Each week, we ask a personal finance or business expert for their money pro tips. This week we talked to Donna Freedman, a full-time freelance writer (including for Policygenius Magazine), blogging course creator and coach, and author of two books: “Your Playbook For Tough Times: Living Large On Small Change, For The Short Term Or The Long Haul” and "Your Playbook For Tough Times, Vol. 2: Wants And Needs Edition."
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Last thing you resisted buying: A bunch of discounted $100 gift cards to Dave & Buster’s.
How did you resist it?: I love taking my nephews there every so often on half-price Wednesday. (Well, they love it; I endure it, with earplugs.) However, I knew if I bought gift five cards I’d probably take the boys there too often – and not only did I not want to set a precedent (“Let’s go every week!”), I wanted that money to work for me somewhere else. So I compromised by buying one of the cards, for about $85.
Last thing you splurged on: After speaking at the Financial Blogger Conference in Washington, D.C., in September, I headed for South Jersey for a week to visit family.
Why’d you OK the splurge?: I’d rather go for a visit than a funeral! I live far away (Alaska) and don’t get to see relatives often.
What’s your current money goal?: Beefing up my retirement savings.
Learn how much you should be saving for retirement.
How you’re working toward it: I have a simplified employee pension plan IRA through my writing business (which is a limited liability company), fund a Roth individual retirement account on my own, and am building cash reserves in online savings accounts and certificates of deposit with (reasonably decent) interest rates.
Money thing you’re most proud of: At age 21 I had a baby, a “permanent part-time” job and no government assistance. I was so broke I did all our laundry (including the cloth diapers) on a scrubboard in the sink. Even so, I had the workplace credit union scrape off a section of each week’s paycheck. Would I have preferred to hire a sitter and go to an occasional movie? Or maybe eat something other than oatmeal and homemade bean soup, spaghetti and chili? You bet! But I knew if things went south it would be up to me to cover the cost. So I saved.
A money regret: Losing waaaay too many years’ worth of wealth-building, due both to ignorance and to a spendthrift (ex).
Biggest money stress right now: Wanting to retire early but knowing I can’t quite afford to just yet, thanks to those lost years.
Best financial advice you ever got: “Future You is going to be judging Current You. Harshly.” That was from my daughter, who blogs about disability and money at IPickUpPennies.net. And she’s right: What I do now affects what will happen to me later on. If I slack off, then Future Me will be affected. Harshly.
Worst financial advice you ever got: Work hard, pay your bills and if there’s anything left over, put it in the bank. The first two pieces of advice have served me well, but unfortunately my parents didn’t know anything about investing. Putting money in the bank isn’t enough. You have to work to grow wealth.
What would you do with a $1 million windfall?: I’d pay taxes, obviously, then invest a bunch, pay off my daughter’s house and my niece’s house, and donate to my charities of choice. I’d also offer to fulfill a dream of my partner’s: to spend a year attending every production of Wagner’s “The Ring Cycle” produced worldwide. #nerdsinlove
Book, podcast, newsletter or blog you recommend to help people be better with money?: Among others, I like Joe Saul-Sehy’s “Stacking Benjamins,” Sarah Li-Cain’s “Beyond the Dollar,” and “Paychecks and Balances” with Marcus Garrett and Rich Jones.
Hardest part of starting a business: Cash flow can be an issue until you get steady clients or customers, or in case some of them fade away. You need savings to cover expenses in case things don’t run smoothly. Think of it as an entrepreneurial emergency fund.
Image: Nastia Kobzarenko