Questions About Poor Credit, Shaving, Potatoes, 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. Pricing for a new business
2. Handling windfall
3. Alone and disabled
4. Starting off with poor credit
5. Walking away versus security
6. Frugal fun that isn’t boring
7. Inexpensive shaving without safety razor
8. Cheap stuff scares me
9. Thoughts against the latte factor
10. Using the air conditioner
11. Huge potato abundance
12. Feeling trapped

This past weekend, my family (and I) attended the Des Moines Arts Festival, which is a free summer arts festival that happens annually right in the heart of downtown Des Moines.

The festival mostly consists of several hundred booths by local and national artists showing off their wares – painters, sculptors, metalworkers, photographers, and so on. There were a lot of food vendors, as well as a large section with child-friendly activities.

On the day we went, the heat and humidity were practically oppressive, but we still wound up staying until just before the festival closed down for the day.

For our family, the main value wasn’t in buying things or anything like that – we weren’t looking for art for our home. We were looking for inspiration.

Afterwards, though, one of the first things that happened was that our children attempted to recreate some of the best things they saw at the festival. They made drawings of some of their favorite pieces and seem to be inspired to sculpt as well.

To me, that was the best reason to go to the arts festival. It inspired our children to create – and it was free.

(Also, a big shout out to the glass sculptor who was incredibly kind to my oldest son and talked to him at length about glass sculpting, even when there were a couple people there who might have actually considered purchasing his wares.)

Q1: Pricing for a new business

I am starting a small business but the pricing is my down fall. It’s simple assisting people with their parties, prepping their cooked food, setting up the buffet line, replenishing when needed, breaking it down, and cleaning up. My question is do I charge by how many people? And if there’s extra work, how much do I add?
– Carrie

My suggestion would be to look online for a business in another area of the country with a comparable cost of living to your own and see if you can find one that matches the services you’re providing, then simply ask that person for advice.

Since that person is in another part of the country, you two won’t be in competition with each other, and someone with experience in the field will be able to give you much better advice than I ever would.

Just look around for areas of the country with a similar cost of living and culture as your own area (for instance, living near Des Moines, I’d probably look for quotes from Minneapolis and Omaha) and then find businesses in those areas that match your own services, then ask them for startup advice.

Q2: Handling windfall

I’m in my 70’s with a hundred thousand in the bank.. I have no idea what to do with it. My uncle had me on his account when he passed away. I don’t own anything except my car and I just don’t see buying a house at my age is a good idea. What say you?
– Nina

If you don’t have any purpose for spending the money, then just hold onto it for emergencies. You may find a need to travel unexpectedly for some reason, for example, or you may find a need to suddenly move to a different apartment, or you may need cash for a medical issue, or you may need to help out a friend or loved one. Cash in the bank can help with all of these things.

You seem pretty content with your life right now, so I’d stick with that contentment and add to that the security of having money on hand to deal with those kinds of unexpected expenses.

Also, given your age and the relative insecurity of the stock market over the short term, I’d probably just keep the amount in cash in a savings account for now. I don’t think that your potential uses for the money would be benefited by having that money in the stock market where you might lose money over the short term before you need to spend it.

Q3: Alone and disabled

My question is how can I get help to get on my feet? My mom died several months ago then a week later my husband died then I moved and been abandoned by everyone in my life. I have only disability to live on which is not enough. By the time my bills are paid I don’t have enough for food. I can’t get help from our wonderful welfare system so can you help me find a way to survive I am all alone and no I know cares although they all said they would be here for me they’re not, so now what? I would like any advice you could give.
– Peggy

Since I don’t know many actual specifics about your situation, my best advice to you is to seek out a pastor at a local mainline Protestant church in your area – Methodist, Lutheran, Presbyterian, Episcopalean, and so on.

I’m not recommending this because I think that religion is the perfect solution to your problems – it is beneficial for some but nowhere near universal – but that pastors at those churches are usually incredibly compassionate people with their thumb on the pulse of charitable help in the community as well as meeting the needs of the disadvantaged.

I have known a lot of pastors in various denominations and I can say with certainty that if I ever found myself alone and down on my luck in a community anywhere in America, the first place I would turn would be to the pastor’s office in a mainline Protestant church. I am very confident that I would get a great deal of help from the person behind that door.

Q4: Starting off with poor credit

I love the Simple Dollar and have been lucky to have had parents who coached me on financial responsibility from an early age. However, I recently became friends with someone who is not from the same financially-minded, upper-middle class background as me, whose father passed away unexpectedly when he was younger and mother has been working multiple minimum-wage jobs to support the 3 children for the past 6 years. Anyway, this young man is now 20 years old and was distraught because his credit seemed “ruined” as he couldn’t get approved for electrical service, credit cards, phone service, etc. He asked his mature, adult friends and they recommended he get a credit card and pay off the balance to build a history, so he applied for several. In reviewing his credit report yesterday, he has multiple “hard pulls” on his credit from attempting to rectify this situation and therefore his credit is poor, even though he has never had debt before.

I know he should get a secured card, his brother just co-signed a car for him so that will help, etc. but I’m just bewildered and at a loss at how much a couple of innocent mistakes made by a young man without the guidance to direct his financial decisions has set him up in such a bad place already. My first instinct is to DO something, but I don’t know where to start. I’m also a high school teacher at a low income school and want to make sure my students avoid similar problems…. help?
– Carrie

This is one of those issues that I can see from both sides. This individual made some mistakes in his youth, ones that are now really costing him in terms of setting up an “adult” life. On the other hand, banks and businesses rightly view him as a credit and overdraft risk – it’s a risk to take him on as a customer because the history that’s available about him is one of missing payments and poor credit.

The best thing he can do is look for a financial institution that will sit down and look at his life in a non-automated way and help him find tools that he can use to start rebuilding. I’d strongly encourage him to visit a local credit union to start, as that’s (at least in part) the purpose of credit unions. They’re meant to help people in the community who need to establish credit. You’re correct that something like a secured credit card is a good first step.

As for teaching students about this, ask this young man if you can use him as a case study in your classroom. Take away some of the identifying items and literally use his story as an example of what can happen to you if you make these kinds of mistakes. If he’s willing to talk about it, invite him to speak to your class.

Q5: Walking away versus security

I’m 55 years old. I have worked for a half dozen companies over the year. I have been contributing to a 401(k) plan since I was 26 and most years I contributed 20% of my income because I did the math and saw what was coming. For a while I had matching contributions too. So right now I have enough to retire and live off of about 2.5% of the balance each year.

Whenever I think about retiring though I get worried about whether I really have enough saved to actually retire. I have a stable job that I like well enough and every year I save more and let things grow without withdrawing, the higher the balance and the better I feel about a 3% withdrawal rate which means that my “take home” would actually go up in retirement.

How do I decide what the right moment to walk away is?
– Henry

In your situation, the right moment to walk away is the moment in which you think you would be happier on a daily basis doing something else besides going to work while keeping in consideration the happiness you get from continuing to build up your retirement security.

At some point, you’ll likely begin to feel like you’d rather spend your days doing something else, like spending your days fishing or working on a different project. That’s the time to retire.

Retiring before then will leave you without direction and missing your job. Retiring after that means you’ll go through time at your job where you feel miserable having to go to work. Neither one of those is desirable.

Listen to your heart. You’ll know when it is time to leave.

Q6: Frugal fun that isn’t boring

What do you do for fun that isn’t boring? Everything fun seems to cost a lot of money either for the tickets or the gear. All the free stuff you mention seems terrible.
– Tyler

The idea of “boring” varies a lot from person to person. There is almost nothing that I personally find “boring” or “terrible” because I have a lot of interests. I often lament that I have a lack of time to do all of the things I’d like to do, and that’s just things that are essentially cost-free.

My only suggestion to you is to try a lot of things, but try them with an open mind. An open mind is key here. If you go into trying something new with the idea already implanted in your head that the thing you’re about to try is going to be terrible, it’s almost always going to be terrible because you’re not giving it a fair shake.

Many of the things I now enjoy doing the most in my spare time are things that, at some point in my life, I felt I had no interest in. I was never particularly interested in hiking until the last 10 years or so of my life. My interest in board games didn’t really launch until I was an adult on the cusp of marriage.

Q7: Inexpensive shaving without safety razor

I tried using a safety razor for about a month. Never got a close shave with it and it often just shredded my skin and left lots of cuts on my chin and cheeks. The only razors that don’t brutalize my skin are the cartridge razors with really expensive refills. Any suggestions on how not to spend $2-3 per shave?
– Alex

First of all, you don’t need to throw away the cartridge on a cartridge razor after the first shave with it. Even the most sensitive skin can be fine with multiple uses of a cartridge razor. Try using them two or three or four times.

Second of all, you can “sharpen” cartridge razors (you’re actually honing, not sharpening, the blades) by using a device like the RazorPit. That little tool has allowed me to keep using the same cartridge on a razor for more than a month at a time.

Third, my experience with shaving with a safety razor versus a cartridge has been that when you shave with a safety razor you have to shave completely differently. With a safety razor, you have to be very very light with your touch, whereas with a cartridge razor you can get away with pushing down quite hard – in fact, sometimes you almost have to do this to get a good shave with a cartridge. Shaving with a safety razor in the same way I shave with a cartridge razor would result in a lot of cuts and nicks and blood. Not pleasant.

Try those things and whether you stick with a cartridge or a safety razor, your cost per shave will go down.

Q8: Cheap stuff scares me

I tend to buy expensive versions of things because whenever I see a lower price, I tend to assume that the manufacture of that item cut some serious corners and I envision the consequences of that as being a disaster for my health or my home. How did you get over this and switch to buying store brands?
– Aiden

I bought store brands and tried them. They worked just fine 98% of the time. When they worked for my needs, I stuck with them. That’s really the full story.

The truth is that if you buy a store brand and find that it doesn’t really work out for you, then don’t buy it again. The only “risk” that’s involved is the relatively low cost of buying that store brand, and chances are that you’ll find some use for it.

Not only that, most store brands are simply identical to the name brands, just with a different label on the packaging. There is no difference between store brand and name brand ketchup, for example – look at the ingredient lists and the nutrition fact labels.

Q9: Thoughts against the latte factor

Do you have any thoughts on this article?

You recently sort of defended the latte factor concept. Thoughts?
– Eric

I agree with the idea that big things like housing costs have a big impact on a person’s finances. However, to say that small costs don’t matter, particularly when those small costs are repeated much more frequently, makes little sense to me.

According to the logic presented in that article, if something costs you $200 a month, it makes sense to try to trim it. But if something costs $7 a day, it’s not a big deal and can be overlooked.

The problem is that the $7 a day expense adds up to $210 over a typical month. It’s actually bigger than the monthly expense, it just doesn’t look that big. Not only that, that daily expense is usually for something less important than the monthly expense.

The real problem is perspective. If you make the perspective on everything into an annual cost, then things become clearer. How much are you going to budget this year for your daily $7 coffee? $7 times 365 is $2,555. Is that a rational annual budget line item for coffee, especially if the average American take-home income is around $50,000 a year?

My solution for things like this is to budget a certain amount of “fun money” every month that I can spend as I please. I might choose to buy a coffee every once in a while out of that money, but if I do it every day, I literally won’t have money for other things I might enjoy. The “latte factor” would eat up all of my “fun money” if I consumed a latte every day.

Q10: Using the air conditioner

My husband and I work different shifts. I leave for work at about 7:30 in the morning and he gets home around 11 in the morning. During those three and a half hours no one is at home. Are we better off shutting off the AC during those hours and then my husband turns it on when he gets home and it runs for a long time to get it cool again? Or should we just leave it on so that it runs occasionally during those hours and it’s already cool when he gets home?
– Lila

There’s no “right answer” here, as it depends on the humidity in your area, the quality of insulation in your home, the actual high temperature that might be reached by 11 AM, whether there are hardwood floors in your home, whether the sunlight directly hits your home in the morning, and so on.

With all of that uncertainty, I’d probably lean toward this solution: When you leave in the morning, close all of the curtains and blinds and then leave the temperature low. That way, your home will heat up as little as possible while you’re gone, which means that the air conditioning won’t have to run as much.

It might not be the perfect solution, but without having a ton of additional information about your home, I can’t really give you the perfect answer.

Q11: Huge potato abundance

What can I do with a ton of potatoes? Like a couple hundred pounds of potatoes? I was able to buy them for pennies a pound as long as I carried them away myself so I loaded up my trunk twice with potatoes.
– Dennis

Sell them for a profit? That’s my first reaction. See if any of your neighbors need potatoes and sell them off at a small profit from what you paid, but at a price lower than what they can get in the store.

If you’re going to keep them around yourself, store them in a cool place with good ventilation, but where the temperature doesn’t dip below 50 F or so. Low temperatures cause them to get discolored and causes a flavor change that you probably want to avoid. Don’t wash them until you’re ready to use them, either. If you do those things, you can store them for quite a while.

You can freeze potatoes reasonably well. The trick is remove as much water as possible from whatever form you’re freezing (by squeezing them in towels), then spread the potatoes out on a cookie sheet and freeze them immediately. After your hash browns or French fries are frozen, you can bag them in freezer containers.

Q12: Feeling trapped

I have a job that pays $78,000 a year that’s about as employee friendly as can be, a great family, and a nice house, and all I can think about is how trapped I feel and how I just want to run away and escape from all of this. I spent a decade of my life building these prison bars and I’m basically completely unhappy with everything.
– Marvin

Every choice a person makes in life means that they’re closing the door on other options. That’s just the nature of life. Whenever you choose to spend money or time, you’re choosing not to spend that money or time in other ways.

Sometimes, we all regret the choices we made in the past regarding our money and time. I have lots of regrets about how I once spent my money and time. I try to do better than that each day.

My advice to you is to look at the life you have now and think about what elements you actually would miss if they went away and the ones you’re responsible for. Preserve those elements, then work to replace the other elements that you don’t like. Change your hobbies and your free time use. Look into a new career. Change as many of the variables as you can change.

You may also want to consider the possibility that a medical issue of some kind is involved. I would talk to your doctor about this in full detail. It may be something as simple as taking a daily medication that replaces something your body is lacking, or even a vitamin or mineral imbalance.

Good luck.

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.

Loading Disqus Comments ...
Loading Facebook Comments ...