Reader Mailbag #6

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.
On personal finance blogging and bribery
How to prep for a job interview
How video games can be frugal
What to do with old baseball cards

And now for some great reader questions!

How do you handle disagreements with your wife?
– ontguy

Ordinarily, this would cross the line into “too personal for my tastes,” but I think there are some things that I can mention that are useful and illustrative here.

For the most part, when we disagree, we use debate tactics. Seriously. My wife and I actually started falling for each other because of debating situations, so it came natural for us to use those techniques in disagreement.

The most effective technique we use is switching positions. I make a genuine effort to argue the position she’s holding, and she argues the position that I’m holding. We actually just switch into this pretty naturally – one minute we’ll be debating it one way and the next we’ll be switching sides. What does this do? It forces us to see the other’s side on something and we usually find out that one (or both) of us is merely being stubborn, not being right.

The biggest challenge is always checking emotions at the door. If you disagree with your spouse and start getting angry, I try to say something along the lines of “I’m getting angry right now. Let’s talk about this later after I cool off,” and she respects me enough to give me that space. I do the same for her. It doesn’t always work, but it works often enough that it’s worth doing.

When a woman ends a relationship that has been going on for a long time and the man finally starts to fight to keep the relationship going, why is that? She gives us all the clues and we have little fights here and there, but we just do not get it till she is DONE.
– Albeeback

Let’s look at it biologically, because that’s really what it comes down to. Guys are predisposed to trying to keep their options open. Biologically, guys can produce their half of what it takes to make a child at almost any time, so there’s not as much value in focusing in on one mate at first. Gals, on the other hand, are rewarded for being more careful about selecting a mate. They have a limited number of opportunities to produce offspring and thus they are rewarded by focusing in on the best mate available to them.

That’s why in most relationships the guy is less interested in commitment (yes, I know, that’s not always the case). That’s not a lack of love, but just what they’re predisposed to do.

In other words, what you’re describing is actually pretty normal and expected from an “average” guy. He’s trying to keep his options open (that’s how he’s wired), but he also has a relationship that he emotionally cares about (that’s why he’s fighting for it). Another problem is in the signals – quite often, guys simply don’t understand the clues they are given. I confess to being clueless myself – my wife often has to be pretty direct with me because I don’t pick up on hints at all.

Ladies, when you want something significant, don’t just drop “clues.” Say what you’re thinking and make it clear that it’s important to you. Sometimes you may have to repeat it. Be direct – guys want to know what on earth you’re thinking, because often they think everything’s completely fine when you’re fuming and then are completely shocked when you blow your top. If you’re dropping hints and he’s not picking up on them, he probably isn’t realizing you’re trying to say anything at all. It’s not about cluelessness, it’s about not understanding what you’re saying when you’re communicating indirectly.

Guys, if you’re wondering what she’s thinking, ask her. If she seems to just blow up a lot about things and you don’t know why, ask her. Tell her flat out that you don’t know what she’s been trying to communicate and ask her to tell you directly.

What’s the key here? Communicate! If you’re not actually talking or just talking indirectly, it’s hard to have a real good understanding of what’s going on. Just sit down and talk about it.

What is the best strategy for paying back college loans? I’m still in college right now: half way through and about 10k deep.

I’m studying for a BS in EECS (Electrical Engineering and Computer Science — a fairly well paying degree) at Berkeley. I’ve heard estimates that graduating students make from 50-60k a year.

Should I pay off as much as I can early on? Or should I just make the minimum every month? I’ve heard that students who payed too much too early (before the 6 month graced period with subsidized interest) have had their payments started and nullified however many subsidized months they had left. Also, my friend tells me I should invest my left-over money and only pay the minimum on my loans.
– Alexis

The default strategy for any loan is always to pay off as much as you can as fast as you can (unless the interest rate is absurdly low, say, below 3%). So, as a general rule of thumb, the more you pay now, the better. This is especially true fresh out of college, when you don’t have nearly as many entanglements as a married person with kids and an established role in the community might have.

Now, if you have a loan with some kind of grace period (assuming here that the grace period is actually a period with no interest at all on the loan or with the interest paid by the government), it’s worthwhile to retain that grace period. However, that doesn’t mean you shouldn’t overpay. Instead, you should be paying as much as possible each month – but only sending the minimum payment to the lender. The rest of that payment should go straight into a high-yield savings account. Then, the day the grace period ends, empty out that account and make a giant payment.

One more point of advice: live as cheap as you can for the first five years after college. You’ll never regret it for the rest of your life.

Should I spend this year 2008 saving my goal of $10,000 and then paying off debt(which is under $20,000)next year 2009. Or do the exact opposite?

I assume if I choose to save first I will still at least be building credit??
– s.a.

There are several factors here that change the answer. How high is the interest on the debt? If it’s a lot higher than the interest rate on the savings account, you should just save a little bit (say, $1,000 or so for a small emergency fund) first and then start hammering that debt. If it’s all low interest debt, like student loan debt, it might make more sense to save first as that savings will give you a buffer against whatever may come down the pike. Another piece is how strong your family and social network is – could you rely on them if everything fell apart? The more reliable they are, the more you should look towards paying off the debt.

What do I do about the financial disaster that is my in-laws? They have nothing, except for three adult children that still live at home and mooch like mooching is going out of style.

I don’t have too many fears, but I exceedingly afraid that someday I will have to pay for them to exist.

HELP!!
– Chris

The absolute first person you need to talk to about this is your spouse. Sit down with your spouse and make absolutely sure that you guys are 100% on the same page on this issue. If your spouse is hemming and hawing on the issue, then your spouse is probably wanting to at least consider that sort of scenario in the future. If it’s something that’s crucially important, you have to let him or her know about it.

If your spouse won’t agree, you have to ask yourself some serious questions because you have to plan for the scenario where you are responsible for them. Is this a marriage-defining issue? Is it something you can’t accept as part of your life? Is there not an acceptable compromise that works for you?

If your spouse is on board, then slam the door on this issue. Don’t let them borrow money or anything else that will get their foot in the door. You clearly don’t trust them or deeply value them, so you don’t want to give them signs that you do or encourage them to rely on you for support.

Throughout all of this, remember that your spouse is in a tough situation here. You’re asking your spouse to make a decision that involves some level of rejecting someone he or she cares deeply about. That’s never easy, and you shouldn’t expect it to be. But if this is a personal stand that’s vital to you, you need to take it.

Have you ever watched Good Eats or read Alton Brown’s books on cooking, baking and kitchen essentials?
– Missy

My wife and I think Alton Brown is by far the best part about Food Network. Interestingly enough, several people we know and are friends with were featured on the most recent season of Feasting on Asphalt – the season where Alton and gang rode along the Mississippi River. We actually knew people at multiple stops during one of the episodes – it was a blast to watch. My father even appears in the background of one shot looking somewhat dazed by what’s going on.

I would say that at least some of the tone of my upcoming food blog will be inspired by Mr. Brown, and I hope to have the opportunity someday to meet him. He was one of the big inspirations for me to jump into the kitchen for the first time.

Which chain restaurant do you think offers the best value for your money (Both fast food and non).
– Phil A

Keeping with the food theme…

I’ll be frank. When I actually eat out with my wife, something we rarely do, we go for quality, period. A meal out is an experience that I’m willing to pay substantially for, so we usually go to very classy places. Thus, among chain dining establishments, I have to give the thumbs up to Ruth’s Chris Steak House. I’ve been there twice and while the bill was pretty high, the meal was quite impressive with steaks that even made someone like me, raised in the Midwest in farm country, smile quite a bit.

As for fast food, that’s tougher. I would probably have to go with In N Out Burger, as it’s the only one I can think of that’s found in a very wide range of places that gives me a generally positive feeling. There is, however, a very local chain to central Iowa called B-Bop’s that is actually similar to In N Out Burger in a lot of ways but with something of a 1950s theme – if you’re ever in the Des Moines area, they’re pretty good. This just reflects the chains I’ve tried, however.

Overall, though, I really enjoy making food at home and we don’t eat out much.

How do you handle comments you feel are offensive or hurtful?
– Judith

If it’s just an attack on me and nothing offensive to others, I leave it there because there’s usually something that can be learned from it. Most people can read personal attacks for what they are – an inability to hold up an intellectual discussion about a particular point. Besides, I’ve seen so many personal attacks over the last year or so that I’m not bothered by it any more – I only respond to try to clarify for people who are reading later on.

If it’s an attack on other readers that heads down the road of personal attack, or if there’s a comment that’s actually offensive, I delete it without hesitation. No one comes here to be attacked or to face a plethora of bad language or adult references. I’ve been attacked for this, too – apparently, some people believe that anywhere they decide to lay down some insults is a free speech zone. Not the case – this is a place where I want people to be welcome to speak their mind and not be personally attacked for it.

Is there any one resource you’d recommend, whether it be a book or a website that would help me achieve my goal of becoming a much better writer? I’d greatly appreciate it.
– Pawel Mrozik

The absolute best resource for improving as a writer is you. All of the books and websites in the world don’t matter. The one thing that separates good writers from bad writers is practice, refinement, and more practice.

Make yourself write every single day, no matter what. Set a goal for writing every single day. A lot of writers suggest writing a minimum of 1,000 words every day like clockwork – that’s a good benchmark to reach for.

If you’re shy, start an anonymous blog and just post there every day with your thousand words of writing. You can get a simple one for free at Blogger or WordPress.

Being financially savvy after reading pf blogs, I now realize term insurance is the best. But I have in the past, enrolled in 3 wholelife policies, 2 of which are for my children’s education. My question is should I continue or redirect those funds into investments channels?
– Justin Philips

It depends entirely on the policies themselves. In terms of the money you’ve already put in, you have to view that as a sunk cost that you’re not going to directly retrieve.

Now, if you cashed out of that fund right now, took that cash, and put it in another investment, would you end up with more money in the end? I usually use a thumbnail of about 8% annual return over more than ten years or 6% annual over less than ten years on a generic investment.

Some whole life policies eventually wind up being good investments if you ignore how they do over the first ten to fifteen years. You just need to figure out if you’ve reached that point or not.

I’d like to hear more about Dance Dance Revolution. I have been using it as my primary exercise method for two years now, and there’s still songs I can’t beat. What version do you play, and what songs do you find the hardest?
– Danika

I use a mix of DDR and Wii Sports for my exercise motivation (and I intend to add Wii Fit to this soon). Until recently, I’ve been so incredibly busy that I’ve not been able to pencil in a daily scheduled exercise routine, but thankfully I’ve been able to start scheduling a period each day for exercise. Here’s what I do.

First, I stretch for a few minutes, then I run through whichever rung of the lifetime fitness ladder I happen to be on. This takes ten or fifteen minutes or so. I then follow it with about ten minutes of Wii Sports boxing (by far the most aerobic exercise there) and then I play a few DDR songs. Frankly, I’m atrocious – I use the workout mode, play hard songs, and try to burn a set number of calories quickly (usually 300).

I don’t really play competitively or to unlock stuff – I just use it as a method to exercise. For the fun of playing a rhythm game, I much prefer Guitar Hero III. My wife and I play that one for a while about once a week – it’s actually very fun and good at teaching rhythm.

Why did you choose to have children?
– laura k

My nieces and nephews convinced me. One of the high points of my college life was seeing them and doing things with them and watching them grow up. My niece is now almost sixteen, for example, and I got to watch her grow up – I remember her talking to her two imaginary friends like it was yesterday.

Children are beautiful. They’re not locked into seeing the world as adults do. Most of the perspectives that adults have are the results of many, many years of reinforcement, both good and bad. Children don’t have that – they think differently about everything and they make you think differently about everything, too.

For my wife and I, it was a no-brainer. We want to have a lot of kids, actually – one more is virtually a guarantee, and beyond that there will likely be even more.

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