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. Dictation software
2. Private school worth it?
3. Switching houses to avoid mortgage
4. Home exercise routine?
5. Weather compromise in Iowa?
6. Angry about money
7. Currency exchange thoughts
8. Family screen saver
9. Rent it out or sell?
10. Old personal finance books
I had a great talk with an old friend about child names. They’re really struggling with the choice.
The big issue they’re running into is whenever they come up with a name they both like, they recognize that it’s the same name as someone they know and they don’t want to give the impression they’re naming the child after that person.
I told them not to sweat it unless it’s someone very close to them. Our children have fairly common names that match people we know, but there was never any question that we weren’t naming our children after some of them.
Q1: Dictation software
You mentioned in your recent reader mailbag that you sliced a fingertip pretty badly and it’s interfered with your typing. Have you tried any of the dictation software available for computers? It’s been a number of years since I used Dragon but I’m usually pleasantly surprised how close my phone’s voice transcription is.
Dictation software works well, but I wouldn’t invest the money in it unless you had a long-term need for it.
WHen I cut my finger, I mostly just needed to stop work early for two days (well, really early one day and a bit early the next). After that, my work was back to normal.
Dictation software works well, but I simply can’t match the productivity I get with my fingers.
Q2: Private school worth it?
Is it worth the extra cost to send my children to private school? Right now, we live in an area with really good public schooling, but we’re going to move in a few months and the city we’re moving to is much worse in terms of public education. The increase in pay will more than cover the cost of private school.
If you’re moving to an area where you have to send your children to private school to feel good about their education… is the move really worth it? Is this a required move for your job?
Step back for a second and add up the private tuition costs for each of your children. On top of that, add in the extra taxes you’re going to be paying with this new job (you’re getting a salary bump, but it’s nowhere near all take-home salary).
I’ve looked at opportunities in my own life that would require me to move to school districts with much, much worse educational systems. In those cases, I would have sent my kids to private school, but after those moves, I wouldn’t be financially ahead at all… so why move?
Q3: Switching houses to avoid mortgage
I am debt free except for a 116,000 mortgage at 5.5 fixed for 15 years. ( we just refinanced in October). Would it make sense to sell and move to another lower price house to get out of debt sooner?
If you’re living in a bigger house than you need, such a move is actually reasonable. I would make that move.
Living in a bigger house than you need means you’re paying energy bills and property taxes for space that you’re not even using. In your case, you’re also paying mortgage interest on that space you’re not using.
This is a move I’d make, provided I wasn’t moving into genuinely cramped quarters.
Q4: Home exercise routine?
I’m attempting to build up a home exercise routine but my knowledge is mostly jumping jacks, pushups, and situps. I can’t afford a gym membership or a bunch of equipment at home and a lot of the exercise sites I’ve seen seem to have some seriously sketchy information. Do you have any trustworthy resources?
I highly recommend you go to your local library and look for the book You Are Your Own Gym by Mark Lauren. It’s almost exactly what you’re looking for.
It’s loaded with great tactics for truly challenging exercise at home with no equipment besides a few things you have around the house. Some of the routines in the book are really challenging, too.
As always, before you start a new exercise routine, check with your doctor to make sure you’re up for it.
If you want an exercise to get started, I recommend the burpee.
Q5: Weather compromise in Iowa?
I had a question regarding winter, I know you have mentioned before that you are prone to the winter blues, so I am hoping this is something you could help answer. I live with my family in Northern Minnesota, but I am one of those people who hate winter. I find that I am very sensitive to cold, and only go outside for short periods in the winter, which makes me feel very cooped up, as I love to be outside. The 4 – 5 months of icy roads make also worry me, as I drive a fair amount (my daughter is involved in a couple of activities that require some driving). I always feel stressed during our long winters.
My husband and I have talked of moving somewhere warmer when our daughter is grown. The problem is, while I have difficulties with the cold, he has a hard time with very high heat (I originally suggested moving to Arizona (or perhaps Florida). He tends to feel rather sick when temps are very high, or there is exceptional humidity.
He suggested a compromise, where we move somewhere with milder winters, yet not exceptionally extreme summers, and Iowa came up in our conversation. He is very enthusiastic, as it is still a reasonable distance to drive back to Minnesota and visit family, yet far enough away that he feels winters will be a bit milder and shorter. So my question is, as someone who lives through these winters, would you catagorize the ‘harsh’ part of your winters ( 20 degrees or less) to be fairly short? I can deal with a couple of months of cold, and even some subzero days, but until the weather hits at least 30 degrees, I tend to be indoors.
What do you think?
Over the last decade in Iowa, my observation has been that typical winters lastsabout three months with some warmer spells in those months. The temperature seems to go back and forth between periods of temperature that are quite low and periods that are warmer.
There are exceptions to that rule, though, on both ends. Last winter (2011-2012), we never had a bit of snow on the ground the entire winter. Three winters ago (2009-2010), we had a winter with a ton of precipitation and the snow stayed on the ground for months.
I haven’t experienced a full winter north of here, but I have family in Minnesota and it generally seems to be a bit colder there (5 to 10 F colder) with somewhat more precipitation that sticks around longer.
Q6: Angry about money
Whenever we start talking about money issues, my husband immediately gets angry and starts storming around the house. What can I do? I don’t know how we’re going to solve our money problems if we can’t talk about them.
If your husband is losing his temper so easily over money issues, then there’s something about the conversation that’s deeply unsettling to him. It’s really hard to tell what it is, but if he refuses any sort of conversation about a vital marriage issue, you need counseling.
It could be something as simple as he’s frightened by money management. It also could be that he’s hiding a huge debt or other financial problem, or that he simply fears having to change his behaviors in some way.
If you can’t even rationally discuss it, though, your finances (and your marriage) are in trouble. Seek counseling.
Q7: Currency exchange thoughts
We used to do currency before leaving to go overseas. The banks on SF had much better rates than the overseas banks. The savings could be as much as 10 to 25% by going to the banks of the countries involved. The rate in Japan at that time was 360:1 but the Bank of Tokio in SF was 400:1 with no service charge. The Banks of Canton and Hong Kong & Shanghai were similar. It was very good for servicemen who didn’t make much money.
I have received a wide variety of emails on the subject of currency conversion.
From what I can tell, the “best” way to do things varies greatly depending on when you travel, where you’re traveling, and how thoroughly you’ve researched financial institutions both before you leave and after you arrive.
I think the final step trumps all. Do your homework. Spending an hour researching currency conversion for your trip can easily save you quite a bit of money on your travel.
Q8: Family screen saver
We used to have thousands of family pictures stored away in boxes. Over the course of a year or two, my husband scanned all of them into our computer and set them as our screen saver. Now, the computer sits in the living room and just cycles through all of the pictures when no one is using it. It’s wonderful to actually see all of those family pictures and it’s great to have the space freed up.
My father-in-law actually did almost this exact same thing, and it’s something I’m thinking of doing as well. We don’t actually have a “family computer” in the room where we’re all at, but it’s something we’re looking at installing.
It’s a great way to deal with old family pictures that just sit in boxes and never get looked at. This puts them in a place that’s front and center, but doesn’t require any extra effort to enjoy.
It does take a lot of time, but there’s no cost involved if you have a flatbed or a photo scanner available to you.
Q9: Rent it out or sell?
My wife and I own a small two bedroom condo on Long Island and mentally, we are ready to move. The complex allows renters, and many of the renters are terrible neighbors. We are also considering having children in the next two years, and we’re at a point where a yard and some privacy would be very nice to have.
Financially, however, I’m not sure if we can move. Houses in good neighborhoods here are around $400k+ and we would only be able to put up around 10%. Plus, I’m not sure we’d break even on the sale of our condo. We gross around $130k/year and only pay some student loans and one car payment (plus utilities, cable and one cell phone).
I had always hoped to rent out the condo and buy a house, but I’ve been told I need at least 30% equity or two years of rental income before I can get a second mortgage. Do we test the market and try to sell, hoping we break even, and then go looking for an approval with just 10%? Do we stay put and keep saving? Or do we rent our condo out and find a rental of our own for the next two years?
There’s no reason not to test the market here. Put your condo out there for a price that would make everything work out for you and see if you get a sale.
If you don’t, keep saving and gradually lower the price on the condo, keeping the price at one that would work for your plans.
Eventually, the condo will sell and you’ll be where you want to be. That’s how I’d handle it.
Q10: Old personal finance books
I recently picked up a big pile of personal finance books from the late 1970s and early 1980s for a buck at a yard sale. I’ve enjoyed reading through some of them and I feel I got my dollar’s worth out of them. My question is whether you think they still have any value today?
I think the principles in most personal finance books are sound and make sense most of the time. Spend less than you earn. Save for the future.
The problem comes in with the specifics. The specifics are always changing. There are always new tools for saving and investing and new ways to distract ourselves into spending more than we should. There are always new ways to be frugal, too.
I think if you’re looking to reinforce the broad principles, they’re just fine, but if you want specific tactics, you might want to look for newer books.
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.