Questions About Thin Mints, Netflix, Daniel Norris, 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. Girl Scout cookies
2. Cash income and taxes
3. Daniel Norris
4. Credit cards are a ripoff!
5. Parkinson’s Law
6. Overwhelming student loan debt
7. Old PCs
8. Big discount for card signup
9. Best “to do” app?
10. Cutting off a child
11. Getting cut off
12. Vanguard Target Retirement changes
13. Cost of living globally
14. Faith and finances
15. Netflix Original programming

Recently, my oldest child was charged with picking a historical figure and doing research on that figure, which culminates with a costume of some kind and an oral history report.

My son thought about a lot of people. He considered Dr. Seuss and Roald Dahl. He looked into Shigeru Miyamoto and briefly considered Abraham Lincoln.

He ended up choosing Jackie Robinson, entirely on his own. Why? His reason was that Jackie showed that people can be good at things no matter what their skin color is. Inside, we’re basically all the same.

Good call, son. Good call.

Q1: Girl Scout cookies

Over the past few weeks I have been practically overrun with girls selling Girl Scout cookies. While I don’t mind buying a box or two of the cookies, it feels like every day I see another girl selling cookies. I feel guilty not buying any, but then I have about twelve boxes of Thin Mints that I really shouldn’t eat in my cupboard and I’ve spent like $50 on cookies.

So the answer is to just say no, right? Then I feel guilty that I am not helping these girls out with their fundraising or salesmanship.
– Tammy

I wouldn’t feel guilty about saying no.

For starters, one of the best lessons in fundraising and salesmanship is that sometimes people do say no. If they get the sense that everyone just says yes all the time, they’re getting a pretty artificial picture.

I have no problems buying a box or two of cookies from girls in the community that I know or that have enough initiative to knock on my door. However, I don’t feel the need to buy a box from the random girl at the grocery store, for example. I tell them “no,” and I don’t feel bad about it.

Q2: Cash income and taxes

All of my income in 2014 was in cash (don’t worry, nothing illegal. Do I need to file income taxes this year?
– Dennis

Legally, you should file income taxes and claim all of the tax income. That is the only way to ensure that you’re not going to be found guilty of tax evasion because, frankly, that’s what tax evasion is – not claiming earned income, even if it’s cash.

Of course, it is going to be very hard for the IRS to catch you in this regard. Most likely, if you were paid in cash, you were paid “off the books” in a way that won’t be reported to the IRS in any way that’s associated with you, so the IRS is likely to be unaware of the income.

That’s not a guarantee, however, and if you do get caught committing tax evasion, the hammer will come down hard. Plus, there’s the fact that you’re essentially enjoying government services, like the military, police, fire departments, and so on, without paying your share of them.

Q3: Daniel Norris

Did you see this article about Daniel Norris? He’s a major league pitching prospect who’s already a millionaire thanks to his signing bonus who lives in a van on $800 a month. http://espn.go.com/espn/feature/story/_/id/12420393/top-blue-jays-prospect-daniel-norris-lives-own-code
– Erik

I am a pretty big baseball fan, so I had heard of Daniel Norris prior to that article, but it’s a great summary of the guy’s story for those unfamiliar with it.

He’s one of the best pitchers in the minor leagues and will be playing in the majors in the very near future, but he lives an extremely frugal lifestyle. Literally everything he owns is in this old camper van that he drives around in that barely runs.

It’s a really fascinating story and I encourage you all to read it. You can make almost any kind of lifestyle choice that you want. You don’t have to conform to what the people around you expect.

Q4: Credit cards are a ripoff!

I can’t believe you would ever tell your readers to get a credit card! Credit cards are a giant ripoff! It’s just a way to get you to buy more stuff and then pay the bank interest on that stuff for years and years! So disappointed!
– Wendy

I view a credit card as being a tool with some danger involved, like an axe or a chainsaw. Used properly, it can be a very valuable tool. Used poorly, it can really, really hurt you.

If you use a credit card properly, by only using it for normal purchases you can afford and paying off the balance in full each month, you can simultaneously improve your credit rating, have consumer protections on your purchases, and enjoy the benefits of your card’s rewards program. That is a pretty worthwhile set of benefits.

Naturally, if you don’t use it properly, you can end up in a punishing debt situation where you’re sending hundreds of dollars in finance charges to the credit card issuer and essentially getting nothing in return.

The question is, is it a good idea to recommend an axe? I think it is, if you make the dangers clear.

Q5: Parkinson’s Law

Have you ever heard of Parkinson’s Law? One of my coworkers has it taped to her desk and it says “Work expands so as to fill the time available for its completion.”

I have been trying for months to carve out time at work for things like self-learning and working toward a certification but it seems like there is this nonstop flood of little urgent tasks and meetings and nonsense that suck up time in between real projects.

How do I find time for self-learning and professional improvement at work?
– Kevin

You make it a priority, plain and simple.

Self-learning at work is one of those things that’s important but not urgent. Most of the little tasks that we take on at work are urgent but not important. Often, urgency distracts us from what’s actually important. Important should always top urgent.

Right now, you’re choosing to make those little urgent tasks more important than self-learning. In other words, you’re substituting urgency for importance. Don’t do that – that’s the real thing you’ve got to break.

What you need to do is block off an hour or so a day for self-learning or whatever “important but not urgent” thing you need to take care of. Make that hour uninterruptible. Close your email program and your web browser and spend that hour learning something new and useful. You can deal with the unimportant “urgent” tasks after that.

Q6: Overwhelming student loan debt

Two years ago I graduated from college with a degree in zoology. I currently make $34K as a vet technician. The problem is that I have $120K in student loan debt at 6%. I pay almost $1,300 a month in student loan payments and I bring home only $2,300 a month. That leaves me with just a little over $1,000 a month to eat and find housing and keep clothes on my back. It’s doable, but it’s basically miserable. I can’t keep dealing with this. What can I do?
– Randall

Here’s the bad news: you’re going to be repaying this, one way or another. You do have some options, however.

For starters, if you’re able to consolidate your loans and lower your interest rate even by 1%, you’ll save a lot. If you can drop your rate by 1%, you’ll save $60 a month. Drop it by 2% and you’ll be losing $115 a month. That’s a start.

Another option is to seek a consolidation that can extend the term of your loan, to fifteen years, for example. Extending a $120,000 loan at 6% from 10 years to 15 years will save you $300 a month in payments. It’s not the best move in terms of the finances of your entire life, but if it keeps your head above water, it’s good.

If you manage to extend the term to 15 years and drop the interest rate to 4% on that $120K loan, your monthly payments drop to $888 a month. That bumps up your monthly money after the loans to a little over $1,400 a month, giving you a lot more breathing room.

That’s the route I would look at. Do everything you can to consolidate your debts that results in a lower interest rate or longer term.

Q7: Old PCs

I have a seven year old PC that runs Windows 7. It still runs fine and does everything I need it to do. How long should I keep using it before I upgrade? Is it still secure?
– Tim

Provided that you’re running antivirus software and antispyware software, your old computer is probably as secure as any PC could be.

I’d keep using it until something goes wrong with it or you have a real reason to upgrade.

The idea that you always need a “new” computer is kind of a crazy one. As long as it does what you want it to do – surf the web, send and receive email, and so on – with reasonable security, why upgrade? There’s no reason to do so.

Q8: Big discount for card signup

A few months ago, I was on a business trip and on my way home I saw that the airline I was using (I think it was US Airways) had a credit card offer that was interesting. Upon signing up, you get a 50,000 point bonus, and you can translate those points directly into airline tickets. It looks like those points are worth $300-400.

What’s the catch here? Why shouldn’t someone just sign up for this, get the points, use them, then close the card?
– Ed

Almost always, cards like this come with an annual fee which can be as much as $100. You’ll usually be dinged for that when you go to cancel it, so you won’t just get those points for free.

The card itself usually isn’t that great. These cards mostly just earn small perks with the airline itself, such as cheaper bag fees or a chance at an upgrade on the flight or some cheap in-flight food or beverages. The reward rate is usually pretty low, too.

When you sign up for such a card, they usually do a hard credit pull, which will result in a small decrease in your credit score for the next few months.

Aside from those things, there really isn’t a “catch.” It’s just a mediocre credit card with a good signup bonus. That might be worth it for you.

Q9: Best “to do” app?

What’s your preferred app for managing to-do lists? Do you still use Remember the Milk?
– Stan

I still use Remember the Milk, but I think part of that is out of familiarity. Remember the Milk is a bit on the quirky side in some regards, but over time I’ve really become used to how the system works and now it’s familiar, like an old glove. Other systems… just don’t feel right.

However, if I were suggesting a system to use for someone starting from scratch, I’d probably point to Todoist. I think it’s absolutely stellar and recommend it highly. I tried using it for about a month, but I was honestly just using it in parallel with Remember the Milk, so I eventually just went back to using RtM full time.

Todoist is just smartly designed, from top to bottom. I really liked using it and it was very easy to get up to speed when using it. Again, if it were not for the work I already had invested in RtM, I would probably be fully on board with Todoist.

There are LOTS of good list managers around, though. I encourage you to try a few and see which one clicks with you.

Q10: Cutting off a child

My husband and I have three adult children aged 30, 28, and 24. The oldest two are established on their own with good jobs and the 28 year old has a budding family. The youngest one is the one I am writing to you about.

He graduated from college in May 2012 and got a job very quickly after graduation. We offered to let him stay with us until he could afford an apartment since his job wasn’t too far from our house. We charged him a small rent and had him pay for part of the groceries. Everything was going well until June 2013 when the business he worked for closed down.

At that point my husband and I decided to suspend the rent and the grocery costs for him until he found a job. At first, he looked for jobs all the time, but for the last several months, he doesn’t seem to do anything other than sit around all day playing computer games.

We have been strongly encouraging him to look for work and he keeps putting it off and making up excuses.

After Christmas, my husband and I decided that something needed to change. We don’t mind him staying with us if he is looking for work, but he’s not doing anything, so we told him that he would need to move out by March 31. He got really upset and said that we were not supportive at all. He showed us a bunch of emails that he had been exchanging with companies all over the country and said that he had talked to them on Skype.

I felt guilty because he had been looking for work, but my husband says that anyone who can spend a bunch of hours each day playing computer games isn’t really looking too hard for work and that he could be working at a fast food restaurant or something if he wasn’t just leeching off of us.

What do you think? Are we making the right move by asking him to move out?
– Maggie

First of all, I do understand why your son was upset. He likely feels as though he was actually looking for a job – as evidenced by the emails he showed you – and that you pulled the rug out from under him in contradiction to the agreement that he thought he had with you. That makes sense.

Having said that, if you’re looking for a job, spending several hours a day playing computer games doesn’t really match up. He could be spending that time more productively, much as he would if he actually had a job. He should be keeping his professional skills sharp and networking with people in his field.

If it’s still possible to continue the arrangement, I’d consider an arrangement where he spends time equivalent to a full-time job either applying for jobs or working on his job skills or building a professional portfolio. You’re essentially “paying” him to do this in the form of rent and food. If that’s a non-starter, then I would just let him go.

I really wanted to pair this question with the following one, because it’s a very similar situation from the opposite perspective.

Q11: Getting cut off

Just after Christmas, my parents took me out for lunch and told me that they were no longer going to “financially support” me.

When I first graduated I lived with my parents for several months where they provided food and covered all the bills, which was great. I moved out after that and they kept providing $500 a month into checking to help make ends meet.

I ended up buying a car that was more expensive than I could really afford and I’ve been using their money to pay for that car. I was also sharing an apartment with two other women, but they both have moved out of the area leaving me with $1,050 a month in rent.

Losing that $500 a month means that I am no longer able to keep my head above water. I am left with about $60 a month for food after all of my bills.

Suggestions on what to do here? I am not mad at my parents for this.
– Charlotte

If I were you, I’d try to sell the car and get a much cheaper car instead. It really depends on the current value of your car and whether or not you can pay off the loan with the proceeds, but if you can, then a cheaper car loan will help a lot.

I’d also look for roommates and try to get out of that lease as soon as you can and move into a smaller and less expensive place. A roommate solves a lot of problems here and is probably the best solution because one could move in quickly.

Since you apparently live close to your parents, you might be able to trim away some of the food costs (and energy costs) by hanging out at their house some evenings, eating dinner with them and maybe taking care of some things around their house in exchange for the food. If you explain what’s going on, they might be more willing to help than you think.

Q12: Vanguard Target Retirement changes

I received this email from Vanguard today. What do you think? I have money in a Vanguard Target Retirement Fund, and I think you do, too.

To further enhance the diversification of your investments, we’re increasing the international allocations of all Vanguard Target Retirement Funds. The amount allocated to international stocks will increase from 30% to 40% of the overall stock allocation, and the amount allocated to international bonds will increase from 20% to 30% of the overall bond allocation. While the amount allocated to domestic stocks and bonds will be reduced, the overall allocation of stocks and bonds will remain the same.
– Erica

Erica forwarded a much longer email, which I trimmed down to the key paragraph.

I haven’t received this email yet (just checked), but I’m not really bothered by this. I think their reasons are sound. Here’s what they said regarding their reasoning:

These changes, which are expected to be completed by the end of 2015, aim to lower the funds’ long-term volatility. We believe that increasing the international exposure of these funds is in your best interests because it will help you reduce your long-term risk. Research has shown that non-U.S. stocks have diversified the returns of U.S. stocks on average over time. Also, the primary factors driving international bond prices are different from those for U.S. bonds, providing a diversification benefit. The funds’ allocations will now be more representative of the overall global market.

As always, predicting the stock market going forward is risky. A move like this is Vanguard’s way of trying to keep pace with changes in global capitalism. Like it or not, more and more of the business in the world is outside of the United States, and this is Vanguard’s way of getting on board with it going forward.

Q13: Cost of living globally

I’ve been playing around with this cost of living calculator which compares cities not just in the United States but worldwide. My family is from the Czech Republic but I have lived in the United States since I was a boy. I currently live in San Francisco and I was stunned to find out that everything costs about a third as much in Prague as it does here. I can find work in Prague that pays pretty well and have family there. Even if I make half as much there as I do here, I’m still going to have 50% more purchasing power. Why not consider it?
– Greg

If you know what living in Prague is like firsthand and are happy with it, then you should certainly consider it. I have no idea what day-to-day life is like in Prague and I can certainly make no judgments based on what little I’ve learned about it.

The thing to remember is that if you move to another part of the country, you’re essentially rebooting your social circle. For me, this has been the hardest part of every move – I miss the people I move away from.

If you don’t have strong ties to the San Francisco area, can get a good job in Prague, feel happy about the thought of living there, have at least some family ties there, and go into it fully informed, it could be a great move for you.

That tool really is amazing, by the way. There are such huge differences in costs, even within the United States.

Q14: Faith and finances

After reading your post on prayer and meditation I am wondering what your personal views on religion are. You seemed to be very careful to not state that.
– Olivia

I am an active ELCA Lutheran. I have my own mix of doubts and beliefs regarding theological issues that are really unnecessary to get into here, but of the religious organizations I’ve tried, I’ve felt most at home in a local ELCA Lutheran church.

I do not like the idea of using The Simple Dollar in any way to promote my own personal religious views. I have had readers write to me personally before and I’ve discussed my views at length with them, but only because they’ve specifically asked about them.

To me, The Simple Dollar is a place for everyone who is struggling with their money regardless of their theological perspectives. While faith can certainly be a tool that helps people, it’s also something that can drive others away. That’s why I was rather careful in tone with the post I wrote on prayer and meditation recently – it can be a very powerful tool, but prayer isn’t something that everyone finds value in.

Q15: Netflix Original programming

Do you think the Netflix Original shows are better than the ones on Amazon? Other than maybe Transparent the shows on Amazon aren’t very good. Are the unique shows on Netflix enough to make it worthwhile instead of Amazon Prime Instant Video?
– Sara

I don’t watch much television, but I do binge-watch series with my wife on lazy weekends and I really enjoyed House of Cards. My wife has enjoyed Orange is the New Black, too, and I’ve also heard rumblings that Unbreakable Kimmy Schmidt is good. I am looking forward to watching Sense8, but it’s not on there yet.

Are those series alone worth a Netflix subscription? If you’re going to gorge on them for one month, sure. It’s probably not worth hanging onto it, though, unless you’re going to watch more than that.

I think that if you have Amazon Instant Video and want to watch some of the Netflix originals, I’d subscribe for just a month and then binge watch the series you want to see, then drop the subscription afterward.

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.

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