Reader Mailbag #23

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 make microgoals work
A guide to moving from a nine-to-five job to self-employment
The time I wrote about Seinfeld

And now for some great reader questions!

I would like to see you address strategies for those of us that are not college educated. My husband is a truck driver and I am a school secretary. We make a decent wage but it’s never enough especially with the economy. Our kids are ready for college but how are we going to pay for that? Retirement? It’s very scary. I feel like we are in the gap. Not too poor, but none too rich.
– Dana

The first step is you need to stop blaming your lack of financial success on the lack of a college education. You already have all of the tools you need to become a success in life.

First thing: sit down and figure out where every dime of your money is going. How much of it is unnecessary? How much of it is just spur-of-the-moment desires? Get rid of as much of that as you can, or replace it with cheaper alternatives.

Second, figure out what you really want from life. Your only major goals in life seems to be vague ideas of paying for college and retirement. Figure out exactly what you want to do. Do you want to give $10K to each of your kids for college? Do you want to have $500K in retirement in twenty years? Define exactly what it is you want to do and when, then divide it down into one tiny goal a week. If you want to save $10K in two years, that means you need to start socking back $96 a week in a savings account. Focus entirely on this week – how can you save $96? What little things can you cut? If you can cut more than that, great! Apply the difference towards an emergency fund for things like car breakdowns, and things that will make it easier to save the money, like a programmable thermostat so you don’t have to keep the A/C running while you’re at work.

That’ll get you going.

How do you go about for writing fiction? Do you take the same “outlining” approach you use for your post? Or do you write fiction on a more “linear” way?
– Jamie

I sure do. I actually outline it twice – I have a character outline for each character (how do they change?) and a plot outline (what happens?), then I combine them into a much more detailed outline, then I start writing onto that.

I usually try to make each major character similar in some way to someone I care about, whether it’s myself, my wife, one of my siblings, my parents, or a close friend or family member. This makes it easier for me to imagine them dealing with the altered version of their life I’ve place them in.

I resigned from my job on Friday and today was my last day at the office. They would rather just pay me my two weeks instead of having me come in.

How would you use the 2 extra weeks’ time? My current plan is to regroup and possibly look at some part-time volunteering while I’m hunting for a job.
– Laura

I’d throw everything I had at the job hunt. Call all the people in your social and professional network and ask what they know about for jobs. Get some strong possibilities lined up before doing anything else.

If I managed to get something lined up with some time to spare, I’d probably spend the rest of that time doing whatever felt most personally fulfilling to me, either some volunteer work or some personally challenging reading.

That’s interesting about the Simple Green. Can that combo be successfully used on regular laundry? I’m just wondering if there’s a point to mixing up a batch of liquid detergent if I can just dump washing soda and Simple Green into my laundry.
– Kristen

This message refers to my wife’s adopted solution for cleaning our cloth diapers – she uses three teaspoons of washing soda and four or five squirts of Simple Green from a spray bottle to clean a small load of cloth diapers.

I think this would work fine for regular clothes that weren’t too dirty, though I’d probably use a bit more of each and experiment – four or five teaspoons of washing soda and perhaps six squirts of Simple Green.

The only problem here is that in order to make this recipe really cost effective, you have to buy Simple Green in huge quantities at a warehouse store. My wife bought an enormous container of the stuff there – a gallon or so – for about $8. This is far cheaper than the cost at your average store – without the ability to buy it that cheap, this recipe wouldn’t be very cost-effective.

Do you ever feel like you’re not doing enough, but then when you think about the tiny frugal step you just took does it feel inadequate? I guess my question is, does it feel like no matter how much you save it will never be enough or you will never actually reach those far off goals?
– Dody

This is the exact reason why I use long term goals to set short term goals. I spend a lot of time looking at my long term goals and trying to figure out how they can be broken down into pieces the length of a week or so. That way, if I can swallow that small bite, I not only get the nice feeling of accomplishing a little goal, I know it’s a step towards my bigger goal.

Here’s an example. Let’s say I have $42K in student loans and I want to get them paid off in three years. That’s a pretty big goal. But if you break it down into smaller bites, it’s not so enormous. Getting rid of that debt requires an extra payment of $269 a week. For a young professional without any attachments, this is something that’s potentially doable. Each week when you make that goal, it feels like you’ve accomplished something worthwhile – but it’s also a good feeling to know that it’s another step towards the huge goal. Keep doing that smaller step over and over again and you’ll have that student loan gone before you know it.

You have said that you and your wife have wills in place already (I think). I am not trying to be grim here, but I was wondering what you have in your will about The Simple Dollar in the event of your untimely death. Would it carry on? Would your wife hire some people to take it over?
– Andy

I have a set of instructions for my wife that, in the event of my death, would turn The Simple Dollar into a giant pile of static web pages. This would allow the site to persist with no maintenance. Google searchers could still find the information on the site and there would still be ad income from it that would help support all of them. I also have a “final post” saved as a draft which she could post to the site explaining this.

I really don’t have much interest in having another writer take over The Simple Dollar. If that ever happens, you can rest assured that I got an offer so lucrative that I wouldn’t have to work ever again. I’ve already turned down offers that would pay off every debt I have and leave me with several years’ worth of living expenses.

What do you do if you lead a horse to water and he won’t drink? He will end up losing this house but has his head in the sand.
– M

Some people have to experience failure themselves in order to learn – and some don’t even learn then. You can’t make someone understand something – they have to come to that understanding themselves.

My advice? Step back and let the failure happen. Don’t help with the pain of the blow, either – save that help for later on when he actually knows how to utilize it for success.

Ok, why do new comments get inserted in the mix of the thread instead of at the end? I’m guessing it has something to do with moderation and getting approved, but it throws me completely off when I’m trying to follow an interesting comment discussion, and I’m sure I miss a lot of comments that way since re-reading the entire thing every time I check back is frustrating.
– Chiara

Here’s the truth: The Simple Dollar gets about 2,500 comments a day. About 50% of those are spam about how to buy various prescription medications or download pornographic materials. Obviously, I don’t want such comments on the site, so I have to moderate the comments.

Now, if I manually moderated all 2,500 comments each day, I’d never get anything else done. So I’ve had to adopt a system to help me out with this project. On the back end of The Simple Dollar is a program that makes a quick determination about each comment. If it’s quite certain it’s spam, it tosses that comment in the trash immediately. If it’s quite certain it’s good, it goes ahead and posts the comment. (The biggest reason why a comment gets marked as good is that I’ve already marked several comments by that person as “good.” The system views that person as trusted and goes ahead and approves their stuff.) The rest go into the moderation queue, where I take a look.

So, let’s say a new article goes up on The Simple Dollar. Comment A, sent at 12:01, is automatically approved. Comment B, sent at 12:02 AM, goes into moderation. Comment C, sent at 12:03 AM, is automatically approved. When they show up on the site, they’re simply listed in the order they were posted. So, Comment A is listed first as #1 and Comment C is listed next as #2 for the time being. When I go through and approve comments, Comment B gets approved. Then, the next time the page is displayed, all of the comments are ordered by the time they were posted – Comment A is #1, Comment B is now #2, and Comment C is #3.

In other words, you can thank the spammers for this.

I know you have at least two kids. Did you do any research on using a diaper service? I wonder if this “luxury” could fit into a frugal lifestyle?
– Angela

As a person that cloth diapers, I’ve found that if you have your own washing machine, there’s not that much effort to it. The real benefit of a cloth diapering service is simply that it keeps you from having to touch baby poop. If that’s a really big stumbling block for you… I recommend not having children.

In all seriousness, though, a diaper service is no different than any other time-saving service. Do it yourself for a bit and if you discover that the time invested in washing and prepping cloth diapers is worth the cost of the diaper service (and any time invested there), then switch to the diaper service. For us, it’s far cheaper to just do it at home.

I want to buy my wife a nice set of kitchen knives – a set that will last forever and will make cooking more enjoyable. Any recommendations?
– Patrick

Don’t worry about a knife set, per se. Instead, just get a couple top quality knives, a honing steel, and a magnetic knife rack.

I’d recommend a chef’s knife – my favorite one I’ve ever tried is the Global 8 inch chef’s knife. Get a paring knife – for this, a cheap paring knife at the local department store will do. You may also want a bread knife as well, depending on how often you bake bread.

I use my chef’s knife for 90% of the stuff I do in the kitchen. Just make sure you get her a very good chef’s knife, a honing steel to keep the edge on it, and a magnetic knife rack so that the edge doesn’t wear off while being taken in and out of the rack.

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

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  1. Emily says:

    Trent, regarding the fact that you get so many spam comments — why don’t you use a CAPTCHA? Some spammers will still manually type the spam in, but it completely removes all that automatic crap. We’re experimenting with it because we get tons of spam too, and last week when we tested it, we got VERY few spam comments and it was great. I highly recommend using it to save time on moderation.

  2. MN Scout says:

    Regarding paying for your childs college. I just got out of college and my parents only had X dollars set aside for each of us children. We all knew there were X dollars for each of us and since we all had a desire to go to college, us kids put in the effort to apply for scholarships, grants, work study, and summer jobs and internships. There are so many resources out there to help college bound students that parents really don’t need to help.

    I also noticed that the kids who had there college payed for by their parents did worse in college then the kids that were really investing their own time and money.

    What parents need to figure out is what is a good X dollar amount to give your children while also looking after your own dreams and ambitions. Make sure to tell your child early enough what that X dollar amount is so that they can start going after the scholarships and grants etc and plan their own future. Remember, if they really want to go to college they’ll find a way.

  3. Frugal Dad says:

    Thanks for addressing these questions, Trent. I’d like to follow up on your comment, “I’ve already turned down offers that would pay off every debt I have and leave me with several years’ worth of living expenses.”

    Even as a proud blog owner myself I’m not sure I could have done that. If you sold the rights to The Simple Dollar and were debt free with some to spare, couldn’t you build up another blog(s) from scratch, monetize them, and be further ahead, financially in a shorter amount of time? Just wondering if you could take us through your decision making after receiving such an offer.

    By the way, I’m glad you did not sell the site, but couldn’t blame you one bit if you did!

  4. Amanda says:

    Trent- here’s a question for you. While perusing one of my free credit reports, perhaps with much more thoroughness than normal, I stumbled upon my good “friend” AMEX, and realized they’ve down some major pulling from my credit reports- 13 times since 12/2006. I do not have any accounts with them. Know any tricks, tips, etc. to ask them to stop? I think that’s pretty ridiculous.

  5. Amanda says:

    Down=done in my previous post. Apparently I can’t spell.

  6. John says:

    How often when you write fiction does your outline change? I ask this because I will have an outline for my stories as well, and then the character I’ve created will wrench the plot from my grasp and go off in their own direction. At that point, I’m conflicted- do I force the story to fit my outline or let it run rampant?

    I think I speak for everyone when I say we would like to read some of your stories.

  7. Margaret says:

    Knife tip — put them in your wood block sharp side up to reduce wear on the edge each time you pull them out.

  8. Emily says:

    Amanda,
    Wanted to jump in here and give you an answer…those unsolicited inquiries won’t ding your credit score (only ones you solicit will, like applying for a car insurance quote). But there is one way to get those companies to back off if it’s bugging you: register with OptOutPrescreen.com. AmEx is basically interested in having you as a customer and checking out your report to see if you qualify for their cards, that way they can slam you with advertisements about how you are preapproved for credit cards with them. If you register, those inquiries should hopefully decrease or disappear.
    Hope this helps,
    Emily

  9. Shanel Yang says:

    Wow, Trent! I love the way you handle so many different types of questions so amazingly well! You always get right to the meat of the problem and then present answers so spot-on that you make it look easy. But, of course it just can’t be! Or, maybe it is for you. Anyway, I just love your Reader Mailbags! I hope you never stop doing these. : )

  10. KC says:

    Dana – 15 years ago I was heading off to college. My dad was a state employee and my mother a teacher’s aid. Household income was probably similar to yours – not rich, but not poor. My parents wanted me to go to college at any cost, but not at great financial cost. Here’s what they told me
    –get a job now (high school) and get one in college – not full time, just part time and save the money
    –choose a public university – big time savings here, I’d even add start the first 2 years in a community college (live at home and work), then transfer to a 4 year public school to finish your degree
    –live on campus or leave cheaply off campus (lots of roomates makes it cheaper), eat cheap, drive cheap (walk)
    –apply for any and all scholarships, even the local ones – a couple of $500 scholarships adds up.
    –get cheap government loans and grants (actually my parents did this and paid them back after I graduated, leaving me with no debt, but dad said they were loans at 2% and much cheaper than anything else he owed on)

    I went through 4 years of this and then 2 more years to get a Master’s. My family did it without going into much debt. In fact I had no debt and my parents didn’t sacrifice their retirement or style of life much at all. I highly recommend state schools and community colleges – they don’t get a lot of respect in the high school crowd, but plenty of adults understand why you choose to attend those in$titution$!

  11. Desiree says:

    I prefer Wusthof knives to Global.

  12. Dee says:

    I have a question for you, Trent (or someone else if they want to answer right away!)

    How can I bring myself to let go of saved money??

    I have about $5,000 in CC debt (nothing extravagant, accumulated living expenses while I searched for a job) and about $3500 saved up…but I can’t bring myself to take large chunks of saved money to pay off my debt! I’m worried that the second I send like $1500 to the CC company, I will have some emergency and need the money.

    I’m super cheap already, so parting with money is always difficult, but I’d really like advice on how to pay off the debt and feel comfortable about it.

  13. Karen says:

    MN- I must disagree. My parents thankfully paid for 100% of my college education with the caveat I couldn’t screw up and since I didn’t want to pay for college I kept my grades up. My father was always a man of his word so I knew he would stop writing checks if I didn’t do well. Now my husband’s parents did not contribute one cent to his college expenses and even though he graduated 12th from his high school class his GPA never saw 3.0. So he came out of school with a crappy GPA and a ton of debt. Yes, I will pay for my son’s college or trade school (started his 529 when he was 3 months old) but if he screws up he’s on his own. To me it’s the best of both worlds. Do well and to be rewarded and if he doesn’t he can take out loans and literally pay the consequences.

  14. Moneyblogga says:

    I like the idea of breaking down a big goal into smaller goals. I’m going to come up with a list of things I’d like to accomplish over time and try to break them down into weekly goals in order to see steady progress.

  15. Amanda says:

    @ Emily- Thanks. I’ll give it a whirl.

  16. "Mo" Money says:

    Personal finance success is simple 5th grade arithmatic. As long as you can use a four function calcualtor you will not have any problems. Discipline is the key to managing your finances.

  17. K says:

    Dee –
    Most experts recommend setting up an emergency fund prior to paying off debt for precisely the reason you mention. The typical recommendation is about 6 months of living expenses. You may be comfortable having less than that while you pay off your debt, although I wouldn’t go below $1000.

    I would recommend thinking about how much you would need to feel safe. What’s the worst emergency you can think of that wouldn’t be covered by insurance? A $500 car repair bill? Losing your job and not being able to find another one for 4 months? The furnace breaking? You should consider things specific to you like is your furnace is 15 years old and more likely to break, or did you just buy a new car that’s still under warranty, etc.

    Once you come up with that number then I would put that money into an account where you won’t be tempted to use it except in an emergency. Then I would put any extra money toward debt. Dave Ramsey recommends setting aside $1000 first, then tackling debt, then building up $10k or more in savings. Others recommend setting up the entire emergency fund first. It’s up to you how comfortable you feel. You could also do both at the same time. Send half of your extra money to the credit card and half to the bank.

  18. scatterhaiku says:

    i’m also, as is moneyblogga, a big fan of breaking down a large goal into smaller, bite-sized pieces, for daily consumption. really good advice, one of the many pieces of advice i need to apply more often unfortunately. :O

    does make it a little easier to get over the initial paralysis of having to face something which seems, at first, to be monumental, if not impossible.

  19. Vikki says:

    As a child, my family was in the ‘getting by’ class. When it was time for me to go to college, there was a hard choice to make for my parents: thier retirement or my education. My parents picked themselves, and that was difficult for me. I had to pay my own way and still have a debt to deal with.
    15 years later, both of my parents have had significant health issues that wiped out much of thier saving. Had they given that money to me for college, I would have had to give up my dreams (and living in a better city 2 states away) to come home and help them. My mother has passed away, but my father is healthy and will probably outlive his savings by 10 years. I’ll have to supliment his SSI then, but am pleased that this has not been an issue yet. As it would have been if they were less selfish when I was 18.

  20. Jolie says:

    Hi there.

    I recently started a new job. The lower level employees have a “sunshine club” where five dollars is collected from everyone monthly. These funds are used (to my knowledge) to purchase beravement gifts or other similar items. I was wondering what your thoughts on this are.

  21. Stacey says:

    Dana and KC,

    Just a quick comment on public vs. private colleges. If your kids have great grades, encourage them to apply to all types of schools – with the stipulation that they’re getting X per year, regardless of the cost.

    I applied to both a state school and a private women’s college, but because I had good grades and a high SAT score I received about three times more financial aid from the private college. State schools rely on government grants; private schools have alumnae scholarships and other sources of funding for students. Small private schools are also more flexible when it comes to financing – you can present your need to the aid office, and they may be able to help you out with additional scholarships or grants. It never hurts to try!

  22. Jesisca says:

    Can you give some advice for a 20-something that has great money management skills, but finds it hard to save due to A) no incoming income because currently in graduate school B)monthly car/insurance/cell phone bills and C) basic college expenses (books, housing, etc) What would be a good way to invest the little money I have and also be able to quickly get the money back if an emergency comes up?

  23. MG says:

    Another knife tip- Just a honing steel won’t keep the edge sharp forever. It only helps with tiny waves in the edge, and only for so long.

    I would recommend learning how to properly sharpen knives. My father learned, and my family has had the same knife set for roughly 30 years, and their still perfectly sharp.

    The stones that you need to sharpen the knifes can be a bit pricey, but not unreasonable, and they will easily outlive anyone. You can also use it to sharpen any other tool. (My father uses the stones to sharpen his fancy Japanese saws.)

    You might also use a knife-sharpening service, but they often don’t do a good job at all.

  24. Kate says:

    “Sunshine Clubs” – the thing I don’t like about them is you never see any kind of accounting for what happened to the money and whatever the current balance is. It’s like $5 a month is going off into the ozone.

  25. Kevin says:

    Trent –

    I have to say that I love the idea of micro goals and I’m a little embarrassed I didn’t think of it earlier. What an easy way to track your progress to a long-term goal!

    I have several ideas I’m kicking around in my head re: my career and future in general and this seems like a great way to actually feel like I’m making progress. Now, the hard part….actually figuring out what little steps to take to get there.

    Kevin

  26. Jake says:

    For the knife suggestion – I would recommend the shun classic series. They are a bit pricey, but they are some of the most awesome and razor sharp knives I have ever used.

  27. Jeff R. says:

    Trent:

    I know there are plugins for a blog that will allow a user to automatically follow a particular thread via notifications. Are there any drawbacks to using those? Would it be appropriate for you to put one on your blog?

    Continue the great posts – [ Jeff ]

  28. sandra says:

    COLLEGE—Paying for 2 kids at a LOCAL public college in Ohio—Kent State. They must live at HOME….no partying…no booze===paid college. Party after college. I was also very HAPPY to find out that most college have satellite branches around the county—savings? $2,200.00 per semester—
    oH–yes-GLOBAL KNIVES–kitchen necessity

  29. Andy says:

    Dee(#9)wrote:

    “I have about $5,000 in CC debt . . .and about $3500 saved up … but I can’t bring myself to take large chunks of saved money to pay off my debt! I’m worried that the second I send like $1500 to the CC company, I will have some emergency and need the money.

    Here is another perspective, in the form of two scenarious:

    1) You move $3500 over to pay off debt, and then have an emergency that costs you $3500 the next day. You can just charge the emergency costs to your credit card!

    2) You move $3500 over to pay odd debt, and you don’t have an emergency (for a long time). You make money by lowering debt payments!

    But — I would do a hybrid and move maybe only $1500 over like you said in your question.

  30. Pankaj says:

    Hi,

    I enjoy your blog and have been a regular reader for 5-6 months.

    I am thinking of investing in a good quality microshredder. Would you recommend one? I have a big pile of photocopies which should be shredded before discarding and hence I am primarily interested in good capacity.

    Thank you,

    Pankaj

  31. Glenda Simpson says:

    Comment: My question is where can I find a reliable emergency radio that does not depend on electricity? Thanks.

  32. Thanks for answering my Simple Green question, Trent! I appreciate it. I do have a membership at Costco, so I’ll check and see if they carry Simple Green. I’m on my second batch of your laundry detergent, btw…thanks for the recipe.

  33. James says:

    Trent, what is “personally challenging reading”?

    Love the site keep up the good work!

  34. Saagar says:

    @Dee,

    Here is what I would do. Get a credit card with 0 percent APR and transfer your balance ($5000) to it. That way you make sure you don’t pay any interest. Now let’s say you have 1 year for the 0 percent APR. So 5000/12 = 417. Try to make this payment each month and at the end of the year you would have your debt cleared and emergency fund built up. If you cant afford 417 a month then half the payment to 209 a month, at the end of the year get another credit card with 0 percent APR and transfer the remaining 2500 balance and continue with the same. I guess you get the picture…

  35. Dennis Robert says:

    Here’s a tip on the knives:
    I sold Cutco for a few months and they make a quality knife set. Most of the salespeople don’t make it more than a couple weeks. At any given time you can look on craigslist or ebay and find a small set of knives (chef, paring, steak, a few others) without a block for $150-$200, that are very slightly used, have a lifetime warranty, and they’ll put a new edge on them for free if you want.

  36. John says:

    What would be the three main goals you would like to accomplish in either one or two terms as the President of the United States?

  37. Chiara says:

    Thanks for the answer – proving once again, spammers should be tarred and feathered!

  38. Matt R. says:

    Got a video game question for your next Mailbag! What strategies do you use to keep yourself from getting sucked into a game for hours? I normally try to limit myself to an hour session, but I end up getting so caught up in the action/drama of the game I can’t stop. I tell myself, “as soon as I beat such and such level, I’ll quit”, but then something awesome happens and I keep playing. I quit video games for year because of this weakness and I just started playing recently. The problem isn’t near as bad as it used to be, but I still end up going 30-45 minutes past my planned sotp time.

  39. Dee says:

    Thank you K, Andy and Saagar for the advice :) All the debt was at 0% until about one month ago, now it’s at about 6.99% I will pay some of it down.

  40. Shevy says:

    Hmm. What about if you figure out what you really want from life in the next 15 years (i.e. retirement time), add up how much you need, subtract what you already have put away, divide it to end up with a monthly amount to set aside and discover that this amount is larger than your entire family take home pay for the month?

    Admittedly we aren’t saving enough right now (about 3% of our gross when we’re allowed by the Canadian government to save 18% for retirement plus $2,500 for educational purposes plus $5,000 annually in a tax free savings account, let’s say a total of 30% of gross) but even if we saved half our money we still wouldn’t be in the ball park (and we’d still have to pay taxes on that other 20%).

    That’s a little depressing, even leaving aside how unrealistic it would be to go from saving 3% to 30% or 50% overnight. What would you do?

  41. Jesse says:

    “The real benefit of a cloth diapering service is simply that it keeps you from having to touch baby poop. If that’s a really big stumbling block for you… I recommend not having children.”

    That last line had me laughing early early in the morning. Classic!

  42. K says:

    @Shevy
    The way people do it is compound interest. Most people need $1.5M or more to retire. Dividing that by 40 working years means you need to save $37,500 per year from age 25 to 65! Not possible for most people. But if you put your money in a fund that earns 8%, you would only need to save $5000/yr to reach that same point.

    Trent’s method is for shorter term goals, where you can’t count on the 8% returns from the stock market, and usually have to rely on the 2% that your bank offers.

  43. James says:

    Our family has come a long way toward financial simplicity and debt-free living. Now we have set a goal that is really stretching us: We are trying to save about $10000 extra by the end of 2008, so the whole family can visit our daughter in the Philippines. So my question is, do you have ideas for family fund-raisers? I don’t think a lemonade stand would quite be the thing in this case. We’re looking for ideas to raise extra money together, that the kids can be involved in.

  44. getagrip says:

    I had to chuckle a bit at the first comment. Specifically “We make a decent wage but it’s never enough…” (been there, said that :-) However, since when are anyone’s wages “enough” for them?

    Our “needs” if not watched closely always grow to match, and more often exceed, our salaries. It doesn’t really matter for most “middle class” folks what your education or income is because if you aren’t watching and aware of where all your money is going you never have enough at the end of the month since you will always spend everything you make. This is even more true if you don’t have any specific goals like Trent mentioned. Honestly, if you have a one or two hundred left at the end of the month do you say, “great, lets create a goal for that and set it aside for the future,” or do you say “Gee, I’ve been needing a new couch/TV/bed/dress/etc.” and spend that money as it appears? (Or worse you just add to credit card debt by taking an “extra” hundred and charging another hundred and fifty for that “great deal”, again, been there, done that.)

    I feel much of the advice on living frugal, finding a way to begin savings, etc. provided by this and other PF sites, have value to most anyone. Particularly the points about budgeting (watching your money) and determining what are “needs” versus “wants”.

  45. Francine says:

    Trent,
    I have a question. Yesterday I received an offer from a bank to open up a new checking account. I saw that they also offer checking accounts to college students and high school students, as long as the parents co-sign. I had to call, and was horrified to learn that 13 year-olds qualify. What do you think about this? Thank your for your time and consideration.

  46. SteveJ says:

    Everyone definitely has different college experiences. It was made clear to me before I got out of elementary school that I was paying for any college I wanted to get. Since I really wanted to go, I did the high school job, and got excellent grades, so I went on a full ride academically. While I was in school, I was going for me and not my parents so I did well while working for living expenses. I find that far too many kids go to school because their parents want them to or they just don’t know what to do after high school. College is a rather expensive way to figure out what you want to do. I had many evening classes with the commuters doing real jobs/families etc, and those classes were always more active and involved because they actually wanted to be there. We kids rolled our eyes a little bit at all the eager beavers, but they really knew what they wanted out of the experience and they were determined to get their thousand dollars worth out of every class. I had a prof that always made the joke that they should just set up a drive thru window for the teenagers, you drive up, pay thousands, here’s your degree, and the rest of us could actually get some learning in :)

    Anyway, I think it’s great that people are setting aside money for your kids, but I’d think about making sure they want to go and will stick it out, even if you aren’t footing the bill. My wife and I are still working out the details, how do you make your kids do their own thing, rather than pushing your agenda on them? I think we’ll set aside the money so we don’t hold them back from getting financial aid, but try to avoid handing it out until they’ve taken the first few steps solo. Make it like any other investment, you show me some returns and I’ll give you some money :)

  47. Kim says:

    I love it when people have kids and then, when it comes time for college, they moan and groan and say “How am I going to pay for this?”. Honestly! They act like the kids just showed up on the porch at age 16 or something.

  48. brooke says:

    Agreed about the Global Knives, if you can’t afford one right off the bat, start with Henkels or Wustof. Check ebay too for these brands.

  49. Shevy says:

    @K

    I do understand about compound interest, but that’s most effective over the long term. Here we’re talking about retirement in 15 years and too many people are seeing their retirement plan values drop right now, never mind earn 8%.

    I’m relatively content to be getting in the 3 to 5% range (depending on when the various investments mature). And the overall trend is slightly upward, that is, that when I reinvest I’m getting a higher rate. I would really hate to get to retirement and find that my (say) $50,000 investment was now worth $30,000! Much better that my $50k should be worth $60,000!

    But that doesn’t help me turn $100 per month into over $750,000 in 15 years. ($750,000 would allow us to withdraw $30,000/yr at the recommended 4% per year withdrawal rate no matter how long we live.) And that doesn’t include the money for other expenses down the road, like paying for my youngest daughter’s wedding.

  50. mischa says:

    I have an off-topic question:

    I just turned twenty and am hoping to open a roth-ira, or at least a retirement savings account soon.

    The dilemma is, I don’t know if I should take time to research where to put my IRA, or start investing now to start earning interest. Should i wait and figure out a good place to start investing, or don’t waste a second and stuff my funds in a place where it can earn interest until i retire?

  51. Dawn says:

    DH bought me Henkels knives – not a set but a few here and there for xmas and birthdays. I’ve had most of them for 10-14 years and I love them. I sharpen them myself and get them professionally done every few years as well as use a cutting board all the time.

  52. SteveJ says:

    @mischa

    I’ve heard it here and elsewhere but put your money into a savings account (like ING Direct) until you figure out what to do with it. For me at least, the psychological boost of earning a few bucks a month on my funds make me want to put more in. It also makes me “greedy”, so I’ll do the research to figure out what investments are best for me and can beat that 3%. And if you don’t get around to it right away, you’ll still be getting that compound interest in the meantime.

  53. M says:

    Thank you for giving me the answer I already knew, it’s so hard to watch a train wreak over and over. Already I hear how difficult the winter will be with the price of LP, how much extra it’s costing to drive to work, he has just taken in another dog, but went out and purchased some new furniture because his place looked a little empty. His new job isn’t exactly what he expected and thinks he can start his own business now that he has a house, needed the job to get the loan. And all I can do it throw my arms up in the air and say here we go again. The unfortunate thing is I feel I am going to need to start distancing myself from this person, the constant self destructive behavior is a huge strain when I’m working full time and as much overtime as I can handle. But the guilt associated with not coming to the rescue is just as hard.

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