Financial planning

Do not bring a child into the world with the expectation that they owe you care or repayment in your old age.

Expecting repayment can lead to negative outcomes, such as children going into major debt to care for parents. Some cultures view family support differently, but the advice warns against transactional parenting.

• In some cultures, family support is considered important and not a burden.

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Apply for tax breaks and earned income credit to offset financial strain.

It helps, though it may not be enough.

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Keep inheritance principal in safe investments and do not spend it; reinvest half of the returns and use the other half only for necessities.

This preserves your financial advantage over others.

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Keep a strict budget to prevent spending chaos.

Without a budget, spending can spiral out of control.

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Decide whether to upgrade your lifestyle, recognizing that it trades financial freedom for comfort.

Upgrading can restrict your ability to quit jobs or take extended trips.

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Begin saving and handling finances early in life.

Starting investments earlier matters far more than investing larger sums.

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Base the decision to have children on your personal readiness rather than fear of missing out.

Parenthood is a serious commitment that does not justify actions you are not fully committed to.

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Invest in low-cost index funds through DIY platforms like Vanguard or Fidelity rather than using brokers who charge fees.

Brokers will probably charge fees.

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Recognize that large families in low-income households may result in adult children remaining poor.

One person reported their Hispanic parents had many children and all remain poor as adults, calling it a bad plan.

• Based on one person's experience with their specific family situation.

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Be aware that dealerships may refuse to install AC in older cars due to the vehicle's age.

Dealerships may deem it impossible to install AC in very old vehicles.

• Dealerships may say it is impossible due to age.

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Invest as much and as early as possible using broad market funds rather than individual stocks.

Money loses value to inflation; the market does not go bankrupt unlike specific companies.

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Practice frugality to get the most from the effectiveness of your wealth.

so you can stay wealthy, support charities, and help your children and grandchildren

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Focus on indexes instead of target-date funds, particularly if you are young, to avoid fees.

it's the fees

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Consider your realistic life expectancy based on family history when deciding how much to save versus spend.

People with different family longevity histories are in different financial positions.

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Do not view financial numbers as the sole measure of life success.

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Secure the financial ability to support yourself before having children.

Inability to do so risks subjecting the child to poverty and relying on assumptions that things will work out.

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Recognize that scientific evidence is debunking the myth that 35 is a strict cutoff for fertility.

The original study supporting the myth is flawed.

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Inspect significant commitments like cars, pets, or partners before spending money on them to avoid unexpected costs.

One person paid more than expected by skipping prior investigation.

• Some argue you cannot meet a child before investing in them.
• Some argue that following this logic strictly may prevent necessary risks.

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Avoid buying yachts unless you live on them year-round.

They are generally bad investments otherwise.

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Account for high maintenance and hangar rental costs when owning general aviation aircraft.

These costs remain significant even if you do not fly much.

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Be aware that crypto and general stock market investments are not safe by any standard and can result in losing all your money.

• Crypto may fast-track investments if done correctly, but can also plummet to nothing.

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Feel satisfied when your child moves out and no longer depends on you, viewing this as doing parenting right.

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Account for inflation when evaluating long-term fixed-income offers, recognizing that purchasing power decreases over time.

The value of fixed monthly payments decreases with inflation; goods cost more today than they did decades ago.

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Save money throughout your pregnancy to cover living expenses during unpaid maternity leave.

Government assistance is often insufficient to manage months without income.

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Avoid buying timeshares with inheritance money.

Timeshares lose value every year unless invested in something generating more than inflation.

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Consider that a partner's current lack of income may be temporary, especially if they are young or in school.

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Avoid judging childless people, as they may be unable to afford children or lack reliable employment to support a family.

Financial constraints and job instability can prevent people from taking on the responsibility of raising children.

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Update investment advice from older books like 'Your Money or Your Life' to reflect the current environment, specifically moving away from treasury bonds or CDs towards a stock/bond blend.

Old passive income strategies relying on high interest rates (almost double digits) are no longer practical.

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Accept that most children are unplanned, yet adults can still love them deeply despite the circumstances.

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Use a robo-advisor or a target-date fund if you are unsure how to construct a portfolio.

Target-date funds automatically invest based on your desired retirement year.

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Consider non-Disney cruise lines for family vacations to save money without sacrificing quality.

Alternative cruise lines can cost less while remaining kid-friendly and comparable in quality.

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Be aware that lacking a supportive family or social network increases the financial strain of raising children due to extreme individualism.

Without a network to delegate burdens, kids are expensive amid rising prices.

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Allow small indulgences only if your budget can handle them; avoid massive purchases or scaling up what you feel you can afford regularly.

Massive purchases or scaling up affordability expectations can break people financially.

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If your current income does not provide a comfortable life, do not voluntarily bring a child into poverty.

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Learn practical financial skills like taxes, investing, and credit management instead of focusing solely on abstract mathematics.

Practical financial knowledge sets you up better for life than failing math exams.

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Share your household's financial situation with your children, even after they become adults.

Understanding the family finances helps build money management skills.

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One perspective is that intentionally having children while living in poverty is irresponsible because it limits the child's opportunities and forces them to pay for course corrections later.

• This reflects one person's view; they noted their siblings could not break the cycle.

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Avoid assuming you are an exception to financial rules when seeking advice.

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Focus on preserving your principal over maximizing returns.

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Consider the decision not to have children as a form of protest against an economic system that makes family formation financially ruinous.

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Increase your 401(k) contributions to match the maximum amount your employer will match.

Employer matching provides a 100% return on investment.

• It may be impossible to contribute the maximum while managing living costs in the current economy.

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Check next semester's tuition bill before spending a financial aid refund.

You might need the funds in the spring.

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Focus on paying off debts with the highest interest rates or principal amounts to increase monthly cash flow.

It is a safe and sane way to prepare for the future.

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Recognize that high-yield savings accounts may still lose value to inflation.

High yields currently pay less than the cost of inflation.

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Use a self-regulated retirement fund like a Roth IRA.

It has tax free earnings.

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Pay extra on bills to get a month ahead, creating a buffer for emergencies and freeing up cash during expensive seasons.

It provides time to figure things out if something happens and reduces bill payments during high-cost periods like Christmas.

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Save all small windfalls for unexpected expenses that could arise before your next paycheck.

Stop the cycle.

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Make minimum mortgage payments and invest the difference if market returns exceed your mortgage interest rate.

investing yields higher growth than paying down a low-interest loan

• trying to time the market may get you burned

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Keep a 'FU money' bucket for guilt-free spending on trivial items.

It allows you to not feel guilty when spending on dumb things.

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Focus on immediate payment for critical car safety repairs, such as brakes, using windfall money.

It is important not to risk brake failure.

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Read the fine print of loan agreements carefully to check if interest rates are advertised weekly rather than annually.

Lenders may advertise low weekly rates that equate to high annual costs.

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Create separate bank accounts for specific savings goals, such as a new kitchen.

One person found it very satisfying to add to these dedicated accounts.

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Cut down on spending on leisure and bills to save at least one month's pay in a primary account every month before increasing discretionary spending.

Being an adult requires expecting unexpected massive bills at any time.

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Avoid investing in failing banks, as high interest rates may not be paid out if the bank collapses, even if principal is eventually insured.

The interest rate won't be insured, and recovering principal can take time.

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Verify that financial aid refunds are grants rather than loan overages that must be repaid.

Students have mistakenly spent loan overages thinking they were refunds.

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Start saving immediately rather than waiting for a salary raise.

Waiting for a raise can damage you greatly.

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Do not carry credit card balances to game credit scores; pay them off immediately after swiping.

Carrying debt costs you money.

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Keep small sums of money in a free high-interest savings account to avoid bank fees.

Avoiding bank fees is worth more than the potential interest earnings at that amount.

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Avoid store credit cards with deferred interest unless you can guarantee full repayment, as missing a payment triggers high retroactive interest.

Missing a payment results in 30% interest.

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Redirect the monthly amount previously spent on minimum credit card payments into savings or other debt repayment after the cards are paid off.

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• Automate credit card payments to ensure balances are paid in full each month.6
• Use tax refunds or windfalls to pay large chunks of remaining debt, then redirect the freed-up minimum payments to other cards.1

Send final payments for deferred-interest loans via certified mail to provide proof of timely submission before the interest-free period expires.

Merchants may claim they did not receive the payment on time due to wait times.

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Plan for specific large expenses like vacations using a separate account so you can spend without affecting your main reserves.

This allows for splurging with cash and no concerns while keeping reserves intact.

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Turn off auto-renewal for subscriptions to force yourself to work out if you still need the service before paying again.

You can save money by waiting until you actually need the service, and you may receive a discount offer to return later.

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Invest your winnings and learn to live off the returns without touching the principal.

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Choose a bank that does not charge fees for routine activities.

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Reward yourself reasonably for accomplishments, then use any excess funds to pay down debt or invest, whichever yields a better result.

This approach is considered a better option than other methods.

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Ignore and delete direct messages from strangers requesting money after receiving a windfall.

Strangers may contact you with sob stories seeking financial aid.

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Use your library card to access digital magazines and books for free instead of buying them.

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Calculate the true cost of expenses by adding income taxes, Medicare, and Social Security contributions to the price tag.

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Insulate windows with plastic foil to reduce heating and cooling costs.

It keeps heat inside in winter and outside in summer; one person spent $10 on foil from Goodwill and saved hundreds on utility bills.

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If you plan to have young children soon, buy used furniture.

Young kids destroy furniture; investing in expensive items leads to anger and resentment when they are damaged.

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Use Freecycle and Buy Nothing groups on Facebook to acquire baby items for free.

Many people are willing to give away gently used goods knowing they will be used.

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Seek affordable or free birth control options, such as pills, IUDs, or implants, which are available at little to no cost in many places.

Many people are unaware these options exist.

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Avoid buying drinks out; make water and coffee at home instead to save money.

Making drinks at home is cheaper than buying them.

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Recognize that being frugal does not always mean buying the cheapest item; sometimes spending more is the truly frugal choice.

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• Buy quality items that last rather than cheap replacements, distinguishing frugality from being cheap.5

Buy high-quality paper towels that can be rinsed and reused.

Cheap paper towels fall apart when wet, whereas quality ones can be reused multiple times.

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Buy cheap tools for infrequent use, but invest in quality replacements if you use a tool enough to break the cheap one.

If you use a cheap tool enough to break it, it indicates the tool is worth spending money on for a quality replacement; buying the best tool only to use it once is often unnecessary.

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Use washable covers on sofas if you have children.

It provides an easy remedy for spills.

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Consider buying a good mattress topper as a more affordable alternative to a new bed.

Good beds are expensive.

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Buy items that save money over time, such as tools that encourage cooking at home or energy-efficient LED bulbs.

These act as a reverse investment by reducing ongoing costs.

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Define frugality as identifying which sacrifices allow you to live comfortably in the life you desire.

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• Define frugality as spending money only on things you truly value rather than on nonsense.1

Buy cheaper alternatives for items like suits if they provide identical utility and appearance.

Expensive items often look identical to cheaper ones, and taking care of a cheaper item can provide real value.

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Replace uncomfortable everyday items like underwear with high-quality versions when you have disposable income.

It was the most worthwhile thing spent on once disposable income was available.

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Recognize survivorship bias regarding old furniture; plenty of cheap items existed in the past, and only the high-quality ones lasted.

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Avoid spending windfalls on depreciating assets like cars, partying, or toys.

Most people do this and end up in debt a few years later.

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Consider paying off smaller debts first if it provides motivation, even if larger debts have higher interest rates.

While large debts cost more daily in interest, one perspective is that a 'small hole will sink ship'.

• Larger debts may have significantly higher daily interest costs.

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If you receive new income or a windfall, divide it into three equal parts: one for debt repayment, one for savings, and one for enjoyment.

Putting all funds toward savings or debt can lead to discouragement.

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Do not tell friends or family about a sudden windfall to avoid pressure to lend or give money.

People you know personally may beg for money if they learn of your new funds.

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Check for minimum balance requirements and transfer limits before opening a high-yield savings account.

Low interest rates on balances below the threshold may not be worth it, and frequent transfers for bills might be restricted.

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Allow yourself small luxuries to ground yourself and maintain social connection.

Removing these luxuries does little for debt but eliminates small moments where you get to talk and makes day-to-day life less heavy.

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Avoid overdrawing your bank account, as fees can accumulate quickly.

Overdraft fees charged repeatedly can lead to financial stress.

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Report large windfalls to state aid agencies if you receive assistance to avoid penalties or complications.

Failure to report winnings can lead to serious administrative messes.

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Use free code readers available at auto parts stores to diagnose car issues before seeking expensive repairs.

A quick diagnostic check combined with online research can help identify problems.

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Maximize contributions to tax-advantaged accounts like 401(k)s and HSAs to reduce taxable income.

reduce your taxable income

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After receiving a tax refund or windfall, review your budget and set aside a portion to desired home improvements rather than spending it immediately.

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If possible, own only one car to save on payments and insurance.

One couple managed different work schedules with one car, resulting in one payment and single-vehicle insurance.

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Focus on vehicle maintenance to ensure reliable transportation for work and school.

Lack of a car can prevent getting a job, and debt costs money.

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Allocate 50% of income to must-haves, 30% to wants, and 20% to savings.

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Shift from a paycheck-to-paycheck mindset to tracking your net worth.

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When starting a higher-paying job, pay off debts and rent cheaply rather than buying new cars or luxury items.

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Align on major life goals, such as whether to have children, before committing to a long-term partnership.

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If public transit gets you to work, focus on fixing your teeth over buying a car for convenience.

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Wait before getting expensive tattoos, as you may wish you had waited.

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Set aside $1,000 immediately to create a starter emergency fund.

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Exercise.

The benefits are endless.

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Get as much insurance coverage as possible.

Emergencies pop up suddenly and proper insurance policies help.

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Determine your desired career path first, then decide what schooling or training is actually needed to reach it.

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Include vehicle-related expenses such as gas, maintenance, tires, and insurance in your budget.

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Choose silicone rings if you work in the trades or need a practical, low-cost option.

Many companies prohibit jewelry while working.

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Find a professional independent jeweler not associated with a big-box store to design a unique ring based on their advice.

This approach allows you to walk away with something that matches beautifully and is 100% unique.

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Give non-ring symbolic gifts like a potato, a tree, or a knot-tied string to represent love and growth.

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When shopping for gifts, ignore sale items that appeal to your personal desires and focus strictly on buying for others.

Sale items can distract from the goal of purchasing gifts for others.

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Choose an oval shape with no halo if you prefer a timeless look.

It is considered more timeless in general.

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Avoid buying luxury vehicles like Porsches or sport bikes.

The thrill quickly becomes your new normal, making other cars feel inadequate or boring.

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Consider titanium bands as a low-cost alternative to precious metals.

One couple found them to be ridiculously cheap.

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Consider that some people are anxious about wearing expensive jewelry daily due to the risk of losing it.

fear of potentially losing the item

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Consider moissanite if you prefer stones that are sparklier than diamonds.

they are sparklier

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Search Amazon for unique and inexpensive jewelry pieces.

One person's husband consistently finds nice, unique items there with some effort.

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Use family heirloom rings for engagements or weddings to add personal history.

Family rings have stories.

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Hold physical precious metals instead of bulky supplies if you might need to relocate during an emergency.

precious metals travel light

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Avoid investing large sums in common rocks based solely on De Beers marketing.

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Recognize that some people avoid diamonds because they associate them with human suffering.

concerns about human suffering behind the industry

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Reset an heirloom diamond into a simple ring as one approach for engagement rings.

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Consider using semi-precious stones like moonstone, rose quartz, or amethyst as a lower-cost alternative to diamonds.

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