Reader Mailbag #68

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We called the store to see if they could set up regular payment plans (the amount due each month varies, wildly) or if they could reduce the interest rate, to which they said no to both.

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

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

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

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

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

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

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

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

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

Even though money is tight right now, I would really like to start putting away small amounts of money into a savings account and then focus on paying down my credit card.

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

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

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

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

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

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

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

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

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

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

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

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  1. Johanna says:

    Why do you consider “a bit of interest on the checking” to be so important? If your average checking account balance is $1000, and you get 0.25% interest on it, that’s $2.50 a year. Even if your average balance is $5000, that’s $12.50 a year. Sure, that’s $12.50 that you didn’t have before, but it doesn’t seem like enough to make “interest on checking” an essential requrement for choosing a bank.

  2. Becky says:

    Trent,

    Where do you draw the line between saving money in order to have a better life later versus spending money to have a better life now? My dilemma: I’m currently saving $500/month by living with a roommate. This money all goes toward paying off my student debt ($18,000 principal balance, with 6.5% interest). However, I’m at the age (mid-twenties) where I would really prefer to be on my own. I found a studio apartment that would be more than my current rent, meaning I would only save $300/month.

    What would you do? Stay with the roommate and save more money or get your own place and potentially save your sanity?

  3. Sarah says:

    The situation Frank is describing (credit card permitting only minimum payment or payment in full) doesn’t sound at all plausible, although I’m not sure it would actually be illegal (for consumer revolving credit, it should be!). Sounds more like his wife encountered a credit-card website deliberately set up to make it hard to repay credit cards, and then got on the phone with some dim, half-trained CSR (hired on purpose to make it harder for the customer to deal with them). Personally, I would try making a payment by mail that exceeded the minimum and see if they had the temerity to refuse to credit your account with it.

    This is the reason no one ever mentions that it’s a bad idea to get store credit cards–for some reason, the stores inevitably hire the absolute shadiest servicers available, the ones that go out of their way to make it hard to pay on time and pay back quickly. I got such a card once, and while I got a significant discount on a large purpose, the sheer worry alone once I realized what kind of operators I owed money to was more than enough to offset it.

  4. Sarah says:

    (Purchase, not purpose…sheesh…)

  5. Amy says:

    One of your readers said “The only payments they will allow her to make are the bill amount (so if it’s $100, she can’t pay $150 for example) or the full balance.”

    I have a very hard time believing that this is legal. And if it is, and it’s in the small print, surely all that credit card reform we’ve been hearing about is going to make this illegal.

    I hope your reader will investigate the legality of this. It sure sounds fishy.

  6. Ann says:

    Re: Maya’s question about the minimum payment being 0 this month – I had that happen last month, so I called the CC company to find out what was going on. They told me that every so often they will let a customer skip a month payment, maybe once or twice a year, if they have been paying on time throughout the year. I was told if I wanted to I could make a payment, but it was not required for that month. The kicker is that INTEREST still accumulates on the balance. I decided it wasn’t worth it & made a payment.

  7. *sara* says:

    Yah the college one is interesting. I really grew up in college, learned how to think and who I was. In hindsite, though, I did not appreciate the value of the education nor the absolute uniqueness of the situation (living free and having opportunity to learn anything that I wanted? That never happens again!) Part of me feels like a year or two in the “real world” of working and paying rent would have given me much more context and appreciation of the value of education. Now that I am out in the real world I see so many once in a lifetime opportunities I had in college that I passed on because of general laziness and lack of perspective.

  8. Rick says:

    I too question the credit card that only allows payment of the amount due. Someone suggested to mail in a payment above the amount due. I would also try using your bank’s bill-pay service to pay your desired amount.

    Regarding the DVDs, I have thought about this problem. I rarely buy new DVDs. I either download them, or I buy them used. In neither case does the content creator get any money. I am not supporting them either way. So why should I even bother to buy the DVD at all?

  9. Debbie M says:

    Karen M and Kate (and Rick) – Trading and borrowing items does not directly help the people who make them, but providing a secondary market encourages others to buy things they’re not sure about, and libraries buy things based on demand. So you’re encouraging other people to directly help the creators.

    (I first started thinking about this in terms of cars–I buy only used cars, but only reliable cars. So people who don’t plan on keeping their cars that long are encouraged to buy reliable cars anyway so they will have a higher resale value.)

    I’ve also heard plenty of (admittedly obscure) musicians say that they do want you to give away copies of their music. It makes them better known, and the people who get your copy are more likely to attend concerts and buy other music and tell their friends.

    Edgar – The problem with switching to a higher interest bank is that the banks paying the highest interest are different from one year to the next. INGDirect used to pay the highest interest, so I started using them, then Emigrant, then FNBO, and now I’m thinking of moving some of my money to Smarty Pig. That’s totally crazy! Like Johanna said!

    I really liked INGDirect, but I got annoyed with their attitude that everyone liked their service so well that they no longer had to stay competitive with their interest. I kept a small amount there in case they decide to become competitive again. When I finally switched to Emigrant, their rates almost immediately plummeted to practically match INGDirect. I would have closed my account with them when a co-worker recommended FNBO, but I can’t figure out how. Smarty Pig is good only for certain kinds of savings, but I finally figured out a few things I could use them for: car insurance, flood insurance, my next car (I’m saving $50/month with no particular end date or final value, but I’ll just make up some figures for those far into the future).

    The current picture for me is:
    * my credit union – 0.5%
    * INGDirect – 1.5% (still 3 times as good as my credit union, thus not a mistake)
    * Emigrant Direct – 1.55%
    * FNBO – 1.65%
    * Smarty Pig – 2.75% (down 0.3% from yesterday!)

    In my case, except for opening my first online account, it’s always been a mistake to switch for higher rates–those big rate differences have never lasted long. Of course past differences are not guaranteed to continue into the future.

  10. Cari says:

    I really like your point on the library and DVD’s (same goes for the books there as well). We are pinching our pennies tight this year. Our children use the library weekly. We also use Netflix in the winter (1 movie at at time, $9 a month…way cheaper than going to the movies). I am glad I rent…it’s a rare movie I find these days that makes me feel I HAVE to buy it.

  11. almost there says:

    I switched from capital one to smarty pig. One can keep the pig private and set a goal of 100 dollars, for instance. One can fund as much money into smarty pig at a time and once the goal is reached leave it there earning the interest. One can add to it at anytime (fund it), thereby earning higher interest than the highest earned at bankrate for savings-non cd.

  12. Brigitte says:

    I was VERY unimpressed with SmartyPig. The last straw was when you had to set a specific date that money gets pulled from each funding account, but you couldn’t set different dates for different goals from the same funding account. So, I couldn’t set one savings goal to come out of one paycheck, and another savings goal to come out of the other paycheck. I also couldn’t do multiple transactions to each savings account per month, so I couldn’t just split the contributions for each account in half and do the same thing that way.

    That’s when I gave up and went back to the more user-friendly ING. The rate isn’t THAT much lower.

  13. Jeff says:

    Sweet Baby Rays is the only BBQ sauce I buy

  14. KC says:

    Concerning the trading of DVDs, books, etc. I am a librarian and I know I’ve been introduced to a lot of artists and writers I never would have discovered without the library. Although I don’t trade that much I can say I’ve probably discovered a few people I might not have had I not traded, too. In other words it increases exposure to new artists and titles. Authors and artists encourage this – especially the new ones. That’s why some of them do free appearances at the library. They know they are getting their name out there and might be introducing themselves to a new audience. It also increases buying. Some of these authors you discover you will want to own for yourself. Had I not been introduced to Shelby Foote’s fiction (not the non-fiction) at the library I doubt I would have ever purchased those titles. But I read them and I wanted to re-read them so I bought them.

  15. KC says:

    Concerning BBQ sauce. I just moved from Memphis and I really miss the BBQ. I can’t find anything where I live now – the meat is poor and the sauce is all runny and has too much vinegar. My solution? Visit Memphis often to see my friends and buy a case of good sauce and a few gallons of meat to bring home and freeze :)

  16. Rachel says:

    I do not feel bad in the slightest about using the library to borrow DVDs. I used to work in a college library in the media department and frequently did the purchasing for new DVDs and other materials. The costs of these to libraries are always significantly higher than the DVDs you pick up at the store, largely because of licensing/copyright issues that libraries must comply with. And, given that we all pay taxes which help the library make these purchases, I feel no remorse. I am actually glad to use the services the library provides, given that they provide these resources legally and do try to meet to the needs of their patrons (often, patron requests for titles inform the buyers’ next purchases for the library).

  17. Stephanie says:

    I am all for my local library and utilizing it to the fullest potential. It saves me money (since I don’t buy everything I would like to read, watch or listen to), it saves me space (since I don’t have to permanently store all those items) and it saves me time (my library has an RSS feed of new items and a killer reservations, hold and checkout process).

    I guess everyone has their own agenda and defines what feels guilty on an individual level. I don’t think about Karen and Kate’s dilemma of the creative person missing out on profit revenue for their work. I think about how I didn’t purchase something new that had a lot of manufacturing energy and raw materials used. I think about how this one DVD gets so much use at a library rather than collecting dust at my house since I may watch it only a few times a year. The library and rental system makes more sense to me. I won’t suffer from feeling like I wasted my hard earned money if the movie is terrible.

    Our society is shifting and like Trent said, we figuring out what comes next. Hopefully we can all feel satiated with less.

    And if your guilt is too much, send the directors a donation. I am sure they won’t refuse.

  18. David Allen says:

    I have to say, I almost always agree with Trent on matters but I have to say something about the last question from Sara “If you were eighteen years old and single right now, would you go to college?” Trent’s answer is correct insofar as it says that college isn’t a requirement nor is it for everyone. However, it ABSOLUTELY IS more than just about growth as a person. For instance, my step father came out of the military in Vietnam with a solid math background and went right into a mortgage broker where he excelled for a number of years before starting his own semi-successful business. He took the equivalent of Trent’s advice and skipped college because he was successful right out of college and as soon as his business began to fall apart – he found himself completely unable to support himself or his family as he had in the past. He couldn’t get work anywhere because he didn’t have a college degree and if he did get work, it was usually commission based underneath someone half his age with a meager college degree. To follow Trent’s example, in the same sense of the high school athlete who skips college for the big leagues, should they injur themselves or something happen to their contract, they may find themselves in the same position as my step father.

    College is not only about growth as a person. It sounds great but College is also about finding multiple skillsets and developing professional opportunities from an accredited institution so people can know you’ve been graduated from an objective instituion. It doesn’t have to be expensive or time consuming – there are ways to finance your education more economically than student loans but the payoff (especially if you’re one of the successful entrepreneurial types Trent described) is much greater than the short term costs.

  19. Johanna says:

    With regard to Joyce’s question, there are a lot of aspects that Trent’s answer didn’t fully explore.

    For example, how much does Joyce have saved for retirement already? If the answer is “nothing” or “very little,” then that’s a reason to save more than 12% now. She’s only 26, so she wouldn’t have all that much catching up to do, but it’s far better to do that catching up now, when the money still has lots of time to compound, than later, when it doesn’t.

    Is early retirement something she’d be interested in at all? If so, that’s another reason to save more than 12% for retirement.

    Finally, is owning a home something she really wants to do, or is she thinking about it because she feels for some reason that that’s what she should do? Homeownership has a lot of benefits, but it also has a lot of drawbacks, so it’s not for everyone, and if it’s not for you, that’s OK. Ignore all the noise about “renting is throwing your money away” – a lifelong renter who saves and invests the money she would otherwise have used to buy and maintain a home can be just as financially stable as any homeowner – and think about whether homeownership is really what’s right for you.

  20. David Allen says:

    I meant to say “He took the equivalent of Trent’s advice and skipped college because he was successful right out of high school.”

    *shakes fist at the lack of an edit button*

  21. Nick says:

    I buy used cd’s all the time, and have no qualms doing so. The ones making the cds (the artists) receive a very low cut of the CD anyway. If it’s an artist I like, I support them through buying their merchandise and seeing them live. I know this doesnt carry over to movies/dvds, but oh well.

    Also, I have a great used CD/DVD store in the area and I like to help them out whenever possible. I’d much rather give $8 to the local shop for a used CD that nets the band $0, than spend $12-$15 for a new CD at Best Buy that nets the band maybe a dollar.

  22. Karen M says:

    First, thank you, Trent, for addressing my question. I think you answered it fairly. I completely agree with you that perfect copies should not be sold, traded, rented, etc.

    Second, I am a heavy user of the library. I also purchase used books, DVDs, and CDs. I try to be as “green” as possible in my lifestyle choices, and buying used fits right into this.

    My comment was more about Trent’s phrasing, which implied that trading DVDs supported the artists involved. The Reader Mailbag this came from (#63) actually had two questions that dealt with these issues.

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

    It is the implication in the preceding quote that the people who create the work receive any profit from a trade that I was questioning. After reading through Trent’s answers to #63 and his answer here, I believe Trent and I think the same way on this issue: neither of us buy, watch, or otherwise partake in pirated copies. Used copies, where the actual DVD (or whatever) was legitimately purchased once, are a-okay.

  23. McClards BBQ sauce is wonderful and can be found in some groceries. It is from a restaurant in Hot Springs, Arkansas. If you see it, try it.

    Restaurant wise, Memphis BBQ is my favorite, but I don’t get there enough.

  24. Damester says:

    Trent:
    I was more than a bit surprised by your response about college.

    There are probably many 18-year-olds today who have great ideas for businesses, some of whom are actually running them and even a few who are doing really, really, really well.

    However, whether they can sustain those businesses and/or have the wherewithal to develop new ones over the years remains to be seen.

    The Bill Gates of the world are the exceptions, not the rule.

    The average 18 year old may have ideas but the average one won’t be able to implement them and will at some point, need to work for someone else.
    Like it or not.

    Today, that means a minimum of a four-year degree (you have places today paying minimum wage who won’t hire without a degree!)to be considered for anything.

    A college degree in and of itself means nothing, it’s really how someone else perceives it and you. The advantage of a degree, for most graduates, is nothing more than it possibly allows you to gain entry to an interview at places where you literally will be screened out automatically if you don’t have one. (We’re not talking specialized degrees here, and to those who go on to graduate work.)

    A degree itself is no assurance of ability or potential success. Just look at today’s workplace.

    That said, the college experience and its value goes well beyond the classroom (and I’m old-fashioned enough to believe that a good education isn’t about qualifying for a job but also about real learning. How to think, how to question, about history and about a world bigger than you knew about before).

    I refer to the learning and the socialization, both of which are hugely important.

    In fact, who you meet and where you go to school can affect your ability to make your way in this world for all your life, for good or bad. And I hate that this is the case, but it is.

    A lot of less than capable people are always employed and making money because of who they know and how they socialize. You’ve got people in their 40s and up still trading on their college days. It does still work that way.

    College is only as good as the school and the student make it. Good schools turn out mediocre graduates while not-as-famous schools turn out leaders in all fields.

    Even entreprenuers can benefit from the right education and I would hope that you would encourage everyone who can, to get a higher education based on their interests and abilities.

    Especially given how little is actually learned in today’s high schools. (Graduates can neither write or read, for example.)

    No, college as it is generally set up today, is not for everyone.

    But the average person needs more, not less exposure, to a wider variety of topics.

    The irony, of course, is that there will also always be people who self-educate and who learn all the days of their lives but who never went to college. Alas, without that degree, they are generally (unless they are Bill Gates or Peter Jennings) treated as less than and they rarely “succeed” unless they create their own big companies.

    Today, you create your own company even while you’re attending college. Better that than no advanced schooling.

  25. Amanda says:

    Look for a local bank that offers a Kasasa account – they currently pay 4.51% interest and you have to one direct transfer each month and use their check card 10 times per month – groceries and gas (if you go weekly) can be 8 of the 10. They also refund all atm fees at the end of each month.

  26. John says:

    Trent – in regards to Frank’s issue with his credit there is another option available. I was recently in a very similar situation with two of my credit cards and after calling them, no, begging them to lower my interest rate and I was denied. I was paying over $300 per month on the payments for both cards combined. One card had 29.99%, the other 24.99%. I too applied at my local bank only to be “rejected”.

    I read online someplace about a site called “Lending Club” where you can get a loan from other people, typically with much better terms. I applied, was approved, requested the amount I needed to pay off the balances, the loan was then shopped around to the members of the site, it was fully funded in 5 days and within 9 days I had the money deposited into my checking account. The new APR is 13%, the new monthly payment is $198 and it is a 36-month term. Running the numbers on my other APRs and payments would have put me at around 15 years to pay them off. In this situation, Lending Club helped me out big-time. You may want to share this site with your readers: http://www.lendingclub.com/

    I was skeptical about it working, but I was willing to try anything to get out from under that debt. Granted the 13% isn’t a stellar APR, but it is better than what I had and I am saving $100 per month now. That extra money is going directly into an online savings account for my Emergency Fund.

  27. Jenna says:

    Frank’s situation with the retail credit card makes me sick. Going along with the other comments, I’m pretty sure that that’s illegal. I would call the 1-800 number on the back of the card and confirm that you cannot pay any higher amount than the minimum payment if you haven’t done that already.

    I once had a certain retail card that had a ridiculous amount of interest. What I did is pay a certain amount above the minimum payment (whatever I could afford in my budget). When I got my tax return at the beginning of this year, I used that to pay off the rest of the card. I then cut up the card and never vowed to use a retail card ever again. If you and your wife tend to get a good amount of money back from taxes every year, this could be an option for you.

    Good luck!

  28. Liz says:

    Hey Trent,

    I just wanted to tell you that I checked “Getting Things Done” out of the library after your latest review of it. Two days later I bought it. Wow. Talk about life changing. The project planning steps alone have already resolved several areas of my life I’ve battled for years.

    One area in particular I am most excited about is that my husband and I have used the program as an inspiration and springboard for a “Getting Money Done” program. It would be too lengthy to describe here. If you’d like the details, please email me and I’d be happy to send them to you.

    Thank you for repeatedly mentioning this book. I had checked out of the library the last time you reviewed it but never got the time to read it. You are right – it is a must read for everyone. We’ve been drowning in clutter, drowning in debt and totally overwhelmed. This book is the lifeboat we needed. Thank you!

  29. Brandon says:

    For BBQ sauce Rudy’s. It’s a chain in South Texas and it whips McClards! (I went to graduate school at the UofA).

    For a dry rub Rendevouz is probably the best I’ve ever had though.

  30. Tyler says:

    I cannot disagree MORE about the DVD answer.

    The argument of “I learn about new artists/actors/directors/etc. from trading” is only valid IF you purchase new/retail copies of that person’s work. Continuing to trade for that person because you now know of them does NOT gain the artist new business, thus no new money.

    Additionally, a trade/swap of CD for CD or DVD for DVD is WORSE than pirating – when you pirate, one artist loses out on a retail purchase; when you trade, two artists lose out on a retail purchase.

    The best option is to use the library (the legal and tax-sponsored entity) to learn of new artists, and to purchase new products from said artists in a critical-fashion through a retail outlet.

  31. MT says:

    As a new(ish) reader of your site, I really enjoyed your series of “best of the simple dollar” posts with links to stuff that you have written about in the past.

    I’m just curious about some aspects/areas of finance and frugality that you DON’T touch on your blog or don’t subscribe to in real life. Other than couponing and the fact that you are willing to pay premiums for good food, I can’t think of any specifics that you’ve mentioned.

  32. prodgod says:

    From a royalties perspective, I seriously question what the difference is between downloading a pirated movie and renting, borrowing, trading, or buying a used copy. In each of those cases (including the pirated download), the creators were paid only once, at the time of the initial retail purchase. Decades ago, it was illegal to resell used records, I assume for this very reason.

    I no longer buy new CD’s or DVD’s at all, so whatever way I choose to acquire them will never make a financial difference to those who created them.

  33. Kevin says:

    This really has nothing to do with this week’s mailbag, but instead is a question that I’ve been wondering about for a while. I’m 18 years old but looking about 7-10 years into the future at the purchase of my first house. Without getting into the whole renting vs. buying debate, I’m internally debating whether or not it would be a good idea to put my savings toward a down payment into my Roth IRA for the time being and, when the time comes, use the contributions earmarked for the down payment plus some earnings (since up to $10,000 would be non-taxable for a first time home buyer).

    My thinking is this: with the way the market is now, I have a great chance to buy low. I’d like to think that, in 7-10 years when I’m looking to buy, the economy will have turned around, allowing me to sell high. This idea wouldn’t affect my normal contributions to my Roth IRA and I’m thinking that I’d determine how much of the earnings I’d pull by some simple ratio of (contributions earmarked for down payment/total contributions * earnings).

    Thoughts? Ideas? Comments?

  34. Joy McDougal says:

    Though I share your sentiment about switching banks a little, it is not rational. At all.

    There are many online high-interest accounts, and if you limit yourself to those that offer the same benefits, but differ in interest-rate, there’s no reason not to make multiple accounts and keep moving your money. Apart from the few minutes you have to invest in keeping tabs on interest-rates.

  35. Dawn loves dobermans says:

    About the college issue. I hae mixed feelings about that. I went when I was 18, and then had to “bow out” for a quite a few times due to injuries/health problems. I’m not sad I started at 18, although there is a truth I learned/realized about myself as time went on: as my life experience taught me more than I had as a very sheltered 18 year old, the better equipt I was at learning things outside of pure science. I am a decently smart person, but I remember in HS, say in English, being completely unable to do the “reading between the lines” type stuff. “The Great Gatsby” was something that I just couldn’t get, beyond just reading the story. I had couldn’t comprehend extramarital affairs. That was something I couldn’t wrap my head around. So unless the reasons were stated clearly, baldly, right oer my head. So all those “clues”, the “empty desert” the sign with the eyes watching over … well, anyways, I ended up learning more and much easier as I got older and became more “wise to the world”. My thought only. Though, frankly, I couldn’t imagine doing anything other than college at that age, either!

  36. SteveJ says:

    @Damester – That is a well thought out reply. The only issue I have is that far too few HS grads are ready to take advantage of college and would be wasting their (or their parents’) money and time. I’m fairly certain that just going to college isn’t conducive to finding your way. I was surrounded by intelligent people that went to college because they had no other idea what to do, and 4-10 years later, that was still the case. I do agree with the merits of exposure to new ideas and thinking, I’m just not sure college is the most cost effective way to do that. Completing two years of college and dropping out with no piece of paper to show has to be equivalent to some other learning experience that isn’t quite so costly. It’s hard to come up with a dispute to the issue of degree inflation, a PhD is already worthless in many fields. Is sending more people who aren’t driven to educate themselves the right answer? I think some life experience before college is a good thing for many of the people who are only going to college because they’re supposed to. I know the middle-aged students in my classes were always more engaged and I believe it’s because they knew what they working towards or working to get away from.

    @Brandon – We have a winner! I’ve had better barbecue in Houston, Memphis, and KC, but I haven’t tasted better sauce yet.

  37. Michael says:

    Trent sees college as just a way to make money. The primary purpose of college should be to gain a liberal arts education.

  38. Marsha says:

    Trent wrote “The purpose of going to college is to grow as a person.” I disagree – while it can be a place to grow as a person, the real purpose is to get an education. People disagree as to whether it’s an education to make a living or a general, liberal arts-type education.

    Personally, I think the mistakes in judgment I made in college were because I hadn’t done enough growing as a person. College didn’t really “grow me up.” I only matured once I got out of college.

    I’m sure all this depends on the person and the college/university, too.

  39. FrugalCubicle says:

    Trent – please revisit your thoughts on college. If an 18 yr old has the opportunity to go to college then they should. If it is not “right” for them, then they can come to that conclusion after they have tried to succeed. Education is a great privilege.

    You wouldn’t have told Lebron James to forego highschool because he was talented enough to be drafted when he was in 8th grade.

  40. DrFunZ says:

    My thoughts…

    Use the library! The folks there are well trained and want to help. Use the DVDs and take out the books. Use the computers. These were all paid for by your tax dollars.

    I am really angry right now that saving rates are so low. How does anyone expect to convince folks to save when they get a piddling 1.6% on their investment?? I luckily sold my home in Sept and am still trying to find the right mix of investments to make in this ridiculous economy.

    OK enough whining from me… I think I’ll go eat BBQ – y’all made me hungry yapping about that BBQ sauce!

  41. reulte says:

    If I was 18 and single (and knew everything I know now), I wouldn’t go to college. I’d travel. What makes people ‘grow up’ are the unexpected events (aka ‘emergencies’ or ‘adventures’) in life. That is something that isn’t always learned in college – especially if/when someone else is footing the bill.

  42. Linda says:

    My sister asked me if I knew anything about https://powerpay.org/. I hadn’t heard of it and you have to sign up to access the site. Have you heard about it?

  43. sleigh says:

    My husband and I recently withdrew equity from our house in order to pay off considerable credit card debt. I felt that this was a reasonable risk because 1) we owe less than one quarter of our home’s value in a mortgage, 2) Our bank offered us a HELOC loan with a fixed rate of 4% for the next ten years, 3) we would be able to pay off the loan within 10 years with a lower payment than we were currently making on the credit card, and 4) the interest rate on the credit cards were much higher than 4%. I was so relieved when we sent in the last credit card payment and paid the full statement balance. What I didn’t expect was that this month the credit card company sent us another bill for a full months interest even though the balance had been paid off in the last statement. The company said that this was for the difference in days between when the statement was issued and the balance was paid. What I don’t understand is that the last payment was made before the due date and no further charges were made, so how can they charge me more interest?

  44. almost there says:

    Sleigh, #43. That is how they do it. If you never carried a balance and paid off by the due date you could take advantage of the days from the charge date to the due date for an interest free loan. But since you carried a balance there is interest accruing from the billing date until you paid off the balance from the latest bill. So you are billed for that additional interest. In reality one can never pay it off if paying by mail since interest accrues while the check is sent until it is posted. Most cc companies will eat the few cents in interest charges after you pay the additional interest from the last bill you paid off.

  45. ShootDawg says:

    Concerning the trading/purchasing of used items, in this case, dvds and cds, to where the original “producers” receiving northing from the aftermarket sale.. wouldnt this apply to everything that is made/produced?
    for example, someone built my house, yet when I bought it used from the previous owner, the original builder (and workers) did not receive any of the money from my sale.
    As someone else pointed out, the same goes for used cars, and just about everything. Services are harder to resell, although it can be done.. search the internet for a fix to a problem, and most likely the original customer had to pay for that fix, if it was in the way of a support contract or such.

  46. Kas says:

    New question for you:

    How do you go about finding pictures to complement your blog posts? I know you use Flickr-hosted images with creative commons restrictions, but what is your process for figuring out what pictures to use?

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