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. Wedding spending concerns
2. Unusual name
3. Planning for the next step
4. Discussing inheritance
5. Budgeting board games
6. Expensive shampoo
7. Thick and thin crust
8. Reading the archives
9. Investment houses
10. Disposable pens
Summer is often a season of overcommitment for me. I’ll need to keep up with my articles for The Simple Dollar. At the same time, I’ll have some other project due – or maybe even two other projects. At the same time, we’ll often fill up our summer to the gills with family activities.
Over a twenty four day period, we went to a family reunion for three days, traveled to the Chicagoland area for five days, and Sarah went to the Seattle area for six days (leaving me with the kids), plus I went to the Indianapolis area for four days. On top of that, there were trips to the zoo and the local botanical garden, along with a lot of little errands related to the oncoming return of the school year.
The end result of all of this traveling was time spent in the car doing work while Sarah was driving. I’d have to master the natural sleepiness (whenever I’m tired at all, riding as a passenger in a car amplifies it) and the usual distractions of the road (the constant refrains of “Are we there yet?” and “I have to go potty!” from the back seat) while getting work done.
September is often a respite from the vacations for me.
Q1: Wedding spending concerns
I am a big fan of saving money and living within my prescribed budget. I am recently engaged and am having a lot of heartburn when it comes to planning a wedding that is incredibly expensive. I personally would much rather spend my money on home repairs or a new car that is going to be needed within the next 6-8months….Do you have any tips for planning a wedding that avoids all the typical expensive purchases? I’ve been collecting cost data from various sites and catering companies, and it just doesn’t seem to be getting better….short of just ‘skipping’ the wedding and reception all together, what do you recommend? I’ve heard some cheaper alternatives is to not provide alcohol or anything decent to eat…which makes me wonder what is left and why even do the wedding reception at all…..My fiance has a very large family and I know we will have to invite at least 120 guests….Any suggestions for this? How much did you spend on your wedding?
We had a wedding of similar size, but we decided we didn’t really need to put on any fancy airs for anything. Instead, we focused on just taking advantage of what we had on hand.
For the food at the reception, for example, several close family members prepared the food themselves and served it, giving that to us as part of (or all of) their wedding gift. We used social connections to reserve the location and used decorations that wound up being re-used for later events.
Our wedding ended up being a relatively inexpensive affair. (Our honeymoon, on the other hand, was not.)
I don’t think it matters too much. However, I think there’s a limit to the “unusual.”
For example, don’t name your child a number or incorporate symbols into their name. You’re essentially guaranteeing that they’ll have trouble with every document they try to fill out in their life.
If you’re more concerned about social implications, I’d suggest going with a reasonable middle name if you’re going to choose a very unusual first name. That way, the child can choose to be addressed by the middle name in adulthood (or even in childhood) if the first name causes social difficulties.
Personally, I don’t think I’ve avoided or disliked a person because of their name, at least since reaching adulthood. There are too many different cultures and personal heritages out there to spend any time wondering about a name.
Q3: Planning for the next step
I am 58 years old, married to a man with a small and successful small town hardware business, and have worked in local government and teaching for the past thirty years. I anticipate, but do not trust, that a state retirement will be available to me-with state health plan insurance in 2-4 years and for life; at about $1,900 a month. My husband and i keep our accounts separate. I have lived frugally most of my life, raising three children in my first marriage on less than $20,000 a year combined income. Now that I look at where i am, it’s hard to determine what my goals are. I don’t need to continue in my frugality, but it is a part of me that I find difficult to put down. I think I should plan better in my investments, and have two annuities that are variable. I also have contributed to an IRA. My home is on 10 acres, almost paid off, and I have a significant nest egg in the bank. I plan to volunteer in literacy after retirement, and my husband, who is four years younger than me, will not retire for several years. The problem-where to invest? My home is in a potential fracking zone (the perceived end of a dream of buying more land), I don’t trust Wall Street, and I am not a big spender or traveler. I live a simple life by the simple dollar, and am healthy and happy spending time with my family and a few friends, and alone. Is long term care insurance a good investment? Would that, besides banking my nest egg, be what the next phase of my life looks like? I have talked to insurance and investment counselors, read much, and am still perplexed. nothing seems to incite my interest in the world of money, and I am pretty conservative in my investments. I have not made money on the market since 2008, and am slightly in the hole from what I had invested. About one half of what I make goes into savings-but keeping it there seems stupid in the long run. How do you focus on a goal when all your goals have been reached? i can listen to investment gurus, and all they seem to do is try to sell me something else. Following your plan, barring any catastrophe in the world, everyone should be where I am as a “middle American.” I am pretty green in my political persuasion and lifestyle, small gardening in the summer, and my husband and I do much of our home maintenance and improvements ourselves. Any suggestions on where to put the close to $200, 000 I need to invest? Everyone should have this problem. But in the end, what I do now will affect the future, and the future seems so unclear.
There are three big things to look at when it comes to any investment: risk, liquidity, and return. Most of the time, when people think about investments, they ignore the first two and just think about the third. Savings accounts excel at the first two and don’t do well at the third, so they’re often seen as terrible investments. Stocks often do terrible at the first, but do pretty well at the second and third, so they’re seen as great investments. Real estate is often great at the first and third but poor at the second, but is usually seen as a good investment. The perception of what is a “good” and a “bad” investment is simply overshadowed by possible returns, often to the point of ignoring risk and liquidity.
In your situation, do you need a great return so badly that you’re willing to either take on significant risk with the money (meaning a good chance you won’t get the return you expect over the short term) or a lack of liquidity (you don’t make money from real estate until it sells or unless you have honest renters)? I don’t think that you do. In your situation, liquidity and stability seem to be the most important factors, and in that case, a savings account is actually a decent place for your money. Supplement it with other stable things that return a little better, like treasury notes, and you should be okay.
It is much easier for an investment guru to talk up the return they got on their money over some period of time. What is ignored is the other periods where the return wasn’t so good, or the difficulty the investor had in selling what he or she had invested in.
The problem is that they’re not going to inherit equally. I’m worried that this will cause hard feelings. What can we do to make the discussion of the inheritance go smoothly without hard feelings?
Unless all of your children are very mature individuals, there are going to be some hard feelings over this, regardless of whether you’re directly exposed to those feelings or not. Even in estates where items were distributed close to equally, I have seen hard feelings.
There are a few things you can do to improve the situation. First, don’t let any of your children know about your plans before any of the other children. If you do, word will inevitably spread and there will be conflicts before you can even talk to all of your children about it. I suggest telling all of them at the same time about your decision.
Second, you don’t owe them an explanation, but an explanation in detail will go a long way toward improving relationships after the announcement. Why are you doing things this way? The better you can explain it, the better off all of the relationships will be.
Even doing these things, you’re likely going to have hurt feelings. It takes a very mature person to hear this kind of news and be able to swallow it without being upset with someone, whether it’s you or the person who’s getting more. You just have to hope you’ve put enough pieces in place that when their maturity kicks in, they’re going to have the information they need to come to the right conclusion about things.
Q5: Budgeting board games
I love interesting board games as well. One of my favorites is “Hare and Tortoise.” The theme is goofy, but the game mechanic is great. It is highly strategic because you choose what space you want to land on and pay carrots to move there (rather than using dice or a spinner to move by chance). You can do various things to gain or spend lots of carrots at once, but at the finish line you are not allowed to have deficit or surplus, preventing anyone from stocking up too much. If you like doing mental accounting on the fly, it’s a really fun game for 2-6 players.
Hare and Tortoise is indeed a pretty fun game. Much as you say, it relies on solid mental accounting.
For me, games are fun when they aren’t reliant on the luck of the dice. I don’t mind some random elements, but my decisions need to matter a great deal or the game isn’t fun. Hare and Tortoise achieves that.
Another game you might enjoy is called Airlines Europe. For some reason I can’t quite put my finger on, I think you’ll like it. Much like Hare and Tortoise, it’s much more dependent on building collections and knowing the right moment to spend them than on any sort of luck. In the case of Airlines Europe, you’re trying to build up airlines connecting various European cities. It’s a bit longer than H&T, but not overly long. It’s one of my group’s favorite games.
Q6: Expensive shampoo
My girlfriend is mostly sensible with her money, but she buys this incredibly expensive shampoo that costs $25 a bottle. This seems insane to me, considering I don’t even use shampoo (I have short hair). Whenever the subject comes up (and I’ve never mentioned how much it costs), she immediately defends the shampoo and says it’s worth it. What do you think?
If she’s sensible with the rest of her money, let the shampoo thing be. Everyone has something they splurge on; for her, it’s apparently shampoo.
She probably senses that you’re annoyed with the shampoo and she’s annoyed with your annoyance. When someone makes good choices and has one or two splurges, it can be rather frustrating when someone they care about is hung up on that one splurge.
I’m much more concerned with a person’s broad financial sensibilities than that one thing they treat themselves with.
Q7: Thick and thin crust
A tiny, but possibly helpful suggestion in the money-saving category for bachelor types who occasionally indulge in frozen pizza: I’ve found that the thick crust ones usually cost the same as the premium fancy topping thin crust ones. However, the thick crust quickly fills me up and can last 3 servings while a thin crust will be gone in one sitting! I usually keep frozen pizza around for once or twice a month cravings that otherwise turned into ordering pizza at 3 tiimes the cost. So yeah. Seems obvious to buy the thick one but it didn’t occur to me until I was driving home from the grocery store with one thick, pan crust pepperoni and one ultra thin garlic chicken because the fancy topping attracted me even though I like the taste of both. Fail! Only one meal when I could have had three. So maybe something so obvious is worth a tiny mention.
This is a very good trick if you’re looking solely at something that’s a rare splurge. You can clearly reduce your per-meal cost by buying the thick crust pizza in this case.
I really like to use the “cost per meal” metric when evaluating food. If I can keep that number low while eating healthy foods, I consider it a pretty big win.
If you’re eating these once a month, good move on the thick crust!
Q8: Reading the archives
You’re blog is rapidly becoming my favorite lunchtime reading but I’d really like to adopt a more systematic method for reading older articles than randomly clicking on the hyperlinks. I know you classify your posts into categories but I haven’t been able to locate a master category list or a chronological list of entries. Am I missing something really obvious? Does The Simple Dollar have an archive? If so, would you mind sending me a link or instructions on how to navigate to it?
The easiest method is to use the chronology, which can be found at http://www.thesimpledollar.com/chronology. It lists all of the posts on the site in chronological order, dating back to 2006.
A few tips, though. First, be aware that my writing style has gradually changed over the years. The earlier posts sometimes read like there’s someone different writing them.
Second, watch out for the timeliness of specific things, like bank account interest rates and mortgage rates. Rates today are very different than they were then.
Q9: Investment houses
I am leaving my current job to get my masters and I was wondering if it would be smart to move my small 403B from Fidelity to a Roth IRA at Vanguard? I would only have maybe $1500 to roll over. Would I have any implications regarding taxes? Should I just leave it as 403B with Fidelity? I know Vanguard has a great reputation and it would be nice to start with them and have everything in one investment house.
I consider Fidelity and Vanguard to be two of the best investment houses out there for the value-conscious investor. You’re not going wrong at all with a Fidelity 403(b).
What I’d do is investigate the specific investment options before I roll things over. What investments do you have your money in at Fidelity? What returns have you earned over the past several years? What’s the expense ratio? What would these numbers be for equivalent investments at Vanguard?
It takes some time to do this kind of homework, but you’ll end up in the right place if you do it.
Q10: Disposable pens
What’s the best way to keep ink flowing in disposable pens? We buy bags of them at the store, but half the time it seems like they get all clogged up and useless before they ever run out of ink. Is there an easy way to keep the ink flowing and save a few cents?
The only consistent way I’ve seen to unclog a disposable pen is to keep some rubbing alcohol on hand and use it when needed.
When you have a clogged pen, just pour out a capful of rubbing alcohol and soak the tip of your pen in the alcohol for a bit – a minute or two. Then, try writing vigorously with the pen. I usually make a bunch of loops.
If it doesn’t work the first time, try it again. It usually ends up dislodging the ink. However, there are some pens that never seem to come unclogged, and in those cases I just move on to other pens.
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.