Reader Mailbag: Dress Up

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. Heating and cooling issues
2. Tax problems
3. Student loan debt juggling
4. Daylight Savings Time switch problems
5. Joint accounts with aging parents
6. Potential book selling scam
7. Multilingual children
8. Roth and 403(b) balancing
9. Salsa deal
10. Splurges

My children have a “dress-up tub” in the basement that contains a wide variety of costume clothes we’ve picked up here and there. Most of it is too big for them, but they can get the items on.

They tend to play with the “dress-up tub” a lot during the winter, but scarcely touch it during the summer because they’re outside so often. This weekend, they dumped it out for the first time in quite a while.

It’s almost as if a big session of the kids playing “dress-up” is an unofficial sign of the changing of the seasons.

Q1: Heating and cooling issues
I am having some problems getting my roommates to understand frugality, especially when it comes to the air conditioning/heating unit in our house. I am trying to research how much money it wastes to constantly have the air on, especially when it is only 75 degrees outside. My roommates believe that it costs more money to turn the air on and have it re-cool the house and insist it run constantly. I think that it is cheaper to turn it off when no one is home. What is cheaper?

Also, we have an upstairs and a downstairs and, therefore, two units. Sometimes when I wake up I find the downstairs has been on cool at 75 degrees all night while the upstairs has been on heat at 75 degrees all night. I feel like this cannot be good, but I can’t find any research to back up just how much money we are wasting or why this is bad. Is this a waste of money? Can you help me find some research on these things, so I can explain to them why I am so frustrated?
- Bill

It’s substantially cheaper to turn off the air conditioning and heating when you’re not at home. Why? If you’re constantly cooling or heating your home, you’re keeping the temperature of your house far away from the outside temperature, and basic thermodynamics says you’re going to lose the heat or the cool in your house faster if the temperature outside is far away from the temperature inside your house. That’s why your A/C runs a lot on a very hot day and not very much on a mildly hot day, and your furnace runs like mad on a very cold day.

However, if you don’t run the A/C or heat all day, the house temperature begins to approach the temperature outside, and the closer it gets to that temperature, the slower the rate of change is in the house. What that means is that at the end of the day when you have to use the furnace or A/C to “catch up,” you’re not going to have to run it nearly as long as the total time it would have to run to keep the temperature steady all day. It’s far better to “catch up” ten degrees at the end of the day than to “catch up” two degrees every single half hour.

As for the heat and air conditioning at the same time, that’s just a waste of energy. You’re far better off accepting that the basement and upper floor are going to be a few degrees different and just use one unit to manage the temperature of the house. My suggestion would be to just use the heat to keep the basement a few degrees cooler than you’d like, then not run anything upstairs. If it gets too warm, crack a window up there for a bit, then close it. Running two units is crazy just so you can have the exact same home temperature in the basement and the upper floor.

Q2: Tax problems
My husband and I got caught up in a dispute with our state’s department of revenue where we kept sending them verification that yes, he had paid his income taxes for 2009 on time, but they kept losing track of our paper work or never updated their records. It finally got settled after a year of going back and forth with them but not before they filed a tax lien against my husband. We did not find out about the lien until two months ago when my husband checked his credit report. It was quite a shock to us, and we immediately set about to get it taken off. The problem is that so far, the best we’ve been able to do is get it marked as paid, where in our eyes it should be removed. We’ve been told that even if it’s paid, a lien is horrible for your credit. We’ve been going round and round with the credit reporting companies and can’t seem to get anywhere with them. I want to try a few more things but am not optimistic they will work. I’m starting to wonder if we should get some legal help. My concern, however, is that I know it won’t come cheap and don’t know if it would be worth it. My husband wants to buy a car next year, so he will need his credit in good shape to do that. How do we figure out if it will be worth it? We don’t know my husband’s credit score right now (the lien is by far the worst thing on the report, so it shouldn’t be that bad but for the lien. His only debt is about $5,000 in student loans). Should we find it out and go from there? Thanks for any help!

- Lisa

My guess is that your credit score is still moderately good, but not great. If you’re really concerned, I’d get your credit score checked through a reputable organization. One approach you might take is to go to your local credit union and simply ask them if they have any credit checking services.

Getting something like this removed from your credit report is often more expensive than the benefit you’d get from having it removed.

As I’ve mentioned before, I consider the methods used in the United States to verify credit as completely ludicrous. There are so many situations like this one where one’s credit history does not reflect the reputability of the person, but more accurately reflects the (lack of) credibility of the institution reporting the credit issue.

Q3: Student loan debt juggling
A little background. I am a medical student and my wife is just out of nursing school, making about $80,000 with amazing insurance and a 5% 401k match. Our combined undergraduate debt is about $100,000 as she was solely focused on nursing school which landed her a great job, and I went to an expensive undergraduate school and worked full time as an EMT ($10/hr). No family contributions either way, but they were both well off and thus no aid outside of loans. My tuition now is $44,000 a year and of course I cannot work. There are not many med school scholarships for kids from middle class families, so it is basically all on loans. She is paying off both our undergrad loans and supporting us in every way.

I was recently approached by a company (a legitimate company) that offered to do all our taxes and handle all our repayment, i.e. tell us who to pay when, once residency starts. I don’t know if you are familiar with how it works, but basically I will graduate with $200,000 in medical school debt (plus undergrad that we hope will have a dent after 4 years of her paying it) and work as a resident for 7 years making about $50,000. This is nice because I will be working about 80hr/week and I don’t really have time to focus on the plans and percentages (though it is very significant with those large numbers). The company charges a flat $500/yr, and they help strategize your repayment, specifically focusing on income based repayment (as a resident, married, and wanting kids, that repayment will be close to $0) then after residency, if I took a job with a non-profit hospital, I would have my loans forgiven after 10 total years. They maximize, fill, and file our taxes too. This seems too good to be true, but there is a lot of testimony, and it takes advantage of a system really set up for people who took out $100,000 to get a social work degree and make $30,000 a year and can never repay that debt.

Do you know if there are dangers in taking out the maximal med school loan amount (which I don’t really need, since my wife pays for living expenses) and using that extra money to pay all our private loans (which are not covered by IBR and the 10 year forgiveness). Also, I feel weird saving money in IRA or 401k with all that debt, but this plan seems to encourage taking out the max, saving it, then having it all forgiven. I feel there is a moral dilemma. We currently max out both our IRAs and match the 401k. We also pay 25% of her take home for loan repayment, plus save for a future house. What are your thoughts on these companies that handle repayment strategies and specifically this 10 year forgiveness plan.
- Ron

I’ve heard of a lot of variations on plans like this. What these organizations do is essentially manage all of your money for you and either assign you some living stipend according to their formula or essentially give you a debit card to live off of while the rest of your income goes toward eliminating your debt.

These plans can work well, but you have to remember that they’re in business to make money. They’re not really doing anything that you couldn’t do yourself. You’re basically paying $500 a year for a service that will save you the effort in paying taxes and the effort in running a debt repayment plan.

I’m not clear on whether this forgiveness plan is tied to this company. There are a lot of student loan programs out there that are backed by government at some level that forgive student loans for people who take on high-risk jobs. It seems like this is just a service that is a “front end” to this kind of loan.

Again, it just sounds like you’re paying $5,000 over ten years to simplify your taxes and some of your money management. To me, that’s not worth it. It may be to you, though.

Q4: Daylight Savings Time switch problems
I have a terrible time adjusting to the switches to and from Daylight Savings Time. Do you have any tips that will help me not kill my productivity?

- James

Honestly, I just try to ignore the switch as much as I can. I try to keep my bedtimes and waking times in relation to sunrise and sunset rather than in accordance to the clock. The biggest trick there is just making sure that when the clocks shift, I’m not causing my children to be late for school or anything like that.

For me, it’s the change in day length that really causes difficulty. Day lengths vary about six hours over the course of a year here and during November, December, and January, the short days can get to me.

If you’re really finding the change rough, I suggest starting an exercise routine. Few things are better at improving and maintaining your energy level than regular physical activity.

Q5: Joint accounts with aging parents
I have read mixed reviews on the idea of adult children being added to their parents’ accounts. The issue often mentioned is the gift tax. But, the upside is that it is easier to make payments on behalf of the parent(s) in the event of illness or death.

What do you suggest? Are there any ground rules you would suggest like keeping the account below $13,000 to avoid gift tax issues? Does it need to be listed as an asset for a will since there are other siblings?
- Michelle

Money in that account would be considered part of the parental estate since the parent never relinquished control of it (because they kept their name on the account). Of course, any money you take from that account for your own use is considered a gift for tax purposes.

As long as anything that comes out of that account is clearly for your parents, there’s no issue at all with you being on the account. This is the type of thing that can be dug up in the case of an audit, so I’d take care with this regard.

When your parent passes on, don’t touch the account unless it’s explicitly for any remaining parental expenses. The rest of the money should be handled by the executor of the will.

Q6: Potential book selling scam
I need to buy some fairly expensive graduate school exam prep books online and the seller wants me to pay through PayPal. After we negotiated on the price a little bit, he asked if I could pay through personal check, money order or by direct deposit into his bank account to avoid the 3% PayPal fee. Is there a potential for scamming through giving an unknown seller a personal check/direct deposit/money order?

- Kelly

Well, if you pay using that method, there’s no reason for him to send you the books if he’s going to scam you. Your only way to force him to send anything would be via small claims court.

The reason that services like Amazon Marketplace and eBay work well is that they offer protection against these kinds of scams. Paypal does as well, though it can sometimes have its own issues.

I would never pay someone I didn’t know without using some kind of buyer protection.

Q7: Multilingual children
Do you think there is any benefit to raising your children in a multilingual household? My mother-in-law speaks Punjabi and insists that our children speak it as well. Will this really help our children in any tangible way?

- Andrew

There are some studies that indicate that there are advantages in overall communication skills for children who learn multiple languages during their first few years of life. Not only that, a truly bilingual person tends to have great potential in job markets. I would think that someone who can freely speak both Punjabi and English would have many job opportunities, particularly if packaged with other skills.

That being said, how exactly would you go about teaching your child both languages? Are both you and your spouse bilingual? Do you communicate at home in both languages? If you’re not doing this – or, even worse, if you can’t do this – teaching your child two languages is going to be an extra challenge.

I think if you have the ability to easily teach your child multiple languages during their formative years, by all means do it. However, if doing so is going to add significant stress to your home situation, I’m not sure the benefits overshadow that.

Q8: Roth and 403(b) balancing
I’m 40 years old and finally got around to thinking about retirement savings a few years ago. Better late than never. I have a 403(b) plan to which my employer contributes 5% of my 70K salary. The plan lets me contribute essentially as much of my pre-tax income as I want to–all the way up to 75%. I was contributing 15% for a while but recently dialed it back to 5% so I can more quickly put together the emergency savings fund I’ve decided to create.

My question is about adding a Roth IRA to the mix and how to invest those funds. I have the 403(b) invested in a moderate growth fund through Vanguard but am thinking of changing that to a target retirement date fund. Should I invest the Roth IRA the same way, or is there a reason to invest one instrument more conservatively than the other? I have to admit that I’m pretty skeptical about the stock market and fairly pessimistic about our economy, but I’m willing to tolerate some risk and hope for the best over the long term.

Also, would you suggest that I try to max out my annual IRA contribution if possible, or should I focus instead on the 403(b) and just contribute to the IRA as my cash flow allows? Or somewhere in between?
- Ron

I think target retirement funds are a great way to plan for retirement. If you’re feeling more conservative, there’s no reason not to invest in a target retirement fund that targets a date earlier than your retirement date.

I see no reason why you couldn’t put both your IRA and your 403(b) into a target retirement fund. You could have one target an earlier date and another target a later date.

As for balancing the two, I would make sure I got every drop of matching money from my employer in that 403(b) before looking at a Roth. If you have all of the matching money already and are looking to save more, I’d put everything into a Roth until I maxed it out, and if I had still more, I’d go back to the 403(b).

Q9: Salsa deal
My wife laughed at me when I mentioned the article on salsa. She found a coupon deal and got 10 bottles of Chi-Chi’s brand salsa for free. She is the queen of the deal.

- Joe

Such deals can be found, but how much effort are you putting into deal seeking? Also, how many of those jars will actually be used before their expiration date?

My experience with such deal-hunting has been that there’s a lot of serendipity involved. If you spend a lot of time digging, sometimes you’ll find nothing at all. Other times, you’ll find a great deal like this salsa one.

For me, it’s not worth it to trawl coupon resources for an hour to save $5 on my grocery bill. I’ll do a quick pass to find coupons that match my grocery list, but finding great deals for the sake of finding great deals never pans out for me over the long haul.

Q10: Splurges
What do YOU splurge on?

- Emma

My biggest two splurges are board/card games and books. Those are pretty much the only things I splurge on at this point. I guess I do splurge on very nice gifts for my wife and my parents at appropriate occasions. I used to splurge on video games, but I’ve only bought one game for myself this year, so I think that’s not really a splurge at this point.

Once a year, I go to a gaming convention with a few friends. I usually save up for this over a period of months. I consider that to be something of a splurge.

I really don’t do any impulse buys that I can think of, though. I’m the type of person who will sometimes put “breath freshening gum” on my grocery list, but without an item like that on the list, I won’t buy gum in the checkout aisle.

Got any questions? Email them to me or leave them in the comments and 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 hundreds of questions per week, so I may not necessarily be able to answer yours.

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36 thoughts on “Reader Mailbag: Dress Up

  1. Becky says:

    Re multilingual children – if you have an opportunity for your children to learn a second language when they’re young, grab it with both hands! Much research shows that there are cognitive benefits to being a multilingual child.

    Also, it gives your children an opportunity to be bi-cultural; which gives them an advantage in their interpersonal skills and personal maturity.

    I was an exchange student in high school. One of my exchange-student friends had a grandmother from the country we were living in. He’d learned some of the language from his grandmother as a young child, and then completely forgotten it all. But he re-learned the language *very* quickly, and was able to pronounce sounds in this language that none of us other exchange students could.

    So even if your children only learn elementary Punjabi as children, it will help them hugely in the future if they would like to travel and learn more about their mother’s side of their family.

    You will be giving your children a priceless gift if you can arrange for them to learn this second language. Congratulations!

  2. Becky says:

    I forgot to say – people who are bilingual learn *additional* langages more easily too. So if your children learn a second language as young children, they will have an advantage later if they want to learn any other language, even if that new language isn’t “related” to either language they know. So if you’d like your child to learn Spanish, or Manadarin, or Russian, etc. someday, then learning Punjabi now will make that task easier for them.

  3. Izabelle says:

    I owe much of my professional success to being bilingual (French + English).

    Yet I am very much jealous of my many friends (and my husband) who can speak 3 languages or more, due to being children of law 101. Law 101 is a Québec bit of legislation that, among other things, forces children of immigrants to go to school in French (the province’s official language), with the result that they speak French at school, still speak English in the schoolyard because it is much easier to learn than French, then speak their mother tongue at home, therefore becoming trilingual at a young age. We will definitely raise our kids in my native French, his native Portuguese and, of course, English!

  4. Matt says:

    @ Q1 – It depends on what type of heating/cooling system you have. I’ve always been told that for my system – a heat pump – leaving it on (though perhaps at a slightly lower level) is more efficient. Turning it completely off (or way down) makes it harder for the system to keep up, and causes the auxiliary/emergency source (electric in my case) to kick in, which though faster is much less efficient. I’ve seen this happen, too – when we came back from a trip in January one year there was a cold snap, and it took days for our house to completely warm back up (days when our heat was on nonstop!). When the house is already warmed up, our heat only kicks on for only a few minutes per hour.

    Trent, I think you oversimplified on this one.

  5. asithi says:

    Q7:
    I’ve always been happy being able to speak 2 languages. If nothing else, you get better service at family run restaurants when you order in their language.

    Q9:
    I would have love the salsa deal. We would have been able to go through all the salsa before its expiration. Salsa is not just limited to a dip for chips. You can add it to many meals or even eat it as a side like we do occassionally.

  6. Andrew says:

    I second Beck’s take on multilingual upbringing. It is an incredible advantage which should not be missed.

    On other matters raised by this post:

    Joint accounts with parents can be very useful, but should be secondary to arranging thins like power of attorney and health care proxies. For all issues of this nature (and there are many!) it is essential to work with a good attorney who knows the ins and outs of elder-care law and estate planning. Well worth the fees!

    Is the daylight savings question a joke? It’s one hour! Does this person never travel?

    It is wise to be suspicious of the PayPal avoidance scheme, but it’s not necessarily fraudulent. I once bought a painting off of EBay which required that I send cash (!) to Hong Kong. Foolish, but amazingly enough it worked–

  7. Izabelle says:

    I forgot to add that experts recommend that if a child is taught 2 languages at home, he or she should communicate in only one language per parent (ex.: English w/dad, Punjabi w/Mom). This will help them learn that these 2 communication systems are in fact separate. The law 101 example above works a bit in the same way: French is for school, English is with friends and the mother tongue is for home.

    I got to learn English much later, but what helped me tremendously was watching television in English as much as possible, learning the lyrics to my favorite songs and then enrolling in an English-speaking college.

  8. Katie says:

    Izabelle, I get it with the home vs. school divide, but doesn’t splitting it at home mean mom, dad and the kids can never all have a conversation together? What do you use at the dinner table?

  9. Izabelle says:

    Katie, I’ll have to find one of these studies and post the link here for the specifics, but I suspect that it may end up being a mash-up of both languages when all are together (ex.: Mom speaks 1 language, Dad answers in the other). My husband and I do not have kids yet, but we do switch between languages when speaking at home. We’ll be speaking French, stuble on a word and use the English one, then revert back to French eventually. When cussing, however, the mother tongue always pops up (!)

  10. Jonathan says:

    @Matt #4 – Doesn’t the auxiliary source only apply for heat? Also, there is still a potential for savings here, one just have to be sure the time the unit is off is enough to account for the additional electricity used by the auxiliary source.

  11. Josh says:

    Q1: If you are splitting the heating/cooling bill with roommates (it sounds like you have several) your share of the bill is never going to be that much anyways. Of course, I agree they could run things more efficiently, but one of the trade-offs you make by having roommates is that you cannot control their every action, or expect them to live by the same exact rules you would live by. In this case, I’d prefer not to ruffle to many feathers or cause to much tension. You are still saving substantially on rent costs, don’t get to nit-picky with them over temperature.

  12. Josh says:

    *too not to, wish I could edit above post

  13. Tracy says:

    Q1:

    If the temperature is set to basically the same as the outdoors, it won’t have a huge impact on your bill, because the units aren’t going to be compelled to kick on.

    High AC or heating bills are the result of wanting the house temp to be drastically different from the outside temperature. The same with the ‘warring’ units upstairs and downstairs – as long as they’re set to the same temperature, it’s not that big of a deal. A bit weird, but not a money sink.

    I personally turn off my heat/air during fall winter and open windows because I like the fresh air – but I don’t have significant allergies or have to deal with significant air pollution.

  14. valleycat1 says:

    Q1 – Trent is incorrect about trying to just run one unit – if the house has separate units for each floor, it’s likely that neither has enough capacity to heat/cool more than one floor’s area to any degree of comfort.

    There’s a lot of conflicting information/ conjecture about how to save on heating/cooling, and a lot depends on whether it’s gas or electric as well as type of unit(s) and climate you’re in.

    One option for you is to challenge your roommates to a contest where each of you (or each agreeing combination of roomies) is in charge of the thermostats for one billing period using whatever reward system works for the group, then compare the utility bills & the winner’s method is used in the future (you would have to agree on how to compensate if the weather has varied greatly between months).

  15. valleycat1 says:

    Q2 – the credit reporting agencies will let you attach a letter of explanation on items such as this. So anyone checking your credit score would be able to see an explanation of the situation.

    I’m surprised Trent passed up the opportunity to promote paying cash for a car to avoid relying on credit scores.

    FWIW, I once planned to buy a car from a dealer, only to be told by the salesman & manager that although I had the best credit rating they’d seen in a long time, they wouldn’t give me the best (advertised) deal on financing. They lost the sale.

  16. Tracy says:

    Q7:

    Even beyond the fact that if they learn to speak it fluently, there’s a really good chance it’ll have a positive impact on their professional life, it’s also just a nice thing to have a ‘special language’ with their grandmother. Even if she speaks fluent English as well, other relatives may not (well, assuming she speaks natively and didn’t just learn it herself!)

    I think Trent’s making it far more complicated than need be with the worrying about a downside – if your wife and/or mother-in-law speak it frequently with the children, they’ll learn it.

  17. Philo says:

    Regarding Q.7, Multilingual children
    Yes, Andrew, you should encourage your children to learn Punjabi. Even if Daddyji and Mummyji don’t speak it (though I’m speculating that your wife might), the kids will acquire invaluable listening, pronouncing, grammar and cultural skills in learning a second language from Grannyji. She also no doubt wants to maintain the link with India, and this is one good way.

  18. lurker carl says:

    Q 1 – It sounds like everyone changes the thermostat settings according to their personal preferences. You’ll never get your room mates to change their habits without creating a war.

    The laws of thermodynamics are working against you when the thermostat is bumped up and down. The walls and floors and furnishings retains their temperature much longer than the air. Thus the house still feels too hot long after the AC has cooled the air because the physical structure and contents are STILL TOO HOT. And the house still feels too cold long after the furnace has heated the air because the physical structure and contents are STILL TOO COLD. And the HVAC system is working longer to equilibrate the air and physical structure, perhaps just as long as it would have operated to keep the temperature stable throughout the 24 hour period.

    Your body compensates for the temperature differences between the air temperature and furniture/floor temperature, you are either shivering because the furniture and floor are sucking heat out of your body or you’re sweating because they are adding heat to your body. You’ll notice this most when sitting on 55 degree F toilet in the winter or getting into a 90 degree F bed in the summer.

  19. Jackowick says:

    Q6 Trent, there’s a middle ground that I’ve used before.

    I’ve bought items on ebay and discussed, for a price break, doing the transaction outside of ebay so we both save some money. Then we discussed the fact that paypal still hits the seller up for cash. So the merchant and I agreed to do half via paypal, half by certified check/money order with the idea being that if there was an issue, we would both be able to use the paypal dispute system. If I never got the items, I can tell paypal. If he didn’t get full payment, he could hold the item and cancel the paypal part.

    If the buyer is willing to go through all these steps, he (or she) has demonstrated some trustworthiness and goodwill.

    So while the “cheapest” transaction might not be totally safe, remember that those fees also give you an outlet for resolution in case of a conflict.

  20. Steven says:

    “Breath freshening gum”? I have to laugh at this. Why not just “gum”? I think this shows a certain level of retentiveness. You should chill! ;-)

  21. Johanna says:

    Q6: “Graduate school exam prep books” do not sound like super-specialized items – there are a lot of people who take those exams, so there must be a lot of people using (and selling) the books you want. Can you buy (or borrow) them from someone in your local area? Then you can do the deal in person, and not worry about getting ripped off.

  22. jim says:

    Q1 Bill: You’re probably right. Usually it makes much more sense to turn down AC/heat when you don’t need it so much rather than leave it on all the time. However it does depend on the type of cooling/heating system in question. Heat pumps can be most efficient if left at a steady state rather than cranked up and down all the time.

    If its 75 degrees then neither the heat nor cooling will really turn on much. So you really won’t see a ton of difference either way. You mention two units. Are the two units connected directly? Or are they separate apartments? Separate apartments with separate heat and cooling are not going to impact each other too greatly. The heat and cooling aren’t directly fighthing one another like having a heater and cooler in the same room. Assuming that the units are separated by doors and insulation etc then the only impact there is the heat that moves through the insulated ceiling/floor. That might make an impact but not so much in your case if downstairs is cool and upstairs is hot. Heat rises.

    I think you have the bigger problem of dealing with roommates that have different preferences for heat and cooling. Thats tough. Is the heat/cooling cost very high? If its not that much you may just want to pick your battles and not worry about it too much. Or you might suggest to your roommates that they let you run the heat/air for a month and illustrate to them how much money you all save. Maybe you can win them over by example. You could even make them a bet about it to get them to agree. Bet them that you can save X amount off the bill for the month.

    Q3 Ron : “I feel there is a moral dilemma.”

    Yep. Thats your conscience telling you that it isn’t OK for a highly compensated professional to take advantage of a government handout intended for people who are struggling financially. I don’t think you need a government handout paid for by tax dollars.

    Q5 Michelle: Are your parents millionaires? If so then they should get an estate planner to help out. If their estate isn’t worth > $1m then you don’t really have to worry about the impact of gift taxes. There is a LARGE exclusion on gift taxes for your lifetime so they can give away a lot of money and not have to pay any tax on it. To properly account for larger gifts they would have to file an extra tax form, but no tax will be due unless its a very large amount of money.

  23. Jen says:

    Shoot…no wonder I never buy gum…I forgot to put “breath freshening gum” on my extensive grocery list. Thanks Trent!!!

  24. Mister E says:

    To differentiate from the “smells like a locker room gum” that’s so common at checkouts I suppose.

  25. Courtney20 says:

    Q6 – I’d tell him I’d be happy to pay by money order after I received the item.

  26. Julia says:

    Q7: I’ve been living in Alaska for about a year. And I quite frequently feel a bit envious of the Native Americans when I hear them speaking in their tribal languages.

    I’m white, all American mutt, of some mixed European ancestry that I can’t completely identify. I enjoy researching the history and culture of the countries that I do know about, but I wasn’t raised with any knowledge of my heritage. I often wish I was.

    If your mother-in-law wants to teach your kids Punjabi, I say go for it!

  27. valleycat1 says:

    Q3 – If you get a bad feeling from the idea, then don’t go for it. Do what’s right. Take out student loans for the amount you need. Don’t put money in someone else’s pocket to manage the extra money or take the loans not planning to pay them back. With all the noise these days about exorbitant student loans, why take on more of an albatross than you have to? If the economy rebounds within the next 10 years or so, those loan forgiveness programs could disappear.

  28. AnnJo says:

    @5, Michelle,

    Bank accounts can be set up in several ways:

    Joint with right of survivorship. This means that when one person dies, the money in the account belongs to the survivor. Depending on who put the money in, it may or may not be part of the estate of the deceased for purposes of gift and estate tax. With this kind of account, the money is NOT handled by the executor of the estate because it passes automatically to the survivor.

    Sole owner with a co-signer. This kind of account allows another person to sign checks on the account, but on the death of the owner, the account belongs to the estate of the deceased, not the co-signer. The funds in this account WILL be managed by the executor of the account.

    Sole owner with a designated beneficiary. These accounts will often show up on bank statements as “Person A POD Person B” POD standing for Pay on Death. These will pass automatically on death and are not subject to executor control. (But for gift and estate tax purposes they ARE part of the estate.)

    Most banks automatically steer people toward joint with right of survivorship, but if that’s not the way you and your parents want it, ask for other options.

    If gift/estate tax issues are even conceivably involved in your parents’ situation, for goodness sake don’t ask a blogger how to handle things, ask an estate attorney. Trent hasn’t a clue on these things.

  29. sewingirl says:

    The multiple language question makes me think of my Grandmother. Her parents spoke only german at home, even tho they were both born in the USA of german immigrant families. When she started public school, she spoke not a word of english. She commented for the rest of her life what a disadvantage this was. The times, they are a’changin.

  30. PawPrint says:

    Q5: I’m a big fan of living revocable trusts with durable power of attorney. I was able to deal with my father’s finances and other issues (selling his house for one) when he was alive, and after he died, the estate was easy to settle because everything was laid out in the trust. I had to hire a tax accountant to prepare the final tax form, but that didn’t cost much.

  31. Finance Nerd says:

    @Q6 — one of the issues with paypal is that once you decide to accept credit cards, you get charged the fee on all transactions, even when the customer is not paying by CC. Or at least that’s how it worked the last time I checked.

    Some sellers set up two paypal accounts — one for customers paying by CC, one for all others. That way you can pay by check/direct debit/etc. without the seller incurring a fee, and still have the protection of paypal.

  32. Mel says:

    Multiple languages:
    My dad was brought up speaking 1 language at home but English outside the house (for political reasons it was not a good thing to be heard speaking the other language). When I was younger, I begged him to speak the other language with me, and he always refused. In his 80s he discovered he had completely lost the language and regretted it.
    My first child is due early next year, the father and I have different native languages and we live (for now at least) in his country. Baby will have both languages around – mostly English at home and the other outside and with its father. I’m reluctant to use the 1 language per parent rule, because I’m still learning the language and need to practice. But all conversations in our house are in one language or the other – there’s not much mixing. I feel confident the baby will learn the difference.

  33. Tom says:

    My comments got eaten by the moderation monster.

    I basically agree with valleycat for Q3, and don’t see a moral dilemma with a resident MD using the Income Based Repayment plan.

  34. joan says:

    #9 Getting any non-parishable food free can always be given to a food bank if the person isn’t able to use it all by the time it spoils. The local food bank is providing food to more people and are always in need of donations. I agree with ASITHI #5 I would have loved a deal like that and none would have gone to waste.

  35. Steve says:

    @Q8 you can’t just switch to a different year with Target Date funds and expect the asset allocation to change. Typically, within a fund family, all the target date funds past a certain year (perhaps 15 years into the future) have the exact same asset allocation today. All that is different is when they enter their “glide path”, which means they start shifting into more conservative investments. (Different fund families do have different allocations.)

    If you want to make your overall investments more (or less) conservative, you have to augment the target date retirement fund with additional conservative (or risky) investments on the side.

  36. Georgia says:

    It is not an “expiration date”. It is a “best by date”. It does not mean that the food is bad by that date.

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