Updated on 02.26.09

Reader Mailbag #56

Trent Hamm

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.
The Value of Cultural Literacy
My Favorite Bargain: The Free Newspaper
Wallet Hacking: Six Tactics for Modifying Your Wallet to Minimize Your Spending and Maximize Your Time

And now for some great reader questions!

I’ve heard one should have at least two months worth of salary in an emergency account. I have 6 weeks worth of vacation time that I could cash out if I was terminated in the near future. Can I count this towards my emergency fund? Or must I have the actual cash in the account? Thank you very much.
– Kathie

Think about this: what happens if your company suddenly goes the Lehman Brothers route? You likely would not be able to touch that promised vacation pay – you’d just be out on the street holding a pink slip.

Promises from your employer are only as strong as your employer is. If you’re with an extremely stable company or with the government, this might be pretty reliable, but even the most seemingly reliable of companies can go under when you least expect it.

Personally, i would view that vacation time as icing on the cake, not as part of my emergency fund.

Trent- How bout a new look to the simpledollar.com. It’s been this format for quite a while and maybe could use a change/facelift…….just a thought. I’m sure regular viewers will offer up suggestions. Peace!
– Frugal Cubicle

I’ve been tinkering with redesigns for a long time, but I’m hesitant to do one until it contributes something useful to the site. A redesign should actually improve the site in some capacity – simply moving around elements and changing colors doesn’t really serve much of a purpose except to gently annoy people who are quite familiar with the current site layout.

That being said, I do have a couple upcoming things that will make a redesign worthwhile. In other words, expect that, in a month or two, there will be some degree of a redesign around here.

Hey Trent, i was looking at some online accounts and was just wondering how come some banks and their online accounts are able to offer a higher interest rates than others do? Or is it that the banks offering a higher interest rate are doing so to lure new customers and is a such a “to good to be true” deal that you should stay away from. I’m just trying to understand how it all works. Thanks!
– Marlon

Banks, particularly online banks that are competing for attention, offer widely varying rates in order to get new customers. In effect, a higher interest rate for a few months (so that it appears high up in the rankings at Bankrate.com and other similar sites) functions as advertising for that particular bank, helping them pick up customers.

If you’re shopping around for a bank, the biggest things you need to look for are FDIC insurance (do not put your money into a bank that isn’t FDIC insured) and a good history of customer service (which you can find out by Googling for the bank and reading what others have written about it).

I wouldn’t get obsessed about the rate of the moment, though. You’re better off looking for a healthy bank with good customer service, because rates change all the time.

What’s your comfort food?
– Char

Anything with a lot of cheese in it, actually. Lasagna. Pizza with extra cheese. Anything with a good blue cheese in it. Croque madames.

I don’t like sweets much at all and I’m not into steaks or other such things. For me, it comes back to the cheese. It’s really my weakness, and it’s probably largely responsible for every single pound I shouldn’t be carrying.

A good chunk of cheese is sublime for me.

I have a question I have been thinking about for over six months! How does a newly married couple deal with debt (even if it is the “good debt” of a student loan) that came from only one partner?
– Jamie

The answer here is communication. There is no ready made answer that’s appropriate for all couples. Instead, you need to sit down with your partner and talk about your financial situation in detail.

When you get married, most of the time your finances are more or less fused in some way or another. That debt will affect the choices that both of you make, even if only one of you is actually paying the bill out of that person’s paycheck. The person saddled with the debt will have less money to contribute to other things, so the other person will have to pick up the pace.

You guys need to sit down and come together with your financial plans. Figure out where you want to be in the future and get a strong grip where you’re at now. Talk it through. You might just find that you’re in this together more than you think.

Where do you want to be with your writing in five years?
– Cho

I’d love to have a big handful of short stories published. I hope to have another book or two published, too, culminating together in actually getting a novel published, which has really been my dream.

The big question, obviously, is what I’m doing now to get there. I’m attempting to write a short story every day at the moment. Some days I fail – other days I succeed. I save them, then reread them a few weeks later, then work on polishing the ones that still seem good. When I get a small collection of polished ones that I actually like together (ten or fifteen of them), I’m going to hand the collection to my wife and a few friends to read and shred. If there’s anything left standing after that, I’ll see about getting them published.

I have found that making myself write fiction every day is making it easier not only to develop ideas, but also to express them in an interesting fashion. It’s much easier than it used to be to develop characters, maximize word use, and so on.

What do you do when you’re tired of living cheap and want to splurge?
– Lemon

My wife and I both have a certain amount of money that we’re allowed to spend on whatever we wish each month. Whenever we want to splurge, we just dip into this money. We keep this pretty informal, though, since we’re both pretty good about not splurging much.

Give this a try. Each time you get paid, set aside a certain amount of money ($25 or $50 or so) solely for splurging. You’re free to spend it however you like, except that when it runs out, you can’t go for more. You can let that amount build up for big splurges or use it to go out a few times for drinks with your pals – however you want to use it.

Our real key for beating splurging, though, was simply discovering things we enjoy doing that don’t involve spending a lot of money. There are so many inexpensive and free things to do that are a lot of fun for us that we don’t really feel compelled to splurge on expensive experiences.

Do you believe in UFOs?
– Lucy

I certainly believe that people spy things flying in the sky that they can’t identify. UFO means Unidentified Flying Object, after all.

Usually, though, when people ask that question, they want to know if someone else believes extraterrestrials are visiting Earth. I don’t know if I believe that or not – honestly, I don’t have enough information either way to say absolutely “no” or absolutely “yes,” but I don’t rule it out as possible.

Having said that, I did witness an extremely memorable flying object when I was about ten years old. My father and I were fishing after dark on a cloudless night. Suddenly there was a round disc-shaped thing in the sky (no, it was not the moon, which was also visible). It was yellow colored and seemed to be very still, perhaps wavering just a bit. My father noticed it, too. We watched it for a long while, then it began to barely inch to the right, then suddenly it accelerated out of sight. If it were a cloudy night, I would have suspected a spotlight of some sort, but the night was clear, so to this day, I really have no idea what it was that I saw.

The strange part? My future wife was hosting a sleepover one night when she was about nine with several other girls – this sleepover would have been about four to five miles from where my father and I were at. Several of the people at that party reported seeing almost the exact same thing. It is quite likely that we all did see the same thing.

When traveling, do you think it’s better to stay at the cheapest hotel you can find or pay more for a better place?
– Lynn

To me, the “cheap” hotel is almost always out of the question. The rooms are often not cleaned well, which leaves me feeling very uncomfortable when I sleep.

If I’m on vacation with my family, I’d vastly prefer to pitch a tent and camp in a state park or a campground somewhere. It’s less expensive than a low-end hotel and I find sleeping outdoors makes me feel refreshed like nothing else.

Having said that, if I’m traveling for professional purposes, I will spend more for a nicer hotel. A good night of sleep is essential for me, and I simply won’t sleep well in a hotel where I’m unsure how clean the sheets are and the air conditioner sounds like a freight train. The risk of a bad experience isn’t worth it for me.

I have insomnia. Any suggestions?
– Lindsay

I used to have insomnia problems in high school and college, but I haven’t had such problems in many years other than an occasional night here or there when something is on my mind.

The thing that used to work well for me was a large coffee cup of warm milk with a bit of nutmeg on top. Some nights, I’d drink one cup fairly quickly and make the second one, then retire to bed with that second cup and sip it as I read something. That would usually do the trick for me.

Another thing that I found worked well was getting exercise in the morning. Seriously – it works far better than evening exercise in terms of making you tired.

If it’s actually disrupting your life significantly, though, see a doctor. There may be a larger issue at work.

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

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  1. Anitra Smith says:

    In my limited experience, the best way for a newly married couple to deal with debt is to acknowledge it, communicate & agree what to do about it (ie. budget). It may also help if you look at all expenses/income as “ours” rather than “mine” and “yours”. This has worked for my marriage as well as many of my friends.

  2. Baker @ ManVsDebt says:


    This is by far my favorite weekly post that you do. I really enjoy Reader Mailbags, don’t ever quit!

    Also, I strongly agree with the above comment. The key for us (we have one person with 50k student loans, one with 1k) was admitting up front that this is ours. We discussed everything before marriage, and try to avoid saying things like “your” student loans, or “so-and-so’s” student loans. It’s our debt!

  3. Michelle says:

    I second the idea that communication is the most important thing in dealing with marital finances, including debt before the marriage. When my husband and I got married, I had a significant amount of student loan debt, and he had none. We talked about things and decided that _for us_ the most important thing was for me to stay home with our kids. So, he makes the money that pays for my debt. We don’t really see it that way, we both feel like we are equal partners in our marriage, so it’s not an issue for us.

    You’ve just got to talk and figure things out for yourselves. What works for one couple would be completely unthinkable for another.

  4. Wendy says:

    I am the saver and my husband is the spender in our marriage. Once we openly discussed our goals and principles with regard to money (ala Smart Couples Finish Rich), it was much easier for me to spend and far, far easier for my husband to accept spending limits. He knows that every month, some of our savings go directly to travel and gifts for family, and when we want to spend money on anything else (including the minivan he wants when our second baby is born this summer), we have a financial framework to discuss it in- neither of us have to be the ‘bad guy’ for our family to get where we want to go.

  5. Gabriel says:

    I have an uncle who’s obsessed with UFOs. He actually has a sideline as a hypnotist to recover people’s memories of being abducted. I’m not sure that I agree with him, but I sure respect his entrepreneurial spirit!

    And…I love cheese too :)

  6. The Personal Finance Playbook says:

    I love croque madames, too.

  7. ChrisD says:

    Re insomnia. This might sound really stupid, but when I had insomnia problems at university the real problem was just that I was cold. Too cold to sleep, but not cold enough to FEEL cold. I added a jumper, leggings and socks to my night-T-shirt and the problem was cured.

  8. Jayne says:

    I am completely with you on the cheese thing.

    My mother still laughs to this day about the time when we were having a money discussion when I was 18 and told her I didn’t need to make a TON of money. I would just consider myself “wealthy” when I could afford to buy only good, real cheese regularly.

    The bagged and shredded plastic just isn’t the same!

  9. Karen M says:

    About hotels…

    I try to stay in the cheapest room of the best hotel I can afford. That way, I can take advantage of all the amenities offered (concierge, breakfast, the security) but not pay a premium price. I don’t need a separate living room in my hotel room. Chances are, I will spend very little time in the room anyway.

  10. SteveJ says:

    I had insomnia for years. I found your environment does play a great part in it, as ChrisD pointed out. Along with hot/cold, noise is often a factor. Some people need it silent (try earplugs), others need background noise (white noise machine or music). Is it dark in your bedroom? I have a hard time sleeping on travel, there’s strange noises, the blankets are too hot, the AC isn’t cold enough, and there’s strange lights. I’m also paranoid about hotel alarm clocks. All unfortunate since I live in hotels for a good chunk of my year.

    Because of my issues with insomnia, I have two ground rules. 1) No tv in the bedroom. 2) No reading at bedtime. I love to read in bed, it’s one of my favorite comfort things. But if I’ve got good books and I’m not particuarly sleepy I’ll just go all night. The goal here is to make the bedroom as boring as possible, try to clear your mind and just lay there. Even that’s more restful than watching infomercials. Nothing beats sleep, but I can at least get through a few non-stop days of no sleep with restful meditation and a vatful of coffee.

    Speaking of which, check your caffeine intake. I used to NEED that 4pm coffee jolt just to make it through the rest of the day and drive home safely. But even though I certainly wasn’t jittery or alert by bedtime, it still may have had some effect.

    Exercise is great, in the morning is best as Trent said, but if you know you’re not going to fall asleep for the next 4 hours, I’d do pushups until I’m exhausted. At least at that point I have no interest in doing anything but lying very still. I can’t bring myself to exercise in the morning (I ran at 630 am for two months, and never made it past a half mile before giving it up and staggering home, I run 3 miles most days without a hitch), so I try to workout immediately after work, before coming home. I really look forward to bedtime because my mind and body are both exhausted. Another thing is to avoid staying awake until a designated bedtime, it’s much more important to get up at the same time than to go to sleep at the same time if you’re trying to establish a rhythm. If you get tired after dinner but want to stay up for CSI, don’t. Go to bed. My wife has very small windows when she can go to sleep and has learned many times that when she stays up just an extra hour then she’s up for the next six.

    One other tactic I’ve heard but not tried, is if you’re laying there just thinking, you might try writing down everything that’s bothering you. Just getting it out on paper seems to lessen the mind’s need to obsess, I know it works for looming projects and tasks.

    My brother swears by Sleepytime tea, but he also has to watch tv at an absurdly loud level as he goes to sleep. So, one size does not fit all.

    Do some research into circadian rhythms, you might get some ideas there on how to move your sleep cycle so it fits your life.

  11. Cathy says:

    Why not use that 6 weeks of vacation time! Good golly!

  12. Karla says:

    I’m starting to think about life insurance. Where do I start looking and how much do I need? Is now a good time to buy some with the economy how it is? what is required to get it medical exams ?

  13. katy says:

    For the woman who has insomnia, hot milk with honey works well. It makes tryptophan. Give it a try.

  14. Ben says:

    Trent, …redo the website. Sorry, but everytime I visit this site (and it’s quite often), I think about how drab the color scheme is. You don’t have to go overboard, but trust me…a little color and aesthetics go a long way. It doesn’t have to contribute directly to “personal finance”. It’s about stimulating the brain and senses simultaneously. Just a thought.

  15. J says:

    I’m surprised that an employer will let someone carry 6 weeks of vacation. If you aren’t going to use it, then you might want to ask about a “buyback” where you can convert the vacation into money …. for an emergency fund.

  16. Mark says:

    If getting a novel published is your real dream, I strongly recommend you start trying to write novels soon. I have the same dream, and for years I let myself believe that short stories were a prerequisite. Only write short stories if that’s truly what you want to write. Short stories can be good practice, especially for the craft of writing a real scene, but nothing compares to the headlong plunge into a novel if that’s where you really want to be.

  17. Anne says:

    Because of the nature of the business (comped staff rooms) I often find myself staying in really nice hotels for work. I gotta say, not at all worth it.

    The fanciest hotels charge for EVERYTHING. Nothing except maybe advice from the concierge is free and it’s good manners to tip him/her.

    I, personally, think you stop adding value at the level of Courtyard by Marriott/Doubletree by Hilton (don’t use Sheraton but I assume there’s one in their family at that level). At those properties the wifi is usually free, security is good, you get a nice gym and pool, and you get a very nice bed. I, personally for non-business trips, think the value is best at the nicer Choice Hotels properties (free real breakfast!), the only downside is that they don’t have beds as nice as the Courtyard/Doubletree.

  18. Gabriel says:

    I regularly skip meals so I can afford to buy Brie. HEAVEN!

  19. michael says:

    re site design: leave it. Or at least keep the color scheme. As someone who multitasks at work, I usually have a window open for ‘thinking’ out a situation(ie taking a minute to step back), and the dull colors here are very much appreciated. It’s less likely to cause a set of eyes to stare towards my screen.

    re insomnia: No napping. I’ve been battling it for 5 years. The days I do best are the ones where I get up early, stay busy, and avoid any rest before bedtime. My bedroom literally has only a bed and 2 dressers. As far as ridding your mind of clutter, a meditating technique I learned in 7th grade health class still works wonders.

    get into comfortable clothes, lay on your back, don’t have the sheet too heavily covering you. Take deep long breaths, and visualize you’re inhaling blue air, and exhaling brown air,..with the brown air being all the BS coming out. Focus on your toes, breathing in blue, and exhaling brown from your toes. Up to your feet, calves, legs, hips, etc. Enough breathing and unwinding, you’ll be asleep soon enough.

  20. cv says:

    The point of an emergency fund isn’t just to cover you if you get laid off. What if your car breaks down beyond repair and you need to buy a new one? What if a dear relative gets very ill and you need to buy a walk-on ticket to fly across the country? What if many of your belongings are destroyed in a natural disaster, and the insurance company takes months to reimburse you? What if you become injured and need to find a way to live someplace wheelchair-accessible temporarily? None of those situations would let you cash out that vacation time. Nothing can really replace having cash on hand.

  21. Cambo says:

    Hi Trent

    I really like the simple, clean layout of the website.

    The font is really easy to read on my iPhone too on the train on the way to work.

  22. Jimmy says:

    For the insomniac, Steve Pavlina rights an article of sleeping/waking, not directed at insomniacs, but may be of some use.

  23. Meika says:

    I agree with cv on the emergency fund. My husband just lost all his luggage on a business trip, and it’s going to/has already cost us hundreds of dollars to replace.

    And on insomnia, my thought is similar to michael/comment#18. When I was pregnant, I was doing a self-hypnosis course as part of my preparation for childbirth (HypnoBabies; highly recommended). It’s essentially just profound relaxation with some visualization and positive affirmations thrown in. I’ve been an insomniac for YEARS, taking at least an hour or two to get to sleep each and every night, but these recordings knocked me out cold within minutes. It was amazing. There are loads of resources on this if you Google it.

  24. Karen in Oz says:

    To the insomniac, see a specialist!

    As lovely and smart Trent is, there is no easy cure, see a psychologist who specialises in sleep disorders.

  25. ben says:

    trent, why did you remove my post about redoing your website? its just an opinion. the colors here are drab, at least add some blues or greens….and don’t remove my post.

  26. ben says:

    Sorry, for some reason, my comment wasn’t showing up…you didn’t remove it. Thanks for removing my fears that you were becoming a blog dictator.

  27. Matt says:

    I want to start investing in some Vanguard Index funds – however I’m unsure whether to go with several individual funds (Shares, Bonds, Property, Cash), or the single diversified ‘LifeStrategy’ fund?

    I have about $5000 to invest, which is the minimum balance for any of the funds – so if I go with the LifeStrategy, I would be immediately diversified, however if I go with the individual funds I could only get one now, and have to wait until I save more money to get into the others.

    What would you suggest?

  28. Matt says:

    I want to start investing in some Vanguard Index funds – however I’m unsure whether to go with several individual funds (Shares, Bonds, Property, Cash), or the single diversified ‘LifeStrategy’ fund?

    I have about $5000 to invest, which is the minimum balance for any of the funds – so if I go with the LifeStrategy, I would be immediately diversified, however if I go with the individual funds I could only get one now, and have to wait until I save more money to get into the others.

    What would you suggest?

    P.S – I’m in Australia – so it would be Vanguard Australia.

  29. Shelly says:

    So glad to read about someone else who has splurge money! My husband and I keep a very tight budget, but one thing we’ve always allowed ourselves is a set amount of money each week to spend on whatever we want. Our money is really tight lately because my husband was laid off in October, but we still set aside $5 for each of us each week — it’s not a lot, but it allows us the occasional coffee with friends or the ability to save up for something we want.

    It also cuts down on arguing about what we’re spending money on — if my husband wants to save up his “fun money” to get a bunch of Magic the Gathering cards, that’s his business. :)

    And I’m with you on the love of cheese.

  30. Sara says:

    Thanks for such an informative site.

    A new questions: Do you recommend using a dealer for car maintenance and repairs or a garage you trust? I have a 2005 Honda Pilot and because it is a “certified” used car, I’ve been using a dealer but I feel like I’m throwing money out the window and possibly getting taken for a ride. Same deal with the last dealer I used (last car).


  31. michael bash says:

    I agree with you on changing the format. Why? Because it’s been the same for some time. So? What is he saying? Change because change is good, or change for the sake of change. Is there a problem? No? So leave it alone. Plus ca change, plus c’est la meme chose. Put another way, we must have better things to do with our time. Make soup!

  32. Mule Skinner says:

    Do NOT change the website format. It is very easy to follow, easier than almost any other. This is true because it is a FLAT FILE. Entries are in order according to the time they were created. The comments are expansions that can be hidden or made visible.

    The lack of color is fine. Everyplace else is flashing rainbows at me.

    I wish others would be more like this one.

  33. Michael says:

    Really enjoyed the UFO story. A set of them appeared over my hometown when I was growing up. Hundreds of people reported them and I know of two people who videotaped them. Pretty interesting, whatever they are.

  34. ChinSister3 says:

    Insomnia….while going thru a difficult period in my life & not sleeping well due to too many things racing thru my brain, an older friend gave me some advice that a doctor had given her…..breath deeply, calmly & slowly, and in your mind spell out the word “RELAX”. I do the “REL” on the breath in, and the “AX” on the way out. It takes a little while, & your mind may wonder off path a few times, but just come back to it & do it over & over. It actually did help me go to sleep.

  35. Karen Mitchell says:

    Hi-I would like to become a writer and make some money from my home. I am also looking for legitimate work that I can do from my home because my health issues. I use to have a pet bunny that literally ran my house. He was my son. I kept sorta a journal on him and my mother feels that I should write a book about him. She has always said that I have a wonderful immagination that I should be able to write or do something with this. How do I proceed? I read your articles all the time and find that they are very helpful to me. They really make me think of changes I should be making in my life. I am unemployed and need a source of income.
    Thank you,

  36. Shauna Redmond says:

    For the insomnia try Valerian Root. You can find it at almost any health food store, including GNC. I get mine from Melaleuca. Helps you to fall asleep and cost about $10 a month to purchase. Not a big price tag for peace of mind.

  37. Lily says:

    I travel a lot and have found that the best hotel deals are either through hotwire.com or priceline.com. As one example, last year I stayed at a Sheraton in Bakersfield, California using the Priceline bidding option and it accepted my offer of $40 for one night. It was divine and regularly costs $120/night.

  38. bay says:

    I know of someone who has a nearly identical “glowing orb” type story…she thought for sure it was some type of ghostly presence, not necessarily an ‘alien’ one.

    But I had to chime in on the cheese. Nothing does it for me like cheese. The stinkier the better! All of my favorite foods are cheeses or have cheese in the title ;)

    And for insomnia…it could be anxiety. I am prone to anxiety attacks and have generalized anxiety…I recently started having sleep problems and my dr. prescribed Ambien. The Ambien would get me to sleep, but then I’d have bad nightmares. I now take an anxiety med (Buspar) and I sleep well and no nightmares.

  39. Marguerite says:

    I love the idea of “fun money.” I tie mine the the amount of overtime I work on a paycheck. I give myself a set amount each payday, and a small bonus if I worked a certain number of hours. That way my hard work gets rewarded, but the majority of that money goes to other things. Nothing’s worse than working a 100 hour week and then feeling like you can’t reward yourself for having gotten through it.

  40. Matt says:

    Your response on setting aside $25-$50 (to each his own, just your example, that’s cool) is about the most important thing you can do for yourself (or as a couple). Just as a diet, restraining yourself will only cause denial, resentment and, eventually, blowing your budget. Giving every one a sense of freedom while staying within your budget provides that sense of reward and accomplishment that you just can’t live without. Also, giving yourself a weekly allowance is a budget in itself. If that latest videogame comes out and you want it… there goes your $50. If you’re willing to wait for a sale or in a few months and find it for $20, you in essence have more money to spend on something else… like another video game :)

    It’s this logical common sense type stuff that keep your posts interesting, Trent. I’d prefer if you try avoiding listing subjective arguments and/or outlines, and go for topics that really hit home — like your homemade laundry detergent, or how to make cheap bread, etc. :)

  41. Dave says:

    Trent – I have a question about starting a new business…

    I am starting a new business and will soon be having some income from it, hopefully. I want to find a good (preferably free or inexpensive) program to track my income and expenses, but don’t know what to look for. I don’t anticipate I’ll need anything very complicated, at least not right away. Do you have any tips?

  42. Georgia says:

    About sleeping, I usually took up to an hour or more to go to sleep. My husband’s head would hit the pillow and he would be asleep. What I used was audio tapes of natural sounds. I love thunder storms and I have one of waves slapping against the side of a boat. These are 30-45 min long and I have never heard the end of one.

    Also, I read a doctor’s idea that we spend too much time under light, which causes us to get a second wind just as we’ve become sleepy. He says to turn all lights off about and hr or two before bedtime and use only candles or the light of the TV, if you want to watch that. Isnt’ that why they keep chickens under constant light? To keep them awake and growing more.

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