Reader Mailbag: Abraham Lincoln

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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. What is a callable CD?
2. Frugal laptop questions
3. Reducing budgeting stress
4. Adequate insurance for single folks
5. Minimizing post-college debt
6. Rent or sell old house?
7. Retirement calculations
8. Drawing the line
9. Splitting the rent
10. Netflix streaming movie recommendations

Abraham Lincoln once said, “Most folks are about as happy as they make up their minds to be.” I agree deeply with that sentiment. It’s all about what you choose to focus on in life – the bad or the good.

I am wondering if you can explain what a “callable CD” is. Merrill Lynch has begun offering a “15 year callable CD” at 4.50% interest; I tried doing some research online but what I could find was in such business-ese (a language I don’t really speak) that I couldn’t figure it out. I don’t see bank interest rates approaching almost 5% for a long time, if ever again, so would not have a problem tying up my money for that long, if only I knew exactly what I would be getting myself into. Can you explain?
- Lisa

A callable CD is basically no different than a regular CD except for one key thing: the bank can close the CD at any time. So, in six months, they might decide that paying out 4.50% annually to you is paying too much, so they just close the CD, paying you what you’ve earned and dropping all of it into a savings account.

On the other hand, if you close the CD, you’re going to be facing the usual fairly steep penalties for early closure, which usually means forfeiting a decent chunk of your earnings.

If interest rates were to stay this low forever, this would be a great deal. If they rebound in a year and return to 2007 levels, this will be a much less positive move. Still, it’s a 4.5% return guaranteed, so it isn’t too bad no matter what happens.

Do you mind telling me what model laptop your using for the frugal laptop. I know its a Dell Inspiron but I wanted to know the model because I’m interested in purchasing one from craigslist or ebay as a secondary laptop. Also how as it worked for you up till this point?
- Marvin

The frugal laptop was a Dell Inspiron E1505. It worked very well for several years. The only problem I had with it until near the end of its lifespan was that the battery stopped holding charge – a $40 replacement battery took care of that.

After about four and a half years or so of heavy use, though, the machine began to experience hardware problems that I was unable to diagnose. A friend attempted to fix it, but reported to me that the costs to repair it (unless I did it all myself) weren’t worth it compared to just getting a new laptop.

Still, during its lifespan (aside from a nine month idle period), it got a ton of use.

How can I reduce the stress I feel from budgeting all my money around, and feeling like I have none left? Or perhaps you have a suggestion for a better way to manage my money or how I should be saving/spending!
- Chris

I actually find budgeting – or at least how I do things – to be stress reducing on the whole.

My technique is pretty simple. Almost everything I do for budgeting is automatic with my bank. I have most of my bills set up to be paid automatically. I have automatic transfers set up that move money into various savings pots. I also have an automatic transfer set up into an account that I can safely spend freely from.

Most of the time, I don’t have to worry about any of it. It just works. I build up savings, have a bit of money to spend as I please, and move on with life. It’s pretty low stress.

If you’re still stressing out over it, spend some time focusing on your goals. Why are you budgeting so fiercely so as to cause yourself stress? What is the big dream you’re aiming for?

I’m 28, single, no kids, rent, only debt is a $4,000 car loan which will be paid off by the end of the year. I have about 20K invested for retirement and a small emergency fund. I earn 50K/year. I have full coverage insurance on my car, renter’s insurance, and health/dental/optical insurance through work. My employer covers some insurance for me: Life = 50K and Disability (Short & Long Term) = 60% of salary.

As long as I’m working for this company is it necessary for me to carry any additional insurance? I feel pretty well covered.
- Abby

If you’re single, without kids, healthy, working for that employer, and young, that’s adequate insurance.

The reason to buy additional insurance is if you see any sign of any of those factors changing. If you’re going to get married, you’ll need more insurance. If you’re going to have kids, you’ll need more. If you get older, you may want to up the disability insurance. If you change jobs, you may end up needing to get your own policy. If you suspect an illness, you may want to ramp things up.

You’re better off being proactive here. If you see any of those changes happening, supplement that insurance sooner rather than later.

I am a soon-to-be-20 Spanish major and religion minor who will be a sophomore in the fall at a private college. My family’s finances are such that I qualify only for an Unsubsidized Stafford Loan, which I am paying the interest on during college. I try to pursue scholarships, but since I can’t demonstrate “financial need,” I often do not get them. I do have about $21k in scholarship, but tuition is $32k, necessitating loans.

Here’s what I have for assets. My savings account currently has approximately $2600 in it, while checking has nearly $300. I have a minimum wage full-time “temp” job this summer (so no benefits), and I do not currently pay any expenses such as gas, food, etc because I share a ride with someone and I pack my lunch. I do not have a car or any other physical assets. I expect to earn approximately $3700 gross this summer- since I will be earning minimum wage ($7.25/hr) for 40/hrs a week for 13 weeks. Of course, after taxes that will be a much smaller amount. I file a tax return in two states since I live in one and work in another.

My current financial strategy is “Don’t spend money; put it all in the bank.” This is all well and good, but the interest rate is so low at my bank that I only make about 50 cents per interest period. I know that investing while I am young is a good idea, and so I’d like some advice on what to invest in. I am currently thinking of putting some of my funds into a Roth IRA for later in life, but I’d also like to invest in the short-term to help pay off my student loans/prevent having to take out as large of a loan. My loan for last year is $5000, and I expect the loan for the rest of college to be approximately the same amount per year, so I will have about $20,000 in loans to pay off. I plan to get married to my boyfriend right after college, and I want to bring as minimal an amount of debt into the marriage as possible. We want to start off in a good place.
- Anna

Your “filing taxes in two states” set off an alarm bell. Are you taking a credit for taxes paid to the nonresident state on your resident state taxes so you’re not double taxed? Here’s some more info on that.

Aside from that, I think you’re doing exactly what you should be doing right now: building up your cash reserves while keeping your expenses low. When you get married right after college, you’re going to be hitching your life’s financial plans to someone else and the best way to make sure that gets off on the right foot and you stay secure is by having a good liquid reserve.

You absolutely need to talk with your boyfriend about how you’re going to manage money together when you’re married and make sure you’re on the same path when it comes to money.

We will be moving to Virginia, and wonder what to do about our house. We bought it in 2005 for $258,000, and realtors are suggesting that we could expect to get about $140,000 for it now. Our mortgage is $97,000, so we could sell it for that and still come away with cash in hand. However, it’s crushing to think that we put $150,000 down, and have lost so much of that.

We could rent it, but only clear about $750 from rental after paying a management company. (We will be far away, so paying 15% to a management company seems wiser than saving a bit and dealing with who knows what from a distance.) We’d need to put another $400/month or so into the house, not including money for things like repairs and upkeep.

My new employer has a place we can rent for $700/month, so we could swing the extra amount to put into the rental. If we decide to buy in the new town, we have a $50,000 gift from a deceased relative that we could use. In terms of making the cash flow/down payment happen, we can go either way.

Our concern is long term. What would you suggest? Better off to rent it, put in the extra money, and deal with the hassle? Or sell it, take the hit, and be done with it?
- Charity

So, you’d make $750 a month from the house if you rented it, but you’d have to put $400 a month back in (I’m assuming taxes) and that doesn’t include repairs and upkeep? What about the remaining mortgage payments? This doesn’t spell a big money winner here.

If I were you, I’d sell that house, pay off the mortgage, and sock the difference away somewhere else, whether it’s in the bank or some investment or into a down payment on another house.

You can’t let the loss of value of your home distort your choices now. That loss is water under the bridge – you can’t do anything about it now. You have to make the best choice based on your current situation.

My primary-breadwinner husband (age 32) and I are expecting a baby in Dec. and re-evaluating his disability insurance policies. Currently, he has three policies: one through work, and two individual policies. On the last policy, there is a “rider” for a service called Retire Guard. According to their website, they will make 401k contributions on his behalf should he become totally disabled. My husband pays about $26/month for just over $1200/month coverage. They say that they will make the contributions on your behalf into a trust in your name, and they offer you some different investment options. They do not actually put that money into your 401k. The Retire Guard option is with a policy through Mass Mutual, which I know is a reputable insurance company. Can you offer some guidelines for disability insurance? I don’t understand the total/partial disability, “riders”, or how to calculate how much you need.
- Leigh Ann

From what I was able to learn about RetireGuard, it sounds like they just put money into a trust for you instead of directly into your 401(k), likely because they can’t directly contribute to your 401(k).

Riders are simply modifcations to the basic policy. For example, some policies have a COLA rider what adjusts your benefits based on increases in cost of living. Riders usually affect the amount you pay and then affect the benefits you get.

Total disability refers to the inability of a person to perform the functions of their job. Partial disability refers to the inability of a person to perform some of the functions of their job, but are able to perform others.

As for how much you need, this worksheet from SmartMoney is the best tool I’ve seen.

You’ve mentioned before that there are aspects of your life that you don’t discuss on The Simple Dollar. How do you decide where to draw that line?
- Emma

In terms of my own thoughts and issues that only directly impact me, I’m pretty open. My only restrictions are on elements about my own life that, if revealed, would inherently affect the lives of others I know and care about.

When you extend the same issue to my immediate family, though, things get less clear. I do mention them, obviously, because they’re important in my life, but this is not their blog. Sarah and I have had many discussions on what exactly is the limit of what should be discussed on The Simple Dollar about specific aspects of our family. It’s mostly a matter of protecting the privacy of someone who is a non-public figure while also recognizing that the domain of what I talk about does inherently involve them at times.

When you start looking at people I’m connected to less directly, things get much vaguer. I have no interest in “outing” people in my extended family or my friends on The Simple Dollar without their explicit permission. When I do talk about them, I usually “blur” some aspects of their identity to protect their privacy (altering names and relationships in insignificant but privacy-protecting ways), sometimes with their help and sometimes just based on my own judgment.

Basically, I want to talk about financial and career and life issues here. I don’t want to destroy reputations or hurt feelings or reveal personal data.

Me and my girlfriend of 2.5 years are moving in to our first apartment together since we graduate from college in less than a week. We are both really excited and are in the right mindset. I have a job at a local corporation making a hefty salary, more than some of my peers. She will be attending graduate school in the fall and so cannot get a job directly related to her major just yet, so she landed one at a local department store for $8.25/hr. Our apartment is pretty nice, one of the more expensive ones around here. We liked the quality, convenience, and space it provided and it fit within our budget.

My question is: I will be making much more than her per month and while I can see how splitting rent and utilities 50/50 makes sense given there are two people living in one apartment, I am wondering if there is a better option to take into account the difference in income. I plugged her income into my budget sheet and while she’ll be able to afford everything, there is a little less padding than I would have liked. She’s been searching for a job for the past couple months so asking her to find one that pays more probably isn’t something she can do easily (or will want to). She is fine with paying 50% but in my mind that doesn’t seem fair. I was thinking of some sort of method that would split the rent so that our ratio is the same as our income ratio. However, she felt that that was a little unfair or that she’d feel like she “owed” me money.

Another idea I had was to use the same ratio method but to give some extra padding, perhaps making it more like 60% me, 40% her. Or, perhaps it would be fine if we only lowered her rent to 40% bi-monthly. Some variation that weighed our income into the equation.

I was just wondering if you’ve had any experience with this or know of a common method people use to account for differences in income that is fair for everyone involved.
- Kam

If there is a deep inequality, you might want to consider paying portions of your monthly bills in proportion with your monthly take-home checks.

So, let’s say your girlfriend takes home $1,000 a month and you take home $3,000 a month. That means you’d pay 3/4 or 75% of the bills. If your girlfriend suddenly started making $2,000 a month, you’d shift the percentages with you now paying just 3/5 or 60% of the bills.

That would be my recommendation to you two, but there may be some pride at stake here. If your girlfriend doesn’t like that arrangement and wants to pay her half, she may be operating on a sense of personal pride. If that’s the case, go along with whatever arrangement works for her. The above is just a suggestion.

OK, I signed up for Netflix mostly so we could use the streaming service for free on my Wii. We were renting about $15 worth of movies each month, so this is actually a money saver.

Got any suggestions for good movies to add to my streaming queue? I’ve liked the movies you’ve mentioned in the past.
- Kevin

There’s more great stuff to stream than I could possibly recount. Here are some things worth looking at that I’ve enjoyed.

Man on Wire. Moon. Jesus Camp. Firefly. Arrested Development. Lost. Hoop Dreams.

The piece that’s got me intrigued right now is that all of Ken Burns’ documentaries are available (save Baseball). They’re pretty much all great – Civil War got all of the press, but I learned more about the world and enjoyed other entries much more (like Huey Long). Here’s a full list.

If you can’t find something in those to watch, I’m not sure I can help. However, I do think it makes a pretty good case for considering ditching cable or satellite television.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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39 thoughts on “Reader Mailbag: Abraham Lincoln

  1. About paying rent with incomes that aren’t equal: my boyfriend and I figured something out. He’s in grad school and I work, so I pay more rent. To make this feel OK for him, I get some perks from paying more: I get the parking spot and my friends get first dibs on our spare bed, no questions asked. We each pay what makes sense for our incomes, and we both feel good about it, because technically I get more from the apartment!

  2. @Kam: One idea that I’ve seen a lot for couples with income imbalances is for each person to take responsibility for a certain set of bills. For example, you pay the rent, and she pays all the utilities. Not only is that logistically simpler (since only one person has to write a check for each bill each month), but psychologically it may be better for the person who’s paying less, since at least they have some contributions to the household that are entirely theirs.

    Whether that solution works for you or not, I think you’re right that it’s not fair for you and your girlfriend to split the expenses 50/50 – the person with the higher income should be paying more.

    Here’s how it looks to me: It’s because of your higher salary that the two of you decided that you could afford this apartment. If you earned less – and especially if you earned the same as she does – you would have chosen a less expensive place to live. Since it’s your income that allowed you to take on the extra rent expense, she shouldn’t have to feel responsible for it.

    You could also try telling your girlfriend that she also owes it to herself to have adequate savings in her own name, and that that’s more important than whatever she might “owe” you.

  3. I recently canceled cable and do the streaming netflix thing now also.

    It’s so awesome. Definitely second all the Ken Burns stuff. Also, you can find most of the Frontline pieces as well which are really well done in my opinion.

    Who knew… TV can be educational…. ;)

  4. I didn’t know you were a firefly fan Trent. Great show! Too bad it was cancelled so quickly.

    Trent,
    Not sure if I mentioned this before but would it be possible to do some posts or some Q&A about the business of the Simple Dollar? How do you get advertisers? How much does the blog make? What are the income sources? How much does the book make you? (that might be a separate topic from the blog) and so on. As an aspiring blogger and writer, I’m really curious.

  5. QUESTION: I’m currently a student in college, but am working for the Summer. Every paycheck, it hurts me to see taxes, medicare, social sec, etc. take aqay about 11% of my salary. I’m wondering if, as a student, there is anyway to file a tax return and regain some of this money. Thanks and I really appreciate everything you do on this website.

  6. Netflix is definitely quality stuff, I love it! Arrested Development is of course a good watch (several times over). I find myself watching more and more of the documentaries – so much interesting information on so many topics.

  7. My husband and I have been debating life insurance needs. We both feel that insurance is a gamble b/c you’re paying a lot for something we hopefully won’t need. How do you make the call between paying for the insurance, or investing money ourselves? We are disciplined investors, so putting an amount equivalent to insurance premium aside each month wouldn’t be a problem, and there are no kids.

  8. @Marvin – I have a netbook as our “secondary” laptop (it’s my primary computer, and my partner takes it when he travels) and highly recommend it as a frugal option if it does enough for you. I use it for word processing, spreadsheets, and the internet, and there’s more than enough power in one for me. I find it comfortable to type on for long periods, but others might not. It IS far cheaper than a full-blown laptop, though, at about $300 for my Toshiba. It’s worth looking into.

    @Chris – Who says you have to budget every single dollar? I certainly don’t, and I find my budget time very intriguing – I can spot trends, graph things (ok, I’m a math dork), figure out if my cell phone usage really is worth the money, etc. As long as you’re saving enough and can cover your monthly bills, I don’t think you need to budget your entire paycheck.

    @Abby – (I work for an insurance company.) You’re fine in terms of insurance right now. The only thing I would ensure is that you have enough in your emergency fund to cover bills on your own – and include the long term and disability insurance in the calculation. And, while I’m thinking, I’d go ahead and get all the preventive care I could out of your health insurance policies.

    @Kam – Congratulations! I don’t think people say that enough for the occasion of moving in together. I wholeheartedly agree with Trent’s advice to split expenses based on income ratio. I’d make sure to use take-home income. My partner and I have been doing this for 4 years, and it’s working out splendidly for us. If/when something changes (like I get to be at a stay-at-home partner), we’ll reevaluate.

    Whew! Guess I had a lot to say this week.

  9. My earlier comment was sent to moderation, so I’m going to try again wtih just part of it:

    @Kam: One idea that I’ve seen a lot for couples with income imbalances is for each person to take responsibility for a certain set of bills. For example, you pay the rent, and she pays all the utilities. Not only is that logistically simpler (since only one person has to write a check for each bill each month), but psychologically it may be better for the person who’s paying less, since at least they have some contributions to the household that are entirely theirs.

  10. Anna needn’t worry about the bite taxes will take out of her paycheck. With an income that low, the tax burden is literally nothing anyway. In fact, she should expect to get some money BACK from the government.

    On another note, I hope she knows what she’s doing with respect to her education. What kind of career is she hoping to pursue with a major in Spanish and a minor in religion? She mentions she hopes to get married immediately after graduating. Does she hope to have kids right away? If so, is she planning on leaving the workforce (assuming she’s able to find employment at all) and becoming a stay-at-home Mom?

    If so, then – at the risk of sounding judgemental – is it smart to spend $32,000/year getting a worthless degree she’s not going to use anyway? I’m just saying it might be something worth considering.

  11. For the question about how to split expenses when you have an income disparity, I had to work through the same issue becuase I have a very high income as an attorney and my boyfriend has “just” a high income as an engineer. We’ve been doing as Trent suggests–splitting househould bills by ratio of our income–for almost two years and it works well for us. For the person paying “less” you can always pick up an extra dinner out, or pitch in more around the house, or take time to make a “special” dinner a couple of times a month–basically, look for another way to contribue to your overall happiness as a coupleif the smaller financial contribution makes you uncomfortable.

  12. Chris,
    If you’re stressing out over your budgetting, try to find a simpler way to do it. Trent’s advice is good too – refocus on WHY you’re doing it – but you may just be making the process too complicated.
    Maybe this will help – write step-by-step instructions on how to do your budgetting process. Then look through it for unnecessary steps or steps that could be simplified. I’ve never actually tried this, it just came to me.
    Kevin,
    Do you like Science Fiction? Then I recommend Doctor Who. Start with Series 1 from 2005 (staring Christopher Eccleston). Some of the older episodes (from the 80′s and ealier) are available by streaming, but if you haven’t watched the show before than the 5 latest series are the most enjoyable.
    I find that I really enjoy many of the shows from BBC (many of which were recommended to me after I started watching Doctor Who). Which brings me to my next recommendation, which is to rate as many shows as you can and try to watch many of the shows that Netflix recommends. The more you rate, the more accurate recommendations you’ll get.
    I’ve found many shows and movies that I really enjoyed that were recommended to me by Netflix.

  13. have u ever though about making ur blog posts printer friendly (like being able to print from browser)? I like to read them on the train on my way home from work and it’s a little time consuming to keep on copying and pasting into a Word document. Your always talking about saving time, so I thought I would offer that suggestion. thanks and keep up the great work!

  14. Netflix Streaming

    I just watched Departures last night. It’s Japanese with subtitles. I thought it was a compelling story and well made.

  15. I give my dh and I an “allowance”. Determine how much cash you can budget for “anything” of your choice and every Friday we get that much cash! A really free feeling ensues.

  16. @ Charity – I’m not sure I agree with the rent or sell suggestion. We definitely don’t have all the details that would be necessary for the decision and I’m not sure I understand the extra $400 a month “thing”.

    Assuming, as I think Trent did, that the $400 is coming out of the $750. That would mean all expenses covered with the house and a $350 profit. To me, that would be enough to consider keeping the house for a while. As long as all the expenses are covered and the house is providing a positive income I would probably sock all the profit away into an account that could be used in case the house could not be rented for a few months. I’d also have that money to do minor repairs/maintenance. As long as there is a positive cash flow I think keeping the house for a while to see if housing prices went up a bit would be worth it.

    But that’s just my take and as I said, we don’t have all the details and I may have a higher tolerance for that kind of risk.

    Things to look at. How is the rental market in the area? Will the management company use their fee to make sure the home is always rented or will that fall onto you and eat away the slim profit margin?

    If you are moving, something I have seen people do is make a small apartment in the home so that coming home to visit family is easier and cheaper. They have a (very small) apartment in the basement (legally) that they could rent but choose to keep vacant for when they come back to see family and friends. It saves money for them because they do not have to stay at a hotel and it made sense because they visit fairly often.

    I’ll stop there but hopefully I added a little more to the thought process.

  17. Charity: Sell the house.

    Its not really clear what the cash flow on the house would be if you rented it. I’m assuming you’re looking at a $400 monthly loss minimum. I don’t see how you could be clearing $750 a month after costs so I assume you just mean $750 in rent after the property manager 15%. And a $400 total loss. You are not going to recoup the initial cost of that house anytime soon and sinking $4,800 a year into it minimum is throwing good money after bad. Sorry you lost so much value. :( But at this point its best to cut your losses and sell it. Trust me, managing a rental out of state can be a nightmare.

  18. Chris, if you are on a zero-based budget, remember to include a category for fun money (cash to blow at will). Even $25-50 a month will give you a little breathing room. My husband just got an $8000 raise, so we’ve just recently changed our fun money from $75 a month per person to $125 a month per person.

    You can see our current budget on my blog, but we need to update it now that we’ve paid off the car. If you don’t make sure to give yourself a small bit for fun, you probably will burn out and give up. That’s what was happening to us before we started our fun money accounts at the beginning of this year.

    Abby, it sounds to me like you’re well-enough insured for now. My husband and I both work and have no kids, so we’ve insured ourselves for $100,000 so that if one of us dies, the other will receive enough to finish paying off the house and have enough leftover for about a year of living expenses. This is on top of the 6 month emergency fund we are building up again.

    Kam, when my husband-to-be and I cohabitated, he was making more than me. I didn’t care and wanted to pay 50%. I figured that when we got married, it wouldn’t matter anyway or if we broke up, it could be a clean financial break at least. We’ve been happily married for 5 years, so I guess we went with option 1, lol.

    Kevin, we just started streaming Netflix through our Wii and I’m loving the X-Files right now. I’m in Season 3 right now and love finding the time to sneak more in.

  19. I would have to disagree (respectfully) with Trent on the question from Charity regarding the house – whether to sell it and take a $118k loss or rent it for $750/month after management fees are removed.

    First, the email from Charity that she put $150k down on a $258k house, bringing the mortgage to initially around $108k. Assuming that she took out a 30 year fixed rate mortgage at 6.5% (these are just assumptions remember), the payments on the mortgage are probably somewhere in the neighborhood of $840/month. If she rents the place net of management fees for $750/month, the loss after deducting the $400/month in “other expenses, is around $490/month.

    Rent the place offered by your new employer for $700/month and that brings you to a total of around $1200 for housing expenses.

    You still build equity by paying down the mortgage on the house you own. You have the distinct possibility that the housing market where you own your home rebounds. Even a 25% rebound in housing prices would net you almost a $30,000 gain.

    The real kicker here is that you have $50,000 in cash. Sock that into a savings account and use it to pay any expenses that may arise.

    If you believe (like I do) that the housing prices have the possibility of rebounding, keep the house.

    You have the cushion – hold off for 3 – 5 years and reassess. Losing $490 per month for 3 years is a lot better than $150,000 right now.

    Thanks,

  20. The way I read Charity’s second paragraph was that their monthly costs (PITI) were $1150 – the $750 they’d get for the rental plus the extra $400 they’d have to put in each month. Plus repairs/upkeep. It sucks that they’ve lost money but at least they’re not underwater. I’d cry a little bit, and then sell.

  21. Re: Netflix. I think that Ken Burn’s Baseball isn’t available because they showing it in September on PBS with an added “10th Inning” update. But all of his stuff is great, I especially loved Brooklyn Bridge.

    I’ve recently watched via streaming: Fargo, Mulholland Drive, Moon, The September Issue, Up, and This Emotional Life. Once you’ve watched a lot Netfilx gets eerily good at recommending stuff to watch.

  22. Kam, I think the ratio thing is a good suggestion. Another way might be to split the rent 50/50, but then you take on some other budget line items such as utilities and groceries.
    Kevin – you might want to add HBO’s “John Adams” to your list.

  23. Charity, you should consider the tax implications of renting out the house for a year or two. It can really tip the balance. It’s a complicated discussion, but suffice it to say, you can deduct a lot above the line as a landlord.

    Kam, something to consider. Perhaps her “fair share” is the cost above what it would cost you to live on your own? Did you guys get a two bedroom since you moved in together? You could take the cost of the two bedroom, subtract the cost of the one bedroom you would have paid for alone, and have her pay the “extra” money it costs to live together. Also, for utilities, etc. most charge a flat fee, and then charge an amount based on usage. You could subtract out the flat fee (that you’d have to pay by yourself anyways) and have her just split the usage 50/50. Basically, you’re paying what it costs to live alone, and she pays you the balance in cost.

  24. @ Marvin, I also have the Dell Inspiron E1505 somewhere in the range of 4 years old. I replaced the hard-drive about 8 months ago, and now it needs a new battery. I don’t know if this is typical for laptops or not? Of course, the hard-drive went just as I was laid off, now the battery when I’m just starting a new project and in need of portability!

  25. Regarding batteries for laptops, most manufacturers deliberately exclude from them warranty. Batteries provide their energy via a chemical reaction, and recharge by reversing that reaction. Over time the chemicals start to permanently break down, gradually reducing a battery’s ability to hold a charge. Unfortunately the manufacturers cannot predict how long this will take as this process will depend on factors outside of their control. Does the user only recharge it while it is in the “optimal” charging range, with a 25 to 75% remaining charge, or do they run down to near zero, reducing the life? Do they know to store and use the laptop only in the proper temperature range, or do they tend to leave it in their car (where extremes of heat in the summer and cold in the winter can reduce a battery’s lifespan?) How heavily do they use it? Etc.

    Because the manufacturer cannot control these and other variables that ultimately control a battery’s usuable lifespan, most will exempt batteries from any warranty. Sometimes a battery will last 2 or 3 years, sometimes it starts to fail in as little as 3 to 4 months. While it is possible a battery is failing early due to manufacturing defects (faulty control electronics or bad components,) many of the early failures are simply due to these variables that the manufacturer cannot control, and most users are blissfully unaware of. It has been my experience that very few users actually read the various booklets that come with their computer and follow the instructions for use and care.

    As for the other components of a computer (such as the hard drive, CPU, video card, RAM, etc.) the most common time for a part to fail is either in the first 6 months, if you have a defective component, or starting around 3 years. Over time the parts of a computer wear down. While it seems obvious with moving parts like a hard drive’s spindle or a fan, even parts that would appear impervious to wear and tear (such as the capacitors on the motherboard) actually do wear out due to heat expansion and contraction and other effects.

  26. I usually lurk around here, but I felt the need to chime in with the fact that Man on Wire is one of the best films I’ve ever seen in my life. Absolutely incredible, and something everyone should watch… Preferably more than once!

  27. @ Tabitha, if you liked Departures, you will love “Cherry Blossems”, a German movie. I was just describing Departures to a German cousin today. The “Nokanshi” Boss, Tsutomu Yamazaki, in Departures, is in many good films such as Tampopo.

  28. Regarding Netflix Streaming, Kevin, you should really just spend time browsing the instant streaming section of netflix. A lot of the movies & TV shows on my instant queue are from browsing. Every time you add a movie, Netflux will suggest other similar movies in the same genre/same actors/same director. I second the X-files. All 9 seasons are on streaming right now. I’ve also been watching an FX show called The Riches that I like. There are tons of documentaries, too. There’s this great Frontline documentary called 10 trillion and counting (I think) that’s a pretty unbiased assessment of how we got into all this debt and how to get out. I have Man On Wire on my queue, but haven’t watched it. I don’t recommend Jesus Camp & am surprised that Trent suggested it, considering how biased it was (think Michael Moore). The filmmakers definitely had an agenda with that one. Another one I highly recommend is “A Beautiful Life”, about the Gerson protocol for cancer.

  29. Chris wondered: “How can I reduce the stress I feel from budgeting all my money around, and feeling like I have none left?”

    Here’s one way that is simultaneously easy and hard: easy, because all you need to do is (say) add $20 twice monthly for a dinner and movie (or whatever helps destress you) to your monthly budget; hard, because you still have to discipline yourself to free up that much money.

    As Trent noted, many budgetary decisions can be automated; your bank will be happy (for example) to transfer (say) $100 per month to your long-term savings account, and you can set up your recurring bills (e.g., utilities, cable) to withdraw money directly from your bank account. I do this for most bills and other recurring expenses such as contributions to my kids’s university funds, but also use my simple calendar program (Apple’s iCal) to remind me every month to deduct this amount from my checkbook. No stress because I don’t have to remember anything: the calendar does all the hard work.

    Anna notes: ” I try to pursue scholarships, but since I can’t demonstrate “financial need,” I often do not get them.”

    There’s an amazing array of scholarships out there, and most don’t have any financial need criteria. The trick is to find time to hunt down the ones you qualify for. Because this research isn’t trivial, I’ve seen statistics suggesting that something like 50% of scholarships are never given to anyone because nobody learns of their existence and applies. A really good university will have someone who can help you figure out which ones you qualify for and thereby reduce your research time, but even a bad university should at least have a long list of these things available in the guidance office. Invest a day looking through the list to see if you qualify; there are often scholarships for things you’d never expect, such as “blond/brunette/whatever girls named Anna who are left-handed” — all being legacies of someone who succeeded and who wants to help someone similar to them succeed.

  30. Kam, what worked for us was percentage of income, each put 50 percent to living expenses 25 percent to savings, and 25 percent to personal. the dollar amounts were different, but we were each making equal contributions.

  31. Kam- I work a budget on a proportion amount with my husband and it works well. What I also do is if there are any tax refunds or benefits that come to us because of salary I also divide that proportionately.

    If your girlfriend is insisting on contributing more, how about dedicating some of her income to savings or special purchases?

  32. Thank you, Trent, for the answer re callable CDs. I appreciate it. And as a native New Yorker, I agree about Man on Wire. I watched it through tears, unable to believe how much I miss those buildings and the thousands of members of the Family of Man who were lost in them.

  33. Abby, buy yourself a disability policy of your very own NOW, today. You can be fired and get hit by a bus the next day and be out of luck. That policy that you buy will pay you tax free; the other is taxable income. And you can collect on both. And when you NEED to buy one it will be too late. At your age, it is quite inexpensive and it sounds like you can easily afford it.

    Under NO CIRCUMSTANCES get one from Unum/Provident. They have lost class action suits for fraudulent denials. If your company insures through them, you don’t actually have disability coverage.

  34. Trent, could you do an article on cheap Internet access (not dialup)? Here’s my situation: just cancelled my Comcast TV/Internet package today (will save $110/month). I’ve got a cell-phone which I can use as a WiFi hotspot for my laptop, but it only allows 5 GB of monthly data transfer. I use the Internet quite a bit, so this limit is not enough for me. The best substitute I’ve found is clear.com, but it looks like their least-expensive option is still $40 per month. I’m looking for something in the $20-$30 range – if it even exists. Would love to see an article on this – and the issue is that I am not tied to a land-line or a cable company, so I need something wireless, and with an unlimited data transfer allowance.

  35. Chris’s question (about budgeting) suggests that part of the stress deals with allocating the funds, but that a good part of it is the “feeling like I have none left” part.

    Chris, if there’s anything you can do to increase the money you’re bringing in (whether that’s from selling stuff on Craigslist, having a yard sale, doing odd jobs in the neighborhood, or whatever), that might help with your budget. I know that’s easier said than done, so know that I’m sympathetic to your situation. But if you have any means of making a little more, it’ll help you allocate your money without feeling like you don’t have room to breathe.

    Good luck with it!

  36. There is a series directed by Ric Burns–New York–it is from PBS. It is fantastic if you are interested in history. Thanks for the suggestions and the blog; it’s a favorite.

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