Reader Mailbag #1

After the unprecedented success of my open question thread, I’ve decided to start a weekly “reader mailbag” to handle a lot of the simpler questions that I get that don’t necessarily warrant a full article by themselves. Each week, I’ll answer ten to twenty questions accumulated from that open question thread and any more questions that are asked in these reader mailbag articles (yes, if you have a question you’d like to ask, leave a comment!). I’ll try to keep a mix of “on-topic” personal finance questions along with other stuff, hopefully in something approaching a 50-50 ratio.

So here goes! First of all, here are a handful of links to earlier posts from The Simple Dollar that directly address some of the recent questions I’ve received.
What you need to know to buy a Wii
The best advice around for talking to your family about money
Why I don’t agree with Rich Dad, Poor Dad and why I don’t agree with The Secret

And on with some questions.

Makeup: necessary expense of both time and money for ladies who want a decent job? In other words, can I be taken seriously by prospective employers for a job above the service industry if I don’t wear makeup?
- Natasha

My personal opinion is that it’s not necessary. I believe, for example, that most makeup falls under the same category as most fragrances – fine for a date or a social outing, but not really needed in the workplace. While I do put a lot of value on personal appearance and hygiene – keeping yourself clean and reasonably sharp looking – that doesn’t mean it’s time to visit the Maybelline counter.

Having said that, you really need to check with what’s acceptable in the culture of your workplace. If it’s the social norm there, then you may want to consider it just for pure office social reasons.

To what Christian denomination do you belong? Is it one in which you were raised? Are you closely aligned with its “personal finance” doctrines?
- Michael

I was born and raised in a household that was ostensibly Christian, but we didn’t attend church or talk about God except for a period where I was baptized as a Catholic mostly to fulfill the wishes of an elderly relative. I dabbled in a lot of faiths in a spiritual quest in college and eventually settled on ELCA Lutheran, largely because I felt comfortable with the pastors in that church and I felt much more openness about discussing my individual perspectives, even if they didn’t match “doctrine.” I largely believe that faith is a personal matter and that the best kind of evangelism is leading by example – I feel no interest in pushing anyone to follow my faith. If someone is curious and wants to ask questions, I’ll talk all day long, but spiritual discovery is an intensely personal thing and pushing someone doesn’t help them to find the true answers they seek, even if they come to conclusions I don’t share.

Only extremely rarely are finances mentioned in any church service or program I’ve been involved with, so I have little to say in that area.

I have encountered people who get financially locked in to less-than-frugal contracts, like for cable TV, or cell phones. They’re already living paycheck to paycheck, and then when they’re forced to cut things back, they’re unable to cancel those things because of the huge fees if they break the contract. What could these folks do differently?
- Babs

First of all, don’t renew when the contract ends. That’s the big thing.

Second, if they’re still going to maintain some sort of service like this after the contract ends, call up the company and negotiate. Offer to sign a new contract right now that covers a longer period in exchange for reducing the optional stuff. Tell them that you will switch to a competitor at the end of the deal otherwise. Tell them also that you may not be able to afford the current bills.

If you get yourself into a bad situation like this, you need to use it to your advantage. Always tell them that you’re going to have a hard time affording it and that you may not be able to pay. Always use the specter of switching to a competitor. Play hardball with them – they play hardball with you, after all.

Do you ever feel like quitting the whole blog thing for good?
- WeSeed

Not even for a second. Blogging gives me an opportunity to really get in the flow with my writing in a way that nothing else does – it’s a very powerful thing for me personally.

Is Ben one of the Oceanic 6? What about Aaron? :)
- Susan

What I’d like to know is why won’t Jack look at Kate’s baby!!
- Diane

OK, Lost. Here’s my opinion. Jin and Sun are the other members of the Oceanic 6, because Sun will want to leave to protect her baby. I think by the end of the series Jack is going to have to do something very bad and it will result in the death of Claire, and that’s why he can’t look at Aaron. What else? Michael is Ben’s guy on the freighter, and the reason Charles Widmore wants the island so bad is because it’s some kind of healing place, like a fountain of youth. I haven’t quite figured out why Ben’s fighting him so hard yet.

Lost is crazy. My wife and I are both obsessed with it – it’s the one television show we watch, and we’re both hooked on it like a caffeine addict stumbling around in the morning looking for the coffee pot.

What are some tips to resist peer pressure to spend when in college? Most of my friends go out often, shop a lot, have lovely new furniture, etc. We do do free activities once in a while, but most of the time I end up staying home because I cannot afford to follow them. This can get quite depressing even if I know I’m doing the right thing staying within my budget while they will end up with huge student loans.
- Marie-France

They’re college students and they have “lovely new furniture”? I spent more than I should have in college, but I would have avoided these people.

First thing, look for some new things to do. Look around on campus for clubs that do the inexpensive stuff you enjoy doing. You “end up staying at home” because you’ve made things into a two-way choice: stay at home or go out and do expensive stuff. There are a ton of interesting and inexpensive options on any college campus – go out there and see what’s available.

Second, don’t base your self-worth on the spending of others. They’re making dumb choices. You know they’re making dumb choices. Don’t judge yourself based on those choices. Judge yourself by what you know to be the right path.

Follow those two and you’ll be fine.

Are you now also going to try writing fiction, like you mentioned wanting to do ideally? If not yet, why not or when?
- Mark

I hope to take another stab at fiction. In my college and early professional years, I wrote a small mountain of short stories that I never bothered to publish and a novel-length work, tentatively called Saturn and Titan and describing a relationship between two brothers, that I tried to get published, got a few nice responses about, and then gave up on trying to publish. This stuff was clearly my juvenilia – stuff that probably should never see the light of day.

First, though, I have a lot of nonfiction writing on my plate. We’ll see where that takes me and if it gives me room for the fiction I’d love to write.

How much is enough — at what amount of savings/net worth will you effectively retire, even if you continue to pursue activities that provide residual income after that? And, how long before you expect to accumulate that amount?
- Shaunie

I’ll have enough when I’m locked into a long-term conservative investment that produces about 50% more each year than my actual spending. That way, I can take that extra and use it as a buffer against emergencies and against the march of inflation. I have no idea when I’ll reach that.

Why are you not publishing my comments? I think they are harmless & modest…just curious to know the reason.
- Rohini

I get 8,000 to 10,000 spam comments a week, so many I have to use a filter to help me get rid of them. If I didn’t do that filtering, I would do nothing but sit around marking comments as spam or not spam all day and never write. Sometimes real comments get lost in the spam filter, and that’s probably what happened to yours. Make a few good, legitimate comments and then this won’t be a problem.

Got more questions? Leave ‘em in the comments!

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  1. Jeff says:

    A weekly mailbag is a great idea! Many of the authors/writers/sportswriters (not sure why the sportswriter deserves their own mention but they seem to be a different breed) that I read on a regular basis do it. Two thumbs up on this idea!

  2. Michael says:

    Thank you for answering such a personal question. I’m glad your church doesn’t focus on personal finance. Some do, and it’s not their job.

  3. Jeff says:

    You say that Lost is the only show you watch. Do you not have cable? Is your TV digital-ready?

  4. Michelle says:

    Natasha might be interested to know that there are plenty of career paths in which a woman would do better not to wear makeup. I work in a manufacturing environment, a blue-collar field dominated by males, and I am one of few females always taken seriously by my male coworkers. I don’t think it’s a coincidence that I avoid makeup and jewelry, and dress in a practical, utilitarian fashion.

  5. KC says:

    I’d like to address 2 points. First the make-up question. I think make up is dependent upon what is expected in your profession and your own personal looks. Do others in your profession wear makeup and how much? You might follow their lead. Also, makeup is very personal – some people need it and some don’t. I have friends who I think are very attractive people, but had skin problems in the past or who have varying skin tones and they wear makeup to blend their complexion. They don’t wear lots of it and it may not be noticable to a lot of people, but it certainly improves their apprearance. Some people just got lucky in the genetic lottery and don’t need makeup period regardless of their profession.

    I’d also like to address the comment of “how much is enough”. I’ve always believed that to be wealthy is to be able to live on what you have without need of a job. In other words if your investments, pension, social security payment, etc can keep you in your preferred lifestyle without taking on an income paying job then you are wealthy. This is very age dependant. My 90 year old grandmother would be considered wealthy by this standard although clearly she is not. But she is able to live on her ss payments and investments – mostly because her monthly budget is so small.

    But my 65 yr old father is also able to live on his pension and investment income. His home and cars are paid for – his monthly budget is quite small, too. He works because he likes to and he figures if he lives to be as old as his 90 year old mother he might need the additional money.

    But most people my age (35) couldn’t live off the investments that my father or grandmother have because of time. You have many more years to live and purchases to make (my g-mother will never buy another car, my dad might buy 1 more, I’ll probably buy at least 5 more). So I trully think that to be wealthy you live independant of a job and there are so many factors involved in being independantly wealthy.

  6. guinness416 says:

    Re contracts, I’ve set up email reminders 40 days before all my contracts end, GICs mature, etc … beyond having an easy heads up for when the contract is over, what I’ve run into a couple of times is the “we require thirty days notice” or “we require written notice” nonsense, so I call 40 days prior and confirm any changes to my contract or how to cancel.

  7. Alex K says:

    I am looking to purchase a few suits for a new position that I have at work. I am hoping to find something of quality that will last a while. Any recommendations on purchasing suits, dress shirts,etc? Do I go for what I can afford now- or try to save a little more and purchase something more expensive for the long run? How do you get past name brand=high quality? Any help would be appreciated.

  8. Matt says:

    What do you suggest for bloggers (especially those in the area of personal finance) in terms of work-life separation and anonymity?

    Should personal finance bloggers be open about their identity, shield it completely, or stand somewhere between? I am mainly concerned about how one’s blogging might be impacted in his or her full-time workplace. Are there any things in particular to watch out for or guard against?

    There are obvious things, like avoiding making posts during your office hours or talking about one’s job directly. But I am also curious about other subtleties. For example, if I announce on a blog that I’m maxing out my retirement accounts and paying extra on my student loans, if my employer gets wind of that information, might they think that since I’m doing so well, that I don’t need a raise very badly?

    In addition, many personal finance blogs discuss entrepreneurship, and side businesses can sometimes get dicey when one has a full-time employer. Basically, a roundup of things to watch out for, or dos and don’ts of PF blogging, would be much appreciated.

  9. Miranda says:

    Negotiating with companies: Most companies will negotiate with you when your contract ends — especially if you are ready to walk (but you have to be prepared to walk if it doesn’t go your way). We never get into contracts — even if they offer a discount. If you negotiate after a few months of being a good customer, you can usually get the promo rate anyway.

    Recent experience: Dish recently moved NFL Network to a more expensive package. My husband was livid. After calming himself, he called to (politely) complain, and made it very clear that the only reason we chose Dish was because NFL Network was part of the less-expensive plan. Guess who has the next up plan at the lower-plan cost? We do.

  10. Brian says:

    My wife and I are attempting to save for a house and we are doing pretty well but we have concerns that our son maybe ADD or ADHD. The doctors are in the process to determine that now. How should I continue to manage my finances with the time and expense ADD or ADHD may bring about (ie. gas, tutors, etc.)?

  11. chris says:

    What do you think about HOAS? I’m currently looking at a couple townhomes (no single family homes are in my price range in the good areas of town)

    One is new construction 1200 sq ft two story
    The other is 1700 sq ft, the cost is about 20% less but the hoa is more than double.

    There are a ton of other factors, but pretending we can ignore those what do you think about being locked into such a high hoa for the long term.

    (if you’re interested in actual numbers or other details to address the question just email me)

  12. T says:

    The make up question is one I’ve struggled with, but over time I’ve come to a pretty firm conclusion:

    Depending on career and location (eg, social norms are pretty different in downtown San Francisco as compared to Jackson, Mississippi), there are definitely situations where not wearing make-up can be an actual issue.

    Sometimes, it is consciously noticed by an employer and taken to indicate a lack of professionalism; sometimes, I believe, it may not be so consciously noticed by an employer but on an unconscious level starts to change how much they view someone as professional and interested in / capable of moving ahead.

    And, in some situations, it can actually affect the quality of your work: for example, a medical resident who doesn’t use makeup to cover up the dark circles under her eyes after a night of no sleep, and comes off as unkempt and uninterested in looking professional to a scared patient looking for reassurance that they are in competent hands, is really doing a worse job because of a decision to avoid make up. It all depends on context.

  13. berate says:

    Regarding Lost, wouldn’t Aaron be considered one of the Oceanic 6? I don’t think it would be “Oceanic 6, plus one baby”.

  14. S Myar says:

    Makeup is totally a workplace issue. There was a case where the judge ruled that the firing of a waitress was justified — this was in a Vegas casino/ hotel and the ruling implied that refusal to wear makeup can be grounds for dismissal. Also the Disney workers get paid for the time it takes them to wear costumes since it is part of the job req. So makeup and dress issues should really be decided by where a person works.

  15. Shana says:

    Re: makeup. As a woman, I have to disagree. There are very few women who don’t benefit from at least a little makeup. Too, not wearing makeup can make someone look remarkably younger than they really are, which as a woman can cause credibility and authority issues. It really does depend on the job, though for anything corporate at least a little makeup should be worn. I generally only wear mascara and tinted lip balm, but I’m also lucky enough to not need foundation to even out my skin tone, or dark under eye circles, blemishes, etc. For me, I can look significantly younger or somewhat ill (depending on the day and season), if I don’t wear anything around my eyes. A woman doesn’t have to have a full “face” for work (which is generally overkill, with the possible exception of parts of the south), but a little is generally a good idea.

  16. KMunoz says:

    LOVE that you answered the Lost question. My favorite show each week, hands down.

  17. Beth says:

    I work in software and most of my female coworkers wear no makeup at all. I usually don’t, either. I feel like when we DO, we look noticeably (yet subtly, ideally) better, but not wearing makeup has no impact on how our colleagues perceive us.

  18. Laura G says:

    I saw your daily schedule and was very impressed by how much you get done in a day! I also noticed that you don’t seem to get 8 hours or sleep a night. Do you ever find yourself suffering for it, or are you one of the lucky ones who can get by on less?

  19. Emily says:

    As a professional woman, here is my take on makeup. I keep it on hand, just in case. I wear makeup to interviews, not much, no eyeshadow, just a light layer of foundation and powder. I also wear makeup to big meetings, it makes me feel like I look better which gives me a huge boost of self-esteem. Otherwise, the only time outside of those two situations is if there is huge and noticeable blemish on my face. It makes me self-conscious. Then my quality of work goes down because I spend all day wondering if everyone is staring at the huge thing on my chin.
    I don’t spend a ton of money on makeup. I buy powder, foundation and mascara. I have a few shades of eye shadow, but those are only for when my husband and I go out.

  20. chris says:

    RE: Aaron and lost again, We’ll have the answer next week, and if you watched the previews you should agree with trent on who they are.

    But thinking about why Aaron isn’t one of the “Oceanic 6″ Basically the Oceanic 6 are 6 figures who are regarded as celebrities for having survived the crash and made it back. If aaron did publicly come back with them I don’t think he’d be treated as a celebrity because of his age.

    But, not knowing the circumstances of their return until the season finale I’m apt to believe that Aaron was not publicly seen as returning with the group yet is somehow known as kate’s child publicly.

  21. KellyB says:

    Of course, Aaron wasn’t really “on” the Oceanic fllght, since he was born on the island, so maybe that’s why they don’t count him.

  22. justin says:

    An interesting fact…

    Jesus talked more about money, than he did heaven and hell combined

  23. Michael says:

    How about adding a “Lost – spoilers!” alert to the front of this post (and others like it)? I’m watching the series on DVD, and now I know what’s coming :-(

  24. Ashley says:

    I respect myself too much to wear make-up just because it’s the “social norm” at my workplace.

  25. sara says:

    I think that more women wear make up than one might think, they just wear it subtly to make them look natural (and awake, as some other posters commented) rather than “made up.”

  26. !wanda says:

    @Ashley: That’s fine, but be prepared to pay for it in subtle ways.
    Women generally don’t wear much makeup where I work. Then again, I work in the hard sciences, where the quality of one’s work is judged more objectively than in some other fields.

  27. Rohini says:

    Cool, that clears my doubt. Thanks

  28. Christina says:

    My question is, I am considering a new job. It’s a good move for my career but I will not be eligle to contribute to the 401(k) for a year. I have a Roth IRA also that I would max out but what do you think I should do after that (for the record I tend to contribute 15-20%, that’s over the IRA max)? Should I just open a mutual fund and contribute to that? There’s not cap on it, but there is also no tax deferment on earnings. What do people do when there is not 401(k) avialble to them for this length of time?
    Thanks a million!
    Christina

  29. Paul says:

    Hey Trent,
    Here’s one that I don’t think anyone has asked.

    Now that Congress and the President have approved the economic stimulus act of 2008, what are you going to do with the extra money? Invest or payoff more debt?

  30. daily reader says:

    Trent,
    A couple of things that seem to be working pretty well on the site..

    re the question “why aren’t you posting my comments”. I think your spam filter must be working pretty well. I’ve made 3-4 comments and you’ve posted each one (so you’re definitely getting the important ones :) )

    The makeup question generated lots of the comments above. I wouldn’t have thought that would be such a hot topic. Lots more women weighing in on that one than I would have anticipated. The open mailbag approach seems to have generated lots of interest. Sounds like something to keep doing.

    Keep up the good work. I’m amazed at the amount of content you can generate. Well done.

  31. Tyler says:

    A Lutheran? In Iowa??? That’s a shock.
    If you’re interested in seeing/hearing a whole lot of talk about money in church, watch Joel Osteen preach.

  32. Laura H. says:

    Yet another weigh-in on the make-up issue:

    I asked myself this when trying to trim fat from my budget (believe me, I went deep: I spend less than $10.00 a week on food, which is not bad for the area where I live, and I have eliminated the $75.00 a month for public transportation by walking to and from work, even though it has been incredibly cold lately). I finally came to the conclusion that, whether it is because of the meditative pause at the beginning and middle of my “day” [I work swing shift; no-one even sees me where I work]), or the way I feel more “grown-up” and “put together” when I wear make-up, or something more subtle, but I actually work better when I am wearing minimal make-up. Anything that increases my at-work efficiency for .50 or less a day is an expense with which I can live.

    I’m sad that I missed the open question thread. Mine would have been: “How can one make certain one is investing responsibly if one uses primarily index funds?” I’d hate to see that my money was responsible for funding genocide, as in the Total/ Unocal Myanmar debacle, but I don’t have the time to research all 500 companies of the S & P index…

  33. vio says:

    Hi Trent!
    I have a question about lifetime education credits. I’m a student and I get a ton of loans to pay for my education. My dad thinks that regardless of the fact that I have no income, I would still be eligible for getting a reinbursment because of all the tuition that I pay (I file as an independent). I thought, however, that the lifetime education credit applies only to tax-paying people who actually earn an income and have a real tax bill and that the education credit only reduces one’s tax bill. I think it’s such a marvelous idea to have this open question bonanza-it makes your blog even more useful (if that’s possible).

  34. JB says:

    I think makeup is completly a personal preference. I wear it everyday as it makes me feel polished and ready to take on anything, ie it is important to me and fun. Plus, I need to even out my skintone.

    I don’t think anyone needs to force themselves to wear it if they don’t want, I’ve never seen/heard of anyone being judged either way in the workplace. Hardly anyone at my work wears makeup except for me. Is this counter culture? I could care less.

  35. EN says:

    Thank you for the opportunity to ask you a question!

    I’m 20 years old but I have a question about retirement already. I want to open a Roth IRA this year but I’m not sure what is the correct asset allocation for my age group. I am interested in two low cost index funds (one domestic, the other international) but that will mean my whole portfolio will just be stocks. Am I making a big mistake by going with 100% stock holdings? I always seem to read advice that you have to have a certain percentage of bonds in your portfolio no matter what. Does this mean I have to look at a bond index fund too?

  36. Kim says:

    I have the majority of my retirement funds in roth IRA mutual funds and in a 401k. Since I have been reading your blog I started paying closer attention to the fees and expenses and realize I am paying out quite a bit. How easy is it to transfer the Roths into index funds? I realize I will have to keep them in a Roth IRA but will I incur a penalty by moving this money into a different account? Is it a good time to buy into an index fund with the market the way it is?

  37. maryann says:

    Will you please share your proportions/ideas on the one skillet meals again? I find all your thoughts and ideas so helpful. Thanks!

  38. D Martin says:

    Just (another) response to make-up.

    I’m a woman who prefers to go without. In some cases it has worked well– when working at a motorcycle shop, there was one other woman who worked there. She was notorious for running off any other girls who worked there. I didn’t wear makeup and (probably more importantly) didn’t flirt with the other employees. The guys stayed away, so she liked me and I stayed.

    On the other end of the spectrum, I know that my sister and all her group of friends look down on me because of it. My friends see me for who I am, but I can’t help my relations.

    In college, the woman who sat next to me in Nutrition class had a horrible day once: her business professor chewed her out for not wearing makeup and told her never to come to class without it again. So I suspect that many of the students who went through his class view makeup as an absolute necessity for a profession in the business workplace. Going without would definitely have bad consequences under those circumstances.

    I’m thankful I have been free to choose otherwise, but I know that not all women have that choice.

  39. Golfing Girl says:

    Makeup: It’s totally dependent on the field you work in, but it’s basically an extension of what you wear. Just as you dress appropriately for work (some wear business suits, others uniforms, etc.) makeup should be conisdered part of the “dress code.” I work at a financial institution and the norm is to wear a business suit and makeup. However, some women do not wear any (that I can tell). One co-worker of mine actually was asked by her female boss to start wearing some! It doesn’t have to be expensive at all, but it is time consuming. I must admit if I were hiring, and a woman came in for an interview without any makeup, I would wonder how much she really was trying to impress me. Just as I would wonder about a man who came into an interview without shaving.

  40. ALN says:

    Like you, I love to write. I have a Ph.D. in natural health and would love to start a blog to deal with non-traditional medicine. However, how do you actually make money blogging? I am at a point in my life where I wish to meet my own dreams. Thank you for your guidance and definitely – don’t give up your blog…

  41. Catherine says:

    I’m also an ELCA Lutheran, and while I agree that financial matters aren’t overtly “pushed,” I think there is a strong undercurrent there. On the doctrinal side it has more to do with tithing and fair trade policies and such. But it’s there on the personal side, too. My husband, raised Catholic and now converted, commented just the other day that he thinks Lutherans are much better at managing money than Catholics. I don’t know if that idea holds water (I think he arrived at it mainly from comparing my family to his family), but I do think that Lutherans have a strong tendency to conservatism and that even the politically leftist among us are frequently financially conservative. And then there’s Thrivent Financial for Lutherans. Which is actually my question: What do you think of Thrivent?

  42. Golfing Girl says:

    Catherine,
    As ELCA Lutherans as well, we had our Roths and an annunity with Thrivant. When we took a closer look at their “10-12% rate of return” we saw that it was mostly eaten up by outrageous management fees. We yanked everything out of it and put it into Vangaurd and other low-fee providers with good track records.

  43. Kristin says:

    It’s not Aaron Jack won’t look at, it’s Kate’s baby. I think the whole point was that the boy was blond, meaning that he’s Sawyer’s son no matter what Kate told Sawyer about not being pregnant. I think Sawyer is going to die, perhaps Jack is even somehow responsible, and that’s why he doesn’t want to see Sawyer’s son.

  44. Andrew says:

    Trent,

    What do you think about couples cohabitating before marriage? Morally and Financially? Do you think it is a good idea?

    Thanks,
    Andy

  45. breena says:

    I have a few questions about cooking…
    1) When you make your casseroles and freeze them, do you have to defrost before trying to microwave it? Additionally, can you heat it back up in the oven?

    2) Also, is it possible to make bread (or pizza) dough in advance and then refrigerate or freeze to bake later? In the case of pizza, can I prep the whole thing, freeze it, then bake later?

    3) Lastly, when’s your cooking blog going to be ready for us?! I’m excited to see what it’ll be like (and what it’ll be named for that matter!)!

  46. Mary says:

    Hi Trent, I am with Paul and vio who want more info on this economic stimulus tax rebate thing that supposedly lots of people are going to get. I hear a lot of conflicting things about it. Do you have to file in order to qualify? What if your income isn’t taxable?

    I have several friends who don’t know what to do. A few of them are disabled and wouldn’t file anyway, one brings in about $1400 in Soc. security disability. Would he make too much?

    Another friend is disabled, getting about $750/mo, he attends college gets grants (pel, etc). Another has no income but is also a student living on grants/loans (the loans aren’t taxable of course).

    Some of the grants are only taxable if not used for school (aprox 2-4 thousand/semester; not enough to require them to file).

    Is this supposed rebate worth the hassle of filing? Of course students can get an earned income credit when they file but does the taxable income have to be over a certain $ amount? I hope this isn’t confusing but I’m just trying to find out how this would work from the perspective of people who do not work, are disabled, or have student aid as their only source of income (similar to vio’s question). Thanks a lot for your input!

  47. As the daughter of two ELCA pastors, I’m rather happy to see that you’re Lutheran, too. I don’t go to church much anymore, but it’s a nice denomination.

  48. JB says:

    Vanguard keeps sending me information about their money market accounts, specifically the prime money market account.

    I’m very unclear which is preferable for the average saver/investor, the money market fund or an online high yield savings account. I know that the money market funds are not insured by the FDIC but which has had higher interest rats historically and is a money market account a suitable place to park some cash, for say a house downpayment?

  49. J. says:

    Having been down that road, I agree with the comments that Thrivent’s investment vehicles are a bad idea and you could do much better with low-cost funds from Vanguard, etc. i hang on to my whole life policies through them b/c the commissions were paid off long ago.

    re: moving retirement funds: as long as you’re very upfront with the recipient of those funds, and are clear about making sure you’re moving money from the same type of account as its destination, it’s painless. make sure you’re moving roth to roth, non-roth to non-roth, etc.

  50. Christopher says:

    Trent, thanks so much for the great advice. I also appreciate all of the constructive feedback from your readers. You obviously have an intelligent audience. My questions:
    1) I’m planning on “popping the question” soon and would like some advice on a frugal yet appropriate amount to spend on an engagement ring. Do you recommend a % salary or a fixed dollar target?
    2) Regarding retirement savings, I’ve been converted to a believer in holding a group of diversified index funds. Unfortunately, there is only one of these available in my 401k. The others are actively managed and have high expense ratios and turnover percentages. Here are my three equity choices:
    -An S&P 500 Index with a 0.025 expense ratio (nice!)
    -A Diversified International fund with a 0.91 ratio and 51% turnover
    -A Small Cap Growth fund with a 1.46 ratio and 27% turnover
    Would I be better off putting pre-tax money into my 401k through these expensive funds or buying cheaper Vanguard Index funds with after-tax income via an IRA? Can I use the actively managed funds offered in my 401k to replace the international and small cap index funds I would buy from Vanguard?
    3) Finally, I plan on purchasing a home that will require updating. What is the best way to finance the improvements? Should I use savings, credit cards, or personal loans then repay after the new appraisal? Do banks offer an improvement loan based on an after-rehab-appraisal amount? The smartest way (but also the slowest) would be to save up cash specifically for each project and knock them out one at a time.
    Apologies for the length. Keep up the great work Trent and thanks again to everyone for the great advice in the comments section.

  51. Max says:

    Have you looked at Upromise, I have a student loan that is below 1%, but found out that I could still use Upromise to pay it down rather than contribute to a 529 (since I’m not going back to school real soon). . .any words of wisdom?

    Thanks!

  52. LC says:

    regarding makeup:

    On a regular basis, I use a high quality tinted moisturizer and coverup for any blemishes and that’s it. Sometimes a bronzing powder since I am pale. It was funny, since we are always trying to save money, I asked my husband if it was ok if I bought the $10 instead of the $3 bottle of lotion cause it worked better. When he found out that it lasts me a good 9-10 months, he just laughed and said that we can afford the extra $0.70/mo :)

    When I have a presentation or an interview I wear more, but those are also times where I dress a little nicer too. But it also gives me a little confidence boost. I only wear one small swipe of eye shadow, mascara, and lip gloss. The whole routine still takes less than 5 min.

  53. TubaMan-Z says:

    “Only extremely rarely are finances mentioned in any church service or program I’ve been involved with…”

    I find this unfortunate as there is a great deal of very practical Biblical advice on the subject of personal finances. Money and related topics are actually covered quite a lot in the Bible. I believe that this is because money is one of those topics where the vast majority of people “don’t get it.” Tyler commented about Joel Osteen – Osteen has such a skewed view (commonly referred to as the “prosperity gospel”) that it is rejected by many, many Christians. For a more accurate (IMHO) view of a Biblical perspective on personal finances, I’d recommend Howard Dayton (http://www.crown.org/). Speaking for my wife and myself, I know that as we’ve learned more, we’ve accumulated less, given away more, and are in a much better position financially and spiritually.

    And don’t let anyone misquote the Bible to you – money is NOT the root of all evil. It’s “For the love of money is a root of all kinds of evil.”

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