Plan Well, Retire Well Saving and investing your money Sun, 15 May 2005 13:02:08 -0500 A Kitchen Remodel: Excitement and Trepidation Mon, 13 May 2019 16:58:00 +0000 This summer, my husband and I are starting a kitchen remodel project -- yikes! Our house is over 60 years old and the kitchen is desperate for an update. In the next few months, I will blog about our journey – hopefully, this will be helpful to others facing remodeling projects.

Home remodeling projects can be scary to start! Since we bought our home, my husband and I have done several significant home remodeling projects and one of the hardest parts is deciding whom to do the work. After a couple of small remodeling projects where we did the work, we know we need to hire other people to do future remodeling work! However, we do want to feel confident that the person we hire will do the work well and within our budget.

Before I started talking to contractors, I did some research on the expected cost of a kitchen remodel. (More about this in the next blog post.) My husband and I also talked about how much we wanted to spend and how we planned to pay for the remodel.

We also talked about the extent of the work we wanted done. About 15 years ago we updated the flooring and lights, and repainted the kitchen. This helped a lot but now we want to remove all the cabinets, etc. back to the studs! A much more extensive project!

I like to write our decisions down. That way I can go back and check on our original expectations. We have the habit of getting excited about "possibilities" during a remodeling job and the project tends to grow! Having a plan that I can check-back with may help us stay on track.

Next, we were ready to start shopping for someone to do our home improvement work. I started asking everyone I know whether they had a good experience with a kitchen remodel project. I posted on Facebook too and then followed up with the responses for more in-depth information. Ultimately, we are working with someone who has done several other projects with people I know well.

The Illinois Attorney General's article, "Home Repair and Construction" suggests the following next steps too.

  • Check contractor complaint records with the Illinois Attorney General and the Better Business Bureau.
  • Get recommendations and references. Talk to friends, family, and other people whom the contractor has done similar work.
  • Get at least three written estimates from contractors who have come to your home to evaluate what needs to be done. Be sure the estimates are based on the same work so that you can make meaningful comparisons.
  • Insist on a complete written contract. Know exactly what work will be done, the quality of the materials that will be used, warranties, timetables, the total price of the job, and the schedule of payments. If someone won't give you a written contract, you likely don't want to work with them.

While you're talking to different contractors, think about what it would be like to work with them.

  • Are you comfortable talking to them?
  • Do they answer your questions well?
  • Will you be comfortable having them (and their co-workers) in your home?

Be sure to ask their references about these questions too. From past remodeling experiences, I know that the construction workers likely will be in and out of my home for several weeks. I want to have a positive relationship with the people working on my kitchen.

Doing your research before hiring someone helps protect you financially too. Here are some warning signs of people you may not want to work with. Be wary of a person who:

  • comes to your home uninvited;
  • tells you that you need to make repairs immediately or your safety may be in danger;
  • pressures you to sign papers today or talks too quickly, attempting to confuse you;
  • offers to drive you to your bank to withdraw funds to pay for his or her work; or
  • asks you to pay for the entire job up front.

How have you found people to do remodeling work at your home? What tips can you share with our blog readers? Please comment below.

Should We Get a Pet? Mon, 06 May 2019 12:41:00 +0000 In April - we released a new podcast track about pets! Camaya and I discuss the lifetime costs of owning a pet, some research surrounding pets, pet insurance, service animals vs support animals, plus some estate planning for pets. There are also tons of personal stories (mostly about cats, but a few dogs as well!)
I hope you'll either give us a listen on SoundCloud or find/subscribe on iTunes!
Eating Out Tips Tue, 30 Apr 2019 12:16:00 +0000 I worked as a member of a wait/service staff (i.e., a tipped worker) for five different types of food service establishments during my undergraduate years. The tips I received helped pay for my student loan, maintaining my car, housing, and some of my other personal care needs. Even though I wasn't bringing in a lump sum, it all added up. I've also been in the role of the customer in situations where I am wondering whether I should tip a service person. In what situations do you tip or decide not to tip?

Researchers who study finance and human behaviors have been very interested in the tipping and the role it plays within our economic and social systems. Some suggested that social compliance and social pressure may motivate our tipping behaviors (Whaley et al., 2014). In other words, we tip because it is an important part of our social, cultural, economic, and dining experiences.

In this post, I describe the effects of tipping in twofold: (1) its role in the lives of service staff, and (2) how it relates to consumer spending on food.

As an economic activity, tipping allows the customers to provide a percentage of the wage of the service individual. So, in addition to their based pay, service staff receive money directly from customers. This system where servers are paid a small hourly amount for wages and tips are supposed to make up the difference to reach minimum wage is called tip credit. Some states have eliminated this type of system and support a higher minimum wage ($7.25 federal, higher in some states), one that doesn't rely on the tip credit for service workers.

While our tips help to support an economic system, this is not always the first thing we think about when we are dining out. Tipping in most cases is a voluntary act (in other cases, a provider can include a base tip for certain types of event and party size). Nonetheless, as you work on your food budget, make sure you include tips in the price for eating out and consider these factors that may influence what you leave for your server:

  • Type of meal: Take advantage of kids' meal and older patrons' reduced meal prices. Some restaurants offer reduced meals for children on specific days of the week. For example, $1.99 kids meal that includes an entrée, a drink, and dessert.
  • Portion size: Many food establishments serve large portion sizes for some meals. If you are like some members of my family and you don't like leftovers, avoid meal types that result in a lot of food waste and chose smaller portions that cost less.
  • Type of food and restaurant: If you have a specific diet or have picky eaters in your household, be reminded that additions and changes to the restaurant menu items may cost you more, and thus affect the amount you tip.
  • The right amount: Some service providers have adopted ways to make it easier for customers to tip. For example, some restaurants have self-check with a prompt that suggests, "10%, 15%, 20%, Customize, or No Tip". This allows customers to determine how much they would like to leave in tip.

Tips are an important source of income for many service staff, and it is a voluntary behavior that is embedded in our social-economic system. As it relates to our behaviors as consumers, it is important to consider how leaving "extra" money fits into our food or eating out budget. This also allows us to remain mindful of our tipping behaviors.

What Gift Should I Give? Thu, 18 Apr 2019 13:25:00 +0000 Graduation season is coming up soon! Whether it's a high school graduation or college, gift giving season is in full swing come May. According to the National Retail Federation total gift spending last graduation season was expected to reach $5.2 billion. The average person buying graduation gifts will spend $102.51. That's a lot of money being transferred to the new graduates. Below are some financial ideas to consider.

How Much to Give?

For me, this is one of the most difficult decisions my partner and I face when giving a monetary gift. We try to be fair to each generation and give the same dollar amount, but that's not always realistic. We have conversations about "well how much did we give to ________?" Life circumstances change and we're able to give more or less depending on how well we budget that particular month/year. While I know cash is appreciated and one of the easiest ways to give a gift, are there other options to help a new graduate out?

Other ideas?

- Experiences

I will say I am a big fan of giving experiences instead of gifts. Whether the experience is enjoyed with the new graduate or gifted, it makes me feel good inside to help them create a new memory. For a high school student, maybe this is a small weekend trip to a new location or even dinner and a movie. Getting to make those experiences are priceless. For a new college graduate, maybe it's concert or sport tickets, it could also be a membership to an art museum. You know your graduate best, find something the two of you can do together.

- Needs

Another idea instead of just cash is helping them purchase something they need. For a high school graduate this could be new dorm furniture/accessories, laptop, or even a gas card to help them get back and forth from home to college. For a new college graduate, maybe its furniture for their new apartment, assisting with moving expenses, or helping them purchase their first few pieces of a professional wardrobe.

- Emergency Fund

While this last idea is cash, its intended purpose is to help jumpstart or fund an emergency fund. Maybe you give it to the graduate in a frozen block of ice [lol], try and make it clear that this is what the money is for. That way you can plant the seed that having an emergency fund is important, but that $20 worth of pizza at 2am is not considered an emergency.

Graduation celebrates a change in a young adult's life, moving on from one accomplishment into the next chapter. If you're feeling pinched financially from all the graduations coming up, plan out your budget or consider waiting until those first few months of their next chapter, that way you can plan for it since the season is upon us. Ultimately you know your graduate best.

Let's Help Each Other Prevent Financial Exploitation Wed, 03 Apr 2019 12:07:00 +0000

Do you have an older relative or friend who has been acting differently with their money lately? For example, are they:

  • fearful or unusually anxious about their finances;
  • wiring money to a new friend or contact;
  • having trouble paying their bills or are making extra withdrawals of money;
  • making abrupt, unexpected changes in their will, insurance or other financial documents; or
  • confused about recent financial matters?

These are warning signs that something may not being going well. While there are several possible causes, it may be that they are a victim of financial exploitation.

While anyone can be a victim of financial fraud, older adults are of special concern. Recently the Office of Financial Protection for Older Americans released a report, "Suspicious Activity Reports on Elder Financial Exploitation: Issues and Trends." Financial institutions such as banks and money services businesses must file Suspicious Activity Reports (SARs) whenever something suggests activities such as money laundering, tax evasion, or other criminal activity – including elder financial exploitation. Several of the report's findings are quite disturbing.

First, elder financial exploitation is widespread. It's estimated that 3.5 million older adults were victims of elder financial exploitation in 2017. The average amount lost (by those reported as a SAR) was $34,200. This is a lot of money to lose! In addition, monetary losses were greater when the older adult knew the suspect.

We often talk about being careful with our money around strangers and watching out for stranger con artists. In the report, approximately 50% of the people who stole money (or attempted to steal) were strangers. However, approximately 36% were known people (in 14% of the cases, the relationship was unknown). The biggest category of known people was family (25%), with fiduciary or non-family caregivers only 7% or 4% respectively.

Elder financial exploitation can look very different in different situations. It can be as simple as a family member stealing money from an older relative's checking account. Or, as complicated as a con that involves transferring money from one country to another.

In many cases, financial exploitation involves either wiring money or depositing large sums on a prepaid gift card, and then mailing the gift card to someone. By now most people have heard of the phone scam where a "grandchild" calls for emergency financial help and asks the grandparent to wire money – and says "don't tell mom or dad!" Another heart-breaking scam involves online romances and money wired so that the friend can come visit. If you're ever asked to wire money or send a prepaid gift card, please slow down and talk to a trusted friend before doing so. Con artists are good at what they do, and this can happen to anyone.

But what about when the exploitation is by a family member or someone the person knows? This can be very embarrassing to the victim and they may not reach out for help. If you suspect someone you know is a victim of financial exploitation, you can recruit help for them.

Contact your local adult protective services (APS) agency for help. You can find out how to reach your APS office from the Eldercare Locator at or by calling 1-800-677-1116. In addition, you can call the statewide, 24-hour Adult Protective Services Hotline: 1-866-800-1409, 1-888-206-1327 (TTY). The people at these agencies can provide a home visit to check on the person's safety. If you have been a victim of financial exploitation, you can call these agencies too.

Money Smart Week is March 30-April 6! Mon, 25 Mar 2019 10:59:00 +0000 You Can't Take It With You... When You're Gone. Thu, 21 Mar 2019 10:30:00 +0000 After the death of both of my parents, I came to this realization as we were left with all of their stuff! How do we cherish the items our loved ones cared about and left behind for us?

What to do with all the stuff?

One of the best things you, our readers, can do is decide how you'd like your personal items to be distributed after your death. An important step is to make sure items of value should be distributed either in a will, trust or through a transfer document such as a transfer on death or via a beneficiary. But, what about the furniture, electronics, costume jewelry, and the rest of all the stuff? There are different ways to distribute non-titled property, below are just a few examples:

Ways to Distribute Personal Property

  • Give the item to them while you're alive – this is one way you know the item gets to the person you want it to, and you can see them enjoy receiving and taking care of it. On the other end, if the item is expensive, it could take away assets you could need in the future. This is something to consider to make sure you are making the right decision based on your situation.
  • Write it in your will – if you are not ready to part with the item, you can gift it to them in your will. After your death, your executor must find the item and give it to the beneficiary. Your will can be as specific as you would want it to be when naming beneficiaries for personal property.
  • Have individuals put their names on the items they want – I have seen in families where this can work. For example, writing your name on a sticky note and putting it under the item. You may have to come up with a system if two family members want the same item, for instance, the older family member gets it or the youngest. This can happen before death or after.
  • Have an estate sale and have family members purchase the personal property from the estate – this could be one way to limit the amount of fighting, but it may not be financially fair to those family members who don't have a lot of money to purchase the items they want.
  • Draw lots and take turns picking items – Pick a number out of a hat or draw straws and then just take turns going through the personal property.
  • Go by seniority, birth order, grandchildren, marital status, etc. - Pick the one that works best for you and your family, then stick with it. Create rules and boundaries, respect other's wishes, and selections.

Ultimately, you will need to decide what is fair in the context of your family. Our friends over at the University of Minnesota Extension provides some valuable resources on the topic of transferring non-titled property. This is a tough subject for many, but the fact is that you can't take it with you when you're gone, so having a plan helps safeguard against conflicts that could arise in your family.