NO.

006 — SEP 2018

SIMPLIFY MAGAZINE
· A QUARTE R LY, DI GI TA L PUBLI CATI ON FOR FA MI LI ES ·

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Issue 006 — Money, Savings, and Debt

1. AN INTRODUCTION: THE MONEY, SAVINGS, AND DEBT ISSUE
by The Founders of Simplify Magazine

2. NO MORE IMPULSE BUYING: THE MAGIC OF MINDFUL CURATION

by Tara Button

3. HARD-EARNED LESSONS FROM FIVE FIGURES OF DEBT

by Samuel Lustgarten

4. 8 STEPS TO PAYING OFF & STAYING OUT OF DEBT

by Jamila Souffrant

5. AFTER THE STORM: HOW TO GET BACK ON TRACK FOLLOWING A

FINANCIAL SETBACK
by Trent Hamm

6. RAISING MONEY GENIUSES

by Beth Kobliner

7. SHOULD I HAVE ANOTHER SLICE OF CHEESECAKE? A BASIC

LESSON IN ECONOMICS
by Kelvin Wong

8. WHAT EVERY WOMAN NEEDS TO KNOW ABOUT RETIREMENT PLANNING

by Cassandra Brashier

9. THE SURPRISE OF GENEROSITY: BEING SET FREE FOR GREATER

SATISFACTION
by Joshua Becker

10. SOME DREAMS ARE WORTH SAVING FOR

by Brian Gardner

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An Introduction: The Money,

Savings, and Debt Issue
by THE FO UNDERS OF SIMPL I FY MAGAZI NE

“Money is the biggest cause of stress in the world.” [1]

This was the headline from a recent GFK Global study that surveyed 27,000
people from 22 different countries. The title (and the survey results it is
based on) are not surprising to most of us. In our home country, for
example, 85% of people report feeling money-related stress. [2]

Most of us can relate to the stress of finances. If we don’t experience it

ourselves, we know somebody who does. So we thought money was an
important topic to address. After all, it’s difficult to focus on the things
that matter most when we’re constantly burdened with financial worry.

That is why the theme for this issue of Simplify Magazine is money.
Specifically, how do we think about it correctly, and how can we embrace
greater intentionality in our use of it?

In this issue, you will find contributions from a New York Times best-selling
author, a Ph.D. in psychology, a radio host, an economics professor from

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Arizona State University, and numerous others who make their living
equipping people to successfully navigate the waters of personal finance.

When we began selecting topics for this issue of Simplify Magazine, we

started with a list of over 70 article ideas! During the selection process, we
quickly discovered that articles in the area of personal finance could easily
fill more than one issue of a magazine. The issue is so important, and the
needs are so great, that we decided to create a brand-new magazine
entirely dedicated to it.

Introducing Simple Money Magazine…

Simple Money Magazine is our first project together since the launch of
Simplify Magazine. With the same reader-focused approach, the magazine is
purposefully designed to provide simple, practical financial advice for the
modern family.

Simple Money Magazine is not your typical money magazine. It is a digital,

quarterly publication that features expert contributors providing practical,
helpful content for readers. Each article is chosen, not because it lends
itself to a clickbait headline, but because it contains information that
people can truly benefit from, living more fulfilled lives.

We are confident that this new magazine will be a helpful resource for you
and your family, and we are excited to release the first issue on October 1.

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Click here to find out more.

May we all find greater intentionality in our finances because of these

conversations,

Brian Gardner & Joshua Becker

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No More Impulse Buying: The

Magic of Mindful Curation
by TARA BUTTON

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My mother says that, when I was a child, it didn’t matter how much pocket
money I was given—mysteriously, by the end of the month, I had none. It
evaporated like leprechaun gold.

If I wanted something, I needed it! I didn’t really know the difference

between want and need.

Pretty pencil cases and magazines with enticing plastic “free gifts” were my
kryptonite. I was also powerless under the slightest pressure from
salespeople. Aged eight, I spent three weeks’ allowance on an expensive “oat
soap” I didn’t want, just to avoid disappointing the smiley saleswoman at
the market stall. It sat in my bathroom melting its patty puddles and
making me feel resentful for months.

As I grew, the spending grew too. Aged 19, I was given a $1,500 inheritance,
the biggest sum of money in my life so far. Naturally, I spent it—all of it—
on the first thing I came across: a treadmill. Each run on that treadmill cost
me around $100.

By my late 20s, my impulse-buying tendency graduated from a quirky habit

to a serious problem. Twice, I managed to rack up thousands of dollars in
credit card debt. The first time, family loaned me money to pay off the
balance. The second time, I was so ashamed, I told no one and instead paid
the debt back slowly and painfully over months of self-flagellation and
cheap pasta meals.

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I think I always expected that when I “grew up” I would just naturally
become less impulsive with money. Like there might be a magical night
class that happens in our sleep when we’re on the cusp of having to “really
be an adult.” I never got access to those night classes, but something
magical did happen to me when I was 30 that changed my spending habits
forever.

I was given a cooking pot.

It was a beautiful, lifetime-guaranteed Le Creuset casserole pot—the kind

of thing you pass down to your grandchildren. As I started to use it and
appreciate it, I was overcome with the feeling that I wanted everything I
bought from now on to be like this—to have the potential to be a
permanent fixture in my life.

So I went looking for a shop that only stocked the longest-lasting things in
the world. When I found out that such a thing didn’t exist, I was so
surprised and so sure that it was something the world needed, I created
this shop myself.

The creation of my business, BuyMeOnce, and my new philosophy on how

to buy came hand in hand. The more I researched long-lasting products,
the more obvious the benefits of long-term buying became. You save
money in the long term; you’re more likely to pick things you really like;
you’re more likely to take care of them; and it’s better for the environment.
Also, asking ourselves, Is this something I want to be in my life forever?

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automatically gets us thinking, What do I want my life to be? The process of

buying for life insists that you get to know yourself, and that in itself is
transformative.

In the book I’ve now written on the subject, A Life Less Throwaway, I call
my buying philosophy mindful curation. It is the opposite of mindless
buying, and like an art curator, you pick each individual piece that you
want to bring into the space but you also have in mind what you want the
whole collection to mean when it’s put together.

None of this, however, means that my impulse buying urges evaporated.

These were baked-in habits, and the world was still just as determined to
get me to spend. Putting mindful curation into practice in my own life was
the first time I truly realized what we’re up against.

Mindful long-term buying is not how the commercial world wants us to

spend, and this world has all the tricks and magic spells to make us slip up
and slip out our credit cards at the same time.

It was time to come up with some counter curses.

Lesson One: Defense Against the Dark Arts of Advertising

If we want to buy things on our own terms, we can’t be dictated to by

advertising.

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I worked in advertising for 10 years, so I’ve seen all their spells. Ads are
charms designed to whisper directly to your subconscious, “Look how
happy you could be if only you had this.” These spells are designed to
bypass the bit that might think, Actually this might be a bit of a fad.

Most of us are completely convinced that we “don’t really pay ads any
attention,” but research has found that people exposed to the most ads,
even if they think they are not affected, are more likely to be in debt and
work longer hours to pay for all the extra things they buy. So, what to do?

The counter curse:

First, cut down the number of ads you see by getting ad blockers, muting
the TV during ad breaks, and considering paying for ad-free content. You’ll
then be left with fewer spells to fight.

Next, face any ads you see in magazines and billboards head-on. (Don’t
ignore them, because your subconscious has already seen them and is being
lured in.) Look them in the eye and tell them firmly but politely, “No thank
you. I have everything I need to be happy.”

Lesson Two: Unfog Your Fashion Future

Trends and fads in fashion and decor are jinxes that exist to make us spend.
These spells tell us that we need to “refresh” our look, that our couch is “too
90s,” that our shoes are “too last season.” They are able to manipulate us in

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this way because so few of us have ever taken the time to figure out what
style is actually right for us.

The counter curse:

The only way to fight the fads and get off the trend treadmill is to find
your true taste. This spell takes a couple of days to brew, but it’s a powerful
one. Spend a weekend discovering the colors that are “your colors.” Go to
the biggest store you can find and hold every color fabric against your face
and see which ones bring your eyes alive. Write down your own recipe for
the perfect fashion potion. Which textures, which patterns, which shapes,
lengths, and fabrics feel good against your skin and create a look that you
can see yourself wearing for the next decade? When you’ve found the right
look for you, get the highest quality version you can afford.

Now when you open your wardrobe, instead of feeling you have “so many
clothes and nothing to wear,” you’ll be greeted with a selection of options,
all of which make you feel fantastic.

Go through the same process with decor, but instead of going to a store,
create mood boards on Pinterest. The first board should just be about
color, the second textures and pattern, then furniture eras and styles, then
accessories. Don’t buy anything new for your home without refereeing to
the mood boards first. If you feel your taste shifting, ask yourself, Is this
being driven by an outside trend, or is this rooted in my long-term taste?

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Lesson Three: Transfigure Your Shopping List

Many of us have a vague list, probably not written down, of stuff we want.
The world constantly encourages to focus on this list. Instagram, Facebook,
ads, family and friends, or just walking down the street can create a litany
of desires in our hearts. The human condition, it seems, is to constantly
desire more, get more, and then immediately want more than that.

The counter curse:

Instead of writing a list of the things you need, write a list of “Things I do
not need.” When I did this, my list included baking equipment, snazzy
notebooks, gym gadgets, and electronics. Write your own detailed list for
every room in your house.

I didn’t realize what a powerful counter curse this was until I shared my
list online and people started to write their own similar lists. One impulse
shopper wrote to me:

I had no idea how powerful this list would become. As someone that has battled for
years with compulsive spending (mostly to comfort myself when I’m feeling
insecure/overwhelmed), this has been beyond liberating. When I start to think, “I
should go shopping,” I can pull out this list and see how there really is nothing that
I need and suddenly those feelings of being overwhelmed become feelings of
gratitude for all that I have. In short, it has (and will hopefully continue to be)
life-changing.

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Write your list, keep it on your phone or a piece of paper you can carry,
and use it as a magic shield against the temptations of impulse spending.

Lesson Four: Curses in the Corridors

The shops are a dangerous place for some of us. And they are filled with
witchcraft we’re not even aware of. Did you know that when they pump
vanilla scent into shops it can double the sales of women’s clothing, that
classical music can make us buy more expensive items, and that they hide
those basic groceries we always need at the back of a mazelike store on
purpose? This is all before smiling salespeople bamboozle us with their
patter or make us feel like time wasters if we don’t purchase.

Online, the magic is of a different variety. You can buy in just one click. No
time to think. No second thoughts allowed. They can take you from an
Instagram ad or Google search and through the checkout process before
your conscious mind has a chance to kick in.

The deadliest curse of all is probably sales. These enchantments trick us

into feeling we’re saving money when we’re actually spending it and create
in us an overwhelming fear of missing out. The phrase “limited time only”
is one of marketing’s most powerful hexes.

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The counter curse:

Don’t go shopping when you’re feeling emotionally empty. It’s like going
food shopping when you’re feeling hungry. You end up coming back with a
basketful of stuff that you crave but that ends up making you feel like crap.
Give yourself a pep talk first or wait until you know you’ll be buying from
a position of strength.

Go through your bank statements, identify where you are being triggered
to overspend, and come up with a plan to bypass that place or put barriers
in the way of your spending (such as taking your credit card details off
their website, avoiding the shop completely, or making a rule that you have
to wait 24 hours before making any purchase).

Use sales smartly. Research what you want, find out from the store when it
might be discounted, and then pounce when it goes on sale, but never buy
anything in a sale that you wouldn’t want at full price.

Write a list before every shopping trip (even if it’s just one thing) and stick
to the list. If something else catches your eye while you’re out, take a
picture of it (or add it to a wish list if you’re online). If you still want it in a
week’s time after you’ve had time to consider how it fits into your life, then
go back to it.

Finally (and this is a message I wish my eight-year-old self had been given),
never buy something to feel like you belong in a shop or because you want

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to make the salespeople happy. You have every right to look around and
reject everything you see. If you find that hard, come up with your own
magic words so you can activate your resistance.

Mine are “It’s lovely. I kind of want it. But no, I don’t need it.”

...

Tara Button is on a mission. Her bestselling book, A Life Less Throwaway,

can clear your clutter, save your sanity and the planet all at once. She’s also
the CEO of BuyMeOnce.com an award-winning business which finds and
sells the longest-lasting products in the world.

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Hard-Earned Lessons from Five

Figures of Debt
by SAMUEL LUSTGARTEN

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The shelves were packed and overflowing with toys. I had $40 in my hands.
The bills whined to be spent, and I was more than willing to oblige. A
thought rushed into my 13-year-old mind: How can I spend this?

After a few minutes of searching, I found an aircraft carrier model. My

grandfathers served in the military during World War II; I respected their
service and dreamed of becoming a naval seaman myself one day. My mind
was quickly made up: This model is mine. I hustled the box around the store
like a football with the end zone in focus. A cash register was ready.

I felt nothing but excitement as I handed over both twenties to the clerk. I
did, however, feel a twinge of disappointment when I received only about
$10 in change. That was the first reality check on how much my purchase
had cost.

Then, as I stepped out into the light of day, I began to regret my purchase.
The magic of the moment was fading. In its place were dread and
confusion. Suddenly, I questioned whether I could have spent that money
better.

My mother had accompanied me to the store. Seeing my excitement turn

to sadness, she offered a piece of advice: “Why don’t you open a savings
account, Sam?”

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The thought initially seemed preposterous to me. I had only $10 to my

name after buying this model. But my mom’s question ping-ponged in my
head.

That night I looked at ads and information about banks. A local branch
had a special: open an account with at least $10 and receive a $10 bonus.
When we visited the bank, I slammed down my $10 and asked to open a
savings account. The representative happily did so. The same energy that
surged through me at the toy store was in my veins, except this time it
lasted.

As I walked away, I felt no regret over my decision to start saving. This felt
right. And who doesn’t like making 100% on their investment in one day?

This was my first financial lesson. I had spent 75% of my wealth on a model
that I never ended up building, because it was essentially a 100,000-piece
puzzle, which also required glue and paint (supplies we didn’t own). I’d
been asking the wrong question when I’d first held those crisp bills. Instead
of asking what I could spend my money on, I needed to ask how I could
best save it.

Debtor

Fast-forward 10 years and one Great Recession. I was 23 and in graduate

school as a doctoral student in counseling psychology. My university job
didn’t pay enough for rent, food, fees, insurance, gas, and the like. I was

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offered tens of thousands in federal money, and I graciously accepted every

penny. Two years in, I had amassed nearly $40,000 in student “aid,” a car
loan, and credit card debt. I was on course for $100,000 in debt (not
including interest) before graduating with three precious letters: Ph.D.

I looked at my bank and credit accounts every day. I felt like a failure. My
peers from college appeared to be beginning jobs that all paid at least
$50,000 with benefits. Meanwhile, I felt stressed. I was mentally drowning
in the debt, losing sleep, and suffering in relationships. I would refresh my
accounts and secretly hope that an apocalypse would wipe away the
balances. Or maybe a relative would win the lottery and gift me $40,000.

There was only one conclusion: every ounce of me must fight to become
debt-free. My first searches for tips included creating a budget and
spending less on meals. Most personal finance gurus spoke to middle-class
people earning a regular salary. Their budgets were simple and based on a
regular monthly income. Mine varied every month. They weren’t for
students and/or those in lower income brackets. And while I eventually
found some helpful resources, the fundamental truth was that I made little
and spent much. That was a budget for debt. No amount of plotting or
Excel spreadsheets could make that equation go away.

After this realization, I adopted the phrase “I’m sorry, I can’t afford to do
this right now.” I felt awful telling my family, friends, coworkers that I
couldn’t fly home for Thanksgiving, make it out for drinks, or eat at that
restaurant. I felt a social pressure to go ahead and spend, but my head

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couldn’t wrap around this culturally accepted mentality anymore. There

was still that 13-year-old kid looking to save.

I requested more hours at my university, started writing a blog about my

personal finance journey, and became a freelance writer. I asked my friends
and family to hold me accountable to these dreams I had for myself. I
imagined being debt free. I drew up plans to save on food and rent. I
cancelled every subscription service and learned to love my local library. I
sold my car and rode a bike or took the bus.

Money started coming in and staying. I attacked the highest interest rates
first, and charts started showing my iceberg of debt melting. I was paying
off my student loans 25 years early and while I was still in school (most
graduates take about 20 years to pay their loans). The same rush of opening
up a savings account for the first time was present in me, and looking at
my bank accounts now brought optimism. Two years later, through side
hustles and stipends from the university, I paid every dollar of debt.

What I Learned

I’m no longer Atlas, carrying the weight of my debt. Instead, I feel like a
cut-up prizefighter with six years of experience. I’ve trained to pay off
debt, save, earn, and save some more. I graduated this August at 29 years of
age with savings in hand and a retirement account started. And while I’m
only four years into my debt-free life, I have amassed new, hard-earned
lessons.

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1. Everything has a debt tax, until it doesn’t.

Filtered through the lens of annual percentage rates on interest-bearing

debt, nothing is what it seems. Prices are merely illusions and the cost of
anything becomes difficult to calculate. How you decide to proceed and
purchase is up to you.

For instance, buying a smartphone for hundreds of dollars is a new reality

in our always-connected era. The value of that item and its ability to assist
you may make it a necessity, but the purchase price doesn’t reflect the true
cost of ownership for you as a person with a broken budget.

As my deficit ballooned and debt grew, I began to see my purchases—big

and small—as containing an invisible tax. When I decided to plop down
three Benjamins on a cell phone, I had to add about 6% APR to the total
every year that this amount would go unpaid.

Thirty-six months of ownership without paying the debt would amount to

$328.54—a nearly 10% tax on the purchase. And frankly, my interest rates
were great, as they were coming from the federal government. Try putting
that purchase on a credit card with 20% APR and you’d be looking at
$401.35—almost 30% over the price of the device!

Once you see how your debt rules everything, you have to make a
conscious choice and commit. Ridding yourself of this financial obligation

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is one of the most freeing feelings. Now, if I choose to buy something, the
price I see is the price I pay.

2. Embrace the challenge of living debt free.

In Silicon Valley, developers and designers have aimed to create apps and
sites that hook people into staying longer than they originally intended.
Facebook, Instagram, Twitter, and Snapchat all utilize psychological tricks,
such as notifications, infinite scrolling (there’s always more in your news
feed), and eye-catching colors that signal something important is
happening. This process of designing platforms to sustain attention
through reward mechanisms is called gamification. When used for ill
intention, people can become addicted and waste hours each day.

This concept can, however, be flipped around and used for good. Defeating
debt can and should become a mission you intend to accomplish—and the
points matter. This is a game where checking your accounts may keep you
motivated to save rather than spend. And you can even involve your
friends!

Living for that debt-free moment motivated me every day. I saw this as an
aspiration and value—one that wouldn’t ever be complete but rather was
one I would constantly work to reach and maintain. I set “smart” goals that
were specific, measurable, achievable, relevant, and time bound. For
example, I aimed to spend just $50 in groceries for one week. I completed
the goal when I put my effort into accomplishing it.

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For every completed goal, I used the same social pressures present in social
media for good. I shared it with friends and family, invited others to join
me for certain challenges, and even offered to pay a penalty to a friend if I
failed to meet one task. Every day was an opportunity and a game I could
win.

3. Time is the most important variable.

Minimalism captivated me many years ago. I longed to recreate the esthetic

I saw on minimalist blogs about clean, open spaces. But perhaps even more
important was the intangible quality of time. As Thoreau wrote, “The cost
of a thing is the amount of what I call life which is required to be
exchanged for it, immediately or in the long run.” By embracing
minimalism, I realized that I could cultivate more time for fun—reading,
writing, and hanging out with friends. If I changed my ideals from
shopping and consuming—the cultural status quo—to the counterculture
of creating and being, I could regain what was lost.

Initially, I accepted without question the full amount of loans each year.
And I felt the rat race of life descending upon me: take out loans, spend
the money, work, repeat. Desperation for more time and less work
motivated me into action.

As I began to pay off loans, I took on side hustles and odd jobs, joined
medical studies that poked and prodded me for money, and pinched every
penny I could. The dream of time through minimalism was slightly

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suspended for two years as I spent many hours dedicated to one end: pay it
all off.

And then the day finally occurred. The final loan. The final payment. The
final time logging into that bank’s website. I took a deep breath and
realized all that wait, worry, and stress was gone. Now I could turn to my
value of minimalism, reduce the number of credit cards, bank accounts,
and work activities. In that moment, I promised myself I would never
return to debt.

Time was mine again.

...

Samuel Lustgarten, Ph.D. is a practicing psychologist specializing in

college student mental health. He received his doctoral degree from the
University of Iowa’s counseling psychology program. After paying off
nearly $40,000 in debt, he authored the book, Frugaling: Save more, live
well, give generously.

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8 Steps to Paying Off &

Staying Out of Debt
by JAMILIA SOUFFRANT

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Like most people, I had debt for a long time. So did my husband. To start
with, as college students, we took on student loans. After graduation, we
added on a home equity line of credit, plus on-again, off-again car loans.

In the end, we paid off $80,000 to $100,000 in loans in order to no longer

owe anyone money. To be clear, this was not easy. We worked our butts off,
not just to get out of debt, but to stay out of it.

Raised by a single mom, I learned the concept of hard work and the value
of money at an early age. The lessons I’ve learned, both from my mom and
from experiences of life, have allowed me to become savvy in budgeting
and all things personal finance. I am now a wife and mom of two young
boys, and I am also a certified financial education instructor. I help people
eliminate debt, save more money, and increase their net worth.

How about you? What is your debt situation? Whether the debt you’ve
accumulated happened in the past or you have new debt continuing to pile
on to existing debt, I hope you’re determined to get rid of it.

Working with my clients on eliminating their debt (and accomplishing

that goal in my own life) has allowed me to develop an eight-step strategy
to help people get going on their debt payoff journey. I understand there is
no one-size-fits-all solution, so take these steps and reorganize or rearrange
them as you need. But I am certain that if you follow them, you’ll make
significant headway with your debt payoff. I have seen it happen countless
times before.

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Step 1: List Your Debts

This may seem simple, but it’s important—you’ll be using the list for some
of the upcoming steps. Besides, too many people don’t even know how
much debt they’re in. Knowing where you stand is an important first step.

In making out the list of your debts, exclude your mortgage (that is
something you can focus on after you pay off your consumer debt). Write
out the following for each type of consumer debt you have: (a) name of the
creditor; (b) minimum monthly payment; (c) outstanding debt; and (d)
interest rate.

Step 2: Complete a Debt Behavior Assessment

For each debt you listed, jot down what made you accumulate the debt in
the first place. The reasons for some debts are going to be obvious. For
example, there’s no question that you have student loan debt because you
went to college. But the reasons for some other debts may be more difficult
to identify. If you are still paying off a bank loan and you remember that
you took it out for Christmas gifts, jot that down. Maybe you’re carrying a
balance on a credit card that you originally applied for just to cover
emergencies. Go back, think about it, and identify the primary reason for
each debt.

This step is a great accountability exercise. It will force you to look back
and ask, Was that worth it? For example, Was the vacation that I took a year

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ago worth it? You may have enjoyed the vacation, but was it a good idea if
you are still struggling to pay it off?

Be real with yourself in this step. The answer to these questions will force
you to be more thoughtful with your spending decisions and keep you
from making unnecessary purchases going forward. If you can identify the
emotional as well as practical reasons behind your spending, then
hopefully the next time you pull out a credit card, you’ll think twice about
it.

Step 3: Make a Debt Pledge

Pledge to yourself, aloud, that you will not use credit cards or take out any
more debt going forward. Don’t see this spoken vow as corny; see it as an
essential stake in the ground. Declare to yourself that, if you cannot pay for
something in full at the time of purchase, you won’t buy it.

If right now you are in debt and cannot pay it all off at the end of the
month, stop! Do not go further into debt. These little steps need to happen
—even this formal declaration to yourself. These actions build up over
time.

Step 4: Organize Your Debts

Make three lists. First, list all of your debts from lowest to highest
outstanding debt balance. Second, list all of your debts from highest to

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lowest interest rate. Third, list all of your debts from highest to lowest
emotional discomfort or annoyance they bring into your life.

For “The Lowest Outstanding Debt Balance List,” if you have a credit card
for $20,000, and you have another credit card for $5,000, the $5,000 debt
will go before the $20,000 debt. List them in ascending order.

For “The Highest to Lowest Interest Rate List,” if you have a credit card or
a car loan of 16% versus a different loan at 12% or 5%, regardless of the
balance, put the highest rate first, going line by line until each is listed.

The last one, “The Highest to Lowest Emotional Discomfort List,” is the
one that most people don’t talk about. But it is important to talk about
your emotional discomfort and annoyance for a specific debt. Some debts
trigger more feelings than others. For example, if you have a car loan debt
and you’re continuously upset at yourself for it, put that highest annoyance
debt first and continue down the list until they are all included.

Step 5: Determine Your Payoff Strategy

Decide the order in which you want to pay off your debts.

I highly recommend paying off the smallest balance first because I believe
in quick wins. If you have a debt you can eliminate in six months or less,
and it’s going to make you feel amazing, then knock that out first. Getting

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rid of these smaller debts will improve your financial confidence and build
the momentum you need to keep motivated.

In general, if you have debts with similar balances, you should pay off the
highest interest rate debts first—this will save you money on interest
payments. But also consider your last list and the different levels of
emotional annoyance around your debts. If one is causing you more angst
and emotional burden than another, make that debt a priority regardless of
interest rate or loan balance. Removing that debt first will alleviate those
negative feelings and improve your morale. Along with the progress you
make toward your goals, how you feel about your finances is important.

Sometimes you might be able to find a sweet spot among the lists, and it
becomes clear what you should do in what order. Other times, it will
require more thought and intention. But once you find it, create your
“Sweet Spot List”—list your debts in your determined payoff strategy.

Step 6: Create a Budget

You need to have a budget. If you don’t have one, this is the time to create
one. Keep in mind, you might not get it right the first time. But it’s
important and you need to start somewhere. The point of a budget is to
help you manage your money, both the inflow and outflow.

Look for ways to maximize the amount you can allocate to paying off debt
above the mandatory minimum payments. Squeeze extra money out of

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your budget by spending less or finding ways to increase your income. This
is key. If you keep on the same path you’re on now, you’ll end with the same
result. Look at the numbers. How can you either make more money or
spend less?

Step 7: Accelerate Your Debt Payoff

Apply any extra money that you find in your budget to paying off
outstanding debt. Hold off on spending on discretionary items while in
debt payoff mode. If you feel the need to reward or treat yourself, do so by
paying off debt, not by buying another item you don’t need. Go back to
step two. You don’t want to create that cycle again in your life.

I know it can be hard. We want to be able to treat ourselves because we

work hard and commute far. Or it seems like all those around us are
treating themselves without a care in the world, and we feel like we should
do the same for ourselves. But let me challenge you. If you want to get out
of debt, you’ve got to stay focused. It will be uncomfortable at times. You
will have to give certain things up. But you will be okay—trust me.

I’m not saying that you should never go out to eat again if you’re in debt,
but I am saying that you should budget for it, be smart about it, and
squeeze money from other places to do such things. That will allow you to
pay off your debt quicker. And that is the goal.

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Step 8: Stay the Course

Setbacks, emergencies, and unexpected expenses will occur—they always

do. It may even sometimes feel like you’re taking two steps forward and
three steps back. This is normal; those are the seasons of the debt journey.
But you lose only if you allow those setbacks to end your journey.

You may feel discouraged and wonder, What’s the point? I’m telling you there
is a light at the end of the tunnel if you just keep going. Because the
important thing you’re doing through all these steps is that you’re changing
your mindset and consequently your behavior.

The road will not be easy, but it will definitely be worth it. The quicker you
can get out of debt, the quicker you can start building wealth. And you can
begin seeing your net worth go from negative, to zero, to positive.

You can do it. I’m cheering for you!

...

Jamila Souffrant is a certified financial education instructor, podcaster,

money coach, and founder of Journey To Launch, where she shares how she
and her husband saved $169,000 in two years and are debt free besides
their mortgage. The Journey To Launch podcast was named one of “27
Podcasts You Need to Start Listening to in 2018″ by BuzzFeed, and her

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incredible story has been featured in Money Magazine, Business Insider,

Refinery29, CNBC, Essence Magazine, and CBS News.

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After the Storm: How to Get Back on

Track Following a Financial Setback
by TRENT HAMM

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You’ve finally done it. You’ve committed to making some big financial
changes in your life. You’re going to plow through your worst debts, build
up an emergency fund, and start saving for retirement.

At first, everything’s going wonderfully. You sell off a bunch of stuff on

Craigslist and wipe out a few really bad debts. You put some money in
your savings account for emergencies. You’re taking big whacks out of your
highest-interest-rate debt. You’re spending less than before too. You
can really see progress.

Then it happens.

“It” can be any number of things. It might be a job loss. It might be an

unexpected pregnancy. It might be an illness of a family member. It might
be a car breakdown. It might be a dryer that refuses to dry. It might be a
family emergency. It might be a flood.

Whatever “it” happens to be, your financial plans are disrupted. Some big
unexpected event has just siphoned off most of your gains. Your emergency
fund is gone. You may have thrown more money back onto your credit
cards. You look at your finances and see that you’re back to square one, or
close to it.

A storm in your financial life can be disheartening. It makes you feel like
you’re never going to get out of debt. It can make you want to quit the
whole financial progress thing entirely.

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Before you do that, though, let me offer a few words of advice.

First of all, this disaster would have likely happened anyway, regardless of

your financial choices. Your attempts to put your finances on a sound
footing did not cause this disaster. It was just part of life. Don’t try to tie
your current crisis together with your financial moves. (You would be
surprised how often people do that, and it’s absolutely the wrong takeaway
message.)

Second, imagine how this disaster would have impacted your life had you
been doing nothing financially over the last few weeks/months/years to
improve your situation. Imagine you hadn’t sold some stuff on Craigslist.
Imagine you hadn’t paid off some debt. Imagine you hadn’t spent a little
(or a lot) less in the recent past.

So the first step is to use the crisis experience to reinforce your

determination to finance wise.

Look Up

What kind of smoking crater of a disaster would your life look like now if
you hadn’t made positive financial moves up to this point?

Likely, because of the moves you made, you were able to deal with this
crisis with much lower stress than you otherwise would have. You were
able to deal with the broken-down car. You were able to deal with the

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family emergency. You were able to quickly replace that dead dryer. You
had the resources in hand to deal with those things.

Without your recent financial moves, would you have been able to handle
it at all? Maybe. But if so, it probably would have involved digging a bigger
debt hole. It might have involved borrowing money from a family member.
It might have involved a really badly kludged solution to the problem.

In other words, without your good moves prior to this disaster, it would

have been far worse. Want to know a secret? That’s one of the best reasons
to be financially responsible. It takes those crisis moments and removes the
financial stress from them. You don’t have to worry about an unexpected
car repair—sure, it’s a bummer, but you can handle it. You don’t have to
juggle accounts. You don’t have to write a check that might bounce. You
don’t have to make panicked calls. You don’t have to get emergency loans.
You just handle it. Although you wind up with a bit less money in your
pocket, there’s no additional stress involved.

The simple truth is this: given that this disaster was likely going to happen
regardless of your financial moves, your life is substantially better now
because you made those moves. Your financial moves have already
improved your life by making this disaster much more tolerable. Rather
than being frustrated by your lack of progress, you should embrace it and
compare it to where you would have been had you not been making these
moves and then had to deal with this emergency.

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The next step, of course, is getting back on the saddle.

Back to the Budget Basics

The recipe here is much the same as it was when you were first turning
things around. You want to have an emergency fund in place—some cash in
your savings account, ideally enough to cover a month or so of bare-bones
living expenses. After that, you want to start cutting away at your debt,
especially anything that has double-digit interest rates. If you don’t have
any high-interest debt, keep cutting at your debt, but also start saving for
other major goals like retirement.

In more detail, here’s a refresher course.

1. Spend less than you earn.

This is the most important part of recovery after a financial emergency,

and it serves as the foundation of every other strategy. If you’re not
spending less than you earn, financial recovery cannot happen.

In a typical pay period, you need to wind up with more money in your
checking account at the end than when you started. If you’re struggling to
do that, evaluate your expenses.

Food is a great place to start—just eat more at home, buy more store

brands at the grocery store, and choose less expensive foods. Meals like

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scrambled eggs and toast, beans and rice, stir fry, soup and sandwiches, and
many others are inexpensive but nutritious and tasty.

Consider your cable bill and whether or not you can cut some channels
from it (or scrap it entirely). Put a cap on your “fun” spending each month.
If you buy a lot of stuff online, delete your credit card numbers from those
sites. These are immediate steps you can take, but they just scratch the
surface.

2. Build an emergency fund.

After an emergency, you’ve likely depleted your emergency fund, so in the

short term, focus on building it back up. As I said, I usually recommend
shooting for a single month of bare-bones living expenses—just enough to
cover the bills and keep lentils on the table.

I also recommend automating this and never turning it off. Instruct your

bank to transfer a small amount each week from your checking into your
emergency fund. If you don’t have an emergency fund, one great way to do
it is to sign up with an online bank such as Ally Bank or Capital One 360,
link the account with your current checking account, and set up a small
automatic weekly transfer. That way, if you do deplete your emergency
fund, you’ll automatically start refilling it, and it keeps filling and filling
during calm periods, so you can eventually handle all kinds of emergencies.

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3. Tackle high-interest debt.

In an emergency, you may have thrown a big expense onto a credit card or
taken out a high-interest, short-term loan. Get rid of anything that’s
exceptionally high-interest first—anything over, say, 30%—and then stock
your emergency fund as described above.

Once you have your emergency fund going, start drilling down through
everything that has double-digit interest rates—your credit cards, mostly,
though some dodgy car loans and student loans might be that high—and
pay them off in order, starting with the highest interest rate. Do everything
you can to make extra payments on that highest interest rate debt.

4. Save for retirement and other goals.

If you’ve knocked down your high-interest debt, start saving for

retirement. The only exception to that rule is if your employer offers
matching funds on your retirement savings, in which case you really should
be contributing enough to get every dime of matching money, because
that’s effectively part of your salary that you’re missing if you don’t collect
it.

If you’re unsure as to how to save for retirement, the easiest method is to

just sign up with your retirement plan at work and choose a target-date
retirement fund that matches a year close to when you will retire. That will
usually be a solid choice for almost everyone.

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You may have other goals, such as a house down payment. For those, an
automatic savings plan—much like what’s described above in the section
about emergency funds—is perfect. Just open up a savings account
somewhere and automate the savings.

What If Another Emergency Strikes?

If it does, follow all of these steps again. Remind yourself that you’re in far
better shape than you would have been without taking positive steps and
then get right back in the saddle by working on replenishing your
emergency fund first and then moving right back into debt repayment.

A financial storm isn’t the end of the world. In fact, your ease of handling a
setback is a sign that your financial progress is working. Just pick yourself
up and step right back on the path.

Trent Hamm is the founder of TheSimpleDollar.com, a personal finance

website that serves basic personal finance advice to a million viewers per
month. He is also the author of two personal finance books, The Simple
Dollar and 365 Ways to Live Cheap.

...

Trent Hamm is the founder of The Simple Dollar, a personal finance

website that serves basic personal finance advice to a million viewers per

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month. He is also the author of two personal finance books, The Simple

Dollar and 365 Ways to Live Cheap.

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Raising Money Geniuses

by BET H KOB LIN ER

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Poll after poll shows that money is the number-one source of stress in
people’s lives—stress that can be detrimental to our mental and physical
well-being. And that stress can easily be passed down from generation to
generation. Research finds that parents are the biggest influence on their
kids’ financial behaviors.

Many families don’t realize that kids can absorb basic economic concepts
such as value and exchange as young as age three, and that many of the
important behaviors they’ll need to be smart money managers later in life
will be solidified by age seven. [1] [2] That’s right: While they’re still in
elementary school, kids’ brains will have already been shaped by the way
the adults around them are talking about money.

Or not talking.

Many parents would rather discuss sex or drugs with their kids than
money. But treating the money talk like the last taboo on the parent-child
communication front can end up causing a lot more harm than avoiding
that awkward conversation was worth.

It’s understandable why parents can be hesitant or downright scared to

broach the subject. They may feel like they don’t have the money skills
themselves to be confident role models. Or they may feel blocked by shame
and fear associated with financial mistakes they’ve made in the past.

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Whatever the case, having money conversations should be a goal for every
family. And it’s not as hard as you think. I wrote my book Make Your Kid a
Money Genius (Even If You’re Not) for parents who don’t know where to start.
Despite what Shark Tank might seem to suggest, you don’t need to be a
CEO or a stock market savant to raise kids with a solid foundation in
financial concepts. Simple, straightforward changes to the way you talk
about money with your children will have a lasting impact.

With a changing economy, stagnating wages, and record-high student loan

debt, kids who feel confident and comfortable navigating personal finance
will be better positioned to grow into adults with lower levels of money
stress. Whether you’re a parent to kindergarteners or college students, here
are some key do’s and don’ts for raising your own money genius.

1. Make sure your kids see cash.

From Apple Pay to Zelle, digital and mobile transactions are the new
normal in our financial lives. But the convenience factor comes at a major
cost: It makes money invisible. How are your kids ever going to learn the
value of the dollar if they never see one? Old-fashioned as that sounds,
making sure your kids see and handle dollar bills and coins will help them
learn several key money skills throughout their development.

When they’re old enough, toddlers and preschoolers can learn numeracy—
counting skills—from playing with coins. As your kid gets older, asking her
to help you in the grocery store might conjure nightmare visions of your

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shopping cart filling up with Pop Tarts and Cap’n Crunch. But it can
actually be an opportunity for tons of teachable moments. “We have $3 in
our budget to buy apples; how many can we get?” “Should we get this
cereal that you saw a TV commercial for or a similar one that’s cheaper?”
It’s all about showing kids that we make decisions with money every day
and fostering confidence in them that they’ll be able to make decisions of
their own in the future.

Having kids stick to cash during the teen and tween years is a smart move,
too, as they start to handle more money and more responsibility for their
own spending choices. While you’re doing back-to-school clothing
shopping, you might be tempted to hand over a credit card and give your
kid a spending limit. Giving cash instead is a much more useful exercise.
Not only will she have to strategically shop to stay under budget, but she’ll
also find parting with her dollar bills to be far more of a mental challenge
than breezily inserting the chip. Behavioral science researchers term this
phenomenon “the pain of paying” and have observed that we spend half as
much when we pay with cash than when we pay with plastic. [3] [4]

2. Don’t give in at the checkout line.

“I want gum! I want candy!” A lot of parents I know start sweating at the
thought of these cash-register confrontations—and the tantrums that
result when you don’t give in. It’s a tense moment that puts the pressure on
your parenting in a public setting. And most moms and dads would agree

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that the easiest way to defuse it is to just pony up and buy the dang candy
bar. What harm could it do?

Well, actually, quite a lot. For me, the bedrock of financial responsibility is
delayed gratification: We need to learn to work hard, save up, and often
wait years to reap the rewards of our efforts. But rewarding a checkout-line
tantrum with a coveted treat sets a feedback loop into motion that’s
ultimately going to undermine your kid’s self-control. That doesn’t just
mean more headaches await you at every retail experience. It can also make
a real impact on your kid’s financial behavior as an adult. A longitudinal
study from Duke University that tracked people from birth to age 32 found
that those who exhibited poor self-control as kids grew into adults with
worse credit problems. [5]

So, how to counteract the checkout conundrum? Grin and bear it. Give a
clear reason why it isn’t candy bar time: “That’s a special treat,” or “The
dentist told us to avoid too much sugar.” Your kid may pout, but she’ll
learn that pouting gets her nowhere—and that’s exactly what she needs to
understand.

3. Don’t fight about money in front of kids—and stay on top of your tone.

Talking about money can be emotionally fraught. For families juggling

complex priorities—household budgets, mortgage payments, and saving for
college, not to mention debt pile-ups and other financial emergencies—it’s
only natural that conversations get heated from time to time.

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But in these heated moments, it’s important to be mindful of your

behavior, for your own sake (take a deep breath) and for your child’s. If you
and your spouse or other family members are veering toward a money
argument in front of kids, table it and take it behind closed doors. One
study found that college students who reported that they’d watched their
parents fight about money as kids had higher credit card debt. [6]

This speaks to a larger issue about transmitting our money values to our
kids. Yes, it’s important to incorporate kids into financial conversations
and to demonstrate that honesty and openness are important when it
comes to having a healthy family attitude toward money. But be aware of
what’s appropriate to share and what’s not. Younger kids especially don’t
need to know all the details of a job loss or divorce. You don’t have to lie,
but you can explain that your family budget will be changing and that you
won’t be going out to restaurants or movies as much. Try to keep it positive
and age-appropriate.

4. Start the college talk early.

College is one of the biggest and most complex financial, emotional, and
logistical issues that you are going to face as a family. The number-one way
to avoid a stressful scramble at the end of high school? Start talking to your
kids early about your family’s plan to pay for college. The start of ninth
grade is the ideal time to have this conversation. It will help you get on the
same page, manage everyone’s expectations, and start researching schools

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that will be affordable for you and your kid, without anyone having to take
on an excess of debt.

Taking on some student loan debt is normal. More than two thirds of kids
take out loans to finance their education. [7] But a good rule of thumb is to
avoid borrowing in excess of your expected first-year salary after
graduation.

If your kids are younger, don’t wait until high school comes around to let
them know that you expect them to go to college. Talk about different
careers people you know have and the kind of education you need to get
hired for them. Explain that people who graduate from college earn, on
average, $1 million more over a lifetime than those who don’t. [8] (That big
number usually makes kids sit up and listen.) And talk about how you are
saving for college, too. One study found that kids whose parents had
accounts earmarked for college savings, such as 529s, were far more likely
to enroll after high school, even if there was relatively little money in the
account. [9]

5. Avoid a “money gap” between girls and boys.

If you have daughters and sons, there should be no difference in the way
you talk to them about money. Period.

Women, in general, continue to earn 80 cents on the dollar, compared to

men. Compounding the wage gap is a real confidence gap in terms of how

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women handle money, especially investing. [10] Surveys have consistently

shown that parents talk about financial issues more with boys than with
girls, even when girls display the same amount of interest. [11] If you’ve ever
teased your daughter about shopping and turned around to talk to your
son about investing, consider the fact that women’s investment strategies
often yield better returns than men’s. [12] Be mindful of stereotypes, and
make sure all kids are prepared to manage their money for life.

Don’t put off having a money conversation in your family. It can literally
lay the foundation for generations of financial confidence and success as
your little money geniuses go on to have money geniuses of their own.

...

Beth Kobliner is a personal finance commentator and journalist as well as

author of the New York Times bestseller Make Your Kid a Money Genius (Even
If You’re Not). She was appointed by President Obama to the President’s
Advisory Council on Financial Capability and was instrumental in
developing the council’s Money as You Grow initiative. Beth has also served
as an advisor for Sesame Street’s financial education initiative.

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Should I Have Another Slice of

Cheesecake? A Basic Lesson in
Economics
by KELVIN WON G

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Often, on the first day of my Principles of Microeconomics class, I ask my

students what they think they will learn in the coming months. Answers
range from “How Wall Street works” to “Understanding how the economy
works,” but they usually do not get to the core of what economics is.
Economics is simply a study of choice.

Understood this way, economics is much more relevant than some realize.
Every single person makes numerous choices each day in just about every
aspect of life. Even in reading this article, you are making a choice to do so
at the expense of not doing other things.

Without even knowing it, you probably analyze situations daily much like
an economist would. My hope is to unpack this process so that you can see
that economics truly is everywhere and discover how you can make better
choices using economics.

You may wonder why the title of my article refers to having cheesecake.
There is no specific reason other than that I really like to eat cheesecake
and I often ask myself, Should I have another slice of cheesecake? after I eat a
first slice. I bring this example up because it will help me introduce some
foundational concepts in economics that easily translate into all of life.

I do not exaggerate when I say that economics applies to every part of life.
Each day, we make choices about how to use our money, time, and energy.
Important areas of life such as education, work, leisure, moving, romance,

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fertility, and retirement, to name a few, are packed with choices. Where
there are choices, economics can provide insight.

Limited Resources

We first need to understand why we make choices.

A basic concept in economics is the idea of scarcity, which means that we

are limited. We are constrained, not just by how much money we can
spend, but also by time and energy. Scarcity is the reason we have to make
decisions. Since we have limited resources, we seek to find the best way to
allocate what we have.

If you have ever made a budget or established a schedule, you were

allocating resources while facing a constraint. Getting another slice of
cheesecake is a choice because my stomach capacity, health, income, and
time are limited. In choosing, I must consider all the constraints I face.
And so it is in many areas of your life and mine.

The Deciding Factor

While scarcity explains why we have to make choices, it does not help us
understand how to analyze them. To do so, we need to recognize that we
weigh costs and benefits in every decision we make. When considering the
benefit of a choice, we ultimately think about our own happiness. Every

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choice a person makes is an attempt to increase their own happiness, even

if the resulting action seems selfless on the surface.

For example, suppose I decide to share my first slice of cheesecake with my

wife. While eating less cheesecake makes me sad, being able to share
something good with my wife makes me happy.

When using this same idea to think about charitable giving or

volunteering, you can see that observing the joy of others often is a huge
component of our own happiness. That is why the dictum “It is more
blessed to give than to receive” has a lot of truth to it.

Happiness Units

But how, exactly, do we measure happiness? Economists use something

called utility. Utility is just another word for “units of happiness.” The more
utility, the happier you are.

Utility is ordinal, not cardinal. This means that the magnitude of utility
does not matter as long as it expresses the order of preferences correctly.

The philosopher John Stuart Mill once suggested that, if the technology
were available, one could perhaps quantify utility through sensing
differences in brain activity. Economists have since given up on finding out
exactly how much utility a choice produces; rather, they simply conclude
that we are all utility maximizers.

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The question I posed in the title, therefore, really is just a utility-

maximizing decision made while facing a constraint. I desire to be as happy
as possible (maximizing my utility), but I also face costs (a problem
because of scarcity.) Therefore, I cannot just do whatever I want.

What You Give Up

Every choice we make comes with a cost, even those that are monetarily
free (ever heard the phrase “There is no free lunch”?), since even our time or
energy can be put to alternative uses. Therefore, economists measure cost
by considering opportunity cost.

Opportunity cost not only takes monetary costs into account but also
considers what one had to give up in making a choice. For instance, if I am
considering whether I should order another slice of cheesecake, and
assuming a slice costs $5, the monetary cost of getting it would be $5.
Doing so, however, will mean that my wife and I have to sit in the
restaurant longer, which is a time cost, and maybe my gluttony will
decrease my productivity later in the day, if I am feeling stuffed and
sluggish. I could also have saved the $5 and put it to use in other ways, such
as by putting it in a savings account and earning interest on it. With all of
that said, the true cost of the extra slice is more than the $5.

Why do economists go through all the work to measure opportunity cost?

Because this framework captures more fully the factors that affect a
decision. For example, take the choice to attend college.

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Suppose tuition, room and board, and supplies for a year is $50,000. Is that
the true cost of going to college? Far from it. Suppose also that a young
woman, instead of going to college, could have earned $30,000 a year
working an office job. This person not only has to pay $50,000 for a year of
college but also must give up $30,000, assuming she does not want to do
both (even if she does, she is giving up other things to do so). If these are
all the factors going into the decision (though in reality, there are many
other costs, such as time, to keep track of), the opportunity cost of going to
college for this individual is $80,000.

Now imagine that she were to get a raise and earn $40,000 a year in the job
she passes up. While the price of going to college remains $50,000, her
opportunity cost now increases to $90,000. If she were to be aware of this
increased opportunity cost, she might be less likely to choose to attend
college.

Opportunity cost is sometimes hard to see or to measure, but it is an

important part of calculating utility. Thus, when making your own
decisions, do not focus just on the obvious monetary costs. Consider what
you have to give up as well.

Understanding Decision Making

With so many different constraints and variables in life, economists simply

cannot keep track of every factor that affects a choice. So this is where we
make an estimate using economic modeling. In a model, we simplify a

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complicated problem and focus solely on the core variables. Rather than
tracking the thousands of factors that may affect a decision, we think of
the few most influential to an individual’s choice.

For example, when teaching consumer theory, I start with a model where a
consumer, with only one day to live, must choose between cheesecake and
brownies to maximize his happiness. Once prices and the consumer’s
preferences are known, this problem can be solved. Although this is an
unrealistic situation, once we learn how consumers make decisions in such
a limited environment, we can use the intuition gained to study more
complicated and realistic problems of consumer choice.

Aside from understanding choices of individuals, more complex economic

models also aid in assessing the impacts of government policy and in
making forecasts for the entire economy.

Motivators

So, why does any of this matter to you? It’s because incentives matter. You
respond to incentives since they affect your benefits and costs.

Incentives are everywhere. If we want our children to make good choices,

we incentivize them to do so. Keeping track of grades is an incentive for
students to work hard, and having teacher evaluations is an incentive for
teachers to care more about their classroom performance. Being paid is an
incentive for working, and profit is an incentive for companies to hire.

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When economists study a government policy and its impact, they are
looking at how the policy will change incentives. For example, how will a
change in minimum wage laws affect society? It will cause a change in the
benefits and costs of different stakeholders. Some who did not want a
minimum wage job before may want one now. Companies with minimum
wage workers will likely see their cost of operation increase, which will
change how they price products and services or hire employees. Even firms
that pay more than the minimum wage may lose some workers to
minimum wage jobs (for instance, someone may now be willing to take a
minimum wage job closer to home). For the government, this can affect tax
revenues and perhaps whether some politicians will be reelected.

Understanding how incentives change on all sides of an issue is crucial to

understanding any problem. Much conflict today results from a lack of
consideration for the incentives faced by those we do not agree with.

Understanding incentives also helps on a smaller, personal scale. For

instance, considering the incentives of the salesperson at a car dealership
or jewelry store will usually get you—the customer—a better deal.
Structuring good incentives for children may lead to better outcomes in
parenting, and incentivizing yourself in the right ways may help you
achieve what you thought was beyond you.

As for me, knowing that I usually am tempted to order another slice of

cheesecake, and knowing how bad that is for my health (I am lactose
intolerant, plus I don’t want to become overweight), I choose to eat a

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bigger meal so that I will have a disincentive to order multiple slices of

cheesecake. And it works! Well, most of the time.

How to Make Choices

As you are thinking about how to manage your finances and other aspects
of your life better, my advice to you would be to spend some time
considering the costs and benefits of important choices you make and to
put in place incentives that will help you make better decisions. Do not
overthink things, though, as that might result in a decrease in your utility.
Seek also to understand the choices and incentives that others face, as
doing so will often demystify why things happen the way they do.

I thank you for taking the time to read this piece. I hope that it was utility
maximizing for you.

...

Kelvin Wong is a clinical assistant professor of economics and the director

of the Program on Economic Education at Arizona State University. He
has been nationally awarded for his teaching and continues to be at the
forefront of innovation in the teaching of economics.

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What Every Woman Needs to

Know About Retirement Planning
by CASSAN DR A BRASH IER

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When it comes to ensuring a comfortable retirement, women face unique

challenges that men don’t. Serious challenges.

For starters, women all over the world, on average, live longer than men. [1]
What’s more, we tend to be paid less than our male counterparts
performing the same job—a whopping 20 percent less in the United States.
[2] Plus, we are more likely than men to stop working or to reduce our
work hours to care for our children and aging parents and relatives.

This combination of factors affects our retirement security. Not only does
it decrease the amount of income we earn—and subsequently save—over
our lifetimes, but it also decreases the amount we are eligible to receive
from Social Security.

Yet we need to make our money last longer than our male counterparts,
which is no easy task. That’s why women are 80 percent more likely than
men to be impoverished at age 65 and older. [3]

Now for the good news: with thoughtful financial planning we—and our
daughters, granddaughters, sisters, nieces, and girlfriends—can create a
finally secure retirement for ourselves, regardless of whether we are single,
married, widowed, or sharing our lives with a partner.

Even though each financial situation is unique, there are general steps you
can take to establish a sound financial foundation and provide a
comfortable income stream in retirement.

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Make Time to Plan

Many of us are so focused on meeting the day-to-day needs of our jobs,

families, pets, and/or households that we neglect our financial planning
goals. Yet taking time to plan for retirement is critical to being well
prepared when it arrives.

Begin now by asking yourself what you’d like your retirement years to look
like and what type of income that lifestyle requires. Write down what
comes to mind. Your answers are important because they will guide your
financial strategy.

Next, schedule time with a financial advisor or time to use online financial
planning tools and resources to help you chart your course. And be sure to
honor this appointment, just as you would any important commitment.

Keep in mind that, as with any new endeavor, the first step of creating
your retirement strategy is often the hardest. Once your strategy is in
place, however, you’ll have a sense of accomplishment and direction. Best
yet? The maintenance steps take less time.

Start Saving

The sooner you put money away, the better. But better late than never, as
the saying goes.

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Start by building up your cash reserves. This involves depositing money in

an interest-bearing savings account until you have saved enough to cover
three to six months of your income or living expenses. Earmark these
dollars for emergencies and unexpected expenses, such as medical or
appliance, vehicle, and home repairs. These dollars will also come in handy
for covering day-to-day living expenses if you find yourself temporarily
unemployed.

You’ll also want to be sure to save for retirement. If you are working and
your employer offers a retirement savings plan, such as a 401(k) or a 403(b),
designate a percentage of your paycheck to automatically invest in the
plan. Whenever possible, contribute the maximum amount you can to
make the most of your company’s matching contribution program, if one is
available to you. This “free” money can add up quickly and make a
significant difference in your financial well-being over time.

It’s also essential to make sure that you have the right asset allocation
within your retirement plan based on:

• your tolerance for investment risk and market fluctuations,

• how much money you want to save for retirement, and

• the number of years your money can grow before you will begin taking
retirement income.

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One common mistake women make is investing too conservatively to

outpace inflation or cost-of-living increases. Although past market
performance isn’t indicative of future results, studies show that, to beat
inflation, a good portion of your plan should be invested in high-
performing stocks. That said, the fewer years you have until retirement, the
more conservative your investment portfolio should be because it has less
time rebound from market downturns.

Keep in mind that an employer-sponsored retirement plan should be part

of a larger, well-diversified investment portfolio that includes a variety of
investments, such as stocks, bonds, real estate funds, international
securities, and cash, to help you mitigate risk.

If you’re over 50 and behind on your retirement savings goals, it’s

important to know that some investments, such as a Roth IRA, traditional
IRA, 401(k), and 403(b), offer catch-up contribution allowances. For details
on which of your investments are eligible, consult with a financial advisor
or your human resources department.

In addition, if you’re earning an income and your employer doesn’t offer a

retirement savings plan or you are not eligible to participate, open your
own retirement savings account, such as an IRA or Roth IRA, and “pay
yourself first” by automatically depositing a portion of each paycheck into
that account.

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Minimize Debt

Women tend to carry more credit card debt than men and are more likely
to pay only the minimum amount due. In addition, we are less likely to go
rate shopping to get a good deal, so we tend to pay more in interest. We are
also more likely to make impulse purchases. [4]

All of these factors can derail retirement planning. After all, the money
thrown away on interest rates is money that isn’t going toward our future
goals. What’s more, the stress of these financial obligations can affect your
health.

To help reduce and pay off your debt, make a list of all your credit cards,
their interest rates, and the balances you owe on each one. Pay off the ones
with the highest interest rates first or consolidate your debt on a reduced-
interest-rate card. If you can successfully curtail your spending, it may
make sense to take out a low-interest loan and pay off all or most of your
credit card balances.

A word of caution: be sure to work with reputable companies, or you may

worsen your situation instead of bettering it. If a debt-reduction deal
seems too good to be true, it probably is.

Also, if you’re prone to impulse purchases, make a shopping list of the

items you need before you go online or to the store. Then only purchase the
items on your list. If something catches your eye, wait at least 24 hours

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before buying it. Chances are, after a day or two, that “must-have” or “can’t-
live-without” item won’t seem as important.

Protect Yourself

Regardless of whether you are a working mom or an at-home parent, it’s

critical to make sure that you—and/or your income-earning spouse or
partner—have adequate insurance protection to meet your needs. There are
a few ways insurance can benefit you and your financial strategy.

Let’s start by taking a look at disability income insurance. If you are like
most workers, your ability to earn an income is one of your greatest assets.
It helps support your current lifestyle and enables you to save for future
goals, such as a special trip or retirement. Disability income insurance
enables you to continue to receive an income and save for your future if an
injury or illness prevents you from working for an extended length of time.

If you are employed, take a close look at your company’s disability income
insurance coverage to see what the policy actually offers. Many cover only
60 percent of your salary and don’t cover bonuses or other types of
incentive pay. For example, if your annual salary is $50,000 and your
annual bonus is $10,000—for an annual total income of $60,000—your
employer-sponsored disability income insurance plan benefit may only be
$30,000 a year, leaving you with a $30,000 shortfall.

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Since roughly 64 percent of initial Social Security disability claims are

denied and only 13.8 percent are approved when appealed, a supplemental
disability income insurance policy can help you bridge this gap. [5] By
ensuring your total income is covered, you can continue to meet your daily
living expenses and to save for the future.

If you’re wondering what the likelihood of needing coverage is, according

to the Social Security Administration more than one in four of today’s 20-
year-olds can expect to be out of work for at least a year because of a
disabling condition before they reach the normal retirement age. [6]

Now let’s take a look at long-term care insurance. For many of us, aging
with dignity is important. This includes ensuring that we are well cared for
in a safe, comfortable environment if we reach a point where we are no
longer able to care for ourselves. Yet the cost of senior housing, whether it’s
assisted living or memory care, can seem overwhelming.

Median monthly costs across all regions of the United States are $3,900 for
assisted living and $5,100 for memory care. [7] Long-term care insurance
can help offset these costs. What’s more, the added peace of mind that
comes from knowing you have long-term care coverage can help alleviate
stress for you and for your loved ones, especially given that older persons
today often have fewer family members who are willing and able to take in
their elders than previous generations.

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If you have a life insurance protection need in addition to a long-term care

insurance need, it’s worth exploring life insurance policies that offer long-
term care benefits. These policies can help protect your standard of living
and provide for those who matter most to you when you’re no longer here.
Another benefit of this option? You don’t lose the dollars invested in a
long-term care policy if you don’t use them.

Get Professional Financial Advice

Building a sound retirement strategy affects all aspects of your life now
and in the future. A professional financial advisor can help you assess your
current financial situation and develop a personalized strategy to help you
reach your goals.

What’s more, an advisor can provide important insight and guidance to

help you maximize your resources, avoid common financial pitfalls, and
minimize your tax consequence during all stages of your life. In fact, there’s
evidence that some investors do better getting professional advice. [8]

In other words, professional advice can help you keep more of your hard-
earned money to use as you wish. It can also help you free up time to spend
doing the things you enjoy with your family members and friends. Really,
when it comes down to it, what could be better than that?

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...

Cassandra Brashier is financial advisor at ClearStep Financial with more

than 15 years of experience. She is a regular co-host of the Mom Show on
myTalk 107.1, has been featured in ProActive Advisor Magazine, teaches
community education finance classes, and enjoys being a resource for
others. For questions or comments, contact Cassandra at
www.momstalkmoney.com or cbrashier@clearstepfinancial.com.

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The Surprise of Generosity: Being

Set Free for Greater Satisfaction
by JOSHUA B ECKER

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My friend Mark’s daughter, Julia, is nine. For years she’d been saving money
she’d receive from birthday gifts, Christmas, and her weekly allowance in a
small pink piggy bank. After years of saving, she had $200.

When Julia saw a handmade flyer at a local coffee shop, posted by a farmer
looking for loving homes for his new puppies, she begged her parents for a
dog. Her parents, who were “dog people,” weren’t opposed to adding a
member to the family. When their family visited the farm to meet the
puppies, they all noticed the small farmhouse and frugal lifestyle of the
farmer’s family. The family, struggling to operate a small family-owned
farm, didn’t own a lot.

That evening, considering the decision, Mark and his wife had a
conversation with Julia about the responsibility, hard work, and discipline
it would take to own a dog. They asked if she was willing to pay for the dog
with her own money.

“But the puppies are free,” Julia protested.

“Yes,” Mark affirmed, “we know. But think about all the love and care that
farmer and his wife have invested into our puppy’s life already, providing
food and water and a warm home to live in. And they don’t have much.
Don’t you think it would be nice to give them something even though the
puppies are free?”

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Confident that a financial investment would help Julia understand the

responsibility she was undertaking, Mark asked her to return to her room
and think about how much she’d like to offer the farmer.

Five minutes later Julia came bouncing down the stairs and announced
with a smile, “I would like to give him one hundred dollars for the puppy.”

Mark, who was thinking $25 would be a nice gesture, was caught off guard
by the generous offer. Julia had worked hard to save that money, and Mark
was worried she’d soon regret giving up so much of her savings for the
puppy.

“Wow,” he marveled, “that’s a big number. Why don’t you take some more
time to think about whether you really want to give up that much?”

Climbing the stairs more slowly than she’d descended them, Julia dutifully
returned to her room to consider her decision.

About fifteen minutes later, she returned to her dad. More sober this time,
Julia explained, “I was thinking about what you said. Then I started looking
around my room and thinking about this nice house and the nice stuff we
have, when the farmer’s family has so little. So I’ve changed my mind about
how much money I want to give them for the puppy.”

Mark was on the edge of his seat.

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“Rather than one hundred, I want to give them all two hundred dollars in
my piggy bank.”

Looking at Money Differently

I’ve thought about this story countless times since Mark first shared it with
me with proud daddy-tears in his eyes. The story confirms what I’ve long
suspected and what research supports: generosity is incredibly appealing to all
of us.

It’s also radically counterintuitive.

Our society, one of the wealthiest in human history, is held hostage by the
pursuit of more. No matter how much we have, we always seem to want
more: more stuff and more money. We choose careers that allow us to
secure more. We envy those who seem to have more. And we constantly
worry that we don’t have enough.

It’s exhausting, right?

While we’re constantly scrambling to bring home the latest fashions, buy
the hot new tech toys, or build obscenely profitable financial portfolios, a
voice in our heads convinces us that we’ll never have enough. And while
some bear this anxiety because of legitimate financial need, this stress is
misplaced for many of us. In a world where six billion people live on less

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than $13,000 a year, most of our financial-related stress is triggered by

artificial need. [1] The reason retailers invest so much money in catalogs,
television commercials, and electronic and print ads is to stimulate our
craving for more.

How do we break free from this bondage of manufactured need, insatiable

desire, and deep-held belief that we don’t have enough? How do we begin
to experience financial peace in a world that constantly calls us to acquire
more and more?

I believe the secret is to practice generosity, regardless of our

socioeconomic status. Generosity is available to all and beneficial to all.

In a world that glorifies self-gratification—“You deserve a break today,”

“Obey your thirst,” “Treat yo’self”—no one’s taking out billboard ads or
Facebook banners to promote generosity. And yet research confirms that
generous actions make us happier, healthier, more satisfied, and more
relationally connected.

Generosity makes us happier.

Researchers at the National Institute of Neurological Disorders and

Stroke, working on a new collaborative project with the National Institute
on Mental Health and the National Institute on Aging, have discovered

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that there is a physiological basis for the warm glow that often
accompanies altruistic giving. [2]

Generosity makes us healthier.

When we do something good for another person, we encourage the release

of endorphins—otherwise known as the “feel good” chemicals—in our
bodies, which brings about a “helper’s high,” fights stress, and keeps our
bodies physically healthier. [3]

Generosity increases our life satisfaction.

There is robust evidence that volunteers are more satisfied with their lives
than non-volunteers. [4]

Generosity improves one’s relationships.

Naturally attracted toward those who have an open heart to share with
others, people enjoy the company of a generous giver to the company of a
selfish hoarder.

Generosity and happiness fuel each in other in a circular fashion.

Prosocial use of one’s time and money results in feelings of happiness

which are likely to lead to future similar choices. [5]

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So, if generosity can make our lives so much better, what keeps us from it?

How Contentment Gently Settles in Our Heart

If we’re honest, many of us fear that being generous will cost us more than
we want to lose. If I give, we may reason, I’ll have to live with less. And while
that’s technically true, it completely misses the larger truth of the more of
less. This warped message, insisting that generosity is somehow a threat to
our well-being, robs us of the opportunity to experience the rich benefits
of generosity.

What if we flipped the narrative to tell a story that is more true than the
scarcity story? What if we opened ourselves to the promise that releasing
our death grip on what we want—pricy toys for the new puppy, a fancier
phone, new carpets—could make room for a pattern of other-centered
living that truly satisfies? What is more true than the myth that generosity
will cost us too much is the reality that generosity benefits others and
benefits us.

One of the most significant counterintuitive personal benefits of

generosity is that, when we are generous, we discover that we already have
enough. Translation: When we give, we are more satisfied.

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In taking baby steps toward other-centered living, many discover—often

for the first time—that they have enough. When we give generously, we’re
given the opportunity to notice that our needs are actually met. The
practice of giving changes our hearts and minds.

We discover how fortunate we are.

We’re reminded that we already own more than we need.

We begin to notice the needs of others.

We realize how much we have to give and how much good we can
accomplish.

We’re liberated from the sticky web of self-satisfaction.

Generosity’s Choices

You can experience the freedom and joy of generosity today as you begin to
make small choices to live differently. I encourage you to start small. If you
think you have to endow a scholarly chair at your alma mater or eradicate
hunger around the globe, you’ll never develop generosity through the habit
of giving. But if you do what nine-year-old Julia did, meeting one tangible
need with some of what’s in your piggy bank, you can bless the world and
experience authentic satisfaction.

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Consider starting by embracing one of these simple practices:

1. Embrace gratitude.

Make a list of the things in your life for which you are grateful. Your list
doesn’t have to be long. It won’t take much time. Sometimes the most
important step you can take to become more generous is to spend more
time thinking about what you already possess and less time thinking about
what you don’t.

2. Start small.

If you’ve never given away money, start by giving away $1. If you are
embarrassed to give just $1, don’t be. You’ve got nothing to worry about:
there are plenty of charities online that allow you to give with your credit
card, and you’ll never cross paths with the people who record your $1
donation. If you’ll feel more comfortable giving $5, $10, or $20, start there.
That little push can help build momentum in your life toward generosity.

3. Take note: Are your needs still being met?

After beginning your pathway to generosity with a financial gift, ask

yourself if you’re still doing okay. Is there food on the table? Do you have
clothes to wear and a roof over your head? If so, rest in the confidence that
you had margin to give.

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4. Give first.

When you receive your next paycheck, make your first expense an act of
giving.

Often, we wait to see how much we have left over before we determine
how much we can give away. The problem is that, most of the time after we
start spending, there is nothing left over. To counteract that cycle, give
first. Every payday, write a check for $10 to your local homeless shelter. You
may be surprised how you won’t even miss it.

5. Divert one specific expense.

For a set period of time (try 29 days), divert one specific expense to a
charity of your choosing. You may choose to bring a lunch to work, ride
your bike to work once a week, or give up Starbucks on Mondays (wait,
make that Thursday). Calculate the money you’ll save and then redirect it
to a specific charity or cause.

6. Fund a cause based on your passions.

There are countless charities and causes that need your support. Some of
them are directly in line with your most compelling interests.

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What are you most passionate about? Is it the environment, poverty, or

religion? Maybe it’s world peace, child nutrition, or animal rights. What
about education, civil rights, or clean water?

Identify what passions already move you, find a committed organization

built around that cause, and then joyfully help them in their work.

7. Spend time with a generous person.

One of the most life-changing conversations I’ve ever had about generosity
occurred when I found the courage to start asking specific questions of the
right person. I remember starting with “Have you always been generous?”
When my friend replied, “No, I didn’t used to be,” I immediately followed
with more: “When did you become so generous?” “How did it start?” “How
do you decide where your money goes?” “What advice would you give
someone who wants to get started?” It was life changing. And the other guy
paid for the meal...go figure.

Generosity rarely happens by chance. Instead, it is an intentional decision

we make. But it doesn’t need to be as difficult as many people think.
Sometimes, reaching into our piggy banks to meet one need we’ve noticed
is the best step we can take.

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...

Joshua Becker is the founder and editor of Becoming Minimalist, a website

that inspires 1 million readers each month to own less and live more. He is
also the best-selling author of The More of Less and founder of The Hope
Effect, a nonprofit organization changing orphan care around the world.

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Some Dreams Are Worth

Saving For
by BRI AN GAR DNER

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Caitlin and her younger brothers dashed up the stairs, their footsteps
thundering on the beautiful wood, as their parents called after them, “Slow
down! And remember—don’t touch anything!”

It was their third weekend in a row touring model homes in their

community.

Caitlin’s parents were in the market for a new home. With two brothers
behind her, they had outgrown their apartment and were hoping to get a
yard finally. Somewhere, according to her dad, where they could hang a
University of Michigan flag (her parents’ alma mater) and plant some
sunflowers in the summer.

“I like this one best!” called out four-year-old Andrew, having just
discovered a children’s playhouse—complete with a ladder and a slide—
built into the stairwell of the show home.

A chorus of “Me too!” followed, as Caitlin and her brother David couldn’t
help but join in. It was fun to imagine what their life would be like here.

I bet the kitchen sink never clogs here, Caitlin thought, picturing in her head
the rusted ceramic sink in their apartment and her dad muttering
something about how a garbage disposal might be nice.

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A Place to Call Home

A few weeks later, Caitlin’s parents announced that they had a surprise.
They drove to the other side of town and parked in front of a modest, two-
story home with a small but inviting yard wrapping from front to back.

“Welcome home!” her parents said as they all piled out of the van.

Caitlin tried to hide her disappointment that her parents hadn’t chosen
the home with the built-in playhouse. Or even the model with the
playroom in the basement.

Her parents had chosen a home one step above their apartment, and she
wondered why they hadn’t jumped three. Even at nine years old, she knew
her parents both had respectable (albeit not lucrative) jobs, and they had
lived in an apartment way longer than any of her friends. Couldn’t they
afford a little more than the house she was staring at now?

Noticing the expression on Caitlin’s face and the way she held back while
her brothers raced to the new house, Caitlin’s dad tugged her toward him
and pulled some things from the back of the van.

A folded University of Michigan flag.

And a small package of sunflower seeds.

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She grinned and grabbed her dad’s hand as they headed for the front porch.

A Room Without a View

A few years later, the summer of Caitlin’s 12th birthday, she found herself
on a cruise ship—the stars in her eyes as big as the ones decorating the
royal-blue carpet of the hallways.

Her parents had arranged the trip with another family, and Caitlin had
been dreaming of this day for months. She’d carefully selected every outfit,
bathing suit, and swim cover and had meticulously packed them into her
own little rolling suitcase.

“Guys! Look at this!” one of her brothers called, opening an interior door of
the cabin to show a Juliet balcony overlooking an endless expanse of ocean.

They were exploring their friends’ room first, en route to their own.

Caitlin took in the beautiful windows and the adjoining rooms with a sigh.
This was heaven.

“Come on, team!” her mom said. “Let’s let the Halversons settle in while we
go find our room.”

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Caitlin figured their room would be close by, maybe down the hall. But her
parents led them to the elevator, where they slowly made their way
downward (stopping at practically every floor to let people on or off) to
the bottom of the ship. They exited the elevator and walked for what felt
like forever, until they finally arrived at their room and opened the door.

Darkness greeted them, until her dad patted around and found a light
switch. No windows. No Juliet balcony. No view of the ocean. Just some
fold-down beds and (thankfully) the same monkey made from a hand towel
that they’d seen in the Halversons’ suite.

At this point, Caitlin understood that her parents were…frugal. (She called
it “cheap”; they called it “conscientious.”) So she wasn’t really surprised.

She sighed and exchanged a look with her closer brother, David, as she
unzipped her hand-me-down suitcase.

New Wheels (or at Least, New to Caitlin)

By the time Caitlin turned 16, she had big plans for her future. She’d
visited the University of Michigan every summer with her dad, strolling
through the beautiful campus, talking about what she might like to study—
envisioning the life she’d want to lead.

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She shared all her dreams with her dad, except one: She hoped to have
more money than her parents.

A lifetime of using fast-food ketchup packets at home (because, as her

parents said, “They’re free!”) had lit a fire in her. Caitlin didn’t want to use
ketchup packets or shop secondhand. She wanted the home with the built-
in playhouse and the cruise-ship cabin with a view.

On her 16th birthday, she knew better than to hope for keys to a new car.
But it didn’t really bother her; she had a plan for her future. Undergrad at
U of M, like she and her dad had always dreamed of, followed by graduate
school somewhere prestigious and a job that would afford her whatever
kind of car she wanted.

So for now she caught a ride to and from school and borrowed a car from
her parents when she could.

A year after she’d gotten her license, her brother David got his learner’s
permit. With two drivers soon to be in the family, their parents decided it
was time to buy another car.

Caitlin knew her dad’s sales commissions had been particularly good that
year. Her parents had finally made some improvements to the family home,
swapping out the linoleum in the kitchen for a nice tile and replacing a

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couple of drafty windows with double-paned beauties. This gave her and
David a modicum of hope. Maybe this time, perhaps just this once, they
wouldn’t end up buying the cheapest option—the cheapest car on the lot.

It turns out, their hope was unfounded, as their parents chose a pragmatic
2008 Volkswagen Beetle in an unappealing shade of yellow. Great gas
mileage, a manual transmission to prevent them from texting while
driving, and zero style factor.

Caitlin hugged her parents in thanks and shrugged toward her brother. It
was par for the course.

“Hey, Caitlin,” her dad said on the night they drove the new (to them) car
off the lot. “I’ve got something to make this baby a little more our own.”

He grinned and—much like the night her parents first showed them the
new house—opened his hand. This time, he held a U of M bumper sticker.

Caitlin laughed and started peeling off the sticker’s backing.

A Turn of Luck

Caitlin could hear her mom’s worried tone as she talked on her phone, out
on the front porch.

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At 18, Caitlin had been accepted to the University of Michigan, had

graduated high school, and was spending her summer busing tables and
packing for college. The photos taped at random to her bedroom walls had
come down as she readied for the next chapter of her life.

What’s up with Mom? she wondered, peering out the window.

An hour later she heard her dad calling from downstairs. “Hey, guys! Will
you come down here for a few minutes?”

Her brothers bounded down the stairs as she followed, quietly, on their
heels.

The moment she stepped into the same room as her parents, she could read
on their faces that something was not right. It turns out, her dad’s industry
had shifted over the last year, leading to much lower sales than normal,
which initially meant low commissions but had culminated in a layoff.

Caitlin listened with her heart in her stomach about some changes they’d
have to make financially. A postponed vacation. More ride sharing to save
on gas money.

What about the U of M? Could her parents still afford to help her with
college? She’d planned on paying for her housing, but her parents had
always been adamant that they’d pay her tuition.

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The University of Michigan dream had been all of theirs, not just hers.

Finally, her dad turned to her and answered the question Caitlin had been
hesitating to ask: “You don’t have to worry about college, honey. We have to
be cautious with our money right now, but college funds are sacred. We
won’t be touching those, and we have enough for tuition.”

Caitlin exhaled in a rush. A few images crossed her mind in that moment:
the first time she ever saw their modest family home; that tiny, windowless
room in the belly of a cruise ship; and her used, pragmatic yellow Beetle.

She realized that for all the times she’d been mystified by her parents’
unwillingness to spend money, their determination to live below their
means ended up being the one thing that would keep her dreams alive.

She locked eyes with her dad, not needing to say thank you out loud
because he could read it clear as day on her face.

Some dreams are worth saving for.

...

Brian Gardner is the founder of No Sidebar, a collaborative blog about

minimalism, simple living, and finding happiness. He is a believer in living
with purpose and passes the time by listening to music, writing poetry, and

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web design. Follow along on his new venture, Authentik, where he helps
creative entrepreneurs build an honest brand and digital platform.

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Colophon
Becoming Minimalist — becomingminimalist.com

Becoming Minimalist is designed to inspire others to journey towards

minimalism in life... discovering the joy of intentionally living with less...
and realizing what that means for your unique lifestyle.

No Sidebar — nosidebar.com

No Sidebar is a collaborative blog about minimalism, simple living, and

happiness. We want to help you turn down the noise that disrupts the
quiet of your heart and mind and soul.

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