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It may have been over a year since I last put together a podcast episode, but I’m back today to talk with Consumerism Commentary Podcast guest Carl Richards. Carl is here to talk about his new book, The One-Page Financial Plan: A Simple Way to Be Smart About Your Money. The author will also be the keynote speaker at the upcoming FinCon Expo.

In today’s podcast, Carl and I discuss why reducing a complex financial plan to one page can be key for living the fulfilled life you envision and how certain emotions can stand in the way. We talk about avoiding financial mistakes, and what a financial adviser’s (or a friend’s) role might be.

Because Carl is “The Sketch Guy” for The New York Times, we talk about the origins of Carl’s sketches, and how these sketches and Carl’s other art have been received in the art scene.

Finally, Carl and I discuss the process of publishing, and listeners will get an early listen to what might be the focus of his FinCon keynote address.

Consumerism Commentary is offering five free copies of The One-Page Financial Plan to five Consumerism Commentary readers. To be considered for receiving one copy of the book, which is also available at retailers, leave a comment below the transcript.

Continue reading this article to listen to or download the podcast. You can also subscribe to the podcast in iTunes.

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I can’t claim to be an expert on raising children. In fact, this is one of many, many topics about which I am not an expert. I do not have children of my own, and my observations of my friends and their children are limited. My experience comes from my memory as a child being raised by my parents.

To be honest, I have no idea how my parents managed my development into a somewhat capable adult or what they were thinking at the time, even though I do have a younger brother and had the chance to do a little more observation.

Ron Lieber’s new book, The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money (Harper, on sale February 3, 2015) will serve as the perfect how-to guide for when I do have children of my own. I will want my offspring to have a well-developed sense of self, including financial issues, long before I did. Maybe I can prevent repetition of some of the mistakes that I lived through, all though sometimes mistakes offer the best opportunities for learning.

Lieber uses his book as an opportunity to encourage parents to start discussions with their children and to guide them in those discussions. In many cases, there are no absolute answers or rules that work for every parent, every child, in every situation. That would be an impossible task, as the financial realities of families wildly, as do children’s developmental processes.

This variety is skillfully woven throughout the book to give readers enough examples and counterexamples to spur reflection and consideration among parents who may not have given money discussions with children much thought. Many of the examples come from Ron Lieber’s community of readers through his column and blog in The New York Times and on Facebook. The author spent a year meeting with many of the families who contacted him to share their experiences, challenges, and decisions.

One anecdote that stuck with me came in a section in which Lieber shared discussions about children who work. I had jobs when I was a teenager, including one retail, but mostly office jobs. These jobs helped me earn a little bit of money, but didn’t really instill much about responsibility. My jobs came during school breaks for the most part, as I believed, as I think my parents did, that education was my priority, and that my “job” was to do well in school.

The author shared a story about a family of nine in Lewiston, Utah, raising 1,800 cows on the family farm. Unlike my life growing up, the children in this family have no time for extracurricular activities.

There is a presumption that [youngest family member Zeb] will work, that his family members will teach him how, and that he will be good at it, quickly. And while none of the boys is a great scholar or a star athlete, their parents operate under the assumption that the ability to perform basic labor is something within every child’s grasp. They know that every boy will grow up to work in the family business, but they’re confident that none of them will be afraid of the effort it takes to succeed someplace else.

The idea of this hard work leads to a discussion elsewhere in the book about the quality of “grit.” Measurements of grit, or how well someone persists, particularly through obstacles, correlates more tightly with direct measures of success than other types of aptitude, like IQ. Allowing children to develop grit through work gives them the ability to handle much more of life as an adult.

An important section of The Opposite of Spoiled focuses on instilling gratitude. Spoiled children show no gratitude for the advantages they have. Lieber offers specific suggestions for dealing with the observations kids have even at an unexpectedly young age. How do you explain socio-economic status to kids who are aware of being rich or being poor through their own observations?

The author points to this research:

[A researcher...] showed 3-year-olds a series of photographs and distinguished between the haves and have-nots. Only half of her subjects thought that the rich and poor people would be friends with each other. Other research has shown that 6-year-olds keep score of which kids have what sorts of possessions and begin to make judgments accordingly. By 11 or so, they’re beginning to assume that social class is related to ambition. Around age 14, they begin to wonder if there is a larger economic system at work that may constrain movement between classes.

It’s safe to say we all know some adults whose attitudes may be stuck at the development level between the ages of 11 and 14. But the book offers great suggestions for addressing issues of class without instilling pity or jealousy.

Lieber also addresses some of the more controversial aspects of child development pertaining to money, allowance and charitable giving.

I don’t read many personal finance books. After a decade of reading some of the best and some of the most laughable, I’ve been kind of burned out by the genre. For the last year, I’ve been selecting my reading carefully. I was initially excited about the opportunity to read Lieber’s latest because I am a fan of his columns in The New York Times, and his articles have often served as inspiration for the topics I’ve covered on Consumerism Commentary.

I’m glad that The Opposite of Spoiled didn’t disappoint. While many readers of Consumerism Commentary have shared their own stories over the years, the concise collection of advice found within The Opposite of Spoiled has offered me new perspectives for raising my future children to be empathetic, understanding, generous, and smart.

Pre-order The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money by Ron Lieber now, in hardcover or Kindle edition.

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Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs).

For more information, read this introduction.

Over the course of 2014, four Consumerism Commentary readers have shared their financial reports, exposing the results of their financial choices on a day-to-day basis. Each participant is paired with one of our Certified Financial Planners. Throughout the year, the experts have provided insight and guidance to help our participants take their finances to the next level, and as the series is now ending, we are able to look back on the year. Learn about this year’s participants and experts.

Jake and Allie are animal lovers who enjoy their pets and have no plans for children. Both are committed to early retirement. Jake and Allie are both interested in owning side businesses, even though they plan to use their nest egg for living expenses. The couple enjoys travel and make it a priority to take trips throughout the year. They believe that it makes sense to use part of their combined $140,000 income to enjoy life now. (Read their update from last month.)

After reading Jake and Allie’s comments, you can watch a Google Hangout they participated in with Financial Planner Neal Frankle. Neal Frankle appears courtesy of Wealth Pilgrim and MCMHA.org. This month’s Naked With Cash is the last of the year, and includes information on debt reduction and a wrap-up of the year.

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The prevalence of tipping is simply a fact of society. On several occasions, a friend of mine bemoaned the perceived necessity of tipping a specified amount to restaurant servers while dining out. He would ask the rest of our friends eating together at a restaurant, “When did the expected base tip go from 15 percent to 20 percent?” I’m not concerned so much as when cultural norms like these change, but how they change. Is it regional? Does a trend like this start among a wealthier subset and then trickle down to everyone else?

Most everyone who dines out understands that tipping is part of the unwritten agreement. If you can’t afford to pay and tip, you can’t afford to dine out. This social tradition has what I would expect to be practically full penetration throughout the United States. We’ve come to accept that restaurants do not pay their servers and bus staff a living wage on their own, and it’s the customers’ responsibility to bring that compensation more in line with a level necessary to prevent too much attrition in the industry.

With social media, the customers’ responsibility — or negligence — is clear. If you spend any time on Facebook or Twitter, or if you’ve seen any news programs covering entertainment, you’ve likely seen many incidents in the last year in which a disgruntled, undertipped server shames a celebrity by posting a copy of his or her meal receipt with a low tip. There’s two sides to every story; for every shamed, allegedly cheap celebrity or NFL professional, there is an allegedly disrespectful wait staff. It really doesn’t matter who is “right.” The point is that tipping in a restaurant, and tipping 15 percent to 20 percent for typical service, is a pervasive social expectation.

Hotel housekeepers may not benefit from the same, strong tradition of tipping as restaurant servers. An organization is trying to change that. A Woman’s Nation, an organization whose mission is to ensure that the value of women is recognizes and respected, is leading a program they call “The Envelope Please.” The purpose of the program is to encourage hotel guests to tip housekeepers one to five dollars a night, every night by placing an envelope for that purpose in every guest room.

Marriott is the first hotel brand to sign on.

And the hotel will certainly face significant criticism for doing so. If a hotel company blatantly encourages customers to tip, it is, in a way, admitting that it does not pay its staff a living wage. And if a large international corporation wants its employees to be paid a living wage, shouldn’t it be that corporation’s responsibility to do so? Shouldn’t it also perhaps be the industry’s responsibility to ensure it?

Of course, the idea of raising compensation faces the same old corporate obstacle: “If I raise the wages I pay, I have to raise my prices. I can’t raise my prices because I need to remain competitive.” There’s no doubt that it’s a difficult perspective to be in for a business. I have several friends who are not only small business owners like myself, but who also have a growing employee force, and they face these problems all the time.

I used to say that it’s the business owner’s problem to figure out, and if they can’t remain profitable while paying competitive wages, they have to come up with a different business plan. But I see that it’s often more complicated than that.

I’ll be honest. I haven’t always tipped housekeepers when I’ve stayed in hotels. That’s simply due to the fact that when I began staying hotels on my own, I had no idea at least a portion of hotel guests considered it normal to tip housekeepers. At the same time, I knew it was expected to tip hotel porters; maybe that’s because you see the “bell boy tip” in fictional entertainment so much, but never see the act of leaving a tip for the housekeeper in an envelope on the bed or nightstand.

This lack of understanding is the reason a non-profit organization focusing on the value of women would consider it important to provide some attention towards the option of tipping hotel housekeeping staff. But do housekeepers even need the tips in order to earn a living wage?

I checked Salary.com to put some numbers behind this movement.

In my zip code, a restaurant server gets paid a median hourly wage of $14, which was higher than I expected. A hotel housekeeper receives a rate of $13 an hour. In San Diego, California, both job types are paid a medium of $12 an hour. In Tampa, Florida, they both earn $11. From these figures alone, it seems that both job types require some additional compensation to make up for the industry’s low valuation.

Restaurants also know that customers will tip, so that is a justification for keeping pay low. As the idea of tipping hotel housekeepers becomes more pervasive, hotels may be just as willing to feel justified in the level of wage they pay because they know customers will make up for some of the deficiency.

According to one hotel insider, housekeepers are scheduled, at least in his institution, to clean 15 rooms a day. To a housekeeper, if everyone follows the expected guideline, she could walk away at the end of the day with between $15 and $75. If it costs very little to Marriott to put envelopes in every room every day, it could add up to a lot of extra compensation for housekeepers. If you assume the additional tips raise the effective hourly rate of a housekeeper by $4 a day, a hotel would not be able to match that through its own compensation plan. There’s no way a hotel could easily raise that pay of its housekeeping staff by that much.

With that perspective, it makes sense for hotels to encourage customers to tip. The staff will get a much better deal than the hotel could possibly offer. The only drawback is the potential downstream effect; more reliance on tips in the future might prevent hotels from raising wages competitively.

I’ll be keeping this in mind when I head to Louisiana this week for a conference and stay at the New Orleans Marriott.

Do you tip your housekeeping staff when you stay in a hotel?

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7 Essential Money Ideas for College Freshmen

by Luke Landes
College Tips

It was a long time ago, but I remember my first few weeks of college. Twenty years ago last month, I left my home state of New Jersey to live on campus at a neighboring state and to pursue my education degree. I had been away from home before for extended periods of time, but ... Continue reading this article…

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Should You Take the ALS Ice Bucket Challenge?

by Luke Landes
Conan O'Brien - ALS Ice Bucket Challenge

If you’ve been online in the past week or two, you have no doubt seen viral videos of strangers — and maybe even your friends — dumping buckets of ice over their heads. There is a charitable cause behind these videos. Most, or at least some, of the cold, soaked folks are accepting the challenge ... Continue reading this article…

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Overcoming Competitive Inertia: Stop the Comparisons!

by Luke Landes
Marching Band

I grew up in competition. It was a part of my life, all over the place. And sometimes competition moved me to push my self far, motivating me to be excellent, and in other cases, competition broke down my will to excel. An individual reacts to competition different depending on the psychological factors, the situation, ... Continue reading this article…

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Get the Most Value From Frequent Flyer Miles

by Mitch Lipka

Whether you’re the most frequent of frequent flyers or someone who is more likely to have miles expire, understanding the real value of what you’ve earned is the key to making the right choices as a consumer. With miles programs constantly being changed and consumers’ loyalties challenged, those with frequent flyer miles have to decide ... Continue reading this article…

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