Questions About Goodwill, Emergency Funds, Library Openings, Cheese, and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.

1. Roth IRA withdrawal question

2. Buy it for life: Goodwill

3. Year away from down payment

4. Retirement and disability

5. Having “a life”?

6. Making cheese at home

7. Can I afford this house?

8. Ames Public Library opening?

9. How to keep leftovers?

10. Unnecessarily large emergency fund

11. Donating time instead of money

12. Cheap video games

13. Home loan balance challenges

14. SNAP reality

15. Financial independence inspirational fiction

For the past four days, we’ve had guests staying at our home.

I love having houseguests, though I find it really exhausting. Spending quality time with people that I don’t get to see as often as I’d like is just wonderful and we often end up spending time doing things that we don’t usually do, like visit things in Des Moines that we often take for granted.

Still, when Monday morning rolls around, I can really feel the sleep I’ve missed. We usually “catch up” on sleep on the weekends, as Sarah and I average about five and a half hours of sleep during the week and about eight or so on the weekends. When we have guests, that extra weekend rest tends to get significantly reduced.

A nap might be in order today. I usually don’t take them, but when I can actually feel my wheels turning slowly due to inadequate sleep, a nap can really help.

Q1: Roth IRA withdrawal question

We have always been a two-income family. I lost my job over two years ago and emergency savings and unemployment benefits have all been used. We don’t use our credit cards but still have approximately 12K in credit card debt and we pay above the required minimum payment toward it each month. For many months now, thinking about the length of time (plus the amount of interest) it will take to pay this off in full is driving me crazy. I had hoped, of course, to find new employment and get rid of this debt with earned income but that has so far not happened. Would you advise using funds from a Roth IRA to pay this credit card debt off all at once and be done with it? I am over the required age for withdrawal without penalty now and as much as it upsets me to withdraw from the Roth, it bothers me more that we have lingering debt that is costing us money.

– Marvin

So, if I understand correctly, you’re over 59 1/2 and thus could withdraw from your Roth IRA without penalty. You’re wondering if it makes sense to use that money to pay off your credit card debts.

My biggest worry would be your other sources of retirement income. What does your retirement look like if your Roth IRA disappears? Do you have other sources of retirement income besides Social Security? Are you going to be reliant on working for some kind of wage at that point?

If you have a pretty well stocked 401(k), I’d pay off the debt. If you have nothing else, I’d strongly encourage you to seek out any kind of work right now and use every dime you can to pay down the debt without touching the Roth so that you have at least some kind of nest egg for the later years.

If I were in your shoes, after two years of not being able to find work in my field, I would be seeking any work I could find.

Q2: Buy it for life: Goodwill

You’ve mentioned before that there are some items you would buy from Goodwill and treat them as “buy it for life” because older models were well constructed. What is your list of those items?

– Jerry

Given the very low prices at thrift stores, I’d buy almost anything that’s on the shelf that doesn’t involve heavy electronics. Older models of blenders, microwaves, toasters, and so on – particularly anything that uses analog buttons and still works – are items I’d be happy to buy.

Most of those devices have extremely simple components inside of them. Prior to the advent of electronics in almost everything, those devices were straightforward and really well made.

Besides, even if something were to fail along those lines, you’re not out very much money.

The big thing I’d avoid is anything with significant electronics in it. A simple button pad isn’t too bad, but I’d almost never buy electronics there. (I say almost because there’s probably a situation where I would make such a purchase, but none immediately come to mind.)

Q3: Year away from down payment

My wife and I have been saving for a down payment for the last six years. When we first started we didn’t know the first thing about personal finance and saved our money in a savings account. Over the last year I have been reading your site and studying personal finance. We are now about a year from buying a home as we should have a 20% down payment for our price range then. But it is only earning 0.8% in this savings account. Should we put the money somewhere else where it might earn more?

– David

I wouldn’t.

Right now, you’re on pace to have enough for your down payment in a year, right? Let’s say you put all of it in the stock market and you had a good year – you might increase your balance by 20% (of which a quarter of it would go away in taxes). That’s good, right? But let’s say next year became another 2008 and you lost 40% of your balance. Suddenly, your home purchase is a lot further off.

This is true for almost any investment with risk at this point. If you put it in something with risk, you might be able to move your purchase date a few months closer – but you run the risk of delaying it for years, too.

I don’t see a huge benefit for you in terms of putting that money into something risky. The upside is pretty small but the downside is pretty awful.

Q4: Retirement and disability

I’m 53, separated and on disability. My problem is I want to save some for retirement. However, I don’t work so no 401K and I can’t contribute to Roth IRA any longer because I don’t have any earned income. I have a small mortgage of $ 42,000 of which I put as much as I can toward it each month. I have no other debt. I have some investments with Edward Jones – a $ 10,000.00 municipal bond that pays 4.5% and have invested $ 50,000 in municipal funds in the American Funds (what Dave Ramsey buys) which are now worth over $ 66,000. However, after your story today about expenses, I’m worried about these municipal funds fees. I am currently saving $ 500.00 per month and just putting it in Money Market account for now. However, I know I should be investing it in some low cost index funds thru Vanguard. Can you make some recommendations for me? I do have a roth IRA with about $ 13000 in it.

– Jill

If you have a permanent income stream that’s greater than your expenses, you’re in pretty good shape no matter what you do. There is no “best” move here, though – it depends on your goal. The safest move would be to pay off that mortgage as rapidly as possible. After that, you’d probably want to save for the future, particularly if there are potential health concerns.

However, I can’t fully back that advice because I don’t know your full situation. It’s apparent from your story that you make enough off of disability that you are able to put $ 500 a month aside for the future. Is that disability going to last forever? If not, then I’d put a greater focus on shoring up your retirement savings so that you can survive when the disability money disappears.

It really depends on the state of your disability, your benefits from that disability, and what your future goals are.

Q5: Having “a life”?

I am 36 and single after having been married for ten years during my teens and twenties. Since then I earned a degree and have a job as a lab technician.

I am really careful with my money. When my marriage ended I didn’t have anything at all in the bank so I was in a pretty hard spot for about two years. My parents helped co-sign some loans or else I would have never been able to go back to school.

So I save every dime I can and live really cheap. I take leftovers to work every day and when I go out with coworkers I usually just drink sodas. I have a “dumb” cell phone and I don’t have cable at home – I just watch Netflix.

My coworkers chide me for being cheap and that I should “get a life.” When I hear that, I honestly don’t know what they mean. There is nothing in life that I really want more than what I already have. To have other things, I would have to give up some things. I remember how my life felt when I came home and found my apartment empty and how the next few years went. What makes me feel good is knowing that could basically never happen again.

– Sam

If there’s nothing you would want more than the things you already have, then you’re on the right path for you. People are chiding you because they see you on a path that isn’t right for them (or at least that’s how they see it).

In other words, don’t worry about what they say. Sometimes, people feel uncomfortable when they see others on a life path that’s very different than their own even though their situations are similar. You’re of similar age and work a similar job – why are you valuing things so differently? For some, it can feel like their own values and choices are being questioned just because you’re doing things differently.

Don’t let it bother you in the least. Focus on what brings you joy, not what brings them happiness by proxy.

Q6: Making cheese at home

Have you ever tried making mozzarella cheese at home? I thought it sounded crazy too but then I tried it. This is what we did. It made a huge amount of mozzarella cheese from a gallon of milk, some citric acid, a bit of rennet and some salt – way more than we could use on two pizzas. If you wanted to make a few pizzas and maybe also make a tomato and basil and mozzarella salad you could use this recipe and have way better cheese for cheaper than buying chunks of it at the store. Plus it’s fun.

– Carly

I’ve actually done this and I was also surprised at how much cheese it made. I used a gallon of milk from our local dairy (Picket Fences) and it made enough for a few pizzas and a lasagna recipe.

I’m not sure if this is something you’d do purely to save money as compared to buying cheese at the store, but it is a pretty easy way to make some very good ultra-fresh mozzarella at home. It is cheaper than buying fresh mozzarella, but it does take some time.

I actually made this cheese out of a home cheesemaking kit I received as a Christmas gift two years ago that contained the rennet tablets and citric acid along with step-by-step directions. I think it was this one.

Q7: Can I afford this house?

A few years ago I asked you a question about quitting a stable part-time job to take a full tuition scholarship plus stipend for graduate school. My decision to do so was definitely based on enhancing my future rather than protecting my present. It worked out well. I graduated with honors and the award for outstanding grad student in my department. I found a full time job after about three months, a year later got a promotion to Director of Operations and have a new career in personal finance. The job is definitely stable and the career prospects are good. I received a small inheritance this year and I paid off a used car and the student loans I had left. So I have a stable job (doesn’t pay great, but has good prospects), no debt, and a dependable used car with only 30000 miles on it (which for a Corolla should mean a very long run). I generally max out my Roth IRA every year and there is some other money put aside for retirement and since I live a quite frugal lifestyle all retirement calculations put me in good shape for retirement at age 67. I also have disability insurance that would provide enough to pay the mortgage and to eat in case of full disability. I am a single woman and head of household with two kids.

My question is this: I am buying a house with a USDA loan; the interest rate is excellent – 3.75%. The taxes are quite reasonable and are capped at an increase of no more than 2 percent a year (State law); Home prices in the area I am buying in have apparently bottomed out in the last 6 months and are now projected to rise at 1.5% for the coming year. The house I am buying is quite a reasonable size for me and my two kids at 1300 square feet. Very small lot so not much maintenance; a community I love; house is in very good shape according to one inspection and two contractors. My monthly payment will be about 26% of my current income. The house is very well insulated so the gas heat should be reasonable. I know the electric will go up because I only pay about $ 50 a month for a house half the size. The house is slightly closer to my job and much closer to my kids school (they have scholarships to an excellent private school) – I drive them now to school but in my new location there will be a district bus (included in the taxes) so I will have significant gas savings as well as convenience (school is currently a 40 minute drive each way). The monthly cost for the house is about $ 200 more than I am paying now in rent; I can’t stay here any longer becasue there are some serious safety and structural issues with the rental. Last year there were many days we were without heat and this area was crazy cold.

I can’t really see any downside to the purchase; however, I am a bit worried about the money pit stories of houses and worry a bit about gigantic repair costs. I am a deeply frugal person – I will buy most of our furniture at yard sales, cook virtually all meals at home. The house is a simple one and has been well maintained. The house already has significant raised bed gardens and I am an experienced vegetable gardener so we should be able to grow some of our own food. I can also fix many household items myself. I will put aside about $ 5000 a year for house repair/replacement and I know how to find used items easily. There is no present need for any renovation projects, except painting two rooms. I am already anticipating replacing the furnace in the next five years and have an estimate for the replacement (and half of the money set aside for it already). I already have a car fund set up so should be able to purchase my next used car in 5 years with cash.

Is there anything I am missing? I read another personal finance blog and the commenters were having fits because a writer “only” had a $ 10000 emergency fund and that wouldn’t be enough for a house. I anticipate being able to pay off this house in 15 years, perhaps sooner as I believe in 6 months to a year I will be getting significant salary increase (I know there are no guarantees) AND I will have the space in the new house to launch a side business which I am already starting on. I am only putting about 5% down on the house rather than 20%, but the PMI is much less than normal PMI with this program, only about $ 50 a month. If I wait another two or three years to save up 20%, the price of the house is expected to increase 3 to 4% AND interest rates will rise, perhaps significantly. We would also end up paying more in rent as we can’t stay here and 3 bedroom rentals are running at least $ 400 more than I will pay for the mortgage/tax/insurance payment.

I see this as an investment in my future and my kids. The house is perfect for retiring into (16 years for me until retirement), quite comfortable for my kids to live in while they get out on their own – but not so comfortable and spacious that they won’t want to leave, lol. Why are some people so incredibly rigid about the 20% down and absolutely no debt before a person moves into a decent living situation? It makes me wonder if I am making a crazy decision. What do you think?

– Kelly

First of all, people are “rigid” about the 20% down issue because that $ 50 per month is $ 50 that’s just disappearing into the bank’s coffers. That $ 50 per month wouldn’t have to disappear if you had a 20% down payment.

Given the amount you’re budgeting for home repair and maintenance, plus your willingness to try to do things yourself, plus a solid home inspection up front adds up to a reasonable solution to the home repair and maintenance question.

As for whether you should do this, your overall situation isn’t perfect for this purchase and there are some gaps in the story you’re sharing here (like the size of your emergency fund, closeness of relatives and/or strongly supporting friends, your location and the state of the surrounding housing market, etc.). Given the information you are choosing to share – which is all in favor of the purchase – you’ve probably already decided to do it and just want my confirmation.

My thought is that there are people in far, far worse financial situations that have successfully bought houses. Some of what you say does point positively toward buying, but it’s really impossible to say for certain without a full look at your finances.

Q8: Ames Public Library opening?

Were you able to attend the Ames Public Library reopening on Sunday? Since you are such a big fan of the library I expected to see you there but I didn’t spot you in the crowd.

– Jane

As I mentioned at the start, we had guests in our home all weekend. We actually talked about going anyway, but decided that the crowds would probably make this a poor choice.

Instead, I plan on doing of my usual “library sessions” there sometime this week. Once every week or two, I go to a local library and camp out with a pile of personal finance books, doing lots of reading and research for future posts.

While I’m there, I’m really looking forward to exploring all of the changes.

Q9: How to keep leftovers?

Here’s our problem. My husband and I are great about eating leftovers the next day for lunch no problem. Problem is that most of the time there’s still some food left but not enough for another meal. So we stick it in the fridge in a little container and two weeks later we find it and it’s scary. This seems wasteful and stupid. Any bright ideas?

– Tammy

We have had this exact same problem before, actually.

Our solution is to have a “leftover night” every Thursday evening and Sunday evening. We choose those nights so that leftovers never sit in our fridge for more than three days.

On those days, we just pull out all the leftovers, assemble plates off of those leftovers, and warm them up. It might not be the most incredible cuisine of all time, but it’s usually just fine for a family supper.

If there’s still anything left after that – which is rare – we just chuck it. After all, it’s been through three meals.

Q10: Unnecessarily large emergency fund

I have about 10k in an emergency fund right now that I have been assembling this year. I don’t make very much money, and have about an additional 10k in a 401k and Roth IRA. My bills are pretty barebones, as I live a fairly spartan lifestyle and live at home, so 6 months of living expenses and an emergency fund wouldn’t require 10k just sitting in my savings account. I’ve had a few setbacks in my life, so I’m gun shy of what to do next. At first I wanted to invest it in my Roth IRA, but now I see that I need to increase my wages instead of saving more. I do have a few “passive” income opportunities (oddjobs and volunteer tax rideoffs). The job I currently work has weird hours, and I can probably use it as a second job. Is it wiser to invest this large (for me) emergency fund in my education, or put it in my retirement (I’m relatively young; 28, so letting it grow will benefit me)?

– Jeffrey

If you are single and young, you probably don’t even need six months of living expenses as your emergency fund. Three or four months of living expenses is probably adequate. Just make sure you’re figuring that all up correctly.

I’d probably go the Roth IRA route with the extra money, honestly. You are going to be incredibly glad to have that money starting in about ten years (when it takes some stress out of retirement planning) on through the rest of your life.

Remember that “spending less” and “saving” and “earning more” are not either/or choices. You can and should do all of them if possible.

Q11: Donating time instead of money

I decided to start donating 6 hours a week (about 10% of the time I actually work and/or commute) to the local food pantry. I stock shelves for them and organize materials and sometimes make phone calls.

Anyway, I told my family this and they were really shocked. They told me that I should be donating money because the pantry needs it more.

Since then I have felt guilty. What do you think about donating time instead of money?

– Mary

Honestly, most charities need both. They need people to take care of tasks and they also need money in the coffers. If you weren’t doing the work, they’d either have to cut back on services or pay someone to do that work, so it would either cost the charity money or reduce the service they could offer. The same is true without a money donation.

In my eyes, time is money. If you devoted that six hours to other work and then donated the proceeds, the food pantry would probably only be better off if you could earn enough to blow away the value of your six hours of volunteering.

My feeling is that the gift of time is just as good as the gift of money.

Q12: Cheap video games

My nine year old son has been asking for a “Playstation” for Christmas. I am familiar with the prices – $ 400 for a console and $ 60 games – and we just can’t afford that.

– Karen

Karen didn’t really ask this as a question – the rest of her email wasn’t really an appropriate reader mailbag question – but I felt like she touched on a great mailbag topic. What does a parent do if their child wants an expensive game console and expensive games for Christmas?

Our approach with this was to check out every used video game store in our area. We’ve had great luck finding used game consoles and used games – games that were the hottest new releases a year or two ago but are now on sale at used stores because of the “cult of the new” crowd – for very cheap prices.

Gamestop is the large national chain store that serves this niche, but they also tend to have the highest prices. Our experience has been better with local stores, which you can probably find with a few Google searches.

Start there. See what you can find.

A final tip: you don’t have to buy your kid the latest console. Instead of a Playstation 4, get a much cheaper and still incredibly fun Playstation 3.

Q13: Home loan balance challenges

We sold a house in 2013 while extremely underwater. Due to not only the economy but the city we lived in, the house sold for nearly 50K less than we owed on it. My credit union helped us by rolling the balance over into a 10 year, 0% interest note.

My question: Is there any advantage to paying this off early relative to other expenses? Our plans include new housing in the next year and ongoing retirement savings. We have a $ 1K emergency fund and 1 month’s income set aside. No other debt right now.

2nd question: Do you know of any programs that might help with this debt? We can manage it for now, but if I lost my job or had some other emergency, this could quickly become a heavy burden.

– Jim

If you have a 0% interest loan, it should be the absolute last thing you pay off. Honestly, 0% interest loans are pretty rare. If I were you, I’d just make the minimum payments on it.

If you want some security against that loan, go to your credit union now and talk to them about it. Ask them if they have a system where a loan like that can be “paused” in the event of a job loss. They very well might be able to do this, since this basically amounts to a personal loan.

Honestly, though, I wouldn’t stress out about it too much. This is about the “best” debt you can have. You’re better off just saving up a bigger emergency fund to protect you if things go bad.

Q14: SNAP reality

I am a single mom with a six year old daughter. My husband died in a work related accident that’s still under litigation. Right now I am doing everything I can to make ends meet. We are on SNAP (food stamps) and we only get about $ 220 a month in those.

I am writing to you not for financial advice but because I am sick and tired of people saying bad things about SNAP and food stamps. People act as though I am scamming the system and eating lobster every day. $ 220 a month adds up to about $ 7 a day for the two of us. Without it, I don’t know what we would do.

I work three twelve hour shifts a week on Monday through Wednesday. My daughter stays at a friend’s house after school on those days. On Thursday and Friday I work six more hours during the school day as a clerk so I can be home when she gets home from school and I watch my friend’s daughter on those days to make up for the days she watches my baby. On weekends I try to find stuff for us to do that doesn’t cost anything like going to the park.

I am not a drug addict. I am not a leech. I am not a jobless scumbag eating your tax dollars. I just want to make sure my girl has food on the table.

– Dana

I really don’t have much to say here. Dana says it all.

I will say that, of the people I have known that have been on the SNAP program, the vast majority of them were on the system out of pure hardship and were genuinely trying to find work and improve their situation. And, yes, I’ve known a lot of SNAP recipients over the years.

I have no doubt that there are people who are on the program that abuse it, but there are people that abuse every government program, from businesses abusing loan programs to taxpayers abusing tax loopholes. Is it fair to judge all taxpayers by the scumbags who refuse to pay their fair share? Nope. Instead, we should think about fixing the loopholes they’re exploiting. Is it fair to judge all SNAP users by the people who refuse to play by the rules? Nope. Instead, we should think about fixing the loopholes those cheaters are exploiting.

If you’re in a situation where SNAP could help you, use it. It’s a tool to help you improve your situation.

Q15: Financial independence inspirational fiction

Do you know of any novels that can inspire people to pursue financial independence? It seems like a boring topic but there have to be some decent ones out there.

– Charity

The only writer that comes to mind that wrote about financially smart characters in a sensible way is Charles Dickens. His novel David Copperfield is, among other things, about people struggling with crushing debt.

I could write quite a lot about David Copperfield. It’s really a novel about how money affects people in different ways, from the struggles with debt and with spending less than you earn that Micawber goes through to the failure of greed as a personal motivation that eventually exposes Uriah Heep as a true villain.

I can’t really point to any modern novel that does this well. I will say that the book Titan by Ron Chernow – a biography of John D. Rockefeller – is told in a novel-like tone and a good part of the early book is about Rockefeller’s very careful nature in managing his personal finances. It’s one of my favorite books.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

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Water partners: Teaming up to solve shortages

Across the world, one in nine people don’t have reliable access to clean, safe water. “Everything flows from having clean water,” said Mort Anoushiravani, Mercy Corps’ water engineer and infrastructure director. “It’s a source of improved health, livelihoods and conflict mitigation.” In South Sudan (below) and elsewhere, many families rely on natural springs and other water bodies. Without water storage, taps can suddenly run dry. And without purification systems, life-giving water harbors disease and parasites.Mercy Corps works with Xylem, a corporate partner, to address urgent water needs in some of the world’s toughest places.Why work with a partner? Combining Mercy Corps’ experience mobilizing communities in remote regions and working in complex, challenging situations, along with Xylem’s specialized knowledge in water technology, means …

via Global Envision:

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Across the world, one in nine people don’t have reliable access to clean, safe water.

“Everything flows from having clean water,” said Mort Anoushiravani, Mercy Corps’ water engineer and infrastructure director. “It’s a source of improved health, livelihoods and conflict mitigation.”

In South Sudan (below) and elsewhere, many families rely on natural springs and other water bodies. Without water storage, taps can suddenly run dry. And without purification systems, life-giving water harbors disease and parasites.

Mercy Corps works with Xylem, a corporate partner, to address urgent water needs in some of the world's toughest places.

Why work with a partner? Combining Mercy Corps' experience mobilizing communities in remote regions and working in complex, challenging situations, along with Xylem's specialized knowledge in water technology, means the pair can reach more people in need. And, they can offer more intensive, holistic solutions through Xylem's technical expertise.

Xylem is one of world’s largest providers of equipment to treat and transport water. Focused on sustainable resource use, Xylem designs pumps, treatment plants and water quality tests for agricultural, commercial and residential use.

In 2008, Mercy Corps first partnered with Watermark, Xylem’s corporate citizenship and social investment program, to provide safe water after natural disasters in Indonesia, Kenya, Haiti and the Democratic Republic of the Congo.

When floods devastated Pakistan in 2010, Watermark and Mercy Corps quickly brought clean water to relief camps.

Munawar Abbas, above, a water quality manager in Sukkur, Pakistan, tests chlorine levels during a water filtration clinic in 2010 made possible through Mercy Corps' partnership with Watermark.

Although Xylem’s technology is sold in more than 150 countries, it has the greatest presence in the United States and Europe. By partnering with Mercy Corps, Xylem can fulfill its mission to improve water access globally.

But the partnership is about more than immediate, humanitarian aid.

To prevent future water emergencies, Mercy Corps and Xylem work together to improve community water systems, install better filtration and purification infrastructure, and train local communities on water safety.

“The greatest number of lives can be saved by addressing water-related risks before a disaster occurs,” said Michael Fields, Director of Corporate Citizenship at Xylem.

“We desperately need new solutions, and the challenge to private companies and nonprofits globally is to find new ways of working together to help vulnerable communities prepare before disaster strikes.”

Watermark and Mercy Corps worked together in 2009, for instance, to help a Sri Lankan community get outfitted with a new water system (above).

By working with a leader in the water industry, Mercy Corps is able to match big problems with big solutions.

For example, when the largest earthquake in Japan’s recorded history struck the country in 2011, the accompanying tsunami destroyed a salmon hatchery in Minamisanriku. The hatchery played a critical role in the region’s salmon fishing industry.

Watermark’s Emergency Response Fund supported Mercy Corps’ work to rebuild the hatchery. Together, the organizations provided holding tanks, vehicles, fishing nets and other necessary supplies. The hatchery released 5 million baby salmon just one year after the quake.

In the photo above, three-month-old salmon swim in a bucket at the rebuilt Minamisanriku hatchery.

Today, one of the world’s greatest water challenges is in Jordan. Already one of the most water scarce countries in the world, Jordan is buckling under the strain of absorbing an influx of more than half a million Syrian refugees.

Mercy Corps is working with Xylem to provide water at the Zaatari refugee camp. Together, the organizations built deep-water wells and a system to supply clean drinking water. Now refugees are supplementing these water sources with rainwater catchment systems.

Before the conflict in Syria, the Zaatari camp (above) was an open desert. Now up to 120,000 refugees live on the land, making it the fourth largest city in Jordan.

Wells and holding tanks at the Zaatari refugee camp help families get the clean water they need to drink, cook and clean.

Partnerships are powerful. Working together, Mercy Corps and Watermark have helped give more than 1.6 million people access to clean water so far, as well as improved water systems in communities across the globe.

Stay tuned for an interview with Keith Teichmann, ‎Director of Innovative Networks and Marketing and Vice President at Xylem Inc.

Photo credits:

South Sudan – Rodrigo Ordonez/Mercy Corps

Pakistan – Julie Denesha for Mercy Corps

Sri Lanka – ITT Watermark for Mercy Corps

Japan – Sylvia Ross/Mercy Corps

Jordan – Cassandra Nelson/Mercy Corps

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Resources:

More about Xylem Watermark and Mercy Corps

Tapped Out, a report on water scarcity in Jordan

For more info: Water partners: Teaming up to solve shortages

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Water partners: Teaming up to solve shortages

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Achieve Any Financial Goal with These 3 Steps

via MoneyNing:

I admit it: I get caught up in the whole New Year’s resolution thing.

When January 1st rolls around, I want to use the dawn of a fresh year as a breaking point for old habits, and the start of great and wonderful things to better myself and my life.

For many years, I resolved to do better with my finances. Unfortunately, I often found my resolution broken before the first month — or even the first week — came to a close.

The good news is that during my four and a half year journey to pay off my credit card debt, I learned the secrets to achieving any financial goal. You’d be surprised at how simple these three steps are:

1. Define the Goal

To achieve great things, your goal must be clear. In order to properly define a goal, it has to be:

• Specific: Part of the problem with making a new year’s resolution is that they’re often too generic. For example, what exactly did I mean by, “I want to do better with my finances?” Instead, your goal should be something like, “Create a budget, tracking my income and expenses, on the first of every month.”


• Realistic: I also had to come to terms with my own limitations. Coming from a place where we’d never even created single budget, it would be unrealistic to hope to fund a $15,000 emergency fund by the end of the year. I knew that the first thing I needed to do was live within my means, THEN I could adjust my goals to be more sophisticated.


• Trackable: If I say I’m going to create my budget on the first of the month, and I haven’t done it by the 5^th, I know I’m not on track. Time to sit down and make it happen.

2. Plan for Success

I’m currently working on a goal to fund my emergency fund with $1,000 by the end of February. When I first started working towards this goal, I determined I would have to put $100 per paycheck into my emergency fund.

Remember: a goal without a clear path to achieving it doesn’t have a good chance of succeeding.

3. Execute

If you’ve done the first two steps properly, what needs to be done here should be very clear. It could be sitting down on the 1^st of the month and making a budget, transferring $100 to a separate account on pay day, or whatever action is necessary to keep moving towards your goal.

While your path should be clearly defined by now, this is the part that requires dedication and willpower. The good news is: if your goal is specific, realistic, and trackable, you’ll be motivated by seeing steady progress towards it.

Achieving financial goals isn’t easy, but these three steps provide a framework to give you the best chance of success.

Are you currently working towards any financial goals? Do you have anything to add that could benefit your fellow readers?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

Related posts:

1. 7 Steps to Creating Lasting Financial Resolutions


2. 4 Steps to Harness Financial Self-Discipline


3. How to Set Financial Goals for the New Year

For more info: Achieve Any Financial Goal with These 3 Steps

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Achieve Any Financial Goal with These 3 Steps

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5 Smart Ways to Use Your Income Tax Refund

via MoneyNing:

Tax time is quickly approaching. Those who anticipate getting a large tax refund will be anxiously waiting to file their taxes, while those who anticipate owing money will be holding off until the last minute.

Regardless of your opinion on whether it’s wise or not to get a tax refund, there are a lot of people who do.

In fact, this will be the first year that I may end up owing income taxes, rather than getting a refund. This used to be the time of year when I would scheme about all the ways I could use the extra money.

If you’re anticipating getting a large income tax refund, here are five smart things you could do with it.

1. Pay off debt

What better way to spend a lump sum of money than to pay down debt? If one of your New Year’s resolutions is paying off debt, taking advantage of your refund is a great idea. You’ll get a head start that will hopefully allow you to accomplish your goals this year.

If you’re in debt, this is probably the smartest thing to do with the extra money.

2. Fix up your home

I love updating my home. I especially love seeing how much I can get out of a small budget. I’ve used income tax refunds a couple different times to breathe new life into an old room.

If you’re willing to get your hands dirty, you could make your tax refund go pretty far.

3. Grow your savings account

If your savings are running low, you could stash your money in the bank. Consider increasing your emergency fund, or putting cash toward a new savings goal.

4. Take a vacation

In the past, I’ve used my refund to go on vacation. My entire family went on a trip to Virginia Beach a few years ago — funded by my refund.

If that feels frivolous, you could just put a portion of your refund towards a vacation, and use the rest to fund other savings goals.

5. Invest

I’m guessing you’d probably agree that investing refund money is a smart idea. Because it is!

If you have a hard time reaching the maximum contribution limit on your various retirement accounts, your refund could give you the boost you need this year. And if you haven’t started investing, using refund mon ey would be an easy way to do so.

If you got a large income tax refund, what would you do with it?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

Related posts:

1. Tips for Smart Tax Refund Spending


2. You Got Your Tax Refund, Now What?


3. Are You Still Getting a Tax Refund?

For more info: 5 Smart Ways to Use Your Income Tax Refund

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5 Smart Ways to Use Your Income Tax Refund

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Personal Finance, emergency, goals, limit, money, money tips, refund, result, savings, sum, tax, taxes, things

Reader Mailbag: Cornucopia

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.1. Food costs while traveling2. Holiday lodging3. Non-frugal roommate4. Fear of returning to school5. Christmas becoming expensive6. Can I trust financial advisor7. Bookkeeping error results in windfall8. Pocket notebook?9. Patience when starting a blog10. Teaching young kids life skillsOne of my favorite things about fall is the natural decor that it provides. I think that fall leaves, small pumpkins, and small gourds are gorgeous on the table this time of the year.My favorite, though, is a cornucopia. It’s simply a horn, usually made from wicker in my experience, that’s laden with these types of things, along with nuts …

via The Simple Dollar:

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.

1. Food costs while traveling

2. Holiday lodging

3. Non-frugal roommate

4. Fear of returning to school

5. Christmas becoming expensive

6. Can I trust financial advisor

7. Bookkeeping error results in windfall

8. Pocket notebook?

9. Patience when starting a blog

10. Teaching young kids life skills

One of my favorite things about fall is the natural decor that it provides. I think that fall leaves, small pumpkins, and small gourds are gorgeous on the table this time of the year.

My favorite, though, is a cornucopia. It’s simply a horn, usually made from wicker in my experience, that’s laden with these types of things, along with nuts and small fruit.

I just think it makes a beautiful centerpiece, plus it’s a useful one. People can snack from it if they so choose and most of the items inside are either natural (like the leaves and gourds) or, even better, they can be eaten (like most of the other items).

It’s not too hard to put one together, either. It just takes a bit of planning. If you want one for your holiday table, right now’s the time to start on one.

Q1: Food costs while traveling

I find when I travel I spend a lot of money on food. How can I arrange food that doesn’t spoil and is able to be taken on a plane? I also buy lunches for the three days I’m in port, and usually dinner on the way home (I travel around dinner time – the only possible time for me to travel).

- Tessa

Unless a meal is served on a flight, I usually try to eat a cheap meal after the flight and tide myself over on the flight with smaller items such as nuts, fruit, and other such things.

Those types of items can easily be purchased at a grocery store at some point earlier in the travel and stowed in a carry-on.

Part of the reason for this strategy is that I almost always work while flying. I’ll write or do some constructive reading and note-taking. If I’m doing that, I find that being on the verge of hungry is a help, as I almost always think more clearly when I’m nearly hungry.

Q2: Holiday lodging

This year, my brother’s family, my wife’s brother’s family, my parents, and her parents all chose to take us up on our offer to have Thanksgiving at our house. We more or less implied that we’d have room for them here, but we don’t have room for all of them. How should we handle this without breaking the bank to provide hotel rooms for all of them?

- Aaron

For me, it would depend on how you “implied” that you had room for them. If you flat out told them that they could stay at your house, they likely budgeted for the trip without accounting for lodging.

If I were you guys, I’d assign each family one of the non-master bedrooms in the house. If there are not enough bedrooms, consider using an office temporarily with an air mattress. I would then use every sleeping bag I have (and encourage visitors to bring them too) and have all of the kids slumber party in the family room.

If that still doesn’t provide enough room, I’d probably talk to the wealthiest family that was coming and ask for their help in getting a room.

Q3: Non-frugal roommate

We live with a girl in Sydney, who makes more money than us and it is “her” place we live at. However, she isn’t as ‘frugal’ with her use of the hot water and electricity as we are. Her boyfriend stays on weekends and has long hot showers (tiny tank meaning noone else can shower for hours afterwards), he washes and dries his clothes, when not using the dryer its using the heater, and they wash up in hot water 3 or 4 times a day. They leave all the powerpoints on and the lights. Since we are paying half I guess we could brooch the subject, but she can very quickly and easily turn around and say “if you don’t like it move out”. We don’t have anywhere else as good, or as cheap to live. Should we just suffer in silence? Of course we turn off the powerpoints and only wash up once a day (in cold water). But I am concerned about our contribution to the electricity bill.

- Angela

It’s going to be very difficult to divide up the energy bill in a way that you all think is reasonable. For it to be accurate, you would have to use separate electric meters. Both of you are going to argue that the other one is using more of the energy – and even if it was split based upon actual usage, it probably wouldn’t save you very much money per month. Let’s say her and her boyfriend are using 60% of the energy and your energy bill is $200 per month. If you split it there, it’s only $120 for her and $80 for you – and that’s assuming you’re also splitting the base fees at a 60%/40% split, which means you’d be expecting her to pay more of the cost to simply have energy available. I doubt that $40 a month is worth the fight here.

I’d be more annoyed with the use of all the hot water, myself. Rather than complain about the electric bill, I’d suggest to her that perhaps her boyfriend showers last when he’s there instead of first, because he uses the shower for so long that it leaves no hot water for anyone else. Suggest that she should go first as well so she gets some hot water because, honestly, that kind of behavior isn’t fair to any of the three of you.

If you angle the discussion about water usage right, you’ll probably get what you want on both counts (or at least an improvement) without having to argue about money.

Q4: Fear of returning to school

Over the last several years, my husband and I have paid off all of our debts and built up about $100,000 in savings. We have always funded our retirement accounts and feel good about our situation.

My husband has always dreamed of returning to school and studying history. Given our situation and the fact that we have basically lived off of my income for years anyway, I have encouraged him to do this. However, he won’t do it. Whenever I suggest it, he mentions a lot of reasons why not.

A big part of our reason for our money makeover was so that he could do this. I’m actually getting frustrated by it.

- Alice

There are a lot of potential things at work here.

First of all, it may be that something that was once a hazy dream no longer seems as great now that it’s actually possible. The idea of returning to an academic setting isn’t always a pleasant one for everyone. I’ll admit that I would love to do something like this, but not everyone would.

Another reason is that he may also be worried about you, and that’s something that’s going to be very difficult to get past. He may be afraid of simply eating away at your income without contributing anything for several years.

Making that kind of major lifestyle leap is scary and filled with risks. If the risks are too great for your husband to take, let it be. Just make sure he knows that door is open for him if he changes his mind.

Q5: Christmas becoming expensive

My partner and I are relatively frugal. He is one of six kids, I am one of three. When it comes to birthdays, his family like to all chip in for one present (usually $30) whereas I don’t get my family anything, as I get lots of things for them for Christmas. However, buying presents for five kids, six nieces and nephews, parents birthdays, mothers day and fathers day is all adding up. My partner has mentioned this to one of his sisters, however they think we are being “cheap”. How do we contribute to presents cheaply, but still get something decent. Neither of us are crafty, so we aren’t the best candidates for DIY.

- Lisa

My honest suggestion would be to shop constantly for these occasions, looking exclusively at sales as the year goes by.

Buy gifts when you see them on deep discount, toss them in the closet, and wrap them up when gift-giving occasions come along.

We do this to a certain extent ourselves. I’d estimate that the majority of our Christmas gifts have already been purchased and are sitting in the closet.

Q6: Can I trust financial advisor

My company has a financial advisor on staff whose job it is to help employees figure out financial problems – how to set up retirement and how to build a debt repayment plan and stuff like that.

Seems like a good deal, but I don’t know how I can trust this guy. If I am having financial troubles how can I know he’s not telling the corporate bosses?

- Jeff

Theoretically, there should be some sort of confidentiality agreement between yourself and this advisor. You should be provided with this when you meet with this advisor for the first time, it should be signed, and you should have a signed copy of it.

That agreement should tell you what he can and can’t share with the company. You’re going to have to read it yourself to figure that out, but I can certainly tell you that I wouldn’t tell this guy anything if the agreement wasn’t extremely clear.

Even with an agreement, he might violate it and tell your bosses, but if that happens, he’s going to be in legal hot water and open for a lawsuit.

If you have a clear confidentiality agreement, I’d feel okay in this situation.

Q7: Bookkeeping error results in windfall

Due to a bit of bad book keeping on my part, I realized that a check for $1,700 which I had been reserving for had already been cashed and paid for. For the last 6 months I’ve sat with that extra $1,700 in my bank account waiting for the check to be cashed… when I had already paid!

Now my question is what is the best thing to do with this “accidental windfall”. I have a decent debt repayment strategy going on now to pay off about $2,300 of credit card debt, which should make me debt free by February. I also have $1,500 in my emergency fund (one months expenses), which I would like to eventually get up to $4,500 (three months expenses)

My ideas are to either:

1) Completely pay off my highest interest debt ($1,382) and put the rest in my emergency fund.

2) Increase my emergency fund to 2 months expenses, and put the remainder towards my debt.

Which do you think I should do? Or do you have another idea?

- Mona

Assuming you’re single, I would pay off your highest interest debt and add to your emergency fund with the rest.

If you’re not single and especially if you have kids, I’d increase the emergency fund.

Why? You need a bigger emergency fund if you have more people that are reliant on your income.

Q8: Pocket notebook?

Do you have any recommendations for a pocket notebook? I know you use one for notes. What do you use?

- Lynn

If I’m buying one for myself, I’m just going to get one of those inexpensive top-spiral Mead pocket notebooks. I’ve bought them in packs of 20 before, paying about a quarter each for them.

However, I have a lot of family members who like to buy me pocket journals and notebooks as gifts. I’m always writing stuff down, so they kind of pick up on that and buy them for me.

My favorite notebook is a pocket Moleskine, but I quite honestly wouldn’t spend the money myself for one. I’ve received several as gifts, though.

Q9: Patience when starting a blog

I’ve seen several times where you’ve said that most people stop too soon in creating a blog. Could you write more about that? I remember your saying that if your blog is growing at about 10 percent readership weekly then, with patience, you believe you it can be a success. But, what if it isn’t? What is a realistic timeframe to commit to in starting one?

- Jeanine

I don’t believe that most blogs ever reach their audience cap. I think most blogs have an “audience cap” that’s a mix of factors – the topic the blog focuses on, the qualities of the writing, and so on.

However, it takes quite a while for a blog to reach that point. In my experience, it takes years of steady and consistent writing to get there.

Another factor is that the readership growth isn’t steady at all. You might have 100 visitors one week, 150 the next, 110 the next, 85 the next, 200 the week after that, and 160 the next week. If you plot that out, the readership is slowly growing, but it’s easy to give up when you see your readership drop from 150 to 110 to 85 over a two week span.

You have to be patient with blogging and you have to write consistently.

Q10: Teaching young kids life skills

How do you figure out whether your kids are ready to learn basic life skills? When do you start trusting them to do things like bathe themselves and to set the table and to make meals?

- Joan

My solution is to let them try as young as possible. Sure, they’re probably going to make a disaster of things the first few times, but that’s what a parent is for.

My two oldest children can bathe themselves, set the table for dinner, clean windows, empty and load the dishwasher, and lots of other things.

In each and every case, we had them try to do this when they were very young. They often failed. They’d take a shower and not get themselves very clean. They’d load the dishwasher in a crazy and haphazard fashion.

After each attempt, I’d tell them that they did a good job, then I’d look for one single thing they could improve. I found that if I just told them one thing at a time, they usually did that one thing correctly the next time (usually, not always).

Gradually, they moved to the point where they were able to do things on their own.

Yes, it means a lot of work for the parents. It means cleaning up messes and reviewing results of tasks you could have done yourself much faster. However, if you just do it yourself, the children aren’t learning anything.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. Iíll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

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Review: FlexScore, part 2 (the website)

This article is by staff writer Honey Smith.There are many personal finance books and tools out there, useful to people in all stages of personal finance. I have a lot to learn before reaching financial independence, and the editorial elves thought it would be useful if I shared some of what I learn with you.My recent reviews include “Soldier of Finance: Take Charge of Your Money and Invest in Your Future” and “FlexScore, Part I (The Book).” This week, I’m reviewing FlexScore’s free online tool.FlexScore is still in beta, which means that they are still working out the kinks before general release. Once the developers are convinced that the tool is as bug-free as they can make it, they will “launch,” …

via Get Rich Slowly – Personal Finance That Makes Sense.:

This article is by staff writer Honey Smith.

There are many personal finance books and tools out there, useful to people in all stages of personal finance. I have a lot to learn before reaching financial independence, and the editorial elves thought it would be useful if I shared some of what I learn with you.

My recent reviews include “Soldier of Finance: Take Charge of Your Money and Invest in Your Future” and “FlexScore, Part I (The Book).” This week, I’m reviewing FlexScore’s free online tool.

FlexScore is still in beta, which means that they are still working out the kinks before general release. Once the developers are convinced that the tool is as bug-free as they can make it, they will “launch,” or make the product/feature available to everyone. Student loan payoff tool Tuition.IO, which I reviewed in January, is also still in beta (though I logged in recently and they are definitely improving the tool, and their blog is infographically awesome).

Philosophy behind the website

As I mentioned in my previous review, the aim of the FlexScore tool is to “gamify” personal finance. What does that mean, exactly? They make 1,000 a perfect score of sorts, meaning if you score a 1,000, you can probably retire today without a problem. Your initial score is determined in part based on your demographic information, your debts and assets, the insurance policies you have in place, and your goals for the future.

Once you have an initial score, the tool creates an individual action plan for you. FlexScore assigns different values to different activities, and by completing those activities you can gain additional points. Examples of activities you could do to gain points are:

• Getting life insurance, or increasing the amount you carry if you have it


• Completing or updating your estate plan


• Opening an Emergency Fund

Sometimes getting points is as easy as reading articles on the FlexScore website or watching their informational videos on a variety of topics. The tool will recommend that you watch specific videos or read certain articles based on your action plan. However, you can access all the articles and videos on their site via the FlexScore learning center.

One of the ways the tool will be monetized is by having sponsored links to companies that provide the services. For example, if “get life insurance” is on your action plan, the site will link to one or more companies that sell that product. However, as long as you get the life insurance and update your profile accordingly, you don’t need to buy from a sponsor to get the points.

What I didn’t like

My main complaint in the review of the book is that there was little information about what constituted a “good score” for a particular person. The main reason for that, of course, is that scores vary widely depending on factors like age, current financial situation, and goals. The online tool gives you not only your FlexScore, but also tells you how your score compares to that of your peers (based on age and location).

While the tool did provide more information on what a good score is, I didn’t find the compare feature to be all that useful. This was mostly because it just seemed to compare my raw score to that of my peers’. While my FlexScore suggested that I was right on track with my peers, I suspect that’s because my student loan is the size of a mortgage and, well, I don’t have a mortgage.

Maybe I’m just nosy and want to know exactly what my “peers by age” are up to. I think making the comparison tool more robust and comparing scores not only holistically but also by category would be awesome. I do expect that the tool will become more robust with time, however, so maybe it’s coming someday!

What I loved

My favorite part of FlexScore was the “breakdown” tool. What this does is put variables on a sliding scale and let you play with the effect that changing your goals would have on your score. The variables are:

• Retirement age


• Monthly income goal in retirement


• Current monthly savings


• Assets


• Debt


• Current cost of living

By sliding each variable up or down, you can see the effect that delaying retirement, decreasing your current cost of living, or paying off a debt would have on your FlexScore. Then you can decide what trade-offs you’re willing to make.

The learning center is also pretty neat. I watched a couple of the videos and they’re not too long or technical. They seem to be designed to explain basic concepts and inspire you to take action. For more in-depth explanations on various topics, the articles are extremely comprehensive.

Who should use FlexScore

My FlexScore was 400, indicating that I have a long ways to go before retirement. That’s news to precisely no one! However, I learned my peers have an average FlexScore of 380, which puts me about on track for my age and location.

One of the questions I asked Jeff Burrow and Jason Gordo, co-founders of FlexScore, was what makes FlexScore different from something like Mint. They said that Mint is extremely robust for day-to-day budgeting. However, it’s harder to get a sense of where you stand in a holistic sense, or understand how changing one aspect of your financial life can impact your ability to reach future goals.

With FlexScore, the action plan and points are part of the game. Sometimes it can be hard to get up the motivation to do something tedious and/or boring, like compare policies and obtain disability insurance. FlexScore is predicated on the belief that by getting points today, you’re less likely to put things off until it’s too late.

FlexScore isn’t a site for micromanaging your daily finances. You’re not going to be categorizing each transaction you make. This is a site for people who want:

• A big-picture understanding of their finances and how it relates to major life goals


• An action plan that is customized to their specific situation


• One central location for information on a variety of financial topics


• Are inspired by competition and games (you don’t compete against others, but can compare yourself to others, and compete against yourself)

To access FlexScore while it is still in beta, sign up here. Let me know what you think in the comments!

A note about swag: While I was provided with early access to FlexScore for review purposes, my opinions are entirely my own. Plus it’s free for everyone!

For more info: Review: FlexScore, part 2 (the website)

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Review: FlexScore, part 2 (the website)

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Personal Finance with No Dependents

I’m in a situation where I’m married and have three children. For the next decade of my life – at least – I have several other lives to be concerned with when it comes to my financial decisions.My closest friend, however, is single. He has no spouse. He has no children. He has no one depending on him but himself.It would not make any sense for the two of us to be making the same financial decisions. We use many of the same strategies – frugality, spending less than you earn, setting up a bright future – but our method of implementing them is very different.Since I usually focus on the financial choices that I make, I thought it might be interesting to walk …

via The Simple Dollar:

I’m in a situation where I’m married and have three children. For the next decade of my life – at least – I have several other lives to be concerned with when it comes to my financial decisions.

My closest friend, however, is single. He has no spouse. He has no children. He has no one depending on him but himself.

It would not make any sense for the two of us to be making the same financial decisions. We use many of the same strategies – frugality, spending less than you earn, setting up a bright future – but our method of implementing them is very different.

Since I usually focus on the financial choices that I make, I thought it might be interesting to walk through some of the different decisions he makes and why.

His only life insurance is a very small policy he’s had since birth. It will cover his funeral expenses and that’s about it.

Since he doesn’t have any dependents, he doesn’t have any children to worry about or a spouse to leave behind. Thus, there’s no need for an extensive life insurance policy – there’s no one left behind to protect if he were to suddenly pass away.

In our situation, Sarah and I need to have substantial life insurance coverage or else we’re risking leaving our children unprotected if the unthinkable were to happen.

He plans on working until he physically and mentally cannot do so, so he doesn’t save a large amount for retirement. He does save a bit for retirement, but not nearly as much by percentage as Sarah and I do.

He’s not a person who enjoys sitting around without things to work on, so he plans on working until he truly can’t. His retirement savings is mostly so that he can afford to live a nice lifestyle regardless of what he’s doing when he’s seventy.

At that point, he might not be able to do exactly what he chooses, so he may have to settle for work that earns a lower income level. For him, retirement savings is not for retiring, it’s for supplementing income.

Again, this is all about personal choice. If he wanted to, he could also focus heavily on retirement and extract himself from the work force at a very early age.

He has a smaller emergency fund than I do. Our emergency fund consists of several months of living expenses. His consists of about two months of living expenses.

Why the difference? He doesn’t have dependents to care for in times of emergency. When something disastrous goes down, he only has one mouth to feed and one head to find shelter for.

He also only has one person who can generate emergencies, while we have five, drastically increasing our chances for overlapping crises.

He can afford more investment risk. If my friend makes an investment choice that doesn’t return as well as he hoped, he’s the only one that has to deal with the life consequences of that choice. He might have to work longer or put aside a goal for the time being, but it’s only going to affect him.

If we invest in something with significant risk in order to try to bolster our returns and it falls short, the life consequences not only affect both of us, but it affects our children, too. We may be delaying goals and opportunities for them, not just for us.

Overall, being single gives you more financial flexibility because you have fewer people that need protecting. That simple truth has impact throughout your financial life. Having a family is deeply rewarding in other ways, but it does have a strong impact on your financial flexibility in a lot of ways.

I consider that fact to be a vital thing to consider when moving into a committed relationship or considering parenthood. Your choices are suddenly burdened with the need to protect other lives beyond your own, which restricts the risks you can take with your personal choices while still being a responsible adult. That choice comes with great reward – the close relationships – but for some, it’s a choice that deserves serious consideration before jumping on board.

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