Reader Mailbag #74

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 saw that you’re looking for an assistant. Send me an email, we could seriously chat about it.
- Michael

For a long while, I’ve been thinking of hiring an assistant for The Simple Dollar. Not to write or anything, but to help with the deluge of email and other things I get every day (like comment approval). I’d like to be able to translate a stack of 300 or so emails into 25 or so that need responses and a list of 20 or so other things I should be aware of. These menial tasks eat up probably two or three hours for me each day and, frankly, I’d rather not be doing them.

I tried hiring remote assistants to do this three times, but it just didn’t work out. I found that during the training period, there was so much communication going on that I would have saved substantial time doing it myself without the embarrassing mistakes.

Right now, I’m looking locally for such an assistant, perhaps a stay-at-home mom in my area who could do this for two hours a day while the kids are napping or something. So, please don’t send me your resume.

Considering the amount of free information on the web, I was wondering if you are paying subscriber to any websites (such as consumerreports.org) and if you think those subscriptions return their value.
- Frank

For me, it depends on how often you actually turn to the service for a key use. Do you often turn to Consumer Reports for unbiased rankings of consumer goods? Or, alternately, do you get sufficient answers from digging around the blogosphere, knowing that many people out there are paid corporate shills as well as specific individuals with axes to grind?

For me, CR is useful, so I’m happy to support it with my dollars. Without that support, useful services go away, which is the same logic I used when I chose to become a paid user of Evernote and Flickr, for example. If I use it all the time, the last thing I want to see is that service to go away, and the best way I can do that is to give that service a small amount.

I sincerely wish that there was a simple and functional micropayment system online, because there are several free sites that I rely on and trust that I’d be happy to support with a small donation if it were simple and pervasive.

One of my closest friends is a film buff. She and her husband are about to have their first child and instead of asking for normal baby items for their baby shower, they wanted everyone to bring a copy of their favorite children’s movie so that these could be shared later on in life with the child. This one has me stumped. What would you choose?
- Ciana

Hands down, Spirited Away. Not even a second’s worth of hesitation.

Why? I think it hits that sweet spot of entertainment and empowerment of children better than any movie I’ve ever seen. Chihiro exhibits completely normal childhood fear and reluctance, but she manages to push herself beyond them to accomplish great things through her hard work.

The imaginative nature of the film, the fantastic art, and the realism of the main character (meaning that her emotional responses come off as completely genuine, something that’s rare in any kind of film) makes this one something I already watch with my son and look forward to enjoying with my daughter when she’s a bit older.

So last week, our washer broke. It gets stuck on the fill cycle and won’t move; it just keeps on filling. We have someone coming out to look at it this week to tell us how much it’ll cost to fix.

This washer is only 5 or 6 years old. But it’s the cheapest Kenmore brand Sears offered at the time. The dryer works fine.

I know that just about any amount the repair man comes up with will be cheaper than buying a new (but cheap, low-end) front-loading washer. But with the benefits of energy efficiency, low water consumption and better wear and tear on our clothes that new washers offer, at what repair price will it become worth it to buy a new washer?

Or is it best to just go with the hands down cheapest option because we have the wedding coming up and that MIGHT eat into our emergency savings and then we might actually have an emergency?

I’m also looking at this from a green perspective too. Is it best to continue using an out-of-date energy consuming product rather than consume a new product, or is it better to save the energy and water consumption by buying a new product and having to throw out the old one?
- FemmeKnitzi

The first thing I would do is dig through some do-it-yourself websites and make a sincere effort at repairing it yourself. Digging around based on the information you gave, I found this guide, which is something I’d be willing to try in your situation.

If you can’t get it to work on your own, I’d call a repairman and get an estimate. Find out what it would cost to fix the problem. If the cost is too high, just replace the washer.

What’s “too high”? I’d investigate what a new washing machine would cost, including the energy savings. If it essentially saves you money to buy new compared to just fixing the washer, go new; otherwise, stay with what you have.

One big reason for this is environmental: dropping a washer in a landfill and eating up the resources it took to make a new one eats up the gains you get from greater energy efficiency, even over many years.

I’m a recovering methamphetamine addict. I’ve been clean for five months and it’s been the hardest thing I’ve ever done, but every day is easier than the one before it.

Right now, I’m putting my life back together. My older brother is helping me get things together. He’s allowing me to live in his basement and he’s paid for some dental work as well. He’s also paying me to take classes at electrical school.

I owe so much to him that I don’t think I’ll ever be able to repay him for all he’s done for me. Where do I even start?
- “Mel”

First of all, huge props for turning your life around. Breaking an addiction and getting away from all of the relationships that support that addiction can be extremely hard. You’re on a much better path in life now and the effort it took to get there deserves commendation.

How can you repay your brother? Simply put, you can’t, unless fortunes change.

Instead, what you can do is tell him sincerely how you feel. That in itself can be hard, but sincerity can’t be faked – and sincerity means a lot.

Also, never forget how he’s helped you and be there for him when he inevitably needs help in the future. Something will happen in his life where a helping hand will be invaluable. When it happens, remember how much your brother helped you when you needed it the most and do whatever it takes to help.

Another way you can likely help is to pay it forward. When you see people in trouble, help them out when you can. This seems trite, but it’s probably the best possible way to repay this kind of generosity.

Trent, I am shopping for a gas bbq grill. Do you recommend any? And what is the best time I can find lower prices on the grill?
- Vanaja

Late summer is usually the best time, as gas grills are usually considered summer seasonal items and late summer is the time when stores rotate into fall and winter seasonal items. August and September are the months to shop for one.

As for what one to buy, I’d recommend not getting one with wood trim. Get a stainless steel one, as they require much less maintenance work to stay in good shape.

You’ll get different recommendations from different people when it comes to items like this. I’d focus mostly on what you need. Research grills on your own, figure out what exactly you actually need, and know this before you actually go shopping.

I was laid off in March, and I am currently collecting unemployment. 30% of my unemployment income goes to my rent (I am on a month to month lease and live in a 1 bedroom alone). My boyfriend is losing his roommates and will also need a place to stay (he too was laid off from the same company, at the same time). We would like to take that next step and move in together, which would cut my rent down to 17% of my unemployment income. Here’s the problem: we are having trouble finding someone who will lease to two college educated, albeit unemployed, upstanding tenants. Our unemployment will not run out until March 2010, and together, we make 3.5 times the rent. Do you know of anything that may improve our chances of signing a new lease?
- Brittany

A big deposit helps. The bigger the deposit, the better – cash always talks.

Another option is to get away from the large management houses – who mostly view you as a number – and seek out apartments owned by individuals, like a family renting out a floor of their home, for example. They’re much more likely to actually take your story into account instead of just discarding you.

Alternately, is there a way to use your current apartment over the short term It’d be tight, but if you’re both unemployed, the savings could be worthwhile.

It looks like everybody is coming back for the final season of Lost. The promotional poster for the season features pretty much every cast member that has ever appeared on the show and several actors have confirmed they’re coming back. How’s that going to work?
- Jeff

The poster that Jeff refers to is here, and it does depict pretty much everyone who’s ever been on the show, including lots of killed-off people.

I think the last season is going to start off with Oceanic 815 landing in Los Angeles in 2004 without crashing on the island. That means that no one who died on the island is actually dead. Afterwards, though, they’ll all start having dreams about the island and will eventually find their way there in some way or another. The final one to return will be Jack and the final scene of the final episode will be identical to the first scene of the first episode.

Or maybe I’m just crazy. Lost might be my favorite show of all time.

Presently I find myself doing well in my career, earning comfortably and seriously I kinda of enjoy it as well. On the other hand, I might not know when the ‘enjoyment’ will die on me.

However deep inside me, there is this inner voice or call that I should try out to be an airline pilot which happens to be my childhood ambition too.

I will stare in awe whenever I see aircraft in the sky. And I will wonder when I can be in the cockpit. This childhood ambition can be costly due to initial training fees.

What will you do if you are in my shoes? Stick to the present job? Or to leave the present job and head for the unknown terrain?
- yfloo

Life is all about chasing your dreams and passions. Go for it.

You know what your dream is. All you have to do is start putting the pieces in place to make it happen. Look into what you have to do to be an airline pilot. Start living really lean, building up your emergency fund and any savings you’d need to make it work. Then start taking little steps towards that dream. Take classes in your spare time.

Eventually, you’ll reach a point where you don’t need that income from your job and you can take that leap. But the journey of a thousand miles starts with a single step.

What are you reading lately?
- Neal

Many, many people ask me about what I’m reading – I guess somehow that The Simple Dollar attracts at least some bookish people.

I used to mention them on Twitter, but I decided that I was usually giving short shrift to books by mentioning them there.

So, I joined GoodReads on July 27 of this year. GoodReads is a site that allows a person to keep track of the books they’ve read. I considered going back and filling in earlier books I’ve read, but I simply wasn’t sure of the dates or the titles, so I decided to just record them as of July 27.

If you’d like to see what I’ve read recently – or what I’m currently reading – tune into my bookshelf on GoodReads. I’ve added a link to it on the sidebar in the “More Social” section, so you can check it any time you wish.

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

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  1. Shannon says:

    Huge props to Mel and his brother. It is absolutely fantastic and empowering to see someone turn their life around and equally as fantastic to see a sibling willing to provide all the help needed to do so. The fact that you are having these thoughts show that you care deeply about your brother, and like Trent said, the time will surely come when your brother needs help, and I’m sure you’ll be willing and able to step up to the plate.

  2. akb says:

    hi trent,

    I was wondering, i have a work offered HSA (health savings account) and high deductible health insurance. They take the money (i decide how much) out of my paycheck and put it into an account that i can then use to pay my deductible and other health related expenses. this is all pre tax money, its a great deal for me,a nd i can keep it as a sort of ‘health nest egg’ of sorts. what I guess I was wondering is, how should this affect my emergency fund, given that I have a fund which is of equivalent size for health emergencies alone?

  3. Kevin says:

    Mel: props to you. Hang in there and be strong. It looks as though you have a wonderful attitude and a very supportive sibling. When the time is right and you’re able, you’ll know what to do for your brother. Take care.

  4. Angie says:

    Regarding the apartment rental, this is where an emergency fund really comes in handy, although that may not help the specific questioner NOW. My husband and I have moved several times to a new place with no job waiting for us, including the place we live now (moved here a year ago). We print out a copy of our bank statement that shows our most recent balance, black out the account numbers, and bring it with us when we meet with a potential landlord. If we’re serious about the apartment, we’ll show the landlord the statement and offer to pay as much as necessary upfront to secure the lease.

    Where we live now, our landlord just asked us to pay for two months before we moved in. It didn’t hurt us much (emergency fund), and she had some assurance that we were really coming (despite not having a job to anchor us in the new place yet).

    The good news is, we found work right away.

    The time to start building up your “I’m moving” fund is while you’re already in a comfortable situation, job-wise and housing-wise. $5,000 seems to do the trick nicely. And the best thing is, you don’t have to spend it, you just have to HAVE it.

  5. Debbie M says:

    Mel, the best way to repay your brother is to stay clean and keep doing your best in pulling your life together. If you backslide, don’t give up, just pick up and try again. Study hard. Talk to your instructors. Try to get a good internship or something like that. And don’t get electrocuted! It would be such a thrill for your brother to be able to see that he was able to do something that really does help you to make your life better. Use him as an extra motivator when you need one, the same way some people use their kids as an extra motivator.

    (My brother is in prison, and I am doing some similar things for him, and that is really all the thanks I want. I want my efforts to actually work, that’s all. Actually, I also greatly enjoy hearing about his successes, even when it’s just that someone did something perfectly horrible to him and he refrained from doing anything stupid in retaliation!)

    Also, while you’re still living in his basement, be a good guest. Find things you can do to make things easier like mow the lawn, cook supper, or repair something. There’s probably something you’re good at that he isn’t or doesn’t enjoy or doesn’t have time for.

    Vanaja, make sure that the grill is designed so that fat dripping from what you’re cooking will not land on any hoses and melt them. I seriously just yesterday watched people putting out a fire that started in a grill this way and set the house on fire. (They had a fire extinguisher and put out the house right away with minimal wall damage and eventually got the grill put out, too.)

  6. Debbie M says:

    Ciana, my favorite kids’ movie is “The Iron Giant.” It also has a good lesson (to do the right thing, be Superman) plus it’s got quirky characters that make it fun for grown-ups, too, and the animation is just beautiful.

    (I’d also have to second “Spirited Away” as a choice.)

  7. To the recovering meth addict…

    There is something you can do to repay your brother! Keep up the commitment you have made to turn your life around!

    Your brother obviously cares deeply for you and he wants nothing more than to see you get healthy again!

    Keep up the excellent work!

  8. Marc says:

    Spirited Away is a great movie, if you can also find “Castle in the Sky” I’d strongly recommend it; both are by the same studio and have stories both children and adults can enjoy.

    Mel: congratulations on getting away from that addiction, hopefully things will be better and better for you from here. Your brother probably isn’t expecting anything in return (except actually staying clean) for his help, so Trent’s advice of voicing your appreciation seems like the best thing to do. I’m sure sometime in the future you will have a chance to repay his kindness (doesn’t have to be financially).

  9. Candi says:

    I have to chime in on the children’s movie. My all time favorite is The Secret Garden. Any of the versions will do (I think there are about 4). Plus you could give the kid a really important gift and give a copy of the (gasp) book with a copy of the movie. The parents might one day find they enjoy reading to and with their children as much as they like watching a movie with them.

  10. Hey Trent,
    Thanks for taking the time to read my blog. I always enjoy reading yours.

  11. J says:

    I don’t think that hiring a local person is going to solve your assistant problem. You’ll still need to communicate and likely will have some embarrassing mistakes, even with a local person, no matter how qualified and intelligent they are.

    Any time someone new comes on board, you are going to have more work to do before they become independent and start contributing fully. In a case like you describe, it would not surprise me if this ramp-up time was at the very least 2-3 months and perhaps up to 6.

    You’re essentially asking for someone to read your mind, and at the very least, understand you. You might want to ask your wife how long this process took :)

  12. My advice for FemmeKnitzi and her washer would be right in line with Trent since it’s only 5 years old. You should try to repair it and get a reasonable lifespan out of it before replacing (~10 years).

    After that, if it breaks down, you might be surprised to know how much you can save by spending a little more up front on a highly efficient model.

    It’s important to remember that value is not always tied to price. Being successfully frugal means knowing when to spend more now to save more later. If you’re replacing something cheap with something cheap all the time, you’re not only spending unnecessary money on replacement but the turnover of materials that went into making that washer is much harder on the environment.

  13. I think this site is really good especially if you do it alone and just shows what can be achieved with a bit of commitment.

    If you don’t mind me asking, how do you promote the site, just seo or do you market as well? all tips gratefully received.

  14. Stijn from Belgium says:

    I have the same thought as commenter #10 J. That’s the essence of a training period: put time and effort in it now so you may benefit in the long run. Just like investing :)

  15. Blair says:

    I watched season five of Lost, without having seen any of the first four seasons, and loved it. Thankfully, Netflix recently added the first four seasons to their instant streaming service, so I can catch up before the show ends.

  16. Blair says:

    As for grills, I really like the Weber Genesis line. My parents have had one for 20 years, and it still works great whenever we use it. Meanwhile, I bought a cheapie grill that’s already broken down.

  17. briang says:

    for yfloo – about becoming a pilot.

    I would recommend reading all of Patrick Smith’s “Ask a Pilot” columns on salon.com. He writes quite well about the realities of the job. I was surprised to learn that most entry level pilots spend years working really long hours to make less than 30k a year.

  18. So that explains why my email(s) went unanswered !:> I understand, just a couple emails a day keeps me distracted; can’t imagine getting hundreds.

    Sorry to hear the remote assistant thing didn’t work out; upon reading the 4-hr workweek, he makes it seem so easy.

    Anyway, if you get to this instead of my email buried in my pile, would love to do a guest post – plenty of my best material on front page at Darwin’s Finance; just let me know.

    Nice job on the mailbag this week btw.

  19. brad says:

    @ #2
    “…They take the money (i decide how much) out of my paycheck and put it into an account that i can then use to pay my deductible and other health related expenses…what I guess I was wondering is, how should this affect my emergency fund, given that I have a fund which is of equivalent size for health emergencies alone?”

    i would say your best bet is to sign up for the hsa, figure out what you can comfortably contribute for the year, and if that is under the 2009 limit, then throw some of the emergency fund in the hsa account too. you can deduct the after tax money you contribute to the account when you file taxes.

  20. Kristen says:

    @yfloo

    My husband left his job as a computer geek to become an Army helicopter pilot. He loves his job! He flies the Kiowa Warrior. :) The program he entered through is Warrant Officer Flight Training program. He was guaranteed to fly from the day he signed up and was accepted into the program. If you like your day job, perhaps you should consider entering this program as a National Guardsman/Reservist. If you like it, you can make it your career, in the mean time, you can just fly. :) If you’re interested in planes more than helicopters, the Army does have some & you can request it if you’re Active Duty or you can try to join a local Guard/Reserve unit with planes. Either way, every Army aviator still learns to fly helicopters before airplanes. If you want to find out more more, leave a comment on my blog (by clicking on my name) or just do some web searching & talk to a recruiter (though many are not aware of the program and you just have to push them to do the research & walk through the process with you).

  21. Mary W says:

    Brittney – What’s wrong with your boyfriend moving into your current 1 bedroom? It seems like the frugal option. I ask this as someone who grew up in a family of 5 kids in a 3 bedroom, 1 bath house.

  22. AK says:

    I’ve been accepted to a MBA program and got a two year deferral so I can work for a couple years. My school’s website says that they don’t consider retirement assets up to $100k in their aid decisions. I’m looking about $50-55k per year in MBA expenses.

    I’m maxing out my 401k and Roth IRA this year and plan to continue to do so until I enter the program. My question is how I should invest the new money in my Roth IRA over the next two years (three years of contributions)since I could potentially take it out to pay for the MBA.

    I have about $30k in other savings and expect to put $2.5k per year (state tax deductible) in a 529 plan.

  23. J says:

    @akb — Check and see if there is a limit on when you can use that HSA money. In my case, putting money into a HSA means that I have to use it all by the end of the year.

    For us, this has zero effect on our emergency fund, since we have a good idea of what we have spent on health-related expenses in the past and use that as a guideline for how much to put into the HSA. If we end up spending it all by October or November, we consider our forecasting to have been accurate enough.

    Keep in mind an emergency fund is for, well, emergencies. If you know you spend about $X/year on health expenses, it’s not an emergency, but a budget item — like gas, electricity, etc.

  24. Mel it is wonderful that your brother was there for you. I don’t believe your brother would be looking for repayment financially wise. What you can do is continue to maintain the positive road you have started. Sit down and discuss things with your brother, doing this will be more rewarding for him than any money will do. Sometimes you can just give him a hug to show your appreciation. All the best.

  25. brad says:

    #19 J

    “Check and see if there is a limit on when you can use that HSA money. In my case, putting money into a HSA means that I have to use it all by the end of the year.”

    you might be getting confused with an FSA or an HRA. any money you deposit into an HSA is yours to keep, forever, with no time limit. its a bank account for medical savings, nothing more. a Flexible Spending Account or Health Reimbursement Account are employer offered plans that usually have the ‘use it or loose it’ clause for the end of the year.

  26. Tabitha says:

    Spirited away is a great movie, but my six year old is still scared of it. I would choose My Neighbor Totoro. My girls have watched this many times over and still request it.

  27. Nicole H. says:

    Brittney, I agree with Mary W. Why can’t you both live in the apartment you’re in now? You can obviously afford it by yourself, even on unemployment.

    Mel, kudos to you for turning your life around. I don’t think you can pay your brother back tit-for-tat, but I’m sure he’s very proud of you. I also think that having someone else in this world who truly has your back is invaluable. This works both for your brother, and for you since you are moving into a position to be there for him should he need it.

  28. J says:

    @brad — thanks, I wasn’t aware of that type of plan. I still would fully understand the mechanisms for withdrawal of the funds, though — in addition to understanding what happens if you change jobs (voluntarily or not). Emergencies are not all medical emergencies — and if you can’t use the funds you have stashed away for an emergency when a real emergency happens, then it’s not an emergency fund.

  29. Lisa says:

    Don’t get suckered into buying a front loader! They are all computerized. They will break! And when they do you are looking at costly repairs. I speak from experience. Stick with a good, old-fashioned mechanical washer. I wish I would have. I had one for 15 years before I replaced it with a front loader and that thing broke a year later just out of warranty. The lid locked with all my clothes still in it, the washer refused to power on, and the repair man couldn’t come out to even look at it for two weeks! At risk of losing my clothes, I pried open the lid with a screwdriver to get my clothes out and two weeks later when the repairman came (and charged me $150 just for the call) I was told the washer needed a new motherboard. I went out that day and got myself another inexpensive *basic* washer that cost a fraction of the the front loader. It is still humming along just great 5 years later. I am sure it will last another 10 years at least. The old front-loader spendy washer in the designer color is now taking up space in the garage, because it is going to be a huge pain the rear to haul it to the dump.

  30. Will says:

    FemmeKnitzi, my washer did the exact same thing about a month ago. In my case, the drain hose coming out of the back of the washer was too far down the drain hole in the wall. This caused a siphon-like suction, so the water was constantly draining while the washer was filling. I just had to decrease the length of hose that was running into the wall, and my problem was solved. Take a look before you spend money on a “repair”.

  31. Mol says:

    Trent, I bet it felt good to write: “I’m a thirty year old writer…” ((the writer part)) =) Your success inspires me to succeed (nonwriting related). Thank you!

  32. Mol says:

    in the About section of your blog that is***

  33. C in NYC says:

    Do you use outlook for email? Maybe you can just use all the outlook features (tasks, contacts..etc) instead of hiring an assistant. You may just need to reorganized.

  34. spaces says:

    Trent, FWIW (worth every cent you’re paying for it), I would start the assistant gradually. Get her/him doing just one thing for you — say, screening comments — and let the person run with that for a few days. After the learning curve dies down, add another discrete task. I am thinking this could spread your time investment around, while getting you some time in your day back pretty quickly. And if the person doesn’t work out, you’ve minimized your wasted training time.

  35. Sara Bee says:

    Congratulations on your sobriety and on thinking about gratitude. Debbie M. is exactly right about how to repay your brother. May I offer another thought? When my own brother was fighting his demons, he used a phrase that helped him stay on track. “No matter how bad things are; meth makes it worse.”

  36. brooke says:

    Wow, did really only one person before me comment on LOST? Surely I missed a few comments! Oh well, I just finished re-watching Season 4 yesterday. I have watched all seasons twice now, except season 5 of course. So Trent, if that is your theory, what do you make of Jacob, the two guys on the beach at the end of last season? And how does Widmore and Ben fit into that? I love the show too, and am positive it is my favorite show of all time!

  37. Dawn says:

    Trent, how do you save (what type of account) for non-essential discretionary items? 2 specific areas are electronics and decorative home improvements.

    The only debt my dh and I have is our mortgage. We are looking to start increasing our emergency fund and saving more.

    One thing I wanted to start was saving to replace our 3 year old laptops. Also digital camera is starting to have problems etc.
    What criteria do you use for determining when to upgrade/replace a computer or other items – especially when they still function.

    We are also considering re-doing bathrooms and bedrooms in our house.

    I would like to pay cash for all of this.

    Thanks

  38. Jacinta says:

    As a small business owner, I thought I’d offer some advice. Taking on an employee will always have very high demands on your time for the first few weeks – few months. Thus you should never take on staff when you are at 100% personal capacity. Instead take on staff when you are at about 60% capacity because that gives you a spare 40% capacity to spend helping the new staff member fit in and understand all of their duties.

    Even though the task looks trivial to you (read email, sort out relevant ones) it pays to be aware that there are a whole host of judgments you’re making there that are not trivial. How is the email found? Is there more than one account? How is relevancy determined? What kinds of questions can be ignored? Which people (family, friends) should always be responded to? If someone emails multiple times, should it still be ignored?

    Ideally you’d go through sorting your email with your employee at half your usual speed every day for a week. You’d explain why you find these ones important, why those ones can be deleted, what stock response can be given to others… Towards the end of the week you’d get them to be involved in making those decisions and provide feedback on whether you felt they were heading along the same lines as you.

    You’d then be available to answer every question they had about their task during the next week.

    After two weeks hopefully everything would flow really well and you’d quickly make up the time you lost earlier.

    Trying to just hope that your employee can come up to speed in a day is short changing both them and yourself. If you want an employee who will be happy and competent at their task(s) you have to spend the time training them properly. Even if this training means that for the short term it would have been faster to do it yourself.

  39. Tracy says:

    Trent, I have a question about cars. My hubby and I don’t have good credit. His from not handling money well before he met me and mine from allowing my ex-hubby to take priority and pay his stuff first. We have to get a new or a new to us car. Hubby drives a 1995 Jeep Grand Cherokee and the gas is killing us. He drives an hour one way to work.

    We qualify for cash for clunkers. We were originally approved for a loan for a Chevy Aveo, financing, with all the rebates, $9500 at 24.59% with payments of $341 for 42 months. I wanted to keep looking and found a brand new Dodge Caliber specifically because Chrysler will match the govt. rebate we’re getting. So with all the rebates, we would only finance $8900 for a MUCH nicer car. The Chrysler dealer says he uses the same lender as the chevy dealer and he can get us the same approval. So it would be $8900 at (we assume) 24.59 (unless he can get them to lower it or unless the chevy dealer added a few percentage points on for his pocket) for 42 months. Payments about $320 or so.

    On the way home, we stopped off at a used car place. He can get us financed for a used 1998 Subaru Forester (which is really the car my hubby wanted to begin with – he just wanted a 2009). He says he can get us the loan for 2 or 2.5 years and that when all is said and done we’d be financing only $3500. If we go with the same interest rate, 24.59% (assuming the worst) then the payments for 2 or 2.5 years would only be around $145 or $175. All this keeping in mind that he has a pretty long commute to work.

    I’m torn. Hubby really wants a brand new car but are we better off with the older car for 2 years and then when credit has improved go for a new car? But then again, if we wait for the 2 years, we won’t be in a position to be “gifted” with $8000 off a brand new car. I’m afraid this might be our only chance to own a brand new car. We checked our insurance and it will only go up $79 for the 6 month period because we’re taking 2 jeeps off and adding the new car on. An objective frugal piece of advice would be much appreciated. Sorry this is so long but I wanted to be sure you had all the pieces of info.

    ps. We’re also getting rid of my gas guzzling mini-van by purchasing a friend’s small 2 door car which we know they took care of. I can run to work and run around town doing errands with the 2 kids in the small car and hubby will drive the other to and from work.

  40. littlepitcher says:

    Best way to pay back that brother is to keep his house clean and repair anything you can. Housework is a time drain on everyone and few things speak the language of gratitude as much as not having to come home to a sink of dirty dishes or generations of dust bunnies in the computer cords.

    It also reminds you just what “clean of drugs” cleans out of your life and psyche.

  41. Kevin says:

    @Tracy (#31): I’d wait. It looks like the money you’d be saving via “Cash for Clunkers” would turn around and go right back out the door as interest, at your utterly ridiculous 24.59% rate.

    If I were you, I’d stick it out for a couple of years, build up your credit, save up a down payment, and buy a USED car. Not an 11-year old car, but something 2-3 years old that’s already taken the “new car depreciation” hit.

  42. TK says:

    Mel, I agree with Debbie M, the best way to repay your brother is to stay clean. The greatest reward for taking a chance with an addict is to see his or her life restored!

    I also agree that being a good house guest is an excellent idea. Having someone to help out with everyday chores can be a real blessing.

    The only thing I would add is that you be truthful. Often, the most damaging element of an addiction is the cover-up lies told to loved ones. (I know this from experience.) Truthfulness is very refreshing and goes a long way toward restoring relationships.

  43. Lori says:

    In the line of #10 and #30, I would suggest that you make notes now, why you do what you do and how. The why for you, the how for them. :)

    My sister is one of the easiest people to get along with because she never leaves you guessing. Moving with her is a dream. “I’m going to back up, turing this clockwise about 45 degrees, so that you can come forward and tilt it back, and the legs should go right through, good. Now let’s back you up towards the filing cabinet…” See?

    Moving our mom helped me be a better person–especially with my family. AND, it helps me be more efficient, not only because if I have to explain it, I’d better be doing it right, but then I don’t ‘just do it’, and I’m better equiped to explain things to…whoever! (Being lingually adaptable helps as well. (allowing for their language to be spoken, not “you mean ___?” except when it is truly qualifying something))

    Thank you for the GoodReads tip.

    And, Mel, congrats on your journey to becoming a Sparky! It’s the best paid job on site. God bless your brother for being there for you, and thank YOU for listening, and making the effort to better yourself. Breaking a habit is never an easy thing, whether it’s a life-sucking job or an a drug addiction; getting out of our rut, and making a change for the better is very commendable.

  44. Sharon says:

    Tracey–if the gas is killing you, why are you getting a car payment, which will kill you as well. If you know that the little car was well taken care of, why doesn’t HE drive that to work and you drive the gas guzzler for you errands? Then you would have money to buy a car outright. Even if it is a only-new-to- you car.
    Yes, it would be a sacrifice on his part, but it would be worth it….

  45. Karen says:

    Regarding large apartment houses – I am in property management and most people don’t realize that the laws we have to follow are much more stringnet than those set out for someone with one or two units to lease out. It is not that we don’t care, but legally we have to treat everyone the same – regardless of their storey. Angie’s comment regarding a large account blance is absolutely correct. That can be used to help get you approved for move-in and I have done that for others many times.

  46. J says:

    @Tracey — I agree with Sharon. 24% loans are pretty much the legal limit without breaking usury laws. If you know the small car has been taken care of, he can drive it.

    Also, the Forester is going to get you mid-20′s MPG at best. AWD is not the way to get good gas mileage. I’m betting your existing Jeep is getting probably 17? Run 17 MPG versus 25 and it’s not a spectacular amount of money you will be saving.

    I’m sorry to deliver some tough love, but with “not handling money well before he met me and mine from allowing my ex-hubby to take priority and pay his stuff first”, you’ve dug yourself a hole. Buying a new car would just be a way of digging that hole even deeper. Step one of getting out of a hole is to STOP DIGGING.

    Hubby may want a new car, you may want to drop that minivan — but if you run the numbers you’ll save on gas (and I assume your minivan is paid for), it’s probably a better idea to keep the minivan, dump the Jeeps and get that small car you know has been cared for.

    I’d also HIGHLY recommend you and your husband read “The Total Money Makeover” by Dave Ramsey. I’m betting you are trying all sorts of plans and schemes to “get ahead” but you just keep treading water. You need a plan that you both agree on to climb out of your debt hole and not get into it again. Ramsey’s way is one of many to get out, but I’ve found it to be very easy to understand and follow, and we’re currently digging our way out of our own debt hole, ourselves.

  47. nancy says:

    With regards to the washer repair. Our general rule for repairs is no more than half the original cost of the item-dishwasher, TV, washer, dryer etc. It has been a good rule for 36 years.

    We bought a new Maytag, not the most expensive model, when we had our first baby in 1975. It lasted 30 years-3 kids-all played sports, 2 refugee families in the 80′s, numerous extra friends staying for various lengths of time. We had it repaired twice. Once was a motor done by repairman, once was the timer. My dad told me a timer was no big deal, just replace one wire at a time from the old timer to new timer. It worked great.

    We have replaced several knobs and refrigerator door shelves. New ones can be purchased online from appliance parts warehouses.

  48. colleen c says:

    “Kiki’s Delivery Service” is another fabulous kids’ film. It is an earlier film by the same famed director of “Spirited Away.” It has a more traditional storyline and should be easier for younger children to follow. Kiki is a young witch and as she approaches the age where witches head off on their own to make their way in the world, we see her find a new home, make new friends and come to trust in her own skills. The animation is wonderful, the voice work is great (the original was in Japanese) and there is none of the typical nonsense of many children’s films — no bad guys, no fist fights, no deaths.

    Another very sweet film for younger kids is “Franklin and the Green Night” which is based on an older PBS tv show. Franklin and his friends set out on a great adventure and the movie is exciting but not frightening.

    Don’t forget “Babe.” It’s magical. It was my daughter’s first favorite, and some of the first sentences she spoke as a toddler were chatting about the movie. It is truly clever and heartwarming.

  49. Sunit says:

    I’d like to answer Mel’s question too:

    HUGE congratulations on breaking that addiction! Really really respect you now.

    I think the biggest payback for your older brother would be to continue staying clean and living a worthwhile drug-free life. You don’t know how good he will feel after he sees the results of his help.

    Once you’re fully independent of his help, once you have a stable job and you’re glowing with life, he will feel amazingly happy to see that he’s contributed to this big change in your life.

    There’s nothing that’s equivalent to that feeling, no amount of money… just pure emotion!

  50. Michelle says:

    I hope this is the right place to post a question.

    We purchased our home 6 years ago with 100% financing split between our 1st mortgage and a HELOC. We are able to make both payments. The 1st is at a 6.375% APR and the floating HELOC rate is 2.75%. We have an emergency fund equal to 105% of the HELOC balance. My question is this, should we: 1) take advantage of low rates to consolidate the 1st and HELOC, or 2) just pay the HELOC off and use that as our emergency fund?

    My concerns with scenario #1 are that we will pay 2-3% in closing costs/fees and be extending our term back out to 30 years which I realize increases our interest costs despite the lower rate. I also expect to have to pay the HELOC balance down $30,000-$40,000 to conform to an 80% LTV. The benefit of course is that we lock in the HELOC rate.

    My concern with scenario #2 is that the HELOC could be frozen and we could find ourselves with only a month’s worth living expenses in our ER fund.

    Maybe there is a scenario #3 that I am just overlooking?

    I should add I am a stay at home mom with child #2 on the way.

    I am a big fan of thesimpledollar and really look forward to your advice.

    Thank you!

  51. akb says:

    @ HSA discusion:

    I have the hsa, my decucitble is 1500, so i have that in the hsa, but how much beyond that ought i fund? my suspicion is that i should put next ot noghtin past that in it, and use my emergency fund/retirement account for other savings. The hsa is a savings vehicle, and i get a decent return on it. I can take money out w/ a credit card, but yes, only health expenses. i dont htink there is a yearly cap on what can go in (or maybe its like 5k, which is way more than i think i’d put in) but i certainly cant jsut put cash in it, it has to come through my employer.. if that makes sense… I’m just wondering given what i’ve said, how much i should a.) leave in the HSA and b.) how much what i have in the HSA should affect what i keep in my emergency fund, knowing that at least all medical emergencies are covered and not comign from there..

  52. J says:

    @akb — As I mentioned before, I’d tally up all your medical expenses from the previous year and put that into your HSA, especially if the expenses are relatively consistent.

    I’ll give you an example of what we do: I am married with two children. We know that we will have periodic medical and dental checkups (with a copay for each visit), we have prescriptions (copays for each), plus the kids typically get sick a couple of times a year (we throw in a couple of copays for that). We also use our HSA funds to buy qualifying medications, as well. In the end analysis, all this stuff tends to add up to around $1000/year. So we take that out, pretax, since we know we are going to spend it.

    Only you can know how much you spend on healthcare. When I was single and in my 20′s, I couldn’t understand why in the world these health savings plans did anything for anyone. I rarely got sick, and when I did get sick, it usually was a matter of taking a couple asprin, keeping enough fluids and sleeping it off. Now that I have a spouse and a couple of kids, it ends up saving me probably $3-400 a year since it’s pre-tax money.

    What follows from the previous is that the healthcare spending is (or should be) a budget line item. If you know that a dental visit and a yearly checkup is going to run you $500 this year, and you are relatively healthy, I’d put $500 in the account and keep the rest in your emergency fund. You might lose out on some amount of savings, but you pick up the flexibility to use the other $1000 for other emergencies — so you trade off the pre-tax savings to pick up the flexibility to deal with any generic emergency that comes along.

    Of course, this all varies with your situation, but if your plan is one where everything is funded after you cover your deductible, then your plan sounds absolutely correct. If you know you are going to have some other large outlay for something (examples: new glasses, contacts, eye surgery, orthodontics, medications or other eligible expenses), put the money in to get the tax break.

  53. brad says:

    @ akb

    “I have the hsa, my decucitble is 1500, so i have that in the hsa, but how much beyond that ought i fund?”

    that depends on your health plan. if your deductible is 1500, and you save 1500, then all you will do is save enough to pay for your responsibility before insurance kicks in. but even after that happens, you will still have coinsurances, copays, and services that may not be covered that you will still need money for.

    “I can take money out w/ a credit card, but yes, only health expenses.”

    i dont want this to sound anal, which i know it does, but its a debit card, not a credit card. just want to clarify because theres a big difference between the two:)

    “i dont htink there is a yearly cap on what can go in”

    there is, for 2009 its 3000 for individual coverage and 5950 for family coverage(those numbers include employer contribution. so if company donates 1k, under individual coverage you can only donate 2k).

    “but i certainly cant jsut put cash in it, it has to come through my employer..”

    you can. all you have to do is fill out a deposit slip from the financial institution servicing your hsa (available online at their website, via deposit slip in your checkbook if you received one, or call them and have them mail you one) and mail it to them.

    “a.) leave in the HSA and b.) how much what i have in the HSA should affect what i keep in my emergency fund”

    a) AT LEAST as much needed to cover your deductible. the best case scenario would be to have the same amount in your hsa as what your OOP(out of pocket maximum) is for any given year.

    b) you dont really need to differentiate between them. i have 3k in my hsa and 2k in my emergency fund and i just consider myself to have a 3k ‘personal’ emergency fund and a 2k ‘hardware’ emergency fund (cars, appliances, food, rent, that kind of thing)

  54. brad says:

    @ j

    “Of course, this all varies with your situation, but if your plan is one where everything is funded after you cover your deductible, then your plan sounds absolutely correct.”

    100% correct. one of the first years my company (‘mine’ in terms of i work there not i own it) offered the hsa, all covered services were paid at 100% after the deductible was met. that is a stellar deal but unfortunately extremely rare. my company only did it to get people on board then they switched to a 10% or 20% copay plan the next year. but dont get me wrong. being only 21, the hsa is a fantastic investment.

  55. brad says:

    *10% or 20% coinsurance, not copay. sorry

  56. Lynn says:

    My car is on its last legs (or wheels). It is just energy efficient enough not to qualify for the now gone government money to trade in this old clunker. My problem is that it has only been over the last couple of years that I’ve begun slowly to try getting my financial house in order. Between some extreme stupidity with credit cards that I no longer have, plus doctor bills (cancer-in remission, and other things), it’s hard to save up an emergency fund much less money to put down on a car. Even if I could get a car loan, which is doubtful. Right now, every time I get in the car could be the time it finally leaves me somewhere, with it needing repairs that I can’t afford to make. And it just doesn’t make sense to continue to put that kind of money in this old car. I take the bus whenever I can (there aren’t too many in my area). Any suggestions?

  57. anne says:

    femmeknitzi- about that washing machine-

    just today i was buying a used refridgerator for one of the rental apartments we have

    i don’t have time to have the old one looked at- the earliest they could send someone out is thursday, and i wanted to get something delivered today so the tenants don’t have to go w/out a working fridge. and it’s already very, very old, so i didn’t want to repair it.

    BUT, the guy at the store said he could send a repair guy out to look at it- if it wasn’t worth fixing, they’d deduct the cost of the repair visit from whatever replacement fridge i bought from them. if they could have done it today, i might have gone that route

    i only went to this place because the appliance shop i usually buy from didn’t have anything in their used appliance section which was suitable

    but i absolutely love the policy they have of deducting the cost of having the repair guy look at it from the cost of the appliance you end up buying from them

    maybe there’s a place near you that is similar?

    and i bought a used washer and dryer last year for our place- there is a 1 year service contract thrown in for free, and i had them come out already to replace the water pump- i had done a similar repair on another machine a few years ago- again, an underwire from a bra was the culprit.

    anyway- i got hte washing machine for less than $200- same w/ the dryer

    you don’t have to buy new, and you don’t have to buy used form a private party and deal w/ hauling away the old one or going to get the new one

    buying used appliances has really worked out well for me. i only bought a new dishwasher because i couldn’t get one used.

    and if you have to buy a new washing machine, or a used washing machine, repairmen have told me whirlpool is the best brand- don’t often need repairs, last for 20 years, and if they need a repair, it’s simple to perform

    good luck!

  58. Steven S says:

    Consumer Reports is also available online with a library card to folks, who live near or in the same service district of a public library that purchases select Gale Databases (or others) with the magazine in it, for the cost or tax dollars provided for a library card.

    Consumer Reports still makes money on selling content to database vendors that in turn are picked up and purchased by public libraries.

  59. Kayla D. says:

    Hi there,

    I hope this is the right place to post this question, but I was just wondering how you first got into blogging, and what you used when you first started out.

    Did you start with your own domain or did you start of with something like a Blogger account?

    Reading your blog and seeing your passion for writing about frugality and life has made me rather inspired to perhaps start blogging myself.

    Any info would be helpful,

    Kayla

  60. Tracy says:

    We’re getting rid of my mini-van because it’s become a money drain. We recently (Memorial Day) did the timing belt, a full tune-up and brakes all around the car. Then it started having more problems. We replaced the spark plugs again and did a new fuel filter. Still having the same problems only worse. It’s one of 3 things and we’re starting with the cheapest first. With almost 150,000 miles on it, my hubby (who does all my mechanic work) is convinced it won’t last the winter for us. Our original plan was to buy the little car and continue to drive the mini-van as the “family vehicle” Then the little car became tied up in probate. Since we honestly don’t know how long that will take, we decided to replace hubby’s car and get the little car when it becomes available. Yes all our cars are paid for now. But when we run the numbers, we’d save money on gas even with a car payment. If you believe the government, our jeeps only get 14 mpg which sounds about right. He’s using 1/4 tank a day to go back and forth.

    I don’t honestly thing there is anything we can do about the issues with the credit. Everything, literally, is over 5 years old on his report. Two of the bad things are due to fall off in 2010 and the other in 2011. Those are the only bad things on there. Mine doesn’t have any recent things either, all over 5 years old. I’m not due for the free report again until this September and I’ll bet a lot of the things on there from last year dropped off since they were so close to the time frame for reporting. There isn’t anything recent on either one of our histories since we try very hard to take care of our current obligations on time. I was of the opinion that since almost everything on there was bad, that it was important to re-establish something current that shows good. He has a revolving line of credit through GE Money Bank which shows current. I thought that by having a good car loan that his credit score wold improve so that in 3-5 years we’d be in a much better position to buy a house. By then mostly everything bad will have fallen off both of our reports and we’ll be in a much better position.

  61. Christina says:

    I have a question about savings and student loans. I am in graduate school and working on an emergency savings fund while paying off a student loan (deferred but accruing interest). Presently I am putting only a minimal amount towards the loan ($50/mo) and the bulk to my emergency savings ($950/mo). My plan is to get to the $6000 mark in the emergency fund, then apply the full $1000/mo to the student loan until its gone, then to start investing in an IRA. The catch is that due to funding I will take a pay hit in September 2010 and will only have ~$200/mo. to save.

    Is my plan sound? Should I try to put money towards all three at once or is in sequential order best?

    thanks,
    C

    Is my current plan a sound one?

  62. Mol says:

    Have you read the South Beach Diet book? It’s a good read even if you are not ‘dieting’. With your interest in food and nutrition (and reading) I’d highly recommend it. =)

  63. Jessica says:

    My husband and I have been noticing for awhile now that we’re outgrowing our friends. We are married and own our home, and are thinking about having kids in the next few years. Most of our friends still live with their parents, and are more focused on buying expensive toys (new vehicles, electronics, etc.) than they are about focusing on their future.

    Is there a way we can politely bow out of these relationships, without causing many hurt feelings? Also, are there any relatively safe online communities that we could use to find people in our area that share our same interests? I know we can make new friends easily, but we don’t know where to start looking for them…

    Thanks!

  64. Julie says:

    Most public libraries provide free access to Consumer Reports’ databases online. Check it out!

    Also, my favorite children’s movies are “The Neverending Story” and “Labyrinth”

    :)

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