Monthly Archives: May 2017

Ways to Save a Buck With Destination Weddings

Ah yes, a destination wedding. Who hasn’t seen those beautiful pictures? White-sand beaches, lush coconut trees leaning over emerald waters, the silhouette of the beautiful bride and groom kissing against a gorgeous sunset…you can literally breathe in the love in the air.

Until this week, as a guy who’s never been married, I always thought destination weddings were really expensive. First of all, everyone has to fly to the destination and the newlyweds are probably flipping the bill. Having heard countless complaints about how expensive wedding venues are here in California I can’t even imagine how much more it is at a resort on an island. Then there is the reception, the flowers, the rehearsals…all seems to cost a bundle.

All this changed when I got invited to a destination wedding at a beautiful resort in Punta Cana, the Dominican Republic. I realized my understanding of this topic was almost entirely wrong. (For related reading, see: Have a Charming (and Cheap) Wedding.)

How Destination Weddings Can Save You Money

  1. Paying for your guests’ travel is optional: Many of us plan to travel to the tropics sometimes in the future—Mexico, Belize, Virgin Islands, Bahamas, etc. If you plan far enough ahead of time, people will just treat your wedding as their vacation and they will pay for their own travel arrangements, saving you a bundle.
  2. Deals of the season: The Caribbean, South America and many parts of Mexico are vacation destinations for “snow birds.” U.S. and Canadian vacationers who crowd the beaches during winter season are nowhere to be seen during late spring and summer months. When we were there, the beaches and restaurants were nearly empty. Competition among the resorts meant prices were very reasonable. Some of the wedding guests booked their all-inclusive stay for two for about $1600 where the regular price runs about $4200 for the week.   (For related reading, see: Shoulder Season: Your Ticket to the Perfect Vacation.)
  3. Location matters: New resorts in over-developed areas use low prices to attract newlyweds. When they have vacancies you’ll get a deal. Do some research and talk to a travel agent. She’ll know where to go.
  4. Leverage your party: At our resort, a minimum three-night stay will get you a basic wedding package, including a gazebo on the beach, some simple flower arrangements, champagne for everyone, an audio guy who rolls out the speakers and plays anything from your iPod and a full support staff for free. From there you can add fancier options such as a poolside private dinner, excursions, party boats, DJs and photographers. Now remember, you are bringing a party of guests to stay at the resort and that means good business. I bet if you just ask you’ll get more stuff for free.
  5. You don’t have to pay for everyone: The other great thing about being in an all-inclusive resort is that you’ll never have to pay for the food and drinks for your guests. We ran into another wedding party from LA and the young couple told us they had 11 guests. Instead of paying for a reception they simply made a reservation at one of the nicer restaurants, ate for free and had a great time!
  6. Bring American dollars and research currency exchanges: All the resorts will exchange for you but the rates are very different. Call them and your local bank ahead to see who gives you a better rate. Airports are the worst deals. Tipping your service staff and shopping with American dollars will get you very good service and much better deals overall.
  7. Vote with your dollars: The Dominican Republic seems to be a country that has brought the economic benefits of tourism to her people. We saw tax dollars supporting a new airport terminal being built, new four-lane interstates, hospitals, apartment buildings, schools and countless other basic infrastructure projects. Compared to neighboring Haiti, which continues to be marred by natural and governmental disasters, I genuinely believe in the Dominican Republic’s effort to improve their economy. For all you social activists out there, this can be a great option.

 

Why Some Kids Never Leave The Nest

It’s an international phenomenon: the kids that won’t go away. The Italians call them “mammon”, or “mama’s boys”. The Japanese call them “parasaito shinguru”, or “parasite singles”. In the United States they are known as “boomerangs”, and in the U.K. they are called “KIPPERS”, which is short for “kids in parents’ pockets eroding retirement savings”. According to 2016 data from the Pew Research Center, close to 32% of Americans aged 18-34 were living with their parents. And if we expand this category to include those living with relatives outside of their immediate family, the statistic rises to almost 40 percent, according to CBS. Generally speaking, this is a more common practice for sons than daughters. Surveys in the United Kingdom and Japan suggest a similar situation in those countries. In this article, we discuss some of the reasons why kids may be living with their parents for longer periods of time and outline some steps that parents can take to reduce the potential for negative effects – both for their kids and for themselves.

The Benefits Of Staying Home
Growing up is not only tough, it is increasingly expensive. In the quest for a rewarding career, many young adults opt for college after high school. Four years later, they have school loans for amounts ranging from just over $15,000 for an education from a public college or university to more than $31,000 for an education from a private school, and that number is steadily increasing. Add on the cost of a car, food, clothing, shelter and a social life, and suddenly one may find him/herself digging out of personal debt. It is easy to see that moving back in with mom and dad becomes a financially attractive option.

Aah! The benefits of home! Somebody else pays the bills, worries about the mortgage, cuts the grass and – if a kid is really lucky – cooks, cleans and does the laundry. It’s like having a butler, a maid and a really rich uncle all rolled into one. No stress, no bills to pay, no worries about the threat of unemployment, eviction, and so on. What’s not to like?

Often, if boomerang kids need money, they find that mom and dad are more than willing to open up the checkbook. The kids only need to stick out a hand and somebody will put a few bucks into it. To top it all off, everything that they earn on their own can be used as discretionary income, and once they are established, it’s unlikely that their parents will kick them out. Living at home rent free often means that a new car, designer clothes and a week in Mexico are suddenly easy to afford, even on an entry-level salary.

See also: The Role of Parents in Financial Education

What’s A Parent To Do?
Clearly, moving back home has enormous and immediate advantages for the kids, but it’s not such a great deal for the parents and, in the long term, it may not be good for the kids either. That KIPPERS moniker is an accurate depiction of an ugly scenario. Some parents are too kind to kick out their still-dependent kids, so instead of using their prime earning years to save and invest for retirement, the parents are pouring their money into adult children who can’t or won’t strike out on their own. Furthermore, in addition to jeopardizing mom and dad’s retirement, junior isn’t learning a thing about the responsibilities that come with being an adult.

You’ve heard the old saying: “Give a man a fish, you feed him for a day. Teach a man to fish, you feed him for a lifetime.” A similar concept applies to your adult children. If you give them free room and board, you may be feeding them for a lifetime, but they’ll never learn to feed themselves. It’s just one of the sad facts of life that most folks will keep taking if you keep giving.

See also: 10 Ways to Deal with Boomerang Kids

Set Rules!
If your adult kids want to come back home, or they won’t leave, you need to lay down the law. Teach them that there’s no free lunch in life. Maintaining a household is an expensive proposition, so everyone living under your roof needs to carry his or her own weight by paying his or her fair share of the expenses. This includes paying rent, paying utility bills and paying for food.

While the kids are chipping in to pay for telephone and cable service, the parents need to make sure to keep their wallets closed. Your children need to pay their own bills. This includes car payments, insurance, gasoline, credit cards and cell phones. Kids need to learn that if they incur expenses, they are responsible for paying them. This will surely teach a child the beauty of budgeting.

Fastest Growing Industries in the United States

Construction in the United States is on the upswing. Seven of the top 10 fastest-growing industries in the country are related to construction. This data comes to us by way of the financial data provider Sageworks, which has compiled a list of the fastest-growing industries based on annual sales increases. This year, computer systems design and related services tops the list, followed by a variety of construction and utility-related industries.

1. Computer Systems Design and Related Services

This industry is far and away the fastest growing in the U.S. As quoted in Forbes, Sageworks analyst James Noe said, “There’s just an obvious need in the economy for these types of services. Everyone uses computers and businesses rely heavily on technology now, so in my mind, it’s a no-brainer that these types of services are growing fairly quickly.” According to a 2012 report from the U.S. Department of Labor’s Bureau of Labor Statistics, a 15 percent rise in employment in this field is expected from 2012 through 2022. Looks like that’s on track, with 18% growth last year.

2. Services to Buildings and Dwellings

This industry is comprised of all the establishments that provide services necessary for the maintenance of a property – cleaning (inside and out), extermination and pest control, as well as landscaping and outdoor construction, like decks, stone retaining walls, and fences. These services saw a 14% sales increase from January to December of last year.

3. Building Finishing Contractors

The industry’s name is rather self-explanatory, these contractors do the work required to finish a building, whether that’s additions, alterations, maintenance or repairs. This industry, too, saw a 14% increase last year.

4. Residential Building Construction

This includes construction, remodeling and renovation to both single family and multifamily residential buildings. 14% growth last year.

All of the next five industry categories saw 13% growth last year.

5. Foundation, Structure, and Building Exterior Contractors

The contractors who install the wood products above among other duties made up the fifth-fastest growing industry in 2016. This category consists of the specialty trades working on the foundation, frame, and shell of buildings.

6. Other Professional, Scientific, and Technical Services

These are jobs that require a high level of education, training and expertise. The services provided come in the form of legal advice, technological expertise, accounting, research, consulting, advertising, photography, translation and interpretation, as well as a number of others. Since computer systems design and related services are listed further up, we would have to imagine this category does not include growth in that particular technical service.

7. Building Equipment Contractors

With all of this construction, these buildings need to have internal work done, as well. This includes electricians, wiring installation contractors, plumbers, and heating and air-condition contractors.

8. Other Specialty Trade Contractors –

Specialty trade contractors consist of carpenters, brick and stone masons, tile and marble setters, roofers, drywall installers, sheet metal workers, ceiling tile installers, and many more.

9. Nonresidential Building Construction

Buildings and developments in this category include hotels, amusement parks, stores, office and public safety buildings, industrial facilities, schools, healthcare facilities, and churches.

10. Other Heavy and Civil Engineering

This industry is comprised primarily of two sectors, “establishments whose primary activity is the construction of entire engineering projects (e.g. highways and dams), and specialty trade contractors, whose primary activity is the production of a specific component for such projects,” according to the Bureau of Labor Statistics.

The Bottom Line

More than half of the top 10 fasting growing industries are directly related to new-home construction. Non-residential building construction is also part of the list. The construction industry, in general, may be one to keep an eye on, given these signs of an economic recovery.

 

The Secret to Managing Your Finances

The first step when organizing your finances is to determine what it is you would like to accomplish. After your goals are set, the most important thing you need to take a good look at is your cash flow, so that you can figure out the necessary steps to fund your goals. I suggest doing this in three steps:

  1. Add up how much you are spending.
  2. Figure out how much you earn and pay in taxes.
  3. Subtract your expenses and taxes from your income to calculate your discretionary income.
This is a cash management analysis. It does two things: it brings awareness to your spending habits, your taxes, and your income, and it allows you to plan accordingly. By plan accordingly, I mean that when you are faced with a decision to buy a new or used car, to buy a bigger home, or even just to add a monthly cable bill to your expenses, you’ll know exactly how that is going to impact your cash flow. So let’s explore how to figure out your cash flow in a little more detail. (For related reading, see 3 Steps for Creating an Emergency Fund.)

Spending

The best way to know where you are spending your money is to import all your credit card and banking transactions from the last four months into a free online budgeting software program. I prefer Mint.com, but there are several out there, including, Yodlee.com, MySpendingPlan.com, and others. Once you’ve opened an account and have imported your transactions, you can look at your spending trends. As you get more data, you’ll know how much goes towards food, auto and housing expenses. This also tells you where you can lower your expenses if needed.
If you’re interested, you can compare your spending habits with that of the rest of the country by looking at the latest Consumer Expenditure Survey. Mint does a nice job of suggesting ways to save money on credit card interest and fees, insurance rates and other expenditures. (For related reading, see Got a Raise? Here’s How to Avoid Lifestyle Creep.)

Income and Taxes

The best way to compare your earnings and tax bill is to look at Total Income on line 22 of last year’s tax return. Subtract line 60, Total Tax and any state or local taxes from their respective returns to determine your after-tax income.