Reader Mailbag #53

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.
Summer Camp In The Neighborhood: How To Get A Collective Of Parents Together To Save A Ton Of Money On Daycare During The Summer
The Lawn Care Dilemma: How Much Time And Effort Should You Spend?
On Starting Over

And now for some great reader questions!

I have a credit card that I use infrequently and it never carries a balance. Because of that, I didn’t pay much attention to the APR until I recently got a new Terms and Conditions pamphlet. The APR is 25%. I know that I can call and ask the company to lower your rate, but how should I go about doing it? I’ve only had the card 2 or 3 years, but I’ve never been late and always paid in full. What rate should I ask them to lower it to? I would appreciate some kind of mini-script or guidelines. Thanks!
– Megan

Given your situation, you’re what the credit card companies think of as a bad customer. You don’t earn them anything for their efforts, since you keep your bills paid off. Thus, it’s not likely that they’ll go the extra mile for you.

Still, it can’t hurt to try. When you call the number on the back of your card, the first person you speak to won’t actually be able to authorize any changes to your rate – only their supervisor can do that. So, as quickly as you can, escalate to the supervisor – simply ask the person you are talking to to speak to their supervisor.

Once you’re speaking to the supervisor, make your case. Point out that you’ve been a customer for a long time and have never missed a payment, but don’t mention that you rarely carry a balance. Request a rate reduction – and be specific about what you want.

You likely won’t get what you want out of this negotiation, but you very well might get some degree of rate reduction. Good luck.

Have you played Fallout 3? I know you love video games that you get some bang for your buck and this is one of those games that you can play for over a hundred hours.
– Tony

I actually don’t currently own a software platform that Fallout 3 – I don’t own a Playstation 3 or an Xbox 360 or a Windows machine with the necessary hardware.

Having said that, Fallout 3 is definitely a game that I’d like to play. In my early college years, I played through both Fallout and Fallout 2 and thoroughly enjoyed those games.

In some ways, I’m glad I don’t have access to a system where I could play this game, because I have a feeling it would be a giant time suck for me.

Trent, you should write a tip-off post about Nouveau Riche.
– Michael

I’ve been contacted by a lot of readers who wanted me to get involved with Nouveau Riche University. In essence, it’s a very clever marketing scheme disguised as an educational opportunity.

Nouveau Riche markets itself with free seminars all over the country. At these seminars, you’re encouraged to sign up for a larger educational program and also to get involved with their real estate selling programs. These programs encourage you to take the equity out of your home and invest it in the investments that they have identified for you.

If you want to learn about investing in real estate, throwing $16,000 into tuition at an unaccredited institution is not the way to go, nor is throwing $3,500 away on books, nor is picking up the bread crumbs of investing that another group is leaving behind for you. You’re far better off hitting the library, getting involved with real estate auctions locally, and learning from the people who are actually doing it successfully in your area.

Are you still planning on having a third child?
– Emily

For the time being, a third child is on the back burner. We were quite interested in a third child earlier on when our children were younger, but as we’ve watched them develop, we’ve decided that, for now, the two kids we have deserve as much of our attention as we can give them.

So, for now, we’ve decided to not have any more children. We intend to look at the question again in a few years, perhaps when these two are approaching school age.

Personally, I wished you’d stop advising people to base their emergency fund on whether or not they have kids. EVERYONE should be able to support themselves (or their family) for more than a month, even if they don’t have to worry about little ones. Yes, you need more cash if you have more to support, but you don’t need more months of security. You need security even if it is just you.
– SP

Everyone needs an emergency fund. Families with kids need a larger fund. Why is that? An adult has the ability to go out into the world and earn a living. A child simply cannot do that.

There are a lot of factors that dictate the size of an emergency fund one should have, but the presence of dependents in the home is one of the biggest. The more dependents you have, the bigger your emergency fund should be.

Other factors include how many monthly bills you have (a person with a mortgage, for example, needs a larger emergency fund than the same person without a mortgage), the stability of one’s current job, and the ease of which a person could find a similar paying job.

How do you convince your kids to eat vegetables? I have a two year old that refuses to eat anything green.
– Jay

The biggest key is to repeatedly show your children that you’re eating and enjoying vegetables. If you want your children to eat vegetables, establish a strong regular meal time, make sure that meal includes vegetables, and take a giant helping of vegetables yourself. Put some on the child’s plate and merely request that the child try a bite of the vegetables.

That’s the routine that works well for our own kids. Because of that, both of our kids love broccoli, the older one is passionate about olives, and the younger one adores carrots. They simply see me and my wife enjoying these things and, on some level, seek to emulate us while also listening to their own taste buds.

I have a question: I have a 12-month CD ladder at ING direct, and right now CDs are earning less than just the savings account. A 12 month CD returns 2.00% while savings earns 2.4%. I know it’s not going to be a huge difference because the CD is less than $1,000, but, when the next rollover comes should I just keep the money in savings earning higher interest? Or should I take this as a sign the savings rate may be lowered soon and I should consider myself “lucky” to lock in a measly 2%?
– vguy

If you can earn more in a savings account than you can in a CD, put that money in the savings account. The purpose of buying a CD instead of having money in a savings account is to earn a higher interest rate. If you’re not earning that higher rate, there is absolutely no reason to own a CD.

CD ladders can be a great way to hold onto your cash, but only use them if you’re earning more than you would in a cash savings account.

What are you reading lately?
– Niles

My current read is The Executioner’s Song by Norman Mailer. It tells the true story of Gary Gilmore, who in 1977 was the first person executed in the United States after the reinstitution of the death penalty. It’s a long and incredibly detailed book.

I decided to pick it up because, frankly, the death penalty is an issue that I’m really undecided on from a moral perspective. I’ve heard from several people that this book provides some good insight into the issue, but so far I haven’t come to feel one way or another.

Aside from that, I’ve been reading a lot of short stories, mostly as “training,” I suppose, for my dream of being a writer.

Is there a directory or guide to blogs on finance and personal financial life that you can suggest?
– Robin

My favorite guide to personal finance blogs is the Wise Bread Top 10 Personal Finance Blogs list. It orders blogs based on a lot of different criteria.

Another good resource for finding lower traffic personal finance blogs is pfblogs.org. It’s basically a listing of the most recent posts on a few hundred different personal finance blogs that have opted in.

It’s hard to judge which blogs will click with you from just a listing of blogs, though. I suggest using these tools, visiting a lot of them, and finding ones that really speak to you.

How do you deal with junk that builds up in your wallet, like receipts, business cards, and so on?
– Andy

I have this same problem. I seem to just accumulate receipts, notes, and other miscellaneous material in my wallet almost automatically. After a few weeks, it can get ridiculous.

My solution for the problem is pretty simple. I have a handful of tasks that I take care of on the first of every month – paying certain bills, doing certain household tasks, and so on. A thorough wallet cleaning is one of the tasks on this list. I simply pull everything out of my wallet and evaluate all of the stuff, asking myself if it’s worth keeping or not.

Typically, my wallet loses fifty percent of its size during one of these sessions, believe it or not.

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

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