Matt About Money https://mattaboutmoney.com Simple. Meaningful. Success. Fri, 13 Jul 2018 13:30:50 +0000 en-US hourly 1 9092505 Profitable Ideas: Getting Amazon’s Prices Wherever You Shop, Money Rules, and more. https://mattaboutmoney.com/2018/07/13/profitable-ideas-getting-amazons-prices-wherever-you-shop-money-rules-and-more/ https://mattaboutmoney.com/2018/07/13/profitable-ideas-getting-amazons-prices-wherever-you-shop-money-rules-and-more/#respond Fri, 13 Jul 2018 13:30:50 +0000 https://mattaboutmoney.com/?p=6259

A weekly roundup of some of the best personal finance articles from around the web.

10 big chain stores that will secretly match Amazon’s low prices (Money). Want the item today? You might be surprise at which stores will match Amazon’s prices.

Paying off student loans faster: A how-to guide (Magnify Money). The pros, some cons, and how to get it done.

9 ways to protect your kids from consumerism and why it’s important (Buy Me Once). Parenting in a consumer culture isn’t easy. Here’s an action plan.

Buy a shirt, get a share. Bumped turns your purchases into shares (Digital Trends). Interesting idea that could be more valuable than cash back.

How to make a decision when you get multiple job offers (Fast Company). Sure, it’s a nice problem, but still… Here are some ideas for how to proceed.

Here’s what smart rich people really do with their nest egg (MarketWatch). For one thing, they follow a clear investment process.

Little money rules (Collaborative Fund). Great insights from one of my favorite investment and business writers.

Women outlive men. Why do they retire earlier? (NY Times). Especially for women, it makes sense to work longer.

What are your thoughts on any of the above? Let me know by leaving a comment below.

Interested in more ideas and encouragement for using money well? If you haven’t done so already, why not sign up for a free subscription to this blog?

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What If Your Kids Had Their Retirement Funded Before They Finish High School? https://mattaboutmoney.com/2018/07/10/what-if-your-kids-had-their-retirement-funded-before-they-finish-high-school/ https://mattaboutmoney.com/2018/07/10/what-if-your-kids-had-their-retirement-funded-before-they-finish-high-school/#comments Tue, 10 Jul 2018 13:30:41 +0000 https://mattaboutmoney.com/?p=6252

In a previous post, I shared some details about how we’re getting our kids involved in investing. At ages 9, 12, and 14, they’ve long had savings accounts and several years ago invested in their first stock. But now we’re dialing things up by switching to a broker that’ll better serve their long-term needs, being more intentional about their investment strategy, and setting targets for how much to invest.

A better broker

They now have custodial accounts at Schwab. They used to have accounts at Capital One, but that’s only because of a promotion the company offered in which they each received $50 for opening an account. Longer term, Capital One didn’t offer a very extensive list of investment options and charged somewhat higher fees.

The strategy

As I shared before, I’m encouraging our kids to follow the Sector Rotation strategy offered by my day-job employer, Sound Mind Investing.

As a high-risk/high (potential) return strategy, we typically recommend only using Sector Rotation with a small portion of your portfolio. However, our kids are super young, so we’re going all-in with the strategy. They understand it has had one-year losses of as much as 31.5% (in 2008, when the U.S. stock market fell even more). However, its average annual return since 2003, when the strategy was launched, is over 17%.

Originally, I thought I’d start them with a small-cap value fund, switching to the current recommended Sector Rotation fund when they had enough money for the minimums. However, at Schwab, some of the funds that require a $15,000 initial investment at other brokers require just $100. When a recommended fund has a higher minimum, they’ll use the highest momentum ETF in the Sector Rotation fund universe, which can be purchased for as little as the cost of one share.

Gaining access to the Sector Rotation fund recommendations requires a Sound Mind Investing premium membership, which costs $169.50 per year. If you don’t like that idea, you could adopt a form of a similar plan suggested by advisor Paul Merriman, which calls for the use of a small-cap value fund. That would be somewhat easier because you never have to change investments, but the returns have been lower than those generated by Sector Rotation.

How much to invest

While this is somewhat arbitrary, the example I’ve used with our kids assumes a goal of having $3,000 invested by the time they’re 16. If they have that much in their investment accounts by then, and if the strategy continues generating an average annual return of 17%, they would have over $14 million by the time they’re 70. And that assumes they don’t add any more to their accounts. (You can run some calculations with different variables with this calculator.) If inflation averages 2.5% per year over that time, that would be the equivalent of $3.7 million today—far more than most people have when they retire.

Eventually, as they earn more of their income (as opposed to receiving it via an allowance or gifts), their taxable accounts will be converted into Roth IRAs. That way, when they want to start tapping their money in retirement, it’ll be available to them tax-free.

In essence, their retirement could be handled before they graduate from high school, freeing them to use other savings and investments for other purposes, such as increasing the amount they give, buying a house, etc.

Some of the challenges

While I might get excited about the seemingly crazy idea of having retirement taken care of before they finish high school, the long time frame for this goal definitely puts a bit of a damper on their excitement. They’re onboard, but still, a goal that’s set so far into the future seems pretty abstract. We may have to keep selling the benefits.

Another potential issue is that having the money in a Roth IRA means they’ll be able to withdraw the contributions at any time for any reason penalty-free, and they’ll be able to withdraw earnings for certain uses, such as a fist-time home purchase or education. At age 18 (21 in most other states), they will gain full control over the money.

We’ll just have to do our best to encourage them to leave the money alone for their later years.

Keys to success

Ever since they could count, we’ve taught our kids to give at least 10% of every dollar they receive to God’s work. We’re also encouraging them to save or invest 50%. That should help them get to the goal of having $3,000 in their investment accounts by the time they’re 16.

After they finish college, begin their first full-time job, and have to pay for many things they don’t have to pay for now, their saving/investing percentage will probably have to decrease to 10-15% as the spending percentage increases to 75-80%.

Keeping their spending under control will be essential if they are to continue giving generously and saving or investing a healthy portion of their income. Very soon, one of the biggest threats to such giving and saving/investing goals will be car ownership. The problem with cars is that they eat—gasoline, insurance, maintenance, repairs, fees, and more. With all the money cars consume, it’s tough to save.

So, already I’ve been talking to them about the wisdom of holding off on buying a car at least until they’re out of college.

In my work, I read lots of articles about money and I’m constantly reminded about what a struggle it is for many people to build a sufficient nest egg for their later years. The possibility that our kids could have that issue handled before they’re even out of high school is pretty exciting to me.

What do you think of these ideas? What questions do you have?

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Profitable Ideas: Wealth is What You Don’t See, Cell Phone Cybertheft Protection, and more. https://mattaboutmoney.com/2018/07/06/profitable-ideas-wealth-is-what-you-dont-see-cell-phone-cybertheft-protection-and-more/ https://mattaboutmoney.com/2018/07/06/profitable-ideas-wealth-is-what-you-dont-see-cell-phone-cybertheft-protection-and-more/#respond Fri, 06 Jul 2018 13:30:54 +0000 https://mattaboutmoney.com/?p=6248

A weekly roundup of some of the best personal finance articles from around the web.

Wealth is what you don’t see (Fervent Finance). This is one of the main messages from my favorite secular personal finance book, The Millionaire Next Door.

Not so simple living (Becoming Minimalist). It’s interesting what gets uncovered when you get rid of a lot of stuff.

To draw workers, employers offer to help with student loans (NY Times). New college grads would be wise to ask about this perk when weighing job offers.

Sustaining wealth is harder than getting rich (A Wealth of Common Sense). Another important lesson right from the pages of The Millionaire Next Door.

Ready for vacation? Here’s the best tech for trip planning (NY Times). How to make the most out of your vacation trips.

The wisdom of frugality: Why simple living is thought to make us happier (The Simple Dollar). Third in a multi-part series, taking a closer look at the benefits of simplifying.

Your life is on your smartphone. These 8 steps can keep cyberthieves out (USA TODAY). Did you know you could remotely lock your phone or even wipe all of its data?

Should my son stay on my health insurance at college? (Chicago Tribune). It’s an option, but here’s how to know if it’s the best option.

What are your thoughts on any of the above? Let me know by leaving a comment below.

Interested in more ideas and encouragement for using money well? If you haven’t done so already, why not sign up for a free subscription to this blog?

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Determining Your Financial Independence Day https://mattaboutmoney.com/2018/07/03/determining-your-financial-independence-day/ https://mattaboutmoney.com/2018/07/03/determining-your-financial-independence-day/#comments Tue, 03 Jul 2018 13:30:24 +0000 https://mattaboutmoney.com/?p=6239

As you prepare to celebrate our country’s Independence Day this week, why not take a few minutes to figure out your financial independence day? If you have any debt other than a reasonable mortgage, that’s the day when you will be completely out of that debt. If the only debt you have is a mortgage, that’s the day you’ll be completely out of all debt.

There are two key steps here. First, running some numbers on my Accelerated Debt Payoff Calculator. And second, working your plan.

Running the numbers

This step should only take about 30 minutes at the most. Enter the details of your debts, starting with your lowest balance debt. The calculator assumes that when your first debt is paid off, you will roll the full amount you were paying on that debt into your next lowest-balance debt.

Do you see the box below the 10th row, the one where it says, “Enter a monthly dollar amount you can add to your debt payoff plan”? This is where you can run some helpful what-if scenarios. Try entering $25 the first time through. The calculator assumes you’ll add that amount to your lowest balance debt (so be sure to do that!). Then try $50 or $75 or more.

The calculator also assumes you’ll do something else that’s incredibly helpful—that you’ll fix your payments. You see, if you go no further into debt on a particular credit card and make the minimum payments that are required each month, your required minimum payment will decline each month. That isn’t kindness on the part of the credit card company; it’s math. Your minimum required payment is based on your balance, and if your balance is declining a little each month, that means your minimum payment will decline as well.

It declines by such a small amount that most people don’t even notice. They get hooked into this declining payment amount and that’s what keeps them in debt for just about forever. But fixing your payments on the amount you paid this month will dramatically speed up the process of getting out of debt. So, add whatever you can to the smallest balance debt and be sure to fix your payments on all the rest.

Run enough scenarios to figure it out—your financial independence day. Set a goal for the extra amount you’ll come up with to accelerate the payoff of all your debts. Stretch yourself, but also make it doable. Then see what the calculator says about how long that’ll take you to finish your plan and figure out from there what that date will be—the month and year of your financial independence.

Working your plan

Of course, this is the hard part. Hopefully, running some numbers to see how much more quickly you’ll be out of debt will serve as a motivator. Then, and I know this is easier said than done, you just have to see the process of getting out of debt as something of a machine. Get it up and running. Get the flywheel turning. Hit the numbers each month — that fixed minimum plus something extra toward the lowest balance debt, fixed payments on all the rest. When one debt is wiped out, roll the full amount into the next lowest balance debt, and keep going. Get some accountability. Get some small wins. Eventually, you’ll feel it. Momentum!

Then one day you’ll make your last payment and that will be one sweet day. Believe me. Having worked this process for about four and a half years to wipe out $20,000 of debt, I know what it feels like to hit that number each month, month after month. And I know what it feels like to make that final payment.

Your city may not shoot off fireworks in your honor, but my guess is that your annual financial freedom day celebration will be at least as satisfying as the Fourth of July.

What questions do you have about getting out of debt?

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Profitable Ideas: Working Smarter, Surprising Ways Your Credit Worthiness is Determined, and more. https://mattaboutmoney.com/2018/06/29/profitable-ideas-working-smarter-surprising-ways-your-credit-worthiness-is-determined-and-more/ https://mattaboutmoney.com/2018/06/29/profitable-ideas-working-smarter-surprising-ways-your-credit-worthiness-is-determined-and-more/#respond Fri, 29 Jun 2018 13:30:26 +0000 https://mattaboutmoney.com/?p=6227

A weekly roundup of some of the best personal finance articles from around the web.

Smarter, not harder: How to succeed at work (Farnam Street). Eliminate the unnecessary, which probably accounts for a shockingly large portion of each day.

The wisdom of frugality: Why simple living is supposed to improve us (The Simple Dollar). Simple, frugal living is about much more than spending less.

I delivered packages for Amazon and it was a nightmare (The Atlantic). It sounded like easy money, until this writer gave it a try.

The trait that determines whether you’re good with money (The Cut). The importance of cultivating the right money mindset.

Have a Yahoo email? An android phone? Your mortgage options may be limited (Forbes). The criteria that determine credit worthiness are changing.

Taking a loan from your 401(k) does come with risks (CNBC). Generally, it’s best to consider your retirement account a, well, retirement account.

The recycling game is rigged against you (Bloomberg View). What we do with all the waste created by our consumer culture is a part of good stewardship. If only it were easier.

Why you need an umbrella insurance policy (Kiplinger). You can get a lot of protection for a relatively small premium

What are your thoughts on any of the above? Let me know by leaving a comment below.

Interested in more ideas and encouragement for using money well? If you haven’t done so already, why not sign up for a free subscription to this blog?

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Credit Card Benefits Getting Stingier https://mattaboutmoney.com/2018/06/26/credit-card-benefits-getting-stingier/ https://mattaboutmoney.com/2018/06/26/credit-card-benefits-getting-stingier/#comments Tue, 26 Jun 2018 13:30:32 +0000 https://mattaboutmoney.com/?p=6223

Three major credit card issuers recently reduced their benefits.

In some cases, the benefits listed below have been so valuable that even having to pay a $75 – $100 annual fee has made them worthwhile. However, the math has changed, so read the details carefully.

Citi

Citi is making the following changes, effective July 29th.

Price protection. Citi’s Price Rewind has always been one of my favorite benefits. If you buy something with a Citi credit card and within 60 days of purchase find it offered for a lower price, Citi will give you a statement credit for the difference. I’ve gotten hundreds of dollars back this way—on a laptop computer, camera, camera lens, Christmas gifts, and more.

The benefit is now capped at $200 per item (down from $500) and $1,000 per year (down from $2,500). Still a great benefit, just not as great.

Damage and theft protection. If something you bought with your Citi card is damaged or stolen, Citi will repair it or reimburse you up to the amount of purchase. The maximum amount has been reduced from $10,000 per item to $1,000, while the $50,000 annual max hasn’t changed. The window for making a claim has been shortened from 120 days to 90.

90-day return protection. If you try to return an item you bought with your Citi card and the merchant won’t take it back, Citi may refund the purchase price up to $300 per item (down from $500) and $1,000 per year (down from $2,500). Another change is that several types of products were added to the list of items not included in this coverage, including: Jewelry, appliances, furniture, and tires.

Car rental insurance. Maximum coverage has dropped from $100,000 to $50,000. Also, Citi cards will no longer cover loss of use. This is one of the lesser-known aspects of rental car agreements, which can be costly. In essence, the company charges you a fee for every day its car is not available to be rented because the damages you caused are being repaired. What to do now that Citi has dropped this coverage? See if the insurance you carry on a vehicle you own covers this.

To learn more about car rental insurance and see whether you should buy it, read Do You Need Rental-Car Insurance?

Trip cancellation and interruption protection. Before traveling, it’s good to know what protections your credit card company offers. For example, when putting together an expensive vacation to NY, I bought five tickets to a Broadway show. Ticket Master offers insurance, but I had checked with my credit card company and they said they would reimburse the ticket costs if we had to cancel our trip and Ticket Master would not refund our money. That enabled me to turn down the Ticket Master insurance.

However, the total amount of coverage provided by the credit card company is now greatly reduced. The allowance per covered traveler per trip is now $1,500 (down from $5,000). Situations in which the coverage would kick in have become more restricted as well. For example, it used to be that if you had to cancel a trip because your pet became seriously ill or you were laid off from your job, the card would reimburse you for certain non-refundable trip expenses. Those provisions no longer apply.

Chase

Effective August 26th, Chase is completely eliminating its Price Protection (similar to Citi’s Price Rewind) and Return Protection benefits.

Discover

Earlier this year, Discover completely eliminated the following benefits:

  • Extended product warranty
  • Purchase protection
  • Return guarantee
  • Auto rental coverage
  • Flight accident insurance

Many credit cards still offer valuable benefits and are safer than debit cards when it comes to identity theft. However, if it’s been a while since you’ve reviewed the benefits available from your card company, now would be a good time to take a look.

Which of the above benefits have you used in the past?

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Profitable Ideas: The Next Bear is Bound to Hurt More, Investing is the Best Foreign Language, and more. https://mattaboutmoney.com/2018/06/22/profitable-ideas-the-next-bear-is-bound-to-hurt-more-investing-is-the-best-foreign-language-and-more/ https://mattaboutmoney.com/2018/06/22/profitable-ideas-the-next-bear-is-bound-to-hurt-more-investing-is-the-best-foreign-language-and-more/#respond Fri, 22 Jun 2018 13:30:50 +0000 https://mattaboutmoney.com/?p=6220

A weekly roundup of some of the best personal finance articles from around the web.

Why the next bear market may feel more painful (A Wealth of Common Sense). With more money in your portfolio, thanks to a nine-year bull market, the next downturn may be tougher to take.

The wisdom of frugality: What is simplicity? (The Simple Dollar). If you’re attracted to the idea of simple living, it can help to define what that means to you.

North Face is cutting waste by selling refurbished old coats (Fast Company). An interesting and welcome new sales strategy.

Cadillac test-drives subscriptions (Gartner L2). This is a trend that’s showing up in more product categories. But leasing or “subscribing” is bound to cost more than buying and keeping for a long time.

Americans lack emergency savings but more say they aren’t worried about it, survey finds (USA TODAY). I’ll save the finger-wagging lecture, but will just say that if you’re saving for retirement but have no or too little in savings, I’d recommend pausing your retirement saving long enough to build a solid base of savings.

Decluttr review: Sell your old electronics, media and games for cash (Bible Money Matters). If you’re trying to clear the clutter, this site may make it easier and more profitable for you.

Investing will be the most popular language (Medium). Interesting way to frame the topic. Which language should your kids learn — Mandarin or the markets? While I like the idea of them learning a foreign language, if I had to choose, I’d vote for learning the language of investing.

Negotiating a job offer (Fervent Finance). Your starting salary will have a long-term impact on your financial health. Negotiate well.

What are your thoughts on any of the above? Let me know by leaving a comment below.

Interested in more ideas and encouragement for using money well? If you haven’t done so already, why not sign up for a free subscription to this blog?

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How NOT to Invest https://mattaboutmoney.com/2018/06/20/how-not-to-invest/ https://mattaboutmoney.com/2018/06/20/how-not-to-invest/#respond Wed, 20 Jun 2018 13:30:25 +0000 https://mattaboutmoney.com/?p=6212

I overheard a conversation about investing recently that made me a little crazy. I heard several perspectives that I completely disagreed with, ways of approaching investing that I think can be far more harmful to a person’s portfolio and peace of mind than helpful.

Since I didn’t feel like I could insert myself into the conversation, I saved my rant advice for this post.

A little background

I’ve been studying the principles of wise money management for more than 25 years. However, for much of that time, out of the many topics that exist within personal finance, I would be the first to admit that investing was my weakest link.

All of that changed in 2012 when I joined the staff of Sound Mind Investing (SMI), a Christian company that’s been publishing an investment newsletter for 28 years. I’ve learned a ton about investing in the past six years, and it is mostly those ideas that made me so concerned about what I overheard.

There were four main issues.

1 – Short-term thinking

I heard several comments about what certain stocks were doing on that particular day. However, the daily movements of the market or a particular stock or fund are, for the most part, nothing more than noise. Historically, the market has been positive just slightly better than half the time. In other words, on any given day, you have a 50-50 chance of making money. But the longer your holding period, the more the odds move in your favor.

Bottom line: Don’t get wrapped up in the market’s daily fluctuations; think long-term.

2 – Market timing

I heard lots of talk about selling certain stocks at their peak. But how will they know when a stock is at its peak? Or when a stock on their buying list is at its low?

Think about the market overall. In any given year, it’ll typically have lots of ups and downs on its way to its year-end result. Which one of the peaks would turn out to be the market’s high for that year? Which one of its valleys would turn out to be its low? It’s impossible to know.

Fortunately, you don’t have to. SMI once did a study that compared the results of two investors we called Lucky Lew and Steady Eddy. Both invested $3,000 each year for 30 years. Lucky Lew miraculously invested his full $3,000 at each year’s lowest point. Steady Eddy just invested $250 at the same time each month, regardless of what the market was doing.

At the end of 30 years, Lucky Lew’s average annual return had outperformed Steady Eddy’s by just 0.7%—10.1% to 9.4%. And keep in mind, Lucky Lew’s approach is impossible. Literally. But Steady Eddy’s approach is one anyone can follow.

3 – Not considering/acknowledging the downside

I didn’t hear any discussion about what they would do when the market heads south, as it will. All I heard was talk about the upside—how this stock or that is destined to grow.

But someday the market will turn. As surely as nighttime follows daytime, bear markets follow bull markets.

And it’s a well-documented phenomenon that losses feel more painful than gains feel good. That may explain why a lot fewer people have money in the market now than before the last bear market. Fear and pain drove them out.

To be sure, the losses were brutal. Between Oct. 2007 and March 2009, the market fell 50%.

Some people couldn’t take it, so they sold, thereby locking in their losses. And some of those folks never got back in. According to Gallup, 62% of adults in the U.S. owned stock before the Great Recession. Today, just 54% own stock. Those who are still on the sidelines missed out of one of history’s greatest bull markets.

If some of the people who left the stock market had decided in advance about what they would do during the next market downturn, maybe they wouldn’t have missed the incredible recovery that followed.

What can you do? Answer this question: “What will I/we do when the next bear market hits?” Make a decision (if you’re married, make sure your spouse is in on the decision) and write it down. Then, when the next bear market arrives, read what you wrote and follow your own instructions. Ideally, your answer is that you won’t make any changes at all, which means you’re following an investment strategy you can live with in good times and bad. Speaking of which…

4 – Not having an objective process in place

For the most part, what I heard in the way of rationale for choosing specific investments were opinions. If subjective criteria drive the decision to invest in a company, how in the world will you know if and when to sell?

At SMI, we have a strategy that would have actually gained more than one percent in 2008. Its strength is seen in down markets. When the market is growing, it’s designed to share in some of the gains, but it isn’t expected to grow as much. During down markets, it’s designed to minimize loss.

We have another strategy that’s designed to far outpace the market when things are good, and it has. But when things are bad, it can be expected to fall hard. Those with a strong stomach have enjoyed remarkably good returns.

I’m using these two examples mostly to emphasize the importance of following an objective investment strategy and being aware of how it is likely to perform under various market conditions. My sense/fear is that many people with money invested in the market are not investing this way.

Do you have a strategy you trust? Are you following an objective, proven process or are you picking investments based on subjective criteria? If you’re using a reliable process, you should be fine sticking with it when things get rough. But if you’re going on gut feel or a hot tip from a friend, what will you do when times get tough?

Investing can be a humbling activity. None of use should ever get too confident in our abilities or complacent about how the market is performing. Watch out especially for the four issues I just highlighted.

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Profitable Ideas: The Stock Market’s Amazing Upward Trajectory, The Money/Loneliness Connection, and More https://mattaboutmoney.com/2018/06/15/profitable-ideas-the-stock-markets-amazing-upward-trajectory-the-money-loneliness-connection-and-more/ Fri, 15 Jun 2018 13:30:13 +0000 https://mattaboutmoney.com/?p=6207

A weekly roundup of some of the best personal finance articles from around the web.

Why do stocks generally go up over time? (A Wealth of Common Sense). One of today’s best investing writers on some important truths about the stock market. For those with the right mindset, it offers one of the best opportunities for building wealth.

Tax credits for college costs (Kiplinger). If you’re paying tuition bills, are you taking full advantage of these credits?

Life is more than compounding money (Intelligent Fanatics). Building wealth for the future is a good thing, but even good things can go too far. Lessons from some very wealthy, very stingy people.

Human condition (Humble Dollar). How to manage one of your most valuable assets.

Advice has changed on what car to buy for a young driver (NY Times). Wait, why would you buy a car for a young driver? At the risk of sounding like Scrooge, let them buy their own car, preferably after they’re out of college!

How these 6 assets might affect student financial aid eligibility (Wise Bread). If you have college-bound kids, it pays to know these rules.

How a new law will let you freeze your credit files for free (US News). This is a great step that hopefully will prompt more people to freeze their credit files.

America’s epidemic of loneliness (MarketWatch). It’s noteworthy how much of a financial connection there is.

What are your thoughts on any of the above? Let me know by leaving a comment below.

Interested in more ideas and encouragement for using money well? If you haven’t done so already, why not sign up for a free subscription to this blog?

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The Importance of Being Known—Financially and Otherwise https://mattaboutmoney.com/2018/06/13/the-importance-of-being-known-financially-and-otherwise/ https://mattaboutmoney.com/2018/06/13/the-importance-of-being-known-financially-and-otherwise/#comments Wed, 13 Jun 2018 14:15:11 +0000 https://mattaboutmoney.com/?p=6199

Like many of you, I was shocked by the recent suicides of fashion designer Kate Spade and TV personality Anthony Bourdain. On one level, their deaths showed what a fallacy it is that fame and fortune assure happiness. I couldn’t help but recall this quote from actor Jim Carrey:

I think everybody should get rich and famous and do everything they ever dreamed of so they can see that it’s not the answer.

On another level, they are a stark reminder that depression is an equal opportunity tormentor. It doesn’t care what type of car you drive or where you go on vacation. Faith certainly helps provide hope, but it doesn’t make you immune from depression.

I don’t know what specific issues haunted Spade or Bourdain. But I do know that money woes are common sources of deep, sometimes debilitating discouragement.

As I’ve written before, when I woke up to the reality of my financial mess when I was in my mid 20s, I struggled through a tough season of depression. I looked forward to the nighttime when I could sleep and I dreaded the sight of sunlight in the morning, knowing I’d have to face the reality of my situation for another long day.

It wasn’t the first time I was engulfed by a thick fog of depression, nor was it the last.

Well-meaning friends who’ve never experienced it tend to offer kind yet unhelpful advice. At the risk of doing the same, I’d like to suggest the following for any readers who are feeling the weight of a heavy burden, whether it’s about money or something else.

First, whatever you’re going through, you’re not the only one. Shortly after becoming a Christian and early in my nearly five-year journey out of debt, I began doing volunteer work with a stewardship ministry. It was eye-opening to see how many people have financial trouble. I really thought my situation was unique.

I looked around and saw people driving nice cars, wearing nice clothes, and looking like they’re doing just fine. But I soon discovered that a lot of those people are not doing fine at all. That isn’t an indictment against them; it’s just a reminder that if you feel like you’re on the outside looking in, you’re not.

Second, help is available. There are some fantastic ministries available with well-trained, compassionate people who are eager for the opportunity to be a help and encouragement to you. Maybe your local church has a stewardship ministry. Start there. (You could see if there’s a local Good $ense ministry by contacting them directly). Or, some national ministries that offer assistance include:

The ministries will help you with the practical, as well as the biblical principles behind their advice.

Third, cultivate the lost art of friendship. We all need someone to talk to, a safe friend we can tell the truth to—and not just about financial concerns. If you’re married, hopefully your spouse is one such person. Mine certainly is. But men also need a good guy friend or two. Women need another woman or two. Men are notoriously bad at the whole friendship thing.

Interestingly, while writing this, one of my best friends called. We cultivated a friendship through a seven-year small group when I lived in Chicago. Five of us would meet on Friday nights, run together, study the Bible, and just hang out. We laughed together and cried together. But we’re all scattered around the country now. We get together about once a year and it’s always a rich and meaningful time. But we certainly aren’t doing life together anymore. My wife and I were part of a great, long-running couples group once as well.

Since moving to Louisville, I haven’t found my group of guys yet. Between work, the fast pace of family life with three young kids, last year’s illnesses and deaths of my in-laws, and what often feels like countless household responsibilities, it’s easy to believe there just isn’t time. But it’s important. One insight to emerge from the tragic deaths of Kate Spade and Anthony Bourdain is that they were lonely. Being surrounded by people isn’t enough. We all need to be known by a close friend or two.

Leading or joining a church small group would be a natural place to start.

Fourth, find ways to help others. Looking back, I’m amazed that the stewardship ministry I applied to volunteer with accepted me. I was a new Christian and just starting the process of getting out of debt. I guess they needed help. I’m so thankful they let me serve.

Being part of that ministry taught me a ton about money—practical things, and biblical principles. By working with people who had financial issues, I saw firsthand that my situation wasn’t so unique. And teaching the principles and practical steps I was learning helped reinforce those ideas in my own life. Plus, it was deeply satisfying work, which showed me more of God’s purpose in my journey.

There’s something very healthy about getting the focus off ourselves and helping others. Since I had made some big mistakes with money, I could relate to the people who came in for help, which I think helped me build trust. It was all a very positive cycle of learning, trying to apply what I was learning, taking all of that and passing it along to others, learning more, trying to apply more, passing it along, and around it went.

You could do the same thing. Join a local stewardship ministry team if one is available where you live. Or start a blog, sharing your journey—all that you’re learning, struggling with and applying, and the progress and setbacks along the way. I’ll bet a lot of people will be helped and encouraged by it. I know it will help you as well.

Have you experienced any significant financial struggles that have left you discouraged or even depressed? What steps did you take that others might benefit from hearing about?

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