Reader Mailbag: Father’s Day

What’s inside? Here are five word summaries of the questions dealt with in today’s Reader Mailbag. Click on the number to hop down to the question.
1. Blogging as steady income?
2. Selling rental for debt repayment
3. Drowning in student loan debt
4. Fed up with overreaching charity
5. Should I join the Army?
6. Save money or prepay mortgage?
7. Paying for law school
8. Earning more from my savings
9. Time limits on debt repayment
10. Which health care plan?
11. Should I replace my car?
12. Renting versus selling a house

Father’s Day was a rainy day, but my kids got me two things that enabled us to hang out inside all day and have fun – the card game Dominion: Alchemy and the video game Batman: Arkham Asylum. We spent most of the day playing games and doing art projects and playing “pile on Dad” in the living room. In other words, it was pretty much a great Father’s Day.

I own a printing / desktop publishing and work from home. I earn just enough to “get by” when I combine the income from the business with my Social Security benefits. I still have a mortgage on my home and want to payit off soon. I have no other debts other than the regular household costs.

I have been writing for about a year – just in my computer – not a blog. I write short items about how people can and should earn extra money and always have an encouraging “story” to connect to the article.

These stories are always true because living almost 70 years I have met many interesting people from all walks of life. I love talking with (interviewing) people about their life’s work or just their jobs as well as their families and their history. It truly interests me and people open up to me more than they realize.

My question to you is this: Could this type of informational writing connected with some encouragement make a good blog that would net me a good income? I value your feedback and would like you to be very honest in your answer.
- Alice

You have the most important thing in place for blogging success – a backlog of good content.

However, there are several things that have to come together to make it work. First and foremost is that good content, meaning that it either has to be new information or it has to be known information presented from an interesting angle. You also have to be able to consistently produce it on a regular schedule, like clockwork. If you suddenly find that you can’t come up with anything and don’t post for a while, your audience will evaporate.

You also have to be able to put forth some significant effort in marketing your writing. You can write the greatest stuff in the world, but if no one knows about it, no one will visit it.

Even if you manage to pull off all of that, there’s still some luck to it. Will the editor of a popular blog even see your stuff? If they do, will they happen to like it enough to link to it? It’s never a guarantee.

I think it’s a mistake to go into blogging with an expectation of earning an income. Almost all blogs never get to that point and it takes a ton of work and more than a little luck to get to that point. If you do reach that point, it can be a very flexible type of work, but it has its own demands, too.

If you want to write and it seems enjoyable, go for it anyway. If you’re just doing it as an effort to try to make cash, you’ll probably find disappointment.

I am just entering my final semester of graduate school where I will end up with an MFA in creative writing. I paid for my first year of school with proceeds I had saved from the sale of a business a couple of years ago…but this second year has been financed with financial aid student loans. I will be $21,000 in debt with 75% of it in subsidized loans and 25% non-subsidized when I graduate. My income is relatively low although I’ve been bumping it up recently and working my buns off to do so.

I own a rental property in Phoenix which used to be my home. I moved to Prescott, AZ nearly 2 years ago and chose to rent it out rather than sell it as the market had crashed and price dropped substantially. I bought it with divorce proceeds in ’06 for $253,000 and currently owe $88,000. The house is only worth around $140,000 at this time. I have a tenant, property manager and positive cash flow, but the tenant is occasionally flaky, paying late, etc. I just had to put a $4,000 air conditioner in it. Ouch. I didn’t have the money to cover it, but coincidentally, my student loan accidentally funded for $4,000 more than I’d asked for (I’ve only requested exact tuition costs but the paperwork got mixed up this time).

My question is this: should I sell the rental property to pay off the student loan and put the rest in the bank for retirement? (BTW, I’m 53 years old and have no other retirement plan) I feel I should, because no telling when the market will turn around and I HATE being in debt. I am currently struggling financially even without my student loan payments although I paid cash for my current modest home with my old business proceeds, as well. My friends and family think I’m crazy to even consider selling the rental house but I think they’re not in touch with the current economic reality.

Could you please offer your advice?
- Susan

Given your entire picture, I’d sell the house and use it to repay your mortgage, your student loan debts and put the rest away for retirement. The fact that your cash flow situation sounds pretty tight strongly encourages this advice.

Many people would point at the positive cash flow of the home, but what I actually see is that it makes your cash flow really unstable on a month-over-month basis. If you didn’t have the cash to pay for that repair, you don’t have the savings or the monthly cash flow to make it work.

You’re in a precarious financial position and the rental house is adding more risk to an already unstable structure. Your best bet is to sell and stabilize, especially given you don’t have any retirement savings.

I am 27, recently married (about 30 days now!), and live in the Northwest. My wife graduated from law school almost 2 years ago with $160,000 in student loan debt (some fixed, some variable), entered in to a bad local job market for lawyers, and wasn’t able to find a lawyer position. To get some experience, she did some pro bono work related to helping people/families/children with domestic violence, drugs, or prostitution problems (she is a do-gooder, and never would have made corporate lawyer moolah anyway!). Long story made short, she has become disillusioned with our law system and she no longer wants to be a lawyer.

She has a steady non-law job not making lots of money, but is able to cover her current loan costs (the full payments have not kicked in yet – they increase every two years), save a tiny bit for savings / retirement, and has some leftovers which get contributed to our other bills. I also have a (currently) steady job and, after covering the rest of the bills, am also able to add a bit to savings / retirement.

I am very frugal and try to be resourceful / thoughtful about every purchase, no matter the price tag. I’ve written up a budget, and have a fairly firm handle on where all the numbers stand. My wife gets a little overwhelmed about budgeting and tracking and planning (I admittedly need to lighten up on my paranoia about the future – there’s probably a healthy balance out there, somewhere… someday!). She is coming on board more and more, especially with the idea of planning for children.

We want to have kids, and we want a house, and a comfortable retirement, etc, etc! We are not big spenders, and while we do have a few monthly extras (like Netflix, cable, a few restaurant dates), we otherwise don’t have too much room to cut back. I also have around $12,000 left on my student loan balance… and I’m currently working through a short sale due to purchasing a home elsewhere a few years ago and then moving for a different job.

I’m just at a loss for a good strategy on how to tackle this mountain of debt and balance with goals of still having a life with children, a house, and other things we want to achieve. I’m afraid I’ll be going gray stressing over this each single day. I know it will take hard work and sacrificing. Generally, I am pretty positive guy but I just shake my head in disbelief and I’m incredibly overwhelmed! I think part of me feels that already, at 27, we may have junked up the ability to achieve a lot of our hopes and dreams.
- Jeremy

The problem you’re having is the problem a lot of people our age have: we want everything but we don’t have the resources to pay for it.

Many people solve that problem by taking on an absurd amount of debt, an amount that they’ll spend most of their life repaying. It’ll cause them to walk a financial tightrope for most of the rest of their lives, making it impossible to do anything but work at whatever job will pay the most, at the complete mercy of their boss.

I prefer the other solution. Put off some of those “needs” until you’re a little older. You don’t need the new car and the new house and the kids immediately. Live cheap when you’re in your twenties and early thirties and channel everything into your career and freeing yourself from your student loan debt.

It’s a decision most of us have to make at some point. I think many people dive into the first choice without reflecting on the consequences – but I think that solution sometimes ends in miserable lives. You have an opportunity right now to figure out which path you want to take.

I feel vicious.

Yet another story in my local news about some minor artist, with no health care, no emergency funds, no planning, who now has stage 4 [whatever] and whose friends are rallying to raise support (cash) for just this artist alone, who has personally racked up $1 million in medical bills or somesuch. And seeks $2 million.

How is this not a ransom demand?

I sacrificed for 25 years and now I’m the [bad guy] because I will not contribute? Yeah, med ins rates [are terrible], unless you get a high deductible and a HSA like I did. Sorry, but $2 million could do a load of good. Or just save you and you alone. And forgive me, but for that kind of money, could we please see some PROOF of your alleged condition? Maybe this just falls under the general category of charity, but when some friend wants me to go to “a concert” that is actually a local fundraiser to bail out minor local celeb [insert name here], I feel taken aback. This is no longer an entertainment expense, it’s a charity expense. But if I take pause, I’m the [bad guy].
- Jan

I agree with you. I guess that makes me a bad guy, too.

I’m all for charitable giving, but I want to know where my charity is going. If someone has a huge goal and is requesting money, I won’t give any money until I can see the books or have someone I trust see the books. If you don’t, you’re begging to get scammed. I have no idea whether the situation you describe is a scam or not, but the signs you mention are identical to many scams.

I don’t see any problem with supporting this artist if you’re a patron of the arts, but not everyone has to be a patron of the arts. Be a patron of what you value most. It might be education. It might be children’s health. It might be any number of things. Don’t let social pressure ever dictate what you should do with your charitable giving.

I’m 22 years old and living at home. I’ve been reading your blog for about a year now and I’m almost out of credit card debt. I don’t have a lot of money to my name right now, but most of my current income (two part time jobs that add up to about 30 hours a week) is being saved for different goals, including an emergency fund.

I’ve been going to school on and off for a long time and have accumulated a large amount of general education credits and, unfortunately, student loan debt. I’ve finally decided that I want to pursue a career as a veterinary technician, however, the program I’m looking at is pretty rigorous and I know I would want to stop working or work very, very little while going to school, so that would be two and a half years without income.

A friend of mine who was formerly in the army pointed out that there is a career option with the military that is pretty much the equivalent to a veterinary technician. If I were to sign a contract for two years with the army I would be paid a decent salary (or at least more than I’m making now with room to make more), trained, and I would have a ton of hands on experience in my field. Once my contract ended I could stay with the army and continue to reap the benefits of being employed by the military, or I could go back to school for free, along with aid for living expenses, and get my veterinary technician certification, which would allow me to more easily get a job as a civilian and get paid more.

Another big plus to this is my health and dental would be covered for free as well, and I don’t currently have health insurance.

I guess I’m just writing to ask what your thoughts are of this plan or just of the army in general. Is there something you know about it that I might be overlooking that would make this not such a great idea?
- Janna

I think it’s a reasonable plan. I assume you know more about the specifics of your field than I do, but it sounds as though you’d get equivalent training in the army as you would in your field of choice.

Obviously, you have to outweigh the pluses and the minuses in your case. Being in the armed forces as an enlsted soldier eats up a number of years of your life – and that life can be very difficult mentally and physically.

If you’re prepared for that, I think you should go for it.

I found myself reading through some old posts regarding extra mortgage payments vs. other investments. The specific article I’m referring to is “Should I Prepay On My Home Loan Or Put It Into Savings?” June 2, 2007. Interest rates then for online savings were in the 4-5% range and now they seem to be no more than 2%. I wonder if this advice is still sound. Also it is unclear if the interest earned had already been taxed or not. Another interesting consideration would be if one was paying PMI would it be in their best interest to at least make extra payments until they own 20% of the home and the PMI can be taken off of the mortgage payment (I think I put down around 10% last year).
- Rob

My basic philosophy is that you should simply compare the interest rate you can get in a savings account to the interest rate you’re paying on your mortgage. If you have a healthy emergency fund and you want a very stable investment, you should simply choose which of those two has a higher interest rate and channel your money there.

Right now, interest rates on savings accounts are really, really low, so you should probably just channel your money into your mortgage if you want a stable return on your money (compared to paying the full thirty years of your mortgage).

If you have PMI, you should use your effective interest rate on your mortgage (with the PMI included) in this calculation. When the PMI is gone, that might change your situation.

About me: I am 24 and am a second-year AmeriCorps volunteer. After taxes I earn about $795 per month. I have an education award from my first term of $4725 to use to pay off my student loans ($5000) and will be receiving a second ed-award of $5225 when I finish my current term in November. I have an additional $1400 in credit card debt (paid down about $2000 over the past year) and I own a ’93 Honda Civic that is paid off. I currently automatically deposit $50 every two weeks into savings and I pay about $200 per month to my credit card.

I’m married, and together with my husband, we have $1,400 in savings.

My husband’s financial history is slightly more flawed than mine. He earns about $1,100 per month after taxes. He has about $65K in federal student loan debt (that is currently in default), another $30K in medical debt, and two evictions on his credit history. He had more credit card debt, but it dropped off his credit report so he never paid it.

My husband has been accepted to law school in the fall but as of right now, we have no way to pay for it. He isn’t qualified for financial aid because of his defaulted loans and he can’t borrow from the federal government for the same reason.

I guess I just don’t know what to do. Even if he didn’t attend law school, we are still swimming in debt and have no means to pay it off until one or both of us gets a decent salary, and in this economy, who knows how long that will be.

Where do we even begin?
- Nicole

Well, if he can’t pay for law school and can’t get loans to cover it, then he’s probably not going to law school. He can try for scholarships and grants, but if he doesn’t have the cash, law school isn’t going to happen.

The first thing I would do is look up my credit report from the federal government. See what’s on there. If you have a pile of bad things – defaults, late payments, and so on – you really don’t have much of a credit score to damage. If that’s the case, try negotiating with your creditors right away. Point out that you have very little income and very poor credit when you negotiate. To put it simply, you’re a giant risk to them and any amount they can recover from you will be a boon – they may be very happy to negotiate.

Your goal is to do everything you can to minimize and consolidate your debt down to manageable numbers. This way, you’ll actually be in a position where you can pay it off, because it doesn’t sound like you can do that right now.

I am a 27 year old in the US Army, deployed, and married with a 3 year old daughter. I come from a family that has NO sense of finances. I was raised on food stamps and unemployment which I guess led me to want to learn how to balance a budget to prevent the situation from ever becoming my own. I’ve helped my parents pay their mortgage on more than one occasion and often buy school clothes, supplies, etc for my 3 younger siblings. Enough with the bio, I have some questions (I fully understand if you do not have the time to reply, I know you get a lot of mail).

At the end of my deployment I will be able to pay off all of the debt my wife and I currently carry (her student loan and our car) and will have a nice little emergency fund in place as well as a down payment on a home. At this point we are looking at our options for mostly safe investments; ie CDs, high yield savings accounts, etc. And we haven’t really seen anything that fits.

We currently bank with USAA, ING, and our local credit union back home in Oregon. ING currently offers CDs with a lower rate than their savings or checking accounts (why would someone choose a CD from them right now?) I guess I’m curious if the best I can expect right now is to earn $11 a year on a $1,000 investment (ING savings, %1.10 APY). I know that every dollar counts and can make a difference in the long run but now that I’m in a situation to save it seems like there has to be a more high interest solution.
- Chris

There isn’t a more high interest solution unless you’re willing to take on some risk. The banks have low interest rates right now because they can borrow money from the federal reserve risk free for just a little more than what they pay out to you. It makes no business sense for them to offer much more than 1.5 to 2% right now.

If you find that you want a higer return than what those investments offer, you have to take on some risk by buying things like bonds or stocks or real estate. You can balance that risk by putting half of the money in a savings account and the other half into something more risky – half is at a stable +1% and the other half varies depending on how much risk you take, so even if it’s down 20%, you’re only losing 10%, but if it’s up 20%, you’re gaining 11%.

That might be your best route. That’s more or less what we do.

My husband and I have been together for four years. When he was in the Air Force around eight years ago, he wasn’t very responsible with his money. We’ve already paid off a car that was re-po’ed, and we occasionally get calls from collectors stating that he owes them money. The most recent collection call is from a phone company bill from April, 2002. This is the first time I’ve heard of this debt (I have been managing his credit/financial stuff for most of our relationship). The statute of limitations for NE is 6 years, as well as CO (where we live now). We are currently waiting for documentation of validation for the debt. It does not show up on his credit report right now, either. The collector could not assure us that if we paid it, that it would not show up on his report, and thus damaging his credit. So my question to you is, if we pay this collection account (in full), what are the chances that it would show up on his credit report? And if it does, would it be a negative item? Is it even worth it to pay it ($100)?
- Jenny

What you have is a debt collector swinging for the fences, hoping to cash in on an ancient debt that they bought for a penny on the dollar. For them, they figure that the small amount of time and effort they’re investing in you, there’s a small chance you might pay off some or all of the debt, netting them a huge return.

Should you ignore it? In terms of legal impact, they can’t do much. What they can do is harass you to an extent – mostly, they’ll be annoying.

My suggestion is to just let it ride and see what happens. If they start harassing you a lot, contact a lawyer and get good representation if it’s a large debt, or judge for yourself whether paying it off is worth eliminating the harassment.

I graduated from college a month ago, and a week later I married my high-school sweetheart (we dated for six years, but waited until after college to marry). I was able to secure an excellent full-time, temporary job in my former college’s IT Department; my wife got a part-time, temporary job. I have received several offers, and accepted a permanent position which pays extremely well and has full benefits. The job starts on July 1, and I need to determine what health insurance package to accept. We can choose either an HMO or a POS, and there are pros/cons to each. My wife is extremely risk-averse, and would prefer the package with the highest premiums, while I have a much higher risk tolerance. On average, she and I both need to go to the doctor for prescription drugs once or twice a year. We are not anticipating children any time soon (although surprises happen, I hear). She has a disease/condition called PCOS which is treatable but not curable, and does require certain prescription drugs. What criteria should I be using to evaluate the two plans? The HMO has higher premiums but lower copays/deductibles, and requires you to stay in-network. The POS has higher copays, but has lower premiums and allows for some out-of-network coverage. I want to pick what’s best for our family, but am unsure how to assess my options. Any guidance you could provide would be appreciated. Thanks!
- Zach

The thing I usually tell people to look at for their health insurance is how they handle truly severe situations.

Compare the two plans for a situation where one of you is hospitalized for a few months recovering from a serious ailment. Which one comes through for you in that situation?

My general belief is that if you can afford it at all, you should always get the best health care plan available to you, and the best way to judge that is in terms of when you’ll need it most.

The transmission on our 2001 Honda Odyssey (120,000 miles) just went yesterday. I estimate it will cost about $4-5,000 to get it replaced. The minivan is only worth around $7-8,000. We have four children under 6, so need a minivan, and have been discussing upgrading to a full-size van in case we have any more. I think that we could probably get what we are looking for for around $12-14,000. We currently have about that much in our emergency fund. I think (hope!) that my job is fairly stable. What do you think? Spend the money on repairing our current car or wipe out our emergency fund and use that money to upgrade now, which we were anticipating having to do in the next couple of years anyway.
- Trevor

I wouldn’t wipe your emergency fund for it. That puts you too much at risk for other emergencies, which would go on credit at a much, much higher interest rate than any car loans.

If I were you, I’d get a lower-cost car, something in the $6,000 to $8,000 range. Pay for it in cash, then start saving for what you really want while driving that into the ground over the next few years.

If you insist on getting that $12,000 car, pay only about $7,000 or so in cash as a down payment and get a loan for the rest, then pay off that loan quickly.

I recently got engaged this past May and we plan a small wedding this coming September. We both own houses. I purchased my house in January of 2006 and she purchased her house in August of 2009. (If only I’d been a year sooner!!!) She qualified for the $8,000 tax credit and after receiving it applied it to some of her high interest debt. (paid off her car and a chunk of her student loans with the highest interest). She has very little equity in her house. No more than 6-7k. It’s a small house and in a great area that we could rent the house fairly easily. My house is much larger and we’d have plenty of space. However, if we rent her house, the $8,000 tax credit will need to be paid back. We’d pay the 8k and move on with our lives in hopes that we find good renters, deal with the upkeep etc. Because we convert it to a business we could write off the expenses so that would certainly help with some of the rental house costs. I on the other hand have $33,000 in equity. The housing market in Indianapolis is fairly flat. My house is one of the more expensive houses in the neighborhood and is one of the few houses with a finished basement so it could either sell quickly or people might think it’s overpriced. I paid $169,900 and could probably sell it for $175,000 but it might be months before I could sell it and we’d pay commissions to sell it. We basically have $8,000 that we know we would pay back/lose (however you want to look at it). It would be nice to only have one house but we are both responsible people and if we had to rent a house, we could. We’d maintain it and keep it up as if we lived in it. Obviously, we don’t want to make any rash decisions because if we decide to try to sell my house, we’ll need to basically leave her house unrented in order to not pay back the $8,000. My question is, should I try to sell my house and set a firm date and if it doesn’t sell, just rent her house. Or just keep them both, pay back the 8k and turn one into a rental? Selling her house to me is out of the question because we’d have to pay back the 8k, and pay all the commissions.
- Ryan

You need to do a little market research. Could you actually rent the house in the area? Is there a lot of demand for rentals? What sort of income could you expect? How much work would the house need to be a good rental? Would you directly handle maintenance or hire a property manager – and how much would that cost? Would you do the advertising for the rental yourself – and how much would that cost? What about generating a legally binding lease for the renter? What is the tax impact of holding onto both homes versus selling one of them? How much extra property tax will you have to pay?

You also have to think about the human element. What do you two want to be doing? Where do you want to be living?

There is no answer to the bigger question until you have a firm grip on those smaller questions, because they will make or break any plans that you have.

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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74 thoughts on “Reader Mailbag: Father’s Day

  1. margaret says:

    Jsn — I’m with you in that I rarely support fundraising for an individual. I remember hearing about some tragic story but the funds collected disappeared or weren’t accounted for. Unless there is a really compelling reason why this particular individual deserves my support, I would rather give to something that helps more people. I think that is only prudent and sensible.

    On the other hand, I live in a small community, and a little 4 year old kid was just diagnosed with leaukemia. I know the family, I know something of their circumstances, I know the people fundraising, and I have a pretty fair idea of the kind of expenses the family will have to go through (e.g. travelling back and forth, finding a place to stay where treatment is happening 3 hours away, caring for their OTHER child), so I would feel comfortable supporting a fundraiser for that family.

  2. Kevin says:

    I feel your anger regarding the expectations of charities, Jan. I belong to a local club, and last year, a young couple who were neighbors of one of our members lost their home to a fire. Of course, they didn’t have insurance. The club launched an emotional appeal for us to all pull together and help this worthy, young couple.

    All I could think was, “Why didn’t they have insurance? And why should I bother PAYING for my own insurance – to ensure I get a payout in the event my house burns down – if I can instead save my premiums and still get reimbursed by just showing up with some authentic-looking tears and a pretty face and a cute baby?”

    I didn’t give a cent. But to be honest, it wasn’t really because of their specific situation. I don’t give to charities, as a general rule. I pay plenty in taxes, thank you very much. The government already forces me to pay for food stamps and subsidized housing for the lazy and weak. I’m certainly not going to provide them with free insurance, too, while simultaneously still paying for my own!

  3. SZCZEBRZESZYN says:

    Trevor — You may be able to find a replacement transmission from a “salvage” vehicle. This means “junk yard”, but what you are interested in is a wrecked vehicle with lower mileage than yours, in which the transmission was not damaged.

    I had a salvage engine swap some time back and got an additional 140,000 miles before I had to give up on the car due to rust.

  4. prufock says:

    To Trevor: For goodness sakes, stop having babies! If you already have 4 under the age of six, it can’t be cheap. I think you can stand to wait a few years, at least. Besides, a standard minivan seats 7, right? So you have room for one more anyway. Hold off on upsizing.

  5. MattPatt says:

    Good Lord, Trent (and commenters above). Perhaps the question to be asking is how in the world anyone could rack up a million dollars or more in *medical bills*? And, as a related follow-up question, how is *that* different from a ransom demand on behalf of whatever medical establishment is treating this guy?

    If you don’t have money to contribute, don’t contribute. It’s totally your right. But when you get into a headspace where you have to convince yourself that things couldn’t possibly be *that* bad for someone (I mean, “alleged condition?”), all you’re doing is showing your butt.

  6. Courtney says:

    I don’t understand your response to Trevor. A $6000-8000 vehicle is not ‘lower cost’ – it’s basically what they already have now. Which they could continue to have for only $4000-5000.

    My general rule of thumb is that if a car has more than 100K miles on it and the repair is more than half the value of the car, it’s probably not worth it. So far we have only hit this once.

  7. Robin Crickman says:

    For Alice who likes to write and is thinking of blogging for income. An alternative way to make money writing and interviewing would be to offer to write personal family histories for people. If you are comfortable interviewing older people and also fairly good at organizing and writing the information you get from an interview, you would advertise that you will assemble a family history for a set fee. You market to adult children who want to record what “Pops” or “Mom” has experienced in life before they lose that resource completely. Write up the information, produce a few copies of a nicely bound book and collect your fee.

  8. Johanna says:

    I don’t understand why some people find charity fundraisers so offensive. Of *course* you don’t have to give money to this particular person, or to any other particular person who asks you for money – but maybe some people do, and that’s why they’re asking. In the case of the local artist Jan writes about, what are the artist’s friends supposed to do – sit there and do nothing and watch their friend die?

    If you’re worried about whether a charity is legitimate, you can always ask for some sort of documentation. But somehow I suspect that even if Jan did have proof of the artist’s condition, she/he would find some other reason to be offended.

  9. Robin Crickman says:

    For Janna who is considering joining the Army, I
    had a client who had experience in the area you are considering. She was in the National Guard and got called up and sent to Kuwait. She was in college at the time and planning to go to vet school when she finished her undergrad work. While she was in Kuwait she was able to work with the Army veterinarian as an assistant and she got to take part in real vet tech work.

    I think joining the Army is a very good idea for you. Vet tech is not a very well paid career and I know several people who trained for that who now are working in other fields. If you get the training while in the Army and later find you really don’t want to continue in that field, you will at least not have debt for the training and will have some income while in the Army. Do please try to talk to some enlisted women who are in the army to get a realistic view of what the lifestyle is like.

  10. Jessica says:

    I have to say that I found the fundraiser opinion and response a bit offensive. Not everyone is in the situation of needing help because they’ve made poor life decisions. My friend was 24 years old, non-smoker/non-drinker, working at Starbucks, and also a performing musician. He had insurance, but it covered surprisingly little when it was discovered he had Hodgkins Lymphoma and would have to undergo weekly chemo treatments. Our local music and art community came together and through two small concerts and an art auction we were able to raise funds to help him cover the expenses that his insurance wouldn’t, and we also raised significant funds for the American Cancer Society as well. My friend has now been cancer free for 5 years. I’m not saying that you should give to every request that comes your way, but perhaps you shouldn’t assume the worst of every person who could use a helping hand. We all still talk about how much fun we had at the concerts, and I’m glad that we can share those memories with our friend, instead of just having memories of him.

  11. kristine says:

    Wow. Food stamps and subsidized housing are only for the weak and lazy? There are millions of working poor in our country, people who break their rumps 12 hours a day for peanuts, many without health insurance, or enough to buy it. I do not judge how they got there-I just have a little more awareness and respect for anyone who does a sold days work. And many fed by food stamps are babies and children. So, I guess yes, they are weak, and probably lazy too, if they are at school or playing, instead of going into a coal mine at age 10. That comment was right out of a Christmas Carol.

  12. Des says:

    Trevor – If you found a Honda Odyssey for sale for $5k that was worth $7-8k would you buy it? Why not just fix your vehicle? Even if you’re *really* itching for a new car, why not fix it and then sell it if its worth $7-8k?

    I’m with Courtney that Trent’s advice makes no sense. Trevor *has* a $6-8k car, and it will only cost him $5k. Why pay more for the same vehicle?

  13. Tracy says:

    Oh thank goodness for some of the sanity comments about the fundraiser – I found the initial question/ response and some of the early comments pretty vile.

    First of all, it’s not blackmail at ALL – nobody’s forcing you to pay anything for the artist’s treatment.

    Second, as one of the other comments touched on, considering the appalling state of our health care system, the artist may not have had the options you think he did. He could have had health care and had the claims denied. He could have been refused coverage, or had pre-existing conditions that made it useless.

    You really don’t know – judging somebody because they have over 1M in health-related expenses is pretty much the definition of being a jerk. And it’s really annoying when somebody says ‘personally racked up 1M in medical bills’ – like it was done casually or irresponsibly or that maybe they should have stopped at 200k and just gone ahead and died. And the reason the goal is probably for twice the amount is probably not so the artist can live a cushy lifestyle but so they can *continue* not dying through treatments.

    Now, I agree that you shouldn’t give money if you don’t believe it will be well spent, or if your charity fund is already allocated elsewhere or you’re just not comfortable doing it. Or whatever personal reason you have – nobody can give to everything and heck, you’re not required to give to anything.

    But I’d also like to point out that at a charity fundraiser concert, you *are* receiving something in exchange for your money, so griping that it’s really charity and not entertainment is pretty weak. You can evaluate it on the strength of the concert/entertainment value received rather than the charity if that’s how you feel more comfortable or you can evaluate it on the charity aspect as to if your getting value for your money, but just like giving/going at all, it’s your choice.

  14. Kristin says:

    Re: the wife of the wanna be lawyer

    Because your husband is in default on student loans and has a poor credit history, he may not be allowed to sit for the bar of your state. A very extensive background check is done on lawyers prior to allowing one to sit for the bar. If you have a flawed credit history, mental health history or criminal history you may have some trouble getting licensed.

  15. Craig says:

    Susan in Arizona just breaks my heart. Probably, what, forty or fifty thousand dollars for that MFA in creatinve writing? And now she’s out her savings, her house… I hope it was an astounding, life-changing time, because it looks like it darn near wiped out all the financial headway she’s made in five decades on this Earth.

    People give up so very much for these credentials. I’ve never seen any indication that an MFA gives someone a leg up in any way; certainly, I don’t notice a preponderance of MFAs among the writers that my wife or I read. There are fantastic writing conferences and workshops all over the country that charge a couple hundred for admission, and the life of a writer is ultimately one of secluded reading and writing. What would it have cost to take a two year “retreat” in that nice paid-for house, read great books in the morning and write in the afternoon, and maybe treat oneself to a conference or workshop several times a year?

    Well, water under the bridge, I guess, and it’s mean to harp on Susan per se. But I hope people who are considering sinking tens of thousands of dollars into graduate programs will take the time to really weigh their options. What career options, for instance, does an MFA have that just some ordinary person with a novel manuscript does not?

  16. candirn says:

    To the guy who just married his sweetheart and is asking about insurance: Given her PCOS, if you do want kids someday, you should choose the plan that has the best payout for fetility assistance. PCOS makes accidental or intentional pregnancies difficult and whichever will cover you better for that illness should be considered.

  17. tentaculistic says:

    Trent – love the 5-word summaries. I sometimes get lost in all the questions (esp on my Blackberry, where all font differentiation like bolding gets stripped out), so that is a very useful idea. Thanks for keeping on improving the way you do things!

  18. valleycat1 says:

    Re Janna & joining the military – be sure that the military will let you sign on with a guarantee that you’ll get the specific type of training you want. And fully think this through before joining just for free education & benefits – assess the fact that you most likely will be sent to a war zone (or support area for a war zone) at some point in your stint, and possibly could be denied the option of getting out at the end of the 2 years. Remember that joining the military is all about you serving the military, not their serving your needs. That said, one of my relatives joined the Air Force & ended up making a career of it, & now has a comfortable retirement at a fairly young age that gives him the flexibility to do what he wants from this point forward.

    And Jenny – on the collection calls – What worked for me in a similar situation was to tell the agency that I have no record of the debt they’re reporting & that the info they are giving me by phone seems to indicate it’s beyond the statute of limitations, but if they’d send me something in writing that outlines the details I’d consider working out repayment details. Never heard anything more from them.

  19. Craig says:

    Trevor–

    When I read your letter, it worries me just a little that your emergency fund will just about exactly pay for the car you’ve decided meets your needs. I think a little soul-searching is in order here. If you had 18,000 in your emergency fund, do you think you’d be looking at an 18,000 dollar car? Or if you had ten grand, do you think you’d find a way to make that number work?

    Once we have an emergency fund, there’s always the risk of hitting that “emergency” button when what we really want is to buy something instead of making do.

    Five grand is a lot of money to put into that dull old car with the stains on the seats, etc. And it’s not entirely unreasonable that you might decide the value of the car doesn’t justify the repair. But I’d recommend you take a long, hard look at your decision and the motivation behind it. Is the car in otherwise good running order? Do you think you’re likely to need a new engine in another five thousand miles? Then, yeah, you should probably dump it. But if you think you have a solid car here–as is suggested by the values you quote–then I say you should dance with the one that brung you. Maybe spring for a detail cleaning of the upholstery, or replace that window with the big crack in it–something to spruce it up and make those shiny new-to-you used cars look less alluring.

  20. Craig says:

    Trevor – That sounds REALLY expensive for a transmission repair. The repair of the tranny in my 4wd chevy pickup was only $2k – and that is much more heavy duty than a minivan. Shop around for a better price.
    And then repair the van and keep going. Hondas should last longer than that…

  21. Craig says:

    Jeremy–

    Ye gads, what a rough position to be in. I hope the other correspondant–and everyone else– thinking about law school reads your letter and really thinks about this.

    The harsh thing about this is that your partner isn’t being a partner here. You’re on utterly different pages about handling money, and I’m not talking about day-to-day, coffee-shop-latte-versus-pack-a-thermos questions. Your wife made a massive financial committment on behalf of her future self, and now that she _is_ that future self, she doesn’t like the idea so much. She’s barely able to cover the payments on a degree she regrets buying, and it doesn’t even sound like she’ll be able to do that for much longer. The rest of everything–the whole burden of keeping your household going as a financial unit–is on you.

    It’s not fair, but more to the point, it’s ultimately unhealthy for your relationship. The worst thing that could happen is for you to come to resent this really unequal burden.

    It doesn’t sound like you’re going to get anywhere by coming at her with stacks of charts and graphs and equations–that’s just going to shut her down. But a family, a house…these just aren’t realistic and responsible goals with this mountain of debt. You have to shovel away the mountain.

    I would try, perhaps, to tell her that you’re a team, and you’re going to work your way out of this as a team, but you really need her to be on board and participating: you can’t handle it by yourself. And I would seriously consider taking, as a couple, some counseling on debt and money management. Let’s be blunt: you both need it. Not wanting to sound like a shill, but Dave Ramsey’s “Financial Peace University” might be a highly worthwhile investment for the two of you.

  22. Jackie says:

    Janna, I don’t understand how the army is equivalent to veterinary assisting. If you’ve been in school for 2 years and the only thing you think you want to persue is working with animals, then what makes you think that the army is going to be a happy career for you? Also, it may be unpopular for me to say, but please please please keep in mind that the army in dangerous! Vet school will not send you to a war zone. Vet school will not ask you to stand in front of people with guns who want to kill you. And please learn about the number of rapes that happen within the US military and the horrifying lack of follow through in investigating and convicting the rapists.

  23. Melissa says:

    For Jeremy w/ the wife with law school debt:
    I would recommend looking into income based loan repayment. If her loans are eligible for this program, you’d pay 15% of your income above the poverty level toward her loans and any remaining loan amount will be forgiven after 10 years of her working full-time for a government agency or non-profit or 25 years of payments. Payment is calculated on your joint income if you file taxes jointly, or on her income if you file separately (and it might be worth it to take the tax hit if her income is a lot less than your joint or may go move to or toward $0 when you have kids. Also, there’s another tax hit at the end: any forgiven loan amount will be taxed as income in the year it is forgiven, unless the law is changed before you get to that point). Anyway, I’d encourage you to look into it and run the numbers. I’m not a professional financial anything, just a wife a few years older than you who’s been looking at repayment options for my husband, who just graduated from law school, while trying to answer the question of whether we can afford to have kids before we’re too old to be able to conceive. It’s a tight spot, the paranoia hits me too, and I empathize.

  24. Donald says:

    For the 27 year old in the Army – THRIFT SAVINGS PLAN!!! You select the amount to save and the amount of risk you wish to take with your money. You can receive as little as 3.25% with little risk or as much as 34% (12 month return) while receiving up to 5% matching. Earnings are tax free until withdrawn. Only draw back is this $$ is not readily available until you are ready to retire (at least 59 and a half); however, loans are available for those times you absolutely need a bridge to get you through unexpected needs.

  25. MegB says:

    re: the spouse who was accepted to law school. The previous commenter was right that he may have serious trouble getting licensed if his credit is that bad. That’s on top of the problem that he will have getting student loans. Also, I went to a very reasonably priced state school for law school and still racked up approximately $65k in student loans. I received a couple of small grants and a small scholarship, but wasn’t eligible for a full ride. I have had a pretty good job for over seven years, and I am still trying to pay them off–about halfway there. That was in addition to the $25k plus in credit card debt that I accumulated both before and during law school. (Thank goodness that is all paid off.) Law school is a HUGE financial undertaking, but a lot of people don’t realize that going in. I know I didnt. Most schools will not allow you to work during your first year, and with the coursework, it is difficult to work your second and third year while keeping your grades up. Plus, in this or any other economy there is no guarantee that you will find a super high paying job when you graduate. Despite what you may hear, the vast majority of lawyers earn anywhere from $60k to $100k–maybe more in some of the larger metropolitan areas. Only the cream of the crop earns the super high paying jobs and even then they work a LOT hours to earn that salary, which cuts into their quality of life. I don’t regret going to law school, and I am very proud of my profession. However, I wish someone had told me to have a very good savings cushion and no debt before I went to law school because it would have saved me a lot of stress and heartache along the way. I hope you and your spouse can learn from my mistakes.

  26. Leah W. says:

    Nicole,
    I echo #13′s comment — before even considering law school, your husband should talk to the law school dean about his past and ask how likely it is he’ll be admitted to the bar. No bar admission = no law practice, period. In law school, we read cases where people were denied admission to the bar for excessive SPEEDING TICKETS. Debt — especially default on debt — is a big deal to the bar, so you should definitely check with the board of bar examiners before taking on the financial burden of law school.

    Jeremy (Trent, you didn’t answer Jeremy’s question! You just told him he wanted too much, and he’s basically SOL!),
    I don’t know much about this, but if your wife is committed to working low-wages jobs (like working for legal aid, a prosecutor’s office, or a public defender, or even some non-law public service jobs), there might be some assistance in the form of grants or loan forgiveness. Her best course of action is probably to contact the financial aid advisor or career placement office of her former law school. My law school didn’t do an awesome job of advertising this stuff, but I know it’s available — but there are very particular requirements. That might be one option for knocking out some of her debt.

    I was going to comment on having kids, too, but I thought better of it. Suffice it to say, Trent, that I think you overlook a lot of fertility issues when you advise people to wait on having kids for financial purposes.

  27. Katie says:

    Also on law school, keep in mind that schools inflate their employed-at-graduation and starting salary numbers to keep their U.S. News ranking up. You absolutely cannot count on making the median salary at your school when you graduate. This is especially true since the legal market absolutely tanked in 2008 and doesn’t seem to be recovering (it was overheated before and there’s a huge surplus of lawyers/law grads). If you got a full scholarship or into a top ten school or if you’ve always dreamed of being a lawyer it might be worth the risk, but I think for an awful lot of people for whom law school just seems like a reasonable thing for smart people with a liberal arts degree to do, it’s a terrible idea.

  28. matt says:

    @jackie: she is talking about doing vet tech for the army, I have a friend that did/does this, she just finished school and is now working for them to finish up her service. The army uses horses and other animals that need care. Its the same as signing up with them to be a doctor, they pay for your schooling, but then you are committed to service for x number of years.

  29. Kelly says:

    Trent, glad to hear you had a great Father’s Day! My family returned home from a weekend camping trip then we attended the graduation party for a relative of my husbands. The night was topped off with a “Sock Hop” antique car show that was put on downtown. LOTS of antique cars and trucks! My father owns a 1953 Chevy pick-up that is his pride and joy which he drove out to the sock hop so I got to see my Dad on father’s day and I didn’t have to travel to see him.

  30. Shannon says:

    To the person contemplating law school – make sure you visit

    http://thirdtierreality.blogspot.com/

    to get an idea of the status of the legal profession and how a law degree is a good financial investment in only a small fraction of cases.

  31. Jack R says:

    Wow! I’m really surprised at the vicious tone of Jan’s note about the sick artist. Am I right in assuming that Trent had to tone down the [expletives]? I could understand anger and frustration if the money is being taken from you with no choice in the matter. How is this not a ransom demand? It’s not a ransom demand because it’s a request for a voluntary donation. And actually, one that has a least some benefit – you can get to listen to some music. Make up your own mind if the amount donated is worth the quality of the performance. It’s not a ransom demand. Are your friends hounding you? Donate or we won’t like you any more? Then maybe you need different friends.

    My wife and I made up our minds some time ago what charities we would give to regularly along with our pledge to our church. But we turn down many, many other benefits and requests that may or may not be legit without a lick of guilt or violent temper tantrums. Hey, if you don’t want to give then don’t give, or go ahead give but make it based on conscious choices that you make. Please, don’t work yourself into a frenzy over someone else’s bad choices or misfortunes. Heaven forbid you ever fall on tough times.

  32. jim says:

    Susan: I’m inclined to say you should sell that rental. But it does depend on how much cash flow it actually gives you right now and how much that money contributes to your income. If you’re barely positive then go ahead and sell it. But if your rental gives you a significant portion of your income such that selling it would make it even harder for you to make ends meet then selling might not be such a good idea.

    Janna: sounds like a potentially good deal. BUT I would make certain that you would get the veterinary position you want before you go signing up. Just cuase the military has jobs in certain areas doesn’t mean you’ll get that job. I wouldn’t want you to go enlist and end up a cook or truck driver cause the Army decides they need you there more.

  33. Anne says:

    #2 Kevin: “subsidized housing for the lazy and weak”.

    I heard a great quote the other day (I think it’s from Barry Switzer): “Some people are born on third base and go through life thinking they hit a triple.”

    You sound like one of those people.

  34. jim says:

    Trevor: $4k-$5k for a transmission seems pretty high. Seems transmission replacement (rebuild) runs $2-4k from what I gather via web search. Make sure to get multiple estimates.

  35. reulte says:

    Zach — PCOS can lead to other conditions as well as fertility problems and should be evaluated on a regular basis for the “pre” parts of these conditions such as pre=diabetes. Easy access to a specialist may be a requirement you’ll need to think about.

    Jeremy — Perhaps your wife can look into estate law; which to me seems to be more people-friendly than corporate law. I know of one estate lawyer who updates wills and trusts from her home office as she stays home with her children. Unless you are making an extraordinary amount of money your wife needs to contribute half -especially if she wishes to maintain her self-respect. Perhaps your best way to consider is the total amount due in some arbitrary number of years — 10 and consider only a year’s worth of that debt at any given time. Set up automatic payments, of course, but only bite off 1/10th to tackle at any given time.

    Janna — I work with military people and my father was USAF. Most of the people I have met in the military have few regrets about joining, particularly the ones who joined for a specific reason because they could always see their goal in front of them. Talk to various recruiters (i.e. Air Force, Army, Navy) and make sure to also talk to some people who have been in the military or are currently in the military.

    Ryan — Why sell her house? Why not sell yours? Or live in hers for the required amount of time and rent yours?

  36. Stacey says:

    Zach – don’t just rely on PCOS as birth control. I’ve had two friends with PCOS have “accidents.” It can be harder to have children with this condition, but it isn’t impossible. :-)

    You mentioned prescription drugs. Encourage your wife to talk to her doctor or pharmacist about the cost of these drugs – most are now available as inexpensive generics, so you may not need the more expensive plan with the better RX benefits. Like Trent said, you’re best off considering the catastrophic (or even semi-scary) health scares that you’re likely to face.

  37. J. O. says:

    Jeremy –

    Craig has made very good points, in my opinion.

  38. J. O. says:

    Jeremy –

    Craig has made very good points, in my opinion. So good, that I have nothing to add.

  39. J. O. says:

    oops, thought I caught that first comment before it posted, but obviously not

  40. Mike says:

    $4-5k for a transmission is ridiculous. You need to check around at some local tranny shops. I wouldn’t pay any more than $2k tops including labor.

  41. alilz says:

    @ Kevin – you must have lived a charmed life to not only never needed help from anyone but also not to have known anyone that needed assistance.

    There are people right now waiting for food stamps, not because they are lazy but they lost their jobs and there aren’t any out there.

    Perhaps you’ve heard of the recession we’re in. With business closing and cutting back there aren’t enough jobs for everyone.

    And even people who were on food stamps before hand probably weren’t lazy.

    I know plenty of lazy, selfish, worthless people who get by because they were born into money or they are connected because of who their daddy is or they are leeches who figured out how to get by doing the least amount of work but getting credit for it.

  42. Jessica says:

    Jeremy,

    $160k in debt for a degree your wife does not want to use is going to impact your choices for a very long time, perhaps for the rest of your life.

    I’m in my mid-thirties. I finished graduate school with what I thought was an enormous amount of debt – $70k – but I have a job that pays well. I often think I would like to cut back on my strenuous work load, I would like better work/life balance, etc. But I can’t – I have to pay for this education, whether I like it or not. As one of my best friends (an under-employed lawyer with mountains of debt) says, this education is non-returnable.

    I see people all around me doing what it sounds as if your wife is doing – burying their heads in the sand and not owning up to the magnitude of the student loan debt problem. I know the acceptable answer is to tell your wife to do what makes her happy, cut back on things, you-can-do-it-rah-rah-rah.

    I have a different take. She needs to find the best paying position she can, whether she enjoys the job or not, and work and work and work. Our previous choices limit our options for today. I know no one likes that or wants that to be true but it just flat is. She owes a ridiculous amount of money for something she doesn’t value but she still owes it. You will not be able to buy a house as quickly as others, or have children as quickly, or do many other things within the time frame you want. It is miserable but hiding from it won’t help. I’m not saying she needs to punish herself, but she needs to be realistic about the situation. Unless the fairy godmother shows up or one of you stand to inherit piles of money, the debt has to be paid. The best way to pay it is to find a high paying job – just clipping coupons and careful budgeting won’t fix this.

    And I just have to say to all of TSD readers in their 20′s who are bored with their lives and looking for something to do, please think hard before you borrow crazy sums of money to go to school. It’s not fair that some people can chase their dreams on their parents dime. If you are not one of those people, accept that and don’t pawn your future like this for a few years of continued education. Work at Starbucks, hitchhike around the US, charge up your credit cards and live in your parents’ basement. Do whatever you need to do to “find yourself” but don’t go to graduate or professional school and take on this amount of debt without a realistic chance that you can pay it back one day.

  43. LMN says:

    Jeremy — about your wife, has she had some counseling about why she doesn’t want to be a lawyer? I guess I’m saying she needs to look harder. I do sympathize; when I graduated from law school in ’94 the market was terrible. I couldn’t find full time work, had a few really BAD part time positions. It soured me so much that I “quit” law and went into something else. A few years later I rethought it and decided that what I hated was all that I had seen: unhappy young lawyers working 80 plus hours/week on a treadmill, billing, jockeying for future partner, chasing clients… What I decided was that there had to be a different way to be a lawyer. I found it in working for state government as a lawyer. I don’t make much — $61k, a lot less than others I graduated with — but I have excellent 100% paid health/life/disability insurance, lots of annual and sick leave (that I can actually use), an excellent guaranteed defined benefit retirement plan… and I work no more than 40 hours week, no weekends. No billing. No wearing a suit unless I go to court. No timesheets. It’s heaven.
    What I am saying is that there’s lots of law jobs out there — and if she’s a “do-gooder” she should look to the public sector. In some states public sector law jobs also have a benefit of student loant forgiveness/repayment per year of public service (usually prosecutor/public defender jobs).
    The salary won’t repay that kind of debt but it will bring in a good amount, she’ll be a lot happier, excellent benefits.
    She should reexamine, after all that time and expense and sweat, blood, tears, just why she doesn’t want to be a lawyer anymore. There’s lots of law jobs out there, and not all of them are guaranteed misery.

  44. Kevin says:

    @Anne:

    Humans are the only species on the planet that actively defies natural selection. Instead of allowing the herd to strengthen and improve our species, we rob the strong to coddle the weak. We give all sorts of advantages to the weak and stupid, thinking it can’t possibly have any negative long-term consequences. It defies logic.

    Where is the sense in spending $300,000 to buy a cancer patient another year, when it could instead be spent improving our food chain or working towards colonizing other planets in the interest of perpetuating our species indefinitely? How smug will we feel, knowing we’ve fed and housed millions of homeless drug addicts, instead of fully funding NASA, while we countdown the days until the killer asteroid impacts (it’s not if, but when)?

    We’re choking out our own atmosphere with reckless production of carbon dioxide. Tens of thousands of barrels of oil are gushing into the Gulf of Mexico, right now, right this very second, as I’m typing this, ruining the entire region for a generation. Meanwhile, the CEO of BP is chided for taking 1 day off instead of keeping his pious vigil and wanting a life, but the rest of us feel no guilt over throwing spare change into a dirty meth head’s guitar case on the street corner instead of reducing our own dependence on oil.

    It’s hypocrisy and absurdity of the highest order. We’re crippling our species and killing our own planet, and congratulating ourselves for it. We nurture the weak and ignore the strong, turning to them only when the urge strikes us to demand still more from them.

    So no. I don’t give anything to any charities. I’m also pro-abortion, mainly because the kind of people for whom abortion is usually a serious consideration also happen to be the kind of people most likely to give birth to the next generation’s criminals and drug addicts.

  45. alilz says:

    Wow Kevin as someone who has known women who’ve made the difficult choice to have an abortion I know that’s not true. I’m pro choice.

    Have you never lost a loved one or someone close to you to an illness?

    Because I have and attitudes like yours stink. I know we aren’t suppsoed to say negative things here, but frankly the world would be a nicer place without that kind of attitude.

  46. Sue says:

    Trent, I would like to start having a money discussion with my mother every month. I do not know how to break the ice with these discussions. Do you have any advice for me?

    I recently started a small saving account and a small 6 month CD at my local bank. Due to that the fact I opened these two accounts, I will not able to fully fund my Roth IRA this year. Is it better to put a small amount in the IRA than nothing at all?

  47. kristine says:

    Kevin,
    Exactly what dollar value do you assign to a life? If your wife had cancer, would you be worried about the food chain? Or are you above having emotion? Or just afraid of asteroids?

    Your cruel abortion comment is backed up by nothing but ignorant assumption. When I went to college, it was the intelligent, wealthy well-bred girls I knew who casually got rid of such “problems”, so they could avoid embarrassment, secure a good mate when they wanted to settle down, keep their figures, and income potential intact. But I would never generalize that as the norm either. Without facts, making anecdotes into generalizations is talking out the rump.

    It is perfectly fine for you not be charitable. But your own comments seem more based in anger and scared self-preservation than logic. If you really want to help the world, try taking positive step rather than screaming damnation. And watch Hitchock’s “Rope”. And maybe listen to Billy Joel’s “Angry Young Man”.

  48. Beth says:

    I have a 2001 Honda Odyssey too. 2001 Odysseys had transmission problems. Mine went at about 60,000 miles. Honda recalled and fixed the transmissions for at least the 2001 Odyssey. You should go online and check for recalls and technical service bulletins, then call the dealership and see what they can do.

  49. Johanna says:

    It’s a shame there are so many people named Kevin who post here. This one is giving all the others a bad name.

  50. J. O. says:

    Jessica – Your advice to Jeremy was well said.

  51. Paco says:

    Jeremy–

    $160k in student loans for a degree your wife won’t use is a terrible waste. If she never wanted a “corporate lawyer moolah” type job, she should not have taken $160k out in student loans in the first place. From my point of view she should hold her nose, work as an attorney for awhile, and pay down that debt ASAP. Who knows, she may find out that she likes being a lawyer after all.

  52. Kelly says:

    I too was a little taken aback at the anti-fundraiser sentiment. In December of 2006, my then 33 yr old cousin was diagnosed with pancreatic cancer. He had a surgical procedure that month and had to stop working from then on out. His employer was nice enough to continue to pay for his insurance up until he died.

    We held a benefit fundraiser for him to help offset medical bills. We raised over 13K for him and his family(a wife and three daughters under the age of 13). I know that they used the money from the benefit to pay their utilities as my cousin was the sole provider for his family. Unfortunately, he was not one of the lucky ones to beat pancreatic cancer and he passed away in June of 2008. He fought with everything that he had. The day he passed away, he was just released from the hospital and refused any pain medicine because he wanted to be coherent to spend a few final moments with his precious daughters.

    For Kevin to say that it was not worth it to try to save him is a pretty ignorant statement. His daughters will never have the opportunity to have their father walk them down the aisle. He was one of the good guys and now he is gone.
    In my area of the country it is commonplace to have a fundraiser for someone who has been diagnosed with a catastrophic illness such as cancer. Insurance only covers so much and most have a cap as to how much they will pay. I know with my own insurance policy the cap is one million dollars!
    Another cousin, who is 34 was just diagnosed with lung cancer. She never smoked a day in her life. She has a 6yr old son. She’s just starting to undergo chemotherapy treatments and I am sure at some point ou family will have a benefit for her to help defray medical costs. I will be more than happy to donate as much as I am able.

  53. marta says:

    Wow, Kevin. I find your views to be totally and utterly repugnant.

    But I suspect there is no point in trying to reason with you.

  54. prufock says:

    Kevin, I guess we can add natural selection and logic to the list of things you don’t understand. It really detracts from your credibility.

    In the meantime, I’d like to see some statistical evidence to back up the following claim:
    “the kind of people for whom abortion is usually a serious consideration also happen to be the kind of people most likely to give birth to the next generation’s criminals and drug addicts.”

  55. Kevin says:

    @kristine:

    “Your cruel abortion comment is backed up by nothing but ignorant assumption.”

    Actually, the statistics support it. I didn’t come up with that idea on my own – it was explained in detail, with supporting statistics, in “Freakonomics,” by Steven Levitt and Stephen Dubner. You should read it.

  56. kristine says:

    Kevin,
    Keep reading. Long since debunked. My background is publishing. I supervised the sales blurb for Freakonimics that ran in the major book club catalogs. It’s all hype. Do NOT believe everything you read. Do your own research, and keep an open mind. I am also pro-choice, but hate arguments based on pop lit, and so called “gurus”. See below, and google content search if you like for the full article.

    “This fiasco reveals much about what’s wrong with public policy discourse in modern America. Fifteen minutes of Googling would have shown book reviewers of Freakonomics that the abortion-cut-crime theory hadn’t come close to meeting the burden of proof, but, instead, much of America’s intellectual elite fell head over heels for this theory. Being largely innumerate and unenterprising, the punditariat is unable or unwilling to apply simple reality checks to complex models. It’s easier to simply engage in intellectual hero-worship and take a guru figure like Levitt on faith. A few book reviewers, like James Q. Wilson (America’s leading expert on crime for several decades), expressed deep skepticism, but most were negligent.

    Now, two economists have redone Levitt’s work and found two fatal flaws in it. The Economist has a good summary here:

    Oops-onomics
    Dec 1st 2005
    Did Steven Levitt, author of “Freakonomics”, get his most notorious paper wrong?

    And the Wall Street Journal reports:

    “‘Freakonomics’ Abortion Research Is Faulted by a Pair of Economists
    By JON E. HILSENRATH
    Staff Reporter of THE WALL STREET JOURNAL
    November 28, 2005; Page A2″

  57. kristine says:

    Kevin,
Keep reading. Long since debunked. My background is publishing. I supervised the sales blurb for Freakonimics that ran in the major book club catalogs. It’s all hype. Do NOT believe everything you read. Do your own research, and keep an open mind. I am also pro-choice, but hate arguments based on pop lit, and so called “gurus”. See below, and google content search if you like for the full article.

    “This fiasco reveals much about what’s wrong with public policy discourse in modern America. Fifteen minutes of Googling would have shown book reviewers of Freakonomics that the abortion-cut-crime theory hadn’t come close to meeting the burden of proof, but, instead, much of America’s intellectual elite fell head over heels for this theory. Being largely innumerate and unenterprising, the punditariat is unable or unwilling to apply simple reality checks to complex models. It’s easier to simply engage in intellectual hero-worship and take a guru figure like Levitt on faith. A few book reviewers, like James Q. Wilson (America’s leading expert on crime for several decades), expressed deep skepticism, but most were negligent.
    Now, two economists have redone Levitt’s work and found two fatal flaws in it. The Economist has a good summary here:

    Oops-onomics
Dec 1st 2005
Did Steven Levitt, author of “Freakonomics”, get his most notorious paper wrong?

    And the Wall Street Journal reports:
    “‘Freakonomics’ Abortion Research Is Faulted by a Pair of Economists
By JON E. HILSENRATH
Staff Reporter of THE WALL STREET JOURNAL
November 28, 2005; Page A2″

  58. MattJ says:

    Jeremy ~

    Long story made short, she has become disillusioned with our law system and she no longer wants to be a lawyer.

    That story needs to get longer. She can’t return her education for a refund, so she needs to pay for it. You can’t pay for it while you’re paying for everything else. Despite her distaste for the profession she chose during her education, it sounds like she needs to keep looking for work in that profession until she finds something.

    On the bright side, the idea that she only has to do this until her student loan debt is paid off may motivate her to be frugal – the sooner the debt is paid, the sooner she can stop doing something she hates. (The fact that she hates it may also motivate her to find something else that pays well enough to cover her debts, and the more experience she gains at her futuer job in law, the more likely she’ll be able to find something else)

    As for how you convince her of this without causing a lot of anger and resentment – I’ve got precious little help for you there. Perhaps a good nonprofit credit counselling service can provide you with the support of a disinterested third party who can help convince your wife to go back into law. Maybe they could even see another way out of your mess that I don’t.

  59. Anne says:

    Kevin:

    It’s so interesting to me that your little rant didn’t even address my comment. Not only were you “born on third base and go through life thinking you hit a triple” but you want to eliminate anyone who had the temerity to strike out. As for those in the dugout or who didn’t even make it to into the ballpark…. well, they don’t deserve to be in the game. Get rid of ‘em.

    Does that about sum it up for you?

  60. friendlyfire says:

    @ Kevin:

    from the Dickens classic, A Christmas Carol:

    First Collector: At this festive time of year, Mr. Scrooge, it is more than usually desirable that we should make some slight provision for the poor and destitute.

    Ebenezer: Are there no prisons?

    First Collector: Plenty of prisons.

    Ebenezer: And the union workhouses – are they still in operation?

    First Collector: They are. I wish I could say they were not.

    Ebenezer: Oh, from what you said at first I was afraid that something had happened to stop them in their useful course. I’m very glad to hear it.

    First Collector: I don’t think you quite understand us, sir. A few of us are endeavoring to buy the poor some meat and drink, and means of warmth.

    Ebenezer: Why?

    First Collector: Because it is at Christmastime that want is most keenly felt, and abundance rejoices. Now what can I put you down for?

    Ebenezer: Huh! Nothing!

    Second Collector: You wish to be anonymous?

    Ebenezer: [firmly, but calmly] I wish to be left alone. Since you ask me what I wish sir, that is my answer. I help to support the establishments I have named; those who are badly off must go there.

    ********
    the chain you are forging in this life will be long and heavy indeed in the next.

    When you are dead who will care how much you paid in taxes? No one’s tombstone marks their aftertax earnings, or how late they stayed at the office, or what healthcare plan they had.

  61. Kevin says:

    @Anne:

    It’s funny that you think you know so much about me. “Born on third base?” Hardly. I worked my butt off for everything I have, and for what? To see my taxes go up so more and more freebies can be handed over to do-nothing deadbeats too lazy to help themselves.

    I wasn’t born on third base, but you’re right, I did have some advantages (white, male, stable upbringing). But I still had to WORK to do something with those advantages. I may have had it a little easier than most, but that’s no excuse for those with more obstacles to just give up and go home crying. I have no patience for people who won’t even lift a finger to help themselves, and would rather whine and complain about how much easier “others” have it, as though the universe is supposed to be perfectly fair to everyone, and they’re thus entitled to whatever it takes to restore equity in society. Gimmie a break.

  62. marta says:

    Sigh. Do you even realise that taxes are spent on things other than food stamps and such for the poor? (yes, the *poor*, not “weak”, “whiners”, “deadbeats” or “lazy”).

    Like, about one THIRD of US taxes are spent on the military (i.e., two stupid wars). I don’t see you complaining about *that*.

    Gimme a break, indeed!

  63. Johanna says:

    Who are these mysterious people who “give up and go home crying” and “won’t even lift a finger to help themselves, and would rather whine and complain about how much easier “others” have it”? (And why is “others” in scare quotes?)
    Do all people on food stamps fit that description, in your opinion? (And if so, how do you know?) Or just some of them?

    The topic that launched this discussion, in case you’ve forgotten, was Jan’s description of people in her/his community organizing a benefit concert to help offset their friend’s medical bills. Now, that might not be a cause that you or Jan would care to support, and that’s fine. But if holding a benefit concert isn’t “lifting a finger,” then what is?

  64. Gemond says:

    Wow. It’s hard to comprehend that there are such judgmental people on the planet as some of those who commented on the charity fundraising.

    you don’t want to give? Don’t give. Nobody has a gun to your head.

    But the attitudes and comments–seriously. Let’s hope you never need any outside assistance.

    And who are you, quite frankly, to even judge another’s worthiness?

    Yea, there are scammers out there, that’s why you do due diligence and vet any organization before contributing.

    And here’s a flash for some of you critics: Most people would rather die, and many do, than ask for help from anyone. And many of those people have incurred high medical bills due to the greediness of the medical community and how they are billed and treated. It’s not their choice.

    I, too, have worked hard for what I have. But I feel that it’s only human to help where you can and that when I stop looking at my fellow man as my equal, despite circumstances, I cease to be human.

    Frankly, I have more of an issue in paying taxes for things I do NOT support personally (wars!) than I have in giving a few bucks to a local charity for someone in my community or elsewhere.

    The idea that people who need help are slackers, lazy and not working is just nonsense. Especially in today’s world which is filled with working poor.

    A close friend is a graduate of both Harvard and Yale. Worked hard in the corporate world. Saved. And when divorced, got screwed royally by the crazy ex. Child custody involved living in a small town where there was next to no work. She scrounged for years. God forbid she had gotten ill during then. She might have needed help as others have. Would you have called her a lazy slacker?

    The viciousness of the comments is something that is so disheartening to me. Especially in a time when more and more people need help and we are being royally screwed by businesses left and right.

    Save that skepticism and negativity and direct it towards the organizations that deprive people of their rights, humanity and a living. Maybe then it would be warranted.

    And good luck if your life changes. May Karma work for you.

  65. SLCCOM says:

    Folks, don’t feed the trolls! And Stacey, yes, there are generic medications available. But no, they are NOT the same as the brand name. Suggesting that people switch to generics can be foolhardy.

    If we hadn’t been spending money to give cancer patients extra time for decades, cancer would still be an automatic death sentence. That $300,000 giving someone an extra year of life may well be the money that leads to a cure for that type of cancer. I look at it as an investment.

  66. Amanda says:

    The person requesting information about selling his or his wife’s home needs to talk to a CPA.

  67. Leslie says:

    And a benefit concert isn’t really “charity” from you, anyway; it’s “charity” from the musicians who are volunteering their time and skill. As a professional musician, let me remind you how this works. Just for the sake of argument, I’m assuming that the musicians in question are professionals, or at least get sometimes get paid for their performances. Normally, you go to a club to see a band and you pay a cover charge. If the club isn’t ripping the band off (which unfortunately can’t always be assumed, but we’ll give them the benefit of the doubt in this case), that cover charge will pay the musicians for their services. Maybe the venue doesn’t charge a cover, but if they’re paying the band, that pay is probably built into the cost of the drinks you’re buying. Many music venues unfortunately don’t pay, and don’t charge a cover, but tell the band that they have the “privilege” of setting up a tip jar and selling CDs. So in that case, yes, tipping is at your discretion, and it could be considered charity or “supporting the artist.” Or if you had respect for professional caliber musicians, you could just consider it paying a freelancer for their work.

    At a benefit, the same dynamics are in place, but the musicians are volunteering their time (in which they could be gigging to make money, not save their friend’s life). The money goes to them, and they decide what they do with it. Geez. Now of course they’ll promote the show and play the sympathy card, but I can’t think of a single thing wrong with that, unless you’re against compassion and helping people in general.

    I guess you might not be going out to hear live music that night already, but a large segment of our population is, and they’re the ones that benefit concert is geared toward. Musicians tend to associate with people who like music. They’re throwing a concert, which has monetary value. I’m sure I’m repeating my point more than is necessary for most people, but I’m sure some people will find a way to disagree. I’m not saying you can’t feel good about your charitable donation at a benefit concert, but somebody is doing actual work if you look hard enough for it. I’m really shocked by the outrage.

  68. Karen says:

    Jeremy-Your wife may want to check out elder law. There are very few certified elder law attorneys out there and the need is big now and will only grow. It took me 4 attorneys to finally find a good elder law attorney, and she was fantastic. And it that speciality she would be actually helping people.

    I wish I had the money to go to law school and become an elder law attorney.

  69. Amy H. says:

    @ Jeremy –
    Since your wife knows that she would prefer not to go into corporate law, she should investigate possible programs (usually administered by the law school one went to, but there are other programs as well) that provide student loan forgiveness for attorneys who work in the public interest.

  70. LMR says:

    My advice to the minivan family is ditch the Honda and find a used American minivan. If you replace the tranny, the engine could go next. Hondas are money pits, I don’t care what anyone says. My husband was a Honda (Prelude and Accord) guy and those things had all kinds of repair issues, each of which cost a fortune. I always buy American and my cars have always been more reliable than those stupid Hondas and cost waaaaay less to repair.
    I bought a 1994 Plymouth Voyager in 2001 (same year that Odyssey was made) and that thing is still going strong except for the air conditioning, which is a bummer, but it gets us where we need to go and mechanics have told me the engine will last forever.

  71. Brittany says:

    On the abortion topic–

    It is true that when abortion was relegalized, crime rates dropped (and continued to decline) 15-25 years later, even when controlling for all other factors. This interesting statistical fact has led some researchers to conclude that SOME abortions by mothers in unstable situations prevented unwanted children from having a rough childhood and ending up in prisons. I have read the study you’re talking about (and others). This is a supported conclusion.

    But there is absolutely no data that this “type” of abortion/abortion decision comprises a bulk of abortions. Your extrapolating the stud to conclude “the kind of people for whom abortion is usually a serious consideration also happen to be the kind of people most likely to give birth to the next generation’s criminals and drug addicts” is completely illogical and unsupported.

  72. Dawn says:

    Jeremy–as a lawyer married to a lawyer, even if your wife did want to do law right now, she probably wouldn’t make much more than she is. Her lack of desire to practice isn’t really the issue some of the posters make it out to be. I empathize with your frustration over the debt load. So many people go to law school (perhaps other schools?) believing they will make good money and the debt is ok. In fact, banks and schools will sell that, even though the average starting salary for lawyers (once you eliminate NYC large firms) is actually not that high.

    Here’s what we did–First, if you haven’t already, see if your wife qualifies to get the student loans consolidated separately (public/private separate), fixed interest rates, and a maximum time you will pay (25 years or whatever the current rules are). Get rid of credit cards, create a budget (sounds like you may have already done this). Treat the student loan payments like a budget item, not a debt item. (similar to a mortgage–you’ll just pay it off like a mortgage). It might help to each get X dollars every 2 weeks to spend without checking with each other. Other than that amount, everything else has to be on the budget. Pay off any other debts you have (smaller ones, higher interest rate ones). Create an emergency fund–use your tax refund, found money, gifts, etc. for this purpose. Then make extra payments to the student loans as you can.

    My husband and I joke that we already bought our second house and our new cars with the student loans (we do have a small house, but it’s mortgage is cheaper than most rent where we live). Losing sleep isn’t going to do you any good. Yes, the astronomical debt sometimes makes me lose sleep, too, but I try to dwell on the positive (I keep a positive journal to remind me).

    If things like not having a vacation or wanting a specific item bug you, you could try a short-term second job. When we wanted a vacation, I took a night teaching job teaching the LSAT review course 2x a week for 3 months. It was hard, but since it was short term, I found I could make it through. We have also tutored, answered a call in customer service line, worked retail during a busy season. I think the key to this is #1-a definite period of time. #2-a specific purpose.

    I’d also try reading several of the books Trent recommends. Maybe something (or parts of several somethings) will click for you as things you can do to help your situation specficially.

    Finally, go back and read Trent’s initial posts on when he was drowning in debt. There may be things there you can use.

  73. Joe says:

    @Janna – Thinking of joining the Military

    First, I’m not completely certain you aren’t looking at a civilian contract position, in which case what I have to say will not apply. But if you are considering enlisting in the Military, please consider these notes:

    1. DO NOT TRUST/BELIEVE a recruiter without doing some research. In the past, their job performance depended on how many people they got signed up. What happened to the recruits after they sign on the line is not their primary concern. It is imperative that you understand EVERY aspect of your contract before you sign, because once you do sign, it is a painful experience to attempt to get something corrected (if it can even proven that the contract is wrong). The saddest words are “But my recruiter said…” It is important you talk to people who are currently serving, and even then, realize that everyone has a different experience.

    2. The availability of a specific job to you depends on:
    a. your ASVAB score
    b. the job availability
    c. your willingness to relocate for it.
    For example, if the Vet tech position you want requires an ASVAB score of 80 or better, and you only score a 79…that job will not be available to you. And yes, you can retake the ASVAB to try and get a higher score.
    If there are only 10 vet tech positions at a given location, and they are currently filled, your chances of being able to get the training for that job is VASTLY reduced if not nil.
    If your only chance for an open position is in Alaska….guess where you’ll be going…
    Also, some jobs are not available to reservists, only to active duty.

    3. In years past, the basic term of enlistment is for 8 years. For Active Duty, it was 4 years on active duty, and 4 years in the Inactive Ready Reserve (the IRR, ie. the people that get called up to fill holes in units being deployed).
    On the reserve side it is 6 years active service with 2 years in the IRR. I say that because I haven’t heard of a two year option. Consider that basic training and your job specific training can take from 5 months to a year depending.

    4. Enlistment Bonuses depend ENTIRELY on the job demand. If the vet tech is in high demand, expect to see a good cash bonus for sign on, a student loan repayment offer (SLRP). If there is no demand for Vet tech, expect to get very little or no cash bonus for signing up and no SLRP. The bonuses exist to funnel people into high-demand positions.

    5. The much-vaunted Post 9/11 GI Bill is a great program…IF you have been deployed overseas for a total of 36 months. Having been overseas for less than 18 months myself, I only qualify for 60% of the Post 9/11 GI Bill and get more benefit from the older GI Bill programs. Just because it is there doesn’t mean you’ll get any use out of it.

  74. Michelle says:

    Zach – Your health insurance affects more than your finances; your plan will determine which health care providers you have access to. If the networks for the two plans are different, or if the POS has decent out-of-network coverage, you should think about which hospital or clinic you want to use in the event of a serious illness (or a pregnancy – my husband and I aren’t planning one anytime soon either, and I also have PCOS, but things happen). My husband took the reputations of the in-network hospitals into consideration when he chose his health plan, and I’m glad to know (as a fairly risk-averse person myself) that we’ll get the best care available in our area if we need it.

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