made so much money!!!!” I love making money, but I do try to limit my risks.

So, this letter is also for my kids, Tyler and Alex, my college students, and of course, my readers!.

How Did We Get Here?


The Democratization of The Stock Market

More retail investor participation in the financial markets did not happen overnight. The household distribution of US stock ownership has been unequal for a long time. 

According to US Census, in 1952, only 4.2% of the US population owned common stock. A 2020 Gallup Poll reported that 55% of Americans hold stocks, but the ownership is mostly the wealthy. Based on net worth, the top 1% own the vast majority of stock market value at 88.1% as of 4Q2019.

In early 2020, with market downturn associated with coronavirus, many young first-time investors signed up for new accounts at online brokers, traditional and Robinhood. That trend of increased young investor participation will hopefully continue unless the GameStop phenomenon ends badly.

Reduced Barriers To Entry

There have been reduced barriers to entry driven by deregulation, technology, reduced cost, and increasing competition. Competition emerged first in the brokerage industry with discount brokers and online brokers.

Robo Advisors

The rise of smartphones drove investors to innovative and disruptive digital services. Robo-advisors such as Robinhood are investment management companies that use computer-generated algorithms and potentially human-based advisory services to develop a stock portfolio. Their products are stocks, funds, options, gold, cryptocurrencies, all available at zero commissions, lower management fees, and no-to-low minimum requirements.

They serve young and first-time investors with easier access to low-cost investing via trading apps on an equal playing field. These fintech companies have fully digital platforms with easy to use interfaces, sophisticated trading tools, and research resources.


With at least 13 million customers, Robinhood is among the largest online investment platforms for stocks, options, and cryptocurrency trading. They don’t require their customers to have a minimum of money in their amount, so they cater to all people, not just the wealthy.

Robinhood attracts scrutiny from the SEC, Congress, and the public. They have increased their educational resources for beginning traders and investors. It is not clear how effective that will be in reducing risks associated with speculative trading.

Their average customer is in their mid-20s, with significant Millennial representation. Due to the madness occurring in the markets, Robinhood has restricted transactions in several stocks to closing positions only and raised their margin requirements as of this writing. CEOs Vlad Tenev and Baiju Bhatt asserted that many of their customers use Buy and Hold strategies with a long-term perspective.

Are Young Investors Taking On Too Much Risk?

Retail investor participation has grown in recent years. Many people began investing during the lockdown as sports, entertainment, and gambling establishments closed.

As a college professor, I encourage my students to begin investing in the market through the Stock Market Game. Some already have Robinhood accounts and are trading stocks, options, and cryptocurrencies. Investing in stocks, which typically generate higher returns than bonds, is the best path to achieving wealth. Higher returns come with higher risks that you need to understand to mitigate those risks.

8 Tips For Young Investors


1. Get Your Finances In Order First

Never invest money in the market you can’t afford to lose. Before investing, make sure you can keep your lights on by paying the utility bills. Your finances should be sufficient to cover your necessary living costs for a reasonable time. Don’t use your rent money to trade or invest. Instead, set some emergency money aside.  

2. Can You Explain Your Strategies?

Don’t take wanton or reckless risks by engaging in strategies you don’t understand. I know people have FOMO (fear of missing out) when they see their friends make a ton of money by adding many risks. Learn through YouTube Channels and resources available to you to understand the downsides in any stock trading or investing.

If you bought X stock, could you explain its fundamentals and why it is attractive at current valuations to a friend or colleague? I am talking about a 30-second pitch, but it is good practice to know why you are investing.

3. Don’t Use Leverage Through Margin Buying

Buying or trading stocks on margin is a significant risky move. When buying shares in a company, you may use some of your own money and borrow the rest from your broker.  People use margin buying to make higher profits through the added leverage. By paying only a small portion of the total amount, investors amplify their purchasing power. However, it doesn’t always work in your favor.

Essentially, you are borrowing money or using leverage to pay for your investment. Margin calls are an extension of credit, with your securities acting as collateral. Typically, you can borrow up to 50% of your intended investment, and your broker has a 30% margin requirement, although it can vary.

A Margin Requirement Example

Mary will borrow $25,000, buying  $50,000 of stock ABC. Under normal circumstances, If ABC drops 30% to $35,000=($50,000 x .30). Mary’s equity is now  $10,000 = (35,000-25,000 borrowed). Her broker’s margin maintenance requirement of 30% rears its head, meaning Mary needs to have $10,500 in her account= (35,000 x .30), requiring her to add $500= ($10,500-$10,000) for the margin call. 

The risks you may face are largely out of your control. When the market becomes volatile, brokers may raise margin requirements to as high as 100%.  A few brokers, including Robinhood and Interactive Brokers, raised margin requirements to 100% on specific volatile stocks like GameStop and Bed Bath & Beyond. You either can satisfy their requirement or sell the shares. If your stock has plummeted, and you don’t have the liquidity to meet the margin call, you must sell the shares.  

4. Short-Selling Is Complicated

For experienced traders and investors, short-selling has its merits, but there is no place for inexperienced traders or investors. A stock’s value may decrease for many reasons, including lower revenues and profits, product failures, or increased competition. Short-selling has been in the press, especially related to GameStop, which has a very high short interest and brought out a swarm of retail traders who have sent GameStop in the opposite of where the short-sellers want it to go. Watching the market volatility reminds me of the dangers of short-selling and margin buying strategies.

A short sale of a stock involves selling a stock you don’t own. Therefore, you have to borrow the shares to sell them on the market, speculating that the share price will decline. The short seller must replace the shares at a later date. As you borrow the stock for the short sale, this trade requires margin, but it requires a higher amount because there is no collateral, as we discussed.

The Fed requires all short sale accounts to have 150% of the implementation’s short sale value. This percentage is a minimum, but the broker can adjust the requirements upward.

An Example of A Short Sale

Let’s say you believe GM is overvalued at its current price of $35. You’ve done research (hopefully!) and found out the company will generate lower revenues than the consensus believes due to potential product recalls. You call your broker and arrange to borrow 100 shares of GM at $35, or $3,500 selling price, and the broker sells those shares.

A few months later, GM shares drop to $27, so you instruct your broker to purchase 100 shares at that lower price, or $2,700. These latter shares are given to the brokerage firm to repay the borrowed stock.  You pocket $800, or the difference between $3,500 and $2,700.

A Short Squeeze

This example is simple and straightforward. Imagine a transaction with GME and shorting 10,000 shares at $5 per share, or $50,000, expecting GME to go to $3 per share. Instead, GME shoots up to $300 per share, and days later, it is worth $3 million. There have been instances of short selling disasters. For example, when a company gets a higher buyout which lifts its shares. The GME situation is different for the messaging boards and how the traders collectively pushed up several companies’ stocks.

Use Call Options

Short selling is not for the faint of heart. You can limit your risks by using call options to hedge against a possible rise in the stock. Without an option, you are opening yourself up to unlimited losses. Targeted hedge funds (e.g., Melvin Capital) lost billions on GameStop, and they have experience. What makes young traders believe that they can handle these risks?

I have not engaged in short selling, which would mean I would want a stock to go down. However, some short-sellers provide valuable insights by uncovering stocks that may be overvalued or fraudulent. Short-seller Jim Chanos haunted the shares of Enron in 2001 by uncovering Enron’s accounting scandal.

Day Trade Is Challenging

The stresses of day trading are very high. Traders rapidly buy and sell stocks throughout the day, hoping to make more profits than losses. Unfortunately, many make more losses at first. They tend to borrow money, buy money on margins, and requires access to capital.

There is a low chance of success in earning an income as a day trader, yet it is a challenge to do this only on a part-time basis. It may sound exciting as you can do it from your home, but there are costly technology needs and a good stomach to handle the pressures. Swing trading is an alternative that has some similarities to day trading but is usually is done over a more extended period and not your full-time job.

When the market gets volatile, don’t bail by selling all your stocks. 2020 was an extraordinary year for many reasons. It was a year in which the stock market proved its resilience.

From its February peak to  March 23rd bottom, stocks dropped nearly 34%. However, the S&P 500 index resulted in a 16% gain for the year and a 44% gain for the NASDAQ. Imagine if you sold your shares on March 23rd?  Many people did sell, learning a lesson about holding on to stocks during market volatility.

5. Buy And Hold Strategy

I am not a short-seller and don’t use leverage or day trade for fear of taking on too much risk. I have made some poor choices through the years, such as selling stocks too early, being too greedy, not having enough patience, or buying a stock I didn’t understand. My investment strategy is more deliberate buying and holding onto fundamentally strong stocks for the long term.

This strategy has some advantages like compounding, lower capital gain tax rates, and waiting out the turbulence and dips, or buying more stock for dollar-cost averaging to reduce my basis. Compounding is an excellent tool to grow your wealth in retirement and taxable accounts exponentially. That said, you do need to use financial discipline. 

6. Take Some Money Off The Table – Don’t Be Greedy

It is a good idea to sell some stock to lock in a 20%-25% gain. I have learned the hard way, watching my stocks climb as if going up were inevitable, losing money in dotcoms and elsewhere. The old Wall Street saying remains close by with these words, ” Bulls make money, bears make money, pigs get slaughtered.” If you have some big gains from GameStop, you probably want to lock that in even if you will pay the higher tax rate.

On the other hand, if a stock is not working as you thought, it may be time to admit a mistake. Consider limiting your losses by selling the stock after it is down 8%. You want to revisit its fundamentals as something may have changed for the worse.  It hurts a lot when you see a bigger loss in a stock you still own. Often, cognitive biases, such as loss aversion, prevents us from giving up on one of our losers.

7. Diversification Minimizes Risk

Concentration in one stock is risky. What if you yoloed, and put a significant amount of your money in GameStop, and it suddenly dropped precipitously. It did that when Robinhood restricted GME and other stocks but removed the restriction when they received criticism. If not GameStop, it could be another stock name that becomes angel but then loses its wings.

Diversify your portfolio is a way to minimize risk. I buy stocks outright, but I remain diversified by buying index funds and ETFs. As you build your wealth, you should make sure you have diversified with other assets, including money markets, bonds, real estate, and gold. 

8. Don’t Gamble Or Speculate Without Some Knowledge

Investing in the markets is a way to use your earned money to make more money than you lose. Don’t gamble your hard-earned dollars on anonymous tips or speculate without trying to understand its risks and rewards.

As I wrap up this letter, I believe you can find success in investing and find ways to make it fun and rewarding. Don’t get sucked into strategies that won’t benefit your finances. As you make more money, you can use your generational influence to make societal changes through work and charity. You don’t have to make money to do good in the world. Don’t get discouraged when you lose money. Make that a learning experience.

Final Thoughts

The unusual market activity prompted by social media-driven calls to buy stocks to counter heavily shorted stocks borrowed by institutional investors is dangerous. It serves as a reminder that investing is never a sure bet. There is a generational opportunity for young people to participate in the financial markets.

I hope that they are rational investors that use common sense and discipline to stave off potential losses. It will be a shame if these investors are vulnerable to losses and are mistrustful of the financial markets as some of these traders engage in possible revenge strategies.

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How To Talk To Your Kids About Money

How To Talk To Your Kids About Money

“Poor or rich, money is good to have.”

Leah Eliash Kaufman, my grandmother

I worked in my parents’ housewares store after school, weekends, and summers. From the age of 12 until I got my first full-time job after completing college, I helped out my parents. It was a family obligation, and I was not paid but got a wealth of knowledge running an up and down business.

Mom and Dad did share their values about money. My mom was mostly frugal, particularly when we had difficult times. My friends came from modest means as well, but they always seemed to have more than me. They had the latest toys, trendy clothing, a new bicycle, and a new car later. We rarely went on vacation because the store was open six (and sometimes seven) days a week.

Memorable Lessons Passed On

While I didn’t have a ton of material things, my parents did pass on life lessons about the importance of education, working hard, and giving back to the community. They also encouraged me to set up a bank savings account, invest in stocks, pay more with cash than borrow, and quickly pay off debt. 

My mom was never able to go to high school though she wanted to be a lawyer. Circumstances prevented her from moving ahead. She was so savvy about money, investing, and running an ultimately successful business.

Are We Rich?

As a mom, I feel her influence, especially with my kids, now in their teens. When they were younger, one or both accompanied me to the college finance classes I taught. That opened the door for my husband and me to have some early discussions about money with them.

I always asked my mother when I was a young child, and my kids have asked us, “Are we rich?”

According to Charles Schwab’s 2019 Modern Wealth Survey of Americans ages 21-75, you are wealthy if your net worth is $2.27 million.

However, the amount varied by generation:

Gen Z         $1.49 million

Millennials  $1.94 million

Gen X         $2.53 million

Boomer       $2.63 million

Those surveyed said that 72% based their definition of wealth on how they live, and 28% considered wealth on the dollar amount.

The average US household’s net worth is $692,000, skewed because the super-rich pull up the number. A more realistic number is the net worth of the median US household, which is $97,300.

The truth is the majority of Americans need help in better managing money with these statistics:

  • Only 38% have an emergency fund
  • 59%  live paycheck-to-paycheck
  • 44% carry a credit card balance at medium to high teens interest rates
  • On average, we spend almost $500 per month on nonessentials

For these reasons, we, as parents, have an essential role in fostering our children’s attitudes and adopting good financial habits.

Here are 10 Ways To Talk To Your Kids About Money:


1. Start to teach them early.

Conversations with your teens about anything sensitive can be awkward, especially about money. According to a 2018 T. Rowe Price survey, 66% of parents are reluctant to discuss money matters with their children. Only 21% of the kids recall their parents speaking about money at least once a week.

Speaking to children about finances takes some of the mystique out of money for them at an early age. It is more comfortable for parents to talk about savings, giving them a head start in math. Explain how the bank holds money for people and explain how it lends money. This will begin a conversation about financial literacy, leading to developing money management skills.

I did take my kids at a too-early age to an ATM to take out money.  My daughter, Alex, got too excited and wanted to try pushing buttons to get some money. She also gave $10 to a friend in her pre-K class for being her friend. It was her tooth fairy money. Luckily, his mom tipped me off. We talked to her about how that money goes into the bank to grow into more money.

2. Wants versus Needs

As they got older, my kids became accustomed to asking for and expecting everything.

It is tough to teach “needs” and “wants” when your 8-year-old says that he needs a smartphone. His friends had one for a long time. We began to set money limits by giving money for after school for the whole week. They learn something about allocating more money for the days they have plans with friends.

Spending money is a neglected topic for many. When kids see us spending money on big-ticket items like a 65″ TV screen, I usually share my thoughts with them with examples. 

We took a vacation with the kids, and when I was eyeing a decorative bowl,  my son Tyler was upset with me for buying something and not limiting myself. He asked me, “if I needed it?” I thought about the bowl and realized I had one just like it. I passed on the bowl and let him know he helped me make the right decision.

Teach your children to shop wisely and not to be impulsive about spending. Emphasize need, quality, and price.

3. The Dangers of Credit Cards Versus Debit Cards

Having credit cards are a big responsibility for everyone. Credit card debt is toxic to all to carry large balances. Parents should speak to kids about the difficulty of mounting debt if you don’t pay your credit card balance fully. Parents are having their children become authorized users on their cards at an early age. Many banks do not restrict age, allowing a 10-year-old who may not be truly ready to have one.

Parents should use this opportunity to allow their children to learn to take care of cards by getting debit cards. Reasonable spending limits can encourage to make choices. Parents should talk to kids about what to use the cards for and when to use cash. A debit card is an excellent way for your kids to acclimate themselves to using a card with care. 

Related post: A Guide To Your Child’s Credit Report: Pros And Cons

4. Financial Education For Your Family

The T. Rowe Price study found the effectiveness of financial education in the home or school were both falling short.

Most young adults who received some financial education in school are more likely to have a budget, emergency fund, be good with money, and have a retirement account. However, 34% said that their parents have more influence than schools on financial habits. 78% of young adults who received financial education had it in the 12th grade or later.

Encourage your children’s active participation in family matters that concern them. For example, they can make their case about the allowance they will receive, participate in family budgets for items you are shopping for like school supplies, clothes, and vacations.

Parents should enlighten their kids regarding their attitudes about money management. These are essential skills. For example, discuss getting another car. They can discuss why they may prefer to buy a new or used car outright versus taking a loan or leasing a vehicle.

Saving Money

If your goal is saving money, give your children reasons why buying a used car is better. A new car depreciates about 20% on average as soon as you drive it, plus most new cars lose some value in the first year. Along with these savings, you may pay less for sales tax, insurance, and registration fees.

Parents are in the best position to model responsible behavior about money. Once kids make some money on their own, parents should require their kids to save for their car when they begin to drive.

Still, the problem may go beyond parents’ reluctance to discuss money matters. Parents may be lacking in some areas of financial literacy themselves. It is a good idea to learn about money and to invest together as a family. I often talk to my kids about a favorite stock I own and why I still like it. They ask for updates at times.

5. Be Honest With Your Mistakes

We all wish we did everything well. The truth is that we make mistakes. We want our children to do better than us in education, making money, and managing money. If you have made money mistakes, whether it was taking on too much debt and paying it off or not having enough liquidity at times, share that with your kids.

We bought a lot of art and antiques at probably peak prices before we had kids. Frankly, I developed the bug to buy 18th-century Federal furniture and other collectibles, but it doesn’t contribute to retirement savings.

6. (Kiddie) Roth IRA

My mistake in buying antiques, although beautiful, is that antiques are less liquid than other assets when you want to raise money. This realization does allow me to discuss retirement savings with my Generation Z kids. Studies show that this generation is more aware of the need to set up IRA accounts early. Teenagers can contribute to a Roth IRA up to the amount they make from eligible employment.

If my son Tyler earned $2,000 as a camp counselor or at the movie theater, he can invest all or part of the $2,000. If kids invest all of it, parents can’t contribute up to the current maximum of $6,500 in 2021. Contributions to Roth IRA is limited to Tyler’s earned income of $2,000. If your teen is under 18 years, typically the age of majority, they are minors, and a parent has to serve as a custodian.

While it would be great for your teenager to contribute as much as possible to a retirement savings account, even a portion of their earnings would be a great start. The lesson for them is the growth of their contribution is tax-free and will benefit from compounding returns over the decades.

7. Investing In 529 Plan

As parents, you should set up 529 savings accounts for your children’s college education as early as possible. Your children may not even be walking or talking yet, but that shouldn’t stop you from beginning to save for your children’s future with tax-deferred dollars.

It is way too early to know if they will go to college. However, getting an early jump may allow you and your children to reduce the need to take on debt. If you haven’t opened an account yet, involve your children when you open the account and explain it to them. It is good to know that saving early may reduce the need for student debt later on.

8. Showy Social Media…Keeping Up With The Jones

Our kids are growing up with smartphones. They are continually interacting with their friends, reading about restaurants and vacations they have gone on, shopping for trendy clothes, shoes, and bags. They are exposed to many different lifestyles at a much earlier age than we as parents have been.

It is “Keeping Up With The Joneses” on steroids. Social media has led to many conversations after we recognized our kids looking a little crushed at times. They would point out that their friends were getting more things than they were.

An Example

Our son, Tyler, was on X-Box playing Fortnite with his friends all the time. Most of the kids were buying “skins” which are costly (up to $20 per skin), an expensive endeavor if you splurge for 60 skins.

We didn’t want to have to pay for this unnecessary game expense on an ongoing basis. We had to sit down with our son to explain that every family has different resources and spending patterns.  Some families make more, and some families make less. He gave us good feedback.

Weeks later, his group of friends moved on to another game.

9. Share Family Values versus Sharing Your Salaries

Discussing salaries are a complicated topic, requiring thought. Most families are uncomfortable discussing money in general, and even more so sharing their salaries. About 30% of families do not earn a regular paycheck. Besides, what does that figure tell your children? Often, it is an abstract number. Salary is different than your take-home pay because of the taxes you are required to pay.

Some say that revealing your salary is an essential part of educating your children about finances. It may help your children by being open and build trust in your relationship. Explaining how your take-home pay relates to your household expenditures could help your kids make your budget more transparent.

 A Better Life Lesson

Others say that salaries are personal information and children do tend to share everything. How do you explain your salary differences, or do you have to do so? 

There are many variables to discuss money without necessarily sharing your specific earnings or net worth. They prefer to know what you do for a living, do you like your job, and you will always have one.

It is better to share what you value, such as your family, friends, how you live, spirituality, and your beliefs. Learn what they value as well.

10. Charitable Giving

“To whom much is given, much shall be required.” KJV

It is never too early to involve your kids in giving to important causes to the family. It is a way to talk to your kids and find what their interests are. They can put aside some small amount and physically drop it in a box at a local shopping center or send a check. The point is to have them recognize they have social responsibilities larger than themselves.

Final Thoughts

Communicating openly and clearly with your children about money will help them grow more financially confident. It will strengthen their bond with you and earn their trust about financial literacy, a topic you don’t generally talk about with others. Their increased comfort with you will help them with important money management decisions they will need to make, such as college, career, buying an apartment or home.

Related Post: Why You Need An Emergency Fund (And How To Invest It)

What is your experience in speaking to your children about money? What works and doesn’t work? We would like to hear from you!










Best Personal Finance Tips You Should Know

Best Personal Finance Tips You Should Know

This time of year is always a good time and place to see where you stand regarding your financial goals. Build and strengthen financial habits to achieve financial success. Use these personal finance tips as a checklist to become more financially organized at the beginning of the year. No matter what your situation is, your financial success doesn’t happen without work. Careful planning, often with professional guidance, requires that you look at a wide range of your finances and how you handle money.

We cover major tenets of personal finance and relevant tips you should know to have better financial health and success.

Evaluate Your Monthly Budget

Track your monthly income and expenses. Break your expenses into fixed or non-discretionary expenses and variable or discretionary expenses by category on an excel spreadsheet. Think of your budget as your household’s income statement. Your budget will help you to control your spending.

Use the 50/20/30 budget rule as a rule of thumb. Essentially, you are allocating your after-tax income into three budget buckets:

  • 50% of your spending are for your needs, notably housing, utilities, groceries, car payments and other needed fixed or non-discretionary expenses.
  • 20% for savings that can be used for paying down debt, emergency fund, and  investing or combination.
  • 30% are for your wants, that is discretionary or flexible spending for entertainment, vacations, and shopping. This what is left after your allocations are made for priorities, notably needs and savings.

Adopt a disciplined strategy as early as possible when you have fewer items to track. Use budget apps readily available or create your own excel spreadsheet.

Update Your Net Worth

Keep track of your net worth which is your household balance sheet. To calculate net worth, add all of your assets that you own less all liabilities that you owe. When you are young, you may have more liabilities because you are just starting out and may have college loans. However, over time, through accumulation of assets that grow at rates faster than your debt, you should have amassed comfortable net worth.

Net worth is an important benchmark to compare against your short and long term financial goals. Are you where you want to be in your 20s, 30s, 40s and thereafter? The fastest way to build wealth is through good financial habits that require saving, spending less, managing debt wisely and investing.

Build An Emergency Fund

Save for emergencies in a separate account that is readily available money. A common mistake made is not saving money for unexpected events like losing a job, pet surgery or a flood in your basement. Plan for 6 months of essential living costs to take care of rent, mortgage, uitlities, credit card bills and any other fixed monthly costs. Make sure your emegency fund is liquid in either cash or cash-equivalent (also known as money market) securities.

This fund should be used for emergency purposes not necessarily your wants for a high priced vacation. If you like to travel a lot, it may be worthwhile to have a separate vacation fund to set aside for those purposes.

Make Savings Your Mantra

Spend less than you earn so that something is left over to put in savings. Part of your savings should be allocated to investing. Growing your money in investment accounts is your best path to a comfortable financial life and to achieve wealth. Alternatively, spending more than you earn will result in more debt.

Automate your finances from your direct deposit paycheck so that some portion goes into your emergency fund, 529 college savings and retirement savings. Even with automation, review your amounts periodically. It is easy to set up withdrawals from your earnings and forget about it. However, you may be able to afford higher amounts than what you set up initially and can sock some more money away now.

College Savings Planning Should Be Started Early

Set up a 529 college savings fund as soon your newborn arrives. There are several ways to save for college besides a 529 plan like a Coverdell Education Savings Accounts and UTMA. Saving for college early gives you a headstart in growing funds through the power of compounding  while enjoying deferred tax benefits. Virtually all states have their own plan though you are not limited to your home state. There are a variety of funds to choose from including target date funds.

Retirement Savings And Earn Company Match

Save for retirement as early as possible. By setting money aside early you benefit from compound growth, that is, interest on interest. You may defer tax payments or reduce tax costs long term. Learn how your employer-sponsored 401 K plan works with respect to matching contributions which can be quite valuable. A company 401 K match may be a certain percentage like 6% of your salary with the firm matching dollar for dollar (or 100% which is generous) or something less of the amount you saved.

These contributions are like “free money” so don’t leave these dollars on the table. Open up a Roth IRA account to complement your 401 K retirement plan. You want to max out these amounts. Invest this money in a variety of investment choices offered by the plan.

Don’t delay savings for your 529 plan or retirement plan because of you are overwhelmed by the various options. Opt-in to a plan. You can make changes later on.

Health Care Savings Accounts

Find out if you have a flexible savings account (FSA) or a health savings account (HSA) available through your employer. Both plans can help you purchase qualified healthcare costs through pre-tax earnings contributions. The HSA is available either through your employer or if you are self-employed. You cannot have both plans.

The FSA plan sets lower contribution limits than HSA, and if you don’t use it by year-end, you forfeit what’s left in the account. The employer controls the FSA, while the individual controls the HSA.

The HSA plan has higher contributions, covers a broad range of medical expenses, and is more flexible. Unlike the FSA, it does not have a “use or lose” feature. Instead, if you don’t spend the remaining amount that year, it rolls over. The HSA is portable, so if you leave your company,  you can bring the account. You can earn interest on your HSA like any savings account. However, if you use those funds on unqualified items you will pay a penalty, and, if you are below 65 years, you may need to pay taxes as well.. 

Managing Debt Wisely

Pay your bills on time and in full so that your balances are not being charged interest. When you pay only the minimum amount required by the credit card companies, you are paying far more in interest for what you charged on your card. Give your cards a rest until you can pay it all every month.

Use shorter borrowing periods for car, student loans and home loans to lessen the interest amount.The shorter the time frame on your car,  home mortgage or student loans, the lower your total respective cost will be  Yes, you are paying more per month but over a shorter period of time. Perhaps you can increase your down payment.

Know your respective interest rates, fees, penalty rates and terms on all borrowings: mortgage, car, student loans, and credit cards. When interest rates decline as they did in 2019, refinance your rates.

Use Credit Cards With Care

Credit cards provide an essential convenience and help us to build our creditworthiness. However, if you only pay the minimum on those balances, you are incurring high interest rates on what you owe. This is when compound interest becomes your enemy, and you are paying interest on interest. Keep your balances as close to zero as possible.

Use cash more when possible. It can be a motivator to spend less and help us negotiate lower prices when bargaining. You feel the burn instantly as to seeing it on your monthly bill.

When using payment provider services like Venmo and Zelle, know the differences in your liabilities. Credit card holders are usually liable up to $50 for unauthorized charges if you report your card as stolen. User protections for P2P vary so check carefully for coverage.

When working on debt payoffs, eliminate debt with highest interest rate first. I understand the psychological benefits of the snowball method and if it that is an effective motivator for you, go for it.

Avoid payday loans should go without saying. however, if this is your only choice, work with a financial counselor as soon as you can.

Control Your Spending

Comparison shop for everything you buy or sign up for: groceries, clothes, cars, homes, applicances, and services such as financial advisors,  insurance, banks ,credit cards. Be as informed as possible about points, rewards and cash-back offerings that encourage more spending than necessary.

Negotiate when and wherever possible. This goes for shopping and the interest rates on loans. However, learn to negotiate for higher compensation as well.  Opportunties are sometimes waiting for you to be more proactive in the bargaining process.

Know your wants versus needs. You don’t need everything to survive. Many items we say we need are really wants we desire like a long vacation or luxurious clothes.

Don’t go grocery shopping without a detailed list. This was a game-changer for us when my husband would come home with loads of unnecessary items all the time. Use per-unit pricing to compare items. Find coupons online.

Window shop with friends and buy when alone.

Be aware of numerous biases playing with your decision making.

When car shopping, buy certified pre-owned cars which have been completely inspected, repaired and may have original factory warranties remaining on its life. Do your oil changes and maintenance check ups as required.

Building And Managing Your Credit

Review your credit report periodically. It is available for free from on an annual basis. You can also get one free report every 12 months to review your credit reports from each of the credit bureaus: Equifax, Experian and TransUnion. Then you can review your report more often especially when there are issues.

If and when you find errors, have the issues corrected as quickly as possible. Here’s how you do it.

Your creditworthiness is essential for more than just borrowing. Your prospective employer, landlord, utility provider and potentially significant other may want to know how you handle money too. By the way, background inquiries are usually soft inquiries that do not affect your score. However, hard inquiries happen when you are signing up for a new credit card or trying to refinance your mortgage loan  and will negatively  impact your score.

Know how the five key categories impacts your credit score. Your FICO scores are based on the following percentages:

  • Payment History – 35%
  • Credit Utilization – 30%
  • Length of Credit History – 15%
  • Credit Mix – 10%
  • New Credit – 10%


Your Child As Authorized User

Parents can help their children build up their credit by authorizing them as users on their cards. Think carefully about your own credit score. If it is low, it may actually hurt their score and defeat the purpose of being on your card. Know your child’s age and maturity, their ability to be responsible and setting up spending limits. There are virtually no age limits so it is up to parents to decide when their child is ready to have access to a credit card.

Yes, it is worthwhile for kids to get a credit boost. However, make sure you are not exposing them to fraud or identity theft, one of the downsides of children having a credit card. You will need to monitor their credit report along with yours.

Before getting them a credit card, talk to your children about money, spending and saving as a means to convey the need for good financial habits. The card is for their needs, not for paying for their friends’ needs and wants.

Raise Your Credit Score

The better the credit score, the lower your borrowing rate and the better on getting credit card deals regarding rewards and cash back. There are a variety of ways to raise your credit score or avoid inadvertently lowering it.

Don’t close any credit card accounts as this will ding your score. Instead, put these cards in a safe place like a drawer and don’t use them.

Keep your credit utilization rate well below 30% of total available credit. It may be beneficial for you to open an home equity line of credit(HELOC). If you have equity in your home you can take out a line of credit up to that value. This will expand your available credit, improving your utilization rate.

Certain programs are becoming popular that may help you boost your score for free or a low monthly amount. For example,Experian Boost, launched in late 2018 counts on time household payments for services such as telephone utilities tpwards your score. RentTrack And Rental Kharma report on time rent payments to credit bureaus.

If you have poor credit or in need of building up your credit, apply for a secured credit card as a means of boosting your creditworthiness. Become an authorized user on a close family member’s card for a period of time.

Applying To College

Fill out FAFSA, Period

If you are seeking funds for college, there is no downside to filling out the FAFSA (Free Application For Federal Student Aid) form other than your time spent. The form is necessary for federal loans, grants, work study programs and merit based scholarships. Don’t lose these opportunities by bypassing FAFSA. Federal loans tend to have better loan rates than private loans.

Be aware of your respective terms, grace periods, due dates and repayment options. Automate where possible so you don’t miss any payments. Try to target paying back your loans in a shorter time frame than the standard 10 year terms especially if you get bonuses or are getting nice raises.

Consider community or two year colleges which can be cost effective, for those who wish to work while going to school or want an interim step.

Save Money In College

When in college, look for ways to save and make money. College students tend to be better budgeters and track spending based on having less money to spend. As students living in a close environment, you are sharing similar tight money circumstances over the four years at school. College students eat ramen noodles, take public transportation and enjoy more experiences.

Keeping up with the Jones comes later on, after you get your first job and start making money. Try to remember your frugal days at college. Resist lifestyle inflation by having  good financial habits.

Understand Your Company Benefits Plan

Whether you are working at your first job or at the same firm for years, review your company benefits package. What may not have been of interest to a 20 plus year old, may be desirable now. Companies are increasingly adding to their compensation plans that can be customized for your life stage. Among the standard benefits plans are retirement plans, health care insurance, tuition reimbursement, insurance, flexible spending accounts (FSAs) or health savings accounts, paid vacation, sick time, medical or family leave.

You may need to add more coverage to parts of your benefits offerings such as life insurance. Typically, companies provide you with a starter package which will likely not be enough protection for a growing family. Company plans vary and may be a good reason to choose between two competing offers.

How To Start Investing Early

You can only reduce spending and save so much. Learning how to invest is the best way to outpace inflation, save money for college tuition and retirement, and accumulate wealth. According to a Gallup poll in 2019, 55% of Americans own stocks either individually, in mutual funds or in retirement accounts. This rate is below pre- 2008 recession levels of 62%.

Inflation refers to increases in prices resulting in reduced purchasing value of money. As prices go up say 2%, your money will get less units than it did in prior periods. Through  investing in stocks, you can better maintain your purchasing power. Stocks  tend to generate better returns (based on higher risks) than other securities, outrunning inflation. Stocks grow at a compound growth rate of 9% over the long term (over 90 years), though 2019 has been a banner year with S&P index, including dividends,  registering one of best gains since the 1990’s at roughly 30%.

Stock Market Games

Playing a simulated stock market game is a great way to learn how to invest and get familar with relevant terminology without losing real money. There are a number of free games  available and easy to set up that mirror realistic trading and investing with friends, family or on your own. Many of these sites have tutorials, videos and articles to educate you on the basics and provide strategic tips.

Start Investing With Small Amounts

Put small amounts  like $25-$50 per month into your investment account that you can afford to lose. That is, don’t invest your rent money. Starting small is a good way to get started as you gain a better understanding and confidence. Many large online brokers have lowered or eliminated commissions and initial minimum amounts designed to encourage small investors. Be aware that there may be management fees on your balances.

Buy Exchange Traded Funds or ETFs  which do not have minimum requirements, are available at low fees and provide you with diversification. Most mutual funds require a minimum initial investment between $500-$3000 and higher. For beginner investors, that may be a steep amount. You have many choices of ETFs and low cost index funds. Start with Vanguard’s offerings.

Some Investing Basics

When you begin buying stocks, have a long term outlook. Although commissions are reduced, you can realize better returns with long term investing (over a year or more) rather than trading. There are tax benefits when holding a stock more than one year by way of capital gains and capital losses.

Have some discipline strategies in place for when you should sell or exit a position. If you have a stock that is up 20%-25%, it is a good idea to sell a portion of your gains. A useful rule is “bulls make money, bears make money and pigs get slaughtered.” That is, don’t get too greedy.

Another good rule when investing in stocks, courtesy of Investor’s Business Daily (a great resource!) is to always sell a stock if falls 7%-8% below what you paid for it. The premise of this principle is that by selling at that level you are capping your downside potential. It has worked well for me. On the other hand, another strategy investors use is to buy small portions of stock initially and then buy opportunistically at lower prices to reduce cost basis of your stock.

I consider that all investors, including beginners, should have a basic knowledge about the Federal Reserve and their impact on interest rates, money supply and financial markets. We a have a primer on the Fed for those who want some insights.

Compound Growth And CAGR

One of the most important terms in finance to understand is compound growth. It can work against you when you are referring to a long term debt such as a fixed mortgage when you are paying interest on interest which increases your loan. Here, when investing, it can work in your favor when you are referring to the growth rate of your investment in your portfolio. Keep in mind, while stocks have above average returns, they have down years which can be sharp like during the 2008 recession.

The most accurate way to calculate returns is the compound annual growth rate or CAGR which smooths out returns over a longer period of time. Investors like to compare CAGR S&P 500 index (commonly referred to as “the market”) to their savings account or to that of a specific mutual fund or to their portfolio. This how investors can see how they are doing relative to the market. The formula for the compound annual growth is here. Thankfully, there are CAGR calculators to use.

If you are investing without a financial adviser, you need to do research. There are a lot of publicly available resources available to learn about the company and its businesses, its industry and its risks. You need to understand trends in the market. Expect stocks to be volatile and they may bounce back quickly after a fall in the market. BLOG POST

Diversification And Asset Allocation

Diversification of your stock holdings is important. Don’t put all your money in one stock or one sector of the industry. That is a recipe for greater losses. The best way to achieve diversification is through buying ETFs or low cost index funds which contain baskets of different securities. You want to minimize your risk as best as possible based on your own tolerance.

Not only do you want to have different stocks in your portfolio, you should aim to have different types of investments. This can include money markets, Treasury, municipal and corporate bonds, foreign securities and real estate. You can use ETFs and mutual funds to gain diversification within each asset class. Asset allocation is a means of diversifying these different investments. How you allocate your assets is based on your preference, age and lifestyle. Use a financial advisor or planner to talk through your planning and goals.

How To Choose A Financial Advisor

Meet with a financial planner or advisor to review your financial goals periodically and discuss how to achieve them. A financial planner does much more than selling you securities. Look for someone with a CFP designation. However, that should not be your only criteria. You should feel comfortable with this person and/or team.They should understand your household’s financial situation, lifestyle and your plans regarding children and college, career, retirement, insurance needs and estate planning. Here is how to choose a financial advisor.

Protect Your Family Financially

We love our families. Take proper steps to financially protect them. Providing financial security–besides making a good income, saving, paying off debt and investing– requires protective measures like buying essential insurance coverage and estate planning.

Insurance Coverage Is Essential

Your employer may provide you with some types of insurance as part of your benefits, including life, health and disability but often it is not enough. As your family grows you need to make sure you are adequately covered to take care of your family’s essential living costs and their future plans, including college. There are 8 types of insurance that you need to have proper coverage: auto, homeowners, renters, life,  disability, health, long term care, and  umbrella insurance.

Estate Planning

Prepare for the worst for your family’s sake. There are a number of steps to take for estate planning. Create a will and/or trust according to your wishes. You also need advanced medical directives and a living will as essential documents for your loved ones and health care providers.  Most people resist dealing with estate planning as a difficult topic. However, not dealing with it may leave your loved ones in a confused state during their time of grief. Think of estate planning as a plan of action that you are taking for your family.

Review And Update Your Designated Beneficiaries

An effective and efficient way to distribute our assets is by designating our beneficiaries outside the will through our bank accounts, insurance policies and such. Many of our assets are nonprobate property. As such, they are transferable to survivors by contract immediately upon death rather than under a will.

The advantages of contract transfer over the distribution of assets by a will are less time, cost and more privacy. Transfers to loved ones by a will could take 6 months-1 year if probate is not required. If contested in court, the distribution could take longer. Even worse, your will would be made public through court documents. At a minimum, be aware of the need to have designated beneficiaries for all assets. Review and update your beneficiaries based on life events such as having a new child or other necessary changes.

Invest In Yourself

Education does not end at the schoolhouse door. Embrace learning so you can master skills that are valuable to you. Read more and acquire knowledge so that you are competitive at work, have wider and diverse social circles and can teach others. Avoid procrastination which can be costly and cause unnecessary mistakes. Use time as the precious resource it is so that you may live everyday to its fullest.

Final Thoughts

To achieve financial success in life you need to have a game plan combined with good financial habits. Measure how you are doing with a review of your budget and net worth. They are key documents that help pinpoint where there may be some improvements needed. Financial planning should be discussed among family members. Calculate certain financial ratios, benchmarking your financial health. These ratios are tools designed to evaluate financial strength. As a companion to this article, see our post: 18 Financial Ratios You Should Know.

We hope this has been helpful to you. Thank you for reading and share it if you found it as valuable. Let us know what your thoughts are! Wishing you much prosperity and health in the coming year!






9 Ways To Avoid Financial Infidelity

9 Ways To Avoid Financial Infidelity

“From hidden debt to secret expenditures, lying about finances can cause a marriage to go into default.”

Kimberly Foss, CFP


The US divorce rate among young people under 30 years has been dropping to below 50% since the early 1990s. However, that may be deceiving. Millennial couples are marrying later and arming themselves with prenuptial agreements.

Total divorce rates may be higher, closer to 53%, according to a study by sociology professor Philip Cohen. Older couples are quitting their marriages more than previously.

Money is the number one trouble spot among couples according to 35% of people surveyed in the SunTrust Bank study. Most conflicts about finances are the driving force in most divorces. Couples talking to each other in making wise financial decisions may reduce some of the strain these topics may cause.

In its Love and Money survey, TD Bank found that 90% of respondents who say they are in happy relationships discuss money at least once a month. It is always better to address these problems head-on rather than procrastinating over financial decisions. Bad financial habits may be costly by not confronting the piling up of higher-cost debt or overspending.

Related Post: 11 Ways To Avoid Costly Procrastination

Financial Attitudes May Be Visible Early On

When couples start dating, they may gain some visibility into each other’s attitudes about saving and spending habits. Once couples become more seriously involved, they should have more in-depth conversations about money to gauge each others’  financial goals. They should communicate their perspectives on financial planning with honesty and respect.

It is awkward to talk with your partner about money if you never have. If you are moving to the serious couple stage, you need a way to get started. Ramit Sethi, a legendary personal finance expert (in all areas), developed “The Definitive Script…” He provides helpful word-for-word phrases for you to use. Frankly, it works for us, after 30+ years of marriage!

First Money Fight May Illuminate Your Differences

Learning how to talk to each other is essential as you contemplate tying the knot. You may get an early view of your financial differences once you decide to get married.  A couple may have different opinions about what kind of wedding you want to have. Should you marry at City Hall (about 3-4% of couples do) or have a lavish wedding.

The Wedding: City Hall or Grand Affair

If you choose the latter, hopefully, you are on the same page. Make sure you do your research and are ready for the high costs.  The average amount spent on a traditional American wedding is $35,439.  However, geographic locations differ.  Expensive weddings could go higher; they cost $75,000 or more in New York and San Francisco.

How the engaged couple handles this monumental event may tell volumes about how close their relationship with money may be. If they agree on the venue together, that is a significant first step. Think twice about having an expensive wedding that may put a big dent in savings for couples. 

Their weak money management skills challenge highly educated professionals like doctors and lawyers. My husband, Craig, an attorney, has often had difficulty with finances. He frequently laughs, saying that he went to law school instead of business school like I did.

My Experience

Finances have been a complex topic for our household. Once my husband embarked on his legal practice several years ago, I never had a good handle on what he earned regularly. It was understandable in the early years as his practice was going through typical growing pains, and his income was minimal. Also, clients don’t pay as regularly as they probably should.

The problem was that Craig never made me fully aware of how tough things were. Truthfully, I was wantonly oblivious and focused on my career, which demanded long hours of 6-7 days and heavy traveling. We probably missed some bills as Craig was the bill payer.

Fortunately, I was doing quite well on Wall Street. Ultimately,  we were able to pay bills. However, as time went on, my husband still didn’t share his income or was relatively vague. He is not alone in hiding information from me. Eventually, I did find out about the financial damage. It caused enormous stress in our lives.

A Financial Planner Helped Us

Among the biggest mistakes I have made, is not being persistent about knowing what he earned. Like others, he has a less predictable income, so he had some valid reasons. We benefited when we worked with a financial planner, and Craig was far more open.

Circumstances change, and you and your significant other always need to update each other. As those of you who have children know, our financial lives get more complicated when your family expands. So, folks, be open and honest with each other.

Financial Infidelity Seems To Be Growing

Many people who succeed in their careers have had trouble handling their finances and may cover up some of their actions. They may hide large purchases they have made, have credit cards, or a loan they didn’t tell their partner. This is known as financial infidelity, which occurs when couples are secretive about money stashed away or having debt accounts hidden away. They lie to each other about financial transactions. It leads to stress, anger, broken relationships, potentially bankruptcies, or divorce.

Financial infidelity has been on the rise, according to a survey by Millennials are nearly twice as likely to hide money or accounts from their partners than previous generations.

Prenuptial agreements, up 62%, have been popular with Millennials, especially women. These agreements are legal documents two people negotiate and sign before they marry. The signed documents cover financial issues and the potential division of assets in the event of divorce.

A Harris Poll done on behalf of the National Endowment For Financial Education (NEFE) reported these findings:

  • in 2 out of 5 couples (or 41%), one spouse admitted to financial deception.
  • 75% of those surveyed said financial infidelity adversely affected their relationships.
  • 36% surveyed believed some aspects of their finances should be private.
  • 25% discussed finances with spouse and knew partner would disagree.
  • 18% say they lied or hid financial information because they were embarrassed or fearful and didn’t want their spouse to find out.

Other Surveys

  • 31% of people in another survey by kept credit cards and other accounts from their partner. Hiding debt is a perilous deception.  The unsuspecting partner may think their household is financially secure when it is not.
  • Almost 30% of couples do not know each other’s salaries by a study by PolicyGenius.


8 Ways Couples Should Talk About Money

Few topics are more uncomfortable to talk about than money. Sex conversations are comparatively easy. Yet, avoiding the conversation about finances because it is challenging is foolhardy.  If you are entering what is hopefully going to be a lifelong relationship, now is the best time to get started.

1. Have Honest Communications

Early on, you should express your general views early on a range of financial topics without specifics on saving, spending, giving, reducing debt, investing, and retirement. Discussing how your family handled finances may be an excellent place to start. What kind of lifestyle do you want to have?

Remember, if you and your significant other are going to have a long-term relationship, there will be plenty of time to get very specific.

Each of you needs a framework to understand your respective money mindsets better. You might consider writing each other a letter as to what is essential to you. Share it and ask questions. It is a meaningful time to say what your significant priorities and learn of your partner’s.

Meeting of the Minds

There must be a meeting of the minds when it comes to values and expectations. You should talk about where you want to live, whether you would prefer buying your own home rather than rent, saving for retirement through work, setting up additional Roth IRA accounts, and setting up a vacation fund.

Most importantly, don’t lie or hide crucial financial information from your spouse because you are embarrassed or fear a potential fight. Face the music by admitting your mistake and ask your spouse for help in understanding the matter.

2. Set Up A Time To Talk About Money

It is a good habit to find a standard time to discuss a range of money issues together. You want to make sure you are on the same page regarding short-term financial goals. Those goals may impact your long-term plans if you breach your ability to save to buy a home. Also, couples should set aside money for an emergency fund for unexpected costs.

Initially, try to meet weekly to establish this as a regular event. You can call it a “money date” and talk over coffee or dinner. It should be informative and not stressful. You should use this time to get comfortable talking about money issues. One person may be a spendthrift, buying only the highest quality, and the other one is thrifty, often purchasing low quality.

Having a discussion is an excellent way to clear up misunderstandings over one spouse’s purchases while the other person wasn’t happy about the amount spent. We have all been there at one time or another when we couldn’t resist a salesperson’s pitch to us.

Have Monthly Meetings

After the first few weeks, consider a regular monthly meeting convenient to your schedule. Gather financial documents, bank statements, budgets to review together. Both spouses are entitled to know their financial situation clearly and correct any divergence from their goals on a timely basis.

3.Tell Your Spouse What You Earn

Generally, it is a good idea to share your salaries as a combined baseline income. However, one person may have a predictable salary while the other person may depend on annual bonuses, commission, or self-employed, receiving less predictable lump sum payments. You will need to figure out how much you both earn annually.

Whether you are not sharing your spouse what you earn or hiding debt from your partner, you impair their right to know about these financial issues. Surprisingly, reported that only 52% of individuals believe their significant other is honest.

For budgeting purposes, you will need to know your household’s combined income. It will be essential to create a monthly household budget to track savings and expenses. You should be working together towards your financial goals. Iron out any fundamental differences.  You should also know your net worth, tracking your assets and liabilities.

4. If/When Finances Merge

Among the most challenging decisions for any new couple are combining finances and dividing up money responsibilities. There are many tasks to take care of, such as managing money day-to-date and dealing with long-term issues.

Own or Joint Bank Accounts

Traditionally, married couples open joint bank savings and checking accounts. Often, one spouse may earn more than the other.

Increasingly, both spouses earn their income. Both spouses should be responsible for saving and spending in line with their goals. If they were married later in life, they might have accumulated assets and debt, notably a student loan and credit card debt. They may want to protect their owners.

Have At Least One Account That Is Yours

For many couples, it makes sense for each person to have their accounts. Each of you may have automatic paycheck deposits and employer-sponsored retirement accounts. You likely have respective bills for entertainment, clothing, and jewelry paying on your credit card.

You can each allocate a pre-determined percentage for savings to the joint account based on your respective incomes. Joint accounts can distribute your income for household savings, investing, routine or monthly fixed expenses.

Some of these savings can be put into the household’s emergency fund for surprise expenses.

5. Divide Financial Responsibilities

You should decide how to share responsibilities for financial tasks. Among the jobs are paying monthly bills, monitoring credit card accounts, establish an emergency fund, paying taxes, charitable giving, reviewing credit reports periodically, and your budget. Determine which one of you is financially more capable for various respective tasks.

Your monthly budget and net worth statements are essential tools. Track your income from all sources, less all fixed and variable costs.  Review your discretionary spending and consider limits if you are overspending.

Net worth statements will give you a snapshot of your assets divided into cash and other financial assets. You want to track your debt amounts from your monthly credit card balances, student loans, mortgage, and car loans. Consider reducing debt to manageable levels, especially any high-cost debt usually from your card balances. Pay these monthly balances in full and zero out that debt.

Related Posts:

10 Reasons Why You Should Know Your Net Worth

How To Pay Down Your Debt For Better Financial Health

How To Control Spending With A Simple Budget

Why You Need An Emergency Fund

6. Spend Less Than Your Combined Income

To spend less than you earn is easier said than done. If you are paying more, then you are relying on your credit cards or loans.

Put yourself and your spouse on a limit that you both agree to, which coincides with your targeted budget goals. For example, if your savings target is 10% of combined income and you are find it challenging, rein in your spending.

Ultimately you want to maximize your greater financial security for your current household and your retirement years.

Related Post: 10 Ways To Better Manage Spending

7. Long Term Financial Planning

You and your significant other need to be on the same page whether you are dealing with day-to-day financial management or long term planning. Any problems in the near term, like reluctantly high debt, need to be worked on to realize your long-term goals.

Consider going to a financial advisor or planner to help you develop your plan more aptly and become more successful financially and in your relationship. You and your partner will need to make many complex decisions over the decades that you will be together. A planner can take some of the angst away.

Related Post: How To Choose A Financial Advisor

8. Strengthen Your Financial Skills

Most of us did not have a course in financial literacy in high school. Having the necessary financial skills is essential for everyone for day-to-day transactions as well as long-term planning. Take a workshop, read personal finance blogs, listen to podcasts, YouTube videos, and TED Talks.

9. Be Happy With Your Partner Or Go For Help

No one enjoys confrontation, particularly about money. However, when we have financial issues, we often have battles. The truth is that our lives revolve around money. We are making, spending, saving, borrowing, and investing money. We do it together and often apart.

Let’s make a pact to talk about money more freely and discuss financial goals together. You will be happier with your partner if you can plan together. Sometimes you need to go for help financially. If you can’t communicate honestly, consider a marriage counselor.

Subscribe to our free Personal Finance email course delivered to you. We can help on a range of topics that can get you started!


How do you talk about money with your spouse or partner? It is difficult for all of us. We can all gain from each other’s insights. Please share your experiences as to what works for you. We would love to hear from you!











How To Save Money When Grocery Shopping

How To Save Money When Grocery Shopping

The pandemic has reshaped our lives in many ways. We are home more due to social distance, remote work, distance learning, traveling, and dining out less. We have spent more on grocery shopping to accommodate this “new normal” lifestyle. 

We were surprised to see a panic buying cause of shortages on store shelves for food and toilet paper. We recognized that as we spent more time at home, we had more significant needs. With vaccines becoming more available, we can start to see the light at the end of this very long tunnel to our regular lives. Hopefully, we will sport some new and improved financial habits. Americans are saving more time money, becoming more frugal.

We can save money by using grocery shopping tips to consciously change our ways. First, let’s take a look at some grocery statistics.

 Grocery Statistics

The average household spent $8,169 annually or 9.9% on food in pre-pandemic 2019. There are 2.53 people in the average household. Roughly 57% of the amount spent was for food at home and 43% for dining out. This year, many of us remained home rather than dining out. 

According to a Lending Tree study released in October 2020, the average consumer weekly grocery spending increased 17% due to the pandemic to $190 from $163.

C+R Research reported that most Americans (85%) found grocery prices have been higher during the pandemic. 

Before the pandemic, the 2019 American Time Use Survey showed the average shopper spent 41 minutes in the grocery store. That time may decline as we make more purchases online.

Ways To Save Money When Grocery Shopping


1. Have A Reasonable Shopping List

The better your shopping list is, the more productive your experience. Make your grocery shopping list as specific as possible. Peruse your pantry, frig, and freezer for what you have. I leave a pad on the counter for things we run out of to form our next list.

My kids aren’t that reliable in writing their preferences down, which are frankly more junk food-oriented. When I come home from shopping, and their stuff is missing, I feel it is their responsibility. They have gotten remarkably better at adding to the list ahead of time.

It saves time and stops us from meandering down all the aisles. I often give myself just enough time to buy what I need. When shopping for groceries without a list, I find surprises in my cart. It feels like somebody possessed me. I bought things we didn’t need but forgot the items I needed to cook with that evening.

2. Use Unit Pricing As A Great Tool

Unit pricing is a valuable tool to use to help you find the best prices. The price label on grocery shelves usually includes the unit price for the product. Sometimes in small writing, the unit price tells you the cost of the product in ounces or pounds, allowing you to compare the price of different sized packages better. Larger sized products and store brand items often have a lower unit price but not always.

Take the case of buying carrots:

  • One pound of baby carrots,  $0.99 ($0.99 per pound)
  • Two pounds of baby carrots, $1.89 ($0.94 per pound
  • One pound full-size carrots   $0.68 ($0.68 per pound)

If you have time to peel and cut the carrots, the full-size carrots are the better deal. All you need is basic math to make better buying decisions.

A Teachable Moment With My Son

Tyler had bought one ounce of cashews at a small grocery store with about 18 cashews for $4.99. He was “starving” on the way home from school, about a 15-minute walk home. We had just bought a large container (40 ounces) of cashews from Costco a day earlier. He had asked for them.

I asked him to do the math. He then realized he had paid 10x more for his little plastic cup. Incidentally, Costco sells that large-sized Kirkland cashews for $26.99. Just saying!

3. Cut Your Fresh Produce and Grate Your Cheese

In a pinch, I will buy fruit, cheese,  and veggies, cut up already. However, I find cutting fresh produce very therapeutic. They stay fresher longer, tastier, and are less expensive. I have all the tools–shredders, graters, dicers–and I use them as needed. However, I enjoy the feeling of cutting a cucumber or carrots. It may not look as pretty (so I have been told), but it is a relaxing activity.

Making our salads and experimenting with dressings has been fun and rewarding. Alex always asks for the recipes, but they are different each time. We have also bought bagged greens or salad packages to save time but feel better about our own. Saving money is a collateral benefit when you are enjoying your salads more.

Grating your cheese from a block is better compared to pre-shredded packages, which can spoil faster.

There is still way more processed food such as Kraft Mac and Cheese than we should have in our home. On American shelves since 1937, I’m sure I am not alone in hoping that one day these boxes disappear.

4. Leftovers Provide Benefits

Leftovers are the bane of so many people’s existence. Not to me. Growing up, we had leftovers though we never called it as such. My mom, a Holocaust survivor, believed in plentiful portions, eating at home, never in restaurants, and having a refrigerator filled to the gills. We didn’t discard food in our home.

Sometimes, leftovers, specially marinated recipes, taste better the next day. I view leftovers as extra portions after purposefully making more to freeze or have the next day or so. Having leftovers save time and money at the grocery store, in the kitchen, and searching for a new recipe. Certain foods are better (lean proteins, vegetables) the next day than other foods. 

I repurpose leftovers for snacks, breakfast, add-ons to other meals. Leftover chicken or salmon is excellent as a salad. As such, these portions provide me with some flexibility and feedback if I know my family liked the meal in the first place. I’m not a great or even a good cook, but I enjoy feeding my family.

 5. Bring Your Phone

There are good reasons to have your phone available. The calculator comes in handy for crunching unit prices, comparison shopping, or playing upbeat music to pick up your pace. It’s a good alternative to overcome piped-in Musak used to slow down your shopping.

6. Use Cash To Avoid Overspending

Credit cards are more convenient when I have significant grocery shopping to do. You can track your spending better. Plus, getting some money back is satisfying if you are using a cashback rewards credit card. However, I often use cash to pay for groceries as a way of limiting my purchases. You can still use some money and get rewards if you are in a store loyalty program.

When using limited cash to pay for groceries, you are increasing your pain which curbs overspending. As such, it is easier to budget.

7. Bulk Buys Don’t Work For Everything

When it comes to bulk buying, my husband, Craig, and I are different shoppers. When Craig goes shopping and sees sales on produce, he is liable to overbuy some things that aren’t bargains at the end of the day. He bulks up on perishables or non-perishables alike.

Buying in bulk does make sense for certain products that don’t have “Best by dates.”  Many household products fit that bill, such as paper goods, cleaning, or items you use frequently. If we buy too much of something like shampoo, my kids often overuse it. A lot of these items take up a lot of space. Family and friends envied us for having so much toilet paper during the early days of shortages. We mailed some rolls to friends. I am not kidding!

Perishables Are Not Good Candidates For Bulking

My daughter, Alex, was going through a veggie stage, asking for red peppers. Craig saw a pepper sale and came home with huge packages, amounting to 24 red peppers! After two peppers, Alex was bored with them. I used them for many recipes over the next week or so, then froze some, but we had some spoilage.

The next day, Alex wanted Brussel sprouts, cauliflower, and cucumbers. Of course, Craig found a sale and bulked up again. I am appreciative that Craig was doing a lot of the shopping those days. However, I finally pointed out the amount we were throwing out was outweighing the cost savings. There are better cost savings when buying large quantities of non-perishable items. That is not true when perishable food spoils.

 8. Buy Generic Brands

Buying generic brands for food, drug, and household products at supermarkets and wholesale stores are a terrific way to save money.  A generic brand for a consumer product is typically sold without a widely recognized name and is usually not promoted by expensive brand advertising.

Brand marketing for products is higher for often the same quality when you buy name brands. The private brands (also known as private label or generic brand)  and the name brands are often sitting next to each other, so it is easy to compare the ingredients’ labels. They are usually identical except for the price, with the generic brand costing one third-to-two thirds less. These savings are very worthwhile.

Kirkland Signature, a store brand, accounts for 25% of Costco Wholesale revenues.  Several notable brands—Starbucks, Duracell, Huggies, and Grey Goose—are manufactured under a private label by name brands with varied savings of up to 50% on some items.

9. Buy In Season

“For everything, there is a season.” These lyrics are from “Turn! Turn! Turn!” written by Pete Seeger and originated in the Book of Ecclesiastes. The words are a reminder that we should value our seasons. And so too, our seasonal foods. Sure, it is always fun and convenient to get a pomegranate when we want to have one.

Transporting produce is easier done these days, but if they are sourcing overseas, that country’s pesticide regulations may differ from ours. Convenience is not a good enough reason to eat out of season.

On the other hand, the cost of seasonal food is cheaper because farmers are harvesting in abundance. Fresher food is tastier and retains more nutrition than food consumed out of season.

10. Go To The Farmer’s Market

As a result of the pandemic, we have shopped less from farmers this year. I missed doing that this year as that is a fun experience to do.  Farmers are typically proud of their offerings,  appreciative of your purchases, happy to share information about their crop. We buy food from the farmer’s market for its freshness, organic, and uniqueness but not necessarily because it is cheaper.

However, buying eggs, cheese, and produce from the farmer’s market is usually better and cheaper. You are also supporting the farmers who have had a tough year.

11. Certain Stores Have Different Purposes

There are many different types of stores that sell groceries. Supermarkets have significantly more choices, such as Publix, Wegman’s, Safeway, and Aldi’s. We have shopped at Aldi’s, which has great prices. Wegman’s recently opened nearby, and we have found reasonable prices, especially for their private brands and excellent service. Their meat counter is accommodating and will cut to the size we need at the same price.

Superstores like Walmart, sell food and household items at affordable prices. Also, they sell clothing, gardening, games, and much more.

We have been members of warehouse clubs, favoring Costco’s, especially for Kirkland Signature, and to a lesser extent BJ’s. Membership pricing has gone up, but they offer value.  In recent months during the pandemic, we have avoided these larger stores. These stores are great when bulking up properly. Trader Joe’s and Costco are exceptionally terrific when you return food without question that has spoiled or doesn’t taste right. We have done it infrequently, but everyone I talk to says the same thing about these retailers.

Aldi’s and Walmart are perfect for grocery staples. Amazon and Walmart are great for buying nonperishables online. I buy a variety of things at Ocean State Job Lot, from spices to hand sanitizer, when no one else had it.

On the other hand, our local grocery store is typically more specialized, smaller, often more pricey. That said, we favor them for their neighborhood feel and want them to do well.

Convenience stores are for grab and go stops to pick up eggs, coffee, bread, and milk at a gas station. Drug stores can serve a similar purpose with like prices for specific food items.

12. Know Store Policies, Sales Cycles

All stores have their own sales cycles, which vary every six-to-eight weeks. The key is to know your store’s predictable cycle to make your purchases at their lowest price points. This information can be found in-store ads, on websites, or ask in the store. You can also find more discounts on certain items during the quieter morning hours.

Certain stores have coupon policies that allow “coupon stacking” meaning you can use both the store coupon and the manufacturer coupon. Retailers may give you twice the discount on whatever coupon you use or double couponing. Some stores will take competitor coupons.

 13. Use APPs, Coupons, Rebates, And Other Tools

Technology has evolved for the grocery shopper to save more money. The first coupon was created by the Coca-Cola company in 1887, providing a free sample of the one-year-old drink. The rebate coupon became popular though there have been skeptics. Craig has been an avid user of coupons for years and is a loyal shopper at certain outlets.

There are useful apps for saving money on groceries, notably using Ibotta, Checkout 51, Rakuten, among others. We can’t do full justice in this article for all the apps that can be used efficiently for savings and will do a standalone post soon.

14. Grocery Owners Use Marketing Psychology

All retailers use behavioral psychology to form biases that cause us to spend more money than we should. We discuss cognitive and behavioral biases here.

Grocery store owners use their trickery to encourage us to meander and linger longer in the stores. That way, we will spend more money on higher-margin items, be attracted to colors like red sale signs, and use larger shopping carts than we need.

Here are just a few schemes they use:

Piping in easy listening Muzak to slow on our pace in the store and stay a little while longer.

Grocery store layouts encourage you to enter their stores by walking to the right, counterclockwise where revenues are slightly higher ($2 per trip on average). Most people, notably right-handed people, steer with their left hand and grab with their right hand. That is where the goods are. I am left-handed but conditioned to go in that same direction, right into the baked goods and produce area. Typical supermarkets want you to walk to the right pleasant smells, freshness, and beautiful colors.

The aisles are especially desirable places for retailers to want customers to go. There are displays in your way at the ends of the lane, which will be another way for customers to stay longer. Grocery owners fill their shelves with their higher-margin products on the shelves at eye-level. Manufacturer fight for this space and pay slot fees for desirable space.

15. Bigger Shopping Carts

The average family size in the US has not increased, and oddly the proportion of our spending on food has decreased to below 10% of income from far higher decades ago. So why has our shopping cart tripled since 1975?

Marketing consultant Martin Lindstrom has said that retailers tried doubling the size of the shopping cart as an experiment, resulting in shoppers spending 40% more on merchandise. Ever carry one of those little baskets? They can hurt and cause black and blue marks at least on my arms.

The giant carts are subliminally causing us to shop and spend more.

16. Order Online And Pickup Your Packages

New research reported that more than two-thirds of shoppers are buying online pick up in-store (BOPIS) for the first time, and more than half are spending more when doing so. The numbers were highest for April 2020. Even as grocery stores opened in May and June, they were at limited capacity.   

Still, online grocery shopping has some lasting benefits. You are less likely to purchase impulsively, more comfortable to compare prices, contactless payments, and more time-efficient.


Final Thoughts

There are many ways to save money when grocery shopping. Our lifestyle has changed due to the pandemic, causing us to reconsider how we make purchases. We may realize lasting benefits as we improve our financial habits and time management. Buying groceries is a prime example of how we can save time, money, and become more healthy.

Thank you for reading! If you enjoyed this article, share it with others and come visit us at The Cents of Money and subscribe to get our weekly newsletter and more.





































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