A financial planning lesson from Notre Dame

Posted on April 16, 2019June 14, 2019 by Danielle

If I were superstitious, I’d say I bring destruction when I travel. Back in 2000, I’d left Paris only a few days before the Concorde crashed. In 2008, I spent a lovely day roaming Athens’ Syntagma square, the scene of riots only a few weeks later. On that same trip, I spent quite a bit of time wandering around Cairo’s Tahrir Square and the Cairo Museum—it took until 2011 for Egypt to feel the “effects” of my visit. But I swear I had nothing to do with the fire at Notre Dame—I’ve been there about half a dozen times and until now it’s escaped my curse.

Nevertheless, it’s an unqualified disaster, and I can’t find any humor or irony in it at all. But it did get me thinking about places I’ve always wanted to visit, and goals as yet unachieved. How sorry I feel for people who never saw it, and may never see it intact again in this lifetime. I remember well the feelings I’ve had for other places and opportunities that suddenly seemed to disappear: after 9/11, how many of us wondered if the whole world had changed and if we’d ever be able to travel again? In 2013, dear daughter and I were in London; would we go now? I’ve always wanted to travel in Israel, but never been able to wrap my mind around the dangers. And I have a long-standing aim to go to India, and to take a cruise to Alaska, both completely unplanned as of now.

How can we change that? Actually accomplishing travel (or any dream that costs money) has a better chance of becoming reality by working through some clear steps.

What do you actually want to do?

I’m happy schlepping through Europe, and don’t worry about languages (where I can scrape by in a few), managing train travel, or finding a hotel. I’d be pretty content with an inexpensive, weeklong cruise to Alaska with an interior cabin. But an India trip is a different story—I want everything taken care of, a guide, transportation arranged and probably first class, hotels all pre-booked. I’ve also considered a language immersion trip. Some people gravitate to cooking schools, or ukulele camps, or fiber festivals, or following the route of Joan of Arc. A theme can be quite an organizing principles, and you should decide just how exactly you want to travel.

What are the obstacles?

Money is the most common. Turns out, time available also can be difficult. Then there are the mental quirks that only live in my (or your) head: although I’ve wanted to see the Palio in Sienna, I’ve actually never made the slightest effort to think it through because it’s run in July and August, probably the two worst months for seeing the rest of Italy. Consequently, while I’ve been to just about every other Western European country, I’ve missed Italy entirely. Unless you can identify what’s stopping you, you can’t investigate and make a plan.

When do you want to go?

This can be both what season and what month or year. You need to give yourself enough lead time to come up with the money and find the time. But having a specific calendar timetable can move the dream from someday to (exact date). Someday will never happen.

What do you enjoy once you get someplace?

For me, it’s all restaurants, museums, and historical sights (some with significant admissions costs). As long as it’s clean and close-in, I don’t care much about hotels. My toleration for shopping is about 2 hours max (unless it’s the Marché aux Puces or a museum shop). You’ll never find me at a sporting event, and only once in about a million miles of travel have I ever taken a nature hike. YMMV. Preferences definitely influence cost and destination selection.

What does it actually cost?

It’s a lot cheaper, of course, to go to St. Louis for a weekend than to spend three weeks touring India. But what’s the actual possible dollar figure? Have you looked up airfare, packaged tours, hotel costs in Amsterdam? Do hotels at your destination customarily include breakfast? What level of luxury are you after? Will you rent a car or buy a rail pass? Researching the trip has been shown to extend the pleasure—the anticipation and choosing possibilities is a huge part of the fun.

Can I get it cheaper?

Here’s where the whole world of travel hacking comes in. Based on my own experience, it’s easier to get it cheap if the destination is popular, close, or more familiar. Our 10 day London trip (including Bath and Oxford) cost about $1,000 total for the two of us. Key West was only the cost of food and a not inconsiderable amount of tropical booze. A western Caribbean cruise we took cost the price of the shore excursions (I could do better now). But so far I haven’t had similar luck trying to snag a low cost way to India. I’ve had the best reductions using travel points of all kinds, leaving at the last minute, and not caring too much where I was heading or precisely where I was staying (Hyatt Regency St. Louis for $49/night—mystery selection on Priceline).

Once you know where and when, you can set up all kinds of alerts, figure out when the cheapest days and times are, and concentrate your points spending. Make a plan for yourself and make those dreams real before they turn to smoke.

Why you need an emergency fund–20 reasons

Posted on February 27, 2019June 14, 2019 by Danielle

Read any financial advice article (including mine) and you’ll be told you need an emergency fund. Usually this is attached to some number (like 3- or 6-months’ salary or expenses) that will make you feel hopeless that you’ll ever achieve it. I’m here to say that even having $1,000 or $5,00 stashed is going to help out a lot, and help you avoid a lot of bad results. And, if you don’t have an emergency fund you’ll never get out or say out of debt: we don’t know what the emergency will be, but unexpected things occur regularly. Having some emergency is definitely predictable. Here are a few reasons you need something.

You lose your job. This is the first thing everyone thinks of—and probably requires the largest emergency fund, since being without any income (even if you collect unemployment) is pretty scary and can last more than a few months.
You have a health issue and have to cover your deductible and out of pocket expenses. Depending on when this occurs in the year, you may need to cover more than one year’s deductible. Let’s say you get sick in November, but it lasts into February—2 years’ worth of deductibles and out-of-pocket.
You slide in the snow, doing damage to your car (bad), or to someone else’s car (worse) or both (worst of all). Neither of these expenses is worth claiming to your insurance company know, but given the electronics in cars nowadays, one came up to $700, and the not very happy person whose care you hit cost $500. Damages to your home and car that are near the deductible are probably not worth claiming (because they’ll raise your rates or drop you.)
You have a fire. Even if you have homeowner’s or renter’s insurance, moving immediately to a hotel, eating out exclusively for any time period, or even couch surfing at a friend’s is going to cost something.
You have a fire and it only wrecks the kitchen. You’ll immediately incur higher food costs.
Your refrigerator, computer, or other appliance suddenly goes kaput.
If you’re a homeowner, the list is almost infinite: tree falls, sewer line gets clogged, hot water heater’s bottom drops out, furnace or air conditioning die, dog destroys couch or bed, cat decides they prefer your wall to wall carpet to their cat pan and you don’t discover it for a while…
Pets need veterinary care.
Someone dies and you have to travel to the funeral, or you have to bury someone.
You lose your job and have to buy temporary health insurance.
You lose your job and need assistance (coach, networking groups, lunches out, etc.) in helping you find a new one.
A loved one needs immediate residential care or home assistance not covered by insurance.
You or your child need a divorce.
You need to hire a lawyer for any reason.
Your child needs special testing or tutoring not covered by insurance or the school.
You have to buy a car, unexpectedly.
You have to move.
You need dental work, glasses, or a hearing aid (which are not usually covered by insurance). Check your insurance, especially if you have children who need any of these.
You have an accident or illness that requires you to pay others for services you routinely did for yourself (grocery shopping, rides, home maintenance and cleaning).
You work for the federal government.

Ripping off charities

Posted on December 4, 2018June 14, 2019 by Danielle

It can be hard to do good. From each client payment, I set aside a specific percentage of the check and put it in a savings account. I’ve found this far easier than coming up with a lump sum at the end of the year. I can fund things throughout the year, rather than in a blitz in December. And, I know exactly how much I have to give—whatever the account balance is.

However, like all of us, I get multiple appeals from GoFundMe, Facebook friends, etc. I also just had a rather odd experience with a donation on Giving Tuesday (note to self: always write thank you notes when someone does something for you). I started to wonder about how this all works, and whether it was the best way to donate the maximum amount. Here’s what I found.

Donate your bag credit at Whole Foods?

Unless someone convinces me differently, I think this is a scam. Apparently, Whole Foods takes this as THEIR charitable deduction, not yours, so you’re actually funding a giant tax deduction for them. Also, you have no receipt. Keep your bag credit, put it in a jar, and give it to an actual charity at the end of the year. For me, 8 bags a week ($0.80) x (say) 48 weeks would be a $38.40 donation.

Petsmart?

This turns out to be an actual donation to Petsmart Charities and you should save your receipts showing this if you do so. However, according to my research the deduction will be reduced by whatever the merchant credit card fees are, if you use a card.

GoFundMe?

Not only is this not deductible, since it’s considered a personal gift not a charitable donation, but the recipient is charged 5% by GoFundMe as well as 2.9% by payment processors. This is an outright waste in my mind, and I recommend never donating in this way. Just send the person a check if you really do care.

Facebook?

These donations are deductible if the organization is a 501(c)3. However, FB charges the charity 5% to sign up. FB did match the amount if you donated on Giving Tuesday—but only up to $7 million, a pittance which was gone in minutes, as far as I can determine. For all my kind friends who have been induced by FB to post donation requests on their birthday—maybe think again? I suppose 95% of something is better than 0% of something but again, a direct contribution would be better.

Credit card, Paypal, or Square payment?

Once upon a time, some credit cards did not charge charities for donations put on cards. As far as I can determine, this is no longer the case, and charities are charged whatever the merchant fee is for the card. Pay through Paypal and they’ll be charged 2.2% + 30 cents per donation. Square rips them off at 2.75% if there’s an actual credit card to swipe through their reader. It’s an even more whopping 3.5% + 15 cents if the number is manually entered.

Sure, it’s easier to give a charity request a credit card, but for most charities, especially small or local ones, every cent really counts. Many people tell me they no longer have checks, but here’s the ideal place to use them if you have them—or learn to send one directly online from your bank if you don’t use this service.

For more information, check out this site:

How to Maximize Your Online Donation to Charity