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. The smartphone carousel
2. Freezer thawing frustration
3. Planning out a move
4. Disheartened by 401(k) mistakes
5. Finding cheap bulk wine
6. Getting started with homebrewing
7. Financial philosophy
8. Frugal sun protection
9. Overactive mind
10. Uses for old flowers
11. Buy it for life: jeans
12. Book swapping by mail
13. When to retire?
14. Sources for campfire wood
15. Drugstores for toiletries
Over the years, I’ve found a really interesting phenomenon when it comes to reader mailbag questions (which you can submit privately by sending me a message via my Facebook page).
Fairly regularly, I’ll get a question from someone out of the blue addressing some kind of personal finance problem they’re having and I usually try to address those in the mailbag. That’s pretty typical.
The interesting part is that probably half of those people end up submitting another question within a month or two. Many of those people end up submitting questions several times a year, and some of them send along suggestions or ideas they’ve had.
Many of the questions in a typical reader mailbag are actually from people who have submitted questions before, but then they send along interesting additional questions or ideas later on that are well worth sharing.
I’ve found that over time the questions and ideas tend to vary a lot, too, as the “first question” is usually about helping them get out of a debt problem or some other specific financial issue, while later questions will branch into frugality or into personal productivity or even sometimes into relationship problems. I think some readers eventually reach reach a comfort level in terms of asking questions.
The point? Don’t be afraid to send me a mailbag question. I’ll do my best to keep you anonymous and answer your question reasonably quickly.
the problem with high end smart phones is not the cost; it is they do not last. i cannot think of an electronic that costs 600 bucks that cannot go past a couple years, three tops. my last phone was fine (had to upgrade the O/S Droid would not push updates because it was “old”). until the power button broke. i contemplated paying someone 70 bucks to fix it but I didnt trust it would work for the long haul. Not to mention that eventually samsung would not allow that phone version to upgrade to a higher O/S much longer. which is important in my field for our company email servers and work apps. I use smart phones for work at a high level. time reporting, conference calls using our internal messaging system, webex, online training courses, you name it. i have rationalized I get use out of the high end smart phones. I just want to buy one and be able to at least keep it as long as an average electronics of the same expense. just seems like a scam. the only phones that last are the no frills, flip tops. Is there a buy it for “life” smart phone? electronic life, that is. 7 years? the first droid on the market lasted 4 years for me and I used to get crazy looks. anyway, would be interesting to know if you could crack this nut. Or not, and this is just the way the 21st century is. play the game or get out (i.e. a crappy smart phone). Is this just too much to ask? my phone payment is over in a year and i expect to last another 3 years, which is not likely.
The cell phone market is primarily driven by cell phone providers who sign users to two year contracts. As an enticement to renew those contracts, providers offer steep discounts on smart phones, even offering some simpler models for free.
In order for that to be a decent enticement, providers need to be able to show off phones that do things “newer” and “better” than one’s current cell phone, so there’s a lot of motivation from everyone involved in the cell phone world to keep pumping out new features all the time.
Your current smart phone will continue to work for a very long time. The problem is that eventually your hardware will be locked out of operating system updates and you won’t be able to download the latest apps from the app store. You’ll have to keep using what you have and, eventually, some of that stuff won’t work either.
That’s just the breaks of the modern cell phone market.
We have an upright deep freezer in our garage. About once a year someone will leave the door ajar or put something in there at an odd angle and the door will stay open causing everything in there to thaw and thus causing most of it to have to be thrown away within a day or two. This is a huge expense that completely defeats the purpose of having a deep freezer. Suggestions?
We have an upright freezer, too, and we’ve run into this problem. We currently wish we had bought a chest freezer, which solves this problem pretty well by using gravity to shut the door.
I have looked at installing a bungee cord on the freezer attached to the body and to the top of the door so that the bungee cord pulls the door shut. My intent was to put it close to the hinge so that the door would still be relatively easy to open and the bungee cord would stay out of the way, but it would provide enough force to ensure that the door closed automatically.
Another option is to slightly tilt the entire freezer by putting the front feet an inch or two higher than the back feet. This allows gravity to do its work in helping the door to close.
We haven’t implemented either one yet, but those are our two best ideas.
My husband and I are expecting our first child in August. We currently live in a large Midwestern city, but most of our family (immediate and extended) live in North Carolina. We’re hoping to make a move there ourselves in the next year, and we’re currently targeting February 2016 for the move. We have an emergency savings fund built up (and we’ve increased it since we found out we were expecting), and we have about 3 months worth of living expenses in our checking at any given time (again, built up to include added costs from our little one). We’ve been pretty aggressively putting as much of our extra savings away in our investment account for a couple years now, and we’re feeling pretty good about how much we have – we think if we stopped investing today it will be enough for a down payment on a house in North Carolina. I’m wondering what should we do as far as saving for this move? I’ve gotten a few quotes, and it’s likely to cost us anywhere between $5,000 – $10,000 to make the move. I also want to build up a bit more because I’m guessing we’ll rent in Raleigh at first to get a sense of the area before buying a house, so I want to have a buffer for any deposits/first and last month’s rent, etc. that might come with finding a new place there. Would you continue to invest as much as possible and then pull some out to pay for the move? Or does it make more sense in the short-term to simply hold out say $12 – 15K from our investments? I hate to see that money sit in our savings account without working for us!
Here’s the thing – money sitting in your savings account is working for you. You don’t know what the stock market is going to do in the short term future. Let’s imagine that the rest of 2015 is like 2008 – suddenly your $12K to $15K that were in stocks suddenly becomes $7K to $10K. Suddenly, your savings for your move goes from being enough to make the move to not nearly enough.
The stock market is a great place for long term investments because eventually – over the course of many years – the ups and downs balance each other out and you have pretty solid steady growth. However, over shorter terms – a few years or less – there isn’t nearly enough time for those to balance out. You might get a really nice return… or you might get a large percentage loss. You just don’t know for sure.
That’s why, if you’re relying on money, it should be somewhere far more secure than stocks. A savings account is a great option because you’re never going to lose any of your balance there. It’ll also grow at a small rate over that period.
No one should “invest” all of their money into a savings account. That’s not what it’s for. It’s good for holding money that you may either need very quickly (like an emergency fund) or money you know you’ll need in the next year or two (like your savings for moving).
When I first started at my current job in 2002 I signed up for the 401(k) there and contributed 10% of my income. I thought that was a smart move. Well, there are two problems, first is that they don’t offer any matching funds and second is that the investments here turned out to be horrible. They all have an expense ratio of like 1% or so compared to good funds that are around 0.05%. The company I work for is very large and I have about as secure of a job as I could have so I don’t intend to leave but I am really frustrated by my mistakes. I have cut my contributions down to 3% and started maxing out a Roth IRA but when I look at my balance I can’t help but hate how much the company has stolen from me through their [awful] investments.
On the other hand, where would you be if you had contributed nothing at all to your 401(k)?
I think you’re taking a “glass half empty” look at this situation. You already have a lot of money built up in that 401(k). Sure, the investment isn’t the best option, but it’s far better than a savings account and it’s far better than nothing at all. It’s still a big part of your retirement planning.
Now that you have studied the options, you can make some choices to put your money in better investment options – like the Roth IRA you mentioned – but that doesn’t make the other investments valueless. They’re still working hard for you.
My wife and I have a couple glasses of wine with dinner every night. It is one of the traditions we’ve held onto through thick and thin and we do not want to give it up even during our financial turnaround. Instead we are just trying to find ways to make it less expensive. We previously bought wine by the case from a local liquor store and from a few local wineries. Do you have suggestions for lower cost alternatives?
I’d do some blind tasting of some lower-end wine, like the Charles Shaw wines from Trader Joe’s. I find them to be quite good, actually.
I know from other wine-drinking friends that they simply aren’t even willing to try low-cost wines or declare that they’re awful as soon as they try them because they’ve already made up their mind about the wine as soon as they’ve seen the label.
So, here’s what I propose. Buy several bottles of cheap wine, along with a couple of your old favorites. Set up a tasting of several wines, but rearrange the bottles behind the wines. (Make a master list for yourself so you remember which is which.) Then, have your wife taste them. Wait a week, then do another random rearrangement and have your wife taste them again. Then show her the results.
I’d say that there’s a very good chance that the winning wine will be from a “cheap” vineyard. When you discover that “best” wine for you, buy that one by the case.
Homebrewing is a hobby I would like to get started with as I have heard you can make a huge variety of craft beers at home for lower prices than you buy craft beer at the store and there is a local homebrew swap meet too. However the equipment I have seen from Northern Brewer that they suggest as a starter kit is always like $50 or more and when I post this question on brewer message boards I basically don’t get an answer. What is the cheapest way to get started?
Honestly, your best route is to go to your local brewing supply store and tell them about your situation and ask what they suggest. They’ll often have items that are on sale that they can put together into a collection of items to get you started.
What you’ll eventually find, though, is that you want to upgrade the pieces you have. I really, really want a new fermenter, for example, as the one I have right now is a bit too small and the neck is really narrow.
You are correct, though, that once you eliminate the cost of equipment, home brewing can definitely be cheaper than buying six packs of craft beer at the store. It’s also a pretty fun hobby.
How would you describe your financial philosophy in just one or two sentences?
“Spend less than you earn and do something productive with the difference. Repeat this over every pay period, every month, and every year and you’ll achieve every financial dream that you have.”
That’s my financial philosophy in two sentences. Naturally, I can expand on every single piece of it for pages and pages and pages, but that’s the core idea.
As long as you follow that formula, you really can’t ever fail. The best part is that there are a lot of ways to spend less than you earn – frugality works, as does entrepreneurship and career focus.
Are there any cheap solutions for sun protection? All of the sunscreens and other things that actually work are pretty expensive especially for a family of six that spends a lot of time outside.
My solution is coupons. I hit the websites of the various manufacturers and download their coupons for their sunscreens. I’ll often print off several copies (or photocopy them).
Then, when I go to the store, I’ll buy the cheapest item that the coupon qualifies me for that meets my needs (that usually means buying several small tubes rather than one large tube). That usually ends up maximizing my savings.
Stores, particularly this time of year, will sometimes have sales on particular sunscreen brands. If you can match up a coupon with a sale, you can get sunscreen really, really cheap.
My biggest problem is that I can’t ever bear down on anything at work for very long or even do it at home. It feels like my mind is working on overdrive and constantly comes up with little questions that tickle my curiosity or things that I need to do or something else so that I am taken out of my work and find myself on Wikipedia or sending an email or something. I can see how it eats away at my work progress and it leaves me feeling as though I will never get ahead at work. There are others here far more productive than me so sometimes I worry about my job.
This describes me to a tee. There are several things I do to deal with it.
For one, I never work without a blank piece of paper and a pen in front of me. Whenever a thought starts dancing in my head and distracting me from work, I jot it down with enough detail so that I can recall it later and then get back to my work as quickly as I can.
For another, when I need to focus, I block every website that I can. I turn off my cell phone. I shut my office door. I simply minimize every distraction available to me. If I don’t, I find it easy to get distracted.
Those solutions aren’t perfect, but they help a lot. My ideal space for work is someplace with a bit of non-intrusive background noise, a blank pad in front of me, and minimal additional distractions.
Do you know of any good uses for flowers that have wilted? My husband brings me flowers a time or two a month and it just seems so wasteful to throw them out when they wilt.
Our usual route is to just compost old flowers. They make a great addition to our compost bin.
If you’re looking for other options, I looked around online and found this list of uses for old flowers.
I had a relative once who used to use old pressed flowers for greeting card decorations. Those cards had a certain elegance to them, I must say.
How does one buy a pair of blue jeans that last for more than a few months? Every pair I buy seems to have holes in the knees and around the ankles before a few months are over.
Here’s the truth – most blue jeans you buy have already been pre-treated both for appearance and to reduce their lifespan so that you have to buy more in the future. People often want jeans that look a certain way and thus will pay for pre-damaged jeans to match that look, even though that means a shorter lifespan.
My suggestion is to look for jeans with minimum pre-treatment. Jeans that already look worn at the store, like lighter-colored jeans, are usually destined to have a shorter life span.
Aside from that, unless you’re willing to pay a tailor or something, my suggestion is to trust Consumer Reports, who beat on denim like there’s no tomorrow. They usually recommend Levi’s. So, if you can find untreated Levi’s at a good price, that’s what I would get.
Here is a great strategy that one of my friends introduced to me for saving on books. She lives in the inland empire in California and I live in North Carolina. One day she suggested that we go through our respective (rather large) book collections and find some books that the other would like and just mail a box of them to each other. It turns out you can ship a big box of books really cheap via media mail. When my box came in it was like Christmas as it had about 70 books in it that my friend had chosen for me to read. Now I have books to read for months and months! We are talking about doing it again in several months when we’ve read through these books.
This is a really cool idea, not only for getting a big box of books, but also for cementing a friendship.
Media mail rates are really low, even for a large box of books. You can send a forty pound box of books for $20. To me, that’s pretty cheap, as you can pack a lot of books into forty pounds.
If you have a distant friend who is an avid reader, contact that friend and suggest a big media mail book swap. It’ll give both of you a bunch of fresh reading material at a really good price!
When do you decide that you have “enough” to retire? Isn’t it risky to retire when you have just enough income to live on? Shouldn’t you retire in a situation where your investment income is more than enough to live on?
My personal target is a 30% buffer. I want my income to be 30% more than my post-tax and post-“retirement” living expenses. If I don’t have that, then I’m going to continue working.
The exact number, though, is more of a matter of a personal confort zone. Essentially, the higher the number, the less likely it is that you will ever need to return to the active work force because your investment balance will just keep going up and up and up (since you’ll be reinvesting the extra).
I feel that with a 30% buffer, neither Sarah or I will ever have to work for income again unless we want to for other reasons.
Do you have any good suggestion for sources for campfire wood? We like to have campfires in our fire ring during summer and fall evenings but the cost of wood is really expensive even if you buy it in bulk.
At least part of our campfire wood comes from plain wood planks that our children break during martial arts practices. They save their own broken planks and we use them during campfires. I know that some people leave their broken planks there and they sometimes have a box of broken planks out in front of the school for people to take if they want.
You may want to check with any martial arts schools in your area to see what they do with their broken planks.
As for other sources, I’d see if there’s a sawmill near where you live. You might also look around for opportunities for bulk purchases (and fill up part of your garage or yard with a big firewood stack).
You should consider using drugstores like CVS and Walgreens for your toiletries. If you plan it right you can get things like toothpaste and deodorant and shampoo for pennies. There are lots of websites for strategy tips too.
I’ve tried strategies at CVS and Walgreens in the past and you absolutely can get very, very cheap toiletries there. However, I found that you have to do a ton of planning and preparation to get one of those really amazing bargains. It often takes lots of research, coupon clipping, checking the flyers, and so on before the stars line up.
For me, that’s a pretty big time investment for what I actually save on the toiletries. I have found that it’s more efficient with my time, compared to the money I save, to just grab a few coupons and buy them on sale at my normal grocery store or at a warehouse club.
It is absolutely cheaper to get them at drugstores if you plan things well. I just haven’t ever found the time invested to be worth it.
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.