The delightful but definitely NSFW (in a good way!) personal finance blog Bitches Get Riches has tackled a topic that needs a perennial takedown: what to do with retirement funds.
“PLEASE tell me you’re not making this disastrous beginner mistake with your retirement funds” is an essential read if you’re just starting out, but also if you went through that understandable-mistake scenario two, five, 10 or more years ago.
The disastrous beginner mistake: failing to allocate your funds.
“(When) you finally get your job, you think the hard work is over. Until your first day, when someone from HR hands you a fat stack of utterly incomprehensible tables comparing healthcare options, legally dubious non-competition contracts, and other byzantine horrors of the modern workplace. Somewhere in there is a big pamphlet asking you how much you would like to contribute each month to a retirement account,” writes Kitty, one half of BGR.
“Given how little financial education Americans get, most people probably pick a number they think they’ve heard before, and move on to the next piece of paper. … So if this is something you’ve done, don’t beat yourself up. It’s an understandable mistake.”
It’s also a fixable mistake. But only if you fix it. The Wise Allocation of Funds Fairy is not gonna show up and say, “Well, dearie, you really blew it two, five, 10 or more years ago. But now it’s all better.”
Again, BGR is not the kind of thing you want to peruse with a supervisor (or an impressionable tyke) reading over your shoulder. Or, at times, with any beverage in your mouth because screens are delicate things. The two women who write the blog keep it real, keep it raucous and keep it essential. Kitty and Piggy write about stuff women need to know, and they do it with panache.
They also do it with zero filter. The writers are frank and funny, but if salty language offends you then BGR might not be a good fit.
Holiday (non)spending
A few months back, almost half the consumers surveyed by CreditCards.com indicated they’d start their holiday buying before Halloween. But retail sales figures from the Commerce Department seem to tell a different story.
October’s sales figures were only 0.3 percent higher than September’s. It’s worth noting that Amazon Prime Day happened in October this year, and that major retailers like Target and Walmart fought back with big promos of their own. Lots of smaller companies offered deep discounts during this time, too.
One-third of those surveyed said they’d be spending less on the holidays this year. But that sure sounds like a lot less.
In a column on Bankrate, Ted Rossman points out a few other possible factors. Shoppers might be extra price-conscious this year because the unemployment rate is still high. Government stimulus funds, including longer unemployment benefit periods, have in some cases been used up.
And because big holiday gatherings could be restricted due to the pandemic, shoppers might be buying fewer gifts overall. For example, the cancellation of the annual family-reunion holiday celebration could translate to “no need to buy bushels of gifts for every shirt-tail cousin” (to say nothing of the cost of driving or flying to this shindig).
At the same time, Rossman cites another survey fact: Almost half of parents, millennials and those with credit card debt think that the holiday season is an “acceptable” reason to take on debt, or to add to existing debt.
Yikes.
“Resist this temptation,” Rossman writes.
“If you take on $1,000 of holiday debt and only make minimum credit card payments at 16 percent APR, it will take you about three years to pay it off, and you’ll incur $267 in interest.”
As I recently noted in “Extreme frugality: Holiday attitude edition,” you can have a joyous celebration without digging yourself into debt. (Or into a bigger hole, if you’re already carrying credit card balances.) Here’s hoping that people will find the balance between “I need to make Holiday Season 2020 the best ever because 2020 has been so awful” and “I need to buy with my head, not with my heart.”
A new gig, or a “survival job”
The SideHusl blog reports on “New jobs for testers, laborers, caregivers and others.” Not all these jobs are prime, warns site creator Kathy Kristof. However, some pay fairly well – and the website has loads of info on other gigs. Longtime personal finance journalist Kristof vets offers and provides the good, the bad and the ugly so that workers can make informed choices.
It’s a scary time for workers. Maybe your hours were cut or maybe your entire job was cut thanks to the pandemic. Should you wait to see if the good times come back, even if you’re perilously close to aging out of unemployment benefits?
That depends on your risk aversion, but money expert Jean Chatzky says there’s no shame in taking “a survival job” to keep the lights on. And now is a good time to be looking: “According to the recruiting firm Challenger, Gray and Christmas, there are currently 700,000 seasonal jobs looking to be filled,” Chatzky says.
(Note: Chatzky’s free newsletter is somehow both a fast read and a meaty one, addressing current money topics and evergreen economic issues. Subscribe here.)
Things you could win
I’m giving away two “Tundra” 2021 calendars. Consider it two holiday gifts you don’t have to pay for, or give one and keep one. If at all possible and the winner wants it, I can have Chad personalize the prizes. Enter by 7 p.m. PST this Friday (Dec. 11, for those who, like me, are chronologically-COVID-challenged).
The Wealthy Nickel blog is giving away a $250 Amazon gift card. You have until Dec. 18 to enter to win.
Money Saved is Money Earned is giving away a $150 Amazon card. This giveaway ends today, so make sure you head over as soon as you read this.
The Budget Savvy Bride has put a $100 Amazon gift card (are we sensing a pattern here?) up for grabs. You have until Dec. 31 to enter.
If you win one of these cards, your holiday shopping just got a bit easier. Here are a few other options:
Buying stuff you need (shampoo, pet food, whatever) to boost your budget during the pandemic
Having a case of toilet paper or some diapers delivered to a family shelter, or to a relative or a friend experiencing tight times
Selling the gift card to a relative or friend, or through a secondary marketplace. Cash is always useful.
Readers: Are you spending less on the holidays this year? If so, was it for one of the reasons cited by Bankrate or for some other reason?
I honestly cannot remember if I stated on a previous post that I would love, love, love to win the 2 tundra calendars. If I DID post before, forgive me, or consider this a 2nd entry into the giveaway. And thank you!
It is a long story but before the pandemic, like last January, I was ordering TP from Amazon and hit 20 instead of 2 CASES. It was only when the mailman knocked on our door to ask us where to put the stuff since our porch was too small, that I realized the error. Then the pandemic hit. I have donated some but also we have been giving a case of toilet paper to anyone we normally buy gifts for (not that many people, only four) and we are doing the same for Christmas. It is useful, it means we don’t have to shop, and we are not cluttering up someone’s home.
I expect that quite a few people would enjoy getting an entire case of TP.
I agree. As for the article, I do think it was a good one. I started a bit late when my first marriage was ending. I put 1/2 into paying down the mortgage and 1/2 in an emergency fund. I also maxed my IRA in boring CD’s and the emergency fund has always been in a money market account. When I hit 6 figures in that account and the house was paid, I decided to start retirement savings. The above was done in 5 years and no I did not have a high salary at all. My plan was to save one year’s living expenses for each year I worked. Thirty years later and I am still working, but only part time. I have yet to use any of the money I have tucked away. I did nothing fancy with it. I chased good CD rates and laddered them. Nothing fancy at all there. I also take very good care of my health and exercise daily. I want to enjoy the time I have as much as possible.
Thanks for sharing your very wise plan. Even though CD rates are pretty dismal these days, the basic premise is sound: Spend less than you earn, think about your future as well as your present, and take care of yourself so that you can enjoy that future to the fullest.
Great gift! We could not get any for 3 months and used tissues and garbage bags. Everyone is on septic tanks at the beach.
We are definitely spending less this year as the adults are not exchanging Christmas gifts. DH and I are only buying for our four grandchildren. While I have canceled my annual Swedish Christmas Eve celebration (haven’t missed one in 61 years but…well, thanks Covid) we won’t be seeing each other so it seemed like a good idea for this year. We will do drive thru gift delivery for the grandkids at their homes as both families are one town over from us. With some of the money we will save I plan on giving to a couple of favorite charities…a family of Catholic Workers who take in and feed the homeless, The Alzheimers Association, my own church’s outreach ministries and the local no kill cat shelter (the feral and homeless cat population has decreased dramatically since this establishment was created). Like our kids said, we all have everything we need and in that we are blessed.
Bitches Get Riches
I couldn’t get to their site, at least through Edge. Something about debugging WordPress.
I’ll see if I can see it in Chrome.
On the finance front, we’ve always been big savers. I retired at 62 and we are in good shape. We have diversified portfolios, and recently purchase rental real estate to bring in some extra income as my husband transitions out of the workplace in a year or two, before his 62nd birthday.
I think I may have spent more than I intended this holiday season. Since SIL has an over abundance of pecans from her trees we gave her an industrial strength nut cracker. We also purchased a less fancy one for ourselves so we sit around and crack nuts together for future nut recipes. Both were purchased from private parties on Ebay so we helped someone out. We are an exciting bunch!
We are also bagging up as much as we can of the enormous pecan crop in quart bags. I’ve ordered some nutcrackers so we will be donating these as gifts close to Christmas to a nearby food give-away site.
I would like to take a moment to wish you a happy holiday season. It’s been such a rough year for so many for so many reasons.
It’s been a rough year, indeed, for my family and so many others. Thanks for your good wishes.
Wish I could help you harvest some of those pecans.