Minneapolis Star Tribune
Q: A friend forwarded a query from an acquaintance, a 65-year-old single woman. “She has paid off her house but the yard upkeep is demanding for her. She needs to replace the roof and furnace in coming years. She plans to work until she is 70, but wonders if she should sell her house and move to something smaller or rent something affordable and invest the money from the sale so she has a cushion when she does stop working. She would like to travel and take a vacation now, while she is healthy and can enjoy it, but is afraid to spend her time and income now because she’s not sure how long it will last.” A: Her question poses a classic personal finance trade-off. What makes this kind of personal finance decision tricky is you can’t get rid of the uncertainty about the future. You don’t know what your health will be a year from now, let alone in 10 years. The same goes for your income, the stock market, the economy and so on. The uncertainty is why putting values at the core of personal finance is critical. If you know the “why” — what really matters to you — you can figure out the “how,” the money strategy.