Family Finances: FAQs

Amanda covers some basics about how to spend in a way that makes you happiest, what’s a Roth IRA, and why she cares so much about all this stuff.

October 6, 2015; 3:54 PM • by Amanda Gibson

Photo by Bullion Vault.

Today it is time for Dear Amanda, where totally fake readers write in exciting questions for Amanda, and she, that’s right, answers them.

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Dear Amanda,
How the heck can you write a column on personal finance? You’ve never been broke. You’ve also never been rich. What makes you an expert?

Dear reader,
You’re absolutely right. I am no expert when it comes to personal finance, or anything else for that matter. My goal is to start a conversation about personal finance, to get people talking about this stuff by sharing my own experiences. Personal finance is one area of our lives where most people can stand to make improvements (I’m looking at me here). Talking and thinking about finance-related issues is one way to start to make change in our lives. Call me a do-goody optimist, but I think with a little bit of work you and I are capable of solving any problem and accomplishing any goal.

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Dear Amanda,
I just got a $1,000 bonus at work. Woo hoo! What should I do with it?

Dear reader,
How can you make a $1,000 difference in your life? Will paying a credit card bill or socking the cash into savings make you sleep better at night? Will taking a mini-vacay make you a happier person? If you were to put that cash into a Roth IRA today, in thirty years you would have almost $16,000. Just sayin’.

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Dear Amanda,
Uh, what’s a Roth IRA?

Dear reader,
A Roth IRA is a type of retirement account. You have to have earned income (a job) to open one. You can open a Roth IRA with many different financial institutions. The “Roth” part means the money grows tax-free. So if you invested your $1,000, the $15,000 you make would be tax-free. Let’s review. Earn $15,000 from an employer=income taxes. Earn $15,000 in a Roth IRA by sitting on your butt=no taxes.

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Dear Amanda,
What is the dumbest thing you’ve ever done with your money?

Dear reader,
I once bought a pair of $70 jeans. When they wore out I sent them back to Levi’s and they sent me a new pair, so I guess it was really two $35 dumb things. But now that I buy all my jeans at Goodwill for $5, and I have come to terms with the fact that I am not and have no desire to be a fashionista, it feels pretty dumb to have spent that much on jeans. In my world at least. If you like $70 jeans, you do you.

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Dear Amanda,
$70 was your dumbest purchase ever!? Come on. How much was the smartest purchase you ever made? Like seven cents?

Dear reader,
You’re right again! I have probably made way dumber purchases. Buying into a bond fund right before two years of consistent losses comes to mind. The jeans just stand out to me as a purchase that didn’t improve my life. The smartest purchase I ever made cost $300. My husband, son, mom, and I were on a home exchange in southeast Utah exploring national parks. I was being a total tightwad with a clear goal of making this the cheapest vacation ever when my mom talked me into spending $300 for my husband and me to take an all-day raft trip down the San Juan River. Seeing that incredible landscape from the road was nothing like floating through it. We saw striations in millions of years of rock formations, we went inside a pueblo, we saw mountain goats climbing the side of a desert cliff, we learned how to safely float the river with no boat, just a life vest (like the most awesome lazy river ever). It was absolutely the capstone of our trip, and the experience was worth way more to me than thirty years of growth on $300 in a Roth IRA.

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Dear Amanda,
Why are you so interested in personal finance? This stuff is so boring!

Dear reader,
Whaaaaaat? You think personal finance is boring? Maybe it is. But you know, some people are born with six toes. I happen to have been born with a ridiculous obsession with money and finance. For me it is not really about the money. It is about living an optimal life. Personal finance is like health. The more you learn, the healthier you can strive to be, and the higher your quality of life. I want so many things out of life–a happy marriage, a cool house, kids who grow up to be successful adults, travel experiences, a fulfilling career, a right relationship with my God. I believe that all of these things are easier to accomplish and enjoy if your money is right too.

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Interested in asking Amanda actual questions? Send an email to editor@rvanews.com and we’ll make sure it gets to her.

October 6, 2015 3:54 PM 1