Money Tips Network

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” – Abraham Lincoln

I love this quote from Abraham Lincoln. It’s such a clear analogy about the value of preparation. Cutting down a tree is hard work, and it is much, much harder if you’re using a dull axe – your strokes are far less efficient and you’re likely to become worn out well before the job is done. You’re much better off getting the axe nice and sharp before you head out to chop down that tree.

This same phenomenon is true with almost everything one might do in life – hard things are made easier if you properly prepare for them.

Debbie writes in:

Love your blog, but you are too focused on the future. What’s the point of working toward financial success if you’re just going to eventually die? Why have a life if you’re not going to live it?

I get some variation on this question about once a month, but something about Debbie’s wording left me thinking.

In a typical year, Sarah and I spend somewhere around 60% of our income, a level we’re pretty happy with since we don’t make tons more than the average American income and we have three children still living under our roof. We save the rest.

Now, we most certainly could spend that other 40% on things that would raise our day to day standard of living, and I have no shortage of ideas on how I might do that. It would be fun to do some international travel. We could redo our entire kitchen.

Instead, we save it, and it’s a model we recommend to readers of The Simple Dollar.

Editor's Note: Congratulations to Nick, Joseph, and Lisa for winning this week's contest!

Like everything else, movie ticket prices seem to go up every year.

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. Losing faith
2. Thoughts on simple investment strategy
3. Tax bracket question
4. Compound interest question
5. Costco versus Sam’s Club
6. Question about “forever stamps”
7. Investing for near term
8. VA disability and property taxes

It appears that the nation’s ballooning student loan debt is not just confined to students.

The crisis, as it turns out, also encompasses millions of parents who are Parent PLUS loan holders. And according to a recent Brookings Institution report some troubling trends are beginning to emerge among parents who borrow money via these federal loans to help put their children through college.

About 3.4 million Parent PLUS borrowers owe $87 billion. (Yes, billion.) That’s about 6% of all outstanding federal student loans. What’s more, the new data show that parent default rates are on the rise, and repayment is slowing.

It’s January 11, 2019 – the first day paychecks will not arrive for some federal workers due to the government shutdown. Among other worries, furloughed employees may be wondering how missed or delayed debt payments might impact their credit if the shutdown continues and they’re unable to pay their credit cards or other bills on time.

The good news is, you’ve got a little bit of time. For all credit card statements received, regardless of when, the due date will be at least 21 days AFTER the date of the statement date. This is a CARD Act requirement. For all other loans, the due date is set by the lender in accordance with their policies and state and/or federal regulations.

AARP, Ad Council and Jean Setzfand, a financial expert from AARP, joined us for our #WBChat on January 10th! Our #AcingRetirement #WBChat featured wonderful tips helped our chatters learn more about pursuing retirement goals in the new year.

Let’s do a little thought experiment before we get to some practical advice.

In an ideal week, a person has 168 hours to spend. Let’s assume that they spend 50 of it sleeping, another 20 on life management tasks (eating, preparing food, basic housework, basic hygiene), and another 18 on leisure.

This leaves 80 hours to fill.

Most American adults fill a lot of that time with their job. They go to work to earn money. This eats up a lot of, but not all of, that time – remember, there’s time spent commuting and so on. Let’s say that 60 of those hours are taken up by actually performing your job.

What about the other 20? That time can be used in a lot of ways.

If you've read money blogs over the past five years, you've heard about Personal Capital. Personal Capital is a free money-tracking tool with a beautiful interface and — gasp — no advertising. (One of my big complains about Mint is that it shoves ads in your face.)

Many of my friends and colleagues promote the hell out of Personal Capital because the company pays good money when people sign up. (And yes, links to Personal Capital in this review absolutely put money in my pocket. But any Personal Capital link you see anywhere on the web puts money in somebody's pocket.)

I sometimes wonder, though, if any of my pals actually uses Personal Capital, you know? All of their reviews are glowing. While I like Personal Capital, I've been frustrated by the app in the past. Even today, I find that it's not as useful as I'd like.