Questions on Misers, Trailer Parks, Used Bookstores, Brain Training, 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. Frugal versus miserly
2. Underwater on car
3. Trailer parks
4. Clearing out leftovers with kids
5. Leftover transportation advice
6. When should we merge finances?
7. Online career options
8. Buy it for life question
9. Retirement “number”
10. Finding the cheapest cell plan
11. House savings in stocks
12. Board games?
13. Questions about debt payoff
14. Used bookstores
15. Brain training?

I spent an afternoon this weekend cleaning out our garage and carting a full carload of materials to the recycling center while also designating several boxes of stuff for a yard sale in the spring.

Whenever I do this, I end up reflecting deeply on why I buy things. Most of the things going into the yard sale were purchased in the last ten years. Why did I purchase them? What motivated me to think that these purchases were a good idea?

A potential yard sale – and even a trip to the recycling center – can be a chance to learn and to improve our habits, especially where it concerns our money.

Q1: Frugal versus miserly

I would like to know if you can provide a difference between frugal, cheap or a miser.
My husband hates spending a cent to the point where he is sick. I see him calculate his share, my share etc… in everything. He constantly tries to get things for free. He has a total income of $82,000, no debt, and savings of one million, and extra each month in dividends.

What is a miser? Is this a sickness?

He is also a skimmer, lets me buy lots of the extras, tips, taxis etc.
– Nancy

There’s a big difference between frugal and miserly/cheap, in my opinion.

A frugal person is someone who is interested in maximizing the economy or efficiency of their money, but also the other attributes of their life – their relationships with others, their time, their energy level, their stress, and so on.

A cheap or miserly person is someone who is always interested in spending the least amount of money, regardless of the impact on other attributes of their life. Spending less money trumps relationships with others, invested time, personal energy levels, stress levels, and so on.

Your husband pretty clearly falls into the cheap/miserly camp. His financial choices are having a negative impact on his spouse. I’m assuming that you’ve discussed this with him and he’s aware that his financial choices bring you personal stress and unhappiness.

I am opposed to cheapness and miserliness, at least with regards to the definitions I gave above. If the definition of cheap or miserly describes you, then you’re sacrificing things money can’t buy to save a few bucks.

A frugal person realizes that there is a balance to be had here. They strive to spend less money, sure, but when it comes with a cost of increased stress or damage to relationships or too much time lost, then sometimes it’s okay to spend a little more in certain areas. It’s a balance, where you want to minimize money spent and personal stress and the impact on personal relationships and the time invested, all at once.

That’s not what your husband is doing.

Q2: Underwater on car

I currently drive a 2003 Toyota Celica with about 160,000 miles on it. A friend of mine who is good with cars suggested that it is currently worth about $4,000. The problem is that I owe a little over $5,000 on it. It seems insane to me to make several thousand in payments on a car that’s only worth $4,000. What should I do?
– Dana

If you choose to sell the car right now, you’ll have to come up with money out of pocket to make up the difference – and you’ll be without a car. That’s almost assuredly an awful choice.

Honestly, your best choice is to keep paying off the car unless there’s some sort of hidden miracle that you’re not describing here.

I was in this situation with my pickup in 2004. I owed more on the vehicle than the blue book value of the car. I just waited around until I had it paid off. It was painful, but every other choice was worse.

Q3: Trailer parks

In the past you have had emails from readers with pretty negative views about trailer parks. I’ve never really seen the problem – there are nice trailer parks and pretty bad trailer parks, just like there are bad neighborhoods and good ones. Anyway, I saw this article on The Atlantic and hoped you would share it with your readers.

http://www.theatlantic.com/business/archive/2014/10/the-case-for-trailer-parks/381808/

Trailers are inexpensive and newer ones are really energy efficient. You can buy one at a cheap price, it will have low bills, and if you keep good care of it, you can eventually sell it and make your money back. It seems like a smart “first home” move, perhaps better than renting an apartment.
– David

I think that when many people think of trailer parks, they think of the bad kind – the kind filled with run-down and unkempt trailers and loud abrasive people and potential criminal activity after dark.

That does describe some trailer parks, but it certainly does not describe all of them. There is a trailer park not too far from where I live and it’s in great shape. There are some families that live there, some older people, and a few young couples, too. The park actually has an amazing playground in the open field at the center of it and my children are a big fan of that playground; we’ve gone there many times.

You’re right that modern trailers are actually really energy efficient and can be a low-cost method for home ownership that many people overlook.

Q4: Clearing out leftovers with kids

Fridays are clear out the leftovers at our house. All of my kids’ lives, they would eat ANYTHING if it was presented like this – and makes use of very small quantities of leftovers:
bagel or piece of bread
butter
garlic salt or garlic spread
grated cheese

Butter your bread/bagel (we purchased day old bagels for this purpose alone) and sprinkle with garlic salt or smear with garlic spread. Place leftovers atop this. Sprinkle grated cheese on top of leftovers. Place under broiler or in toaster oven till the cheese is bubbly and browned. Voila! No more leftovers.
– John

This sounds like a very smart idea.

Much of the time, our leftovers are in the form of little Rubbermaid containers of vegetables, so we often remix them into a soup. Take all of your leftover vegetables. Dump them into a pot. Season them like crazy. Cook for an hour. Add ham or bacon during the cooking if you so choose. Boom – you have soup.

Leftover night doesn’t just mean eating the same stuff that you ate a few nights ago in the same exact form again. Be creative like John and find a new way to use the stuff.

Q5: Leftover transportation advice

How do you take leftovers to work? Do you just take a Tupperware container in a store bag? Or do you do something else?
– Angie

I don’t actually leave the house for work, so I just pull stuff from the refrigerator and put it directly on a plate to reheat and enjoy for lunch. This is pretty routine for me – I do it every day unless I’m really loathing the experiment we had for supper the night before or when I’m eating out with a friend which happens about once a month or so.

Sarah usually uses the “Rubbermaid container in a store bag” method for taking her lunch. It seems to work well. Sometimes, there are two or three containers and/or a Thermos. This is what I did at my previous job, too, though we did eat out for lunch quite a bit.

More than anything, it really depends on what kinds of leftovers you are bringing in. Are your leftovers runny? That’s really the big key, at least in my experience.

Q6: When should we merge finances?

I am 25, my boyfriend is 24. We have been dating for four years and have been living together for a year. I am starting to assume that we will become engaged and get married eventually. At what point does it make sense for us to merge our finances together?
– Megan

I generally do not encourage people to merge their finances until very close to marriage. The biggest reason for that is the legal protections offered by marriage. In a divorce, there are clear procedures that are followed to help you separate your finances. Without a divorce, things are much less cut-and-dried.

However, you two are in a situation where you are cohabitating, which means that your individual financial choices are starting to have an impact on each other. My honest recommendation is to have a full “open window” policy on each other’s finances. You’re quite willing to show each other account statements and credit reports and so on.

The reason I wouldn’t merge yet is because it creates an unnecessary hassle if you guys don’t stick together long term. If you merge things and then things fall apart in six months, you have a much bigger hassle on your hands. Wait until the mutual commitment is secure before signing up for accounts together.

Q7: Online career options

I had a baby, and that changed my world when I lost my job.I wish I had my masters so I could have been adjunct, altho I’ve heard they dont make money. I’m looking into being a business ed teacher in public schools- but thats low pay. But I’m really an accoutant/trainer. I work in intl development and speak Spanish and I love it. I wonder if there are international MBA programs that are cheap or an online program that has a study abroad… how could I find this?
– Susan

It sounds like you want an MBA that will help you get the most value from your Spanish language skills. Honestly, any strong MBA program in the United States will help you leverage that skill.

If I were you, I’d start comparing domestic MBA programs using this tool at MBA.com. See what programs meet your exact needs. It sounds like you’d like one that has an online program for most of the coursework, which you can find on that site.

The ability to speak another language (or multiple languages) is a valuable asset regardless of which program you choose.

Q8: Buy it for life question

I understand the value of buying something so that it lasts for the rest of your life, but shouldn’t the focus be on what the most cost efficient way to fill a need is? For example you might be able to buy a pair of socks that lasts for the rest of your life that costs $100 but if you can buy a pair that lasts a year for $1 shouldn’t you just buy the $1 pair?
– Jimmy

You’re correct, to a certain extent. However, you’re neglecting the fact that this will trigger a need to buy socks on an annual basis for the rest of your life. You’ll have to spend time each year shopping for socks. On the other hand, if you have the lifetime socks, you’ll never have to invest that time again.

Let’s say you’re going to live another fifty years. Let’s also say that it takes ten minutes to shop for those socks. That adds up to five hundred minutes – eight and a third additional hours of time spent shopping for socks. That effort would save you $50 on those socks – an hourly “wage” of less than $6 per hour.

Part of the idea of buying something for life means you never have to buy it again, which means that you’re also saving time over the long haul, too.

Q9: Retirement “number”

What is your “retirement number”? How much would you feel like you would need in the bank to retire and no longer have to worry about working for income?
– Tricia

To estimate my “number,” I just use the 4% rule.

The 4% rule says that you can safely withdraw 4% of your retirement balance and be able to live for essentially forever on what’s left. That’s because, over the long haul, an investment should be expected to raise, on average, 7% a year and inflation eats up 3%, leaving you with 4% growth.

The real question would be how much I would want to have per year for the rest of my life. That number would have to cover our whole family and give us some healthy breathing room.

If we had $2 million in investments, that would give us the ability to withdraw $80,000 a year according to the 4% rule. We would put all of that into stocks and do our best to live off of the dividends and only tap the balance when we needed to. That’s probably the number that we would use to walk away from day-to-day work.

The thing is, neither Sarah or I could stand to be that idle. I’m pretty sure we’d both earn at least something.

Q10: Finding cheapest cell plan

I am 71, therefore, I’m “qualified” not to understand all the terms and so forth that are mentioned regarding best cell phone plan for a family. Presently, I owned the Samsung Moto G which has limits on talk, text, data. My husband’s phone is now “dead,” so he needs a new phone. We are rearing a 15 year old grandson who has autism. Now that he’s in high school and has after school practice in band, etc., he needs a phone. Very recently I have been seeing ads from T-Mobile regarding $100 for 4 members with talk, text, and data. Seems as if it’s unlimited as well. Is this a good plan and is it a good value over Verizon? Would T-Mobile save me money over Verizon which my daughter has and we could be added onto her plan. Presently, the Comsumer Cellular plan that I’m on is about $25 per month, so T-Mobile would turn out to be about the same per person if we went with T-Mobile.
– Lois

The number one most important factor when buying into a cell phone plan is whether or not you have good signal coverage in your area. If your cell phone doesn’t get a strong signal everywhere you’re at, then it’s not worth a dime.

I’d start by checking out OpenSignal and seeing what the coverage for T-Mobile and Verizon look like in your area. If they’re comparable, then I would start comparing their plans and see which one has the lowest price on the services you need.

For example, do you actually need a data plan? Do any of you use data on your cell phones (meaning, do you check websites on them)? If not, then don’t shell out for it and stick with voice and text.

T-Mobile has been really competitive with prices lately, especially their bundles, as you point out, so if you do need data and T-Mobile has good coverage in your area, that’s probably a great option.

Q11: House savings in stocks

My husband and I have been saving for a house down payment since 2010. We have been putting $100 a week into the Vanguard Total Stock Market Index. Over the last few weeks, the value of our investment has dropped by about 9%. For us, that basically means several months of savings, which means our house just got several months further away.

My husband really wants to sell before things get worse. I think this is just “selling low” which is a horrible move. What do you think?
– Samantha

Over the last few years, you guys have been spoiled by a bull market. This is probably your first real taste of a “bear” when you have significant money in there.

The real question is this: is there a specific dollar amount that you need by a certain date? If you have a very specific goal like that, especially when that goal involves a timeline that ends in the next several years, then you shouldn’t be in stocks. Stocks work best when you’re not worried so much about the exact date or the exact balance.

For you guys, I would suggest figuring out what exactly your goal is for saving for a home. Do you simply have a dollar amount and you don’t care when you get there? Is there a deadline by which you must buy a home?

If it’s all kind of nebulous, then you’re fine staying in stocks. If you start developing a deadline, it’s time to transition to bonds or to a money market account.

Q12: Board games?

What’s the scoop with the board game hobby? Do you invite friends over to play Monopoly?
– Zelda

I haven’t played Monopoly in a very long time.

The reality is that over the past two decades, there has been an absolute transformation in the board gaming world. If you go into a board gaming hobby shop – and there are a few in any large city – you’ll find more board games than you can count. These games cater to almost any theme you can imagine, almost any game length you can imagine (from ten minutes to many, many hours), and almost any level of complexity, too. There’s also a nearly infinite variety in ways to play – there are games that are somewhat like the Monopoly and Scrabble you might be familiar with, but there are games that play in ways that are completely unlike anything you’ve probably ever tried.

I like games that make me think, but I like there to be at least a little bit of luck involved so that it’s not a completely dry exercise (like, say, chess). To me, that makes the thinking that much better.

I like games with a wide variety of themes, too – one of my favorite games is about building a network of power plants across the United States, for example. My wife’s favorite game (I think) is about building fireworks displays. There are game themes that appeal to everyone – trust me, if I knew you well at all, I’m pretty sure I could find several board games that would have a theme of interest to you.

More than anything, though, I like the social aspect of them. Games can be a great way to get people talking, especially the quieter folks. A game gives people something to talk about – it’s a perfect conversation starter.

The British fellows in this video give a very good explanation of it as well.

Q13: Questions about debt payoff

I carry a large amount of credit card debt. It is currently on a 0% interest promotional rate for another year. I have enough savings to pay it off and still have a good cushion.

A financial advisor recommended that I keep my savings earning interest and hold off on paying off the credit card debt. But I really want to be rid of this debt that has been haunting me for many years. I’m afraid if I don’t pay it off now, there will always be some reason not to.

Another factor in the equation is that I am 51 and am not putting the maximum amount in my company 401k. I feel if I paid off the debt I could immediately start putting more towards retirement.
– Sally

Your financial advisor is giving you the best purely financial advice, but it’s not necessarily the best advice on the whole.

Let’s say, for example, that you have $10,000 in credit card debt. If you don’t pay it off right now and wait a year with that $10,000 in a savings account, that $10,000 will earn 1% – or $100. You’ll have to pay taxes on that amount, so it’s probably closer to $75. This also assumes that your savings account actually returns a full percentage point, which it probably doesn’t.

If having that credit card balance is a stress to you and you would genuinely feel like you have a fresh start by paying it off, you’re only losing that relatively small amount of cash and gaining a great deal of peace of mind. I consider that worth it.

If you’ll feel better paying it off, pay it off. It’s not a financially perfect move, but the psychological benefits may certainly outweigh the few lost dollars.

Q14: Used bookstores

What do you do if the used bookstores in your area are terrible?

There are two used bookstores in my area. One of them seems to trade in nothing but westerns and hardboiled detective stories. The other one is about half childrens’ books and the rest is complete chaos where you can’t find anything.

Are you just lucky to have good used bookstores in your area?
– Monica

I frequent one used bookstore in my area that’s pretty chaotic, but it’s a friendly place. I like going in there and just browsing the shelves. Sometimes I find something interesting, sometimes I don’t.

The thing with a used bookstore is that you can’t really go in there with a specific title in mind and fully expect to walk out with it. A used bookstore is more of a serendipitous experience. You never quite know what you’re going to walk out the door with.

Another option is to use a site like PaperbackSwap, which allows you to “swap” paperbacks online for the cost of mailing them via media mail (about $2). I’ve been very happy with this service in the past, particularly in terms of reading through older book series.

Q15: Brain training?

What do you think of “brain training” sites like Lumosity? What’s the best “bargain” for this kind of brain training?
– Thomas

I honestly don’t know enough about brain science to say one way or another whether sites like Lumosity actually do anything positive in terms of keeping your mind healthy. While there are definitely studies that show that an active mind reduces the chances of dementia later in life, it seems unclear as to how much impact formal “brain training” actually has.

There are a number of free competitors to Lumosity out there. One of my friends swears by NeuroNation, for example. They do very similar things to Lumosity without the annual fee.

My take? This is basically opinion gleaned from having read a handful of scientific articles, but I tend to believe that brain training games tend to make you better at that specific task and at very similar tasks but have questionable benefit in terms of overall thinking capacity. For example, if you practice a brain training game to improve your short term memory, your short-term memory will gradually improve. If you play a game that forces you to do a lot of mental arithmetic, then your mental arithmetic will gradually improve. Will that change your life? Probably not, but it’s better than nothing at all.

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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