On a recent trip to Guadalajara, Mexico, our hosts announced one Sunday they were taking us to a special place outside the city. We climbed into a van and motored an hour southeast, coming to a halt on the shores of Lake Chapala.

Mexico’s largest fresh-water lake, Chapala is a picture-postcard-worthy gem rimmed by quaint and historic towns, and known for its awesome sunsets.

After strolling the sun-washed malecon, a promenade ribboning along the shoreline in Chapala city, we climbed back in the van for a lakeside joyride. We were soon in Ajijic, one of the most popular retirement towns for North American ex-pats in all of Mexico. Pronounced a-HEE-heek — possibly for the self-satisfied giggles of U.S. retirees — Ajijic has emerged as the spot for folks dreaming of retiring in a resort setting, but at a fraction of what they’d fork out in the States.

I can’t recall what our guide said it would cost per month to live in Ajijic with a gorgeous lake view and the services of a maid, but I do recall the stunned gasps of us Yanks when we heard the tiny sum that passed the guide’s lips.

The perfect time

The vast differential between the cost of retirement here and in not-too-distant foreign countries hasn’t been lost on Panama City, Panama-based author Kathleen Peddicord. She’s the author of How to Retire Overseas (Penguin, 2010) and How to Buy Real Estate Overseas (Wiley, 2013).

“This is the perfect time for North Americans to be thinking about living, retiring and investing in real estate outside the United States,” she recently told me. “Many Baby Boomers about to become retirees are flat out worried they won’t be able to afford to stop working. And because American retirees are healthier than any before, they have a much longer retirement to pay for.”

While looking at more years in retirement, they’re also eyeing fewer retirement assets than they may have counted upon, she adds. “If they do the math as many people are doing, they’re saying, ‘How is this going to work?’ They answer for so many people is to look outside the box, and I’m speaking geographically. They might have considered Florida or Arizona in the past, but that’s not where they’re going to get the biggest bang in retirement.”

They need to look beyond North American borders, she says, and when they do it’s low cost of living that catches their attention. Options like Mexico, Panama, Ecuador, Belize, Nicaragua and Uruguay offer a good quality of life, for less.

“The point is to not have a lesser quality of life,” she says. “Why do that? You don’t have to. After working all your life, you don’t want to spend the rest of your days just making do. And overseas you can live much better than you can in the United States . . . Once you take the first step and start to realize the possibilities, you realize that not only are you going to stretch your budget and live better too, but this will be a lot of fun and allow you a spirit of discovery.

“This phase of life, which could have been spent just sitting in a rocking chair, becomes the best part of your life. You’re free to embrace all this opportunity that is now before you. It’s just a big adventure.”

Down Mexico way

For brevity sake, let’s look at the nearest of the countries mentioned above. While a bit more expensive than the others, Mexico is a “turnkey option” for many North Americans, Peddicord says, and offers a more comfortable life.

“Ajijic is a good example,” she adds, noting there are already so many retirees living there that there’s a ready-made upport system for freshly-retired newcomers. “But if you want a beach lifestyle, the beach community running north of Puerto Vallarta, which is called the Riviera Nayarit, is already well-developed. And it has a well-developed infrastructure, not only on a practical level of roads and communications and airports, but also from an amenities standpoint of golf courses, shopping, marinas and restaurants.”

The selection of beach condos is abundant, and all are dramatically less costly than on, say, the coast of California, Peddicord reports.

“Dramatically less expensive than California will be areas off the beach, and there are very interesting neighborhoods available. You can have a lifestyle very similar to the California coast in all regards, but especially in real estate.”

The clincher for many is the cost of health care. Depending on what country you retire to, the cost of health care can be 10 or 20 percent of what it is in the United States. Your U.S. health insurance and Medicare won’t cover you, but that needn’t stop you, according to Peddicord. “Good comprehensive health insurance can be gotten for $100 a month or less,” she says.

Whether you buy or rent, the cost of real estate in that region of Mexico will be a quarter to a third of something comparable in California, she adds.

We were just about to wrap up our Skype-enabled conversation when Peddicord dropped a number that will lead to dropped jaws among many Americans.

“The average American Social Security check comes to about $1,100 monthly,” she says. “And there are many places you can live on that alone.”

For more information, pick up Peddicord’s books and also visit her website, www.liveandinvestoverseas.com.

Then start packing your bags.

Death. Nothing in this life is certain but that except death, but that is the one thing almost everyone prefers not to think about. It is depressing to think about our own demise. Why think about something that depresses you? Because it is not about me, it is about the loved ones I leave behind.

My husband will be an emotional wreck if I, well, leave him. Money will be the last thing he will think about at that time, but he has to eat. We have some dreams, some expensive dreams that we want to make a reality. That will cost him a lot of money. I will be doing him an injustice if I left him unable to pursue those dreams. I have been trying to put together a master information kit that has everything he needs in case of an emergency.

Essential but often overlooked estate planning documents

Advance health care directive form

When I went for surgery, the hospital gave me an advance health care directive form I could fill and get notarized. It had 5 different sections for me to fill out -

1. Power of attorney for health care/Health care proxy: This part lets you name someone to make decisions about your health care if/when the doctor declares that you no longer can make/communicate your health care decisions.
2. Living will: This section has information about your wishes about different end of life decisions, if you can no longer speak for yourself.
3. Organ donation information
4. Physician directive: A form that lets you designate a physician to have primary responsibility for your health care.
5. Signature and witness form

From what I gather, it need not be all in the same form. Some people choose to do those individually with their attorney as part of their other estate planning documents. The power of attorney for health care and the living will put together are called an advance health care directive.

Will or (better) revocable living trust

A will is one of the most basic and most common estate planning documents. A will, at its simplest form, will dictate who will inherit your assets and who will become guardians for your children. Most estate planning attorneys will ask you to have a revocable living trust instead of a will to avoid probate and to give more detailed/complex instructions. Here is a great comparison of what wills and living trusts can do, and their pros/cons. At this point, all we have is a simple will that I made up myself. When our net worth hits a certain point or if we have a child, we will consult a lawyer to have a more robust living trust in place. A will is very easy to make, so even if you feel you don’t have assets significant enough to warrant meeting with a lawyer and setting up a living trust, at the very least, draft a will.

HIPAA release form

HIPAA was created to protect the privacy of the individual, but it also makes it difficult for family members to discuss your health care and/or deal with insurance on your behalf at a time when you cannot do so.

Financial durable power of attorney

A simple power of attorney document lets you appoint someone you trust to handle important financial and legal matters on your behalf, but it becomes ineffective if you die or become incapacitated. You need to have a durable power of attorney if you want the power of attorney to continue to be effective even if you become incapacitated or incompetent. Durable power ends upon death.

If you want to use a lawyer to draft any of these documents the American Bar Association offers a search and referral tool to look up lawyers in your state and Nolo has an extensive lawyer directory categorized by practice area and state.

My life information organizer

It took me almost two years to compile all this information in one place. This is a big binder of information about, well, pretty much everything in our life, divided into multiple areas.

• Personal (personal information, passport information, previous addresses)
• Emergency (emergency Plans, emergency contacts)
• Digital (email accounts, passwords and login information, data backup plans)
• Bank (bank accounts, account types, balance, account Numbers, username and password hints)
• Career (current resume, employment history, education history, transcripts)
• Insurance (life insurance, health insurance, car insurance, homeowner/renter insurance)
• Medical (doctor information/contact, medical summary [allergies, blood group, etc.], prescription medications, family medical history)
• Life (organ and body donation, final arrangements, estate plans, funeral receipts)
• Credit card (account numbers, username/password hints, payment information)
• Investments and retirement (investment accounts, retirement accounts, businesses, real estate investments, safe deposit box information, inventory)
• Proof of ownership (house documents, car title)
• Debt (debt owed to you, debt you owe)
• Family (marriage /divorce certificates, birth certificates)
• Charity (trust information, directions for the trust operation)

Other things to look into

Beneficiaries

Make sure the beneficiary information is up to date for all your accounts.

Life insurance

This is one thing we are still lacking. Yes, we don’t have life insurance. I have been meaning to get term life insurance but keep procrastinating. Until early last year, both of us were working and we didn’t have any kids. I was planning to get a policy when we have kids, but now debating getting a policy even before having a child. Hopefully, I can get this done by the end of the year.

It is not a fun or even a comfortable exercise, but we owe it to our loved ones to make this as easy as possible. What end-of-life planning tools have you used? Do you feel peace of mind with these directives in place, or have you yet to establish your wishes?

Social Security benefits used to be something that all tax-paying workers could count on. A portion of your pay would be automatically deducted from your paycheck, through the payroll tax, and in return you would reap the benefits of the program when it came time for you to retire.

For many decades the program worked well. “Today’s employees would raise the revenue to pay current retirees, and were assured that when their time to retire came, the current employees of the day would pay into the system to finance their retirement,” explained Olivia S. Mitchell, director of the Pension Research Council at the Wharton School of the University of Pennsylvania.

Why is Social Security running out?

But due to the recent financial crisis and recession that ensued, as well as the current high unemployment rate and an aging Baby Boomer population, many of whom are expected to live way past age 65, there will soon be insufficient money coming in from payroll tax revenue to pay out Social Security benefits to expecting retirement recipients. This has many people worried about the overall future of the system and whether Social Security will be there for them, when it’s their turn to retire.

For Social Security to continue to exist as it does today, there will need to be a major overhaul in the program. Congress must figure out a way to reconcile the expected deficit in the program. Otherwise, it will have to resort to paying out less in benefits than it previously had.

That means that instead of relying on Social Security as a way to support their retirement, people will have to depend on their own savings and investments, says Ellen Derrick, certified financial planner™ with Learnvest Planning Services. “People need to ask themselves: ‘What can I do now to make sure I am protecting myself for the future, a future that may not include Social Security?’” she says.

According to forecasts made by the Social Security Board of Trustees, there should be enough money coming into the program to pay out only about three quarters of total expected benefits starting in the year 2032. “So if you were to receive $1,000 a month, it is projected that you would only receive $750 a month instead,” says Derrick. “Those benefits should be intact through the year 2086,” she notes.

Part of the reason this may occur: “The law says that the Social Security administration can only pay benefits up to the amount of revenue that it has, so if it’s insufficient, the government will have to figure out new solutions if it does not want to cut payments,” explains Mitchell. And that will take a big change in policy.

How you can prepare yourself

So what can you do now to prepare yourself for the possibility that the full amount of Social Security benefits won’t be there when it’s your time to retire?

The simplest answer is to keep working. For those people already retired or close to retiring, you don’t need to worry— your benefits are secured. “But if you’re 10 years away from retirement, it’s time to buckle down,” says Derrick. As a financial planner, she tells her clients who are age 55 and younger that they should not even include Social Security in their retirement planning calculations. “If you do get it, it will most likely be a smaller amount than what you are currently being promised,” she says.

Many financial planners are advising people to keep working and retire later than they may have originally planned. “It’s helpful to delay retirement until as late as possible,” says Mitchell. In fact, there are already added benefits built into the Social Security system if you defer claiming benefits until age 70 instead of age 62. “Your monthly benefit could go up by as much as 76%,” she says. It is important to realize that the age you take your social security benefit can vary from person to person. This is a topic you should visit with your financial professional to select the time that is right for you.

How much you’ll need to save

Mitchell also recommends that people start saving more while they are still working, and spend less. The recommended percentage of one’s paycheck that people should invest in a retirement fund varies greatly according to age and circumstances, but many financial planners advocate putting in between 10% and 20%. The more you can save, the better, Mitchell advises. Another factor is that many people today are living a lot longer than they used to. “Longevity is increasing, and it is expected that people may soon start living to over 100,” she notes. That means many more years of savings will be needed over the course of your lifetime.

Another tip: Everyone who is offered a 401(k) retirement plan from his or her employer, with a contribution-matching program, should take it. It’s free money! If you’re self-employed, setting up a traditional IRA or Roth IRA account or an individual 401(k) account is key. If possible, you should contribute the maximum amount those plans allow each year. “Even if you are a stay-at-home mom, you can set up an IRA in your name and deposit income coming in from your spouse,” Derrick advises.

What else you can do to stay on track

Staying healthy is another way to protect yourself now for later on in life. “You should be investing in your mental and physical health, because that is your capital,” Mitchell says. Good health will help you be able to work longer and hopefully reduce medical expenses when you are in your retirement years.

She also suggests that people start to think about their social capital, which includes friends, neighbors, community and family. “In the old days, when parents would grow old, they would move in with their kids, but that has changed,” Mitchell says. Today, if you have friends and family who can help you, it may allow you to remain out of a nursing home and in your own home longer, which will be less expensive later in life,” she explains.

Continuing to work part-time, even in retirement, is another good idea. “People who work part-time remain mentally alert and connected to friends. It is another aspect of successful aging,” she says.

Derrick also recommends that workers check to see if their retirement account is on track for where they thought it would be, at least once a year. “If it’s not, you should adjust your contributions, especially if you get a raise or a new job that could make a significant difference in your salary,” she says. At times you may find that you have to rearrange your savings rate to take care of a child’s needs or to set up a college fund. “But at the same time, you don’t want to sacrifice your own retirement; you want to weigh those priorities,” says Derrick, and avoid these top retirement mistakes.

The earlier you start saving for your retirement, the better, even if it’s a just small amount at first. “People come up with all sorts of reasons to put off saving for their retirement, but retirement is the one thing you can make the biggest difference with if you start saving early on,” Derrick notes. That’s because the earlier you start, the more time you have to let your money grow.

Additional stories from LearnVest:

The secret of retirement savings: You can’t make up for lost time

What’s the best age to begin claiming Social Security benefits?

Reboot your career: How to do your dream job in retirement

How do you approach your income tax withholding? Do you opt for a higher withholding in order to get a refund, like 85 percent of all Americans (according to a recent survey)? Or do you go for the minimum and pay in when you file your taxes? Most articles you read on this topic appear in April, but isn’t that a little late to do something about it?

Instead, let’s look at the issue before tax time is upon us again.

Skip the refund

Several personal finance bloggers, like Luke Landes at Consumerism Commentary and J.D. Roth at Get Rich Slowly, say opting for larger withholding to get a refund is not the smartest choice. Although there are some who say it’s neither good nor bad to over-withhold, a casual survey of the personal finance blogosphere shows most  say the refund way is a bad way to go, and here’s why:

1. Interest

You don’t earn any interest on money you give the government before you need to. Why would you let someone else sit on what is really your money when you could be putting that somewhere and earning interest on it?

2. Out of reach

The future hasn’t stopped being uncertain. What would happen if something unforeseen came up and you need the money? Your government is not going to have an sympathetic ear and let you have that money back.

3. You can save properly yourself

In other words, if a savings account is what you want, you have many better options than leaving the money in Uncle Sam’s care.

4. You might just spend the refund windfall

When you drill down into this one, it’s like the opposite of the previous argument, which says you’re smart enough to save wisely. This argument says no, you might not save that expected windfall. You might squander it, you reckless rascal you!

5. You’re missing out on investment opportunities

You could be investing your money and earning big bucks while waiting to file your return, instead of letting it just languish there in some government account earning zip… an expansion of #1 above.

6. What’s the government doing with it?

This line of reasoning goes something like this: government is bad, big government even worse. What are they going to be doing with your money? Like the ingredients of bologna or summer sausage, you really don’t want to know. So don’t give it to them unless they come and pry it out of you with an April 15 deadline.

Go for the refund

For some reason, almost no experts take the view that it’s smart to opt for larger tax withholding in order to get a refund. What this debate amounts to, then, is the experts vs. the masses, because, as noted above, 85 percent of us, the masses, think the refund strategy is the way to go.

Why do we listen to the experts and then have the nerve to do exactly the opposite? Is it because we are just not smart enough, or may there a method to our madness?

I believe there is a method, and it’s not madness at all.

1. Interest foregone is immaterial

Exactly how much interest do you forego by giving the government more money and then getting it back? Let’s say, for the sake of argument, that your refund is $1,200, and you get that because you, inadvertently or on purpose, have $100 a month too much deducted for your income tax. If your savings account pays you 1 percent per year (about average these days) the grand total of interest you are sacrificing for your folly is $6.50 — that’s  less than a single Big Mac meal.

2. The penalty

In the opposite corner of the interest you lose is the penalty you run the risk of paying. Most commentators are strangely silent about this issue. I don’t know why, because in my book this is huge. How do I know that? It hit me one year when just a few unusual items, like a prior year state tax refund, pushed my Federal tax liability over the amount that was withheld. Uncle Sam doesn’t like that, so much so that he whacks you with a penalty of 10 penalty.

That’s a whole lot more than you will earn on any savings account!

Here’s the fundamental problem: our taxes are hard to track during a year. The government doesn’t send you a statement, like you get for your 401(k) for example, to tell you where you stand. If you get any income beyond a simple paycheck, you’re in murky water.

It’s just not worth the risk, I decided, so I went from sailing close to the wind to over-withholding.

That’s when I discovered several other benefits not too many people talk about.

3. Incentive to file early

Every year I was among the hordes who scrambled around in early April to get my taxes mailed off before the dreaded 15th deadline.

No more.

Now that I know I’m gonna get a refund, I let my imperfection run free. Like a kid, I’m on my taxes early to get my money, and by the time others do the April scramble, I’m counting my refund bucks like Scrooge McDuck. The previous pain and drag became an annual treasure hunt.

Is that so bad?

4. Big budget

If you’re a home owner, you’re well acquainted with the myth that a home is an investment. You know the truth: a home is nothing but an insatiable money pit. Every year there’s something: new roof, new fence, exterior repainting….

I know, the experts say you should be perfect and save for those things properly, with a real savings account. You know, the type that pays a fraction of a percent in interest each year. So, every year, when we get our refund, we see how much it is, and then we see which holes we can plug this year with what has become our “annual budget.”

After we celebrate with a nice dinner, of course.

We still have an emergency account and we still save up for special things, but what’s so terrible about turning the necessity of filing taxes from an unpleasant event to a nice one? While recklessly blowing off all of fifty four cents a month?

Nobody has been able to answer that one yet.

5. It’s right after Christmas

For many people, those big circles of friends, family and extended family mean they buy a lot gifts over Christmas, including some last minute surprises for people who invite them to a Christmas dinner, but for which they didn’t plan by buying gifts on sale after last year’s Christmas.

I don’t know about you, but come the New Year, all our money fountains are cleaned out. Should that happen to perfectly planning people? Probably not. Does it happen? I’ll let you answer that one.

And so, rather than beat myself up trying to be perfect, I follow a system that works very well, one which turns my imperfection into an asset, not a liability.

I like the idea that soon after Christmas, I know that tax money will be coming in, not going out.

Conclusion

With apologies to the well-known MasterCard ad:

• Interest foregone by letting Uncle Sam hold onto my money: $6.50
• Priority Mail postage to get my return in early: $5.95
• Peace of mind, knowing I will get money, not pay it: Priceless

Which strategy do you follow? Why?

Information services company Experian recently released a study comparing the debt status of men and women. The angle Experian highlighted for their press release was that the study demonstrated that women are better at handling their finances then men, and indeed, the numbers bear this out to some degree. But that’s not the most striking thing about the study.

Actually, a couple things struck me when I looked at the numbers. The first thing is how surprisingly similar the credit status of men and women actually is. The second thing is that neither set of numbers looks especially good.

Credit differences between men and women

Here are some of the contrasts highlighted by the Experian study:

• Men tend to opt for larger mortgages than women, with an average origination amount for men of $187,245 compared to $178,140.
• Men also carry larger non-mortgage debt balances than women. Between credit cards, auto loans and personal loans, men owe an average of $26,227, and women owe an average of $25,095.
• Men use more of their available credit card limits, at 31 percent of available credit compared to 30 percent for women.
• Men are more likely to be more than 60 days late with their mortgage payments. This delinquency rate is 5.7 percent for men, compared to 5.3 percent for women (these figures include mortgages issued independently to men or women, and not joint mortgages).
• Men’s credit scores are a little lower on average than women’s. Men had an average score of 674, while women had an average of 675.

Now, I look at financial data almost daily, and I’m used to discerning the significance in fairly subtle numerical differences. Still, I have to say, most of the above differences do not strike me as significant at all — especially the single point differences in credit scores and credit utilization ratios.

Even the apparently larger differences in mortgage size and consumer debt outstanding amount to less than 5 percent. To put that in perspective, as Experian points out in its press release, women working full-time earn 23 percent less than men. You could argue, then, that men tend to take on lower debt burdens than women relative to their respective incomes.

On the other hand, women should get credit for having lower mortgage delinquency rates despite their lower incomes. The point is, as I parse these numbers, I find more similarities than differences, with some mild advantages on either side. What bothers me, though, is what the numbers say about the financial management of both men and women.

Why nobody wins

While you can argue about whether or not the Experian survey shows that women really do manage their money better than men do, what’s clear from the data is that neither sex does a particularly good job. Just think about some of the numbers posted above.

First of all, there’s that personal debt burden of $26,227 for men and $25,095 for women. Remember, that doesn’t include mortgages. People with debt burdens like that will take a long time to climb out of the hole; it will likely be even longer before they can start to amass some serious retirement savings.

Second, large as those debt totals are, both men and women have only used about a third of their available credit. That means that credit card companies are content to let these people go even more heavily into debt.

Finally, there are those average credit scores of 674 and 675. These are both well below the threshold of 700 which Experian defines as an indication of good credit management. In other words, the average American, whether man or woman, does not show good credit management and is likely to have to pay higher interest rates as a result.

A good time to pay down debt

One of the obstacles to advising people to pay down debt is that by lowering interest rates so drastically, the Federal Reserve has done everything in its power to make borrowing attractive and saving unattractive. However, a closer look at interest rates shows that not all interest on debt is particularly attractive.

For example, since the end of 2008 credit card rates have fallen by an average of just 0.56 percent. That’s not such a good deal, and in a world of 3.5 percent mortgage rates and 0.10 percent savings account rates, 13 percent credit card rates seem out of step.

Besides that, with interest rates rising lately, this is an especially good time to pay down variable-rate debt. Those who don’t will see their debt burdens become more difficult to manage.

Higher expectations

When men and/or women start showing more reasonable debt burdens and higher credit scores, we can start arguing about whether one sex is better than the other when it comes to financial management. In the meantime, both get a failing grade, so arguing about differences seems relatively trivial.

A study released in February of 2013 by the National Association of Home Builders says one of the most important qualities new home buyers want is an energy-efficient home. They add, “Nine out of ten buyers would rather buy a home with energy-efficient features and permanently lower utility bills than one without those features that costs 2 to 3 percent less.”

The problem is that some sellers boast “energy-efficiency” without really having the goods to back it up. And just because the home has energy-efficient appliances doesn’t necessarily mean it’s saving energy in other areas.

Having a holistic approach to energy-efficient homes is a much better way to go for both savings and reduction in energy dependency. So when you start your house hunting adventures, bring this list with you and look for these features:

• ENERGY STAR appliances
• Air leaks around windows and doors
• Energy-efficient windows and doors
• Low-flow fixtures and toilets
• Digital thermostat controls
• Properly insulated attics and walls
• Low-energy lighting systems
• Well-maintained heating and cooling system
• Eco-friendly carpet, paint and building materials
• Energy- or water-efficient landscaping plan
• Tankless water heater
• BONUS: solar panels, geothermal system, wind turbine or any other alternative energy source

After you’ve gone through the list above you’ll want to ask some these questions:

• When was the last energy audit conducted and can you see the results?
• Can you see past energy bills?
• Do you have maintenance records for any of the energy-efficient appliances or alternative energy sources?
• Are there any local or state tax credits for owning this home?
• Do local energy companies buy back energy created by my home?
• Does the current homeowner work with the ENERGY STAR home program?

LEED Home Certification

In some cases, homes will feature LEED certification as a key selling point. A home with LEED certification means that it met specific environmental standards established by U.S. Green Building Council (USGBC). Ask to see the documentation from their LEED inspection and the certification.

Your new energy-efficient home doesn’t have to have all of these qualities, but each of them can help lower your energy dependency and monthly bills. Not only are these types of homes a smart buy, but energy-efficient features can also increase your home’s value if you decide to sell the home later on.

In July of 2012, USA Today reported that homes featuring energy-efficient upgrades sold for 10% more than non-energy-efficient homes in the surrounding area. They added in an earlier story that, “In Seattle, homes certified as eco-friendly sold for 8.5 percent more per square foot and were on the market 22 percent less time than other homes, according to a new report that tracks new home sales from September 2007 through December 2009.”

Buying an energy-efficient home is a smart investment that can pay off each month and later in the future. Just make sure to ask the right questions and look for the right features so you don’t get stuck in a home that doesn’t meet your expectations.

See more articles from QuickenLoans.com:

Hold the Phone! Beware of Phony Medical Alert Companies
Mortgage Missteps: The Too-Good-to-Be-True Deal

The scene was a sidewalk café on Chicago’s northwest side one summery evening around 2006. I’d been joined for dinner by a couple friends, Grant and Kate, and between bites of chicken Vesuvio – or was it a chopped salad? — was enjoying the witty, intelligent repartee of my two companions.

There was a lull in the conversation, and then Kate turned to Grant, the only renter among the three of us. “So, when are you going to join us among the ranks of homeowners?” she asked, in a tone of innocent inquisitiveness.

I expected Grant to offer a timetable for home purchase. But he instead responded as if Kate had impugned his ethnicity, or had scorned his mother’s good name. It was clear he was very sensitive about his renter status.

His deeply wounded reaction was a reflection of the era. It was the day and age when folks from teenagers on up were jumping at the chance to scoop up homes put within reach by zero-down payments and teaser-rate mortgages. Some felt if you were still renting in such an environment, you weren’t part of the club. You were an outcast, a pariah, and seemingly one of life’s most pathetic sad sacks.

Judging from his response, I think Grant himself held that view.

But, as events were soon to show, Grant wasn’t behind the times. He was ahead of them. Just a year or two later, the mortgage meltdown would throw many overextended new homeowners into foreclosure. Suddenly, renting became not just acceptable, but the hip, trendy, now thing to do. By shunning the temptation to join the home-buying binge, Grant had been crazy like a fox.

Renters by choice

Even in these times, when new apartment buildings are sprouting like late-spring clover to meet the surging population of renters, some still believe apartment life means simply throwing money down the drain every month.

But the expanding legions of renters by choice are convinced otherwise. Driven by a desire to enjoy life in ways you can’t when anchored to a ranch or split-level, they realize renting gives them opportunities homeowners don’t enjoy.

They can turn maintenance chores over to their landlords, have their building’s staff pick up their dry cleaning, and attend apartment building parties, meet their neighbors and make new friends. They can also pursue exciting job offers across country, without having to fret about the details of selling a home.

Beyond these renting advantages, there are a slew of economies that await the shrewd apartment resident who selects the right rental property. A partial list of such money savers might look something like this:

Apartment building fitness centers. Joining a health club can set you back plenty, but at a great number of apartment communities, particularly newer ones, the chance to work out comes on the house, so to speak. With your club just a few floors away on an elevator, you’re saving gas and wear and tear on a vehicle, too. Apartment communities lacking in-house fitness centers often give residents complimentary memberships at nearby facilities. “Gym memberships can cost upwards of $100 a month, so having your gym included with your rent is a significant savings,” says Diana Pittro, executive vice-president of RMK Management Corp., which manages dozens of Chicago area communities.

Business centers. Outfit a home office, and you’ll shell out big bucks for a computer, printer, Internet access, desk, office supplies and far more. But at many apartment communities, a welcoming business center offers residents all those necessities, at no extra cost. Moreover, home-based entrepreneurs who need to meet clients in a business-like setting appreciate the conference rooms available to residents in many apartment community business centers.

Says Barbara J. Geffen, co-CEO of Northbrook, Ill.-based Prime Property Investors, owner of two Northeast Illinois apartment communities: “Our business centers are appreciated by a variety of our residents, from casual online browsers to professionals who work from home.”

Swimming pool. Imagine the expense of installing your own in-ground swimming pool, then furnishing it with deck chairs, cabanas and pool cover, not to mention a summer’s supply of chlorine and pool chemicals. Now think of the time you’d spend keeping the pool in ship shape. It would be like a second job.

But many rental properties give residents access to well-maintained pools with all the above extras. Some of the more spectacular sparkle like jewels on high-rise rooftops, and the awesome view comes at no additional charge.

Grilling stations. At many apartment communities, there’s no need to invest in a grill, propane or charcoal. The grilling station on premise is open to residents who need only show up with their favorite foods, grill and open wide. As many renters will attest, grilling is even more tasty when it’s free.

More ways to save. These are just the start of the money savers you’ll find at a large number of newer apartment communities. Additional ones include free dog washes, car washes, on-site community rooms, party rooms and theater rooms, discounts at area stores and restaurants, cooking classes, dancing lessons, wine-and-cheese get-togethers, catered holiday parties, discounted food deliveries and low-price premium cable packages, to name a few of the ways to economize.

As I mentioned up top, I’m a homeowner myself. But I get a bit envious when I tour one of the amenity-laden apartment communities being opened to today’s renters. As tempting as all the above economies seem, it’s the simple, joyful, carefree lifestyle renters enjoy that is so undeniably attractive.

No wonder many people returning to renting report they feel as if they haven’t just taken on a new lease, but a new lease on life.

Memorial Day weekend has officially kicked off the summer travel season. The wet weather is Portland, Ore. is making me dream of all the sunny vacations I could possibly take. I almost planned a last-minute vacation for the Memorial Day weekend and had to take a pause to rethink whether we can afford to actually spend what I was planning to spend.

The answer is no, we have a lot of expenses coming up this summer; we cannot afford to take an expensive vacation without any planning. But that doesn’t mean I am going to put my life on hold. I am planning to take at least two weekend or long weekend trips every month this summer. Most of it will be road trips with a couple of long distance trips thrown in. We plan to make it affordable by using every single resource available to us to get us the best value for our money.

Ways to save money on vacations has evolved a lot with the ever-changing technology and new media. The tried and true tips still work, if you want to brush up on them, here are a few posts from Nickel - How to save money on vacations, Saving money on travel, Eight ways to stretch your vacation dollar and More tips for saving money on vacation travel.

What I will be covering in this post is how to take advantage of new technology advances and social media to get better value for the money.

Image credit : Jason Howie

How to save money on vacation using social media

Tweet and follow the savings

I have a love and hate relationship with Twitter. I hate it when people tweet every single thing they do, but I can’t say I don’t love the savings and the customer service I get via Twitter.

• Coupons and deals: These days the best way to get notification for great deals or coupons is to follow the airline, hotel and rental companies. All the online deal sites (like Airfarewatchdog) have a Twitter presence too. Create a separate list for travel related tweets, this will keep your inbox clean and still give you a summary of deals available for the day.
• Better customer service: I have gotten better rooms by tweeting about my stay at hotels. I have also expedited my refund request for a cancelled flight by contacting customer service via Twitter. Companies are trying to keep their social image clean, so instead of emailing, filling out a contact form or waiting forever on the phone to get hold of a human, tweeting has been a great way to connect with customer service.

Treasure hunt on Foursquare or Facebook Places

• Unlock destination deals: When you get to a restaurant, new city or any store, if you are willing to let everyone know that you are there and check-in, Foursquare and Facebook Places will offer you customized savings deals for that specific place that you can use right away.
• Receive bonus points or rewards: Some companies will offer you bonus points (for their loyalty program) if you check-in via Foursquare or other social media outlets. For example, Starwood Hotels offers bonus Starpoints if you check-in via Foursquare or Facebook.

Plan your vacation via Pinterest, Yelp & Facebook

• Figure out where to vacation: Pinterest has been my latest time sink. I like browsing boards where people have pinned places they would like to visit. With so many photos from very different sources, I can get a great overview of any place. I do not have to rely on professional photos and later be disappointed. After virtual touring, I then create alerts for my favorite places via various online tools to see if I can grab a great deal on them.
• Make sure to avoid tourist traps: Yelp and Facebook are great places to ask questions. By combining suggestions from your friends and strangers, you can plan your trip, avoiding tourist traps and hit hidden treasures.

Smart savings at your finger tips

If you have a smartphone but are not taking advantage of the savings via apps, you are missing out. Here are some apps that I love.

• Gas Buddy: A popular app to find the best gas prices. It uses the GPS in your phone to find all the gas stations and the prices in your location in real time. (Available on iPhone and Android)
• Skype, WhatsApp and Viber: I personally use Skype to make calls via WiFi instead of using roaming minutes. There are other apps like WhatsApp that allows you message anyone without any fees (They do charge $0.99 either one time or yearly as a subscription fee depending on the type of phone). Viber that lets you talk to or message other Viber users for free.
• GetAround or Lyft: Instead of renting a car for the whole day or taking the cab, you can give your business to a local by renting from them or getting a lift from them. You can locate your ride by using these apps. If you frequently rent a car hourly, Zipcar and Hertz 24/7 might be a great fit for you.
• Yelp: You can check out reviews of any restaurant and get recommendations on what to order.
• Blackboard eats or Scoutmob: If you are visiting a major city, chances are you can find great deals on restaurants (10-50 percent off) through these apps. There are always social deal sites like Groupon or Living Social to get restaurant vouchers to try new restaurants.
• Eat out with Kids: If you have kids this is a great app to have. You can find kids-eat-free places or restaurants with discounted kids’ meals.
• Expensify: Keep track of your spending to make sure you are on track with your budget. If you have to expense any part of your trip, this app makes that task very easy as well.

Get online and save money

• Yapta: Have you ever seen the prices go down just after you book the trip? A lot of companies price match their own prices but you have to do the due diligence and keep checking the prices to see if they have gone down so that you can ask for a price match. Yapta does this for you. You enter you trip details – flight, hotel, rental car and the software will keep checking the prices for you. You will be notified if the prices go down and you can submit the price match request to your airline. This way you can be sure you are not overpaying for the trip just because you booked it a day early.
• TripIt: Keep the entire itinerary and the confirmation numbers in one place so you don’t miss anything.
• Tripadvisor and FindMeetGo: Tripadvisor is an excellent place to start your research, ask for advice on places to visit and refine trip plans. FindMeetGo is a new tool I am planning to use this summer to find other travelers visiting the same location at the same time you are visiting. You can team up, share tips and make your trip more fun.
• Blogs: There are plenty of blogs that focus on individual cities with a treasure trove of information on great places to visit or free things to do in a city.

While this isn’t a comprehensive list, I wanted to highlight the potential for saving a lot on travel by using all the online and mobile resources that are available to us. These are some of the tools that I use to make my travel more affordable.

How do you use the latest technology and social media to save money on your vacations? What are your favorite apps to save money?

This post, written by Michelle Sheiman, is from our partner site LearnVest.

Successful budgeting tends to depend on two things: careful planning and a steady income.

The first, anyone can do. The second isn’t so simple.

If you’re self-employed, you might be asking yourself: “But I don’t have a regular paycheck coming in. Can I even set up a budget? Should I bother?”

You can. And, yes, you should.

A budget is simply a way of figuring out how much money you need to go about your daily life, and arranging things so that you don’t exceed that number. No matter your situation, budgeting is a critical part of making sure your finances are sustainable. (And it no longer requires a pen and paper: The free LearnVest Money Center and corresponding app will do it for you automatically.)

Budgeting is especially important if your income is irregular, such as if you’re a freelancer, a temp worker, a consultant, an artist, a permanent employee with fluctuating hours, or a commissioned salesperson. Or if you do seasonal work, if a big part of your income depends on tips, if you own a small or startup business, if you’re on call, or if you are simply an odd-jobber, then this article is for you.

Use this simple three-step plan to set up a budget you can stick with. For more guidance, LearnVest offers low-cost financial plans, put together by our certified financial planners™.

Step one: Know your baseline

When you have a steady paycheck and a predictable income, you budget by allocating spending categories within that limit. But those with unpredictable incomes must work “backward” — starting with the amount of money you’ll spend to figure out how much you need. If your income is unstable, then it is your expenditures that must be stable, predictable and repeatable.

According to the 50/20/30 rule, there are three categories of expenditures: essentials, priorities and lifestyle. Your baseline expenditures are those in the essentials category — those that must be paid every month, without which you can’t live. The first costs you’ll want to estimate are:

1. Groceries

For your baseline, include the lowest food cost that is reasonable for your circumstances. Plan your grocery expenditures without any extras, like restaurants, coffee shops (unless you must use them to have business meetings or to avoid paying for internet at home), wine or fast-food pit stops. If you’ll be couponing and cutting back your food costs, take that into account, but if you know you won’t clip a single square, be realistic about your cost estimates. One of the best ways to get an estimate is to track your spending for at least a few weeks to get an idea of how and where you spend.

2. Housing and utilities

For almost everyone, essential expenses include rent or mortgage. If you’re responsible for either, or if you house-share, live for free or have a sliding rent arrangement, include your minimum monthly housing cost in your baseline. Make sure to include the monthly amount for homeowner’s insurance and property tax bills in your total.

If you live in a geographic region in which heating or air-conditioning is a life essential, include these average monthly bills in your baseline. In moderate regions, utility costs are a lifestyle choice — but heat isn’t optional in January in Vermont.

The same goes for internet and phone costs: If you work from home, they’re most likely a necessity, and should be included in your housing and utility estimate.

3. Medical costs

A note about health insurance: The number-one reason people go bankrupt is because of medical costs, so it could not be more important that you have some form of health insurance. You should include these costs in your baseline estimate, as well as payments for any outstanding medical bills.

4. Transportation

Do you need to include transportation to work in your baseline? Consider the lowest possible transportation cost given your job or jobs. Do you absolutely need a car, car loan payments, auto insurance, maintenance, garaging costs and gas expenses? Or is there great public transportation in your city? Can you walk to work? Telecommute? Can you infrequently taxi, Uber, ride-share, Zipcar or call for delivery? Again: Be realistic with your estimate. If you’re actually going to drive your SUV alone, round-trip, every day, factor that into the costs.

Add up the baseline numbers, and you have the amount of the monthly “paycheck” you’ll write to yourself.

Step two: Set your income target

This step is easy (well … sort of). Once you know your monthly baseline expenditures — and thus the paycheck you’ll write to yourself each month — use an online tax calculator to get a rough idea of how much you’ll owe in taxes. Add this new number to your baseline costs.

This figure represents your bare-bones monthly income requirement.

The tricky part, of course, is guaranteeing you have enough income to meet your expenses.

Anything above the bare-bones income target goes first to your financial priorities savings; second to your emergency fund savings; and third to you as “bonus” to spend on lifestyle choices.

Step three: Set up separate bank accounts

To make this plan most effective, you’ll want to set up separate bank accounts. Your bank will let you have as many accounts as you need, and if you maintain a minimum balance in all the accounts combined, it should waive fees (just as it would if you maintained a minimum balance in a single account).

1. Business checking

Here you’ll have your checks auto-deposited, you’ll plunk your daily cash from tips if you get them, and you’ll deposit your invoice payments from clients. You’ll make only three transfers from this account each month: one to each of the below accounts.

2. Personal checking

From this account, you’ll pay all your bills — essentials, priorities and lifestyle — but you won’t spend more than you’ve paid yourself any month. This account will also receive any monthly “bonus” you might want to pay yourself when your income exceeds your target, and you have money left to spend beyond your savings (which is technically a fourth transfer).

3. Emergency savings

Every month, after you’ve paid yourself for your baseline and transferred amounts for financial priorities, you’ll put money into your emergency fund.

You should be aiming to save at least six months of net income in this account, to be used in the following situations only:

1. You’ve lost your job, and need to continue paying rent, bills and other living expenses.
2. You have a medical or dental emergency.
3. Your car breaks down, and it’s your primary form of transportation.
4. You have emergency home expenses — e.g., your AC breaks down in 100°F-plus weather, your roof is leaking, your basement is flooded, your toilet is overflowing, etc.
5. You have bereavement-related expenses, like travel costs for a family funeral.

4. Priority savings

This account holds money for annual or semiannual payments (income taxes, property taxes, home insurance) and for important goals — payments on student loans, the down payment for a house, or college savings for your child.

That’s it! You now have a basic budget, your income target and where exactly your money should go … no matter how it comes in.

Additional stories from LearnVest:

Why I Would Never Buy a New Car

The Surprising Way That I Make Money on the Side

How an Energy Audit Saved Us $2,400 a Year

This post is from new staff writer William Cowie.

A few weeks ago, the lottery jackpot was almost $600 million. Did you buy a ticket? If you’re like millions of others, the answer would be yes. As the size of the jackpot climbs, more people buy tickets.

Why? The “big pot” Powerball ticket costs the same ($2) as the one paying the minimum of $40 million, and the odds are identical (lousy). So, why do more people buy tickets when the pot becomes larger? Is $40 million not enough? (“Nah, $40 million isn’t what it used to be. I’m not wasting my time on one of those!”) It may not be the pinnacle of logic, but when the jackpot swells, so do the sales of tickets.

Odds are you ended up not winning the big one and its $375 million estimated cash value. If you did, you wouldn’t be reading this. (By the way, isn’t it interesting: if anybody should be reading this, it’s the winner of that fortune, and if there is someone almost guaranteed not to read anything about personal finance or investing, it will be that winner. Go figure.)

So you didn’t win the big one. In fact, you probably haven’t won any lottery.

But there is something you get which you may be overlooking: windfalls.

Windfalls

You might never win a lottery, but odds are you’ll receive many a windfall in the course of your lifetime.

Nobody ever talks about it, but it’s true: we all get windfalls from time to time. Sometimes it’s a gift, sometimes a bonus. Sometimes mom and dad simply give their kids a little handout. It could be a rebate check from a utility or a small prize in a charity raffle. Some are small and some not so small. Whatever it is, we all get windfalls.

We don’t get them all the time. But we all get them. The essence of a windfall is it’s unexpected. But what’s not unexpected is that almost all of us get them.

The important question is: what do you do with your windfalls?

Your mindset

What you do with your windfalls says a lot about your mindset about money. You know what they say: actions speak louder than words. Nowhere is that as true as what happens to your windfalls.

What’s your first, no-brainer, reaction to getting money unexpectedly? Head to the clothing store for that outfit you’ve had your eyes on? A lovely dinner out? If you’re a spender, your no-brainer use of a windfall is to spend it.

But, if you’re an investor, your no-brainer use of a windfall is to invest it.

Okay, what did you do with, say, your last three windfalls? Can you even remember what they were? If you can’t remember, just close your eyes and imagine getting a $100 refund check. What would you do with it? Nobody’s watching so you don’t have to be politically correct. What’s the thing that makes your heart leap the most? Don’t think about what duty calls you to do. What made your heart skip a beat?

That’s a good indicator of your passion where money is concerned.

Why is this important?

Windfall crystal ball

Where people are today financially is a very good predictor of where they’ll be in the future. So, if you spent your windfalls, odds are you’re not wealthy.

Ouch. The first time somebody pointed that out to me, it stung. I fancied myself as someone responsible, but when I looked back, there was more spending than saving in my windfall record. And it showed in my financial status (or rather, lack thereof).

Consider the squirrel in the picture above: she grabs every acorn she can find, and puts it away. If you’re a saver or investor, you put away every loose acorn you come across. Anybody should be able to do it: you’re already getting by without the windfall, so if there’s ever a perfect bit of money to put away, it’s those windfalls.

None of us may win the lottery, but each windfall brings a spare acorn or two.

Where do you put those acorns?

It’s hard to find a better place than the old-fashioned savings account. If your investment of choice is rental properties, there’s not much you can do with, say, $200. Or you may not be able to buy a block of Apple shares.

But you can put it into your savings account. Yep, that’s right, old faithful.

A savings account is a wonderful staging area for investing. You can accumulate any amounts, big or small, until the balance reaches a critical mass, at which point you can deploy the funds into a higher-yielding investment.

Once you open your eyes for those windfalls, and you put each one into your savings account, you’d be surprised to see how those turbocharge the balance.

Your next windfall may be unexpected. But you can decide ahead of time where you’re going to put it, no matter how big or small.

Forewarned is forearmed.

This post is from staff writer Richard Barrington.

Have you got bull market fever yet?

Its symptoms are giddiness and a blurring of reality. It happens when the stock market has had such a run of success that investors start to imagine just what kind of riches it would create if that run just kept going.

You can tell bull market fever is going around by the sheer volume of commentators offering theories on why the market is poised to go onward and upward. These are the same voices that were prevalent in the summer of 1987, then again in 1999, and again in 2007.

We all know what happens next. The expert commentators always manage to survive these setbacks — they simply shrug it off and move on to selling their next prediction. The real devastation comes to those normally cautious investors who get lured into taking more risk than they should at precisely the wrong time. Those are the people who need to avoid catching bull market fever.

Now, let’s be clear. I am not predicting the next great bear market. I’m just saying there’s starting to be an awful lot of bull in all the current bull market talk. If you don’t want to get burned, here are six things to watch out for:

1. This time, it’s different. It’s not that bull markets are created without a rationale — there is generally a convincing-sounding reason why success should not be limited by the normal boundaries this time around. This can be applied to why an individual company should be able to keep expanding beyond its normal saturation rate, or why conventional valuation parameters for the market as a whole should no longer limit the price of stocks. The truth is, it’s always different — no two bull markets play out exactly the same way. For that matter, neither do any two bear markets. Despite the differences unique to each situation, just remember that the fundamental rules of business and economics still apply.
2. Trust in momentum. One of the most striking symptoms of bull market fever is how much trust people come to place in sheer momentum. This is the believe that a stock’s earnings will grow at 20 percent this year because they grew at 20 percent last year, or that stock prices will go up by 15 percent this year because that’s what they did the year before. With stocks, it’s not the case that what goes up must always come down, but even in the best case scenarios growth rates have to level off.
3. Earnings gains through cost cutting. A recent example is HSBC bank, which has already cut $4 billion in costs and is looking to lop off another $3 billion. This has shored up earnings enough for the stock to outperform its sector over the past couple years. Sometimes cost-cutting is necessary, but only as a temporary, corrective tactic. Serial cost cutting is not a strategy for long-term growth, so if that’s the only way a company is improving its earnings, don’t bet much on its future.
4. Story stocks. These are the companies with compelling-sounding concepts behind them. Often they involve the next great franchise, or the next big thing in technology. It’s bad enough that those stories are often better than the actual product the company offers, but even when there is something real behind the story, these stocks are prone to be overpriced. Remember, you aren’t the only one who has heard the story, so keep in mind what that may have done to the stock’s price.
5. Asset bubbles. These are things investors pile into just because other investors are piling into them. Gold was one until recently, and before that, real estate. If you feel tempted to get into an investment just because that’s where it seems the crowd is going, be aware that you may be buying into a classic asset bubble.
6. The interest rate contradiction. This is a particular oddity of the current situation. The stock market has been rising lately on optimism about the economy. Beyond that, stock prices have been driven up in recent years because interest rates are extraordinarily low. The Federal Reserve has made it clear that it will back away from its low interest rate policies once the economy improves, yet the market has been a little skittish whenever there have been hints that the Fed might allow interest rates to rise. In short, the market seems to want both economic improvement and a continuation of record low interest rates, but the two are somewhat contradictory. If valuations are based on optimistic earnings projections but what are essentially pessimistic interest rate levels, one part of this calculation won’t work out.

Don’t get me wrong. I’m actually mildly optimistic about the economy itself. As for the stock market though, it seems to have over-anticipated the good news, leaving relatively little more to gain and a great deal to lose if the economy disappoints.

This article, by Ainslie Simmonds, as told to Libby Kane, comes from our partner site LearnVest.

In 2009, I was a very senior executive celebrating my fourth anniversary at a brokerage firm. 

I was working about 70 hours a week, managing 80 people and traveling to the company’s other offices (two of which were cross-country) 3-4 days a week, twice a month. Even when I wasn’t at the office or on the road, my Blackberry was constantly lighting up on nights and weekends. I would estimate I got about 400 emails a day.

But with three children under 10, I knew that years of working at a blistering pace was taking a toll on our family, and I needed to make a change. I set out to find something a little less intense and found a great consulting role in marketing and product development with a small firm.

I was excited to keep up all my professional skills (and get some new ones) at a pace I knew would bring some welcome relief to the crazy of our household. At this new job I would manage only 15 people, largely set my own schedule and truly be offline while I was at home. But to make it work, we had to make some adjustments in order to accommodate my reduced salary.

In fact, it was a big reduction: $5,000 a month, plus the substantial bonuses I would no longer receive. When I did the math, I didn’t think it was even possible to make such a massive shift in our lifestyle—but I knew I had to give it a try if I didn’t want to burn out before I turned 40.

How We Cut $5,500 a Month

My husband Mark and I live in Larchmont, N.Y., a small town about 30 minutes outside of New York City, with our three kids, plus our dog Emily, our cat Nikki and our fish Charlie. It isn’t cheap: The median household income hovers around $160,396.

Mark and I had always been good savers. I grew up in a modest home in a blue-collar town near Detroit, Michigan, but I never felt deprived. My parents taught me to never spend more than you earned—period. And I think that instinct kicked in when I took the new job. I had lived with less before and I absolutely knew I could do it again.

Salary cuts aside, I knew that no matter what, we could make things work as long as I followed my parents’ advice. I was fortunate that along with my new position, I still had the financial advantage of a 401(k) with company match for my retirement savings, and considerable savings. My kids stayed on my husband’s insurance, and I realized it was cheaper to leave them there and put myself on my new company’s plan. That just left our monthly expenses, which had ballooned as our family grew.

After a lot of conversation with my husband and a ton of research, I figured out how to make it work.

The first thing I did to scale back our spending was aggregate all of my accounts with an online tool (the LearnVest Money Center wasn’t around then!) to understand where my pay was going. Once I could see my spending in one place, I sorted my expenses from largest to smallest. I figured if I could make big cuts on the big items, I would have a fighting chance of making it work. I’ve never been an over-spender, but we had a substantial mortgage and a full-time nanny, which topped my list of expenses.

First, we put down the money we had saved from our bonuses years prior to pay down a big chunk of our mortgage so that we could refinance and move from a jumbo to a conforming loan. I’ll explain: Fannie Mae only guarantees loans that meet certain requirements, including falling under a cap that changes annually. For 2013 it’s $417,000 ($625,500 for high-cost areas like Larchmont). These are considered “conforming loans.” Because they’re guaranteed, there’s a higher demand for them, and consequently lower interest rates.

The loan we had originally was considered a jumbo loan because it didn’t meet those requirements and wasn’t guaranteed, and had a higher interest rate. Once we put our bonus money toward the loan, we were able to refinance for a conforming loan with the lower interest rates (we went from about 6.75% to about 4.125%). Plus, we achieved 20% equity in our home and were able to stop paying PMI, the insurance you pay before that marker. That made about a $1,500 difference in monthly cash flow—a huge win—after a lot of effort!

Since both Mark and I were working full time, we had employed a nanny to help out. When making cuts, I decided to switch from our nanny of eight years to au pairs, who would live with us for one year each, sacrificing some salary for room and board. I worked with a company that arranges for international students to spend time in the United States. I didn’t like the idea at all of having someone living with us, but the switch would save us another $1,500 a month. (So far, we’ve had three au pairs, and everything’s gone great.)

We also tackled some other areas, like eating out, which saved about $500 per month (we’re up to $3,500 in monthly savings, if you’re keeping track!). I know spending $500 a month on eating out sounds like a lot, but for a family of six—including the au pair—that’s only dinner out four times a month, spending about $15 per person each time.

I had more time to shop and cook because of my new hours, and I’d say it was the best thing that ever happened to our family. My kids were too young to realize that we were cutting our expenses, but I know they noticed that I was home more—and less stressed when I was.

While making all of these cuts, we also made sure to leave room for little luxuries so the transition wouldn’t be too hard. For example, we love wine, so we doubled our “bottle of wine at home” budget. Side note: There are some amazing bottles forless than $20 in any local wine store!

That’s not to say that everything went perfectly all the time. Mark, who works in clean energy, was incredibly supportive—but we did have a “flare up” when I tried to  swap his precious parmesan cheese block for a less expensive kind. There was a near revolt from my foodie husband, and I learned that some cutbacks are just not worth the fight.

Between these changes and a few more everyday tweaks, we managed to reduce our monthly spending by about $5,500 in the end.

Where We Are Now

The hardest part of the entire process wasn’t the actual spending less. It was the legwork of researching and finding the best lower-cost options, just when I was starting a new job. Refinancing a mortgage takes time, focus and paperwork. So does finding a great au pair service, writing the application and interviewing candidates. Plus, I had to get used to someone else living in my house … which actually turned out to be much easier than I thought. The au pairs tend to be really independent, and when they’re off duty, they usually aren’t around. I was worried about the transition, but my kids like having a fresh approach every year.

It took me two and a half years to get myself into a role at the consulting firm where I could earn a good deal of sales commission, and we kept up our new spending habits throughout that time. In fact, I eventually ended up earning even more than I had at my old job when all my sales commissions were factored in, but at that point, we had already made structural changes in the big things and were able to save more than we ever had.

I’m no longer at my consulting job—I found my next position through a project for a company I ultimately decided I really wanted to join.

When I read all of the research about the relationship between money and happiness, I can’t help but think that they’re completely different metrics. I was certainly very happy when I shared a basement apartment when I was just starting out, and no matter where life takes me, I know that I could be equally happy with far less than I have now.

This post is from staff writer Jeffrey Steele.

The following has occurred to me countless times; maybe it has you as well. Perhaps you’ve even been the one to utter those oft-repeated words.

Two or more people are talking about how far behind they are in saving for retirement. They’ve saved so little, in fact, that the idea of raking together a half million dollars or so in savings by age 65 seems an impossible dream. There’s the pause, and then one of the conversationalists mouths the punchline.

“My retirement plan,” he or she says, “Is to work until I drop dead.”

Not exactly “A” material as comedy goes, but it often draws a nervous titter. And I think that’s one of the twin objectives of the person speaking the line.

The comment is meant first to get a chuckle and a commiserating nod from one’s partner in patter, making the speaker feel not so alone. Second, it’s intended to offer added reassurance to the quipster. “Okay, maybe I didn’t do that great a job saving for retirement,” he or she thinks. “But it’s not like I’ll be dumpster diving. I can always just go on collecting a paycheck after 65.”

Maybe that’s true. But if a recent study is any indication, it’s more likely false. And that realization should give anyone complacently planning on continuing to draw pay post-65 new urgency to come up with a real retirement plan, one taking into account the notion that health issues, ageism, the need to care for an ill spouse, disability or many other factors might make it impossible to go on working.

A big disconnect

The Employee Benefit Research Institute (EBRI) has conducted its annual Retirement Confidence Survey for the past 23 years. One question asked of current workers is whether they intend to work for pay after traditional retirement age. The survey also asks retirees if they are currently working for pay.

Since 1998, the percentage of workers saying they intended to work longer has ranged from 56 to 74 percent, with the current figure being 69 percent.

“Meanwhile, we asked retirees whether they were working for pay, and that has crept along in the 20s for most of the time we’ve done the survey,” Nevin Adams, director of education and external relations and co-director of the EBRI Center for Research and Retirement Income, told me recently.

This year, one quarter of retiree respondents were working for pay, a decline from 37 percent in 2007, and 34 percent in 2009, Adams said.

That means the percentage of post-65ers who actually are working is just more than one third the percentage of workers who say they want to go on working. Is it too much a stretch to say if you plan on continuing to be paid for working after age 65, your chances of doing so might be approximately one in three?

That’s scary or should be for those hanging retirement hopes on the ephemeral notion they’ll be in demand by employers through most of their Golden Years.

Retirement factors

Interestingly, the idea of walking away from one’s working days because of sufficient retirement cash was just one of the reasons retirees said they quit before they intended to, Adams said. The most common reason, offered by 55 percent of respondents, was that they had a physical health problem or disability.

After the second most common reason — that the respondent could afford to retire — other frequent reasons for quitting included leaving the workforce to care for a spouse or family member (23 percent), because of changes with the employer (20 percent), another work-related issue (20 percent) and a desire to do something else (19 percent). Clearly, some respondents offered more than one reason for leaving the workforce before they had planned to.

Sometimes, it’s good to get a slap in the face, a bucket of ice water over one’s head, or some other painful wake-up call. This is one such time, Adams says. “It’s not always within your control at what point you retire,” he cautions. “Realize it might happen sooner than you want, and make preparations.”

Planning ahead

You can take Adams’ urging one of two ways. First, the preparations you ought to be making are the same ones we’ve always been advised to make. Save, save and save some more, so you’ll have options retirement savings provide.

But a second approach to his admonition might be to stop joking and get serious about working longer. That way, you may be able to develop or acquire the qualities that will make it hard for you to be retired against your wishes.

That could mean studying the occupations forecasters predict will be in demand for the next decade, and getting trained for one of those.

It could mean researching the professions and the employers most friendly to older workers, and begin mining these opportunities long before age 65. It could mean taking your current skills and building a consultancy around them. Or it might mean starting a business in a field unrelated to the one you’ve held.

Of course, we can always hope that by the time we workers retire, it will be a lot easier to continue working than it is today. But why risk it? Respond to that wake-up call, and do it before your fallback gets whacked.

Money and its effect on happiness is one of those topics that has been discussed over and over again. Yet, the topic fascinates the academic community and the research continues — with contradicting results every few months. The latest finding in this genre of research comes from two economists at the University of Michigan, Betsey Stevenson and Justin Wolfers. Their new study, published in the May edition of American Economic Review, argues that more money does buy more happiness.

The study looked at “satiation” with respect to income. In other words, they questioned whether there is a saturation point, where you earned “enough” to be happy, beyond which you are not happier with the increased income. In previous studies, this saturation point has been anywhere from $50,000 to $75,000. This study argues that there is no such point where happiness starts to slope down while income increases.

(click to view larger image) Image source: The Economist

I am not entirely convinced by these studies. I feel any hypothesis can be proved right with the relevant subset of data. And it is almost impossible to account for every single variable like gender, age, cost of living, race, education level, location, confidence level, expenses and personal savings rate. Despite these weaknesses as a pure scientific experiment, these types of studies always make me stop and think about how I perceive money affecting happiness.

In my opinion, money does buy happiness. I honestly cannot see why it wouldn’t. Yes, that is a bold statement but I stand by it.

Money does buy happiness

Money cultivates goodness: If you have more money than you need, you can give it away and make someone else’s day. There are too many people in this world that can use the help. Feed a starving child and the content smile on its face will fill you with happiness. What stops anyone from donating their excess to a cause they relate to? Use the money to make the world a better place. Compassion makes humans happy and that is experimentally proven.

Money buys security: With money to take care of your survival, you can think about other things, things that you really want to do with your life. You do not have to worry about whether you will ever be able to retire. You do not have to lose sleep worrying about how you are going to pay for your food and shelter tomorrow.

Money buys freedom: Money buys choices. People with money do have more choices than without. Many dream about early retirement. Most people who think about early retirement don’t really mean they want to quit doing everything and spend their entire day either in front of a TV or on a beach sipping margaritas. What they are really after is financial independence — the freedom to not depend on a paycheck, the freedom to not let anyone dictate what you can do with your day. Money buys this freedom.

Money buys time: How many of us want to spend more time with our spouse/parents/friends/kids but have to go to work to make ends meet? Don’t we wish we had more time to do everything we want to do? Take more vacations, go to the museum in the middle of the weekday with your kid or simply relax and read a book. When we have a job, we pay for money with our time. Why not use the money to buy us time to use it as we see fit?

Money buys experiences: There is a multitude of research that says people value experiences over stuff. Most of us remember a great vacation much more than an expensive toy. Why not use the money to travel the world, taste different cuisines, learn new languages, get immersed in different culture and learn new things every day? Do whatever makes you happy.

Money is a tool. As with any tool, it can only be as useful as we make it out to be. If we are spending it wrong, get obsessed about the tool itself instead of using the tool, compare our material possessions with others and get stuck in the over consumption cycle, yes, I can see money making people miserable. If you always judge someone based on how much money they make instead of what good they are doing with their lives, yes, money absolutely doesn’t bring happiness. If the only aim in life is to hoard money instead of doing good with it, yes, money starts to take control of your life. If money is spent in right ways, I do not see how it cannot increase happiness. The richer I get, the happier I am about it.

Do you disagree? How does money affect your happiness? If you feel money doesn’t buy happiness, why? What’s your take?

This post, written by Anthony Fontana, is from out partner site QuickenLoans.com.

Nobody likes wasting money, do they? Actually, according to a news report from Moebs Services, banks, credit unions and thrift institutions made $32 billion on overdraft fees in 2012. That’s right, $32,000,000,000! That’s a lot of zeros.

The 2012 numbers represent an increase of $400 million, or 1.3 percent from 2011. If you think last year’s number is staggering, it still falls short of the record $37 billion in fees set in 2009. However, at its current rate, Moebs predicts a new record-high will be set at the end of 2016.

So, if you break down the population, how much did the average American pay? Well, considering there are approximately 330 million Americans, the average American paid about $100 in overdraft fees in 2012. If you break down the population by age, keep in mind that roughly 100 million Americans are outside the legal working age and are unlikely to contribute to the statistic. This means that the average working-age population paid close to $400 a year in overdraft fees.

Perhaps what’s even more unsettling is the rise in overdraft spending isn’t due to an increase in the price of the fee. Instead, it’s resulted from a greater number of overdrafts. Of the approximately 38 million people who have a consumer checking account, the Moebs study found that the median overdraft is about $40.

Apparently people really do like wasting money. If you fall into the category of someone who has been charged an overdraft fee, there are ways to ensure it doesn’t happen again. You can start by checking your account statement on a regular basis. In today’s world of smartphones, this task can be done in a matter of seconds without a trip to the bank or an ATM.

There are many ways to overdraft your account. The most common way is to withdraw more money from your account than you have. You can opt in for overdraft protection, which will allow you to withdraw the money and then pay a fee later on. If you decide against opting in for overdraft protection, your transaction will be denied.

While overdraft protection can be useful in some cases, a recent study by the Pew Charitable Trusts found that 54 percent of the customers who had overdrawn their accounts did not realize they had signed up for a service that cost money. Do you fall into this category?

Be sure to check with your bank about overdraft penalties and if you are signed up for overdraft protection. Do you think overdraft protection is worth paying the hefty fee? Let us know in the comments below!

Additional stories from QuickenLoans.com

Mortgage Missteps: Not Checking Your Credit

Mortgage Missteps: Opening (or Closing) a Line of Credit

Summer Jobs for College Students

Prom inflation? There’s such a thing now? Seriously? Yep.

Visa evidently thinks prom spending is significant enough that they’re spending money doing an annual survey about how much people are going to spend on proms.

The 2013 report just came out a few weeks ago. What did it say?

New records

Recession, schmecession, prom spending is expected to set new records this year. Check out the chart below:

If 40 percent over two years is not inflation, what is?

The prudent ones among us, who routinely budget for planned expenses, would have had to put away close to $100 per month for the past year to pay for this year’s shindig. How much will it be next year?

Prom debt

However, something tells me that saving ahead of time is probably not happening all that much. What gives me that idea?

Clue #1: Credit card company survey sponsor. Do you think Visa would spend good money reporting on something people bought for cash? Out of interest I Googled “Visa survey on grocery spending” and came up empty. Think about it: if you made your money from people incurring debt, would you be interested in a class of spending that in most cases does not involve debt? Me neither.

Clue #2: Those with an annual income of less than $50,000 plan to outspend those earning over $50,000. Does it make you shake your furrowed-brow head, too?

Clue #3: Single parents plan to spend almost double what married parents spend. $1,563 to $770. Slow down and let that sink in: single parents usually make less than a married household, and spend almost double on prom night.

So, what are the chances that the higher spending by lower income earners is funded with credit card debt? Pretty high, I suspect. (Visa didn’t disclose that percentage, but in the past month they launched a new smart phone app, Plan’it Prom, to, well, you guessed it, plan out the prom, 21st century style.)

So, not only is the spending on prom nights rising to record levels, but it probably is funded by a disproportionate amount of debt.

What?

According to Kit Yarrow, a consumer research psychologist, ”prom is the new wedding.” When you look at where the money is going, it’s easy to see her point.

The big-ticket item is the dress or the tux. Some will spend upward of $300 on a dress, worn one night, although that probably wouldn’t be the average.

Then there’s the venue. The school hall doesn’t cut it any more. (Wait, you mean there are actually people who once had their prom in a school hall?)

Well, how are you going to get your fancy bottom to said fancy venue? In a fancy limo, of course. Maybe a party bus? Borrowing Dad’s car to take your date to the prom and having her back in her parents’ home by 11pm is so… hey, did they even have a century when people did that?

So, once the well-dressed young adult has arrived in stylish wheels to the fancy venue, how can you just end right there? And so the after-party was born.

I didn’t mention the pre-prom tan, because I just couldn’t bring myself to do that. The prommers apparently do it, though. Add it to the tab, Dad.

Why?

Those among us who are older are no doubt aware that prom night has always been an important event. But important didn’t always equate to spending at this debt-inducing level. Why, then, has prom spending skyrocketed?

Perhaps a form of peer pressure (“C’mon, Mom, I don’t want to be the one left behind!”) is partly responsible for ballooning prom budgets?

However, the stat mentioned above which shows single parents outspending married parents two to one makes one wonder if prom night isn’t some attempt, conscious or unconscious, by a parent to have a “do-over” to recapture the romance of a time with no responsibility beyond being home at a certain time.

Or could it be that the recession is over and any occasion to step out and celebrate is a welcome distraction from the hard times we all went through?

By far the most troubling thought to me is that this one night will be the highlight of a young adult’s life. Can that be? Is there nothing better in someone’s future than prom night? Isn’t that just the most depressing thing you heard all year?

Why do you think prom spending is rising so quickly? Especially among those who seemingly can least afford it?

Advice

How do you feel about the level of prom spending? Do you feel it’s getting out of hand, or is this just part of the new normal? What do you feel is a reasonable budget? How much of that budget should the parents pay for?

More importantly, what advice would you give to parents with teens getting ready for prom night?

This post is from staff writer Richard Barrington.

I was recently interviewed on the subject of online banking, and the reporter asked a very direct question: is online banking better than traditional branch-based banking?

It’s a fair question given the information we were discussing. This included surveys from MoneyRates.com that show online banks consistently having higher money market and savings account rates than traditional banks, as well as lower checking account fees. There was also a recent MoneyRates poll that found bank customers who use online services were a little more satisfied with their banks’ customer service than those who don’t.

So again, it was a fair question, but even though online banks might seem to have a lot of evidence on their side, the answer doesn’t come down to the banks. It comes down to the customer. In order to decide which bank is right for you, you need to look in the mirror and decide what kind of bank customer you are. That will help you sort out not only the issue of online vs. traditional banks, but also questions of size and other bank characteristics.

The following are some questions about what type of bank customer you are, along with a discussion of how each relates to your choice of bank:

1. Are you a saver? If you plan to keep a large amount of money on deposit, then your bank search should focus on where you can find the best savings account, money market account, or CD rates. If, on the other hand, your need is primarily for a checking account, look for a bank which offers free checking — these are a minority among traditional banks, but most online checking accounts are still free of monthly maintenance fees.
2. Are you a student? Students often have trouble qualifying for free checking accounts because they tend to have low account balances and don’t have paychecks throughout the full year to meet direct deposit requirements. However, some banks have special accounts which offer free checking to students on easy-to-meet terms. Local and regional banks seem to offer these accounts more often, but some larger banks have them as well.
3. Are you over 50 years old? Just as some banks offer free checking to students, the same type of banks often have programs providing free checking to older customers — and the qualifying age is often as young as 50 years old.
4. Are you wealthy? Wealthy customers need to be careful about exceeding the $250,000 FDIC insurance limit; remember, this limit combines the total of all your accounts at any one institution. Wealthy customers may want to spread their accounts among multiple institutions to qualify for more insurance, and choose each of those institutions according to the type of account being opened.
5. Do you have a very small checking account balance? At the opposite end of the spectrum from wealthy customers are those who live paycheck to paycheck, and maintain a minimal checking account balance. Banks often have minimum balance requirements to keep an account open, or to qualify for free checking. You’ll find these balance requirements tend to be lower at smaller banks than at larger banks, and they are especially low at online banks. So, if your checking account is small, focus your search on smaller banks or online banks.
6. Are you a traveler? If you travel frequently, you will want to look for a bank whose ATM network is spread out across the areas you tend to visit, so you can avoid out-of-network ATM fees. These need not be the bank’s own machines; some banks belong to broader networks or have arrangements for reimbursing ATM fees in areas where they do not have machines. If you travel internationally, you may want to consider a bank which has currency exchange services or even foreign branches.
7. Do you like to do business online? As mentioned previously, online banks have certain interest rate and fee advantages over traditional banks. If you increasingly manage your personal business online anyway, then you are a very good candidate for this kind of bank.
8. How much do you value personal interactions at the bank? Ask yourself this: when was the last time you walked into a bank branch? If you realize that you do almost all your banking via telephone, mail, and ATMs, then it is worth considering whether you too might be a good candidate for online banking.

By the way, the question of online vs. traditional banking isn’t always an either/or decision. Many banks today have a mix of both types of accounts, and customers can choose which services they want to access online.

One thing that banking customers have in their favor is choice: there are about 7,000 FDIC-insured institutions in the United States, and they come in all sizes and types. Thinking about what you want from a bank will help you narrow down the selection of which bank is right for you.

This post, written by Aaron Brandt, comes to us from our partner site QuickenLoans.com.

In order to survive, we need water. However, the water we drink could actually harm us. According to the Center for Disease Control and Prevention, tap water can contain contamination from natural chemicals and minerals, viruses, bacteria, parasites, pesticides and even sewage overflow. That sure doesn’t sound like something you’d want to pour into a tall glass to quench your thirst.

The popular alternative to tap water is bottled water, but this might not be the best option. According to the Natural Resources Defense Council, there are actually fewer regulations on bottled water than tap water. And in many cases, bottling companies are just filling their containers with tap water anyway. Those non-biodegradable bottles are also very harmful to the environment as well as expensive. If a person drinks an average of three bottles a day, this can run you anywhere from $3 to $10, depending on the brand. That’s $1095 to $3650 per year on water alone. So maybe tap water is worth a second glance.

While tap water may contain some harmful contaminants, it still can be very useful and cost effective if paired with a filtration system. According to the Environmental Protection Agency, the national average cost of tap water is just $2 per 1,000 gallons. That’s $.002 cents per gallon! In order to take advantage of this tremendously cheap resource, there are several tools at your disposal.

• Faucet-mounted filters: These filters attach directly to your faucet. The replaceable filter captures all of the contaminants. The filter will slow down the flow of water from your faucet. The assembly costs around $30, and replacement filters (which usually last about a month) cost around $20.
• Carafe filters: These are basically pitchers of water with a filter mounted in the lid. Every time you pour water in through the top, it gets filtered. It can take some time to fill the container, and might not be enough to satisfy your water needs if you drink lots of water. They typically cost from $20 to $40, and replacement filters can cost from $15 to $30.
• Countertop filters: These filters run from your faucet, through a standalone filter and out a separate faucet head. They also will not impede the flow of water from your regular faucet, if you don’t want the water to be filtered. These can be costly, running from $50 on the low end, all the way to $200. Replacement filters can run from $50 to $150.
• Undersink filters: These filters are installed out of sight, and let you get filtered water right out of your faucet. Depending on your sink’s plumbing set up, the filter may require additional pluming work, such as connecting to the water line or drilling a hole in your counter top. The filters can cost from $100 to $300, with replacement cartridges costing from $10 to $80.
• Whole-house filters: These filters help remove dirt and rust, but won’t filter out much else. They are best paired with another filter, to remove the remaining contaminants. They are placed on the main water line going into your house. These can cost from $40 to $300.

No matter what you choose, do some research to learn about each filter’s effectiveness, lifespan and maintenance requirements. Spending a little money on a system up front can save you big bucks in the long run and protect from harmful contaminants. If you already have a filter, let us know which works the best for you in the comments section below!

Additional stories from QuickenLoans.com

Walkable Neighborhoods Offer Great Benefits and High Home Values

Water Efficient Landscaping: 5 Small Changes for Big Savings

Summer Jobs for College Students

This post is from staff writer Jeffrey Steele.

A few weeks back, by sheer coincidence, I happened to meet a young woman currently enrolled in the same journalism school master’s degree program from which I graduated more than a third of a century ago.

We got to talking about all the opportunities she and her classmates enjoyed. From studying at a Chicago news bureau to working in Washington, D.C. while still a master’s candidate, these were openings not offered me or my fellow members of the Class of 1979. Noting my astonishment, she said her parents were just as dumbfounded by the opportunities awaiting today’s collegians.

“My parents say that if they’re ever reincarnated, they want to come back as their own kids,” she added with a smile.

More opportunities — and debt

I can understand that sentiment, but I bet student debt is not one of the areas that leaves parents envying their college-age offspring. The severity of the college debt crisis continues to mount, as discussed in a recent report by the Squared Away blog from the Center for Retirement Research at Boston College.

Here are a few factoids from that blog. The nation’s student debt burden has reached $1 trillion and continues to rise. Eighty percent of bankruptcy attorneys report student loans are driving more clients through their doors. Payments on half of all student loans are being deferred, an indication those with large loan balances are facing perilous financial circumstances. Student debt is held by 44 percent of American households headed by people under age 35, and it’s concentrated in poorer households, according to the Pew Research center.

Yes, it is true college degrees add an average of $1 million in lifetime earnings for every man and woman holding the sheepskin, the reports says. But that notwithstanding, what’s the societal fallout when students emerge from college with $50,000, $100,000 or even more in debt hanging over their heads?

The issues resulting from the punishing college debt include some surprising emotional landmines, as well as a few crucial lessons today’s high schoolers and their parents can learn from the debt-burdened students who went before. Let’s look at the lifestyle and psychological fallout, then turn to a few critical lessons.

Wedding bell blues. Women with no debt are more likely to marry than those who come out of college with large student debt loads. Fenaba Addo, a post-doctoral fellow at the University of Wisconsin’s Department of Population Health Sciences, studied the effect of student debt on single women in their 20s. The probability of marrying declined steadily with amount of student loan and credit card debt. Interestingly, there was no similar impact on a man’s ability to marry.

Stressed, depressed, but not repressed. Studies have found that people with extensive student debt are more likely to feel stressed out and depressed. But they’re not repressed. The rates of cohabitation with their significant others are higher for both men and women carrying substantial debt, Addo found.

Perplexing self-esteem issues. Among the most intriguing findings related to student debt is that it is linked with higher, not lower, levels of self-esteem among the debt burdened, at least initially. Part of the reason may be that college has become so difficult to afford that taking on mountains of debt is almost seen as evidence one has gone far in his or her college career. However, one study found the effect evaporated when reality set in a few years out of college.

Lessons learned

Many families won’t be able to eliminate the reality of college debt. But they can minimize its damage now and down the line. Here are some strategies:

* Rethink the conventional wisdom. Many believe state institutions are going to be the cost-effective option. Not necessarily. Many smart, middle-class high school students may be better off applying to private colleges, where competition for merit aid is not as stiff as at huge public universities, Squared Away reported.

* End of the romance. A lot of parents feel they must surrender to their sons’ and daughters’ idealistic feelings about the college that “feels right” for them. Phooey, say experts. With college degrees commonplace today, says one, “You have to consider very, very carefully how much of your life and how much of your money you’re going to invest in that educational experience.”

* Debt reducers. Consider strategies like summer work, work-study programs during the school year and even living at home as ways to trim costs.

* Be practical. Majoring in literature, history or philosophy was not unusual for yesteryear’s collegians. Today, that’s impractical. Students need to link their passions to disciplines associated with good-paying jobs, Squared Away says.

* Plan B: Community colleges and vocational schools. A four-year college degree isn’t right for every student. Some would be better off logging the first two years at a community college, or forsaking college altogether for the hard-edged, very practical training afforded by vocational programs.

* Have the conversation. Parents must have serious discussions about what higher education costs will do to family finances. It’s a way to counter what in many families are unrealistic expectations on the part of college-bound young people.

If you’ve gotten this far and are coming away from this blog with the notion that economizing on college costs ought to be as big a priority as grubbing for grades at midterms and finals, go to the head of the class.

This post is from staff writer Suba Iyer.

“Modern man drives a mortgaged car over a bond-financed highway on credit-card gas.” ~Earl Wilson

So far, we have lived debt free. We used to live paycheck to paycheck because our spending was out of control, but luckily we never got into debt. Once we got our act together, not having any debt was tremendously helpful in quickly building our net worth up.

A couple of weeks ago, a conversation with a fellow blogger sparked an interesting topic. In his opinion, it is impossible to live debt free before anyone turns 50. He added that, our society is credit based, and thus it is simply not possible for normal people. Some people do it, but they either have to be extreme frugalists who live like hermits or trust fund babies who had everything given to them.

I am not so sure. Is it really impossible for people who make an average living to live without any debt?

Cultivating a debt free mind set

Everywhere we turn, be it the news, the radio, the internet or friends and acquaintances, everyone will emphasize the fact that our nation has embraced debt. We are comfortable carrying debt as long as we are making payments. It is difficult to break out of that mind set and choose to be debt free. We have to break free of the ingrained tendency to think that debt will fix all problems. There was a time in America when everyone got by with what they made and lived debt free.

Credit cards, layaway programs and easy access to credit have all made it extremely easy to get into debt. We have to think long term and decide that enough is enough. Debt is not a solution; it is a hurdle to freedom. The only thing that saved us from going into debt even when we were living from paycheck to paycheck is our hatred of debt. So having that mind set itself is winning half the battle.

It is possible to live debt free. But we have to choose to do so.

Developing a debt-free strategy

Once the main obstacle of cultivating the debt-free mind set is crossed, the implementation is comparatively easier.

• Setting priorities: The main priority in this case is to be debt free without living like a pauper. To achieve this, we have to prioritize our spending. What is more important to you? A flat screen TV now or a mortgage free house later? A fancy dinner out every day or a great memorable vacation later?
• Breaking bad financial habits: Habits define us. We do a lot of things out of habit instead of making a conscious decision to do so. We might not even realize that we are burning money on something we don’t enjoy because we do it over and over again. Analyze your spending habits and see if they align with your priorities. If not, it’s time to break bad financial habits and introduce some good ones.
• Understanding financial weakness: All of us have our weaknesses. Ours is eating out. We are currently going cash only for just our food expenses, because we found that even though we are disciplined in other areas of credit card use, we tend to spend 25-40 percent more on food when we use credit cards versus cash. Cash makes us think twice about eating out or buying more than we need.

Understanding the challenges and rewards

It takes a lot of courage to be debt free because it is a lonely place. People will question your every decision; they will criticize your way of living and dismiss it as foolishness or assume you are swimming in money. Choosing to live debt free means you will have to think long term and master delayed gratification. It takes a strong resolution to ignore all the negative influences and keep plowing ahead with the reward in mind: freedom.

Is it possible to live debt free in America? Absolutely!

Will we stay debt free? Refining the relationship with debt

As I mentioned above, we are currently debt free. Will we remain debt free forever? I cannot say for sure. We are planning to take a mortgage sometime in the future. What changed? We no longer hate debt. I don’t believe there is good debt and bad debt, but I believe in my math. Even though we have close to enough to buy a house outright, it make more sense for us to keep that money in investments as the mortgage rate is a lot lower than what that money is currently making.

Now I understand some people prefer to be debt free, period. It gives tremendous peace of mind. We choose to arrange our money by making it work for us with the maximum potential. That will be our first step in debt, if we feel uncomfortable; we could always pay it off. We feel this is the best path to build our wealth. Other than the mortgage we plan to always remain debt free.

This post is written by John Allasio and comes to us from our partner site QuickenLoans.com.

Right now is the most popular time for people to buy a home, and if you’re looking to sell or refinance your home, one of the things you’ll have to deal with is the appraisal. If your appraisal doesn’t go well, it’ll considerably drop the perceived (because perception is reality) value of your home. So, it’s really important to do some research and know what to prepare for when you’re getting an appraisal.

The basic thing to keep in mind, an MSN.com article explains, is that “Some of the advice [for appraisals] — like home valuations themselves these days — might seem contradictory. But what all the appraisers agree on is the importance of keeping the look, feel and condition of the property as updated and cared-for as possible.”

To best prep for your appraisal, you should become familiar with the appraisal process so you know what to expect so you can prepare your home accordingly.

The appraisal

While your mortgage lender can’t conduct the appraisal, they’re the one to order it through an appraisal management company, which will then select the individual appraiser to visit your home. The appraisal will last approximately 20-45 minutes as the appraiser examines the quality, condition, size, etc., of your home.

The three parts of the appraisal

With every appraisal, you have the inspection, the comparables and the final appraisal report. The inspection is the part where the appraiser visits your home. The comparables (comps) are similar homes in your area that have recently been sold. The appraiser researches comparable homes to help figure out the market value of your home.

And, you guessed it, the final appraisal report is what the appraiser issues after he/she has inspected your home and researched the comps.

Your home

The general appearance of your home will affect the appraiser’s evaluation of your home. Before an appraisal, spruce up your home, inside and out, so your house looks clean, neat, well-kept and appealing to others.

Start with the outside

Mow and trim the lawn, put away or organize any tools/gardening equipment and clear away any debris like leaves or sticks. Get rid of any noticeable weeds or dead plants, too. Also look at the condition of the house itself. Do you have peeling paint, cracked/missing bricks or mortar, damaged gutters or siding? Peeling paint is one of the big things appraisers look at, and some types of mortgages appraisals – like FHA – have very specific requirements about paint condition. It’s absolutely worth your time and money to repaint any worn or damaged areas inside or outside your home before an appraisal.

Now tackle the inside of your home

After you’ve got everything shipshape outside, walk through your front door and try to look at everything through the eyes of a critical stranger. Mess and clutter will project a negative image of your home and can decrease its appraised value.

Some experts say just an old TV can make an entire room look outdated. This isn’t a necessary change, but if you were thinking about upgrading your TV soon anyway, think about doing it before your appraisal to spruce up your home’s appeal.

Keep your appraiser’s comfort in mind

You don’t want to patronize your appraiser, but think about little things you can do to make the visit a pleasant one. For example, lock up your dog if you have one. The appraiser doesn’t want an excited, or angered, pet jumping up on him/her while working. If it’s cold outside, make sure you have your house set at a comfortably-warm temperature and vice versa if it’s hot outside. You want the appraiser’s visit to be as pleasant as possible.

Also keep in mind the $500 rule

Appraisers often measure home value in $500 increments. If your home needs some relativity-minor repairs, they’ll hurt your appraisal. Absolutely fix or replace all non-functioning door latches/handles, torn screens, worn out carpet and basic plumbing and light fixtures.

Effective age

Having lights, doors or windows that don’t work can affect your home’s effective age. If elements of your home are worn or in disrepair, its effective age will be higher so it will be compared to homes that are older than it actually is.

Keep track of all repairs or updates to your home

This is something you should do whether you’re thinking about appraisals or not – so that you can point them out, along with any other special features of your home, to the appraiser.

Sell the neighborhood

You’ll also want to keep track of and show the appraiser any changes or amenities in your neighborhood. If there are any parks, playgrounds, historic landmarks, unique shops, restaurants or anything else that makes your area stand out as a great place to live.

The bottom line for home appraisals is to make your house as appealing as possible but don’t stress about it too much. Appraisers are trained to be careful and fair in their inspections.

Additional stories from QuickenLoans.com:

13 reasons to buy a home in 2013

For sale by owner: The pros and cons for the seller

For sale by owner: The pros and cons for the buyer

This guest post is from William Cowie, who has contributed to Get Rich Slowly and other personal finance blogs. He also blogs about investing and offers a free Investing Basics course on Bite the Bullet Investing.

Everywhere you look, the story’s the same: the value of your house is going up. The National Association of Realtors reports that home prices for March were up about 12 percent from a year ago, a trend that’s been holding for more than a year now.

How does that make you feel?

Does it make you feel nice and rich? Or simply relieved that the end is in sight: your underwater home loan might soon break the surface and see sunlight for the first time in years? Or, if you don’t have a home and you want one, are you feeling a sense of panic, that your dream of owning your own place is slipping through your fingers?

If you answered yes to any of those questions, you’re probably tempted to do something, because you might not have the chance again soon.

Slow down, take a deep breath and fetch your trusty calculator.

The big picture

Home prices go up, and they go down. Many of us realize this in one part of our brain, just not always the part that makes home buying decisions. (Everyone who bought between 2005 and 2008 probably can relate to that.)

This chart clearly shows the swing in home prices (click image to enlarge):

U.S. home prices for the past 10 years: up and down

Home price movement is not random; it’s part of the overall economy, which moves in cycles which lasted roughly 7 to 10 years each since World War II. (Here’s a good chart showing that.)

What do you do?

The chart above shows that home prices bottomed out sometime in 2011 and have begun their cyclical upswing. Will prices ever hit the peak of 2006-07? If so, when? It could take two years, it could take 20. The economy moves slowly, as do home prices, even though at times it feels like lightning.

Regardless, I think it’s safe at this point to expect home prices to continue rising for the next year or two at least.

So, how do you play the cycle for your benefit? You have four choices:

1. Trade up
2. Trade down
3. Trade sideways
4. Do nothing

As my neighbor Jim pointed out, moving is very expensive, and is guaranteed to set your net worth back by at least $30,000 after you factor in things like new drapes, furniture, appliances and even garden tools. From a purely financial standpoint, then, the last option is the only smart one. There are, of course, other life reasons which might compel a move, it’s just important to remember that it’s very expensive.

But, let’s say you’re interested in capitalizing on your newfound wealth by selling your current home and buying something nicer. Ever notice how, when you’re buying something more expensive, you don’t call it more expensive, but rather “something nicer”? But when you’re buying something cheaper, you never say “something less nice”? This isn’t a trivial observation; this is the part of the brain that overlooks hard financial data when we’re about to make a bad financial decision. We always tell ourselves the nice version of what we’re about to do. It’s called rationalizing.

Rationalizing or not, you decided you want to get a nicer house, and you want to take advantage of the growing equity in the home you currently own. So, is it a good idea to wait till you get more equity in your own home before you trade up?

In order to make the best decision, consider the following:

1. You’re chasing a moving target

If the price of your home is going up, so is the price of the place you have your eye on. That might seem like a pretty obvious observation, but you’d be surprised at how many people assume theirs is the only home price rising.

2. Homes are priced in dollars, not percentages

As a general rule, the higher up you go in the housing food chain, the bigger the price swings measured in dollars: 10 percent of $900,000 is $90,000 and 10 percent of $200,000 is only $20,000. Both are 10 percent (as in “home prices are up 10 percent”) but the dollars are very different.

3. Your key number is the price difference.

This means if you’re trading up, the key number for you is the price difference… in dollars. Sound obvious? Keep reading.

The math

For the sake of round numbers, let’s say your current house is worth $200,000 and the nicer house is $250,000. (The actual amounts don’t matter, they scale to whatever you’re looking at.)

Your key number is the difference in those home values: $50,000… today.

In the recession, your house was probably worth, let’s say, 20 percent less than today, $160,000. The house you’re eyeing (let’s call it your dream house) also went for less in the recession. If your home was down 20 percent, that one would also have been down 20 percent.

So, four years ago your dream house went for about $200,000.

At that time, then, the difference between your current house and your dream house was $40,000, compared with $50,000 today. Same two houses.

Now, let’s say the economy starts going gangbusters and your current house appreciates even further. Your dream home will, too.

Let’s say you decide to wait till you have more equity before trading up to your dream house, and let’s say at that point the prices are $300,000 and $375,000 for your current and dream houses, respectively.

You can see math clearly: the difference to trade up would have gone up to $75,000, from $50,000 today and $40,000 in the recession.

For the same trade.

Conclusion

A dollar is a dollar, and you have to repay it, with interest. You pay the fewest dollars for a trade up when you feel at your poorest, i.e., in the recession. And when you feel the richest is when you pay the most for the exact same trade.

So, waiting till you have more equity with which to trade up is an illusion. It never gets better, only worse.

The best time to trade up is as close to the bottom of the recession as you can. The longer you wait, the more you pay.

Conversely, if you’re considering a trade down (empty nesters, for example) the best time for that is when home prices are at their highest. Of course, we never know exactly when “the highest” is, but you get the math.

You might feel rich hearing the value of your house is going up. However, until you stop living in your current home, its price is really irrelevant, good for after-dinner conversation (in good times and bad) and not much else.

The only number that matters is the price difference if you’re trading up or down.

Finally, if you’re thinking you’ll never have the opportunity to buy your first home, be patient. I succumbed to that thought and stretched too hard to get a house, thinking that was my last chance. Huge mistake. Prices will come back down. They always do. Keep saving and wait.

I almost sprained my neck last week from shaking my head while reading stories about wild fluctuations in the value of the Bitcoin, an electronic currency.

Bitcoins began 2013 with an exchange value of less than $20. Their value started to climb, and that climb accelerated until they reached a peak of $266 on April 10. Then the bottom fell out, and within two days the Bitcoin exchange rate was down to $61.11. I’ve seen my fair share of crazy investor behavior over the past 30 years, but this was really one for the record books.

Of course, plenty of investments have gone through boom-and-bust cycles in recent years, so what was it about this story that particularly drew my curmudgeonly ire? Let’s examine a few details of the story:

• One analyst explained that the Bitcoin might yet rally in the future because “(e)ven assets that have no underlying value have people willing to trade in it.” Too true, but hardly reassuring.
• An exchange which handles Bitcoin trading attributed the precipitous decline in price to a rush of new customers trying to buy into the currency. If that’s true, it’s got to be the first time in financial history that surging demand has caused prices to plummet.
• Bitcoin was developed by an anonymous hacker. Is that really good enough to earn people’s trust? A person who participates in illegal computer activities and won’t be identified wants your money. Any takers? Well, apparently yes.

The Bitcoin has an appeal to both liberals and conservatives who don’t like Big Brother monitoring their money, or using their currency (via monetary policy) for political purposes. On a more sinister level, this online exchange system also appeals to people pursuing illegal objectives such as tax evasion or money laundering.

Bitcoins strive to be free from monetary policy manipulations by limiting the amount of the currency in existence. Unfortunately, any number of decisions about managing distribution of the Bitcoin constitute a de facto monetary policy, including the decision to let new participants buy into the currency, how many are allowed to buy in, and on what terms the currency can be exchanged for other currencies. Even the decision to limit the supply of Bitcoins is a form of default monetary policy, and unfortunately one that threatened to turn this currency into more of a Ponzi scheme than a stable exchange medium.

This doesn’t mean that the Bitcoin or an idea like it can’t succeed, but it does mean that so far, this specifics of this concept are badly flawed.

What’s to like about the Bitcoin?

Like many attempts at innovation, the Bitcoin may prove to be learning experience that leads to better things later on. After all, there are things to admire about the idea:

1. It is easy to imagine major currencies becoming available globally. The assorted troubles of the euro have provided a cautionary tale about trying to coordinate a currency backed by several nations. However, the idea that in the future technology will allow consumers and merchants to choose from a variety of major currencies and have the digital means to make exchanges seamless is both readily conceivable and desirable.
2. Payment systems are already becoming increasingly electronic. Money itself has long been a symbol rather than anything carrying intrinsic value, and more and more that symbol is expressed in electronic rather than in physical form. So, the idea of a fully online currency doesn’t seem very far-fetched.
3. Frustration with the conventional banking system is understandable. The whole “too big to fail” concept continues to leave a sour taste in many people’s mouths. It’s like an abusive relationship, where one person continually behaves badly but then keeps telling the other one “you can’t live without me.” I agree that the banking system has done a lot to lose our trust; I just don’t think the Bitcoin has done anything to gain that trust.
4. Frustration with central bankers is also understandable. Central banks use money to try to manage complex economies, which can make people holding that money feel like a pawn in a chess match. Recent examples are the near elimination of savings account interest by the U.S. Federal Reserve in an attempt to stimulate the economy, and the threat (which they later backed down from) by the European Central Bank not to honor the insurance on Cypriot deposits. Our money would feel much more secure if it were not being used as a tool for managing economies and financial systems, though I’m not sure it is possible to isolate any form of currency from those realities.

Unfortunately, recent events demonstrate that the Bitcoin is a long way from becoming a stable, universal currency free of supply-and-demand issues and of speculative manipulation.

If you choose to support the Bitcoin because of what it represents, then by all means do so. Just understand that it is still an experiment, so limit your investment in it accordingly, because experiments sometimes blow up.

This post is written by Krissy Schwab and comes from our partner site QuickenLoans.com.

At one point you’ve probably driven through a neighborhood and seen a house covered with solar panels on the roof. This type of home, known as an active solar home, simply has the addition of solar panels to the already existing structure.

However, some people are taking advantage of solar energy without solar panels—creating a new style of home construction called passive solar homes.  Sunplans.com notes that utilizing the passive solar in-home design can possibly cut energy bills in half.

Passive solar homes are custom planned and built depending on the region and hemisphere you live in. For example, here in the northern hemisphere, the sun in the winter season comes up in the southeast and sits low in the southern sky.

Therefore, to capture the most amounts of sunlight and heat in the winter, you would want to put as many windows as you can on the southern side of your house. Conversely in the summer, the sun rises higher in the sky, so constructing an overhang or porch area on the southern side of your house will block most of the summer sun from heating your house.

What I love about the passive solar style is that there are elements you can incorporate into your existing home if you want to make it more energy efficient. Some of the ideas may cost a bit of money to install; however, they may add value or even living space to your home. Adding any one of these elements can help you utilize the natural sunlight to warm your house even in cool climates.

Add an aperture

Basically, an aperture is an area on the south side of your home that utilizes tons of windows to capture sunlight during the winter—much like how a greenhouse captures and traps sunlight to warm it. You could even add a few skylights to the southern-facing roof of your house to also help capture sunlight for both maximum heating and lighting in your home.

Install a darker, hard masonry or wood floor

Once you have fine-tuned your house to seize the most sunlight it can, you’ll want to make sure the heat from the sun gets trapped in the house. One way to do this is by installing a thick stone or dark wood floor to absorb and retain heat.

Add thermal masses to retain more heat

Many people choose to add thick masonry walls and/or masonry below the flooring to retain even more heat. This is similar to the heat-island effect that occurs in large, metropolitan areas. I’m sure when you’ve watched the weather in the morning, you’ve noticed that cities are often warmer than the suburbs or rural areas. During the day, all that brick, metal and concrete in the city absorbs the daytime heat. The same thing on a smaller level happens in a passive solar house with a thermal mass. During the day it absorbs heat, and at night when it’s cooler, the mass releases heat.

Add an overhang or sun porch

In the summer, all of those windows you put on the south wall will turn your house into an oven! To moderate the temperature in the summer, install an overhang or sun porch to limit the summertime sun—keeping your house cooler.

Adding planned landscaping

Seasonal landscaping can also help with keeping your house cool in the summertime, but still allows sunlight for winter heating. Many people plant seasonal trees or vines that may help block sunlight. Even though it was unintentional, my house is completely shaded during summer afternoons courtesy of some lovely, leafy trees around our backyard. In the fall, all of the leaves fall off the trees and the back of the house generally stays pretty warm in the winter since it gets the most winter sunlight. The lesson here is not to plant evergreen trees or any other type of plant that might block the sunlight during the winter season.

Some of these concepts aren’t the cheapest additions or fixes to your home and may come along with a little sweat equity. However, with these additions, you can avoid the installation and wiring that comes along with installing solar panels in your home. With many people turning to more sustainable homes to save money and resources, incorporating more environmentally friendly options makes your home more desirable if you decide to sell it in the future.

More stories from QuickenLoans:
Earth Day: Its Past and Present
Pros and Cons of Composite Decks
Inexpensive Raised Bed and Planter Options for Your Garden

This post is from staff writer Jeffrey Steele.

At a recent neighborhood function, I ran into a woman I’ve known for years, but hadn’t seen in a few months. She’d be the first to admit to suffering a weight problem. A shorter woman, she’d packed on enough pounds over the years to audition for the role of a beach ball. But here she was far more svelte, and looking good.

“Edna! You look fantastic,” I exulted. “What’d you do?”

“I’ve been walking,” she replied. Then she smiled. I don’t know, but I hoped the grin was in part acknowledgement of my small role in her making that choice. As a long-time fitness walker, I sermonize to the point of annoyance on the endless upsides of a fitness walking regimen. And Edna knew I practiced what I preached. She’d routinely honked and waved at me from behind the wheel of her minivan when spotting me hoofing a mile or four down Central Avenue.

“So you’ve lost lots of weight,” I said. “What other benefits have you felt? Do you find you have more energy?”

“Yes.”

“How about sleep? You sleeping better than you did?”

“Yes.”

“And you’re in a better mood?”

“Yes!”

I came away from the conversation suspecting Edna had experienced something many big-time walkers do. Like us, she’d started to get addicted.

Financial strides

Over the years, there’s been much written on FiveCentNickel about ways to save money at the gym by embarking on a shoestring fitness routine. But nothing, I noticed while scanning the archives, has been focused solely on lacing up those shoestrings and embarking on a regular campaign of brisk walking.

That’s an oversight I’m addressing here, because it’s likely financial as well as health benefits will mount with every mile you log as a regular walker. Let’s take a look at how the world’s simplest form of exercise could help you save sizable bucks over time, while also possibly adding greenbacks to your pockets.

Health benefits

First, consider long-term health. Being sick isn’t just a drag, it gets costly over time, what with prescription drugs, hospital stays and whatnot.

Walking is proven to boost HDL or good cholesterol, while shrinking its evil twin, the bad cholesterol known as LDL. It lowers your blood pressure, reduces your risk of Type II diabetes, helps keep your bones strong and decreases stroke risk. You don’t have to study the rising costs of health care long to know that all the positives of walking could keep you from running. Running up medical bills, that is.

Get off your meds

According to Mother Nature Network, researchers examining National Walkers’ Health Study data on 32,000 women and 8,000 men found folks who took the longest weekly walks were more likely to use less medication. If you are on a course of meds, imagine the savings of giving up even a few of them, if not all. It would be like finding a large medicine jar of U.S. currency

A slimmer profile

As Edna learned, regular walking can do remarkable things for your physique. And that could mean a permanent end to shelling out good money on diet books, diet pills and diet fads. As reported by CNN.com, a Duke University Medical Center study found walking 30 minutes a day can prevent weight gain in most physically inactive adults. Sure, you’ll spend a bit more on yummy foods you no longer have to pass up, but the net result of giving up all those pricey diet gimmicks should be an improvement to your bottom line, as well as your bottom’s line.

Postpone dementia

Futurists predict there will be enormous costs in the years ahead associated with greater numbers of older people with Alzheimer’s disease and other forms of dementia. The costs of long-term memory care can completely bankrupt families. But studies of older people suggest walking for as little as 45 minutes weekly wards off Alzheimer’s disease. No matter what your age, walking is a proven boon to your brain. Being more mentally sharp could also sharpen your pencil, helping you find ways to lower your budget and trim unnecessary household expenses.

Moneyed marching

All the above arguments have to do with saving money by engaging in regular walking. But I’ll go beyond these talking points, asserting that a walking regimen can provide revenue infusions that otherwise wouldn’t be offered.

As any fitness walker can tell you, walking is a mood enhancer. Like other exercises, it helps the body produce endorphins, which makes you happier. A regular walk will also help you sleep better, give you more energy and reduce feelings of stress and anxiety. And while I haven’t seen any studies on this, I’m convinced it has a way of clearing your mind, helping you focus on problem solving and even idea generation. I don’t think it’s a coincidence that the only time I ever won an award for contributing to this column, it was for a blog based on an idea that came to me while hiking 2-½ miles one chilly December morn a couple years ago.

If you’re a less cranky, better rested, more energetic, less stressed out and anxious person who’s a good problem solver and creative idea person, there’s no reason to think you won’t be a more marketable employee. Over the course of a career, that’s sure to mean more demand for you services, a higher income, and more promotions, resulting in, yes, an increasingly healthy total net worth.

If concerned about your long-term fiscal as well as physical health, give walking a try. Sure, you may start with small steps, but they could prove to be long strides toward a more comfortable financial future.