Reader Mailbag: Tax Day

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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. Selling gifted art
2. Money and anger
3. Stock performance question
4. Entertaining children without television
5. Value from used books
6. Old medical debts
7. Community volunteer opportunities
8. Breakfast recipes
9. Book recommendations?
10. A few frugal tips

Today, April 15, is the day income taxes are due in the United States. If you haven’t filed yet, you need to file. If you can’t get it done, file an extension as soon as possible. Here’s Form 4868 if you need that extension – it’s really easy to file and gives you an automatic six month extension to file your taxes.

Q1: Selling gifted art
In the late 90′s my parents gave me two pieces of art that as a child I always admired. One of the pieces has minor water damage from hurricane Hugo back in 1989, the other one had damage only to the frame.

Years later, after the hurricane, I noticed that those two pieces were no longer hanging up in my parents house. I asked them and they said that because of the frame damage and the minor water damage they did not want to hang them up and also wanted to make room for new art they had purchased. I asked them if I could take the paintings off their hands. They agreed.

To this day I am not sure what actually happened. What I mean is I am not sure if they gave them to me to keep, to use temporarily or if they were a gift. We never really talked about it. Fast forward to 2013 and I still have both paintings hanging in my house. Not only do I still love both pieces but I love that they make me feel mature and sophisticated, as if i’m an art collector and I feel very cultured.

It never really occurred to me to find out how much they are worth but I the artist’s work featured in a gallery and it made me curious. Turns out that the smaller piece ranged from $3,000-$5,000 (with minor water damage maybe less). The bigger piece (I replaced the frame some years ago) ranges from $6,000 to $12,000! I was shocked! These were taken from the internet and not from an expert appraiser, although I am thinking about hiring one.

My questions are these: 1, how should I approach my parents about this? I mean to this day they never ask about the paintings. Should I even tell them? I doubt they would ever notice if I sold them? Of course I would feel bad if I tried to sell them without their permission.

And my second question is, should I sell them or hold on to them? Just knowing that I possibly have $17,000 hanging on my walls right now is very exciting!

My wife and I could really use that money for a nice vacation, new furniture for the house that we’ve been wanting (such as a king mattress and frame / headboard, new couch, new carpet), plus it would just be nice to have some extra cash to have for everyday use.
- Reggie

I’d have a conversation with your parents about it. Unless no one actually has any sentimental ties to these paintings, they probably would notice if you sold them, particularly if they visit your home with any regularity.

I don’t know enough about the art world to be able to identify what kind of investment these paintings are in their current form, but I do know that art needs a buyer before it can actually earn the value that it’s appraised at. It’s not like the stock market where you can reliably sell most publicly-traded stocks whenever you’d like and find a buyer almost instantly.

Should you sell them? That’s really up to you and what kind of artistic and sentimental ties you have to these paintings. If the cash value and what you can do with that is worth more than the artistic and sentimental value, then I’d seriously look at selling them.

Q2: Money and anger
Whenever I have a conversation with my wife about money, we’re both angry within a minute and nothing gets resolved. I don’t know how to make this work.

- Adam

If an issue is bringing you both to anger immediately, then there are some very serious unresolved issues that you need to work through. I highly suggest marriage counseling, as you may need help working through this.

If that isn’t an option, I suggest starting with goals. Each of you make a list of things you’d like to see happen in your life over the next, say, ten years, then sit down and compare them. Agree to focus on the goals that you share above all else. Then, try to figure out what you’d need to do – not what you would have to change about what you’re doing right now, but what would need to happen – to make that a reality.

Goals are a positive thing and are easier to talk about. Mistakes are a negative thing and can lead to anger.

Q3: Stock performance question
My stocks are currently +13.66%. I am using Sharebuilder and I am currently not actively investing because I am trying to refund my emergency fund after a medical procedure. How do I take advantage of the uptick in my stock picks or should I just sit tight? At one point they were -4%. I am 29 and as I said I am not actively investing at this time. I am working on my emergency fund and saving for a downpayment. I live on Long Island so that means I’ll be working on that downpayment for a long time. I have also increased my 403(b) contributions because I can use up to 40% on a first-time home purchase. But my question for now is should I do anything to take advantage of the rise in my stocks or just hang on to them as a long term investment, which is what they are meant to be in the first place.

- Jim

Right now, stocks are definitely high, and if you use the “buy low, sell high” maxim it makes sense to sell them right now. Of course, it’s unknown how much higher they might go. Is tomorrow going to see further gains or the beginning of losses? We simply don’t know.

If you took that money out and put it into savings earning you about 1% and then continued saving at your current rates, how long would it take to reach your down payment amount? If it’s less than ten years or so, I’d probably take the money out of stocks. If it’s longer, I’d probably stay put.

In truth, that decision has virtually nothing to do with whether the stock market is high or low right now. It has more to do with protecting yourself against volatility.

Q4: Entertaining children without television
How do you manage to get anything done during the day without just plunking the kids down in front of the television? I have lots of ideas for things for them to do but they all require my time, which I don’t mind giving, but it makes it impossible to start building a side business or keeping up with many household tasks.

- Roger

I can get some things done during the day with all three children here without having them glued to the television. The key is to get them involved in open-ended creative projects.

We have a giant end roll of newspaper (which we bought from the local newspaper office). I’ll cover the whole kitchen table with it, put out a bunch of crayons, and say, “Can you guys draw me a zoo?” This will keep them occupied for at least a half an hour and usually longer.

I’ll get out a giant bucket of LEGOs or other building toys and sit them on the table. I’ll ask them each to build a castle or, collectively, build a mega-castle. Again, this keeps them occupied.

During that time, I try to get household tasks done. I save the more focused tasks like business-building and writing for times when they’re in bed or at school.

Q5: Value from used books
I have hundreds of books sitting in my basement. I don’t know what to do with them. I really only read ebooks and library books now so I don’t want to trade them. How can I liquidate these books?

- Marvin

A yard sale is certainly one option. Put them all out there for a dollar each, then drop it to a quarter each on Sunday.

You can do the same thing on Craigslist. Make a giant list of all of your books. Sell them for $1 each, 7 for $5, or 20 for $10. Tell people if they’re buying a bunch to make an ordered list because you may have already sold some of them.

If they still don’t sell, take the remainder to Goodwill. If they’re in good condition, Goodwill will take them.

Q6: Old medical debts
My boyfriend recently got a letter in the mail saying he owes over $2,000 for some medical stuff that happened when he was a teenager. We’re still in our early twenties and don’t have a lot of money, so this is a big deal for us. His aunt insists that he should ignore the debt because his credit score isn’t important (her logic was “well you won’t be buying a house anytime soon!”). I really think she’s wrong. Right now he doesn’t really have any credit to his name (I have great credit – all of our bills are in my name because I’m the one who keeps track of our finances). I feel like even though this debt shouldn’t be his problem, somehow it is, and if he doesn’t deal with it, the only thing on his credit report will be bad. He called the people and they said he can pay $100 per month but he really doesn’t want to give them any money. For the record, we have no other debts and we’re currently working hard on our emergency fund. Is it worth paying off or should he listen to his aunt and not worry about it?

- Sally

The honest thing to do is to pay it off. The debt is in his name and it was incurred to pay for a service. Not paying it essentially means someone is taking the loss on the cost of the doctor’s services and any and all equipment and material used.

Your aunt is correct in that if you don’t make any payments on a bill, it will eventually disappear from your credit report. It usually takes seven years from the last payment for the bill to disappear. If he’s 22 and the medical stuff happened when he was fifteen, it’s probably close to vanishing.

If I were you guys, I’d check his credit report. Use the federal government’s tools at AnnualCreditReport.com – that’s the site run by the Commerce Department to give people one free credit report per year.

Q7: Community volunteer opportunities
I’ve decided to spend a few hours a week with my nine year old son doing charity work as per your suggestion. How can I assess whether or not the charities are kid-appropriate?

- Annie

Call them. That’s the route I would take.

You’re right in that some charities have useful and safe roles for children while others do not. It really depends on the work that the charity does. For example, I’d have no qualms taking my seven year old to a food pantry to help stock the shelves, but I don’t think he’d be of much use on a Habitat for Humanity build site.

If you use some common sense, you can probably filter out some of the charities in advance before ever contacting them.

Q8: Breakfast recipes
I know from reading that you like warm cereal for breakfast and I love your overnight slow-cooker steel-cut oats. That recipe changed my breakfast. Given that, this new one also changed mine and it was something I didn’t see online so I wanted to share with you. I ended up combining techniques of several cooks to add fruit to oatmeal in a simple but delicious way.

Choice 1: I roasted a whole butternut squash in the oven for 90 minutes at 425. When you’re done, you get that nice squash pudding type substance and just have to scrape out the seeds. After it cooled, I put the squash into silicone muffin trays and froze it. Then, for oatmeal, I just heated the squash cube in the bowl by itself for 2 minutes and then added oatmeal and milk and heated it all together. Voila! It was so much heartier than just oatmeal and seasoning.

Next, apples. I’ve been getting more apples from my CSA than I could keep up with so I chopped them in the food processor then in a skillet combined apples, almond butter (maybe 1/4 cup?) cinnamon, nutmeg, ginger and a splash of vanilla. Cooked just long enough to thoroughly mix the ingredients. So good! It combines perfectly with pre-cooked oatmeal and a little milk for a filling breakfast that’s bigger than the sum of the parts. Both dishes have no added sugar and you wouldn’t want to add because the apples and squash are both so sweet.

I know you agree with me that automatic breakfasts are best, and these are so easy once the fruit is prepared beforehand. I have yet to freeze the apple mixture, but I expect it to work the same as the squash. Have you frozen pureed apples before?
- Shelley

Freezing apples should work completely fine, especially in the processed form you’re describing. We’ve made many batches of applesauce using a food processor and they’ve been fine after thawing.

Both of the ideas really sound delicious. I particularly like how they both go so well with steel-cut oatmeal.

I really enjoy steel-cut oatmeal for breakfast. We’ll often put it in a slow cooker and let it very slowly cook overnight. It makes for a great breakfast the next day.

Q9: Book recommendations?
I love your book recommendations that you give every once in a while in the reader mailbag. Got any new ones? I need to fill up my library reserve list!

- Denise

Three books I’ve deeply enjoyed recently:

Ubik

Why Does the World Exist? by Jim Holt is a nonfiction work where Holt attempts to answer the titular question. He interviews scientists, philosophers, theologians, and many others in an effort to answer that question. Expect some dense reading (at times) and expect to be challenged and read things you disagree with.

Those Angry Days by Lynne Olson is a nonfiction book that covers the period of 1939 to 1941 where the United States was indecisive about entering World War II. Why were we indecisive? It’s a question that’s shadowed heavily by what we learned during the war, I think. This was a 576 page nonfiction book that I wish had been longer, as there were details that I now want to learn more about. It really makes you think about the anti-war movements today, too.

Q10: A few frugal tips
Do you think these would be useful to your readers?

1. Toothpaste: When it is almost over, I cut the tube at the neck. This leaves you with 2 pieces. I have noticed that the rest of the paste in these 2 pieces last for atleast 2/3 days.
2. Bath Soap refill pack in flexible plastic bag: same as toothpaste
3. Pumpkin/Cucumber: (tip from my grandma) If the skin of the pumpkin is not too hard (most of the time it is not), then remove it and stir fry in low to medium heat. Add a pinch of turmeric powder and salt(Turmeric powder is good for your health and does not change the taste). Uses: 1)You can have this as a side dish for rice; 2) you can add it to your salad/soup; 3) You can grind it and use it as base for soup.
4. Raw banana: Same as above. Note: not all varieties of banana taste good. you have to try and find out which are the good ones.
5. Coconut milk/Cream/tomato paste: I dont use one full bottle of the items mentioned for one dish. So I freeze the remaining portion in an ice cube tray. Once frozen I move them to a box/ziplock. Then whenever I need any of these items, I take that many no:of cubes and use it. The rest will remain in the freezer. This tip can be extended to liquid/semi-liquid food items which are used only in small quantities.
6. Clothes: we never buy house clothes. When we feel that the clothes used for outside uses have worn out, then we start using them as house clothes. When they worn out as house clothes, they are used as rags.
If you have small kids at home we sometimes take worn out clothes and stitch dresses for the dolls .
7. Bedsheets/bedcover: When they get old and cannot be used anymore as beedsheets they are cut into small pieces and are used as rags. Sometimes we stitch the four sides of the towel before using it.
8. Beet greens: stir fry them in low heat and add it to your soup/salad.

- Aubrey

I really like lists of random money-saving tips, particularly when they’re ones that can also save time or successfully re-use things that I might otherwise toss out.

In fact, I welcome them from readers. If you have any tips you haven’t read before, please send them along. In the future, I might have an edition or two of the mailbag that’s nothing but frugality tips!

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

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