Reader Mailbag #50

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.
Investing in Yourself: Mental and Spiritual Health
Is Success a Choice?
The Five Ps: Breaking Down Big Dreams Into Little Steps

And now for some great reader questions!

When shopping for a used car do you think it is better to focus on a younger car with higher mileage or a older car with lower mileage?
– Elizabeth

Older car with lower mileage every single time. The age of the car isn’t really that important – what’s more important is how much wear and tear the car has faced over time.

I’d far rather own a 1970s model car with 20,000 miles on it than a 1990s model car with 80,000 miles on it.

Lost has been crazy so far this season. What’s going to happen next?
– Locke

First, I’m pretty confident now that every significant question ever raised on the show is going to be answered. They’ve been doing this pretty effectively this season so far, even addressing how Danielle got to the island (something I thought would be never mentioned again). I think this will continue. Beyond that, here are three predictions:

+ The time skipping is finished after Locke turned the wheel. Whatever “time” the people on the island are at now is where they’ll stay. I think it’s going to be in the 1980s when the Dharma Initiative is in full swing (which is why the season opened with Daniel working with Dr. Candle).

+ Locke will come back to “life” when his casket reaches the island, but it’ll be a strange sort of “alive,” much like how Christian Shepard is now.

+ This very next episode will feature a plane from Ajira Airlines landing on the island with at least some of the Oceanic Six on it.

I’ve been calculating my networth, and I was wondering. Is there a rule of thumb for guesstimating how much your cars value depreciates each month?
– Mol

I use a really simple formula for doing this. First, I find out what the car was worth when it was new. Then, I take the mileage of the car, subtract it from 125,000, and divide that by 125,000. I then subtract $5,000 from the new car cost and multiply it by the mileage number. If that’s less than $1,000, I mark it up to $1,000.

What does this do? It basically says that the car immediately goes down $5,000 in value when it is bought, then decreases in value steadily until it reaches 125,000 miles.

Here’s an example. Let’s say I have a car that’s worth $25,000 new and has 75,000 miles on it. (125,000 – 75,000) / 125,000 = 0.4. ($25,000 – $5,000) * 0.4 = $8,000. So, I’d figure the car is worth $8,000. It works as a thumbnail, at least.

What is your opinion on engagement rings? I plan on proposing to my gf very soon – I am in my mid 20s, have no debt, a substantial emergency fund and a monthly income (after tax) of over $5,500. Do I really need to spend the 3 months of salary (ie over $16,000!) that most people/websites seem to be recommend??
– Jason

My opinion is that you should talk to the lady you’re going to be engaged to and find out what she wants. Some women LOVE the big ring. Other women would prefer you saved most of that money for a house or another major purchase in your married life.

My wife wanted a very simple ring. She saw no reason at all for anything complex. Another friend of mine is so proud of her ring that she almost obsesses over it. Neither perspective is right, but you need to know what perspective your partner has before making such a huge purchase.

What is your advise when one spouse wants to take control of a huge debt and work at paying it off (by the snowball method) and the other doesn’t agree and has no other plan? We are drowning in debt and my husband will not help me–he just pays the minimum payment and sometimes sends a little extra. We are also in our fifties and I worry about the future.
– Lara

Again, communication is the big key here. You need to sit down with your husband and talk through some things. When do you plan to retire? At what level of lifestyle do you plan to retire?

Don’t worry about the actual debt snowball. Just sit down and figure out what your real shared goals are. Then, go through your financial state and figure out how you’re going to get from here to there. Again, don’t push the snowball. You need to gently – very gently – lead the horse to water here.

Don’t put it in context of money. Put it in context of your big goals and dreams together. Running up the credit card begins to seem silly if you’ve started envisioning things together.

I always seem to overrun when doing errands and hence end up really hungry in town. Aside from taking a packed lunch, what is the best way to eat something for cheap? Our town has supermarkets as well as Subway, McDonalds and the chippie (I’m in England) but getting bread & cheese or meat plus juice works out almost as expensive as just going to Subway and spending £6! I am reluctant to buy just crisps or a chocolate bar for about 50p because they won’t be filling for more than 20 minutes, if that, and have no nutrition at all. Any suggestions?
– princess_peas

Don’t buy crisps and chocolate. Instead, look for foods that are easily transportable, relatively healthy, and provide a sustained nutritional and energy boost. Dried fruit is a good option. Granola bars are another option, as is beef jerky or other, similar dried meats.

What’s nice about things like these is that you only need to eat a little to sustain you, they go well with water, and most of all, they preserve very well in the car or in a pocket until you need them.

I usually keep a few granola bars in my glove compartment for just this purpose, actually.

When figuring your net worth percent change, how can you handle the switch from a negative net worth (or net debt as you say) to a positive net worth?
– Nate

During the period where that transition occurs, you can’t really calculate a worthwhile percentage change in your net worth.

Another approach worth considering is to simply figure the percent changes in your assets and the percent changes in your debts and not worry about the actual percent change in your net worth.

I actually do all three numbers. I find that the change in assets and the change in debts together provide at least as good a picture of one’s personal finance health as the change in net worth.

If you could go back in time and watch any historical event, what would you want to go back and watch?
– Mitch

If you’re looking at all of time, I’d go back to the start of the universe and see what’s there. Where did this all start? Was there a “big bang” or has this universe just always existed?

If you’re looking at just human history, I’d want to go back and observe the last year or so of the life of Jesus, as well as the year or so afterward. I’d like to see what really happened, rather than relying on the retellings of retellings that we rely upon for knowledge of what happened. The events in that area at that time have had an incalculable impact on our world.

How many credit cards do you carry when you leave the house? Given identity theft risks, I’m wondering whether you have a wallet full or not.
– Eliot

Most of the time, I just carry two card, my Citi Driver’s Edge card and my Target Visa card. I also have an Amazon.com Visa, but it stays at home since I only use it for purchasing things off of Amazon.

I do consider having credit cards in your wallet to be an identity theft risk. I often make a conscious effort to keep tabs on my wallet all the time when we’re out and about, just to make sure it hasn’t been lifted, and I carry it in my front pocket whenever I’m somewhere that makes me cautious.

What is your greatest fear?
– Sammy

My greatest fear is not being able to be there for my kids as they grow up. It fills me with more concern than anything else in my life.

I have always had this deep fear that I’m not going to live until I’m very old. I think it started when I was young, when I had a ton of medical problems all throughout my childhood. I believed through most of my late childhood that I probably wouldn’t live to be as old as I am now. Now that I’m thirty, I often am filled with a sense that I’m not going to live or be fully healthy for much longer.

I really have no reason for this. I eat pretty well (especially recently), I’m active and productive enough to do a ton of writing each day, and I’ve always been there for my kids and my wife. But the worry is still there. In fact, it’s been so bad at times that I’ve recorded videos for my kids to watch later in life if they grow up without me.

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

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  1. mehrzahl says:

    I disagree about the used car bit. Lower mileage could mean the car has only been used for short trips, running cold (higher wear). Higher mileage usually indicates more highway useage, at normal operating temperature (much less wear!).

  2. To determine you car’s value, use Edmunds TMV (True Market Value) calculator. It uses sales of the actual vehicle in the calculation.

    http://www.edmunds.com/tmv/used/

    I like how jewelers over time have moved the estimate from 2 month’s salary to 3. I got engaged last year and spent about 1.5 month’s salary for the ring and wedding ring. My fiance saw it in a store 2 days after I bought it and loved it (she didn’t know I had bought it).

  3. CPA Kevin says:

    For the car question, I use the Kelly Blue Book for the value and update it annually. You can easily look up any car’s value online.

  4. Nick says:

    >>The age of the car isn’t really that important<>I’d far rather own a 1970s model car with 20,000 miles on it than a 1990s model car with 80,000 miles on it. <<

    With the advent of things like seatbelts, airbags, stability control, and anti-lock breaks I would argue with your statement.

    Not to mention the idea of fuel injection, catalytic converters, and who knows what else that will help improve fuel economy and safety all while reducing your emissions.

    I will agree though, you definately don’t need the 2009 car, you can get by with that 1998 Chevy Cavalier just fine–I just think that going too far back will have repercussions beyond being frugal.

  5. CPA Kevin says:

    Interesting ideas on “Lost” by the way. This season is definitely revealing a lot. I especially liked the part about Charles Widmore previously being on the island.

  6. Johanna says:

    princess_peas: When I lived in England, my favorite thing to do for a quick and filling lunch was to buy a tub of hummus and a packet of whole wheat pitta (pita, for Americans). At most English supermarkets I’ve seen, that would cost less than 2 pounds total. In a pinch, you can eat it without any utensils, but there’s usually someplace where you can pick up a plastic knife.

  7. Bill K says:

    For Jason… Go to BlueNile.com… I’ve purchased plenty of jewelry from them, including my fiancee’s engagement ring. You’ll get a lot more for your money, whether she wants big, small or somewhere in between.

    Their customer service is EXCELLENT.

  8. E.C. says:

    Although I think the overall advice that a lower mileage older car is the better choice, I don’t think getting a car from the 1970’s would be sensible. Overall vehicle safety has improved a lot since then. For a car you’re going to drive daily, you want decent crash test ratings and emergency handling and braking.

  9. KC says:

    Jason – DeBeers and other diamond companies created the 3 months salary as marketing to sell more diamonds. You should be able to get a really nice, good sized ring for about $5000 or so. And in this economy if you have cash negotiate. Don’t be afraid to ask for a cash discount.

    Elizabeth – buying a used car depends on your needs. If you have kids you might go more for a newer-used car (2-3 yrs old). If its just you then maybe a little older. If you have some car repair knowledge you can get really old. Personally (35 yr old female, married no kids, drive less than 10k miles/yr) I look for something at least 4-5 years old with average mileage – I consider 12k miles a year to be average. Over 50% of a car’s value is lost at the 5 year mark. Those 1st 5 years are where you see the fastest depreciation and that’s the buy point for me.

    If you really want a beater (that 70s car Trent was talking about) go with a brand that has a reputation for long lasting cars and look for that low mileage. Try to find the 1985 Civic some little old lady drove to the grocery store once a week for the past 20 years.

  10. kathryn says:

    I was surprised by your car advice, living in Iowa as you do. We live in Michigan and the salt eats cars alive up here. Every single old car I have had has died of rust long before the working parts have worn out. (We had one we drove until it literally dropped…fortunately DH was only going 20 mph.) Now I always look for young cars with higher (highway if possible) mileage. Our experience has been that the engines will last practically forever; not so the body.

  11. Steph says:

    We bought a car with low mileage, or so we thought, last year. It was a formerly leased car with 22,000 miles on it. Since then, we’ve had the brakes go out, the air conditioning compressor break, a broken tie rod, and various other problems. We think someone illegally rolled back the mileage on the car.

    So my advice to anyone buying a used car – figure out how to check the brake pads. If they are really worn at a low mileage, the mileage is probably fake.

  12. Robin says:

    Jason – I would suggest going ring shopping with your gf. I know it takes away *some* of the surprise, but she’s going to be wearing it for a long time! And honestly, she probably knows you’re thinking about proposing anyway. Just pop into a mall jewelry store while you’re out, and see what she likes. I could never wear a ring that costs $16,000 dollars! I would kill my husband if he spent that kind of money on something that’s just going to sit on my finger. My ring was around $2000 and it’s PERFECT. It’s less than he was planning on spending, and it’s exactly what I wanted.

    Also, we’ve had really good customer service with Helzberg, but I’ve heard great things about Blue Nile.

  13. F says:

    I have some advice for the engagement ring guy

    I was in a similar position, where 3 months’ salary worked out to affording a ring with much better than average for the 4 C’s.
    While I didn’t spend 3 months’ salary, I still ended up getting a pretty fantastic ring – and I regretted it after. Some reasons (in order of undesireability):

    1. Whenever we (or she) meet new people, the ring definitely gets noticed. And we find that people immediately draw certain conclusions about us that we would prefer that they didn’t. (My wife often gets dirty looks from other women. Or she gets comments about how it “must be nice”, or they try and find faults in her to try and make her feel undeserving)

    2. My wife is worried about it getting stolen, or worse, her being mugged.

    3. It costs a ridiculous amount to insure – the cost of insuring the ring is probably more significant than the upfront cost.

    I guess in the end, the extra cost is just not worth it. In retrospect, I would have rather spent a few thousands less, got something more in line with what everyone else has, and stashed the difference away for retirement/home purchase/honeymoon.

  14. Samantha says:

    I second the note about BlueNile.com. I’ve used it for lots of gifts (and have received a couple from there as well) and been really happy. But definitely see what your girlfriend wants first. You don’t want to put her in the position of having to tell you afterwards if the ring doesn’t match her style or make her feel comfortable. She’ll hopefully be wearing it for the rest of her life! You might also want to consider that she may have strong feelings about diamonds and the exploitative way that many of them are obtained. There are many other beautiful stones, or you could also go with an antique ring that doesn’t add to the demand for diamonds now.

  15. Neal Frankle says:

    On the car question, I suggest a little different approach.

    Buy a two-year old Toyota or Honda. That’s my rule and its worked out great. I believe that repair costs are very high and should be considered when buying a car. These two babies have very low maintenance expense.

    Buy the 2 year old car with the least mileage and you’ll never regret it.

  16. George says:

    Jason – 3 months of salary is NUTS. Make it 3 months of savings, because if you can’t save much, then there’s no sense in spending it.

    Trent – you really don’t want a car from the ’70s, not even a low mileage car. They were poorly built, rust-prone, crappy performers, strangled with emission controls on carburetors in an era before low emissions were understood. ’80s cars are better in so many ways since electronic FI became the norm. In both ’70s & ’80s cars, maintenance is an issue since it can be difficult to find parts (especially trim) in a timely fashion. If you do get something from the ’70s, make it a high-end vehicle.

  17. prodgod says:

    I know I’ll get some flack for this, but don’t be afraid to search PAWN SHOPS for diamond rings. Before we got married 24 years ago, I was only making $700 a month, so I had no business buying expensive rings or anything else. We could have waited for a few years and saved for a big wedding and a fancy ring, but we both wanted to get married right away. There was a long-time pawn shop downtown and I knew the owners were diamond experts. I bought both of our rings and spent only a few hundred dollars. I know it doesn’t sound romantic, but if you don’t think the diamond you’re buying in the mall is “recycled,” I’ll bet it is.

    Personally, I think people spend way too much on rings & wedding receptions and not enough focus on the actual marriage. But, everyone has different priorities. I like our meager rings because they’re a nice reminder of our very humble beginnings together.

  18. MegB says:

    To Jason:

    Please don’t take your girlfriend shopping with you for an engagement ring. My husband (very pleasantly!) surprised me with a beautiful engagement ring, and it was so special. We had been dating about 18 months when he proposed, and even though I knew it was coming at some point, I was still completely thrown off guard when he did it. I didn’t even know that he had bought a ring!

    See if you can subtly find out what she prefers. I think my husband sort of casually asked me about it several months before. In my opinion, you can never go wrong with a classic solitaire and then spice it up with the wedding ring that you all choose together. But IMO, the surprise and joy of a proposal is so worth it.

  19. Gina says:

    Jason – If possible, bring up the ring in a roundabout way – especially easy if you see a show or movie where a proposal happens & the character makes a big deal about the ring. Then send out some “feelers” to see how she feels about them. “Wow, that’s quite a rock! Do most women really want a ring like that?” Then see how she responds, maybe she’s had a longtime dream of a certain style or look (I had no preconceptions on size, but I always wanted a ring from Tiffany’s). Maybe she’d love a vintage ring (do you have an heirloom ring in the family?) or would rather have a sapphire than a diamond.

    Some women aren’t picky about the ring, as long as they get one, but if she does it will be a big win for you if you get her the “dream ring.”

    My husband did go to Tiffany’s, but I know he didn’t go for that 3 months salary malarkey. My ring is lovely & when I look at it I am reminded how something that may have seemed trivial to him initially became important because it was important to me.

    Good luck & Congratulations!

  20. Will says:

    Trent,

    My question for next weeks mailbag would be surrounding 403b’s. I am 24, live in a big expensive metro area and get to save very little money, but the nonprofit I work for offers a 403b and there is no employer match or anything like that. I put away 5% or so (I think) per month into that account but I was wondering if that money wouldn’t be better off in a Roth IRA or anything of that sort. Thanks for any input you can provide

  21. Jason-

    I agree with MegB. I personally wish that I had known less about my husband’s proposal plans when he asked me to marry him. It would have been more special (not that it wasn’t…it just would have been even better). Does your girlfriend have friends who would know what kind of ring she would like?

  22. CPA Kevin says:

    Don’t go to a mall jewelry store – go to a local jeweler that actually has some skill in the field. They might be able to build you a ring for the same price as buying a “stock” ring from another store.

    My story : my wife’s aunts had a 1/2 carat diamond necklace that belonged to her grandmother. (The stone was from her original engagement ring.) They couldn’t decide what to do with it since there are 5 of them and one brother so I offered to buy it from them for $600. We then went ring shopping together so I could determine her taste in rings. We found a few antique rings at various places until picking one that was only a couple hundred $$. The jeweler replaced the existing diamond with her grandmother’s and now we have a family heirloom instead of something generic from a mall. And for probably half the cost. As with most things, it’s not how much you spend, but what you spend it on.

  23. Tyler says:

    I am also surprised at the car advice. In a situation where a car from the 70’s/80’s has low mileage, I foresee a couple of possibilities:

    a) The car has had period of non-use (we are talking years without the engine running.) Was it located in storage, or just sitting outside next to the barn? Was the vehicle looked over, or were animals becoming cozy in it? Has anything deteriorated?

    b) The car was used solely for going to from the grocery store and post office once a week. Depending on your location, this can be the harshest usage for your vehicle – if you are living in the midwest (I’ll just use Iowa), you experience both the high heat summers and the freezing winters. Someone who only uses his/her vehicle for very short trips (we are talking 20 minutes a week) in those harsh conditions (having the a/c or heater going full blast) may be doing more harm than someone who drives the 20 miles to work every day.

  24. Amber says:

    It really depends on the girl. I didn’t want a diamond that was mined recently or even one at all, and I think it is a little irresponsible to spend a large amount of money on a piece of jewelry that most societies don’t even have. (most wear their wedding band only) However, my finance is very traditional and we settled on an antique diamond that I get complements on everyday because of it’s uniqueness-no one else has this ring. It’s just as important to surprise her as it is to take her opinions into consideration. Good luck at doing both.

  25. Chris says:

    I think you’re just about spot-on in your Lost thinking. This is shaping up to be quite a season!

  26. Craig says:

    I think Trent’s advice on the car might be taken a bit too literally. Perhaps more what he meant is that he’d rather buy a 2004 model today that only has 40,000 on it, rather than a 2007 model with 80,000. The 2004 is new enough that he’s getting a reliable car, but the low miles means that it is not in need of new brakes, drive train, etc….

  27. Connie says:

    Actually, when I was in England just a couple months ago, Subway had an ongoing “sub of the day” deal that was only £1.99 or 99p (I can’t remember which) for a sub. Whenever I was in a rush, or couldn’t bring food from home b/c it was prohibited at some libraries, I would drop by and get that sub, which was a very affordable and complete meal.

  28. Anastasia says:

    My husband asked me to help pick out my engagement ring. We picked out one together that I absolutely love, and wear every day.

    I think surprises are wonderful for some couples, and for others, a joint shopping trip is better. Different people are different :)

  29. guinness416 says:

    Jason, you can still do a “surprise” proposal with a plastic ring or whatever and shop together later – the shopping itself can be a really fun, giggly, couply event.

    I would not have been happy for my now-husband to go out and spend big bucks (or little ones!) on an engagement ring without consulting me – I don’t like diamonds and didn’t want one. Others obviously disagree. We can’t know which side your girlfriend would lean towards, so have a good think or consult some of her friends to make that decision.

    And I would question that “most people” believe the 3 months rule. Internet articles are not most people! I have many quite spendy friends and colleagues, some of whom spent huge amounts on engagement rings and weddings, but they’re all well aware the 3 months rule diamond industry propaganda.

  30. Sally says:

    I’ve always thought it was very convenient that the diamond industry’s “rule” for spending money on engagement rings is almost guaranteed to put anyone in debt.

  31. Trent,

    Thanks for answering my question, that was the solution I arrived at too, I’m glad we agree.

    I also carry 2 credit cards in my wallet, I’m ALWAYS feeling my pocket to make sure its there.

    As for your fear, Its understandable fear, though not enitrely rational. I guess it would make you appreciate what you have now instead of waiting until some future date when everything is perfect. Either way I wish you health and happiness!

    -Nate

  32. Dean says:

    @princess_peas If you have a butchers in your town centre you can often get a locally produced meat and salad sandwich for around £2.

  33. Anne says:

    Here is a wonderful article from The Atlantic on the diamond cartel. The article is from 1982 (!), but basically still applicable, and very eye-opening.

    http://www.theatlantic.com/doc/198202/diamond

  34. Kacie says:

    I wouldn’t want to have a car from the 1970s. Good luck trying to get parts for that! Spendy spendy.

    @Princess peas: Are you staying hydrated while out? Sometimes, we feel hungry when we’re really dehydrated. You might try taking along a bottle of water, juice, or a smoothie.

  35. jaf says:

    Godo advice on the ring.

  36. ceejay74 says:

    I have a question I’ve had trouble finding any online answers for:

    I’m American and live in the U.S. with my husband, a resident alien from England. We’re in our mid-thirties.

    We’re concentrating more on paying down debt and growing our EF right now, but we do contribute about 5% to our 401(k)s.

    I know the optimal places to save for retirement in the U.S., taxwise, are 401(k), Roth IRA, and traditional IRA. However, we plan on moving to England eventually, and we’ll probably retire there.

    Does that change which types of accounts we should currently save our retirement money in? If we’re living in England, can the UK tax any or all of these retirement funds once we start withdrawing them?

  37. Jessica says:

    Like the first poster, I use KBB.com (Kelly Blue Book) to find the value of my car. Based on Trent’s method, my car was worth about $1,250 and KBB estimated it’s value at $3,315. Not too big of a difference really, but just throwing that info out there…

  38. Sara says:

    I always thought the ring was supposed to be 2 months’ salary… which still seems a little ridiculous to me. I guess it depends on how much you make, but if you’re making over $5k per month, $10k for a ring seems like a lot (if you make a lot less, it may take 2 months’ salary to get a decent ring).

  39. -_- says:

    Yes there was a big bang, we can literally see it in the form of cosmic background radiation, and we know that the universe is still slowly expanding.

    Also, it’s a little unclear from your statement, so just in case, to clarify the big bang theory isn’t about the start of the universe, it’s about what has happened since the start. The ‘bang’ happened just after the start of the universe, it didn’t actually create the universe.

  40. Mary says:

    I have a question: What do you think of the vegetarian lifestyle? Is that something you would ever consider for yourself?

  41. Sharon says:

    Sam’s Club sells very nice jewlery, too. We went shopping for our wedding set (2 gold bands, one engagement ring, .25 carats) in the Diamond District in NYC. Spent $250 for the whole thing — of course, that was in 1978!

  42. Shevy says:

    People really are different, aren’t they? I would hate to be surprised with a ring.

    My ring from my first marriage was basically a diamond chip that I helped pick out. We were 19 and 20 at the time, so a pricy ring would have been impossible, but it was a cute little ring with a matching wedding band that suited my hand and I really loved it. One of my girlfriends got married about the same time and got the huge rock. I would have lived in fear that someone was going to mug me if it had been mine.

    My current ring is an antique family ring with lots of sentimental value. The diamond is bigger, but not ostentatious.

    As for the question where only one spouse is on board with the idea of paying off a lot of debt, communication about shared goals is the optimal outcome, but some people don’t seem to be able to put long term gain over short term pain.

    If her spouse has already agreed in principle to the idea of retiring debt free in 10 or 15 years with at least some kind of money beyond what government or company pensions will supply then she shouldn’t ignore paying off debt or saving for retirement. Lara can snowball or snowflake her own debt (credit cards in her own name first) and add money to her own retirement savings until her husband comes around to the importance of improving their financial situation.

  43. Karen says:

    Love Love Love Lost!!!! I am hoping for a Sun/Jin reunion soon.

  44. Tyler says:

    @Craig: Except that Trent didn’t post an example involving vehicles 3 years apart in age, he posted an example with vehicles 20-30 years apart in age.

    The example you give is realistic, the example Trent gives is not. The responses point out the errors in the original proposition.

  45. princess_peas says:

    Thankyou for answering my question, Trent and others!

  46. kevinf says:

    Jason – read this article about diamonds from the February 1982 issue of Atlantic Monthly.

    http://www.theatlantic.com/doc/198202/diamond

    It confirms what other people are saying in the comments…mainly that the whole “3 months of your salary thing” is an advertising and marketing trick.

    (the article is long, like all AM articles, but it’s worth it because it’s very interesting).

  47. Kathie Allen says:

    Jason, if you want to propose with a ring (very romantic IMO), how about spending a modest amount on a “starter” ring to use for the proposal, then have the discussion about spending more with your soon to be wife. If she is the type that loves diamonds, then the two of you can return to the jewelry store and upgrade to a more expensive ring or add more diamonds/rubies/stones to the ring. Check with the store before you buy on their return/exchange/upgrade policy.

  48. Kathie Allen says:

    Dear Trent,

    I’ve heard one should have at least two months worth of salary in an emergency account. I have 6 weeks worth of vacation time that I could cash out if I was terminated in the near future. Can I count this towards my emergency fund? Or must I have the actual cash in the account? Thank you very much. Kathie

  49. Amy says:

    Jason, the fact that the “three months” rule was the “two months” rule for the past 20 or 30 years just goes to show how artificial it is.

    You probably know your girlfriend well enough to know if she would prefer shopping with you for a ring, or would prefer being surprised. And if she likes surprises, I do think using a “stand-in” ring is a good compromise, so she then can help choose. She’s going to be wearing it forever — if you get something she doesn’t like, she’ll agonize over whether to say something to you, or whether to wear something she doesn’t like.

    Personally, I think engagement rings are a huge waste, but I know most women expect them. My husband and I had NO money when we got married, and I wouldn’t hear of an engagement ring. Instead we shopped together and spent about $800 on our wedding bands, and mine has some very tiny diamonds set in. I love it and wouldn’t want anything else.

  50. Jo says:

    About the ring, my husband gave me a stand-in when he proposed so I can pick out what I wanted. But he knew I wouldn’t want anything super expensive because we both want to spend what money we have on experiences instead of stuff.

    That said, his mom urged him to get me one-carat at least so we don’t look cheap (and she was willing to subsidize) I can see why she feels pressured…their close knit extended family all sport at least a 2-carat.

    I ended up with a 1 carat, but guess what, I dont’ wear it. My preschoolers are always trying to grab it so I am leaving it alone for now.

  51. Carmen says:

    I definitely think the woman should have input into the engagement ring style. Because she would never change it, but might always wish it had been different.

    Personally, I don’t think I suit solitaires, mainly because of how raised they tend to be. The Tiffany ring would be a nightmare for me to wear every day now, although it works well with time spent in a suit or black tie dinner dress. This is where it’s important to think long term.

    So we shopped together. But I love the suggestion of a surprise proposal first. You could also voice your ideas to your gf so she knows you put time and thought into looking at rings, but wanted to make sure she’d love the ring too.

  52. Carmen says:

    Sorry, forgot to say that c$5k should buy a lovely ring. You don’t need to spend huge money. But it will mainly come down to diamond quality, plus size to a lesser degree.

    Large stones are rarer than small ones and thus a single 1 carat stone will cost more than four 1/4 carat ones; plus the larger stone will need to be a better quality to look the ‘same’. Or perhaps it’s better to say that flaws show up more on larger stones to the visible eye and thus one would want a better quality.

    That is of course assuming there is a diamond involved! If not, the ring need cost very little.:)

  53. Battra92 says:

    I’ll be more blunt about the ring than most people. If you gf demands a 16K ring, you’re proposing to a gold digger. I could’ve used a stronger word but that would have been rude.

    I’m 100% convinced I’ll never be married (no woman will put up with me) but if I did her engagement ring would be Cracker Jack at best. (I used to work in the silver industry so I know how insane the markup on what amounts to a worthless rock and sliver of metal are actually worth.) If she’s hung up on symbols or flashing wealth or wants something that is the size of a quarter and costs as much as a Kia she’s out of her mind.

  54. Lauren says:

    Trent,

    You’ve posted a couple times in the past about starting up a serious exercise regimen. I was just wondering how that is going and also if you have any tips on staying motivated. Thanks!

  55. Mule Skinner says:

    Older car/younger car: safety features accumulate year by year. My car, for example, lacks “electronic stability control” which the very next model year does have. My even older car lacks side air bags. Emissions are generally reduced year by year also.

  56. Mule Skinner says:

    Engagement rings: I’m against them. I think this is an anachronism, rather like a dower payment. It bespeaks a time when men controlled all the money and women had to wheedle gifts out of them. Haven’t we got past that yet?

  57. mia says:

    i dont want to rain on anyones parade, but the diamond industry doesnt really have the best… human rights record. i would prefer a ring that was handmade by a local craftsman. it doesnt have to be made from fancy materials, but i would like to KNOW where it came from. i wouldnt want to look down at my finger every day and wonder what kind of sordid history my ring has.

    works out cheaper, too.

  58. littlepitcher says:

    If you have a plastic spoon in the car, pick up a yogurt. They always seem to be more filling than other snacks. I keep an old set of metal baby cutlery in the glove box so I’m not limited to pricey take-out food while out rambling.

  59. SteveJ says:

    I like the plastic ring idea, but you better plan on going shopping the next day, as anyone you tell about the engagement will want to see the ring.

    Buying a ring together also seems like a great way to get those finances out in the open early, few things put strain on a relationship like a big purchase. Cynically, if your financial tastes are different, several thousand dollars is well worth that knowledge :)

    My wife “hinted” (I’m pretty obtuse), at the ring she would want some day at a mall store. When I did get around to proposing many months later, I then went to every jewelry store in 30 miles (50+ stores) to try and find one like it. I eventually got lucky, and I’m pretty damn sure no one else has one like it. We bought our wedding bands together and I still haven’t recovered sufficiently to enter a jewelry store again. Luckily my wife doesn’t like to wear jewelry very often.

    Also, because I didn’t feel like the ring was a sufficient surprise, I worked extra hard to make the proposal special and surprising.

    The three month rule is ridiculous, regardless of your salary.

  60. watching our future evaporate says:

    Over the last couple of years my husband’s parents health has been declining, over the last 6 months it’s declining rapidly, he’s been taking off work to take them to appointments, has had to leave work to pick one up who’s fallen or needs some other immediate help. I’ve been doing what I can but my employer isn’t as forgiving they are not my blood relatives, we’ve been married 16 years and dated for 5+ years before that, plus I have my own parents who are in better health but still need help. My concerns are that in this economy my husband’s employer may find they can do without him, he’s asked to make up the time he’s had to take but the answer has been no. His health is suffering, I think he’s aged 5 years in the last 6 months, but as an only child all the responsibility falls on his shoulders and believe it or not they are not eligible for any government help because they are not below the poverty level, close but not close enough, we’ve checked every agency. We’ve hired people to clean the house, mow the lawn and that is expensive, but there are not enough hours in the day, one of us is there almost every night to fix dinner, bring in the mail, do a load of laundry (the washer/dryer is in the basement). Meals on Wheels does not fit their dietary needs they are both diabetic. They will not leave their home of 50+ years for assisted living and moving them in with us is out of the question due to our homes layout, lots of stairs, narrow doorways and just to small, we live outside of town so if one of them were to need us it would take twice as long to get there from work. We are always running into town at all hours to do this or that. I know there are no answers, we’ve contacted their church, government agencies and nonprofits, they want to die in their own home but we just can’t keep up anymore, they would hate us if we forced them to move out, they refuse live in help which would be expensive and they want their privacy. I fear my husband will have a heart attack or stroke from the stress, lose his job, fall asleep at the wheel, our savings are dwindling and we can’t leave town because they might need us. He has talked to them about all this, they say they understand our position, and feel that they will die soon (and then we will be happy, guilt, ya think). I just want to let your readers know what might be in store for them as their parents age, we should have seen this coming but I doubt there could have been anything done, 10 or so years ago he wanted to talk to an accountant to get their affairs in order, get the insurance policies together and maybe put the house in his name, they say they don’t need a will because my husband is the sole survivor and will get everything anyway.

  61. Michelle H. says:

    Ref: engagement rings

    My husband wanted a surpise proposal, but knowing how particular I am about jewelry he wanted me to pick my own ring.

    He bought a small solitaire to propose, and then we shopped together to choose my wedding ring. I now wear the solitaire on my right hand and plan to eventually have the stone put into another ring.

    And the 3 months pay rule is nuts! I would not be comfortable wearing a ring that made me a target for muggers.

  62. J says:

    For the ring, propose first without one. Then, as a template to married life, set up a budget and go shopping together. X months salary is a marketing plan made up to make the diamond merchants rich. Maybe she doesn’t want a ring at all. If you think talking plainly about such a thing with your girlfriend is awkward, wait till you need to talk money, kids, houses, etc.

    For the car, I’d take the 1990’s model rather than a 1970’s one that has been sitting around rotting. Vehicle technology has come so far since 1970 it’s not even funny, and something from the 90’s is going to be considerably more reliable, all other things considered. Maybe the better guideline is picking the better maintained vehicle with a good track record (for example, checking Consumer Reports for “best used car bets”). At this point, most cars from the 1970’s are antiques, better used for the occasional Sunday drive than getting to work.

  63. Carmen says:

    Gosh, I missed the car reply first time. From a safety point of view alone, the newer car is the significantly better choice. Even a 1-2 year old car with 100k+ miles (freeway driving), would be a great choice. Aside from any financial and aesthetic requirements, safety is pretty high up the list in terms of “car needs” for me. One day I might also have a ridiculously fast 2 seater to drive down the German autobaan.

  64. michael says:

    Like many, many others, I watch TV shows on DVD or on Netflix.

    So pretty please, with sugar on top: If you’re going to have spoilers for Lost (or anything else) in a posting, put that at the beginning of the article. It’s just common courtesy.

  65. Robin says:

    I am also really surprised about your car advice. I agree with another reader that it really depends on your area. I know that an older car with lower mileage in a lot of areas means that the car was driven a lot over the back roads and side roads, stop and go, and that’s not good for a car. It’s pretty likely that a newer car with higher mileage was driven mostly over the highway, and would thus might take less overall wear.

  66. Roger says:

    Three months salary for an engagement ring? That’s just incredible; even in my short lifetime, I remember when the rule was supposed to be two months salary. Amazing that these pushes from retailers can become accepted practice and even tradition.

    The time travel question is interesting as well. With so many world-changing events that have occurred throughout history (even limiting ourselves to terrestrial, within the range of recorded human history), I doubt I could limit myself to a dozen events, let along one. Being the conspiracy buff I am, I would definitely want to see the truth history between such mysterious structures as Easter Island, the pyramids, and the Nazca Lines. Although, again, there’s just so much to see.

  67. Bella says:

    @Jason
    I would so be disapointed if my boyfriend would spend 3 month’s salary on a wedding ring… Maybe I love it too simple! You could always get a good one for less and think of upgrading lets say the diamond for a tenth anniversary, and so on, when you realise if she really loves it… I think I’d rather go on a cruise on the mediteranean for that price ;).

  68. cheet says:

    Gotta agree with Tyler (#16). I’d be very wary of an older vehicle with low mileage. I always used to think that buying cars from the elderly was the way to go, based on the theory of low mileage and less wear and tear.
    However, recently I’ve heard that it’s better to buy something that’s been driven regularly to avoid problems that can come with vehicles driven less — especially if they’ve been primarily used for shorter start-and-stop trips.

  69. Jordan says:

    Trent’s car advice is terribly off. Engines (and nearly every other component) has made so much progress from the 1970s. There have also been numerous safety improvements (quite a few cars built in the 1970s are known for exploding once being rear ended).

  70. Carmen says:

    In follow-up to a previous post, did you end up getting long term disability insurance?

  71. Vanessa says:

    Question:
    Hi Trent. I’m new to blogging, only got 2 or 3 posts going atm. How can I get my blog to appear on Google? Even when I type in all the keywords I can think of, I can’t find it!
    (I’ve purchased your ‘better blog’ doc which was a great read, BTW.)

  72. Linda says:

    I’m glad we’ve gotten those Lost, ring and car issues handled with appropriate attention.

    For watching our future evaporate (comment #60):
    My heart goes out to you, your husband and mostly to your parents-in-law. The life changes they are facing are in the future for most of us. I’ve seen others face these changes (loss of independence, mobility, fear of a fragile future, etc.), in my own family and my work as a geriatric nurse. Tough stuff. I can’t offer any suggestions for you, as all situations are different. I’ll keep you in my prayers. Hopefully those of us who see what may happen to us in our futures, will plan for it so as not to cause these problems for our children or others.
    My husband tells a story he heard when he was a young boy and it’s stuck with him:

    A man told his son to fetch a large gunny sack out of the barn and come with him. The boy retrieved the bag, and went with his father to his grandfather’s room, where Grandpa, now withered with age, was lying in bed. The man put Grandpa in the gunny sack and told the boy to help carry Grandpa in the sack, with the intent of throwing him into the river. The boy asked why, and the father answered that Grandpa was too old to do anything anymore, and no good to anyone, so it was time to throw him into the river. When they got to the river, they tossed Grandpa in. The father was walking back to the house and noticed that his son wasn’t with him. The father turned to see the son struggling with the sack at the river, and asked the boy what he was doing. The boy replied, “Saving the sack.”

    Trent, I’ve had similar fears that you describe (dying too young). Maybe these are normal fears, especially when you have so much to live for (family) and a history of unstable health. I didn’t have health issues when I was young, but I was convinced I’d die before I was 21. I didn’t. Then I knew I’d die before my Dad. I didn’t. Now, I’m worried I’ll die before my Mom, husband and others who depend on me. The jury’s still out on those (thankfully). Maybe that’s an indulgence in a sort of self importance. But it’s sure an awful worry to carry around. Maybe some therapy would help. Prayer helps me. I still struggle with it, but prayer helps. Knowing that I’m not the only one who has these worries helps, too. If these worries are fairly common, then they are less to worry about. Talk with your friends. Maybe you’ll find you’re not alone with your fears.

    God bless us all.

  73. Alex says:

    Hi Trent this question is related to one you answered in this post regarding credit:

    I have a very long history of credit and even a few credit cards. My wife, on the other hand, graduated from college recently and has no credit history (her parents took care of college).
    Is it enough just add her on my existing credit card account (and get her a card) or should I have her sign up for her own account?

    Thanks.

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