Comments on: Reader Mailbag #41

By: Monica

Monica — Thu, 18 Dec 2008 18:20:17 +0000

We are upside down on our home with an ARM that is set to reset in 3 months. It last reset 3 months ago (resets every 6 months) and increased by about $100 but has a cap on it. Will the decrease in the interest rate help me when my mortgage adjusts or hurt me? Additionally, is there anything I can do to improve my situation (being upside down) besides negotiating with the mortgage company or borrowing money from family in order to come up with the difference (in order to refinance)? The mortgage company told me I could file some paperwork with them to keep the monthly payment the same for 6 months but that I’m only allowed to do that twice during the life of the loan. Right now we’re doing okay (if the monthly payment stayed the same) but we have $5,000 in credit card debt we’re trying to get paid off my April. A lower rate would help us decrease our credit card debt. We intend to stay in the home for about 5-7 more years.

By: M

Wed, 17 Dec 2008 20:43:48 +0000

Chris,
It’s really hard to give advise without all the facts. Are there children at home? Would you save money by not having to pay child care. Did you eat out a lot before and is your wife willing to make meals from scratch. My friend and her husband found that it is actually less expensive for her to stay at home. She no longer needed clothes for work, they didn’t need a second car, he started taking brown bag lunches from left over’s the night before. Didn’t need an after school sitter, the children started doing better in school, they lost weight, no more to go food. They didn’t spend the entire weekend catching up on chores, laundry, house cleaning, and yard work, he now spends more relaxing time with the family. This takes a great deal of planning, sacrifice, and compromise, they gave up cable, changed their cell phone carriers from monthly to pay by the minute (emergency use only), started using public transportation, car pooled, used the public library to borrow movies and books, she put in a huge garden this summer and canned quite a bit. She went to garage sales for clothes for the kids, books and movies, she had several garage sales of her own, resold things from garage sales she had been to (buy a box of kids clothes for $1 and resell what she didn’t want). There are also options of a part time job, going to a temp agency and working when they call, watching a couple of children after school. My friend cleaned elderly people’s homes every couple of weeks. She also baked beautiful cakes. It was a combination of what they could save if she stayed at home and the willingness to do what it took to make a little money on the side. It’s not Leave It To Beaver, but they are happier, healthier, have a calmer home, more involved in their children’s lives . You two need to sit down and have an honest talk, what would need to be done to make this work, if it is even possible. Good luck.

By: katie

katie — Wed, 17 Dec 2008 02:40:33 +0000

I have a question for you,

My husband and I have been working really hard and have paid off out student loan and credit card debt. Our plan was to save up 1,000 as a mini emergency fund and then start paying down our auto loans(a total of about 10,000 which we could have paid off in about 7 months) now Im beginning to wonder with this bad economy if it wouldnt be better to continue saving for a more substantial emergency fund? Our interest rates on the cars are higher then we could get right now on a easy to access savings account. Thanks

By: Donna

Donna — Tue, 16 Dec 2008 20:49:35 +0000

In response to Chris whose wife was laid off in October, I work part time as a cyberagent at home for a company who services Fortune 500 companies. I’m am preparing for when I “retire” and need supplemental wages. There are several companies out there that are not “scams,” but are very reputable. Of course there is a several week training period to qualify, then the training period for the company you decide to actually service, but I’ve been servicing the same company for nearly two years and it sure beats working retail!

By: Kate

Kate — Tue, 16 Dec 2008 19:53:20 +0000

Mailbag question:

Since the markets are doing so badly, I want to withdraw about some money from a traditional IRA (about $12,000 over three semesters) to pay for full-time college tuition at a state school. This IRA has pre-tax and after-tax money in it, mixed together from when I contributed more than the employer match when I worked.
Since I am using it for college tuition, I only will have to pay taxes and not the penalty. I plan to convert the traditional IRA to a Roth IRA when I am done with college, so I think this move will lower my eventual conversion tax bill also. When I get re-employed after graduation, I plan to pay the money back to the IRA.
Does this make sense or is there something I am overlooking? My goal is to finish school with no student loans.

By: Andi

Andi — Tue, 16 Dec 2008 15:26:38 +0000

Something I am slowly learning (having read An Omnivore’s Dilemma and several books on grassfed meat) is that good food is not always cheap food. A hard paradigm shift for me to make because I’ve always looked for the deal. It may not always be a good thing that we have such an abundance of cheap, overprocessed food available to us.

By: Chris @ BuildMyBudget

Chris @ BuildMyBudget — Tue, 16 Dec 2008 04:13:24 +0000

Thanks for addressing the insurance issue. I have some(what I consider) priceless works of art my siblings have created over the years which I have wanted to insure. Rather than getting them appraised, I just decided on some economical renter’s insurance because you’re right–why would you want to replace a one of a kind?

By: Pooh

Pooh — Tue, 16 Dec 2008 00:03:40 +0000

Linda’s movie recommendation: I second the vote for Slum dog millionaire. It has everything you want in a movie – believable acting, beautiful and creative film making and a feel good story. It speaks to the question “what is really valuable in your life” that this site addresses so often. Not your run of the mill predictable film and worth the matinee price (you DO go to the matinee don’t you? – it’s cheaper) Oh and it’s mostly in English for those who hate subtitles.

By: Kristin E

Kristin E — Mon, 15 Dec 2008 23:22:02 +0000

http://www.instructables.com/id/Floppy-Disk-Pen-Holder/

Tech geeks instructables! Great gift ideas for tech nerds when on a budget.

By: Gigi

Gigi — Mon, 15 Dec 2008 22:58:36 +0000

You don’t need to be a fresh basil snob to get a good sauce. I’ve made great sauces with dried basil and oregano, and in a pinch (gasp) have used garlic powder. Its still vastly superior to Prego or Ragu. If you really want to be econmomical, you can get huge cans of chopped tomatoes at a warhouse club for less than $4 (I’ve seen them at Cub too, but they might be a little more expensive) which would make several batches of pasta sauce to either can yourself, or freeze. If you want a smoother sauce, use a hand blender to puree’ them, and because sometimes tomato sauce, made from canned tomatoes or fresh, are a little acidic, add a little sugar to the batch to balance it.

By: Rebecca

Rebecca — Mon, 15 Dec 2008 21:43:55 +0000

Re: the question on baby food. I would also encourage you to check out “baby led weaning”. (Just google it for info) It’s a great way and certainly cheaper than jars! Also, don’t feel like you need to start early. 6 months is really the earliest they should be starting solids.

By: GayleRN

GayleRN — Mon, 15 Dec 2008 21:32:27 +0000

People who don’t live in Michigan (I do) have no idea how much of our economy is dependent on the auto industry. It reaches every corner of the state. In the small town where my parents live you can now buy a perfectly decent house for 15K. The problem is that there are about 5-10 jobs in the entire town. The situation is reminding me of 1973-4 where highly educated people could not find jobs at all. Michigan produces lots of highly educated people, but I see that the young people are leaving, just like I did back then.

By: greenfamily

greenfamily — Mon, 15 Dec 2008 21:28:44 +0000

I’d like to respond to Chris about his wife working from home. I disagree with Trent’s very simplistic a) b) solution. Although I’m aware Trent doesn’t hold network marketers in very high esteem, thousands of people have made and are currently making a very good living working from home as network marketers. How to explain the success of Avon, Mary Kay, Melaleuca, Silpada, and Lia Sophia, just to name a few?

Personally I prefere Shaklee, a nutrition/wellness company with an illustrious environmental track record and the best compensation plan in the business. The company was purchased five years ago by Roger Barnett, whose family owns (among other things) Columbia Music and Time Life Books? Apparently he thought highly enough of network marketing to spend $320 million to buy the company, and has since created several additional ways for business owners to earn great income and lavish trips all over the world.

There are people in Shaklee who have made an excellent income very soon after starting their business precisely b/c they have harnessed the power of the internet. It’s no longer just sharing product within your own small circle!

The cost to start a Shaklee business is $300, including over $200 of product. I made my investment back in the first two months, and am well on my way to my first promotion. You can look at the website http://www.shaklee/net/mygreenfamily.

Besides that, Chris’s wife could also consider keeping other children in her home if she has kids of her own and is so inclined.

I am also surprised Trent didn’t address the issue of living expenses. If Chris’s wife starts working from home, they may have to sacrifice some luxuries in order to make it work. Find ways to trim the outgoing expenses and make it work for her to stay at home. You can do it!

By: Mister E

Mister E — Mon, 15 Dec 2008 21:15:08 +0000

@Shevy

Why do you buy your basil in blister packs?

Maybe it’s a regional thing but I can buy an absolutely monstrous bag of the stuff for $2 at my local market. It’s also really easy to grow.

You can make lots of wonderful sauces without basil too.

By: Shevy

Shevy — Mon, 15 Dec 2008 20:44:09 +0000

Even ignoring the cost of a bottle of olive oil and a jar of oregano (because I happen to already have both) it would still cost me *far* more to make tomato sauce than to buy a can.

Let’s see. Tomatoes $2.49 per pound. Fresh basil $2.99 for a plastic blister pack. I’d be surprised if I just needed one pack, unless I need less than half a dozen leaves.

It would be cheaper if you grew a tomato plant and some basil, but not if you had to buy the ingredients.

By: The Other Michael

The Other Michael — Mon, 15 Dec 2008 20:00:10 +0000

Ed says: “With the market the way it is, I’ve been thinking about contributing less…”

Ed – The whole point of investing is to buy low and sell high. The market right now is low, so contributing less now would be foolish. There is never a good time to NOT take advantage of the maximum amount of free money your employer offers you.

By: kz

kz — Mon, 15 Dec 2008 19:43:36 +0000

I’m with momof4 – I, too, live in Michigan, just 30 minutes from Detroit. I’m not trying to sell the bailout, but I think it’s important to mention that the failure of any of the ‘Big 3′ (or the ‘Detroit 3,’ as NPR has taken to calling them since they’re not the biggest three auto manufacturers anymore) would be very difficult for all members of our state. I work in the energy industry, which is relatively stable, but am still affected because of home values that have been on the decline since at least late 2004. Unemployment is very high already, and not just among blue-collar workers.
Luckily, my family is doing okay so far because we live below our means and didn’t spend more than we could afford on a house. But it’s still very unnerving when you know so many things are going wrong.
I know there are a lot of people who say, “Well, if you can’t find work there, then leave. Move somewhere else, anywhere else, for a job.” Waaaaay easier said than done. If you’re on the edge to begin with, moving to find a job when your house will likely sit on the market for over a year at a heavily discounted price will just not work.
I’m not complaining – personally, I love Michigan. I just wanted to point out my own perspective – the ’solutions’ to our problems aren’t as simple or fast-acting as some pundits would have you believe.

By: Johanna

Johanna — Mon, 15 Dec 2008 19:40:50 +0000

On pasta sauce: Where I live, fresh tomatoes that are worth eating are expensive – and for 6-7 months of the year, cannot be had for any price. For me to make pasta sauce out of fresh tomatoes, it would actually cost more than Ragu/Prego. Canned tomatoes are cheaper, easier, and available year-round.

If you like pasta, I highly recommend the cookbook “Pasta e Verdura” by Jack Bishop. Many, many recipes for vegetable sauces for pasta. Some are variations on plain tomato sauce (my favorite involves adding arugula and olives), and some are completely different (like broccoli and balsamic vinegar). All of them are excellent.

By: H

Mon, 15 Dec 2008 19:24:41 +0000

Trent,

I saw a sneak preview of Benjamin Buttons and it is really good. Very beautifully shot. Long though. Two hours and forty five minutes.

Enjoy.

By: Madelaine

Madelaine — Mon, 15 Dec 2008 19:07:51 +0000

Homemade tomato sauce can also be based on a can of crushed tomatoes, which is still a lot cheaper than Ragu/Prego etc, and ends up tasting better.

Just add some olive oil, salt, sugar, oregano/basil to taste.