Questions About Sale Prices, Photoshop, Cast Iron, Books, and More!

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. Helping parents with retirement
2. Question about sales
3. Moving to new investment firm
4. Vegetarian options at ethnic grocers
5. Buying nonperishable food online
6. Professional drinks and frugality
7. Cast iron for a family
8. Fantasy sports as frugal hobby
9. Learning Adobe software for cheap
10. Handling a spending addiction
11. Baby frugality tip
12. Best book of 2014
13. Stock market investment questions
14. Tracking the “chain”
15. Celebrating New Year with kids

During the week between Christmas and New Years, I spend a lot of time reflecting on the year that just passed and thinking ahead of the year to come, a theme that you’ll see reflected in a few of the questions in this mailbag and in some of the posts to come this week.

Was 2014 a success or a failure? I have a hard time really thinking of any year as a “success” or a “failure” on the whole. I’d identify 2008 and 2011 as high water marks professionally, but both years involved some serious personal challenges and failures, for example. I feel as though 2014 was “good” in most regards, but didn’t stand out as “great” in many areas.

Will 2015 be great? What can I do to make it great? It’s something that I’m going to be thinking about a lot in the next few days.

Q1: Helping parents with retirement

My question revolves around my parents. They haven’t made the best choices over the years with money, they have spent more than they earn and haven’t built much capital. They are now starting to view their retirement coming up (10 years away) and are starting to be more proactive with their finances. I am trying to help them in a non-judgemental way and was wondering if you could give some direction to the questions to ask them as I help facilitate discussion. I have thought about goals for retirement/next 10 years and helping them track their spending and calculate their net worth. Is there anything else you suggest? It is just a fair bit different guiding someone else through the steps (who may still show resistance) then leading yourself down this path.
– Neville

As time goes on and I hear the experiences of more and more readers (as well as my own experiences), I’ve come to believe strongly in the old adage “you can lead a horse to water but you can’t make them drink” when it comes to family. You can do all the poking and prodding in the world, but it isn’t going to make a bit of difference when it comes to the other person changing their behavior unless they want to make that change.

All you can do, as someone who loves them, is simply be strongly supportive of any positive choices they make and make sure they know you’re there if they need help plotting out their next step. If you jump in too much, not only will it not really help, it may foster some resentment.

Just make it clear that no matter what they need, you are only a phone call away. You can list off things that you’ll help with so that it’s in their mind, but you have to wait until they’re ready. I think you’re doing well so far, but just make sure you don’t push yourself in too hard. Be patient and you will be invited if they need you.

Q2: Question about sales

Help me settle a friendly argument I have with my husband. Okay, let’s say you go into a store and there’s an item that’s regularly $40 and it’s on sale for $20. My husband says that you should just ignore the $40 entirely and that the item is just worth $20. My thought is that if the item normally sells for $40 that’s what the item is worth and it’s on sale because the store is just trying to get people in the door.

So what is the item worth? $40 or $20?
– Jane

I usually think of an item as being “worth” whatever I could immediately sell it for. I’m usually okay with paying something more than that – after all, there are costs in making it immediately available to me, offering customer service, how much I actually need or want the item at that moment, and so on – but it’s “worth” whatever I could sell it for.

To make it simpler, unless I directly need or want the item, the item is worth whatever I would end up with after selling it on eBay or Craigslist. It only has additional “value” if I actually have a real use for it that goes beyond just seeing it on the shelf and imagining some way I could use it even though I never even thought of wanting it before.

My guess, in this situation, is that the item is worth less than $20. If it’s worth more than $20, you should have bought it and flipped it.

Q3: Moving to new investment firm

When I graduated from high school, my grandfather gave me $20,000 in a mutual fund at Charles Schwab under the promise that I would sit on it until I was ready to buy a house. I’m now 26 and I’m not ready to buy yet mostly because I haven’t really settled yet and I keep switching jobs, so I do want to keep investing. However I want to move all of it to Vanguard. What is the best way to do that?
– Adam

Since you didn’t specify exactly what mutual fund you’re invested in, I’m going to guess it’s in one of the funds managed by Schwab themselves, like SWANX.

There are two possible things you want to happen here. Either (a) you want to own a Vanguard fund but still have Schwab as your brokerage or (b) you want to simply cash out and move everything to Vanguard. I would strongly recommend the latter as it cuts out a middleman.

Assuming you want the latter, you’ll have to sell your investment at Schwab. You will owe taxes on the gains – basically, everything above $20,000. The taxes should be long term capital gains, meaning that you’ll only be paying 10% or 15% federal taxes on them. So, let’s say you sold it and it had a total value of $40,000. You’d owe taxes on just $20,000 of that money and you’d only have to pay either 10% or 15% in taxes – either $2,000 or $3,000. You’d want to talk to a tax professional to make sure of your amount.

Then, just open an account at Vanguard and buy one of their funds with the amount you have left after taxes – $37,000 or $38,000 in this example. From that point forward, you will only owe taxes on the gains above that new initial balance. Good luck.

Q4: Vegetarian options at ethnic grocers

there is a wonderful product called nutrela that can be found in asian food markets. it comes in two forms, granulated and chunks. these are soy products but cost only $1.59 for a box (of the chunks) that will make 3 large pots of meat-less soup/stew/chili that people will swear contain meat. i don’t like the granules, but i’m sure they would fit in some families better. to use the chunks, simply soak them in water first to plump them, then put them in your prepared soup/stew/chili and let them soak in a while. my mother denies that the soup i make for her can possibly be vegetarian!

another great find at the asian market is canned jack fruit. this stuff is perfect for making chili. use it instead of the ground meat you normally use. with the spices in chili, there is simply no way to tell that you’re not eating meat.

Both of these products will save a lot of money, are easy to use, and pack a lot of nutrition for the price.
– Dylan

I am unfamiliar with nutrela, but it seems to be a soy-based protein that you can use in a lot of dishes. If you’re looking for a meat substitute, it’s certainly worth trying.

For me personally, I don’t really use meat substitutes any more. They were useful when I first chose to be vegetarian and missed the texture of meat, which they could reasonably match, but after a while, I didn’t really miss it so we just stopped using it.

I haven’t tried jack fruit either, but that sounds more interesting.

Q5: Buying nonperishable food online

Is it safe to buy nonperishable foods online (things like herbs and spices)? I sometimes see good prices but I’m a little worried about ordering it.
– Kacey

If you’re buying from a reputable source, I would have no qualms about buying a nonperishable food online. After all, when you buy those things at the store, you’re also buying at the end of a supply chain that you don’t know much about.

I usually buy our family’s most frequently used herbs and spices at the local food co-op in bulk. It works pretty well for us.

However, I wouldn’t have any real qualms buying such items online.

Q6: Professional drinks and frugality

At my company, many workgroups go out together after work for drinks. Often, the managers foot the bill but many times the workers buy rounds of drinks. This is really expensive. I’ve been doing it for a few weeks and I’ve been hit with $50-100 tabs a few times.

I’m new at the company and make $36,000 a year. If I have to spend $100 or more a week just to keep up with the social network, that’s like $5,000 a year after taxes that just vanishes. I can’t afford that long term.

However this seems like something that basically everyone participates in. The few that avoid it are derided and kind of ignored at work and left out of stuff.

What do I do?
– Charley

First of all, you need to establish whether it’s really “everyone” or if you’re just perceiving it to be so because you happen to know several people who are doing it. I used to work in an office where it seemed like “everyone” went out, but in truth it wasn’t that big of a group – in fact, it was a minority.

Another thing to do is to look for other ways to connect with those people. I found that dinner parties were a great way to connect with professional peers and sometimes even build lasting friendships with them. It doesn’t have to involve spending a big wad of cash to get drunk.

There’s also no reason why you can’t just do this some of the time. Why not just go out on one night a week with them and skip the others? That way, you stay connected with the group but it’s not bankrupting you.

Q7: Cast iron for a family

If you were in your 20’s and you had the forsight to know the size of your future family
1) how many cast iron skillets would you recommend to yourself? What sizes?
2) How many Le Creuset pots would you recommned to yourself? What sizes?

– Stephen

If I were buying cast iron skillets for my family as it exists right now, I’d buy two large Lodge skillets with lids, probably the 15″ version. There are occasional meals where I do need to keep two skillets going at once.

As for the enameled cast iron, I’d probably buy two six quart enameled cast iron pots. However, I’d buy those with the Lodge brand as well. The Le Creusets we have are great, but they’re really expensive. The Lodge cast iron pots I’ve seen are 90% of the quality at about 25% of the price.

I find that between those things, I can cook almost anything I can imagine. We also have a stainless steel saucepan that we use for things like making quick sauces… and that pretty much covers our stove top cooking items.

Q8: Fantasy sports as frugal hobby

One frugal hobby that I haven’t seen you cover is fantasy sports like fantasy football and fantasy baseball. You can play it online for free either with friends or with strangers and if you get into it it can be a lot of fun and actually can be as involved as you want. Some leagues even have prizes. It all costs nothing too.
– Jeremy

I play fantasy baseball, fantasy football, and fantasy basketball. All three are quite fun.

Honestly, though, I really only watch baseball (actually, I mostly just listen to radio announcing of baseball games). I almost never watch football and only occasionally watch basketball.

I play the fantasy sports because I view them mostly as a game. I try to figure out who’s good and bad using pure statistics, and because I rarely pay attention to anything other than the injury wire and the stats, I don’t get affected by the “hype” for certain players. I actually think that helps me play better.

Anyway, I absolutely agree that fantasy sports are a great way to have fun and there are lots of ways to play for free online.

Q9: Learning Adobe software for cheap

One of my goals for the new year is to really learn how to use Adobe Photoshop and Illustrator. Although I have the software I am on a pretty tight budget. I am looking for ways to learn the software well without spending too much (preferably for free). Any ideas? Good Youtube tutorials or something else I don’t know about?
– Jennifer

There are tons and tons of good Youtube videos for learning Adobe programs (and any other complex software tools). Check out these channels for Photoshop. The organized videos for Illustrator are a bit more sparse, but this is a good starting point.

If you’d like a more organized “class” feel, I recommend checking out some of the stuff at SkillShare. Some of the content there is free, while other parts are delivered via a subscription-esque model.

More hands-on learning is probably going to require a classroom environment. You may want to check at your local community college or your local university to see if they have anything that fits.

Q10: Handling a spending addiction

We have a family member that buys expensive things; in the range of $25,000.00 to $40,000.00 about twice a year. He is in talk therapy and on medication for the problem. It is an addiction for him. He knows that he has a problem but has been unable to stop his compulsion to buy. So far the family has been able to keep the finances ok but it is coming out of what should be house payments and retirement savings. Do you have any suggestions as to what can be done to stop his use of this money? I’m sure there are more people out there who are dealing with a compulsive gambler, alcoholic, etc that could use some of the same help.
– Will

I think you’re probably looking for Debtors Anonymous, which is a group for the people with the type of compulsive problems that you describe.

It can help a lot if he’s willing to change, but that’s true of all groups of this type. The change really does have to come from within. Such groups just help.

If he’s not really willing to take steps himself, his immediate loved ones should make moves to financially protect themselves. They should not be in a situation where his missteps can drown them financially.

Q11: Baby frugality tip

If you’re going to have a baby in the future, hold onto old t-shirts. They make great burp rags. When you have to burp your baby, toss that old t-shirt over your shoulder before you start burping. That way if the baby spits up a little it will just go on the old t-shirt and keep your good shirt clean. I used to even keep them in my car. It’s a lot better than buying receiving blankets or spending any money on burp rags.
– Jane

We did this ourselves. We also used a lot of receiving blankets for this kind of purpose because we received a lot of those as baby shower gifts.

There are just so many products that are sold as “baby items” at an expensive rate that are easily replaced by common-sense items like an old t-shirt (or simply have no purpose at all). The problem is that it takes advantage of the desire of new parents to “nest” and take care of their child before they really know what they need.

You won’t love your child any less if they burp up as a baby onto an old t-shirt instead of a receiving blanket or something similar.

Q12: Best book of 2014

I love your book recommendations each year! They usually fill up my library reserve list! When will you share your favorite books of 2014???
– Khloe

I read a bunch of books I deeply enjoyed in 2014.

The book that made me think the most in 2014 is This Changes Everything by Naomi Klein, which lays out the economic impact of climate change in varying degrees regardless of the source, as well as the economic impact of various responses we might take to climate change. It doesn’t dwell on the issues of who or what caused climate change but instead on the long-term economic costs of it.

The book that haunted my dreams was Station Eleven by Emily St. John Mandel, which felt like a slightly more uplifting version of The Road. Post-apocalyptic, yes, but it doesn’t just dwell on the despair.

One book I really loved but would only recommend to some people is The Martian by Andy Weir. It tells the tale of a guy stuck on Mars for more than a year by himself and how he survives with very rudimentary equipment. It’s very hard science fiction, meaning that everything happening has a hard scientific explanation. For some, that’s very engaging and for others, it’s not quite as much. I’d recommend it to science fans.

Q13: Stock market investment questions

I would love to invest in the stock market, you know, buy shares of companies like Apple, Starbucks, Coca-Cola and whatever else I’m interested in and have researched. To start I’ll try to give you a sense of my financial profile:

I have a 401(K) at work and a Roth IRA with T. Rowe Price, some debt I guess (I co-signed my mother’s mortgage and small-ish student loan for my sister…a whole story there but so far its been manageable; knock on wood) but no primary loans in my name at all and no credit card debt either.

I am also building (or rebuilding) my emergency fund (I’m currently saving and will also put any tax refund I receive towards that as well) and I have a small foundation in my checking account (no overdraft fees here!)

I think I have (or will have) $1,200 to invest in stocks. If I need more money I’m willing to wait and save up a little more but if this is enough money I’m more than willing to start now. I just don’t know WHERE to start; should I go through a (traditional) broker? And if so, who?

My options are Motif Investing, Loyal3, Betterment and then Scottrade (maybe Fidelity?) I learned of Betterment through a few blogs but then Mint.com suggested I opened an account with them, same thing with Motif Investing. I think I learned of Loyal3 through them as well. I’m well aware of Scottrade and Fidelity from years ago and those seems like viable options as well.

I should mention that I have a Schwab High Yield Checking account connected to a brokerage account I don’t use. I wasn’t even considering them…but should I? I haven’t decided how I want to manage my stocks but I don’t want to be an passive investor. I either want to be fairly involved and actively manage my portfolio myself or somewhat low maintenance (low cost and diversified, of course) but not entirely hands off either.

There are so many things to look for; like how much it costs to trade and number of stock options as well as any other fees, etc., that I get a bit overwhelmed.

What has been your experience with these, if any? Should I invest in two, three or ALL of these with a small amount and then track results to see which I like best, like their web interface and fees? Could I sustain something like that at first? Is it legal or feasible financially?

Or should I settle on one or two at first?

Or, is it more practical to just choose one company/firm and give myself time to familiarize myself with it and learn a bit before deciding what I do and don’t like, and whether to stick with that one or move on to something else?

Again, I think I have $1,200 to invest. But I could start with $500 and/or wait and save a little more (like $2-3,000). What IS an ideal amount to start with anyway?

What should I do? How do I pick the right brokerage or company right of the bat?

I mean, I know I’ll make mistakes and that there is a learning curve but I want to start NOW. I just turned 30 years old and it’s something I’ve been thinking about for a while! I really want to make money and I’m more likely to “hold” then sell, sell, sell…I think.
– Jenny

With that amount, I wouldn’t invest in multiple investing firms at once. Instead, I’d just pick one and see if it meets your needs.

In general, you can do most of the important comparisons without having an account there, such as the expense ratios on the various funds you might choose. Most investment houses let you see these without signing up and, if they don’t, you want to steer clear anyway.

Interface is probably not a reason I would use to decide where to invest. Most investment houses change features all the time, so choosing one based on liking the interface more might end up being a moot choice in a year or two.

Q14: Tracking the “chain”

When you’re working on a new daily habit, how do you track your progress? Do you literally print out a wall chart and stick it on your wall and mark off each day with a big X?
– Devon

A wall calendar works really well for this. You can just print out an annual calendar like this one and start marking off the dates.

For the last couple of years, I’ve been using a Hobonichi Planner as a personal journal to keep track of things that I want to remember about each day. I use this for my “chains” using some of the blank pages of graph paper at the back. Since I use that planner every single day, it works well for me.

The key is to just keep track of your chain in a place where you’ll see it all the time. That will give it the impact you want.

Q15: Celebrating New Year with kids

How do you guys celebrate New Years? Do you hire a babysitter? Do you keep them at home? Do you guys celebrate at home or go out? Trying to figure out what a frugal family does on this big “party night.”
– Alexis

Most years, we just invite a handful of people to our house and play board games and watch movies until the midnight hour. We let our children stay up as late as they can as well, as it’s the one night each year that we don’t worry about their bedtime. They can sleep a lot on the first of January to make up for it.

We usually make a big pot of soup in the slow cooker early in the day and then have some snacks later in the evening. Mostly, it’s just an excuse to hang out with friends.

It’s pretty low key, which is how Sarah and I like it.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. 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.

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