Showing posts with label international stock market. Show all posts
Showing posts with label international stock market. Show all posts

Saturday, May 18, 2019

Some Further Thoughts on the One Bag Challenge

Jeremy writes in:

My group of friends has been kicking around an idea and I wanted to get your take on it. Let’s say you had to live out of a suitcase or a big duffel bag permanently. That’s all the possessions you could own. What would be in that bag and why?

I actually wrote about this a few years ago when I discussed a month-long period where I did this as a 30 day challenge. During that challenge, I aimed to live out of a backpack and a duffel bag. I gave a brief list of some of the items I carried in that bag, but I didn’t get into too much detail; instead, I moved quickly on to the things I learned from doing it, which I boiled down to six lessons:

+ Lesson #1: It is far easier to do this if you have living space of some kind.
+ Lesson #2: At the same time, this approach to life makes a very tiny apartment in a city much more reasonable.
+ Lesson #3: ‘One bag’ becomes more of a challenge with children.
+ Lesson #4: My hobbies would need a lot of re-thinking.
+ Lesson #5: There were some huge advantages, too, like reduction in household chores, easy travel, spontaneity, and reduced expenses.
+ Lesson #6: I would quickly start to put a very high premium on high-quality sturdy stuff that just works as well as stuff that takes up less space.

I would really encourage you to read that first article, as I’m going to try to avoid covering the same material again.

I kept a lot of notes during that thirty day challenge, so I have a list of what I originally kept in the bags when I was trying to do this. However, going back through that list with some further reflection, I would change some items. Here’s how I would pack for that kind of “one bag challenge.”

The Bag Itself

If I were to do this, I would want a sturdy and very well made duffel bag that could last for many years. I actually have a duffel bag that I love that I think would be perfect for this – the Best American Duffel #5. It’s incredibly well constructed, holds 85 liters of stuff, and has smartly designed handles and straps. If I were looking at a less expensive option, I would look for a duffel from an army surplus store.

The first thing I would put in this bag is a smaller backpack or large messenger bag. The reason for that is that there are many times when I want to take a small portion of my possessions elsewhere but not carry around the large duffel. For example, if I’m visiting someone but want to spend the day out and about, I’d want a smaller bag to do so, or if I’m going on a short trip, a backpack makes more sense than a huge duffel. I have used a North Face Surge II for many years for this purpose and it works well; I also have a Goruck GR1, which is an incredibly sturdy but overpriced backpack. I will likely never need to buy another one as long as I live, between the two I already have.

Contents of My Bag

So, what goes in the bag? This is a modification of the list I kept when I was doing my thirty day challenge and in much more detail than the earlier post. It’s worth noting that some of these items are in there because I’m not assuming things about where I’ll be staying. If I can assume that I’m always living in a home or apartment or hostel or something like that, many of these items can go away.

Clothes are the foundation of the bag. Not only do I need enough clothes to survive for a number of days between washings, they also provide the padding needed to protect some of the stuff in the middle of the pack.

Five shirts Two t-shirts, one long-sleeved t-shirt, one dressier short sleeved shirt, and one dressier long-sleeved shirt. I would buy items that are extremely wrinkle resistant and store them by rolling them up to minimize space.

Four trousers/pants One fairly dressy pair of pants, two pairs of jeans, and one pair of nice shorts. This would shift a little depending on the climate, but I typically avoid shorts until it’s at least in the upper 80s and I live in Iowa, so this is appropriate. The dressy pants and shorts must be as wrinkle resistant as possible.

Five pairs of socks Two pairs of athletic socks that I can sweat in, one pair of dressier socks, and two pairs of winter appropriate socks (probably thick merino wool socks). Again, this covers the various uses of socks. During the summer, I wear sandals 95% of the time, so these are mostly for workouts where I’m wearing shoes or cold weather.

Five pairs of underwear This is self-explanatory.

Two pairs of long underwear Again, this is more important in colder climates. This serves as an under-layer beneath my pants on cold days.

A hooded sweatshirt Essential for several months out of the year in northern areas.

A cardigan A dressier alternative to the hoodie.

One reasonably dressy fall jacket This will be worn much of the time in the fall and spring and less intense parts of the winter. I want a sturdy jacket I can wear in a variety of temperatures.

One hardy winter coat This will take up some real space, but isn’t needed in warmer climates. On a -20 F day in Iowa, though, I’ll pull out my arctic Carhartt. Keeping warm is far more important than appearance at those temperatures.

Winter accessories, meaning a stocking hat, gloves, and a scarf.

A summer hat, which is less expensive than sunscreen.

A tie for dressier moments.

A pair of dressy shoes These are worn on nice occasions.

A pair of cross training athletic shoes These can be worn for exercise most of the time. I would beat the snot out of these and replace them when they start to fail.

A pair of sturdy sandals My default when it’s warm.

A pair of heavier winter shoes My default when it’s cold and snowy and icy.

My clothing would take up about half of the bag’s volume. The rest of the items would fit in the other half, largely surrounded by clothes.

A couple of reusable bags This would be useful for organizing and carrying laundry and keeping dirty laundry separate, as well as other carrying purposes.

A couple of plastic plates, bowls, forks, spoons, and cups This enables me to eat with some civility in most situations.

A flashlight so that I can see in the dark. This would be a pretty small one.

A very basic tool set or a multi-tool so that I can open packages, make minor repairs, and so on.

A basic sewing kit to repair minor issues with clothing.

A tightly compressed sleeping bag so that I can sleep anywhere.

A pillow to rest my head on at night.

Two towels and two washcloths for bathing.

A bag of toiletries, including a toothbrush, toothpaste, dental floss, deodorant, soap, shampoo, conditioner, hairbrush, comb, a razor and blades, and a nail clipper.

A sturdy nylon rope for all kinds of things, but the big thing would be an impromptu clothesline.

A first aid kit including things like bandages, a bottle of aspirin, antibiotic ointment, tweezers, and so on.

A bottle of sunscreen so I don’t burn myself to a crisp.

A super-sturdy umbrella, something I wouldn’t skimp on. I usually use cheap umbrellas that break frequently, but if I lived out of one bag, an umbrella would be vital and I’d want one that was incredibly sturdy.

Insect repellent to keep bugs at bay.

A loud whistle in case of emergencies, to attract help. Believe it or not, I used to carry a whistle around my neck all the time, something that I did for much of my adult life until recently.

A security pouch that would contain a few vital documents, to be worn under my clothes much of the time. This would include things like my passport, my drivers license, my credit card, my bank card, some cash, and so on. This would be protected with the utmost care, rarely leaving contact with my skin.

A TSA-approved luggage lock to secure my stuff when I travel or when I’m not around my bag.

The remaining space would mostly be filled up with things that I personally would find useful and valuable. These would vary a lot depending on the person.

A sturdy laptop I write for a living, so having a laptop to write on would be vital. I’d probably want a tablet, too, preferably an iPad with an Apple Pencil, but that’s not quite essential. I found room for it last time, though.

A Kindle would provide me with more than ample reading material for a very long time, so there’d be no reason to pack books. I’d load the thing up with books just in case I was away from an internet signal for a while.

A smartphone for communication and navigation as needed.

A GPS device in case my smartphone couldn’t navigate because of no signal or no data plan.

Chargers for those devices, including a solar charger so I can charge devices literally anywhere there’s sunlight.

A notebook and some pens because journaling is a major part of my life. Collecting my thoughts on paper is how I stay sane much of the time.

A deck of playing cards and one or two very small footprint games Tabletop games are a big part of my life. It would be the hardest thing, space wise, for me to give up. I would definitely include a deck of cards and a book on my Kindle with the rules to many card games, but I’d likely find room for a few very small games as well. I’d likely include a small magnetic chess and checkers set. The publishers Button Shy Games, Oink Games, and Jordan Draper Games have some wonderful games with tiny footprints, too.

A water bottle and some water purification tablets Obviously, I need something to drink. The purification tablets are needed if I’m not sure of the water source.

Some nonperishable food items I’d have things like granola bars and protein shakes stowed away in there.

A hot plate and a small pot Ideally, I’d want a hot plate with a magnetic stirrer and a bunch of stir bars, but this will do. This would enable me to make soups, pasta, vegetables, and a lot of other things.

These items would almost perfectly fill up the duffel described at the start of this list. I was able to largely live out of a duffel bag with a list of items very similar to this for thirty days (obviously, I didn’t abandon my home to do it, but I did make every effort to stick to the possessions in the bag).

Why Is This Useful?

While this list might be interesting, how exactly is it useful to real-world personal finances? What application does it have to the financial challenges most of us are facing?

First of all, it clearly shows that we don’t need as much stuff as we like to think that we do. I have far more possessions than I could ever possibly fit into a duffel bag, but the truth is that the vast majority of what I need or want to use in a given day could fit in one. Yes, I would miss some of my other possessions, and it would seriously cut into some of my hobbies (like cooking and playing tabletop games), but the advantages are numerous.

The big advantage is, obviously, you spend far less time managing and organizing and moving stuff when you have far less of it. This is the issue with having more stuff: you have to spend more time organizing, you have to spend more time moving, you have to spend more time cleaning, and that adds up to less time actually enjoying the stuff. Living out of a bag basically deletes that problem – you spend very little time cleaning or moving or organizing. Everything’s just in your bag, and when you want to go, you grab your bag and that’s it.

Thus, when you’re investing less time in cleaning and organizing and moving, you’re able to spend more time doing things. If my experiment with living out of a bag taught me anything, it was that such minimal living gave you a lot of free time for hobbies. The time I would have spent cleaning and organizing and such could be spent reading and hiking and so on – things I actually get deep personal value from.

Such minimalism also leads to incredible savings in terms of living space. If you adopt such minimalism with your possessions, it’s far easier to make do with, say, a tiny efficiency apartment or a tiny home. With the contents of the bag listed above, I would easily be able to live in a small single room, which would keep the rent quite low, and still enjoy most of what I have in my life right now. The less stuff you have, the less space you need, and thus the less housing costs you.

If you want to start down this path, start looking at your life through an 80/20 lens. If you spend some time evaluating your stuff, you’ll find that you spend 80% of your time using 20% of your possessions. The other 80% of your possessions scarcely get used… so why keep them around? They almost entirely take up space, and even if you’re in a situation where you would use one of those items, there’s often a substitute available for you.

Try this for a month: whenever you use an item, put it in a place of commonly used items, maybe a table somewhere or something like that. As the weeks pass, notice that you’re frequently going to that table rather than going around your home for items. By the end of the month, most of your time retrieving items will be centered around grabbing stuff from that table. So, why do you have all of that other stuff? Why not just start selling it off and getting rid of it if you’re scarcely using it? It’ll make some pocket money for you, make your home a lot less cluttered, and not take away anything you use regularly.

While most of us are never going to live out of one bag for an extended period of time, experiments like these do demonstrate that we actually don’t use most of our possessions very much and we use some questionable justifications both to keep those possessions and to buy new ones. Those justifications add up to money lost buying those possessions we rarely use, money lost in larger living space to store those possessions we rarely use, and time lost taking care of and moving around those possessions we rarely use.

Take some time and think about what would be in your own “one bag.” Then, when you’ve got a good sense of that, start being extremely critical about your possessions – and particularly any new purchases – that would be outside of that bag. They’re going to cost you money and time and the likelihood is that you won’t use those new items very much – are they really worth the money you’re spending on them and the cost of storing them?

Good luck.

The post Some Further Thoughts on the One Bag Challenge appeared first on The Simple Dollar.

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Is a Gap Year Better Financially Than Going Straight to College?

Nathan writes in:

I am entering my senior year in high school next fall. My parents want me to go to college in the fall right after graduation. They have some savings for me but I will have to add some student loans. I want to take a gap year or two and work full time. I would put that money aside for college and figure out what I want to do because I don’t know what I want to study. Is it better to graduate a year later with no student loans or go straight to college after high school with student loans and go straight to a job with better pay?

This is a really great question from a well-spoken high school student. I have a feeling that Nathan, with his ability to think through situations and his ability to present them this well, will do just fine in whatever he chooses to do.

The question you’re asking, in essence, is whether or not the relatively low earnings you might bring in during a “gap year” right after high school, when applied to college tuition, is more financially valuable than starting in your career path a year early.

That question is loaded with a ton of assumptions. You have to assume how much you’d earn during that year off and what portion of that you’d actually save. You have to assume how much you’d earn after graduating and what portion of that you would immediately be able to apply to student loans. There’s also the issue of a changed career trajectory – would the “gap year” change your overall career trajectory in a positive direction, improving your post-graduation annual salary?

Let’s look at the easy question: does a gap year help you with your career trajectory? If a gap year can actually improve your career path, then it should be a no-brainer, right?

According to the clearest data I could find, a “gap year” can help if you use it in a way that genuinely improves your college results by helping you get into a better school, clarifying what you want to do in school, and helping you build a better work ethic. However, the benefits of a gap year seem to be heavily tied to how you spend that year. The best outcomes seem to come not from working at a job in your hometown for a year, but engaging in a program like Americorps for a year.

I’m not going to get into the nuances of a gap year, but it seems that the most benefits from a gap year aren’t correlated with maximizing income during that gap year but rather maximizing rewarding experiences and personal insight during that year. In other words, a gap year offers the best career outcomes when the primary goal is rewarding experience and helping you figure out your goals rather than just maximizing income. It is unclear whether a gap year of this type is a net positive financially, but it does seem to be a pretty strong net positive in terms of college performance and happiness with one’s career choices. Sarah and I are open to the idea of our own children taking a gap year for this very purpose – life experience and figuring things out, not earning income.

Let’s get down to the dollars and cents of it, though. Let’s say, for example, that you took a year and worked 50 weeks full time at a job paying $10 an hour while living at home. You’d earn $20,000 – let’s assume after taxes and some minimal expenses, you were able to bank $12,000 of it.

That $12,000 would theoretically cut out $12,000 in student loans. Student loan rates seem to be somewhere around 5% right now, and most loans are on a ten year repayment schedule. That ends up totaling $15,367 in student loan repayment over the lifetime of that loan.

That’s what a gap year focused on income saves you, but what does it cost you? In terms of your career, it essentially costs you a year in retirement, assuming you would have the same length of career as you would otherwise. However, if you were to assume that you stick that $127 a month for the first ten years that would have been your student loan payments into a retirement account that returns an average of 7% year, you wind up with an extra $200,000 in your retirement coffers, which actually lets you retire a year or two earlier than if you didn’t take that gap year as you’ll hit your target retirement number at a younger age.

The issue with these kinds of calculations, however, is that it assumes perfect financial behavior on your part. It assumes that you’ll work a full time job for 50 weeks during that gap year. It assumes that you’d contribute that now-nonexistent student loan payment to your retirement account rather than spending it. It assumes your lifelong financial path will be smooth.

In my eyes, this exercise reveals two things.

One, the decision of whether or not to take a “gap year” is less important in the end than the commitment to lifelong smart financial choices. If you commit to spending less than you earn every year of your life and doing something smart with the difference and if you commit to using windfalls and extra sources of money for wise things like debt elimination and retirement savings, you’ll blow away the financial difference between a gap year of working for money and going straight to college after school.

I think this is a really key lesson that applies to almost everyone. Making wise financial choices day in and day out trumps almost any life choice you might make. If you consistently spend less than you earn, eliminate debts and avoid high interest consumer debt, and get into a situation where you’re not relying on loans for cars or eventually a home, your good financial choices will trump most of the life and career choices you might make.

I really like the old Charles Dickens quote from David Copperfield:

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

It’s as true then as it is now: consistent smart financial choices, starting with spending less than you earn, is incredibly important for a stable life and trumps most life and career choices.

Two, in terms of maximizing the benefit of a gap year in terms of your career and quality of life, the focus of your gap year should be quality experiences and personal growth, not the wages of a 40 hour a week job. A gap year that focuses on quality experiences, figuring yourself out, maturing, and getting a grip on what you actually want to do with your life seems to strongly correlate with better academic performance in college.

In the end, it comes down to your own personality and situation. Do you know what you want to do with your life? Do you have good personal habits when it comes to being self-motivated? The more sure you are about your future and your own habits, the more sense it makes to go straight to college. However, if I were making a recommendation to my own children when they were unsure about what to do next after high school, I would probably encourage them, if they were reasonably mature, to consider taking a gap year and figure out their plans going forward while getting quality experiences through a program like Americorps.

Good luck, Nathan, but I think you’ll be fine either way.

The post Is a Gap Year Better Financially Than Going Straight to College? appeared first on The Simple Dollar.

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Thursday, May 16, 2019

The Million Dollar Question

What would you do if you had a million dollars?

This question seems to come up regularly as a conversation starter. I’ve found that the answers tend to fall into two groups.

In one group, you tend to have answers that involve radical life changes. That person would just move to another part of the world or go on a bunch of vacations or buy a ridiculously expensive home.

In another group, you have answers that involve financial security. That person would pay off debts, maybe buy a modest home or a reasonable car, and put the rest away for big future goals.

You might see a mix of the two, where the radical life change person does pay off credit card debt first or the financial security person does go on a great vacation, but most of their planning centers around their main objective. It’s either radical life changes or financial security, and it’s pretty clear which one is the focus.

I’m clearly in the “financial security” camp. If a million dollars suddenly fell on my lap, I’d put all of it away in investments with the intent to live off of 3% withdrawals for the rest of my life. That would add up to $30,000 a year just from the $1 million, not counting the other retirement savings we already have, nor counting the other investments we have. This would probably hasten our retirement to the pretty near future, but I don’t think we’d retire tomorrow. We’d just sit down and talk through what’s next, but it would mostly center around preserving the life we have right now.

Answering this question and daydreaming about that situation is a lot of fun, but there’s actually something really useful buried in this question. If you give it some serious thought, it’s actually an indication of what your personal plans should be, and thus what your financial plans and professional plans should be like.

For example, with my own million dollar dream, it’s really just an extension of the path I’m on, which happens to be the path I want to be on. I like my life in most ways; no life is perfect, but mine is pretty good, and I simply want to fortify and secure the life that I have and move early retirement, which is already in the plans, a bit earlier.

In other words, the real division between the kinds of answers that people give to the “million dollar question” is whether the answer is just an extension of the life path they’re already on or whether it constitutes a radical change in your life.

Those two types of answers point toward two completely different schools of financial and life advice.

“A Million Dollars Would Simply Accelerate My Already-Existing Life Plans!”

This is definitely the group I’m in and, I suspect, the group that many Simple Dollar readers find themselves in.

People in this group already know what they want out of their life and they’re working in that direction already. An infusion of money just contributes to the plans they already have in place.

My question to people who are in this group, and a question I ask myself all the time, is this: what can I do to hasten those plans? If having a million dollars dropping on my lap means I accelerate and secure the plans I have for my future, what can I actually do right now without that million dollars to accelerate and secure those plans? If this plan is so obviously important to me and so front and center in my life, what else can I be doing to secure and accelerate those plans?

For me, I’m already on a path to complete financial independence and early retirement. A million dollars would merely accelerate my journey down that path. This path is something Sarah and I have carefully considered and we’re in strong agreement on. It’s where we both want to go.

So, what can I do to get us there faster? What can I do to move that point of early retirement a year or two earlier? That’s the real question that the “million dollar question” is asking me.

The answer to that question, of course, goes back to spending less than I earn and doing something useful with the difference. Keeping a firm grip on my spending, looking for opportunities to bring in a little more income, and then using that gap to accelerate our goals is the recipe, and I’m always on the lookout for those things.

However, at the same time, chasing a bigger “gap” should not come at the expense of what I value in my current life. This is such a key personal finance lesson. You have to be able to distinguish between what’s actually important in your life right now – what makes it worthwhile for you – and what isn’t important, and be willing to discard the things that aren’t important for the things that are.

The recipe for accelerating your existing plan really centers around deciding what’s important in your current life and what really isn’t, discarding that unimportant stuff, and using those discards to accelerate the things that are important.

The really interesting side of all of this comes with the other answer to the million dollar question.

“A Million Dollars Would Change Everything!”

If you are in a situation where a million dollars would cause you to make radical changes to your life, altering your profession or your relationships or where you live or how you spend most of your time or some combination thereof, the clear question is why aren’t you orienting your life toward making those changes anyway?

The magic of the “million dollar question” is that it eliminates the issue of financial need from the question of what you want to do with your life. If the things you want to do with your life are drastically different than the things you are doing with your life, then there’s a good chance that you’re in a relatively unhappy cycle in your life, one that’s held in place solely by financial considerations.

If there’s ever a call in your life to start making some financial changes, it should be this one. If the things you most want to do with your life are significantly different than what you’re actually doing with your life, and the only thing that is keeping you on the current path is finances, then it’s time to radically reboot your finances so you can have that life.

I should know, I’ve been there.

For roughly a year before my financial turnaround, I felt like my life was stuck in a serious rut. My dreams and visions and plans were in one direction, yet day in and day out, I felt like my life was heading in a different one. I actually recognized it as it was happening; I wrote about that feeling in my journal and tried to process what it meant.

I knew only that my daily routine was one that was comfortable, but only in the most surface of ways. It was a life that, at a quick glance, should have brought me substantial joy, but what it brought me was fleeting tastes of pleasure and comfort and an underlying feeling that life wasn’t what I wanted it to be.

As I wrote back then:

Sometimes I feel like my life is completely without purpose and I’m just following some invisible pattern that someone else has put into place.

I was walking along a path and there were a lot of things that I liked along that path, but it wasn’t bringing me anything deeper or more meaningful. Rather, it was a path to a destination that I didn’t really want to go to. I loved the pleasures of my day to day life, but I didn’t want to find myself at age fifty without having actually achieved anything I wanted out of life. I didn’t want to be stuck at a stressful job with very little to show for it.

I had all of the little things I wanted today, but I was walking away from all of the big things I wanted out of my life.

If you had asked me the million dollar question then, my answer would have been full of radical life changes. I would have moved. I would have changed jobs. I would have likely splurged on a lot of things that I thought would bring me some joy. In short, I would have used that million dollars to try to stumble toward a life that was much different than my own.

If I knew that about my life and my life choices, then why on earth was I staying on that day to day path?

It took us several more months to really figure things out, and that’s when Sarah and I launched into our financial turnaround. Rather than wandering down a pleasant and comfortable path toward a destination we really didn’t want, we chose to wander down a bit more challenging path to a destination we really wanted. In other words, we started living our day to day life in a way that would lead to the things we would do if a million dollars fell in our lap.

That’s my advice to anyone who would make lots of life changes if a million dollars fell on your lap: start living your day to day life so that you’re heading toward those changes you want.

If you would change where you live, then that means you’re probably unhappy in some deep way with where you live. What can you be doing to aim yourself in a direction to go somewhere else?

If you would change who you spend time with, then that means you’re probably unhappy in some deep way with the people around you. What can you be doing to change your relationships and your social circle?

If you would change your job or your career, then that means you’re probably unhappy in some deep way with what you’re doing for a living. What can you be doing to change your career trajectory?

If you would splurge on a bunch of things, then that means you’re probably unhappy in some deep way with the things that you do for leisure. What can you be doing to explore new interests in your life without causing further financial chaos?

Underlying all of those questions is this one: what are the things in your daily life that you spend time and money on that aren’t in line with or guiding you to the things you would do if you had a million dollars?

Here’s the thing: most of the stuff that you’re dreaming about if you had a million dollars are things that are probably outside of your current financial and life reach. You can’t just snap your fingers and make them happen. If you could, then that’s what you’d be doing, right?

The question you should always be asking yourself is this: how can I spend today to move myself closer to that million dollar vision?

What I found, as I was moving through my financial turnaround, is that every day in which I did things that moved me closer to that million dollar question felt like a really good day. I didn’t have to be perfect about it, but I found that if I took several steps forward and only a few inadvertent steps back most days, it felt pretty good. It feels really good to be able to go to bed at night knowing that you spent the day doing things to move yourself toward the life you really want rather than just coasting through the motions of the life you have.

“What about the fun things, the little pleasures?” Don’t worry so much about the little pleasures that you fill your life with. Those are infinite in abundance, and many of them are free or exceedingly low cost.

More than anything, I found that if I started shaping my normal daily routine into something that I both enjoyed in the moment and which resulted in me being a little closer to that million dollar dream at the end of the day, things felt very, very good.

It takes a lot of experimentation. You have to try lots of new things and you have to try cutting out some old things, too.

It takes a willingness to cut some things out of your life that seem very fun and enjoyable and comfortable in the moment, just to see what life is like without them and whether there’s something else that can fill that space.

It takes a lot of commitment to building new habits. Many of your old daily routines aren’t going to work. You can’t keep going into work and going home and doing the same old things and magically expect new results. You’re going to have to knock down some of those routines and do new things.

It takes some frustration, too. You’re going to take steps that are the wrong steps for you. You’re going to cut out things that you shouldn’t have cut out, and part of you will be shouting that the whole plan is wrong. It isn’t. That’s just the animal part of your brain that resists change. Accept that you will make a few mistakes along the way, and that it’s completely okay to backtrack on some details and do them a different way.

It takes patience, and a lot of it. Even if your days are now headed in the right direction, that doesn’t mean you’ll achieve all of your big goals next week. Rather than staring at the million dollar dream all the time and getting frustrated that it’s not right here, right now, look at your daily life, the good things that it contains, and how it’s heading to where you want to go.

You can do this.

Final Thoughts

I invite you to spend some time seriously thinking about the million dollar question. What would you do with your life if you suddenly had a million dollars in after-tax money in your hands? Would you simply accelerate many of the things you already have in place? Or would you make some radical changes and embark on some major splurges?

If your answer is acceleration, then it’s worth looking at your life and asking how you can accelerate things. You’re likely happy with your life direction, so the question is how you can get to that million dollar dream just a little faster.

If your answer is splurges and big changes, then you should consider whether you’re living a daily life that you’re really happy with, considering that a sudden windfall would mean a radical change in direction. What’s keeping you from working on that radical change in direction right now? Furthermore, is it really that thing you’re blaming – your job, your spouse, your kids, whatever – or is it just your unwillingness to give up a comfortable daily routine and upset the cart a little bit?

In my heart of hearts, I truly believe that the best life we can be living is one where we’re living every day as another step or two toward our million dollar dream in each area of life. That might mean that our daily life isn’t quite as comfortable and easy as it could be, but it means that each day is in line with what we want most and each day builds upon the efforts of the last rather than working against it.

What is your million dollar dream? What are you doing today to get there?

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Wednesday, May 15, 2019

Some Thoughts on the Cost of Eating Out

A few weeks ago, I found myself in a situation where I was really hungry but there weren’t many food options around. I decided to keep my costs as low as possible, so I went into the only restaurant I could find, a nice little diner. I want to be clear during this article that I am not picking on this diner. It was a nice place to eat, the service was good, the food was good, and I was happy with it.

At the diner, I ordered an extremely simple breakfast. I had a cup of coffee, some scrambled eggs, some fried potatoes, and two pieces of toast. The total bill was about $10 – really, not that bad – and then I left a $2 tip, so the cost was $12.

During the meal, though, I couldn’t help but calculate the costs in the back of my head. I was served roughly three scrambled eggs with a little bit of cheese on them, probably a single potato’s worth of fried potatoes, two cups of coffee, and two pieces of toast with maybe a teaspoon of butter between them.

So, let’s look at the ingredient list of that meal:
+ three eggs
+ 1/4 cup shredded cheese
+ 1/2 potato
+ a small amount of onion in with the potatoes
+ two slices of bread
+ roughly a tablespoon of butter
+ two cups of black coffee
+ a negligible amount of salt and pepper

I could assemble those ingredients into a breakfast at home in about the same time it took them to get breakfast out to me at that restaurant, and then I’d have a few items that would go in the dishwasher afterwards.

So, what would the ingredients have cost me?

+ I can get a dozen eggs for $1.99, so three eggs cost $0.50.
+ I can get eight cups of shredded cheese at the local grocery store for $5, so 1/4 cup of shredded cheese would cost $0.16.
+ A typical potato weighs about 12 ounces and I’d estimate that I had half of a potato on my plate, and a pound of potatoes these days comes in around $1, so the potatoes cost about $0.38.
+ The small amount of onion was probably $0.05.
+ I can get a loaf of 20 slices of bread for about $2.50, so two slices cost $0.25.
+ I can get a stick of butter for about $0.75 and that contains 8 tablespoons, so a tablespoon of butter costs about $0.09.
+ I can make two cups of coffee at home for about $0.70 using my usual coffee making technique.
+ We’ll add on another $0.10 for seasonings like salt and pepper.

The total cost of those ingredients is $2.23. Even if you might quibble with the cost of each item and think that it would be more than I stated, you’d be hard pressed to get this over $3 unless you went very high end with each item.

As I noted earlier, I think my time investment would have been similar if I prepared and ate this meal at home, though I would have been busy in the kitchen for 15 minutes instead of reading the menu, ordering, and staring at my phone for 15 minutes waiting on the food. However, that effort would have saved me about $10.

The meal quality probably would have been pretty similar, but I’m pretty sure I would have at least liked my coffee at home better. I’m kind of picky about coffee and I really like my home brew recipe.

This experience reminded me of a few key principles of food frugality (and taught me a few things as well).

Eating out consistently is a very expensive endeavor. When you compare a meal prepared at home and a meal eaten out of similar quality, the meal eaten out will always be more expensive. When you eat out, you’re not only paying someone to prepare it for you and someone to serve it to you and often someone to clean up for you and someone to manage those folks, you’re also paying for the facilities to make and serve the food, the taxes, and some profit for the person who invested all the money to pay for all of these things.

Sure, you can sometimes find a decent meal at a restaurant that’s less expensive than a great meal at home, or a low quality meal at a restaurant that’s less expensive than a good meal at home, but you’re taking a serious cut in quality, and if you apply any sort of frugal planning and use low cost food staples at home, a restaurant is never going to consistently beat – or even come close to – the low cost of preparing food at home.

I was really paying for convenience, not the food. When I went to that restaurant, my focus was on getting a decent meal relatively quickly. It seemed to be the fastest option available to me at the moment, and thus I was really paying for convenience rather than the food itself.

That’s often a big consideration when people eat out. They do so because they’re hungry and they’re not near any options for preparing food themselves or to acquire low cost and quick to eat items. There are many places in America where the only convenient options for food are convenience stores and fast food restaurants, even in places where you might not expect this to be true.

Situations where you need to spend for the sake of convenience are often prevented by better preparation. Whenever you find yourself in a situation where you’re turning to a restaurant or a convenience store not because you want a nice meal on a special occasion, but because you need to do so out of convenience, it’s usually because either you didn’t plan ahead at all or you’re in a crisis moment.

An emergency is understandable, but many meals that people eat out do so solely because they didn’t plan ahead when they knew that there was a good chance that they might need to eat a quick meal or a hearty snack in a convenient way.

There are a lot of ways to prepare for those kinds of situations, where you need a quick, convenient meal. You can make a lot of meals at home in advance so that you have items that can be popped in the microwave or oven at your convenience. You can use a slow cooker for a lot of meals. You can mostly prepare meals in advance, leaving only final assembly for busy evenings. You can prepare sack lunches to take with you.

Or you can do this:

I could have prepared better by keeping more food items in my bag. My favorite technique for keeping hunger at bay when I’m out and about is to have a few food items in my backpack, which is pretty much always with me when I leave the house for more than a few minutes. It’s because I didn’t do this that I wound up in that “I’m hungry, there’s no other food options, time to go to a restaurant” situation.

My routine should be that if I know I’m going out and about soon, I make sure that my bag has some food items in it, just in case. Toss in an apple, some granola bars, a water bottle, a bag of nuts, maybe some crackers or something. The key is to just have something that’s low cost and easy to eat in my bag.

In fact, I usually have several granola bars and/or protein bars in my bag all the time for situations just like this one, but I’d consumed them all over the previous few weeks and there was nothing in my bag.

Eating out should be an experience you can’t recreate at home. The meal I ate was perfectly fine, but it was one that I ate solely for convenience. It wasn’t a special experience or a memorable experience. In fact, I probably would have forgotten about it had I not planned on writing this post. It would have become a forgotten $10 expense, the kind of “lost” $10 that ends up paving the road to financial struggles.

The best financial approach to food that I’ve found is to eat meals mostly prepared at home and mostly made out of low-cost staples and only eat out (or have treats) on genuinely special occasions. It’s easy to learn how to cook a ton of great meals with low cost staples, especially if you have a reasonably well stocked pantry.

On the other hand, special occasions are usually best when they’re really meaningful – you’re eating with someone special or it’s a truly special occasion – and when they’re planned in advance so you can anticipate it. I have far more financial concern about a $15 meal from a restaurant three or four times a week than a $75 meal at a restaurant once every month or two.

If that’s the financial path you’re on, it’s time to rethink the costs of eating out.

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Adjustable-Rate Mortgages Are Making a Comeback – Is That a Good or Bad Thing?

Years after their fall from grace amid the subprime mortgage crisis, adjustable-rate mortgages (ARMs) are making a steady march back toward the mainstream.

According to a December 2018 report from Ellie Mae, a software company that process mortgages, the percentage of home purchases that used adjustable-rate mortgages ticked up to 9.2%. Not only was that the highest level in 2018, it was also an all-time high since Ellie Mae began tracking such data back in 2011.

While many personal finance and industry experts view this resurgence with concern, warning consumers to continue avoiding ARMs like the plague, that’s not the sentiment in all quarters.

ARMs do have their supporters, despite their involvement in the housing market crash that triggered the Great Recession. Here’s a closer look at the pros and cons of using an ARM to purchase a home.

What Are ARMs, and Why Are They Coming Back?

For those who are unfamiliar, ARMs are mortgages with an adjustable interest rate. They offer borrowers a lower initial interest for a fixed period of time, typically three, five, or seven years. After that, the rate fluctuates based on the market. A 5/1 ARM, for example, will have a fixed interest rate for the first five years, then reset to a new rate every year thereafter based on market conditions.

ARMs have been getting a boost in popularity as rates on 15- and 30-year fixed-rate mortgages climbed throughout 2018. The average rate on a 30-year, fixed-rate mortgage is back down to 4.14%, according to Freddie Mac, after hitting a high of 4.94% in November. However, average rates in the mid-3% range are probably long gone, and most experts expect rates to inch upward in coming years.

In general, when the economy improves, borrowing gets more expensive. ARM mortgage rates, however, often start out about 0.5% lower than fixed-rate loans.

In such an environment, borrowers looking for lower mortgage payments and interest rates are increasingly opting for ARMs.

“I’m not surprised to see ARMs making a comeback. As housing prices continue to rise, many potential homeowners are simply getting priced out,” said James Stefurak, CFA and founder of Florida-based Monarch Financial Research.

The Difference Between Present Day and the Run-Up to the Great Recession

For those who may now be considering an adjustable-rate mortgage thinking the lower interest rate will help them qualify for more home, think again, says Mike Ferraro, area manager for Bank of England Mortgage.

“One of the popular reasons people did an ARM prior to 2008 was to qualify for more of a house. At that time, lenders qualified borrowers at the initial lower rates with no consideration of any future rate increases,” explained Ferraro. “This led to many consumers taking adjustable-rate mortgages that per today’s standards would have actually been qualified for much less.”

Today, however, lenders qualify borrowers for ARMs based on a higher interest rate calculation, rather than the initial rate that’s offered, Ferraro said.

And overall, mortgage underwriting is far, far stricter now, said James McGrath, co-founder of the New York City real estate brokerage Yoreevo.

“Coming out of the downturn, ARMs got a bad reputation for good reason but the problem was more about underwriting rather than the product itself,” explained McGrath. “If you can’t afford a loan, you’re going to default, it’s as simple as that, and during the housing bubble, borrowers were able to lie about their income and banks didn’t care if they did.”

The Drawbacks of Adjustable-Rate Mortgages

Not having control over fluctuating interest rates can be a challenging experience, one that can sometimes end in disaster for the homeowner, as evidenced by the aforementioned housing crisis.

Borrowers who opt for this type of mortgage need to be prepared for, and comfortable with, a potential rollercoaster ride.

“Borrowers must realize that it is possible that their monthly mortgage payment could increase significantly depending on changes in the economy, interest rates, the money rate, or the housing market,” explained Patricia Russell, a certified financial planner and creator of the site FinanceMarvel. “Choosing an ARM with restrictions could also prevent a buyer from being able to switch to a fixed rate within a certain period of time.”

More specifically, when ARM fluctuations occur, it could translate into significantly higher mortgage payments almost overnight, which can be troublesome for low-income borrowers in particular.

“If rates move up quickly the borrower could spend hundreds in additional interest payment dollars in as little as one year,” said Matt Seu, principal at the financial services firm Actualize Consulting. “This increases the borrower’s chance of default significantly.”

If all of that’s not clear enough or doesn’t give you pause, spend a moment chatting about the topic with money expert Dave Ramsey.

The renowned financial advisor expresses his disdain for such mortgages in no uncertain terms, urging home buyers to avoid ARMs at all costs.

“I would never under any circumstances take an adjustable-rate mortgage,” said Ramsey. “Ask yourself this: Which way do you think the rates will ‘adjust?” If you said up, you’re right.”

“This isn’t rocket science,” Ramsey added. “The bank offers you a lower interest rate to get you in, and when rates adjust, they almost never adjust down… Make sure a house is a blessing and not a curse. Save for a down payment and get a 15-year fixed-rate mortgage and pay it off as soon as you can.”

The Benefits of Adjustable-Rate Mortgages

Still, there are plenty of industry experts who insist that there are plenty of benefits to using ARMs.

Depending on a borrower’s overall financial situation, an ARM may make sense, suggests Russell. The lower rates at the front of the loan make it possible for some new homebuyers to purchase a home and still have enough money available for other needs or renovations in their new home.

“An ARM now could allow someone to purchase a home they want with an affordable payment,” added Russell.

In addition, for high net worth borrowers, ARMs offer a lower interest payment allowing them to invest the difference, said Seu. When rates rise, this type of borrower can quickly refinance into a fixed-rate loan or simply pay off the note entirely.

How to Decide if an ARM Makes Sense for You

So how to decide if an ARM might be a good choice for you? Proceed with a good deal of caution, do your homework, and understand all of the possible outcomes.

In particular, analyze what the payment difference would be in today’s interest rate environment between an ARM and a fixed-rate mortgage.

“In certain interest rate environments, buyers should choose ARMs,” said McGrath. “In particular, when short-term interest rates are significantly lower than long-term interest rates, they make a ton of sense. Please note, that is not the case today as short-term interest rates are fairly close to longer term interest.”

Yet another factor to consider is how long you intend to be in the home. If you plan to sell the home before the introductory fixed rate expires, an ARM could make sense (though plans do change). If the answer is the rest of your life, however, then an ARM is not likely to be a good choice for you.

“If a consumer plans to be in a home their entire life, then they should not do these loans just for the initial lower rate, as it will surely adjust higher in the long run,” said Ferraro.

However, ARMs can be a good choice for people who know with some degree of certainty that their income is going to be higher in the future.

“If home loan rates rise and the monthly mortgage payment goes up, they know they can afford the higher payment,” explained James Stewart, a mortgage originator with national lender and servicer Planet Home Lending.

Examples of such situations might include:

  • You are finishing school and going into a high paying career with solid job prospects.
  • A stay-at-home partner or spouse will be going back to work when children start kindergarten.
  • Your secure job has predictable pay raises based on years on the job.

In addition to those situations, there are a few other instances in which an ARM might make sense, added Stewart.

These include buyers who are planning to pay off the home loan before the ARM adjusts, because they plan to move up to a new home or location, and buyers who intend to religiously pay extra principal each month on their mortgage.

“When an ARM gets adjusted, the new payment is based on the amount still owed,” said Stewart. “Reducing what you owe may give you lower payments.”

The bottom line, however, is this: When agreeing to an ARM, you’re taking on the risk that the monthly payment will rise, and it may rise quickly and significantly.
If that added risk is going to cause you to feel overly stressed, an ARM may not be for you, said Stewart.

Mia Taylor is an award-winning journalist with more than two decades of experience. She has worked for some of the nation’s best-known news organizations, including the Atlanta Journal-Constitution and the San Diego Union-Tribune. 

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Think. Wait. Fast.

“Everyone can perform magic, everyone can reach his goals, if he is able to think, if he is able to wait, if he is able to fast.”Siddhartha, Hermann Hesse

My high school English teacher passed away several years ago. Before he passed, I had the chance to tell him that he had a profound impact on my life. After all, I write for a living, and it was his teaching more than anything else that enabled me to write reasonably good material fairly quickly, which led me to where I’m at now.

Another thing that he did for me that I don’t think he ever realized was that he opened my eyes to a much wider world of reading and the impact it can have on me. He introduced me to Henry David Thoreau, whose writing has had a profound impact on my life (see here and here and also a ton of my inspiration articles). He introduced me to Herman Melville, a writer I didn’t appreciate as a sixteen year old but whose works I devoured when I was in my thirties.

He also introduced me to Hermann Hesse, whose quote starts off this article. I remember diving into Hesse’s books during my last semester of high school, particularly a copy of Siddhartha with a bright blue cover, but also several others that I checked out from the library. I read every single Hesse book that my local library had (and could get) during the summer between high school and college and my dog-eared copy of Siddhartha went with me to college that fall.

A few years ago, I went through a period where I decided to re-read a fairly long list of books that I could recall having a major impact on my life. I made a long list of them and started snagging them from the library or downloading them for free from Project Gutenberg if they were old enough to be in the public domain.

Some of those books were still very impactful for me, while others were less so. Siddhartha, and several other Hesse books I re-read, were on the “impactful” side of the equation.

As I was reading through those books again, I copied down a lot of quotes that I wanted to think about, of which that quote at the beginning was one. I actually stuck the quote in a note to someday write about on The Simple Dollar, but it ended up getting buried in a pile of several hundred (yes, hundred) other ideas I have for articles, most of them half-baked.

A few days ago, I stumbled across it again, simply because I was searching through my notes for references to something else entirely. I found that note, opened it up, and the quote just rang out to me like a church bell on a quiet Sunday morning.

Think. Wait. Fast. That’s really all you need to do to achieve almost any financial goal, and almost any goal in life.


The thinking part of a goal is the process by which you turn a vague daydream into something concrete that you can actually achieve in life.

An idle daydream about being debt free or being able to live off of your savings or retiring early or paying for your child’s college education is pleasant, but it’s just an idle daydream, one that slides into your head and then drifts away just as easily. It’s pleasant, but it doesn’t really do anything.

Turning that daydream into a goal requires thought and planning.

What exactly is it that you want to achieve? “Paying for my child’s college education” sounds great, but how much will that actually cost? “Saving for retirement” sounds great, but how much do I need to save? “Losing weight” sounds great, but what’s the best way to actually do that? A good goal requires some research.

What is my target? What exactly is it that you want to do? This works best when it’s something that’s clearly a “yes” or a “no” when you’re checking to see if you’ve achieved it. Using a number is often useful, but you can also have a specific condition. For example, if you want to save for your child’s college education, what is the dollar amount you’re aiming for? If you know what tuition costs at a good university, maybe you’ll aim for four semesters of that tuition amount in their 529. Again, this builds off of the initial thought about the goal and

When is my target? Another key element is the end date for your goal. When do you want to achieve this goal by? Sometimes, it’s obvious – you want to achieve that college savings goal by the time that person starts college, or you want to achieve your retirement savings goal by the time you retire. Sometimes, it’s not so obvious – when is it that you want to be debt free? You can choose that for yourself.

Is this all realistic? If you know what you want to do and when you want to do it, you should check and make sure that the goal is realistic. You want the goal to be a bit challenging, but you don’t want it to be literally impossible. A good way to do a reality check on your goal is to break the dollar amount down into a weekly or monthly amount and see whether that makes sense. For example, if you’re aiming to pay off $10,000 in debt in two years, you’re aiming to pay off $100 in debt every week. Is that feasible?

What are your daily steps? A final major element in your thought process about goals is what that big goal translates into in terms of daily steps. I like to use a series of questions to help me figure it out if it’s not obvious:

+ What can I do this year to bring me closer to my big goal?
+ What can I do this quarter to bring me closer to what I need to do this year?
+ What can I do this month to bring me closer to what I need to do this quarter?
+ What can I do this week to bring me closer to what I need to do this month?
+ What can I do today to bring me closer to what I need to do this week?

The entire focus in terms of action, then, is that thing you need to do today. The entire plan hinges on that thing for today and nothing else. Then, each week, reassess all of those questions.

All of this requires a lot of thought. The idea is simply to bring that goal into focus so that you can actually see what effort you need to put forth today and how it relates to that goal as well as to discard half-baked ideas so you don’t throw your efforts away down an aimless path.


Big goals require a lot of patience. Almost every big goal out there has a timeline that stretches far beyond what feels “real” in our everyday life.

After all, if you could achieve a big goal in your life in just a few days, well, then you’d obviously do it. The reason that many people don’t achieve big goals is because of the wait.

For me, a key part of the wait is the part of the thought process above where I break things down into what I need to do today in order to achieve my goal, and then I make today’s element paramount. I try to avoid making the piece for today too big – it has to fit into my life, after all – but I do try to make it urgent and important. Doing that not only keeps me moving forward toward the goal, but it makes the goal feel real and tangible in my everyday life rather than something huge and outside the scope of my normal life.

I use a lot of different tricks to make today’s step toward a goal relevant, but the biggest part is that I remind myself of today’s step in the morning. One thing I do each day, early in the day, is to review my ongoing goals and make sure that there’s something in my day related to that goal. Sometimes it’s an addition to my to-do list; other times, it’s another step in a 90 day challenge.

For example, if I’m working on paying off my debts, today’s goal might be to “find one thing I can change to spend less money and execute it and put the saved money aside for an extra debt payment.”

If I’m working on saving for retirement, I might have a similar task, but with the goal of working toward a place where I can bump up my 401(k) contribution at the end of the month (meaning I need to be making a permanent or easily repeatable change).

Those kinds of things go on my to-do list. Other things are just reminders, like reminding myself to be more conscious about what I’m eating or to listen attentively when having conversations with people.

However, the most important ingredient over the long haul is patience. You have to be able to give it time, because most big goals simply can’t happen overnight.

There are a number of things you can do in your life to cultivate patience, beyond the techniques above:

+ Review your day during moments of downtime. How have things gone? What do you need to do the rest of today?
+ Intentionally do things with minimal distraction (a great step here is to start using “do not disturb” mode on your phone as often as possible, or even leaving it behind when doing things).
+ Take on “micro-challenges,” where you push yourself to do something pretty challenging for your goal today – a particularly hard daily step.
+ Ask three questions before making a statement when talking to someone. Whenever you’re conversing, make it a point to ask questions and listen rather than impatiently diving in with your initial idea.
+ Postpone impulsive splurges; if you want to splurge, put it off for another day rather than just saying “no.” You can even schedule it if you want, but don’t do it right away.
+ Plan ahead for big indulgences and enjoy the anticipation.
+ Chart your progress over time as you move from your starting point to your goal. This is really useful if you have a number to track, like your net worth or your weight or your planking time or whatever.
+ Focus on how far you’ve come, not on how far you have to go. You’ll generally buzz right through a honeymoon period with your goal, and then it’ll get tough. Rather than focusing on the distance ahead, look back at how far you’ve come and tie it to your efforts today. “I paid off $2K in debt in the last few months because I did something useful every day toward that goal; I can definitely keep that up!”
+ Take on a few long-term commitments. If you can commit to something that other people rely on that also nudges you toward your goal, that will help you keep moving forward and usually make it much easier to generate something to do today.
+ Pause before you take action and ask yourself if this really makes sense. Does this choice really help me out in terms of what I want out of life?
+ Remind yourself that mild discomfort is tolerable and doesn’t have to be immediately fixed. Your life doesn’t have to be constant comfort. (We’ll get back to this in a minute.)
+ Automate as much of your plan as you can so that impulsiveness doesn’t wreck your progress.
+ Find free hobbies to capture your attention so that you’re not tempted to always spend money.


Fasting simply means choosing to go without something in the short term in order to achieve some long term benefit. It usually applies to choosing not to consume food, but it applies to almost everything we buy or consume, from television to the internet, from hobby items to special treats.

Some people fast for spiritual or social understanding, as going without something important like food or drink can teach you a lot about the experiences of others and about yourself.

However, fasting in some form is often a key part of a long term goal. You’re usually giving up something that you consume, whether it’s money or food or time. Many 30 day and 90 day challenges are forms of fasting, where you’re agreeing to go without something that you regularly consume.

For example, let’s say that one element of fasting that you decide to take on is that you’re going to buy store brand items for everything from now on unless the product reveals itself to be problematic. At first, you’ll have to consciously remind yourself to buy store brand ketchup and store brand hand soap and store brand pasta, but as time goes on, that will begin to feel like the natural choice.

Fasting is often a dietary choice useful for weight loss. For example, many people choose to practice intermittent fasting as a weight loss strategy, in that they choose to only eat one meal a day or only eat during a six hour window each day.

Over a long period, fasting towards a goal should elicit some permanent changes in behavior. For example, I know several people who consciously practiced intermittent fasting and now feel most comfortable eating just one meal a day, along with perhaps one small snack.

Here’s the thing, though: fasting is hard. Going without something that you want, particularly when the want is incredibly strong and the thing you want is easy and harmless to acquire, is an intense personal challenge. This is often the piece that causes people to fail in their quests for financial improvement and other aspects of personal improvement. Think of the person that tries to be frugal for a while and then bounces right back to spending, or the person who diets carefully and then goes right back to eating a ton.

My advice is simple: if you’re fasting in order to help bring about a permanent change in your life or to achieve a big long term goal, choose principles of fasting that you can continue permanently. For example, if you’re trying to use fasting to diet, rather than looking for something that gives you some quick results that you can’t possibly sustain over the long haul, look for something less intense that you can sustain over the long haul that will still give results but a little less quickly. The same is true for spending changes: stick with realistic changes you can sustain rather than hyper-aggressive ones that you can’t pull off.

Not sure whether something is sustainable? That’s what a 30 day challenge is for. Stick to the change for 30 days, then assess whether it’s permanent or not.

Final Thoughts

Think. Wait. Fast. That’s really all you need to do to elicit real change in your life. Three words.

It seems simple and it is, but it’s incredibly hard to do. People constantly try and fail to achieve the changes they want out of life, not because they’re failures, but because change is hard. If it was easy, everyone would be millionaires with a perfect body and inner peace.

So what’s the trick? I think if there’s one trick to making think, wait, and fast work, it’s breaking things down into smaller pieces, trying them out, and then making sure the smaller pieces are realistically sustainable. That requires thinking, waiting, and fasting, but it leads to the strong possibility of permanent change and achieving the big goals you want.

Think. Wait. Fast.

You can do this.

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Monday, May 13, 2019

Questions About Extra 529 Money, Online Banks, Hoarding, Auto Insurance, and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Trusting online banks
2. What are capital gains?
3. Evaluating a hoarder’s shed
4. Auto liability insurance help
5. 401(k) or 403(b)?
6. Turning weekends into vacations
7. Vegetarian and saving money
8. Extra 529 money
9. Frustration at slow debt repay
10. 90 day challenge question
11. Emergency fund with credit card?
12. College graduate and independence

Over the last few years, I’ve become aware of something that many parents face as their children grow up, something I like to call “May overload.”

Basically, every end of year event for anything your children have been involved with is scheduled at some point during the month of May, often on multiple days.

We’ve had end of the year band concerts, end of the year banquets, end of the year choir concerts, presentations, special dinners, and all kinds of things like this. With three kids in upper elementary and middle school, the last few weeks have been a tangle of scheduling and we don’t really feel like our kids are oversubscribed, something we’ve tried to avoid. Most of the activities they do are in-school things.

It feels like a genuine shift from when I was in school. It seemed like, although there were end of year activities, they generally didn’t involve the parents very much at all, and it didn’t really start until I was in high school.

I fully applaud the idea of parents showing support for their children’s endeavors, but it feels nearly overwhelming at times if you have kids involved in even a few activities. The idea of a “family dinner” basically disappears and you simply prepare slow cooker meals where people eat when they can, often in shifts, because the logistics of the evening activity calendar are so crazy.

Anyway, on with the questions.

Q1: Trusting online banks

I don’t understand how a person can trust an online bank with their money.
– Amy

For me, a bank is a bank. No matter what the bank is, I’m trusting it with my money. Nothing is stopping the brick and mortar bank in my community from just going out of business tomorrow and disappearing with my money except FDIC insurance, and the same is true with an online bank.

The way I look at it, the only difference between an online bank and a brick and mortar bank in my town, provided they’re both FDIC insured, is that one is paying for a building in my town and one isn’t. There are some advantages to having a building that I can just walk into, but for me that doesn’t cause any extra faith in their stability or long term trustworthiness.

My trust in that bank is in the FDIC, which is the insurance on my deposits. As long as I can verify their FDIC insurance, then I feel pretty confident about the safety of my deposits, and that’s true whether it’s an online bank or not. Really, at that point, the only difference is whether the bank owns or is leasing a building in my town.

Q2: What are capital gains?

What are capital gains? I don’t understand?
– Harry

A capital gain occurs when you buy something, it increases in value, and then you sell it. The amount that it increased is your capital gain on that investment.

Let’s say you buy a house for $100,000. You take good care of it and housing prices in your area are going up. A few years later, you sell it for $140,000. With that sale, you have $40,000 in capital gains.

You do have to pay taxes on your capital gains, but the reason capital gains are interesting is that they’re taxed differently than normal income. If you owned the item for just a short amount of time – less than a year – it is considered a short term capital gain and is taxed like normal income. However, if you owned the item for more than a year, it is considered a long term capital gain and is taxed at a significantly lower rate than other income – currently 0%, 10%, or 15%, depending on the level of your other income.

That’s often how wealthy people avoid paying a lot of taxes. Much of their income is often in the form of long term capital gains rather than normal income, so they pay a 15% tax rate on all of it. Compare that to someone earning a healthy normal income – they’re paying an income tax rate between 30% and 40% for much of their income.

Q3: Evaluating a hoarder’s shed

My father was a hoarder. He had an old storage building out behind his house that is just full of stuff, like 40-50 year runs of several magazines, tons of old toys, tons of tools, and all kinds of stuff. It’s all in crates and boxes and tubs. There’s a comprehensible order to it, but there’s just so much stuff here that I have no idea where to even begin and so I haven’t. It’s just kind of sat there while I’ve been renovating the house.

Part of me wants to just throw a match in it, but I think there’s a lot of value in that building. What would you do? My brother thinks I should hire a picker.
– Mark

If you don’t know how to assess the value of all of that stuff yourself and the task is going to be huge, you probably are better off hiring someone to help. However, it is very likely that anyone you hire will be seeking to find valuable items at a bargain price, so they’re at least somewhat likely to lowball you in terms of their estimate of what items are worth. That’s their business model – they’re doing a lot of legwork to find a little value.

So, you have a choice here.

You can start going through all of that stuff yourself, figuring out the actual values of all of the stuff and selling it to the best of your ability. That is going to be a large investment of time, but it will get you the best return on your money and you’ll reap the rewards of any really valuable items you find in there.

You can just trash all of it. That will require the least time investment for you but won’t return you anything. If you hire someone to do it, it will be relatively cheap.

Alternately, you can hire someone to go through all of it, whether it’s a picker who will likely go in there for free (in the sense that you won’t have to pay that person) but they’ll lowball you on the value or actually hiring someone to evaluate all of the stuff for you but you’ll likely have to pay them for the service and you may not break even there if there’s not a lot of value.

My choice would be to either start dealing with it myself or to just hire an antique picker and take what I could get with the understanding that I may be lowballed. If you go with a picker, I’d spend some time looking around for a picker with a good reputation – do your homework here.

Q4: Auto liability insurance help

I carry only liability insurance on my car. On Friday someone smashed into the rear end while it was parked. The car is still drivable but it needs a lot of work that I can’t afford. What can I do?
– David

If you didn’t already do this, I would take a ton of pictures of the damage and then try to find other recent pictures of your car prior to the damage. I would also contact the business that utilizes that parking area and/or the city and see if there is any video of that area during that timeframe so maybe you can see who hit your car. Do that immediately. You should also call the police and explain what happened.

Your only hope here is figuring out who hit you and also being able to demonstrate that you weren’t doing anything wrong and that there was damage done to your car. The best moment to do that would have been right after the accident – you should always start snapping pictures immediately in that situation and then contact nearby businesses and the city immediately after that. A police report will also help.

If you are unable to figure out who hit you, you’re just going to have to make do with what you have and consider this a learning experience. This is a great example of why an emergency fund is a wonderful thing to have.

Q5: 401(k) or 403(b)?

My new job offers a 403(b) but it sounds exactly like a 401(k). What’s the difference? Read some articles but it’s not clear.
– Brianna

The only difference that really matters at all to a worker who has a retirement account is that a 401(k) is offered by a business while a 403(b) is offered by a nonprofit institution. In terms of how they function for the employee, they’re basically identical.

In the past, there used to be some restrictions on the investments offered within a 403(b), but that restriction was lifted many years ago.

The only other difference I know of that matters to the individual is that in some 403(b) plans, there is a provision that allows older workers with more than 15 years of service to have a higher contribution limit, adding $3,000 per year to the limit until you’ve contributed an extra $15,000 under that extra limit, but 401(k) plans don’t allow such a window. This is only meaningful if (a) you have a 403(b), (b) you have more than 15 years of service, (c) you’re contributing enough to be hitting up against the contribution limit (which is $16,500 a year), and (d) your plan allows for it. In other words, it very rarely applies.

So, for your purposes, there is no difference. Treat your new 403(b) at your new workplace just like you treated your old 401(k) at your previous workplace.

Q6: Turning weekends into vacations

I was reading this article and thought that this seemed unrealistic for busy people but then I thought of you and how you “block off” time on weekends for uninterrupted leisure. Do weekends with big blocks of leisure time make Mondays better?
– Andrew

Absolutely. The only time Mondays are miserable is when the weekends are full of chores and obligations. When I intentionally make a weekend into a mini-“vacation” or at least get as many obligations as I can taken care of during the week so that I can have some big blocks of weekend leisure time, Mondays aren’t bad at all. It’s the weekends that are chock full of unwanted tasks and such that are miserable.

My preference is to fill every second I can during the week with something intentional. I don’t sit down and idle during the week, no time spent playing a smartphone game or watching TV unless there’s some other strong reason for doing so. Instead, I do something, whether it’s a household task or a work task or a parenting task or whatever. If I feel too “tired” to do it, then I go take a nap or go to bed so that I can wake up refreshed.

Does that sometimes make the weeks feel really long? Sure, it does, sometimes. However, I go to bed feeling like I got a lot done, and I also feel anticipation for that entire Saturday coming up where I can devote the day to something fun I’m looking forward to.

Q7: Vegetarian and saving money

I understand that if you eat mostly at home and are vegetarian it can be cheaper because buying burgers and steaks at the store is expensive compared to veggies and rice and stuff, but when I eat out it seems at least as expensive to be vegetarian as not and usually more so since there are usually only a few vegetarian items on the menu. You either eat like a side salad or fries or one of two way overpriced entrees.
– Brian

I largely agree with all of that, except that the restaurant situation is changing. This was even more true ten or fifteen years ago.

There’s also the issue that a lot of it has to do with where you choose to eat. For example, if you’re in a situation where fast food is your only option, most “Mexican” fast food places (like Taco Bell) actually cater extremely well to vegetarians, and quite cheaply, too. The last time I ate at Taco Bell, I ate the cheapest of the four people I was with.

If you’re eating at a typical dine-in restaurant, it really depends on where you’re eating. I fully agree that most restaurants in America are meat-focused when it comes to their entree selection, but, again, that seems to be slowly changing, not in that they’re abandoning meat-based meals, but that they’re adding more vegetarian-focused options. Some restaurants and chains are definitely better than others, though; in terms of chains, places like PF Chang’s and the Cheesecake Factory are really good in terms of vegetarian foods.

Still, I agree that it’s cheaper to do it from home, but that’s true for every kind of diet. The only time eating out seems on par with eating at home is when you’re comparing, say, a dollar menu fast food burger to a homemade burger, and that’s not even a fair comparison because the quality of the homemade burger blows away the fast food burger.

Q8: Extra 529 money

What’s the best thing to do with extra 529 money? I am graduating in December and will have about $6,000 left in my 529 when I do. I got several scholarships and finish in under 3 years.
– Mark

I would suggest either spending it on something you can continue to use after college or to hold onto it in case graduate school enters your picture.

If you don’t have a current computer and can see yourself using one in the future, this might be a good time to buy a solid computer that will last you for several years. You can use it for your final semesters in college and then continue to use it after graduation as needed.

If you think there’s any chance of going back to school after graduation, you can hang onto that money for that potential future. Graduate school? Going back for a different degree? 529 money is there for both.

You can also simply sit on it until you have children of your own, then change the beneficiary to your child. This will incur a gift tax situation, but the gift tax exclusion limit is currently $14,000 and will likely go up, so it’s very likely that with $6,000 in the account, the transfer will fall under the gift tax exclusion and not be a problem.

Q9: Frustration at slow debt repay

At the start of the year, I decided to get rid of credit card debt. I had about $9K spread across three cards. I did all of the usual stuff, like moving balances around to get lower interest rates, but it’s now mid May and I live like a hermit and I still have $7.5K in debt. Getting old.
– Violet

Here’s the thing: you’ve already done the hardest portion of the repayment. You’ve covered the first 1/6th of the debt, which may not seem like much, but it’s bigger than you think.

Let’s say your debt, on average, is at a 20% interest rate. Your monthly minimum payment on that debt is going to be about $158, by my back of the envelope math. If you’ve made 5 payments and the balance has dropped to $7.5K, that means you’re making roughly double payments – about $300 a payment.

If you were making normal payments, it would take you fifteen years to pay off that $9K in debt. Because you’ve made double payments and will, in theory, keep making them, your debt will be paid off in about twenty seven months total, or about 21 months from now.

Yes, it seems like a long time, but you’ve cut 15 years of debt payments ahead of you down to less than two years ahead of you. Even if you switched back to just paying the $158 minimum each month right now, the whole thing would be gone in less than 8 years instead of the 15 it would have been if you were making normal payments. That’s how big your impact has been already.

Keep it up. That debt will be gone before you know it.

Q10: 90 day challenge question

Do you line up 90 day challenges with yearly quarters? Also how do you handle vacations or other exceptional situations?
– Anne

So far, that’s exactly what I’ve done. I start 90 day challenges at the start of a calendar quarter, meaning at the start of January, April, July, or October. The first quarter is exactly 90 days in non-leap years, and the other quarters are 91 or 92 days, so they fit really well.

As I discussed in the 90 day challenge article, my focus with a 90 day challenge is intent and effort above all else. If I want, say, healthy eating to become a lifetime habit, that means I need to practice how I’m going to eat healthy while traveling. If keeping my spending low is a lifetime habit, then I need to practice how to do that when travel is involved. This is true for any unusual situation – they’re not “breathers” to let me “cheat.” Rather, they’re opportunities to really master how a permanent lifestyle change is going to work in this situation.

In fact, I find that when my routine is mixed up and I have to really rely on good intent rather than routine, it seems to “set the hook” of the new habit really well for some reason. If I really hammer home that a particular habit is important when life is mixed up, it’s more likely to stick with me, it seems.

Q11: Emergency fund with credit card?

Don’t understand why you would encourage people to have money in a savings account at 1% when they have credit card debt at 18%.
– Mark

Simple: because those credit cards are unreliable in a genuine emergency. In an emergency, cash is king.

Let’s say you have a real disaster in your life and your credit card is suffering identity theft. What happens then? You need cash.

Let’s say that your mother is gravely ill in another state and your credit card is maxed out. What happens then? You need cash.

Let’s say that your credit card is cancelled because the bank decided to purge troubled accounts. What happens then? You need cash.

Cash is king. Cash solves real life problems.

In a bubble where emergencies didn’t happen, I would fully agree with you. In a perfect world where you always have spare breathing room on a credit card and identity theft never occurs, I would fully agree with you. However, that’s not the world we live in.

Q12: College graduate and independence

We have three children – oldest just graduated college, middle in college, youngest finishing up sophomore year in high school. We told the oldest that he could move back home until he finds a job provided he’s consistently looking for one and after that we’d talk about it. He already has a bunch of interviews in the next two months in various places, some nearby and some in other cities. My husband and We are trying to figure out what to do when he gets a job if it’s local. He has about $40K in student debt and is interviewing entry level positions that will pay $50-60K. He should be able to afford rent on his own. I am in favor of allowing him to live here for a while with cheap rent but my husband is strongly in favor of nudging him out the door. Thoughts?
– Mary

I think this is more of a parenting question than a personal finance question. In situations like this, I think the best solution is conversation. I’d just sit down with your son and ask him what he envisions for the future. Ask him what he thinks he’ll be doing in a year. Where will he live? Where does he hope to be working?

There’s a good chance that he intends to move out as soon as he’s settled in a job, in which case this is kind of a non-issue. If he doesn’t intend to move out for a while, that’s when you and your husband need to have some conversations. Are you going to force him to move out? Are you going to charge him rent?

My feeling would be that if you have a good, trusting relationship and he wants to live there for a while as he’s getting used to professional life, you can consider charging him rent and letting him stay for a while. You can also consider putting the money aside when he pays you and then giving it all back to him when he does move out, or you can actually use it for household expenses. It’s really your call.

The much more difficult challenge for you is what you should do if he doesn’t get a job. I would assume you’re planning on letting him stay there until he secures a job and then for a little while after that at least, but what if he doesn’t get a job for months or years?

Sarah and I have already discussed this and our plan is that our children can live here rent free after college provided they’re actively searching for work. If they’re not looking for work in their career path, then they need to find a service job and start paying rent. Our intent is to hold onto it and give it back to them in a lump sum when they move out, as the rent is really just a tool to get them to start making choices. However, this does assume a healthy and trusting relationship will exist with them at that point.

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

The post Questions About Extra 529 Money, Online Banks, Hoarding, Auto Insurance, and More! appeared first on The Simple Dollar.

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How to Pick Your First Homeowners Insurance Policy

Purchasing your first home can be an overwhelming process, one fraught with emotion and a seemingly endless stream of paperwork and documentation.

For many people, a home is the most significant purchase of a lifetime, making it even more critical to protect this investment with a thoughtfully chosen homeowners insurance policy.

While homeowners insurance isn’t mandated by law the way car insurance often is, most mortgage lenders require that a policy be in place before closing on the home.

But how is one to weed through the myriad options available, obtain a reasonable price, and find a reliable company? We asked industry experts to weigh in.

Shop around, and start early.

First and foremost, it’s important to shop around. And start doing so early in the home buying process, not at the last minute.

“A lot of buyers wait until the end of the loan approval, appraisal, and inspection process to start looking and then they’re in a bind and need something fast,” said Missouri-based agent Justin Strong. “When this happens they usually end up going with something cheap that might not be the best fit for what they actually need.”

Doing your research ahead of time, on the other hand, allows you to develop a sense of what the going rates are as well as the various coverage options.

To compare costs, you can call individual insurance carriers one by one and obtain quotes, work with an independent insurance agent who can do that legwork for you, or use one of the many online price comparison platforms, suggests Fabio Faschi, property and casualty team lead at Policygenius. The latter two options will save you time — and time is valuable as you’re getting ready to close on a new home, noted Faschi.

Understand the various policy types.

As you’re shopping around, it’s also important to have a grasp of the types of homeowner policies available.

The options have names such as HO-1; HO-2; HO-3; all the way up to HO-8, explained Katie Tu, an insurance specialist at QuoteWizard. HO-1, for instance, is a basic policy, while HO-8 is designed for older homes.

“Homeowners insurance is not one-size-fits-all and each form has different coverages included with it,” Tu explained, adding that HO-3 is a common choice among first-time homebuyers, as it covers more perils than the very basic HO-2.

A less comprehensive option, often referred to as a “named perils” plan, HO-2 covers a specific list of problems including such things as fire or lightning, smoke, theft, vandalism, windstorms and hail, damage caused by vehicles or aircraft, and more.

Those who want protection that extends beyond the specific problems outlined in HO-2 policies may want to consider HO-3, which typically covers all risks except those specifically excluded.

It’s a good idea to discuss the options with an agent who can help decide which is the best fit for you, said Tu.

Know what determines your rate.

A variety of factors will impact your ultimate policy premium. They include such things as your home’s value, location, the coverage level you choose, and even your credit score, says Tu.

Still other items that play a role in the policy’s cost include the building materials used to construct the home and the age of the property.

“Brick homes could receive lower premiums compared to a wood-sided home because of the reduced risk of a fire hazard, collision damage, or structural collapse,” Tu explained. “When your home was built could determine if the wiring and plumbing has been updated to general building code. Aging components are prone to wear and tear, thus presenting an increased risk. Older homes are also prone to asbestos or lead paint. Overall, if a home is viewed to be riskier to insure, the premiums are likely to be higher.”

The key takeaway is that there are many items beyond your control that impact your home insurance cost — and there are also variables you can control when selecting a policy.

To bundle or not to bundle?

Bundling is one of the choices you can make to lower your home insurance premiums. Most insurance companies offer multi-policy discounts, making it a good idea as you’re shopping around to check in with the company where you may currently have car insurance or other types of coverage.

Bundling your home insurance with your auto or life insurance may lower your rate up to 25%, says Tu.

However, just because you have an existing auto or life insurance policy with a particular company doesn’t mean it’s the best company to provide your home insurance. It’s still important to ask questions and consider other providers as part of your research process.

“The company that you’re using for life and auto insurance may not be able to offer a better price on your home insurance even with the bundle discount, or they may not be able to insure your home like it needs to be insured based off of the type of home it is,” explained Strong.

“Not all companies can write every type of home,” he added. “Some companies don’t write mobile homes or maybe they don’t write homes that are built prior to 1970 or they don’t write homes that have roofs that are over 10 years old.”

Settle on a deductible.

The deductible is another area that can impact your policy’s final cost. For the uninitiated, a deductible is the amount of money you will be responsible for paying out of pocket if you have a loss. For example, a $1,000 deductible means you’ll pay the first $1,000 toward repairing a covered loss, and the insurance company will pick up the rest.

In general, opting for a lower deductible typically increases the overall cost of the policy, while higher deductibles will often reduce the cost of your policy.

It’s also important to note that some policies will list deductibles as a percentage. In addition, some may have multiple deductibles. If you live in a hurricane-prone area for instance, your coverage may have a separate hurricane deductible, said Seth Miller, a licensed insurance agent and sales director at InsuraMatch.

The bottom line?

“Pick a deductible you would be comfortable paying in the event of a loss,” said Miller. “If paying $1,000 out of pocket would be a significant hardship, then it makes sense to opt for a lower deductible. The caveat there is that the premium will be higher.”

Understand the difference between market value and replacement value.

When determining just how much coverage you want to pay for, it’s critical to know the difference between your home’s market value and its replacement value, and why that even matters.

“First and foremost, be educated. Understand that a bank appraisal will not determine the amount of coverage you actually need,” explains Mildred Ayala, first vice president of private client services at HUB International Northeast, a personal insurance practice.

Market value is typically the amount that you can sell your home for, and that price takes into consideration such factors as the size of the property, the school district, and more, said Ayala.
Replacement value, meanwhile, is purely the cost to rebuild your home back to what’s known as “pre-loss condition,” using materials of like kind and quality. If your home is destroyed by fire, you’ll need to rebuild – but that doesn’t mean you need to repurchase the land it sits on.

“When you insure your home to value, which is required by most insurance carriers, the policy will provide guaranteed replacement in the event of a loss,” said Ayala. “In other words, if there is a total loss, the company will pay the full amount to rebuild the home.”

Know what the policy does not include.

Keep in mind there are certain risks and events that homeowners insurance doesn’t cover, notes Tu, of QuoteWizard. For example, standard policies typically do not cover floods or earthquakes.

“If you’re in an area that may be prone to such disasters, you’ll have to consider getting separate insurance for that,” she explained.

Many policies include some coverage for items like computers, firearms, and jewelry, but it’s a good idea to review and confirm the limits your policy includes for these additional items, said Kimberlee Leonard, insurance analyst for Fit Small Business.

“If the policy’s jewelry limit is $5,000, but your engagement ring is valued at $15,000, you will need a different policy to protect the ring from loss, called a Personal Articles Policy,” said Leonard.

If you’re working with an independent insurance agent, have the agent explain what you’re purchasing. The goal is to make sure you’re getting a good policy that will cover your needs in the event of a claim.

“Not all policies cover everything that can happen to a home, so make sure to ask many questions about what is covered and what isn’t,” said Strong.

Research the financial strength of the insurer.

It’s also a good idea to review an insurance provider’s financial strength. In other words, can you be confident that the company will be able to meet its financial obligations?

There are various organizations that analyze a company’s financial solvency and issue an associated rating, explained Strong.

AM Best is a common organization that will issue financial reports for insurance companies,” said Strong. “There are also other companies that will issue reports depending on the size of company. For instance, Standard & Poor’s issues reports for companies that are larger in size.”

Smaller single state or regional insurance companies may not be included in such rating criteria. But Demotech issues reports on companies that are smaller in size, said Strong.

Find the right balance between price and protection.

Ultimately, when shopping for home insurance, the goal is to work toward the right balance of price and coverage, as the lowest price often doesn’t equate to best purchase, says Tom Schwarz, executive director for Military United Insurance.

“Understand what you’re buying and make sure it’s appropriate for your situation,” said Schwarz.

What’s more, you can always change your selection as you continue to shop around, says Leonard.

“Just because you send the [mortgage] lender a quote from one insurance agency doesn’t mean you can’t shop for a better rate while the [closing] deal is still being done,” said Leonard. “Keep the process moving with a quote, and update it if you find a better deal.”

Mia Taylor is an award-winning journalist with more than two decades of experience. She has worked for some of the nation’s best-known news organizations, including the Atlanta Journal-Constitution and the San Diego Union-Tribune. 

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