Marketplace

Budgeting

Question: I will finish my Ph.D. in June 2008 in business. Because my income over the past five years has been variable (from unpredictable teaching assistant and research work), I have not really created a "budget" per se. I'd like to avoid tracking every penny I save, but I also want to start saving for retirement and paying off my $30,000 educational debt. I've saved about $10,000 in the last year in an ING Orange Account. I wanted to put it in an index fund but need access to it in case of medical issues (I have had 7 surgeries during grad school). Also, if I get a job paying a high salary as a visiting professor, I am wondering if it would be stupid to try to pay off all my debt in one year. After all, I'd like some security if the academic job market does not go my way in 2009. Thanks. Susan

Answer: I don't think it would be stupid for you to pay off the debt. But I do agree with your concern that you could end up in a cash flow bind if the academic job market doesn't go your way or if your health deteriorates again. I would plan on spreading out debt repayments over a few years, which is still fairly aggressive.

By the way, for some reason "cash" is often looked down on as an investment. Yet in the current troubled economic environment cash is king. Plus, you only want to put money that you won't need for, say, five years or more in a broad-based equity index fund (like the Standard & Poor's 500, the Russell 3000, or the Wilshire 5000).

On the budgeting side, I wish I could write the line that budgeting is fun. But I can't. However, the chore of creating and sticking to a budget is worth it. I can emphatically state that within a relatively short period of time the result from fashioning a budget is genuinely liberating rather than constraining. For one thing, a household budget is the starting point for taking control of your finances. It's the baseline for all your saving, investing, spending, and giving decisions. For another, a budget is really where values are transformed into reality. The real payoff from budgeting is this: you spend your money where you want it to go and save for what you would like to do with it.

You don't need to spend enormous amounts of time tracking data. For a relatively small investment in time and effort upfront--usually a couple of months--a budget will become a lifetime of good financial habits. At that point, ballpark figures and estimates are fine for most people. One last point: make as much of your savings automatic as possible, from participating in a retirement savings plan at work to having a portion of your checking account automatically siphoned off into a savings account every month.

01/15/08 by Chris Farrell

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Blending Finances

Question: Hi Chris, My girlfriend and I will be graduating from Cal's City and Regional Planning Master's program next month. We will also be moving in together.

Neither of us has lived with a partner before. We're thinking about buying a car. And we're wondering if you have suggestions for any books or resources that will help us have a harmonious financial relationship together. At this point, we're not sure whether we will be getting married but still want to thoughtfully and logically think through our communal finances. Justin, Oakland, CA

Answer: Congratulations on you and your partners thoughtful approach to money. To me, how money is handled defines one of the big differences between living together and being married. Even when married couples strive to keep their finances separate, money mingles over time. And for most newly married couples the decision to set up merged accounts is deliberate. But when you're living together it makes sense to keep money separate most of the time.

Keep the lines of money communication open. Don't let any problems or issues fester. Establish a regular money meeting for paying bills and talking over finances. And whatever system you and your friend decide on for splitting and paying the bills-- keep it simple. Now, on your specific question of a car, it's easy enough to divide insurance, maintenance, and gas bills. But what about ownership? For instance, who gets the car if you split up? And if you buy together you should have a contract that spells out obligations.

Ownership is a legal issue. A good resource for looking into the options for a car contract between unmarried couples is the Nolo.com guide Living Together: A Legal Guide for Unmarried Couples. As you can gather from the title, Nolo's book is written from a legal perspective. For insight on handling the basics of household money as a couple, I like Ruth Hayden's For Richer, Not Poorer: The Money Book for Couples. It's geared toward married couples, but there is practical advice for any couple.

04/28/08 by Chris Farrell

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Opt-Out

Question: Chris: These days all of us receive so much unsolicited mail in our mail boxes, that it is a real headache. It is even more so, with the prescreened credit offers, because we are obliged to shred those papers with our names on it, or else someone will steal our identities. I found this web site that allows you to opt out.

www.dmachoice.org/MPS/proto1.php

What is the catch? Is there a downside to opting out? Thanks, P., Pittsburgh, PA.

Answer: The only downside I can imagine is that you might miss a good deal or an attractive offer. For most people, that's a small price to pay for cutting down on unsolicited offers in the mail and telemarketing calls.

The Direct Marketing Association (DMA), a trade association, allows you to opt out of direct mail marketing solicitations for 5 years. You can register online at www.the-dma.org/consumers/offmailinglist.html. (This is the website you mentioned in your email.)

There's more. The federal government has created a National Do Not Call Registry. It's a free service for reducing telemarketing calls. To sign up go to www.donotcall.gov. Or you can call 1-888-382-1222. You will stay on the list for 5 years, and then you can renew again.

The four credit reporting bureaus (yes, sad to say, there are four of them now) offer an opt-out service, too. Equifax, Experian, Innovis, and TransUnion--the four horsemen of the credit reporting business--have a website with the details at www.optoutprescreen.com. The toll-free number is 1-888-5-OPTOUT. It's a bit disconcerting to realize that you will be asked to provide some very private information, including your home phone, Social Security number, and date of birth.

Last, you can get more details about preserving at least a shred of privacy in the Internet Age at the Federal Trade Commission, at www.ftc.gov.

05/23/08 by Chris Farrell

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Credit Counseling? Bankruptcy?

Question: My husband and I have been offering budget counseling to friends and family for about 2 years now. It is rewarding to help people find their way back on track. Recently though, I'm afraid we've strayed out of our league and know it. We're trying to come up with a budget for a family with 40,000 in credit card debt that has eaten away at the monthly salary. Their mortgage is 50% their monthly income and they're a large family. I can't send them away empty-handed though, so what are some resources we could share with them and when (as homeowners) is it time to think about filing for bankruptcy? Thanks, Jacqueline, Sacramento, CA.

Answer: It's great that you help out family and friends with their money issues. It's also smart to know when someone needs more expert advice than you can offer.

That said, there are a lot of scams at worst and incompetence at best in the consumer credit counseling and debt management business. The organization that I like is the nonprofit National Foundation for Credit Counseling. NFCC has a search engine at its website for you to find an accredited Consumer Credit Counseling Service near you. (To be sure, the quality of the advice varies across the country with some offices better than others, but the service is legitimate.) I took a quick look and I didn't see a CCCS in Sacramento. I do know that the Consumer Credit Counseling Service of San Francisco (www.cccssf.org) offers credit and bankruptcy advice over the phone and the Internet.

If your friends would like to do some research on their own, one of the best consumer- friendly guides to bankruptcy and credit is offered at Nolo.com (www.nolo.com.) Their books are good. Your friends can profitably spend some time on their website gleaning information.

And they can always consult with a bankruptcy attorney to talk through their options.

06/02/08 by Chris Farrell

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Bankruptcy? Credit Counseling? Where to Turn?

Question: Hello Chris, I am a thirty year old male living in Asheville, NC. I currently have over 20,000 debt to a private student loan lender (Loan to Learn) which is a consolidation of a previous loan plus an additional amount from L.T.L. The school I attended did not participate in the Federal student loan program or I would certainly have opted for that instead. I have not been in school for the last year but have filled out the FAFSA for the 08-09 school year and am considering going back. I am in serious default of my private loan right now and in no financial state to 'catch up' in the manner they wish. They allowed me to apply for forebearance, then denied me due to being in default. I have been regularly ignoring their daily phone calls for some time now. I am wondering, if I return to school is it possible to transfer or consolidate my private loan over to a federal loan where I would have drastically better interest rates, lower payments and the possibility of forebearance? Are the re any other options to begin working this matter out? In addition I also have two small credit card debts. They are far more feasible for me to deal with right now and the cards have been destroyed. Should I consider bankruptcy?? I am engaged to be married soon and hope to start a small business with my brother in the next couple years. In other words, I am thirsty for any knowledge about how I can begin to relieve myself of this awful financial dilemma! Thank you for your time! I really hope to hear some feedback! Sincerely, Ryan, Asheville, NC

Answer: A few specific points: Declaring bankruptcy won't get rid of your student loans. You can't "discharge" student loans in either Chapter 7 or Chapter 13 personal bankruptcy. You never want to mix private student loans and federal student loans in a consolidation. The reason is that federal consolidation loans offer far better benefits than private ones, and you don't want to lose those by putting the two very different species of student loans together.

You could also visit with a credit counselor to get advice. In earlier posts, I've recommended the Consumer Credit Counseling Services with the National Foundation for Credit Counseling (www.nfcc.org). There is an office in Asheville, the Consumer Credit Counseling Service of Western North Carolina (www.cccsofwnc.org).

You have a lot going on: A big debt burden, a desire to head back to school, getting married, starting a business with your brother. My advice is to slow down. There is a season for everything, and it seems to me that you need to make some priorities. Right now, the big priority in your life is to sit down with your fiancé and go through all the financial options. The two of you should gather information together (such as both of you visiting with a credit counselor). The two of you need to come up with a mutually agreed upon plan for handling the debt and getting you to school.

06/06/08 by Chris Farrell

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Merging Finances, Including Debt?

Question: I am 37 and getting married in three months to a gal who is 10 years younger than me. Financially, we're at different places in our lives and I am wondering what I need to do as we merge our lives together to protect my modest wealth and assets in case of a financial disaster on her part.

I've had my hard financial knocks in life, but have gotten to the point where I have a good job, good credit, own a condo, own a car, have money in retirement accounts, and my credit card debts are very low and manageable (and could be paid off quickly if needed). My fiancée has huge student loan obligations ($100k+) and damaged credit because she declared bankruptcy three years ago. Her debt is almost entirely student loan debt, so that does simplify things.

How would you proceed into such a situation? Please do not use my name if you answer this question as I do not want friends/family to be able to identify us should they hear or see the question. Thank you! Washington D.C.

Answer: Ah, romance. Poets, philosophers, and songwriters have long struggled to capture the mysteries of love and marriage.

That key question is this: Are all the financial issues out on the table, discussed, and the approach toward dealing with debts bought into by both of you? Are you on the same page about handling her student loan debt? Your credit cards? How much is each of you going to set aside in retirement accounts? What you need to do is really gain an intimate understanding of each others desires and fears about managing money as you go into this marriage. The rest is financial technicalities.

This is where a prenuptial agreement can help. Now, most people don't like the idea of a prenup. It isn't romantic. It has an aura of preparing for failure in the marriage. But look at it this way: A prenup can be a critical part of your money discussion. The beauty of a prenuptial agreement is that it is a vehicle, an impetus for full financial disclosure. Many couples like to write their own wedding vows. A prenup allows a couple to write their own marriage contract. It should cover all assets, including property and difficult-to-value holdings like stock options, businesses and professional practices, and academic degrees. You should also cover all debts, potential inheritances, and spousal support.

A prenup is a binding legal contract. That means you'll need lawyers to help both of you understand the document and to make sure the prenup does not violate any laws. Another way to handle it is a more informal, do-it-yourself approach. It isn't a legal document and it won't hold up in court, but it's a written understanding between the two of you. It's a way of getting both of you on the same financial page. The value lies not in the contract, but in the process.

Two books that might help your financial relationship: For Richer, Not Poorer: The Money Book For Couples by Ruth Hayden (Health Communications), and Prenups for Lovers by Arlene Dubin (Villard Books).

06/17/08 by Chris Farrell

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Budget

Question: I am looking for a good program or book to helps us with prepare and follow a budget. Thanks. Daryl. Austin, MN.

Answer: I like the approach advocated by Ruth Hayden in For Richer, Not Poorer: The Money Book for Couples.

07/23/08 by Chris Farrell

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A Budget Toolkit?

Question: Can you recommend a good online budgeting tool? Suzanne, Thiensville,WI

Answer: My favorite budgeting quote:

Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

It's from David Copperfield by Charles Dickens.

There are a couple of good ones. Quicken Online is geared toward tracking where your money is going. (There are also the various Quicken personal finance software packages.) Others swear by Microsoft Money Plus. I have heard good things about Mint.com, but I haven't used it myself. There are plenty of good budget worksheets online, too. A basic one is offered for free by the Consumer Credit Counseling Service of San Francisco at www.cccssf.org. (It's under "forms".)

However, I know far too many people who have paid for a sophisticated computer-based budgeting tool only to have it gather cyberdust after a few months. The software and online programs work for anyone with a good reason to track their spending and saving patterns on an ongoing basis--and in detail.

But for a lot of us out to create a household budget, pen, paper, and a calculator is enough. It all depends what you're trying to do.

Whether you go online or use a notebook, the chore of creating and sticking to a budget is worth it. A household budget is the starting point for taking control of your finances. It's the baseline for all your saving, investing, spending, and giving decisions. Without a budget it's harder to control risk. Instead, you're more financially vulnerable to a sudden setback, such as car failure, job loss, or an illness. A budget is really where values are transformed into reality. The real payoff from a budget is when you spend your money where you want, and save for what you would like to do with your money.

Most of us don't need to spend an enormous amount of time tracking data. For a relatively small investment in time and effort upfront, a budget should become a lifetime of good financial habits. At that point, ballpark figures and estimates--with the aid of automatic bill paying and automatic savings programs--is enough.

In an interview I did several years ago with Eric Tyson, author Personal Finance for Dummies (and a number of other finance books) we talked about a couple that was making a budget, and they were eager to do all kinds of data entry on the computer. Tyson's response was "do they really need to be tracking all of their spending on a monthly basis? Because if they set a specific savings goal like we are going to save 10% of our income or 8% of our income each month and they are able to do that, then my feeling is who cares where it goes after you have accomplished that savings."

I vote for keeping a record of your spending for several months to find out where your money is going, and use that for creating a working budget. But once you have one, with time it's no longer necessary to minutely follow your expenses--unless there's a good reason to do it.

09/06/08 by Chris Farrell

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Which Debt to Pay Down?

Question: My parents gave me a check to help with debt reduction. I am somewhat overwhelmed with the possible uses for this check. I have a loan with 12% interest which would be close to being paid off with their check; a credit card at 0%; and credit card at 10%. My first instinct is to pay off the loan and be nearly done with my 2nd highest monthly payment. However, credit card debt is less favorable to my credit than a loan. I also wonder if I should split the payment and pay off some debt and put the rest into a 2-year CD? Or finally, much needed home repair that I could pay up front rather than financing. What's best: loan repayment, credit card repayment; repayment and savings; or home repair? Kate, Minneapolis, MN

Answer: In a sense you can't go wrong. But there are trade-offs, and that's where the paralysis comes in. Here are some ways to think about it.

The standard advice--with good reason--is to attack the high interest debt first. By definition, it's the most costly. However, all of us need some positive reinforcement and there is a "whew" factor to consider when we finally get rid of a debt. That's why it can make sense psychologically to attack the debt with the smallest amount due even if financially the logical course is paying down the high interest rate debt.

Now, reminiscent of the fierce debate over whether to tie a kid's allowance to household chores, either approach has passionate advocates. I fall in the agnostic camp. Either way, you're getting rid of debt. The real question is, which approach will work best for you? Paying off a loan or tackling higher rate debt?

That's one big issue. The other one is the home repair. You say it's "much needed." I interpret that to mean the repair will help maintain the value of your home. I know that the housing prices are falling now and for the foreseeable future. But over a longer period of time your house is a major investment. In that case, using the money from your parents as investment money, and setting up a debt repayment plan to attack your other debts, seems sensible to me.

Last, understanding how you got into debt in the first place and how you plan to stay out of debt once you get all your debts paid off. Part of this process is the proverbial "know thyself" and part of it is creating a practical budget you can and will stick to over time.

So, with all this in mind, here is how I would approach it.

If you haven't done so already, take the time to make a realistic budget for paying off your (remaining) debts. Next, while in most cases borrowing to make home improvements is good debt that should pay for itself over time, it might be the best course to avoid taking on new debts. This way you can get your home fixed up, and focus on your debt reduction plan.

Does anyone have another thought or approach?

09/10/08 by Chris Farrell

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An adventure travel

Question: Hi, I can already hear you replying "are you nuts? Worry about reducing debt and stockpiling your emergency fund first!" But I feel that it's one of those things that you must check off the list, before I am tied down with kids. Do you have any suggestions on how I can fit this in without dropping the ball on my financial, educational and career goals? I am about to start graduate school, and could take some time in between semesters or wait until after I graduate. I was thinking 4-6 weeks of adventure backpacking. 1-2 weeks at a time wouldn't work for this type of excursion. PS -- I do love listening to your show! Thank you. Mia, Marlborough, MA

Answer: Go! You're not going to hear from me that taking an adventurous backpacking trip is nuts. (I might say I'm jealous but that's a different story.) The economy may be down, but that doesn't mean your spirits should spiral lower, too. You want to take a break to refresh your mind and body and spirit before during or after graduate school? That's wonderful. So let's make that happen without taking on any or much debt.

One questions is how to hike and walk for several weeks frugally? A trip with a backpack should be a low cost excursion anyway. Better yet, there are plenty of deals in the travel business right now, from low cost flights and cheap excursions to price cuts on rental cars and hotel rooms. Travel is down, and businesses of all kinds are cutting deals to stay in operation.

The real trick is to carefully plan ahead. Map out your route. How will you get to where you are going? Where will you stay? What is your budget? It's so much easier to be frugal when you take the time to do research and planning. We all end up spending more than we should when we rush to book a flight or dash off to the grocery store at the last minute. With research and planning you'll be able to find and book deals, create a tight budget that you can live with during the trip.

If the numbers still don't quite work out, consider hiking for 4 to 5 weeks rather than 6 or choosing a less expensive spot for your adventure. It will still be worthwhile, and you'll have plenty of opportunity to go on long trips later in life--even with kids in tow.

Of course, there are the bigger financial questions, such as the debt burden you're taking on at graduate school and the kind of income you'll earn when re-enter the job market. Still, with careful planning and a frugal budget you should be able to come up with a trip that's both cost-effective and soul nourishing. It's also good to go off on a trip like this before you embark on your new career. That's an adventure in itself. .

Have fun with your frugal adventure. Let us know how the trip goes, and relay any "frugal" tips you pick up along the way.

04/24/09 by Chris Farrell

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Changing careers

Question: I spoke to Chris about 6 years ago. My dad had died in March of 2001 and left me and my brothers and sister a little money. Chris's advice was to divide it into 3 amounts: cash, mutual funds, and equities.

Well, I'm sad to say that my mom died this past February. She had sold the farmland late last year, and so she's left us that, and next year we'll get the rest of dad's money. Which is, it turns out, quite a bit.

I want to write full-time, but I don't want to squander my mom and dad's legacy. Their memory is dear to me. I want to write their and my story. Can you recommend how I should proceed? Note: I'll be 42 years old this October. David, Birmingham, AL

Answer: I'm sorry for your loss, and understand the care you want to exercise before taking your next step. There are many issues to consider before making the kind of shift you're contemplating. Lots of people these days are intrigued by the idea of changing careers. They want to do something that makes a difference. They want to do something that offers more meaning to their lives. Like you, they have a dream. It's wonderful. It's also the case that careful research and planning can increase the odds of success.

That's where a financial plan comes in. Of course, how much freedom and flexibility you have largely depends on how much money you're inheriting. That said, here are some classic techniques to consider when making the shift. Many people find it's smart to work part-time and tap into savings (in your case inheritance) to make up for any shortfall. Another time-honored tactic is to give yourself a set period of time--perhaps 6 months to one year--to pursue your dream and pay yourself a "salary" from savings. That is what you live on, and no more.

In some cases, employers will entertain proposals for a longer period of time away from the office through a mix of vacation, furlough and sabbatical.

It's a good idea to give yourself a target date to evaluate whether this is working. It could be anywhere from 3 months to a year. An evaluation date will help prevent you from running through the inheritance.

A key question is what will you do for health insurance coverage during this period of time? You don't want to be without it, and many people find this is the main stumbling block to get over in devising a career change.
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So, my bottom line is use this time to play with the numbers, explore your job options and come up with a practical plan. You should also get practical money advice by networking with other writers in your community. Most veterans are more than willing to share their insights and experience. Good luck.

07/27/09 by Chris Farrell

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Online budgeting

Question: Do you have an opinion regarding online budgeting websites? I inquire as my fiancée has recently discovered such a website at www.mint.com through a magazine she recently received. Specifically, as she told me, this particular site requires that you input certain credit card account and bank account information and then it shows you where your money is spent. I am perhaps a bit on the old-school side of things, but it sounds kind of odd to me and I told her I would look into it. I figured that I would ask a trustworthy and reliable source for their opinion on this particular site. Thank you for your time and I look forward to your response. Justin, Sacramento, CA

Answer: I'm a fan of the new generation of online services for budgeting. I did an informal survey among some friends this past weekend and mint.com got good reviews. It's easy to use. The site aggregates all your credit card, savings, investment, mortgage, auto loan and other financial data. You mine the information to see where your money is going. The program also has built-in guides for attacking your most expensive debts first if that's an issue. Mint is a monitoring tool--you can only read the data, you can't transfer money around--that facilitates budgeting. You did hit on the big caveat to Mint. You do have to give it your user name and password to various financial accounts. There are competing programs, such as Wesabe.com, that let you export and upload the financial information yourself. It's more cumbersome, however. Here's an interesting take on Mint and security.

By the way, check out your bank or credit union. The competition is spurring financial institutions to offer better yet simple budgeting tools. I live in an online world, but there is nothing wrong with monitoring finances with paper and pencil, either.

08/18/09 by Chris Farrell

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Money and emotions

Question: You know how we often despise in others the qualities that are most like our own? Well, I have always been very critical of my mother for her spending habits, that she seems to spend to fill some kind of an emotional void or to feel secure knowing that she can spend (vs. times in her life when money was in short supply). I notice increasingly in my own spending habits, though, the same impulses, that spending money gives me a pleasure akin to eating a food that was forbidden as a child. Money is my Hostess snack cake. Growing up, we didn't have any, and now I can have it any time I want. The question is: What advice can you offer - or what tools, books, etc. can you recommend - to better understand and reshape my emotional response to spending? Because while my husband and I are lucky enough to have the resources (and luckily I hate to shop), I want to be able to set and achieve spending and saving goals, and to get the same satisfaction from having done so. Thank you for any help you can offer. I have just discovered your program (after listening to Marketplace for years) and am an avid podcast fan. Sarah, Efland, NC

Answer: Whew, this is a huge topic. It's also a wonderful question. I'd love to hear from listeners any suggestions they might have for you or personal experiences to pass on.

Looking at this question through a personal finance lens, I believe that giving is central to managing our money lives. Saving for emergencies and for retirement is central to any financial plan. But I would give primacy of place to giving. The mindfulness of giving forges connections with community and strangers. It reminds us that when you think about what matters most it's usually relationships, experiences and making a difference, not things and money. We get to support causes with our dollars and recycle stuff we no longer want and get it to people who need it more. "Money is to be spent or given away," says Ross Levin, a Minnesota based certified financial planner. "Planned, systemic giving to charity helps dislodge the hold that money may have over you. Sharing your experiences and hopes can have a huge impact on those around you. You get to choose to make a difference."

You asked for resources. A practical personal finance book that grapples with our emotional responses to money in a consumer-dominated society is Eric Tyson's Mind Over Money: Your Path to Wealth and Happiness. Another book I've found valuable isn't directly focused on managing money, but its thought provoking along the lines of your question. It's Stumbling on Happiness by Daniel Gilbert. A Harvard psychologist, Gilbert's book is a quirky exploration of our imaginations. He confronts the issue of we do so many things that don't make us happy and pass on the things that do. Hmmm, maybe I should take it off my book shelf and re-read it...

09/02/09 by Chris Farrell

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Go on trip

Question: My wife (30 yrs old) and I (31) have been saving for multiple years to take a 6 month world trip and I am hoping you'd give me your opinion if it is too financially risky to take this trip. I can take a leave of absence from my work with the expectation that I'll still be employed when I return. My company is an FFRDC [Federally Funded research and Development Center] so it is relatively secure. My wife will have to quit her job and search upon return. However my job is 2/3 of our income and we could live off my job alone if needed. We rent so we should be able to cut most expenses while we're away. We have zero consumer debt, though we have $45,000 in federal student debt at 2% APR. We estimate the trip will cost $30,000 and have $40,000 so that we have a good buffer. This is not our only savings as we have been saving for retirement for multiple years and already have about $100,000 toward retirement in our tax advantaged plans. We also have several months (~4 mo) expenses saved up in the bank for a rainy day. However I am still a little worried. With the poor economy and losing 6 months of pay is this just foolish conspicuous consumption that will put my wife and I in financial peril or is this a small, calculated risk which, given we are young, can course correct even if the unexpected happens? Obviously I'd love to make this trip, but I like feeling financially secure as well. First Name: Nichols, Redondo Beach, CA

Answer: Okay, I'm jealous--really jealous. It sounds like a wonderful adventure. I guess I'm supposed to act like a sober-minded guardian reminding people not to take unnecessary risks when the economy is down. But I can't do it. I don't believe it. As the 15th century French poet Charles D'Orleans wisely wrote, "It's very well to be thrifty, but don't amass a hoard of regrets."

You can't get rid of the risk that when you return you face a rough time. It's in the nature of your adventure. But you've carefully thought through the risks and rewards of taking the trip, and you've done a lot to minimize the risk of hitting a tough patch when you return. You've prepared your employer for your leave. You've saved a lot, leaving yourself a decent margin-of-safety to fund your wife's job hunt when you get back to California. The global downturn also means that in many places you'll be able to take advantage of cut-rate prices. Bon voyage.

10/06/09 by Chris Farrell

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