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. Solar panels
2. Personal finance advice by age
3. Establishing “brown bag lunch” routine
4. Switching to LEDs
5. The expense of pets
6. My early retirement experience
7. Fiction for financial success
8. Taking a sabbatical?
9. Relating to very wealthy sibling
10. Spare clothes at work
11. Frozen lasagna watery when cooked
12. Recommended notebook for online classes
One of the biggest stresses of parenthood comes when your child is sick. Not just a little sick – seriously sick, where lots of very frightening treatments are on the table and you’d give just about anything for that child to feel normal again for a little while.
Although the medical costs are always a worry, it’s just a drop in the bucket compared to the sickness you feel in your stomach when your child lays there suffering from an illness that mom or dad can’t simply fix.
Remember not just the sick children, but the parents who are sick with worry, too. May they all find the respite they need and deserve.
You have mentioned buying a solar system for your home soon. How did you go about running the numbers on that saving you money? Is buying a system outright a better deal than leasing the panels?
It is very difficult to hold firm when it comes to numbers regarding solar panels because the prices are dropping pretty quickly over the last several years and it’s really hard to tell where the “bottom” is. It also doesn’t help that tax benefits are changing all the time, as are the rates that energy companies will pay you for your excess energy.
Right now, most of the estimates I’ve seen for a full home system, after tax benefits, is about $14,000. Unless you live in a mansion and have reasonable home energy habits, that system should cover all of your electrical needs and more, allowing you to sell a little bit to the electric company each month. The benefits of that scenario depend heavily on what the energy costs are in your area, but this could be fully paid off in six years in some areas.
Some solar companies offer a leasing package, where they will install and maintain the panels for free but they get all of the tax benefits and you pay them a monthly fee. That fee is usually – but not always – less than the amount of energy you save. If you don’t want to pay anything up front, this option is tempting, but it’s not a guarantee that you’ll save (though it is likely).
The problem seems to be that as panels become more efficient, the tax benefits are getting less and less and the energy companies are paying less and less to buy back electricity from panel owners that are producing extra. In other words, I think that the “startup cost including tax benefits” is going to remain pretty steady, only dropping at a very slow rate going forward (as panels get cheaper but the tax benefits evaporate), but the buyback rate from the electric company will drop slowly, too. In other words, now is as good a time as any to buy in.
I see articles all the time about “personal finance for millennials” or “how to invest in your 20s and 30s” or “money for seniors.” Yet they all kind of read the same to me and it’s basically “spend less than you earn and invest the difference.” How does that actually change as you get older?
The younger you are, the less you need to save each month for retirement to have plenty of money left at a typical retirement age – say, age 65. If you have nothing saved for retirement at age 25 and want to start, you can do just fine by saving, say, 10% of your income. Later on – say, at age 45 – if you want to do that, you’re going to have to save around 30-40% of your income for retirement.
Younger people generally have a negative net worth, meaning the value of their total assets is less than the total of their debts. That is a hole well worth climbing out of as quickly as possible, as it makes it difficult to make moves like borrowing for a home loan and such. That’s why, for college age students, the advice is to avoid student loans if possible, and for recent graduates, the goal should be to eliminate the worst of your student loans, consolidate them, and simply get them under control. Student loan advice is very important to people in their 20s, but not so much for people in their 50s and 60s.
In other words, most of that advice is really that core message that you give, tailored to the specific life situation that people at different ages find themselves in. Do they have a long career ahead of them, or are they nearing retirement? There are different things you should be doing and thinking about.
Do you have any good strategies for permanently establishing a “brown bag lunch” routine?
My big challenge is that I don’t feel like I have enough time most mornings to assemble a meal at home. I’m in a rush getting the kids to school and getting myself ready and out the door by 7am and making a lunch is the obvious thing to “skip.”
I’ve tried making meals the night before but they never turn out well. Sandwich bread is cold and soggy.
Any other ideas?
If you’re wanting to take sandwiches but find the sandwich bread “cold and soggy” the next day, pack a sack lunch where you keep the materials separate from each other. Have one container with the sandwich contents in it and another container with the bread – or store a loaf in your work desk if applicable.
Overall, I found that the best routine to establish when it comes to brown bagging lunch is to simply do all of the prep work the night before so you can just grab your lunch bag in the morning from the fridge. I usually try to prep things like this immediately after supper the night before as my lunch for the next day is usually supper’s leftovers.
Yes, some things don’t mix well if you leave them sit in the fridge for 12 hours and sandwiches with any moisture is definitely one of them, so just keep things separate. You’re better off taking two or three baggies and assembling things on site rather than having an awful meal.
OK, so I’m on board with LED bulbs after reading about them on The Simple Dollar and seeing some in action at Lowe’s. My question is whether it makes sense to just switch everything right now? Or do I wait until the bulbs burn out and replace them with LEDs? We have a few unused bulbs in the cupboard too. Most of my bulbs are incandescents but some are CFLs which I hate.
If you’re looking purely at saving money, you should toss incandescents immediately and replace them with LED bulbs. CFLs should probably wait until the end of their natural life cycle to be replaced as there’s not nearly as much of an energy savings in replacing a CFL with a LED as compared to replacing an incandescent with a LED.
Of course, the problem is that tossing perfectly good incandescents in order to save some electricity in the short term isn’t good for the environment, either. Those bulbs wind up in landfills, after all.
The best solution is to swap out the incandescents in most light sockets and save all of those incandescents for infrequent usage sockets, like a closet light or a laundry room light. Those lights aren’t on for long periods, so the LED savings isn’t a big deal.
You should write an article about how expensive pets are. They can be really really expensive.
We got a dog as a puppy 13 years ago. Since then we have fed it good quality dog food that ended up costing about $25 a month ever since. We’ve bought toys for him, taken him to the vet regularly, bought him some bones, several different collars and tags, and so on.
During the last year of his life he was very ill and we faced some very large medical bills for him. We finally ended up putting him to sleep because he seemed miserable all the time.
I estimate that we ended up spending around $8,000 on this dog including all of the food (probably around $4,000), toys and bones and treats (probably around $1,000), and then other gear and the vet visits (probably around $3,000 all told). That’s a real expense, even over a lot of years, and I am sure I’m forgetting stuff.
If you get a pet, especially a dog or a cat, make sure you realize that to treat it well you’re going to be facing a constant expense for the next several years and that will be a hold on your finances.
We recently made the decision to get a hypoallergenic dog – a Yorkshire terrier and Maltese mix. Our children love him – it’s wonderful to see the dog get so excited and the children responding to that excitement each day when they get off the bus.
You’re absolutely right, though. A pet can be a really big expense. Even just the day-to-day care can be expensive if you’re choosy about what you feed the dog (to avoid animal obesity and other problems). If you love the pet and keep up with vet visits and shots, that’s also going to be an expense.
Then there’s end of life care. No one wants to lose a loved pet, and many people are willing to spend a lot to eke out another few months or another year with a pet that’s been part of their life for so long. It’s often hard to look at those expenses in a fair and balanced fashion when it’s a loved pet that’s in question.
My point? Be aware that pets are expensive if you’re going to treat them properly.
I have really enjoyed reading The Simple Dollar tonight. I found it this afternoon and got lost in the archives… great, thoughtful stuff!
I managed to retire early at age 44 and I wanted to share some of my experiences with you (and maybe your readers). I was able to retire because I was an early employee of a private company and I got some stock options, and when the company went public, I sold some of my stock as soon as I could and had enough money to retire. I still have some stock in the company, though I have sold most of it to diversify and to put some in safer investments.
What I learned is that being “retired” at such a (relatively) young age was a strange social experience. I found pretty quickly that other people judged me as a weirdo if I told them that I was retired. I was in my mid-40s but I looked even younger.
The big thing you need to do is find something to fill your time and then tell people that’s what you do for a living. If you are writing a book, tell people you’re a writer. Don’t tell them you’re retired.
Another thing I found was that sometimes people would understand that I had saved some money when I would mention that I was retired and then see me as a “mark” to extract money from. That was another reason to stop mentioning that I was retired.
The other reason that it’s good to have something to fill your hours is that all of your friends will most likely still be working during the day. You’d be surprised how empty your social calendar is if you expect to fill it during the day. Fill your daytime with your work and your errands and save the fun for when other people aren’t working.
A lot of the other advice you already get – live cheap, don’t spend money on stupid stuff, yadda yadda yadda. But my big advice is to just find a new “career” even if that doesn’t earn you any money.
This is good advice. My plan, when I retire, is to just tell people what my main project is at the time being when they ask what I “do.”
In fact, right now, when people ask what I do, I tell them that I write. The truth is that I would continue to tell them the same thing even after I “retire” from writing for money and move onto writing things that are less sure of success (fiction, in other words).
I’m not a big fan of the “what do you do?” question as a conversation or small talk starter, myself. It often defines people by their careers, when many people work in order to achieve other things in life.
Do you have any suggestions for good fiction that depicts smart people who are careful with their money as significant characters? All of the books that personal finance sites ever suggest are either nonfiction, completely terribly written “fiction” that’s basically nonfiction, or novels that are promoted for political reasons like Ayn Rand. Help!
That’s a good question. I’ve found, like you have, that when fiction is written to highlight financially reasonable characters, it’s often really dull and obvious. The only real example I can think of that I enjoyed was David Copperfield by Charles Dickens, and that novel is written in Victorian English, which can be hard to read today.
This is going to sound crazy, but I actually think several of the characters in George R. R. Martin’s A Song of Ice and Fire series are pretty good financial role models, occasionally dispensing really good advice along the way. (ASOIAF is the book series upon which the HBO television series Game of Thrones is based.)
You might expect that I would mention Tyrion Lannister, who is the usual voice of “smart life advice” in those books, but the one that immediately comes to mind isn’t Tyrion, but Bronn. Bronn is a sellsword. He’s essentially a self-employed entrepreneur who is constantly making smart financial moves throughout the books. He’s frugal with his gear and equipment and mostly only splurges at the expense of his wealthy clients who treat him to wine and meals and other things. When he’s paying for himself, he buys simple gear and eats simple food.
Another aspect of the novels that I found interesting is that debt plays a pretty large hand in the affairs of everyone. Debt owed to banks is constantly forcing characters into situations that they really don’t like. This is a subtle theme in the novels, but it’s there, particularly in the affairs of characters like John Arryn and anything involving the Iron Bank.
This probably isn’t a great recommendation if you don’t enjoy fantasy, but those novels do a great job of showing how money and debt can steer the course of lives and how independent and financially sensible people can prosper and thrive even in the worst of times.
What do you think of the idea of taking a professional sabbatical? By that, I mean stepping away from my current job and spending a year or two doing something that’s personally and professionally going to improve me and then returning to the workforce with something unique on my resume? I am feeling just a bit burnt out at work due to other personalities but I still dearly love my career. Right now, I have enough in savings to pay for two years of living expenses.
I don’t think this is a terrible idea, but it depends on a lot of factors.
First, are you very confident you’ll be able to find a job in your field in one or two years? Are there many more qualified applicants than jobs, or is it the other way around in your field? I wouldn’t do this if I were in a field with a lot of unemployed people seeking work.
Second, do you actually have a clear plan for your “sabbatical” and what you would actually do with that time? It needs to be way more clear than a vague notion.
Third, are you really self motivated? If you’re not, it’s going to be easy to stop following your sabbatical plan and, if you do that, you may find yourself in a real pickle.
I wouldn’t do it if any of those three were anything less than 100% certain. If you were sure of all three, it could be a solid idea for a career rebirth.
I have always had a very strong relationship with my younger brother. When our parents passed away, it was just the two of us for several years. He managed to get into a really good school, far better than I did, and after college he married pretty quickly into a well-off family. However, he then started a very very successful business. They are now millionaires many, many times over.
His financial success and crazy schedule have made it harder for me to relate to the things going on in his life. We talk on the phone two or three times a week and text constantly, but it feels like we have less and less to talk about. We are the only family that we each have now and I can see it slipping away because of this.
First of all, it’s likely that he feels the same way about you. He’s probably feeling a little less sure how to communicate with you because your lives have gone somewhat in different directions.
The only way to defeat that is through communication. You need to swallow your nervousness and tell him exactly how you feel about it.
The thing is, you need each other. You are the connection that you both have to your roots. He is a reminder for you of how hard choices can pay off. You are a reminder for him of his roots and how others have sacrificed to make his path clear. Don’t let that go.
It’s hard sometimes to say things that need to be said. Call him up and say them.
When you worked in an office environment, did you keep a set of spare clothes there? Do you think this is a useful thing to have?
I used to keep a duffel bag at my desk that included a change of professional clothes and a change of active/exercise clothes in them. I also kept some toiletries in that bag – a toothbrush, toothpaste, mouthwash, floss, a hair brush, soap, shampoo, conditioner, a razor… you get the idea. I also had a towel and a washcloth in there.
That way, I could handle whatever came up at work without being completely scroungy for the rest of the day.
My actual work building didn’t have a shower, but there was one available nearby that I could use if needed in a gym used by my organization.
I’ve tried several frozen lasagna recipes and I have always had the same problem with them. When I thaw them and cook them they always end up really watery. Why does that happen? A normal pan isn’t watery but if I freeze and thaw it it becomes watery.
It becomes watery because, when you freeze it, a little of the water that’s naturally inside the other ingredients – in the noodles, the cheese, the vegetables, and the meat – freezes on the outside of those ingredients. That “frost” that you might see on the outside of the lasagna is an example of that.
Thawing it and cooking it does not make the water go back into the ingredients. Instead, what happens is that the other ingredients are slightly drier than before but the lost water is now just loose in the pan.
So, what can you do about it? You can assemble the lasagna as “dry” as possible by doing things like patting down the noodles before you put them in the pan, patting down any vegetables you might use, and so on. Another trick is to add a tiny amount of corn starch to the sauce – like 1/4 of a teaspoon to the full jar. This will thicken the sauce just a little, but it will allow it to absorb some of the moisture in the pan. You should also actively brush away any “frost” you find as soon as it comes out of the freezer, as that just becomes water.
A final trick, and something you should always do with lasagna, is that after you remove it from the oven, you simply allow it to rest on the table for about ten minutes before serving it. During that time, some of the moisture evaporates in the form of steam, which also helps the lasagna to be less watery.
What do you use as a notebook for the online classes that you take?
Honestly, any notebook will work. I have some features I like to have in my notebooks, however.
Since I take classes online and this notebook will only be used for notes, I don’t like perforated edges on the pages. I don’t want them to be easily removed.
Spiral binding is okay, but if I’m using that, I want some kind of “protective page” between the front cover and the first page of notes or else that first page will get a lot of wear on it. I actually prefer “bound” notebooks without perforations, though these tend to be strangely expensive, or “composition” style notebooks without perforations.
College ruled paper is fine for most classes, but if I’m taking a STEM (science technology engineering or math) class, I prefer grid paper if possible. In fact, I almost default to grid paper for everything.
My favorite notebook I’ve ever used is the Confidant model from Baron Fig. They’re just about perfect, but they’re also perhaps more expensive than necessary. I received several as a gift a while ago and have been enjoying them greatly. I also like the notebooks from Leuchiturm 1917.
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.