Making Bets

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Gambling seems to be everywhere these days.  The commercials for betting apps inundate my TV.  With the Super Bowl in Las Vegas (the casino capitol of the country) this year, the number of things you could bet on seemed to be never-ending….right down to the color of Taylor Swift’s shirt.  Casinos are popping up in shopping malls.  Sports betting is an app on your phone.  Lottery tickets are available from a vending machine at the convenience store.  It’s pervasive.

Betting on things is generally not the best idea.  It’s definitely not a solid plan for a stable income.  You should never bet money that you can’t afford to lose.  The lottery is a tax on people who are bad at math.  The odds are always stacked against you.  Yet that doesn’t stop me from occasionally buying a Power Ball ticket and dreaming of what I would do if I won several million dollars.  It’s not an investment strategy.  It’s a source of entertainment. I don’t do it often, and I go into it knowing I’m probably going to lose.

There are ways to make bets that are not necessarily detrimental.  One year I used my income tax refund to buy some stocks.  I picked a few companies whose products I used and bought 10 shares of each.  One of those companies was a DVD rental by mail company called Netflix.  Those 10 shares cost me $170, and I sold them several years later for a few thousand dollars.  That was a good bet, which funded the installation of central air conditioning in my house.  I don’t remember what the other stocks I bought at that time were….because they were not good bets.

There are more educated, less risky ways to bet on things.  My retirement fund is largely in stocks, but it is managed by people who do that for a living—people that do research and keep things balanced appropriately for where my risk level should be at this point in my career.  It’s definitely beyond my skillset.  But there is still some risk involved in anything that involves the stock market.  There’s still some level of betting involved.

One of the smartest bets you can make is to bet on yourself.  Every time you pursue something new, you are betting on yourself.  Maybe you are taking a new job.  Maybe pursuing a new degree or certification. Maybe starting a business. Maybe something as simple as cooking a new recipe for the first time. Every time you attempt something, you are betting on yourself.  You won’t always succeed.  But you are taking the risk and putting yourself out there. And the person who bets on themself is miles ahead of the person who is afraid to try.

Regardless of what color shirt Taylor Swift wore to the Super Bowl, there are good bets and bad bets.  But betting on yourself is ALWAYS a good bet.

What is Your Goal?

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I almost never mention my first husband.  It was a short marriage that ended decades ago, so it somehow seems like part of a different lifetime.

He and I differed on one very important issue, and I think that is what ultimately drove us apart.  We had different financial goals.  Or at least a different order in which we wanted to pursue them.  All of my life I had two primary goals: earn enough money that I don’t have to be dependent on anyone else, and own my home.  When we married, I had finished my Master’s degree and was started on my career as a financial aid professional.  I had achieved goal number one.  But I was living in a rental apartment.  A year after we got married, we moved to Chicago.  I continued working as a financial aid advisor (this time at a law school—I found my niche!).  He started attending law school.  Within a year of our move to Chicago I was looking at condominiums.  I still wanted to own a home.  He didn’t agree.  He claimed he didn’t want to make that kind of commitment to Chicago.  And that was the beginning of the end.

Ultimately, we divorced.  And a year later I bought a condo in Chicago. A studio was all I could afford, but who needs a bedroom when you have a 27th floor lake view?  It was all mine. And I loved it.  My home, my mortgage, and my rules. After only three years, I sold that condo at a 25% profit.  I moved back to Pennsylvania and started working for Penn State.  And as soon as I was able, I bought a townhouse.  I’ve bought and sold my home two more times since then, and now I know that I’m in the home where I plan to stay for a very long time.  I’ll probably even manage to pay off the mortgage in full.

What I learned over the years is that when the real estate market is strong enough, you don’t have to commit to a home forever unless you want to.  It is possible to sell a home after only a few years without taking a loss on it.  Real estate is more than just a place to live…it’s an appreciating investment.

My first husband still lives in the suburbs of Chicago with his wife and kids.  Ultimately, he did make that kind of commitment to Chicago. We just didn’t have the same goal at the time when it really mattered.  Everyone has their own financial goals. And before you too far into a relationship, it’s important to be clear with your partner what your goals are, and hopefully they will match up with each other’s.

Owning a home and being self-supporting were my goals.  My current goal is retirement at age 60.  Some people have a goal of saving a certain amount of money.  Some have a goal of being debt-free.  Others have a goal of starting their own business.  Your goal is the thing that is important to you.  And everyone’s goal will be a bit different. What is important is that you have a goal and you set your sights on working toward it.

What are your financial goals?

We Don’t Talk About Money

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We don’t talk about money.  And that kind of makes sense.  Money is one of those things that you don’t want to boast about if you have it, and you don’t want others to suspect if you don’t have it.  There’s a cultural stigma attached to talking about money. It can bring up negative emotions.  Those who have more money seem to come out on top in power dynamics.  Those who have less money can be looked down upon.  And rather than inflict that into our everyday lives, we just don’t talk about it.

Unfortunately, money isn’t a topic that can just be avoided in life.  Having money is a necessity to survive.  You have to learn about how to manage it.  How to earn it.  How to save it. How to spend it wisely. How to insure against losing it.  Perhaps things have changed since I was a kid, but this is not information I was taught in school.

My parents were always very secretive about how much money they made.  I guess they thought that would give me some sort of protection against societal stratification at school.  It really didn’t….but the thought was nice.

Luckily my parents did actually teach me some things about money.  They taught me about how loans work when I borrowed some of the money I needed to add a tiny black and white television to my bedroom.  They taught me about budgeting by giving me an allowance.  They taught me about saving by setting up a savings account for me and encouraging me to add to it regularly.  When I started my first minimum wage job at the local grocery store, they taught me how to use a checking account (and how to write a check, which is quickly becoming a lost art).  When I started my first full time job, my father taught me the importance of contributing to the retirement account (at least enough to get the employer match) right away.  And I’m sure there were many more examples over the years.

I count myself as lucky that my parents were able to teach me a bit about money.  I count myself as very lucky that I was intrigued enough by the topic to become a lifelong student and teacher of personal finance.  There is always more to learn.  But we don’t talk about money. I honestly believe that if talking about money were less taboo, more people would have a better understanding of personal finance and would become better managers of their own money.  Unfortunately, that isn’t the world we live in.

We don’t talk about money.

That Time I Fell for a Scam…

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I made a really stupid mistake just before Christmas.  I pride myself on knowing enough not to fall into financial traps.  And I did exactly that.

I was doom scrolling through social media and came across an ad offering me a too good to be true deal on an electric fireplace/entertainment center.  I wanted it to be real.  It looked real.  So I clicked.  It took me to a web site that looked just like Big Lots.  But it was BigLotsSale.com.  Not Big Lots.  I was convinced it was real.  I really wanted that fireplace. So I jumped.  I put in my info and my credit card and I was off.  I received a confirmation email, so I was sure this was for real.  A day or two later I received an email confirming the shipping.  It was real!  It had to be real!

After a few more days. I went back to the shipping email to click the tracking number and find out when my amazing fireplace would arrive.  And that’s when I figured it out.  The tracking number didn’t lead to anywhere.  I started searching the shipping company and discovered it was fake.  Crap!  I had been duped.  A subsequent search on BigLotsSale led me to discover that this is a very common, yet very well done, scam.  Reddit helped me find all of the painful information.

My first action after discovering my mistake was to lock my credit card.  Then I looked at the charges on my card and found one that I had not made.  I called my credit union and they removed the charge I didn’t make right away.  They canceled my card for me and walked me through the process to dispute the charge that I did make on the fake web site.  Then came the fun of moving all of my automatically billed things to a different card.  Automation is great….until it isn’t.  Then I went out to the three credit bureaus (Experian, Equifax, and TransUnion) and put freezes on my account, so the scammers would not be able to open new credit in my name.

I’m actually very lucky.  There is no significant damage caused by my error.  My only potential loss is the $50 charge I made trying to buy the fireplace.  And I may eventually get that back as well.  And I learned a very valuable lesson about buying things through an ad on social media.  I don’t recommend doing it without first researching the “merchant.”  But I also learned how easy it is for people to fall victim to a scam.  I’m very educated in this area and still fell for it.  How easy would it be for someone who doesn’t  focus their life around financial education to make this mistake and have it turn out so much worse?

I’m trying not to beat myself up over this.  It’s done.  I learned something. Everything turned out ok.  This was a very impressive, sophisticated scam.  I’m not a financial idiot…just someone who really wanted an amazing deal on something I really desired.  Technology is scary.  The scammers knew from my online history what would make me jump.  And I definitely won’t be making that mistake again.  A mistake is only a problem if you don’t learn something from it.  And I definitely learned a valuable lesson about shopping from social media ads.

If you have ever fallen for a scam, don’t take it as a personal failure.  It’s not.  It’s an opportunity to move forward with better knowledge than you had before.

Be careful out there.  The internet is a scary place!

 

Opportunity Costs at Every Turn

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As we settle into exam time for most of my readers, now is a great time to think about opportunity costs.  Every time you make a choice, the thing you choose costs you something, and the thing you didn’t choose costs you something.  For example, if your friends want you to go blow off steam, but you decide you need to stay home and work on a paper, then the cost of staying home is that you won’t get to have fun with your friends.  The cost if you chose to go out would be the lost time working on the paper.  Every single choice you make comes with this kind of a trade-off, or opportunity cost.

Here are some of the opportunity costs you may be facing during this stressful time of the semester:

  • Studying versus socializing
  • Sleep versus study time
  • Studying versus working
  • Studying versus extracurricular activities
  • Healthy meals versus easier take-out food

As you stare down the barrel of these choices, prioritization is the key to making sure you are making the right decision.  What is the right choice for your physical health?  For your mental health?  For your financial health?  For your academic health?  And which of these is the highest priority for you?  Everything must take at least some sacrifice in order to find the right balance for your needs.  Nobody can give everything 100%.  You only have a total of 100% to give, and that has to include self-care.

It’s a truly difficult time of year for students.  You won’t be able to do everything you would like.  But with skillful prioritization, you’ll be able to make everything work.

Give Thanks–and Be Rich

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Thanksgiving is upon us.  And I like to celebrate that each year by recounting the many things I have to be thankful for.

This has been a particularly difficult year for my family.  My father passed away in March after a long illness, my siblings and I moved my mother into an assisted living facility, and then we emptied and sold the family home of 56 years.  And throughout all of this, I was dealing with a significant injury to my left knee.  It was a lot.  Really a lot.  And you might wonder why I would have anything to be thankful for at all.  But I honestly do.

I lost my dad this year, but I’m so grateful that his sharp mind is no longer trapped in a body that was failing. And I’m thankful that he was able to share his wisdom with me for many years, and those lessons will move forward with me throughout the rest of my life.

My mom is no longer able to live on her own, but she is still able to have at least some semblance of independence in her assisted living facility.  I’m grateful that she was willing to make that move, and I’m so thankful that she is receiving excellent care.  And as a bonus, she is near me now, so I can visit her nearly every day.

It was bittersweet to empty and sell the home I grew up in.  It was a lot of exhausting work.  And it was heart-wrenching to part with the physical location of so many memories.  But I’m grateful that a new family will now be able to build memories in the home I loved so much.  And I have to say I’m more than a little thankful that I no longer have to worry about the maintenance of a house 100 miles away from my current home.

My knee injury was painful, and frustrating, and brought a sudden halt to any plans I had made to focus on physical activity this year.  I had to deal with crutches, and physical therapy, and ultimately with surgery, and then a cane.  But I’m grateful that I was able, over time, to get my knee to the point where it is almost normal again.  I may not be running any marathons, but I’m confident that I’ll be able to resume more rigorous activity after the new year.  It could have been so much worse.  It could have stopped me from being able to take on the tasks that were needed around the situations with my parents.  I’m very thankful that my knee didn’t stop me from being where I needed to be.

These were only a few of the countless obstacles I faced this year (2023 has definitely not been a favorite).  And each one of them taught me a lot about being appreciative of what I have.  I have a roof over my head.  I have enough money to buy food.  I have solid transportation.  I have a husband to share my adventures with.  I have two cats who love me unconditionally.  I have a career that provides me with the most incredible intrinsic rewards.  If you were to look at my bank account balance, you would never describe me as rich.  But a wise friend once told me that there are two ways to be rich.  One is to have everything you want.  The other is to want everything you have.  And by that standard I am very rich.

Be thankful.

Give Yourself a Little Grace

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We’ve reached that point in the semester when everyone is exhausted and overwhelmed.  The stretch from Labor Day to Thanksgiving break seems eternal.  The will to do what is required isn’t as strong as it needs to be.  This happens every year at this time.  And it’s not just a student sentiment.  The faculty and staff are right there too.

You may think I’m about to head into a “you can do this” pep talk.  But I’m not.  Today I want to focus on how it’s ok to give yourself a little grace.  On Sunday when I got back from a four day training conference, my email was a little out of control.  I thought about logging in and trying to clear out the jam Sunday night.  But I gave myself a little grace.  I let the email sit until Monday.  And because of that I did not get my weekly email out on Monday like I normally do.  But it’s email and the Moneywise Tip.  Nobody is going to die if these things are delayed by 24 hours.  And giving myself that concession was a better choice for my mental health.

I’m not saying that you should skip classes and turn in assignments late.  I am saying that sometimes things you are working on won’t be quite up to your standards.  Sometimes you may have to say no to something you would prefer to take on.  Sometimes you will have to pass on a social event.  Sometimes you may substitute a convenience option from the supermarket rather than making something from scratch.  Corners may be cut.  And it’s ok to give yourself a little grace.  Nobody is perfect.  Nobody has infinite time.  Everyone is tired.

Life can be overwhelming.  Especially when you are in law school, and you see exams peeking around the corner.  Take a breath.  Look at your priorities.  If you can take something off your plate, do it.  If there is someone who can help you, ask.  Give yourself a little grace.  Is the world going to end?  Is anybody going to die?  Likely not.  It’s ok to make yourself a priority.  And now…what you expected earlier….you can do this!!!

A Quick Look at Credit Reports

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Did you know that your financial history has a report card?  Your credit report is a detailed snapshot of your financial history, painting a picture of your creditworthiness to potential lenders, landlords, and employers. What your credit report says can significantly impact your financial opportunities and overall well-being.

There are three major credit bureaus – Equifax, Experian, and TransUnion – that maintain credit reports for individuals in the United States. These bureaus collect information from various sources, including lenders, credit card companies, and public records, to compile a comprehensive overview of your credit history.

Your credit report contains tons of information, including:

  • Personal Information: Your name, Social Security number, birth date, and current and past addresses
  • Credit Accounts: Details about your credit card accounts, installment loans, and other credit-related accounts, including balances, payment history, and credit limits
  • Public Records: Information on bankruptcies, tax liens, and judgments
  • Credit Inquiries: Records of when someone has checked your credit report for lending, employment, or other purposes

By law, you are entitled to a free copy of your credit report from each of the three major credit bureaus once a year.  Thanks to a pandemic change that was made permanent, however, you can now get a free copy of your credit report once a week (though that may be overkill for most people).  You can access your free reports through AnnualCreditReport.com, the official website authorized by the federal government.

Regularly reviewing your credit reports is important to check for accuracy and identify potential errors or fraudulent activity. If you find any discrepancies, you should contact the respective credit bureau to initiate a dispute.  Credit report errors happen more often than anyone would like.

Your credit score is a numerical representation of your credit history.  It is derived from the information in your credit report. It typically ranges from 300 to 850, with a higher score indicating better creditworthiness. Lenders and other entities use your credit score to assess your risk as a borrower or tenant.  Your credit score itself will not appear on your credit report.

A lot of factors go into the calculation of a credit score.  Those with good credit make their payments on time.  It’s a good idea to keep your credit utilization to a maximum of 30% of your available credit.  Applying for credit multiple times in a short period can lower your credit score.  And a longer credit history helps to build a higher credit score, so building strong credit is a bigger challenge for younger people.

Your credit report is basically the report card of your financial habits. You should take a look at it and see how you are doing.  If your credit needs work, you should do that sooner rather than later.  The worst time to find out there is a problem on your credit report is when you actually need credit.  Take a look.  It’s worth it.

Repair or Replace?

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My Subaru is in the shop.  My beloved 2012 Outback with 107,000 miles on it.  I took it in Friday for a scheduled service (a major service, which was already going to come with a four digit repair bill), and they discovered a few more things on the verge of failure.  It’s going to be expensive.  Expensive enough that it made me think about whether it was worth fixing, or if it would make more sense to replace the car.

Ultimately, I decided to make the repairs, despite the price tag.  My Subaru is paid off.  And while a nice new car sounds appealing to my senses, it is not appealing to my wallet, especially with car loan interest rates looming around 7% or higher.  And even to replace my Subaru with a car of equivalent age and mileage would cost more than twice the cost of the repair.  Although I originally bought the Subaru used, I know it has been well taken care of for at least the last six years.  The tires on it will be good for a couple more years.  It’s already set up with a trailer hitch and wiring to be able to tow my little camper.  So I’ll have a big outlay of cash for the big repairs now, but then my car should be good to go for another 100,000 miles.  Or at least until I retire and my needs change.  If I were to buy a new car now, it likely wouldn’t even be paid off before I retire.

A really huge car repair bill can give you pause.  Especially when it’s an older car with a lot of miles.  It would have been easy for me to walk away and start searching for a replacement.  But the reality is that my old Subaru is of more value to me than it is to anyone else.  And for about a year’s worth of car payments (or hopefully less), my old Subie will be ready to roll for a lot longer.

Would you repair or replace?

 

Saving at the Pump

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How much does a gallon of gasoline cost?  Nobody knows.  The price of gasoline is all over the place in Centre County right now.  A gallon of 87 octane can cost anywhere from $3.54 to $3.85, depending on what station you visit.  Even the prices from one Sheetz to another can vary depending on which end of State College you are on. It’s enough to make you crazy.  I’m accustomed to prices varying from city to city, but not such large disparity within one town!

I’ve never been the kind of person to drive around chasing the best price for a gallon of gas.  But a difference of 30 cents per gallon when I put 13 gallons into my Subaru is $3.90.  That’s more than the cost of one gallon.  And that’s worth driving a little further for—there’s no way that I’m going to burn a whole gallon of gas just driving across town to the less expensive station.

Luckily there are ways to lower your per gallon price, as well as ways to know how much your local stations are charging before you make the drive.  I’ll be honest….that $3.54 per gallon price is at Sam’s Club, so you can only take advantage of that with an annual membership (which I maintain for other reasons—gas prices are a bonus for me).  But there are stations in Bellefonte charging similar prices without a membership fee.  I’m a Sheetz loyalist, but my local Sheetz has the advertised price of $3.85.  I never pay full price for gas at Sheetz, though.  I save three cents per gallon by using my My Sheetz card, and an additional five cents per gallon for using my Sheetz branded credit card.  I also collect rewards and offers on my My Sheetz card, so right now I have an extra 11 cents off per gallon waiting to be used.  That will bring my next Sheetz gas purchase down to $3.66 at my local Sheetz, or $3.56 at one at the other end of town.  Sam’s is still cheaper, but not enough to make it worth going out of my way.

So how is a person to know where to go to get the best price on gas?  Just driving around defeats the purpose.  Thankfully, there is an app for that.  I use the Gas Buddy app on my phone to check the prices at local stations whenever it is time to fill my tank.

Someday I’ll get an electric car so I can avoid all this gasoline nonsense and just charge up at home.  But that’s not an option for me right now.  But I feel like I’m making the best decisions I can to fuel up in an economical way.  Are you getting your best deal on fuel?