Spending Diary: The Most Commonly Ignored Personal Finance Advice?

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After finishing The Index Card: Why Personal Finance Doesn’t Have to Be Complicated by Helaine Olen and Harold Pollack, I found it to be a solid all-around personal finance book that joins others like If You Can by William Bernstein and The Richest Man in Babylon by George Clason in the category of “recommended books about money that are short and easily digestible”. All good ideas for gifts for recent graduates.

They don’t shy away from what I think is the most commonly-ignored financial advice: TRACK YOUR SPENDING FOR THREE MONTHS. Even if you don’t track your budget closely after that, this initial spending diary can be eye-opening. Yes, it takes a bit of effort and can be rather uncomfortable psychologically. Here are some book highlights:

Track ALL of your spending…

For three months, keep track of everything you spend money on, no matter how small. That $1.50 bag of Cape Cod Waffle Cut Sea Salt potato chips? It counts, just as much as your four-figure mortgage or health insurance payment.

… for THREE MONTHS.

If you monitor only one month of spending, you won’t gain a full picture of where your money goes. Routine but sporadic expenses such as car repairs, doctor bills, and the emergency trip to the cat’s vet are more likely to occur over a several-month period.

Now, you can pick your “must keep or I’ll wither away” purchases and the things what won’t hurt as much to cut.

You need to determine what day-to-day spending is necessary and unavoidable, what is a luxury but helps you get through the day, and, finally, what is excess. Only then can you avoid falling prey to spending traps.

This allows you to make trade-offs: I’ll take advantage of the office coffee machine, but I’ll use the money I saved to travel to Italy next summer to attend my best friend’s wedding. I’ll drop my landline phone to pay for my gym membership or boost my child’s college savings.

Final tips. You can put everything on a single credit card or debit card, and then go through your purchases line-by-line. If you use cash, take a picture of your receipts and/or purchases on your phone. If you feel comfortable with it, link your account to Mint.com (or similar) and they will help you categorize things automatically. You’ll need to spend a few weeks teaching it (check in every few days), but it gets better over time.

If you can manage to track everything for three months to get an honest (if uncomfortable and scary!) view of your finances, you may find a big gap between what you think you spend vs. what you really spend. Where does your money go every month?

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Blue Zones: Financial Lessons From the World’s Oldest People

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While learning about Okinawan centenarians, I also came across the idea of Blue Zones – places where a high concentration of people live past 90 without chronic illnesses. While the eating habits of Blue Zone residents have been mentioned a lot, Richard Eisenberg of NextAvenue wrote a three-part series focusing on the financial aspects of their longevity. Here is , , and .

Rather than focusing on the residents’ diets, he reports on how the oldest people in the Blue Zones make their money last and what Americans and America can learn from this.

Here are my notes:

The Nicoya Peninsula of Costa Rica

  • Close-knit family structure. Rely on immediate and extended family members. Nursing homes and assisted living facilities are rare.
  • Government-run public health care system with minimal out-of-pocket expenses.
  • Small government-run pension systems.
  • Low cost-of-living. Lower spending due to low consumerism. Rarely travel.
  • Rare to find elderly that own stocks or mutual funds.

Okinawa, Japan

  • They form a “moai”, which is a group of about 20 close-knit older friends who look out for each other both financially and emotionally. This acts as a replacement for assistance from blood relatives.
  • Government-run public health care system with minimal out-of-pocket expenses.
  • Low cost-of-living. Low consumerism. Low debt.

Sardinia, Italy

  • Close-knit family structure. Rely on immediate and extended family members. There are no long-term care facilities in Sardinia.
  • Government-run public health care system with minimal out-of-pocket expenses.
  • Low cost-of-living. Low spending due to self-reliant farming culture.

Ikaria, Greece

  • Close-knit family structure. Rely on immediate and extended family members. Nursing homes and assisted living facilities are rare.
  • Government-run public health care system, but no long-term care program.
  • Low cost-of-living. Low consumerism. Low spending due to self-reliant farming culture.

Loma Linda, California, USA

  • Technically, the Blue Zone consists of the members of the Seventh Day Adventist religious community.
  • Close-knit religious group that helps each other out.
  • Has a culture of self-discipline, planning, and preparation.
  • Tend to be wealthier with significant investments.
  • Tend to have frugal spending habits.

Commentary. One common thing that I notice about this list is that many are small, isolated communities, either by geography (islands), ethnicity, or religion. I feel that smaller groups more acutely appreciate the advantages of helping each other out. You can have long-term trust that you will raise your kids when they are young, and they will in turn watch over you when they are adults. When you get into larger cities, people seem to separate and start worrying mostly about themselves.

Of course, a bigger version of this is government-run health care, where everyone pitches in and agrees that nobody will become destitute due to a hospital bill. The American healthcare system is so complex and ingrained with powerful inertia that the idea of efficient, transparent, high-quality healthcare remains a huge puzzle waiting be (even partially) solved.

(I’m not saying we need the same system as Japan or Greece. But even billionaire capitalists Jeff Bezos, Warren Buffett, and Jamie Dimon realize that our bloated healthcare system is hurting our economy. Their new combined venture has a goal of “simplified, high-quality and transparent health care at a reasonable cost.”)

On the smaller front, many familiar concepts still apply. Start saving early and plan ahead. Practice self-discipline in spending and lower your consumeristic appetites. If possible, move to a place where there is a lower cost-of-living. It’s so much easier to spend less when everyone around you spends a lot less! Get yourself involved in a close-knit community, whether based on blood, ethnicity, neighborhood, or religion.

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How Often Should You Cook at Home on Weeknights?

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I subscribe to a NY Times e-mail newsletter called , which sends – you guessed it – five weekly “fresh dinner ideas for busy people who want something great to eat”. However, one of the recent newsletters was titled How Often Should You Cook? and you might be surprised at the answer:

One question I’ve gotten a lot since I started writing this newsletter is how many nights I cook dinner during the workweek. The answer is not five.

I typically cook a meal from scratch on two weeknights, maybe three. You don’t need to do more than that! Pick at least one recipe that makes good leftovers, doubling or stretching them with eggs, vegetables, toast or grains if necessary. Or supplement with something else in the fridge or cabinet. Dinner can be a fun, crazy mishmash; photographers will not be showing up to document the meal.

As for the other nights: My partner cooks, or occasionally we order chicken parm or go out (luxuries of urban and suburban life), or eat our preferred brand of freezer pizza with a nice big salad.

There is no single “right” answer to this question, but I still found it reassuring. I used to try to cook close to 4-5 nights per week, but now it is also closer to 2-3 nights per week. Sometimes it feels good to eat something green (or otherwise colorful), fresh, and healthy. It always feels good to share a meal with family and friends. I get the same good, wholesome feeling when I eat something where I know exactly what went into my food. It feels like hitting the reset button, and I always find that it helps keep my weight down. Saving money is secondary, but still a welcome result.

Food delivery apps are making things so convenient now, but it’s usually not very good for my bank account nor my health.

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Forced Retirement: The Time to Prepare is Now

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Here’s a random thing that happened after becoming financially independent. When I caught this from the movie “Up in the Air” on TV, I felt sympathy but I remember it used to give me stress and anxiety.

Ever since starting out with a negative net worth due to $30,000 in student loans, I’ve saved money every pay period because I worried about what would happen without a job. I wanted my financial life to be a robust fortress. It was a gradual process and not black-and-white, but one day I realized that I longer had to worry about a boss (or worse, a mercenary consultant that looked like George Clooney) firing me ever again.

Barron’s recently had an article (possible paywall but it worked for me) which is really an excerpt from the book 55, Underemployed, and Faking Normal by Elizabeth White. Essentially, it is about people who had well-paying jobs for a long time, but hit hard times in their 50s and 60s:

I never thought it would happen to me. All my life—working at the World Bank, getting my M.B.A. at Harvard Business School, starting my own retail company—I thought of retirement as golfing in Florida (not that I really wanted to). Even after my business failed—taking most of my savings with it—I bounced back. I reinvented myself as a consultant and earned a six-figure salary. But in my 50s, the Great Recession hit, and the clients were slower and slower to call back. By age 60, it was crickets.

With nothing to speak of coming in, I was running through what was left of my savings. I started to notice friends in the same boat, trying to keep up appearances. A small group of us began to talk. All were 55 and older, well educated, with a history of career choice and good incomes. And then the bottom fell out. None of us expected to be here: in our 50s and 60s, scrimping and scraping or borrowing money from our adult children or 84-year-old mothers.

What is her advice for surviving forced retirement? Well, it sounds a lot like what you would read in an early retirement article.

The key question is not just how to tighten our belts. The real question is: Can we cut way back and still have good quality of life, still find ways to be connected to who and what we love? I believe that the short answer is yes.

A big first step in securing our futures is adopting a live-low-to-the-ground mind-set, which means that we have to drastically cut our expenses to fit our new income realities. But it also means figuring out what matters to you and what your priorities are and then cutting way back on everything else.

Once I get beyond the basics, it’s really about good health, family, and friends for me. I used to eat out a lot, and that’s something I still miss. But the women friends I rely on for sanity are all still here. It turns out we didn’t need fine dining and $12 glasses of Chardonnay to bond us.

You should happily spend money on your priorities, cut back on everything else, and realize that happiness is not about stuff. Sound familiar?

The key difference is that this is presented as a last-ditch solution after your hand has been forced. If you combine aggressively prioritized, lean spending with a solid six-figure career for a while, you have the basic recipe for financial independence. It may be much harder because of our various human tendencies, but it can be done.

We live in a culture that creates need where none existed before and defines quality of life as a metric of income. When you’re making money, all of that mindless consumption goes unchecked. When funds are tight you have to think about it. What do you really need to feel deeply grounded and content? You’ll discover that you actually need very little. It really does not cost much to be happy. I’m spending a tiny fraction of what I used to spend, and the world hasn’t ended.

What if you realized that at age 25 instead of 55?

Bottom line. Forced retirement may make you realize that you can live on a lot less money than you spend now. However, perhaps this book can help those who still have a solid job right now that they can also streamline their spending and thus be better prepared for whatever may happen in the future. I enjoyed the writing style in this excerpt and find it relatable.

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Free Morningstar Premium Mutual Fund Reports via Public Library Card

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Updated 2019. Let’s say you are a DIY investor and doing some research on some mutual funds. You decide to learn more about the Vanguard Intermediate-Term Tax-Exempt Fund. You pull up the Morningstar quote pages (ticker and ) and find some useful numbers, an analyst report hidden to the public as a “premium” feature.

You see a 14-day free trial and after some more clicking around, you discover that a premium membership to Morningstar costs $199 a year or $24 a month.

mstar_premium2

Now, I’d like to read the rest of that analyst report, but I’m not sure if it is worth the fee. Well, you may already have access to those analyst reports through your payment of local and state taxes. Yup, the good ole’ public library!

Many public libraries have a subscription to what is called the Morningstar Investment Research Center database. Most offer instant, online access via your library card number and PIN. You should look under the “Databases” or “Resources” section. Some only have a limited amount of offsite licenses, so you’ll have to either ask for a password or you’ll have to read them in a branch. Here’s a screenshot of my free report accessed from the comfort of my home, with all the good stuff blurred out of course:

I was also able to access their analyst reports for stocks, mutual funds, and ETFs, as well as the premium version of tools like Portfolio X-Ray.

Now, if your local library system doesn’t provide this access, you can also look at state libraries, university libraries, or other libraries in the region for which you are eligible. Finally, there are some public libraries that offer library cards to non-residents for an annual fee. For example, the in North Carolina offers library cards by mail for $45 a year (Seniors 62+, $35 a year).

Non-residents of Mecklenburg County can obtain a Charlotte Mecklenburg Library card for an annual fee of $45.00. This amount is approximately equal to the annual property tax a Mecklenburg County resident pays to support the Library. A non-resident library card entitles you to the full services of the Library at all locations.

According to their website, they also offer access to the Morningstar database. $45 a year is still significantly less than $199 a year, and there are other library benefits like access to Libby/Overdrive eBooks and RB Digital magazines. However, I would call them to confirm before you plunk down $45 as the services they offer can change at any time.

That is just one example. Here are some more libraries with , although I haven’t checked again in 2019 as to whether they offer M* access.

  • ($25/year)
  • ($27/year)
  • ($50/year)

Bottom line. If you want to access reports and information from the Morningstar Premium section, check your local and state libraries to see if you can access it for free with your library card. Some public libraries also offer library cards to non-residents for an annual fee. However, if you are signing up for a specific service like Morningstar, I would call them up first and confirm that they are still offering it for non-resident cardholders before you pay any fees.

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Personal Finance on a 3×5 Index Card: Classic and New Young Adult Version

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A few years back, Professor Harold Pollack quipped that everything you really need to know about money fits on a 3×5 index card. Folks asked him to prove it, and the resulting handwritten card went viral. Eventually, the idea became a book cowritten with Helaine Olen called The Index Card: Why Personal Finance Doesn’t Have to Be Complicated. Here is the original photo:

Via , I learned that Dr. Pollack recently created a . Here again is a photo:

In case you can’t make out the handwriting, his tips are as follows:

  • Pay your credit card bill in full every month.
  • Keep a budget and spending diary. Pay cash up front whenever you can.
  • Don’t smoke. Mind your alcohol and dining spending, too.
  • Start saving early. Make it automatic, ideally through a 401(k).
  • If you have a job and no kids, aim to save 20% of pretax income.
  • Invest in low-fee total stock index funds, ideally in a 401(k).
  • Open a Roth IRA if you don’t have access to a 401(k).
  • Don’t buy individual stocks or try to time the markets.
  • Think federal first when borrowing for school. And don’t combine public and private loans if you consolidate.
  • A focused and rigorous major matters more than where you go to college.
  • Don’t push your friends to overspend. And beware the same peer pressures applied to you.

Sound, simple advice. But simple is not easy, and it can be hard to pull off everything on this list. I recommend using the card to help focus your efforts.

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Personal Finance: Recognizing Control and Using Your Time Efficiently

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Morgan Housel wrote a post called which really resonated with my outlook on investing and personal finance. The main idea was that you should consider the impact of your efforts in relation to the time and energy spent.

The idea that reducing your needs has the same impact as increasing your income – but the former is more certain and in your control than the latter, so it has a higher expected value – is as true for someone spending $15,000 a year as it is someone spending $15 million per year.

The hard part is becoming satisfied with spending less. […] For me it’s been realizing that what makes people happy is having options – doing what you want, with who you want, when you want, where you want. And options come from savings and assets, which are the opposite of spending.

Stock returns: Limited control. I decided on an asset allocation and invested my money in low-cost, low-turnover investments. Learning about investing and asset allocation initially was a good investment of time, but I still have limited control of the outcome. More importantly, this gave me the conviction and patience that it will work out in the long run. But I still might lose money in any given year, and I can’t just put in more effort and improve that return. I only check in on my portfolio quarterly.

Cash returns: Moderate control. About 1/3rd of my portfolio is in high-quality bonds, which in my definition includes cash and certificates of deposit. Here, I have some more control. For example, if I put money into a 5-year CD at 4% APY, I have high confidence it will do better than a 5-year Treasury bond at 2.50% yield. Sometimes there are such opportunities for the individual investor, sometimes there aren’t. Therefore, I track the best interest rates monthly.

Income: Moderate to significant control. Income is obviously important, and I while would rate it as more important than spending, that doesn’t mean spending in not also very important. There are plenty of people who earn $250k and spend $250k per year, while a $85k earner could spend $60k and save even more. But that same 250k earner has the ability to “see the light” and have their saving explode over the next few years. Unfortunately, there are no easy, foolproof ways to earn a high income. Of course, you should invest in yourself and improve your marketable skills and thus increase your human capital. Some people can move up the corporate ladder, others will do better with a more entrepreneurial route.

Personal spending: Significant control. Managing your spending is all about priorities, but there are two simple ways to attack your spending. First, you could start from the bottom and get rid of the more questionable “wants”: Expensive food habits (coffee, alcohol, snacks), monthly entertainment subscriptions, gambling, etc). Second, you could start from the top and pair down the big “needs”. I could have gotten a mortgage approval for a 3,500 sf house in my neighborhood. I live in a 2,000 sf house. I could pay cash for nearly any vehicle on the market. I bought a used minivan. I could have had fewer kids… Oops!

Credit cards, bank bonuses, and other “found money”: Significant control. You won’t get rich solely from taking advantage of credit card sign-up bonuses, maximizing your cash back, or picking up $10-$100 here and there each week, but I estimate that it adds up to $3,000+ each year for our household. $3,000 is a 5% increase to a $60,000 income, or a free annual vacation. You should pick and choose what works for you; for example I refuse to drive around town (to buy gift cards, redeem coupons, buy and resell, etc). I prefer deals that can be done with just clicks.

This is also a good reminder that even though I might not write about them repeatedly, your biggest returns on effort might be: get a better job, relocate to a city with greater relative opportunity (income vs. cost-of-living), move into a smaller house, and buy a cheaper car (or find cheaper transportation). On a daily basis, the things that catch my eye (and thus what I write about) are actionable ideas where I have control of the outcome.

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Generation Wealth Documentary: What Are You Chasing? (Free on Amazon Prime)

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If you have Amazon Prime, I noticed that the documentary film Generation Wealth is now included as of February 1st, 2019. Here’s a short blurb and the :

Lauren Greenfield examines materialism, celebrity culture, and social status and reflects on the desire to be wealthy at any cost. This visual history of the growing obsession with wealth uses first-person interviews in Los Angeles, Moscow, Dubai, China and around the world to bear witness to the global boom-and-bust economy, and to document its complicated consequences.

I haven’t finished it, but my biggest takeaway is that you shouldn’t be obsessed with certain things because even if you get what you think you want, you still won’t be happy or content!

  • If all you care about is money, you’ll never have enough money. The millionaire wants more. The billionaire also wants more. Someone else will always have a nicer house and a bigger yacht.
  • If all you care about is your looks, you’ll never be pretty enough. Your body can never be too skinny, your lips can never be too full. If someone gave you a $1 million of plastic surgery, you would probably end up just as unhappy as today.
  • If all you care about is social status, you will be striving forever. Why spend your life trying to impress people who don’t matter? The celebrities you want to be like? They aren’t all that happy either.

Obviously I think money is important, otherwise I wouldn’t be here. But money is a tool, not the goal. Can you use your energy in a useful and meaningful manner? Can you cover the basics – safe housing, clean food, and quality healthcare? Do you have loved ones with whom to share your time? None of the answers to these questions require a brand name. None require looking up to anyone on Facebook or Instagram. I try to remind myself of this regularly, whenever I feel the urge to “upgrade” something.

Watching this film made me feel exhausted more than anything else. These people are wasting so much of their life energy chasing something they’ll never reach.

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Learning to Cook at Home: A Valuable Investment

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Cooking at home can save a lot of money as opposed to eating out all the time. We all know that, right? If not, here’s a big green chart to drill it in, taken from by Wellio:

Here’s what that means on a monthly basis:

Being a good home cook should be viewed as a valuable skill – one that takes an investment of time and effort, but can pay dividends forever. You may not eat at a restaurant or do meal prep every day, but I know that some of you dual-income high-earners are dropping around $1,500 a month on food. That’s closing in on $20,000 a year. Your grandparents probably spent a fraction of that. Converting even a couple of those meals a week can multiply into real money. (Not to mention that home-cooked meals have helped with my weight loss and health goals. Eating out a lot seems to always correlate with weight gain for me.)

The problem is that if you haven’t developed the skill, it’s just too painful. You work hard and are exhausted at the end of the day, why tackle another difficult project? For me, if I have to make an extra stop at the grocery store, I’d rather just stop at the korean BBQ place and buy it ready-to-eat.

If you are just starting out, you can’t expect to be able to whip up a nutritious and tasty meal with the ingredients in your pantry in 30 minutes. You need to set yourself up for success. You need to divide and conquer. On the weekend, you should pick out one or two “easy” recipes that look appetizing to you and buy all of the ingredients that you need. Don’t wait to “pick it up on the way home”. Buy it on the weekend, and carve out 30 minutes of prep time on two weekdays. Remind yourself that it takes time to prepare a meal prep kit too, or even drive somewhere to get take-out. (Okay, Uber Eats and Grubhub are pretty darn convenient. But those delivery fees and tips add up fast!)

This is summarized in my Cooking at Home Flowchart:

dinnerflow2

Once you have some “go-to” weekday meals, you can schedule them and rotate as desired. Once you get a lot of recipes into memory, then you can start to improvise. I’m sorry, but newbies can’t go straight into thinking of recipes as Salt, Fat, Acid, Heat. Maybe if you were the culinary equivalent of Beethoven. I’ve made hundreds of (I like Melissa Clark recipes) and one-pot meals and I still get stuck if I don’t have things thought out ahead of time. If you learn to prep, then that one weekend grocery stop can equal 5 weeknight meals.

Wellio is a food prep company that offers to help you out with recipes and shopping lists. I haven’t used them, but I like that they are trying to attack the pain points in home cooking. I’ve mentioned them previously in Which Meals Offers The Most Nutrition Per Dollar?

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The Permanent Gift Guide 2018 – Buy Stuff That Lasts Forever

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I’m reading through all these gift guides and so much of it seems just trendy and disposable. Do any of the authors actually own all the stuff they list? How many of these gifts will end up forgotten by this time next year? I decided to create an alternative “Permanent” Gift Guide, consisting of things that (1) I actually own, (2) I’d buy again if I lost it (it sparks joy), and (3) I expect to last for a very long time (or at least comes with a lifetime replacement guarantee).

Moka Pot Coffee Maker – $30
A lot of people love espresso, just like the Italians. But traditionally Italians only drink espressos in cafes. They don’t have huge, fancy espresso machines at home; they have Moka pots! (Okay, they now like Nespresso pods.) But something like 90% of Italian homes have a Moka pot. Read this for details. I also learned why Cuban households also love Moka pots. Comes in different sizes. Bialetti is the original but there are other Moka pots that are cheaper and with good reviews.

LEGO Classic Medium Creative Brick Box 10696 – $28
When cleaning out my parents house, what were the toys that still worked and my own kids could pick up and start playing with instantly? Legos and Hot Wheels. As a kid, I never ever followed any of the directions that came with a Lego kit, so I am partial to these big assortment Lego mixes. Lego wants their bricks to be biodegradable, which is nice but at least their stuff lasts forever and can be used forever!

allcladsaute

All-Clad Stainless Steel Fry or Saute Pan – $100
I first heard about this brand when they kept winning comparisons by America’s Test Kitchen. However, they are quite expensive. Now, you don’t need All-Clad everything, but do I think a large stainless steel fry pan or saute pan from All-Clad is an important kitchen addition that will pretty much last you forever. (Skip the non-stick All-Clad and go with T-Fal for best non-stick value.) Resurrect occasionally with Bar Keepers Friend.

Patagonia Houdini Jacket – and – $100
This ultra-lightweight jacket (3.6 oz) packs into it’s own chest pocket (so there’s no extra bag to lose). This means you can throw it anywhere, from your cargo shorts pocket to your purse to your travel carry-on. It’s good for wind and light rain (not fully waterproof though) and just those times when you’re a bit chilly. It’s relatively expensive but the quality is high and it has traveled with me everywhere for several years.

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Lodge Pre-Seasoned Cast Iron Skillet – $15
With over 10,000 reviews (!) and a 4.5 out of 5 star average rating, these heavy-duty beasts are trendy again. Great for searing and pan-frying, oven-safe, no worrying about scratches or dings. They will outlive you for sure. Got a rusty one? They are easy to resurrect; here’s a on how to season your cast iron. Here’s a slightly-more expensive version with a silicone handle.

Darn Tough Full Cushion Wool Socks – Men’s and Women’s – $25
You wouldn’t think socks would come with an , but they do from Darn Tough. If you wear a a hole in them a decade later, they will still replace them for free. Made in Vermont and comes in different thicknesses for use in both the heat and cold. High-quality wool keeps your feet dry and doesn’t stink. These are pricey, but I am slowly collecting them as part of my minimalist wardrobe.

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Zeroll Original Ice Cream Scoop – $16
If you walk into an ice cream shop, this is probably the brand that they use. Once you try it, you will wonder why all the other ice cream scoops in the world are so bad in comparison. It has conductive fluid that makes it easier to get through rock-hard ice cream. It creates the perfect ball shape for placing on cones. The 3-ounce size makes medium-sized ball, but other sizes are available. Why not own the best ice cream scoop in the world for under $20?

Osprey Packs Farpoint 40 Travel Backpack – $160
After doing a lot of research on travel/hiking backpacks, I decided to plunk down a lot of money on an Osprey Pack. They have an that will repair any damage for any reason free of charge, no matter when you bought it. So far, I have not been disappointed. Quality materials and construction. (My previous pack was from REI, but they discontinued their lifetime repair/replacement guarantee in 2013.)

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Le Creuset Enameled Cast-Iron Dutch Oven – $300
I cook multiple times a week with our Staub and Le Creuset enameled cast-iron dutch ovens. Cast iron isn’t a lot of maintenance, but you do have to keep it dry after each use to prevent rusting (and seasoning it again takes time). With enameling, you can just wash and leave it wet. The dutch oven shape also makes it perfect for braises, stews, and soups. (They also look nicer at dinner parties.) They do run $200-$300 but spread out over years of use it’s not that bad. I love ours, but honestly I don’t know how much better they are than this Lodge Enameled Dutch Oven which regularly runs under $60.

Hot Wheels 20 Car Gift Pack – $20
I gave my old Hot Wheels to my daughters, but will be giving some new Hot Wheels to my nephews. I will admit that some of my old ones seem much more heavy with more metal content than the new ones, but none of the new ones have broken yet either.

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Wusthof Classic Knifes – $350
I remember wondering if Wusthof and Henckels were worth the price as I zapped them onto our wedding registry. Then someone actually bought us a set of Wusthof Classic knives and we proceeded to use them nearly every day for over a decade. They have been professionally sharpened a couple of times (less often than recommended), but they still work perfectly with no chips or rust spots. I bought a $40 Asian cleaver from a shop in Chinatown a couple years ago, and it only lasted a few months before large rust spots appeared. My mom told me I didn’t treat it right. Probably. I told her I’d rather spend $80 on a knife and have it last decades even after not treating it right. So I bought this one.

Let me know if you have suggestions (preferably due to personal experience).

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Health Care Flexible Spending Accounts: Last-Minute FSA Eligible Ideas

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Here’s my annual reminder to get back all the money you put into your Healthcare Flexible Spending Accounts (HC FSA) before the end of the year. The maximum salary deduction limits were $2,650 (2018) and $2,700 (2019).

Quick ideas. If you didn’t exhaust your funds with insurance copays or deductibles, here are eligible items that you can still buy over-the-counter without a prescription. Just order things online and then submit the receipt. Amazon even has a special with an “under $25” and “little-known eligible item” section.

Certain over-the-counter (OTC) items such as cough medicines, pain relievers, acid controllers, and diaper rash ointment require a prescription for reimbursement. (No, I don’t understand why sunscreen and lens solution don’t require a prescription but cough medicine and ibuprofen does. Why would I buy it if I didn’t need it? Shrug.)

When getting a receipt, make sure it clearly includes the following:

  • Date of service or purchase
  • Name or description of the item
  • Amount of purchase

Deadline extensions. Starting in 2013, employers have had the option of adding one of the following:

  • Some plans allow a grace period until March 15th of the following year as opposed to a December 31st deadline to use your 2017 funds, but it may only apply to claims and not late purchases. Check with your employer.
  • Some plans allow participants to carry over up to $500 in unused FSA funds into next year. Check with your employer.

Big, exhaustive lists.

  • , Federal Flexible Spending Account Program
  • , an affiliate of Aetna.
  • – Wageworks acquired Conexis.
  • ]

Finally, only your FSA administrator can provide you with the exact guidelines for reimbursement according to your plan. I learned this the hard way when our FSA administrator switched one year from in-house to Conexis (now since acquired by WageWorks). Wow, Conexis was a pain. I had to submit some claims three times before finally getting approved. If you count the time wasted, I probably lost money by participating in the FSA at all. The other employees in the company must have also complained so much that the very next year, FSA reimbursement was again managed in-house.

If you have an HSA, look for a “limited-purpose FSA” option that is restricted to dental and vision care services. These have the same max annual salary deduction.

“My Money Blog has partnered with CardRatings for our coverage of selected credit card products. My Money Blog and CardRatings may receive a commission from card issuers. All opinions expressed are the author’s alone, and the content has not been provided nor approved by any of the companies mentioned. Thank you for supporting this independent site.”

Dependent Care FSA: Save on Daycare, Preschool, Summer Camps, After-School, and Elder Care

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One of the newer work perks that we took advantage of this year was the Dependent Care Flexible Spending Account (DCFSA). This is separate from the Health Care Flexible Spending Account (HCFSA) and the Health Savings Account (HSA). However, they do work in a similar way in that you can pay for eligible expenses with pre-tax money and thus save money by being exempt from income taxes on that amount. For example, we were able to pay for $5,000 in preschool expenses using your DCFSA in 2018. At a a 30% marginal total tax rate (see below), that was a $1,500 savings.

Eligible expenses for children (under age 13)
The overall idea is to cover childcare while you are working:

  • Nannies, Au pairs, and babysitters
  • Daycare and Nurseries
  • Preschool
  • Before and After School Care Programs. (Non employer-sponsored.)
  • Summer Day Camps

Eligible expenses for adults
The overall idea is to cover care for an adult dependent (spouse, relative) who is physically or mentally incapable of caring for themselves and lives in your home for more than half the year:

  • Adult or Senior day care center
  • In-home custodial caregiver (Non-medical, like eating and bathing assistance)
  • Transportation to/from eligible care (by your care provider)

You should keep detailed supporting documentation and itemized receipts for your HR department and potentially the IRS.

Maximum contribution amounts
The annual contribution limits for 2018 and 2019 are below. (They are not adjusted automatically for inflation.) Note that you can’t exceed your earned income.

  • $5,000 per year if you are married and file a joint tax return or if you file as single or head of household. (If MFJ, one person can get $5,000 when the other does not participate at all.)
  • $2,500 per year if you are married and file a separate tax return. (If MFS, both of you can get $2,500 individually.)

Similar to the Healthcare FSA, these funds must be claimed during the year deducted ( any grace period) or you will lose the funds. “Use it or lose it”.

Total tax benefit
When you are able to pay with pre-tax money, you are avoiding taxes on:

  • Federal income tax
  • State income tax
  • FICA (Social Security tax)
  • Medicare tax

For 2018, the Social Security tax rate is 6.2% on the first $128,400 wages paid. The Medicare tax rate is 1.45% on the first $200,000 and 2.35% above $200,000. For us in the 22% federal marginal tax rate, that’s a total of 22 + 6.2 + 1.45 = 29.65%. So we’re nearly at a 30% savings even ignoring state income taxes. A 30% total tax savings on $5,000 in childcare expenses is $1,500. This is definitely worth enrolling and submitting a few receipts, even if our claim submission system is a bit slow and clunky.

This is also separate from the . You are not allowed to “double-dip” and claim the same specific expense for both this DCFSA and the tax credit. But if you have enough total expenses, you can get both.

Bottom line. If you pay for childcare or care for a disabled adult dependent, you should check if your employer now offers a Dependent Care Flexible Spending Account (DCFSA). The times to check are when you get a new job, have a new child, change marital status, your spouse loses benefits, or during Open Enrollment. If you pay for full-time care, it is quite likely you can max this out and save some serious money. Just be sure to file those claims on time!

“My Money Blog has partnered with CardRatings for our coverage of selected credit card products. My Money Blog and CardRatings may receive a commission from card issuers. All opinions expressed are the author’s alone, and the content has not been provided nor approved by any of the companies mentioned. Thank you for supporting this independent site.”

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