Jonathan Clements's Blog, page 3
November 22, 2025
Letter from Elaine
Last week there was a forum post penned by Dick Quinn on shopping carts. This post was an inappropriate and unkind rant/lament that had no place on HumbleDollar. We can all agree that this post should have been better moderated and that the comment thread which turned acrimonious should have been stopped.
Going forward, I kindly ask commentors take a mindful pause before commenting to prevent further igniting an already incendiary post. And I kindly ask those who pen forum posts to think carefully about the personal finance lessons or observations they are sharing. HumbleDollar provides a wealth of information from both its content and its community, so questions are always welcome.
My husband Jonathan often spoke to me about the overall kindness, civility and intelligence of the HumbleDollar community. Please do not prove him wrong.
The post Letter from Elaine appeared first on HumbleDollar.
Replacement of Kitchen Appliances
Recently, we needed a new dishwasher.
The appliance company crew went about removing the old unit, making adjustments in order to install the new unit, then installing the new unit. They provided a quick explanation of the controls.
After the crew left, I realized there was only a single basket for the knives, forks, spoons, etc.
Realization: I should have pulled out the multiple baskets in the old unit! Those baskets might have saved the need to find and buy some after market baskets.
if I hadn't used them, the retained baskets could have been donated to our local ReStore for Habitat for Humanity.
This idea might apply to other appliances, and perhaps tool kits as well.
The post Replacement of Kitchen Appliances appeared first on HumbleDollar.
November 21, 2025
Money, Happiness, and Choice
To be sure, there are ways that money can boost happiness, and below are some ideas to consider. But there are also obstacles to contend with. We’ll look first at the obstacles before turning to the recommendations.
The most significant challenge is the fact that—to a great extent—our happiness level is hard-wired into us. Everyone has a happiness “set point,” with the result that some people simply end up being happier than others, regardless of their finances or circumstances. People debate about how much that set point matters. To one degree or another, though, researchers agree that happiness isn’t entirely in our control.
Another reality to be aware of: Happiness for most people follows a predictable pattern throughout life. Specifically, that pattern tends to be U-shaped, with happiness often dipping in early adulthood, as responsibilities begin to pile on. Buying a home, climbing the career ladder and raising children—these things all take work and can take a toll. The good news is that happiness tends to start rising again by the time folks hit their 40s. But it’s hard to sidestep those earlier, more challenging years.
The third obstacle is what’s known as the Easterlin paradox. Richard Easterlin was a leading researcher on the psychology of money. One of his key findings was that when societies experience economic growth, the resulting rise in prosperity, counterintuitively, doesn’t seem to affect people’s happiness levels. Roughly the same percentage of Americans today report being very happy as did a hundred years ago, despite the vast improvement in our standard of living.
Someone with just an average income today enjoys luxuries that John D. Rockefeller might have only dreamed of. Why doesn’t happiness improve along with standard of living? Easterlin’s conclusion was that it’s not just our absolute standard of living that matters; it’s our relative standing. That’s why Scandinavian countries tend to rank highly in global happiness surveys. If there are fewer people with outsized—and ostentatious—wealth, that tends to make everyone feel better.
To be sure, these three factors are obstacles to contend with, and they’re generally hard to avoid. The good news, though, is that there are plenty of things that are well within our control, regardless of age or stage or financial standing. Below are five strategies you might consider as the new year approaches.
Plan
Suppose you’re thinking of taking a vacation next summer. Even if it’s several months away, happiness researchers suggest you start planning that vacation today. That’s because a finding in the research is that we derive enjoyment from looking forward to things. So if you increase the lead time before a vacation or other event you’re looking forward to, you’ll increase the enjoyment you derive from that experience.
Give
In a finding that’s been replicated more than once, giving has been found to boost happiness. Whether it’s to family, a friend in need or to an organized charity, giving almost universally brings us joy. According to the research, we get a lift from each gift we make. So writing five or 10 modest-sized checks may have more of a positive effect than one large donation.
Organize
Psychologists talk about the damaging effect of “open loops” in our minds. This refers to tasks that are unfinished. According to the research, they’re particularly unpleasant because they occupy disproportionate mental space. Suppose you have five items on your to-do list, but one of them is overdue. That one overdue task will tend to loom large, sapping energy, even while you’re working on the other items. That’s why I suggest keeping your financial life as simple as possible. The result, generally, will be fewer open loops to worry about.
What does this mean in practice? First, I suggest structuring your household finances so that as many things as possible run on autopilot. If you have a credit card or cards, turn on the auto-pay feature so you don’t have to keep track of deadlines. Do the same with your rent or mortgage, with your insurance and with other critical services.
If you’re in your working years, I suggest the pay-yourself-first approach to budgeting. Instead of trying to track every dollar—a task that few people have the time or discipline to undertake—instead simply divert a portion of your paycheck into savings before it even reaches your checking account.
Other steps you can take to streamline your finances in 2026: If you have more than one bank, credit card or brokerage account, see if you can consolidate any of them. If you have old 401(k) accounts, roll the balances into your current employer’s plan or into an IRA. And within each account, see if you can streamline the number of holdings.
You could use a free tool like Portfolio Visualizer to examine the correlation between two funds and see whether your portfolio would be materially affected by consolidating into just one.
Buffer
In organizing your finances, another step I recommend is to build in a buffer. While cash isn’t a great long-term investment, it can serve an important purpose in reducing open loops. Even if your bank doesn’t pay much in the way of interest, I’d still maintain an amount large enough that you don’t have to ever worry about running low. If that means selling some stocks now to build up a cash reserve, that strikes me as worthwhile.
Delegate
My neighbor tells me that he has an assistant who works remotely—from Romania. She takes care of standard things like managing his calendar but also helps with a variety of other tasks that he finds tedious, like booking travel and paying bills. All of this can be done from afar. A service like this might not make sense for everyone, but there’s a useful takeaway: If there are tasks you really dread, don’t resign yourself to living with them. Instead, see if there’s a way to delegate them. Indeed, one of the best possible uses for money is to buy time. On this point, all happiness researchers agree.
Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.The post Money, Happiness, and Choice appeared first on HumbleDollar.
Year-End Tax Planning Moves
Here are some tax moves to consider:
1. Maximizing retirement contributions
Before the year ends, if you have the means, consider contributing the maximum allowed $23,500 to traditional 401(k), Roth 401(k), and similar workplace plans.
Even if you can’t max it out, increasing your contributions in November and December can still make a meaningful difference. And if your employer offers a match, make sure you’re contributing at least enough to get the full match.
2. Mega Backdoor Roth
This strategy allows high-income earners to save even more in a Roth account, if permitted by a workplace retirement plan. For example, say you contribute the entire $23,500 to a pre-tax 401(k), and receive $10,000 in employer match. You can still contribute $36,500 to after-tax account if allowed by your plan.
After contributing to the after-tax account, you can roll the funds over to a Roth IRA or Roth 401(k), shielding them from future tax.
3. Backdoor Roth
If you have a high income, you can’t contribute to a Roth IRA directly. But, there is a strategy called “Backdoor Roth”.
It involves making a non-deductible contribution (so no tax deduction) to a Traditional IRA, and then converting the amount into Roth.
Importantly, you need to ensure that you have a $0 Traditional IRA/Rollover IRA/SEP/SIMPLE by December 31, otherwise, the conversion will be partially taxable. I wrote more about the Backdoor Roth strategy in a previous issue.
4. Optimizing Charitable Contributions
If you’re planning to donate to charity before the end of the year, consider donating appreciated shares from your taxable brokerage account instead of cash. When you donate stock that has increased in value, you can deduct the full market value of the shares (up to a set AGI limit) without paying capital gains tax on the appreciation.
After the donation, you can use the cash you had originally planned to give to buy back the same shares. This effectively increases your cost basis in those shares, which reduces your future capital gains tax when you eventually sell them.
5. Tax Loss Harvesting
If you have stocks/ETFs that have a loss, consider selling them to offset gains from other investments or to claim up to a $3,000 capital loss deduction on your tax return. This strategy, known as tax loss harvesting, can reduce your taxable income and lower your overall tax bill.
A common strategy for some investors is to sell a fund that tracks the S&P 500 at a loss, and rebuy a similar fund, say the Total US Market Fund. Looking at the S&P 500, it's down ~5% from its all time highs, so it could be a decent move.
Just remember the wash sale rule: don’t buy the same or a substantially identical security within 30 days before OR after the sale, or the loss will be disallowed for tax purposes.
6. Tax Gain Harvesting
If your taxable income is below $48,350 (or $96,700 for MFJ) in 2025, consider selling appreciated securities at a gain and buying them back. This increases the cost basis of your investment and lowers future tax liability.
However, if state or local taxes apply, this strategy may not be worthwhile due to the opportunity cost of paying those taxes. This strategy is ideal for an investor in a no income tax/no capital gains tax state.
7. Maximize HSA
HSAs provide many tax benefits, including a tax deduction, tax-free growth, and tax-free withdrawals for medical expenses.
You can contribute $4,300 for individuals or $8,550 for families if you have a HDHP (minimum deductible of $1,650 for individuals and $3,300 for family coverage). Individuals age 55 and older can contribute an additional $1,000 "catch-up" contribution.
I personally maximize my HSA every year since my employer also provides a matching for it. It's a great way to save/invest for the future healthcare costs.
8. Business Entity
If you are a business owner, choosing the right business structure can have a big impact on your taxes. For individuals with net income above $100,000, electing S corporation status could be a smart move.
An S corp allows you to split your earnings between a reasonable salary and distributions. While your salary is subject to payroll taxes, distributions are not, which can reduce your self employment taxes. However, you have to analyze the payroll costs, including compliance, for maintaining that S corp status.
9. Track Expenses
Most small business owners or people with a side hustle overpay taxes because they don't keep a good track of their expenses. Some of the smaller things like entity formation or business meals could get missed. This is why it's a good practice to have a separate business bank account and connect it to various bookkeeping softwares.
Last minute bookkeeping often leads to missed opportunities and higher taxes. For self-employed individuals, tracking income and expenses consistently throughout the year can make quarterly estimated tax payments more accurate and reduce the risk of penalties.
10. Gift
In 2025, you can gift up to $19,000 ($38,000 for married couples) per person without impacting your lifetime estate and gift tax exemptions ($15M in 2026). This won't reduce your taxes now but will allow you to strategically transfer wealth to your heirs tax free. This is especially relevant for individuals living in states that have a low exemption (like Oregon with $1M)
Which ones are you going to take advantage of this year? Let me know in the comments!
Bogdan Sheremeta is a licensed CPA based in Illinois with experience at Deloitte and a Fortune 200 multinational.The post Year-End Tax Planning Moves appeared first on HumbleDollar.
The Kids Are Alright
In a recent post about a child who doesn’t seem to have it all together, Molly McIlhenny reminded us that kids are likely more savvy than we give them credit for. That got me thinking about my younger self. Maybe my story can help in some small way.
I have always had a good work ethic. You can ask my high school sweetheart if you like. She would get so frustrated because I would often pick up extra hours at the supermarket and destroy whatever plans we had made. Perhaps that’s why she dumped me.🤔
School was a different story. My work ethic did not transfer to school work. I know you can’t tell by the brilliance of my posts, but I was in the bottom quartile of my graduating class. I once joked that I didn’t know the difference between a pronoun and a participle, an adjective or an adverb…. I actually don’t know the difference.
I just wasn’t firing on all cylinders; I was a hard worker, but also a lazy student.
How would my life be different had I buckled down in school? If only I read the accounting textbook instead of eating the pages, I might have begun my tax business in 1975, rather than in 2005. I would have had an accounting degree, enabling me to expand my business beyond tax preparation. As it was, every time I had an opportunity to keep the books for a small business, I ended up referring them to my friend Julie, an Enrolled Agent (EA). I sent Julie dozens of good clients. I would have earned much more money and avoided the physical maladies from the more brutal occupation that I chose.
Nothing would please me more than having my tale of woe help a youngin who is channeling my past. I eventually succeeded despite the obstacles I created for myself, still, the lack of a work ethic in school carried with it a 30-year opportunity cost.
Twelve, sixteen or more years of school seems like a long time to a kid, but we know it is not much time at all. The long-term payoff of education can be difficult for a young person to see in the moment. Education equals opportunity, young people need to make the most of it.
I’m sure my folks worried for my future, but I turned out okay, your kids probably will as well. 😁
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Is the current stock market anything to be concerned about?
I just looked at my investments for the last month. It’s not a pretty picture and I have a big chunk in bonds and cash.
Have we entered a period of concern? Are assumptions under stress? Do we do anything or nothing? Should short-term spending be adjusted?
For those who are relying on investments in retirement what are your thoughts - just an anticipated blip or something more?
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Skipping a Generation
My father-in-law, while certainly not a wealthy man, holds assets in the mid six-figure range. The subject of inheritance came up during a recent visit to his home in Spain, sparked by a conversation that my wife, Suzie, and I had just finalized updates to our own will due to the sale of my business.
I raised a specific suggestion for his estate planning: given that his three children are all financially secure and truly don't need the inheritance money, would it make sense to skip a generation?
The primary benefit of this "generation-skipping" strategy is maximizing impact over mere convenience. Since the children are financially comfortable, an inheritance would likely be absorbed into their existing wealth with little perceptible change. By contrast, a potential distribution of maybe $75,000 to each of the seven grandchildren—whose ages range from 4 to 28—creates a foundational, life-altering impact. This approach transforms the bequest from a simple transfer of assets into a powerful, lasting legacy, helping the younger ones with university costs or providing a down payment on a first home for the older ones.
After thinking about my suggestion for a few weeks, he's had conversations with my wife Suzie and his two other children, and they are all in agreement that it's a good idea and it seems likely that this is the pathway my father-in-law is going to follow.
While the family is fully on board, it's not a straight path forward. Because my father-in-law's assets are in Spain, we've learned there are some complications due to Spanish inheritance law, often called 'forced heirship.' Essentially, the law there limits how much of the estate he can freely bequeath, meaning we'll have to work closely with a local Spanish lawyer to ensure this generation-skipping plan can be legally executed.
Although it's maybe an unusual idea, and not suitable for most families, his goal is to turn this future inheritance into a foundational life boost for the grandchildren. I was wondering if anyone in the humble dollar community has thought about this generation-skipping strategy, or been a beneficiary of one, and what specific impact it had on your early financial stability or key life milestones.
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November 20, 2025
Health Insurance Double Take
The United States Bureau of Labor Statistics measures year over year changes in the health care component of the consumer price index (CPI). The monthly health care inflation rate for September, 2025 reflected a 3.28% annual rise. Our perception is that this is a relatively high increase, although in reality the current rate represent is slower annual growth when compared to the past 50 year average rate of 5.09%.
Admittedly, our perceptions of increased health care costs are slightly colored in part by how other CPI components also adjust. We envision a future where costs should remain constant, or even decrease over time. Even so, I venture we all acutely feel pain of increased health care costs, a price which typically outpaces inflation, and carry a special angst when trying to budget for personal health care.
My wife and I are extremely fortunate that my retirement package included an option to retain our current health insurance at the same employer subsidized level as when working. We have plans for high quality medical, pharmaceutical, dental and vision care. The benefits are worth their weight in gold, especially now that I consider myself only 80% immortal. We also have the option to continue supplemental coverage when Medicare begins.
Our co-payments for pharmaceuticals are a bargain. For example, I pay pennies per pill for medications to control high blood pressure. I am truly humbled when I consider how prescription coverage has given us access to powerful drugs that both extend and improve quality of life and every day health.
Yet I still find myself experiencing premium payment angst, especially when contemplating benefits for dental and vision component coverage.
Consider dental insurance. My father once said, “Ignore your teeth, and you won’t have to.” It was an edict he learned the hard way, having spent the equivalent of my first year’s college education on implants. With that said, the dental work contributed directly to his having an infectious smile during his retirement.
My grandmother never had dental insurance. She had perfect teeth, obvious to anyone who peered into the glass on her bedside night table.
My wife has nearly perfect chompers, requiring only scant fillings while in her youth. Unfortunately, those antique silver fillings recently began to fail, which required two rounds of replacement and one crown. The cost was manageable, but without dental coverage, the price would have been similar to a crown worthy of the House Targaryen.
My view towards vision coverage is best described as myopic. I have a stigmatism that requires exacting lenses. I am prone to mishandling my glasses, and therefore take full advantage of my yearly right of replacement included within our vision insurance plan. I manage this frugally, ordering generic frames and progressive lenses on-line at a cost less than 75 dollars.
My wife’s eyewear taste runs a tad more couture. Her recent annual optometric exam concluded with a significant prescription change. She has never been satisfied with the products supplied through on-line services. Therefore, off we went in search of a brick and mortar supplier. Lori suggested we visit Costco Wholesale, hoping to find a reasonably priced set of frames. She humored me and tried on multiple pairs. It soon became apparent that the only glasses holding her interest were the highball set located in the kitchenware section next to the cutlery.
Next stop was the mall. We visited an eyewear store with a poorly wired, neon logo above the entrance. Ironically, of all possible non-lit letters in the store’s name, it was missing an “I”. Not a good omen. There was a second eyeglass store in the mall, with options better suited to Lori’s tastes. Indeed, there were literally hundreds of frames from which to choose. 60 minutes later we narrowed options to eight frames.
Still too many choices. My vision began to blur. I took pictures of her wearing frames so she could contemplate each pair. She whittled the group to four possibilities, one of which I nixed because of the cost. While our country’s Philadelphian founding father Franklin may have been the inventor of bifocals, I could not fathom paying nearly three Benjamins for frames.
I am color challenged, so we asked the sales person to help pick a final choice. To play it safe, we also texted photos to my daughter. My wife settled on the winning pair when both the sales person and my daughter chose the same frames that Lori also considered her top choice.
Most of the expense for the frames was covered by our vision insurance plan, with additional allowance for accompanying lenses. Even so, my wife chose supplementary options (lightweight, scratch resistant and photochromic lenses) which considerably elevated the final price. Good thing I am on the low cost blood pressure medication I mentioned earlier.
Reflecting on benefits I receive from health coverage, I should probably “reframe” my insurance premium bellyaching. I should not question whether I receive value for paid insurance premiums; the answer is certainly yes. Rather, I should ask how insurance companies remain viable business entities, especially if everyone takes advantage of benefits like we do.
Jeffrey K. Actor
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Four things you might want to consider when thinking about paying for healthcare.
People and money, especially when not actually their money, generates some interesting points of view and confusion. It sometimes seems to bring out the illogical.
Health care and health insurance are especially volatile topics. I spend a great deal of time writing about health care on my blog and I spent most of my working life dealing with health insurance and related health care issues. I helped organize three HMOs.
The cost of healthcare is a significant issue for most people and yet finding a workable solution is greatly hampered by misinformation and what people want to believe. Here are a few examples that derail efforts at improving our situation.
Number 1 is defining “affordable.” When it comes to healthcare there are different ways of thinking about it. Most people focus on premiums because in any given year, that is all they actually spend. Spending significant amounts on health care is concentrated in relatively few people. For example, the bottom 50% of the population (by spending) only accounted for 2.8% of total healthcare costs.
Also, around 14–15% of people have zero healthcare expenditures in a given year.
Number 2 is the role of insurance companies and their profits. Many people see the premiums they pay as going directly into insurer’s coffers. Of course that is not true. In fact, the percentage of premium revenue that can be retained for all purposes and expenses is limited by law. It’s called the MLR or medical loss ratio. It’s either 20% or 15%.
In addition, insurance company net profits are low - 5% or less on average. Lower in most cases than regulated electric and gas utilities - another vital service.
Also, insurance company premiums are reviewed and approved by state or federal agencies. It’s hardly a matter of charging what you like.
CEO pay is often mentioned as a cause of high premiums. That is not the case. First, most CEO compensation is equity not cash. If you take the cash or even total compensation and divide it by the number of policies in effect, it’s clear the impact if minimal. One calculation I did came to about $10.00 per year, per policy.
Some people are convinced insurance companies intentionally deny needed care to make money. Are claim denials? Are there wrong denials? Of course, but they most often occur through error in submission by the provider or insurer claim examiner. If you look at your coverage you will see words like “medically necessary, appropriate,” etc. related to care that is covered. There is plenty of room for interpretation, but the tendency is for the patient to demand what their doctor orders and want no questions asked. At the same time we and doctors know there is a significant amount of unnecessary care provided.
The issue is more focused on managed care plans and Medicare Advantage Plans. When I think about this I often wonder how many people, including health care professionals, it would take to willingly subvert their integrity to intentionally deny a valid claim payment.
Initial denial rates vary by type of plan, but 14% is a reasonable average-some denials are reversed. Given most large employers (covering 60% of American workers) are self-insured, they have control over the process and can and should assure fair claim processing. In this case, the claim administrator does not have a financial incentive to deny claims. Workers often don’t understand this because they may still receive an ID card from an insurance company.
It’s a conundrum. The thing is, without any review, premiums and fraud will be higher. Medicare audits have criticized its lack of concurrent review and delays in identifying fraud.
Number 3 Mention Medicare-for-All and socialized medicine pops up, even though that is far from the truth. I had someone tell me recently that doctors are employed by Medicare. Another said “many” doctors don’t take Medicare. Less than 2% of doctors have opted out of Medicare, but because of low fees, the number is increasing. The other claim is that it would cost trillion$ and taxes will increase. Of course it would cost Americans trillions over a decade, not the government, but that is half the equation.
Employers pay on average 8% of payroll to fund health insurance, employees pay about 20% of premiums, some pay more. States and the federal government pay for Medicaid and CHIP. Everyone pays out-of-pocket costs, some quite large.
All that would be diverted to M4A. If captured correctly, there would be significant administrative savings for doctors and hospitals - and many employers.
In other words, there is no reason for M4A to have a significant net cost increase.
Number 4 Nobody thinks they should spend their own money on healthcare. It’s just not a pleasant thing to do. We want spending money to be a positive experience. Forty dollars is $40, but not really. Is it taking someone to the movies or a prescription co-payment? One is “affordable” and the other not.
Will we ever have a better health care payment system? I am not optimistic, not in my lifetime, but in the meantime we will complain loudly about what we have-likely looking in the wrong places for a solution.
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November 19, 2025
Not Just About the Money
From September 2023 to October 2024 I penned nine articles for HumbleDollar, all were all edited by Jonathan. With each article submitted, I asked Jonathan if he thought my stories fit in with HDs mission. You see, they provided scant financial advice, and leaned heavily on humorous things I picked up at places like my tax office or even the local watering holes where I used to sell beer. Still, Jonathan liked them because they leaned on the human side of money and relationships.
Many of Jonathan’s writings had little or nothing to do with how to make money, but rather how to live your best retirement. Being happy is more important than having money, although money sure can help. But as Mark Crothers recently wrote, it’s one thing to have money, and another to know what to do with it. HumbleDollar can help you with both.
There is literally a smorgasbord of content on the website to choose from. If you are new to HD, I encourage you to check out every one of Jonathan’s articles since the time of his cancer diagnosis in May of 2024. They are both deeply personal and instructive, and you don’t need to be looking death in the eye to benefit from the advice.
For the newer readers, if you come across a writer that you like, just click on their name, and you can find everything they have posted, either on the forum, or the articles that were edited by Jonathan.
And don’t be shy about starting a conversation, as the folks here are happy to share their experiences.
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