Updated on 06.04.13

Reader Mailbag #76

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.

We currently have a propane-fueled water heater. I live in AZ which has fairly reasonable electricity rates. Since propane is pegged to the price of oil, if we ever have to replace the water heater, would it pay to convert to an electric water heater? If so, do you have any idea how much time it would take to recoup any differential costs for the switch?
– Jeff

It’s absolutely impossible to say without rates. Real numbers are needed for these kinds of calculations.

However, I will say this: replacing a functional piece of equipment in order to save on energy rates is rarely a good idea unless you’re certain that you’ll be able to quickly recoup the cost. Replacing a functional item is a reliability risk – if you know it works, why risk replacing it with a lemon?

It’s also environmentally costly to simply replace equipment with such abandon.

What is your favorite thing about blogging?
– Journey

Probably the respectful and thought-provoking discussions I have with readers.

There’s nothing more interesting than a refreshing new angle on an idea. It makes me think about whether I’m right, whether they’re right, and sometimes whether the question itself is worthwhile.

Part of the reason that purely negative comments frustrate me so much is that they’re usually presenting a good idea, but they bury it in attacks and vitriol that take that good idea and bury it in negativity. This helps no one.

I have recently lost my job and am collecting unemployment. My former employer sent me paperwork about my 401(k). What should I do with that money? I don’t need to take it out but don’t want to leave it with the company if I have other options. Thanks.
– Josh

The traditional advice is to tell people to roll over their 401(k) into an IRA the second they walk out the door. This advice is usually given under the assumption that IRAs are competitive – meaning they have lower fees – while 401(k)s are larded with high fees.

That’s not always the case. Quite often, IRAs nickel and dime you with fees and, at the same time, 401(k) plans are often managed quite well with low fees.

My suggestion is to figure out where you would want to put your IRA – probably in a low-fee place like Vanguard – and figure out all of the fees and costs associated with what you want to invest. Then, compare that with where you’re at now. Are they comparable?

How is it possible that you get paid to blog? Is it from like, page views, advertisements or something? Do you get paid per blog post?
Just curious, I’ve never heard of anyone being paid to do something that sounds as fun as that.

– Steve

I get paid in several ways. The most straightforward one is advertisements on the site. Most advertisers pay me a small amount (a few bucks) per thousand views of their ad. Since The Simple Dollar gets quite a bit of traffic and I show multiple ads, that can add up.

A secondary way I earn income is through links to Amazon. If I review a book or talk about some product and link to Amazon in my description of that item, if someone clicks on that link and then decides to buy the book, I get a small percentage of the cover price of the book, and I also get a small percentage out of anything else they choose to buy while there. Since I already link to Amazon because I think their pages have a lot of information about books and products, this is more or less icing on the cake.

Lately, my income from non-blogging sources has risen as well due to the impact and popularity of The Simple Dollar. I’ve been able to sell some freelance articles and sign two separate book deals, things that only happened because of The Simple Dollar.

The problem with making money blogging is that it’s a long slog. It takes a very long time to build up an audience to the point that you would earn more than a pittance from it.

I am 36 years old and have been spinning my wheels career-wise for the past 7-8 years. Five years ago, I got two useless licenses and last year, I got another one.

I’m at a point in my life that I would be able to try to go back to school, but I wonder what the pay-off would be.

If I go to a “trade school”, I can go full-time for as little as 4 months for $4500 or I can get my masters for $40K and up (and everything in between). Obviously, I would be without an income during this time.
What would be a better investment for me at this stage in my life? Keep in mind that I have less than 30-years to “get my money back”. I’m open to just about anything: my personal choice would be to continue working and go to school part time, but I’m curious if anyone knows what the “pay back” for higher education really is. When does it start becoming profitable?
Oh and I currently make about $18K as an “entry level” clerical position.

– Ashley

Again, without specifics, it’s hard to draw very clear answers here.

The best possible thing you can do in your situation is to follow your natural passions and talents. What are you naturally good at? What are you passionate about? Those are the areas where you should be pushing for your future career.

Sometimes that path leads to trade school. Sometimes it leads to college. Sometimes it leads to starting a small business.

Don’t worry about the money. If you follow something you’re passionate about and utilize the talents you have, money will always come.

The best thing you can do right now is simply live as lean as you can, take stock of your already-existing talents and passions, and start following up on them to see where they might lead.

Are you a conservative or a liberal? I can’t tell from your comments!
– James

I’m definitely a libertarian. I believe highly in the value of privacy and I believe that any activity that a person can do without harming someone else shouldn’t be punished by law. As long as you’re not hurting someone else, I don’t care what you do with your time and energy and money, as far as the law is concerned.

On most political issues, I see both sides of the coin. I think that most political issues end up coming back to an individual’s own moral code and I think it’s very hard to make a law that everyone should abide by that’s beholden to one person or one group’s set of moral values.

I’m an ardent believer that the best investment the government can make is in education, because education sets the stage for solving society’s problems over the long run. I would happily forego Social Security and Medicare and Medicaid to give the children in my town a better education. But, again, there you go – that’s my own values speaking, and I have a hard time believing that my own values should trump your values in terms of the law.

I think this is why I’m continually more interested in local politics and care less about national party politics. Individual liberty, quality education, and personal safety are best protected on the local level, where elected officials are directly connected to their constituency every day instead of sheltered in an office in Washington surrounded by aides with their own agendas.

Does that make me a liberal or a conservative? I have no idea. It just makes me me.

I want very much to budget our money well so that we can pay off debt, create an emergency reserve, and prosper. What is making it difficult for me (besides my right-brained tendencies :) is that our income is in part from seasonal work. We have one job paid by a salary year round, and another job paid by hourly wages only during the school year. So during the summer, our income drops to about 1/3 of what it is the rest of the year.

I had worked out a system of saving during the more prosperous months to make it through the dry summer, but was doing all the record-keeping on paper. Do you have any suggestions for how to make this situation work using a program such as Quicken?
– Michelle

You’ve already got the right idea – when both of you are working, you need to save as hard as you can so you can survive the lean months.

I don’t really think the best solution for this is Quicken. I think the best solution is to set up an automatic savings plan at your local bank and make adequate savings automatic. Set up the plan so that you’re putting enough money into your savings account each month that you could actually survive on it, then make it your goal to make ends meet with the excess.

So, let’s say your living costs each month are about $2,000 and you find that you bring in anywhere from $1,000 to $5,000 each month. Set up your automatic savings plan to knock $2,000 each month into savings, then attempt to live out of your checking account. Only tap your savings when you absolutely must.

Should I feel obligated to attend a dinner party held by someone that I don’t like? I invited this couple to a dinner party we held several months ago and they were really loud and borderline rude. They loudly asserted some borderline racist opinions and left everyone feeling uncomfortable. Now they’ve invited me to a dinner party of their own. Should I go?
– Shanda

Absolutely not. You should never feel obligated to attend a purely social event if you’re going to feel uncomfortable.

Having said that, not accepting their invitation without an iron-clad reason will likely damage that social connection. Is that something you’re quite comfortable with doing? It sounds as if it is, but many people often try to have their cake and eat it, too – they’ll avoid spending any time with a loosely-connected friend, but expect that person to be there when needed.

Life doesn’t work that way.

In 2010, Lexington, KY (where I live) will be hosting the World Equestrian Games. The whole city is getting revamped in anticipation of the many people coming here from all over the world. Our newspaper recently ran an article about people renting out their houses during that time. Based on the article, my fiance and I (we will be married by the time the games come around) determined that we could probably get about $1000/day to rent out the house. The article had a smaller home with no yard that was going for that much. The games last for 15 days. During that time, we could go on vacation or stay with my fiance’s parents without any trouble. We’d have to clear out our clothes and some valuables, but for $15,000, it seems well worth it. There might be some issues with damage, but a damage waiver would at least help, and we might need to update our insurance policy for the home. The article even listed 3 companies that offer different levels of help with the process (i.e. hands off and no commission or hands on with commission). Do you think this is a good idea to pursue? Do you have any thoughts on this that might be helpful?
– Katie

If I were in your situation, this is something I would do.

Before I did it, I’d contact a lawyer and see what sort of legal protection I needed. Insurance coverage? Damage waivers? What other issues are worth considering here?

$15,000 is mighty lucrative, but you definitely need to protect yourself. I would strip that house down to the point of being like a hotel before I left, removing everything that could possibly be used for identity purposes and blocking all mail delivery.

At meals, do you feed your children different foods than you eat yourself?
– Leonard

Since the children were old enough to actually eat at the table with us, we haven’t done this. We serve them a plate that’s as identical to ours as possible and let them decide for themselves.

We only make one simple request at dinnertime: they have to eat one bite of everything on their plate. Beyond that is entirely at their discretion, but they are required to sit at the table until everyone is finished. Mostly, this is a good way to maintain conversation and to get them to try multiple bites of an unfamiliar food, since it’s right there and they see us eating it.

If they refuse, then we literally put their plate in the fridge and they are served that plate whenever they’re hungry in the future until they’ve tried everything on it.

This really seems to work well in practice. They’re constantly exposed to new foods and have found that they like unusual things. My son, for example, has utterly fallen in love with black olives, while my daughter is the biggest one year old connoisseur of broccoli in the world.

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

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  1. Georgia S says:

    I’m certainly no expert on libertarianism, but I’ve always had the impression that most libertarians are against taxes. Is this true for you? While it seems clear that you’re all for reallocating taxes to fund education more heavily, I was surprised that you didn’t seem more anti-tax in general.

  2. Jeff says:

    FYI: Looks like the answer to the “seasonal income” question is incomplete. Stops mid-sentence.

  3. Arlene says:

    Just a comment about renting out a place for a big event. I live in Washington D.C. proper (a mile from the White House) and leading up to the Inauguration the all the papers ran stories about people renting out their places for big cash. Everyone thought they could make a few extra bucks and Craigslist was inundated. The problem is, rentals were wildly overstated and it’s likely that only a very lucky few walked away with any extra money from that. I don’t know anyone personally who was successful renting out their place during Inauguration, but from asking around at that time no one else did either. So it’s best not to count those eggs in the basket quite yet.

  4. I know when the huge annual bike rally rolls through Sturgis, SD, the entire town (save for the people who like the rally) clears out and rents out the houses… Everyone makes a KILLING doing it, too.

    If not renting it out, one could look into “swapping” perhaps with a family who wants to attend the event from another area? Then you can enjoy a new place without worrying about lodging, and since the people are willing to trust you with their stuff, perhaps it’s a bit more peace of mind. Just an idea.

  5. J.D. says:

    Trent, I always say that I’m a small-l libertarian. To me this means that I do not identify with the Libertarian party (which I truly view as crazy half the time), but that, like you, I’m all for individual liberty. Some of my views would be considered conservative. Some would be considered liberal. But generally I think that subscribing to the views of one party is…strange. The parties have such internally inconsistent viewpoints (their positions are often arbitrary) that I don’t see how anyone can embrace the Republicans or the Democrats without reservation.

  6. Annie G says:

    “On most political issues, I see both sides of the coin.”

    As if there are only TWO sides for every issue.


  7. Jessica says:

    I would argue that you don’t need a reason not to attend a party if you don’t have one other than, I don’t like the person. I read Amy Sedaris’s “I Like You” in which she states the smartest guest advice I’ve ever heard. She says, “If you can not or don’t want to attend, leave it at that. Don’t add a because, because everything after because is bull****” In my own replies to invitations, I think that’s true. A simple, “we’re unable to attend,” is much less suspect than, “well my mother’s in town…” etc. It’s like calling out sick and faking a cough; you’re boss is more likely to believe you if you just say you’re not feeling well and get off the phone.

  8. Courtney says:

    I think your answer to Michelle is backwards. They should sit down and determine what their minimum monthly living expenses are (housing, utilities, gas, food, medical, etc). Then have their salaries going directly into savings, and set up the automatic transfer from savings to checking to cover their living expenses. They can determine at some interval (perhaps annually or semiannually) how to allocate any excess towards savings/debt reduction goals, entertainment purchases, and so on. This is far simpler than transferring money manually to savings in some months and out of savings in other months.

  9. Erin says:

    It looks to me like you missed the point of the first question. They’re asking about options _if they need to replace it_. It doesn’t seem like they’re considering a random replacement of a working piece of equipment.

  10. Dan says:

    JD, and others.

    i don’t want to get political, but funny that everywhere i turn these days, i keep hearing the term libertarian….now i’ve considered myself this for years, but like any political party, i don’t drift to the extreme. if the last election was any indication, perhaps the “good old days” of the republican party (not the recent days that have tainted it) are sending their followers towards libertarianism?

    maybe we’ll get a third party candidate in this country and finally get rid of the two party system.

  11. Sarah says:

    Katie,looking to rent the house for the Equestrian games also needs to consider the tax implications. There are specific rules for renting your primary residence. There is a special rule if you use a dwelling as a home and rent it for fewer than 15 days. In this case, you would not report any of the rental income and you would not deduct any expenses as rental expenses.

  12. Amber P says:

    One idea in answer to the seasonal income question: See if you can get by on the reduced summer income all year long. So say your monthly income is $2k during the summer and $6k the rest of the year. If you kept your expenses constantly below 2k you won’t feel a pinch come summer, and you can bank all the excess income the rest of the year. If that’s too far-fetched, average-out your annual income and expenses and figure out how much you can save per year. Then divide that figure over the 9 months you are making more money and put aside that amount during only the months that you make extra.

  13. Dave says:

    With the first question, at the time you need to replace your water heater ( or anything else ), sit down and run the numbers, do an informed decision. If you have a gas heater now, installing a replacement is less expensive, In Arizona solar may be best, or a heat-pump, look at all option,
    I is a good idea to do the research before you need it, and rerun the numbers now and then, they will change.

    For living on a varing income, I would go the other way about it, if you bring in $1000 some months and $5000 other months, and you can live off $2000 a month, have it all go into a savings account, every month take out $2000, the rest is allready in savings. If a year to year trend shows your balance is going down, you need to rebalance, ie more in or less out, if it is going up, rebalance by paying debts off, long-term saving, or spend more.

    My take on Political parties is, the parties are for the poeple that can’t think of them selfs, there are leftist Repuplicans and rightist Democrats, Libertarians have some veiws of both, as are Centerests.

  14. Craig says:

    The reason to roll your 401k into an ira as soon as possible after leaving a job is that an IRA gives you thousands of options on what to do with your money – from stocks, mutual funds, etf’s etc. Your old 401k probably gives you 10-15 mutual funds to choose from!

  15. A.M.B.A. says:

    Re: budgeting for drop in summer income: This was my situation for several years as a teacher when my employer didn’t allow “summer pay”, i.e. having the 10 month pay spread over 12 months. This is what I did. I was paid monthly on the 15th. I figured out my monthly need plus a bit extra, because it seemed I spent a bit more on fun, travel or university expenses during the summer. Say $4000. I put into savings September through June an equal amount so that on June 16 I had $8000. I then “paid” myself 4k out of that on July 15 and August 15 to cover the month.


  16. Bob says:

    Trent, since part of you income is from ads on the site, it would seem that people that read the Simple Dollar via RSS or email would cause you to loose income, is that not the case?

  17. J says:

    @Jeff — keep in mind that pretty much any power source likely has some correlation to the price of oil.

  18. T says:

    Re: the advice to Michelle on variable income:

    If she makes varying amounts $1-5K/month and is putting $2K every month into savings automatically, I’d be worried that those $1K months, if up next to each other, would cause the savings withdrawal to bounce.

    Of course she can cancel the withdrawal in those months, as needed (though she’ll need to watch for that) and automatic savings is a great plan – just wanted to point out that concern.

    You can budget in Quicken for irregular income (if you know how much it will be!). When you set up your budget, there’s an option for both income and expenses to use monthly detail – I use it to indicate my husband’s “extra paycheck” months and the months our car registrations come up for renewal, things like that. You may not want/need that kind of detail to your budget screen, but it is available, even in our older version.

  19. Frugal Dad says:

    @J.D. Amen! And other than extremes on both sides, there isn’t much difference in the two major political parties. Most politicians are about growing the size and scope of the federal government, and that’s true on both sides of the aisle.

    I identify more with libertarians, but don’t identify myself as a member of any one party.

  20. alex says:

    First Question. I also live in AZ and agree with Dave that solar is a good option if you live in most the state (I live in Flagstaff, so solar might be an issue during the winter up here and in some other bits of the state). I would also consider going tankless as we are in a desert and the gallons stored in-tank aren’t really doing anything useful while they are in there. At-the-source heating might also be considered because you’ll conserve water by not waiting for your heating. I would say it is important to consider both energy and water costs in your decision. Good luck.

  21. SH says:

    Jeff living in Arizona should consider a solar water heater. There are many professional units available that have a high ROI and little to no operating cost after initial investment. In addition, I believe they are covered under the 30% rebate program the Feds are offering through the DOE. I live up north and even I am seriously considering it. If Jeff finds himself handy many DIY plans are available on line if you Google for them.

  22. Kevin M says:

    RE: renting out your home – don’t forget to consider the tax ramifications as well. In general, there is a 14 day rule that will determine what income and expenses are reportable or deductible. Check with your CPA for clarification. Sounds like a good opportunity though.

  23. David says:

    Love the Q and A. Very cool that you are a libertarian as well. The question about making money blogging I found interesting. At our site http://www.dinksfinance.com brings in a decent profit each month, in similar ways as your site.

    Here is a post with our specific income from our site http://www.dinksfinance.com/2008/06/is-blogging-easy-money.html that I think the individual would be interested in. I understand why you might not post directly how much you make blogging, but it is cool to see the stats once in a while.


  24. Jim says:

    I can’t see any reason why Shanda would want to go to a dinner party hosted by someone she doesn’t like. It sounds like she may be worried about hurting their feelings by saying no to the invitation? Or maybe there is some other reason she doesn’t simply tell them no.

    JD said: “I don’t see how anyone can embrace the Republicans or the Democrats without reservation.”

    Few people agree with a political party platform 100%. You & Trent don’t seem to agree with the Libertairan platform completely yet you call yourselves Libertarians. Most people tend to label themselvs & vote for the party that matches their believes closest, but its rarely a perfect match.

  25. Kelly says:

    Now to put a political twist on the first question, if you believe that it is not very environmentally friendly to throw away working equipment with such abandon, what would be your thoughts on the “Cash for Clunkers” deal. (I’ll actually say that I agree with you in general but feel the program might be beneficial to help boost the economy and the car companies…just wish they would have done this instead of bailing them out in the spring).

    FWIW, I am a semi-republican/libertarian. I like portions of all parties but tend to want a smaller federal government. I really do hope that libertarians make a push in the next couple of elections to give us a legitimate three party system.

  26. Do 401(k)’s really charge fees? I understood that funds charge fees, but I never realized that the vehicles themselves do. Could you clarify, Trent?

    I might have to have a talk with my HR rep…

  27. DD says:

    I really liked your way of getting kids to try different foods. My kids are a pain in the butt when it comes to meals. So I shared it with my wife and she too thought it was worth a shot.

    Tonight was simple; baked salmon, sweet corn & mashed potatoes.

    My 4 year old likes salmon(she calls it pink fish) so she passed with flying colors. It seems my 2 year old son doesn’t eat anything other than crackers and chicken nuggets so we knew we’d have our work cut out for us.

    Sure enough he didn’t try anything, and I was preparing his plate to be saved for later when his older sister tried to help him out. She started doing the whole airplane going in the hanger or the train coming to the station thing, and it worked!

    Only when he opened his mouth for the bite, she shoved it in too far. He then gagged and vomited up the chocolate milk he drank.

    We decided that the bite counted, and we let him have a sandwich :)

  28. @ Jeff and his water heater –

    I saw it mentioned earlier and would like to emphasize: I can’t imagine, living in Arizona, that you wouldn’t benefit tremendously from a solar hot water system. Of course, as others mentioned, this shouldn’t be implemented until your current water heater is no longer viable.

    @Trent, JD, and others on Libertarians –

    I’ll have to go with JD on this one and say that drinking the kool-aid of any specific party is just kind of creepy to me, yet most of the people in my life are pretty dead set on one side of the fence or the other. Sometimes it leaves me feeling like I’m straddling the line and just need to pick a side.

    I’m never very persuasive in a political debate but moderate quite well as I can usually identify with both sides of an argument. I just try to pick the best characteristics and viewpoints from all parties and candidates I learn about vote for an individual, not a party. It’s always refreshing to find I’m not the only one that feels this way.

  29. Shane says:

    Regarding water heaters,

    Electric water heaters are really inefficient compared to ones with a flame. In AZ, use solar if you have good siting and keep your propane as a backup.
    If you ever do have to replace it, get more propane or natural gas (if you have that option).

    disclaimer: I work for a gas/electric utility.

  30. deRuiter says:

    Michelle, The person who earns hourly money during the school year but no money in the summer needs to get a summer job. Try waitressing, construction, or a small part time business. We have a woman locally who weeds gardens during the summer months and she works all she wants to work. Her pay, here in the Northeast, is impressive per hour. You could also do house cleaning during the summer, always in demand around here, if the person is thorough. Even a part time summer job would solve your cash shortage. Part time work leaves you time for summer fun Your partner is working full time all year round, right?

  31. Courtney says:

    deRuiter – That might not be an option if they have children who would need daycare or a sitter during the summer. It’s possible that working a second job during the summer could be a net loss for them.

  32. Davy Haynes says:

    Very insightful and mature quote. I need to keep your response in mind when responding [myself] to negative, sometimes personal attack-type responses.

    You wrote:
    “Part of the reason that purely negative comments frustrate me so much is that they’re usually presenting a good idea, but they bury it in attacks and vitriol that take that good idea and bury it in negativity. This helps no one.”

  33. Treva says:

    Regarding Ashley, who’s not sure if she should go to trade school or get a Master’s b/c she wants to make sure the investment is paid off before she retires in less than 30 years…. I’m not so sure I would look at it like that. For one thing, if she’s picking a career she loves, she may work well beyond the standard age of retirement. If she ends up in a job that’s a means to an end, then she’ll high-tail it outta there as quickly as possible. Or, G-d forbid, she end up injured and forced into retirement before she’s 50. This is why I would go for something you love and stop looking at from strictly a numbers perspective.

    My grandma is 80 years old and still works 40-50 hours a week (sometimes more) b/c she *loves* what she does. She could retire. She’s saved up for it. Her house has been paid off for decades. But she loves taking care of people (she’s a CNA), so she keeps working. I know my grandma; if she didn’t like her job, she would have left first chance she got. She always says that life is too short to be miserable.

  34. Noelle says:

    Craig (#9) makes a good point about moving your 401(k) from an old employer to get significantly more investment choices – because you control the IRA investment as opposed to them controlling the 401 (k).

    In my opinion, the number one reason to move the money out is that THEY (your former employers) control the 401(k) plan and have no interest in working for your best interests *at all* once you leave – including investment choices, access to the funds, etc. Get your money out of there ASAP!

  35. Freddie says:

    I started reading The Simple Dollar almost 2 years ago. From the different post I got the courage to put together a childrens book from stories I have told over the years of working with children. To say the least it has been exciting to get the story published. Now my challenge is how to market the book. I am listed on Amazon. I have a web site called http://www.talesfromthefarm.com. I have plans for about 5 more small books. Any suggestions?

  36. Kathryn says:

    This is in reply to Ashley’s question about returning to school. I returned to school at age 40 after not really having a career, just a series of jobs. I got my Master’s in Social Work and have been a therapist and case manager ever since – 15 years. I’ve never been sorry because I’m doing what I love to do. The pay is better than with my previous jobs but it took awhile to accomplish that. There is nothing better than getting paid a comfortable living to do a rewarding and fulfilling job. It was worth the sacrifices, school loans and the times when I didn’t get paid enough.

  37. Lisa Owens says:

    I, too, consider myself a Libertarian although I used to vote based on the issues. Now I’ve decided that the only way the Libertarian party will become the third national party is if more people vote Libertarian across the board.
    My question is, do you think my votes (and yours if you vote Libertarian), are wasted? My husband and I argue about this come every election.

  38. Brian says:

    If you believe in education as a long-term way to address societal problems, that would indicate that you believe in some form of objective truth. If that is true, what are your thoughts on the recent Republican statements re: “death panels” and “pull the plug on grandma” that are being used as scare tactics to defeat any health care reform? Do such statements, and their underlying fundamental dishonesty and bad-faith argument, cause you to move away from the Republican party, or to reject its dishonest arguments?

  39. Nikki says:

    Hi Trent-

    I wondered if your wife has always been on board with living frugally or if it was primarily your idea and she needed to be convinced? In our family, as much as my husband is appreciative and supportive of our frugal lifestyle, I put in most of the effort and enjoy doing so, where he mostly enjoys the rewards. :)

  40. Kate says:


    Sorry for the screaming caps, but I wanted the person who asked that question to spot it easily. The original question was if the individual ever HAD to replace the water heater (rather than replacing it just for lower fuel cost.)

    We were recently in this position: our propane water heater died, and we had a choice of replacements. We went with electric and we are VERY happy with the results! Our electric bill is up a bit, but now that we’re only using propane for cooking, those costs are WAY down and life is a bit easier in terms of planning for bills.

    I really prefer some form of gas for cooking, for better control, but I’ll take electric for everything else! The overall cost is cheaper, the results as good.

    Hope this helps!

  41. Lynne says:

    In response to the person who works for a school and has to make up for no pay during the summer: I have been working as an assistant for 30 years at an elementary school. Our gross income for the year is divided into 10 equal payments, leaving us with no income during the summer. This year they gave us the option of having 16 2/3% withheld from each of the 10 paychecks, to be paid the 11th month of our “school calendar”. The amount equal just shy of 2 months pay, thereby covering the time without a paycheck. Although I was thrilled to finally have this addressed, I realized that I myself should just have that same 16 2/3% automatically deducted & sent to my savings account, where it will accrue interest, however slight that may be. So, my advice would be to try this and see how that works for you.

  42. Perry says:

    If she makes varying amounts $1-5K/month and is putting $2K every month into savings automatically, I’d be worried that those $1K months, if up next to each other, would cause the savings withdrawal to bounce.

    I think the idea is that during the $5K months, she lives on $2K, and puts $2K in savings, leaving the excess of $1K in checking. With enough $5K months, this would balance out, but I agree that it sounds risky. I agree with Dave’s suggestion to put it all in savings and have $2k automatically transferred into checking every month.

  43. Perry says:

    #4 Foxie@CarsxGirl @ 9:16 am August 17th, 2009

    I know when the huge annual bike rally rolls through Sturgis, SD, the entire town (save for the people who like the rally) clears out and rents out the houses… Everyone makes a KILLING doing it, too.

    I imagine that this works better in smaller cities such as Sturgis and Lexington than it does in large metropolitan areas such as Washington D.C.

  44. Thank you, Trent! (Mine was the 7th question in this post, about handling seasonal employment budget-wise).
    That is an excellent idea, and I hadn’t yet considered it.
    Thanks for taking the time to think that through and offer your help.
    I enjoy your posts and your podcast very much.

  45. Trey says:

    I have a question regarding the book Get A Financial Life, which you recently reviewed.

    In it the author recommends maxing out your 401k up to the company match, and then investing any additional in a Roth. I am currently putting 10% of my income into retirement with contributions between my 401a and 457b plans. This is 2% over the max contribution my employer provides.

    Should I take that 2% and open a Roth, or should I just leave it be? It seems like an insubstantial amount of money to go through the trouble of opening a separate account, but if the benefits are worth it I would have no problem doing it.

  46. Tim says:


    Trent, to what extent does “knowing your audience” affect your blog posts? I mean, you’ve got a pretty niche market- most people I know would consider it some kind of punishment to read through a financial blog “for fun.” So do you pretend to write to the “average adult American” or do you recognize that your audience is typically more financially responsible than the average American, or at the very least, intending to be more financially responsible than the average American currently is.

  47. Mol says:

    Trent, do you have any recommendations on blogs, articles, or books on selling your home?

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