Reader Mailbag #51

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently.
Review: Smart Couples Finish Rich
How and When to Cut Direct Financial Ties with Your Children
How Does the McDonalds Double Cheeseburger Stack Up to the Homemade Version?

And now for some great reader questions!

Are there any ways to optimize utalizing toll roads? How do you weigh between it taking more time to get to point B and it costing $0.75 on a toll road?
– Mol

How valuable is your time? Beyond that, how good is your gas mileage? Those are really the two considerations you need when considering this question.

For example, if you’re going to waste ten minutes just avoiding a single $0.75 toll, it’s probably not worth the time investment for most people. Not only are you losing ten minutes, but you’re also losing some fraction of a gallon of gas, possibly enough to equate to that lost seventy five cents.

Alternately, if you can plan an alternative route that only adds a minute or two to your trip and keeps you from dropping $3 on a long toll road, by all means you should strongly consider the alternate route.

I once added eleven minutes to a trip to avoid roughly $4 in tolls on a toll road. I felt, in the end, that it was a good tradeoff for me at the time, but others might feel differently.

What are some good places to eat in central Iowa? I’m going to be in the Ames and Des Moines area for a week or so and I’m looking for some good dining options.
-Willie

If you’re in Ames and like barbecue, Hickory Park is a must-visit. It’s practically an icon of central Iowa, a place that simply must be tried. The Cafe is a wonderful little place on the north side of town as well.

The Des Moines metro area has a ton of great dining options. Sage is always mentioned – if there’s a “top restaurant” in the area, it’s probably Sage. Try La Mie for breakfast and Court Avenue Brewing for great food and drinks.

Your best option, though, is to just ask your hosts in town for their suggestions. Enthusiastic dining companions can make the cheapest place into something wonderful.

what’s the best way to build credit? I graduated from college without loans or anything, thinking I was being smart, but now I’ve found I can’t get a condo or the other things I want because I have no credit history.
– ariel

The only way to build up credit history is to get some form of credit. My recommendation is to apply for a credit card and use it for purchases you would normally make anyway, like filling up your car with gas and buying groceries. Keep the bill constantly paid off. This will provide a great start to building a good credit rating.

You may find that it’s fairly hard to get a credit card right now with the economic uncertainty. If that’s the case, look into setting up a secured credit card with a small credit limit. A secured credit card is one in which you pay the credit limit of the card up front and that amount is refunded to you later (either at a prescribed date or when you cancel the card). This basically insures the issuer and minimizes their risk, making them much more likely to issue a card.

How are your New Year’s resolutions with regard to exercise and better health going?
– Amy

Pretty well, actually. I’ve lost about 15 pounds so far this year, actually faster than I would like, to tell the truth. All I’ve done is substitute in some healthier food options for less healthy options (drinking only water and skim milk, for one, and eating fruit for a snack) and start walking quite a bit (this past week, I walked a little over three miles each weekday).

I did not want to initiate any major changes in my life, but I will say that I do feel better, particularly over the last week or two. I definitely feel a lot more energy than I did a month ago, which is fantastic.

So, so far it’s been a success.

Are you familiar with–or perhaps even participating–Ramit’s (from I Will Teach You To Be Rich) Scrooge Strategy? He has a whole different approach to saving money that avoids most frugality tips. Instead he focuses on things like calling to get your cable/phone/insurance/etc. bills lowered and tackling those major spending habits. His argument is that small frugality tips (those that “only” save $5-$10 per month) take too much effort when trying to implement several at a time over a long time; an argument that I believe is completely valid. Anyways, I just wanted to get your opinion on Ramit’s view of frugality [or lack of]. Personally, I don’t believe there is any right or wrong way to save money, but do find Ramit’s method to be my preferred choice. Thanks.
– TMS

I think it’s good in concept and attractive for people looking for the big quick fix, but it’s shortsighted.

Let me give you an example. Let’s say I can swap out the incandescent bulbs in my house for CFLs and drop my electric bill about $8 a month. This activity would take me about twenty minutes, just once.

Under the philosophy you describe, such an activity would be a waste of time. Yet, over the course of three years, that activity saves $288 for only 20 minutes worth of effort (actually less than that, since with CFLs you don’t have to change bulbs nearly as often).

There are countless examples like this – little frugal steps that don’t save much money per month, but don’t take much time either. As a result, these efforts pay a huge hourly wage. Ignoring them because the immediate result isn’t splashy is a pretty big mistake, in my opinion.

You and your wife seem to have a very strong marriage. Can you give me some tips on how to keep my marriage strong? What do you do to keep it that way?
– Sally

Here are five things I make a conscious effort to do that seem to help our marriage stay strong.

I tell my wife I love her every single day. I usually do it in the morning before she leaves the bedroom, and on weekdays I’ll also tell her when I see her in the evening for the first time. I usually couple it with a kiss. It’s so simple, but it’s a constant reminder of the fact that I do love her, no matter what.

I ask about her day, listen, and ask follow up questions. I do this not only so I can keep tabs on her professional life, but also to give her a great chance to vent about her situation. Everyone needs to talk about themselves sometimes to someone who is interested – I try to provide that for her as often as I can.

I try to surprise her on a regular basis. I’ll spend an hour preparing a really excellent supper when she doesn’t expect it. I’ll spontaneously give the kids a bath when she’s comfortable on the couch under a blanket, even if it’s her turn. Doing these little unexpected things not only shows her I care, but also often compels her to do similar things for me.

I hold her hand. I do this all the time, whenever it crosses my mind and seems appropriate. I’ll just hold her hand gently while we’re talking or we’re riding in the car or we’re waiting for an appointment or we’re sitting on the couch in the evenings.

I talk about EVERYTHING with her and let her determine what’s interesting. If something is concerning me, I don’t hide it from her. I tell her about it. Most of the time she’s interested and we’ll discuss it – sometimes she’s not and I let it drop (this is key – if she’s not into the topic, I don’t push it). Either way, though, she gets the message that I’m making an effort to share and be open.

Why should I save for retirement at all if I don’t ever want to retire? I truly love what I do.
– Marc

You might love what you do, but will your employer love you when you’re in your seventies?

Retirement isn’t just something you plan for and choose on your own terms. Quite often, people are pushed into retirement simply because they’re starting to slip a bit in the marketplace. This doesn’t mean that they’re suddenly worthless – it’s simply a result of competitive organizations.

You might also find that your situation changes unexpectedly in your later years. Perhaps your spouse gets very ill and you need to devote your time to taking care of her. Perhaps your child dies suddenly and you choose to adopt your grandchildren, requiring you to devote a lot of time and attention to them. Perhaps you might want to continue your work independently. Perhaps you might discover a new passion in your later years.

What kind of digital camera do you use to take pictures for your photo-heavy posts?
– Alex

I currently use a Canon PowerShot SD880IS and I’m thoroughly happy with it. It takes 10 megapixel images, which are big enough for any manipulation I might want to do and also big enough to make solid-looking 8 x 10 prints. It also has a ton of options right on the camera, most of which I haven’t mastered yet, but I’ve been playing with quite a lot. It also fits in my pocket.

I have used PowerShot digital cameras for many years and have been quite happy with all of them that I’ve used. I mostly use them for family pictures, some outdoor shots, and also random pictures of things for The Simple Dollar and other web publishing.

I loaned my sister $500 several months ago. She pledged to pay me back quickly, but I haven’t heard a word about it in months. Should I confront her about it? What should I say?
– Cilia

Loaning money to family members is always dangerous because of situations just like this one. Cilia, you’re basically in a no win situation here.

If you don’t say anything but keep it bottled up, you’re likely to build up some resentment towards your sister over time, which will damage your relationship. Alternately, if you do say something (particularly if you do it repeatedly), you’re likely to cause your sister to resent you, since you’re behaving more like a lender to a borrower than a sister to a sister.

My suggestion? Mention it once if you must, but just let the debt go. Forget about it, except to remind yourself not to loan any more money to your sister. If you want to help her in the future, make it in the form of a gift.

Me and my boyfriend are obsessed with Babylon 5. Do you like B5?
– Mol

I tried to get into Babylon 5 at one point, but it never really clicked well with me. My wife absolutely despised the series, though – she has described it as the most boring science fiction series she’s ever seen.

Quite frankly, it’s very difficult for us to get into a “long narrative” style television series at this point with two young children. We’re only able to keep up with Lost thanks to DVR, and we’ve tried to follow a few other series but failed, simply because we’d get so many episodes behind that it would seem hopeless.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

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