Questions About Wallets, Hybrid Cars, Procrastination, Personal Loans, 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. Tiniest food budget
2. Retirement income drop
3. Dealing with excessive email
4. Long-lasting wallet
5. Long-lasting jeans
6. Personal loan advice
7. Question about buying a hybrid
8. Cash tips and income tax
9. Cell plan for everything
10. Procrastination help
11. Smart kid unready for college
12. Everyday carry
13. Different tax results
14. Unethical accountant?
15. Popcorn

When I first started drafting this week’s mailbag, I was looking at an incorrect calendar that led me to believe that Monday was actually April 1.

So, in honor of April Fool’s Day, I actually started drafting a reader mailbag that was a parody of the style of Bill Simmons’ reader mailbags, like this one (language mildly NSFW, sports topics). I even had a great ending, where I was going to include the three strangest frugality tips I’ve ever received and finish with “Yep, these are my readers.”

Unfortunately (or fortunately, depending on your perspective), I realized that today is actually March 30, not April 1, so that kind of Reader Mailbag will have to wait for another year.

Q1: Tiniest food budget

What is the tiniest food budget that you could have for your family for a week assuming you had nothing in the fridge or pantry? What would you buy and prepare?
– Stephen

If I were ever in that situation, I’d go to the store and buy plenty of whatever vegetables and fruits were on sale and the cheapest per pound, along with some dried rice, dried beans, oatmeal, bread, a dozen eggs, and peanut butter. I would be able to get all of this for $30 or so (remember, I have a family of five).

From that, I could make lots of different meals, from peanut butter sandwiches to stir fry, from oatmeal with fruit to eggs with toast, and so on.

I’d supplement that with eating meals at the various free community dinners that are in my area. There are several each week, on different evenings, and they are free, though a jar is put out for a goodwill offering. I’d take the free meal this week, then give later on when I was back on track.

That would be my meal plan if I were ever in a desperate pinch with my family. In fact, I may actually try something like this for a week this summer in order to write a post about it.

Q2: Retirement income drop

Every book or article I have read about spending in retirement quotes the same number when it comes to retirement spending. You’re going to spend around 80% of how much you spend today.

I am not so sure about that. I retired about two years ago and in 2013 and 2014 my wife and I have spent about 50% of what we did when I was working. That’s because all of the shortcuts we used to take when I was working are no longer necessary.

When we were both working we used to eat out a few times a week and now we barely do. It’s a lot more fun and delicious to make supper together. I don’t commute any more and we sold one of our cars in 2013 so we don’t have gas or insurance or registration or anything. We thought we might travel more but the only traveling we have done is to visit friends and stay with them for a day or two. We have lots of little things going on around town here most of the time.

The biggest change is that I just don’t want things. I used to make a big deal out of wearing great suits to work and things like that but now most days I just wear a flannel shirt.

I think 80% is more a little high, and if fear about that number is keeping people from retirement, it shouldn’t.
– Alexander

I think that the 80% number is a rough estimate for people to work with. In some cases, like yours, the number will be much lower.

In other cases, like mine, I’m not sure the number will change much at all. Right now, I work from home and eat leftovers for lunch every day and we make almost all of our meals at home. I don’t know how my expenses will drop when I retire.

80% is somewhere between our two examples and that’s why it’s used as a quick number for people when they’re calculating. Most people’s expenses will drop some. Some people will see a big drop, like you, and some won’t see any drop, like me.

Q3: Dealing with excessive email

How do you deal with tons of email? I started working as a freelance writer a year ago and I get so much email I can barely keep up. I can’t even imagine what you get. How do you get anything done?
– Carly

The problem is that for every email that you actually want to read and respond to, there are ten or so that you read and are just useless. Not only that, when your mail volume gets big enough, you gradually have to stop responding to emails you might have responded to a year ago because if you kept responding to everything you would literally get nothing else done.

Over the years, I have just built up lots of filters to try to trim my emails down to the bare essentials, and I don’t feel guilty if messages get swept up in those filters. It is simply impossible to keep up with all of them and have some semblance of a life, so you have to choose which fraction is actually most important and deal with those.

I completely understand why some people just eventually abandon email.

Q4: Long-lasting wallet

I replace my wallet every single year because it’s always falling apart in the early spring. This year is no different. Isn’t there a wallet that will last more than a year? I have bought many different kinds of wallets at different prices from different stores and they all fall apart.
– Kenny

I have had the same problem as you. My wallets fall apart within one to two years no matter what kind of wallet I buy.

Eventually, I just went completely minimalist with it. I carry the minimum possible number of cards and other things I might need while out and about and basically just keep them in a sleeve in my pocket that has a rough exterior so it’ll stay in place.

Wallets seem to simply be things that gradually fall apart due to wear over time, so there isn’t a great reason to spend a ton on one.

On that note…

Q5: Long-lasting jeans

Do you have any recommendations for long-lasting jeans? I don’t expect them to last forever, but my jeans wear out every year or two with holes in them or some seam completely ripping out due to fabric wear.
– Candace

The best tip I have for you is to wash denim jeans only when they’re actually dirty, not after every wearing. It’s washing that really wears out denim more reliably than anything else.

Another tip is to make sure you’re getting the right length. Jeans that are too long will almost always wear out near the ankles really quickly. If you’re riding the fine line between lengths, get the shorter length.

Another tip: never buy anything that’s anything other than raw denim. Avoid anything that’s pre-washed or treated in any way to achieve a “look.” That denim is severely weakened and will not last nearly as long.

Q6: Personal loan advice

Right now I have the following credit cards:

Credit Card A – 19.9% interest, $7,400 balance, $224 minimum payment
Credit Card B – 14.9% interest, $5,000 balance, $150 minimum payment
Credit Card C – 14.9% interest, $2,000 balance, $50 minimum payment

I saw a flyer a few days ago for personal loans for credit consolidation. I stopped in and they offered me a 9.5% loan for 48 months for the total of all of these debts. The monthly payment is only $362.

Should I take this loan or not? Seems like a good deal but I have messed up so much debt stuff in the past that I am not sure.
– Troy

Given what you’ve shared here, this consolidation loan seems like an absolute no-brainer. I’d sign up for it immediately.

It lowers your monthly payment. It drastically lowers how much you’ll pay in total interest. It gets those multiple credit card companies off of your back.

The one thing I need to say here, though, is that you shouldn’t use this as an excuse to dive back into debt. Just don’t do it. You’ve clearly had a tendency in the past to carry a credit card balance and keep adding to it. That’s a recipe for financial disaster.

Q7: Question about buying a hybrid

I am currently considering buying a new car. I typically buy new and drive a car for my commute until it starts to have consistent troubles around the 150K to 200K mile mark and then I trade it in and buy a new one and my 2005 Toyota is starting to reach that point. I will be paying cash for whatever I buy.

I was looking at 2015 Toyota Camrys and I noticed that there was a hybrid and a non-hybrid version that were very similar except the hybrid had far higher fuel efficiency and a higher sticker price. My calculations are that at current gas prices (about $2.60 a gallon around here), it’s going to be a wash over the time I own the car, but if gas goes up, it will be a good deal. Do you think a hybrid Camry is a better deal than a non-hybrid Camry?
– Ben

Your calculations are pretty spot on. According to the government’s fuel economy data on hybrids, you can expect a hybrid Toyota Camry to catch up in value to a non-hybrid Camry at a little over 100,000 miles given current car and fuel prices.

Since you’re probably also incorporating the value of your trade-in here, the pendulum swings even a little more toward the non-hybrid, which gives you the result you are seeing.

It really is a toss-up. If I had a magic crystal ball that told me what gas prices would look like over the next decade, I could give you an answer here – but I don’t. Will fuel prices stay low? Will they rebound to the $4-5 per gallon range? I just don’t know, but the answer to that question would quickly tell you which car choice is the right one.

My gut feeling is that prices will rebound and the hybrid will end up being the better deal, but I don’t have any factual reason for thinking so. I just know that prices were really high in the recent past and I don’t see a good reason for them to not eventually rebound.

Q8: Cash tips and income taxes

I have been a waitress for several years. Where I work the waitstaff makes about $3-4 an hour while the cooks make $12-15 an hour and the assumption is that the waitstaff will make up the difference in tips. Whenever I get a tip, I stick it in my pocket or else get it at the end of the night when they’re clearing out the register or when I get off shift as they’ll give me tips out of the register then.

I earned some extra money this year from a second job during the summer and so I did my own taxes in TurboTax this year and I learned that I am actually supposed to report tips for income tax. I want to be honest, but I didn’t know this before and I have no idea how much I earned in taxes and I really don’t have nearly enough saved for a big tax bill right now. I started saving 25% of my tips for taxes starting a few nights ago by putting it in a tax jar in my dresser.

What should I do?
– Melanie

You’re in a real pickle here due to an innocent mistake. The true honest thing to do is to file an amended return for those years, providing the best estimate you can make for the tips you earned in those years. That’s something that’s very difficult to accurately estimate, of course.

If you choose not to do anything about it, you are breaking the tax laws. Now, because your error is going to be difficult for the IRS or you to estimate and because it’s going to be relatively small potatoes compared to some of the tax issues the IRS has on their plate, you’re likely to be overlooked for previous years, but there’s still a chance that they’ll figure out something is amiss and the penalties and late fees will add to your overall bill.

Another route is to negotiate by calling them up, explaining the situation, and coming to a negotiated settlement where you make an offer to pay a smaller amount. That’s completely legal and within your rights.

You’re doing the correct thing going forward by keeping track of how much you get in tips and saving some for taxes. It sounds like you’re following the advice of your tax software, which is really a good move here.

Q9: Cell plan for everything

In the last year, I have dropped my cable bill and my home phone bill and now rely entirely on an unlimited data and voice plan from T-Mobile. I live close to a tower so I get very fast 4G that Netflix works great on so basically I have unlimited internet and video that goes with me everywhere I go for about $90 a month. If you live close to a 4G connection and get it on your cell phone all the time you should consider just dropping everything else and getting an unlimited data plan.
– Marcia

This makes at least some sense if you live close to a cell tower and have a strong 4G signal at home. That’s not going to be everyone, of course. There’s also the question as to whether or not you’re in a high traffic area, as cell phone data speed can drop to practically nothing in busy periods.

However, if you have a reliable and speedy 4G connection in your home, know how to use your phone to provide internet access to your other devices, and the area isn’t overcrowded with other users, this is a nifty little solution that can save a lot of people money while also being very convenient.

Where I live, there’s a mediocre 4G signal that is much less reliable and a bit slower than the data speeds I get from our local provider, so this isn’t a leap I would make yet. We’d have to greatly increase our current data plan with our phones to take advantage of it, and that would basically match what we pay for our internet service right now.

Q10: Procrastination help

The reason I am writing to you is that I have a lot of problems doing things that aren’t extremely urgent. If it does not have a deadline that’s coming up in the next few days, I always convince myself that I don’t really need to do it right now and find something else to do. I end up not doing things I need to do like staying in shape or saving money. This is bad procrastination but I don’t know how to break it.
– Barry

I was a horrible procrastinator in my early college years. The best tip I ever found for overcoming it came from one of my professors, who wasn’t teaching anything close to productivity but still provided a great idea.

His idea was that you should keep a list of all of the things that you should be working on and making progress on and then spend two minutes a day working on that thing. Each day, you’ll take a step forward. The added bonus is that you’ll often end up spending more than two minutes on the thing, which is great.

I used that strategy late in my college career and especially in my professional career, often in an unconscious way. It helped me take care of a lot of important but not urgent tasks.

Q11: Smart kid unready for college

Our son is a high school junior. He gets straight “A”s at school but I just don’t think he’s ready for college at this point. He does not take school seriously at all because he’s smart enough that he can get away with last minute work and no studying. When I try to make him study, he argues against it and uses his good grades as evidence that he studies enough. He has no academic interests at all and spends his free time either reading fantasy novels or playing games with his friends. I feel like he’s going to be in real trouble if he hits an actual hard class because he has no study skills at all and I am worried that he’s going to bomb out in college and it will be a waste of money and time for him at his current maturity level. All of his advisors just say the same things about college being absolutely necessary and don’t even consider if he’s really ready for it. I know you have an open mind about college so I wanted to get your take.
– Clint

Your son sounds a lot like me at the end of my high school years. I had very little work ethic, but I found it easy to maintain good grades by putting forth minimal effort.

When I got to college, I saw a lot of kids just like me drop like flies. Luckily, I was able to build some work ethic by having semesters where I had a few classes I could skate through and just one or two that were tough, which helped me build work ethic without totally collapsing my grades. I was luckier than many of my friends, as a lot of them dropped out in the first year or two of school.

I can’t predict whether your son will make it or not, but you’re correct in saying that he probably won’t make it without real work ethic. He should be taking the most difficult classes available to him right now in order to build that ethic. Is he doing that? If so, are you sure there aren’t even harder options, like college credit classes, that he could be taking?

The “no academic interests at all” part is also worrying. Have you sat down with him and discussed what he pictures himself doing in the years after high school? What does he say without your prodding?

I think college is probably the best path for him, but he really needs some work ethic or else it has the potential to be disastrous.

Q12: Everyday carry

I have been fascinated by websites that show what people carry in their pockets every day. What do you carry in your pockets every day?
– Adrian

I think I answered this a year or so ago in the mailbag, but I can’t find the answer, so I’ll give a fresh one.

Right now, in my pockets, I have:
– My driver’s license, a credit card, and a few membership cards held together by a really sturdy rubber band
– A $10 and a $1 bill, along with $0.81 in change
– A Field Notes pocket notebook that’s about 90% full
– A Uniball 207 Signo Ultra Micro black ink pen
– A SpyderCo Delica4 pocket knife
– Three receipts that I need to file
– My cell phone
– A small box of mints

It’s a little boring, but that’s what I’m carrying right now. I sometimes carry a multitool instead of the Spyderco, but lately I’ve just been carrying the Spyderco all of the time.

Q13: Different tax results

I was really curious as to what tax software was better so I used both TaxAct and Turbo Tax to prepare my taxes this year. I don’t want to name names, but one of them showed that I should receive about $600 more in tax refund than the other. How do I know which one is right?
– Melody

It’s really hard to tell. They don’t work exactly the same, after all; even though they both are based on the same tax code, interpretations of some strange cases are a little different.

Both packages do offer some guarantees regarding accuracy, however.

If I were you, I’d look at the one that gives you a bigger refund and read the guarantee. If that guarantee seems strong enough for you, that’s the one I would file. If it seems very flimsy, I’d file the other one.

Q14: Unethical accountant?

I just learned recently that the guy I had doing my tax preparation was also doing some accounting for a few businesses in town and is in a lot of trouble for some unethical accounting stuff (don’t really understand it, but it sounds like he might be going to jail). Is there anything I should do regarding my old tax returns that he helped me with in past years?
– Eric

It’s extremely unlikely that he did anything unethical with your personal tax return unless the other unethical accounting things he did involved identity theft or other things.

Most likely, he got in trouble for being “creative” with the accounting practices of whatever business he was helping, and that “creativity” was a bit outside of standard business practice. He may have been involved in something somewhat shadier, too, but it’s really hard to tell.

Just follow the case. If you don’t hear anything about suspicious personal tax returns or identity theft issues, I wouldn’t worry about it.

Q15: Popcorn

Since the start of the year, we have instituted a family movie night on Fridays with our 11 year old and 8 year old to great success. We’ve watched the Star Wars movies, the Indiana Jones movies, and a few others. Part of this is popcorn and we have just been using a couple of microwaveable bags each time. But when I was at the store recently I saw that jars of popcorn kernels were way cheaper than the bags. I read online that some people use a small brown paper bag and a bit of oil to microwave popcorn while others use a popcorn popping machine. What’s the best route and the cheapest?
– Vincent

We pop up two bowls full of popcorn in our Stir Crazy popcorn popper each week. After the initial cost, we found that this was about the cheapest way to pop popcorn, as all it requires is a handful of kernels, a bit of oil, and a tiny bit of electricity (less than $0.01 worth per batch, according to my numbers).

Your microwave solution excludes the cost of the dedicated popcorn popper, but adds the cost of the paper bag and the additional electricity used (based on the wattage of our microwave, it would use more electricity to pop the popcorn than our Stir Crazy does, but it would just be like half a cent per load).

So, let’s say it costs one and a half cents more per batch to use the microwave, and we make two batches per week. To pay for the Stir Crazy, we’d have to make somewhere around 1,000 batches of popcorn to make up the difference.

Now, I do think the Stir Crazy does a better job. I’ve used both prepackaged microwave bags and homemade microwave bags and I think the Stir Crazy has a higher popping rate (meaning fewer kernels are left behind) and the kernels are perhaps a bit less dry. But is it worth the extra $30? Probably not. I’d put a Stir Crazy firmly in the “Christmas gift” category as something you’d use but that you don’t need to spend money on.

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.