Reader Mailbag #15

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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.

How to translate your passions into additional income
Financial tips for minimum wage earners
My thoughts on The 4 Hour Workweek

And now for some great reader questions! (This week, I included a number of food-related questions because I seemed to get a ton of them over the last couple of weeks.)

Another bank has a slightly higher savings account rate than my current bank. Should I switch?
- Micky (among many others)

My personal feeling is that jumping from bank to bank to chase a rate difference of less than 1% is a waste of time unless you have hundreds of thousands of dollars in your account, in which case you should be investing most of that in something else. If you’re leaping from a very low interest account to a high interest account, the exact rate at the moment means very little, too. If the rates at the banks you’re considering are within 1% of each other, ignore the rates.

There are two reasons for this. First, the rates among most of those high interest banks change very regularly. They bump up. They bump down. One bank might go up a bit the same day another one goes down. There’s really no pattern to it other than a general following of the direction of the Federal Reserve’s actions – if the fed raises rates, the rates go up, and vice versa.

The features you should be looking at revolve around ease of use. Does the bank have great online services, including robust bill pay? Is customer service easily available? Is the ATM network enormous, with an ATM card that also has a Visa or Mastercard logo? These are the real questions you should be asking, not about a minor difference in rates that will probably change by the end of the month.

Instead of having another child, why don’t you adopt one of the kids who has already been brought into the world and neglected?
- Johanna

Before we had children of our own, my wife and I looked very seriously at adopting two older girls (ages five and eight), but their custody situation changed before we had the opportunity to do so, leading to what appeared to be a reunion with their real parents.

We would be hesitant now to adopt an older child because I’ve witnessed very closely what can happen in a family where there are already children and an older adopted child enters the household – everyone is pushed to a stress limit, especially the younger children already there. It’s not something that’s fair to burden my own children with, so for the moment, we’d only be interested in adopting a very young child (one less than a year old).

That being said, my wife and I would love to adopt a very young child, and there’s a very strong chance that’s what we’ll do if we add any future children to our home. Our only real concern at this point is cost and legal protection. An acquaintance of mine has adopted two children from Russia, a path my wife and I are considering, and he’s offering us a lot of advice on how to do that.

My daughter will start first grade next year, and I’m curious as to whether I should have her buy school lunch or make her lunches at home. What do you think is the most cost effective option? Is the time saved worth the money saved? School lunch is $1.50 per day.
- Lisa

The first question to ask is whether or not there’s refrigerator space at the school for her to keep her lunch cool and also microwaving options for reheating. If there’s not, I probably wouldn’t bother with it. If there is, then I’d strongly consider it, as there are many good sack lunches you can prepare that are delicious (better than the school food, because even a magician can only do so much with government surplus) and cheap.

The primary concern, though, is food quality, not time. You’ll not be able to beat $1.50 a meal if you’re considering both your own food cost and the time involved. The reason for packing your child’s lunch is to ensure that they’re eating quality, healthy food for their lunch.

I heard about this great investment opportunity called an 801k. How much money should I be investing in this great opportunity?
- Ron

If you hear about some great investment opportunity and can’t find a strong multitude of opinions on it both online and in print, don’t invest. Almost always, opportunities like these are scams.

So, look at it this way. Let’s say such opportunities are rip-offs 90% of the time. That means you’re taking a 90% risk of a significant loss if you invest. There’s no investment on Earth worth that.

Even if it turns out that this opportunity was a good one, you likely wouldn’t be much worse off just investing your money in an index fund returning 8-10% a year. So I’d just take my money to Vanguard instead of into some sketchy scheme.

I like reading cooking magazines at the grocery store in order to get ideas, and so I’ve decided to start subscribing to one. You’re a foodie – what’s the best one to subscribe to?
- Milton

I currently subscribe to bon appetit and Cook’s Illustrated (both were gifts), and I often flip through several others on the newsstand. I rarely fail to pick up at least one idea from any cooking magazine.

The cooking magazine I get the most out of is Cook’s Illustrated, but that’s not the end of the story.

The cost for Cook’s Illustrated is $26.95 for a year’s worth of issues – that’s six issues. My bon appetit subscription cost $12 for twelve issues.

If I were going to pony up $25 for cooking magazine subscriptions, I’d probably go with bon appetit and another one, say Food & Wine or something else that matches a more narrow interest. For example, I also subscribe to a home brewing magazine that I believe costs $15 a year.

Cook’s Illustrated is the best, but it’s not the best bang for the buck. Since I use such magazines as inspiration, I get more overall by subscribing to two other magazines for that price.

I just won $13,000 playing the lottery. What should I do with it?
- Andrew

First tip: stop playing the lottery. Just stop. Every time you get the urge to play, take the cash you were going to spend on tickets and put it in a jar somewhere in your house and forget about it. After a year, go look in that jar. You’re a winner!

Now, about that $13,000. The first thing I’d do with it is pay off any outstanding debts, particularly anything with an interest rate over 7%. Provided I didn’t have that, I’d invest 60% of it or so and spend the other 40% on some sort of memorable experience like a trip somewhere interesting, something I wouldn’t forget.

Speaking of not forgetting, don’t forget that you’ll be required to pay income tax on those winnings. That’s a large enough amount that the IRS will definitely be interested.

My career dream revolves around playing baseball, something which has proven impossible. I’m depressed and don’t know where to go now that I’ve realized my life long dream will never happen. Any ideas?
- Al

If baseball is your passion, stick to baseball. Match it with other skills you have. Are you a good writer? Look into becoming a sportswriter, or start a sports blog. Like to travel? Look for opportunities to become a scout. Like interacting with young players? Become a high school or college baseball coach.

If you know what you love most in your heart, try to find whatever angle you can to keep that passion alive. You can’t play, but maybe you can share that enjoyment with others in various ways. Maybe you can help the next generation of players live out their dreams.

You recently talked about your Global chef’s knife and how it was worth a $100 investment to you, but what about beginners? What sort of knives should a beginner get?
- Emily

You only need one knife to start with for your entire kitchen, and it shouldn’t cost more than $20. Just get an 8″ chef’s knife at your local department store, along with a honing steel. All together, your purchase should be about $25 or so. Then, just use that honing steel on the knife every time you go to use it.

This type of setup was all I needed for many years. I only recently upgraded to a Global after trying one and discovering how nicely it fit my hand, which is very large. If I had a smaller hand, I’m not entirely sure I would have ever upgraded – the Global just fits my hand substantially better.

I just got hired at my new job and I’m unsure how to dress on my first day. Any ideas?
- Amy

My approach would be to call and ask someone at the company. Just ask what appropriate dress is in the department you’re joining, and wear a fresh and crisp version of that the first day. Then look around, watch what the others do, and stick to the high end of what’s appropriate in your department.

There’s no reason to be embarrassed about making this kind of call. Many, many people have this exact same question when they go to a new workplace. Just call and ask.

What’s your favorite kind of barbecue sauce?
- Chet

I prefer my own homemade blend (which has some family secrets in it that I’m loath to share). But, in terms of the ones you can buy at the store and are widely available, my favorite is Stubb’s Smokey Mesquite. It’s not perfect for everything, but it’s good to great on almost everything and makes the best grilled beans I’ve ever tried.

In the end, though, I’d rather make my own. Here’s a modified recipe from my favorite one that’s good for general use: 2 cups ketchup, 1/2 cup chopped onion, 1/2 cup Coca Cola Classic, 2 cans chipotle chiles, 1/4 cup brown sugar, 2 tablespoons oil, 2 tablespoons apple cider vinegar, 1 tablespoon Worcestershire sauce, 2 minced garlic cloves, 1/2 teaspoon celery salt, and 3/4 teaspoon black pepper. Just use the oil to saute the onion and garlic in a large pan until the onion is soft, then add everything else and stir it until it’s roughly consistent, then simmer over low heat until it’s as thick as you want. This recipe is pretty sweet – if you’d like it less sweet, swap out the Coca Cola for water. (This is fairly close to my favorite, but I can’t reveal that one in its entirety).

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

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69 thoughts on “Reader Mailbag #15

  1. I’m so happy to see that Stubb’s BBQ sauce is your favorite — it’s from Austin, Texas, where I live. If you ever come down here, you have to go to the Stubbs restaurant! Texans take great pride in their BBQ — just pick up a copy of last month’s Texas Monthly :)

  2. The full context of my question about kids is in the comments section of Reader Mailbag #10. Notice, Trent, that the question wasn’t actually directed toward you. It was directed toward another reader who said “I feel it is my responsibility to bring at least one kid into this world to negate all the yahoots who bring kids into the world and neglect them.”

  3. I don’t know of many elementary schools that provide microwaves and refrigeration for first graders. We weren’t even offered a microwave until I was in high school.

    Packed lunch is the way to go, until a kid wants to buy lunch, which will happen at some point. It’s very easy to pack a lunch that requires no refrigeration or heating. Parenting magazines are always publishing recipes for lunches.

    I always liked packed lunches because they made me feel loved, especially when my mother would include a note. Not to mention, with a packed lunch, you get to start eating as soon as you sit down. Just make sure your child has a few bucks in case you forget to throw the lunch bag into their backpack :)

  4. I’ve always wondered why the secret to a great recipe is hard for some to share with others. It takes nothing away from their own end product. I can see if it was perhaps going to be commercially distributed–that makes sense. But if not, why not?

    It just seems a harsh way to keep to one’s self a great thing that many others would enjoy making for their own family and friends. I’d love to know your secret recipe and give it a whirl. And no, I have no intentions of marketing any of it—as for other reading….

    Trent?

  5. Good answers.
    $1.50 a lunch, thats hard to beat, even if you are on a budget I don’t think you can save much more than that. My parents made me bring my lunch when I was a kid and I didn’t like it. I was usually the only one and I felt different.

    About the bank switching thing. Whenever trying to make a financial decision, I always work out the math. 1% just isn’t much of a difference. Sometimes simplicity is worth a few bucks and the avoided confusion.

  6. oops…..meant to say “as for OTHERS reading”, meaning while I wouldn’t attempt to make money off your recipe, I can’t speak for others.

  7. All very useful information and so easy to understand the way you explain everything!

    I’d like to add that most employers are impressed if you call up the H.R. person/dept. and ask what you should wear on your first day. It shows initiative and concern for your putting your best foot forward. Not a bad way to start a new job! But, then be sure to wear whatever he/she recommends.

    Thanks, Trent for another excellent post!

  8. On lunch: Being able to eat a school lunch is a useful life skill. Being able to eat food you don’t like, or aren’t used to is a good thing.

    On dress: It never hurts (for a guy) to bring a suit and tie, you can take the coat off, and the tie off. A nice pair of wool pants and a modest dress shirt rarely hurts. You can always wear khakis and a polo (or whatever the standard dress may be) on your second day. Asking is best.

  9. Lisa – I’d be more concerned about the health of the school lunches than the price. You probably can’t beat their prices but evertime I look in the paper they are serving fried chicken nuggets, pizza, fried fish and crap like that. I’d aim for a packed lunch that was healthy and gave my kid plenty of protein so she wouldn’t crash in her after lunch classes. Cost wouldn’t concern me so much. PB on whole wheat, carrots, fresh fruit, a big cookie (hey, we can’t all be healthy).

  10. Regarding the qustion about appropriate attire when starting a job, if you are afraid to ask and it is an office job alway err on the side of conservative. Day one is an extension of your intrerview, you have the job but you will likely meet many of the senior staff during your first week and it is your only opportunity to make a first impression.

    Even if the office is causal people tend to be impressed by formal dress.

  11. Are there really elementary schools that provide microwaves for kids to use to heat up leftovers? I’d stick to sandwiches, fruit, cut up veggies, cheese and crackers, etc. If you’re worried about keeping stuff cold, throw in an ice pack. Just be sure to pay attention to any allergy restrictions at your child’s school – I don’t know how kids these days are managing without peanut butter, but a lot of schools ban in.

  12. Wow, what kind of luxury school provides fridges or microwaves for children’s lunches? Anyway, it probably is cheaper and healthier to make the student’s lunch. Incidentally, by the time I got to high school, it was definitely the right move for me to make my own lunch. I would often use the lunch period to study in the library, and carrying my own lunch let me eat small parts of it in class whenever I was hungry. The lunchroom was a zoo, and people who had to wait in line to buy food often only had five minutes to eat it.

  13. Johanna: it’s a relevant question for me to answer as well, so I thought I’d answer it.

    Noah’Dib: if it were just my idea, I’d gladly share it. But when someone comes to me and says, “Here’s my barbecue recipe secret, please don’t tell anyone,” it wouldn’t be cool to post it on a blog with 100,000 readers.

  14. “Wow, what kind of luxury school provides fridges or microwaves for children’s lunches?”

    Mine did, back in the 1980s, and it was a very rural and small school.

  15. I wholeheartedly agree with KC on the healthfulness (namely the lack thereof) of lunches at school. One would be appalled at the fare being peddled to our kiddos. We’ve lived in two different states while our oldest has attended grades K-4 and I have only permitted him buy the school lunch on a handful of occasions due to the dismal food choices offered–and not once in the past two years. A parent can better keep track of their child’s nutritional needs via the brownbag, and teach responsibility skills as well. First purchase a sturdy, insulated lunchbag that can hold a small icepack inside for “refrigeration”, and wipe down the inside of the bag as needed. Second, you AND your child make the lunch together. The BEST part for our family now is that since my son has helped me make his lunches since he was small, he now makes his own lunches each night after supper for the next day. He just pops it in the fridge and grabs it the next morning when he loads and stages his backpack by the backdoor.

  16. I’ve never heard of a school providing access to microwaves and refrigerators to students, but it’s a decent idea that would make lunches easier.

    In my elementary schools (I attended 3 different ones) every student brought a lunch or went home to eat since there was simply no other option. I was usually able to go home but the years that I wasn’t I always had a lunchbox or bag with a cooler pack. Some students would bring hot soups or stews in thermoses but I don’t remember ever going that route.

  17. Trent,
    I love hearing that you are considering adoption as a means to expand your family. We are currently in process of adopting from Kazakhstan and I would love to offer support with your adoption process, agency selection, country selection, etc. E-mail me if you’d like an invitation to our private blog.

  18. 2 cans of Chipotle peppers? I’d guess there are 15-20 peppers per can… Perhaps you mean just 2 peppers.

  19. My son takes lunch to school every day (he is in kindergarden). I did make him go through the lunch line the first week and so that he would know how it worked and I keep a small balance on his account in case he ever needs to buy lunch/snack for some reason.

    No school that I am aware of in our rather large and prosperous district has fridges/microwaves for the kids. My son actually likes oatmeal for lunch so I make it in a food jar (a thermos that is shorter and wider than your average thermos) in the morning and it stays warm until lunch. I usually pack a yogurt and string cheese also and put an ice pack in his lunch box to keep it cool. It has worked just fine all year.

    And I assure you that you can make a significantly healthier lunch for your kid for the same money or less than the school lunch. It takes me 5 minutes in the morning to make his lunch so we are not talking about a lot of additional time either.

  20. I think the value of bringing school lunch is in learning not to eat out every day. That said, I like Leslie’s approach of learning how it works, and I remember how much I looked forward to French Bread Pizza Fridays at my elementary school lo these many years ago, which I was allowed each week. The answer is clearly “once in a while,” like so many other reasonable choices we make as adults. :-)

  21. With regard to the lottery question, how much did you spend to “win” that $13,000?

    I don’t gamble but I have friends that go to Vegas spending $2000 on the trip/hotel/food/gambling money expenses and “win” $1000 and get excited. I can’t be the only one to see the flaw in this logic.

    But, if you just stopped by and won the money on a whim, congratulations!

  22. oops. I guess you can’t just stop by and win the lotto. But I think the point remains the same. If you’ve been playing for years, what’s the total expenditure to win?

  23. An “801k plan” is simply a Dividend Reinvestment Plan (DRIP) or Direct Stock Purchase Plan (DSPP). 801k is simply a “marketing” term invented by someone trying to sell investment newsletters.

    Google 801k and you’ll find some basic info.

  24. Trent,

    Do you use your homemade laundry detergent to wash your diapers? Just curious. I am pregnant and planning on making my own cloth diapers. I know they make special laundry detergents for baby clothes that are supposed to be extra gentle and free of dyes, perfumes, etc. Is this necessary, or will a wash in the homemade detergent, followed by a water-only wash be safe for a baby’s delicate skin?

    Thanks,
    Brandi

  25. School lunch may be cost effective, but nowhere near healthy for a child. At the school I work at, the fruit portion of the meal is a slushy that contains some fruit juice ! Of course, many students don’t even bother with the full meal, because $1 can get you a handful of cookies, and then you can pocket the rest.

    I know some schools can have nutritious meals, but look into it. Nutrition isn’t something to be cost-effective about.

  26. Why not seek the highest interest rate for cash accounts? Several on-line banks consistantly pay higher interest rates than the others. The difference between 3% and 3.5% interest rate isn’t 0.5%, it’s nearly 20%! That’s an additional $500 per year into a $100K emergency fund and requires zero time once the account is established.

  27. I agree with KJ’s comment: packing a lunch every day is a good example in healthy choices and frugality, never mind some responsibility: remembering to both make and bring the lunch is good practice for everyone.

    When I was in high school, my parents gave me lunch money, until I started frittering my own money on stupid items. The straw that broke the camel’s back was when I bought some mouth spray. My mom said if I could afford that, I could afford to pay for my own lunch, or pack from home. I started bringing my own lunch! (no fridge or microwave.. I’d freeze a yogurt and use that as the ice block)

  28. On the issue of school lunches, I am definitely in favor of packing your own. My four kids all take lunches to school, happily I might add because they know they will be getting a moderatly healthy lunch, with decent portion sizes of things that they like. They are at 3 different schools and all say that the school lunches are either “gross”, overprices or even when good (at the high school) involve a very long lunch line with little time to eat. They much prefer being able to just sit down and start eating in the limited time alloted (usually 15 to 20 minutes.) None of their schools has refrigerators or access to microwaves. The fridges would be a huge problem to keep kids from other kids lunches (cause unfortunately it always seems that there are a few trouble makers) and the microwaves are banned due to potential lawsuits. (Food heated too hot burning someone). I just use ice packs and vary the food with the weather.

  29. @Trent: Ah, the key word there is “small.” In the schools I went to, there would not be enough fridge space for every child to put their lunch, and there would not be enough time for every child to microwave their food.

  30. I often recommend Fine Cooking magazine to people who want cooking ideas. It includes fancier recipes, some for everyday and also ‘formulas’ that can be applied to a variety of different ingredients. There are product reviews too, like Cook’s Illustrated, but I feel like it doesn’t take as long to read (important to those of us with a big pile by the bed).

  31. Trent, I find it interesting that you would willingly tell everyone your thoughts on one of three things you are not supposed to talk about with strangers (money, government and religion), yet balk at telling people you favorite bbq recipe.

    Don’t get me wrong, its your right to do whatever you want, I just find it interesting what you are willing to disclose in some aspects but not others.

  32. @KC
    I would find it hard to believe that a school is serving anything fried. I am a school teacher and our cafeteria is required by law to bake all their items, there isn’t even a fryer in the place. Even though they serve pizza, it is baked and it usually has a whole wheat crust and low fat cheese. So ask the school if you are nervous about it – but they are required by law to be health conscience.

  33. Do you really have to pay income tax on lottery winnings? (Not in the UK.)

    My kids, as well as my husband, take a packed lunch too. It’s healthier and cheaper ($3.60 each/day for a tiny portion). But it can be time consuming since I like to vary what they eat – sandwiches on different breads or salad (pasta/cous-cous or rice) once or twice a week. The fruit, veg, treat and drink is varied too. I started doing this in March and save $17.20/day now between the three of them because of it.Yay!

  34. Trent, I’d love to know if you’ve taken a speed-reading course in the past. How you get through so many books so quickly blows my mind and makes me jealous.

  35. I found a subscription to one of the Cook’s Illustrated websites (annoyingly, they have three separate sites, Cook’s, Cooks’ Country and America’s Test Kitchen) was worth the cost ($24) as it gave me access to years worth of recipes and articles, in a searchable format. Plus, my recipe organizer, MacGourmet, can import from their website to automate shopping list building!

  36. Trent you are correct…801k is not a real investment strategy….just an advertising hook to get you to sign up for an over-priced investment advice membership. I thoroughly enjoy http://www.stockgumshoe.com which is much cheaper (free or your donation) and very interesting, particularly if you get a lot of those teaser emails for expensive investing newsletters.

  37. Just chiming in like others before me that school lunches don’t have to be an either/or situation. We allow our kids one bought school lunch/week and they bring the other 4 days. I can think of only one time my son picked a day other than pizza Wednesday and my daughter will get fish sandwich once in a while when its offered- otherwise its pizza Wednesday for her too. And I am thankful our school lunches are only $1.

  38. Trent what about becoming a foster parent instead of adopting?

    A question, how much CC debt did you have and how long did it take you you to pay it all off (excluding school loans and mortgage)

    thanks

  39. School lunches are usually garbage from a nutritional standpoint.

    Think hot dogs, cheap mac & cheese (powdered cheese), or low-grade pizza with ingredients that belong in a chemistry set, not lunch.

    You can easily beat $1.50/lunch with sandwiches, cut veggies, fruit, yogurt.

    Use an insulated lunchbox and an ice pack to keep everything cold enough.

    We used let our kids buy milk, but at $0.50 for a half-pint at school vs. $2.80/gallon at Costco, they now take their milk.

  40. Chef’s knife idea from Mark Bittman: look for high carbon steel blades with white plastic handles, either at a restaurant supply store or a warehouse club (Costco, Sam’s, etc.).

    Add a honing steel (the less fancy the better) and you’re good to go. As Trent says, use the steel every time you pull out the knife — this doesn’t sharpen the blade, but it does keep it straight, which is more than half the battle. Make sure you store the knife properly & never cut against anything harder than plastic or wood.

  41. To Milton:

    The best food magazine I’ve ever found is Cuisine at Home magazine – it’s all recipes and cooking/kitchen techniques. And, it comes 3-hole punched! I don’t see it in stores much but it’s on Amazon if you want to check it out.

    Trent, I love your choices though, especially Bon Appetit. Good job this week!

  42. Is something up with your RSS feed? The last few days it hasn’t been updating properly. It’s still telling me that the book review is the latest entry.

    Or maybe it’s my a problem on my end, it’s just most obvious here because you update more frequently…

  43. I also had never heard the term 801k before. When purchased directly from the company (not an “801k” broker), though, DRIPs are completely awesome.

  44. [Noah’Dib: if it were just my idea, I’d gladly share it. But when someone comes to me and says, “Here’s my barbecue recipe secret, please don’t tell anyone,” it wouldn’t be cool to post it on a blog with 100,000 readers.]

    Understood. Thanks for clearing that up, Trent. Great site, love the topics…

  45. Trent – I love the blog! I have a similar homemade BBQ sauce recipe, except instead of Coca-Cola I use beer. I use a variety of different types and styles depending on what I will use the sauce for. For example, if I want a really creamy “heavy” full bodied sauce, i will use a stout (Guinness is the easiest to find, but its not necessarily the best). Using a good beer also adds nice hints of molasses. I also will use beer to marinate meats in before I grill or smoke them…adds a nice flavor (if you like the taste of beer)..and of course the alcohol is cooked off.
    And being a beer drinker, its always fun to experiment and drink the leftovers :-)

  46. Inform yourself of the serious issues that can arise when adopting troubled children. It may be a great effort, but it can lead to years of heartache.

    See my adoption blog at http://bradadoption.blogspot.com for so thoughts from the heart from someone who adopted a sibling group (my only children) years ago. I am working on really updating it now.

    Brad

  47. For cooking magazines, I highly recommend Cuisine at Home. I used to get Cooks Illustrated, but I find the recipes and the dishes better at Cuisine. Cooks is great for understanding the science behind the food, and when I no longer have little ones underfoot maybe it will appeal to me more. But, Cuisine at Home has some amazing recipes that I use all the time.

  48. Its interesting reading the amercian perspective on packing lunch for school kids. Here in India, almost all mothers pack lunch for their school going kids and I, just like most other Indian mothers wake up early in the morning to pack a freshly prepared meal. So there’s no concern of good going bad as they are freshly prepared. Ofcourse, I am referring to the middle class Indians who send their kids to private schools. The poor send their kids to government run schools where the government provides them with lunch through a midday meal scheme.

  49. <>, –> I totally agree. When I visited home few months ago, my brother told me a similar situation where there was a local bank and offeered such different plans. A lot of people moved their savings from nationalized banks to this local bank anticipating great returns. Apparently few short term investors (?) have gained encashed some money as well. But majority of the account holders lost their money when one fine morning, the organization was no longer there, and government officials had sealed (seized) the building. It has been several years, the building is still sealed. I know that’s scary.
    -Ram

  50. hmmm… 1st line of my comment was removed when i posted it – I was referring to the section reference 801k “Almost always, opportunities like these are scams” …
    -Ram

  51. I am 45 years old and will be able to retire in 8 years, the way it’s set up now, pending a new contract, I will get my health insurance paid for. I will have put in 35+ years and be 54 years old. I am maxing out my defered comp,$15,500 per year, but only have $170,000 in this account that I can’t touch until I’m 59 1/2, I started late and the economy hasn’t been anything to sing about. I am paying $1000 extra on my mortgage and hope to have it paid off a few months before retirement, it’s about $170,000 (interesting my mortgage and defered comp are about the same), it’s present value it $229,900 so if necessary I could get a second mortgage. Many of my friends say I should be putting the extra $1000 I put on the mortgage in savings, I have about a $13,000 safety net. I feel that saving the extra interest over the eight years is worth the sacrifaces I am making now, they also comment that maxing my defered comp is also a waste of my “youth”, not taking the trips they are, buying the things they feel are necessary to life. On the other hand I am living within the means I feel I will be living in 8 years, smaller income, but no house payment, I do plan on working after “retirement” finding a job I truly love as the one I have “sucks” to say the least but to leave now would be foolish after all the time I’ve put in. Who’s right my friends or myself, I don’t travel, I’m not a “thing” kind of person and I do put in a lot and I do mean a lot of overtime to achive this goal of being completey debt free in 8 years. Should I live for the now, or am I being anal retentive about my money and future. The house is my only debt. Opinions? My twice monthly take home is $1202 after defered comp has been taken out so I am literally putting my entire salary on my home including escroe, my living expenses come from overtime on top of the $1202 and a very frugal life style. I see nothing wrong with this, but they say I will regret it in the future. I have no one to support buy myself. Thoughts?

  52. Kudos for considering adoption. I’ve said it more than once here in your comments – it’s the way to go.

    It’s not as pricey as you might think once you consider all of the grants, tax credits, etc., and it is well worth it. There are definitely a variety of ways to go about the process, some of which ensure a baby (vs. a toddler/older child).

    Our twins are Ethiopian and we’re at the very beginning stages of a domestic infant adoption – feel free to shoot any questions you feel comfortable asking a complete stranger.

  53. @Mary: If you’re happy with your life now, keep doing as you’re doing. It has nothing to do with numbers, as long as you live below your means.

  54. Dear Trent,
    I would strongly recommend that you or anyone do a LOT of research and introspection before embarking upon a transnational adoption. I wish I were more well-versed on this topic, but I have seen a lot of debate, and I work in an international context, so I do have a lot of reservations regarding the idea of taking children out of their country and culture (EVEN THOUGH we may think that we can provide them with a better quality of life). I am certainly not promoting lack of care for kids that need resources and attention. But there are myriad issues that many people do not consider when looking into this option. Although it can be difficult to adopt in the US, I don’t personally promote importing children as an alternative to reproducing.

  55. You lost me when you were blatantly unable to divulge your barbeque sauce “secret”. There was no need to even mention that you were leaving anything out. For me that changed the tone of your blog enough to question your sincerity on other topics.

  56. re microwaves — the only time I heard of a microwave in a classroom was one that the teacher supplied, and even then, the kids were only allowed one minute of heating (20 minute lunch period, 20 kids — you can see the problem), so it had to be cooked at home and only warmed up at school. The teacher said she had had students sent to school with a bag of microwave popcorn (unpopped) for their lunch and nothing else.

    re knives — I like the idea of buying whatever you want in the best quality, but a lot of the time, I don’t know what the best quality is, and I don’t seem to be very good at researching that. Similarly, we want to start replacing our third and fourth hand falling apart furniture, but I am paralyzed by the thought of buying something and then deciding later that I don’t like the style etc.

    re cloth diapers/homemade laundry detergent — homeade is probably better than commercial for baby. The most important thing is the good rinse at the end to get the detergent out of the diapers.

  57. Trent if you never have consider trying a rada knife. Its the best I ever had and the only one I buy now. The french chef’s knife is awesome, and I just bought the paring knife and use it constantly. And they are quite inexpensive by comparison!

  58. I know I point this out a lot but for anyone who doesn’t know, usually, supermarket ketchup and bbq sauce contain a LOT of high fructose corn syrup so check the label before you buy if you’re trying to manage your weight. High fructose corn syrup is one of the worst things you can eat if you’re weight conscious. It’s in a lot of brands of pickles too, although I have found a couple brands that don’t.

  59. When my son was in grade and middle school, they had a monthly lunch calendar in the newsletter sent home once a month. I would make him circle the days he wanted to have lunch at school and then I would make his lunch for him the other days. He had a wide mouth thermos for soups or chef boy ardee or Franco. Just cook it in a seperate container for three minutes in the micro then put in the thermos. Was still nice and hot when his lunch hour came.

  60. burningcookieca — good grief, this is supposed to be a blog about finances. If you’re going to be offended about not getting a recipe, refuse to read his future cooking blog.

  61. Packing is cheaper, more nutritous and does not require refrigeration or microwave access.

    Ask the thousands of “old” people who went to schools that didn’t provide lunches at all & you’ll find food poisoning never comes up! Plus there is a better chance to learn bargaining skills with packed lunches :)

    I packed lunch for my daughter for 6 years of elementary and often stopped to calculate the cost – about 75 cents was the average. And she was thrilled to take lunch – you should see what some of these cafeterias pass as food – oh the smell – shudder!

    Save money, save the environment – use re-usable containers in your kid’s lunch :)

  62. JFrance (#58)

    Thank you for the website. I will study it and compair it to others I have seen, there have been quite a few differences in the calculations even with the same numbers.

    !wanda (#56)

    Thank you for your support, sometimes people tell you things so often you wonder if you are making the right decisions. I’m an wanting a completly debt free retirement, but just because I leave this job doesn’t mean I won’t get another, just something I enjoy and many people don’t understand if I am not happy why I just don’t quit now, “You could be hit by a bus tomorrow”. What a thought!!!! And if I am hit by a bus, what difference will all of their comments make anyway. But to walk away with only 8 years left seems stupid, guess I’ll just have to wait for that bus. The others just think I’ll die from overtime. LOL If I’m at work I’m not spending money, the lights aren’t on, the TVs not on, the temp in the house would be unbearable if I were home, either to hot or to cold. Many joke it’s just a warehouse for my stuff, well it’s a darn nice warehouse. I’m willing to shop at goodwill for my clothes, eat whats onsale, bring my meals to the office, and drive my car till it drops, my last one was 16 years old and full of rust, but got me from point A to B.

    Trent,
    So many of your thoughts/suggestions and comments from others reading your blog really made be buckle down and get to work getting out of debt. So many people still believe debt is a way of life, very sad. Sorry I babbled on, but yes I just got off work and have to be in at 6am, but only for 12 hours.

    Again thank you for letting me know I’m not crazy.

  63. Reader Mailbag Question!

    Myhusband and I currently rent half of a house that is frankly, too small for us to have a family. In addition to that, our landlord keeps getting these letters from a bankruptcy lawyer, so it makes us a bit nervous that we could lose our home with very little notice to find someplace new.

    We’re hoping to start a family soon, and we’re sick and tired of moving. We’ve been keeping our eyes open for another place to rent, but there’s currently nothing available.

    We were recently offered a rent-to-own situation by one of my husband’s current customers. Unfortunately, that house is not going to work out because it’s really not suitable for kids.

    Just for kicks, I decided to see what houses are going for around here in this troubled market. A year ago, $300,000 bought you a trailer, but now, I’ve found 2 nice little houses in our town for less than that – one for $275k and one for $229k. They’ve both been recently updated and really won’t require much work or money on our part to make either of them livable.

    The problem is that we weren’t quite planning on buying a house just yet. See, we’re about $30,000 in debt. We’re aggressively paying it down – 18 months ago that number was $52,000, but we’re still far from the finish line.

    Our original plan was to wait on buying a home until our debt was gone, but give our current situation, I wonder if it would be better to buy a house right now.

    We currently pay only $950/month in rent(mega deal), allowing us lots of extra money each month to pay towards our debt. If we end up renting another place, we’ll pay at least $1500 – $1800/month, taking a huge chunk out of our extra debt payment money. Plus, that money will be gone forever, since we’ll be paying someone else’s mortgage.

    Using a few of the online mortgage calculators, and figuring in things like taxes, insurance, and home repairs, we could quite easily afford to finance that $275k house and still have a few hundred dollars left every month to add to our minimum debt payments.
    (I lean more towards the $275k house because the taxes are only $5000, as opposed to the $229k house with taxes of $10,000)

    Our problem is that we don’t really have much for a down payment. We weren’t really thinking about buying a house right away so all extra money was going towards the debt payments. We have about $2500 in an emergency fund.

    I’ve heard that getting a mortgage with no down payment is not a good idea, but what about in a situation like this? The market is so low right now that we could actually afford to finance the entire $275k, and if the maket goes back up to what it was a year ago, the house will be worth almost twice that.

    What’s your opinion on this? Should we rent someplace else and lose all that money just to have to move again when houses are much more expensive?

    Or should we buy a house right now while they’re cheap, without putting anything down, and still having that $30,000 over our heads? If we get a house that chea, it’ll keep our mortgage payment lower for the next 30 years.

  64. @Bekki–

    Please don’t buy a house right now. Nobody knows for sure what the market will do in a year’s time. It could be even better for buying a house, or it could be worse.

    If you buy a house without a down payment and the market DOES get worse, you could quickly be owing more on your house than it’s worth. If you had a loss of income or were met with a costly medical expense (say, a complicated pregnancy), you could really be in trouble.

    With your debt situation and low down payment, you probably won’t qualify for a decent loan. Your payments could be a lot higher than you thought, and you won’t have much equity.

    I know it really stinks to move a lot. I’ve moved about five times in the last five years–all apartments.

    Once you get rid of your $30k in debt, you’ll free up a LOT of your income. You’ll be able to set up a comfortable emergency fund and saving for a decent-sized down payment.

    My husband and I are living in an apartment (with much to be desired). We’re having our first baby at the end of this year. Our only debt is a car loan, which requires payment of $277/month. We have almost $8k in emergency savings, with the goal of having a six-month emergency fund soon.

    I’m not thrilled that we’ll be bringing home our baby in a car that’s not paid for, but having no credit card or other loan debt will be the best thing we can do for our baby.

    Stay the course! Keep paying off your debt! And keep looking for a better place to rent. It isn’t a forever situation, but if you buy a house now and get in trouble with it, it could take you many years to dig yourself out.

  65. Dear Trent,

    Thank you for writting such an interesting column.
    I enjoy them very much. Each one teaches me something. I often forward them to others when they are in similiar situations.
    Keep up the good work.

    Ellie

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