A Brand-New Year

Tomorrow we begin a brand-new year. Maybe even a brand-new decade, depending on how you calculate it. This is traditionally the time when we review our accomplishments, failures, and missed opportunities over the past year and make resolutions to be better in the future.

Among the most popular New Year's resolutions are weight loss, physical fitness, and financial fitness. All of these goals are admirable and none are easy to achieve. That's why many people give up after the first month or so.

These goals can complement each other. If you attain a healthy weight and physical fitness, you might spend less money on doctor's visits and prescription drugs to treat weight-related illnesses. You can save money by cutting out junk food and empty-calorie snacks, which will also help with weight loss.

You can torpedo your financial goals by investing in an expensive weight-loss program or joining a gym, and then letting those self-improvement resolutions fall by the wayside. As a lifetime member of Weight Watchers (now rebranded as WW), I've watched year after year as standing-room-only January meetings shrink in half by March. Gyms experience the same scenario. In fact, managers have no problem overselling memberships at the beginning of the year; they count on a certain percentage of new members not showing up. Think of all the wasted money on the weight-loss and fitness industries! If you're going to shell out hard-earned funds, stick with the program to protect your financial investment.

I believe financial motivation has kept me at free-lifetime status with WW as much as the desire to maintain a healthy weight. As long as I attend at least one meeting a month and weigh in at goal (or within a two-pound grace weight), I maintain my free status. If I miss a month or tip the scales too much when I check in, I have to pay until I get back to goal. That fear prevents me from straying too far from the plan.

It's fine to pay for a program that will help you achieve your goal. For some, it's the only way, as WW was with me. Do some research first, to ensure you're getting the best value, and that the program is something you can realistically follow and reap benefits from. And then commit. Sticking with the plan can be a financial resolution as well.

What are your resolutions for 2020? I’d love to hear your comments.

If achieving financial fitness is one of your goals, read Live Well, Grow Wealth.

Countdown to Financial Fitness: Live Like a Millionaire

Countdown to Financial Fitness: Live Like a Millionaire: Most millionaires don’t amass their fortunes overnight. Of course, there are exceptions: lottery winners, beneficiaries of a huge inherita...

Live Like a Millionaire

Most millionaires don’t amass their fortunes overnight. Of course, there are exceptions: lottery winners, beneficiaries of a huge inheritance, business owners whose products rocket to instant stardom.

Adjusting to sudden wealth brings its own set of problems—especially how to keep it—but that's the subject of another post.

More common are the millionaires who earned their money slowly, by practicing healthy financial habits all their lives. They might live or work alongside you, á la The Millionaire Next Door. They reside in modest houses, drive practical cars, shop at discount stores. By living below their means, spending and investing wisely, they’ve gradually built up their wealth. By continuing to live below their means, spend and invest wisely, they’re able to hang onto their wealth.

Some have-nots believe living like a millionaire means owning the biggest mansion on the block, driving an expensive sports car, wearing designer clothes and flashy jewelry, over-tipping, showering friends and relatives and acquaintances with gifts, never comparing prices or caring how much anything costs. But if you keep spending more than you’re bringing in, you won’t stay a millionaire for long.

Here are some habits that will help you build wealth and keep it:

1. Always pay your bills on time.
2. Keep debt low and use credit to your advantage.
3. Never spend more than you earn.
4. Save a portion of your income each month. Treat saving like another bill, i.e., pay yourself first.
5. Comparison shop. Never pay more for a product or service than you have to.
6. Don’t spend money on junk you don’t really need or want.
7. Don’t be wasteful.
8. Plan for contingencies.
9. Let your money work for you.

Like losing weight, building wealth can be a slow, gradual process. But by following a plan and developing healthy, lifelong habits, you’ll continue to make progress toward your goal.

What are your suggestions for building wealth? I’d love to hear your comments.

For more saving and investment tips read Live Well, Grow Wealth.

Countdown to Financial Fitness: The High Cost of Poverty

Countdown to Financial Fitness: The High Cost of Poverty: It’s wonderful to reach a point where you can stop working and let your money take over. And if you manage to spend less than what your mo...

The High Cost of Poverty

It’s wonderful to reach a point where you can stop working and let your money take over. And if you manage to spend less than what your money brings in, your nest egg continues to grow, adding even more money to work for you.

Unfortunately, for people living in poverty, the converse is true. Life costs more when you don't have money.

Banks and credit unions offer their good customers free checking, interest on deposits, and affordable loans. If you fall on hard times or don't manage your account well, you're hit with overdraft fees, low balance fees, late payment fees, higher interest rates on borrowed funds—extra expenses that eat up the spending power of your money.

People who don't qualify for bank accounts have to pay check-cashing services to access their money. And if they can't stretch their funds to cover their expenses until the next paycheck, they may be forced to pawn possessions or take out a payday loan at a usurious interest rate. More drain on spending power.

Those who try to avoid banking fees by keeping all their money in cash risk having it lost or stolen. And it's difficult to operate on the cash system only. No direct deposit, no compound interest. And try to travel or shop online without a credit card.

Workers who live paycheck to paycheck struggle to save anything for a down payment on a house, a new car, or higher education for their children. All of their money goes to support day-to-day existence rather than building a better life.

I always assumed prices should be lower in stores located in low-income neighborhoods. Just the opposite! Plagued with higher crime and more inventory erosion, merchants charge more for goods and services because they require more security to stay in business.

In poor communities, less is invested in schools and other infrastructure. Shopping in the better neighborhoods is often not an option because public transportation doesn't always go there.

So how do we break the cycle of poverty?

It’s a complicated issue, and I wish I had the answer. But the first step is to reverse the cash flow. Reach the point where more comes in than goes out. And those living in extreme poverty may need help to right the ship.

One program I’ve read about is microloans. These are tiny, short-term, low-interest loans made by individuals or organizations to provide start-up funds to an entrepreneur who may not qualify for a traditional bank or small-business loan. They’re used primarily in developing countries but have caught on in the United States as well. A small investment to steer the cash flow in the right direction. For example, lend a seamstress $500 to buy some fabric, which she uses to make clothes to sell at a flea market. With her profits, she buys more fabric, which supplies her with even more inventory that will generate additional profit. Eventually, she’s able to pay off her microloan, hire someone to help her, and someday afford to move into her own shop.

Habitat for Humanity is a nonprofit organization with a mission I support. Providing “a hand up, not a handout,” the charity helps make home ownership more affordable by giving low- or no-interest loans to build or rebuild houses with volunteer labor and donated materials. The recipient of the home has to pitch in on the project, as well as commit to helping on future builds, giving back to others. I’ve watched the joy cover a new homeowner’s face when we handed her the keys to her finished home—a priceless experience to share.

In my twenties, I was a caseworker for the Texas welfare department. I found it depressing to observe the cycle of poverty in matriarchal households, where fourteen-year-old girls aspired to get pregnant so “I can get my own grant.” I watched a few young women break out and start minimum-wage jobs, but in less than a year, they were back on the welfare rolls, because they couldn’t afford to lose their Medicaid, and childcare expenses ate up their pay checks. What was I doing? I felt like an enabler.

One evening at a party, I met a woman who was dating a friend of mine. When I told her what I did for a living, she exclaimed, “Welfare saved my life!” She told me the story about how she got pregnant as a teen and dropped out of high school. Her parents kicked her out of the house, and the baby’s father was not in the picture. At the welfare office, she made friends with another young woman in a similar situation. They moved in together and enrolled in computer school, attending during opposite hours so they could share childcare duties.

They scrimped and worked hard, but after two years, they’d both finished school and landed good-paying jobs. They weaned themselves off welfare and never went back. “But if it hadn’t been for welfare, I don’t know what I would have done,” she said. Her success story made me feel a lot better about what I did for a living.

The problem of poverty is not simple and might never be solved. And not everyone is motivated enough to take advantage of a hand up and do the hard work necessary to crawl out. But with compassion and judicious investment, we can make a dent.

What are your thoughts about reducing poverty? I’d love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Countdown to Financial Fitness: Trusting Tourist Information

Countdown to Financial Fitness: Trusting Tourist Information: Whenever you travel to a new city, the Tourist Information Office is usually your best friend. Cheerful representatives hand out free ma...

Trusting Tourist Information

Whenever you travel to a new city, the Tourist Information Office is usually your best

friend. Cheerful representatives hand out free maps, make recommendations about what to see and do during your stay, and answer questions about attractions, hotels, tours, and local transportation.

But be sure you’re visiting the official tourist information office, not just a vendor who provides “tourist information.”

On our recent cruise to Iceland, we had a stop in Akureyri, Iceland’s second-largest city, located on the northern side of the island. The onboard port lecturer told us that all the city buses in Akureyri were free, and he encouraged us to use them.

When we got off the ship, the first building we saw displayed a big sign saying, “TOURIST INFORMATION.” We went inside. It was basically a souvenir shop, but they also had an information desk and free city maps. We asked the woman at the desk where we could catch the free public bus.

She made a face. “I have no idea where it stops; I never take the bus. Tourists shouldn’t ride it. You’ll get lost.” She was selling tickets for the Hop On, Hop Off bus for $25 each.

In many cities, the Hop On, Hop Off (HOHO) bus delivers good value. Sometimes, not so much. It depends on how long you’ll stay in the city, what you plan to see, and how close the major attractions are to one another.

If you’re going to be in town for several days and the HOHO stops near your hotel, a multi-day pass that includes discounts on attractions might be a great deal, because you’ll have plenty of time to get your money’s worth. If you’re only in port for a few hours, you might have time for just one loop—a poor man’s guided tour—and you won’t be able to reap all the benefits you’ve paid for.

And if the sites you plan to visit are within walking distance of each other, it could be more cost-effective to take public transportation or even a taxi to the center of town instead of trying to hop on and off every block or two. Also, pay attention to the schedule frequency and crowd size. I’ve seen HOHO buses in some cities packed so full, you can hop off, but when you try to hop back on, you have to queue up and wait for several buses to pass before you get a seat.

In Akureyri, we skipped the HOHO bus option and continued on foot into town, where, a few blocks away, we found the real tourist information office. That representative gave us a better map and told us exactly where we could catch the free bus. She explained that the number five and the number six made a complete loop, over the same route. One headed clockwise, the other counter-clockwise.

Before we boarded a bus, we decided to explore the downtown area. We hiked up a slight hill to the church (which was under renovation) and then walked to the botanical garden, a touted HOHO stop and also a destination for ship’s shore excursions. The grounds were beautiful and there were numerous plants in bloom. And admission was free.

When we finished our stroll through the botanical garden, we found the public bus stop. The number five wouldn’t come for twenty minutes, but the number four would be there in ten. Should we get on the four? What if we got lost, as the HOHO saleswoman warned? We noticed that the final destination of both buses was a stop called Midbaer. We figured we could take the four to Midbaer and then switch to the five.

Midbaer turned out to be the central station across from the real tourist information office. It was the end of the line for the four, and there was a five ready to depart (probably the same bus we would have boarded if we’d kept waiting at the botanical gardens). We hopped on the five, rode a complete loop, and since we still had time before we had to go back to our ship, we did another loop on the six.

We compared notes with a couple from our cruise who had taken the HOHO. The routes we had traveled were similar. “Just so-so,” was their assessment.

“Was the commentary interesting?” I asked them.

“You could barely hear it for all the static,” they replied.

Unlike the HOHO, the free public bus doesn’t provide commentary. But you get to chat with the locals, mingle with them as they go about their daily life. And you can’t beat the price…

Sharon Marchisello is the author of Live Well, Grow Wealth.

Should You Refinance?

We keep expecting interest rates to rise, but then they get cut again. If you're carrying a mortgage, maybe it's time to refinance.

Should you do it? That depends.

If the value of your home has increased since you bought it, so has your equity. If you put less than 20% down on your home's purchase price, you're probably paying PMI (Private Mortgage Insurance). The rise in equity, combined with the principal retired since you took out the loan, may equal more than 20% ownership, which will enable you to drop the PMI when you refinance. (PMI protects the lender against the risk of foreclosure, and when the buyer has more skin in the game, i.e., at least 20% equity, the lender figures the buyer has less incentive to walk away.)

Some homeowners see that increased equity as an opportunity to borrow funds needed to make improvements. Add a pool. Renovate the kitchen. Finish the basement. Build a sunroom. Before you refinance your mortgage, compare available products with the mortgage you already have. Maybe it's smarter to take out a home equity loan for your project.

Look at the interest rates and terms being offered compared with your current mortgage. If you can lock in a low fixed rate, now may be the time to refinance that adjustable-rate loan, guaranteeing uniform payments for the life of the mortgage. When interest rates rise steeply, homeowners lured into adjustable-rate mortgages can get into financial trouble, with payments rising to unmanageable amounts.

When I still had a mortgage, the popular rule of thumb was, if interest rates go down at least 2%, refinance. But there are other factors to consider.

Refinancing isn't free. Just as when you took out your first mortgage, there will be closing costs. You'll need an appraisal of the home's value, credit reports, title insurance, bank and attorney fees. Some lenders may require you to pay "points." In mortgage lingo, a point is equivalent to 1% of the amount borrowed. Some institutions charge "origination" points, which are part of the closing costs to compensate the lender. They may also offer "discount" points, which I always thought was a misnomer (it's not a discount; it's an added cost to the buyer). Discount points are paid upfront to "buy down" the interest rate. Pay a chunk of interest at the beginning of the loan so you can enjoy slightly lower payments.

After you've compared products and estimated costs, calculate how long it will take to break even and start realizing the savings from lower mortgage payments. If you're planning to move before that, or if the timeline is so long you don't know what you'll be doing yet, perhaps refinancing is not a good idea.

Another disadvantage of refinancing is that you're starting over with a new loan. Most are for 30 years (some are for 15 or less, but they require higher payments). Maybe you've been paying on that mortgage for a decade or more, and you're starting to see light at the end of the tunnel. Maybe you plan to retire before your 30 years is up, and wouldn't it be nice not to have to keep making mortgage payments?

Retiring with a paid-off home and no debt can be exhilarating. With a small financial footprint, you need much less income to sustain the lifestyle you want.

And then some people consider mortgage payments a perpetual cost of living, no different from insurance or utilities. My mother-in-law refinanced her condominium multiple times during retirement, and she still carried a mortgage when she died at age 97, even though she'd lived there for more than 30 years. (She told people it was paid off because we'd switched her to automatic payments a few years earlier, and she no longer had to write out checks to the mortgage company.)

What experiences have you had with refinancing? Was it a good decision? I'd love to hear your comments.

For more saving and investment tips read Live Well, Grow Wealth.

Countdown to Financial Fitness: Reduce Summer Expenses

Countdown to Financial Fitness: Reduce Summer Expenses: It's not even summer yet and many parts of the country have already experienced sweltering heat waves. Summer brings higher bills for ...

Reduce Summer Expenses

It's not even summer yet and many parts of the country have already experienced sweltering heat waves. Summer brings higher bills for electricity and water as we struggle to stay cool and keep our lawns alive.

Here are a few reminders to help reduce those expenses:

Don't keep your house so cold that you have to put on a sweater or curl up under a comforter. When the weather is hot, enjoy wearing shorts, sundresses, and sleeveless tops. For every degree you turn up the thermostat, you may save approximately 1% on your energy bill. If no one's home all day, turn it up even higher and program your system to start cooling a half hour before you arrive.

Speaking of air conditioning, don't forget those annual check-ups for your HVAC (heating, ventilation, and air conditioning) system. Filters may need changing and the technician can repair minor problems before they become major. Not only will you save money by having equipment that runs at top efficiency, you'll prevent potentially life-threatening situations, like poor air quality or even fire from years of dust build-up.

Fans are great for circulating the air around you, creating a breeze to make you feel cooler, but they do nothing to lower the temperature. Turn them off if no one's in the room; they just use up electricity.

If you have large windows or sliding glass doors that face the sun, keep the drapes or blinds closed during the hottest part of the day. Not only will your house stay cooler, but you'll prevent the upholstery from fading.

When you run your air conditioner, make sure all your doors and windows are closed, including those in rarely-used bedrooms and bathrooms. I can still hear my father yelling at me to shut the door if I held it open too long for the cat to make up her mind if she wanted in or out. "What are you trying to do, air condition the whole neighborhood?"

Lots of hot days without rain can wreak havoc on your lawn, so expect your water bill to rise if you want your grass to survive. But be careful about putting your sprinkler system on a timer. Unexpected rain showers may save you from having to water your vegetation. There's nothing sillier and more wasteful than seeing a neighbor's sprinklers going off when rain is pouring down.

Don't stock up as much on perishable food that doesn't need to be refrigerated. Vegetables like onions and potatoes that can spend weeks on the counter during the winter might start sprouting after only a few days in warm summer temperatures. Fruit will ripen faster, so plan accordingly to avoid waste. In the south, we have a problem with bugs, so some dry goods like flour and crackers have to be kept in the refrigerator after they're opened. Allow space for that if you face this dilemma.

What tips do you have for saving money on utilities in the summer? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Countdown to Financial Fitness: Appealing Your Property Taxes

Countdown to Financial Fitness: Appealing Your Property Taxes: We just received our property tax assessment and, like many of our neighbors, we're in shock. I'm reminded of a cartoon illustrati...

Appealing Your Property Taxes

We just received our property tax assessment and, like many of our neighbors, we're in shock. I'm reminded of a cartoon illustrating how a house is viewed through different eyes: You see your house as you know it. The real estate appraiser sees a dilapidated shack. The tax assessor sees a palace.

Our county tax assessor thinks we live in a palace.

I used to not pay much attention to the assessment statement, which arrives each spring. I didn't really know what my house was worth—or care that much—since I wasn't getting ready to put it on the market. The figure the tax assessor provided was merely informational.

The tax bill arrives in the fall, but by then it's too late to appeal. Property owners have 45 days from the date of the assessment to protest the valuation that will be used to calculate the tax bill.

About three years ago, when the real estate market started to recover, our property assessment shot way up. I finally paid attention, and then I found out it's not that hard to appeal. There are companies that charge to file an appeal on your behalf, but the process is simple enough to do yourself and save that fee.

In Georgia, you can print a one-page Appeal of Assessment form, found online at https://dor.georgia.gov/documents/pt-311a-appeal-assessment-form. Fill in your contact information; the rest of the data can be found on your property assessment form. Start with an appeal to the Board of Equalization, the box for which there is no charge.

Under "Property Owner Comments" I write "see attached." Then I prepare a one-page narrative about why my property is worth less than the assessment.

Start with a visit to an online real estate site like Zillow and type in your address. (It's creepy how much information they have about your house.) Zillow will give you a "zestimate" of what your home is worth, i.e., a suggested asking price if you were to list it for sale. If Zillow's estimate is less than what the tax assessor says your property is worth, include it in your narrative.

Then, most importantly, look at comparable sales in your zip code. (Don't worry about homes still on the market; what matters is how much a buyer will actually pay.) Preferably the sales should have been closed within the last six months, but go back further if there hasn't been much activity. Include sales of nearby homes in similar neighborhoods, with similar square footage and similar amenities.

If you use a "comp" for a more expensive home, be sure to point out why that home is worth more than yours. Perhaps it has an extra bedroom or bathroom, a pool, or has more square footage. Maybe the lot is larger or the location is more desirable.

I also note that many of my "comp" properties have had recent renovations, such as a new kitchen, deck, or professional landscaping, whereas my house still has original flooring and appliances. (If you have done a major remodel recently, there's no need to call attention to it in your narrative—just leave this part out.) Remember the cartoon; you're drawing the picture the real estate appraiser sees (the dilapidated shack).

If the "zestimate" and a handful of recent sales of comparable homes in your area are lower than your assessment, you have a good chance of winning your appeal. I've been successful two years in a row, and I'm hoping the results of my 2019 appeal will also be successful.

In our experience for the past two years, when the property tax bill arrives in the fall, it is for approximately 85% of the total amount the county thinks we owe, and it's noted: "under appeal." Then in January, an assessor comes to look at the property (outside only) and make a final determination.

The first year we appealed, we received an additional refund from the county after the assessor's visit. Last year, we received a small bill after the appeal was finalized, but that amount plus the original 85% added up to less than we would have had to pay had we not appealed.

With just a little effort, you could save hundreds of dollars!

Have you ever thought about appealing your property taxes? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Countdown to Financial Fitness: Why Must Everyone Go to College?

Countdown to Financial Fitness: Why Must Everyone Go to College?: Our country is reeling from a national scandal involving wealthy parents bribing coaches and administrators at prestigious universities to...

Why Must Everyone Go to College?

Our country is reeling from a national scandal involving wealthy parents bribing coaches and administrators at prestigious universities to admit their children because these kids were unable to get accepted on their own merit. Why is that very expensive piece of paper so important?

College can be a rewarding experience, the source of lifelong friends. A degree is essential for entry into many professions. But without rich parents or a full-ride scholarship, earning a college degree can plunge a student deep into chasms of debt. And sometimes, unable to find a job that pays well enough to retire that debt for decades.

Some high-priced degrees don't prepare the student for any particular career. Thus, the graduate ends up working in the service industry, holding a minimum-wage job that doesn't require a degree at all.

Mired in all that student-loan debt, the graduate is financially unable to start enjoying the elements of the traditional American dream: owning a home, starting a family, indulging one's passions.

In Europe, high school students are directed toward the training that best matches their aptitudes and interests. Why force every child onto an academic path? It's demoralizing for those who are not suited, and it keeps them from developing skills in other fields where they might excel. Fields where good-paying jobs exist.

There's no stigma in many other countries for someone who attends two years of vocational school, apprentices to be a plumber, an electrician, a carpenter, a mechanic, etc., and then immediately goes to work in a lucrative profession, with very little debt. Why not encourage more technical training in America? Why can't it be more respectable to pursue careers where one can earn a decent living without an academic degree?

Arguments include, "But college provides a well-rounded education." "College should be a right." "Mine is the first generation to have the opportunity to go to college." However, many people learn just as well, if not better, outside the classroom. Some students don't even develop an interest in learning until later in life, after their formal education is finished. These days, there are countless opportunities for continuing education: reading, travel, public television programs, online webinars, professional organizations, special interest clubs, community colleges. All one needs is the basic foundation of reading, writing, and thinking—the skills that should be taught in the first twelve years of school.

I don't regret going to college, and I don't mean to sound hypocritical by implying that others shouldn't go. Just look at the price tag, and decide if you're getting good value for your money.

What are your thoughts on college? Should everyone go? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Countdown to Financial Fitness: Learn Your Foreign Currency

Countdown to Financial Fitness: Learn Your Foreign Currency: We recently returned from a trip abroad, and I'm constantly amazed at stories from fellow travelers about how they grossly overpaid for...

Learn Your Foreign Currency

We recently returned from a trip abroad, and I'm constantly amazed at stories from fellow travelers about how they grossly overpaid for services because they didn't understand the local currency. If there's one bit of homework you should do before you visit another country, find out what the exchange rate is.

It's especially confusing when you have to add lots of zeros to the currency unit to reach the USD equivalent. Local currency can seem like monopoly money. But tack on an extra zero or two, and suddenly you're handing out serious funds for tips and cab rides.

For example, we talked to a guy who thought he was tipping his bartender a generous ten dollars. After comparing notes with a local customer at the bar, he found out he'd just given the guy one hundred dollars. On the bright side, he got great service for the remainder of his stay!

When you exchange money, take a moment to look at the bills and coins you receive. Get a feel for how much each is worth compared to your home currency. Some denominations may look similar but vary greatly in value.

If the exchange rate for local currency versus your home currency is not easily divisible (i.e., two to one, three to one, ten to one, etc.), don't be afraid to whip out a calculator if you're not good at doing math in your head. We spoke to some women who'd paid three times the amount they thought they were negotiating for a cab ride from the airport into downtown Buenos Aires. (At this writing, there are approximately 38 Argentine pesos to the U.S. dollar. They'd just come from Chile, where the exchange rate is about 650 to one; they'd assumed the two currencies were similar in value.)

Sometimes it's easier and more cost-effective to pay with a credit card than to exchange money so you can pay with cash. However, many inexpensive services cannot be paid for with credit cards or foreign currency: bus rides, purchases at street markets, meals at small local restaurants, lots of taxis. If you do pay with a credit card, try to use one that doesn't assess foreign transaction fees, which can add up. Also, make sure you're clear on the amount charged. The vendor may quote the price in dollars but the charge will be entered in local currency. Verify that the amount on the slip you sign is equivalent to what you were quoted.

We had an overnight stay in Buenos Aires before boarding a cruise ship and we were able to pay for our hotel and transportation from the airport with a credit card. But when we inquired about a taxi to the pier, we were told the drivers only accepted local currency. The pier was quite close; the desk clerk advised us the fare should not be more than 300-400 pesos.

So, we set out to get cash from an ATM, which we do frequently when we travel abroad. But every machine we encountered assessed a transaction fee of between six and ten dollars. The fee wouldn't have been so onerous if we were withdrawing a large sum of money, but for the small amount we wanted, it did not seem cost effective.

After four or five unsuccessful attempts to withdraw money without an excessive fee, we decided to return to the hotel and cash a twenty-dollar bill at the desk. We knew the exchange rate would be worse, but they shouldn't charge a fee. Except then we found out our hotel did not offer currency exchange.

The desk clerk suggested he could call the taxi company and give them our credit card number, which they could charge when the ride was complete. We agreed, and he called us a cab.

En route to the pier, we verified the arrangement with the driver. Credit card number to the home office? He knew nothing about it. Frantically, he started texting back and forth with his dispatcher.

As we neared the pier, we eyed the meter, which still showed less than 200 pesos. "What if I just give you cash in U.S. dollars?" my husband asked.

"Much better," the cab driver replied. When we arrived at our destination, we handed him a five-dollar bill, and he was happy.

(When we got home, I checked my credit card statement to make sure no duplicate charge had appeared from the cab company. Fortunately, there was nothing.)

On board the ship, we played trivia with an Argentine native of Buenos Aires, and we told him the story of our cab ride.

"Ooh… you got ripped off! Five dollars!" he guffawed. "That ride shouldn't have cost you more than 100 pesos."

So we, too, were gullible, overtipping tourists. But the ride still cost us less than withdrawing local currency for the fare out of the ATM.

For more saving and investment tips read Live Well, Grow Wealth.

Countdown to Financial Fitness: Plan for Contingencies

Countdown to Financial Fitness: Plan for Contingencies: Going without an expected paycheck is a hardship for most people. I've seen statistics claiming that one in three Americans is one payc...

Plan for Contingencies

Going without an expected paycheck is a hardship for most people. I've seen statistics claiming that one in three Americans is one paycheck away from homelessness. After the recent government shutdown, and watching footage of furloughed government employees lined up at soup kitchens, I suspect those numbers might not be far off.

And many jobs in corporate America are not as secure as a position with the federal government. My husband and I both worked in the airline industry during the eighties, nineties, and early two thousands, when carrier after carrier went bankrupt and/or laid off thousands of employees, and those remaining took huge pay cuts and lost benefits.

As I point out in my new book, Live Well, Grow Wealth, it's important to have an emergency fund.

What is an emergency fund? At least three to six months' living expenses stashed in a low-risk, liquid investment such as a savings account or money market fund. And it's money you don't touch unless there's an emergency: a large, unanticipated, unavoidable expense. Like losing your income.

Having an emergency fund saves you from diving deeply into debt, raiding your retirement savings and thus losing irreplaceable time value you've built up, or liquidating investments at an inopportune time, forcing you to lock in losses or incur unplanned capital gains.

If you don't have an emergency fund, now is the time to start building one. Setting aside a few dollars a week shouldn't be too daunting. Round up your change. Forgo a few treats or vices. The account won't look like much at first, but leave it alone and keep adding more; pretty soon, it will grow.

A great way to kickstart an emergency fund is with a lump sum. Maybe that tax refund you're hoping for? Or if you work for the federal government, maybe you'll receive a big check for back pay. Put what you don't need to cover unpaid obligations into your emergency fund.

What if you don't have time to save? You're living paycheck to paycheck, with nothing left over. Another shutdown is looming.

If you survived the last furlough, you hopefully developed some frugal habits out of necessity, some of which could be made permanent. Analyze your expenses and divide them into Essential and Discretionary. Drop subscriptions and memberships you're not using. Defer appointments for haircuts, manicures, professional cleaning, classes that have not been prepaid. Cook at home more, and build menus around what is on sale at the grocery store. Combine errands to use less gasoline. Don't shop for new clothes, electronics, toys, etc. Consider doing some things yourself that you normally pay someone to do for you, such as yard work, house cleaning.

Keep your credit record spotless or improve your score by always paying your bills on time. Leave plenty of available credit on your accounts and keep your debt ratio low. That way, if you do have to borrow money, you'll qualify for a decent rate and won't have to resort to usurious payday loans.

In my opinion, funding the government and paying its staff shouldn't be tied to other legislation, and politicians shouldn't jeopardize workers' livelihoods when they can't agree. But I'm not in charge. You have to be prepared for anything, by reducing your expenses so you're living within your means and building an emergency fund.

For more savings and investment tips, read Live Well, Grow Wealth

Countdown to Financial Fitness: Enough Money

Countdown to Financial Fitness: Enough Money: "If only I made $80,000 a year!" one of my carpool colleagues once told me. "I'd never care what anything costs." A...

Enough Money

"If only I made $80,000 a year!" one of my carpool colleagues once told me. "I'd never care what anything costs." At the time, we were each earning around $50,000 annually so it seemed like an $80,000 salary would put someone on Easy Street.

I didn't agree. I don't think I'll ever get to a point where I don't consider how much things cost. No matter how many millions I have socked away. Why would I pay more than I have to for anything?

Pay more for better quality, certainly, or perhaps the convenience of obtaining something quicker. Who doesn't like to be pampered, especially if you can afford it? But even billionaires look for deals and freebies. Wealthy people don't pay more than they have to; that's how they stay wealthy.

And conversely, that's how lottery winners and others who suddenly come into a fortune end up losing it all. They indulge every fantasy, and they stop caring how much things cost.

Big purchases bring along big expenditures. Beyond the $200,000 price tag for that new sports car are increased costs for insurance and maintenance. And you'll have to feed it premium gasoline instead of regular. Multiple luxury homes incur multiple tax bills, and they have to be furnished and maintained. You need to hire people to take care of them. And the more square footage, the higher the utility bills.

That's why wealthy families who inherit castles and historic mansions turn them over to foundations and open them to the public, for an entrance fee. The upkeep costs would otherwise drain their estates.

Money can make you comfortable. It can make life easier. It's possible to reach a point where your money earns enough to fund your lifestyle so that you don't have to work for a paycheck. But money is still a finite resource.

My frugal attitude came from being raised by parents who lived through the Great Depression. They remembered what it was like to struggle to make ends meet, and they taught me never to waste anything—especially money.

And it makes sense. Unless a higher price tag adds value, why pay more than you have to for anything?

For more saving and investment tips read Live Well, Grow Wealth.

Countdown to Financial Fitness: Financial New Year's Resolutions

Countdown to Financial Fitness: Financial New Year's Resolutions: Improving one's financial situation is a popular New Year's resolution. But if you're too vague about what you mean by that, ho...

Financial New Year's Resolutions

Improving one's financial situation is a popular New Year's resolution. But if you're too vague about what you mean by that, how will you ever know when you accomplish it?

Here are some more specific, actionable pledges that might help you achieve the results you’re hoping for. You can customize and quantify them into S.M.A.R.T. (specific, measurable, attainable, realistic, time-limited) goals to meet your needs.

1.      Reduce debt. Stop using credit cards for incidentals (groceries, gasoline, dining out, utilities, etc.) if you're carrying a balance. When you carry a balance, interest accrues as soon as each new purchase is posted, making everything you buy needlessly more expensive. Try to make more than the minimum payment each month on at least one card so you can whittle away at your debt. As soon as possible, zero out at least one card and then keep it current, i.e., pay the entire balance in full, on time, every month.

2.      Increase retirement savings. If you work for a company that has a 401k or similar plan and you're not contributing, start now. If you didn't max out your contributions last year, increase them for 2019. If you have eligible income but no workplace retirement plan, or you're already contributing the maximum, start or contribute to an IRA (Individual Retirement Arrangement). Also, it's not too late to fund an IRA for 2018; you have until April 15.

3.      Establish an emergency fund. Too many Americans are one paycheck away from homelessness. To keep from sinking into debt or wiping out your retirement savings if you're hit with a large, unexpected expense, start building an emergency fund. An emergency fund should hold at least six month's living expenses in a low-risk, liquid investment. Did you get some cash for Christmas? Instead of blowing it on toys, put it into a savings account or money market fund. Budget a little each pay period—even if you can only manage five or ten dollars—to build your emergency fund. Did you vow to give up or cut down on a vice like smoking, drinking, hitting the vending machine every afternoon? Put the savings realized from modifying those habits into your emergency fund.

4.      Review investments. It's a good idea to take inventory of your holdings periodically to ensure you're still on track. If you work with a financial planner, make an appointment to discuss whether any changes are necessary to keep your asset allocation in line with your goals and tolerance for risk. Open your statements promptly and read them. Ask questions if you don't understand something.

5.      Focus savings goals. The beginning of a new year is a good time to evaluate why you're saving money in the first place. A new home? College? Retirement? A trip around the world? How close are you to reaching those goals, and what do you need to change if you're falling short? 

      What financial goals have you set for 2019? I'd love to hear your comments.

For more saving and investment tips read Live Well, Grow Wealth.