Photo by Andres Ayrton
After he received a positive work review, an employee had to decide whether to take his raise as a lump sum or as a salary increase. Unsure if it was better to get the money all at once or to spread it out over the entire year, the employee sought my advicec. Here’s how I responded:
“If you take the salary increase, how many months will it take to match the amount you would get in the lump sum? Are you fairly certain you will have this job at least that long? Of course there are no guarantees, so you need to evaluate your tolerance for risk.
“The safe decision would be to take the lump sum, pay taxes on it now and look forward to another merit increase in the future. However, if you are more of a risk-taker and believe you will be on this job for many more years, accepting the monthly option could net you more money over the long run.
“Sometimes the best way to make a decision is to take the ‘pillow test.’ Consider which decision would allow you to sleep better.”
To stay at home or not
Another employee wondered if quitting her job to care for her young family at home was a reasonable solution.
“With two little boys, my husband and I are paying through the roof for day care. It seems like almost all the money I earn goes to child care, so I’ve been thinking of quitting my job and staying home with the kids,” she wrote. “I’m enthusiastic at the thought of spending more time with them, but I also want to be sure my family will be OK financially. Is there an easy way to make sure the decision is right for us?”
I told her not to make any rash decisions. Instead, I advised, “write down a figure that represents your monthly net (take-home) pay and deduct from that all of her work-related costs, including day care, transportation, clothes, lunches, gifts, office supplies and anything else she could come up with that would go away if she stayed at home.”
Next, I asked her to consider all the expenses she has because she works, like more fast food, take-out and restaurant meals because she’s too tired to cook.
“Do you hire help for the yard work or housecleaning? If you are home, there’s a good chance you can do those jobs and reduce your expenses even further,” I asked. “You may be shocked to discover it’s actually costing you to hold down a job because you’re paying out more than you earn. Unless you make a whopping big salary, there’s a high likelihood you will be better off financially by being at home with your kids where you can also cook, clean and perhaps garden, too.
“Even if you decide to keep working, going through this exercise is bound to give you a new perspective and clear-cut reason for the decision you make,” I said.
Turning good items into cash
When money proved tight, a woman in Texas decided to take her twin daughters’ outgrown clothes to a consignment shop to earn some extra cash. She asked for tips on how to make the most money that way.
My response: First, make a list of the children’s consignment shops in your area. One chain I know well is Once Upon a Child, which may be a good place to start, should there be one near you. Next, do some research.
Each shop will have its own unique policies on which types and conditions of items they accept. Find out the terms, i.e., once an item sells, how will they split the proceeds with you? Do they accept gently worn items or only pristine? Must clothes arrive in dry cleaner bags or freshly laundered?
Once you have all the facts, decide which shop you will try first. Make sure your items fit the store’s criteria, then make your first delivery. Keep careful records. Many shops have a policy that what doesn’t sell is given to charity unless you pick up the item in a timely manner.
Consignment shopping and selling is a great way to turn good items back into cash. Another way is to do this online. ThredUp.com is a very popular online consignment and thrift store. Once you are at the site, select “Sell” to discover how this shop works. I have purchased items from ThredUp.com for my grandsons, and it was an easy, pleasant experience. The Kids department is very active. That you have matching same-size items could definitely give your items a lot of attention and quick sales.
It’s possible you will find selling your kids things at your own yard sale nets you more money for less trouble. You just have to experiment. If all else fails, remember when you donate to a qualified charitable organization, you are allowed to deduct the fair market value of each item from your taxable income. When you itemize your tax return, that can add up to a considerable amount and benefit you with a larger tax refund or smaller tax bill.
