Reader Mailbag: Ingress

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What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Board game suggestions
2. Starting a babysitting exchange
3. Retirement savings questions
4. Online dating worries
5. Dutch oven versus crock pot
6. Starting out with home brewing
7. New car after accident?
8. Learning a new language
9. Vacation just before 60
10. Informal catering?

Lately, I’ve been playing the GPS game Ingress (no, I don’t have any beta keys). Basically, it’s a game centered around geocaching – you go to certain locations and push buttons on your phone to earn points and you’re competing with others to control those points. It’s free, too.

Anyway, it’s been great at getting me and my kids out of the house even on cold days, where we’ve found ourselves outside wandering around and completing objectives. If an afternoon is remotely nice, we’ve been outside walking around playing it.

I think Ingress is just the first decent game of this type and I think even better games will come along in the future as people come up with even more creative uses for GPS. If it gets people out exploring the neighborhood around them, then it’s going to be a great thing.

Q1: Board game suggestions
I’m looking for some board games for family night. My son is 3 right now and daughter 1. We are looking for a board game we can play with our son right now and slowly transition our daughter into. We have a variety of interests. My son loves geography, music, art, science, everything to do with nature. We are a green family that grows our own veggies, recycles, has no TV, lots of outside time..etc. My son is a an avid BMX rider so we aren’t not limited in our interest.

- Andrew

It’s really difficult to recommend a board game for a child that young because early childhood cognitive development is so different for different children.

At three years of age, my son’s favorite board game was Kids of Carcassonne. It was a bit over his head for a while, so we made up games with the components for a while. By the time he was four, he understood the game quite well, though. By the time he was six, he had clearly outgrown it, but he had a younger sister that was really into it by then. Now, our youngest child is just starting to have fun with the game components.

Knowing nothing else about your child other than what you’ve written, that would be my suggestion. It’s got pieces that are fun to play with before they’re ready to really understand the rules, straightforward and open-ended gameplay that’s appropriate for a four year old (or so), and works great as a game to incorporate younger siblings into as they grow a bit older.

Q2: Starting a babysitting exchange
Over the last few months, I’ve started to get to know some of the mothers of other children in my son’s kindergarten class. Most of them live pretty close to me and seem to have similar lives to my own. Our children get along well, too.

I was thinking of trying to start a babysitting exchange with some of them. Do you have any suggestions on how to get one started?
- Amy

Just suggest it. Suggest to the other parents you talk to that it seems silly for you all to have to pay for babysitters when you all know each other and you can just swap the effort among yourselves.

One good way to do this is to have one night a week where one of the parents in your group just takes all of the kids for, say, three hours. One family would have several kids from the time they get off the bus until it’s time to go home to bed. That means the other families in the exchange (two or three of them) would have one evening a week free from the kids.

Another way is to just start off by doing it with one other mom. Suggest swapping Saturday afternoons and early evenings over two weekends in the coming month. You’ll take their kids for one of them, they’ll take your kids for another one of them.

The worst thing that can happen is that they say “no” or that they just subtly avoid it, in which case you’re in the exact same boat you’re in now.

Q3: Retirement savings questions
Hi Trent I a few questions about saving for retirement:

1. What happens if you over-contribute to either 401k or IRA account? how much are you penalized? is there anything you can do to correct the situation and not be penalized?
2. is there any downside to putting all retirement savings in my companies 401k plan vs spreading out my retirement savings between my companies 401k and my own IRA account?

As always thanks for all the help. I started reading the simple dollar as an undergrad, kept it up through graduate school, and now as I’m starting out at my first full time job. I can’t thank you enough for getting me to the great financial shape I’m in right now. keep up the great work!
- Roger

If you over-contribute, you need to get the excess money out of the account. The best thing for you to do in this situation is to contact an accountant who can walk you through the steps to make sure you don’t make further mistakes that would add to your tax burden.

Don’t stress out over it, but you should contact an accountant as soon as you can if you’ve over-contributed to your retirement plan.

The advantage of an IRA over a normal 401(k) is that you have more control over the investments. The advantage of a 401(k) is that you can get employer matching. So, typically, the best route is to invest into the 401(k) up to the amount needed to get every dime of matching, then max out the IRA, then move back to the 401(k) if you want to save even more.

Q4: Online dating worries
I’ve been thinking about trying online dating services, but how do you know the person on the other end isn’t a complete creep? This really worries me on the free sites where anyone can make an account, but the frugal side of me really doesn’t want to spring for a paid service.

- Erin

You don’t know that the person on the other end is a complete creep. That’s why you should be very careful in revealing your identity to a prospective online dating partner. I would never use my real name on such a site and if I ever met anyone I’d be sure that it was in a public place and that people knew exactly where I was.

From what I’ve heard from friends, the paid dating sites have a much lower “creep” ratio, though there are still some weird ones in the water. Also, the paid sites tend to have much stronger methods for finding appropriate matches.

Is online dating the right choice? I think that’s a personal question relating more to one’s emotional needs than to a financial choice.

Q5: Dutch oven crock pot
Waaaaaay back when, you said you bought an expensive Creuset pan (after careful planning) because…? Can you tell us what can that pan do that a crockpot can’t do?

- Emily

I can fry eggs in the pan. I can bake rolls in the pan. I can make stews in the pan. I can boil water in the pan. There aren’t many pieces of cookware that I would feel good about doing all of these things in.

Add on top of that the fact that it came with a 101 year warranty and it somewhat makes sense. The thing is pretty much indestructible.

This is an item I expect to hand over to my children someday, and they’ll probably give theirs to their children.

Q6: Starting out with home brewing
A friend of mine gave me a book on home brewing for Christmas because it’s something I’ve mentioned an interest in before. I started thinking seriously about doing this but when I started adding up the costs of what the book suggested for starting out, my eyes bugged out. You’ve mentioned homebrewing before. How did you do this without spending way more than just buying a couple of decent six packs at the store?

- Gene

Rather than specifically following what’s in that book, I’d look for a “starter kit” that has low-end versions of most of the equipment you need.

One very low-end option is a Mr. Beer kit, which will let you make tiny two-gallon batches of home brew. It’s a good one to experiment with, but you’ll only be making a handful of bottles per batch.

If you’re very unsure about homebrewing, I’d suggest starting there. Make some of the kits so you’re sure you understand the process and then you can move up to a larger setup as needed.

Q7: New car after accident?
This past Friday, I was involved in a motor vehicle accident: the driver of the other vehicle ran a stop-sign, and T-boned my car. There were no injuries, thank goodness, but my vehicle was totaled. I had just purchased my car (a 2000 Honda Accord with 110,000 miles) for $5000 (cash) in July 2012.

Essentially, I have no idea whether to buy a new car (and take out a car loan) or to buy another used car with the money I receive from the insurance company.

I’m 27, I have no debt, and my credit score is excellent. I am able to save about 20% of my pre-tax income toward retirement plus another 15% or so toward general savings. Normally, I wouldn’t hesitate to buy a used car, but in the past year and a half, I have spent over $10,000 on vehicles (first to keep my old car running, then to buy the Honda, and lastly, needing emergency repairs on the Honda’s gas tank). The recent costs associated with my cars are giving me pause about buying used. If it helps to know, I put about 20,000 miles on my car each year and I have about $8,000 in my emergency fund.

In your opinion, what is the best financial choice – buy new or buy used?
- Diana

I would avoid taking out a car loan unless it’s for buying your very first car. If you’ve bot more than a few thousand to spend, you shouldn’t go over your budget to buy a car.

Once you have your replacement car, start making monthly “car payments” to a savings account. Put $100 or so away in a savings account each month and forget about it. Make it $150 or $200 if you can.

If you sock away $100 a month for four years, you’re going to have about $5,000 to buy a car with at the end of those four years. If you’re doing $200 a month, that’s $10,000 to buy a car with. Interest is working in your favor in a savings account instead of against you on a car loan.

Q8: Learning a new language
My company has been discussing opening an office in Vietnam. That means there will be huge demand for people who can speak both Vietnamese and English fluently. This seems like a great opportunity for me, since I’ve been thinking of just starting over. What’s the best way to learn a language quickly without just breaking the bank?

- Florence

The best way I’ve found is to find a “language buddy.” I actually did this to an extent, mostly as a favor to an exchange student from China.

All you have to do is find someone who is new to the United States whose native language is Vietnamese and then spend a few hours a week with this person. Half the time, converse in English with that person and help them with every language mis-step they make. Half the time, converse in Vietnamese with that person and they’ll help you. You’ll both come out of this drastically improved.

If you’re starting from scratch, I’d start with Youtube videos. This series of videos would be a great way to start with the basics of Vietnamese.

Q9: Vacation just before 60
I will be 59 in February 2013 and I want to travel. My husband does not want to travel so I plan to go solo or with a group. We have no debt and about $180K each in 401K and about $6K in emergency funds. My plan is to start drawing about $5K a year from my traditional IRA to travel when I am 59 1/2. I would like to know what impact this would have on my taxes. We will own our home in 2016. My husband is retired and I work full time. We are both in good health. Our 21 yo son is in college which is paid for by a trust fund set up by his grandmother and he is supported by us (roof over his head, food, car, cell, health insurance, miscellaneous) until he graduates in 2014.

What do you think? I want to cruise to Alaska and also travel around the US and Europe. What do you think of solo travel? I think we are in good shape and what is the point of being the richest person in the cemetery?
- Lynn

I think it’s perfectly fine to go on a solo trip. Sarah and I do this at least once a year, in which she travels to Seattle to have a vacation with her sisters and then I travel to Indianapolis with friends for a gaming convention. It lets us both enjoy a bit of individual relaxation.

Your financial picture seems like it could sustain this travel as long as you’re under the expectation that you’re going to be working for several more years. If you’re pushing toward full retirement in the very near future, you might want to rethink this idea.

I don’t have a full financial picture nor an estimate of what your spending is like, so I can’t give a full recommendation on it, though.

Q10: Informal catering?
I’m really good at making finger foods and appetizers. I’m always asked to bring them to parties and such. Anyway, a friend of mine is holding a big Super Bowl party and simply asked me to make all of the appetizers and has offered to pay me for doing so. I really like the idea but what kind of business protection do I need here? If I make something that makes people sick, what happens?

- Joely

It really depends on where you want to take this. Is this a one-time thing or is it something you’re planning on growing into a long-term business?

If you’re thinking about growing this into a business, you can look into catering insurance, which provides protection for exactly the scenarios you’re thinking of. The problem is that the cost of such insurance would devour what you made from this one event, so if you’re not wanting to build this into a business, you’re probably not interested in going down that road. Beyond that, you’re going to want to consider how to form this into a business where your liability is minimized, so you’re going to want to hit the library for books and other materials.

If you’re not into the idea of this becoming a business, I wouldn’t get on board with this offer as it stands. Instead, I would just agree to prepare a batch of your best appetizers and bring them with you as any good party guest would.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

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