Eat, Drink, Give Thanks

Holiday Spending, The Mighty Roth IRA

Dec 05, 2020

:::Issue #2. Why are you receiving this? You want to be in a good place. This is where I share educational content and practical tips on personal finance, so you can get to your good place, wherever that maybe:::

👋🏼 Hello wealth builders!

Welcome to the second issue of the hellogoodplace newsletter.

We are on the heels of a Thanksgiving where many of us didn’t get to spend time with our families and loved ones. Considering I spent Thanksgiving in 2019 stuck on the I-5 in a snowstorm, dinner for two in my warm apartment this year didn’t seem so bad. I hope you had a wonderFULL and safe Thanksgiving 🦃

What I’ve been up to:

🎙 Performative Speaking

Wow, what a transformative month of learning how to speak. Robbie and team has really pieced together a special course for anyone that wants to step up their game. I not only feel more confident speaking in front of others, but I now get excited at the opportunity. I saw the transformation in my cohort-mates as well, and that was something special to see. Watch my final project below titled: I help people fund their dreams.

Performative Speaking Cohort 2 starts January 11 - sign up here..

🤖 Thank goodness for Alexa

A few years ago on a golf trip to Portland, my friend Jason told me that he bought an Amazon Echo Show for each of his family member so that his parents can see their grandkids more often.

“They love it,” he said.

With my sister, my parents, and myself all living in different cities, I decided to pick one up for each of us when my nephew was born a couple of years ago. It has been a godsend in 2020. I can only speak for Amazon’s product, but I imagine all the other ones work just the same.

Holiday spending

The weeks between Thanksgiving and New Years is my favorite time of the year. The Christmas carols, the lights, the holiday spirit, I love it all.

The part I get a bit stressed over is gifts. I’m not good at giving or receiving gifts. To be honest I hardly even think about gifts, which has gotten me in trouble on more than one occasion. I still shutter when I think about all the times when someone got me a gift, and I had nothing for them 🤦🏻‍♂️

Gifts can also put your stress on your budget. A recent study showed that in 2019, Americans racked up $1,325 in holiday debt and that most won’t pay if off on time.

But you’re in luck, because my colleague Jeff Clark and I came up with:

7 Tactics to Stick Within Your Holiday Budget:

Create a budget! If you want to keep it simple, just create one holiday budget for all your needs. If you want to break it down, then we suggest using buckets, such as one for family, one for friends, and of course one for yourself.
Ask people what they want. A study by Joel Waldfogel found that people value holiday gifts less by a third to a tenth. Surprises are fun, but good gifts that you actually want are more fun. I imagine it also takes the stress out of people that are bad at picking gifts (like me).
Make a list before shopping. Advertisers are really good. Really, really good. They can even read your emotions to entice you to buy things that you never knew you wanted or needed. You have little chance keeping to a budget if you walk into a store (physically or digitally) without a plan. Make that shopping list.
Make frugality fun. My family decided to do a Secret Santa exchange this year. I’m happy because I only have to buy one gift, but it will also be a fun experience unwrapping gifts together.
Set ground rules and expectations. Communication is key at any time, and perhaps none other than 2020. Have a quick chat with your friends and family to see if you want to exchange gifts this year, and if so, what everyone is considering.
Shop around (or use a plug-in to help). I find myself defaulting to Amazon for just about every purchase, but I’ve found it’s not always the cheapest. Look around to see if you can find better deals. Plug-ins like Honey and Rakuten can help find deals for you.
Consider gifting experiences or time. Most of the time, people just want to hang out with you, and your time and attention is the greatest gift. Perhaps a promise for a weekly date night with your significant other, a more frequent visit to your parents (when it is safe to travel again), or a visit to a museum or zoo with your child.

I hope this list can help you make the most out of this holiday season!

The Mighty Roth IRA

High income earners often know that they should be maxing out their 401(k) annually. But too often this is where they stop.

Roth IRAs are one of my favorite tools to grow your wealth. Unfortunately, high income earners do not take advantage of it because:

The rules state that high income earners cannot put new money directly into a Roth IRA
The annual limit of $6,000 doesn’t seem like it will make a difference

For details, check out my latest two blog post. First is on how a Roth IRA can save you $180,000+ in taxes, 4 ways to contribute to a Roth IRA.