Every Quarter Counts

Some people are not comfortable talking about money. I am actually a very private person and often don't like talking about anything about myself, money included. However, I am learning that this is not always beneficial in the long run. How do we figure out how to do things or what to do if we do not seek the information and advice from others? How do we avoid the mistakes that others have made if not to talk about them? I am not saying that I am going to put my taxes online for everyone to see them, but maybe if I did someone would give me some tips to do them better! Actually, if you can give me some tips to do them better (I do them myself; your first tip is probably to hire someone else!), please let me know! 

Due to worries about finances surrounding COVID and the economy in general lately, I think this is a good time to share tips about money, be it saving, spending or investing it. I was always taught to save it, but as I have gotten older, I have learned a little about spending what I have saved! But today I will not talk about the spending portion, only the saving portion. I have heard many mind boggling stats about Americans, such as that less than 30% have more than $1,000 in savings! 

Today I want to discuss three pieces of advice I have been given and the things I have learned over the years because of them. If you know something that I don't know, please let me know. 

Never throw away free money.  I had just landed my first college job and was filling out all of the HR paperwork, including 401k documents. I had no idea what half of the terms meant and I asked a friend of my parents to tell me what boxes he though I should check. He told me that it did not really matter what fund I put my money into; what mattered what that I should put at much as I could from each paycheck into the 401k and most importantly, should at least contribute the amount the company was willing to match, otherwise I would be "throwing away free money." For example, I believe my company at the time would match dollar for dollar up to 3%. He told me that I should try to put in 10%, but if I didn't feel that was possible, that I should at least put in 3%. I did what he said and by the time I left that company after eight years, I did not miss the amount I had been putting in each month, I was fully vested and I walked away with that extra money "in my pocket" (technically it is in my retirement account, but it's still mine). 

A side note or addition to the above is that if your company has a 401k, you should put money into it. Some companies have an automatic contribution (i.e. they will put 2% of your paycheck in unless you opt out) but many require you to sign up on your own. Currently in the U.S. you are allowed to put up to $20,500.00 per year into your 401k before taxes and your employer match does not count towards this number, so it could be even more than that once the match is added. I will talk more about this specific topic in a future post but the takeaway for this post is that you should contribute something. 

What does this mean? Even if your contribution is pennies or dollars, if the company is willing to match it, you should put as much as you can! It can also be beneficial to implement some sort of similar plan with your kids to teach them to save some of their hard earned money instead of spending frivolously. For example, you can suggest that they put half of their babysitting money in an account and you will match whatever they put in there dollar for dollar. 

Compound interest is your friend. This is not a new concept, but I think it is one that is not fully explained to people in the early days, when it is the most pertinent. Did you know that if you started putting $50.00 per month into a account yielding 2% when you were 18, and then stopped putting money in at age 40, by the time you were 67, you would have about $30,000.00. Your total investment would be about $14,000.00 in this case. 

If you only starting saving your $50.00 when you were 30 and you kept putting $50.00 per month in your account until you invested $14,000.00, or were 52, then let it sit until you were 67, you would end up with about $23,000.00, over 20% less. Think about that. I used $50.00 and a low rate of 2%, but imagine your interest rate was 5%. In this case, the gap gets even wider ($100,000.00 vs $54,000.00) and if you double your total investment to $28,000.00 and assume a 5% rate you would end up with $198,000.00 vs $109,000.00. 

I think many people feel that they only have a few dollars and it is not worth it, or that they don't have any extra cash, but even if you are only putting in $5.00 or $10.00 at the beginning, it will add up eventually and I do think every penny counts. I think in most cases, you won't miss it if it's taken out beforehand, and to go back to my point number one, if you are putting in $10.00 and your employer is matching $10.00, it will add up faster than you think. 

What does this mean? Start saving as early as you can! Even if your contribution is pennies or dollars, when put in an interest bearing account early, you can reap the benefits of getting interest on your interest. But wait, what if I am already 40? In this case, it still makes sense to put as much as you possibly can in as early as possible, as you will still be able to take advantage of compounding!

The Latte Factor. This is an old concept and one I have written about several times. Basically the gist of it is that if you skipped your daily latte purchase, you could save a lot of money. The end. But seriously, if you bought a coffee from Starbucks every weekday, that would be approximately $20.00 - $25.00 dollars per week you would save. Using the example above about compounding, instead of $50.00 per month, you could be putting away $150.00 per month just by making your own coffee. The item does not have to be coffee; it could be a salad or a sandwich or a fill-in-the-blank. The bottom line is that the little things add up and probably many of them are unnecessary or frivolous and the savings now will pay off in the long run. 

What does this mean? If you think that you don't have enough extra money to put in a savings, here is where you can reassess. I am not saying that you need to give up all things good in your life. Even if you skip one latte a week (or one McDonalds hamburger, or one Uber ride or....etc.) you will now have that $5.00 a week or $20.00 a month to put into your interest bearing savings account! As you can see, each little bit counts. 

So now we have talked about three ways to save money. Do you already use some of these methods? Do you have other tips or tricks that you use to save money? Are you a spender or a saver? 

Disclaimer: The information above is solely an opinion based my own personal experience. You do you. I am not a tax and/or financial advisor; nothing in this post should be taken as investment advice. I have no fiduciary responsibility to anyone reading this post. Please consult a financial advisor for investment advice.  For my other posts regarding money, go here


Looking Back: Books

After spending a lot of time reading in my backyard in 2020, the last year and change has felt like I have not really read very much. Of course, on a relative value scale that is not really fair; it's almost like comparing the price of the stock market now to March 23, 2020 and saying that the price has gone up a lot. I am still reading a lot just not as much as 2020! 

For the first quarter of 2022, I abandoned four books already (Cloud Cuckoo Land, Furiously Happy, The Man Who Ate Too Much and The House on Vesper Strands). All of them were audiobooks, so maybe it was a concentration or situation issue, but I gave all of them up before I even got half way. However, for every high there is a low etc. and there have been quite a few good ones as well! Here are some of my favorites from the last three months. 

Pony by R.J. Palacio: This is a YA novel by the author of Wonder. She creates characters that you can't help but love and sprinkles in a little adventure and some of the trials of growing up (in Wonder she tackles being disfigured and in Pony we meet the main character's invisible friend). I want to read more of her books! 

Remember: The Science of Memory and the Art of Forgetting by Lisa Genova: If you have not read any of her books, you need to do it now. Genova has a PhD in neurology and writes about neurological diseases. I really enjoyed her book Still Alice, which is about early onset Alzheimer's. Her subjects are heartbreaking but fascinating at the same time. In Remember, she talks about how the brain stores memories and she reassures us the when we forget where we put our keys it may not be a slide into old age; we likely are just not paying attention! I have not read a book of hers yet that I do not like. 

Crying in H Mart by Michelle Zauner: This was a very touching book about a woman in her twenties who loses her mother to cancer. She speaks of her mother's strength and how seeing this wane affected her. Upon finding about her mother's diagnosis, she begins to get in touch with her heritage and figure out more about her own identity overall. 

The Man Who Died Twice (Thursday Murder Club, #2) by Richard Osman: The four octogenarians from the Thursday Murder Club are at it again, they are off to solve a murder while simultaneously being helpful and thwarting the authorities. You never know what they might do. However, in the end, they get the job done but not without a lot of adventures along the way. 

The Paper Palace by Miranda Cowley Heller: This book begins with a married woman with three kids cheating on her husband with a long time friend. The remainder of the book speaks to her struggle of what to do with her mixed feelings. It flashes back and forth and gives us some insight into her long time relationship with her friend, some of the trials they went through together and how this led to the subsequent relationship with her husband. 

Food: A Love Story by Jim Gaffigan: I listened to this as an audio book and I enjoyed hearing the jokes in the author's own voice. It was a good mix of him making fun of himself for loving food, and some interesting observations about food. For example, he questions why a shiny orange piece of plasticy food became "American cheese." This book made me laugh out loud while running, like when he talks about being so full he couldn't button his pants, so he decided to have some cheese as a snack and when he realized he didn't really like it, he decided to finish it. I have been there! 

A Slow Fire Burning by Paula Hawkins: By the author of A Girl on The Train, this is yet another murder mystery by Hawkins. However, she does well developing her characters and this book was no exception. We meet the murdered man's strange ex-lover who has a criminal background, his uptight aunt with a bone to pick and the kooky boat neighbor, and we are kept guessing as to whether it was one of them who offed him or not. 

Invisible Girl by Lisa Jewell: A young woman disappears in a small neighborhood and fingers start pointing at who done it. Was it the creepy 30 year old "kid" who lives with his aunt and visits strange internet forums? Was it the young woman's therapist, who is not quite as perfect as we once believed? You tell me! I mean, who doesn't love a thriller? 

The Last Widow (Will Trent, #9) by Karin Slaughter: Speaking of thrillers, here is another one! I have enjoyed the entertainment that this author has brought me over the years. The particular one is about a CDC employee who goes missing and a month later a bomb goes off near a hospital. Are the two things linked? And why? We will soon find out! This is a detective series where Will Trent and his partner Sara, a medical examiner, team up to save the day. Or will they? 

Maid: Hard Work, Low Pay, and a Mother's Will to Survive by Stephanie Land: College plans go out the window fast when the author finds herself unexpectedly pregnant. She tries to make it work with the father but eventually moves out and attempts to make a life for herself and her young daughter by cleaning houses. She tells her story from the point of the maid, whom for some people is invisible, while others are friendly toward her and even go out of their way to be kind. 

The Bohemians by Jasmin Darznik: This book talks about the famous photographer Dorothea Lange and her move to the city of San Francisco back in the early 1900s. She starts off as a na├»ve girl and gets hardened through the people she meets, and the things she experiences, most notably the depression. 

Our Woman in Moscow by Beatriz Williams: The main character, Ruth, has not seen her twin sister in years, since her twin disappeared behind the iron curtain to Russia with her husband and children. Then out of the blue, she gets a postcard from her sister asking her to come and visit. She teams up with a counterintelligence agent and goes to Russia to get her sister out of trouble and finds adventures she never expected. 

The Nothing Man by Catherine Ryan Howard: When Eve was 12 her parents and sister were murdered. Now she is older and she decides to write a book about it. The killer reads the book and thinks maybe he should finish what he started. It's a little strange as it's a story in a story, but in the end I was very satisfied with the way it wrapped up. 

Out of the thirteen books above, four are non-fiction, and yes, I am counting the Gaffigan book! Eleven were audio books, as I am not feeling as motivated to read when I am home in the evenings as I have been in the past. 

What has been your favorite book so far this year?