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PERSONAL FINANCE: More thoughts after a vacation –

I recently heard a radio show discussion about health, and how we know what we need to do, but we just don’t do it. We need to eat well, exercise, regularly get enough good sleep, AND live within our means. I couldn’t believe it when I heard that, but I totally understand it, since I talk about it all the time in my financial literacy presentations. If you are a regular reader, you know that, at last check, for Americans, 8 of the top 14 stressors in life were money-related, and stress, or the lack of it, is a big factor in our overall health. It’s yet another reason to get your personal finances under control and live within your means.

Speaking about living within you means or not living there, I was shocked to see the numbers on the overdraft fees earned (an interesting way of looking at it) by the financial industry in 2020. At a recent Senate hearing, which included Senator Elizabeth Warren, it was reported that financial firms brought in $31.3 billion in just overdraft fees in 2020. Remember, a billion dollars is one thousand million dollars. What was also interesting is that those fees were down 10% from 2019, in part because of the waiver of many fees during the pandemic. J.P. Morgan Chase alone claims to have waived $400 million in over draft fees in 2020 and the first quarter of 2021. I hope that as we return to “normal”, one of the lessons of the pandemic will continue to be the importance of living within your means, including having adequate savings, so that the amounts of overdraft fees will decrease in the future.

As I write this column, it’s the end of June, which for most of us in mid-year. That makes it a good time to review your financial plan and see if you are meeting all of your financial goals. In addition, it’s a good time to also review your estate plan, insurance coverage, and the status of your home maintenance and, possibly, home improvement plans. Lastly, if you haven’t already done it, you should also get a free annual credit report from for each of the three major credit reporting agencies, unless you prefer to spread getting the free one for each agency over the year, which I personally recommend.

On a different subject, we continue to hear about homes selling for significant amounts over the asking price in some markets, and buyers, in order to be more competitive, are sometimes waiving inspections, and even paying in cash with a quick closing. This will probably continue as long as inventory and interest rates remain low. I recently saw a cartoon which made me smile. It was a real estate agent talking with an interested couple in front of a For Sale Sign. It read, “… and the neighbors on both sides have credit scores over 800.” Sounds like a good selling point to me!

Here is some good spending advice from the Gist by Finny. “There’s a litany of rules and guidelines out there that want to advise you on how to allocate your money. You’ve got the 30/50/20 rule, the 20% rule, the 15% rule … The reality is that none of these rules are gospel, they’re just general guidelines to point you in the right direction, and the truth is that everyone’s percentages will be different from one another.”

“Insert the 1% rule into the mix now too. The 1% rule is for those earning less than $200,000 per year. So like 95% of the American population. It states that if you find yourself wanting to purchase something that will cost more than 1% of your annual salary, you should wait a day before you decide to buy it.

“That means, if you make $60,000 and you want to purchase anything over $600, then you’re gonna need some time to think about it.

“We usually make better decisions after giving them more thought, so do some pondering on the purchase.”

I, personally, believe that we should all take a pause before any impulse purchase of a relatively costly item. I say give it at least a day.

By the way, The 50/30/20 rule states that you should budget your after-tax income in three categories: needs, wants and savings, including savings for emergencies.

Just as a reminder, if you are a postage stamp user, like I am, I hope that you have or soon will purchase a supply of Forever Stamps before the price goes up on Aug. 29. I purchased my estimated five-year supply already. By the way, you may be able to find some stamps at a discount on the internet if you prefer to go that route. Just make sure that they are Forever Stamps or are in usable denominations.

On a different subject, economists continue to disagree on how long the inflationary period that we are in will last as we come out of the pandemic and disrupted supply chains and increased demand for goods and services even out. Some say six months, others 12 months, and some 18 months or more. Hopefully, everyone is continuing to focus on the increased prices and are adjusting their spending and budgets accordingly. Also wages for some may be increasing, the enhanced child tax credit payments will help many families, and some may be receiving cost of living increases for indexed pensions, labor contracts, and possibly Social Security.

Speaking of the enhanced child tax credit payments which are being discussed all over the media, I have three suggestions. First, don’t over-analyze the program. Second, realize that, for now, it is just an allowance for all families with children that are below a certain income level. Third, trust that long -term allowances like this do, in fact, reduce child poverty.

In the next column I want to look at questions to ask before starting a small business.

John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at

John Ninfo