MONEY Spending

When It’s Okay to Splurge on Yourself

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Dave and Les Jacobs/Kolostock—Getty Images

"It's a shame to work so hard all the best years of your life, just so you can afford to survive in the worst years of your life."

When Stan Calow was growing up, frugality was a way of life: “You spend as little as you need to, and then save everything else.” So, the 58-year-old engineer and U.S. Army veteran from Kansas City, Missouri always hated spending money.

It took his financial planner, Cindy Richey, to drill the point into him that it was actually okay to enjoy his savings once in a while.

After much prodding, the message finally got through. Calow and his wife just returned from a trip to France, touring the chateaux of the Loire Valley, just like they had always dreamed.

Says Calow, who learned about the fragility of life by serving in Kosovo: “I wanted to live life while I’m still young enough to enjoy it.”

It’s a tricky dilemma for many of us. As much as pundits tell us to scrimp, and save, and sacrifice for the future, when is it actually okay to spend a little on yourself and enjoy this life that passes all too quickly?

Indeed, according to a new survey, many of us are not enjoying it enough.

When Wells Fargo asked affluent Americans about what they regretted most about their finances, 15% said “not having enjoyed their money more”.

It is an honest answer that you do not often encounter in financial surveys. After all, splurging on yourself is typically seen as selfish and gauche.

But as some planners point out, it’s your money, and you should not be made to feel bad about enjoying it occasionally.

“People are so nervous about outliving their money, and sometimes they shoot too far in their saving,” says Joe Nadreau, director of innovation and strategy for Wells Fargo Advisors. “You don’t want to come to the end with $3 million saved, but having sacrificed your whole life along the way.”

Of course, leaving an inheritance is still an important consideration, according to 57% of affluent Americans in the Wells Fargo survey.

But just remember that once the will is read, you are six feet under, and no longer around to witness your family enjoy that wealth.

A Bank of Memories

So try thinking of the concept of ‘inheritance’ a little differently: Instead of purely in terms of dollar bills, consider it as a set of memories, which you can create together as a family while you are still alive.

“We have recently noticed a sizable uptick in clients who are more interested in sharing their wealth in the form of experiential gifts,” says John Fowler, a planner in Keller, Texas.

“It might mean taking the entire family on a cruise, or paying the airfare to fly in to see grandma and grandpa in Arizona, Colorado, or Florida. At the end of the day our clients realize stuff is just stuff, but with a little effort, they can create a memory for their families that will last a lifetime.”

Keep in mind that splurging on yourself doesn’t mean you become miserly with others. It is not an either/or proposition; You can treat yourself once in a while, and also be generous with charitable causes that are meaningful to you.

“People call me all the time to get permission to enjoy their money, which I heartily give them,” says Dave Ramsey, a popular radio host and author of “The Legacy Journey.”

“Often the thing that breaks it loose for people is to increase their giving. Because the more generous you are, the more you get permission to spend on yourselves.”

As for Kansas City’s Stan Calow, he looks forward to traveling the world with his wife, and enjoying future grandchildren. It was hard to get him to enjoy those savings, but now he’s making up for lost time.

This thought, in particular, came to mind when he was walking the streets of Paris recently:

“It’s a shame to work so hard all the best years of your life, just so you can afford to survive in the worst years of your life.”

Read next: When It’s Okay to Splurge on Yourself

MONEY real estate

Seniors Are Seeking Out States Where Marijuana is Legal

senior woman smoking marijuana pipe
Norma Jean Gargasz—Alamy

The top moving destination in 2014 was Oregon, which voted to legalize marijuana last November.

When choosing retirement locales, a few factors pop to mind: climate, amenities, proximity to grandchildren, access to quality healthcare.

Chris Cooper had something else to consider – marijuana laws.

The investment adviser from Toledo had long struggled with back pain due to a fractured vertebra and crushed disc from a fall. He hated powerful prescription drugs like Vicodin, but one thing did help ease the pain and spasms: marijuana.

So when Cooper, 57, was looking for a place to retire, he ended up in San Diego, since California allows medical marijuana. A growing number of retirees are also factoring in the legalization of pot when choosing where to spend their golden years.

“Stores are packed with every type of person you can imagine,” said Cooper who takes marijuana once or twice a week, often orally. “There are old men in wheelchairs, or women whose hair is falling out from chemotherapy. You see literally everybody.”

Cooper, who figures he spends about $150 on the drug each month, is not alone in retiring to a marijuana-friendly state.

Twenty-three states and the District of Columbia have laws legalizing medical marijuana use. A handful – Colorado, Oregon, Washington, Alaska, and D.C. – allow recreational use as well.

The U.S. legal marijuana market was $2.7 billion in 2014, a figure expected to rise to $3.4 billion this year, according to ArcView Market Research.

Figuring out how many people are retiring to states that let you smoke pot is challenging since retirees do not have to check off a box on a form saying why they chose a particular location to their final years.

But “there is anecdotal evidence that people with health conditions which medical marijuana could help treat, are relocating to states with legalized marijuana,” said Michael Stoll, a professor of public policy at University of California, Los Angeles who studies retiree migration trends.

He cited data from United Van Lines, which show the top U.S. moving destinations in 2014 was Oregon, where marijuana had been expected to be legalized for several years and finally passed a ballot initiative last November.

Two-thirds of moves involving Oregon last year were inbound. That is a 5 percent jump over the previous year, as the state “continues to pull away from the pack,” the moving company said in a report.

The Mountain West – including Colorado, which legalized medical marijuana in 2000, and recreational use in 2012 – boasted the highest percentage of people moving there to retire, United Van Lines said. One-third of movers to the region said they were going there specifically to retire.

Lining Up for Pot

The image of marijuana-using seniors might seem strange, but it is the byproduct of a graying counterculture. Much of the baby boom generation was in college during the 1960s and 70s, and have had much more familiarity with the drug than previous generations.

Many of the health afflictions of older Americans push them to seek out dispensaries for relief.

“A lot of the things marijuana is best at are conditions which become more of an issue as you get older,” said Taylor West, deputy director of the Denver-based National Cannabis Industry Association. “Chronic pain, inflammation, insomnia, loss of appetite: All of those things are widespread among seniors.”

Since those in their 60s and 70s presumably have no desire to be skulking around on the criminal market in states where usage is outlawed, it makes sense they would gravitate to states where marijuana is legal.

“In Colorado, since legalization, many dispensaries have seen the largest portion of sales going to baby boomers and people of retirement age,” West said.

The folks at the sales counters agree: Their clientele has proven to be surprisingly mature.

“Our demographic is not punk kids,” added Karl Keich, founder of Seattle Medical Marijuana Association, a collective garden in Washington State. “About half of the people coming into our shop are seniors. It’s a place where your mother or grandmother can come in and feel safe.”

Read next: Can You Buy Marijuana With a Credit Card?

MONEY online shopping

What You Can Get for Free If Your Amazon Prime Delivery Arrives Late

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moodboard—Getty Images

You may be entitled to a free month of Prime membership.

Jason Jepson’s love affair with Amazon Prime lasted quite a while. But about a year ago, when some deliveries started going through the U.S. postal service rather than a private delivery service like United Parcel Service Inc, Jepson noticed the service getting spotty.

The 40-year-old communications consultant from Austin, Texas said first it was one package that was delayed, then a second. Then seven. Then 13.

“Finally I called them up and said, ‘Hey guys, this is getting ridiculous,'” Jepson said.

Guaranteed two-day delivery is a big promise, and from Amazon.com Inc, it comes with a pretty hefty price tag of $99 a year (up from $79). But it is a fact of life that packages sometimes get delivered late. In fact, according to a poll by Reuters/Ipsos last year, 10 percent of Amazon shoppers who chose two-day shipping said their packages did not arrive on the expected day.

Granted, that was between Nov. 1 and Dec. 31, a busy time of year when many retailers are stretched to their limits. Amazon spokesperson Julie Law cites internal figures showing the percentage of on-time deliveries in the “high 90s”.

So what exactly are consumers entitled to if their Prime shipments arrive late?

It turns out: More than you probably expect.

With Amazon’s promotion for “Prime Day” coming up on July 15 – offering more special discounts than Black Friday, Amazon promises – it is useful information to have handy.

What You Get

When bargain-hunting site DealNews did some digging into the fine print of Prime contracts, researchers discovered that late delivery usually qualifies customers for a free month of Prime membership.

DealNews staffers tested this policy out themselves, and scored that free month not once, but twice – even for shipments that were only a couple of hours late. Customers can call, email or report late shipment on the website.

“Most people don’t even know they can get some redress for late delivery,” said Benjamin K. Glaser, DealNews’ features editor. “They aren’t even aware there is an official policy offering refunds.”

Keep in mind what else might be affecting shipment times, though, such as credit-card charges that did not go through, attempted deliveries that were not successful, or missed order deadlines. But if eligible shipments keep turning up later than promised, you can ask for that free month multiple times a year, DealNews discovered.

“If for some reason our delivery promise hasn’t been met, customers can call or e-mail and we can extend them an extra month of Prime membership,” confirms Amazon’s Julie Law. “But we don’t allow people to abuse that.”

Of course, customer-service reps can also respond to late shipments in different ways, such as offering to expedite new deliveries, as they have often done with Jason Jepson.

In other cases, you might be offered Amazon credits that could be worth even more than the free month membership, noted Glaser. That is not official policy, but depends on a case-by-case evaluation of customer experience, said Amazon’s Law.

And, if you are not in a rush to get your stuff, you can even opt out of two-day shipping for a particular item, and get a $1 video credit for your troubles.

It makes sense that the retailer needs to take good care of its Prime customers. They spend an average of $538 a year shopping at Amazon, or 68 percent more than non-members, according to a survey by RBC Capital Markets. And 61 percent of respondents reported upping their spending after becoming Prime members.

As such, Prime is a critical growth engine for the retailer. Memberships grew worldwide by 53 percent from 2013 to 2014, says Law, and the Reuters/Ipsos survey found that 96 percent were satisfied with the service.

That is why, despite anecdotal reports of late deliveries, the magazine Consumer Reports judges Prime service to be worth the cost. “You look at what you get, and it’s actually quite a lot,” says Tod Marks, the magazine’s senior projects editor. “As annoying as it is to pay the $99, you can earn it back very quickly.”

MONEY Travel

5 Money-Saving Tips for Road Tripping Families

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Blend Images - Jon Feingersh—Getty Images

There's an art to saving money on the road.

With four kids between the ages of 1 and 12, Loralee Leavitt is a cost-savings ninja when she hits the road.

Leavitt, who hails from Kirkland, Washington, estimates that she has gone on more than 30 road trips with her growing family, logging over 60,000 miles, to places like Utah, Colorado, Arizona and California.

From packing their own food, to staying in state parks, to scouring for last-minute hotel deals, the family has made an art of saving money. Their piece de resistance: A trip to Montana’s Glacier National Park that did not cost more than $400 total.

“It is easy to spend more than you expect,” says Leavitt, author of “Road Tripping”. “But if you prepare it right, it can be a lot of fun, and very cheap.”

More Americans are planning road trips around the United States. In fact, 65 percent of those polled report they are more likely to take a road trip this summer than they were last summer, according to a recent survey by booking site Travelocity. And when you single out parents, a whopping 81 percent said they were more likely to hit the road with the kids this year.

Be careful, though. While a domestic road trip might appear like an affordable alternative to traveling abroad, costs can easily spiral out of control.

A recent study by travel site Expedia found that Americans expect to pay an average of $898 per person for a weeklong trip within their own country, hardly chump change.

To keep a lid on summer road-trip costs, we canvassed financial planners for their best tips, culled from personal experience. Here’s what they had to say.

Use Apps to Your Advantage

Not that long ago, travelers squinted at printed maps and missed exits. These days, there is no excuse for not using smartphone apps.

Google Maps, for instance, will get you from Point A to Point B without getting lost and racking up unnecessary mileage. GasBuddy will locate the cheapest local stations where you can fill up the tank. Apps like RoadNinja and Roadtrippers can tell you about local amenities and help plan your route, and HotelTonight or Hotels.com can locate last-minute lodging discounts nearby.

Get Campy

Ditch the hotels, and stay in campgrounds, says financial planner Therese Nicklas of Braintree, Massachusetts.

By camping in state parks with her family of four for around $10 a night, and cooking their own food, Nicklas estimates they save about $150 every single day.

You don’t have to pitch a tent every night. Consider an occasional splurge at a hotel with a pool, hot showers and free breakfasts.

Diehard money-savers might enjoy so-called “dispersed camping” permitted in many national and state forests, where you set up away from designated campgrounds. No amenities, but no fees, either.

Also consider an annual pass from the National Park Service, allowing you access to more than 2,000 sites nationwide for $80.

Hold Money-Saving Competitions

Adviser Niv Persaud of Atlanta has an innovative idea: Make budgeting a game with your kids instead of a chore. “For each dollar they save, on coupons, special deals, or cheap gas, they earn a star,” Persaud says. “The one with the most stars at the end of the trip gets to pick the location for the next family vacation.”

Forget Flights and Car Rentals

Whatever savings you realize by staying domestic could be wiped out by airline bookings and car- or RV-rental fees. So do what David MacLeod did, and schlep to your destination in your own car, even if it’s a long distance away. The planner from Fullerton, California recently took his family all the way from southern California to Montana in their trusty Honda Odyssey, saving $1,000 in the process.

Bring Your Own Food

The silent killer of many family travel budgets: Eating out. Nip that in the bud with a cooler or two stuffed to the brim with snacks and quick meals.

“A simple gallon of milk, box of cereal, yogurts and fresh fruit can provide a great breakfast at 1/4 of the cost of eating out,” says Janice Cackowski, a planner in Independence, Ohio. She also advises eating out only at lunch, when restaurant prices tend to be much lower.

Above all, don’t be scared off by the idea of being in a car for so many hours with your kids. Magic occurs when families actually spend time with each other. “Something wonderful happens: You pay attention to each other,” says Leavitt.

MONEY Workplace

What YouTube Star Michelle Phan Learned From Her First Job at a China Buffet

How To Keep Your Social Media Game Sincere - 2015 SXSW Music, Film + Interactive Festival
Steve Rogers Photography Internet personality Michelle Phan attends How To Keep Your Social Media Game Sincere' during the 2015 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 16, 2015 in Austin, Texas.

The makeup advice guru and 3 other YouTube celebs dish on their first paid jobs.

Not long ago, Americans megastars only came from places like network television shows or Hollywood films.

These days, they also come from somewhere else entirely: YouTube.

While old-media outlets like newspapers have been losing subscribers, YouTube celebrities have been gaining them by the busload.

For the latest installment in Reuters’ monthly “First Jobs” series, we asked a few of the top YouTube stars to discuss how they came from nowhere to cultivate millions of adoring fans.

Michelle Phan

YouTube subscribers: 7.8 million

Specialty: Makeup advice

First Job: China Buffet host

“I was 16 years old, and wanted to help my mom with the rent. There was a restaurant called China Buffet in Tampa that hung a ‘Help Wanted’ sign outside, so I went in and ended up hosting every Friday and Sunday for $6 or $7 an hour.

“My favorite dish was lo mein, which was so greasy. But I was a teenager then and could basically eat whatever I wanted.

“What I learned from that job was how to greet people and make eye contact. I used to be a very shy introvert and never even spoke to people, so it was that job that first gave me the confidence to talk to strangers.

“That was my first legal job, but even before that my brother and I used to sell candy at our school, charging for lollipops and chocolate bars in the gym and the auditorium. We made a good amount of money, too: In two months, we made $600 that we used to buy computer parts and build our own computer. I have always been a hustler like that.”

Cassey Ho

YouTube subscribers: 2.35 million

Specialty: Fitness tutorials

First job: Candy seller

“Back in middle school, every time I used to trick-or-treat, I would take all the chocolates and microwave them and then make my own little chocolate creations. My friends all liked them, so I started charging them for it.

“Later on in high school I added cookie sandwiches with buttercream inside, and everyone went nuts. It became a whole enterprise, with five employees working for me. I was known as “Cassey the Cookie Girl” all over campus. That business even helped me get a full scholarship.

“It’s ironic that I now run a fitness blog. My friends accuse me of having planned it this whole time, of making them fat and then getting them back into shape.

“I learned that if you create a product that has value, you can definitely start charging for it. I also learned that people not only buy because they like the product. They buy because they like you.”

Matthew Santoro

YouTube subscribers: 4.3 million

Specialty: Amazing facts and top 10 lists

First job: Deli counter

“I worked at a Canadian supermarket called Loblaws, essentially frying chicken for a living. I worked my butt off all the way through high school and university, saving up enough to pay my tuition and graduate with no debt.

“I had never had a job before, and handed in a resume with hardly anything on it. But my mom suggested that I send a thank-you card after the interview, and that must have been what got me the job. It was the only one they got.

“I came in not knowing anything, and just learned on the job. Most of all, I got to know how to deal with angry customers. People would come in just fuming mad, and you had to know how to defuse that situation. That skill translates very well to everyday life.

“The number-one question I got at the deli counter was whether or not I ever got sick of fried chicken. And the answer was always no. It’s tasty and delicious. What’s not to like?”

Bunny Meyer

YouTube subscribers: 5.2 million

Specialty: Beauty tips

First job: File clerk

“My first job was as a clerk at an oil-and-gas company, and I actually got fired at it.

“They hired me to do a special project, putting me in a huge office stacked floor-to-ceiling with boxes, and I had to put sticker labels on them all. They thought it was going to take me all summer.

“But when I get a task to do, I like to see how fast I can do it. So I challenged myself and finished within a week. They were completely surprised and said they had no more work for me. They had to let me go.

“What I learned was how important it is to find a job where you can work at your own pace. I like to work very quickly, uploading videos almost every day.

“These days, that kind of diligence and effort pays off. But before, that just wasn’t where I belonged. I could never see myself having a desk job again.”

MONEY Kids and Money

70% of Rich Families Lose Their Wealth by the Second Generation

ARRESTED DEVELOPMENT with Jessica Walter and Portia de Rossi
Carin Baer—20th Century Fox Licensing/Everett Collection Scene from Arrested Development with Jessica Walter and Portia de Rossi

A little honesty might help preserve the family fortune.

When Stephen Lovell used to visit his grandparents as a kid, it was like entering the world of Cole Porter or The Great Gatsby.

People dressed in tuxedos and sipped cocktails. They owned boats, airplanes, a hobby farm. Not to mention a lavish mansion in Ontario, Canada, and a summer home in Southampton, New York.

He estimates that his grandfather, who founded the John Forsyth Shirt Co, had a fortune of at least $70 million in today’s dollars. But through a combination of bad decisions, bad luck, and alcohol dependency, the next generation squandered that money.

“I think about it all the time,” says Lovell, a financial planner in Walnut Creek, California.

Indeed, 70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to the Williams Group wealth consultancy.

U.S. Trust recently surveyed high-net-worth individuals with more than $3 million in investable assets to find out how they are preparing the next generation for handling significant wealth.

“Looking at the numbers, 78% feel the next generation is not financially responsible enough to handle inheritance,” says Chris Heilmann, U.S. Trust’s chief fiduciary executive.

And 64% admit they have disclosed little to nothing about their wealth to their children.

The survey lists various reasons: People were taught not to talk about money, they worry their children will become lazy and entitled, and they fear the information will leak out.

When I asked financial planners why the wealthy are so poor at passing along money smarts and why second- and third-generation heirs turn out to be so ham-handed, the answers were surprisingly frank.

A sampling: “Most of them have no clue as to the value of money or how to handle it.” “Generation Threes are usually doomed.” “It takes the average recipient of an inheritance 19 days until they buy a new car.”

Yes, the statistics may be grim. But just because most wealthy families see their fortunes evaporate within a couple of generations does not mean yours will. Some strategies to avoid it:

Talk Early and Often

You may think you are encouraging hard work by not disclosing wealth to your kids, but that really just fosters ignorance.

If you have just never talked about money, get over it, and give your kids a crash course in financial literacy. Many financial institutions, including U.S. Trust, offer specialized learning materials and courses to get heirs up to speed.

That goes for grandkids, too: Instill smart money lessons in them, and you have pushed family wealth forward another 30 or 40 years.

Discuss the Will

If you are ready for true transparency, take it up a notch and bring up the elephant in the room: the will.

“Parents and grandparents should communicate the whats and whys of their will in a group setting, with all their children present, long before the will is read,” says David Mullins, a planner in Richlands, Virginia.

That way, you can hash out any issues as a family beforehand. It is better than after the fact, when the patriarch or matriarch is not around to explain or make adjustments, and things devolve into all-out legal war.

“Trust me, siblings will find out who got what,” says Mullins. “Without proper communication, this can destroy families.”

Create a Roadmap

Almost one-quarter of baby boomers think their kids will not be able to handle wealth properly until the ripe age of 40. And almost half of wealthy individuals over 70 agree.

That is why you should give your heirs a financial roadmap in the form of a family mission statement, advises U.S. Trust. You can lay out what you expect in terms of spending, saving, and giving back, as well as pass along strategies for building wealth.

Stephen Lovell wishes his mother had that kind of roadmap.

“How did my mother blow it?” he says. “She just didn’t know any better. And now we all live with that regret, every day.”

MONEY migraines

Don’t Let Migraines Hurt Your Finances

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Getty Images

Americans lose an estimated 113 million work days to migraines.

If you have never experienced a migraine, consider yourself blessed by a thousand angels.

Sarah Hackley wishes she could say that. The Austin-based writer and editor suffers from headaches so severe, “it feels like someone is jamming an ice pick into my temple while dropping an anvil on my head.”

Nowadays, she gets attacks at least twice a week, sometimes daily. But twice in her life time, the 31-year-old mom of two has experienced migraines that lasted for an astonishing two years.

Migraines may not exert just physical pain or emotional duress. They could hurt the pocketbook, too, and blow up the most careful financial planning.

Hackley quit her job, working part-time from home, and has spent many thousands of dollars visiting specialists around the country. She isn’t saving much for retirement.

“Migraines are a huge deal for your finances, because they influence what you can do,” says Hackley, author of “Finding Happiness with Migraines.”

Saving is already hard for most Americans. Throw in a debilitating condition that can leave you bedridden, wracked by pain, sensitive to light, noise or smells, and unable to work. How will your bank account fare then?

“Part of the suffering is that migraines take such a huge hit on people’s lives and finances,” says Carolyn Bernstein, clinical director of the Comprehensive Headache Center at Beth Israel Deaconess Medical Center in Brookline, Massachusetts.

“You are unable to go to work, you are using up all your vacation time, and you are prevented from being able to advance in your career,” Bernstein says.

Costs to Wallet, Life

These recurring headaches torture a surprising number of people – about 36 million Americans, or 10 percent of the population, according to the New York City-based nonprofit Migraine Research Foundation.

Each year, that translates to 113 million lost work days, a cost to employers of $13 billion, and $50 billion in annual healthcare services.

Migraines can torpedo finances at multiple stages of your career. They can affect your education, by encouraging sufferers to drop out; your prime earning years, by hampering productivity and promotions; and your golden years, with the pain pushing you into early retirement.

“When migraines are out of control, they can set people up for a lifetime of underachievement,” says Dr. Richard Lipton, vice-chair of neurology at the Albert Einstein College of Medicine in the Bronx, New York.

Part of the challenge is that migraines are mysterious and individual in nature.

Still, there are a few key strategies migraine sufferers can use to minimize the financial hit.

Don’t Suffer in Silence

“See a doctor and get treatment right away,” advises Lipton.

A tailored personal strategy might include taking preventive medication on a daily basis, avoiding triggers that could range from missing meals to getting irregular sleep or drinking alcohol, and having additional medication on hand for when the migraines hit.

To control ongoing healthcare costs, consider medical savings accounts. You will be forking out for everything from deductibles to co-pays to out-of-network services, and you should at least be using pretax money to cover all that, saving you on the order of 30 percent.

Bernstein provides this example: If you are on three different medications to control your migraines, each one with a co-pay costing $10 a month, that’s $360 for the year.

Add in physical therapy 10 times a year, each session with a $25 co-pay, for another $250 annually. Other treatments like acupuncture could prove effective, but might not be covered by your insurance plan.

Protect Yourself

If attacks are causing you to be away from work fairly consistently, you may be seen by higher-ups as someone who cannot be counted on, and miss out on plum assignments or promotions. Or worse, be first in the firing line if there are staff cutbacks.

As a result, “ask your doctor for a letter to give to your Human Resources department,” advises Bernstein. “That way you won’t get penalized for having migraines. Once it’s documented, you have some degree of protection.”

As for Sarah Hackley, she is able to work only a few hours a day, or a migraine is triggered, laying her out for a full week.

But with the help of doctors and fellow sufferers at online communities like Migraine.com, she can at least manage her money and her migraines.

“It’s an expensive condition, but all the support out there is invaluable,” she says. “You can’t put a price on that.”

MONEY stocks

Millennials Prefer Hot Tech Stocks While Gen Xers Shop for Dividends

Tesla Unveils New Battery System
Kevork Djansezian—Getty Images Elon Musk, CEO of Tesla, with a graphic unveils suite of batteries for homes, businesses, and utilities at the Tesla Design Studio April 30, 2015 in Hawthorne, California.

Among the top picks for young adults aged 34 and younger: Apple, Facebook Inc, Tesla Motors Inc, Alibaba Group Holding Ltd.

It seems America’s youth have found a hero, and he is 84 years old.

For those aged 34 or younger, their No. 2 favorite stock – behind only mighty Apple Inc – is none other than Warren Buffett’s Berkshire Hathaway Inc.

This is according to new data from the brokerage TD Ameritrade, which took a snapshot in May of the individual equity holdings of every one of its retail clients (not including mutual funds and exchange traded funds, which themselves hold baskets of different securities).

When it came to picking individual stocks, the results showed a generational difference. Millennials, who are pegged as tech-obsessed upstarts, favored the stocks of their own time. Aging baby boomers, who are stereotyped as stubbornly set in their ways, and Generation X, which is stuck in the middle, mostly favored what they know best, that is, dividend stocks.

Among the top picks for young adults aged 34 and younger: Apple, which accounts for a whopping 11.7 percent of their equity holdings; Facebook Inc, at 1.9 percent; electric carmaker Tesla Motors Inc (TSLA), at 1.1 percent; and Chinese e-commerce giant Alibaba Group Holding Ltd, at 1.1 percent.

For all those aged 35 years and older, Apple reigns supreme in their portfolios as well, with a share of 9.4 percent. Other popular stocks include General Electric Co, at 1.7 percent; AT&T Inc, at 1.4 percent; and Exxon-Mobil Corp, at 1.4 percent.

No mystery there: Follow the dividend.

“Older clients tend to search for higher yield,” said Nicole Sherrod, TD Ameritrade’s managing director of trading, since dividend-paying stocks provide a steady income stream as boomers start easing into retirement.

“So you see energy companies like Chevron, and healthcare names like Johnson & Johnson, and telecoms like Verizon, all of which they are very familiar with and have been investing in for years.”

For the youngest generation, however, it is all about what is hot now.

“It’s a demographic that is very much into tech, so it’s not shocking that it tends to skew much higher in their portfolios,” said Sherrod.

“Take something like Tesla: It’s something hot that millennials covet, and although they may not have the purchasing power to buy the car yet, they can certainly buy the stock.”

Who Has It Right?

But the underlying question: Do America’s respective generations have their equity mixes right? Or is some rebalancing in order?

To find out, Reuters took the trove of TD Ameritrade data to Patrick O’Shaughnessy, a portfolio manager with Stamford, Connecticut-based O’Shaughnessy Asset Management and author of the book “Millennial Money: How Young Investors Can Build a Fortune.”

His No. 1 concern for both generations: Back off on the Apple, guys. Not because of poor fundamentals, but because of serious overweighting.

“Those Apple percentages are crazy high,” O’Shaughnessy said. “In comparison Apple is around 4 percent of the S&P 500, so that is a huge individual position for both age groups.”

O’Shaughnessy also warns millennials against loading up on the latest sizzling tech stock, say Alibaba, and advises them to look hard at underlying valuations. In many cases price-earnings ratios have shot sky-high, and just do not represent smart buys.

If millennials remain determined to invest in the sector, they should instead look at stodgier tech names like Microsoft Corp, he said. With proven revenue streams, stock buyback programs, and growing dividends, tech’s old guard should prove safer harbor if market storms hit.

O’Shaughnessy’s final tip for investors: Look abroad. Since the U.S. market has “killed every other market for five years,” that likely means many investors are now overweight in American stocks. As a result, bulking up your portfolio with more international names would be wise.

Whether it comes to millennials, or Gen Xers, or boomers, each generation seems to be investing in what it knows. Generally speaking, that is a good thing – and happens to be a favorite principle of Warren Buffett himself.

MONEY

Don’t Let the Cost of a Haircut Ruin Your Relationship

Haircut
Alamy

Never mess with the hair budget.

Here’s a little marital tip: When financial experts say couples should compromise on absolutely everything, there are times when you just need to split hairs.

For instance, just try to tell your spouse how much he or she should spend on getting their hair done.

Guaranteed nuclear war.

I asked my social media followers about the way couples should handle the significant costs of getting one’s hair done, and the reaction was fiery.

A sampler: “There are some things you don’t share with your spouse, and hair cost is one of them.”

“It costs to look this good … and no, hubby doesn’t need to know, nor does he ask.”

“Smart husbands don’t mess with the hair-doing budget.”

“Two things men should only address if they have something good to say: hair and weight.”

Haircare, in particular, seems to be an intensely personal subject for couples. Throw money concerns into the mix, and it can lead to the financial equivalent of a really bad hair day. Indeed, financial arguments are by far the No. 1 one predictor of divorce, according to research by Sonya Britt, a professor at Kansas State University.

There is no doubt the costs of haircare can add up, and quickly. U.S. spending on hair services in 2014 amounted to a record $46 billion, estimates Parsippany, New Jersey-based consulting firm Kline & Co.

The average salon client drops $67.17 per visit for hair services, according to American Salon’s Green Book industry report. That’s a repeated cost, of course, with men going to a stylist 11.2 times a year on average, and women dropping in 12.9 times annually.

“As a woman you grow up feeling like expensive hair treatments are mandatory, almost like you’re being shamed into it,” says Dr. Phoenyx Austin, a fitness expert in Washington and author of “If You Love It, It Will Grow” and the children’s book “Love Your Hair.”

“You don’t want someone telling you you’re spending too much money. It’s a very touchy subject.”

That said, Austin says the final tab can easily get “out of hand,” when you are combining pricey appointments with expensive take-home products. She knows of women who spend up to $1,500 a month on their hair.

Elaborate Procedures

Costs can disproportionately affect minority communities, where haircare procedures tend to be more elaborate. The average cost of getting extensions or weaves, according to the Green Book: A whopping $487.25 every time, up $137.29 in a single year.

Austin, who is African-American, went for a more natural look years ago, which saves a ton of money on processes like chemical straightening. But if times are tight and there is room for your family’s salon budget to be cut back, she advises that you look in the mirror first.

“The worst thing is to come at your spouse complaining about a salon bill, when you’re shelling out lots of money on other stuff,” she says.

“Make sure to frame the discussion that any cutbacks will go into family savings, or to your kids’ college. That’s a good way to massage it into the conversation.”

Samantha McGarry once went into battle on the subject, and the skirmish was brief and decisive.

“At one point, my husband said something about the cost of getting my hair done,” says the 47-year-old public relations executive from Framingham, Massachusetts. “So we had a little conversation, and now he knows to focus on other areas.”

If times got really tough, McGarry would find room to trim spending and try more do-it-yourself coloring jobs. Truth be told, McGarry doesn’t spend crazy amounts on her hair: $120 every now and then on a cut-and-color. She certainly does not want that budget shorn.

“It’s about feeling beautiful, it’s about having ‘Me Time,’ it’s about all of that,” McGarry says. “Spouses should probably steer clear in order to keep the peace.”

MONEY Budgeting

Here’s Why More Americans Are Saying ‘I Do’ at City Hall

Couples head toward the Historic Dade City Courthouse to say their marrige vows.
Zuma Press—Alamy Couples head toward the Historic Dade City Courthouse to say their marrige vows.

It may be the best wedding gift of all.

When Scott Oeth was thinking about proposing to his girlfriend, Linda Hardin, he knew the stats. The average wedding costs in 2014, according to popular website The Knot, were a whopping $31,213.

That’s when the Minneapolis financial planner thought, No way.

Lucky for him, his bride-to-be was thinking exactly the same thing. So last year the couple arranged for a courthouse wedding, a celebratory dinner at their favorite steak house, covered as a gift by his new in-laws, and a backyard BBQ reception later in the summer for 100 guests.

Total cost: A paltry $1,250.

Oeth, 43, says he wouldn’t change a thing. “It was all wonderful, and we had such a great time,” he says. “I don’t think that most people who spend tens of thousands on traditional weddings could say the same.”

More newlyweds seem to be thinking like Scott Oeth and Linda Hardin. Courthouse and city hall ceremonies now account for between 3 and 4 percent of marriages, up from 2-3 percent a couple of years ago, according to industry resource The Wedding Report.

Financially speaking, toned-down weddings make a ton of sense. After all, think of all the other places newlyweds could spend that money to get their marriage started on the right financial foot, Oeth says.

Fully funding IRAs for both spouses. Paying off high-interest credit cards. Getting rid of student debt. Starting a 529 college-savings plan for young children. Saving up for a down payment on a first home.

“Expensive weddings are like a subprime mortgage crisis of the heart,” says Laurie Essig, associate professor at Vermont’s Middlebury College and “Love, Inc.” columnist for the magazine Psychology Today.

Noting that most young people have student loans, Essig says, “It just doesn’t make financial sense to be taking out even more debt to have a lavish wedding.”

Those typical expenses, according to The Knot, include $14,006 for venue rental, $2,556 for the photographer, $3,587 for the band, and $555 for the cake.

In many urban centers, costs can be much higher than those national averages. In Manhattan, for instance, the typical wedding bill comes to a wallet-punishing $76,328.

Of course, it is no mystery why people are so willing to pay through the nose for their Big Day. Marriage is seen as a once-in-a-lifetime moment that couples want to memorialize with one spectacular day.

Forgoing Extravagance

When you think of financial alternatives to a fancy wedding, it is hard not to see the logic of forgoing the extravagance.

“Of course, it doesn’t make sense to spend all that money,” says Essig. “But marriage is a magic ritual, and magic will always outweigh more pragmatic stuff, like going down to city hall and filling out forms.”

Many spouses-to-be are afraid to bring up the idea of shaving wedding costs, for fear of appearing like a cheapskate, hurting their partner’s feelings, or angering in-laws at a highly emotional moment.

Get over that reticence and have a money conversation, experts say.

The so-called wedding-industrial complex may not like it, but there is no law against buying a used dress from a thrift store, or getting a vintage ring, or having the ceremony in a park instead of a grand ballroom, Essig suggests.

Even if your wedding is a quick and simple affair, always check local regulations beforehand, advises Christen Moynihan, editorial manager of the website Broke-Ass Bride. There might be waiting periods after acquiring a marriage license, or specific ID requirements for getting all the necessary approvals, and you do not want to be caught off-guard.

A ceremony in front of a justice of the peace might only run a couple of hundred bucks. “There was a time when low-cost weddings and courthouse ‘I Dos’ were scandalized, but in recent years there has been much higher acceptance for weddings to take place in whatever way the couple envisions,” Moynihan says.

Scott Oeth and Linda Hardin redirected some of their wedding savings toward a fabulous honeymoon on Kauai. Since they are cost-conscious, they bought a travel package through Costco and got free first-class flight upgrades because of Scott’s Delta Medallion status.

Total cost for the fairytale honeymoon? Around $3,000.

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