Thursday, September 28, 2017

If Your Parents Haven't Saved for Retirement, YOU Better Be Saving for Their Death

Many people in the lower, middle-class and many more in the poverty zone are not retirement ready.  The latest data on Baby Boomers paints a dire picture: many have zero or insufficient amounts of retirement savings.  Last year, published a study that showed that 28% of seniors in this country don't have any retirement savings!  If you're a generation X'er who has parents that are part of this 28%, you're not feeling happy with your folks right about now.  Maybe they're managing to survive on their own still today, but fast approaching running out of money.  Or they're living off social security, and barely making ends meet.  You may have to spot them a Benjamin here and there so they make it through each month.  Not good.  

Survey: Comparison of How Much Millennials, Gen Xers, Boomer and Seniors Have Saved for Retirement 

Both my parents live off one pension, my dad's.  He worked for Santa Clara County and retired with a Public Employee Retirement Savings pension.  Provided California doesn't go bankrupt, he should be okay.  Still, living in one of the most expensive cities to live in this country, San Jose, doesn't make me (or them) feel financially secure.  He stresses all the time about not having enough money to pay for food and the mortgage to his ridiculously over-priced 900-square-foot, 2-bed condo.  Selling it is not an option right now, though he'd stand to make a considerable return because of the equity.  He supplements the income from his pension by renting a room to my uncle, my mom's brother.  It's an all too common scenario for poor folk out there, renting rooms to extended family.

Image result for number of Baby boomers without retirement savings

I'm already scared by the retirement crisis that could be a part of my own reality in the future.  So I save via my teaching pension, two Roth IRAs, and a 403b every month.  This helps alleviate some of my anxiety.  As one of four siblings, I'm second in line to help my parents in the event of an emergency.  My older sister, Claudia, lives in San Jose and is there to help my parents immediately, including financially, should something happen or change.  My younger brother and sister are Millennials (big age gap between us), and are struggling to carve out their own place in our society, alike all other Millennials.

If my parents and their retirement savings lasting was all I had to worry about, I'd be a happy camper.  But I happen to be married, and my wife's parents became my parents as well.  Because of a medical emergency, and lack of retirement savings, my father-in-law now lives in my home (Jessica's parents are divorced).  I live in a 5-bedroom home so there is plenty of space.  We support him financially in many ways.  But he's not doing so well.

This brings me to an even darker scenario.  You see, if 28% of Baby Boomers didn't save for retirement, are they saving at least for their FUNERAL?  Uh...hello...old people die.  Why isn't anyone talking about this?  Death is expensive!  This article was published this month, and it claims that the average cost of a North American funeral and burial is now between $6K and $10K!  If your parents aren't saving for their retirement, what makes you think they're saving for their death?  So as the child of a broke parent, chances are you and your siblings (if you're lucky to have any) will be footing the bill for your parent's funeral.  And lets compound this situation if you happen to be married to someone whose parents haven't saved for their death either.  That means that you could be paying thousands of dollars to bury up to four adults in your own lifetime.

What Can Be Done?

Well...crap...get on your parents today!  Tell them that their retirement savings plan was an epic fail, and now they should at least not burden you with their death.  $50 a month if they're in good health!  Can they save this much each month for their respective funerals and burials?  I think they can.

If they can't save the $50 a month, then it's up to you to do it.  Have your siblings save $50 also each month.  Unfortunately, your parent's death is going to have to be included in your new monthly budget.  Unless your parents are already on it.  Otherwise instead of grieving properly, you'll be wondering if you even have enough for a decent headstone.  Heck, you may have to cremate them and go against their wishes!  If you can't afford it, you can't afford it.  Are you going to put the expenses on your credit card and be in debt for years?

Very sticky situation isn't it?  But we must all monetarily prepare for the death of our parents, just in case they didn't. It's not fun talking to your parents about finances and their demise, but an adult child must if they are responsible.  Are you responsible?

Thanks for reading!  Until next time.  If you liked this morbid blog post and want to get more like them, please subscribe.

Sunday, September 24, 2017

Social Media, Kneeling Athletes, and Politics Leads To You Staying Put

I just finished reading my second book this month, Brian Tracy's, No Excuses.  Mr. Tracy, a legend in the field of success, recommends that a person spend two hours a day on personal development.  He describes PD as reading, listening to an audio program, or watching video on topics that will make you better at what you do or want to do.  If you're in sales, for example, then you should be improving your sales abilities by learning from great salesmen/saleswomen who have already learned what you still have yet to.  Self-discipline and self-control (themes throughout the book) are the keys to take yourself to the next level.

Image result for kneeling during national anthem

Most Americans lack the self-discipline it takes to commit to completing difficult tasks, goals, etc.  And self-control, which includes an ability to manage yourself because as Mr. Tracy says, you cannot manage time, is just as important.  Those two hours a day may as well be 12 hours a day for the average person.  There is so much distraction in our country these days, that getting even a 30-minute, uninterrupted reading session, requires incredible personal focus.

According, people are now spending over two hours a day on social media!  And time spent on social media platforms is increasing yearly.  Before the weekend began, our President made some headlines again.  When isn't he, right?  Well, his comments on professional athletes pretty much vanquished thousands of hours of productivity for our country.  Thousands of people flocked to Twitter, Facebook, and LinkedIn to read or post their opinions on athletes kneeling during our National Anthem.  Now, I'm not here to express my own opinion on this issue.  I made a mistake on Facebook, posting one message and it cost me at least a half hour of my life.  I learned my lesson.

daily time spent on social media

Are you regretting your own involvement on social media this weekend?  Take the time to reflect right now if you have yet to consider how financially fruitful your engagements were with other people who follow you or who you follow online.  Did any of your individual comments lead you to making a single coin or future coin for that matter?

I have an entire chapter on my recently published success book for teens (see left sidebar) that I devote to what I call, "Noise."  Noise is anything in the media, news, etc. that has the potential to hijack our emotions and our attention from our self-development.  I claim that tuning into "noise" will keep one ignorant.  It's true!  Is there any redeeming aspect of being part of ongoing political stupidity and drama?  Do you feel accomplished or productive after telling everyone your position on an issue for an hour each day?  There's no end to the material one can comment on.

Americans are sad, sad, people.  For how can we be a happy people without each person feeling like they completed something meaningful for themselves each day, and not solely for their employer?  The highlight of one's day cannot be whether or not you made your point excellently on someone's thread.  Or whether you won the exchange against your liberal or conservative friend.  Realize that I'm not saying staying informed is pointless.  Of course staying informed is important.  What I AM saying is that obsessing about political matters is useless and a complete waste of time.  It means you truly have nothing better to do with your life.  As Mr. Tracy says, "The quality of your thinking determines the quality of your life."

I've read in many places online that racial division is our greatest problem.  No my friends, racial division isn't our greatest problem.  It's actually our greatest opportunity.  Our biggest problem is a lack of a unified vision.  America lacks a vision.  You too lack a personal vision.  And this is why we will all go nowhere and everywhere, and simply stay put.  Right where our enemies want us.      

Thursday, September 21, 2017

Kid's Bed Or Adult Bed for Your Child?

If you have children, you don't need reminding how fast they grow.  One day, they are babies, completely helpless, and you're in control.  You turn around, and they've learned to walk and talk; And THEY are in control.  You just pretend to know what you're doing.  Making financial choices for kids is not easy.  When it involves the use of their money (earned from doing chores or an allowance) you want to give them some room to make both good and bad choices, i.e., mistakes.  This way they can learn concepts like saving, delayed gratification, impulse buys, not having any money left over for other things, giving, and so on.

Image result for kids jumping on the bed

But then there are decisions that must be made with you having the final say.  These decisions, like getting a new bed for your toddler, can allow for some input from your kid, but the price tag and your budget should ultimately determine what you buy.  It's dangerous to buy kids exactly what they want all the time, under the guise of, "it's what is needed anyway."  You do this often and you'll only be helping to develop a spoiled child.  Example, they need clothes.  They don't need Gucci or Louis Vitton clothing!

At Casa Gomez, both of our children are in need of a new bed.  My daughter is tall for her age.  She's almost six, but she's as tall as some third graders.  She's been sleeping in what used to be a crib.  We converted it to a bed with a single rail at the front that opens half way up.  So, we are saving money right now as we didn't have to sell her used crib in order to finance the purchase of a toddler bed.  My son is still in his crib.  He's four, and still has at least a foot before he reaches the end of the crib with his tiny feet.  I can convert his crib just like I did his sister's, and we can postpone buying a bed for him for several more months.

Are you in the same boat as a parent?  Are you thinking it's time to buy your child a bigger bed, but are on a budget and don't want to break the bank?  What's the most economical thing to do?  I have some answers below:

So although the kids beds at Amazon or your local furniture store can be cute or cool, and may be reasonably priced, 

Delta Children Wood Toddler Bed, Disney/Pixar Cars
(You can get this bed and mattress for $116 at Amazon), is it worth buying one knowing your kids will grow out of them in 1-2 years?  You'll be back at square one, needing to buy another bed.  Rails, rails, rails!  Right, I hear you.  You want your kid not to fall out of his/her bed.  So we can try going even cheaper at Amazon and get some rails:

Dream On Me Classic Toddler Bed, Espresso
This one will run you only $109 with the mattress included.  And it sure looks long so you probably can simply take the rails off when your child is old enough. much weight can it support?  Those legs look flimsy.  Your child will after all not only grow taller, but denser as well.  So we're back to thinking if it's worth it.

The solution to me is simple.  Buy your child an adult-sized mattress (make sure it's comfortable) and box spring.  I suggest a Full.  Why?  Because your child, unless they grow to be the size of a lineman on the football team, will not outgrow their bed.  Forget the frame for now.  They don't need one.  Just plop the box spring and mattress on the floor.  Here are some other benefits:

1)  Your kid can jump on his/her bed and burn energy until their heart is content.  Every day!  They won't break their frame since there isn't one.

2)  They can sleep in the middle of their full-size mattress and have room to travel all about their bed during the night.  And if they travel too far toward the edge and should fall off the mattress,'s under a 2-foot fall.  Certainly not enough to hurt them.  They may not even wake up if your floors are carpeted!

3) No Boogeyman under the bed!  Most beds with traditional frames have dead space underneath them.  The Boogeyman lives there!  You should know, you were a child before.  So by placing the box spring and mattress directly on the floor, the Boogeyman will have to go find another place to live.

When it comes to your home and your family, you don't have to follow anyone's standards.  That's what I've learned thus far as a father of toddlers.  Your kids need a roof over their head, clothing, and to be fed.  That is it.  They don't need a luxury bed, and doing what's best for your financial situation is better than trying to keep a traditional look to a kid's bedroom.  I understand that a decent mattress will cost you more upfront, but if your child doesn't wet the bed anymore, that mattress can last for many years.  You'll save in the long run.

Thanks for reading!  Until next time.  If you liked this post and want to get more like them in your inbox, please subscribe.

Sunday, September 17, 2017

Your Kids Want A Pet And You're On A Budget, Now What?

We have a cat at Casa Gomez that goes by the name of Tiska.  She's a tabby.  She likes two people only, and by "like" I mean she tolerates temporary handling by just my wife, Jessica, and me.  She will cuddle with my wife in the bed.  She will occasionaly rest on my lap and at the foot of our bed on my side.  But that's all the love I get from that animal.  My kids get nothing but hisses from Tiska.  My son who is braver than my daughter, will try to pet her, but she runs away, frightened or annoyed.

Tiska annoyed at my son about 3 years ago.

Now I can't blame Tiska for the way she is.  She was somewhat neglected by her first owners, before my wife adopted her at about a year old.  Tiska was very "nuts" back then according to Jessica.  When I first met Tiska she used to scratch the hell out of me.  I couldn't walk barefoot anywhere for fear of her coming by and taking a swipe at me.  In due time she grew to trust me.  When I married Jessica, I also married Tiska.  Men, if your girlfriend owns a pet before you, the pet comes with her if you marry.  Do yourself a favor and don't try to fight this.

Tiska is at least 11-years-old.  Our kids have been asking for another cat.  One they can actually pet.  With wet food, treats, dry food, and cat litter, we spend about $30/month on Tiska's needs.  She's had two visits to the vet, costing a total of $1350 for both visits, including the crazy expensive medication.  All this to say that no way, no how are we taking on a kitten while Tiska lives.  We don't know how Tiska will react with a kitten around.  Her motherly instincts may kick in, or she may just decide to fight the kitten, seeing it as competition.  I've told my kids they need to wait, much to their dismay.  Besides, we're on a budget and we can't afford two pets.

This leads me to the rest of you.  Are you a family with one or two children looking to get a pet?  Are you also on a budget?  So how does one manage pleasing their child(ren) while not breaking the bank?  I've researched the top pets for children, and combined it with research on which pets are the most affordable to own.  Finding a popular and affordable pet is the solution to your dilemma.

Image result for kids with pets

First, the most child "friendly" pets are:

1.  Dog (temperament depends on breed and also watch out for allergies).
2.  Cat (more independent than dogs and again, watch for allergies).
3.  Rabbit (you need access to hay)
4.  Guinea Pig (two recommended)
5.  Turtle (not recommended for homes with kids under 5 because they can spread salmonella; they also have long life spans).
6.  Bird (think parakeet and also more than one is recommended).
7.  Lizard (very low maintenance, best for older kids who can handle them gently).
8.  Hamster (short lifespan; will lead to a lesson on death)
9.  Fish (great to look at)

The information above was gathered at  Now keep in mind that though these animals are kid friendly, they each have their unique needs in terms of environment, feeding, cleaning, and attention.

Onto a cost breakdown of owning the pets above.  Investopedia reports that in 2011, some 62% of all households in America owned a pet and spent $50 billion on costs.  $20.5 billion was spent on food, $12.6 billion on medicine, and $13.6 billion on vet care.  That's a lot of money folks.  You can expect to pay...

Hamster: A one-time charge of about $160 on a cage, toys, and the hamster.  Then between $100 and $150 annually for food, bedding, and litter.  This is one inexpensive little pet.

Bird: Parakeets will cost you between $10-$60 to buy.  Remember, you'll need two as these animals do better with company.  Food will run you about $75 a year for an individual.  Expect to pay a one-time cost of $50-$500 for a cage.  Toys and accessories will run you $30 annually.  Finally, annual visits to the vet will cost between $100-$200.

Fish:  For kids, think Goldfish or Beta fish.  The beta fish is hardier.  The purchase cost of a goldfish vary by size and type at time of purchase.  The most expensive goldfish is the Calico, $3 to $30 for sizes 3-inch to 6-inches.  You can start with a fishbowl, $6-$13, and move into a small aquarium as the fish grow in size, $150-$600.  Goldfish pellet packs can run between $2 to $10.  Feeding them on a schedule will save you money and time not having to clean their tank so often.

Cat:  A cat will cost between $600 to $1,100 on year one.  I strongly suggest you limit your purchase costs by adopting at the local pet shelter.  Please!  Those furry felines need homes.  After year one, expect to pay between $375 to $750 a year.  Cats live an average of 14 years!

Dog: Let's face it, kids love dogs.  So do adults.  But they come with the most responsibility, and also costs!  Small and medium breeds start out at $500 to $875 a year.  Let me again suggest that you adopt.  Save a dog's life!  You'll spend between $8000 to $13,000 on average for a small/medium dog living about 14 years.  Larger dogs cost more initially, but have shorter life spans, 8 years on average.

Rabbit:  Contrary to belief, rabbits are not easy animals to maintain.  According to you'll spend between $330 to $390 initially.  This includes adoption fee, a pen, litter box, hay feeder, and other items.  Prepare to pay about $85/month ongoing for ten years (the average life of a rabbit), unless you can get hay directly from a farmer.  Then it'll be about $70/month.  That's $840 annually, times 10 for a ten year life span, equals $8,400!

Guinea Pig:  The initial cost to get a single guinea pig (two recommended) will be about $199.  Optional items like chew sticks, toys, hay rack, grooming supplies, and an outdoor run will be about $99.  Monthly maintenance costs are about $72.  I gathered this info from

Turtle:  The most common type of pet turtle is the red-eared slider.  You can get one at a pet store for as little as $20.  Visit your local animal adoption center before buying one!  Expect to pay $100 to $200 for a terrarium or an aquarium.  Remember that turtles are reptiles and require UV lamps, plus water heaters.  Turtle upkeep will run you about $50/month (food and vitamins).  Annual vet visits will cost between $20 to $80.

Lizard: The price to purchase a lizard is reasonable, between $15 to $150 depending on species and age.  Annual cost rundown: $35 to $50 for vet care, $30 to $50 for cage, light, and substrate, $120 to $150 for feeding, and $5 to $10 for vitamins.  Total = $190 to $260.

Okay, there you have it folks.  There are many benefits to your kids having a pet, among them is learning responsibility.  But before you go out and make an impulse buy, please know what you're getting into.  Don't get carried away.  Remember that your children will grow and go off to college, leaving you with their pet (unless pets are allowed wherever they live).  Pet ownership is a big commitment financially and emotionally.  So do it the right way from the start!  Thanks for reading.      

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Thursday, September 14, 2017

Why Early Retirement Is Not A Status Symbol

Well, I wasn't going to say anything about this, but after seeing it over and over everywhere I turned for personal finance ideas outside of my own, it's more than warranted now.  I've had just about enough of the "early" retired using the fact that they're no longer part of the "rat race" as their claim to fame.  Here's an example from J Money's Budgets Are Sexy site.  So "Mr. 1500" retired at 43 and now gets to enjoy 40 mile bike rides into the mountains and hours at the library.  Dang, I'm missing out!  Similarly, we have other popular personal finance bloggers using the fact that they've "retired" early as their status symbol.  I'm not going to name any names, but you know who they are.

Image result for status symbol

Many of these personal finance bloggers got to retirement earlier than the rest of us by hoarding every last penny they earned while working.  They budgeted fiercely and lived minimalist lifestyles for multiple years.  It's not a bad idea if you're unhappy working as an employee.  They had high paying jobs in tech or other high paying professions.  They also shared their approach with others and now many people emulate them.  Why?  Because they make it seem as if reaching this goal is the greatest thing in all the world.  With each other's help, they made early retirement into a credible status symbol.  Meanwhile the actual wealthy people of this country never truly retire...they work their assess off to make more money and to leave behind a powerful generational legacy.  Wealthy people want to be talked about (positively) well past their death.

Find Fulfillment And Ride It Out

I'm here to tell you that if you feel happy and fulfilled in your profession, then great!  You too are as successful as these "early" retired bums.  Why would people feel happy and fulfilled at their jobs, right?  Yuck!  It's called having a job that makes you feel like you're contributing to a special cause, something that meaningfully aligns to your own sense of purpose on this planet.  If you're aren't so lucky, the easiest (and hardest at the same time) solution would be to quit your job.  Go out and either create or find what's going to satisfy your mission in life.  See, you only live once.  You have one lifetime to give it everything you got.  Unfortunately, many people are squandering this opportunity daily!

It may be taken as me being facetious, but I truly love what I do, teaching young people at an urban school.  I can't tell you how privileged I feel simply to be around them.  This blog catapulting me to a point where I wouldn't need to work anymore would not be enough for me.  It's too passive.  The bloggers who use early retirement as a status symbol may see writing articles as qualifying as a service to mankind.  I don't.  I mean, there's thousands of sites offering information that similarly help people with their financial needs.  Meaning, if I were to stop blogging about success, entrepreneurship, finances, etc., no one would be affected by it.  Others would simply fill in the void.  On the other hand, my work with teens inside and outside of school (as Teacher Homie G) would be missed if I were gone.

Image result for helping others

You Must Not Be Fooled

You must not be fooled into the path of these middle class early retired bloggers.  Keep working hard for as long as you can if the work is enjoyable.  Of course you must save for retirement, but not at the expense of living a normal lifestyle.  If your job doesn't fulfill you, but you don't have any way of leaving it, because perhaps you are very risk averse and entrepreneurship scares the pants off you, then I suggest you try out some of the following,

1) Be a mentor to a younger employee at your company
2) Be a Big Brother or Big Sister at your local Boys and Girls Club
3) Find a local non-profit with a cause you believe in and volunteer
4) Get involved more with your Church, Temple, Synagogue etc.
5) Write a book that either entertains or helps people
6) Volunteer at a local school, perhaps as a tutor or coach

There's more to your humanity than reaching a financial goal like early retirement so that you have more time to f-around.  Excuse my language.  Yes, you'll get to be able to spend more time with your loved ones, and you'll get to have more time to do the things you really love doing, but also consider that you're on this planet with others and they may need you.  In other words, don't stop being of service to your fellow man (or animal).

No one is going to care that you retired earlier than others when you die.  You'll have fewer regrets, however, if you took an active role in helping others while you were young and strong.  If you can say that you used your early retirement to be able to champion a cause by directly working with people, then you will find an inner peace like a monk at a monastery.

Thanks for reading!  Until next time.

Sunday, September 10, 2017

How to Protect Your Identity And Credit After The Equifax Breach

This week I checked online at Equifax's devoted website page to see if I was one of the 143 million Americans who had their valuable information stolen by hackers.  I was.  So was my wife, Jessica.  I can't tell you how incredibly upset I was at Equifax for allowing this to happen.  But I was livid after finding out that they knew about this breach two months ago and only reported it to all of us little consumers just now.  I don't believe for one second that the three executives at Equifax who sold shares a few days after the company detected the breach "didn't know" about the hack.  How stupid do they think we are?

The fact that they sold the shares within a couple days of the detection gives them better cover for their lies to the SEC.  Had they waited a week or longer, there is no way they could've lied about their ignorance and it be anywhere near credible.  May every Executive at Equifax be fired, and put in jail!  How do you feel about this?

But we must move on folks, and protect ourselves.  Thieves have our names, social security numbers, addresses, and quite possibly even our driver's license number.  They can sell the entire file on the black market to one buyer, or in blocks to multiple buyers, and meanwhile we have no idea if our info will be illegally accessed today or ten years from now.  So today's post provides you with some ways you can protect your identity and credit if you happen to be one of the 143 million Americans affected by Equifax's shameful blunder.  Let's begin:
Image result for identity theft protection

1)  Now you'll have to monitor your credit at all 3 credit bureaus.  If you didn't do it at all, it will become imperative for you to monitor your credit at least once a year.  That's free at  I may have to bite the bullet and pay for a monthly credit reporting service.  After comparing various identity theft protection services at (a very comprehensive report btw), the best one for me is IdentityForce.  Their package starts at $23.95/month.  Don't think that just because you don't have a lot of money to be stolen from your accounts that you are less of a target.  Remember thieves can open credit cards in your name and if you're not monitoring your credit, the liability falls on you.

Why not simply take the one year courtesy identity protection program provided by Equifax as a mea culpa gesture?  You kidding me?  They're scoundrels!  Don't trust them at all.  In fact, you may be waiving your right to be part of a class action lawsuit if you do.  It says so on their fine print if you actually read the terms.  My day to sign-up for the service is 9-12-17.  But after doing some research, I'm not going anywhere near their website any more.     

2)  Freeze your credit.  You can avoid having to worry about someone opening up a credit card in your name by calling the three credit bureaus (avoid calling Equifax) and telling them you want your credit frozen.  This means that any would-be identity thief will have to provide a PIN to "unfreeze" your account before being allowed to open a new credit credit line.  They won't have this PIN, you will...(hopefully they haven't already locked you out).  Here are the numbers you can call: Experian, 1-888-397-3742.  TransUnion, 1-888-909-8872.
Image result for credit freeze

Here's the catch.  You'll have to wait at least three days to "unfreeze" your credit and you may have to pay a small fee ($10.00 at Experian for most U.S. states and free for seniors 65 and older) for doing this.  If you are not going to be applying for a mortgage or a loan any time soon this may be a cheap option.  The freeze can be as permanent as you want it to be so no recurring costs.

3)  Set a Fraud Alert.  A fraud alert is great to deter identity thieves from opening up accounts in your name.  They'd need your name,  social security number, address, and other personal info to do so.  So basically all of the information Equifax gave up.  If you weren't affected, you should consider this free service.  The catch is that the fraud alert set-up only lasts 90 days so you'll have to be on a renew schedule.  Unlike a credit freeze, however, you'll only have to call one of the three credit bureaus to set this up.

Other tips:

4) Make sure that whatever You decide to do, you also repeat the process for every other adult in your household.

5) Be extra leery and vigilant prior to tax season.  Identity thieves will use your social security number to file fraudulent tax returns and receive your tax refund.

Okay so it looks like we all have yet another thing to worry about now thanks to Equifax.  My best suggestion is for you to pay $10.00 to freeze your credit, if a monthly monitoring service is too expensive.  Identity thieves may be able to withdraw all your cash from accounts, but they at least won't be able to open credit cards and really hurt you for a long time.  May you never be the victim of identity theft!  Thanks for reading.        

Wednesday, September 6, 2017

5 Reasons Why You Shouldn't Open A Store Credit Card Account

I was at the Home Depot on Monday, getting 5 gallons of paint.  Jessica wants a new interior look, and after over ten years of seeing the same colors on our downstairs walls, I don’t blame her.  Back in 2006 I used a terracotta for our dining room, a yellow for our kitchen, and a green for our living room.  What can I say...I got a little artistic while single.  Today, however, the walls look like they can use a new coat, especially with our kids marking it all up.

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Labor day is great for homeowners because the promotional savings at places like HD and Lowe’s are substantial.  We purchased a 5-gallon bucket of Marquee, HD’s best paint brand for $170 with a $40 rebate.  If filling out a rebate form and sending it in the mail is too hard for you, or if it’s something you’ll forget, do it as soon as you get home.  I took care of it immediately by requesting my rebate online.  Rebates are not the topic of today’s blog post though.  Store credit cards are.  You see, as I was paying for my paint and supplies, the woman at the register asked me if I wanted to apply for a HD card.  It came with some perk that I can’t even recall right now because I tune out these types of requests.  Many retail stores offer a store credit card option for a 10% savings and people take the offer.  They figure they can save more money.  But…

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We already know Americans have an awful habit of not paying all of their credit card balances on time.  According to CNBC, the average American household has an outstanding balance of $8,377!  As a country, Americans owe more than 1 trillion in credit card debt.  Wowsers!  Opening up a store credit card to save 10% on a purchase, and to continually save on purchases at that same store may sound like a logical thing to do.  Here are 5 reasons why you may want to pass up that offer to open an account next time you're enticed:

1. According to a 2016 survey, store cards charge an average Annual Percentage Rate (APR) of 23.84% while regular cards not tied to a retailer charge on average only 15.77%.  So if you don’t pay off your balances in full every month, you’ll pay back that 10% you saved in interest charges by your second payment.

2. If you cancel your card because you realize you’re too tempted to keep using it, your credit score will drop.  This happens anytime you close a credit card account.  The solution here would be to transfer your outstanding balance to a fee-free regular credit card and hide the store one.  Better yet, have someone else hide it from you so you really won’t know where it is!

3. The store you shop at can close for good leaving you inconvenienced. Corporate offices determine which store locations deserve to remain open every year based on same store sales comparisons. If the let's say, Target, you shop at with your store credit card should close its doors, and other Targets are far away, you'll have to drive further to continue using your credit card in person, or stick to online purchases only.

4. The retailer goes out of business all across the state or country. Remember Sports Authority? Sears? The former is defunct while the latter is on its way to joining the fallen victims of Amazon. So what happens to your credit card in this scenario? A) Your account is forcibly closed. That's right, there's nothing you can do about it. Your credit score takes a hit. Oh, and don't think you don't owe the rest of your balance because you do. These retail stores have relationships with banks who are ultimately going to want their money from you.

5. Continuing from above, B) your account is assigned a line of credit with another retailer, one you don't actually want to shop with! Sure they'll give you advanced notification of all of this, but what if you truly don't like shopping at the newly assigned retailer? Only one thing you can do: close the account and incur a credit score hit.

No retailer is safe these days. The juggernaut that is Amazon is affecting every aspect of the retail industry, margins, sales, distribution, etc., and by virtue of buying other businesses (Whole Foods for example) no space is safe. But even if this weren't happening, opening a store credit card just doesn't make any sense. Not when you can get better perks by using a standard credit card with a lower APR. Best case for your financials is to not have to use credit, of course. And if you do, simply so that you can rack up points or rewards, make sure you pay off your balances each month. Please don't be a credit card debt statistic.

Thanks for reading! Until next time.

Saturday, September 2, 2017

Why It's Stupid For One Person To Handle All The Finances At Home, 4 Suggestions

At Casa Gomez, 80% of the finances are handled by yours truly, and 20% by my wife, Jessica.  I mostly handle paying the bills, the mortgages on our properties, and writing out checks on accounts that are not on automatic withdrawal payment.  Jessica handles the budget, gathering info from me on how much was paid to X, Y, Z, and so forth, and letting us know if we're on or off budget.  The pros to this arrangement is that it forces us to communicate.  The right hand must talk to the left in other words.  But there is a scary downside.  I'll get to this later.
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How do you and your significant other handle your household finances?  First, a survey conducted by TDBank found that many couples maintain separate bank accounts, and 42% of couples have a joint account while also keeping individual accounts.  My wife and I don't keep any separate individual accounts.  When she logs onto Wells Fargo she basically sees what I see.  In my opinion, couples who maintain individual accounts along with one joint account have financial trust issues.  Newlyweds are another story; they need time to get their financial house in order.

The drawbacks of having a joint bank account include resentment over how it is used by one partner, for example, the money is used to buy things the other partner doesn't consider necessary.  Or resentment by one partner over having to pay for the other partner's debt.  This one doesn't make any sense to me.  Shouldn't you have discussed each other's debt scenario before getting married?  If your partner's debt was an issue you couldn't live with, why did you agree to get married? supportive and help them pay it down!  Finally, a drawback to keeping just one joint account is divorce since both partners have equal access, and can at any time withdraw all the funds and walk out.  Cold!  But it happens.

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If you're in a solid relationship (like my wife and me) and you don't worry about cheating, divorce, etc., then a joint account makes all the sense.  My money is her money, and vice versa, no matter who brings in the most cheddar in the family.  Jessica and I have spent time talking to each other about what types of purchases one can make, and anything over $100 that isn't food, we talk prior to the purchase.  We're both good about that.  In other words, we're on the same page and I trust her completely (she trusts me completely) not to go gambling, or on a shopping spree for clothes, expensive watches, jewelry, and so on.

I know we are not the only couple that lives this way.  There are thousands in this country who operate in a similar fashion where one person handles most of the finances while the other takes on part or none of the role.  And this can be dangerous, not to mention stupid.  So a couple of days ago, a cyclist was hit by a drunk driver and died of his injuries here in Oceanside.  He was on a bike lane (and road) I constantly use myself.  Now I know I take the risk of getting hit by a car every time I cycle along the road.  Obviously we all take risks every day.  Driving is a risk.  Heck, getting out of bed is a risk!  My point is that at any time, you or your partner can die, and if only one of you knows where to find an account number for lets say, a credit card, then how are you to put your partner's financial affairs in order with any ease?  You'd be hard pressed to do so.

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What should you do?

1.  Email any people you communicate with about accounts and let them know to include your significant other in any communication from now on.  Provide these services with your partner's name, email, and phone number.

For example, I emailed the person assigned to me at my property management company for my rentals.  I let her know to include my wife in all matters from now on.  I also emailed and did the same with the company that insures all of our rentals.  Stupidly, I was the only one they had on record even though Jessica is co-owner of all our properties.

2.  Write down, in a notebook, the account numbers and contact information of all your service providers (gas, electricity, water, Internet, streaming or cable, and so on).  Asterisk or mark any account that is on automatic withdrawal from your joint account and specify which day of the week the funds are drawn.

3.  Retirement accounts.  Make sure your partner knows the account number (and custodian name) to your 401k, 403b, Roth IRA, Traditional IRA, etc.  Hopefully you already designated your partner as the beneficiary.  I still have to let Jessica know who to call for one of my Roth IRAs, my 403b, and my CalSTRS teacher's defined contribution pension.

4.  Life insurance accounts.  I have two that Jessica has heard about but she has no idea where the policies are located.

I think I took pride in taking care of most of our family's financial affairs.  It was a gender role I fully accepted and Jessica didn't mind it.  But now I realize how incredibly careless this was.  I was failing to communicate some of the most important information I had on hand with my wife.  Basically I was giving her a ton more work to do in the event of my demise.  I don't want her burdened any more than she has to be.

It's not smart for one person to handle most or all of the finances.  If this is your case, I suggest you share the load 50-50.  Split the bill paying duty, and make sure each of you gets involved in the decision making when it comes to your assets.

Thanks for reading!  Until next time!  If you liked this post and want to get more like them in your inbox, please subscribe below:

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