Money Management

I love shopping at Dollar Tree, but stuff is so cheap that it can be a problem. Here’s how you can keep mindless spending in check. 

Dollar Tree is one of my favorite places to shop. It has a ton of great kid items ranging from squirt guns to building block sets. I also love the store’s dishes, candles, and vases.

Because there are so many great deals, I take my kids to Dollar Tree often. The problem, though, is that there’s a big mistake I have to be careful to avoid so I don’t end up doing unnecessary damage to my bank account.

Cheap goods can still add up to a big expense

The big mistake that I have repeatedly found myself making at Dollar Tree stems from the fact that the prices are just too good there.

When everything costs only $1.25, I often don’t find myself stopping to think about whether we really need the item. After all, the price I’m paying is so tiny that it hardly seems worth taking the time to think about whether the purchase makes sense.

Unfortunately, this can cause problems — especially when shopping with kids — because I’d find myself throwing a ton of unnecessary purchases into my cart. Nerf football? For just $1.25! Sure, why not? Elmo sippy cup even though we have 100 better cups at home that won’t spill? Toss it in. Yet another packet of glow sticks, a craft kit, a sticker book, sunglasses, and an adorable picture frame? Throw them all in the cart!

Wasted money is still wasted money. And since I was charging things on my credit cards I didn’t need just about every time I went into the store, this started to really add up.

Buying just five unnecessary items at Dollar Tree a week would end up costing me $6.25 a week, or $325 a year (and I was often spending more than that). I wouldn’t just drop that much money on a single impulse purchase without thinking about whether I needed it — but when it was just $1 or $2 here or there, it didn’t seem like an issue.

Always look at the big picture

My Dollar Tree problem is a good example of how I — and many people — can get into trouble if we don’t spend consciously.

See, a lot of decisions seem like small ones, whether it’s spending that extra couple of bucks for coffee or splurging on an Uber instead of taking public transportation. It’s easy to justify that it’s only a few dollars but that adds up when you do it often enough.

That’s not to say that it’s never OK to spend on small pleasures that make your life better. But, you’ll want to make these splurges while thinking about how to use your money in a way that most improves your life. Frittering away hundreds or even thousands of dollars on meaningless purchases that each don’t matter in their own right but add up to a lot over time is not the best way to use your hard-earned money.

To stop this, I’ve gone back to basics and limited what I spend at Dollar Tree. I’m OK with a certain amount of spending each month and once that’s gone, I simply don’t go back. And you can do this with whatever your weaknesses are.

Whether it’s Dollar Tree, your Starbucks habit, or anything else you tend to spend too much on without thinking about it, you can take back control and stop the waste. This doesn’t mean you have to give up your habit. Just put a value on how much you actually want to devote to that hobby each month and once it’s gone, you’re done.

This has made a surprisingly big difference in my Dollar Tree shopping. Now I think about what I’m putting in my cart so I don’t find myself wasting money for fear I’ll hit my limit and a great new product will come out and I won’t be able to get it. It could make a difference for you too, so give it a try.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks and Uber Technologies. The Motley Fool has a disclosure policy.

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Some people largely rely on seasonal work to survive financially. Read on to learn more. 

Michigan’s Mackinac Island is a unique place. It’s only accessible by ferry, and cars (other than emergency vehicles) are banned. Visitors and residents alike get around on foot or by bike, and outside of the summer months, the weather can be less than inviting.

As such, Mackinac Island businesses rely heavily on summer tourism to stay afloat. In fact, many of the people who work on the island don’t actually live there. There are only about 500 to 600 full-time residents on the island. Workers commonly live in nearby cities or towns and commute by ferry during the peak season, which commonly runs from May through September.

My family and I recently visited Mackinac Island, and during our stay, I couldn’t help but chat up a couple of workers to ask about their lives and livelihood. Here are their stories.

Greg, a 20-something historical interpreter at Fort Mackinac

Fort Mackinac is a major attraction on the island. Visitors can explore soldiers’ old quarters, learn what army life was like, and witness old-school rifle and cannon firings.

During our tour, we were guided by Greg, a 20-something historical interpreter who dresses in uniform and shares the history of the fort during a series of 30-minute walks throughout the day. Greg was kind enough to take questions during our tour, and my eight-year-old daughter wanted to know if he was a “real army guard.” I wanted to know if he was a budding actor, or what inspired him to take the job he did.

Greg explained that he grew up near Mackinac Island and always wanted to work there. He enjoys his current gig because it allows him to interact with people, and he says the pay is decent (though I didn’t press to get further details).

Since the fort is only open from June through October, Greg needs a way to earn money during the offseason. To supplement his income, he works in food delivery. He says his job at the fort provides him with the bulk of his annual income, and he makes it work by saving a big chunk of his summertime paychecks. He also says that rent is reasonable where he lives, so that helps.

Jordan, a 40-something bartender

Jordan has been working as a bartender on Mackinac Island for over 20 years (since, as he puts it, he was old enough to drink himself). In recent years, he’s been fortunate enough to snag a gig at a popular restaurant on the island where the drinks are higher-end and the tips tend to follow suit.

Still, because his income is not only seasonal, but quite variable, Jordan has to budget carefully. Despite working on the island for several months of the year, he still needs a car to get around on the mainland, so that’s an added expense that eats up a lot of his earnings. He says he’s careful about spending on extras and does most of his traveling locally, since he loves where he lives.

Outside of the summer months, Jordan continues to bartend. But it’s hard for him to get really good gigs because he always leaves for Mackinac Island during the summer.

It’s worth it to prioritize his summer gig, though. He says he can earn more money working for three or four months on the island that most people can earn by bartending full-time 52 weeks a year.

It’s all about smart choices and careful planning

As you can see, it’s more than possible to get by earning most of your living in just a few months. But to pull that off, you’ll generally need to budget carefully and supplement your income with other gigs. You may also need to make certain sacrifices, like renting a home instead of owning one (since it can be hard to qualify for and afford a mortgage loan when your income isn’t considered steady).

But for people like Greg and Jordan, seasonal work allows them to be where they want to be during the summer, and it takes some of the pressure off during the rest of the year. And if they can make it work, so can you if the idea of earning a living on an island like Mackinac sounds appealing.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Citigroup is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has positions in Citigroup. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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It’s important to choose your stocks with care. Read on to see why. 

Investing in stocks is a smart strategy for growing wealth over time. Over the past 50 years, the stock market has delivered an average annual 10% return, as measured by the S&P 500 index. At that same return, a $10,000 investment in stocks today could leave you with a portfolio worth more than $452,000 in 40 years.

But buying stocks is something you’ll want to put a lot of thought into. That means researching each and every stock you add to your portfolio. If you choose your stocks at random, you could face some pretty unfavorable consequences.

You might end up with poor performers

There are many solid businesses that deserve a place in your portfolio. But if you load your brokerage account with random stocks, you might end up with a number of companies that don’t do a good job of managing their money and earning profits. The result? Less money for you.

It’s important to look at a given company’s financials before buying its stock. A company that’s loaded with debt may be a company that’s in trouble — and one you’re better off avoiding.

You might end up with a portfolio that lacks diversification

You need to make sure your portfolio is diversified. That way, if a single company or market sector takes a beating, you won’t necessarily see the value of your portfolio plunge right away. But if you choose your stocks at random, you might end up owning shares of numerous companies within the same market segment. And that’s not a good thing.

Let’s say you end up in a situation where 80% of your portfolio consists of tech stocks, and the tech sector gets hammered. You could see the value of your investments plummet. On the other hand, if tech companies only comprise 20% of your portfolio, the damage may not be nearly as severe.

When researching stocks just isn’t your thing

Some people don’t have the time, patience, or desire to research stocks on an individual basis. If you’re one of those people, don’t sweat it. Hand-picking stocks isn’t for everyone, and it’s better to be honest with yourself than simply fall back on a plan that has you adding stocks to your portfolio at random.

A better bet for someone in your shoes may be to load your portfolio with S&P 500 ETFs, or exchange-traded funds. These publicly traded funds seek to track and invest in S&P 500 companies, so by buying them, you’re effectively adding many stocks to your portfolio without having to research them one by one.

There are also segment-specific ETFs you can look at. You may, for example, decide to buy shares of an energy ETF, bank ETF, tech ETF, and so forth so you’re investing in different sectors of the market without having to dig deeply into individual companies’ finances.

Choosing stocks at random is a move that might backfire on you. If you’re not up for research, there’s absolutely nothing wrong with falling back on ETFs.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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