Questions About Building Skills, Building Routines, Emergency Funds, Stocks and More

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Lost my job. Now what?
2. Skill building during time off
3. Contributing to Roth IRA early?
4. Why are stocks crashing?
5. Free educational resources
6. Net worth calculation of debts
7. Simplest meals
8. Saving fresh vegetables
9. Bump up emergency fund?
10. Buying stocks?
11. Building some “home systems”
12. Dealing with all of this

This is going to be a somewhat different version of the mailbag, as most of the questions I’ve seen recently have centered around life adjustment and concerns about employment in the coming months. All of us are adjusting to a lot of changes right now.

Questions that I won’t address include opinions on public policy or direct medical questions about coronavirus. I am neither a public policy expert nor a medical expert.

Rather, I’m focusing on what I know best — personal finance and related issues.

Let’s dig in.

Q1: Lost my job. Now what?

I lost my job, not because of my own fault, but because of a big layoff of an entire shift. I have some unemployment benefits but I need a new job ASAP or there won’t be food on the table. But no one is hiring right now and a lot of places are completely closed. There are two factories kind of close that hired a few people because they’re producing a lot right now but I think they’re temps. Not sure what to do. I have $800 in my checking and scared.
– Andrew

First of all, I would strongly advise you to look to your state government for relief for your immediate situation. A lot of states are offering assistance to folks who are struggling to find work after recent layoffs in the current environment. Just Google for your state and “layoff assistance” to see what’s available. There may be extended unemployment benefits available.

Also, as of the time I’m writing this, there are a number of plans being discussed to aid all Americans in this moment of crisis. Just sit tight. Lots of people are in your situation and they’re not going to be left out.

In the meantime, try to keep yourself from dwelling on your own misfortune. Rather, do what you can to get yourself ready for opportunity. Rest up and get plenty of sleep. Eat healthy. Keep in contact with employers in your area that may have positions you’re right for. Talk to everyone you know who might have an “in” to help you find work.

You should be asking yourself what you can do to (a) get a job soon and (b) improve your chances of getting a job later, and doing those things as much as possible. Things will get better, and you’re not going to lose everything in the interim. Focus on what you can control, above all else.

This leads into the next question.

Q2: Building skills during time off

Do you have any recommendations for skills to build during time in isolation and ways to do that easily?
– Erika

There are lots of skills that you can easily build online using online courses and other tools. It really depends on what you want to learn, so I’d suggest starting there. What skill, if you added it to your skillset, could really help you in your career? Better focus? A foreign language? A computer programming language? Some new and promising areas in your field? Maybe you want to take the first steps in an entirely new career. Maybe you want to learn a particular piece of software. It’s almost unlimited.

The skill you choose should be one that really appeals to you and also is one that will provide some value to your career. Given those two factors, I can’t possibly list all of the skills one might build.

At that point, I’d use Google to search for a guide on that specific thing that you want to learn. For example, if you’re considering learning a foreign language, this is a good guide, which would then lead you to things like Conversation Exchange, Duolingo and common word lists for your preferred language (you might search for, say, “100 most common words in Spanish”).

Rather than just browsing a list, step back and ask yourself what fits you, choose something, find a guide on how to learn it, and lean into that hard over the next few weeks.

Q3: Contributing to Roth IRA early?

The stock market has fallen 20% in the last month, I have a counterintuitive idea. I’m thinking of finishing up maxing out ($3,500 left) my Roth IRA for 2020 ahead of schedule. For context, I have contributed the $6,000 maximum the last 3 years and am invested in the Vanguard 2060 Retirement Fund. I have the cash flow and know I’m not going to need to touch the funds for decades and realize the stock market is a long-term bet. Buying the shares of the 2060 Retirement Fund now when the price has fallen seems like a simple way to earn an extra 20%. Does this sound sensible or what factors am I not taking into account?
– Jeremy

First of all, let me make it clear that I don’t believe in market timing. The idea of “buy low and sell high” does make sense, but the problem is that it is almost impossible, particularly with the stock market, to tell when it is “low” and when it is “high.” You can observe that, yes, it’s lower than it was a few weeks ago, but how much lower will it go? Or is it already past the bottom?

If you look at the long-term history of the stock market — this current moment excluded because it’s honestly an exceptional moment — it is almost always better to put money in earlier rather than later. If you look at almost every year in the history of the stock market, it’s better to put in money at the start of the year than to space it out throughout the year.

If you’re worried about this crash, in particular, remember (a) it’s not the end of the world, no matter how difficult and crazy things seem at the moment; (b) basically all companies producing things people need (or nearly need) are going to still do really well, and (c) people will return to more normal routines as this passes and better treatments and vaccines are developed (and there will probably be some pent-up demands). It will take some time to recover, but things will recover.

If you are in a financially stable place where making that kind of early contribution to your Roth isn’t going to come back and bite you later in your daily life, then I’d say go for it.

Q4: Why are stocks crashing?

Can you explain why stocks are crashing? I guess I don’t understand the connection between [coronavirus] and stocks. I tried to follow on CNBC but they were talking way over my head.
– Adam

The stock market is declining in value because people are selling off stocks in companies that they think are going to be facing hard times in the near future. Travel companies, hotels, restaurants and businesses like that are likely to struggle in the next few months at least, so people are wary of owning stocks in those companies.

When there are lots of people selling, the buyers can hold out for the lowest prices and if the sellers are desperate to sell, they keep cutting their sale price until there’s a buyer. So, you may have a share that was selling for $50 yesterday, but if no one is willing to pay that today, you might decide to cut the price to $45 and see if anyone will buy it, or even to $40. If lots of people do that to lots of stocks, the stock market declines overall.

It’s worth noting that not everyone is selling. Many people are buying. Whenever someone sells a share of stock, there needs to be a buyer, and some people see a sale going on right now and are happy to buy at lower prices.

When you see a big drop in a single day, you have a lot of people who want to sell stocks and buyers are waiting until the price is low enough. When you see a big rise in a single day, the reverse is true — buyers want to buy and so sellers see a chance to jack up the prices on the shares they have. It’s not that different than a toy market at Christmas, where hot toys get marked up in value and unpopular toys are on discount.

Also, almost all of this is done by computers, nearly automatically. They talk to each other and negotiate the buying and selling.

That’s basically how the stock market works. It’s people just haggling over stocks, and right now people are wary of buying stocks in companies that might be affected by coronavirus.

Now, you might ask yourself why these shares have value at all. The reason is that each share is essentially a tiny piece of ownership in that company, and when the company is doing well and making a lot of money, each shareholder gets a tiny sliver of that money, which is called a dividend. If a company isn’t doing well, they might pay out a very small dividend or no dividend at all. If investors see a company isn’t doing well, they realize that they might not receive much dividend money from that share any time soon and thus want to sell it, and that’s exactly what’s happening.

I hope that all made sense! Follow up questions are welcome at the link at the bottom of this article!

Q5: Free educational resources

Don’t know if you saw this but Scholastic is offering a bunch of free educational materials for families and kids that are at home from school. Full books and activities and lesson plans separated by grade level. Here’s the link.
– Barry

That’s a really good resource! Thanks for sharing! It’s also near the top of our own list. In our own search for educational resources, we found these other free resources to also be very useful.

Khan Academy has a ton of resources for at-home learning. It has some good lesson plans and daily schedules for people at home right now, but the URLs seem to be changing a lot (probably because they’re updating on the fly), so just check the homepage and I’m sure you’ll find it.

If you’re specifically looking at math materials for K-8, Prodigy Math is excellent.

If you have somewhat older kids, particularly ones into computers, take a look at Code Academy, which is basically an online computer coding boot camp.

I could list tons of these, but these four are particularly good for varying ages.

Q6: Net worth calculation of debts

I have a question for calculating net worth, how do you compute the liability for loans? Do you include the interest you have to pay? Example: I have a $500,000 loan but if I compute the total amount I’ll be paying, it would be around $600,000.
– James

I think either measurement is fine. They both have advantages and disadvantages. The most important thing is to be consistent with how you do it – if you choose to calculate things one way, then stick with that for all debts.

I have personally chosen to just use the balance rather than the balance plus total interest. The reason is that, if and when I refinance or consolidate or transfer a loan to something with lower interest, that shouldn’t result in a big bump in my net worth. If I have a $5,000 debt that I’m going to owe $2,000 in interest on and then I merely transfer it to a zero interest credit card or something, that doesn’t raise my net worth.

At the same time, calculating the total of the balance and the interest you’ll owe as of this moment in time does create a more complete view of your liabilities. If you don’t change something, you will have to pay off $7,000 in total on that debt.

I don’t think you’re doing it “wrong,” no matter what you do, as long as it’s consistent throughout all of your debts.

Q7: Simplest meals

What are the simplest of the meals your family relies on? Read about them before but can’t find the link.
– Jerry

I don’t think I ever wrote about them before, but here are the two easiest ones I make regularly.

For our one-pot pasta, I just put three cups of water in a large pot, add a pinch of salt, and add a 24-ounce jar of pasta sauce and bring it to a boil. Then, I add a full 16-ounce box of spaghetti or other pasta of choice and bring it just up to a simmer. I then cook it according to package directions, uncovered, though I usually go a minute or two longer. This causes the water and sauce to boil down into a nice sauce that goes great on the pasta. That’s it! You can add all kinds of things to this if you want, but the rough structure of 3 cups of water plus a jar of sauce to a pound of dry pasta pretty much always works and produces something tasty. Plus, there’s only one dirty pot.

The other really simple thing I love to do is the three-ingredient mac and cheese. Basically, it’s just equal amounts of dry elbow macaroni, condensed milk and shredded cheese, with just a little water at the start. It takes eight minutes. You might want to double it for a family. Here’s the recipe. We’ll often pair this with a bag of flash-frozen vegetables. It’s healthier and tastier than boxed mac and cheese and not any more difficult to make.

Q8: Saving fresh vegetables

The local store is sold out of everything frozen but seems to have lots of fresh vegetables. Any easy way to freeze them?
– Dan

You can freeze many vegetables pretty easily in quart or gallon Ziploc bags. You’ll also need a pot and a bowl and a baking sheet. This works really well for things like broccoli, cauliflower, and carrots.

Cut up the vegetables into the size you’d want to use for cooking. Then, fill a pot partially full with water and raise it to a boil. While it’s getting there, fill a big bowl partially with ice water.

Toss vegetables into the boiling water for five or ten seconds, then immediately pull them out and put them in the ice water for a minute or so. Pull them from the ice water, shake off any excess water, pat them dry with a towel, and spread them out on a baking sheet. Then, pop that sheet in the freezer overnight. In the morning, fill up a Ziploc bag with those frozen veggies.

Q9: Bump up emergency fund?

Considering slowing down my retirement savings and bumping up my emergency fund for a while. I think things are OK right now but who knows what six months will bring. Thoughts?
– Colin

While I’m not sure that slowing down one’s retirement savings is the best option at the moment, it’s definitely a smart idea to pump up your emergency fund as we enter a period of definite economic uncertainty.

You might want to consider whether there are other options available to you for bumping up your emergency fund in the short term. I suspect a lot of people are spending a lot less on going out and on other nonessential items at the moment, and if that’s you, then you already have freed up some money for your emergency fund.

I think the decision to tone down retirement savings has more to do with the state of your retirement savings. Are you still on pace for a healthy retirement, even with the downturn? If so, then cutting back might be OK. If you’re not, then I’d look very hard at other places to come up with money for that emergency fund.

I do agree strongly with the general principle of ratcheting up one’s emergency fund right now, however. I’d just encourage you to step back and make sure you’re not robbing something more important.

Q10: Buying stocks?

At what point will you buy into stocks? How low will it have to go?
– Avery

I haven’t really thought about this at all. Honestly, I probably won’t buy in outside of my normal contributions.

In effect, this question is really about market timing and trying to guess where the bottom of this stock market drop is. Frankly, I have no idea. It might be today. It might be Friday. It might be next week. It might be a month from now. There’s really no way to know.

As I stated above, there is definitely a bottom somewhere. A lot of companies are not going to be deeply hurt by this, particularly ones producing essentials like foods and household supplies.

The issue is guessing where that bottom is, and I think that’s an impossible game. I don’t think anyone can guess.

Q11: Building some “home systems”

We are spending this downtime building some better “home systems” like your articles about laundry and dishwashing. Also trying to optimize meal planning, grocery lists and a few other things. Good time to reboot the way we do ordinary stuff!
– Jenny

I agree — right now is a great time to improve your routines for a lot of ordinary household tasks. Here’s what I wrote about optimizing laundry and optimizing dishwashing and an earlier article about our meal planning strategy that I will revise soon.

There are actually a lot of areas you can optimize in your life. Right now is a great time to go through literally every possession in your house and make a serious call about what’s worth keeping and what isn’t (and make big piles of stuff to sell and stuff to give away). It’s a great time to get your sleeping schedule under control (the healthiest thing you can do is to get in a routine of waking up naturally but then actually rising when you’re awake instead of lounging in bed). It’s a great time to get really efficient at making meals and get more comfortable in your home kitchen.

All of those things, over the long run, will save you a ton of money and time and energy, and if you’re stuck at home for a while, there’s no better time than right now to hammer those things in place.

Q12: Dealing with all of this

I am really struggling with everything going on. I am a teacher and am home through at least mid-April. My husband works from home. We don’t have any kids yet. Most days I just want to stay in bed all day and hide. [My husband] gets up and does his thing and is making the meals too. If this is every day now I don’t think I can do this.
– Amy

First of all, I strongly suggest adopting some kind of daily routine that involves getting out of bed when you wake up, practicing basic hygiene and doing some things each day. Maybe you can work on some lesson plans or learn effective methods of teaching online, or you can take on household tasks.

Another good thing to do is to just take long breaks from social media and the news. Put the phone away and don’t read the news. Focus instead on actually doing things and not looking at your phone all the time.

You should make sure to spend some time outside each day, if at all possible. Get some sunshine and fresh air. Make it a point to do this for at least a while each day.

Spend some time calling lots of people you know and just talking to them or video chatting with them. It helps.

I’m finding it helpful to do a lot of small things to brighten my day. I really like just going out on the back step when it’s sunny and just enjoying the sunshine, so I’m doing that whenever the weather cooperates. We’re making a lot of family-friendly tasty meals that everyone enjoys, kind of a “greatest hits” sort of thing. I just had a slice of toast with melted cheese on it, pretty much my favorite snack in existence. Little things really help.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. 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.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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