Reader Mailbag: Quitting

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. Vacation spending
2. Tablet as exercise tool
3. Personal finance TV shows
4. Oil-filled radiators
5. Kindle e-books
6. Finding new friends as adult
7. The repair-or-replace dilemma
8. Television as background noise
9. Old silver certificates
10. Stay-at-home parenting planning

Recently, a friend of mine quit his job rather abruptly. He had simply reached his limit when it came to the bureaucracy and politics of his workplace and one day, he just couldn’t take it any more.

I can really sympathize with that, especially because he had an escape plan in place for himself. He had a side business that was doing okay, but he knew that it had a lot more potential if he could devote more time to it, so that’s what he’s doing. His wife has a job that she loves and they were both on her insurance anyway, so they’ll be fine.

The problem is that people sometimes do this without an escape plan. My advice to anyone working is that they have an escape plan. What will you do if you were to suddenly quit or get laid off from your job? Do you have a plan?

If you don’t, make one. You will never regret having a plan in your back pocket.

Q1: Vacation spending
Any suggestions on what percentage of one’s net annual income could be spent on vacations each year? Assuming a reasonable job, house payments, and student loans. We are working on frugality but also want to practice good self care.

– Martin

It’s all about your budget, which is merely a reflection of what you and your partner want out of life. Sit down and make a budget.

First, figure out what you’re spending on your required bills – and that includes retirement savings. The money you have left over is up to you to use in whatever way you see fit. You have to decide how to use it.

If you choose to take nice vacations, you’re taking money away from other ways you might be spending money enjoyably.

I can’t give you a percentage because I don’t know how important vacations are to you compared to the other perks in your life and I also don’t know how much money you’re making.

Q2: Tablet as exercise tool
[I use my tablet for] exercise. I have a handful of apps that I use to keep up a home exercise routine – YAYOG, yoga, and a few others. I spent about $12 all told and they basically guide me through a home exercise routine that doesn’t use any equipment.

– Mavis

This was part of a long email from Mavis about how she is using her tablet for all kinds of things – as a cookbook and so on. I wanted to highlight the exercise part because I’m actually doing this, too.

I mostly use three apps on my iPad – YAYOG, Pocket Yoga, and 7 Minute Workout. All of them can easily be done in your living room without any equipment. I try to do both YAYOG and Pocket Yoga most days, but when I’m time pinched, I make sure to do the 7 Minute Workout. I used to do the “200 Squats” and “100 Pushups” app but I found that they just worked a few muscles to death without doing much to other muscles. I wanted/needed something more well-rounded.

There are a lot of great apps for home exercise on tablets and phones and many of them are free. The only thing you need is the motivation to actually do it.

Q3: Personal finance TV shows
Are there any shows that talk about personal finance in a positive way? My sister watches a lot of television and it seems to be on all the time. A lot of the time, it’s on news shows, so I was thinking that maybe she could sub in some good personal finance shows there.

– Danny

The best one airing right now is The Suze Orman Show, which airs several times on the weekend on CNBC. It’s mostly a talk show where Suze talks to callers.

There are several reality shows that air intermittently, like Extreme Couponers, but these shows generally seem to be light on the useful tips and heavy on the “look at these weird people” that many reality shows seem to use. There are also a few cooking shows and specials on the Food Network and the Cooking Network that focus on low-cost meals. Of those I’ve watched, I actually liked Sandra’s Money Saving Meals the best.

My favorite one was The Dave Ramsey Show, which used to air nightly on Fox Business, but it was cancelled, unfortunately. I thought it was the best personal finance show that I had ever seen on television.

Q4: Oil-filled radiators
About how much does it cost to run one of these for 4 hours a day? What’s the electrical cost difference between an oil filled radiator and a space heater?

– Dave

You can figure it out by finding the wattage of both devices. For example, if you’re looking at a 1500 watt oil-filled radiator, then it’s going to eat 1.5 kW. If you run it for four hours, then that’s 6 kWh. You can do the same calculation with a space heater.

The real question is efficiency. After all, you want to use the minimum number of watts to make your room comfortable. It is very hard to assess the efficiency of space heaters, so I usually trust comparison reviews for things like that from Consumer Reports. Here’s their space heater summary.

I know that they covered this topic in depth in the October 2010 print issue, so if your library has that one, you can start there.

Q5: Kindle e-books
Have you ever thought about compiling your best information into a series of Kindle and Nook books? It seems like it would be a good income stream for you.

– Ashley

This is actually in process. I’ve been working on a few of these and I have ideas for several more. The biggest problem I’ve had is organizing and formatting the information.

My plan is to focus on specific topics and make well-organized books focusing on that topic, broken down into short pieces that people can easily read. If you read my first book, 365 Ways to Live Cheap, you’ll know what I mean. I’m shooting for entries that are about three times as long as the entries in that book (so I can give some more detail without being overwhelming), but not as many entries.

I’m hoping to start “shipping” these in the early summer, starting with the Kindle but eventually moving to other e-readers.

Q6: Finding new friends as adult
My family moved to a new city last year. We’re struggling with building new friendships. In our old city we still spent time with friends from college but we don’t know anyone here. Other than tapping coworkers, how do we even find new friends?

– Dana

There are a lot of avenues, but the one I’ve had the most success with is to look for public events that match my interests.

What do you enjoy doing? What do you do for fun? Take whatever that is, then look for ways to do that at public events where you might meet new people.

Those events are gatherings of people who are passionate about the same thing you are. You know you have that in common with them, so use that as a starting point to talk to lots of people there. Odds are you’ll click with at least a few people – so swap email addresses or phone numbers with them. Become friends with them on Facebook. See what happens from there.

It’s worth the effort of going to ten events like this if you can find one or two good friends out of it.

Q7: The repair or replace dilemma
I’m coming up on a big purchase dilemma, and I’d like your advice. Simply put, the 17 year old Geo Prizm that I have driven for many years (and 226,000 miles) is at the end of its useful life. It will not pass inspection in February; it needs a minimum of $500 of work to do so, and it has been slowly deteriorating for a year or two now. I have known this moment would come, and am well on my way to saving for a replacement vehicle, but won’t have enough to pay in cash in February. (My savings plan was derailed by $5,000 in major medical expenses in 2013.) As I see it, I have three options.

1) Repair the car ($500+) and drive it for as long as it lasts (6-18 months, perhaps). It’s always been reliable, and though it is ugly and quirky, I love it. It has been paid off for years and owes me nothing. Pros: this will give me more time to save for a down payment, potentially enough time to save for the entire cost of a car, and it gets great gas mileage and is inexpensive to drive. I know not to take sunk costs into the equation too much, but it has brand new brakes and will be newly registered in February. Cons: it really is reaching a safety threshold, as more things go wrong, and could break down catastrophically at nearly any point, plus the repair money will have to come out of my new car savings and will set me back a month or possibly two, if there’s more wrong with it than is already known.

2) Let the car go after it fails inspection + 30 day grace period, and drive my truck through the summer. The truck is not a winter vehicle, and serves solely as a hauling vehicle, but it is reliable, in good repair, and will more than serve. Pros: this extends the time I have to save for a down payment, and saves the repair money for the Prizm. Cons: it is extremely expensive to drive (32 gallon tank, 15 mpg), and though I don’t drive much (perhaps 400-500 miles a month) it will add up; this will add wear and tear to it (it’s a 1991 Chevy); it’s not an easy everyday driver, as it’s huge (king cab + extended bed) and tough to fit into parking spaces and cramped streets, and it is absolutely not a winter vehicle – I would have to purchase an everyday driver in November.

3) Let the car go, and purchase a replacement vehicle in February, possibly taking advantage of the Presidents’ Day sales. Pros: reliable new vehicle that would resolve this dilemma quickly. Cons: I will only have $6,000 for a down payment at that time, which is good but not great, and makes my payments higher than I’d like. (My goal is to, at minimum, save enough of a down payment that I will be able to easily double my monthly payments to pay the car off quickly.)

I am mostly torn between options 1 & 2, and am leaning heavily toward #2 – much as it would increase my daily driving costs, it would be the most reliable, safest option. I would appreciate your thoughts!
– Danielle

I think I like the second option the best, too. If you’re able to drive the car into mid-March, you should be through the worst of the winter, which would let you drive your truck after that. This gives you most of a year to financially prepare to replace that car.

Another thing to think about: why do you have two different vehicles for personal use? Wouldn’t it make sense to just have one vehicle that you use for as many things as possible? That would save you significantly on insurance at the very least. It’s something to consider.

(Also, remember, your car might pass inspection. I’ve seen cars that have passed inspections before that… I can’t comprehend how that car passed the inspection.)

Q8: Television as background noise
Television isn’t a bad thing. I leave mine on most of the afternoon and evening for background noise while I’m doing tasks around the house like dishes and making dinner.

– Sarah

You can do the same thing with radio. I do the same thing in the afternoon – dishes, meal prep, and so on. I have background noise, too, but it’s provided by a radio that’s usually tuned to 90.1 FM. Sometimes, I’ll listen to podcasts or to music.

My only objection to television is that it’s expensive for what you get out of it. There are many other lower-cost forms of entertainment, like books from the library or exercise, that people could choose to fill their evenings with. It’s filled with ads and product placement so that you’re at least aware of tons of consumer products – and probably subtly encouraged to buy a few.

Between the cost of the television, the cost of the energy to use it, the cable bill (if you have it), the ads, the product placements, and the time spent watching, it’s a really pricy proposition.

Q9: Old silver certificates
I recently came into three cigar boxes that were full of silver certificates. They are mostly $5 and $10 certificates. If you add up just the face value, it’s $1,497. I am wondering what I should do with these. I know they have to be worth more than their face value.

– Terry

It really depends on the specific certificate and the condition it’s in. If they seem worn, as though they were actually used as currency, most of them will only have a small premium over face value – say, $11 or $12 for a $10 certificate.

Unless you’re willing to spend a significant amount of time identifying each certificate and searching through numismatic websites figuring out if they’re worth an extra premium beyond that (most of them won’t be, and out of the few that will, the premium is unlikely to be gigantic), your best bet is to just take the bundle to a dealer who will probably buy them for a small percentage above face value.

There are people who enjoy this type of research quite a bit. If you have a friend who is into this type of research, work out an arrangement with that friend where you’ll split all value above face value with him or her.

Q10: Stay-at-home parenting planning
A week or two ago, you included a question in your column from a young wife who asked your advice about quitting her job, which was low wage and brought in little net income. She was anticipating saving money by giving up her car, saving on child care in the future (she has no children now), and generally she just sounded as if she wanted your blessing to quit working and stay at home, because that’s what she wants to do.

I always appreciate your practical and useful advice to others, but I have found myself thinking about her ever since. I suppose because I had some tedious jobs early in my first marriage, and I also anticipated living happily ever after, staying home to raise children, supported ever after by a loving husband. It didn’t happen – my husband left when I was jobless with an 18-month old baby. I was fortunate – I moved to my old hometown where I worked for my father and went to college part-time . . . but I have always worked for the simple reason that: having a job is the only secure way for a woman, with or without children, to live . . . unless she’s rich enough not to need an income. I’m writing to say that I think that basic truth should to be part of your advice to women asking questions like this.

You answered in terms of whether they really could do without a second car and other details to help her balance income and expenses in making her decision. Your advice was all good, but I think you should have mentioned something else entirely that she should think about while deciding what to do — not so much that her current job is worth keeping, but about working at all — and about what her life is likely to be like if her dream of a perfect supported-all-the-time future does not work out forever.

I might be wrong on the statistics for 2013, but I believe it is generally true that half of marriages end in divorce in this country and MANY of them are between people with children. This young woman doesn’t value her job, but now, while she has no children, is the perfect time for her to try to prepare herself for a better higher-paying, more interesting job. Going for some training now would be great for her — she can keep her job and check up on local low-cost or free training options (I wouldn’t recommend taking out student loans for school to someone who isn’t even thinking on her own about furthering her education). There are free online courses for learning the Microsoft Office suite of programs, for instance, which she could do on a computer at home or perhaps at a library, which are required for an office job — and any office job would probably be better than what she is doing. Even those that don’t pay well can lead to better office jobs once you have a year or more of experience. In most office jobs, you do end up learning things on the job for free, out of necessity, and, if not, the experience alone is worth something to potential future employers. You can work your way up in an office job to something more — or not, as you choose.

What is of great concern is her belief that, when she has a baby if not before, she will never have to work or worry about making a living. Not only may she end up divorced and expected to support herself and provide some of her child’s support, no matter who the child lives with, but something catastrophic could happen to her husband even if they are together and will be forever. He could be seriously injured in an accident that is not his fault today, he could be diagnosed with a devastating disease that impacts his ability to keep working, a natural or financial disaster could wipe out his employer overnight or gradually.

Life is never entirely smooth. No young woman can anticipate being always supported by her husband . . . shouldn’t he be able to rely on her as she does on him, if the need arises? Further, I doubt she thinks beyond the next few years and that baby she is planning her future around to when she is in her late 40s, her children raised and gone. What she will be doing to be an interesting, involved person who can retain her husband’s interest for another 30-40 years after that . . . so he will want to keep supporting her? While I believe there are lots of worthwhile things to do other than selling your time for money to make a living, as most of us have to do . . . unless she is in the 1%, she NEEDS to consider the possibility that she will have to work to support herself or her family. Now, before she has a baby, it would be easier for her to do something about improving her work situation than it ever will be again.

This is not a criticism, really, I read your all of your emails and think you offer a priceless service to your readers. It’s just that that question could have been from me a long time ago — and I think young women need to know that planning to be a stay-at-home mother is not a secure way to plan your future — or your child’s. If you get to be – hurrah! Most young women do NOT get to be, and and many of those who are stay-at-home mothers for awhile end up abandoned and living on child support and trying to build a career a few decades late when it’s very hard to ever catch up.
– Bailey

The stay-at-home issue is a really difficult one, for the reasons you mention. It does make sense for a person to always be prepared for whatever may come in their financial future.

This is a very complex issue. People are given lots of mixed messages. Stay home with your kids. Stay in the work force. Don’t define yourself by your children. Don’t define yourself by your job.

However, there are a lot of couples that believe strongly in having one of the parents stay at home with the children, at least until they’re of school age. My son’s best friend is from a homeschooled family, for example. One of my wife’s closest friends is also a stay-at-home mother. In both cases, these were decisions that were long-planned by the married couple. Having a parent at home was something they both desired. Simply having one parent stay at home is not a harbinger for marriage collapse.

I generally think it’s a mistake to make moves under the assumption that a marriage is going to fail, particularly a first one. 41% of first marriages fail, according to these statistics, but there’s a 40% lower likelihood that a marriage fails with children involved. This lowers the divorce rate of first marriages with children down into the 25% range. Most first marriages with children will succeed, and if you add clear evidence of strong communication between the partners, I think it’s reasonable to assume that their marriage will be successful at least through the early childhood of the children.

If a couple says that they’re planning on having children in the next year or so and that one of them is going to stay home with the child, it makes sense to me that the stay-at-home parent should be preparing for that life switch. That doesn’t mean they should abandon their career at that point, but I think they should look at it in the sense that they should make sure as many bridges remain open as possible.

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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