You’d be surprised how often I’m asked some variation on this question. People will write in to me asking me whether they should buy an index fund (in other words, they would own a little bit of a LOT of stocks and ride the averages of the stock market), a managed mutual fund (where someone else actively chooses stocks for them), or whether they should just pick stocks for themselves. They’ll ask me my opinion on various investments and investment advisors.

Really, in the end, their questions come down to one issue. Can I beat the stock market and earn a greater return for my money than I might get in an ordinary index fund?

The answer is yes, of course you can, but the ability to do so isn’t that simple.

Here’s how I like to explain it. Let’s take 1,000 random people who have at least some money invested in the stock market, whether in their retirement funds or otherwise, and give them each $100,000 to invest in the stock market.

At the end of the year, if you added up the market value of all of those investments and compared it to the total amount you started with ($100,000,000), the amount of total growth would be about the same as the overall stock market.

That makes sense, right? Some of those investors will do better than the market. Others will do worse. A lot of them will tread water and roughly match the market.

It’s really not all that different than filling out an NCAA basketball tournament bracket. Very few people will miss all of their picks, and very few people will pick the Final Four completely right. Some of the picks will seem easy (a 1 seed versus a 16 seed) while others will be very tricky (an 8 seed versus a 9 seed). Most people will end up somewhere in the middle, getting some picks right and missing on others. The ESPN Tournament Challenge demonstrates this quite well (I was at the 53rd percentile, by the way, with none of the Final Four picked correctly).

Those people that do beat the market, just like the people who pick the Final Four correctly, show that it is possible to beat the odds. If you know how to do this well, you can certainly make a lot more money than the average investor.

The problem is that very few people can do this consistently over a long period of time.

There certainly are people who have done it in stocks. Peter Lynch and Warren Buffett immediately come to mind.

The problem is that if people have a knack for doing this, they’re often scooped up quickly by the hedge fund or private equity businesses and make an obscene amount of money plying their trade. Individual investors – you and me – don’t have access to their expertise without paying a lot of money, and if you’re like me, you don’t have that kind of money to pay someone for advice. The fees for the attention of someone on that level would obliterate the amount I actually have to invest, leaving me with very little.

Thus, for me, there’s really only two options: doing it yourself or simply buying an index fund and playing the average.

Doing it yourself can be very rewarding. You know exactly what you’re investing in and have control over it. You have the freedom to choose companies to invest in that you actually believe in instead of just pieces of lots and lots of companies. Having the right handful of companies can certainly beat the market – just ask anyone who bought Google in 2002.

One problem is that doing it yourself can also be a big time sink, especially if you’re trying to maintain some degree of diversity, which you should be (Diversity simply means that you own lots of stocks of companies in unrelated sectors, like owning stock in Coca-Cola, Nike, and DuPont all at the same time, which is good because if something affects Coca-Cola’s bottom line, it shouldn’t have much of an impact at all on Nike or DuPont). You have to invest the time to study a lot of companies, make the decision as to which ones to invest in, and then keep a constant eye on them.

Another problem is that with those rewards comes risk. The smaller the number of stocks you’re invested in, the greater the risk of being hurt by a slump in one particular economic sector. The larger the number of stocks you’re invested in, the more time you have to devote to simply managing your stocks.

My advice generally is this: if you’re passionate about stock investing and are willing to take on some additional risk for some additional reward, individual stock investing can be worthwhile and you can sometimes do better than the stock market. However, if individual stock investing isn’t something that excites you, don’t. Invest in an index fund and you can just ride the average due to owning a little bit of lots of companies.

Of course, no one says you can’t do both. An old friend of mine has most of his money locked up for retirement, but he keeps about 5% of his paycheck aside to invest in individual stocks. He mostly buys stocks that he understands that pay a high dividend. His stocks rarely shoot up in value, but he does receive some nice dividend checks. Plus, it’s a great hobby for him that isn’t sinking his future.

That’s the biggest win of all, perhaps.

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Removing credit card users
2. Making your own shoes
3. Clothing budget for teenage girl
4. Board games for two
5. Too tenacious on debt repayment?
6. Getting child out of nest
7. Car opportunities
8. Blogging mistakes to avoid
9. Financially responsible versus happy
10. Medical school question

Many people ask me how I find time to play so many board games.

Each Wednesday evening, I get together with a small group of friends for the sole purpose of playing board games and chatting. We usually play for three or four hours.

About every third Saturday, Sarah and I get together with a few others for a dinner party that’s usually prefaced and followed by board games and card games.

About once or twice a week, Sarah and I will play board games against each other in the evenings.

Board games and card games with friends are a big – and pretty inexpensive – part of my normal social routine.

Q1: Removing credit card users
I have a question regarding an issue I am having with a credit card and the company (it is a PNC Bank VISA). I am fairly young (27) and I have had this card since 2006, it is the oldest credit card that I have and oldest credit I have aside from student loans (which are long paid off). Additionally, I do not have any debt but I do have a few credit cards that I use regularly and pay off every month.

I recently broke up with my boyfriend of 3 years. During the time that we were dating I added him to the credit card as an authorized signer for various reasons that made sense at the time. Now we have broken up and I have been trying to remove him from the account. First I filled out the form online to remove him from the card and was told I had to fill out a form and mail it in. After doing that, I received a response saying that they could not remove him from the account because they could not verify his address.

I called customer service today to ask about it and was told that he could not be removed for credit score reasons, but they were pretty vague about what that meant. First it seemed they were saying that his being on the account was keeping his credit score up and for that reason he couldn’t be removed. Then I was told that he couldn’t be removed because they want him because then both of us are responsible for paying the bill. This card is seldom used, has never carried a balance, and has always been paid by me. And he is unemployed and disabled (has been for some time) and has no money and must have a terrible credit history/score. The customer service rep said that the only thing I can do is to cancel the card and apply for a new one.

I am confused as to why this sort of situation would even exist. It was my card first, I have always paid it, and now they are telling me I cannot remove him. He has cut up his card, but as far as I know still has access to the account information online and if he has the numbers saved somewhere he could in theory rack up a significant bill, that I would have to pay. Have you heard of this sort of thing happening? What should I do here? I don’t want to cancel this card since I have had it for a long time and it has a very high limit, so it would mess up the length of my credit history and also my credit:debt ratio. Are there any steps that I might be able to take that could make it possible for him to be removed from the card? Or is cancellation my only option?
- Erin

My guess is that the credit card company in question here changed their standards for who to issue a card to since you initially applied for the card. Under the revised standards, both of you would be needed to keep the card.

My guess is that if you cancelled the card and applied for a new one, you probably wouldn’t get the same card or same rate you currently have.

My suggestion would probably be to get a card from a different company, then cancel this one. Of course, if this is the oldest card on your credit history, you may have a downward bump on your credit score right after you cancel it (since you will have shortened the length of your credit history), but you should recover over time. I know I would be very uncomfortable having a card out there with an ex on it as an authorized user that I couldn’t remove.

Q2: Making your own shoes
A couple of years ago I bought a cheap pair of shoes from a Chinese shop. They were surprisingly resilient and comfortable, and lasted me about half a year after which I glued them and they lasted about a year before the in-soles got too worn out to wear comfortably. I then put them aside for a long time having bought some in-soles to replace the the old ones.

Last month I got back to fixing them, and this is the total cost breakdown (although originally in local cost, converted to US$):

Original shoe price: +/- $ 8.00
Price rubber glue: +/- % $ 1.50
Price in-soles: +/- $ 4.00
Pair home-made slippers made of car tyre for sole: +/- $ 7.00
Price rubber glue (a long time had passed): +/- $ 1.50
Price cheap pillowcase (to replace back end): $ 1.00
Seamstress – sewing old in-soles to new, sewing up back end: +/- $ 8.00
Cobbler – stitching soles to shoes: +/- $ 7.00

Now this wasn’t all at one time. First I glued the soles to the shoes, then in-soles were too worn away, as I stated before. Then with the help of a seamstress I fixed the shoes (she stitched the old in-soles to the bottom of the new ones and stitched a piece of the pillow case to the back end of each shoe) and glued the in-soles and the soles back on. The soles soon came off again and I waited until I got paid again to get the soles stitched back to the shoes. All told, it cost me three times as much to keep an old pair of shoes going than it would have been to get a new pair.

I don’t regret it, as I got a lesson from that, these orthopaedic in-soles make the shoe much more comfortable than when they were brand new, the car-tyre sole and the cobbler’s stitching means they will last for a good while longer than they did the first time, plus I have a one-of-a-kind pair of Frankensteinian shoes. But I can’t help but think that maybe it might have been better to get a new pair of shoes for say, about $ 35.00. By the way I later bought another pair of shoes, same make, same price, different type and it’s almost annoying how long they’ve lasted, much longer than the first pair.
- Des

My understanding – and your story matches with that – is that if you’re buying a relatively low-end shoe, it’s less expensive to just buy one than to assemble it yourself or have a cobbler do it. However, that situation gets a little less clear with very high-end shoes (the kind of shoes that, honestly, I’ve never owned).

As for why one was poorly made and why another was well made, my guess would be it’s the difference between workers or, possibly, a demand on that shoe factory to improve standards. It is very hard to tell which one it is.

In the future, unless you’re going for a very high-end shoe that a cobbler may assemble for you, I would just buy one off the rack.

Q3: Clothing budget for teenage girls
Any suggestions on how to structure a clothing budget for a teenage girl? Not the dollar amount, but what it should cover, how it should be doled out, etc,? I want my daughter to learn how to budget and spend wisely. She is actually very careful and does not have a lot of clothing, but she needs to learn how to manage money and shop wisely. When I was her age my mother gave me a certain amount of money, and then insisted I spend it on my winter coat (of her choosing). Should I cover underwear, socks, a pair of everyday shoes, her winter coat, and then give her money to budget to buy the rest? Or should she have to budget for it all herself? I am worried that might be too much to manage all at once. Also, if I give her a monthly allowance she might not have enough for all the things she needs when the weather changes. (She is still growing.)
- Rhee

My honest opinion is that you should set an overall budget for her and require only that she buy the minimum amount of underwear and socks that she’ll need (and maybe a few other simple rules regarding tasteful clothes).

I would probably do this seasonally with a growing child, revisiting the issue each season. Buying clothes when a teenager is in their growth spurt can be difficult.

I would also suggest that you start off by thrift shopping with her. Don’t start at the high-end shops. Go thrifting to start this process off and let her discover that there certainly is “cute” stuff to be found in such places.

Q4: Board games for two
My husband and I, sadly, don’t have friends yet. We just moved to a new state and are busy job-hunting (hubby), and starting a new business (me). We love to play Scrabble and chess, but they’re getting old. I have Ticket to Ride already; can you suggest others that we might like?
- Lisa

If you like chess, I would suggest trying go, Hive, or Arimaa. All are excellent abstract games; Arimaa is absolutely wonderful and can be played with the chess set you already have, and go can actually be played with two pieces of paper.

Two player games that my wife and I have enjoyed over the years (that are a little less abstract than the ones above) include Dominion, Pandemic, Carcassonne, Mr. Jack, and Lost Cities.

Check each of these out. I think you’ll find at least one that you’ll like.

Q5: Too tenacious on debt repayment?
I’m age 25 and have spent most of my adult life struggling to go to school and to survive largely on my own. I racked up credit card, student loan, and private loan debt to the tune of about $57k in order to scrape by. I’ve finally graduated with a Bachelor’s degree at age 25 and now have a steady job where I make $51k per year.

I’ve been here about 7 months and I’ve been following an aggressive debt repayment plan going by interest rate. I’m down to about $42k. (I recently got a used vehicle for $9,000 so that’s part of the 57k.) I put as much money as possible into my debt every month and predict I’ll have everything paid off by May of next year.

When I say I put as much money as possible, I mean as much money as possible to the expense of everything else. I am so tenaciously paying it down I have elected to pay nothing to my 401k and I have even declined health insurance from my employer, all for the sake of having more money to pay that debt down with.

So I have no retirement savings, no emergency fund, no health insurance, all for the sake of paying down my mountain of debt. I have very little to worry about in terms of liability – I live very cheaply, I have no kids, I am in great health and don’t engage in any risky behaviors, I live 4 miles from my employer so the car breaking down is not a huge concern, I rent so no house repair emergencies, and my job is a government contract so it’s likely I won’t lose it. I’ve been growing slightly more worried as the months go by that I don’t have 401k or emergency savings, but I thought I’d get your opinion on it.
- Amanda

The declining of health insurance is a bad move. I would get your health insurance reinstated as soon as possible. If you have a health crisis, you will need it.

Now, what about the retirement savings?

First, I would build up an emergency fund. Cut back on your debt payments to the bare minimum for a bit until you have $1,000 in cash savings.

Next, I’d look at the debts I still had and focus on the high interest ones first – the ones with an interest rate above 10%. Get those all paid off.

Once that’s done, I would kick off the retirement savings, contributing 10% pre-tax to my 401(k).

After that, I’d build up the emergency fund a little more – up to about two months of living expenses – and then focus on the remaining debts.

You have enthusiasm for debt repayment and that’s excellent. Keep it up – just give yourself a bit of a safety net first.

Q6: Getting child out of nest
I am the parent and my son has been living at home with me for the last year. I cannot keep doing this…I have no savings and I am not making it on what I recieve from SSD and VA benefits. He seems to have no interest in looking for work out there, but most here there are really no good or fair jobs for felons, which he is one. He has a GF with 3 kids by him. I am not sure I want to do this anymore…I would love to buy him a cheap car so he can go out without having to use mine. As well as the gas I put in it. Is there a way to maybe have his GF help support him? He can’t live with her because of his felony-the landlord does not want him there. I see no way out of this. If you do, could you please tell me?
- Sarah

You’re really in a bind here. The punishment felons go through doesn’t end when they get out of jail. It is very difficult to find great employment once you leave prison unless you have some spectacular skills that can overcome the felony.

The worrisome element here is your son’s unwillingness to help himself. You’re going to have to decide if you’re willing to actually give him the boot or not.

If you aren’t, be prepared to live in this situation over the long term. If you are, sit down with him and start setting up a timeline for him to leave. Take every step you personally can to make it happen.

Q7: Car opportunities
My question involves getting a car. I am 27 but in deep financial debt. I had my identity stolen by a family member when I was 18, but did not realize until I was 20. This means that my relative had 2 years to rack up over $10,000 in credit card debt before I found out. I have worked hard and have the balance down to $1,500. I have my own credit card debt of $7,500 that I am on a payment plan for and have no credit cards at all because I don’t trust myself with them. I am also on payment plans to repay my student loans from college ($168/month).

I worked as a teacher right out of college, but I was a private school teacher, which means that my salary was no where near the public school salary (even though a public school salary is still not what it should be for the amount of work teachers do). My first year of teaching, I made $20,000 before taxes and had no benefits, but I was living with family and paid menial rent. I made a move to Virginia and made $29,000, still with no benefits, for two years, but had a $900 apartment, utilities not included, on top of food, gas, etc. Needless to say, neither job allowed for much wiggle room in saving, especially since I had a $3,000 hospital visit my second year in Virginia.

I am now a secretary at a church. I make $17/hour (no benefits) and have an all-inclusive rent of $700 very close to my place of work. I have also begun tutoring with a local company. I have 6 students and tutor about 12 hours a week at a range of $21-$25 an hour. The company does not take taxes out of my paycheck, so I created a separate savings account and take 30% off each tutoring paycheck and put it in the new savings account as a “tax fund”. The tutoring job requires constant travel, usually to 3 different homes an evening. I have a 2000 Ford Focus, fully paid for, but it is not always very reliable. Since October, I have had to use practically all of my emergency fun to pay for repairs when it broke down (about $2,000 all together). The car is only worth about $500 and when I took it to the shop last week, the technician told me that I would have to make another repair around $700.

I am tired of spending the money I work my butt off on this car instead of lowering my debt. I have a friend who works at a car dealership who says I can get a newer used car for a monthly payment of around $150 (with a high interest rate because my credit is shot) with a dealer warranty. I have about $2,000 I can put down on the car initially and I believe that the monthly price fits in my budget if I cut costs in other areas. Would you advise this plan or am I being a complete idiot?
- Jennifer

First of all, your story at the start about identity theft is, quite simply, frightening. Any relative who would do that is a pretty poor example of family.

As for the car question, it certainly sounds like you’ve reached the point in your car’s lifecycle where the repair bills are adding up to more than the car is worth. That’s usually the time to move on to a new car.

If you’re currently spending much more than $150 a month in repair bills on average – and it only takes a few big bills to get there – then you’re probably better off switching cars. Get what you can for your old car, then switch. You’ll be money ahead.

Q8: Blogging mistakes to avoid
I’m starting a blog on dating and relationship issues. What are some pitfalls to avoid?
- Kelly

There are lots of mistakes that every blogger will make along the way. I’ll point to three that I particularly wish I had figured out before I started.

First, figure out what your “privacy line” is. What aspects of your life are you going to talk about, and which ones are off limits? What about the life of your spouse? Your friends? Your children? Sometimes there are situations in your life that are difficult to explain without crossing that line, and what I’ve found after a few mistakes is that you’re better off avoiding anything that comes close to it.

Second, figure out your policy for reader privacy. It sounds like you’ll be giving advice to readers. Figure out how you’ll handle their privacy. What will you do if they change their mind after the article is posted? How will you explain your solution to the readers of the article if you have to change it later? Not having a good policy on this caused me a lot of trouble a few times, causing readers to leave the site at least once.

Third, just avoid controversy that isn’t directly in your topic area. If you’re writing about a controversial topic that’s all about relationships, great. It’s just not worth it. At one time, I believed talking about my thoughts on specific issues would create a greater understanding between myself and my readers. Instead, I just drove them away. It’s just not worth it.

If I understood these three things before I started, I would have avoided almost all of the worst mistakes I’ve ever made on the site. Learning is all about messing up sometimes.

Q9: Financially responsible versus happy
I’m female, 56, single, have owned my own company for almost 30 years, make a gross income of $60k/year (gross) on average. I never know from one year to another how much work I will have, but the workload has been consistent all these years. Some years I have made 80k. I work out of my home.

I have no debt. Because of some financial issues in the past, I now have only $125k in online “high-yield” savings and $10k in a Roth. I live in a state that has no state income tax and my yearly expenses (including federal taxes) are $45,000.

I was diagnosed with breast cancer three years ago and had surgery and treatment. I am more anxious than ever to have a good quality of life, which I do not have here. I moved to this state a few years ago to save money and to live near my son, but he has taken a job in another state. I am completely bored here and have no real friends and now no family. I don’t like the cold, the snow, and the environment here. If I move to be near my son, which he wants me to do, my healthcare premium will double, I will have state tax, and there will be other expenses I don’t have here. On average, my monthly expenses would increase about $700/month, not including state tax. I would be much, much happier elsewhere, but then I’d have financial anxiety and also wouldn’t be able to save as much money every month. I worry about cancer recurring, I worry about not having enough money in savings, and yet I also worry about wasting my life here in a place where I have no life.

Considering what I consider my bleak financial picture for my age, would you recommend that I bite the bullet and stay in a place where I’m not happy living but am able to save money (and travel to see my son), or make the move? I am able to save about $15k/year here, but every single day I am miserable, although I do find comfort in the thought of being financially responsible. But is it responsible to save money but be miserable?
- Valerie

My first question is how much your company is worth. Is it something you will be able to sell when you’re unable to continue working? Do you have assets with value tied to this business?

The more your business is worth, the less urgent this question is. I can’t tell from the email what that business asset you’re holding is worth.

If I were you, I’d move. I can tell by your description that you’re not living in the lowest possible place in terms of cost of living, and I can also tell that you’re not happy where you are at. You should either go all-in on the saving and move to a place where you’re truly minimizing your costs or move to where you’re happy.

Unfortunately, I can’t tell you which one to do. I would encourage you to calculate your net worth as well as the worth of your business and see where you’re at overall.

Q10: Medical school question
I am 21 and will be starting medical school this fall after working for a year. I will have saved about $12,000 at ING. My question is this: should I open an index fund (with maybe $1000) or use all the money toward medical school? Basically, do the benefits of an extra 7 years (med school + residency) outweigh the debt I am going to accrue through private loans?
- Eve

An index fund is not a secure place to put your money over a seven year period. It is too volatile over that period. You have a strong likelihood of losing money over that time frame.

If I were in your shoes, I’d minimize the debt that I came out of school with rather than bothering with an index fund. An extra $1,000 invested in your first year of medical school reduces that first year debt by $1,000. That’s six years of interest on that $1,000 saved before you even get out of medical school.

If everything else is in place to succeed in school, minimize your debt.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

When I was in high school, I took a consumer education proficiency test and passed it with flying colors, demonstrating that I had the knowledge needed to manage my own money and be a savvy shopper. Within ten years, I was buried in debt.

This isn’t an experience that’s unique to me. On The Simple Dollar’s Facebook page (feel free to become a fan), I recently asked “Did you take a personal finance or consumer ed class in school? Was it useful to you? Did it keep you from making financial mistakes later on?”

Quite a few people publicly stated the uselessness of their personal finance education, while still others emailed me or sent me direct messages about it. A sampling of the comments:

Ryan B.: “i had to take consumers ed with drivers ed and [...] no….i had to learn from mistakes…”
Kelly K.: “My consumer ed class in high school was a waste of time.”
Charlie R.: “Yes, I did, and no, it didn’t.”
Baley W.: “Senior year in high school we took FPU. I remembered the principles, but I still got into debt. I don’t think it helped one bit, even though I’d like to think so.”
Shiela F.: “In high school & college along with accounting classes and no, it did not help. ”
Annie J.: “We had a small personal finance chapter in Home Ec./Family Relations class and no, it wasn’t helpful.”

Even some who got value from their classes saw that it didn’t impact their peers. Amanda H. stated: “I took a college personal finance course at the behest of my father. It wasn’t perfect, but it gave me a whole new awareness on things like investing and how interest works. And how important it is to get started young. Which I think was rare and put me miles ahead of my college-age peers.”

Many others didn’t recall any sort of education, which either means there literally wasn’t a class or the class had so little impact on them that they did not recall it at a later date.

Simply put, personal finance education as it currently exists is not reaching people when they need it. Quite often, they learn about it later on through their own difficult experiences.

In fact, I think “experience” is the key word here.

Consumer education and personal finance education is often lumped in with many other classes at the high school level. They’re taught in a classroom environment with minimal examples that actually impact the lives of students in any way. Sometimes it’s a class all its own, but other times it’s just a small piece of another class and at yet other times it’s not dealt with at all.

Just like any other ordinary class, one or two will “click,” a handful of others will approach it like any other academic subject and succeed on the surface without deeply understanding it, and many others will let the info go in one ear and out the other, retaining as little as possible.

Simply put, treating personal finance as just another thing that students need to be “educated” in doesn’t really work.

How can we possibly make personal finance education relevant (beyond the simple step of making sure that it’s at least presented)? Over the past few years, I’ve been collecting ideas from the mountains of personal finance books I’ve read, and I’ve got some suggestions for how to turn personal finance education into something much more valuable than the experiences described above.

First, homework (and classwork) should focus on discussion and actually doing things. Make homework (most of the time) very simple for this class. Go home and ask your parents a basic question about their finances and report on what you learned. Why do they buy a certain product type? What was their best experience at work? How do they do their taxes? The goal isn’t to get students to tell about their families, but to get them talking at home about personal finances.

At other times, focus on actually doing things. Make everyone in the class get a savings account or a checking account in their name. Have them go to the store and find the best bargains they can on enough laundry detergent and dryer sheets to do 100 loads of clothes. Hand out copies of credit card offers and have them figure out what happens if they charge $500 on the card and don’t pay it.

Second, put a big emphasis on personal stories. If you go around and ask people what the one thing that got them on the right financial track and helped keep them there was, it’s almost always someone else’s story and how they translated that into success. Dave Ramsey’s story. My own story. The stories in books like Your Money or Your Life. People see some element of themselves in that story and they want what that person has achieved, so it makes the steps to get there seem much more real and relevant.

If you’re teaching, use your own story, but don’t be afraid to get speakers in very regularly who are open to talking about their own stories.

Third, recognize that you’re trying to plant key concepts that may not “click” for years. Don’t spend a day talking about the difference between 401(k)s, 403(b)s, and Roth IRAs. It’s not relevant to them and it’s too much detail. Instead, make absolutely sure they understand the key things that they’re going to face.

One key technique for this is to cycle back regularly to old topics that you’ve already covered. Just like exercise, you can’t keep a muscle strong if you vigorously exercise it once and then never touch it again. Scatter specific topics and speakers throughout the year that call back to the key topics already learned.

Finally, focus on goals and how to approach them. One of the few examples of personal finance that I remember from school was when a teacher in elementary school kept a jar on her desk. She told us that if she just put a quarter in that jar every single school day, there’d be enough money in that jar for a pizza party for the class at the end of the year, and every little bit students tossed in would make that party better.

Every day, she’d add a coin to it at a time when she knew everyone was watching. Sure enough, that jar slowly filled up. Sure enough, at the end of the year, the money in that jar paid for a big pizza party.

It stuck with me for a lot of reasons. Repetition, of course, was one of them. The big pizza party at the end was the other one.

Even now, though, the idea that there was a goal set at the beginning of the year, that a plan was put in place for that goal, and that a little bit of effort each day brought the class to that goal has an impact on me.

Don’t be afraid to do this exact thing. Even more so, don’t be afraid to share your own goals right in front of the students. “I’m saving $20 per school day for a car,” you might say, then actually buy a car with that cash at the end of the year. Save $10 a day during the first semester, then buy a laptop (or some other item they might care about) before Christmas.

The simple truth is that a typical classroom experience isn’t going to reach most students – and even trying new things won’t reach every student. Instead, focus on doing everything you can to hammer home a few key ideas – debt is bad, saving money is good, planning ahead is great – and try to relate that to their life.

I think Sarah D. put it best: “Honestly, I don’t think you really learn anything that you are not invested and interested in. The very best lessons I learned about money were from actual experience.” Experience, not classroom learning, gives people the personal finance lessons they need. This goes not just for teachers, but for parents, too.

In fact, I’ll leave this article with a note to parents. Personal finance is a life skill, just like changing your underwear. Be involved in teaching your kids how to manage money, just like you were in teaching them to change their underwear.

One of the most challenging parts of having three children of different ages is that they seem to pick up sicknesses then pass them to each other, and just as they finally all get well it seems like another one gets a cold of some sort. I just want this season to be over with.

It’s funny. In the late stages of winter (right now), I look forward to summer. In the late stages of summer, I look forward to winter.

Accepting False Limits Everyone accepts some false limits. The people who accept fewer false limits, though, are the ones who succeed. (@ seth’s blog)

Is Entrepreneurship Right For You? I think it’s right for more people than are out there being entrepreneurs, but I don’t think it’s right for everyone. (@ jonathan fields)

Newton’s First Law of Personal Finance Most of us, by nature, resist change. If a lifestyle change is suggested to us, our default reaction to it is usually negative. Even if we can just move that switch up to neutral, it can have a profound positive impact on your life. (@ mrs. nespy’s world)

Raising Money Savvy Kids One section really stood out for me: “Before age 10, I knew what my father’s salary was, the amount of our mortgage and the interest rate we were paying. I knew how much a week’s worth of groceries cost and the value of buying term life insurance and investing the difference. Parental actions can be ambiguous, but when they are accompanied with a commentary of values and decision-making skills, they offer sage mentoring.” Indeed. (@ free money finance)

Interview: The Simple Dollar I did a brief interview recently with Jane over at debtmanagement.net and thought some of you might enjoy reading it. (@ debt management.net)

This morning, as my children were waking up, I was inspecting their dresser drawers looking for clothes. I pulled out clean underwear and socks for both of them, but rather than continuing through the drawers, I started digging through their clothes hamper, inspecting the clothes right in front of them.

I’d examine one garment, say “This is dirty,” and throw it in one pile. I’d look at another, sniff it, and then decree “This one’s just fine,” and put it in a second pile. I invited them to join in, too (though I kept an eye on the items they were passing judgment on, especially ones they decreed to be clean).

Soon, the hamper’s contents were sorted, leaving two piles. I threw the dirty pile back into the hamper, then began folding the clean pile. As I did this, I also described what I was doing: “Many of the shirts and pants and dresses you wear aren’t really dirty unless you get dirt or other stuff on them. You can wear them again.” To illustrate this point, I let them choose their clothes for the day right out of the clean pile.

As they were brushing their teeth and getting ready for the day, I did a similar sorting of my own clothes right in front of them, retaining some and putting others aside for washing.

Obviously, this sorting technique cuts down on the number of laundry loads that we have to do, saving money and time.

Perhaps just as important, though, is involving the children in this and explaining to them what’s going on so that they view such tactics as the normal way to behave. If this is simply how they do things as they grow up, then they’ll spend less of their money on unnecessary things and have more of their money for other (ideally better) purposes.

Here are some other things we do around our house to encourage our children to think frugally.

At the end of a meal, if there are items still on the table, I’ll ask our kids what they think we should do with it. They’ve learned that what we do with extra food is save it for leftovers, which we have for dinner roughly every other night.

When it’s time to drink a beverage, I encourage them to drink water because it’s both cheap and healthy. Our oldest child now simply gets water whenever it’s time for him to drink a beverage.

When it’s time to read, we use library books and accentuate their usage. I’ll almost always mention that this book came from the library for free or that we need to go back to the library soon to get some more great free books when I’m reading them a book that came from the library.

When I utilize one of them as a helper, I’ll point out things like the types of lightbulbs we use and why we use them where we do. “This is an LED bulb, which is perfect for outdoor use. It’s a little more expensive, but it uses very little electricity and it’ll last for a very long time.”

I also utilize them as helpers for things like garden work (something I’ll depict in a bit more detail later this week), which is almost purely a frugal project.

Life is full of moments to make better spending and time choices. If you’re a parent, those moments are often also teachable moments.

An old friend of mine that I’ll call David has this amazing gift for talking to people of all stripes. I’ve seen him talk comfortably with a United States congressperson, a research scientist, an orchestra director, a janitor, and an unemployed person all within a few days of each other and build a quick rapport with each of them.

He achieves that rapport by doing a few things over and over again until they’re completely natural to him. He is never shy about talking to anyone. He starts off every conversation by asking two or three questions about the other person, putting them at ease and getting them to talk about themselves. He focuses on finding something positive in their situation – and when he finds it, it brings a big smile to his face.

The amazing thing about David is that he doesn’t achieve their respect by looking like he’s well-off or well-established. In fact, you’ll often see him in a well-worn sweatshirt, worn baseball cap, and blue jeans. He drives a fifteen year old pickup with some significant rust on the bottom.

One time, David and I discussed this, and he said (I’m paraphrasing from memory here), “People dress up and drive expensive cars to impress or intimidate others or to feel better about themselves. I don’t want to impress or intimidate others and I feel best when I’m just wearing something comfortable.”

David has a bunch of money in the bank and the ability to greet congresspeople by name. Do you?

Whenever I’m out and about, taking my kids to preschool or running some errand, I’ll see a wide variety of people. I see some people driving shiny new cars and others driving rusty old cars. I see some people dressed to the nines and others wearing raggedy old clothes. I see some people smiling and friendly, while others are glaring and surly.

Guess which one of those factors has the greatest impact when I make my mind up about someone? It’s not the cars. It’s not the clothes.

It’s the person.

There was a time in my life where the circle of people I hung out with appeared to be affluent. They dressed well. They drove nice cars. They had lots of gadgets.

Yet, most of them spent an awful lot of their time trapped in negativity. They would ridicule anyone not dressed well or anyone that didn’t match some very narrow picture of what they viewed as successful.

David, quite simply, would not have fit into that group at all.

Over time, I came to realize that it was people like David that were the successful ones, not the people in that group. Many of them were in debt up to their eyeballs. Most of them were having trouble moving forward on their career track and would often completely fall apart at the slightest setback in their lives.

Simply put, they didn’t have the money in the bank to sustain them, the connections to people that they could call upon, or the personal attributes that would make it possible for them to get back up on their own two feet.

My initial perspective was dead wrong. The people who appeared affluent weren’t really affluent at all. The people who didn’t appear affluent actually were.

What I came to find is that the initial appearance of a person often has little connection to their actual success in life, when by success I mean the goals they’ve achieved, the security they’ve earned, and the relationships they have with other people.

Usually, what I’ve found is that genuinely rich people appear in whatever way they feel the most comfortable, while people who aren’t truly affluent appear in whatever way they think others expect them to appear. This covers everything from clothes and haircut and automobile to personality and attitude. Sometimes, successful people dress well, while others dress extremely casually. The same is true for people who seem to be avoiding true success.

The next time you feel intimidated by someone you’d love to know or by some other social or professional situation, ask yourself what you would change about the situation to maximize your comfort. Would you feel better if you were wearing different clothes? If you drove a different car? If you had a good night’s sleep last night? If you were freshly bathed?

For example, I usually feel best shortly after a shower in a clean pair of jeans and a t-shirt, for example, preferably after about seven hours of sleep. I’m much more likely to smile at others and strike up a conversation with them if these elements are true, not because of how it makes them feel, but because I’m in the right mindset.

Don’t worry so much about what other people think. Instead, focus on putting you in the right mindset and you’ll go a lot further.

Warren Buffett is often seen wearing cheap suits.

Bill Gates looks most comfortable in a well-worn sweater.

The appearance of affluence has little to do with true success. People do.

A few days ago, someone made the interesting comment that they’re “beyond frugality” in their personal finance journey. When I asked her what she meant by that, she made several comments along the lines of “focusing more on improving income” and “optimal use of time.”

That phrase, “beyond frugality,” stuck in my head for the last few days. It’s a comment that’s often made by people who have managed to get their financial lives under control and have reached a point where they feel like the next big change in their lives is to improve their income.

Often at that point, frugal tactics seem unwieldy. If you have time to invest and your financial life is under control, the thought would go, why not invest it in improving your skill set, starting a business, or something else that will improve your earnings? Many personal finance blogs, such as I Will Teach You to Be Rich, focus on this perspective, often to the point of deriding the idea of frugality.

In a lot of ways, I agree with the idea of moving in that direction once your finances are under control. However, I absolutely don’t agree that it’s “beyond frugality.”

“Hard” and “soft” frugality In my eyes, most of frugality boils down to two categories: “hard” frugality and “soft” frugality.

“Hard” frugality refers to activities that, in a mission to spend money, cause the person involved to invest significant amounts of energy and/or time, particularly when the amount of money saved isn’t monumental. Making homemade laundry detergent would be an example of “hard” frugailty, as would cloth diapering.

“Soft” frugality refers more to choices in the moment, such as the decision at the store to buy a more economical toilet paper bundle at the store, as well as defined one-off projects that consistently save money, like air-sealing your home. This type of frugality is “convenient” frugality – you can always make those decisions in the moment and you can schedule those one-off projects whenever you have time or energy, rather than “having” to make a batch of laundry detergent or “having” to deal with cloth diapers.

When someone derides frugality or claims they’re “beyond” it, it usually means they’ve abandoned or don’t want to utilize “hard” frugality. They stop doing things that save money if they require a major investment of time or effort and sometimes deride such things.

Frugality is a mindset There are a few important things to note, though.

For one, many aspects of “soft” frugality are learned behaviors. I almost view many of the things that I would call “soft” frugality as being one-off projects. At first, they require you to be very mindful of the situation around you, but as you practice them, they become second nature. Once upon a time, I would puzzle over which household product to buy – now I have a very good sense of which ones are the best bargain for my dollar and make my choice fairly quickly.

Once “soft” frugality becomes natural, it’s easy to forget that it’s frugality. Instead, it becomes simply who you are – you’re a frugal person. I think that many people who say that they’re “beyond frugality” find themselves in this group. Many of the tenets of the softer side of frugality are so natural to them that it just seems part of who they are. When they look at what they’re not doing, they see “hard” frugality, they evaluate that choice in terms of their current direction in life and time and energy available, and they realize that many of the “hard” frugal choices don’t match them right now. Thus, they feel “beyond” frugality.

Often, people who have become naturally adept at “soft” frugality find themselves in a stronger financial place than before and they find that their directed efforts bear much more fruit if they’re targeted toward entrepreneurship or improving their career path.

Simply put, once your frugality progresses from the point of having to be mindful to the point where frugal choices seem natural, you’re never “beyond” frugality. It’s simply a part of who you are.

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Inheritance concerns
2. Emergency fund size
3. Using Roth as emergency fund
4. Frugal odor elimination
5. Home warranty
6. Estimating child costs
7. Maxing out IRA contributions
8. Board games worth it?
9. Student loan woes
10. Giving up hobbies

Opening Day for Major League Baseball is this week. I’ve been a baseball fan since I was in diapers and some of my best memories of childhood involve listening to baseball games on the radio with my dad or watching them on television with my family and friends. Baseball and basketball are the two sports I truly enjoy (yes, I’m an American who isn’t a big fan of football).

Most days, you’ll find me listening to baseball day games on the radio, particularly during the week. If the Chicago Cubs have a 1:20 start time during the week, you can almost be sure that I’m listening to that game here in Iowa.

(Last year, I had a fantasy baseball league with several readers. I’m not going to repeat that this year – one league is enough for me to focus on. I came in the middle of the pack, by the way.)

Q1: Inheritance concerns
My grandparents have always been savers and despite never making $50,000/year combined, have invested well and now have a sizable sum saved (somewhere over $3 million).

My grandfather passed away last summer and left everything to my grandmother. Since that time, my grandmother has written her will to give each of the grandchildren $10K in cash and $50K in stocks/bonds.

When my grandmother passes (which, thankfully, will be a long ways off, she’s in the best health I’ve ever seen her in) and I receive this inheritance, I want to be prepared for what to do with it. I’m 27, have no debt and am in great financial shape, so the vast majority (if not all of it) will go to my retirement fund. The part I’m worried about is the stock/bonds. It’s in accounts that are appropriate for an 80 year old, but not for a 27 year old. My question is should I cash this stock out (and take the tax hit) and reinvest it in my portfolio or should I leave it in the stocks/bonds she has it in? I realize that asking her for the inheritance now makes more sense tax-wise, but it’s absolutely not an option due to family dynamics.
- Joe

You’re going to take the tax hit either sooner or later. You’re probably better off getting the money under your control and into your portfolio as you would like to have it sooner rather than later.

Thus, if I were in your shoes, I’d sell the stocks and bonds as soon as I inherited them, pay the taxes on it, then incorporate what remains of the $50,000 into your portfolio as you see fit.

Of course, tax laws may change by then, but my understanding is that the taxes on inherited stocks are based on the day your grandparent dies and, when sold, generate long term capital gains. In other words, the tax on the investments shouldn’t be too enormous.

Q2: Emergency fund size
I have a question for you and your lovely readers about how much money to keep in an emergency fund. I’m well aware that this is a personal decision, and one that is the result of many factors. I’m 26 and living in a large metropolitan city without any family around me. I’ve already decided that my goal is to have 6 months worth of money in an account to use in case of a catastrophic event (I have to pay large hospital bills, I lose my job, etc.). I’m very close!!

My question is this – my 6 months savings value fluctuates by $3,000 (less than the available credit on my paid off credit card) depending on which bills I decide to cut. The higher value represents what I spend currently, while the lower represents my “cut back” version. If you were to suggest things to cut from your expenses if you were to suffer a loss of work or somehow had to live off of your savings – where would you start?

Also, would you suggest using the available credit on your paid off credit card as “part” of your emergency fund?

I’m not sure if this adds anything, but I currently put $1,000/month into this fund, and I’m looking to move apartments next year (which will require about $5,000-6,000 to move if I choose to do so upfront – moving is expensive in my area!). Whatever value I end up with, I’d want the moving fee in my savings account on top of that cushion so that when I move, I still have 6 months worth of $$ in savings.
- Katie

I would use your “cut-back” number, simply because it reflects how you would live in a situation where you were living off of your emergency fund. If you lost your job, you wouldn’t be going out to eat with coworkers a few times a week, after all.

Sometimes, yes, your “cut-back” number will change. When it does, adjust your emergency fund accordingly. I wouldn’t withdraw from it if your “cut-back” number goes down, though.

Either way, you’re in very good shape to tackle whatever may come.

Q3: Using Roth as emergency fund
Here is my situation. I currently have about $60,000 of credit card debt because of a failed business years ago and no emergency fund. My interest rates are relatively low because I have good credit. I have a very secure job with excellent health insurance, short and long term disability insurance and the organization contributes 10% of my salary into a 403B plan (the older I get, the more they will contribute). I am currently renting and have no desire to buy property because of the high prices in the DC area. Because of these factors, the chances of me needed an emergency fund are pretty low, but I would still like to start one with a goal of at least 6 months of expenses.

I currently have around $1,200 extra a month after expenses and minimum credit card payments which I’m currently putting towards my debt. My question is this. Would it make sense to open a Roth IRA and contribute part of my extra money to that each month? Since you can withdrawal any amount up to the principal without taxes and penalty, I figure I can be accomplishing saving for retirement AND building an emergency fund at the same time while paying on my debt. If there is an emergency I can use that money, if not, it’s growing tax-free for retirement.

Can you see any drawbacks to this plan?
- Shawn

If your Roth is not part of your current retirement planning, it does make some sense. However, there are a few drawbacks with this plan worth noting.

First, your savings in the roth is going to be capped at the annual Roth limit, which is currently $5,500. If you’re going to sock away $1,200 a month, you’re going to have your Roth IRA full in about four or five months, at which point you’ll be saving in another vehicle.

Second, the earnings you gain on this savings plan will not be usable by you right now. It will basically be untouchable until retirement.

My suggestion, honestly, would be to just open up a normal investment account through an investment house you trust and invest directly, not through a Roth. That way, you have immediate access to the gains, though you will have to pay taxes on them.

Q4: Frugal odor elimination
I was wondering if you had any frugal, diy suggestions on home odor control. I have a dog and two cats and a six-month-old baby, and I’ve recently declared war on the bad smells around here! Also, my husband can’t smell, so it’s totally a one-woman battle :-) I’ve been using coupons to buy plug-in oil warmers (Febreeze, Air Wick brands), which I love but I realize once you get the plug-in for free with the coupons, you’re on the hook for the oil refills, which run $2-$3 a piece and last about a month. I already have three in the house, and want add two more, but that’s a cost of around $15/month. I also use Febreeze-type sprays on furniture and carpet foam on the rugsl. Any ideas on cheaper ways to keep my house smelling fresh?
- Sarah

Baking soda is your answer.

One solution is to simply spread a bit of baking soda onto a saucer, then sit that saucer in an area where smells are very strong and leave it there overnight. You can also put some baking soda into shoes with a heavy odor.

To replace a Febreze spray, just add 1 1/2 cups of water to a spray bottle and 1 teaspoon of baking soda, then shake it thoroughly before re-inserting the trigger so that all of the soda is dissolved into the water.

Weirdly, that same formula works really well for curing upset stomachs.

Q5: Home warranty
My husband and I purchased a home a little over a year ago, and as a “closing gift” our realtor gave us a 1 year home warranty with a large national company. We went ahead and renewed the policy when it came due a few months ago. Mainly because our home is older with a furnace and water heater towards the end of their lifespans… and if they were to fail our warranty company would cover the replacements. Over the course of the last 16 months we’ve used the benefits 4 times for minor items. I am wondering if it is even worth paying the yearly premium of $560 on the chance that we will even use the benefits to the fullest.
- Lindsey

Home warranties are, on the average, never going to be worth what you pay for them. If they were, the companies wouldn’t sell them – it wouldn’t make any sense for them to be paying out more than they’re bringing in.

A much better approach is to take that yearly premium, subtract about 20% off of it, and put it each year into a savings account. Forget about that savings account until you need a major home replacement that you can’t afford out of pocket, then dip into that savings for that new furnace or central air unit or whatever it is you need.

This way, you’re not spending as much, you’re gaining interest on what you save, and you don’t have to play paperwork games when something does go wrong.

Q6: Estimating child costs
My wife and I are beginning to think about having children, but I have no idea how to estimate what having a kid costs. Beyond knowing that the medical expenses associated with the birth aren’t cheap (and that kids cost money to feed/clothe/house/etc), I don’t know a thing. What should I expect it to cost, both in terms of more or less up-front medical (and maternity clothing) costs associated with pregnancy, as well as an estimate of how much I should expect my annual expenses to go up? Are there any good resources you’d recommend to help me inform myself?
- Andy

The numbers you get are going to wildly vary depending on the assumptions the people involved are making.

Are you going to a secondhand maternity shop for clothes or to a boutique retailer? Are you buying a $1,000 custom made crib or a $50 one at a department store? Are you hitting yard sales for children’s clothes or are you making Baby Gap your go-to place? Is your wife choosing to directly feed the child, or are you going to be buying lots of formula? Are you going to cloth diaper or are you going to go through Pampers by the case? Do you expect to continue your same dining patterns except with a child in tow or are you going to eat more at home with healthy options? Do you need additional room in your home for the baby or does your current domicile provide what you need?

There are countless questions involved in such a model. Certainly, there are costs involved with having a child. Whether or not those costs are backbreaking or whether they’re absorbed easily into your changing lifestyle has a lot more to do with what you value than the child itself.

Your best approach is to start thinking about these questions now and start looking at the actual prices involved.

Q7: Maxing out IRA contributions
I am interested in opening up a Roth IRA and I know the cutoff for making a maximum contribution this year is coming up with the tax deadline. Is the benefit to maxing this years contribution enough to warrant taking some extra money out of my savings to make it happen? I can do this and still maintain my 6mo emergency fund. But if there isn’t a big benefit, I can just open the IRA in a few months and work on maxing out next years contributions.
- Jim

It depends on whether you’re in good shape with other aspects of retirement savings or not. Do you have a well-funded 401(k) at work? Have you been saving at a good rate for a long time?

The more tenuous your retirement savings is, the more I’d lean towards using cash savings to bolster your Roth.

Of course, no matter what, I wouldn’t let that emergency fund get below $1,000 at the lowest, and preferably I’d keep it a bit higher than that.

Q8: Board games worth it?
I’ve been looking at some of the board games you’ve mentioned before, but the price seems crazy. $40? If I play it once for an hour, that’s not a good bargain. Please tell me how this is frugal.
- Evan

For starters, many of the games in my collection cost far less than $40 new. My best estimate, using online tools of various kinds, is that the average new cost of a game in my collection is somewhere around $18.

For another factor, many of the games I own were picked up at thrift stores, acquired by trades, purchased only during sales, and so forth, further lowering the average cost per game. Beyond that, many of the games I own were gifts from friends and family.

Add on top of that the fact that a single game is entertaining a table of people for hours, and that when I visit my friends I’m usually playing their games, the actual cost per hour of entertainment per person is quite low.

When the average cost per game gets down in the $8 range, I’m pretty happy. I’ll usually not pick up a game unless I’m pretty confident it’ll hit our table several times (at least).

If you’re not certain about whether you’d like a game, visit a gaming store in your local area and ask to try some of the games. Many such stores have weekly demo days where they’ll show you how to play a game and then you can make up your own mind about it.

Q9: Student loan woes
I have a student loan of 40K at 6%, when I returned to school after many years of working. After I graduated, the first year, I deferred payment. I am now in my second year and in forbearance, paying approx. 250/month. That covers only the monthly interest. Next year, I need to start paying $452 per month, full amount. Our kids goes to college in less than 2 years and I am paying for a state college fund/plan for him, monthly. I should have about 1.5 year’s of college credit paid for, by the time he starts college. My spouse works part time, because he lost his permanent job, several years ago. He’s not highly employable (chronic depression and PTSD, with medication), so I am the primary earner, and have been for many years. We all have medical benefits through my job, and they withdraw from my paycheck: I pay dearly at $700 per month. We have ONE $4000 credit card debt at 14%, no others. We refinanced our mortgage recently, saving us about $200 per month, with a 200K mortgage balance. I participate in my employers retirement plan. Our savings account is about $700. No cable, no cell, no entertainment, one car paid, groceries bought from outlet, clothes bought at Goodwill. We pay about $500 per month for private school tuition for our son.

Question #1: should I opt for Income Reduction plan for my student loan? I have serious anxiety about my student loan balance. I do not want our son to have a student loan, if possible. Because I work at a higher institution, they offer tuition benefits for dependents. He does not want to opt for this. He wants to apply out of state and seek scholarships. He’s got a GPA of 3.7 and thinks he can do it. I reminded him about the hidden costs of college.

Question #2: How do we convince him to apply in our hometown, so he cannot be straddled with any education debts, like me? My fear is that he will be wooed by a student loan debt that I will have to help him pay for. I cannot. I have my own student debt and cannot rely on my spouse’s future income. By the way, I used part of my student loan to help pay for our family living expenses at the time I was a grad student, because we were short on funds. I did not see the train coming. I should have bitten the bullet and REJECTED the excess loan amount offered to me from financial aid. PLEASE HELP me to see that there is HOPE. I’ve tried applying for higher paying jobs but they are scarce and very competitive. Taking deep breaths!
- Mary

For your first question, I’m not entirely sure what you mean. Do you mean that you want to set aside money from your check automatically to cover your student loan payment? Or are you wanting to somehow apply portions of your pay to your child’s education if he attends that university? If you’re having trouble consistently paying your student loan, having it automatically withdrawn is probably a good choice as it will force financial discipline on you.

For the second question, why would you help him with his student loans? There’s no reason for you to do so. My parents didn’t help me with my loans, and my wife’s parents only helped in that they took out a few loans themselves to help pay for her college education – they didn’t make payments for us later on. This is his decision and those are his consequences, so you shouldn’t be tied down by them.

I think you’re just in a routine right now where you handle everything for everyone in your life. You’re clearly handling things for your husband and you’ve been a parent, too. It’s hard to imagine not handling things, but that’s where your path is headed with your son. Let him take the reins.

Q10: Giving up hobbies
How can you just decide to give up a hobby if it’s something you love? You’ve talked before about how you tore things down to just focusing on The Simple Dollar as a hobby. That would be boring.
- Ed

If you think that focusing on one hobby is boring, that’s fine. However, that means that your spare time is going to be split among a number of activities and you’ll never gain the momentum with any one of them that you would need to find a career related to it.

I chose to focus on my writing and The Simple Dollar for two reasons. First, and this was the big one, I enjoyed it. I loved to write and I wanted to get better at it. I knew the only way I would improve is with some intense focus. Second, I did have dreams of making it work professionally, and without a lot of work, I knew that would never happen.

It’s not a choice that everyone would make, but it’s a choice that worked for me.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.