For this post, I thought I’d change things up a bit. Think of it as the awkward vacation edition. Generally, these posts are a recap of how people in my life question our money-saving choices. Since I’m writing this cozied up to the Pacific Ocean in Costa Rica–seriously, our hotel’s wifi stretches all the way to the beach–I thought I would share some recent comments that I encountered while planning and taking this trip. A few focus on splurging. A few focus on frugality. And all of them left me feeling more than a little awkward. Continue reading “Frugally Awesome…or Awkward: Vacation Edition”
Last month, The Minimalists did a podcast on debt. That podcast led to a profusion of tweets about the drawbacks of credit scores. In fact, the underlying message–ripped out of Dave Ramsey’s playbook–was that no one should want a credit score.
The Minimalists by way of Ramsey tweeted out that a credit score is nothing more than an I-Love-Debt score. If you don’t love debt, you don’t want a credit score. At all. None. Nada. Zero. It sounds absurd–and it is–because a credit score in-and-of-itself doesn’t cause the debt problem. By their logic, I should throw away my mirror if I don’t like my hair. I should get rid of my scale if I don’t like my weight. And I should probably disregard those wellness screenings I get every year. Those warning lights on my car dash? Apparently, my car can’t have problems if warning lights don’t exist.
The reality of a low credit score is that it reflects a small slice of a vastly complex conundrum, just like a check engine light or a thyroid test result. It is one piece of someone’s overall financial health. It’s not the only piece, nor is it the most important piece. But it is a piece nonetheless. So let’s not ignore it, okay?
Instead of thinking of a credit score as an I-Love-Debt score, I think of it as a Make-Money-Work-For-Me score. Money is a tool. Learn to leverage it. A healthy credit score matters. Not convinced? If you ever plan on doing any of these things, someone is probably going to take a hard or soft look at your credit score:
- Buy a home.
- Rent an apartment.
- Take out a loan.
- Employer background checks.
- Set up utilities, Internet, or cable.
- Rent a car.
- Open a bank account.
So credit scores do count for something. Of course, if you can pull a Dave Ramsey and pay cash for your mega mansion, you don’t need a credit score. But for the average person, having an understanding of credit is important because it plays a role in establishing a financial foothold. Saying it doesn’t either speaks from a position of ignorance or privilege. And if Ramsey is the financial guru he’s lauded as I’ll let you decide which camp he lands in. While it may be true that you can work around credit inquiries, why put someone in a position where they have to learn to do that?
Besides possibly needing a credit score when establishing yourself as a homeowner, renter, employee, or TV binge-watcher, a high credit score can open a lot of doors for people. If we’re going to teach financial fitness, let’s share all the possibilities. Let’s not limit people.
Here’s a short list of ways in which I’ve put my credit score to work:
- Financed my Master’s degree and wedding with 0% cards – hello, bonus points!
- Travel hacked my way to cheaper vacations
- Qualified for a better mortgage loan rate to the tune of .50%
- Financed a car for 0% – gasp, I know!
And I’m sure there are all sorts of other ways that my credit score works on my behalf that I haven’t even stopped to consider. The fact of the matter is debt is a problem, but credit scores are not. Like most things finance related, with a deeper understanding, this is one more tool that can put money to work for you.
So Tell Me…What do you think of credit scores? Have you ever put yours to work for you?
No, this isn’t going to be a post about how I put breakfast and booze in my suitcase to save money. That kind of packing isn’t necessary here. We’re taking Mr. P’s favorite kind of trip where he can eat so much that people marvel at his ability to not throw up: an international all-inclusive vacation. Now let’s talk packing. Continue reading “Pack Smarter to Save at All-Inclusives”
At the beginning of the summer, I outlined my grand plans to earn extra income this summer. And grand they were. Summer school wraps up today, and I only have two more meetings on the docket. Thanks to all of my school-related side hustling, I’ll have clocked in just shy of $3500 after taxes. That doesn’t even include the money I made tutoring or contributing to Tip Yourself. For someone who is hellbent on crushing her mortgage, you’d think I’d be pretty content. But I can’t help but wonder if I’ve been hustling too hard. Continue reading “Am I Hustling Too Hard?”
Bill Nye once said, “Everyone you will ever meet knows something that you don’t.” And therein lies the danger of the single source. She’s the mouthpiece of personal finance. He’s the only financial expert Americans need. I shudder when I hear people speak about any singular financial figure and his or her theory as prophet and gospel. The speed at which soundbites are shared on social media sans attribution only compounds this issue. Is everybody reaching similar conclusions or is everyone parroting back one person’s ideas? Continue reading “The Danger of the Single Source”
Is your budget really as smart as you think it is? One of the first things many people do when they are trying to get their financial fitness on is to create a budget. Undeniably, there is a requisite amount of trial and error involved in the first few passes. A budget should meet everyone’s needs, be grounded in reality, and align with your goals, values, and charitable priorities. Flexibility is key. For a long time, I was pretty pleased with our budget. After all, it allows us to save 42% of our after-tax income without factoring in any side hustle money. And that doesn’t even include the 10% of our pre-tax income that we each pay towards our respective pension plans every year. Clap louder. I can’t hear you this far away.
While it seems like we’re sitting pretty with our line items each month, it turns out that the true test of a budget involves the magic number twelve. That’s right. Yearly budgets lend an equally powerful perspective. Even if you already have your budget broken into percentages, the yearly totals either get a little harder to swallow when you think of what else you could be doing with some of that money, or the numbers will inspire you to take a victory lap around the kitchen table. I put our budget up to the test and multiplied every line item by 12. Below, I share just a snapshot of the good, the pricey, and the ridiculous: Continue reading “Test Your Budget with the Power of 12”
Titles of favorite personal finance books are volleyed about all across social media. Books that win favor based on their content as much as their titles, like The 4-Hour Work Week and I Will Teach You to Be Rich. Then, there are the heavyweight financial gurus: Suze Orman, David Bach, and even Dave Ramsey.
I always have at least one finance book in my library haul, but I’m equally interested in the history and the philosophy of money. For instance, most people read The Richest Man in Babylon to learn the secrets of smart wealth building. It’s not that I didn’t take note of those themes, but I also spent my time fact checking the history and applying all sorts of gender theory to the writing. I am that person.
So when this perennial-student-turned-teacher was gifted a copy of It is Only Money & It Grows on Trees by Cara MacMillan, my heart fluttered. The book promised a deep dive into finance using different cultures and religions, and it more than delivered. In a small-but-mighty format, the text explores the meaning of money, the ways in which money is utilized, and smart finance tips in a way that is really comprehensible. Continue reading “A Money Book with the Heart of a Teacher”
While I’m a far cry from an expert gardener, it’s been a hobby of mine since I was little. And it’s always been a family affair. I can’t ever recall a summer where my dad and I weren’t trying our hands at a tomato plant or twelve. Not to mention the ill-fated encounter with a pumpkin vine and his riding lawn mower. When I was even younger, my grandma taught me how to grow moss roses from seed and then harvest them for seeds for next year’s gardens. Then there’s my mom. She has a remarkable eye and knack for landscaping that I wouldn’t put it past her to retire a second time and start working for a gardening center. Now that Mr. P and I have been living in our home for three years, he’s been roped into the gardening mix as well. We’ve had our share of successes and failures, but he’s equally enthusiastic about gardening.
While I still can’t really explain the difference between a brandywine or a beefsteak tomato, I can say that there are quite a few parallels between starting seeds and planting pennies. Here’s what my garden has taught me: Continue reading “Money Lessons from My Garden”
Letter grades are one of the hallmarks of the American education system. Whether it’s an A or an F or something in between, letter grades define our academic abilities as students for nearly two decades of life. And then what? People still talk about succeeding and fret at the notion of failing. What would happen if we altered the verbiage and recategorized failure?
That is, in fact, one of my favorite parts of summer school. Since these are non-credit classes given my students’ ages, I assess individual skill strands. I don’t have to worry about assigning letter grades that have to translate into GPA points and transcript data. My favorite category? Not yet. There is no F. There is no no. Instead, a student is either mastering a skill, developing a skill, or hasn’t done it quite yet. More chances will be offered, and there is more work to be done. She hasn’t failed. He hasn’t flunked. They’re just not ready yet.
As someone who
obsessed obsesses over failure regularly, removing the notion of failing from my mindset has been liberating. I haven’t flunked personal finance. I haven’t failed a goal. I’m just not there yet. I’ll get there. I might be on mile two while everyone else is eyeing the finish line, but I’ll keep trudging on. In the spirit of summer school, here are my not yets–financial and otherwise. Continue reading “Harnessing the Power of Not Yet”
There’s something about money: It brings out the best, the worst, and the most awkward side of people. Since I’ve dedicated a fair amount of time this summer to side hustling, I’ve had to do some explaining for how I’m spending my time. I get it. A lot of people think teachers have summers off and spend time eating
bonbons ice cream straight out of the carton. But even fellow educators have had some really interesting things to say when they hear about my hustling. As usual, my interactions lean more towards awkward rather than awesome. Continue reading “Frugally Awesome…Or Awkward: Part 4”