This Week in Your Wallet: July 24, 2012
One of the reasons I love summer so much is that it’s a great time to catch up with friends. In many parts of the country, I know that the beach can make for a wonderful weekend getaway. If you live close to one, it’s typically rather cost-effective. You can pack a picnic and go for a day trip, or you might choose to shack up with friends or family for a weekend of affordable fun — well, affordable for the visitors, at least.
I added that clarification thanks to a recent report from Reuters about the cost of playing host. In it, the author estimates that the average cost of hosting friends is a whopping $450 — for one weekend. How can you rack up such a high tab simply staying at home and having a few people over? It turns out that if you pick up the tab for a couple of dinners, drinks and snacks, it’s easy to spend that much, and then some.
Now, I have to say, I have found the cost to be much less than that. I am fortunate enough to host friends frequently in the summer and I find they are constantly asking what to bring and whether they can chip in. Often, they will go out and get the papers or pick up the supplies for dinner while I’m not even looking. But if you don’t have friends like mine, here are some things Reuters says you can do to minimize the financial burden of being a good friend:
- Have the talk. I know, money can be an uncomfortable subject amongst friends (to see its true effect on friendships, check out a SavvyMoney post I recently wrote on the subject). However, it’s important to sit down and discuss expectations before the weekend begins. If your guests will be using your car, ask that they cover the cost of gas. Tell them that you’re planning on making a big dinner for everyone one night, and ask if they might be willing to cover drinks the next night. If they’re true friends, they’ll be willing to compromise.
- Make a plan for dealing with work. The Reuters article interviewed one woman whose guests stayed so long, she needed to take off a week of work. If you have paid vacation time to use and no better way to use it, this is fine. But if you get paid on commission or missing work for guests would cut into your salary for the month, don’t be afraid to let your guests do a self-guided tour of your town for one or two days. They’re adults — I’m sure they’ll manage just fine!
- Don’t demur when they offer to bring something. When they say, “what can we bring?” (and let’s hope they do at least ask this), answer honestly. If you know you go through wine like water when they’re around, ask them to bring a few bottles of their favorite red.
For more tips on saving money when guests are in town, check out the full Reuters article through the link above. And now, here are the other headlines for the week:
More Americans Living Paycheck-to-Paycheck
According to a study by the Consumer Federation of America and the Certified Financial Planner Board of Standards, 38 percent of Americans are living paycheck-to-paycheck, and just 30 percent say they’re financially comfortable. These numbers represent a complete reversal from 15 years ago, when 38 percent of survey respondents were financially comfortable and 31 percent were living paycheck-to-paycheck.
While it’s certainly not good that more than a third of our country is living month-to-month, the part of the study that struck me the most was this: 55 percent of survey respondents said it’s hard for them to know who to trust when seeking financial advice. Do you agree with this? What information would help you know who to trust? Use my Facebook wall to tell me how you feel!
Online Tools to Help Maximize Social Security
I get many questions from viewers and readers about how to know when to take Social Security, and what the best strategy is. Do I file and suspend? Do I take spousal benefits? How do I know what’s right for me?
It’s hard to give blanket answers to all those questions, because answers can depend so much on individual situations. In light of this, SmartMoney recently compiled a great list of websites you can use to help determine the answer that fits your life and your plans. Among their solutions: MaximizeMySocialSecurity.com, SocialSecuritySolutions.com, SocialSecurityChoices.com and AnalyzeNow.com. You can check out the full rundown through this link.
Passing it On
As you may know, I think it’s important to talk to your kids about money: to teach them how to save, how to spend responsibly, how to use credit wisely. Perhaps this is why a recent New York Times article caught my eye. In it, author Paul Sullivan interviewed adult children who had received an inheritance from their parents — and were unprepared to deal with the amount of money that came their way.
Now, the point of the article was to tell people they should talk to their kids about the money they will be receiving, but frankly, I think that’s a “problem” that fewer and fewer people are having these days. If you have money to give to your children, fantastic, and by all means do sit down with your children to make sure they’re prepared to receive it. But the more likely scenario is that you’ve realized you will needyour nestegg to cover growing healthcare costs and the general cost of living as you age. And that’s fine — that’s what it’s there for! However, you need to make sure your children know this. Some children might be expecting a large windfall, so it’s important to sit down and have a reasonable discussion about all of this.
It might be an uncomfortable conversation at first, but I’d like to think that most adult children will be happy you can pay for your own healthcare costs as you age. The Wall Street Journal ran an article onthis subject back in June, and it ended with a quote that I think all adult children should embrace: “Whatever my mother has is hers,” one man told the Journal. “It’s not my inheritance. I didn’t work for it. My brothers didn’t work for it. My parents worked for it.”
Have a great week!
Jean
