What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Handling financial incompatibility and stress
2. Inexpensive but unorthodox wedding
3. Eliminating regular expenses
4. Career paralysis
5. Why smartphone for non-business use?
6. Buying a lifelong home
7. Old record collection
8. Credit card denial
9. Maximizing battery life
10. Retirement investing and diversification
About a month ago, my wife had the windshield replaced on her car. A large rock struck the windshield during a road trip and, over time, the scratch grew significantly.
Anyway, rather than just leaving the windshield at the repair shop, she kept it. She went home, pulled some 4″ by 4″s out of the garage, and made a rectangular pattern with them in our garden. She then set the windshield on top of the boards.
Instant mini-greenhouse. It’s not perfectly sealed, of course, but it does raise the internal temperature by quite a few degrees on a warm day. She’s using that space to get some plants in the ground a bit earlier than she otherwise might be able to.
Q1: Handling financial incompatibility and stress
I am married to a wonderful man whose financial ideas are polar opposite of mine and I am struggling to bridge the gap. I have always been extremely sensible with money, I have been saving and investing since my first job at 15 years old. I previously maintained a safe amount in my saving and I am generally a very frugal person always living within my means. To put my husband’s views of finance bluntly he spends exactly what he earns, any savings that we have gets spent and having 2 car payments is just part of life. Why work if you’re not enjoying what you make. At first I enjoyed all the fun of spending and having duel incomes it worked out, but eventually it caught up. The savings was gone and our debit was drowning us. So he asked me to take over our finances and fix our problems, since I was more sensible. This worked, I refinanced things and we both worked overtime to get things back to a manageable place. But my problem is that you can’t change someone. We are constantly just making it. And I think he is beginning to feel like I am bossing him around I have to be the one to say we don’t have any money. Which leads me to feel bad and tell him he is ok spend money he really shouldn’t. The whole situation is becoming very stressful on both our sides. Yes I know counseling is a good idea but just don’t believe that people really change all that much, and he doesn’t disagree about what we SHOULD be doing, it’s just that in practice it doesn’t happen. This is starting to feel like a “Dear Abbey” question so I will get to the point. I am looking for practical things that I can do to keep out sanity and financially co-exist. Separate savings, doing bills together for transparency?
In situations like this, marriage counseling is a good idea. You have very different fundamental approaches to one of the key issues in your marriage and it’s adding up to serious stress.
If you’re looking for a more practical solution, I’d suggest simply setting up a savings plan that scoops a certain amount out of each paycheck that comes into your checking account and moves it to a savings account elsewhere. If there’s less money in the pool to spend, there will be less money spent.
This won’t solve all problems, of course, but it’s a start. It’s a lot better to live paycheck to paycheck if, say, $50 or $100 is getting saved out of each and every paycheck before you ever spend it.
Q2: Inexpensive but unorthodox wedding
My husband-to-be and I have decided that we want to have a “potluck” wedding. Instead of bringing a wedding gift that we don’t really need or want, we want everyone to bring some sort of food to the reception (unless they’re from out of town, of course). This array of foods would serve as the meal. My soon-to-be mother-in-law hates the idea and says it’s tacky, but I think it’s not only a great way to have families bond but it’s also going to enable us to not have to blow a bunch of money on a catered reception. What do you think?
I actually think this sounds like a really cool idea, even ignoring the fact that it saves money. If you have lots of different families bringing their “specialty” dishes, you could provide the source for a lot of different icebreakers and conversations among people. I’d suggest having people write what the dish is, any allergens in it, and their name on an index card next to the dish.
As for your mother-in-law, ignore her. This is your wedding, not her wedding. It’s up to you guys to make the decision together.
Having said that, before you go down the path of something that might cause tensions, make absolutely sure your husband-to-be is on board with this.
Q3: Eliminating regular expenses
My husband is in a Nursing Home and the cost is approx. $5,000 a month. I am on a fixed income and live very conservatively. Of course I am having to take money from our savings ea. month to keep up with expenses (we did not have N.H. insurance). Any suggestions for eliminating normal expenses that perhaps I am not seeing? I am too old (80) for employment so that is not an option.
The most efficient way to reduce all of your household bills is to move into a smaller space. I don’t have any info on where you are currently living, but does it make sense for you to downsize into smaller living quarters? Doing so would reduce your energy bills, your property taxes, etc. If you own your home, you could sell it and move into a small apartment.
Another option is cohabitation. Do you have any siblings or close friends that are in a situation similar to yours? One of you could sell your living quarters and move in with the other one. That would provide constant companionship and seriously lower bills, as you could split the bills and one person could pay a small amount of rent to the other.
It’s really hard to assess ways to lower your monthly bills without a strong picture of what you’re doing right now. I’m mostly suggesting housing changes because it’s an option most people don’t think about until they’re pushed to the precipice.
Q4: Career paralysis
I hate my current job. I have a pretty good emergency fund and I’ve been thinking about applying for other jobs in my field, but I am afraid word will get back to my current boss and I’ll be fired for it. What should I do?
It depends. Are you hired on an “at will” basis, or do you have a contract or a union that protects you? Also, what kind of person is the individual you’d put down for a reference on your application?
If you’re unhappy at your job, at some point you do need to make a change. If you decide that now is the time for that change, don’t just apply to one job. Apply to quite a few and make sure that you’re looking at a few that you should be a very strong candidate for, even if it’s not your ideal position.
Life is too short to spend half of the waking hours of your life in job misery.
Q5: Why smartphone for non-business use?
I don’t really understand why someone would dump that much money each month into a smartphone if they’re not using it to help run their business. It seems like a giant expense just so you can watch a Youtube video while you’re on the train.
I agree with you that a smartphone that’s used primarily as an entertainment device is a pretty expensive option. You don’t need an iPhone 5 or a Galaxy S3 to swap texts with your friends, after all.
There are some career paths that do utilize phones with a lot of these kinds of features on it, though. Anyone with a highly-booked schedule is going to find a smartphone to be invaluable.
For just entertainment, though? You don’t need a smartphone to make calls and send/receive texts. It’s overkill and it’s going to cost you a lot of money.
Q6: Buying a lifelong home
My wife and I read your blog regularly and often your posts are a good jumping off point for important financial discussions. I am hoping to get some advice about our upcoming house purchase.
We are in our late 20s, both with decent salaries at stable jobs. Due to some years working in business, I have around $100k in savings and investment (separate from retirement accounts) and no debt.
We obviously feel very lucky and grateful to be in this situation, but we are facing a conflict regarding buying a house.
My wife was raised in one house her entire life, and her parents still live there today. It is very important to her that we do the same: buy a house before we have kids, and live in that house our entire lives.
The catch is that we live in a major city center and we love it. Even small condos in our area are $500k and up, and a really great place is even more.
So…we could buy a home within our means, but then I worry that we will outgrow the house and I won’t be satisfied living there for 50 years. Or, we can try and find our perfect house in our favored location, but then we will be taking on a huge mortgage. We are generally frugal people, so while we can probably handle a large mortgage, I am uncomfortable with moving from a good cushion of savings to a big mortgage debt for 30 years.
We have discussed many angles on this (moving out of the city, waiting longer to have kids/buy a house), but we are at an impasse here. Any suggestions on how to make this major decision?
You’re trying to choose between different personal values here, and it’s never really easy to do that.
I find when I’m trying to make a decision like this, I try to look at the negatives of it. What would I miss if I chose option A? What would I miss if I chose option B? What am I risking with each option?
Quite often, looking at what I’m actually losing will make it clear which option is better for me.
For me, I’d choose the smaller house. Even if you outgrow it later, you will still have equity in that house which will help you to move on to your next place.
Q7: Old record collection
I’m in the process of cleaning out my father’s home now that he’s in a retirement home. He has a collection of about 800 records that are in really good shape. I’m sure they have value to someone but I don’t know how to go about selling them.
If I were you, I’d go through the collection and extract every album by an artist that you’ve heard of. If you haven’t heard of the artist, type in the artist name and the album name on a computer file.
I’d then list that pile of records (minus the ones you pulled out) on Craigslist for something like $0.50 or so per record or best offer. Sure, you might have overlooked some gems, but the only way to know that is to have the collection appraised, which would cost you far more than the collection is worth.
For the ones you have heard of, look them up individually online and see if you can get a sense of what they’re worth. If you do happen to have any with significant potential value, get those professionally appraised.
That’s the route I would follow in this situation. If you don’t want to put in the effort, you can always just list the whole collection on Craigslist.
Q8: Credit card denial
I recently applied for a credit card through my bank and received a letter that said I was denied due to a past bankruptcy. The thing is, my bankruptcy is more than 10 years old. I immediately pulled all 3 of my credit reports to make sure it’s not still on any of them, and it’s not! Where are they getting this information?
If the bank in question is one of the ones you were unable to repay in the past, then they likely still have records of that bankruptcy. They may also have purchased another bank (or been purchased by one) that you dealt with during the bankruptcy.
If you’ve been a customer at a bank, they do take that status into account when considering you for a loan.
If I were you, I would just apply elsewhere for a credit card. Try to look for a bank that you didn’t deal with in the past.
It depends on the kind of battery. Examine the battery, then look it up online to find out specific usage information for that type.
Some batteries work best if you drain them completely. Others work best if you charge them all the time. It really depends on the battery type.
If you can’t get the battery out of your phone, look up your phone online and see what you can find.
Q10: Retirement investing and diversification
I am currently a single 44 year old mom of two boys (9 & 12 y.o) Their father passed away so I collect SS for them. I currently contribute 11 percent of my pay to my 401k and I put $75 in a Roth per month. I also have a traditional IRA (from a previous 401k) which I do not contribute to. I currently have two 529 plans for the boys valued at about 20k each. My question is should I be more diversified with my investments? I don’t want to change what I am already doing, just thinking that this may not be enough. Should I be creating more passive income and open a scott trade account and purchase some dividend producing stocks or should I contribute to my IRA? I am confused as to what else I should be doing.
In terms of accounts, I think you’re fine, unless you have specific goals that say otherwise. The diversification I’d worry about is within those accounts.
Most of the investments you describe should offer “target” funds that you can invest in that automatically rebalance as you get closer to the date at which you intend to use your money. If you’re unsure about balancing, just make sure that all of the accounts are invested that way.
Do that and you’re already diversified.
Diversification beyond that – into the taxable investments you named – really depend on your goals. Do you have any pre-retirement or pre-college investment goals? Assess your goals before you even think about investment.
Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.