Q&A Thursday for May 3rd

Here’s Q&A Thursday for May 3rd! (Is it May already? Yikes.)

Q1. I have some extra cash. Can I invest in the stock market?
A. If you want to. But before you do that make sure your credit cards are paid off, you have an emergency fund suitable for your needs and you’re on track for retirement. If you don’t have all three of those things, I can think of three things that cash would be better for.

If all that is in line, open a brokerage account with a firm like Fidelity, Vanguard or Schwab and get some guidance on what to invest in. I like Index Funds that mimic the movement of one of the larger stock indexes like the S&P or the Nasdaq. 

Q2. What are some financial steps you should take when preparing to have a baby?
A. What a good question. Too many parents jump into the biggest monetary drain on their lives without getting their stuff in order. First and foremost you need to know how much you make and how much you spend. The biggest thing that a new baby can affect is the total household income because one parent usually takes time off from work to stay home with the newborn. Some jobs have paid maternity and paternity leave and some don’t, make sure you’re collecting it if you’re due. And some jobs’ short term disability insurance covers maternity leave as well, so check on that.

After you do an accounting of your budget, make sure all your debts are taken care of. This is not the same as being paid off. Just make sure that your debts are in your accounting of expenses so you still are paying down credit cards, student loans, and the mortgage in a reasonable way. Your retirement should be included in this assessment also since you are under no circumstances to stop paying into your retirement just because your little nugget costs more money. You will ultimately hurt your child in the long run if you don’t have yourself taken care of in your retirement years.

And finally, if you can in the next few months, build yourself a little cushion of money. Whether this is through an emergency savings, some gifts from family or clearing out some space on credit cards (not a lot, I am not advocating financing your baby), just be prepared from some first time expenses like cribs, car seats, other baby accoutrement.

I honestly could write a whole post on this and might in the future. But here are some beginning steps to get you started. And congratulations!

Q3. Is it better to take a job you’d love but would pay you peanuts, or get a job you can do that may kill your artistic soul but pays you double?
A. You have got to be an artist to write such a dramatic line. I love it.

Ok, as someone who took a job for money and not for the love of the job, I have to say that you should take the job for peanuts. You ultimately spend more money trying to soothe yourself if you’ve taken a job that is really just toxic or against your principles. I took the job for the higher paycheck and ultimately spent the difference between what I was making before on eating out, americanos, and shopping because I was so miserable and needed some kind of therapy. Oh, and I spent it on that, too.

If you don’t have a job offer for a job you’d like but instead have a job that is a short term solution and doesn’t involve punching puppies or something else atrocious while you get your footing in the arts, I would recommend taking the job in those circumstances. The smartest thing any artist can do is have a “day job” until you are making enough to cover your basic expenses. I know successful stage managers and actors who still bartend, spend a few days a week filing, or have side jobs as home organizers to support their arts “habit”. If this position could be that, then take it and make it clear that your priority is not this job while you pursue your other goals.

But, if this is truly a question of “I have two offers and need to pick one”, take the lower paying job so you don’t need to start an online shopping habit to help yourself get through the day.

Q4. Do you know any good money saving tips for traveling?
A. Why yes, I do! I am by no means a “budget traveler”. There are hundreds of website devoted to that and can be found with a simple Google search. When I travel, I stick by one basic principal, which is to spend my money on the thing I will remember the most. For example, when Andy and I got the opportunity to go to Austria last January, I saved up money not to spend on a first class ticket, but for lift tickets and really nice skis to rent. When we go to Orlando this June, we’re going to play in the Disney parks, not to eat out at Gloria Estefan’s restaurant so we’re splurging on the Park Hopper Pass and plan to eat sandwiches that we bring from the hotel for lunch.

So there’s that.

Some basic tips, check on Bing.com and use their price predictor to make sure you aren’t booking flights before they’re at their lowest price. Save money on food by eating in and making lunch your big splurge meal, not dinner. Walk every where you can, that way you get some exercise and avoid paying for taxis and public transportation. See if your hotel comes with breakfast. Most overseas hotels do as do a lot of domestic chains. And if you just want to change scenery for a bit, consider a home swap or using a site like airbnb.com to find people who are renting out rooms to travelers.

Those are my simple, basic travel tips that I abide by so I don’t spend an arm and a leg to go on vacation.

Be sure to submit your Q&A Thursday question here.

And if you are a submitter and want to look at your particular question more deeply, I’m now offering a 15% discount on a comprehensive package and a 10% discount on a specific planning session to anyone who submits a question with their name attached! (Your name will not be published when Q&A Thursday gets posted.)

This entry was posted in babies, investing, savings plans, travel. Bookmark the permalink.

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