Reader Mailbag: Parenting

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. Life insurance question
2. Where do I begin?
3. Paying bills with reward cards
4. Waiting for an internship
5. Settling credit card debt
6. Ignoring debt
7. Podcast basics
8. Turning your life around
9. Handling unexpected medical expenses
10. Kickstarter ideas

One of the biggest things parenting has taught me is the appreciation for my own parents, who had to handle all of this stuff for me when I was little.

Sometimes, I can’t imagine what I did with the abundance of time I had before children came along.

Q1: Life insurance question
Recently, my mom has decided to get life insurance from [a well known insurance company] for me. She says I can use the money later for my children (I’m only 21, and I don’t plan on having any children in the near future) and its tax deductible (which I don’t think is true). I don’t know what goes on in her mind to make her think this is something she should do. I tried to convince her not to do this and that there are probably better ways to invest her money even if I don’t know what exactly would be a better alternative, but she keeps insisting. And although I am pretty sure she can’t apply for this without my consent, she won’t let this go. Would you have any advice of what I can say to explain to her that this is a relatively bad financial investment and that she should just save money for her own retirement. I know I am incredibly lucky to have parents who can afford to make the payments for life insurance or whatever they think I need (even when I really don’t need it), but I rather they retire earlier and enjoy their lives and let me save for myself (I can’t help but think I’m going to end up horribly spoiled and not be able to appreciate the value of a dollar if they keep this up).

– Evelyn

The big question I would have is who exactly this life insurance will benefit. If the reason for buying it is solely as an investment, then you’re better off putting it in a savings account because then the insurance company won’t get a cut. If there’s another reason involving beneficiaries, then it’s going to be more tricky.

The issue here isn’t the facts for or against the type of policy that your mother is looking at. The facts against that type of policy are abundant and easy to find.

The issue is whether or not your mother will even listen to you at all on this issue. This is particularly true if she’s listened to a persuasive salesperson who has tugged strongly on her heartstrings.

You’ve got to figure out why she wants to buy this insurance. There’s an emotional reason behind it.

Q2: Where do I begin?
I’m 25, single, and a few months away from graduating with a master’s in public health. I have finished paying for school and have no debt of any kind as I worked throughout my undergrad and master’s. In fact, I have more money than I know what to do with.

For safe keeping, and because I didn’t know what else to do and was too busy with school and my two jobs to have time to think, I have put the majority of this money (approx. $75,000 Cdn) in short term GIC’s, the terms of which are ending at the end of this year so I’ll be able to move this money. I have recently received an additional $40,000 from a grandparent. This money is now just sitting in my saving’s account.

I don’t require any of this money to live off of, since I am still working, and will be making even more once I start working full time in January when I am done with school. I have a lot of work experience in my field, and there are many jobs in this area, so I expect to find a job where I expect to make at least $55,000/year, and likely more within a couple years. Currently my living expenses are minimal. I rent a very, very cheap apartment and my only other expense is my cell phone bill, and the regular stuff (food, clothing, etc.) (max $1,500/month which all comes out of my employment earnings with some to spare).

The point being that I have over $100,000 that I don’t currently need, and don’t expect to need in the near future, which I know I should be investing, but I don’t know where to begin. Should I buy investment property? What kinds of investments should I be considering??? I don’t have any specific retirement savings plan set up. I know I am fortunate to be in this position, but I am completely overwhelmed. I have been trying to educate myself about investing, but I find myself quickly tossing the books aside because there are too many options.

My only goal is that within the next 5 years I hope to buy some property outside of the city (currently live in downtown Toronto). I anticipate that anything else I want to pay for (travel) can come out of money that I am earning/will be earning.
– Judy

Your goal with this money is short term, so I would keep it in cash. Most other investments with a high potential return also have a high potential risk, so if you were to try to tap that investment in, say, three years, you could very well have a lower balance than when you started.

Sometimes, it’s hard to shake the feeling that money in a savings account isn’t invested. It is. Savings accounts are an investment that’s extremely low risk and very liquid, two features that are hard to find together in an investment. For those benefits, you generally get a low return.

These features make savings accounts a great place to keep money in the short term – less than five years or so. This is particularly true when you’re not absolutely sure when you’re going to need that cash.

Q3: Paying bills with reward cards
Does it make sense to make all your purchases and bill payments (minus the mortgage) with a credit card with a rewards program, as long as you can pay off your balance each month? My husband and I finally paid off our credit cards earlier this summer and started talking about how we want to handle payment for everything. We decided that our credit card, Chase Freedom, has a pretty good rewards system. There’s options for travel stuff and gift cards, but you can also get the money back on a cash card. Because our monthly spending is more than 1/3 of our card limit (it’s a really low limit), we actually make multiple payments a month to keep the ratio from getting too high, although we expect our limit to go up in a few months after we’ve shown we’re making the full monthly payments. Does this help at all in terms of the ratio idea on your credit score (I have no need to worry about mine right now, but my husband wants to buy a new car by next summer)? And is there something we’re not realizing in our plan of taking full advantage of our credit card’s reward program? Paying it off every month has really improved our picture of just how much we’re spending and what we’re spending it on, so that’s a bonus in my mind. And so far, at least, we haven’t seemed to revert to the mind set that we can spend more because it’s credit (we’re fairly frugal people, although we admit we eat out too much.) But I still have this feeling that we’re trying to cheat the system, and it’s going to bite us in the butt. Thanks!

– Teresa

While it’s tempting to jump on board with a plan like this, there are a few things to watch out for.

One, you need to be extremely vigilant with due dates. If you miss a due date, you’re going to be quickly accumulating interest that will very rapidly cost you more than the rewards are worth.

Two, you need to never be fooled by the balance in your checking account. If you go this route, your credit card will be coughing up a large bill every month that you will have to cover. Your checking account balance is a mirage at this point.

Three, you need to still have a pretty good sized emergency fund in cash. Credit cards do not work as an emergency fund because banks constantly tinker with credit limits and often cancel cards at inopportune moments.

I don’t really recommend or not recommend this path. It offers some rewards, but also offers some risks.

Q4: Waiting for an internship
I am a graduate student who just needs to complete my thesis to graduate so I decided to take a job while I finish so I wasn’t twiddling my thumbs. I took a position as a year long intern or volunteer which offers a $5500 bonus toward my $60,000 of student loans if I complete the year. It pays $375 every 2 weeks and I have food stamps at $176/month. I have some savings, and my loan is in deferment until June. Unfortunately the money I recieve from VISTA barely covers my rent and utility bills with practically nothing left over for gas or incidentals. I have been working here for 2 months at a position that I moved from GA to OH for which cost more than I expected, partially for the items I needed to buy since it was my first time living alone I had some gaps in my possessions. I do not have time to take a second job until I complete my thesis defense in November but I have already realized I’m not happy with this position or the organization I’m working for. Is it worth the money for me to finish out the year just for the bonus toward my loans or a leg up on getting federal jobs?

However, until I can line up a solid job or internship opportunity or a city I would like living in I don’t want to just quit and have to find a job that pays enough in a poor county and I am unattached and a recent graduate I’d prefer to move to a city I like and find a position or hunt for the perfect position while I can over just settling again for something that I find monotonous.
– Kristie

If you have a good paying job while you’re waiting for another one, I encourage you to keep the good paying job. However, you should spend your time at that job recognizing that this is not where your heart is and save your energy and focus for the next step in your career path.

Look at your current job for what it is: an exchange of some time for some money. It is not your career path. It is not life-ending when you leave this job. It’s just a way to make money.

Your focus should be on establishing a career path, and if your current job keeps you in a good place to do that, keep at it.

Q5: Settling credit card debt
I was just curious–I’m kind of new to the PF blog world (just started following the major ones [including yours!] on a daily basis a few months ago), and I’m finding it surprising how little coverage settling credit card debt receives. I see a lot of questions submitted by individuals who have (what I consider) extremely high amounts of cc debt (20k, 30k, 40k…) and I feel that I never see any advisement about the settling process. Instead, it seems that most everyone is advised to suck it up and strap themselves in to snowballing through the debt and insane amounts of interest for the next 5+ years (or more!).

My question is…why? Of course there are negatives to settling–the hit to the credit score, right?–but I have a friend who recently settled her 25k+ cc debt for 25% of its original amount and their score is still “good” (around 650). And this was a calculated move on her part. Although she could have kept up her monthly minimum payments (even though they took up 50% of her take-home pay and she would have been stuck in her hand to mouth existence), she purposely defaulted in order to settle. And she now is cc debt-free. It seems almost logical to me–she stopped paying her monthly minimum payments, defaulted, spent a few months getting badgered by collectors while she stockpiled the money that would have gone straight out the window to make the tiniest of dents in the debt, and then she settled and paid off those amounts in full with cash. Altogether, it was an 8 month process as opposed to a several years’ long torturous journey.

Is it an ethical issue? Is that why settling seems to be considered a last ditch effort (as in, only an option if you’ve already defaulted and have no other choices)? Or are there other negatives I’m not seeing?
– Jeff

For one, it is an ethical issue. Planning ahead to take someone else’s money then defaulting on that debt is just simply dishonest. It’s theft. There’s no other way to paint it.

Another factor is that it does drop a bomb on your credit report, even if you negotiate it away. It has a pretty big negative impact, one that doesn’t just affect the debts you might take on, but also affects job applications and insurance rates.

Yet another factor is that you’re hoping that the negotiation process goes the way you want it to. You’re betting on the company being willing to negotiate with you and doing it in a smooth and expedient process, which does not always happen. If it doesn’t, you’re going to have a giant wound on your credit report for many years.

Not only that, you’re also running a chance of being blacklisted from future transactions involving that bank. I have a friend who simply cannot get a card from Chase, even though he’s had strong credit for years, because of his previous default on a card from them.

No one offering reputable personal finance advice would suggest borrowing a bunch of money with the intent of defaulting and negotiating it away.

Q6: Ignoring debt
She is 24, has a degree in nursing, works full-time (three 12s = 26hours) at a hospital for $21/hr and is a whopping $130,000 in student debt (private school, no scholarships, and some bad decisions). Her monthly minimum payments are about $1050 a month, for the next 20 years. The way I see it, she has two options 1) pick up extra shifts, live extremely frugally, continue livinig with her parents, and hopefully pay it off in 8-10 years, or 2) pay the minimums, live her life, finally move out on her own, and just ignore that $1000 a month for the next 20 years. I am ALWAYS an advocate of getting out of debt as soon as possible, but in this case, is it worth giving up your life and your independence for 10 years? I’m just not sure!

– Brittany

It depends on whether she is willing to trade ten difficult years and ten great ones for ten mediocre years in terms of her finances.

Almost always, I would choose the ten difficult years and ten great ones. I would far rather live in a challenging situation for a while right now to have a great life sooner rather than later. I’d always choose that over a middle-of-the-road situation both now and later.

Part of the reason is that I’ve found that challenging situations always bring out the best in me. I rise to the occasion. I figure out ways to make it work. Then, because of that experience, I have the foundation in place for something great.

Q7: Podcast basics
You mention all the time how you listen to podcasts during the day. I get that podcasts are like free radio programs you can get on the computer, but how do you get them and how do you listen to them?

– Bob

Podcasts are pretty much exactly what you describe. They’re free radio programs that you can download on your computer. There are a lot of them and you can thus use them to essentially program your own radio network to listen to while working.

I use iTunes to listen to and manage podcasts. It has a great interface for finding thousands of different podcasts. Once you’ve found one you like, you just click on the “subscribe” button and whenever a new episode of that podcast comes out, it downloads to your computer for your listening convenience.

I could list dozens of podcasts to start with, but I really just suggest going to iTunes, visiting the iTunes Store within the program, go to the Podcast section, choose a category that interests you, and check out some of the top podcasts in that category.

Q8: Turning your life around
I have a question for you. My sister was very rebellious in high school and dropped out and had 2 kids before she was 18. She is now almost 30 and through some difficult experiences has hit rock bottom and is ready to turn things around. Our family is going to support her getting her college degree. We were curious though about what degrees would be best to pursue if your not going to get into the field until your 34 or 35. My wife is a CPA and in that world it seems extremely difficult to get into at this age with no experience. Others seem like that would be a little easier. Don’t know if any of your readers would have any other advice on going back to college at 30+ as well.

– Emily

Passion trumps age, every time. What is she interested in? What does she like to do?

It doesn’t matter what the field is. If you’re going there because you love the topic and you’re willing (and happy to) throw tons of time into learning from the classes, meeting people who are also into that topic, building relationships with professors, participating in organizations related to that topic, seeking out internships, and working on your own projects, you’re going to succeed.

Most of the tales you hear about people getting degrees and not finding work are from people who got into the field because they thought it would make them some money or got into the field because they kind of liked the topic but weren’t really passionate or don’t have a work ethic. If you have passion and a work ethic, you’ll succeed.

Q9: Handling unexpected medical expenses
I am really trying to be more aware of my spending habits, but due to health difficulties, I am finding additional expenditures that I normally don’t incur. I had purchased a product (aloe vera for the stomach) that was fairly expensive that I needed to take to treat the extreme pain th I’ve am experincing from a flareup of an ulcer (to nip this one in the bud at this point – the most recent research indicates that ulcers are not caused by stress). Anyway, my physical therapist ( I’m also dealing with a rather severe form of spinal stenosis) told me that he purchased aloe vera juice for $7.99 per gallon which is about a third of what I had paid. Unfortunately, it doesn’t work like the other did, and since, unlike Henry’s, I don’t think Trader Joes takes merchandise that has already been opened.

So, my effort to save kind of blew up in my face. Anyway, if you have any suggestions on how to deal with unexpected medical expenses, it would be greatly appreciated.
– Sharon

Sharon, you pretty much described why it’s useful to have a big emergency fund.

Life happens. One day, you wake up with a severe ulcer and find that the best way to treat it is with aloe vera. You try a sample of a kind and it works well, but buying more costs a lot of money. Where does that money come from? An emergency fund.

There are tons of things that happen in life that can really be supported with an emergency fund. It’s simply the best solution to the challenges life throws at you, in a general sense.

Q10: Kickstarter ideas
Have you ever considered using Kickstarter for any of your ideas? I would absolutely contribute to a Kickstarter campaign if you were to finally get off your [rear end] and write that fantasy novel you’ve mentioned several times.

– Jim

I’ve actually thought about doing this for my fantasy novel that I’ve been working on.

For an example of what this would be like, here’s a kickstarter project for a book. In essence, people would “pledge” a certain amount to “kickstart” me to write the book. In return, they would get various things – a signed copy of the book, perhaps, or a PDF copy of the book as soon as it’s done, or a thank you in the acknowledgements of the book. I had some ideas for other perks, too.

The thing that’s held me back is the thing that’s held me back from doing it anyway – time. The content produced for The Simple Dollar, plus all of the other management, eats a lot of my time. Add on top of that family time, basic life management, and a bit of time for other hobbies and my time is pretty much eaten up.

I have considered slowing down the pace of The Simple Dollar for a while to give something like this a go, but it’s really going to be a personal decision whether I do it or not. In other words, the decision to jump on board with this has more to do with whether I think I could do a good job of this than whether a bunch of people would be willing to “kickstart” it.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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  1. Tracy says:

    “Sometimes, I can’t imagine what I did with the abundance of time I had before children came along.”

    Why would you have to imagine it? Can’t you just … remember it?

    @Q3

    I disagree with Trent’s advice here – it’s really not that big of a deal or that big of a risk. First of all, the whole emergency fund issue he suggests is completely irrelevant, since you’re not talking about using it as an emergency fund.

    I pay several bills that way and yes, you have to know your due date and you have to be able to pay it in full each month but neither of those things are hard or complicated unless you’re the kind of person who forgets to pay your bills (in which case it’d be a problem no matter how you decide to pay them)

  2. Tracy says:

    @Q8

    “Most of the tales you hear about people getting degrees and not finding work are from people who got into the field because they thought it would make them some money or got into the field because they kind of liked the topic but weren’t really passionate or don’t have a work ethic. If you have passion and a work ethic, you’ll succeed.”

    Um, what? Please, cite your sources.

    (Which isn’t to say that yes, skill, aptitude and interest are extremely important and should be considered. But that paragraph is just BS)

  3. valleycat1 says:

    #2 Tracy +1, especially in today’s economy.

  4. TLS says:

    Q4 – Trent’s answer here doesn’t make sense. This person does not have a job that pays well at all, it doesn’t cover her expenses, even with food stamps added in.

    Q9 – I understand the plug for an emergency fund, but Trent’s advice doesn’t help this person at all right now. (And, Sharon, I think Trader Joe’s does take back food merchandise if you aren’t satisfied with the product).

  5. Steven says:

    I’m coming out of college with a degree in something I’m very passionate about, but there aren’t any jobs available in my area unless I’ve got a Masters or PhD AND at least two years of practical experience. The job market is horrible, in case you haven’t noticed. It has less to do with your passion or work ethic as it does with even being able to find a position that fits your skill base. I’m beginning to realize that in order to succeed in today’s job market, you must have more education than a Bachelors Degree…at least for people who are just entering the workforce, or those who are making career changes.

  6. Courtney20 says:

    “Sometimes, I can’t imagine what I did with the abundance of time I had before children came along.”

    I think you answered your own rhetorical question in Q10.

    I feel like something is missing from the question in Q6. But don’t you always talk about future self and present self? Choosing to live the 10 difficult years for the prospect of 10 great ones only works if you’re around to enjoy the 10 great ones. Not to say that everyone should only live for today and to heck with tomorrow. But length of time being miserable should certainly be considered.

  7. valleycat1 says:

    Q8 – Not all careers require a degree from a 4-year college. Associate degrees in a career track program from community colleges (2 years, usually) or career training at a legitimate technical/trade school are additional options or a good first step until she’s ready for or can afford full-fledged college.

  8. Baley says:

    Q8 – I agree with valleycat1 on this one. Technical skills will many times land you a job more quickly and reliably because you will actually be trained in something useful (versus a 4-year degree in underwater basket-weaving, aka English, Business Management, Art, etc.). If her interests mean nothing (as the question-er seems to indicate by simply asking which degree will be the best regarding entering the workforce), nursing would probably be a good field: 2 years of school will land a decent-paying job in most areas/circumstances. (If I’m not mistaken; I’m not up on the current job market for nurses, but this is what I believe to be the case.)

  9. Johanna says:

    Q5: First of all, there’s a big difference between borrowing money with the intention of not paying it back and borrowing in good faith, but later finding yourself in a situation (for whatever reason) where you can’t realistically pay it back. The former is fraud, I agree. But the latter is not.

    To answer Jeff’s question, to decide whether settlement might be a good option for you, you should probably look not only at whether you’ve defaulted already, but also at how likely it is that you’ll default in the future. In the situation Jeff describes – where just paying the minimums takes up 50% of your take-home pay and leaves you absolutely no wiggle room to save for emergencies or irregular expenses – it seems like default is almost an inevitability. If it takes you 5 years to pay off the debt at that rate, that means going 5 years with no emergency fund. And what are the odds that you’ll go 5 years without having any emergencies? It sounds to me like Jeff’s friend made a wise decision to settle her debts.

    To answer Jeff’s other question, Liz Weston writes about this stuff sometimes.

  10. sjw says:

    Q2 – it isn’t clear because you mention GICs, but you should put your max allowed into TFSAs. That way you won’t get charged taxes on whatever growth you do manage.

    I’d also recommend putting in your 18% allowed into RRSPs. Again, the money can stay in GICs, it’s just that by putting them into an RRSP (and you can withdraw about $20k for a home downpayment – if it hasn’t increased since I did it) and TFSA that the cash you are making will grow without tax. When you’re making so little on it right now, the tax can kill any chance of beating inflation.

    Since you want a bunch for a down payment, I’d suggest looking into GIC ladder instead of short terms (some of which are paying less than ING on a standard savings account).

  11. Jayme says:

    Q3: I think you’re playing with danger considering how recently you got out of debt. If it had been years ago and you were used to not having a balance, that’d be one thing. I’m not anti-credit card…just anti-credit card when people aren’t used to using it wisely. I’d put some small bills on there if you want like utilities – then you don’t have to worry about multiple payments/month. That’d get you started without going full tilt and see how you can manage it.

  12. Wendy says:

    Q9 – Trader Joe’s will definitely take it back, even opened and without a receipt. They have a great return policy with no questions asked.

  13. Meghan says:

    Q5 – No one mentioned that the settled debt gets you a 1099 Income Statement from the CC company.

    I know on CC debt she will owe taxes on her $18,750 “income”.

    Hopefully the lady doesn’t run up another $25k in CC debt and she learns to live within her means.

  14. TLS says:

    @ Johanna
    I think there is a grey area between borrowing money and never intending to pay it back, and borrowing money and intending to pay it back, but being unable to do this due to unemployment/illness/etc. There are people who live far beyond their means, and, while they do intend to pay back their loans/CC, realistically they will never be able to do so.

    Case in point: I have a friend that has lived above her means for many years. She has repeatedly spent money on ‘wants’ (expensive desintation wedding, a high-end car, etc.) when she barely had money to cover her ‘needs’, using loans and CCs to supplement her income. Any attempts to talk to her about the situation were/are met with defensiveness. Now, she can barely pay the minimums and is facing default. It is a situation of her own making, which could have been avoided.

    Clearly, a lot of people are in this boat. While they actually did intend to pay back what they owe, years of what I would call ‘reckless spending’ make repayment pretty much impossible. So they default and their debts get passed on to everyone else.

  15. jim says:

    Q1 : Can your mom really afford it? If not then I’d simply refuse it. But if she can afford it then fine. Maybe you could get her to do something else? Like a 529 account or help you save for a house?

    Q3 : Paying bills and doing all your shopping with a credit card to get rewards cash back can be a great idea. I make >$500 a year that way. The key reason I would NOT do it is if you still have problems or concerns with your ability to control your spending with credit cards and have any doubt that you wouldn’t pay it off every month. Credit cards can be a loaded gun for some people and may be too tempted to overspend. If thats not you then fine, but I wouldn’t use rewards cards if theres real risk of over spending from them or not paying it off every month and accumulating more debt.

    Q4 : I definitely think you should find something else and quit. Even a minimum wage job would support you better. If you hate the VISTA job and you don’t value the experience then quit as soon as you get something else. Your current job is not paying you even close to minimum wage and even the bonus money won’t hit minimum wage level (assuming you work full time?). If you want to do it and you value it then thats another thing, VISTA is great. But don’t do it for the money or career advancement if it makes you miserable and destitute.

    Q5 : Trent said: “No one offering reputable personal finance advice would suggest borrowing a bunch of money with the intent of defaulting and negotiating it away.”

    I don’t think Jeff said anything about purposefully running up debt with the intent of defaulting. He as talking about negotiating a settlement after the fact. Not starting out with an evil plan to defraud banks.

    Defaulting on debt can be an ethical question for sure. But many of the people in that situation are doing whta is necessary to avoid bankrupctcy and in many cases they may have already paid more in interest to the bank than they ever charged in the first place. Its not just evil theft.

  16. jim says:

    #14 TLS, Yeah certainly many people with credit card debt got there due to their own actions and irresponsibility. Those people do pay a price with poor credit ratings, high interest rates, oh and of course all the interest they pay to the banks the whole time they’re in debt. But then there are also many people with debt that wasn’t just wanton spending like medical bills, job losses, car failures, etc.

    Interest rates are higher on unsecured debts because they are unsecured and theres a higher risk of defaults. Thats just how it works. If a person doesn’t want to share the cost of defaults from some credit card users then they should avoid accumulating credit card debts which is a good idea anyway.

  17. Sarah says:

    Re: ulcers: Patients with ulcers should be tested for the bacteria H. Pylori. If you test positive, antibiotics are the standard treatment. While many people can be H. Pylori positive and live in symbiosis with the bacterium, people who develop ulcers from the bacteria are at greater risk for gastric cancers. (But not all ulcers are caused by bateria. Just most. See a doctor.)

  18. Katie says:

    Also, irresponsibility does not equal fraud – that’s a specific thing and shouldn’t be conflated with more general fiscal mistakes.

  19. Johanna says:

    @TLS: But those years of reckless living are water under the bridge. So at this point, I think the question that someone in that situation should be asking is “What is the best thing to do for my finances going forward?” not “How much suffering do I need to bring upon myself to atone for my sins?”

    If you feel the need to atone for your sins, talk to your spiritual adviser. Who should, ideally, not be the same person as your financial adviser.

  20. Steve says:

    Q9 The cheaper aloe vera juice may not have worked out, but it was worth a shot. If the juice had worked you would have saved a lot of money long term. And it sounds like you didn’t even risk any money.

  21. Steve says:

    Q9 The cheaper aloe vera juice may not have worked out, but it was worth a shot. If the juice had worked you would have saved a lot of money long term. And it sounds (from the other comments) like you can return it, so you didn’t even risk any money.

  22. TLS says:

    @ Jim
    Good point.

    @ Johanna
    I’m fine with taking action to clear the slate once the situation has gotten to a certain point (bankruptcy, default, settlement, etc.). Thankfully, our society is set up to allow people to do this. It may all be water under the bridge, but if a person hasn’t learned from their financial missteps, the whole situation is going to repeat itself.

  23. jim says:

    TLS, “but if a person hasn’t learned from their financial missteps, the whole situation is going to repeat itself.”

    Yeah. Unfortunately that could be the case. Some people never learn. But then at that point I’d really blame the banks. If someone defaults once and then a bank turn around and lend that person money then the bank knows EXACTLY what they are doing. Thats a calculated risk on the part of the bank. I mean if your friend never paid you back and you kept lending them money then whos’ the fool?

  24. jim says:

    Q8 : 34 is not very old. Not at all. I don’t know why someone would think 34 is too old to start a career. WHy would it be hard for a CPA? Maybe theres something I dont’ know. I don’t know if theres ‘best’ degrees for someone >30. WHy would one be better than another? I’d say find a good job field that she is interested in. Finding work at 34 is not hugely different than at 22. Some industries or companies may have a bias towards young people but thats true no matter what and you can’t turn back her clock.

    Q9 Sharon : I would build some medical costs into your budget that would handle an amount above your known/expected costs. If you have ongoing health issues then you’re going to have health costs so you should budget something for it. You don’t know what the costs will be but you could at least set some money aside every month to help handle whatever comes up. Look back at your past couple years of spending and figure out the average monthly cost and then budget at least that amount. An emergency fund is of course a good idea in general too. But every unplanned medical purchase shouldn’t be an emergency fund item especially if you have some ongoing medical issues. You also don’t want to be emptying your emergency fund every other month for your up and own medical bills.

  25. Kate says:

    “Sometimes, I can’t imagine what I did with the abundance of time I had before children came along.” I bet your parents are wondering how they ever had the energy and time to take care of little ones, too. I always advise parents (especially those parents who have more than two children) to save their yearly calendars. Looking back at mine, I wonder how we did it.

    Q8: wondering if the sis is seriously serious about going back to school or if the family wants her to and is doing the thinking/soul searching for her. That said, 35 is young! I know people who have started careers in their 40’s/50’s and gotten jobs because they were excited about the prospects of working in a field they loved.

    Johanna: how do you feel about the current rumblings for student loan defaults and forgiveness for that? This is not meant to be confrontational at all…currently student loans are the one thing that can not be forgiven in a bankruptcy.

  26. Jane says:

    I agree with Trent about children and time. Even though my oldest is only three, sometimes I just can’t even remember how my days and nights were before I had kids. Maybe it’s just a cloud I’m currently under, but it all seems so far away. And yes, I too sometimes think, what the heck did I do with my week-ends and evenings?

  27. Laura says:

    Q8: I graduated at age 34 with a BS in CS, and didn’t have a bit of trouble getting a job. Nobody can tell exactly how old you are by looking at your resume. Besides, my husband likes to say – how old will you be in 4 years if you *don’t* go back to school?

  28. Johanna says:

    @Kate: No time to elaborate right now, but I am wholeheartedly in favor of making student loans forgivable in bankruptcy.

  29. Rachel says:

    I don’t know how people with children find time for anything beyond the everyday tasks and duties of maintaining a home and caring for the children. Households in which both parents have full-time careers blow my mind. (Why would two career-driven people even think having a child is a good idea? Someone else ends up raising the child, for the most part.) I’m guessing sleep and exercise are among the first things to go.

  30. Heidi says:

    Q#6: Where I live in the Northeast, nurse earn $40-60/hr. At 130,000 in debt, consider becoming a traveling nurse, where you can earn more money and have housing and possibly food paid for!

  31. jim says:

    “how do you feel about the current rumblings for student loan defaults and forgiveness for that?”

    Personally I think we need to crack down on private lenders mostly. There isn’t a significant problem related to government student loans. The real problem comes from the private lenders. I think the private lenders should have a lot more rules and requirements in order to do student loans OR they should just let it be forgiven in bankruptcy. Right now the system is screwed up. The private lenders basically get to charge high rates and then own the borrower for life plus get government backing on it all.

    With government loans we already have the income based repayment plan which I think is good deal and really should cover the people real difficulty paying those. Maybe we should force the private lenders to do that too?

    But on the other side of the coin I really think we shouldn’t let students borrow $100k to take 6 years to get a BA in generic studies at obscure uncompetitive private U.

  32. jim says:

    Q6 : She might want to look into Income Based REpayment. I’m not sure she’d qualify for it but would be a good idea to check. Her loans are much more than her income, if her debt qualifies then the IBR could cut her payments in half.

  33. Genny says:

    Ditto on finding a second career you are passionate about. I went back to school at age 45 and at age 49 got a job this August in a competitive field (teaching). The pay is not stellar but I have a very fulfilling career at last.

  34. Genny says:

    Note to my previous post-by competitive I meant that there were a very large number of candidates for open teaching positions. I realize that most careers would be similar in number of candidates versus open positions.

  35. EngineerMom says:

    #29 Rachel – You are wrong that two parents with full-time careers end up letting someone else raise their kids. Both of my parents had/have full-time careers. Mom’s a college professor (Ph.d. in nursng), dad’s an engineer (Ph.d. in mechanical engineering), both have always worked.

    I never felt that I was being raised by someone else. Yes, I went to daycare and after-school care until middle school. But I and my two siblings have always had close relationships with my parents because they made the time. Band concert? At least one parent there. During-school family event? Yup, I wasn’t alone. Saturday soccer practice? Check.

    Mom teaching me to cook? Indeed. Dad teaching me to bake? Also true. Mom teaching me to sew? Dad teaching me to shoot hoops and woodwork? Some of my favorite times were spent at the YMCA learning how to do layups.

    Being a parent means making time for your kids, no matter what else is going on in your life. It doesn’t mean giving up everything else that’s going on in your life.

  36. jackowick says:

    We need a reboot of how we raise children to respect money AND credit in this country. We shouldn’t need to be talking about whether it’s ethical or not to default on CCs, regardless of whether it’s intentional or “accidental”. We should be talking to our kids now about how to save, what credit is good for/bad for, and not assuming they can figure things out.

    My family was raised on the “save first, spend later” old school system. However, one family member never learned how to fully measure credit and got into a terrible overspending situation that blew up. While my parents did do well to teach us about savings, they just assumed and neglected to discuss the credit side.

    And I’m sorry to tick off any parents, but as I read over and over about student debt, there comes a time when you have to put your foot down and tell your child they are paying for an education, not vacation. Sending your child “out of state” to another state school is ridiculous if the same education can be achieved in state.

    Community college to 4 year school is also cheaper but parents don’t want to put their feet down or people feel a “stigma” about community college. Then, here’s the kicker, the only people who put value on the name on the college degree are those looking for the Ivy leagues. Sad to say but true, and I do hiring at my job. If you HAVE PASSION and/or EXPERIENCE, I don’t care where you to went to school. I’ve met more than enough dopes who went to a “highly regarded” name brand school for a non-specific major and can’t speak in an interview to save their life.

    But what do I know. I’m just offering my opinions. You can disagree, and I’ll disagree, and then we’ll do nothing together.

  37. Rachel says:

    EngineerMom:

    “Being a parent means making time for your kids, no matter what else is going on in your life. It doesn’t mean giving up everything else that’s going on in your life.”

    Not giving up everything, but many things. I see it this way: The choice to become a parent is a full-time job in itself. It’s very hard to have two full-time jobs and do both well. Some people pull it off rather well, but not without a lot of stress. At least one parent needs to be home more than the other (i.e., working only part time). There are only so many hours in a day…

  38. jim says:

    Jackowick “the only people who put value on the name on the college degree are those looking for the Ivy leagues”

    I agree to some degree. Your skills, work ethic, personality, etc. are more important than the college degree.

    But the name of the college DOES matter in many ways. Its not just Ivy League versus everyone else. Honestly : would you rather hire someone from Eastern Idaho Technical College or Georgia Tech? (sorry EITC grads.)

    To be blunt: If you went to the University of Phoenix or NorthbyNorthwest Mississippi Agricultural U. then that does NOT carry nearly as much weight as a well known, respected university. College degrees are a filter for qualified candidates and quality colleges win out over unknown or uncompetitive colleges. Of course a applicant with great experience, work ethic etc from U Phoenix might be a great worker and could get hired but U Phoenix may get their resume put in the discard pile in stage one. Id certainly rather have a respected university name on my diploma.

  39. Katie says:

    Rachel, consider whether you’re really better able to speak to this than someone who grew up in the situation you’re decrying and didn’t have that experience.

    At least consider that experiences vary.

    Then consider whether making generalized, blanket, and frankly insulting statements about the parenting and parents of people whose lives you have no idea about other than your own conceptions is really a reasonable thing to do.

  40. Sarah says:

    To the guy with the internship/job he doesn’t like–DO NOT QUIT WITHOUT HAVING ANOTHER JOB LINED UP.

    There is a huge stigma these days against people without a job and no one will believe that you quit of your own free will with the job market the way it is, so if you want out, find a replacement job FIRST.

    Just say you are leaving because you want more challenge and want to focus on a different type of organization/industry. Don’t slam the old job in any way.

    Good luck.

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