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. Time to change career path?
2. Overdraft problem with bank
3. Ally Bank’s “buckets”
4. Tracking fuel data
5. Board games as holiday gifts
6. Earning is more important
7. Borrowing from TSP
8. Cleaning a dishwasher
9. Cold-brew coffee setup
10. Good beginning investment book
11. Finding time for self-care
12. Practical white elephant gifts
For readers in the United States, happy Thanksgiving week, and I hope you have someone to celebrate with this week.
For those outside the United States unfamiliar with the tradition, Thanksgiving is a holiday in the United States, held on the fourth Thursday of November, that often results in a four day weekend (Thursday through Sunday) for many workers. Many extended families and groups of friends get together for Thanksgiving to share a large traditional meal, usually involving turkey. Some families celebrate other late fall and early winter holidays early during those gatherings.
We’ll see some family and friends this week, eat some cranberries, share a few hugs and laughs, and hopefully avoid politics because arguing politics at a family event is basically never fun.
On with the questions.
I’m 31, partner is 29. I deeply regret what I chose to study in school as the parts of it I loved do not show up in work in this field at all from what I can tell. Classroom doesn’t translate. Quarterlife crisis, whatever. My partner is encouraging me to switch careers but she makes only $30K a year and I make about $46K. She does have insurance that would cover us.
Going from $76K a year to $30K is a stiff drop in income, one that I don’t know if we can afford and I feel guilty putting her through it. On the other hand, I do not want to work in this field for another 35 years.
Any insight as to what to do?
I know all about the “quarter-life crisis.” I was pretty disillusioned with my career at that point — I really loved the people and some aspects of the work, but other aspects were miserable — and when another door presented itself, I jumped. In that situation, I didn’t leap into school, but into writing for The Simple Dollar full time. This meant a significant reduction in income over the short term, but I had hope that it would eventually grow back to where we were and also cut a lot of costs. My wife had great insurance, better than I had at my job, so it didn’t really change our insurance situation.
My advice to you is to very, very carefully assess whether you can make ends meet on just her salary and, if you can, make the leap now rather than later. It really comes down to that calculation — can you make it work for a few years on just her income?
If you do this, give it your all so that you can get the maximum value out of your return to school. Don’t just study, but start building connections in your new field from day one. The value of college isn’t just found in the classroom.
My job recently changed their entire payroll system. They told us all that our next paycheck might be delayed a few days due to the switchover and it was, most of our direct deposits arrived 3 days late. This shouldn’t have been a big deal, but it was because of [my bank]. I went in and told them about it and they said that I could pay my bills as normal and they would put a note on my account. During that three day period, I overdrafted twice and they charged $70 to my account. I went in and complained about it and they saw the note but said they “couldn’t do anything.” I escalated to a manager and the manager told me the same thing. Contacted corporate and basically just got run around a bunch. So mad!!! What can I do?
Aside from switching banks? Not much. If they were clear as to their overdraft fees and you overdrafted your account, then you owe the fees. They could waive them as a way to help retain you as a customer, but they have no obligation to do so.
If you don’t like how you’ve been treated, I would switch to a different bank. Open a new account at a new bank and start migrating everything over to the new bank from the old one. Only close out the old one when you’re sure all of your direct deposits and bill payments have been moved over to the new bank.
It would have been a good customer relations move for the bank to waive the overdraft fees, especially since you talked to them first, but that’s their business call.
What do you think of the “bucket” system Ally Bank is adding?
I wasn’t sure what Nathan meant until I found this press release from Ally Bank describing the system. In a nutshell, Ally is adding a feature to its online banking accounts that allows people to essentially create “buckets” for savings. You might have an “emergency fund” bucket and a “car savings” bucket and a “holiday savings” bucket, for example, and you can automatically transfer money into each one on a regular basis.
You could also use it for a form of budgeting by creating “buckets” for different expenditure types, though I think that would require a fair amount of online account watching. This would be like an online version of the classic “envelope” method of budgeting.
I think this makes having a lot of goals in the same savings account a lot easier, and I suspect this kind of feature will roll out to other banks in the future. Capital One 360 (formerly ING Direct) has had essentially this feature for a long time and I’ve found it very useful many times.
I have always tracked fuel efficiency in a notebook I keep in my glove box. I have columns for date, type of gas, gallons put in, and cost. I assume you do the same based on other posts. Do you use a notebook or an app for it? Haven’t found a good app.
I used to use a notebook, but a few years ago I decided to try out a bunch of different apps and ended up sticking with Road Trip, and now that there’s so much data in it I just stick with it. It tracks everything I can think of and displays the data in a lot of useful ways. I don’t see a reason to even try other apps, honestly.
It has completely supplanted the “notebook in my glove box” strategy for recording that kind of data, and I also use it for recording other forms of maintenance and a few other car-related things.
Give it a shot. If you’re the type that records fuel mileage in a notebook (like I am), you’ll probably like it.
I used to (secretly) love family game night when I was a teenager. We would eat pizza and then we’d set up a game on the table and play it and my dad would be trying to win every time and my mom would laugh at him being so competitive and we’d talk about the week. I’d be a typical “roll my eyes” teen but I really loved it. We used to play Acquire, Masterpiece and Scrabble the most.
I want to find a game or two to give to some families as gifts that would be good for family game nights. I was thinking of giving a “family game night” kit to some friends with kids around 10 years old with a game and a few coupons for pizza. But there are so many games at stores and I don’t know what to buy. Looking for a really good family game for $20-30 for this. I know you’re really into board games so I thought you’d have ideas.
Acquire is still around, believe it or not. The current version has really nice 3D buildings to represent the corporations. However, the price usually floats between $30 to $40 on Amazon, though it goes on sale fairly frequently and gets down in your price range.
Ticket to Ride is an absolutely stellar family game that works well for three to five players and currently clocks in at $26.99 on Amazon. The board is a simplified map of the United States. Each player has a pile of trains in their color and is attempting to connect cities together in a connected route to complete the secret goals they have (like connecting Seattle to Houston).
Pandemic is usually in the $20-25 range on Amazon and it’s a really good family game, too. It’s cooperative, meaning the players work together to rid the world of four different diseases. The players are scientists and medics who travel around the board (a map of the world) curing diseases and providing medicine, then the diseases spread automatically using a deck of cards. It’s really clever.
We have a family game night at least once a week and play all kinds of things, so the trick for me here is to separate what things my family likes because everyone has clear tastes and quirks at this point from what would work well for a wide range of families. I think the above games would work well for a wide array of families.
If you want to establish long-lasting financial success, earning more is more important than frugality, but you write mostly about frugality. No frugality can take you from making $30K a year to making $90K.
I agree with you, but there are a few issues with that from an advice-giving perspective.
One, people who are looking for financial advice are often struggling right now, and frugality has much more of an immediate impact than trying to improve one’s income. Income improvement is a long road — you can’t just walk into work tomorrow and triple your income. However, you can wake up tomorrow and start taking actions that reduce your spending load.
Two, frugality advice is way more broadly applicable than advice on earning more. Aside from a few general truisms like “work hard” and “build a lot of transferable skills” and “be a lifelong learner” and “think about what you’re doing from the long term perspective,” it’s hard to give advice on earning more money that’s useful to a wide range of people. The advice quickly becomes specific to your career path or business situation. Frugality strategies apply to wide swaths of people and can provide results to all of those people.
Three, frugality has a more direct path to results. If you do X, you will save money. Most career and business strategy advice is far from a guarantee because so much of it is reliant on other people. Mostly, it’s advice on how to put yourself in a position to be more likely to increase your income. In the end, it’s your boss’s decision to promote you and a customer’s decision to buy from you.
In the end, you’re correct that a tripled income is going to be more powerful for your finances than pretty much anything that can be said about frugality, but it’s much harder to give advice for career improvement that has the immediate impact that many people seek. I do write about career things fairly often, but I think both tools are needed and have a valuable role.
I have worked for [a branch of the federal government] for 11 years and have put money into my TSP since starting. I now have $122K in my account. One of my coworkers borrowed $50K from his TSP for a house down payment, combining with the $20K he had to put 20% down on a $350K house. Was this a good move? Trying to do the math on this. The loan itself seems great at 1.75% but then you’re losing money in your TSP for a while so it can’t grow.
You should not borrow from any retirement plan unless it is an absolute necessity, and a house down payment is nowhere near an absolute necessity. You will lose your shirt on this.
Let’s say, hypothetically, that your TSP is growing at an average of 10% a year. If you take $50,000 out of that, then you’re no longer getting that 10% growth and you’re paying 1.75% interest on that money. That’s effectively an 11.75% interest rate on that loan.
You are way better off getting PMI from your lender than you are borrowing money out of your TSP, particularly such a large amount. The additional 1% that the mortgage insurance costs on top of your interest rate is much less impactful than the effective 10%+ interest rate that you’re paying from a TSP loan. If you get a home mortgage at 4.5% and the PMI is another 1% until you get it down below 80% of your home value, a 5.5% loan is much, much, much better than a 1.75% loan that is causing you to miss out on 10%, 7% or even 5% growth in your TSP.
When I bought my dishwasher, the salespeople had me buy some kind of dishwashing cleaning solution that you were supposed to run in it once a month by running a normal empty load with just this stuff in it to clean it out. I understand that dishwashers need maintenance and cleaning, but is that solution necessary? I’ve read that many people just use vinegar for this. Does that work well?
We’ve had a dishwasher for a decade now, never had any clogging problems, and the only thing we’ve ever cleaned it with is vinegar. What I usually do is put some vinegar in a spray bottle and spray it all around the interior of the dishwasher, then fill up the detergent well with vinegar and run a normal load.
Once in a while, I’ll go over the interior of the dishwasher with a toothbrush and toothpick to clear out any small holes that I see and to scrub away at any built-up debris. I usually use a baking soda paste for doing this, just baking soda with enough water added to make it kind of the consistency of toothpaste. Then I’ll run a normal cleaning load with vinegar as noted earlier.
That’s all I’ve ever done, and it seems to be fine. It was a cheaper dishwasher, which I now kind of regret, and I know what I’ll look for if we choose to replace it, but it works fine.
Could you walk me through, very carefully, step by step, how you make cold-brew coffee?
Sure! It’s not too hard.
The only equipment I use is a cold brew coffee pitcher with a wire mesh filter, very much like this one, and a simple burr coffee grinder, like this one. You do not need the grinder if you just buy ground coffee, but even I with my undeveloped coffee-tasting taste buds can taste a real difference between making coffee with freshly ground beans. If you grind your coffee for cold brew, grind it on the coarsest setting possible on your grinder.
So, how much coffee and how much water? It really depends on how strong you want it, which depends on your ratio of coffee to water and how long you let it brew. There is no perfect answer here.
All I can tell you is what I do to produce a cup I like. I like it at a ratio of one part ground coffee to eight parts water by weight, which I will then cut with about 1 part almond milk or water to 2 parts coffee when I actually drink it. So, in practice, I actually weigh this all out with a small kitchen scale. 32 ounces of water weighs 946 grams, so for an 8:1 ratio, I need 118 grams of coffee grounds.
So, I measure out 118 grams of coffee grounds with my kitchen scale, put it in the cold brew maker, then add 32 ounces of water. I put the whole thing in the fridge for 24 hours (if I can’t get the timing exact, I end it a little early), then dump the coffee grounds into a compost bucket to put in our garden.
That’s enough for four 8 ounce cups of coffee, which I then cut with some almond milk (which I really like the taste of — it’s one of my splurges) and maybe a drop of honey and/or a bit of cocoa powder … or sometimes I’ll just drink it black, often cutting it with a bit of water because it’s strong for my taste.
If you like it cold, drink it cold. It’s a lot better than hot coffee cooled down, which always tastes really acidic and “off” to me, and you can easily heat it up in the microwave if you like it hot. It lasts pretty well in the fridge for a week or two, especially if you put it in a separate closed container.
You can “eyeball” the coffee grounds if you want, but you’d be surprised how much the coffee changes if you’re off by 10% – 20% in weight in terms of the grounds. It definitely won’t taste the same each time.
I like the taste of cold-brew coffee and I like that it doesn’t require constant new filters and it doesn’t require any expensive equipment. My math is that an 8-ounce cup of coffee straight black costs about $0.50 with this method when I’m using really good beans — cheaper if I’m using cheaper stuff, obviously. The coffee is really good, far better than I’d ever get for even a $2 – $3 cup anywhere else. It’s far cheaper than buying premade cold brew at the store, too.
That’s how I do it, but you should play around with it and find a method that gives you exactly what you want. Play with the coffee-to-water ratio, especially, and also how long the grounds sit in the water.
I checked out some investing books from the library and they were over my head right off the bat. Can you suggest a couple of good beginning investment books that I can check out or request?
My default suggestion is The Bogleheads’ Guide to Investing by Larimore, Lindauer and LeBoeuf. The first edition of that book was the one that really helped me get my head around the basics of investing while also presenting a coherent investing strategy that actually made a lot of sense to me.
Read it slow and think about each chapter. You don’t have to devour it in one sitting. It’s very readable and understandable, but there is a lot to think about — at least, there certainly was for me.
After reading that book, quite a few other investment books made sense to me, enough that I could decide whether the strategies those books were proposing were worthwhile.
How do you, with all the writing you do, find time to be a decent husband and father and keep up a house and still find time for self-care? My husband and I are so dead at the end of most days that we simply fall in bed just to get up and run on the treadmill the next day. I feel like I am missing something.
Well, here are some big things. Unless I’m watching a show that I’ve planned to watch with my family (basically, Friday movie nights or maybe one episode of a show on a weeknight with my wife after the kids go to bed), I don’t watch television, period. I have my cell phone set up so that I don’t look at it very much, either (I wrote about this last week, actually). I try to multitask as many things as I can when they don’t require active effort — like, for example, as I write this, there’s a meal in the slow cooker, a load of dishes in the dishwasher, a load of clothes in the washer and the Roomba is going upstairs. I put effort into making as many tasks as efficient as I can, as I noted recently — I’ll invest an hour to figure out the most efficient way to fold clothes, spend the next several sessions doing it more slowly to practice it, and then it’s eventually 25% faster than how I used to do it. I keep a to-do list with tasks tagged in various ways and follow them carefully. I also time block, which means that I have periods of time set aside for specific tasks and during those time blocks, that’s what I do. I also try to eat a healthy diet and get plenty of sleep — I’m far less productive if I’m awake 19 hours a day than if I’m awake 16 because “sleep-deprived Trent” is way way way less efficient at literally everything than “plenty-of-sleep Trent.”
This gives me enough breathing room to have time blocks for leisure and for “self-care,” which I presume is what you’re referring to for things like exercise and meditation. For me, genuine focused uninterrupted leisure is really a form of self-care, too. When I get time to play a game uninterrupted or to read a book for an hour or two uninterrupted, I genuinely feel better.
Something people sometimes ask me is whether I have time to “daydream” or let my mind wander or “zone out.” I honestly usually do that when walking, and I take a couple of walks a day. I’ll get into a steady pace and my mind will just wander from thing to thing and I usually come back with a lot of ideas and sometimes a solution to something that’s been bugging me.
For me, time management is a lot like frugality. It’s worth some effort to find ways to cut out the bad uses of my time, but like washing Ziploc bags, there comes a point where you’re wasting time trying to be more productive. For me, the litmus test is almost always “Will I be glad I did this a month from now?” I always regret wasted time. I don’t regret real leisure or self-care.
Last year my family did kind of a “white elephant” gift exchange where everyone brings 4 small gifts under $10 each and everyone puts them in identical brown paper bags and sits them out on a table and then they get handed out randomly. When you opened one you could trade with the person to your left or right if you wanted. It gave everyone four little gifts to open and no one felt bad because they were all small items. Some of the stuff was pretty lame, though. I am trying to come up with good ideas for this year. We’re doing it the Saturday after Thanksgiving.
With a white elephant exchange, it’s hard to get very personal with gifts because you don’t know for sure who will be opening them. Thus, you want something people will like, but something with actual broad appeal; for example, I’d skip specific entertainment items. Here are some ideas I have along those lines.
You will almost never miss with high-quality versions of common things people actually use (and consume). Buy some really nice homemade soaps. Get a bottle of a really good kind of hot sauce. A couple of bars of really good chocolate would hit the mark, or some other kind of candy. A bomber (a 22-ounce bottle) of a good craft beer usually clocks in around $10 and could be a hit. Seasoning and soup mixes can be a good idea, as can, say, $10 of beef jerky from a good butcher shop. A couple of containers of really good lip balm can hit the spot, as can some good hand cream (my wife can’t make it through the winter without Eucerin for her hands). The key to things like this is to do a bit of homework and figure out a quality version of that item that people will actually want. Look online for some highly regarded hot sauce and hit a specialty grocer to get some, or find some really well-regarded soap and order it online.
Another approach is to give out little useful tech items that everyone would use, like an inexpensive USB charger or even a good phone charging cable. I was surprised how in-demand those kinds of items were the last time I did an exchange like this. Everyone seems to always have a use for another one or their old one is frayed or something.
The easy answer is a $10 gift card to Starbucks or to the online Apple store or something like that. It might not get the wows, but people will likely use them.
I’m sure you can find four ideas out of that mix.
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.