Questions About Savings Accounts, Career Changes, Cleaning Ovens, Cider 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. Career change during uncertain times
2. What if everyone stays home?
3. Chasing yield on savings accounts
4. Food dehydrator versus using oven
5. Thoughts on “Money in Excel”?
6. On cleaning ovens
7. Waiting on possible job return
8. What is a “good skillet”?
9. Are unemployment numbers “oversold”?
10. Making simple cider
11. Money from fundraiser taxable?
12. TV shows with frugal characters

I’ve spent a lot of time out in our yard in the last few weeks, doing things like getting the garden ready, playing some outdoor backyard games with my kids, mowing the yard and so on.

The simple act of being outside makes things feel a lot better. The warm sunshine on my skin, moving around and doing something together — it all adds up to things feeling a whole lot better.

If you can, get outside a little bit. Things will feel a lot better.

On with the questions.

Q1: Career change during uncertain times

Throughout the past year, I have been thinking about changing careers. I have felt more and more unhappy with my field. I am an electrical engineer. I am a long-term planner and I feel like there is zero value in long-term planning in my field so that anything I do that won’t pay dividends more than a month from now is just time wasted and that feels awful to me.

This came to a head during coronavirus when my employer didn’t seem to have any idea what to do, stumbled around for a month, then fired a bunch of people (not me) that wouldn’t have needed to be fired if we hadn’t stumbled around for a month. Same thing happened with a lot of businesses in my field so it’s not just my employer.

I have been examining other fields and want to go back to school to be a civil engineer. Long-term planning and problem-solving is what drew me to engineering and I feel young enough (32, single, no kids) to go back to school and start over. However, I feel like this might not be the right time for it.
– Jim

I don’t know whether this is an accurate assessment of the electrical engineering field or not, but it’s undoubtedly how Jim personally feels about the field. If you feel unhappy in your field and you feel as if your skills are being wasted, then you should at least consider a career change.

I don’t think this moment in time is a bad time to think about going back to school, particularly if you are financially stable enough to make that move. Do you have much debt? Do you have some money saved for retirement? Do you have a plan for keeping your basic needs met during your period of going back to school?

I assume that re-training in this new field will take at least a couple of years, at which point I believe we will be seeing at least some economic recovery.

In other words, if you have at least a basic level of economic security in your current job and you’re easily able to go back to school for retraining in a new field, I’d go for it, particularly when it’s a field like civil engineering that will always have value.

Q2: What if everyone stays home?

What exactly happens to the economy if everyone just stays home?
– Brenda

This is a really good question.

Basically, businesses that cater to people who are staying at home — meaning businesses that deliver items and services — will thrive, while businesses that can’t or won’t cater to those people won’t survive. There will be some failed businesses, and there will be some new ones that pop up to replace them. Many businesses will figure out how to transition. Some sectors will get a lot stronger, while others, like travel-related businesses, will get a lot weaker.

There would be a transition period as this happened, and there would be a lot of marketing from the struggling sectors to try to convince people to leave their homes and use the products and services of companies that need you to leave your homes to use their products and services.

Given enough time, available services and products would adapt to what customers want in a “stay at home” era. I don’t think it would actually take that long at all, given that a lot of those kinds of services already exist. We live in an era where most things can be delivered to most houses and there is an abundance of entertainment within one’s own walls.

In other words, I think there’d be a rough patch for the economy as things transitioned, some sectors would do great and thrive like crazy, while other sectors would decline rapidly.

I do not think that a world where everyone stayed at home a lot more and were more frugal in their spending would be a financial apocalypse for the nation. Most of those folks would just spend that money in different ways, and businesses and services would adapt to that new spending.

Q3: Chasing yield on savings accounts

I see a lot of talk about high-yield savings accounts. I understand the value of higher interest rates but is it worth the time to chase the best rate? It doesn’t feel like it is.
– Annie

Right now, it’s hard to find a non-introductory rate for a savings account above 1.5%, and even anything above 1% is likely a temporary promotional thing. So, let’s look at a 1% APY interest rate versus, say, a 0.25% APY rate you could get at pretty much any bank.

If you have $1,000 saved, a 1% APY account will net you $10 by year’s end. A 0.25% APY account will net you $2.50 by year’s end. In other words, for every $1,000 in the account sitting for a year will earn you $7.50 more in a 1% account than a 0.25% account.

That’s probably worth it if you have several thousand dollars in savings or more. You might make $50 more in a year.

If you have amounts larger than that, I would ask why you have that money in savings instead of in other investments that are likely to have a better return. The advantage of a savings account is that it’s safe and liquid, not that it offers a great return. Thus, you mostly want short term savings and emergency savings in your savings account, not long term savings.

So, if you have, say, $5,000 in there and you rate chase to gain 0.20% additional APY, you’re gaining $10 over the course of a year. To me, that’s not worth it — it’s not worth the time invested to find accounts, sign up for them and keep looking for better deals. If I have a lot more than $5,000, I’m probably doing something else with it (unless I have a huge family and a ton of monthly bills and thus need a really big emergency fund).

Basically, just find a bank that has a consistent solid interest rate on their savings accounts and park your money there. Here are savings accounts we recommend.

Q4: Food dehydrator versus using oven

What’s the point in using a separate food dehydration device when you can just use your oven on low?
– Amber

For small batches of dehydrated food, a food dehydrator isn’t worth the expense. You can definitely dehydrate small amounts of food in your oven.

The advantage of a food dehydrator is that it’s designed for that specific purpose — dehydrating food. Your oven is designed for baking. Food dehydrators dehydrate your food with less overall energy use than an oven and will generally produce better results due to airflow considerations.

However, that doesn’t mean that someone interested in food dehydration should run out and buy a food dehydrator immediately. It’s silly to have such a devoted tool for something you’re new to doing and aren’t sure that you’ll do very often.

If you’re new to dehydrating food, you should dehydrate food in your oven several times and make sure that this is something you’ll want to consistently do going forward. Make some dehydrated fruits. Make some jerky. Make some fruit roll-ups. Make some dried herbs. See how all of that works out for you.

If you dehydrate one batch of something two or three times a year, a food dehydrator isn’t a good purchase. If you dehydrate things on a weekly basis and are sometimes frustrated because your oven is constantly in use, a food dehydrator makes a lot more sense.

Q5: Thoughts on “Money in Excel”?

Do you have any thoughts on “Money in Excel”? I use Mint for money management but have an Office 365 subscription through work and am thinking about switching over when it is available.
– Oliver

Money in Excel is an add-on to the Microsoft Excel spreadsheet program that basically turns it into a personal finance tracking tool. It basically seems to turn Excel into a tool much like Mint, YNAB, Quicken, or other financial tracking tools. Without trying it hands-on — it’s not available yet as of the time I’m writing this — I can’t say how good it is, but the previews certainly look promising.

If you already have a Microsoft Office 365 subscription, Money in Excel certainly seems like it’ll be something worth trying. I personally like the fact that it automatically yanks all of your data straight into a spreadsheet so that you can play with it yourself, whether you use the pre-made tools or not.

I don’t think I’d subscribe to Office 365 just for this, but if you’re already subscribing and are already using some other software tool for tracking your finances, I would try this the day it’s available. It’s got no additional cost for Office 365 folks and seems potentially very useful.

Q6: On cleaning ovens

What is the use in cleaning an oven? It is a nasty job and I don’t see the problem leaving some burnt stuff on the bottom.
– Kerry

There are a number of reasons why you should clean your oven:

  1. A clean oven heats up more efficiently. It will reach the desired heat faster and maintain that heat without the heating element firing up for longer, which means it uses less energy and thus saves on your energy bill.
  2. Clean ovens last longer, because a dirty oven strains the heating coil and other parts of the oven and reduces its lifetime.
  3. Old, burnt food on the bottom still gives off smoke and other things that you don’t want on the food you’re cooking.
  4. An oven that hasn’t been cleaned in a while may have clogged ventilation, which can again keep smoke inside the oven where you don’t want it.

Basically, cleaning your oven makes it run more efficiently, makes it last longer, and helps improve the quality of the food you cook in it.

Having said that, the thought of cleaning an oven is often worse than the actual cleaning process itself. You really just need some rags that can get really grimy, some water and an oven cleaning solution, which you could buy at the store or make yourself. My preferred method is to make a paste out of baking soda and water, coat the entire inside of the oven with it, and let it sit for 12 hours or so. At the same time, take the racks, also coat them with that paste, and let them sit in a bathtub for 12 hours. After that time is up, wipe down all surfaces with damp rags, and if you see that there are still some chunks that are lodged in place, spray them with white vinegar from a spray bottle, which will cause it to foam up, then wipe away all the foam. Get the inside fairly dry, then do the same with the racks. That’s it. It takes maybe 15 minutes to coat things with the baking soda paste and another half an hour the next day to get everything clean.

Q7: Waiting on possible job return

I previously worked as waitstaff at a high-end restaurant where I made a very nice income thanks to generous tipping. I am currently laid off because the restaurant is shut. The restaurant can partially reopen now, but isn’t yet because of various reasons. I am hoping to get called back when they do open, but I expect the place to be at lower capacity and with a lot fewer diners. I have been receiving unemployment and live simply enough to keep my head above water. Do you have suggestions?
– Adam

I think you’re doing exactly what you should be doing in your situation. Sit tight, wait, collect unemployment, and be ready to return when you’re called.

If you get to the end of your unemployment and your previous employer still hasn’t reopened (or has reopened partially but hasn’t called you back), you should give them a ring to see what’s happening, but then seek out other work in similar positions. Assuming you were good at your job, it should be easy to get a good recommendation, though work may be hard to find in the short term.

If you’re concerned about that possibility, I would start studying fields and job opportunities where you might be able to find work when your unemployment runs out. I don’t know what your skillset is, but someone who was able to get good tips and keep a job as a waiter in a high-end restaurant should be able to find a variety of work.

Q8: What is a “good skillet”?

What is a good skillet? It seems like there are so many out there and different people saying this one is good but that one is junk and the next person says the opposite.
– Dana

It really depends on how you cook at home, and another big factor is whether you had a bad individual experience with a skillet or not. Some people who cook a lot get very attached to the type of skillet they prefer.

The biggest difference in skillets is the presence or absence of nonstick coating. Many skillets come pre-treated with a coating on them that makes it so that common things you cook in a skillet don’t stick to them. The problem is that such a coating eventually comes off, and when it does, that pan is toast. You do not want to eat that coating at all and when it starts to flake, that means it comes off in the food you’re making.

If you buy a cheap skillet and aren’t really investing in it too much, a nonstick one is fine, but you should buy it with the understanding that the coating will fail, probably sooner rather than later. Most nonstick pans I’ve used have the coating fail after a couple hundred uses, and then they need to go.

If you want something relatively inexpensive but long-lasting, you’re probably looking at cast iron. The issue with cast iron is that it’s heavy and that you have to use it a lot before it’s easy to cook on, because cast iron gradually builds up a “patina” over a lot of uses. Patina is basically a natural nonstick surface that’s embedded in the cast iron itself, so it will basically last forever. Another issue people have with cast iron is that you can’t just toss it in the dishwasher or else it will get rusty. If you’re willing to invest some time in getting that patina built up and you’re willing to clean it by hand (it doesn’t take too long, but it is less convenient than the dishwasher), then cast iron is a good choice.

The other option is to go expensive and buy items from, say, All-Clad. All-Clad makes some amazing stuff, but you’ll be paying more than $100 for a skillet — seriously (here’s an example). They use metalworking techniques to make a fairly nonstick skillet surface that will last for a really long time and there’s no coating that will chip off, but you pay a lot for that. (You can cook eggs in them, but it’s a learning process; everything else is fine.)

It really depends on what you’re looking for in a skillet and what your budget is. I know people that swear by cast iron. I know people who will only buy high-end stuff. I know people who just get a $20 nonstick skillet and toss it every year or two and swear by the convenience. We personally have a mix of things, but I think we’ll gradually invest in higher-end stuff as time goes on.

Q9: Are unemployment numbers “oversold”?

I have a question that’s been bugging me and I hope you’ll have a good answer for it. There has been a lot of focus on the high unemployment claims the last month or two and people are comparing it to the Great Depression, but aren’t a lot of those jobs just going to come right back once shelter-in-place orders are lifted? I know not all of them will, but won’t most of those folks just go right back to work?
– Greta

Yes, a lot of those people will return to work, just like the person above who was talking about waiting on his restaurant job. The business they worked for will reopen, they’ll get called back and their name will vanish from the unemployment rolls.

The question is — and this is one we don’t know the answer to — how many businesses won’t be able to reopen and how many businesses will reopen with much smaller staffing. We simply don’t know the answer to that yet.

I think it is overblown to call the unemployment numbers of March and April to be equal to the Great Depression because back then, those people didn’t have jobs to potentially come back to. At the same time, some portion of the people now won’t have a job to come back to, and we won’t quite know for a while how it will all shake out.

I think it will end up economically being much like a very bad recession that takes some time to work through. What will really matter is what unemployment numbers look like when all of the stay-at-home restrictions go away. That’s the number that should cause genuine concern. Watch the unemployment rate, especially a month or two from now, for the real picture.

Q10: Making simple cider

We have been having fun at home making simple cider in resealable bottles. We pour in some fruit juice, add a little bit of sugar and a quarter teaspoon of wine yeast, open it up once a day to “burp” it, and then move it to another container after 5 to 7 days by pouring off the non-yeasty liquid on top and put it in the fridge. After 5 to 7 more days we pour off the non-yeasty stuff again and drink it. It’s cheap and tasty and some of the batches have a nice kick!
– Annie

This system basically works for most fruit juices. You’ll get better results by avoiding tart and highly citrus juices and stick with stuff like apple juice, strawberry juice, pineapple juice, peach juice, pear juice, and so on.

I’d really suggest watching some Youtube videos on this before doing it yourself. While Annie nails the basics, you want to make sure you don’t end up with too much pressure in your bottles, and using the wrong kind of yeast will have some interesting results. Bread yeast, for example, would probably imbue some unusual flavors.

Here’s a really great intro video to making hard cider at home that will add a lot of detail to the explanation. They pitch a few products in the video, but you don’t need most of that stuff to make a basic batch. You mostly just need a big resealable container (that you remember to burp regularly), some sugar, some juice and some wine yeast, and then look up a video specifically for the kind of juice you have, and you’ll end up with something tasty.

I highly recommend trying tepache, a fermented pineapple-based drink, and here’s how to make it.

Q11: Money from fundraiser taxable?

Last year some friends hosted a small benefit for me for some medical treatment that I couldn’t afford. They raised about $6,000 selling sandwiches and some people played music and there was a donation box. I think there was some kind of card tournament too but I was talking to people. I didn’t think about it and filed taxes not including it this year, but then I just talked to one of them and they said I should have included it in my taxes. Is that right? I thought it would be considered a gift.
– Angela

Provided this is an accurate description of the benefit, I believe you’re right and your friend is wrong. The money in the donation box is clearly not taxable — it is a freewill gift to you, and gifts to individuals are not considered tax-deductible for the giver and generally don’t have to be reported (I’m assuming you didn’t create a charitable organization for this). The sandwich thing is unclear to me from your description, but if it was in the sense that your friends were making sandwiches for people who showed up with the understanding that they threw a few bucks in the donation box for the sandwich, then it’s fine.

There are a few exceptions. If one of your friends kept some of the money as a “fee” for fundraising for you, that’s considered income. If any of the donations to you exceeded $15,000, then there would be tax implications. If funds were being raised for a registered charity, there would be tax implications. If you gave anything to anyone in exchange for the money, there would be tax implications as that would be a sale. If your friend was selling sandwiches as part of a food vendor business, then they would be responsible for those business taxes (you wouldn’t, assuming that the proceeds were given to you as a gift). None of that seems to apply here.

Again, unless there are aspects to this story that you’re not stating, I think you’re completely fine. Even if you are slightly in the gray area of any particular tax rules with this, this is just not something the IRS is going to bother investigating. Small scale benefits where you’re not giving anything to anyone in exchange for money are pretty clearly fine under IRS rules, and I don’t see anything violating that in your story.

Q12: TV shows with frugal characters

Can you point me to examples of TV characters that act frugally without being presented as weird?
– Claire

There are many shows that have focused on making ends meet without making the characters seem strange. Without going too far back into television history, Everybody Hates Chris, Malcolm in the Middle, Roseanne/The Connors, King of the Hill, Bob’s Burgers, The Goldbergs, One Day at a Time, and Atlanta immediately come to mind as examples of this. I think those shows depict largely realistic people finding creative ways to make ends meet. There were certainly some oddball characters on those shows, but that strangeness didn’t directly overlap with frugality.

I think most of the characters on the show Parks and Recreation would be considered frugal and aren’t presented as particularly weird. Most of them are office workers and make what seems to be a fairly good salary, but they don’t spend extravagantly.

I’ll fully admit that my lack of widespread familiarity with television, particularly in the last several years, may be limiting me here, but I actually think television programs themselves have a lot of examples of frugal people that aren’t weird. The problem is that the characters that often really stand out on television are the ones that behave in an extreme fashion, so you remember the extremes.

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.