This is a tough conversation. The numbers don’t lie, the ratio of housing prices to income quantifies how difficult it has become to afford a home. However – you knew that was coming – there are paths to home ownership. They may be longer, they may involve hard choices, but they exist.

Let’s talk about it. It’ll take two posts but issues this big need time and space.

Math and Economics

There are endless resources which highlight and prove what our eyes have been telling us for years—houses are expensive and incomes are not keeping up. Parts of Maine have been hit hard, especially since 2020, but the road we’re on started getting steeper well before the economic shocks related to the COVID pandemic. There are endless opinions and numbers to suggest why this has happened, but I dare sum it up in one powerful word: economics. I could go three words to be more specific: supply and demand. I can get even more specific by saying that demand exceeds supply and buyers have been willing and able to pay higher prices which makes them… Go even higher. Don’t get me started (today) on why this has happened although I’d love to dig into it someday.

And does it matter why it has happened to someone who is fighting this battle today? Not so much, I suspect. However, an understanding of the economic fundamentals that have brought us to this point can help us as we explore solutions both for ourselves and for the larger community in general.

Viewing Home Ownership Obstacles through a Generationally Diverse Lense

Yes, I am already a homeowner, and I benefited from the surge in real estate prices between 2000 and 2016 (when I sold my first home). So, to be fair, I cannot write this post solely from my point of view. I am trying to see this world through the eyes of someone who is looking at the market now, likely a first-time buyer, or someone who will be a first-time buyer someday. Someone like the high school and college students I teach or someone who wants to make the move from renting to owning. Someone like my 13-year-old who will, in a blink, start thinking about this. What would I tell them?

Again, it’s a tough conversation. But I want to talk about what can be done rather than add to the paralysis by analysis centered on what can’t be done.

To that end, I asked for input from those who are looking straight at this challenge in real time. Jaden Kyung-Moon Bauch is a financial educator, a 2025 graduate of The Maine College of Art & Design, has passed several key investing exams including Series 65 and Series 7, is studying to become a Certified Financial Planner, and was interviewed for one of my previous posts. She also authors an Instagram account and website loaded with old school financial advice presented through a new school voice – @TheFinancialPalette and https://www.thefinancialpalette.org/.

“Student loan debt, rising car prices, and increasing rent all make saving for a down payment feel nearly impossible. On top of that, there’s often a lack of education around what homeownership actually entails. Many people assume that putting 5% down is enough and that it’s fine because it gets them in the door, without fully understanding the long-term costs and risks. I also see people underestimate the true cost of owning a home, thinking it’s just the mortgage payment, when in reality maintenance, repairs, taxes, and insurance add up quickly. A similar mindset shows up with rental properties as well.

All of this contributes to a broader sense of pessimism. When young people feel shut out of such a major milestone, it compounds into deeper frustration with the system and the economy as a whole.”

Wow. Exactly.

Jaden continues, “I really encourage people to look at the broader structural issues, but also to focus on what’s within their individual control. That means doing the math honestly and, when possible, sitting down with a professional to explore what paths might exist.

The reality is that things are not fair for our generation. But I think it’s important to focus on what we can do about it, both individually and collectively, and to invest in education as a form of empowerment rather than resignation.”

Wow again. Timeless wisdom.

“When young people feel shut out…”

That’s a powerful phrase, especially the word feel. To feel shut out from home ownership is a real psychological barrier based on the reality of the numbers. But Jaden responds with the idea, “to invest in education as a form of empowerment rather than resignation.”

But how? I often mention psychology in my posts related to financial behavior and wellness, but I am not a psychologist and cannot offer that kind of advice. However, I can talk about concrete actions and strategic habits that can help with Jaden’s point about education leading to empowerment.

Financial Decisions Always Involve Choice

Every era, every generation, all of us, face particular challenges when it comes to our finances. For my parents, an objective look at the numbers says it wasn’t as hard for them to get their first home than it will be for someone in 2026 or for my son in 2036 or so. But I can tell you that it didn’t feel that way for my folks (imagine buying a home with interest rates in the teens!) It seemed like a mountain and to climb it they had to make lifestyle choices for many years. They drove old cars; their kids had a lot of secondhand clothes when secondhand clothes weren’t cool; we rarely ate at restaurants; vacations were road trips in crowded cars to see family rather than flights and hotel stays.

In the abstract sense, it’s no different now. Yes, the road is more difficult in terms of pure dollars, and it may take longer to navigate, but the set of choices is similar.

Home-Buying Considerations

Before getting to the tips and strategies, here are some other concepts to consider.

  1. The impact of credit score.
    For most of us, buying a home will be the most significant use of credit in our lives, and for that purchase, credit score will have a huge effect on our ability to not only afford a house but to also manage the financial fallout. For example, if the best interest rate available on a 30-year mortgage is 6%, that rate will go to the borrowers with the best credit scores, the A+ scores—generally 750 or higher. For the same loan, a score of 650 will generally mean a 1% higher rate, which over the life of the loan will add up to more than $100,000 in additional interest. 100-point differences in credit score typically move the rate about 1%, which means about $100,000 over a 30-year note. Not a set rule, but the math usually lands in that ballpark.
  2. Downpayments and PMI or private mortgage insurance.
    For the most part, a 20% downpayment is needed to get a standard mortgage and that means a mortgage that does not require PMI. PMI protects the lender in case the borrower cannot pay. Let’s put on our economist’s hat and do a quick analysis. On the one hand, PMI can make home ownership more accessible as it allows for lower down payments. On the other/trickier hand, PMI is expensive (typically hundreds of dollars/month), and it is pure cost to the borrower, the only benefit being a less than 20% down payment. Once a mortgage is paid down so that the LTV (loan to value ratio) hits that 20% mark, PMI can be cancelled, but the ultimate cost for a homeowner can be in the thousands.
  3. 30 years versus 15 years.
    Getting a manageable monthly payment is at or near the top of everyone’s list. However, it’s important to understand the impact of compound interest in a 30-year versus a 15-year mortgage. It’s massive, often measured in amounts of more than $100,000.

We’ll take a break right here while I put together more information and specific tips for part two of this post.

Another thank you to Jaden Kyung-Moon Bauch and additional thanks to Hannah Finegold at Hannah Finegold Real Estate at Real Broker, LLC, for sharing her experience and advice on buying a house. (Hannah is my former student from Waynflete, and Jaden is a former student and co-teacher from Maine College of Art & Design)

The holy trinity of foundational personal finance tools includes the budget, spending less than you make, and the emergency fund. This post focuses on the superpowers of the emergency fund.

We tend to think of financial emergencies in terms of big numbers—a hole in the roof with thousands of dollars flying away kind of thing. And yes, those things happen, and emergency funds can play a role in managing the ensuing financial stress. But the focus of this post is the smaller crisis, and the role the emergency fund can play in handling those situations and helping us build a stronger financial foundation to deal with future, and sometimes bigger, money messes.

Why Have an Emergency Fund?

The purpose of the beginner emergency fund is to pay for (with cash) unexpected expenses—items not in our monthly or periodic expenses. This could be a tire for the car, the need to travel for a family emergency, meeting an insurance deductible or covering a medical expense.

This is important as it helps to avoid or minimize credit card or other types of expensive borrowing to handle these costs. Using credit cards for these situations, even for just a few hundred dollars, often adds to or begins a cycle of debt because when the bill comes due there is usually not enough to pay the entire balance, interest is charged, and the balance tends to linger and drain the budget.

The above situation and the presence (or not) of an emergency fund promotes a two-sided psychological effect. On the downside, watching a $700 car repair bill affect your finances for months can be a major weight and lead to a feeling of financial hopelessness. On the other hand, being able to handle that unexpected expense from a bank account, then get back on track to other financial goals, can be a real boost, providing inspiration to be an even better money manager, build a stronger emergency fund and a foster a sense of independence.

Getting Started

Most experts call for $1,000 as a level one emergency fund. Considering the aforementioned psychological benefits, $1,000 is still a good starting point. However, inflation, especially on things like car repairs, is very real, and that leads me to lean toward $1,500 for that beginner fund (for a full-time worker).

Ok, where does the money come from?

Yes, this is difficult. It takes scratching and clawing, budget cutting and sacrificing—repeat. And repeat. It means taking a few bucks here and there from streaming services, eating out, etc. It could also mean paying the absolute minimum towards credit cards or other debts for a few months in order to get to that $1,000 or $1,500.

Subsequent emergency fund goals:

  • One month of expenses
  • Three months of expenses
  • Six months or more of expenses

The ideal level depends on many factors such as renter vs. homeowner, dependents, other household income, non-housing debt, and income replacement vs. handling emergency expenses.

Emergency Fund Powers—Activate!

For the beginner, it usually makes sense to have the emergency fund in the same place as the bill-paying account (for example, a savings account). Therefore, it might not earn much interest. However, as the emergency fund grows, it can provide the opportunity to park it in a high yield savings account, an interest-bearing checking account, or even a short-term certificate of deposit (be sure to understand early withdrawal penalties at your institution). That could mean earning 1.5, 2, or even 3% on these back-up monies.

Another way that emergency funds “pay off” is by allowing you to take on higher insurance deductibles, and that can add up to hundreds of dollars a year in lower premiums. Yes, you are assuming more risk with higher deductibles, but you can take the savings from lower insurance costs and add that money to your emergency fund, and watch the snowball grow in your favor.

Challenge Questions

  1. I have $3,000 in credit card debt that I am trying to payoff. I currently do not have an emergency fund, and my budget is tight. I have about $200/month that I can either put towards my credit card or towards building an emergency fund. What should I do?
  2. Pay the minimum on your credit card and aggressively get to that $1,500 emergency fund (EF). Once you reach the $1,500 EF level, then take that extra money and attack the credit card. Or do something in between. Put a large percent of the $200 toward the EF, and a little extra on the card. Either way, BUILD THAT EF.
  • My employer will match a percentage of what I put into the company retirement program (401k, 403b, etc.). I hate to miss out on any of that “free” money! I only owe a small amount on a credit card, but I don’t have much money in savings, just about $500. Should I take full advantage of my employer match or first build my emergency fund?
  • This is tricky. Yes, “free” money is great, but without an emergency fund in place, you are not in a good position to be saving for anything long term. The money you put toward your retirement is not liquid and should an emergency arise, it would mean penalties and tax implications if you access those funds. In a vacuum, the best practice is to BUILD THAT EF to the appropriate level and then take a look at beginning retirement contributions. However, we don’t live in a financial vacuum, and there are other considerations such as the psychological aspects of getting started on that retirement fund. A “do a little of both” approach could be on the table here as well.
  • I’m about to buy a house. How much of an emergency fund should a new homeowner have?
    • At least three to six months of expenses. The exact amount will depend on the condition of the house, other debts, and insurance costs. Generally speaking, for a homeowner, the more the better. You’d rather not experience the full meaning of “house poor”.

Remember the ads about some things being priceless? “There are some things money can’t buy. For everything else, there’s Mastercard.” No matter what card we use or how we feel about credit in general, it was an effective campaign. And there was something to the message—some things are priceless.

In closing out the second year of this blog – this being the 24th post—and closing out 2025, I want to go boldly past the dollars and cents, the credit scores, mortgage rates, budgets and investments, and take a look at dollars and sense, with sense referring to why personal financial “success” is important beyond the numbers in our bank account.

Financial wellness means something different to all of us, and that’s a good thing. I don’t teach personal finance with “get rich”, “make a zillion bucks”, or “retire wealthy” as blanket ideals. I try to help folks learn how to manage their finances within an unruly and complicated system so that they can pursue their goals, whether that means building wealth, changing generational perspectives about money, or finding a way to do meaningful work without worrying about how much it pays. Again, our system is messy and loaded with potholes, and even if your goals are non-financial, it takes financial savvy to get there.

And that’s all very personal. For me, financial wellness has categories and milestones, some with $$ but not all. The example I offer today is about walking my kid to school.

(I Didn’t Know) The Impact of Better Money Decisions

When I began to rewrite my personal finance story, I was thinking about my future self, but mostly if not wholly in the context of building up my bank account, probably for the purpose of what it could buy me later in life. Not bad. And the future me stuff was right on target. But what I didn’t know at the time (or didn’t think about) was that a day would come when a stronger financial foundation would be used to fund choices that ultimately have nothing to do with money and are in fact priceless.

This is an excerpt from an essay I wrote a few years ago, highlighting (and counting) the time I was able to spend walking my son to school.

Starting from when he was about one, he has tallied about 1,500 school days. That is about 3,000 trips counting both directions. Five of those years have been in Spain, making up about 1,750 of those 3,000 trips. Of those 1,750, I estimate that I have walked with him on more than 90% of those days. That comes to about 1,600 walks to or from school with my boy. I would apply an even higher ratio from when we lived in Portland, with me having walked or driven him nearly 95% of the time. Let’s call that another 1,200 legs. I’ve walked him to school or back nearly 2,800 times.

I wrote that a few years ago and can now add a few hundred more to that total even though now he usually walks by himself, not necessarily wanting his folks tagging along.

Yes, That’s Priceless! What Does It Have to Do with Money?

The seven years we lived in Spain and all of those walks to school and other places, were largely possible because I was a stay-at-home dad. Part of the reason I could do that was my wife’s career, but if I had not gotten my finances straightened out years earlier, I wouldn’t have been able to sell my home, pack up a few boxes, move across the ocean, and use savings and investments to fund my portion of the adventure. My wife had a good job in Spain, but she was not making a huge salary, we lived in a spartan apartment, owned a very old car, and kept things really simple financially.

Specifically, but not necessarily in order, this was the path that led to those priceless walks:

  • Get spending under control
  • Use a budget
  • Pay off credit card debt and car loans and never go back
  • Save for a down payment and buy a modest (to say the least) fixer-upper home
  • Rent a room in that home for several years, offsetting expenses and paying down mortgage
  • Begin retirement saving
  • Investing savings and proceeds from home sale to help with Spain expenses and expectation of little to no income for several years

Questions:

  • Could I have still spent the time taking those thousands of walks with my son if I hadn’t gotten my finances in order?
    NO, I would have been working four jobs in order to manage my debt, or I would have been doing a job I hated just for the money and/or I would not have been able to be a full-time dad for those years in Spain.
  • What exactly was the payoff of improved money habits?
    For me, it was the freedom to decide, the power of choice, and the value of time.
  • Was there also some luck involved in all of this?
    YES, but it’s something to see how my luck in these areas increased once I stopped carrying thousands of dollars of debt at 21% interest.

I may not have known exactly what I was working toward when I restarted my financial journey, but one thing I am absolutely certain of is that the path to financial wellness has given me choices and paid dividends—a return on investment —well beyond what any stock, bond, or bank account ever could.

Now, if I can only figure out a way to fix our political system. Let’s see, first…

“OK, class, today we’re going to cover life insurance. This is one of the more important yet misunderstood … Class? Gang? Hello, is this thing on?”, I said, every time I approached this topic, tapping my white board marker as if it were the microphone and I was the failing stand-up comic.

I get it. I don’t want to talk about it either — as a consumer.  But as a financial educator — I do, I do believe in life insurance.

Why Don’t We Want to Talk about Life Insurance?

This entire post and the book sequel could be based on this question alone. Let’s look at this and then connect it to practical steps towards getting (or not) covered.

  1. It’s hard enough to think about our future alive self when it comes to money not to mention our not-living self. This is part of the reason why it’s hard to save, reel in spending, manage credit score, avoid huge car loans at 21 years old, make smart decisions about education and borrowing, etc.
  2. Talking about life insurance means that at some point the word death or dead or deceased will have to be used in a sentence to describe yourself or someone you care about. Yuck.
  3. Culture, family history, and personal preference lead many to flat out not believe in life insurance.
  4. Fear of the pushy salesperson. Hey, I used to be one of those guys! Of course, I wasn’t pushy. This is a real thing as the art of selling life insurance too often takes precedence over whether someone actually needs or wants it.
  5. Confusion! There are several different types of life insurance and what feels like 100s of companies. I wonder… If life insurance were required by law like car insurance, would companies resort to marketing it with strangely named animals?
  6. It’s an expense, and it’s an expense for something we can’t benefit from ourselves.
  7. It is (usually) costly, depending on type, need, health, etc.

Now Can We Talk about It? A Few Things to Know about Life Insurance

Understand Need: The fundamental question, right? Do I need life insurance? This is where our values come into play, possibly more than our finances. Personal finance folks like myself focus on the facts, but it is ultimately a personal and sometimes emotional decision to buy life insurance. In terms of those facts, the need for coverage can be based on several factors:

  • Is someone dependent on your income?
  • Is there a particular debt you would want paid in the event of your passing?
  • Is there a specific cause you would want to benefit?
  • Do you simply want to leave a person or persons a pile of cash to enjoy?
  • Do you want the peace of mind of knowing that some or all of these needs are at least partially addressed through life insurance?

How Much to Buy? A good sales representative will help you through an objective analysis which considers income replacement, debt, education costs, charitable considerations, tax implications, etc. For example:

  • Amount based on an income multiplier like two-, three-, or four-times annual salary.
  • Amount based on debts to be covered such as a mortgage.
  • Amount based on how much to leave to a certain person or organization.
  • Amount based on affordability.
  • A combination or sum of the above.

What Kind to Buy? This is where is gets…oh, what’s the right adjective? Is there a list of adjectives to describe life insurance options? I’m going to say sticky – in my mind that is a combination of tricky and intimidating. What adds to the stickiness is that there are a lot of opinions on this subject. The best you can do is learn about the different types, get further advice from an insurance professional, financial planner or counselor, then make an informed decision. The major players:

  • Term Life: insurance for a specific number of years, (10, 15, 20, etc.).
    • Relatively inexpensive compared to other types
    • Use it or lose it. No cash value.
    • Possible to renew or extend at a new rate depending on health.
  • Whole Life: coverage for a price all the way until age 99.
    • Much more expensive than term.
    • Builds cash value which can be stored, borrowed, or become part of death benefit.
  • Variable Life: offers insurance and the chance to build cash through various investments options.
    • Often thought of as a hybrid of term and whole life.
    • Permanent, lifelong coverage.
    • It can build cash but the only guaranteed part is the death benefit as investments can fluctuate in value.
  • Universal Life: has features of whole and variable life policies but also can offer flexibility in terms of coverage and premiums.
    • Permanent, lifelong coverage.
    • Flexible, but the pure insurance piece is more expensive compared to term.
    • Investments not guaranteed and a drop in value can cause a policy to lapse.
    • Complicated product.
  • Employer-based or Group Coverage: sometimes part of an employee benefit package which can provide relatively inexpensive coverage based on salary.
    • Not portable – no coverage once you leave that job.
  • Declining Balance Term: the death benefit mirrors your mortgage balance, so as the mortgage is paid, the insurance benefit declines (towards zero).
    • Relatively inexpensive way to provide peace of mind that your home would be paid for in full in the event of your death.

Or Just Live Forever

As with any kind of insurance, it comes down to a cost/benefit analysis, looking at what we need vs. what we want, how much risk we want to retain, and in this case, what others need and want. It’s easy enough to get online quotes on life insurance, but here are a few final things to consider:

  • Get a recommendation for a licensed agent from someone who understands your values and has had a positive experience with that agent.
  • Research the company in terms of their service and financial strength.
  • Understand that depending on the type and amount, a medical exam might be required.
  • If you buy life insurance make sure to identify the beneficiary or beneficiaries.

Among debtors, 60% reported financial stress post-Black Friday, emphasizing the psychological toll of holiday overspending. – Federal Reserve Data

At some point when I lived in Spain I  noticed the emergence of “Black Friday” sales and thought, “What?!” My brain sizzled with a Grinchy stammer, “They don’t have Thanksgiving, they don’t have the day after Thanksgiving… Yes, they have the end-of-year holidays with presents, but no day after Thanksgiving. So, how can they have Black Friday?”

It didn’t take long for me to grasp that it was a standard marketing gimmick, designed to make Spaniards believe they were getting some kind of deal, when all they were really getting was a demonstration of the timeless proverb about how a fool and his euros are soon parted.

Unofficial research done through my various English classes confirmed my suspicion that Spanish people had no idea what “Black Friday” meant in connection to retail shopping; they heard of it but didn’t know where, they assumed it was some kind of American thing tied to Christmas, and they absolutely planned to participate.

The most fascinating thing for me was how Spanish marketers pulled this rabbit out of a hat, slapped a 40% off sign on it, and watched as shoppers jumped. Of course, this was not because they were Spanish — how many Americans drop a chunk of their paycheck every May 5th for reasons they probably can’t explain?

Black Friday Savings: What part of that should be in air quotes?

First of all, let me reaffirm that I am not anti-capitalism, so I don’t have anything against companies doing their part which is to make profits. I’m not sure it’s the best system, but it’s the best we have. I am, however, pro personal finance success, and those two things often work against each other. Right, I’m invoking the Paradox of Thrift; consumer spending is critical to our economic success as a country but controlling our own spending is critical to our individual financial success.

I recommend doing your best to ruin the economy this holiday season, and a key part of that process is to leave Black Friday (and all other gimmicks) behind.

More from the Federal Reserve:

  • 18 million Americans reported using high-interest payday loans to cover Black Friday spending in 2023.
  • Black Friday-related bankruptcies saw a 7% increase year-over-year, with analysts linking the trend to escalating borrowing costs.
  • Late payment fees from BNPL (Buy Now Pay Later) plans during Black Friday totaled $150 million, a 20% jump from 2022.

Staggering. That’s $150 million that didn’t buy anything. $150 million that didn’t go towards retirement plans, wasn’t used to pay off debt, saved for a car, invested for education, etc.

Reject FOMO and Say Goodbye to Black Friday Blues

I like to give gifts. I like to buy things for myself. What I like even more is feeling good before, during, and after spending. The great marketing machine that surrounds us wants us to believe that we have to “get the deal” in order to be happy about what we buy. “Don’t miss this Black Friday deal – up to 40% off” really means “If you don’t get something now and at this price, you will somehow be less happy, you will be missing out, and we hope you didn’t notice that the 40% is often deceiving.”

No judgement, no shame. I have played every role in this play (including waiting in line at 3 am in order to save $50 on a set of speakers), but the one I’ve been playing for many years now has been the most fulfilling. The only things I’ve missed by not participating in Black Friday or any other sales gimmicks are the hole in my budget, the drain on my bank account, and the weight of that bloated January 15th credit card bill.

Practical Tips for Managing Holiday Spending

Leave FOMO behind – this is not easy, and I don’t want to minimize the potential difficulty involved in understanding the psychological connections between FOMO, Black Friday pressure, and our financial health. However, the behavioral piece is one of the biggest factors when reigning in any type of want-based consumption, and if it’s not tackled, other strategies will fall short. To dig into your relationship with money, I recommend a book by Dr. Sarah Newcomb: Loaded: Money, Psychology, and How to Get Ahead without Leaving Your Values Behind. I’ll throw in one of her articles as a bonus.

Budget, budget, budget – work potential purchases into your budget without spending more than you are taking in. Make cuts here to pay for there, etc. If your budget can’t handle it, walk away.

Pay cash and/or only use plastic for budget-friendly buys – this is an extension of the budget comment. Watch out for thoughts like, “Put in on the Visa and pay for it later.”

Research – if you’ve determined that your budget can afford the item and/or that it is a need rather than a want, put that old internet to good use and see if the Black Friday price is actually special. Most research that I’ve seen (as well as my own experience) suggests that prices have a way of creeping up in the weeks leading to Thanksgiving – so 40% off of an inflated price is not really a deal at all.

 *****

It’s a never-ending balancing act. It’s nice to buy things. It’s even nicer to buy things for someone else. It’s nice to receive gifts. I like gifts! But when gifting (and spending in general) leads to financial stress, that’s not a gift for anyone.

Timeless personal finance advice to fill your mind and, hopefully, your wallet

I Googled “Personal Finance Advice” just to see what AI would say. Wow, what came out closely resembled the outline for every personal finance course I’ve ever taught. Hey, wait! Everyone wants to know if people are cheating by using AI, but what if Uncle AI is stealing from us?!

All kidding aside, the advice was solid, no complaints. But, of course, it reads like a textbook. It’s technical and mechanical. There is just no personal in its personal finance content, and while I am not here to offer a referendum on the use of AI in general, I am here to talk about personal finance advice. I’m here to talk about impactful, effective, and lasting personal finance advice.

It Takes a Long Time to Turn a Big Boat

I don’t know who said that or what it was in reference to, but I love it, and I feel it. My financial boat has never been very big, but it certainly was at one time headed in the wrong direction, and it took a village of voices and encouragement to change its course. Ultimately, it required my own action to make a real difference, but I wasn’t alone. For me, the first and loudest voice was Dave Ramsey.

Dave’s shows are sometimes endless rants of one classic quote after another, but to follow my own rules, I must pick a #1.

“Live like no one else so that someday you can live like no one else.”

Translation into language that my formerly bad-money-decision driven mind could understand; stop using credit cards and car loans to buy things you can’t afford but that you think you should have because other people do… And then down the road you might be able to live without constantly worrying about money.

I can’t move on without at least one more from Dave.

“Be weird.”

This usually comes after he lays out what the average American does when it comes to money; spends too much, borrows too much, lives beyond their means too much. So, he pushes us to go against that, to spend less than we make, to budget, to drive used cars, to think about our future selves. I’m not totally there, but the more I keep at it, the weirder I get.

Facing Our Financial Realities

Suze Orman has to be on any list of folks who talk money, and one of her sayings left a huge impression on me when I was struggling to make better decisions.

“Live in your truth.”

I think the full quote might be, “Stop lying to yourself and live in your truth”, but the second part is what hit me hard. There are many areas where this advice can be applied to our financial lives. In my case, it scored the most points when it came to cars. Even when I understood the numbers, even when it was clearly beyond my means to get (another) new car, I did it anyway! I tricked myself into believing false narratives about repairs, refinancing, and rates. I still fumble with money, but I strive to be in a place where when I know I am not making the best choice, I accept the opportunity cost, move on, and live in that truth.

Check out this post for more insight into my perspective on car loans.

Digging into My Money Mindset

Can I quote an entire book or two? If so, it would be these two books from Maine’s own Dr. Sarah Newcomb:

  • Loaded: Money, Psychology, and How to Get Ahead without Leaving Your Values Behind
  • I Hate Money: Understanding Your Financial Attitude

I met Sarah several years ago at a Maine Jump$tart event, and although by that time I was in better shape with my own money, her presentations and books gave me a huge boost as a teacher of personal finance. It’s nearly impossible to choose a single quote or catchphrase to capture the impact of Sarah’s work, but I can say that it led me to spend more time on the psychological aspects of our money decisions and even led to me writing a little story about my own early experiences with money.

“When it comes to money, we’ve all got issues.”

Simple. Direct. Powerful. Memorable. Thank you, Sarah.

This Is about the Benjamin

Finally, no writing on this topic would be complete without a nod to perhaps the master of sensibility, Benjamin Franklin. We all know or should know, “A penny saved is a penny earned.” Could that be the most classic and well-known money quote of all time? Maybe, but I recently found this one, and it’s quickly becoming a go-to, even though it comes with the risk that I sometimes have to translate its meaning (that includes me as well, as I had to look it up!).

“Six Pounds a Year is but a Groat a Day.”

This is a perfect compliment to my work at FAME as me and my colleagues offer this advice in many ways, whether we are discussing personal finance or saving for education. In our dialect it means something like small money decisions can have a big impact down the road, every little bit helps or watch out for how those “small” monthly expenses add up over the course of a year.

And Really Finally…

I’ve developed a few of my own sayings over the years. Not sure if I’ll ever be considered “quotable”, but here goes.

On the power of economics, “If someone tells you that something is free, put your hand on your wallet, back away slowly, find the real cost.”

On the reasons why to save and invest, “Take part in the economy or it will take a part of you.”

From 25 to 29 and Counting: Personal Finance Education Requirements

When I started this blog in April of 2024, there were 25 states that had passed legislation requiring high school students to take a personal finance course before graduation.

As of June 22, 2025, the club has grown to 29 with Texas being the latest to join following California (June 2024), Kentucky (March 2025), and Colorado (May 2025).

No, Maine is not there yet, but financial education is still happening – in classrooms, at home, in blogs…

News from the Classroom

In July, FAME held its Personal Finance Summer Institute, hosted by Waynflete School in Portland and taught by yours truly, along with John Raby from Thornton Academy in Saco, and Shiho Burnham from Baxter Academy in Portland. This was the second year for this course, and the 14 students in attendance represented Portland High School, Baxter Academy, Deering High School, Casco Bay High School, and Brunswick High School. What makes that list even more special is that John Raby joined me to teach this course partly as preparation for this fall when he will be teaching Thornton Academy’s first ever personal finance class (and Shiho used this course to provide her with more tools for Baxter’s existing personal finance offering).

The 24-hour course covered banking, saving, investing, credit, credit scores, economics, insurance, taxes, and budgeting. In fact, budgeting was the cornerstone of the class and allowed students to build a 12-month fictional stage of life budget. Most importantly, the budgeting part of the Summer Institute was designed to foster a skill for life, and the students now have a deeper understanding of how to use a budget and why it is a crucial item in the personal finance toolbox.

Also, by the time this post is published, I will have started teaching a semester-long personal finance course at the Maine College of Art & Design. Not surprisingly, budgeting is the foundation and ongoing thread of that course.

Personal Finance Quiz Pop-Quiz

All of this teaching and thinking about personal finance course requirements has me in outcomes mode. So, the teacher in me says, it’s pop-quiz time. Let’s go with three divisions – youth, high school, and adult. No fancy technology here, so you’ll have to scroll to the end to check your answers. (Questions compiled from a variety of sources, including my own classes.)

Youth Division (up through grade 8)

  1. Why does money have value? (Why can we buy things with it?)
    1. Our money is made of a very rare form of thin, green, gold leaf
    2. We believe (we have faith) in what it represents
    3. It grows on trees
  2. What are savings?
    1. Money that we use to buy hot dogs
    2. Money that we give to our friends to fix their skateboards
    3. Money that we put aside to pay for things in the future
  3. What is the best plan for your next $20?
    1. Spend all $20 at the movies, definitely paying $8 for popcorn
    2. Save $5, spend $10 at the movies, spend $5 on a gift for mom
    3. Dig a hole in the yard and bury the $20
  4. What is an example of something you need?
    1. Food and water
    2. Video games
    3. $200 Messi jersey
  5. What’s the secret to long-term success with money?
    1. Spend everything you make
    2. Spend more than you make
    3. Spend less than you make

High School Division (up through age 18 or so)

  1. When deciding what to buy, the best plan is to:
    1. Always go with the cheapest option
    2. Always go with what is popular
    3. Always think about the relationship between the cost and the benefit
  2. What is a budget?
    1. A spending plan
    2. A statement showing how much money you earned last year
    3. The amount you can spend using a credit card
  3. Investing in stock means:
    1. Loaning money to the government
    2. Owning a part of a corporation
    3. Opening a business
  4. Which is a type of bank account that pays a fixed rate of interest for a fixed term?
    1. Checking account
    2. High-yield savings account
    3. Certificate of deposit (CD)
  5. What’s the secret to long-term financial success?
    1. Spend everything you make
    2. Spend more than you make
    3. Spend less than you make

Adult Division (everyone else)

  1. Which of these is your friend when you save and your enemy when you borrow?
    1. Dividends
    2. Compound interest
    3. Time
  2. Which type of policy is managed by the Federal Reserve Bank in order to promote stable prices and full employment?
    1. Fiscal policy
    2. Monetary policy
    3. Foreign policy
  3. Which investment generally carries the highest risk?
    1. Single stocks
    2. Money market savings accounts
    3. Stock mutual funds
  4. Which mortgage will cost the most in the long run? (no calculators, just instinct, rate on 15 year is .5% lower)
    1. $2000/month for 30 years
    2. $2800/month for 15 years
  5. Everything matters; interest rates, credit score, income, health, luck… However, all things being equal, what’s the secret to long-term financial success?
    1. Spend everything you make
    2. Spend more than you make
    3. Spend less than you make

*****

As I wrote this post, I thought about those questions and about Maine’s progress towards a personal finance graduation requirement, and I wondered:

  • Would a personal finance class have made a difference for me?
  • Would it have helped me avoid my wasted financial decade, known as my 20s?
  • How much will it help today’s students to prepare for their financial futures?

For my part, I can only say that I wish that I had had the chance to find out. I wish that learning about the risks of credit cards had crossed my desk before the credit card companies passed out the free t-shirt along with a $500 limit gateway card.

For the current high school generation, a note from one of my summer students commenting on the role of money and on how learning about money has prepared him for life after high school.

“To me, money is not status. It’s the ability to make my own choices. It’s the idea to invest in myself, the discipline to save for tomorrow, and the understanding that money won’t make me happy, but it will give me the setting where happiness can root.”

Yep, that’s why I do this work.

Answers Youth: b, c, b, a, c

Answers High School: c, a, b, c, c

Answers Adult: b, b, a, a, c

Boston, Spring of 2012

Waynflete School’s team has made it to the finals of the Boston Federal Reserve Cup Challenge for Economics and Personal Finance, and we wouldn’t have gotten that far without Alysa, who was the team’s default personal finance expert, successfully fielding questions on credit score, insurance, banking, and more.

And…we won!

Fast forward to 2025, and here I am once again turning to Alysa – this time for professional help on a critical topic: cyber hygiene (her phrase, not mine, and I love it). Who knew that she’d continue to do great things? I did!

Alysa, tell me about your work at Avalara.

During the pandemic, I was hired as an Operations Analyst by DAVO Sales Tax, which has since been acquired by Avalara Inc. Avalara is a B2B tax compliance company, serving all sizes and types of businesses in the business-tax space. I am just about to start my fifth year with this organization and am currently an Analyst of Global Client Payments (I work on the Treasury team). I manage company and customer funding and payments, bank reconciliations, customer refunds, and merchant account balances. I also audit sales tax filings and bank transactions for fraudulent or inaccurate payments and work closely with our tech engineering team to make product improvements to our funding processes.

It seems that our financial security is being compromised daily through cyberattacks and scams. Is there more danger more often, or does it just seem that way because it is so highly reported?

There is no nice way to say this, so I will give it to you straight. Yes, the danger is growing and growing at an exponential rate. Cyber-attacks, especially financially motivated ones, are increasing in volume, sophistication, and impact.

Everything is digital now. We are quickly moving out of the analog world where we pay with cash and transact in person. I can’t think of a single bill or purchase that requires you to pay with physical money or a check. Everything from mortgage payments to movie tickets is paid online. This rapid increase in digital transactions creates more opportunities for cyber attackers.

Then we must consider advances in technology, which benefit us as consumers, but also benefits the scammers.

Sure, there is some cognitive bias at play. When the media and headlines show a constant stream of cyberattacks and scams, it is to be expected that this adds to our perception of a growing danger.

What are the most common threats in 2025?

The big three attacks that everybody should know about are phishing, ransomware, and credential stuffing.

Phishing is the most experienced type of attack on a day-to-day basis. Phishing, and its many subcategories such as targeting phishing, whaling, smishing, vishing, business email compromise, etc., all fall under the umbrella of social engineering. In this type of attack, the scammer impersonates a trusted party to trick victims into revealing sensitive information such as login credentials, credit card numbers, or other personal data. Usually, this involves playing on the victim’s emotions by creating a false sense of urgency, which causes them to overlook their logic and better judgment and then take action by divulging personal information. This can be done via email, text, call, social media messaging, QR codes, or malicious websites.

A perfect and recent example of this in Maine and surrounding states was the EZ Pass toll scam text. A text was sent to thousands of people saying that they had unpaid tolls and that unless they took immediate action an additional fee would be charged. Of course, this was not true. The attacker played on people’s desire to be law abiding citizens, and a fear of incurring additional charges to get the information they wanted.  

Phishing is often accompanied by ransomware—malicious software that encrypts a victim’s files or systems, demanding a ransom payment to unlock them. Ransomware is generally delivered via a phishing email, manipulating the victim’s emotions to click a link or download the software. While ransomware attacks are more common for businesses, individuals can also be impacted.

Credential stuffing is a little different than phishing and ransomware in that it does not require any action to be taken by the victim. In this type of attack, cyber criminals obtain login credentials from past data breaches, which are easily found on the dark web, and then use them to attempt to gain access to multiple accounts. It is an automated process, requiring little manual work for the fraudster and allowing them to target a wide audience of victims.

How does, or will, AI factor into this world, for the attackers and for the defending public?

I alluded to this earlier, but AI is the next frontier in the technology space and will continue to create areas of increased risk of, and improved protection from, cyberattacks. 

Hackers are now using AI to make their attacks smarter, faster, and harder to spot. They can create super convincing phishing emails or even fake a voice or video call from a trusted party, including family and friends, to trick someone into handing over sensitive info. AI tools also help them scan huge networks to identify weak spots much more efficiently than a human ever could. With AI, even less experienced attackers can launch advanced scams. That’s what makes it so dangerous, the attacks are getting more believable, more targeted, and a lot more frequent.

Luckily, AI is doing a lot of good on the defensive side, too.  It’s like having a super smart security guard that never sleeps. It can spot unusual behavior quickly; like if someone logs into your account from a strange location or suddenly downloads a ton of files. It also helps filter out phishing emails, detect malware before it spreads, and even predict where attacks might happen next by analyzing patterns and past incidents. And AI can respond in real-time, isolating infected devices, blocking suspicious traffic, or locking down accounts automatically before things get worse.

So, while attackers are using AI, so are the defenders. At this point, it is a matter of who uses it better, sooner.

I recently heard you use the phrase, “practice good cyber hygiene”. I love it! What are some of the specifics to that end?

I love it, too! Let’s talk cyber hygiene and how we can improve our own.

Cyber hygiene is the digital equivalent to personal hygiene. It’s the habitual practices and behaviors that we follow to maintain health, prevent infections, and minimize vulnerabilities. The same way we wash our hands to decrease the risk of spreading germs or contracting an illness, there are things we can do in the digital space to decrease our risk or impact of cyberattacks. Cyber hygiene can be boiled down to good password practices, smart cyber use, and responsibly managing devices.

Social media platforms are a cesspool for cybercrime. They are an open door to your personal information, and the scammers don’t even have to try hard. People proudly broadcast their personal lives and information. It is so imperative that we are highly selective with what we relay to the world. While reusing passwords is more prevalent with older generations that only needed one password to survive, the younger generation lives almost entirely online and opens themselves up to a more targeted type of attack.

Presenting yourself on social media is the same as presenting yourself to the entire world, scammers included. What you do, where you go, who you talk to, what you like… It can all be used against you. Remember a few minutes ago when I said that phishing, the most common form of attack, is a type of social engineering? This is where the scammers get the ammo.

Lastly, responsible physical device use. Boring, but classic and effective.

  • Lock your computer when you aren’t using it. Lock your phone when you aren’t using it. Don’t leave your things in public places. Know where your technology is at all times.

I want to emphasize that cyber hygiene is not a one-and-done thing. It is an ongoing practice. Just like washing your face only makes it clean until you sweat or get dirty, cyber hygiene is only as good as its maintenance. The more we live online, the more we need to treat digital decisions as the real-life decisions that they are.

Alysa is my former student and advisee from Waynflete (Class of 2012). I was lucky enough to have taught Alysa several times, including Personal Finance. She attended Southern Maine Community College and earned an associate’s degree in hospitality management and business administration. That is where she discovered a love of accounting. After SMCC, Alysa transferred to Ohio Wesleyan University, where she earned a BA in Accounting with a Business minor. She works from home with her two dogs and in her free time rides her horse, reads, and, of course, investigates recent cyberattacks.

There are many definitions of interest, but this one has been my go-to for a long time. Short. Simple. Strong.

in · ter · est

  1. the cost of money

The cost of money. Let that sink in. It means that there is a cost associated with money’s existence; not just for borrowing or lending. There is also a cost to holding on to money. You know, the old shoe box, mason jar, or mattress-style storage facility. What’s the cost with the jars or boxes? Opportunity cost – the money can’t earn interest; it can’t work for you.

Our bank accounts are in play here as well. If money is in the bank, we aren’t using it, and that is our cost. We make up for that cost by asking the banks to pay us interest.

But most of the time, we think of the cost of money in the form of paying interest–it’s a real cost and a major factor when we borrow.

However, although interest rates are highly marketed as the starting point for borrowing decisions, they shouldn’t be. The borrowing decisions should always start with how much is being borrowed, why it’s being borrowed, what it’s going to buy, and whether we can afford the entire amount rather than just a monthly payment with “low low LOW” interest.

#1 on the list

Car loans. There is no better example of how debt is marketed through interest rates than the car loan. When I see a $40,000 vehicle sold as “only $550/month for 72 months at our LOW 2.9% APR” it triggers a sort of personal finance trauma, reminding me of when I put myself into the car debt cycle, all the while convincing myself that I got a “deal” based in the interest rate.

A quick analysis based on 2024 data:

Average new car price $48,000
Average interest rate 7%
Average term 68 months
Average down payment + trade-in $12,000
Monthly payment $645
Total interest paid $7,700  (11% of price of car)

Now apply the “limited offer” of 2.9% APR (only the best credit scores get this, by the way):

Monthly payment: $574
Total interest paid: $3,100 (6% of price of car)

Did interest rate matter? Yes, to the tune of $4,600 over 68 months or about, coincidentally, $68/month.

The bigger personal finance issue here is that the interest was based on a loan of $36,000 (after trade and down payment) for a $48,000 ride.

What’s more likely, that we find ourselves in a pinch because of $68/month in interest or because of a $48,000 purchase (which is losing value by the mile)? And don’t forget all the other costs of a $48,000 car; higher property tax, MUCH higher insurance costs, higher sales tax.

Again, interest rates must be considered, but not as much as the amount borrowed. Transportation is important, cars are the reality for most of us, and prices are staggering. But there are ways to mitigate those costs – the overall cost of a car and its impact on our financial well-being.

The bottom line: minimize borrowing for a car and interest rate will be an afterthought.

Plastic problems

When we find ourselves concerned about the interest rate on our credit card, we have a bigger issue to address—credit card debt period. Pay off the debt and only use cards for budgeted expenses, and the interest rate won’t matter. Furthermore, signing up for a new, lower-interest card to transfer a balance is often a symptom rather than a cure. This is not ‘never do that’ advice, but a caution that these card offers exist because, statistically speaking, most people will end up using the new card and, ultimately, find themselves further in debt instead of improving their financial situation.

The best plans for managing credit card debt include:

  1. not using the card
  2. using a budget with a payoff plan and/or
  3. contact a free credit counseling service if the debt is overwhelming your finances.

But what about student loans?

From a numbers and interest rate perspective, I could just copy and paste from the first section on car loans. The math is what it is and, once again, interest rates don’t matter in comparison to the amount borrowed. The big difference here is that an education is not a depreciating asset, so the calculus on how much to spend/borrow includes other (and not always quantifiable) variables.

The bottom line is the same—minimizing borrowing comes before worrying about rates.

There is a lot to consider—FAME is here to help. Check out this link and the resources on the side menu.

Date the rate, marry the home

Similar theme for houses, but the stakes are higher. Yes, it’s easy to see that a 1% rate difference on a 30-year loan could mean $100,000 in interest, but since the rates are determined by credit score and market conditions, it’s largely out of our hands when we sit down to sign the papers. What is not out of our control is how much down payment we’ve saved, how much we borrow, and ultimately, whether we are choosing a home we can truly afford.

This is an excellent tool from Enrich on determining how much home you can afford, considering income, location, down payment, and other debts. Enrich: Home Affordability Analyzer

It took me a while to get here but it was worth the effort

For me, it took many years to reestablish a financial foundation, and one of the key pieces of the puzzle was eliminating non-house debt and paying cash for just about everything—including cars.

So…

  • I have no idea what rate my credit card charges because I haven’t paid a dime of interest in a couple of decades. I use it for budgeted expenses and pay in full every month. Emergencies are paid for from my emergency fund. The credit card provides convenience and reduces exposure to theft/fraud compared to a debit card.
  • I paid cash for a used car.
  • I don’t love the interest rate on my home, but the house is affordable based on our down payment and how the overall mix of mortgage, home value, income, and budget is in my favor. And refinancing at a lower rate is often worthwhile for an appreciating asset like real estate.

Finally, if debts are paid, then the only interest you need to think about is the type you are earning. What’s the cost of your money?

“The first principle is that you must not fool yourself — and you are the easiest person to fool.” –Richard Feynman, Nobel laureate and physicist, from his speech to the Caltech Class of 1974.

*****

Wow, all I had was, “Graduates, as you head out into the world, remember to be good to one another… And remember to spend less than you make.”

I don’t think Dr. Feynman was referring to personal finances, but I could argue that right there, he offered some of the best money advice you can find. I say that because so much of “adulting with money” comes down to making sensible decisions, yet it’s too easy to get off that track and fool ourselves with “I need that new car, a higher credit card limit, a sports betting account, the XYZ streaming service,” etc.

What should be on the financial radar for new college grads? It can’t all be done in a day, but it all can be done. This isn’t really life advice – it’s personal finance advice – but there is probably significant overlap.

First, get to work. Whether you are diving right into the “grown-up” job related to your education or just trying to earn while you look, it’s critical to get the earnings flowing. All work experience is valuable, even some of those awful jobs we hold as we move down the career path. I’ve had a lot of jobs. Maybe I even have a spreadsheet listing them to share with my son someday. Maybe it’s a couple of pages long. Learning what you don’t like or don’t want to do has value. I am now doing the best work of my life, and even the worst work experiences from my resume have contributed to the skills I use today.

Take advantage of time. I put this high on the list for a reason. There are a lot of reasons but let’s focus on opportunity cost or the cost of decisions. When it comes to retirement savings and the cost of missed opportunities, I know what I’m talking about. A 25-year-old let’s say YOU, who saves $200/month until age 65 will have accumulated approximately $525,000 (based on 7% returns and average inflation). Someone else, let’s say ME, who waits until age 40 will have to put away $700/month to reach that same amount of savings by age 65. There is no better formula for reaching your financial goals than time + steady habits. Check out Vanguard’s take on this topic and/or try out this calculator and run some numbers for yourself.  

Learn to budget. No matter how much you are making, learn now how to plan and account for your spending. Many banks offer budgeting features, there are plenty of free apps and websites, and, of course, there is the old-fashioned but most effective spreadsheet.

Make saving a habit and build an emergency fund. If you are collecting a regular paycheck, consider automating your savings and build up a $1,000 emergency fund as quickly as possible (before investing, before the long ski trip, before anything considered a “want”).

Manage your housing costs. Housing is and will be your largest expense, so it’s best to get used to making smart decisions. You want your own place, but maybe your future self says, “Hey, do the roommate thing for a few years, it will save you thousands.”  

Take charge of your student loans. You signed for the loan, and now it’s time to pay it back as agreed. Pay what you should but do it in the most sensible way for your income. Visit StudentAid.gov, make sure you are on a plan, stay in touch with the loan servicer, and understand all your rights and responsibilities.

Understand health insurance. This is one of the most expensive and difficult to manage aspects of Americans’ financial lives. If you are fortunate enough to be on your parents’ plan, you can stay there until you turn 26. Beyond that, health insurance is a major consideration when looking at potential jobs and has to be accounted for every step of the way.

Learn about taxes. The good news is that there are plenty of easy-to-use, accurate, and reasonable software services out there. The bad news is that as you move into earning a full-time income, taxes will eat more of your pay and the rules will get more complicated. Enrich offers an excellent introduction to dealing with income taxes.

Watch out for car loans and credit cards and payday lenders, and rent-to-own… And, ugh, there are a lot of places to misspend your hard-earned dollars. Buying too much car is one of the most likely areas where we stumble, and that impacts our ability to save, and that affects our choices down the road, and so on and so on. Drive used cars, borrow as little as possible, and always save part of your income for car expenses and the next car.

Protect your identity and your money. In other words, be careful with your financial life and technology, and be sure to be insured! Car insurance, renter’s insurance, health insurance – all those pieces should be in place as you begin to save and build wealth. Ask a friend or family member for a trusted agent, get some advice, and evaluate your coverage every year. For protection from financial scams, stay current with help from sources like the Federal Deposit Insurance Corporation (FDIC).

*****

Finally, listen to your future self. I could go on all day. So, when I say finally, I mean for now.

Yes, you hear that voice. It’s firm, sometimes mean and annoying, but always kind and full of good intentions.

“Are you saving for retirement?”

“A new car? Really?”

“A few sacrifices now will be worth it later.”

“Have fun, but plan for it and understand what it costs.”

“Spend less than you make, or I’ll come through time and…”