Good morning, HTM Family!

Just a quick reminder…

Whatever hardships you’re going through right now, there is hidden beauty in them.

Roadblocks, setbacks, and challenges are all necessary in life for you to build grit and become your awesome future self!

Tough times don’t last. Tough people do.

Hang in there and stick with it!

OK let’s get on to the money stuff… 👇👇👇

TO DO

Open a Holiday Spending Credit Card 💳

I’m spending a boatload on Amazon this year for gifts. So I just picked up the Prime Visa and scored a $200 Amazon credit as well as 5% off on ALL purchases. Woot woot!

If you’re looking for a new rewards card, here are some top picks for the best holiday spending credit cards.

Also, try the HTM credit card search tool for more filters and card options! (<— this link works this time! 😅)

SPENDING

Frugal Santa’s Playbook

I truly do love giving gifts, spoiling kids, and spending money on others…

But it seems each holiday season there’s a growing trend of hyper-consumerism that is putting more and more households into bad debt and spending regrets.

So for those of you that need a reality check, or tips on acceptable thriftiness during the holidays, here are our notes…

✋ Honest conversations: You’re not the only person trying to have a frugal/fun Christmas! Many people are too nervous to bring up saving money tactics for fear of being labeled a tightwad. But the truth is, most friends and family would welcome discussions on how everyone can save on gift buying (without eliminating fun, of course). Setting spending limits, splitting meal costs and chores evenly, etc.

🛍️ Start shopping early: Hurried gift buying usually leads to overspending for convenience. So use the time you have now to think up good gifts, buy sale items, and even pick up a few spare gifts to keep on hand for anyone you might "forget" later.

🤖 Use AI: For gift ideas — try using a chatbot like GPT, Perplexity, or Giftlist which can help you think up unique gifts. Type in something like “Please help me think up 10 unique gift ideas in the $x - y price range for my friend. Here are some personal details about them… 1,2,3…”. The more specific you are with chatbots, the more narrow and accurate the output.

🛠️ Get your craft on: DIY or homemade gifts are 100% acceptable. In fact, some recipients may feel they are even more thoughtful than store-bought gifts (I personally think so 🙋‍♂️).  YouTube has like 40 trillion DIY videos out there — you can learn to make anything fairly easily these days. (Another frugal idea is to make art, write a song or poem, or digital gift that doesn’t cost anything). It’s the effort that counts!

🧞 Share wish lists: If you’re worried about buying someone a gift they may never use (or them getting you a useless gift) it’s OK to have a conversation with them about wish lists! Most adults will happily forgo the surprise element to ensure their gifts are used and appreciated.

🧾 Return receipt: Buying returnable gifts is smart (make sure you give them the gift receipt and encourage them to use it if needed!). And vice-versa for items you receive. Nobody wants more clutter in their house, there’s no shame in returning stuff.

🎁 One in, one out: Speaking of clutter, (especially kids’ toys!) try instituting a “one in, one out” policy where for every item you bring into your home you have to get rid of or give away an existing thing. This teaches kids to be mindful of clutter, helps them understand giving, and keeps your house neater too!

Good luck and happy holiday shopping!!

Related stuff:

• 🛒 Spending Stats: Round-up of 2024 holiday shopping surveys (all stats point to increased spending vs. last year)

• 👨‍💻 HTM Post: Making a Holiday Spending Plan

• 🎙 Podcast Ep 439: A Very Merry Minimalist Christmas w/ Meg Nordmann

TOGETHER WITH BETTERMENT*

Save for retirement

Betterment wants to help fund your future! Invest in a Betterment Roth or traditional IRA, and they’ll match 1% of your eligible contributions at the end of this year. Terms Apply. Get started today.

CARS

Underwater Car Loans 😭

Here’s a crazy statistic and chart via TransUnion…

More than half of all used car loans (54%) exceed a loan-to-value (LTV) ratio of 120%!

That’s like going to the dealership to buy a $20,000 car and leaving with a $27,000 loan (why!? —> people need to borrow more than what the car is worth to cover fees/taxes, negative-equity from their old trade-in, and putting 0% downpayment).

Sadly, it’s a growing trend… 👇👇👇

OK here’s the good news…

Cars are built to last longer than ever before. So people underwater on car loans have a chance to recover, as long as they keep their vehicles for longer (ideally, 10-15+ years)

A few other tips to reduce car costs:

• If you do need to get a car loan, aim to put down a substantial down payment. Start your loan with positive equity (and way less risk!)

• Choose vehicles with a strong resale value and low maintenance costs (Think Toyota > Land Rover)

• Stay away from longer loans. 72 & 84-month car notes are the worst! The shorter the loan period, the less you pay overall.

• Keep your car as loooong as possible. Regular maintenance FTW, people. The longer it lasts, the more value you get for your hard-earned dollars.

Remember, a car is a tool, not an investment. Buy the minimum you need, not the maximum you want.

This will reduce your overall transportation costs, increase your financial margin, and allow you to more easily achieve your biggest financial goals.

Related stuff:

• 🚗 Depreciation Calculator: Check out this calculator. We all know that cars go down in value, but it’s mind-blowing how quickly it happens!

• 🎯 Car Budget: How much should you spend on a used car?

• 🤷‍♂️ Financing: We always recommend saving up and paying cash for vehicles. But if you need to finance, here’s our guide with financing tips.

• 🙅‍♀️ 84 Month Loans: They’re bad news bears. Consumer Reports details the downsides, costs, and risks.

ICYMI

In other news…

Easy Passwords ⚠️
NordPass just published the Top 200 Most Common Passwords people use, most of which can be hacked in under 1 second! Good reminder to set strong, unique passwords for all your online accounts (or use a tool like Bitwarden to manage it all!)

Going Broke? 🇺🇸
Taking a nuanced view on our national debt levels, Ben Carlson put out a great post: Is the United States Going Broke? Yes, $36 Trillion (and growing) is a ridiculous debt balance, but there are other perspectives to keep in mind too.

Kid Advice 👩‍🏫
Kids young and old will benefit from these 13 bits of money advice from Jonathan Clements over at HumbleDollar. His children are all grown up now and have adopted excellent financial habits. (Love point #3 — “own the world”)

4% Rule 🏝️
Financial Samurai spoke with Bill Bengen (founder of the 4% rule) and cleared up some misconceptions about this infamous rule of thumb for retirement withdrawals. Here’s a blog post summary, but if you have time listen to the pod episode - it’s much more detailed!

Holiday Hustles 🎄
It’s a great time to start a side hustle as holiday spending ramps up. Here are some ideas and inspiration from SideHusl blog. — “Both Nextdoor and Facebook are great places to announce things like: “I make holiday cookies. $20 per dozen.” Snap a photo. And, Voila, your baking business has launched!”

Daffy x Robinhood 🤝
For all you crypto richies out there - Daffy just announced integration with Robinhood to simplify donations. You can donate crypto directly (avoiding capital gains) and then assign that money to any charity, school, or religious organization that can’t accept crypto directly. A big win in the charity world!

Nature Pics 🙊
If you’re into beautiful scenery and mind-blowing nature pics, here are the winners of Nature’s Best Photography Awards for 2024. We live in a beautiful world, don’t we?

Investing Unscripted 🎙️
Big cheers to Jeff & Jason for hosting me on The Investing Unscripted Podcast! Check out the episode here, we talk about all kinds of beginner investing mindset stuff 🤓.

ASK HTM

“Should I do a Roth conversion during a sabbatical year?” 🤷‍♂️

The short answer is: Yes! It’s smart to realize any tax gains in extremely low-income years vs. paying them during higher-income years.

In fact, if your income is super low you might even be under the federal tax threshold for owing any tax at all!

Here’s the long answer and other stuff to consider with Roth conversions.

Cheers for reading and catch y’all next week! 💪

Best friends out 🍻