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. Piecing through debts
2. Children’s birthday cards
3. Handling when life kicks you
4. Exhaustion after work
5. Lifetime memberships
6. Intensity comes and goes
7. Finding work
8. Different dreams than spouse
9. Regrets and the past
10. Gift cards to overpriced stores
I usually like to mow the yard with the blade on the highest setting. That way, moisture at ground level is more protected and the lawn is less likely to dry out during the summer.
The only problem is that if the blade is at the highest setting, the lawn looks shaggy within just a few days, particularly if neighbors mow at a lower setting.
The solution? If our yard doesn’t look overgrown, I just don’t care. I keep an eye out and see if our grass starts to really look uneven and perhaps just a bit seedy and I use that as an indicator of mowing time, nothing else.
Q1: Piecing through debts
I’m 50 and my wife is 52. She has chronic health issues that required her to stop working many years ago, so we have been a single income family for the last twenty or so years. Having a growing family and covering medical costs has meant that we were forced to build up quite a bit of credit card debt. I have being actively trying to reduce this over the last year or two.
There are three credit cards, two in my name and one in my wife’s name, and a store card (a grocery and clothing store). They total approximately $12,400. I finished paying off my car four months ago and have been channeling the payments from that into paying down my wife’s card. I chose to reduce hers first both because it has the lowest balance, except for the store card, but also so that she will not have the burden of debt in her name and no income other than pension and life policy benefits, should something happen to me. I would attack the store card next before the two credit cards in my name that have the larger balances.
On these other cards I’m paying the minimum due rounded up to the next $10 and keeping to that amount as the balances slowly decrease. Is this a sensible thing to do rather than paying the absolute minimum and putting all the rest towards the card currently being attacked?
The car is 8 years old and having been bought new has been kept in good shape so there is no need for us to consider replacing it in the next five years at least.
My question relates to building an emergency fund versus settling the card debt. We have no cash emergency fund though I do have an investment account with a current balance of $1,200 that Ican draw on if necessary. The options, as I see them are:
1. Continue paying as much as possible on the cards to reduce the debt while considering the available credit on the cards as the emergency fund until the cards are settled and then channel all payments into rapidly building an emergency fund.
2. Reduce the additional payment I’m making on the cards by half, or thereabouts, and use the difference to start building an emergency fund, until the cards are settled and the full amount used to pay them can be added to the emergency fund savings.
3. Reduce the additional payment I’m making on the cards by half, or thereabouts and increase the monthly payment into the intestment account by the difference. As an investment account there is some risk involved in this option but potential interest earnings are greater than a savings account where charges are greater than interest until a large balance is reached.
Which of these would you consider to be the best option?
We also have a home loan (mortgage) with an outstanding balance of around $15,000 and 10 years to run but payments on this are less than the payments on the cards and the interest rate is also considerably less than that on the credit cards.
I have also had a windfall in the form of a performance bonus of around $1,500 after tax. I intend using a third of this on necessary home repairs. Should I channel the rest into reducing the card debt or use it as the seed for an emergency fund?
If I were in your shoes, my plan of attack would be to first build up an emergency fund of around $1,000 in cash. This will handle most of the emergencies life will throw at you and keep you from going completely off the deep end if something happens. While building this, I’d make minimum credit card payments.
After that, I’d hit the credit card debts with full force. I’d start with whichever card has the highest interest rate, make very large payments on this card, and make minimum payments on the others.
When that highest interest card is paid off, move on to the next highest interest card and repeat the cycle. For the second card, you should have more available each month to pay since you now have a card paid off.
Once all of the high interest debt is handled, I’d build up the emergency fund to at least two months of living expenses, then start addressing the lower interest debt.
With the windfall, I’d put it into the emergency fund to fill it up to $1,000, then use the rest for debts.
Q2: Children’s birthday cards
Whenever my nieces and nephews have a birthday, I used to get them a card at the store with $5 inside. But I’ve been thinking about this. Why not just take a piece of card stock, write “HAPPY BIRTHDAY” on it with a drawing, and put an extra $2 in the card? They barely look at the card anyway, and an extra $2 is cheaper than a card at the store. What do you think?
I think that’s a perfectly fine idea.
The sentiment that a card expresses can be done just as effectively (or, arguably, more effectively) by making a card yourself.
For those that don’t appreciate the card, it will make no difference. For those that do appreciate a card for its sentiment, the fact that it was made by hand will mean more.
In my opinion, this is absolutely the way to go here.
Q3: Handling when life kicks you
I am the primary earner. My husband works part time and is actively working towards being a professional actor. I make 10.50 per hour and I normally work 48 hours a week (with the 8 being overtime). I watch my energy consumtion. I always buy generic items, and basically go to work and then come home. I have also been actively trying to save. Putting at least something into a savings account that is not connected to any debit card and is separate from our main joint account. But life interferes at every turn. Every time I make a little headway something else always occurs that makes a huge dent in either my savings or in my allotment of bills. How do you deal with life when it just consistently kicks you when you are down?
Step back for a second and ask yourself what your situation would be like if you didn’t do those frugal things. If you bought name brand items and spent far more at the grocery store each week, where would your life be when one of those disasters happens?
I’ve had my progress kicked back to the curb many times, but when that happens, I ask myself where I would be if I had never put in any effort at all. Each time, I realize how much worse my situation would be.
That simple step makes me really appreciate the impact that good financial moves and frugal living has on my life.
Q4: Exhaustion after work
When I get home from work, I’m usually so exhausted that I don’t have the energy to do anything more than just order delivered food, eat it, put on my pajamas, and go to bed. So much of the frugality you talk about happens in the evenings, but I miss all of it. Any advice?
Prepare your evening meal in the morning. Get a crock pot and assemble the dinner meal you want in there, then set it to cook slowly while you’re at work. When you get home, there’s no need to even lift the phone for take out – just get a plate and serve yourself, then put the rest in the fridge when you’re done.
Make enough for two dinners so that the following night, you can just come home, fill up your plate, microwave it, and you have supper.
This little move alone will cut back drastically on the cost of the delivered food. As for the other things… if you’re staying in and sleeping rather than going out, you’re not spending money.
If you’re working a normal 40 hour week and find that you’re sleeping all the time when you’re not working, you might want to see a doctor, though.
Q5: Lifetime memberships
Some of the organizations my family belongs to have membership dues. We consider those dues worth what we getting. Some of them offer a lifetime membership. What criteria do you use to evaluate if this is a good deal?
For example, as a Girl Scout leader I’m required to be a member. If both my daughters continue through graduation, I could save a lot money, even ignoring dues increases. But if they drop out when they hit middle school, as many Girl Scouts do, then I’ll have spent more (ignoring dues increases) with a lifetime membership than annual renewals.
These are organizations I like and support. But I love and support my kids too and I’m trying to be prudent with my money so we can save for retirement and fund at least a little of their college education.
If a lifetime membership would cost you more than buying annual memberships, then don’t buy a lifetime membership.
Remember, you’re supporting those organizations every time you write them a check. You’re not depriving them by simply going for annual memberships.
You should never feel guilty about not giving enough unless you’re actually using your money for frivolous things while lamenting that you can’t give. If you’re using your money sensibly – for retirement or for other things – then you shouldn’t feel guilty at all.
Q6: Intensity comes and goes
Sometimes, I feel very strongly about getting my finances in order. Saving money is really exciting and feels good. At other times… I just don’t feel enthusiastic about maximizing my personal finances. It seems unimportant. How can I keep the fire strong all the time?
You can’t. At least, I can’t.
I’ve found that my own fire ebbs and flows when it comes to saving money. Sometimes, I’m very enthusiastic about finding new ways to save money or minimizing a known bill. At other times, it feels pretty distant to me.
I’ve found that the best solution is to do things when I’m on fire that will make it either automatic or incredibly easy to keep saving when I’m not as enthusiastic. One-time things that continually save money, like installing more energy efficient things around the house or switching to rechargeable batteries or making meals in advance and freezing them, are things I try to fill my time with when I’m excited.
When it’s not as exciting, it’s still easiest to use those energy efficient bulbs or those recharged batteries or those meals from the freezer.
Q7: Finding work
Why does it seem that after struggling for years and chugging along to pay debts and just when I am within reach (as in WEEKS!) of paying off the darned things, some calamity happens. I planned to get out of debt by the time I was 50. I was so excited to be out of debt.
But, I had to move when the situation where I was living became intolerable. THe neighbor on one side would start and abandon bonfires next to her house in the hopes it would burn her house (not to mention all the other neighbors’ houses) because it was not selling. The other neighbor would party all night and finally started shooting each other. They finally started shooting each other in MY yard. I was not getting any sleep and I was working two jobs!
I moved into a duplex with a much higher rent and the person and family on the other side of the duplex harassed me (parking behind me so I could not leave to go to work, stealing my trash to look for ??, blasting me out of bed at all hours with the stereo, playing the stereo at full volume all night, staring at me while I was sleeping through the windows,stomping through freshly shovelled sidewalk so the snow would be stomped back on the sidewalk, etc, etc) out of there, mostly because I ignored their attempts at sparking confrontation-it was weird, higher rent, same type of people-go figure. So there went any hope of saving anything because I has to get out of there.
So, now I am in a house, where the neighbors burn all the time,in the winter it seems everyone has a wood burning fireplace that they dont have properly vented and the rest of the year, they constantly have bonfires (in the guise of ‘fire pits’) going with flames higher than the roofs of their houses going nearly every night of the week. So my house fills with smoke and I wake up choking on smoke nearly every night.
The sad part of this is that I lost my job about a year ago and have had a devil of a time finding another one. I have a BS and can pass drug and background checks, and get plenty of interviews,(sometimes three in one day) but no job offers. I finally found a part time job, but that is not nearly going to pay my bills, much less the bills and the rent. I have been cashing out my savings, 401k and stock to stay afloat. I dont have anywhere to go, my parents are dead and I dont have any siblings and worked too much to have friends, otherwise, I’d have moved out of here a long time ago.
I dont know what to do, I seem to be doing all the right things, but I had one of the reps from one of the many temp agencies tell me that there are so many people applying for jobs that the wages are dropping like a rock-as I have encountered in the last year.
It is frustrating to know the right things to do to make a financial sucess of life, and I did those things for a long time, but all I really want is a job. I have pretty much given up on trying to find a full time job with benefits,I am pretty much at the end of my rope and would welcome any suggestions. I have applied at everywhere from fast food to temp agencies to everywhere else.
Just keep applying. Apply anywhere and everywhere. If there’s a business, stick your head in the door and ask if they’re hiring.
One comment I’d make: it sounds like you live in an area with some unfriendly people. If you don’t have family or friendship ties… have you considered moving to another part of the country with better job prospects and a lower cost of living?
Des Moines, for example, seems to have a thriving job market and a pretty low cost of living. You might want to at least consider a move like that.
Q8: Different dreams than spouse
My husband and I followed your advice and sat down to talk about our dreams. We each made a list of our goals and dreams for the next ten years. Almost none of them overlapped. Since then, we’ve kind of dropped the subject but it’s been eating at me. Are we moving in different directions in life? How can we get back on the same page about our goals and what we’re doing?
If you have drastically different visions for the future, you really should sit down and talk about this. Couples in which members are heading to different places aren’t going to last or else they’re going to stay stuck in the same place.
Sit down and talk about these goals. This isn’t about “winning.” This isn’t about convincing the other person that your goals are the right ones.
You need to find common ground among your goals. You said “almost none” overlapped. Which ones did overlap? Which ones actually have significant overlap when you look at them side by side? I’m betting that at least a few do.
Those are the goals you should adopt as your primary focus together. They are things you both believe in.
Q9: Regrets and the past
I’m a 34 male, married with 3 kids under 8. At 20 I started my own online business and did quite well with it making between $130-$250k profit for a good 10 years. Then around 2009 income started falling quite fast due to a variety of reasons and now it’s at a level that barely covers bills.
Being that I was young and quite successful, I took my lot in life for granted and never thought I’d be facing financial uncertainty in the future. Throughout the years I tried different financial/business endeavors, most notably trading stocks, which resulted in losses and failure.
Now this is where it gets weird and it’s something I never realized until recently. After initially splurging on shiny things, I quickly realized they no longer mattered to me and were pointless so for the last 10 years or so I was never motivated to make money to buy things. Thus, I was making good money but had no goals or plan for it so I just coasted and took things for granted. When I tried something new and lost like $30k on it, I got mad, sure, but it never hurt psychologically like it should have.
That is until the gravy train ended and money became harder to come by. Now I realize that if I had planned things better and was less reckless with the way I risked my money, I could pretty much be set for life rather than facing uncertainty.
I’m finding it hard to deal with this and can’t help but dwell on the past, which I know is not helpful.
To further complicate matters, I don’t have any degree because I pursued my business instead. Also, I have never worked for anyone before and I don’t exactly have the best personality/mind frame to be an “employee” per say but am also tired of the uncertainty of being self-employed.
And the advice that many people give about following your passion and all that jazz doesn’t really apply to me because I don’t have a passion that I’m crazy about or anything. I tend to get bored extremely fast and change interests quite frequently. The only thing I enjoy that is constant is spending time with my kids, which I’m sure you can relate to.
I know I’ll have to make some sacrifices and I can’t have everything but I’d love to hear if you have any advice on how to get through this valley, put the past behind me and find something professionally satisfying for the future.
For something to be professionally satisfying, there has to be at least some aspect of it that you take personal pride in and have some degree of passion about. It’s pretty much impossible to be satisfied with something and enjoy something if you just don’t care. Otherwise, it will always be drudgery.
Aside from your children, what have you ever taken pride in over the course of your whole life? What have you ever deeply enjoyed for more than just a fleeting moment?
That’s where you have to start. You probably won’t immediately have the answer, but those are the places to start looking for answers.
Q10: Gift cards to overpriced stores
For our wedding, my husband and I received several gift cards to stores that we don’t shop at. We’ve gone there and simply felt like everything there was overpriced. Does it make sense to still use the gift cards? What if there’s nothing there we even want that’s within the price range of the gift card?
You can always sell them if you don’t think you’ll use them, but you won’t get face value for them. CardCash.com specializes in this, with values varying depending on the retailer.
If that doesn’t satisfy you, your best option is probably to find the lowest cost item you actually have some use for and use the card in conjunction with a bit of additional cash to purchase it.
I agree that it’s frustrating to get a gift card to a store where that gift card only pays for a few of the items in the store, and I also agree that a lot of retailers specialize in stuff that I have no interest in owning.
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.