Are we having a rental crisis?

rental increase


Half your income for rent? Say it ain’t so! According to a 2017 Harvard study (CNBC reporting), 45 million American households rent their home. Of those renting, almost half (21 million) are considered “burdened” because their rent is over 30% of their pre-tax income. 1 in 4 (11 million) are paying over 50% of their pre-tax income on rent; “severely burdened”. Craziness I say! According to Zillow, 21% is the historical “norm” (housing expense as a % of income).


Rental occupancy is at its highest level in 30 years. Apartment construction has jumped 35% since the housing crisis/recession due to increased demand; twice as many apartments were built in 2017 compared to 2016.  80% of recent apartment construction is considered “luxury”, largely due to the rising cost of construction (labor, materials, and land). Much of this building is in urban areas where the cost of living is already high. Is this sustainable?


I’m not going to insert politics into this discussion; however, I do want to give you some tools and ideas to help evaluate if you should rent or buy and how much of your income you should allocate to your monthly housing expense? If you don’t have a plan, you could find yourself “stuck” in a vicious cycle – not saving enough for a down payment (for purchasing a home) and therefore forced to keep paying ever-increasing rental payments.  This could lead to living paycheck-to-paycheck, credit card debt, etc.


In most major markets, buying a home is a better long-term solution (vs. renting) – but only if you’re ready? Let’s ask some questions first.   .     .


Do you plan to move in less than 5 years? I know this might be a difficult question but you will need to give it your best guess anyhow. If you said yes, you should probably rent; the transaction costs of buying and selling a home are too high if you frequently move; rent instead.


How much time and money are you willing to spend on repairs and maintenance? This is especially important if you are interested in purchasing a single family home – rather than a condo or a townhome. recommends you estimate 1% of the purchase price for annual repairs & maintenance on your new home. The problem with home repairs and maintenance is that they are lumpy – they don’t occur on a regular basis; for example, it’s difficult to know when major appliances (furnace, air conditioner) will fail, or when the roof might spring a leak. These expenses will surely occur; you won’t have a plumbing problem – you’ll have a plumbing emergency. It’s wise to set aside money (monthly) into a housing fund that can be used to pay for these irregular, but inevitable expenses.

Are you afraid? You will be.   .     . Yoda


How much will it cost in rent vs. a mortgage in your part of the country?

Do some research – look at comparable homes in your area – both for sale and for rent. Add up the monthly expense for interest, property taxes, and insurance – this is the rental portion of a monthly mortgage payment – ignore the principle portion of your payment; housing prices increase at basically the same rate as inflation (over long periods of time),  so its extremely likely that you will sell your house for more than you originally paid for it. Compare the rental portion of your monthly mortgage payment to rent for a comparable house.  Also factor in that your rent is likely to go up over time – probably in line with inflation; however, it has jumped 4 to 5% in some areas.  Just sayin’ .    .    .

I will share my situation

$582 monthly interest (goes down over time)

$311 monthly escrow (property taxes and insurance) (goes up over time)

$216 monthly repairs & maintenance (using the 1% factor) (goes up over time)

$1,109 total

When I looked up comparably sized houses for rent in my zip code ( I found a range of $1,720 to $1,995.  Realize that the landlord is paying comparable expenses too (property taxes, insurance, principle, interest), plus repairs and maintenance – as well as a profit.   .      .

I’m saving about $600 – $900 per month; probably helps that I’ve lived in the same house for the past 13 years.

I don’t really think it’s super important whether you rent or purchase your home – but I do want you to limit your housing expense to 25% (no more than 30%) of your pre-tax income. I believe this gives you the best chance to succeed in personal finance. I personally believe that purchasing is better than renting (financially at least) over the long-run (most of the time anyhow).  You can also make home improvements/decorating decisions without getting the approval of the landlord; plus you might be able to deduct the interest and property taxes on your income tax returns (if you itemize). The landlord is going to set the rent at a level to cover his costs as well as some profit. If you would rather rely on the landlord for needed repairs & maintenance, then you are going to ultimately pay for that – via higher rent. This concept applies to pretty much any convenience in life.

Don’t buy more house than you need. Although purchasing a home might be financially beneficial over time (vs. renting); buying a home doesn’t compare favorably to the returns you could get in a low-cost index mutual fund (invested in equities). Buy as much house as you need and invest the rest!


Some specific advice from


If you are a family of 3 (with an average income) aim for a 3 bedroom and limit the square footage to 1500 (or less).


If you are single – go with a one bedroom condo – preferably close to your job.


You might ask yourself how handy you are and if you have time to do repairs & maintenance – if you really don’t want the inconvenience of repairs & maintenance then maybe you should opt for a townhouse or condo, whereby the homeowners association is usually responsible for exterior maintenance. Again, if you are want someone else to do these services for you – expect to pay for it – usually via much higher monthly HOA dues.


In most markets, the rental portion of your mortgage will be less than a comparable house would rent for; however, you have to use this savings to “offset” the upfront mortgage costs:  appraisal, loan origination, realtor fees, etc. – could easily be $3,000 to $5,000. A portion of this savings will also be used for repairs & maintenance – use 1% of the purchase price as an estimate.


Maybe you think 25% – 30% of your income for housing sounds great, but when you look at prices in your area, the math just doesn’t work – everything is too expensive!


Some practical, but not necessarily easy/convenient, advice:


1)            consider getting a roommate


2)            consider a different location – the most popular parts of town usually have exceptionally high prices for real estate.


3)            consider a different occupation/career. Maybe your income is too low.  See my previous post on improving your career path.

4)            consider a tiny home – I know this sounds a little crazy/extreme, but use it as a tool to save up for a really good down-payment for your next house.  Your first house doesn’t have to be your “forever” house.  I recommend a smaller “starter” home as your first home.


5)            shop around – especially if you are renting – don’t just accept a price increase from the landlord; use the internet and look for a better price. It’s cheaper (and more convenient) to at least attempt to negotiate with your current landlord – good tenants are hard to find – leverage that fact into a better price. You can always threaten to move. Go on social media and ask for suggestions – maybe someone you know has a room for rent.

buy vs rent

Let me know what you think – leave a comment below with your opinion of buying vs. renting in your area.

10 things I learned from Millennials



Alright, alright, I’ll admit it, I’m a little obsessed with Millennials. Their mind-set, their approach, their priorities – it all makes me curious about what makes them so different, compared to other generations? Millennials are also referred to as generation Y – they question the status quo – why do I have to work 40 hours a week when I can get my work done in 30?


Specifically I am interested in how they approach personal finance. I’m convinced they are truly, significantly different from previous generations. I’ve been accused of constantly throwing shade at millennials and will readily admit that some of their tendencies seem a little wonky (downright irritating actually, #YOLO – FALSE! – you live everyday, you only die once #YODO) – many are walking contradictions (aren’t we all?); having said that, today’s post isn’t about being hyper-critical of 20 and 30-somethings – we were all young and inexperienced once; besides, not all millennials are self-absorbed, think they’re entitled to a participation trophy and live in their parents basement.


I’m actually going to list the top things I have learned – and admire – about the millennial approach to finances, because truth be told, I’m a millennial wanna be – I’m just too old to be an actual member of the cool kids club.   .     .

young people

Before I get to the list, let me state the obvious – these traits don’t apply to all millennials. I’m not here to stereotype everyone born from 1980 through 1995, that would be crazy; however, there are some traits that are quite common among this generation – traits that set them apart from other generations. I’m going to list the top 10 things that I admire about the millennial approach to personal finance:


1)            It’s better to spend money on experiences than stuff. One survey (Harris poll) indicates that 78% of millennials would rather spend money on an experience than on a desirable good. For many, they simply don’t fall for the siren call of extreme materialism (Mcmansion, BMW, etc.). Buying possessions could drain your bank account. Experiences, this got me to thinking, what are some of my most memorable experiences?

My top 10 experiences, it was really difficult to list only 10 – I guess I’m rather nostalgic  .   .   .

Spring training baseball with my dad and Uncle Dale, in Florida near Orlando – there’s really nothing quite like spring training baseball – a timeless American tradition

UNC basketball game with my parents, when Hansbrough broke the scoring record (Go Heels!)

Banff (Canadian rockies) – hiking with friends to a frozen lake; 83 degrees at the base, then you hit the snow-line after a 45 minute hike – amazing!

Alaskan cruise with family – spectacular views, the train, the whales, the glaciers, the rainforest, the reindeer, the smoked salmon .     .      .

Disney vacation (2016) with just my family; Mickey, star wars, Indiana Jones, a safari ride, Epcot, international food & wine festival  – priceless memories!

Boat tour of Lake George with close friends – beautiful mountain views in upstate New York – I could easily go back every year!

Smith & Myers concert with a buddy – probably the best concert I’ve ever been to – small venue, great vocals, and some of my favorite alternative rock songs from Shinedown – including lots of covers: Phil Collins, The Eagles, Adelle, U2 – you get the picture.

Snorkeling in Georgetown (Grand Cayman) with Heather on our honeymoon; the blue water, the coral, the fish – all in crystal clear high definition!

The river walk in San Antonio with a mariachi band (with Heather) – hard to describe but its very picturesque – I love south Texas; Austin (live bands), the brisket (The Salt Lick), and of course the Alamo – Everything is bigger in Texas!

I think Millennials have a great point – I wouldn’t trade any of these memories for say a new beamer – not a chance!

What are some of your favorite memories?

2)            You can save money in a sharing economy. You can rent out a room in your house (Airbnb) and possibly bank a few thousand each year to help pay part of your mortgage.   Use Uber and maybe you don’t have to buy a car at all – might be workable if you live in a big city – imagine the savings of no car payment, insurance, gasoline, maintenance, etc. Social networking sites like make it easy for people to connect with others locally and share power tools or gardening equipment.


3)            Technology is your friend. Cut the cord. Automate your finances. Millennials are comfortable with technology and are more willing to pay bills online and automate their savings. See my previous post on

4)            Restaurants are expensive, instead, eat at home (be healthy of course). Millennials are increasingly shunning restaurants (especially chain restaurants, vs. their pre-recession levels) and why not? You can get great ideas from Pinterest and cook at home – after going to the farmers market (or ordering from Blue Apron) to get some local, ethical, fresh flavor. I believe the average restaurant meal is about $12 per person vs. $2 per person if you cook at home.


5)            Earn some mad money from a side-hustle – a recent study (Bentley University) indicates that 66% of millennials want to start their own business.  Maybe you want to start your own blog/podcast, provide online tutoring services, teach English remotely (via skype), be a social media/SEO consultant, pet sit, drive for Uber – there’s a lot of possibilities.    .    .


6)            Focus on learning in your career – lifelong learning can lead to a more fulfilling and healthier life.  Interconnected millennials embrace technology and prioritize happiness and learning – they believe there is a link between the two.  Millennials are constantly micro-learning with so much information at their fingertips (via the inter-web).  A lot of this information helps them with their career aspirations.


7)            Optimistic – Millennials are persistently more optimistic than other generations – about their prospects and the future.  80% think they will be better off than their parents (USA today).  See my previous post on 10 habits of happy people.

8)            More comfortable talking about money – Millennials are going to talk about their salary and finances and are unimpeded if other generations are uncomfortable with these typically taboo subjects (Cashlorette survey).  They are significantly more likely than other generations to discuss their salary with friends, family, even coworkers.  They are revealing and transparent – maybe in an effort to make the workplace more equitable – knowledge is power – know your worth.  Millennnials will use social media to ask for advice from peers – personal finance is a team sport!


9)            Simplify – This generation is more actively frugal, reconsidering the role of material possessions, luxury and sustainability – probably as a result of the great recession.  This new approach affects their shopping and consumption habits.  Whether by necessity or by choice – minimalism is now en vogue.  Basics are in – complexity and clutter are out.  Recycled and vintage are chic.  You have to be a minimalist to live in a tiny home.  I think millennials are redefining needs and wants, in pursuit of what’s really important – functional products with a lower environmental impact.


10)            Avid savers and avoid debt/credit cards – this might be a reaction to the Great recession of 2009 as well. A 2018 Bank of America survey found that 1 in 6 millennials now have $100,000 or more in savings. That’s impressive! One study (bankrate) showed that about 2 out of 3 millennials don’t have a credit card. Another study (Facebook IQ) said that 46% of millennials define financial success as being debt-free. 86% reported saving on a monthly basis!


Watch this funny video about Millennial stereotypes – it’s hilarious!


Hey, we got married!! Here’s why we aren’t broke(r)



Congratulations! You are about to get married!! Weddings! Cake! Ceremonies! Cake! A lifetime of happiness! Cake!!


…and debt.


The Knot, a popular wedding website, said that according to their 2016 study the national average wedding cost was $35,329 (not including the honeymoon).  That is a lot of money, but as many, many, many friends and family will tell you, that is a small price to pay for the memories, and the moments, and (hopefully) a once in a lifetime event.  But is it?


The problem with paying incredible amounts of money for that special, special day, (and don’t let anyone tell you that it is not one of the most wonderful, amazing days you will ever experience), is that the cost doesn’t end when the party does.  Very few people can pay that $35,000 out of pocket, and so the debt of the day will follow long after the chairs are folded, or stacked, or burned, depending on how crazy your reception gets.  So here are some tips to help you spend a lifetime of happiness together, instead of starting your marriage in debtors prison.

wedding prison

First thing first, sit down and create a budget. What can you afford? Are mom and dad helping? Some parents may want to be a part of the planning process and give their ok on each purchase before footing the bill. Some may want to contribute a certain amount,  or take care of a certain aspect of the wedding (the food, the DJ, etc.) Make sure to have these important (and potentially awkward) conversations to know what you’re working with.

bride father

Next, figure out what is most important to you and your new spouse to be. What is the non-negotiable on which your dream wedding hinges? Is it a fantastic buffet? A venue out of a fairy tale? A live band to keep the party rockin? Budget a little more for that and get thrifty with the rest. Keep it simple: don’t go overboard pinning ideas to your dream wedding board. While Pinterest (a virtual bulletin idea board) is a treasure trove inspiration it can easily overwhelm you in a bog of possibilities. Pick one theme; a rustic, greenery, victorian luau might be a little much.


Consider keeping the guest list small. More people = more mouths to feed and larger capacity venue. Both are high costs in wedding planning. You do not have to invite everyone. You do not have to invite all your co-workers or your boss. Make a list of people you can’t imagine having the big day without.  And be ruthless here, we went through seven revisions of our guest list.  We went from the initial 500+ guests to a final total of 96.  Some of those removals hurt.  Some of them came with giggles.  But we stand by our choices, and not having wedding debt looming over us really takes the sting out of getting the stank eye at church from your brother’s cousin’s fiancee’s boss’s sister.


Know when to DIY…and when to call the pro’s:  Doing it yourself can be super cost effective. But it can also be stressful and time consuming. Keep DIY decor simple. Dollar store vases and candles are simple, cost effective, and classic. Hand cutting and folding hundreds of tiny, sheet music, origami roses will have you (and the friends you drafted into helping) pulling your hair out and spending the same amount of cash on wigs as it would have cost to buy the things off of Etsy.

origami rose.jpg

The time of day of the wedding can be a huge cost saver. An early afternoon wedding is intrinsically less formal than an evening event. Casual attire, food, and atmosphere provide ample budget slashing opportunities. Just provide light hors d’oeuvres and lemonade, or perhaps just cake and champagne.  The time of year also greatly affects what the venue and rentals will cost.  January and February come with massive discounts for venues, rentals, and even caterers.

Think outside the norm of typical wedding venues. Think parks, gardens, historical sites, your uncle Ulysses’s big back yard, or a friend of a friend’s restaurant patio. Steering clear of big wedding hotspot venues opens up cheaper and usually more unique options.  For example, we decided that our wedding would be held in a mountain cabin, and when we began looking at options, we realized that the cabin that would be large enough for the wedding, would be large enough to house our families and bridal parties, thus saving us a lot of hotel costs.  We ultimately fell backwards into a prohibition era mansion (another partial gift), but being open to new and unusual things led us to some really cool and unique ideas, that were at the same time frugal.

As for food, go casual. Use your favorite local restaurant, ask your aunts, or church ladies, if they would pitch in and make a dish. We got lucky here. We are blessed with some very generous friends and family who gifted us with, among other things, all the meat (cooked to delicious perfection) needed to feed our guests, as well as a truly top tier wedding cake (perhaps make very good friends with a professional baker six to twelve months before the wedding??). We only needed to buy the hors d’oeuvres, sides, and drinks. The cocktail hour hors d’oeuvres were fruit and veggie trays ordered from the grocery store (Costco or Sam’s Club are great options) and we ordered the sides from our favorite BBQ restaurant in the area.


There are many other areas we could touch on, but you are smart people, and you get the picture.


Ultimately this day is not about the wedding, it is about the marriage.  Don’t worry about the day so much, worry about the life afterwards.  If you are the type of people who want to start off with strong memories, and feel like you would regret not blowing out the wedding, go nuts.  But don’t be surprised when you are looking at your amazing, picturesque wedding photos over a single bowl of unflavored ramen split between the two of you, while hoarding spice packets to use on your 50 pound bag of rice that sits in the corner, because if I taste rice one more time this week, Susan, so help me, I will literally pound my face through the hornets nest in the backyard.  Of course the other end of the spectrum is to serve Taco Bell and wildflowers (vegan friendly!!) as your reception meal so that you can later look at dismal photos over filet mignon and beluga caviar.  Find your balance.  Find what you can live with.  Find that place where your memories and your bank account are friends.  Because, honestly, the best part of the wedding, is the wedding night.  (This statement is not endorsed to be published by my wife, and she is, frankly, mortified).

groom punch

The previous guest post was from Marcus & Laura.  Congratulations!

May the road rise to meet you,

May the wind be always at your back,

May the sun shine warm upon your face,

The rains fall soft upon your fields,

And until we meet again,

May God hold you in the hollow of His hand.

Q: Is Amazon Prime worth $99 a year?

prime black

A: you might have already guessed my answer, it depends .     .     .


I am not an Amazon Prime member but I am quite curious about this service and got to wondering if this is something that you should consider spending your money on?


I did some research and read a number of articles on the subject – I will put a link at the bottom of this post to one of my favorites on this subject, by Motley Fool.


My first question in this type of analysis is to ask why a company (Amazon in this case) would offer such a service? The answer, almost invariably, is because it makes them money.   .     .


There are about 90 million Prime subscribers in the U.S., so a lot of your neighbors already think it’s a good idea. Prime members in the U.S. spend about $1,200 annually, vs. about $600 for non-members. The annual fee to become a prime member is $99 (single payment) or $12.99 per month ($156 annually); the monthly cost went up 18% in January 2018, it was $10.99 previously. Amazon thinks their Prime service is a good deal (for Amazon’s profits of course – they’re already the dominant on-line retailer after all, and its not even close), but is it a good deal for you?


Let’s do a high level review of what the Amazon Prime service provides (before we pass judgment); there are many facets to this service (all included with your $99 fee), which makes the cost/benefit analysis a little complicated, and sorta depends on where you live.


1)            Free and faster (2 day) shipping – with no minimum order required. This is the cornerstone of the service. This probably deserves a couple additional footnotes. You can get free standard shipping for orders over $25 anyhow (without being a Prime member) – but standard shipping takes 5 – 8 days. Although the vast majority of items qualify for 2 day Prime shipping, not everything sold on Amazon qualifies for 2 day Prime shipping – you can filter for items that are eligible for 2 day shipping (just look for the Prime logo) – just a little wrinkle I want you to be aware of. At $99, you would probably have to make 20 orders (of less then $25) to offset the upfront fee (assumes an average $5 shipping fee). Some will certainly value the convenience of 2 day shipping (note that same day shipping is available (via Prime Now) in select cities – 35 currently) and not having to wait until you build up a $25 order.

fast shipping

2)            video streaming. Prime membership also includes free access to thousands of movies and TV shows (including some original/exclusive content – such as The Grand Tour – a reboot of the popular BBC show Top Gear). Basically Amazon video streaming is a cheaper (watered-down) version of Netflix; it’s still worth something, even if it isn’t on par with other top-tier video streaming services.

grand tour

see my previous post on my experience as a cord cutter

3)            music streaming. Prime membership also includes access to about a million songs (no additional charge). It doesn’t have the selection of bigger services like Spotify or Apple music (over 30 million songs each), but again, it’s worth something. See my previous post on comparing Spotify and Apple Music.

4)            Audiobook streaming. Prime membership allows listeners to stream audiobooks on demand – rotating a selection of about 50 titles, as well as unlimited access to Audible channels – original programs, comedy, lectures, news articles, etc.


5)            Prime reading. Prime membership provides unlimited access to a rotating selection of more than a thousand ebooks, magazines, and comics.  These can be accessed via a Kindle, Fire tablet, or via the Kindle app. It will be missing some popular titles but it’s still worth something.


6)            Prime photos. This service allows secure, unlimited photo storage in the Amazon cloud.


7)            Twitch Prime. This service allows ad-free viewing on Twitch, the social-video platform and community for gamers.


There are other lesser perks that I didn’t list here, such as early access to Amazon lightning deals, but I think I have listed the vast majority of the services you get (for no additional charge) with Amazon Prime membership.


Let me circle back and remind readers that data indicates that Prime members spend about twice as much as non-members and about 40% more per transaction. I believe some of this behavior is psychological – people want to make their membership “worth it” – something to justify their annual $99 membership fee. I think this is potentially dangerous – while Amazon does offer fairly low prices, some analysis indicates that about 50% of their items can be purchased cheaper elsewhere (e.g., Walmart – their biggest competitor – which offers an online price match guarantee and free shipping options as well). I don’t want your Prime membership to be a license to spend more and I certainly don’t want you to stop comparison-shopping. I recommend you try to help compare online prices.  I believe Amazon is counting on you getting lazy and buying more and more from them (blind loyalty) – remember, they aren’t always offering the best prices.   .     .


In summary, Amazon Prime might be a good deal if you already frequently order from Amazon (at least 20 orders per year) – they certainly have great prices on some itemsdon’t stop comparing prices! It certainly makes shopping more convenient – especially if you’re already invested in the amazon ecosystem (Kindle e-reader, Fire tablet, echo, etc.).  I’m sure faster shipping is important to a lot of you as well – especially if you live in a fairly remote area that’s not that close to big box retailers (e.g., Wally World). It also might make sense if you opt for Amazon Prime and then cancel your Netflix and Spotify Premium subscriptions – this savings alone could offset the $99 annual fee.


However, if you don’t frequently (20 or more) order from Amazon and won’t use their video or music streaming services, then you should probably not become an Amazon prime member. Think about it (use critical thinking) – run some numbers. (review your own Amazon order history). Are you a disciplined shopper? – or will you spend more if you have a membership? Compare Amazon Prime to Walmart – many of the Walmarts prices are cheaper and they offer free shipping options as well (called shipping pass) – plus I think Walmart’s return policy could be easier to use (more physical locations). I recommend you try a free 30 day trial of Amazon Prime before you pony up the $99 (or $156 if you pay monthly) for an annual membership.


See my previous post on critical thinking skills.

I personally will not be paying $99 to become a Prime member. We don’t order that much from Amazon (maybe a few times per year – mostly at Christmas) and I don’t think I would use the other (e.g., music, video, book streaming etc.) services much either.


Let me know what you think of Amazon Prime. I might do a separate post on which items are usually cheapest at Amazon vs. other online retailers – it’s tricky (by design)  .   .    .

evil amazon



What does your financial dream look like?

beach view

Your financial dream; this is the fun part, go ahead and dream, but make sure you dream BIG! Let your imagination go. What do you want your financial future to look like? Does it involve debt? Harassing calls from collectors? Living paycheck-to-paycheck? (that’s not a dream, that’s a nightmare)


According to the survey below, paying off debt is the number 1 financial priority. I certainly agree with that priority, but I would ask a basic question, WHY? I would say because most people want financial stability and the ability to build wealth. The best way to have financial stability and the ability to build wealth is to be debt-free!


To have the motivation to achieve your dream, you need to establish why you have the specific dream you have; otherwise, you might give up when times get tough, and they will get tough; the Bible says “in this world you will have trouble” (John 16:33);


“You hungry for failure? Maybe a side of unemployment? ‘Cause that’s what’s for lunch. ” Wolf from the movie Hoodwinked (Patrick Warburton)


Maybe you want to be debt-free in order to save up for that dream home. Maybe you want to be generous (help others) in retirement. Maybe you want the peace of mind that comes from being debt-free, true financial peace; imagine what that might be like (no debt payments to anyone!), give it a minute to soak in; paint the picture, burn that image into your frontal cortex.


Almost regardless of your specific dream, being debt-free should be job one because your ultimate goal will be that much easier to achieve without the burden and stress of debt. The Bible says the borrower is slave to the lender (Proverbs 22:7); I don’t know about you, but that doesn’t sound good.   .     .


I believe the very first step (#5 in the survey below) in any successful financial process should be to establish an emergency fund (at least $1,000), because an unexpected expense could derail that wonderful dream (owning your dream home, with a leaking roof and no money to repair it? Sounds more like a nightmare to me.)  I want it to be more than a dream though, (dreams only come true in the movies); I want it to be a goal – a goal with steps, milestones and most importantly, a plan! (aka a budget).


“A fool with a plan can outsmart a genius with no plan any day. And your mother and I think we have a fool with no plan.” Father of T. Boone Pickens. I have read his biography “the first billion is the toughest” – I highly recommend.


Top 5 money management priorities (per the Principal Financial Group Annual Financial Well Being Index 2016)


1)            paying down debt


2)            saving for retirement


3)            creating/maintaining a budget


4)            saving for a major purchase


5)            building a savings account for emergencies

dream beach

Let’s set some goals (to get out of debt), goals that are:












See my previous post about whether or not debt is really that bad (hint: it’s kinda like a fried twinkie – its not that good for you.     .       .)


and another post about what’s so wrong with being average (hint: it’s involves way too much debt)


Endless cycle of debt?


debt cartoon

68% of Americans in debt doubt they’ll ever pay it off, according to a recent report. That’s a fairly alarming statistic and a really pessimistic view on life. I’m not denying there are real challenges/reasons for going into debt: medical debt, student loans, unemployment, etc.  These are real issues and real problems. My trite observations won’t magically fix all of these societal deficiencies; however, I don’t want this mindset to become an excuse; a reason for putting off the necessary and pragmatic steps – that you can take – to become (and stay) debt-free.


I believe the debt mindset is an excuse (for some) to spend beyond their means, because debt is a fait accompli (an unavoidable circumstance). If you accept that something is unavoidable then you don’t have to do anything about it (i.e., change your lifestyle) – just sing kumbaya (to achieve interpersonal harmony) – around a campfire of course (do you hear the crackle of the fire?) – and roast some marshmallows while you’re at it.


A permanent debt cycle is not something that I believe you should merely accept as part of your life. Permanent fixtures in your life should be faith, family, friends, not debt.   .     .


Having said that – many people reading this post will say my previous rant was nice and all, but also very irrelevant (and inconsequential) – they can’t change the past! – they already have debt. Chances are, that describes most of you. So what now?, Even if we accept the premise that debt is unavoidable (a debatable, but moot point for most); what’s the “procedure” if we have already become a victim of the debt monster?


Let’s tackle this particular quandary in two stages: 6 causes of debt (hey – some younger readers might have thus far managed to avoid the debt star), and 6 steps to help reduce/eliminate debt (if you already have it).  See a totally irrelevant (but really funny)  bit on a cannonball wound (Brian Regan)

Let’s start with some of the most common causes (per


1)            reduced income/same expenses; i.e., living beyond your means and letting credit cards fill the gap. When your outflow exceeds your inflow then your upkeep is your downfall.


2)            medical expenses; probably numerous causes here but I presume lack of or lapse in health insurance are leading causes – along with chronic conditions.


3)            poor money management; not having a budget and generally not being aware of where the money went .   .     .


4)            saving too little or not at all; living paycheck-to-paycheck; spend it all baby! This becomes a significant problem when combined with an unexpected expense (e.g., roof replacement). Houston – we have a problem.   .     .


5)            underemployment – I’m going to consider unemployment in this category too. Close cousin to #1. For whatever reason, whenever you are unable to find a full-time occupation.


I’m gonna add 1 more bonus category (because I want to)


6)            student loans – seems like a common cause – at least anecdotally, and I was surprised it didn’t make the list anyhow.


I’m going to add some commentary on each of these common 6 debt causes and how to avoid – and deal with – these conditions (after your debt affliction).


1)            set (and keep!) a budget – be able to quickly adapt your expenses to your lifestyle (don’t over-spend).   Set and monitor your budget with Start with the heavy hitters: housing, transportation, and food (these 3 probably make up 2/3rds of your budget anyhow). Having an emergency fund also really helps, should you experience an unexpected expense. Sometimes expense mitigation isn’t the only solution, you might also need to take a second/part-time job to increase the income side of the equation. If your household income is less than $50,000, I would submit that expense management might not be the only/best way to balance the budget.


2)            insurance – I strongly recommend that you consistently carry health insurance. Don’t let it lapse – even if you have to take out a cobra/continuation policy. If you already have medical debt; work with the provider to setup a reasonable short-term-arrangement (over communicate if necessary; don’t be an optimistic procrastinator – it won’t go away on its own). Work a part-time job, if necessary, to pay off this debt as soon as possible. Review the charges and make sure they are reasonable and customary – I know it’s time consuming but hospital billing errors are more common than you might think.  I also recommend you contribute to a health savings account to have a medical emergency fund.


3)   or; also see answer to #1


4)            start with a $1,000 emergency fund – sell some household goods if you have to. If you truly can’t save anything (with your current lifestyle) then I suggest you review your housing (might have to downsize/move), your transportation (might have to sell/trade), and food (I would avoid eating out/restaurants). See previous post on “my expenses are too high”

5)            I probably can’t answer this quickly and definitively for everyone. Might need to go back to school and get a different degree. Might have to move or commute to a better job location. Might want to read “strengths finder 2.0” to get suggestions on occupations you’re best suited for.   See previous post on preparing for a possible job loss

6)            student loans.   This is probably a sticky wicket – or a hot mess (if you are in the south (like me). There are ways to avoid student loans: scholarships, community college (at least for the first two years), in-state tuition, part-time job during school, military service before college, and trade schools (e.g., HVAC technician). At least think about it. If you already have student loans: Refinance to a lower interest rate. Work a part-time job and pay-it-off as quickly as possible.  Get fannie mae out of your life!


To be honest, being successful in personal finance is a whole lot more than just a math problem; It’s a motivation problem. You have to really want to get out of debt. It’s going to take hard work and sacrifice. If it was easy, everyone would have already done it! I don’t want you to rationalize debt just because most of your friends have debt. Staying in debt isn’t the smart thing to do. Be different. Be weird. Be debt-free.  Think about all the things you could do with the money you are currently spending on debt – go ahead – dream a little – now go out and make it happen!


Set some goals to get out of debt, goals that are:











I’m going to take my own advice and set a goal to pay-off our remaining car loan.  We currently owe $22,658 (as of 1/1/18) (I know, I know – go ahead and roll your eyes at me.    .      .).  I’m setting a goal to pay it off by July 31, 2019.  Beginning in February I’m going to start making double payments – the 2nd payment will be principal only.  That won’t be enough fire power to get it done by July 2019 (that’s only 18 months – yikes) – I will have to also throw in some “found” money – tax refunds, bonuses, etc.  You can do it!

get mad

This is Sparta!  I know its random but I needed some motivation, so work with me.

How to prepare if you think you might lose your job?



I got a request recently for a blog post on this particular topic. I’ll be honest – I don’t think I have all the answers on this one; however, I’m going to give it the old college try and see if we can discover some steps you can take to be prepared (kinda-sorta-maybe) for the proverbial “pink slip”.


This isn’t going to be one of my normal posts – being prepared to lose your job isn’t your proto-typical financial problem. There are some financial steps you should take – more on that later – but I want to address the more philosophical aspect of this issue. To many, the prospect of being laid off is more than just a passing concern; it’s more like a personal fear. It’s a recession when your neighbor loses his or her job; it’s a depression when you lose your job.


This isn’t really a math problem – you need to mentally prepare yourself for the real possibility, at some point in your career, that some business-case analysis will result in your position being eliminated (accountants call them efficiencies). I have first hand knowledge of this particular phenomenon (I was laid off from Alltel in 2001) and will readily admit it can be quite disconcerting – for some this can even lead to bouts of depression. To many, their job is, in many ways, an extension of themselves. Being laid off can be a form of rejection that some struggle to quickly recover from.


I personally don’t think it’s particularly healthy to throw your very own pity party – I say mourn (briefly) and move-on. I want to solve this problem with faith, friends, and preparation.


Faith – I think most of you know that my faith is very important to me and my self-worth is not encompassed in my occupation. My job is not who I am – it’s what I do to help support my family. I’m a Christian and believe my value comes directly from the creator of the universe – he sent his son to die for my sins (John 3:16) – to give me a hope and a future (Jeremiah 29:11). I could go on but don’t imagine you tuned in for a sermon. For this reason I remain cautiously optimistic. If I lose my job, I will find another – this too shall pass. Wisdom, guided by experience, has taught me this is so.


Friends – I recommend you confide in someone about your thoughts – warts and all; someone who will unconditionally love you and listen to your concerns, fears, dreams, etc. I believe God created us to be social creatures and don’t believe it’s healthy to go through life alone.


Preparation – I believe there are many financial steps that you can – and should – take in preparation, should you find yourself unemployed – made available to the industry so to speak.   I’m going to list 5 steps that might help:


1)            Emergency fund – most financial experts recommend you set aside 3 – 6 months living expenses. This is really sound advice as this cushion is designed to handle the proverbial “rainy day” that will certainly occur should you find yourself without a steady paycheck. If your company announces a merger (politically correct way of describing an acquisition) then I recommend making sure you have at least 6 months set aside.

2)            reduce your expenses. I think this is important for a couple reasons. First, you might need to reduce your expenses to fully fund your emergency fund. Second, your next job might involve a lower salary and “right-sizing” your budget is a lot easier when you do it by choice, rather than by necessity. See below a previous post that will hopefully help you brainstorm some ways to cut back on your lifestyle.

3)            update your LinkedIn profile and your resume. Regardless of a pending job loss – I strongly recommend you maintain a good network of business contacts (i.e., others in your industry, leaders, recruiters, etc). This is a good idea because you can learn from others (stay sharp!) and this network will come in very handy should you need a reference or an idea of a good company to work for.


4)            talk to a recruiter – in many industries this a very valuable way to learn about job opportunities. For example, Robert Half is a well-known financial job placement firm. They can also help you assess what you can/should expect in a salary – based on your skills, location, industry, etc.


5)            read the book “strengths finder 2.0”; really more of an online assessment tool that helps identify your personal strengths to help narrow your job search to occupations you are best suited. This might be a great opportunity to explore a different field or occupation – don’t immediately take the next job that comes along. See below a link to a previous post.

I think these 5 steps are a good place to get started but I hope you will also consider (ask a good friend as well) how valuable an employee you are currently and what you can do to become even more valuable. It’s difficult to find talented employees so take the necessary steps to make yourself the best version of you possible. The previous post also includes other tips to enhance your career path. I’m sure there are many other tools and techniques to deal with, and prepare for, being outsourced but I hope you found this post helpful.


subscribe to my blog!  At the bottom of this post (hopefully – might have to be on the full site, not the mobile site – sorry) you will see a box to add your email – then hit the subscribe button – you’re all set! – you will now automatically receive all my new posts directly to your email inbox (usually once a week) – woo hoo!


Drop me an email ( or comment below about your thoughts about being prepared, should the corporate cronies give you your walking papers.

Tax planning



I know this is a boring topic – I hear ya – but drink a little coffee and let’s contemplate this exciting and esoteric issue – okay, okay, not so much .    .     .  but it’s important nonetheless.

One of the traits that millionaires have in common is that they strategize to minimize their taxes (from Thomas Stanley’s book “the millionaire next door”).

see below a link to previous post about other millionaire traits

How do they do it? (you might ask, in a Brian Regan voice).  I’ll give you a hint – It’s not an ancient chinese secret. The key is to plan early in the year and setup your income and expenses to take advantage (legally of course) of existing tax laws.

tax deductions

If you go to an experienced tax planner (I prefer a CPA – but I’m inherently biased) after the fact – he or she can only keep you out of jail – that’s it; CPAs are good and all but they can’t change the past. If, instead, you go to a tax planner before the fact – he or she can you help you set up your affairs in such a way as to minimize your taxes in the coming year, as well as going-forward.


Congress passed significant tax changes in late December 2017. Regardless of your political leanings, I encourage you to better understand these changes – specifically how it will impact your particular situation. I will provide a link (at the bottom of the post) to a good summary of these changes (it’s worth your time to read and understand). Depending on your situation, I strongly recommend you reach out to your tax professional (if you haven’t already done so) in the next few weeks to do some tax planning based on the new tax law.


I believe the recent change to the tax law is over 1,000 pages long, so tax planners are probably still processing how this new law will impact their individual clients. I guess my point is this blog post couldn’t possibly address each person’s individual situation; so I strongly encourage you to reach out to your tax preparer/planner, (even if you do your own taxes). This particular year is a great time (biggest change to the tax code in over 30 years) to have a face-to-face meeting with your planner to discuss what you should be doing, going-forward, to minimize your taxes (plan .   .    .  plan .    .    . and then plan some more). Think of it this way, you pay a lot in taxes, every year!

Let’s look at some of the most common:


1)            income taxes – Federal and State


2)            payroll – i.e., social security, medicare, etc.


3)            property taxes on real estate


4)            gasoline/road taxes


5)            vehicle registration and property taxes


6)            sales taxes – state and municipal


7)            miscellaneous – taxes included in your cell phone bill, other utility bills, etc.


I encourage you to calculate your total tax payments (at least once a year) and how much tax, as a percentage of your income, you pay. I believe my effective tax rate is about 30%, (when I consider all taxes); that’s more than my housing expense – say what?! (Ron Burgandy voice).

I know many of you will say there isn’t much you can do about some of these taxes, especially the usage taxes (like road taxes) – maybe so – but if you are aware of how much in taxes you pay each year – do some strategic planning to minimize each of these taxes and consider alternative ways that might reduce your taxes in the future. For example, you could get a more fuel efficient vehicle and reduce the amount of road taxes you pay each year.


At the risk of sounding preachy, let me ask you to consider the following  3 tax reduction ideas (to get your brainstorming started):

1. contribute more to your 401K – this tried and true method reduces your taxable income and also helps build up your nest egg for retirement.

2. contribute more to your health savings or flexible savings account – this reduces your taxable income and helps setup a health-care emergency fund.

3. contribute more to charity – hey, it’s the right thing to do; and you might be able to get a deduction on your taxes too.


tax stuff

Tax foundation summary of new tax law



Looking back on 2017



As we celebrate new year’s, let’s look back and see how we did (financially, of course) in 2017. There’s good news and then there’s some bad news.  .       . Let’s start with the good news: I don’t have any credit card debt (woo hoo!), I contributed 15% to my retirement (including the company contribution), I fully funded my health savings account (HSA), our net worth increased by $56,000, we cash-flowed Mark’s private school tuition (after May), stayed on budget (basically – see miscellaneous comments below), and debt is $16,323 lower (still have mortgage and auto debt) – did manage to pay off my car note in 2017 though. We spent less than the national average on food, housing, utilities, transportation and entertainment. (see chart below)


The bad. Even though we stayed on budget (basically) throughout the year, the miscellaneous category was a big problem – more later in the post. We spent a lot on healthcare – medical care is really expensive (thank you captain obvious) – seems odd since they are still “practicing” medicine.  The mortgage debt doesn’t bother me too much (for now) – but I am disappointed that we still have an outstanding car loan – see my post about top 5 regrets.

I analyzed my miscellaneous category and realized that I have gotten lazy and included too much in this category. When I re-analyzed I realized that some of these charges should be categorized as housing (e.g. new stove), transportation (e.g., car taxes) and entertainment (e.g., vacation).


My new plan in 2018 is to set aside money into a separate bank account and pay these “miscellaneous” charges from that account.  Most of these charges are recurring – even if they don’t occur every month (e.g., vacation). I am going to auto-draft the same amount from each paycheck and hopefully this “sinking” fund will pay for these miscellaneous charges – some of these charges are unavoidable (stove quit) and some are discretionary (vacation). However, both are a part of life and I should set money aside monthly – to do otherwise is whistling past the graveyard (i.e., ignoring the obvious).



our % National % per BLS
housing 29% 30%
transportation 10% 16%
food 9% 12%
ins./SS 15% 21%
healthcare 7% 7%
entertainment 4% 5%
charity 11% 3%
misc. 14% 7%
100% 100%


I will provide a little commentary for each category (note the above percentages are after income taxes – remove federal and state income taxes (but not social security) before doing your own calculation).


1) Housing – pretty much in line (a little better) but I hope it gets better in 2018 because we replaced a stove and a couch in 2017; those were fairly large additions to this category that I hope don’t get repeated next year.


2) Transportation – a little better than average – which is kinda surprising because we still have a car loan – see my separate post on cars.

3) Food – a little better than average – which is also a little shocking because we could/should do better in 2018 – especially eating out at restaurants – see below a separate post on food.

4) Insurance/Social Security – kind of a weird BLS (bureau of labor statistics) category – we are actually under-budget here but I think that’s actually a bad thing because it means we should contribute more to our retirement. Including social security is a little odd but that’s the way the BLS did it.  See below a separate post on social security.

5) Healthcare – in line with the national average – at least we fully fund our health savings account (HSA) each year and get a bit of a tax break by paying for medical bills and prescriptions from the HSA – it also serves as a sinking fund and doesn’t impact our monthly budget (e.g. take-home pay) – because it’s funded via a payroll deduction.


6) Entertainment – a little better than the national average – probably because I’m a cord cutter, but we still spent a fair amount on vacation expenses and other entertainment (Go Braves!)


7) Charity – a good bit higher than the national average. I’m a Christian and believe that the Bible strongly encourages us to give to others – especially to the church – in order to help the needy and tell people about God.  We are supposed to be Christ-like and God was a giver – John 3:16 – just sayin’


8) Miscellaneous – a good bit higher than the national average – this is mostly due to Mark’s private school tuition – a choice I will definitely make again in 2018 because I know how much better Mark does when his education is specialized for his ADHD.


Let’s compare to how the rich spend their money.

Please send me your feedback about my posts, including ideas for topics I should write about in 2018;

Happy New Year!



new year

I want you to get mad (at me)!



Seriously, I really do. I want you to take a long, hard look at your financial decisions. I hope that at least one of my posts has made you question my sanity – I hope it also made you question (at least ponder) your financial strategy.  I’m hoping at least one of my posts made you feel a little uncomfortable (maybe even guilty?); uncomfortable enough to change?  If you have read my blog posts and I didn’t challenge at least one of your financial habits, then I would call that an epic fail (stole that phrase from my son).

How are you doing financially? If you think that’s a sufficiently vague question, then let me ask more specific questions:


1)            What is your net worth?


2)            What is your credit score?


3)            How many months will your emergency fund carry you?


4)            What is your retirement savings percentage?


5)            What is your debt-to-income ratio?


6)            What is your giving percentage?


If you want more information on any of these questions, see below a link to my previous post on 6 ways to measure financial success


I want you to exercise your critical thinking. See below a link to my previous post about critical thinking.


I know some of my recommendations sound a little crazy, but remember


If you always give what you always gave, then you’ll always get what you always got.


I realize you probably think some of my recommendations are downright unrealistic – I agree!  Sometimes I struggle to make smart financial decisions myself.  I am frequently preaching to yours truly (in my blog), in search of determination and will-power to do the right thing; to do what it takes to get ahead (the right way). See below a link to my previous post about financial independence


Financial independence is difficult – if it was easy, everybody would be rich. Our society usually has more excuses than valid plans to improve our finances. I’m striving to help us overcome these excuses; excuses that only serve to encourage a life of mediocrity. Let’s review a few of these excuses/myths:


1)            Budgeting is hard and takes way too much time. It actually used to be a lot more difficult and time consuming; but, it turns out, there’s an app for that. I am aware of two excellent solutions to help automate/simplify the process: and They both have mobile apps. Start with the basics: food, transportation, and housing – probably 2/3 of your budget right there


2)            I simply can’t afford a 15-year mortgage – it’s too unrealistic. I will admit it’s not easy.  I still recommend you follow the advice from and buy a starter house that is no more than 2 times your annual household income. There’s some logic behind his recommendation.   If you stick to his methodology, your monthly mortgage payment will be, at most, 25% of your take home pay. This way your mortgage allows you to live your life now (sorta) and hopefully not bring your mortgage with you into retirement (that’s one friend you don’t need tagging along).  Besides, you’ll pay way too much interest expense with a traditional 30-year mortgage.


3)            It’s simply not reasonable to ask me to buy a car that’s only 20% of my income. You might be right again! Used car prices have definitely increased in the last few years and this indeed might be an area that you end up going over budget;  however, your budget is a zero sum game  – if you go over in one area, you have to be under in another area to compensate (whack-a-mole, anyone?)  I have a separate post about cars, but to over-simplify I strongly encourage you to avoid going into debt for a depreciating asset. If you already have a car payment on an expensive car, consider selling the car and buying a less expensive car (especially if you have credit card debt), or alternatively, keep the car – if you can payoff the note in 2-3 years.


4)            It’s too difficult to reduce my spending on food. I too struggle in this particular arena. I encourage you to limit your food budget to 10% of your total expenses. You can find tips about food budgeting from If you don’t have the time (nor the inclination) to do that much research, then start by limiting your dining out – eating at home is much less expensive than eating at a restaurant. You already knew that – moving on.  Eat healthy though – you only get one body.  It’s not that life is too short, it’s that you’re dead for so long.    .     .


5)            I don’t need to set goals. It won’t take that long but goal setting really is part of the secret sauce you will need to be successful; short, medium, or long term? yep – you need ’em all.  This is the perfect time of year to set some goals for 2018. Start small and set a goal to create (and keep!) a monthly budget (every month!) with everydollar or Set a medium term goal to pay-off your credit card debt and those evil student loans.  Set a long term goal to be debt-free (freeeeeeeeedom!).  Tell someone that you are setting these goals and give them permission to hold you accountable.  If you are married – this is a great opportunity to sit down and communicate (you can binge Netflix later); set these goals together – remember, you and your spouse are a team!