Reader Mailbag: Morning

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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. Ready for another child?
2. Gift cards for Christmas
3. Shrinking packages
4. Investing savings
5. Buying your own cell phone
6. Hobbies that make money
7. Evernote alternatives
8. Terrible credit
9. Work at home advice?
10. Credit union out of state

As much as they wear me out, I really love the routine of our family mornings right now.

Our youngest child usually climbs into our bed at about 5 AM and alternately cuddles with me and Sarah. Sleep is pretty much done at that point as a lot of whispers and hugs are exchanged.

He gradually gets more rambunctious, urging us to get up and then wake up his siblings, particularly his older sister who sleeps deeply. We all eat breakfast together and I help the children get ready for the bus.

By 7:45, the house is quiet and I focus on the work I need to take care of, knowing that by about 3:30, the house will be full of noise and laughter again.

I will miss this time a lot in several years, when it has all passed and our children are grown (or close to it).

Q1: Ready for another child?
We both seem to have a lot in common, early 30’s, major financial problems in our 20’s, kids, etc. I read in of your articles about your worst money mistakes. There was one in particular about having a third child to soon. I soon may be making that same mistake myself. My wife would like to begin trying for a third child this January. She would ideally like to have four in all. We are just starting to make progress on a huge debt. We’ve made a lot of changes in our lifestyles and still hope to improve more.

There are several reasons why I feel I’m not ready for another child. I’m worried that having this child now could greatly slow down the progress we’ve made so far. My wife stays at home and takes kids in after school and works part time at a preschool while I work shift work. Her income would be cut back while staying home with the new baby (no financial assistance for parental leave).

We are a very busy family, with both kids doing hockey, soccer, swimming lessons and preschool. We are always on the go. This can get expensive but we value a healthy athletic lifestyle for our children as frugally as possible. I am concerned that it would be very difficult to provide this for another child let alone two more.

We’ve discussed this at great lengths and she is unwilling to hold off any longer. In a perfect world, if I worked 9-5, Mon-Fri, had all my financial goals on target, earned a higher income and she could stay home to look after them, I would have no problem with more children. My hectic shift work schedule, plus overtime, our financial issues, the sports activities, her volunteering for the school and church, the after school kids running around our home daily, is already stressful and overwhelming enough. On top of that she reminds me almost daily of how she can’t wait to be pregnant in January and have a new baby soon. I’ve already convinced her to put it off for a couple years, but time is running out.

Everyone I discuss the issue with agrees with me, but no one really has any good advice. Just wondering what your thoughts might be.
- Eric

If you are not both fully committed to having another child, you shouldn’t have another child. That’s my advice, as clear as can be.

It sounds like you’re looking around your life and see that it is very full at the moment – and it is. If you don’t feel as though you can give the emotional support and care to a third child that you currently give to your wife and your two current children, you need to be clear about that.

Although we had some concerns, when it came right down to it, Sarah and I were both pretty sure about wanting a third child. After the third one, we evaluated things again and decided that at least one of us was not yet ready for a fourth one, so we did not have one.

Talk about it with your spouse, give it a year, then re-evaluate. It may be that you move towards having another child because of that year, and it may be that she moves further away from it.

Q2: Gift cards for Christmas
Gift cards seem like a pointless gift to me. Why not just give them cash? It’s more flexible.

- Joe

The common argument against what you’re saying is that it ensures that the people with the gift card will do something enjoyable with it. This would, of course, apply to gift cards to restaurants or something else that would strongly encourage a leisure activity.

If you’re giving someone a gift card to Walmart or Target or Amazon, I agree: you might as well just give the person cash. They’re likely to just use the card on groceries or household supplies anyway, so why lock them into a specific retailer?

The only reason I can see to hand out gift cards is if you got them at a discount yourself and won’t use them in any reasonable timeframe.

Q3: Shrinking packages
The most frustrating thing for me at the grocery store is when I buy my usual package of something only to find that they’ve reduced the amount of stuff in the box. I’ll buy a box of cereal and when I get home I see that it’s smaller than it used to be and then shortly after that they’ll bring out a “big box” at a higher price.

- Jenny

This is why I focus heavily on “cost per use” or “cost per unit” when evaluating which is the best deal at the store.

If you look at your purchases through the filter of the cost per ounce or the cost per item inside the box, it becomes clear what you’re actually getting for your purchase and it becomes really easy to compare different packages of the same size.

The only problem is, as you mention, companies often “shrink” their packages and then roll out more expensive “big” packages. The only way to catch it is to get really adept at figuring out that cost per unit so that you can estimate it really quickly in the store on everything you put in your cart. I’ve reached that point, but it takes a lot of practice.

Q4: Investing savings
My wife and I are in our early 30′s. We both have what I consider well paying, steady jobs. We have a pretty relaxed budget because we are comfortably able to save between $1500-$2000 a month depending on vacations,how often we go out to eat, etc. We believe we work hard and enjoy spending our earnings on life experiences and things we enjoy-without going overboard!

We have no debt besides a mortgage for our primary residence at $150K and a rental property at $92K. We both contribute our full company match into 401K, we have a Roth IRA, 10K in stocks and $40K in our savings. On top of this we make the equivalent of 2-3 extra mortgage payments on each property every year.

My question is should I be investing our savings in something with a larger return or interest on our money? Our long term goal is to payoff our rental free and clear before tackling our primary residence. With potential bonuses and promotions, I think we can have the rental paid off sometime in 2016. We are working towards financial freedom, I just don’t know what we should do with our money in the meantime.
- Mike

Assuming the interest on your mortgages is low, I would probably throw more of your money into retirement savings. Make sure that you’re maxing out your Roth IRA each year.

If you’re maxing out your Roth along with the 401(k) contribution limits, I’d figure out what your other goals are. Do you want to buy another rental property? Do you have other big goals in mind?

Figure out your timeline for those goals, then start saving appropriately. If it’s a long-term goal (ten years or more in the future), look at the stock market. If it’s short-term, stick with savings accounts (unless you’re really fine with a lot of volatility with your money).

Q5: Buying your own cell phone
I dropped my cell phone into a river and it wasn’t insured. I still have about eight months until my next contract renewal with [my cell provider]. What’s a cheap way to get a phone?

- Adrienne

The first step I would take is to talk to my cellular provider and see whether or not there’s an arrangement they can help you with. They may be able to provide you with a low-end phone or something like that.

If that doesn’t work out, I would start searching for phones that work for your provider and get the cheapest phone I could find. I’d use that until my next contract renewal, then get a better one with the discount from your provider.

A final thought: how did you drop this phone in the river? Whatever phone you get, you should consider different practices with using it.

Q6: Hobbies that make money
What are some hobbies that make money instead of costing money? I enjoy several different hobbies, but I realized that all of them involve spending more and more money. I’d like to have a hobby or two that actually makes money.

- Art

Gardening, once you’ve covered the startup costs, can save you a lot of money. You simply grow vegetables and fruits for home consumption instead of buying them. Cooking is similar – knowing how to prepare food well makes the incentive to eat out a lot smaller.

If you have a computer, blogging can earn a little bit of money. Simply start a blog at a free provider like Blogspot, add some ads to your blog, and try to write useful and interesting things regularly.

My son is getting into numismatics, where he looks for rare coins through our change. Whenever we get a handful of change, he looks through them for specific rare coins. He’s also collecting sets of the state quarters and national park quarters.

Q7: Evernote alternatives
I’m sure you’re aware but Evernote isn’t completely free. Yes, it’s free for most practical purposes however it fails in what I consider a key use case: if you want offline access to notes created anywhere other than your phone, you can’t do that for free. You have to pay.

Two alternatives:

1) If you are a fully Apple user (iOS + OS X) then their built in Notes app with iCloud sync is free and pretty good.

2) If you are a heterogenous user (OS X + Android or similar) then I’ve started using Google Keep, an extension of Google Drive, it is free and pretty good.

Neither of those is as handy as Evernote, no. But they’re not bad, and they really are free including offline access.
- Reggie

Google Keep seems solid. In fact, I would be pretty tempted to use that if I didn’t already have literally hundreds of notes in Evernote. It’s not quite as polished as Evernote, but it’s good.

The Notes idea is great if you have all Apple systems, but that’s pretty pricy right there.

There are really a lot of systems out there that work pretty well. I just find Evernote does all of the things I like really well – tagging notes, organizing them, and so on.

Q8: Terrible credit
Thanks to three years of nonstop mistakes my credit is so bad that I can’t get any credit cards or a cell phone deal. I am using a pay as you go phone. How can I rebuild my credit?

- Dave

Time is going to be your biggest ally. The longer you wait, the less impact your mistakes are going to have on your credit history.

I don’t know if you have outstanding bills or other things. If you’re actively being pursued by bill collectors, you need to take care of all of those things and get them in order before your credit will improve.

If that describes your situation, I suggest heading to the library and picking up a book on fixing your credit. A good one is the Credit Repair Kit for Dummies.

Q9: Work at home advice?
After the first of the year, I’m switching to telecommuting as my company is moving to a smaller office suite (the company is fine and we’re actually hiring). My big worry is focusing on work with all of the distractions at home. How do you do it?

- Allison

Have a place at home where you work, period. This is your work space and when you’re there, you work.

When you sit down to work, turn off all distractions. Turn off your cell phone ringer and your automatic email checking. The only things that should be present are work elements.

Set a timer and work by it. I usually work for an hour and a half or so, then take a fifteen minute break to do work around the house (dishes, laundry, etc.). Sometimes, though, I slip into a “zone” and work for a lot longer than that.

Q10: Credit union out of state
My husband and I are about to move out of state. We do have family in our current state and we intend to return and visit frequently. My question is, I really like my credit union and would like to keep my account with them even as I live out of state. I do most of my banking online, and have automatic deposit. The only drawback I see is that I will occasionally have atm fees. I use my debit card frequently and don’t use a lot of cash anyway. Do you see any drawback to continuing to bank with an out of state credit union?

- Andrea

If everything is handled online, as you describe, I wouldn’t object to doing this, especially since you plan on visiting frequently.

There are going to be times in the future where you’re going to want to deal with a teller, but with online banking and ATMs, that situation doesn’t happen as often as it used to. Since you’re returning to the area sometimes, then that’s really not a problem.

A good banking system is something to hold on to.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. Iíll 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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