Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

I’m 22 and I’ll be starting grad school in the fall. I have almost enough cash in the bank to pay tuition for my two year program (including the mandatory summer semesters), but I don’t have any additional cash for housing, food, textbooks, etc. I plan to work a lot of overtime this summer and save what I can from that, and then work as much as possible while I’m in school to help cover expenses. Because of my assets, I can’t currently get student loans, but I will probably become eligible later as my assets decrease, hence my question:

Should I contribute to my Roth IRA these coming two years, or should I keep my earnings as cash and put them toward expenses? If I contribute to the Roth, I’d become eligible for low interest student loans fairly soon. Would it be a better deal to have student debt and have the corresponding amount of money in a Roth with two more years of compound interest, or to graduate debt free?
- Ariel

There really is no “best” answer here, as both paths are good ones to financial security. It’s really a matter of personal preference.

The “no debt” person will clearly argue for avoiding the debt and getting out of college without anything on your plate. That affords you a lot of life and career freedoms that might not be in place otherwise.

The “save for retirement” person can argue quite well for putting money into the Roth IRA, because the younger you are when you invest, the more years you have for compounding to work in your favor.

What would I do? I’d probably sock money into the Roth and take on student loans. The student loans are usually low interest and that interest is tax-deductible, plus they have flexible repayment that stops if you’re jobless. Sure, you’ll have some debt after college, but you’ll also have a healthy start on retirement, which will be a big advantage down the road.

Questions like this are what financial advisors feast on, because there’s reasonable logic no matter which way you choose. Thus, they can make a good case either way and will focus on whichever one will net them the most commissions.

We are dealing with a huge credit card debt that both me and my husband has piled. I have curbed my indiscriminate spending habits, have built some emergency fund. I also have a regular retirement savings and seperate savings for my kids education.
Unfortunately my husband is struglling with his debt and I am failing to help him with it. It is creating a lot of tension in our family.
As we are Indians I have a sizeable amount of gold jewellery that is lying unused in my locker. Should I sell off a part of it to help my husband and end the tension between us?
- Sudipta

Will selling the jewelry make you resent your husband?

For me, that’s the biggest factor in your story. If it will not, then by all means, find a reputable dealer and unload that gold - it’s an asset, after all, that is probably best used elsewhere right now.

However, if you’ll resent him for “making” you sell the jewelry, don’t do it. That’s the kind of sand in the oil that can destroy the engine of a good marriage over time.

Another key piece: you need to talk about this, just the two of you. Talk about all of the anger and hurt feelings and mistrust and angst about the debt. Get it all out there on the table.

As an older graduate student, I am finding that I am racking up quite a nice debt ($20-30K) in student loan money. I am working p/t while I am in school, so that I finish faster. What do you suggest I do with the debt once I start paying it? Should I try to pay it off in as little time as possible, or to hang onto it and pay it off over more years. I already have a good credit history. But, I have barely any retirement money saved, and will be 40 in a few years. I am wondering if money is better off split between the two, favoring the retirement fund. Thank you.
- Marie

There’s no reason to accelerate payment on student loan debt, particularly if it’s taking away from retirement savings. Student loan debt is usually low interest and has some of the most forgiving policies one can ask for - forbearance if you’re out of work, for example, and the interest is usually tax-deductible.

If you’re nearing 40 and have no retirement savings, I would “split,” as you word it, and start saving for retirement instead of making extra student debt payments. You’ll never again be this young - and that means you’ll never again have this good of an opportunity to maximize the compounding of your retirement savings.

How do you make a resignation letter look respectable, but not ramble? Where is the happy medium?
- Mol

Keep it simple - don’t ramble at all. Most of the reasons for your resignation will be revealed in conversation, not in the letter.

Simply state the date of your planned departure, offer your assistance during the transition, and make a short statement that you valued your time with the company - something like “Thank you for the support and the opportunities that you have provided to me over the last eight years. I have greatly enjoyed my tenure with the company.”

Don’t worry about any other details. If they need to be discussed, they will be discussed in other venues. There’s no need to actually include any of that in a resignation letter. Just keep it short, sweet, and respectful.

What are your feelings on a writer that plagarizes? For example, Chris Anderson apparently plagiarized from Wikipedia for his latest book.
- Elvis

First of all, I do understand how someone can plagiarize in the way described in the article linked above. As I’m writing my second book - a much more complex work than the first one - I find it littered with notes, clippings, and material of all sorts. It’s a lot of work to keep proper attribution straight - and then when you add in an editor who doesn’t understand fully what your notes are referencing, it’s easy for a piece or two to wind up without proper annotation - which seems to be what happened here.

I enjoy works that call upon lots of different sources to create a fresh new conclusion.

That being said, plagiarism is theft, period. If you take someone else’s work without any form of credit (unless they’ve allowed you to do this), you’re stealing from them, no different than if you walked into their garage and took their lawnmower. Material items and intellectual items are both the result of a serious time investment and stealing either one is wholly wrong and should be punished.

As for a writer, I tend heavily towards a “fool me once, shame on you - fool me twice, shame on me” approach. If a writer makes a mistake once and owns up to it, I let it slide, knowing as I do how things like this can happen inadvertently. However, I would then expect extra care from the writer to avoid similar mistakes in the future. If it happened again, though, I would no longer trust the writer, believing that the person has a serious problem.

How many monitors do you have for your main computer that you work on?
- Sandra

I currently have one - a 24″ Dell monitor that suits my current needs.

I am currently considering a second monitor, exactly the same size as the first, to sit over to the right. The big advantage of a second monitor is that it would allow me to see things at a glance that I currently have to either switch windows for or use a keyboard shortcut to see, breaking my train of thought. Having a second screen would allow me to glance quickly without such interruption.

At my previous employer, I had two screens on my desk, and such quick switching was both intuitive and useful for me.

You’ve talked many times about how you follow individual stocks for kicks. Why don’t you jump in and actually clean up on this rebounding market?
- Shane

I largely believe individual stocks are essentially investment gambling and I don’t have an interest in putting a large portion of our money at risk. If I just put a small portion at risk, it would be eaten up by brokerage fees.

So, for now, I sit on the sidelines. My intent, over the long haul, is to learn more by watching and studying, then eventually move to something like the “Black Swan” investment model. Basically, I’d have 80% or so of our money in something really safe, then I’d actively invest with the other 20%, attempting to hit investment home runs with it.

I’ve been doing well on my own lately. For example, in March and April, I was following Spartech closely and I couldn’t figure out for the life of me why it was staying so low. Since then, it’s doubled.

After seven months of unemployment, I finally found a job and I start next week. I’ve completely used up my emergency fund and had to live on my credit card for a while. Should I use my first check to start paying down the credit card or start rebuilding my emergency fund?
- Andy

Rebuild the emergency fund, at least to $1,000 or so, before you focus on knocking down those debts. Just because things are going well at the moment doesn’t mean your car won’t break down next week.

You’re obviously living pretty lean now. Don’t undo that because you have a job - keep sticking with the things that are working for you in your leaner life. Many people have a tendency to let their lives expand to meet their paychecks. If you can avoid that, you’ll be in good shape.

Did you take your kids to see Up? What did you think of it?
- Yan

We had planned a family excursion to see Up the day after Father’s Day and my son was really looking forward to it. Unfortunately, on the day we were planning to see it, my daughter got really ill. After some discussion, my wife and I made the decision that one of us would take our son to see the movie and the other would stay home.

So, my son and I went to see Up last Monday and we both loved it, for drastically different reasons. My son kept talking about the dogs, particularly Dug, and the balloons. I was far more captivated by the relationship between Carl and his wife as well as between Carl and Russell.

It was really a movie that both a three year old and an adult could get something really enjoyable out of - and that’s a pretty high compliment. It’s something that Pixar simply does well.

Why aren’t you on LinkedIn?
- Jeff

Why don’t you comment on FriendFeed?
- Louise

Why are you ignoring my invitation to Facebook?
- Andy

To put it simply, I don’t have time to participate heavily on all of these services. Instead, I tried them all and followed the conversation - and it led me to Twitter. I think Twitter’s the best “social media” service for actually carrying on conversations with like-minded people - and finding new ones. Facebook and LinkedIn (beyond the basic signing-up and getting your info out there) are good for keeping up with people you know - but that doesn’t get me heavily involved over the long term.

FriendFeed basically combines all of these together, so I signed up there as well and created a single feed for my site, Twitter, and anything I put on Facebook. If you want to follow me there, feel free, and I occasionally jump into discussions there.

However, Twitter is where I spend most of my time. I post links, chat with people, and share interesting stuff on there all the time. It just fits me better.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

I understand what you are saying about supporting the people who make movies/television shows, but how is “trading for DVDs” being supportive? No one related to the production of the show receives any money from a trade.
- Karen M.

I get all my DVD’s from the library, for free. So, am I also telling the people who produced them that their products are worthless to me? I’m asking legitimately, as I don’t know the answer. Not trying to be a smartass. If the answer is yes, then how is using the library any different than piracy? Of course, I return the DVDs, but I probably wouldn’t watch them at all if I had to pay for them, even as a rental. It wouldn’t be worth the money to me at this point in my life.
- Kate

Kate and Karen’s questions are tightly related and deserve a detailed answer, so I’ll deal with them together.

First of all, I don’t see any problem with trading for DVDs or books or CDs. At some point, the original copy of the item was purchased - the person that bought it now owns a single copy of the item to do with what he or she pleases. Trading a DVD is just like trading a wheelbarrow - it’s an item that you now own that you can exchange with others for other items of value.

A similar logic occurs at the library. If a library has a copy of a book or a DVD, that means they’ve purchased that item. Since you pay your taxes, the library is funded by you (and everyone else in the community) By checking it out, you’re simply using your share of an item that you’ve already purchased.

The murky area comes in when you’re able to perfectly duplicate such an item. Many people like to argue that if you can easily make a duplicate of an item, then each copy has essentially no value at all. Going down that road results in a long, complex discussion.

My conclusion is similar to that in Lawrence Lessig’s book Remix - the genie is out of the bottle when it comes to such duplications of creative works, but we’re still in the infancy of figuring out what comes next. I believe that right now is a pretty grave time for many content producers, but the future is very bright, indeed, once new avenues for making money from creative works come to fruition.

You’ve been mentioning a lot of books you’ve read recently on Twitter. Any recommendations from your recent reads?
- Joely

Olive Kitteridge by Elizabeth Strout is fantastic. The titular character is simply the most well-rounded fleshed-out character I’ve read in a long time.

I had a lot of pure fun reading Now I Can Die in Peace by Bill Simmons. Bill isn’t just a great sportswriter - he’s a great writer. I’ve got his next book on my wish list.

Finally, World Made By Hand by James Kunstler presents a wonderfully fleshed-out but realistic look at a world after peak oil and in the aftermath of the fall of the United States government. The “return to basics” is a direction that I think most able-bodied and able-minded people would go.

I am 26 and I will have a $20,000 increase in income next year. Should I put my extra money into a company matching 401k or save up for a down payment for a house?
- Joyce

Depends on how much you’re saving in that 401(k) right now. A good rule of thumb is that your total contribution (yours plus any matching you get) should be around 12%. If you get too far above that, you’ll have a very healthy retirement, but you might be choking off other savings in your own life.

If I were you, I’d just make sure you are saving that 12%, then sock the rest away in a savings account for that house. Just be careful to actually save it for that big goal - don’t get tempted into other things along the way.

Have you heard of AFullCup.com, it appears to be a coupon and deals sharing website. I can’t decide if there is any value in it, let me know what you come up with.
- Ruby Leigh

There are lots of great deal forums out there - A Full Cup is just one of them. The Fat Wallet forums is the place that I often lurk, for example.

With such sites, you usually get out of it what you put into it. If you just go there a bit and occasionally search it, you’ll likely find a few good deals. If you’re really involved and watch it like a hawk, you’ll find many more.

The problem is this: the more you watch for “deals,” the more likely you are to end up buying things you don’t really need, which somewhat defeats the purpose. Thus, I generally use such services only for searching for discounts on things I’m already thinking of buying.

I’ve been with ING Direct for a while, but their savings rates are pretty low. There are other banks out there offering accounts that earn as much as 3%. Why shouldn’t I switch?
- Edgar

In my quick searching, the only bank I could find with savings rates at 3% or above is SmartyPig (I’m mentioning this because I’m sure someone will ask that).

Anyway, I see no problem with simply seeking the highest rate if you’re simply looking to sock cash away for a long term goal and you won’t ever need it in a pinch. This is exactly what high interest online savings accounts are best at.

Having said that, I would be wary about switching away from a primary bank that I was happy with. If your bank has good online bill pay, no fees, offers a bit of interest on the checking, solid interest on the savings, and has never caused you any problems, you should not move all your banking to another bank because of a higher interest rate on the savings account.

My wife has a store credit card that is maxed at $2,500. The only payments they will allow her to make are the bill amount (so if it’s $100, she can’t pay $150 for example) or the full balance. She applied for a loan from her bank so she could pay the full amount off and the interest rate would be lower from the bank, but she was denied. I then applied (same bank) and was denied also due to insufficient credit history.

My “quick” question is, are there some other options for her to get a loan in order to pay off the card so she’s not paying out the nose in interest?
- Frank

The first place I would go is to a local credit union. Explain your situation and ask if they can help.

If that’s a no-go, see if one of the two of you can qualify for another card and execute a zero balance transfer onto it.

A third option: make the bill amount payments and sock an extra payment or two into a savings account each month, then pay the whole thing off in a year or so.

What’s your favorite store-bought barbecue sauce?
- Elgin

At least in terms of the widely available ones, I’ve been partial to Stubbs for years. I love using it on everything - but particularly on chicken. Few things are better than a piece of chicken smothered in good barbecue sauce.

Most of the mainstream brands, frankly, taste far too sweet to me. They give me the same feeling I get when I drink a Pepsi - way too sugary, and a bit of aftertaste that I attribute to the high doses of corn syrup.

In the end, though, I prefer to make my own. I use varying amounts of tomato paste, brown sugar, Worcestershire sauce, English mustard, apple cider vinegar, soy sauce, cayenne pepper, and various other things for experimentation (like a shot of Jim Beam, for example). I mix up what I want, boil it for twenty minutes or so, and it’s good to go. It’s a lot of fun and you can scale back or scale up the sweetness or various flavors to your heart’s desire.

I just got my monthly statement from my credit card company, stating that my minimum payment due this month is “$0″. I currently have a balance of about $1,500 on this card.

My question is: Should I take the $50 that I normally pay per month on this card and put it toward my savings or should I just pay $50 to my credit card company this month as usual?
- Maya

Depends on the interest rate on that card. If it’s above 5% or so, you’re better off getting rid of that credit card debt.

That is, of course, assuming that you do have at least a little bit in savings to provide for an emergency fund. If your savings is less than $1,000, you’re gambling against Murphy’s Law - and that’s never a good gamble.

So, to summarize: if you have less than $1,000 in savings, put the $50 in savings. Otherwise, put it towards the debt unless it’s less than 5% or so.

If you were eighteen years old and single right now, would you go to college?
- Sara

No, I wouldn’t. But it’s not that straightforward.

If I were eighteen right now, I’d be an eighteen year old with a pretty successful business on my hands that I had built myself. If a person graduates high school and has built a solid business on their own, it makes sense to follow the business, at least for a while.

The purpose of going to college is to grow as a person, and I fully respect that. However, if you’ve got enough talent (and have had enough luck) to have built something successful, that’s an opportunity that you shouldn’t pass up.

I feel the same way about anyone that has exceptional opportunities coming out of high school. For example, if a baseball player is good enough to get drafted and get a multi-million dollar signing bonus out of high school, by all means, they should go for it. Going to college puts that opportunity at risk due to injury and other lost opportunity factors.

If you have something good in the hand, don’t trade it for two in the bush. Don’t avoid college, but if you have great opportunities, don’t look at college as an absolute post high school requirement, either.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

What is the thought process you go through when organizing an article to write? Do you outline your thoughts first? Often when I try to write something, it ends up fairly chaotic.
- Crystal Groves

I usually start off by writing down a bunch of ideas in a very stream-of-consciousness fashion. Facts, ideas, and other bits all just get thrown down on paper. I don’t worry about the order or anything else - I just try to dump the ideas out of my mind.

After that, I usually try to make up my mind about the order of the article. I usually just move the pieces I jotted down around until they make some logical sense.

From there, I just write the post. I literally go through the points and transform each one into a paragraph or two, outlining what I’m thinking. Sometimes, I just polish the rambling into a sentence. Other times, I add a lot more flesh.

At that point, the article’s almost done. I scan it again for any major errors, check anything that still needs checking, then I consider it done. If it were a print piece or a portion of a book or something, I’d let it rest, edit it, let it rest again, and so forth, but that’s not a realistic process for a blog where the key is the fresh flow of ideas.

I was wondering what you would do if you were recently laid off like I am and had some credit card debt? I was going to pay it off with my tax refund, but then I unexpectedly lost my job. Some experts like Suze Orman and a few friends have recommended just making minimum payments on this debt and stashing the refund in my emergency savings because credit companies will close your line of credit, and you can no longer rely on it for the worst-case scenario.
- Writergirl

For one, you should never rely on credit cards for your worst-case scenario. That’s what a big, healthy emergency fund is for.

Having said that, I largely agree with Orman. If you’re in a situation with no income, your best bet is to minimize every possible monthly bill and conserve cash so that you can survive longer without an income - since you don’t necessarily know when your next employment opportunity will arrive. Thus, cutting down to minimum payments on debts is a strong step in that direction, even though it does mean a larger debt over the long run.

If you’re so worried about Mint’s security, see http://www.mint.com/privacy/security-tech/. Check out their security. if you can hack into and know several ethical hackers.
- Frugal Cubicle

I’m not worried about that aspect of security. My concern is with human failure and human failings. Every time you choose to share your account information with another company, you open up another hole for potential identity theft - someone on the inside skimming account numbers is just the start.

Thus, my logic is pretty simple: is the benefit of the service more than the cost of sharing your information with them? In Mint’s case, it might be, but does it offer a compelling advantage over other services that do much the same thing without requiring you to share your data, like a desktop Quicken install or Wesabe?

I’m not saying Mint is a bad service at all, and I have no doubt that their security is strong. However, every time you share your account information with yet another source, you increase your chances of identity theft and other chicanery. It’s not a trade I’m willing to make.

How’s your fantasy baseball team doing?
- Mel

Mel is actually a member of the very competitive fantasy baseball league I’ve participated in for the last two summers - this is my third year in the league. Mel is winning the league - I’m 7th out of 12. This is more or less Mel’s way of getting me to talk about my failings as a fantasy baseball player.

Here’s the scoop - my pitching is stellar. I have Roy Halladay and Zack Greinke. ‘Nuff said.

The problem is with everything else. One of my earliest draft picks was used on David Ortiz. Yes, the same one who decided 2009 was the year to watch his power disappear and his batting average drop to .190. He’s now on the bench. Several of my other picks are underperforming, too.

So, there I am - stuck in the middle.

My husband and I plan on taking a two week road trip this summer to VA, DC, PA, and OH. We signed up for AAA and saved so much on our DC hotel that it paid for the entire membership… Qustion: What will your family do to keep costs down on the road?
- Jessica

There are several tactics that can easily shave money from your spending. First, figure out which states have the lowest gas prices. For example, we found it was very worthwhile for us to gas up just before we crossed from Missouri to Kansas, then just barely make it into Oklahoma to gas up again - saved us several dollars by just planning a bit better. Second, air up your tires before you go. Third, take along picnic foods and eat at rest stops - this allows everyone to run around and stretch and keeps food costs down. Fourth, minimize stops (because gas stations are loaded with impulse buys) - and when you do stop, have everyone use the bathroom. EVERYONE.

Those tips will go quite far towards cutting your costs while you’re on the road.

We are upside-down on my husband’s car loan and are trying to get rid of it. what steps do you take to do this when the car is worth less than the loan?
- nw

When you sell an upside-down car, you’re still responsible for the difference in cost - there’s no magic way around that. If you don’t have the cash to immediately make up that gap, you either need to keep paying down the loan or find another way to leverage something else you own to get yourself out from being under water.

For selling it, your best bet is to simply do the leg work yourself. This MSN MoneyCentral article on selling your own car should help quite a bit.

If money were no object, would you hire a nanny for your children?
- Kali

I would, but it wouldn’t be a typical nanny hire. I would hire my sister-in-law at a rate to make her plenty comfortable. She’s been providing care for preschool-aged children for almost a decade now and I trust her deeply with our own children.

Would I hire a nanny if we were making enough that we could easily afford one? More likely, I would hire someone very competent to handle much of the drudge work of The Simple Dollar - approving comments, filtering email for the ones that are relevant, researching specific points, setting up interviews, etc. - to someone else, trim my work time quite a bit, and do it myself. We simply don’t earn enough to do this - I’ve tried hiring people at a level I can afford, but their competence hasn’t been there.

My biggest concern, though, is my children’s social development. Where we live, there’s not a ton of stay-at-home parents or other such individuals to give my child any sort of normal social interaction at a preschool age. That worries me - I was very ill-equipped to handle the social aspects of school when I started and it took me literally ten years to figure out how to start coming out of my shell. Believe me, I’ve looked for opportunities, and short of driving my children forty minutes one way to stay-at-home dad meetups in Des Moines, there aren’t many options.

You talk a lot about researching before a large purchase. What do you use to research?
- Jessica

My first stop is almost always Consumer Reports. They’ve almost never led me wrong when I stick with their “Best Buys.” I’ve used their advice in car purchases, appliance purchases, and countless other smaller purchases.

If the purchase is a big one, I usually hit the magazine room at the local library and dig through five years or so of Consumer Reports back issues to get a big picture of what’s going on.

I’ll often Google for web reviews as well, but I tend to not trust them as much unless they come from a source I’ve long viewed as reliable. I tend to believe more in trusted sources than I do in sheer quantity of reviews. This is probably borne from my experience as a blogger, where I’m almost constantly inundated with all kinds of offers to do positive reviews of various things.

I was wondering about how to best position yourself for getting a mortgage. I am 20 and have only had one credit card and no debt. should i get a CC and make some smart moves to build credit so I can get the full amount on a mortgage (with a proper down payment also)? and what are smart credit moves?
- Erik

I think you’re already doing fine. Just avoid being late on any bills and use your credit card regularly but keep the balance paid off, and you’ll be in good shape.

One big thing you should do, though, is check your credit report at http://www.annualcreditreport.com/, which is the website the federal government set up for people to get free copies of their credit report. Don’t use other services - they try to trick you into paying for something that the government has ensured you can get for free.

Make sure there are no errors on it. Check up on anything you see on there that you don’t recognize. Doing so will ensure that your report is accurate and, with your good history, will provide great support for getting a mortgage in the future.

What religion do you practice specifically? I’ve gathered you’re a Christian, but what denomination?
- Mark

I’m an ELCA Lutheran. If you want to know more, you can bone up on our beliefs.

Why am I a member? Several reasons. First, the ELCA is not a group of Biblical literalists. They encourage discussion of what the religion means, what the Bible actually means, and so on. Second, they practice open communion and encourage discussion with people of all faiths. Third, we don’t believe one can “earn” their way into heaven - it’s not up to us at all - and we generally don’t believe faith to be a conscious choice.

What about the “E” in ELCA, which stands for evangelism? I don’t believe that quoting scripture does any good at all in the modern world. Actions speak louder than words, and actions of love, respect for others, and fulfilling one’s commitments speak awfully loud. If someone asks what I believe, like Mark does, I’ll tell them - until then, I’ll let my choices in life speak for themselves. I can do a lot more good in the world by actually focusing on being a better person and doing good deeds than by wasting my time judging anyone else for their choices.

Got a question of your own? Ask it in the comments, and I may address it in a future mailbag!

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

I just turned twenty last month and want to know what else I can do for the sake of financial security. I have a savings plans with ING Direct, but I always see people saying “If I had started doing (blank) when I was twenty, I would be financially secure right now!” How do I learn how to invest, or where, or what into? What should I know about credit cards and banks? Is it good to be in a little bit of debt (with regards to credit cards) for the sake of good credit?
- Eli Skipp

It sounds like you have a ton of questions and don’t know where to start, but at the same time, it sounds like you also have a level head about money.

If I were you, I’d put aside an hour of your time a day for a few weeks and read two books - one well-rounded personal finance book and one book on investing.

My suggestions? For the first one, there are a lot of good general personal finance books out there. Just pick the one tailored to where you’re at in life. If you’re in college, Please Send Money by Dara Duguay is pretty strong. Just go to the personal finance section of a bookstore and browse a little - and find one that fits.

For investing, though, I have one straight-up suggestion - read The Bogleheads’ Guide to Investing by Larimore, Lindauer, and LeBoeuf. It’s the best all-around guide on investing that I’ve ever read, and is a great complement to any more general personal finance book.

Do you think that committing to a blogging schedule out of passion, despite the fact that it promises no immediate revenue streams, to be a productive step? Can I have the expectation that I as continue, I may encounter more opportunities for income than I can see at this moment? How have you experienced the growth of income-creating opportunities on your own blog? How have you best determined how to streamline your interest with insights that your readers will ultimately pay to enjoy?
- Holly

If it’s borne out of passion, committing to a schedule is a productive step, but not for the reasons you’re looking at here.

If you’re passionate about something, blogging gives you a powerful method to talk about it. You’re able to share what you discover. You’re able to explore your ideas. You’re able to grow in that passion.

Setting a schedule, in a way, makes you accountable to that conversation. People will be more likely to read if you consistently and regularly engage in conversation with them. Think about your friends - the ones you call every day or every week are much more likely to engage you than the ones you call every once in a while when you feel like it.

However, you immediately jump to the “income-generating” conclusion. If you’re committing to a schedule under the belief that such a schedule will lead you directly to money, you’re most likely going to be severely disappointed.

If money is the goal of your blogging pursuits, you will fail. I’m not saying that it’s stupid to try to earn money from blogging - it’s not. But if you’re in a situation where you would stop blogging if the money dried up, the blogging isn’t really your passion - and it’ll come through in what you’re doing.

I have about $10K sitting in bank and I feel I should do something about it. Since I do not have Roth IRA account, I plan on spending $5K (max) to invest on Roth IRA. But I am struggling to find ways to invest remaining $5K. I really do not want to invest in stocks, 401K or mutual funds - I have lost quite a bit of money on all these last few yrs nor I have time to do research. Ideally I would like to invest where there is atleast 5-6% return. Pls advice.
- PR

So, you want a 5-6% return right now without risk? You and the rest of the world, buddy.

Here’s the problem. To get a significantly larger return than you would get in a savings account or a treasury note (the most risk-free options, which both currently return at most about 3%), you have to take on risk.

No investment is a guarantee, not even the treasury notes (but they’re as close to a guarantee as you’ll find). When you start seeking higher and higher returns, the risk gets higher and higher.

Stocks and real estate are two areas where you can almost always get a 5-6% return over the long haul. Over the short haul, though, it’s basically a gamble.

If you could accomplish one goal with The Simple Dollar in the next year, what would it be?
- Edgar

I have five one-year goals that I set for myself on June 1 of this year, which means I want to accomplish them by June 1 of next year.

100,000 email/feed subscribers I’m currently just a hair over 60,000. The way to do this is to just keep writing good stuff and make sure at least some of it is welcoming to new readers. If you want to help with this, the best way is to simply send interesting articles you see to your friends.

25,000 Twitter followers I currently have around 4,400 followers, but I’ve just now started paying strong attention to Twitter. I think I just finally realized how useful it can be for generating conversation. How can I get to that huge goal? Again, I just need to keep putting useful stuff on Twitter.

Second book finished I have a pretty strong outline and drafts of a few chapters. I’m hoping to have a complete strong first draft done in September or so, then let it “rest” for a month, then revise it.

6 more “downloadables” I have a big stack of requested downloadables that people want me to make - it’s just a matter of putting aside the time to get them done.

One final thing… There’s a final goal I have that I’m not going to share quite yet, but I think it’s pretty cool. I think it’ll serve as a resource for a lot of people out there.

Some of us have put in a lot of time constructively correcting Trent’s posts in the past. Here he is pretending he does not actually make mistakes; rather, he deliberately portrays one side of a controversy to generate discussion. That’s why errors was in quote - he doesn’t actually think we’re pointing out real errors, or at least that there’s no such thing as an erroneous opinion. We’re a little frustrated.
- Michael

I write a lot of articles where I address only one or two facets of a many-faceted situation - usually, the ones that interest me or that I know would be really relevant to a reader that has contacted me recently. Most of what you actually see on The Simple Dollar is actually reader-driven - I try hard to match post ideas to what people tell me that they are going through or they want to hear about.

I assume that in the comments people will delve into those other uncovered angles because those other angles are the ones that interest them. What I find amusing is that many such comments accuse me of “errors.” They’re usually not errors - they’re just not issues I find interesting to talk about or I choose not to talk about to keep the article reasonably simple - after all, this is The Simple Dollar. If you want The Overly Complicated Dollar, go elsewhere.

Yes, I make real errors. I make a lot of them. But choosing to cut out a point because I think it would cause an article to drag out too long isn’t an error - it’s an editorial decision to make the site more readable and useful to more people. Again, simple.

If I actually wrote about every angle of a complicated issue, I would be writing a book, most of which would not be interesting to you, and something that only a handful of people would bother to read and comment on anyway. That’s not the point of a blog, where the purpose is to generate discussion. I’d far rather get people to think about an issue in a new way or pick up a new useful tip.

Many of my posts are already long enough.

So, if you think I’ve made a big error by omitting something, by all means, call me on it. I welcome it, as long as it doesn’t devolve into personal attacks on me or on another commenter. We all come here to learn, not to hate.

While QuickBooks simple start is def cheaper than the full out Pro version, normally, often times you can get the Pro version for $100 if not less (watch for coupons at various sites) and lately Staples has been throwing in a nice bundle of extra free software which you might or might not use (can always flip it on craigslist or ebay) so don’t rule out the higher end versions just because they seem cheaper at one time.
- Chris

The big reason why I tend to point people towards QuickBooks Simple Start Free Edition is because it allows people to essentially try out QuickBooks for free and see if it matches their needs. If it doesn’t - no investment lost other than the time. If it does, then the upgrade path to a full version of QuickBooks is perfect.

I actually think all software companies should use this type of technique to sell their software - and more and more are moving to it all the time. For example, the free Quicken Online seems to do just that - it’s a mostly full-featured version of Quicken, but the desktop versions seem to have a fair bit more gas in the tank.

If there’s a free option for the software you want to use, try it out.

How does one justify the cost of a house, insurance, property taxes, and maintenance these days? I understand that equity is built but it seems (without running though the numbers) that you’re really paying for a house 3 times over once all the interest is factored in. Add all the previously mentioned expenses and it seems like renting comes out ahead.
- Reflection

For many people, renting does come out ahead. Buying a house only comes out ahead if (a) you have a need for a lot of living space (i.e., you have multiple children) since large houses have huge rental expenses and (b) you plan on staying put for a long time -or- you have the cost of the house ready to go in cash.

If you’re single and just want a small house, you might be able to find something that’s cost effective by hitting foreclosure sales - that’s how my sister-in-law did it. However, my experience has been that family homes in good condition are few and far between at local auctions and the ones that do appear are bid up like crazy.

So, if you’re single or married without children and plan to at least keep your location options open, I think renting is likely the best option. Neither renting nor owning is the best choice for everyone.

I have a question: Is it really cheaper to sew your own clothes, or your children’s clothes, rather than buying them?
- Lisa

It depends on your skills with a sewing machine and the cost and quality of the materials you can get.

A person who has never used a sewing machine or never assembled clothes before will likely wreck quite a few items before making something worthwhile. In other words, there’s a pretty nice sunk cost of time and materials before you get up to speed.

Now, if you’re a skilled sewer and have access to lots of good material, you certainly can make very nice clothes for little cost, and often do it in the evenings while watching a movie or something. It’s just not as simple as sitting down and starting, though - it takes some skill, and that takes time to build.

My wife has the skill to do this. She’s made stuffed animals and doll’s clothes for our children and has made a few shirts. Her problem is that she gets burnt out - she’ll get really into sewing for a few weeks and make several things, then she gets tired of it.

On another blog (which I will not name since they do not deserve to get traffic for this type of content), a writer talked about obese people in the workforce, and how they would not work with them/hire them. They went on to make some claim that overweight people were less effective than normal-weight people. From a legal standpoint, isn’t it illegal to say something like that? Can an employer not hire you even though you are qualified for the job simply for weighing more than they judge normal? Also, what is your opinion on that?
- Marie

Obesity (unless it’s caused by a demonstrable condition) is not covered by the Americans with Disabilities Act. Given that one’s physical fitness can certainly be a criteria for many jobs, I understand how obesity can be used as a hiring factor. If you’re hiring a crew to build a house, for example, a physically fit person will have more utility than an obese person.

Having said that, I think “overweight people were less effective than normal-weight people” is a pretty ignorant blanket statement. Many people that are extremely skilled at white collar work are overweight, largely because of the sedentary nature of the work. Is this person actually going to claim that Lee Raymond, long-time CEO of Exxon who built the company into the behemoth it is, was less effective than other options?

You hire the best person for the job. A person’s weight might have something to do with their effectiveness at manual labor, but it often has very little to do with your effectiveness at white collar work.

Is that really your voice on the podcast or video? Are you using some kind of voice modifier?
- Duane

Nope, that’s my real voice. It’s low, I know, but I think it’s fairly expected. I’m six and a half feet tall, wear size 17 shoes, and a size 15 ring. My voice box is similarly sized, I think.

What I’d really like to work on isn’t the sound of my voice, per se, but my ability to speak in a way that holds attention. I’m currently working on that.

Got a question of your own? Ask it in the comments, and I may address it in a future mailbag!

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently. Several readers have asked about our decisions with regards to child care, something I’ve written about extensively in the past (because it was a very challenging issue for us to work through). Beyond these articles, I will likely write an update soon.
Daycare: Personal, Family, and Financial Responsibilities in Balance
Should I Send My Child to Daycare or Should One of Us Be A Stay-At-Home Parent?
The Stay At Home Parenting Question Hits Home - Hard
Stay At Home Parenting: Is It Worth It?
Rethinking The Costs Of Child Care - And Considering Some Major Choices

And now, some great reader questions!

Question - I just became the Senator of Finance in an International Honor Society I am a part of. Most members are not too active, but I have a lot of gusto, and I am wanting to do a fund raising event every month, but not overwhelm or bore our chapter. Did you come across any interesting ideas catered towards this kind of thing in college?
- Mol

Find out what people enjoy doing, and create a fundraiser based around that. Have a Guitar Hero tournament. Have a softball tournament or a basketball tournament. Make your fundraiser into something that people would do anyway, except add a bit of organization and a bit of a carrot to it.

Even better, look around the community for sponsors. Ask them to contribute prizes, then plaster that company’s logo all over your promotion for these events. This lets you keep all of the proceeds for your fund raising purposes while giving out interesting prizes.

Remember, a fundraiser isn’t purely about the money. It’s also about raising the reputation of your organization. Doing something fun that gets people in the door is the best way to do that.

I have started a new job which will leave me with quite a bit of extra money to save, spend, invest, whatever. Over the next year I plan on establishing a fairly healthy emergency fund, paying off all of my debt, and still having enough left over to do something with. I’ve contemplated putting the money into my Roth IRA, but I’ve also contemplated using the money for a business venture; I don’t have a solid plan now, nor would I really need one until I have that money to make a decision with anyways, but I was wondering your take on the issue - when would you advise one or the other?
- Dave

If you don’t have a concrete business idea, put the money into your Roth IRA. No matter what happens, the window of opportunity for contributing for retirement is never better than when you’re young.

What about if/when you come up with a great business idea? Develop it a bit. Do the basic research to make sure it would work, and write a business plan. If the idea comes together to that point, then you might have something worth thinking about. Until then, it’s a dream.

Never sacrifice your future for a “maybe” or a “could be.” Keep your eyes open for opportunities, but don’t avoid saving for retirement for it.

Right now we are using a 529 plan to save for college for our 3 kids. Someone told us that we should be saving in a Roth IRA because we could have more flexibility in how the money is invested, getting a better return and we would have more flexibility in using the money, so if our child got a scholarship and didn’t use the money, we could just apply it to retirement, whereas with a 529 it must be used for educational expenses. Our state’s 529 plan isn’t that great, but they offer a matching grant every year that we are eligible for right now, but will not be after this year. And if we move our money, we will lose all the matching funds.

What do you think of this? Is it worth it?
- Michelle

The real question is whether or not you’re adequately saving for retirement elsewhere. Are you saving at least 10% of your income for retirement right now? Do you have poor retirement investment options at work? If these things are true, you’re likely better off just using the Roth IRA for retirement. (Remember, also, that you’re not restricted to using your state’s 529 plan - there are great plans in other states that are open to you, like Iowa’s).

If you’re completely covered for your retirement savings, then a Roth IRA is a potential investment vehicle for your children’s education. It has one disadvantage - if you don’t use it for the education, you can’t touch it until you’re at retirement age (without paying an extra 10% tax penalty beyond what you’d normally have to pay). On the other hand, a “savings plan”-style 529 allows you to access the money for any purpose with no penalty other than the normal taxes.

I think the flexibility of a good 529 plan, plus the need to use a Roth IRA for retirement, makes the 529 a better move for my children’s college education, but your situation may vary.

That said, I think you’re wrong, in that pets CAN be compared to humans. It’s not as black-and-white as you think. If you had to choose between saving the life of your dog, or the life of your child, the choice is obvious. But what if instead of a child, it was an adult stranger? What if it was a convicted murderer? What if it was a cancer victim who only had a few days left to live anyway? Which would you save then?
- Kevin

Here’s the problem whenever you make purely moral comparisons, particularly when comparing one life to another. Different people have different experiences and thus different sets of values. Some people look at pets and value them as much as people, while others do not. Some people think the life of one human (say, their child) ranks above the life of another (say, a stranger), some do not.

There is no absolute answer to questions like this. One can argue until they’re blue in the face about it, and it doesn’t change the simple fact that different people have different values and, for many of those cases, there is no absolute right or wrong.

That’s the reason I usually avoid issues of moral gray areas. There are reasonable, rational people that are on both sides of an issue, and they feel very strongly about their side, believing that they are right and the other person is wrong. No amount of arguing will change it, because the people on each side are coming from a different set of life experiences which have led them to different sets of rights and wrongs.

So, can you compare pets to humans? I see both sides of the coin here. Which one is right? I don’t know. I know how I feel about it, but it really doesn’t (and shouldn’t) impact how you feel about it.

We invite a small group of people over to our house every Tuesday night. The group has grown from 2 people, to 20 people….and counting. I love hospitality and my husband and I decided we wanted to feed them dinner everytime they come over.

With the group being the size that it is, I have started to use paper-plates instead of normal plates to serve up the meal. While in jest, one of the group members commented that paper-plates were environmentally unfriendly, but my rational was that washing 20+ plates would be more of an environmental offence. Afterall, where we live, we’re actually in drought and are on Stage4 water restrictions! What is your stance? Which is the lesser of 2 evils? Which option is more environmentally friendly?
- Daniella

Given the water restrictions and also given that you can recycle paper quite easily, I think paper plates are a reasonable choice in this situation.

To me, this is another example of the “moral absolutism” I mentioned above. What’s a greater impact on the environment - the amount of a tree required to produce a handful of paper plates (and the processes therein) or the amount of water and detergent used to wash twenty plates (and the processes therein)? There’s not going to be an absolute answer to this question.

The real solution is to just be mindful of the environment. If you use paper plates, make sure you recycle them. If you choose to wash the dishes, do it with any water restrictions in mind.

Trent, here’s a question: What do you do in those situations when you go out to eat with a group of colleagues or acquaintances and they decide to divide the bill equally among each participant? I never order the expensive stuff and I don’t drink beer or wine, but often end up paying the price. Any ideas on how to politely get out of it?
- anna

If I’m concerned about this, I just request a separate check early on in the meal. When the waiter comes to take my order, I simply say that I would like my own check. That’s trivial for a waiter to do, and it also pulls you out of splitting any bills.

Of course, if there are appetizers ordered or something else shared, you shouldn’t dig in, since you won’t be sharing the cost of those appetizers. The only way out of that is simply agreeing to contribute to the appetizers - or ordering an appetizer of your own and sharing it freely with others.

I personally think that individual bills at a restaurant is the best policy. Splitting a bill at the table has so many potential ways to cause hurt feelings that it’s just not worth it.

You wrote about how you give your business to ethical businesses and businesses that provide good customer service. I would like to make my purchases at these kinds of businesses, but it seems there is a Walmart at every other intersection. Do you have any suggestions on where to start offering your business when you are looking for these qualities?
- Mol

You have to go by your own experience. I find all the time that some branches of chain businesses have spectacular customer service, while other branches have atrocious service.

You should also factor in the other costs for you. If you have to drive ten miles to go to a department store or a grocery store with better service, it’s probably not worth it for the inexpensive purchases you’ll make there.

For most of my regular needs (like groceries and household items), I simply tried all of the local stores until I found ones I like with good service and reasonable policies and prices (Fareway and Target, namely). For larger purchases, I shop around - I don’t have a “regular” place for those purchases.

Is it worth installing tankless water heater in the house to save money on energy cost?
- Mateen

It depends heavily on your water use. The heavier the use, the less efficient they are. Factors that cause you to use more hot water include more people living in the home, frequent shower and bath use, heavy laundry use, and so on. If you’re single, it’s probably worthwhile - if you’re in a family of five with frequent bathers, it’s not going to help as much.

Here’s why. A tank hot water heater just holds a bunch of heated water in it. As it cools, the heater will kick on to warm it back up - on and off, on and off. Now, if you’re using that hot water frequently (and thus not using much energy to constantly re-heat the same water), they’re almost as efficient as tankless heaters - and they’re much less likely to cause you to run out of hot water. On the other hand, if you’re single and you rarely use much hot water, you’re going to waste a ton of energy just heating and re-heating that same water.

We’ve thought about a tankless heater, but we’ve decided to hold off for the time being until our tank heater starts showing significant problems. We don’t feel the advantage is enough to replace our current heater.

You seem to have upgraded your Nintendo DS Lite to a DSi. How did you do this? Why? Isn’t it a waste of money?
- Thom

Shortly after the new DSi was released, I traded my old Nintendo DS Lite and a small handful of games that I’d played through for it. My old DS Lite was beginning to have some issues with recognizing games when you put them in the slot, so I knew it would have to be replaced before long, anyway. So, the DSi was essentially free - I got rid of a system that was beginning to fail and a handful of games I’d already beaten.

Was it worthwhile? Since I’ve picked it up, most of the time I’ve spent with it has revolved around playing with the cameras on it with my three year old son (taking pictures of him and me, going around the house with it, and so on) and playing Dr. Mario, which was a free download for the system - neither of which I could have done with my old DS Lite. Plus, the screen is a bit larger, which is great for the eyes.

Would I have paid for it? Probably not. I would have just stuck with my old DS until it failed, then spent some time without a DS to see if I actually wanted it.

Do you still keep in touch with your high school friends? I’m about to graduate from high school and many of my family members tell me that most of my friendships will die off slowly over the next few years.
- Eddie

I’m married to one of my old high school friends. Aside from her… not really. I keep in touch with a few of them on a very irregular basis, but that’s about it.

It wasn’t an immediate transition. I kept in close touch with several people for years after college. But, as time went on, it became more and more clear that there was a widening gulf between us. We had fewer and fewer shared experiences to talk about and were often separated by many, many hours.

I think that today’s technologies (like Facebook and Twitter and text messaging) make it much easier to keep those connections alive, but I still tend to think that over time, your experiences will diverge more and more and you’ll have less and less in common, until you find yourself with perhaps just a friend or two from those days.

That’s fine, though. Over the years, I’ve picked up other friends. Life goes on - you grow and change.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently. Several readers have asked for more “big lists” of money saving tips recently (and I’m working on a couple), but here are three of my favorite ones from the past.
Little Steps: 100 Great Tips For Saving Money For Those Just Getting Started
100 Things to Do During a Money Free Weekend
The Readers Speak Out: Their 25 Best Actions for Saving Money

And now, some great reader questions!

How did you come up with the name The Simple Dollar?
- Mol

When I was first thinking about the site, I made a giant list of potential names - just pure brainstorming. Most of them were pretty awful (somehow, looking back, I don’t think Big Bad Voodoo Debt would have clicked).

I went through the options on the list and gradually knocked off the dumb ones and the ones that were already in use for some other purpose. When I got down to a small handful of promising options, I read them off to my wife, who liked The Simple Dollar.

It was as simple as that! I think it ended up being a really good choice.

Do you have any good recommendations of board games or card games that are fun for two people? Settlers of Catan seems really interesting, and I’m planning on buying it, but it looks like you need at least 3 people to play it. Do you and your wife have any faves?
- S.

There are a lot of great choices for two players - backgammon, Lost Cities, Carcassonne, and Spite & Malice immediately come to mind.

Having said that, I would strongly urge you to find another couple to regularly play board games with. There are many great games out there that are perfect for four players. Plus, a big part of the enjoyment of any game is the socialization opportunities it creates.

Here’s a great discussion of two player board games on MetaFilter.

I am serving as a bridesmaid for a dear friend in a few weeks. I estimated (based on my own wedding and others in which I’ve been part of the bridal party, and knowing the actual cost of the bridesmaid dress) what the financial requirements would be, and was comfortable with them. I assumed there would be some sort of bachelorette event, and that I would contribute to it, but at the shower a few days ago, I learned all the details, which were planned without involving me at all, and I’m not comfortable with the amount of money I am being asked to spend (more than all my other wedding-related costs combined). I think it is excessive, and excessive particularly in that what we’re being asked to spend contributes no value to the couple’s life together.

To say that I was asked to spend this money is an exaggeration. Plans have been made, and I have been told that I am splitting the cost with the other bridesmaids. When the issue of cost was raised, the maid-of-honor, who is the bride’s sister, said, “I’m poor, but I can afford it.” I can’t. I don’t know how I can get out of the situation. I don’t think staying home from the party is a realistic option because it would hurt the bride’s feelings, and I adore her.
- Katie

From my perspective, the die has already been cast here. Your options are either to do something that’s bound to cause some waves or to simply pay for something you don’t approve of. I don’t think there is a tactful way out of this situation, particularly if you’re concerned mostly about the bride’s feelings. I agree with you that the planning process was not appropriate, though - you should have been involved in planning the event.

If you truly cannot come up with the money, you need to tell everyone involved. Simply staying home the night of the party will create negative feelings, too, as the costs will go up for everyone else still participating. If the bill is $1,000 and they were planning on dividing it among four people and you don’t show, suddenly the shares all go up almost $100 - and that will create even more hard feelings.

Having said that, this is a great reason to always be involved with the planning of any event where you’re going to be expected to shell out money. Quite often, if you rely on your own personal estimates, you’ll find that they don’t match well with what others intend to do.

“At first, these comments bothered me quite a bit - … Now, I realize that the vast majority of such criticizers are simply people with giant chips on their shoulders.”

An open mind is a good thing.
- Mark

Let me give you an example of the types of “criticism” that are levied at me:

What kind of career advice would you give? How to have a “career” at being self-righteous and armchair quarterbacking others lives from behind your computer screen, while sending your spouse out into the real world to have a real job?

I think most people would prefer the $20.

There was a time, early on, when a comment like that would really bother me. I would wonder what I had done wrong and try to think of some way I could make the site better to please such commenters.

As the site became more and more popular, though, I began to see more and more comments like these and I began to really believe them. I thought I was wasting my time with The Simple Dollar. I’d believe that I was merely a “self-righteous armchair quarterback” who didn’t help anyone.

In order to keep writing, I had to see these kinds of things for what they are: angry people spouting their anger at a convenient target.

It’s not hard to see when genuine, intelligent criticisms are levied against the site and against my own opinions. I value those quite a bit. However, most of the negative comments go down another path entirely, simply attacking for no real purpose at all other than to show off one’s chip on their shoulder. If I let those comments bother me, I’d stop The Simple Dollar tomorrow.

I am 56. In ‘83 I got a BA degree in art with a minor in humanities. I tried having my own business but was unable to make a go of it. I had 3 children to support so I started taking any job I could find. Now I am a cashier in a dining hall at the local university.

I’ve heard several people say go to college and get a degree. Well what if you already have a degree? I took a Microsoft class this spring hoping to make myself more employable but I don’t know where to head to from here. I don’t have a clue as to the type of job that would best suit me and I am definitely open to more training but from where? Do any of your readers have suggestions?
- JoannMe

It sounds to me like you’re in a fairly tough place. Your degree isn’t highly marketable, unfortunately, and you’re at a stage in life where employers are less likely to take a risk on you.

If you need to be employed quickly, I’d start with an employment agency. Once I found a temporary position, I’d do everything in my power to wow them. Go the extra mile to really help out around the workplace and show that you’re something special.

If you have more time than that, do an honest skills assessment - there are many online tools that help with this. Figure out where your skills lie and then look for jobs that match those skills. Get training in those areas that match the kind of job you’re looking for.

I’m sure readers will have a lot of suggestions on this one.

You mentioned your son likes Pixar movies. I love watching them with my own kids. Which one is your favorite? How do you rank them?
- Louise

My favorite Pixar movie is probably Ratatouille, but my children don’t like it nearly as well - they tend to request pretty much every other one instead of this one. I do like all of them, though, and I think they all provide some great family-friendly entertainment with some good lessons tied up in there.

Here’s how I would rank them, for my own enjoyment:
Ratatouille
WALL-E;
Toy Story 2
Finding Nemo
The Incredibles
Monsters, Inc.
Toy Story
A Bug’s Life
Cars;

That was harder than it had any right to be.

I’ve been following you on Twitter - you read a lot of books! How do you keep track of what you’re going to read next? Do you plan it out, or do you just grab a new book when you finish the last one?
- Cho

I usually have a good idea of the next book I’m going to read, but that’s about it. I usually have about five books I’m interested in reading in the next month or two floating around in my mind, but in no particular order.

Sometimes, I’ll go through the books i have on hand, discover a few that I really want to read soon, and put them in a prominent place so that I see them over and over again. That’s usually a good way to ensure that these are the next books I read.

That being said, I usually am reading two (sometimes three) books at once. I usually pick ones that are very, very different from one another so that I don’t get confused between the two books. Thus, when I mention what I’m “currently reading,” it’s usually the one I’m closest to finishing.

If you were to stop writing The Simple Dollar today and start another blog, what would it be about?
- Ursula

Food, undoubtedly. I’d write about cooking, shopping for food, and so on.

For a long time, I attempted to start such a blog in my spare time, but I found over and over again that I simply didn’t have time to start another blog at the level of The Simple Dollar. It takes a lot of time to run The Simple Dollar - far more than just the writing that you read.

So what do I do with that pent-up desire to write about food? I write about one food-related post a week here on The Simple Dollar, usually focusing on low-cost food ideas. This somewhat restricts what I write about (but not entirely).

What do you think is your worst trait as a parent? What do you work on?
- Cam

My worst trait as a parent is completely misunderstanding what my children are saying to me. They’ll be trying to communicate something to me in words and in gestures, and I’ll completely whiff on it, either because I can’t hear them really well or because I’m impressing an idea I already have on what they’re saying.

How do I work on that? I usually find that getting down at my children’s eye level helps with this problem. Looking them right in the eye usually makes the communication clearer and helps me to understand what’s really going on.

My other problem is that I tend to run out of gas around bedtime. I’ve been up since 6 or so and scarcely stopped all day, and by the time I’ve read the kids their bedtime stories, I’m utterly exhausted. I’ll nod off in their room (I usually sit in there in a chair for a bit if they ask me to until they start to drift off) and then my wife will wake me up after I’ve missed some time we could spend together in the evening. My best bet to stop this is to stay active in the evening until their bedtime arrives - if we do stuff that’s fairly sedentary after supper, I often get a bit sleepy.

How are you doing with your fantasy baseball league this year?
- Roger

It’s going pretty well, but not because of my supposed “good” players. My MVP early on, for example, was Zack Greinke, who was one of my last picks. Meanwhile, some of my earliest picks (like Carlos Zambrano) have done good, but not great.

Here’s the thing with fantasy baseball. I simply love baseball. It’s something that my grandfather and my father ingrained deeply in me. I grew up watching tons and tons of games and dreaming of being able to play as well as Kirk Gibson or Ryne Sandberg.

That passion is still there, but now it’s channeled differently. Back in the day, I used to watch every Cubs game with my father. Now, I’m the only baseball fan in my house, so I listen to the radio, do some reading, and play some fantasy baseball to keep up with it.

Even now, I still get goosebumps during exciting games. “Two on… two out… the Cubs down by two” still gets me going, after all these years. I like to imagine my father watching the game, and I think about my grandpa, too, and something just feels right.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently. Three readers have written me for advice on expensive hobbies (particularly golf). Here are some thoughts on saving money on hobbies.
Ten Ways That I Save Money Golfing
The Tug of War Between Frugality, Hobbies, and an Emergency Fund
Making Expensive Hobbies More Financially Manageable
Evaluating Your Expenses - Entertainment & Hobbies

And now, some great reader questions!

I was reading your series on buying a house, and I have a question about that. Did you read a particular book or books that you would recommend for someone considering buying a first home? (Or maybe building, I’m picky)
- Chapeau

During our home-buying process, I hit the library pretty hard and looked at a ton of books. Mostly, I’d just make lists of questions that I didn’t know the answer to, then I’d hit the library and seek answers to all of them at once, then repeat a few weeks later.

The most useful all-around book that we found was, surprisingly, Home Buying for Dummies. It consistently had readable answers to most of the questions we came up with. Eventually, my wife purchased a copy of the book and it became quite dog-eared by the time we finally made our move.

My suggestion? Make a big list of questions. Go to the library and look at lots of different home buying books to find answers to your questions. When you find one that really seems to answer things well for you, buy a copy and then don’t be afraid to add notes all over the book. It worked really well for us.

I want to start a Roth for my wife and I through Vanguard but the minimum fund amount is $3000 each so it would be quite a substantial amount of money to buy even two funds for each of us. Do you have any suggestions how to start one through vanguard without so much start up money?
- Bob

Since you’re in a Roth IRA, there’s no tax penalty for switching from fund to fund. Thus, my suggestion would be that each of you start with the Vanguard STAR fund. It’s a well-diversified standalone fund that has only a $1,000 minimum.

Once you’re in that fund, have all of your contributions go there until you’ve built up enough to buy the minimum of whatever funds you want, then sell all of the Vanguard STAR shares and use the proceeds to buy the other funds. Then, change your contributions so that you’re allocating how you like.

This is exactly what I did with my Roth IRA - worked like a charm.

Have you considered reviewing children’s storybooks that deal with money management themes? We already own two (-The Peanut Butter and Jelly Game- and -Stock Market Pie: Grandma Helps Emily Make a Million-), and I’m familiar with a few other titles, like -Alexander, Who Used to be Rich Last Sunday-.

I know Dave Ramsey has a handful of books aimed at kids, but I haven’t read them yet, and I’d be interested to hear someone else’s opinion of them.
- Jenzer

I’ve seen several books along these lines and they look compelling. I think most of them teach really good lessons in a way that young children can grasp.

So why haven’t I reviewed any? To be frank, I’m waiting until my son and daughter are a bit older - probably a year or so. When they reach that age, I’ll start reading such books to them and see how much the ideas stick in their heads. That, to me, will be the real test of whether or not these books are worthwhile.

I will probably start with some of the Dave Ramsey books, actually.

This won’t work for everyone but I am a 20-something that lives close to home. I just use my mom’s Sam’s card whenever i need to go there. Therefore I don’t pay for it. Not to mention, it is free to her because it is a necessary business expense.
- Ryan

I actually did the same thing when I was in college, more or less. My college was fairly close to a Sam’s Club, so my parents bought a membership and would often fill up their vehicle with Sam’s Club purchases when they came to visit. I kept the other card that came with the membership and went there quite often.

If you have a family member who would also benefit from a membership at a warehouse club, talk to that family member and discuss splitting the cost of the membership. You might find that, though $40 is too much to spend, $20 is a price point you’re willing to pay.

Personally, if you have adequate storage room in your living space, I think most people will get their membership’s worth out of a warehouse club.

If you have a little spare time, do you bother entering competitions, answering surveys, becoming a mystery shopper and the likes to make a little extra money, or is it just a waste of time?
- V

Most of the time, I don’t bother. The time investment is too much for the return - or the chance of a return, in the case of contests and other such things.

That being said, such things can be a simple distraction in the evenings - a way to fill commercial breaks with something largely mindless that can bring in a dollar or two. I usually use that sort of time to bargain hunt, for example.

However, if you’re devoting blocks of time that you could be using elsewhere, things like surveys aren’t worth it, in my opinion.

Whenever you mention watching TV shows or listening to music or watching movies, you always talk about buying them or renting them. Why not just BitTorrent them or use LimeWire?
- Kelly

Because I’m opposed to piracy. Whenever an album or a television show or a movie appears, a lot of people - most of them earning just a typical living wage - are involved in producing that item. They work hard to provide a good piece of entertainment.

Whenever you download a movie or a piece of music or a TV show, you’re telling all of the people that worked on the item that their contributions are worthless to you. That is inherently a lie, since you’re going through the effort of downloading it - if it has no value, you wouldn’t be putting forth the effort.

Yes, I know all about how the RIAA and the MPAA are evil. I also know that most people who use that as an excuse are looking to build a big grey area on the issue so that they can feel justified in their theft.

Having said that, I will say that there are much better solutions to this whole problem than the MPAA/RIAA or the pirates are advocating at this point. If this topic really interests you, I strongly encourage you to read Remix by Lawrence Lessig, which is an extremely levelheaded and intelligent book on copyright in the age of the Internet. His conclusions are really interesting, and I think that adopting some of those conclusions would make all of this a moot point.

How do you catch up on television shows you missed?
- Adam

This somewhat follows from Kelly’s question. I know a lot of people catch up on television shows via BitTorrent and other such services.

Fortunately, though, most of the shows I follow (like Lost, for example) have their episodes up on the web for free viewing. If I want to start a series from scratch, I’ll usually trade for the DVDs of the series, but, quite honestly, there aren’t many series that I would want to devote that much time to.

If a series is actually good enough that I could see myself watching the whole thing all the way through multiple times (a la Lost, probably), I would have no objection to buying or trading for the DVDs. The people that create such compelling work deserve the dollars.

Have you ever played the lottery?
- Chloe

When I was in college, I used to play the lottery fairly often, particularly scratch-offs. I really have no idea why I did this - it was more of a laugh than anything else.

At some point, I realized how much of a waste of money it was. This revelation came well before my ultimate financial meltdown, so it wasn’t a part of my financial turnaround. I just didn’t see the point any more.

If I’m going to “gamble” away my money, I’ll do it in a way where I at least have some control over things, like poker or blackjack. Otherwise, I might as well just agree to hand the casino or lottery commission a dollar and let them hand me back 93 cents over and over and over again.

Why are you always so self-righteous? Why do you look down upon everyone else?
- Tom

Comments on my writing alternate between claims that I’m self-righteous and claims that I’m overly humble. Frankly, I don’t see either one.

I think that any time you comment on someone else’s life, you run an enormous risk of coming off as self-righteous. After all, you’re suggesting to others how they should live their lives, and it often comes from your personal experiences and reflections and learning. In giving that advice, you inherently create an impression that you’re “right” and the person asking the question is “wrong.”

Very rarely is that true. My own life has taught me that you should never, ever judge anything by its cover. Quite often, the questions I receive are from people who are successful in most aspects of their life, likely more successful than I am. They’re asking for thoughts and advice on a certain area - money, careers, and so on - where they don’t feel as confident.

Because I respect the people that write in, I feel obligated to give them my honest answer. I consider it dishonest to sugar-coat things for anyone. So, I get right to the point - I tell them what I know and how I would do things. Quite simply, if I did anything else, it would be pretty insulting to the person who wrote to me asking for that advice.

Most of the posts I write for The Simple Dollar come directly from questions posed by readers. You deserve my honest take on things without sugar coating. To give anything else would be a failure on my part - and it would let you down, too.

If that means I sound self-righteous sometimes, well, that’s something I’m quite willing to take.

My wife was sick with appendicitis in approximately 1998 or 1999, absolutely no later than the year 2000. She was making payments of $10/month on the debt and eventually got it down to around $450. Then the hospital stopped sending monthly statements. So she called and they told her that the debt was forgiven and she no longer was required to make any payments. Again, this was no later than the year 2000.

What do you think?
- Paul

The call came from a collection service. Likely, that collection service just bought your still-existing debt from the hospital (likely for pennies) and is now just fishing to get some return on their investment. I would ignore this collection agency, particularly if you have some sort of written evidence of loan forgiveness. If you do not, you can try contacting the hospital, but likely they no longer have the debt on their books at all.

In any case, it is always useful to get things like this in writing. If an organization forgives your loan, you should ask for some sort of documentation to that effect.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently. One reader asked which books I’ve reviewed has made me think the most. I had a hard time with this, actually, because many books have stuck in my mind for a long time, but here are five that I’ve chewed over time and time again for years.
Review: Made to Stick
Review: The Well-Educated Mind
Review: Words That Work
Review: The Paradox of Choice
Review: The Wisdom of Crowds

And now, some great reader questions!

I think it is strange that the same car is sold in Europe it has to have an oil change every 10000-15000miles (20 000-30 000 kilometers) but when it is sold in the US it needs an oil change every 3000-5000 miles. This is true both for european, asian and even american cars sold in both places????
- Oskar

The biggest reason for this is that in Europe, many automobiles have diesel engines. Diesel engines run differently - for one, they’re quite a bit hotter and for another, diesel fuel is formulated quite a bit differently than unleaded.

The end result of these differences is that diesels require less frequent oil changes than engines that run on unleaded fuel.

There are a lot of compelling reasons for the United States to switch to diesel from petroleum-based cars, but in all likelihood both types of engines will eventually be a thing of the past.

Considering this is a financial blog, I’m amazed you didn’t mention Mint as a must-have iPod/iPhone app. If you are not keeping track of your finances, you should start. If you are, you should consider Mint, the free online money management site. Their iPhone app is killer, allowing you do check balances in your accounts and on your credit cards, keep an eye on your investments, keep track of your budgets, and look up recent purchases. I use it on a daily basis.
- spritemv

Mint worries me from a security standpoint. As I’ve stated many times with regards to Mint, it doesn’t offer enough compelling features for me in comparison to the security risks of sharing my bank information and other personal data with another organization. Note that I don’t care what their stated policies are - in the end, I’m still trusting whatever computer resides at mint.com to keep my data safe. Thus, I don’t recommend Mint. I think Mint has a lot of neat features, but it’s not worth the data concerns I have. I would love it if Mint provided a fashion to allow you to upload such data without providing account information.

In comparison, I find the security policies of Wesabe to be much more palatable (and, in my opinion, they have a better iPhone/iPod Touch app). With them, you have the option of giving your account information - or you can do the uploading yourself with any personal data stripped. I prefer the latter.

I do not feel it’s worth the risk to share my account information with a third party unless there’s a very compelling reason to do so.

I had just recently moved into a large apartment and was looking at purchasing some furniture, in attempting to get credit I realized how bad my credit really was. There are several debts on the account, mostly old medical expenses when I was in college and uninsured. Other than the medical expenses, I have one Credit Card with a $500 limit that is maxed. A friend suggested that I apply for a debt consolidation loan through my Credit Union, pay everything off, and diligently make the loan payments. He also suggested that once I pay off the Credit Card to leave the account open as “Available Credit” because it would help my credit score. What is your opinion on this
- Krueck

I think that’s a pretty good plan, both in terms of consolidating the debt and in terms of leaving the credit card open. Go talk to a local credit union and see what they have to say about things.

It’s worth noting that depending on how old the old medical expenses are, they may not be affecting your credit much at this point (unless you’ve been making payments recently on those debts). It’s likely that the maxed-out credit card - particularly if you’ve missed payments - is the real problem on your credit. Your first focus should be in getting all of your accounts up to date, as that will help your credit more than anything else, then getting the credit card balance down should be the next goal.

You said invest the maximum to get a company match in your 401(k), then invest the rest in a Roth IRA. While I completely agree with that, what do you suggest to someone who has problems finding that little extra to put in their Roth because they are tying to pay down debt(while going to college), and invests in a Roth 401(k) at their job? Should I become more fastidious with my budget and go for the IRA or continue with the 401(k) where my investments are doing better?
- Chris

Are you saving enough for retirement right now? That’s really the big question. It’s more important that you’re saving at least 10% for retirement than it is to worry about exactly how you’re doing it.

If you’re having trouble coming up with that 10%, your best bet is to automate the payments. Try to get the payments to your Roth IRA deducted automatically from your paycheck, or have it come out of your checking account the day after your check is deposited. Make it so that you don’t have to think about it and you’ll find yourself budgeting with the money left over.

The earlier you start saving for retirement, the better. The more you save early on, the better. Why? Early investments have a lot of years to compound and multiply their value - later investments do not.

Do you have any thoughts or suggestions on the 2009 tax credit for adding energy efficent windows and doors to a home?
- Jane

If you know the efficiency of your current doors and windows and they’re particularly inefficient, upgrading to efficient windows and doors is a pretty bright move. Not only will you increase the value of your home and enjoy reduced utility bills, you’ll also pick up a tax break this year.

I almost always think that these types of investments are worthwhile because they reduce your monthly bills in the future, and it’s often hard to tell what exactly your future holds, plus they often increase the asset value of your home.

If you don’t know the efficiency of your windows and doors, it’s time to do a proper home energy audit - and you can do it yourself! Here’s a great guide from the Department of Energy on doing just that. This is a great weekend project - it’ll help you identify the big energy inefficiencies in your home and give you some goals to work towards.

You work alone all day long many days. How do you deal with loneliness during the day?
- Bender

My goal most days is to get in a writing zone where I don’t notice the loneliness. If I’m successful, I can easily write for hours without even noticing the time passing - then, suddenly, it’s four o’clock and it’s time to get started on the evening activities.

On the days where that doesn’t work, I’ll usually place a phone call to my mother, who’s always willing to talk and fill me in on all the news from my hometown area.

If both of those fail (and that happens about once a month), I’ll pack up my messenger bag and go somewhere in public to work, just for the sake of watching people and interacting a bit.

What do you do with personal finance books after you read them?
- Lawrence

First, a note: quite often, when I hear about a personal finance book of interest, I’ll write to the publisher and ask for a review copy of the book. Most publishers are happy to send me a copy, even though I’m quite clear that I’m not promising a review at all - I only try to review books that make me think in some way.

So what do I do with those books when I’m done with them? I do lots of different things. Sometimes, I’ll give them away to commenters if they leave a particularly thoughtful one - I’ll just email that commenter and offer to send them the book. Sometimes, I’ll send out the book via PaperBackSwap (usually with a “bookmark” mentioning The Simple Dollar). At other times, I give the book to people I know.

At one point, I tried to give a box of books on frugality away at a food pantry, but there was no interest at all in them, which surprised me a bit.

On Twitter, you said “I buy local when it’s obvious - at a farmer’s market, for example - but outside of that, I don’t worry about it too much.” Could you elaborate on that a bit? What about American cars and American appliances?
- Charles

This was part of a lengthy discussion on Twitter about what it means to “buy American” when parts - and, often, whole products - come from global supply chains. Should I be partial to a Ford Fusion, which is built in Mexico with only 50% American parts, over a Honda Accord, built in Ohio with 70% American parts? (See http://tr.im/k1Kw for more.)

Personally, I prefer the Honda. American workers are assembling the cars. American workers are making more of the parts. In both companies, there are stockholders all over the globe, which is where most of the profits go. The only part of the equation that’s more “American” for Ford is the name on the label and the million-dollar salaries of the top company managers.

Because of all of these factors, I don’t worry about the “nationality” of most products - at least not anything that comes from beyond what I can track. I like buying produce at the local farmer’s market from people in the community. I prefer to buy Picket Fences milk, because that dairy is just a short drive from here. Beyond that, I often have little idea from who or where the product comes from - who was paid to assemble it, who made the parts, and so forth.

So, frankly, I don’t worry about it too much. I evaluate based on the quality of the product, not on the perceived qualities of the name on the label.

How do you decide which questions to use in a reader mailbag? You’ve said before that you get many more questions than you can answer.
- Angie

I get about 50 questions a week for the reader mailbag, of which I answer ten in the mailbag, about five in individual posts, and a few more by direct email responses.

How do I decide which ones to respond to? I don’t use an exact method. Instead, I just look for questions that look interesting. Does this question make me think? Would it result in an interesting answer that might spur discussion (without enraging people)?

I do like shorter questions that get right to the point. I generally don’t like long questions with tons and tons of rather extraneous details.

What are your summer vacation plans this year? You mentioned camping and a potential road trip. Will you be able to speak or meet with readers? We’d love to meet up with you for drinks if you’re ever near Memphis.
- Kylie

My parents, my wife, my children, and I are going on a long “road trip” vacation together in June. We intend to visit the Dallas/Fort Worth area, New Orleans, and possibly Memphis. Later in the summer, my wife, my children, and I are going to camp somewhere north of Duluth, Minnesota.

If things work out, I might be doing a small event of some sort in both DFW and New Orleans, and possibly in Minneapolis. This would likely involve a presentation at a library and/or an open “get-together” with readers for appetizers and beverages. If my schedule works out for this, I’ll post details later on.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.