Questions About House Downgrading, Disney Saving, 401(k)s, Home Odors, 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. Downgrade now or later?
2. Getting rid of stuff
3. Homemade mac and cheese idea
4. Saving for a Disney vacation
5. Cutting interest payments
6. Inexpensive pleasant house smell
7. Long lasting grill
8. Writing down expenses
9. Setting aside money at birth
10. 401(k) worth it without match?
11. Athletic motivation without personal trainer
12. Online and offline writing strategies

There are few things more enjoyable than a cool summer evening far enough away from the city lights that you can see thousands and thousands of stars in the sky. You’re surrounded by loved ones and good conversation and your eyes glance upward at the heavens and everything just feels at peace.

On with the questions.

Q1: Downgrade now or later?

We are a family of four: me, my husband, and two children. We have three more years of daycare, at which point, our plan is to enroll them in public school. Ideally, I would like to be able to drop them off and pick them up, which means scaling back to a (potentially significantly lower paying) part-time job if I cannot have flexibility with my full-time job.

We are in good shape financially, ahead of the curve in terms of retirement for our age right now, and contributing to 529s as well. We do anticipate this will change significantly when I change jobs in three years (in line with our family goals), at which point, it may not make sense anymore to pay our high mortgage to continue living where we do.

We live in a very desirable established neighborhood in [a large metro area in the US], and it is now estimated over $100k above what we paid for 2.5 years ago. The main reasons we want to stay: we like urban life, our walkability is excellent (we take neighborhood walks as a family every weekend and sometimes on weekdays too), and accessibility to all the fun parts of the city is great (all within 15 mins). We also think that we got the house at good value, and, given the trends in the city, the house will appreciate (even if perhaps not at the rate it has recently).

However, we recently made calculations and realized that a similar home in [an outer suburb] would save us approximately $1000 per month in mortgage (accounting for the appreciated value in our house rolling over to our new down payment). We could save $15000/year in post-tax money after accounting for lower mortgage payment and less taxes etc. [The suburb] has better schools than [the city], and the work commute is favorable. The downside is that it is suburbia: We would be 30-40 minutes away from our favorite spots in the city, which means we would do these things less. There is no walkability in the area. We feel like we would lose some of what makes our family “us.” Lastly, while [the suburb’s] real estate is also appreciating, it won’t appreciate at the rate that [the city] is. So once we sell, we doubt we could ever afford to have the amazing urban experience we currently have.

For a long time, our plan was to hold off on thinking about moving until public school. This will give us three more years of great city living and also give the house a chance to appreciate more. Worst case scenario and it stops appreciating, so will [the suburb], which means we can still pull off the move. But we have been talking about it more and more, and are very torn. Both choices speak to our values–so now it is a matter of what makes more financial sense?
– Andrea

It sounds to me that, right now, you want to live in the city, but in a few years, you want to live in the suburbs. You recognize that living in the suburbs is cheaper, but you also simultaneously recognize that your home is appreciating faster in the city.

My opinion? Live in the city until you want to live in the suburbs (for school-related reasons) and then move out there.

While you stay in the city, your home will appreciate in value pretty quickly. As soon as your situation changes, sell that house and pocket that appreciation, using it as a bridge to a mostly-paid-for home in the suburbs. Make that switch when the time is right for you.

Q2: Getting rid of stuff

You said, “that date comes and goes and I happen to notice the box after that date, I just get rid of everything in the entire box without even really going through it. I trust my earlier decision that the stuff in that box is just sentimental stuff that I was on the fence about.”

Do you just throw it out? I’d like to get rid of my stuff through donations or giving it away rather than throwing it in the trash, but if I were to look at it again to do that, it will trigger attachment and I’d feel conflict about getting rid of it all over again. How do you avoid that? Get someone to take it away for you?
– Denae

This refers to a strategy I’ve mentioned a few times where, when I’m cleaning out my closets, I put stuff I’m not sure whether I should get rid of in a big box, put a date on that box, and stick it in the garage. If I need something that’s in that box, I get in there and dig it out. If the date passes, I get rid of everything that’s in the box.

The truth is that if I see a box with a date that’s already passed, I don’t even look in the box if I’m taking it to Goodwill. I just take it there and drop it off without even thinking twice about it. I don’t give myself a chance to let nostalgia for some item I haven’t looked at in years to take over.

So, when I initially pack up the box, I make sure that it’s all stuff that Goodwill will accept and I put things in there reasonably carefully. That way, when I do get rid of it, I don’t have to even think twice about it.

I trust my initial “on the fence” feeling and my decision to put that stuff in a dated box. If that date has passed, that means I already decided long ago that this stuff needed to go.

Q3: Homemade mac and cheese idea

Here’s a fun twist on the mac and cheese: I’ll add a few big dollops of plain hummus. You need less actual milk/cheese and it adds more nutrients. I am always trying to get my kids to eat protein and legumes… it’s an easy win.
– Jenna

This is a great strategy to use with any mac and cheese, whether it’s the homemade recipe I shared in that post or a box mix. Adding a little bit of hummus – a good tablespoon or two of it – causes the hummus to practically disappear into the mac and cheese, but it gets a bunch of additional very healthy protein into the dish.

Whenever we have plain or gently seasoned hummus around, I add it to all kinds of stuff (including mac and cheese). I often add it to things like vegetarian lasagna or as a sandwich spread. It’s a great way to make something a lot more filling and adds some great protein without adding a ton of calories.

Hummus should be on the list of “sneaky foods” that a parent can add to a lot of dishes to make them a little healthier for the kids (and also more filling, so the meal stretches farther and perhaps leaves some leftovers).

Q4: Saving for a Disney vacation

How do I open a savings account for a Disney vacation?
– Lindsay

The best way to save for a big expensive vacation like a Disney vacation is to automate the whole thing. I would go online and sign up for an account at an online bank like Capital One 360 or Ally Bank. Then, link it to your current checking account and set up an automatic transfer from your current checking account to this new savings account.

If you set up an automatic transfer of $20 a week, you’ll have over $1,000 after a year. $40 a week becomes $2,000 after a year. If you wait just a couple of years at that rate, you’ll have enough for your Disney vacation.

The advantage of doing it this way is that you don’t have to actively think about saving. It just happens automatically, with the $20 or $40 a week vanishing from your checking and appearing in that savings account. If you have that account at a different bank, you’re aren’t tempted to tap it at an ATM – you can’t even access it that way. The only catch is that you have to be a little mindful of your checking account balance. Never draw yourself down close to zero or you might wind up in trouble when that automatic transfer happens.

That’s my approach for savings goals like a big expensive vacation or a new car. Just automate it and then walk away from it until you want to use that money.

Q5: Cutting interest payments

I want to cut the amount of interest accrued each month but can not pay off balance. What are ways to do that? Pay when statement ends vs due date? 2 payments the 1st month to get ahead?
– Dawn

The first thing you should do is to try to improve your interest rate. This can be done in a number of ways, starting with simply calling up the lender and directly asking for a rate reduction, using a zero interest balance transfer to move some of the debt to 0%, or refinancing a loan to a lower interest rate.

Once you’ve done that, the most effective way to lower your monthly amount of interest accrued is to simply pay your loan off as fast and as hard as possible. When you have the money, make a payment right away. Many debts accrue interest daily or continuously, so the faster you make a payment, the better, in terms of accumulating interest.

If you’re serious about getting rid of a debt as fast as possible, your best approach is to make a payment directly after each pay period. Whenever you get a paycheck, make a payment on that debt right away. Whenever you get a windfall, make a payment on that debt as soon as possible.

Q6: Inexpensive pleasant house smell

What are some inexpensive ways to make your house smell good? Candles that don’t smell artificial are expensive and so is potpourri.
– Angelica

My favorite smell in a home is the smell of cooking food. Things like sautéed onions, simmering tomatoes and herbs, apples, and other food flavors smell wonderful to me. The best way I’ve found to make that smell is, well, to actually cook them. I love cooking aromatic things in a slow cooker because the aroma fills the house all day long. Try using a slow cooker to cook something that has an aroma that you love, or bake something that smells good (like cookies).

Another good strategy is to start eating a lot of citrus fruits and then saving the peels. Let the peels sit out in various places and the area will smell like citrus for quite a while. When the aroma starts to fade, run those peels through the garbage disposal (the disposal is often a big odor producer in the home and citrus peels will help).

Another good strategy is to get a few plants that put off a nice aroma, like geraniums, eucalyptus, and gardenias. They’ll last for a very long time and continually make your house smell good as long as they get adequate light and water.

I find all of these solutions much less expensive and vastly superior to the aroma of candles or potpourri.

Q7: Long lasting grill

My grill seems to shoot craps every few years. Do you have a long lasting grill recommendation?
– David

In my experience, the lifespan of a grill has far more to do with maintenance and care than anything else. If you take care of any grill, it will last for a long time. If you don’t take care of it, it won’t last for long.

The biggest factor? Don’t leave your grill outside where it’s exposed to the elements. If you want it to last, keep it in your garage. If you must keep it outside, keep it covered when you’re not using it. The elements will destroy your grill incredibly fast. You also need to clean it after each meal that you grill.

If you’re not willing to do this, the least expensive route is just a regular rotation of cheap grills. Get them cheap when they’re on sale (usually in the fall) and assume it will only last a few years no matter what you buy.

If you’re going to put in the effort to protect it from the elements, clean it, and maintain it, the best sub-$500 gas grill I’ve ever used is the Weber Spirit E210. It’s very well built, cooks evenly, and is just well designed with almost every little feature already considered and placed where it should be.

However, if you’re not going to maintain your grill, clean it, and keep it covered or in the garage, just get a cheap grill when they’re on sale at the local hardware store and use it for several years until it fails.

Q8: Writing down expenses

Can you explain what you mean when you say you write down expenses in your pocket notebook? Is it like a ledger or something?
– Drew

I jot down all kinds of stuff in my pocket notebook – whenever I have something I want to remember, whether it’s a thought or a book title or an expense, it goes in there. I then go through the notebook once a day or so and do something useful with all of the stuff.

With expenses, I just write down the dollar amount and what I spent it on. I do this when I’m trying to carefully track my spending for a month or two, something I do regularly but not all the time.

It’s just a freehand note, like “Gas at Casey’s – $40.81” or “$17.02 – gift for Sarah from bookstore.” It’s nothing more complicated than that. I usually separate my notes with a horizontal line, so I’ll usually just underline the note with a slash across the page so I can write something different right below it.

When I get home, I’ll transfer that expense to whatever software I’m using to track my expenses overall. I usually use Excel for this so I can manipulate the data as I see fit – I used Excel professionally for many things so it’s a familiar tool for me. (I’ve used a number of packages for tracking expenses over the years.)

Q9: Setting aside money at birth

How much money would you have to set aside for a child at birth to take care of them for life starting at say age 18?
– Vince

I set up a spreadsheet to estimate this number, with some assumptions. Let’s assume that $30,000 a year in today’s dollars is enough to “take care of a person” for life, and that inflation is 3% per year. Let’s also assume that this is a long term stock market investment returning 7% per year that’s not adjusted for inflation, and we’re also assuming all dividends are reinvested and that all taxes are otherwise covered. We’re assuming that this has to kick in at age 18, as you noted above.

If that’s your scenario, you would need to put aside $360,000 to cover it.

The biggest variable we can change here is the year at which this needs to kick in. If you say that it doesn’t have to kick in until they’re 25, then $270,000 in initial money should work. If you wait until age 50, $100,000 would do it.

You can also tinker with other numbers, like inflation. If you assume 2% inflation forever, you can put aside $265,000 at birth and they can live forever on what amounts to $30,000 in today’s dollars starting at age 18, given the above constraints. If you assume that you’ll get a 7% inflation adjusted return (which is higher than what I expect, but not outside the realm of possibility), you’d only need $140,000 to start covering them at age 18 for life.

In other words, it really depends on the constraints you put on your question.

Q10: 401(k) worth it without match?

Is it still a good idea to contribute to my 401(k) at work if the employer does away with the match? A lot of people here are dropping their contributions. Thoughts?
– Stephen

I usually recommend a very specific hierarchy of investment options for one’s retirement.

First, contribute to your 401(k) as much as possible to get every dime of employer matching. The employer matching dollars are more valuable than any other factor mentioned here.

Once you’ve done that, contribute to a Roth IRA you open yourself up until the contribution limit ($5,500 a year for most people), assuming you are eligible for a Roth (most Americans are).

Once you’ve done that, contribute to your 401(k) up to the contribution cap.

Decide how much you want to contribute, then follow those options until your contribution money runs out.

If your employer has cut employer matching on your 401(k), then, I would open up a Roth IRA and start contributing to that instead of contributing to the 401(k). Contribute just as much to that Roth as you did to your 401(k). You’ll be fine.

Q11: Athletic motivation without personal trainer

For several years, I hired a personal trainer who met me at my local gym and motivated me to get in better shape. He’d push me through workouts and give me great suggestions on what to do until our next session and specific meal plans and such. That kind of guidance really helped keep me in shape.

My trainer moved away right at the same time that I was rethinking my finances so I decided to not get a new one. I am finding that it is really hard to keep eating healthy and go to the gym. It turns out that my trainer was a really good motivator that would get me over the hump and get me to exercise and eat healthy and without that motivation I’m just not getting there and it’s starting to show.

I am strongly considering hiring a new trainer. Is this the right move or is there something I’m missing?
– Scottie

It sounds to me like you’ve found that a personal trainer makes a profound positive impact on your life, physically and mentally. You know this about yourself. If you have the financial flexibility to do so, I would sign up with a new trainer.

Now, this is not my default advice for everyone. There are several key caveats in Scottie’s story that most people don’t have. One, he has a long history of keeping his fitness level up and his diet in good shape with the aid of a trainer. Two, he’s seen that this falls off drastically without a trainer. Three, being physically fit and healthy is deeply important to him. Those three factors are all very important in my suggestion that he continue with a trainer.

However, if you want to try to get some of the benefits of a trainer without having one, here are a few suggestions.

First, get a good workout app on your phone and let it notify you as much as it wants to. There are a lot of good fitness apps out there. Try a bunch, see what works for you, and let it yell at you to get some exercise.

Second, figure out what exercises you actually like and focus on those things or on fundamental movements that will improve you at those things. For example, I really enjoy taekwondo, so I’m motivated to actually practice taekwondo as well as do exercises and stretches that make me better at taekwondo.

Finally, do lots of meal prepping. Figure out what nutrients you’re wanting to get in your meals and then prepare a TON of them at once and freeze them. That way, you don’t have to think about meals – just grab one from the freezer.

Q12: Online and offline writing strategies

I have a specific question that largely comes about because I see a lot of similarities between the way you operate and my own modus operandi. The particular area of similarity is writing. I enjoy writing and do a lot for both professional and personal purposes. However, a difference between us is that you still use a pen at least some of the time; I can go weeks without touching a pen or pencil. I always have my phone, iPad or a computer to hand and tend to type everything [often into Evernote – big fan] or maybe use the phone camera to record a phone number or whatever.

So my question is about different writing “mechanisms”. It seems to me that there are 3 broad options: handwriting, typing and verbal dictation. Do you feel that your creativity, lucidity or something else varies, depending on which mechanism you employ?
– James

I find my smartphone to be a distracting environment and I generally try to minimize my use of it. This often means leaving it in another room and just checking messages every once in a while and leaving it at home while I go somewhere on a short errand where I don’t have a pressing need for it (like a bike ride or a walk or something like that). In those cases, I use a pocket notebook to jot down thoughts; when I’m at home on my computer, I usually use Evernote for random thoughts.

When I’m writing down things for my own reflection and learning, the time spent actually writing down things by hand is time that really helps me process what I’m writing. I remember things better. I absorb concepts better. I tend to come up with follow-up questions and move on to the next logical idea quite well. This doesn’t happen nearly as well if I type entries into a digital journal instead of writing them by hand, or take notes by typing instead of writing them down by hand.

Almost every article I write for The Simple Dollar began life as a handwritten note of some kind, where I think out what I want to say and organize the thoughts. I then transfer that outline to an electronic state and actually turn that outline into the post that you read. My words per minute is far, far faster when typing, but it generally only shines when it’s on the framework of an outline that I wrote by hand.

I do not trust verbal dictation for anything other than capturing a brief note when I’m in a situation where I can’t use my hands to do so.

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

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.