Updated on 07.31.14

Reader Mailbag #72

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.

I love gum. I know buying it in bulk is cheaper than at a liquor store, but does anyone else have ideas beyond that?
– Michael C.

First of all, don’t bother trying to make it at home. The best recipe is comparable to Fruit Stripe gum – it tastes awful and has bad texture after about thirty seconds.

Your best plan is to buy in bulk. At my local Sam’s Club, there’s tons of gum for sale in bulk (by the box) that’s cheaper per pack than what I seem to find in grocery stores (where the low-end packs seem to be around $0.80).

There’s also Candy Warehouse, which directly sells bulk candy, but the prices, though lower than at the local liquor store, are a bit higher than what I’ve noted at Sam’s.

So, what I’d do is this: if you have a warehouse club membership or a friend who does, shop for gum there. Otherwise, Candy Warehouse is a good option.

How would you decide how much to invest and how much to spend if you had a good (?) chance of dying pretty soon, but also a reasonable chance of surviving? The fanatic saving for retirement seems like a bad idea if you’re putting all your money into a future you probably won’t live to see. But if you do manage to, you don’t want to then starve to death on a street corner.
– Laundry and Dishes

Depends entirely on whether you have dependents or not and also on the exact nature of your illness, at least from my perspective.

If you don’t – and you’ll be able to actually function well if you survive – then I’d spend away. If you do survive, you’ll be able to build your savings back up with further work.

If your illness might make you incapacitated for a long time, you’ll probably want to leave your savings alone. Similarly, if you have dependents, limit your spending, as your savings will help them in the aftermath of your passing.

Do you know of groups that have meetings for people interested in reducing debt or improving personal finance habits?
– Salvatore

I sure do. There are a wide variety of groups on debt reduction and saving money in most cities of decent size. However, there doesn’t seem to be an overriding organization that collects all of these groups. Many of these are self-started.

So, how do you find them? I’d suggest three ways.

First, hit meetup.com. Meetup has tons of local groups that are meeting on tons of different topics. Dig around a bit – there are groups on debt, on investing, and many other areas.

Second, check your local library. Many larger libraries have interest groups on all sorts of topics, plus many other community groups will post flyers there. Check out the bulletin boards as well as the library’s schedules.

Finally, check the largest church in your community. Many large churches have groups and classes on all sorts of topics and they’re usually open to anyone who cares to attend.

What made you decide to start a blog on this topic?
– Lily

Well, as I’ve mentioned, I’ve been writing since I was pretty young. I tried various online writing exercises in college, then I tried a parenting blog in late 2005 and early 2006 that was just taking off, but some of the readers were extremely … creepy.

I decided to give blogging another shot in October 2006 – and the timing perfectly coincided with my own experiences with figuring out my money and the experiences of the people around me showed me that a lot of people were going through similar money struggles. So I started The Simple Dollar.

Quite seriously, it’s all about following my interests and passions as well as looking at what other people might value. I could sure write a navel-gazing site, but who would want to read it and how would it really connect with anyone and provide value in their life?

I am in my early 30s, own my own apartment, am employed, have good credit and a family that is financially well-resourced and stable. I am dating a man, also in his 30s, who is a financial mess. He works his butt off following his passion, but does not generate a ton of income (he has trouble paying rent and is often behind on bills). He has credit card debt from his 20’s (he admits he was stupid about it at the time), and his family always on the brink of financial disaster. On the plus side, he is a hard worker and does not spend frivolously. He also respects and supports me, makes me laugh and challenges me, and may be the love of my life. I love that he follows his passion and I support him in that.

I love my boyfriend and can see a long-term future together. At the same time, my (admittedly privileged) background makes me skittish about merging lives with someone in such financial turmoil.

What questions should I be asking myself (and him) as our relationship continues? I want to go with my heart here, but my head is worried I could be walking into a life of debt and money anxiety.
– Brooke

You need to be talking about your money together as soon as possible and quite regularly, too. This is clearly an issue of concern for you and also a concern about your future lives together.

Clearly, he comes from a background that didn’t think about money at all, and you came from one that did. It might make sense for you to manage your shared finances – and you each have a certain amount to spend freely each week/month.

Whatever the best solution is, you need to talk about it, very clearly, and you need to come up with a clear solution that protects your futures together. I’d suggest that you read Smart Couples Finish Rich.

ELCA’s articles on doctrine are so vague and unsure. They can’t articulate or explain anything very well. Is that because they think any religion’s as good as their own?
– Michael

This comment comes from an earlier Reader Mailbag where I mentioned I was an ELCA Lutheran.

The ELCA puts more emphasis on one’s personal faith than on a greater church. In general, with the ELCA, the individual is more important than following dogma. Thus, the church documents can be pretty vague in places – it’s left to individuals and individual congregations to make up their own mind.

From that respect, ELCA churches are much less about following some explicit set of beliefs than it is about a group of people who support each other in their own personal journeys.

I think that’s a much healthier perspective than one that forces a strict set of beliefs upon people.

My husband and I have no credit card debt. Our only debt is our mortgage which is at an interest rate of 6.625% (we can’t refinance at this time). In my mind it makes sense to dump all extra money into paying down the principal on our mortgage because that’s like getting a 6.625% return on our money. Right? We have chosen to do this rather than open any investment accounts which may or may not get a 5-6% return on our investment. What are your thoughts on this strategy?
– Emily

If you’re saving for retirement at the same time, it makes sense. You’re right, for most purposes, your payments are an investment that returns 6.625% after taxes (although you might be losing a bit on any tax deductions you get from mortgage interest).

If you’re doing this in lieu of retirement savings, that’s a mistake. Retirement savings, socked away now into a tax-advantaged account like a 401(k) or a Roth IRA, have much longer to build via compound interest. Plus, if you’re investing over the truly long term – more than ten years – well-diversified stocks will return at least the amount you mention (some may shout about how the value of some stock index is barely changed from ten years ago, but they’re ignoring dividends).

If you’ve covered your retirement, getting rid of your mortgage as fast as possible seems like a good plan to me.

Do you have any suggestions for free downloadable enjoyable games?
– Mol

Most of the free games worth playing aren’t really downloadable – they’re usually played in a web browser. Also, it really depends on what kind of games you like.

My favorite free game – and it has been for a long time – is Desktop Tower Defense, which has sucked down more hours than I care to admit.

Several of my friends are Peggle addicts. The full game costs $20, but you download a free trial that has lots of levels in it.

Here are several more classic games that are free – and these games ate up quite a bit of my childhood years.

What did you replace your passion for playing golf with? I know it’s an expensive habit, but I’m having a hard time giving it up!
– Karl

I found other avenues of competition, mostly games of various kinds, and I started hiking more.

The games really helped feed my competitive urges and provided similar careful thinking about my next move that golf provided. I started playing games like Settlers of Catan and Puerto Rico with my wife and with other friends.

The hiking helped feed my enjoyment of the outdoors. In fact, I came to find that I enjoyed the woods far more than the golf course – more alive, more beautiful, and filled with more interesting sounds than some drunk yahoo yelling and the noise of a lawnmower.

Why does it seem to always take two days for my comments to show up?
– Cindy

I generally approve all comments once a day, usually in the mornings. Sometimes, if there’s a conversation that’s interesting, I approve them a few times throughout the day.

Regular commenters are often auto-approved – that’s why sometimes you’ll see comments go up even though yours is still awaiting moderation.

On the weekends, I’ll often skip a day or approve on a more haphazard schedule, as weekends are usually filled with all kinds of family activities.

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

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  1. Joel says:

    Here’s a question for you: The only credit card I’ve ever had is one my father signed me up for when I went away to college. I’m 25 now, and starting to get curious if there are any beneficial credit card programs I’m missing out on because of my very basic card. I rarely use it (I use a my bank debit card for most expenses), but could use it more if there was an incentive.

    Any suggestions for rewards programs or should I just keep the card I have around for emergencies and keep using my debit card?

  2. Lynn says:

    For free games, I recommend SNOOD. It is easily found on a google search.

  3. Matt says:

    Trent, your mention of golf: I am a new golfer, and have come to love it for the challenge of perfection, and individual accountability versus team sports. I also enjoy being outside, hanging out with friends, etc.
    I usually use coupons, and go during “twilight” hours, and rarely pay more than $20 for 9 holes and a cart. For 2 hours of my time, I find it well worth it. I go maybe once a month, so I’m not one of those that go at least twice a week or anything.
    It’s just really fun, and a casual hobby I would rather not give up. So do you still play at all, occasionally, or have you given it up altogether?

  4. et says:

    I have a question related to the 2nd one above. What are your views on leaving an estate for heirs? I know that planning for dependents to be taken care of is a given, as much as is possible. But assuming the heirs are adults who do (or could) earn their own way – what are your ideas? My grandparents were all about leaving a large estate behind for all the kids & grandkids, but I’ve read some authors who say the goal should be to have a 0 balance (after funeral expenses & settling the estate’s accounts), because counting on a large payout can keep people from being fully responsible for their current spending. (More to say, but I’ll stop here!)

  5. Johanna says:

    @Brooke: Questions I’d ask are:

    Are your income plus his income enough to afford the lifestyle you both want?

    Are you both comfortable with the fact that you’re the one bringing in most of the money?

    You say he doesn’t spend frivolously now, but will he start spending frivolously when he has better access to your steady income? Do his tastes get more expensive when he knows that you’re the one who’s paying?

    Finally, are you going to come under pressure to help support not just him, but his whole family? How will you respond if one of his relatives has a minor financial emergency and asks you for $1000? Are you comfortable saying no? Is he comfortable with you saying no? Or can you figure out a way to say yes in a way that won’t lead to all of his relatives treating you like an ATM?

    The last one, I think, is the biggie, because it has the most potential for surprises. Beyond that, you know what you’re getting into – you know he doesn’t make much money, and you know he has debt.

  6. reulte says:

    Dear Brooke – Pre-Nup, Pre-Nup, Pre-Nup. No, seriously – pre-nup. I don’t think it’s your ‘privaledged upbringing’ that’s causing your hesitation about ‘merging lives’ — I think it is looking into a black hole of future financial turmoil that scares you. And it should. You say he has problems playing his rent and possibly other bills — who ends up paying them? Who does he depend upon to make his ends meet? How does he plan to take care of this if/when you commit to each other? What has he done to fix up this financial mess? OK — maybe his bills would ease up and give him breathing room IF he moves in to your apartment. But are you going to open yourself up to a bankruptcy if his passion peters out? In a situation where the finances are so unequally portioned, you will need to be extra careful to not let them become a weekly argument, a dividing line between you and the cause of divorce . . . you will need professional assistance. Don’t let people convince you that having a pre-nup is just preparing for divorce and isn’t ‘true love’. If he loves you, he’ll want you to feel secure. Besides, you have to live with both your head and your heart.

  7. AJ says:

    Thanks for that candy website. I am an addict so that will help me reduce my expenses. Also, thank you for that question that young lady had about her boyfriend. Luckily. I will be out of credit card debt soon. I will still have my student loans though. Hopefully, I can pay a significant portion down before I even think of getting married. I do not want to be the one in the relationship bringing everyone down financially.

  8. Tamara says:

    Salvatore – If you are in Canada and looking for a local group that meets to talk about money issues, you might be able to find one here http://www.gailvazoxlade.com/bb/

    Brooke – I would also recommend Gail for some worksheets and thoughts to starting a budget or speaking to a partner.

    Mol – I am totally addicted to Peggle, and to Plants vs Zombies. Both have free downloadable trial versions, and can be purchased fairly cheaply.

  9. LD says:

    Salvatore (and others) – if you live in Canada, there may be a financial discussion group called a Gail Club near you. These clubs have been formed over the past year based on and inspired by Gail Vaz Oxlade’s books, blog, and tv show. Most of the clubs meet about once a month to discuss budgeting, saving, investing, setting goals, etc. See http://www.gailvazoxlade.com/bb/

  10. Debtors Anonymous is an excellent group for people who want to reduce their debt, and change their money behavior to avoid a debt cycle. Its format is the same as AA.

  11. Merna says:

    I buy gum by the 60-piece pack in the grocery store when it’s on sale. Never pay more than $2.50 per pack. Much better than $0.80 for 12 pieces. And they seem to go on sale quite often.

  12. Michael says:

    Ha, thanks for answering my ELCA question. I’ll take that as a “yes.” :)

    Often the children of a dying parent want the inheritance and unconsciously pressure the parent to leave as much money behind as possible. Your advice to limit spending is appropriate for the rare, terminally ill hedonist, but more often the dying should be encouraged to actually spend money on themselves!

    For example, I knew a woman who wanted to have her hair done twice a month but thought it was extravagant since she might die soon. She could barely work up the courage to ask a friend whether it would be greedy to visit a salon more often! Her children couldn’t wait for her money, and this obliging, sensitive mother responded. And when she did eventually die, the children bought two businesses and drove them both into bankruptcy Not everyone can capably receive large sums, so leaving inheritances might not be the most prudent choice anyway.

  13. KC says:

    @ Emily – My husband and I are in a very similar situation to you – no debt other than the mortgage – except our mortgage is 5.3%. Trent brought up some good points – save for retirement while paying off this mortgage early is good advice. But also boost your “other” savings, too. Remember a home loan is still some of the cheapest money you can get – especially in this economic climate. In fact many people (with good credit) are having trouble getting loans at all. So I would advise boosting your “other” savings as well.

    If something happens to your car and you need to get another one you’ll want cash – if not to pay entirely for the car at least enough for a decent down payment for financing. The insurance company isn’t going to rush to get you a check for your wrecked car (been there). Also you might need money for something else – better to have it in your savings than tied up in early mortgage pay off.

    Its a fine line to walk – on the one hand the more you can pay up front on a mortgage the more you save (since very little is principle in the early years of your mortgage). But at the same time you need to save for retirement and you need some money in the bank. Just don’t become too obsessed with putting every extra penny on that mortgage.

  14. Jeremy says:

    Including dividends, the MCSI US Broad Market index is down 13% over the last 10 years. The S&P 500 is down 20% over the last 10 years. You are making extremely irresponsible claims.

  15. marie says:

    To Brooke; if you do end up staying in the relationship and giving it a try, I would suggest the Pre-Nup as well. Really, if everything works out well, then who cares right? If the guy is aware of his own financial mistakes, and knows that he has much less to offer than you do; then what should he care? Pre-nups are like auto or life insurance; you would never drive an un-insured car, would you?

    As for right now, I would suggest discussing the situation with him, perhaps helping him prepare a debt repayment plan or organize a budget. Tell him it is important to you that he, without needing to be rich, needs to have his affairs in order before you two could ever think of merging finances.

  16. *sara* says:

    For the gum chewer:
    look for coupons in the sunday paper, and then wait till it goes on sale. Or you can even buy coupons on ebay- often 10-20 for around 99 cents a batch. I just bought 4 packs of good quality gum for 30 cents a pack. I’ve gotten it for less than that before. The 99 cent only store is also a great place to look for deals

  17. Brian says:

    A good “debt reduction support” resource is Financial Peace University by Dave Ramsey. You go to his website http://www.daveramsey.com/fpu and type in your zip code – it will list classes starting soon in your area. If you don’t like Dave Ramsey, this, of course, would not be a good option. The class was very helpful for my wife and I though.

  18. Gum Advice: This will make me sound pretty pathetic… I actually always eat half of a piece of gum at a time. A big part of it is that I get really annoyed by giant wads of gum. It’s always worth a try, right?

  19. Hope D says:

    To Brooke; I married a talented man who has his own business. Things can get tight following your passion. The advice I would give you is a large emergency fund. There will probably come a time when you have children, and you will need time off. You may even decide to be home with the new love of your life. You will need to trust that your husband can take care of you during this time.

    You and he will also need to discuss how you want to handle loaning or giving money to others, including family. Dave Ramsey recommends a book called “Boundaries”.

  20. John says:

    I appreciate your candid honesty of your “Road to Financial Amageddon” series. How did you recover, psychologically, from the knowledge that you were responsible for decisions that would cost you dearly?

    I say this because I have made my share of mistakes and irresponsible decisions, and the regrets keep haunting me even after the consequences are done and dealt with. I’m only 20, but I feel like I’ve acquired enough emotional baggage for 40 year old.

    Worse, the regret from my decisions makes it even more difficult to fix them. When I, for example, try and change a bad habit, a little voice in my head says “Damn you, John, why didn’t you do this years ago!” So on top of the usual resistance, I also have to deal with the stress of regret (which makes it tempting to just walk away and repeat the cycle) How did you deal with regret?

  21. Helix says:

    Regarding replacing a golf habit (or any expensive hobby), may I throw my cap into the ring for disc golf. I’ve never been an “actual” golfer, but I picked up disc golf recently and I LOVE it. Most courses are in the woods (I love hiking too) and it’s a great way to spend a few hours having fun and getting some exercise. Obviously, there’s some equipment involved, but you can buy a three-pack of discs for under $30 that has everything you need.

    You can see if any courses are in your area here: http://www.pdga.com/ Some have entry fees but many do not. With the numbers of times I’ve played I think my cost per game averages less than $1.

  22. Damester says:

    I agree with other advice offered to Brooke, by those commenting here. Obviously, one does not want to assume the debts of others, including family, especially if those folks might just assume that because you have it, it’s there for the “taking.” (not saying that this is the case at all…your boyfriend may be unwilling to take your money, but one wonders, if one is married, what the “expectations” of the rest of the family are)

    I’d add that it is very important to really examine your own attitudes about money and relationships. What do you believe is the man’s role in terms of “taking care” of you and how much of that is about money?

    The focus has been on issues with the guy here, but there are things to be dealt with on your end as well.

    Let’s be honest. Most of us are products of our society and even in this supposedly enlightened day and age, many women really want it both ways: Total financial independence AND a partner who will still bring in the bulk of income and do the heavy lifting, regardless of their income opportunities. I’m not judging that, I’m just saying that it’s important to understand your own expectations from a spouse on the financial front.

    Especially as it comes to lifestyle. Many folks who are trying to live their passion are prepared to live on less and to live very close to the edge at times. It’s a trade-off they make. Spouses, not so much. So if you have big lifestyle expectations, and you don’t want to primarily fund them, or you can’t live a downscaled live, no matter how much you love this person and vice-versa, it may not work.

    Personally, I’ve known a number of women who were deeply attracted to artists of all types. Women who made a fair to large amount of money on their own and in their own businesses. Some of these women were very ambitious and driven. Those who married these men, who understood who they were and who had also talked about financial issues ended up quite unhappy for the most part, primarily because once married, they seemed to shift gears about financial issues. They fell back into a very traditional approach to “how it should be.”

    They often ended up resenting their spouses for a lack of ambition (translation: primary focus and end result of all work should be earning money–money that was expected for a lifestyle, etc.). It turns out they really did not respect the work of the men and accept the limits of that work. FYI: None of the men were extravagant, expected their wife to fund their lifestyle or them. In fact, they were willing to live very frugal and careful lives, which their wives did not.

    To me, money is something you can earn (for the most part) and if you’re good at it, great. However, there are plenty of talented people whose real life’s purpose won’t make them a lot of money. If I’m in a love with a man who is passionately (not recklessly) pursuing something, still being basically responsible about his life (not a victim looking for someone to take care of him)and who provides what I’m looking for on key things (emotional connection, etc.)in a relationship, the money issue is relatively minor issue. If I’ve got a lot of money, I’m happy to spend it on someone I love. And money can’t buy me love and affection…let’s be clear on that.

    People with money don’t necessarily make better spouses. If they did, there would be a lot of happy rich people and that isn’t the case.

    The issue is not the actual money but what it means to you and to him and the relationship. Having it, or not, can affect couples in soooo many ways. It’s really important to discuss that after taking a close look at your own feelings.

    If you expect a spouse to provide certain things, if you would feel like you were “keeping” someone else if you had the primary financial responsibility, if you are worried about what other people think…these are things to consider.

    But if this man gives this woman things that money can’t buy, genuine love, affection, support, understanding, etc… well, those are rare to find in anyone. And they outtrump stuff and a lifestyle. You don’t have to live in a shack or a mansion. Find some happy middle ground.

  23. Laura in Atlanta says:

    @#1Lynn? Good grief, another Snood fan!!!! Lynn will possibly agree with me that while yes, Snood is a great free game — it will also cause you to get sucked up into it’s evil lair of Wasting Time, Ignoring Your Family and Staring at the Computer Screen for Hours On End.

    Snood is a teeeny bit addictive. ;-)

  24. Kevin M says:

    For the golfer, maybe find a part-time job at a favorite course – they usually let you play for free as a side benefit. I did it in college one summer and my dad does it now.

  25. Alexandra says:

    Hi Trent. I am a long-time reader (never commenter because I got too frustrated at seeing people’s comments appear HOURS before mine were ever approved) I’m glad you’ve adressed this issue now.

    I have just discovered something I think you might be interested in checking out. It’s a DS game made in the UK with 100 classic books. Thought you might be interested since you love reading and you are a fellow DS user. You don’t need to post this because I know it might seem like a commercial plug (I have NOTHING to gain from this) but I thought you might be interested!

  26. jc says:

    I’m surprised by your answer about the ELCA and its professed beliefs, Trent. It’s definitely about more than just any one person’s beliefs, and it’s definitely about the work that groups can do as more than just a collection individuals, while your answer (I think accidentally) seems to imply the opposite.

    I’m not sure which doctrines Michael regards as vague. As a whole church it certainly equivocates on issues like homosexuality or the exact nature of biblical authority, because its members do not all agree. But there’s plenty else about which the ELCA has very definite stands, some ideas that it shares with nearly anyone else who calls him or herself a Christian, and some ideas that set it apart from other groups of Christians.

    It’s kind of sad/weird that pulling up “ELCA doctrine” on Google mostly brings up links with non-ELCA Lutherans slamming the ELCA for its perceived deficiencies.

  27. Marcus Murphy says:


    Calculating Depreciation:

    I am going to buy a used car and my CU offers a really great rate (4.95%) and for up to 72 months. I am trying to balance the loan length with the rate of depreciation, so at any point in time if I need to sell the car and I still owe, that I am not upside down on my investment. What is the best way you think to do this? The reason for this exercise is because I also have some CC debt I am trying to pay off that will have higher interest rate than the car. Should I not need the car I don’t want to have to dip into savings to pay the difference of what I owe vs. what I can sell it for. Your insight (opinion) is appreciated!

  28. Sophie says:

    Many of your posts indicate that you cook often and enjoy it. Do you have any knowledge/opinion on health issues concerning the various types of cookware (i.e. Teflon/non-stick vs anodized aluminum vs cast-iron)? I worry about this when I cook for my family and was wondering if you’ve done any research on it.

  29. Joe says:

    Ok, I’ve read all of the comments, but nobody seems to ask: Why would you buy gum at a liquor store (see question #1)?

    Maybe it’s because I’m in Oklahoma and we have draconian liquor laws, but I don’t even think our liquor stores carry gum.

    Did nobody else find this strange about the gum-purchasing question?

  30. katy says:

    Do you know of groups that have meetings for people interested in reducing debt or improving personal finance habits?

    Debtors Anonymous (sorry for the double post previously)

  31. Kelly says:

    I know I’m behind in starting a retirement fund, but I want to get started now (I’m almost 30 and I finally have a steady full time job). My company doesn’t offer a 401k, but they have something called a 401an (whatever that is-I don’t get any choice in it). I think that a Roth IRA is where I need to go, but how do you go about getting one? I guess I’m pretty ignorant when it comes to this sort of stuff and I don’t even know where to begin. Thank you so much for your time and your column. I may not understand it all, but I’m trying to learn.

  32. spaces says:

    Brooke — Me too, welcome to the club! I didn’t grow up with much of anything, but by the time I met my spouse I was solidly into my career, while he was still in grad school not making ends meet. My guy overspends, period. I have to be the financial cop, and sometimes be the bad guy. It stinks sometimes, and does cause friction, but what makes it work is that he is willing to let me run the financial show without too many questions, and though he is forgetful, he is honest. That, and being madly in love. There are worse flaws than my spouse’s IMO.

  33. deRuyiter says:

    The benefit of prepaying on your mortgage EARLY in your mortgage’s life is that you earn / save MUCH MORE THAN THE 6.5%. Friends foolishly took out a 25 year mortgage for what seemed to me a rather small amount of money when buying a house. Their monthly payment was approximately $250. Downloadeing an amortization schedule they found to their shock that the first few monthly payments they paid off two or three dollars a month on principal and the rest was interest! By prepaying $3. one month they were able to save the $247. interest payment off the end of the mortgage and shorten the loan payment by a month, a pretty good investment of three dollars, saving. A few months into the mortgage they took $2,000 from savings for prepayment on the mortgage and shaved YEARS off the mortgage. You NEED an emergency fund. You also NEED to prepay at THE BEGINNING OF THE MORTGAGE, THE FIRST QUARTER OR THIRD OF THE MORTGAGE TERM. After that it doesn’t pay to prepay because the amount of interest saved is so small compared to amount of principal. THE MONEY SAVED BY PREPAYING IS AFTER TAX INCOME. If you pay off your house, you have your house. With the current government plunging the country into unsustainable debt, there is a chance that eventually the government wil NATIONALIZE your retirement account, fold it into Social Security to keep that system from going bankrupt, and ASSIGN you a monthly amount for retirement. If your mortgage has been paid in full, at least you’ll have your house!

  34. plonkee says:

    There isn’t a Christian denomination in existence that isn’t criticised by other Christian denominations for being either too vague, or to dictatorial. Or believing in *wrong things*.

    It would have some kind of poetry in a conversation about the ELCA if I could blame it on Luther, but I’m certain it goes back to within the first 500 years of Christianity. Just one of those things – if you’re happy where you are, don’t sweat it.

  35. Charlotte says:

    Brooke, it’s as simple as this: When in doubt, don’t. A money problem is basically the same as a drug or alcohol problem. Sure, people can — and sometimes do — change, but don’t plan on it. Listen to your head, not your heart. Following a passion is great, but being financially responsible is even better. Pay attention to those red flags.

  36. Andrew says:

    For the golfer. Try disc(frisbee) golf if there are courses in your area. Most courses are free to play. Those that do charge are usually around $5. The equipment to get started is cheap compared to clubs and balls. You can find courses and more info at http://www.pdga.com.

  37. michael bash says:

    FOR THE GUM CHEWER: Just don’t chew it – outside your house. Can you imagine Walter Cronkite, Larry King or Opra chewing gum? The cheapest way for Hollywood to make a person look stupid is to put gum in his/her mouth. Not to mention the smell.

  38. Matt says:

    @#18 Marcus:
    Do the right thing: Take out the longest long possible at the lowest interest rate (in your case, 72 months at 4.95%?). Pay your monthly payments and save the amount you would have had to put into the loan in an emergency account. If you ever need to pay the car off early, use the money in that savings account.
    Simple as that. But you have to have the strength to not touch that money for something else not related to paying off the car. That way, you’ll still make all your payments, and have the confidence of knowing you’ll be able to pay off the car at any time.
    There is no mathematical formula for life events. Best scenario is risk reduction.

  39. Karen says:

    Joe – I agree, a liquor store? I’m sure there is a reason and am interested in knowing more. In SC we usually get gum at the grocery store, gas station or Sam’s. I also agree with Michael. Gum chewing should be a private activity.

  40. Jessica says:

    My husband and I earn good livings but we have a lot of relatively low interest debt that we would like to start paying off in anticipation of buying new cars and having children. I’ve managed to save about $5000 so far, at a rate of a couple of hundred dollars per month. Our debts are mainly low / no interest (about $14,000) plus a mortgage on an “investment” property that is losing money every month but that we cannot sell in this economy. Should we keep saving for now or should we start paying off the smaller debts and/or the mortgage (in hopes of refinancing to a lower rate)?

  41. Andrea says:

    @ gum chewer: I’ve had great success following the Walgreens ad (buy 2 get 1 free) and they often use in store coupons as well which they will let you use as well. With that I have paid as little as $.20 per pack. When I cant get that deal, or someone chews faster than the sale cycle, I buy at Sam’s. :)

  42. slccom says:

    Chewing gum can be crucial for those of us with dry mouth, though. Try chewing in private and drinking lots of water in public. People for some reason will praise you for drinking so much water!

  43. Lynne says:

    I find that asking the specific doctrine of the ELCA Lutheran Church a bit disturbing. If I really wanted to know the answer to that, I wouldn’t google or ask on a blog, but rather I would go to one or more ELCA churches and talk in depth with the pastor about it. I also believe that regardless of specific church doctrine, most people of any denomination have their own personal beliefs, which may or may not agree with those held by the church. I think most of us agree in principal with many, just not necessarily all, of the various tenets of their chosen church/religion.

  44. es says:

    MAILBAG QUESTION: I NEED ADVICE. The short story is that my divorced parents are each in financial ruins. When is it the kids’ responsibility to support the parent??

    Here is the long story. Growing up mom stayed at home while dad worked and we had a nice life. I am the oldest of 3; we are now 41 married with 2 kids, 39 single, and 33 recently married trying to have kids. I am the only girl. My dad left my mom about 10 years ago when they were about 55. My dad remarried right after the divorce. January 2008 he bought a B&B and is now bordering bankruptcy for various business and health reasons. He is also supporting his new wife’s 2 grown children and grandson who live with him and help at the B&B. My mother has never wanted to work; ‘she didn’t sign up for that’. She gets defensive whenever I mention getting a better job. She has no college degree and is very insecure about her abilities. Every time I talk to her about getting a better job (she’s making 9.49/hr in the Balt/DC suburbs) she tells me no one wants to hire her but she’s never tried. It was suggested by my grandmother (her mom) that all kids and her pay mom $50 a month ($200 total monthly) because she’s ‘broke’. My dad filed for bankruptcy and said he couldn’t pay her the indefinite alimoney she was originally awarded. My mother is frugal while my dad is a risk taker and frivolous. Here is where it gets messy. My mom refuses to help herself by trying to get a better job or get a second job or rent out her spare room. She feels she ‘deserves’ a certain life. I tell her that might be true but it is not her reality. Not only does she not help herself, she doesn’t help me with the kids or around my house. My dad is halfway across the country but is confident and resourceful so there is not as much concern about his ability to find some kind of work. He helps and is generous if he can be. I think he made some stupid decisions on the business coupled with his wife’s cancer has really set him back. His decisions though have directly affected mom’s life and mine because I’m the first person she calls when she has a problem. Mom does not outright ask for money but talks about not having any. Dad tries to shield us from his issues if he can. I don’t get along with my mom well and my husband does not agree with supporting someone who will not support themselves. My brothers want to minimize upsetting my mom so they are inclined to pay her $50 a month presumably for the rest of her life. Her mom who she can barely stand is still living at 90 and just gave her money. Ironically, my grandmother has been supported in her late life by my aunt, my mom’s sister. Any money grandma has is really my aunt’s. The original question is when are the kids responsible for supporting their own parents?

  45. Jackie says:

    (long-winded) Question:
    I just changed health insurance to a high deductible plan. On this plan I am allowed to get a Health Savings Account (HSA). HSAs are kind of like IRAs for health care. Contributions are tax deductible, but limited to $3,000 per year and the account can only be accessed for medical costs. I’m trying to decide how much to fund this account. For tax purposes, it seems beneficial to max out my contribution, but trying to put contribute $3000 within this year would have me putting in $600/month which is way out of my budget! I’m thinking about transferring $3000 out of my emergency fund (I would still be left with 3 months salary in the fund) and putting it into the HSA. I’m not sure if that goes against the whole idea of the emergency fund. The money will no longer be totally liquid, but I wouldn’t have to dip into my emergency fund for medical emergencies. The plan would be to throw any extra money at the emergency fund (including the expected tax refund from the HSA) into emergency savings in order to rebuild it to it’s current level and start saving for 2010’s HSA contribution. My other option is to not touch the emergency fund and instead put any extra money each month into the HSA, not max it out, but still contribute. What are your thoughts?

    Also, HSAs are all over the board in terms of returns and plans. Some are simple savings accounts that are riddled with fees and currently giving very low returns (monthly fees outweigh returns). Others allow you to put your HSA into a brokerage and use it to buy stocks and funds. I’m not sure which kind to choose. I don’t like the idea of too much risk with this money, but since I’m young and healthy it may not be an issue.

    If you’ve already discussed HSAs then let me know, I couldn’t find anything about them.

  46. Angelo says:

    Hi Trent, do you have any opinion on the device known as Majicjack? It seems like a reasonable way to save money on my phone bill(I have a land line and a Tracfone) but have read some extremely various opinions and reviews on the device. Thanks, Angelo.

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