Money Musings 💭 this was worth it to me
As someone who is very conscious of my spending and the opportunity cost of each dollar, it can be challenging for me to make a big purchase, ESPECIALLY if that big purchase is a lifestyle upgrade that I’ll be paying for week after week or month after month.
This summer I spent some time thinking more strategically about the coming year (with my Mom - thanks Mom! 🥰) and I realized that J and I had not had dinner alone for MONTHS. Like 5 months.
Yes, COVID had a lot to do with this, but we have been lucky to find amazing vaccinated babysitters who are available to help us.
My mom challenged me to get a babysitter every weekend. 😱 Yes, regardless of our plans.
We are one month in and this has been so worth the tradeoff for us. We are able to spend time alone together, with friends, or even use that time for errands or things we need to get done. But I’m trying to prioritize it for fun plans.
Now the fact that this is even a possibility for us is a tremendous privilege and it’s so important to acknowledge that we have a childcare crisis in this country.
But the reason I’m sharing this is that sometimes it’s worth splurging if you’re able to.
What’s a splurge or worth splurging on is so personal and I know for most it won’t look like a weekly babysitter, but to me this is the greatest luxury I can treat myself to.
Yet, once you are really aware of your spending and your goals, it can be difficult (almost painful) to prioritize money elsewhere. But some things are worth it.
If you are able, what are those things for you? Hit reply and let me know.
P.S. Can you take this super quick (only 2 YES/No questions) poll for some goodies we're cooking up? Take the poll here! Thank you 🙏
MONEY MOVE OF THE WEEK
UNDERSTAND INVESTING EXPENSES (+ TAXES).
One of the potential reasons women investors experience higher returns is that they are long-term investors. Not only does this allow them to wait out dips in the market but trading is expensive. There may be fees associated with buying and selling (trading or commission fees). There are also tax implications when we sell (in non-taxed advantaged accounts).
Here’s how it works. When you sell an investment you either experience a profit or loss. That’s just the difference between what you bought and sold the investment for. So if you bought an investment for $100 and sold it for $150, you earned $50 in profit (or a $50 realized gain).
If you buy and sell in less than a year, it’s a short-term capital gain. If you buy and wait at least a year to sell, that’s a long-term capital gain. Why does it matter? Taxes.
Short-term capital gains are taxed at a higher rate - at the same rate as your income. Long-term capital gains are taxed at 0% if you earn under $40K, at 15% if you earn $40-441K, and at 20% if you earn over $441K.
“Fun” 🤪 fact: An unrealized gain is the growth in an investment BEFORE you sell. It’s not a realized gain (or truly your money) until you sell.
Another unavoidable investing fee if you are investing in funds is the expense ratio. This is the cost of running the fund passed on to the investor in the form of a percentage fee. If a fund has a 0.05% expense ratio, and you have $10,000 invested, you’ll pay $5 per year in fees. So the lower these fees are the better!
YOU GOTTA SEE THIS
CAN WE LIVE OFF WOMEN-RUN BRANDS?
At the Fiscal Femme, we’re huge proponents of supporting women-run businesses. But is it actually possible to live off of only women-run brands? The short answer? No.
Time magazine’s Alana Semuels lived out an experiment for a week this summer in which she only spent money on businesses either owned by women or run by a female CEO.
Unsurprisingly, she found that it was really hard to do. Even some of the grocery items we might assume come from women-run companies—Annie’s Homegrown, Brianna’s Salad Dressing, Mary’s Gone Crackers, Libby’s Pumpkin, Mom’s Spaghetti Sauce—are actually owned by men. You can read more about her experience here.
If podcasts are more your style, check out this episode of Planet Money that follows Alana’s experiment.