Once upon a time, I decided it was high time I sell some of my stuff on eBay to make some extra cash. Since it was just after the holidays, I decided to get the ball rolling with a new shirt I had just received for Christmas.
Even though it was cute, the shirt fit a little small for my taste. And even worse, the store it was purchased from was out of state, which meant no returns. So, after taking some pictures and crafting a snazzy description, onto eBay it went. Priced at $6, the shirt sold right away.
Off to a Good Start, Until...
Unfortunately, the buyer later wrote to say the shirt had a hole in it and demanded a refund. I asked for a picture and, when they wouldn't produce one, denied their request for their money back.
The path toward retirement and financial independence usually involves buying a home and investing for retirement and the future. But, what if you had to choose?
William Cowie posed this question to me recently and asked which path I would take to financial independence if given the option. My answer: I would invest for the future and forgo the house in a New York minute. Let's look at why I think that makes sense.
Performance Over Time - 1940 to Present
Throughout history, housing prices have appreciated over time. Because of this, both real estate investors and homeowners have built wealth with ease by building equity in their homes and properties.
A few weeks ago, I received a flyer from a fireworks store that made me shake my head. "Spend $400 in one purchase and earn 40% off for the rest of the season," it read.
"What a bargain," I thought as I flung it toward the recycling bin. I mean, does anyone really spend $400 at the fireworks store?
Then I remembered that, yes, many people do. Not only are most of my neighbors fireworks fanatics, but dozens of people I know do it every year, including people in my own family.
It's getting to be summertime, and the living should be easy. But if you've ever priced out a week-long vacation, you already know what a shocking experience it can be. Even when you're frugal, the costs that come with domestic and international travel are inescapable and really add up quickly.
Not only are you on the hook for lodging at a hotel or resort typically, but you may also have to pay for airfare, a rental car, resort fees and travel-related taxes. And if you want to have any fun or eat, your expenses won't stop there. Add in the cost of park tickets, excursions, shows, and meals and you're ponying up a great deal of cash for your relaxing getaway.
Combined, all of these costs can take a heavy toll on the average American family's pocketbook. According to a recent study from American Express, an average vacation in 2013 cost approximately $1,145 per person, or $4,580 for a family of four. That's a whole lot of money to spend for an annual trip, especially when you consider the fact that the median household income still sits at around $52,000 a year.
It's easy to become overwhelmed with the various costs that pop up when you're a homeowner. Things like furnace/AC Repair, having to put on a new roof, and annual maintenance can take a bite out of your savings account -- and leave you wondering why you ever stopped renting in the first place.
That's why it makes sense to save money and take care of certain home maintenance projects yourself. But, is that always the best idea?
Can I Quote You on That?
My husband and I sure thought so earlier this year. It all started when we got a quote for bed-edging, existing plant and grass removal, a pre-emergent treatment, ground-cover installation, and mulching in the front and back of our home.
The United States policy on maternity leave can be a touchy subject among families, and especially women. Unlike all other wealthy countries, many of which mandate weeks and months of paid leave for natural and adoptive mothers and fathers, the U.S. mandates no such thing.
In fact, the last movement toward maternity fairness in the U.S., the Family and Medical Leave Act of 1993 (FMLA), included a provision mandating 12 weeks of unpaid leave annually for mothers of newborn or newly adopted children. Twelve weeks doesn't sound so bad, but that unpaid part can sure sting.
Bundle of Bills?
We all know that babies are expensive, but it isn't just the cost of diapers that adds up. It's also the cost of maternity business attire while you continue to work, your health insurance deductible for the delivery, the cost of bottles and formula, and the crippling bills associated with quality healthcare once that baby is born. When you consider all of those expenses together, it becomes quite clear how easily having a baby can end up being a four- or five-figure investment.
No matter what I do to prevent it, spring budget creep always seems to take hold this time of year. Sometimes it seems as if the dollars start flying out the door the second the temperature starts to rise. And although I budget for all of our known expenses, the extra expenditures still add up -- and hurt.
Part of our creep is a product of spring clean-up -- mulch, new plants and flowers, and vegetable garden start-up. But the rest? It's all social -- neighbors inviting us over for cookouts, dinners out and card parties. Warm weather stuff.
Still, as much as it pains me to beef up our entertainment budget in warmer months, there is a part of me that enjoys it. When we moved to a new town and neighborhood last year, we started our journey without any local friends. And as many of you know, it can sometimes be difficult to make real, true friends once you reach your 30s.
Earlier this month, my little family of four embarked on a much-needed spring getaway to the Caribbean. I'm sure that doesn't sound frugal at all, but rest assured that it was. After a year of planning and a whole lot of strategizing, we were able to book that particular trip for what amounted to a boatload of hotel loyalty points, a bunch of airline miles, and around $700.
I know that isn't cheap by any means, but it was a good deal when you consider the fact that our trip price included round-trip airfare for four, a six-night hotel stay at an all-inclusive resort, transportation, and tips. Pretty sweet.
Still, this whole travel-with-kids-on-a-budget thing is getting infinitely more difficult. We used to be able to travel anytime -- off-peak, off-season, and last-minute. But now that my oldest daughter is in school, we are stuck planning our budget travel for the school breaks that take place during spring, fall, winter, and summer. Needless to say, the school schedule sure does throw a wrench into my plans.
When you are living paycheck to paycheck, down on your luck, or living a student lifestyle, it can be difficult to imagine a world where you are suddenly building wealth. Take this comment from Kendra on one of our Ask the Readers posts, "What do you do when you're broke?"
"I feel like like Caleb a bit -- in that most of these blogs don't cover how to get started. I mean for a student, for someone who's been born into poverty, how does one get started? I'm a student. I have NO income and my graduate program won't allow me to get a job. I only have 'living' money from loans -- and quite frankly, when I need more, I just get another school loan. (I have full faith that I'll be able to pay debt off quickly and make great pay at a job sometime in June/July).
"But as someone who doesn't know much about money other than what's on these blogs how do I START making money work? What can I do with $20? $50? You know what I mean?"
According to the U.S. Department of Health and Human Services, around 108 million Americans go without dental insurance during any given year. And since paying the full weight of dental care is often out of the question for those living on low incomes, many people simply choose to go without or get by with as few cleanings and check-ups as they possibly can.
However, if you do have out-of-pocket funds with which to pay, you already know how quickly cleanings, fillings, and basic dental care can take a bite out of your budget. After all, a typical dental filling can cost anywhere from $100 to $200, a cleaning can cost upwards of $200, braces can cost $5,000 to $6,000, and so on.
Obviously, one of the easiest ways to save on dental care is to have a dental insurance policy for your family. The bad news is, many employers don't offer dental coverage to their employees, even at a cost, and the dental plans commonly sold on the open insurance market can be of questionable value.