Reader Mailbag #77

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.

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?
– Joel

What you’re doing right now in terms of credit card usage is very good – rarely using it (which helps your credit rating but doesn’t get you in debt) and instead mostly using your debit card. That’s perfect – keep it up.

Your best bet, if you’d like to get a little more value out of this situation, is to simply get a Mastercard or Visa associated with a chain you regularly use, like BP or Target. Where do you shop for food regularly? Where do you get gasoline?

Quite often, cards at such places reward loyalty. Just use it for your normal purchases and you’ll regularly get rebates or discounts of all kinds associated with that retailer.

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.
– Angelo

From what I’ve seen, MagicJack works well for what it is. It simply uses some of your internet connection (you have to have broadband) to place and receive phone calls. It’s easy to use. The problem is that it’s as reliable as your internet usage is and it also requires your computer to be on to use it.

What I didn’t like is that the MagicJack software delivers advertisements to your computer. It also “analyze[s] the phone numbers you call in order to improve the relevance of the ads.” I’m not a big fan of spyware – it’s a big privacy breach that I’m not interested in.

Having dabbled with many different VoIP solutions, I’m happiest with Skype. I can use it pretty much anywhere – at home on my desktop computer, on my laptop, on other computers, and on my iPod touch – without taking hardware with me (all you need is a webcam). I can call any number in the U.S., Canada, Mexico, and a few other countries for free, and receive any calls for free. I can also do video chat with other Skype users. It’s only $24.99 a year for all this – and just chatting with other Skype users without a phone number is free.

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?

– Matt

I play occasionally, but it’s usually when I’m able to meet up with others who enjoy playing on a non-fanatic basis. That usually means lining up schedules.

I actually enjoy playing the most with my wife and my father-in-law, neither one of whom takes it very seriously and makes the entire thing quite fun.

For me, it’s now a rare-occasion social event instead of a giant almost-never-ending time and money suck.

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.
– et

If I were planning on leaving an estate, the last thing I would do is tell the people I would give the money to. You’re right – if a person knows they have an inheritance coming, it changes their behavior.

Instead, I’d just say I was planning on giving anything that was left to “various groups” and simply arrange things privately with my lawyer.

I don’t have any problem with leaving money behind for your descendants, but I do think one should keep in mind the psychological impact of such an inheritance, especially if it’s known in advance.

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?
– John

Simply put, you can’t change the past. It’s water under the bridge. The only moment you control is the now and so worrying about the past doesn’t help.

I recovered by stepping up to the plate and making changes. I put a lot of effort into undoing my mistakes in the realization that the only way things would get better is by today’s action.

Let go of the past. Don’t be burdened by guilt for the things you’ve done. Instead, be thankful for the fact that you have a chance – right now – to change it.

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!
– Marcus Murphy

If I were in your situation, I’d buy the cheapest car that will keep me on the road for a while. That way, you’re not going to be upside down for long on the car, you have more money to get rid of that pernicious credit card debt, and you’re closer to debt freedom.

If you’re getting a seventy two month car loan, that means you’re buying something pretty expensive, likely something new. That’s not a good mix with a pile of outstanding credit card debt.

Doing this now means that you can actually afford a good car later (assuming that’s something you value) without the prison of debt holding you in place.

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.
– Sophie

I used to use Teflon-coated dishes, but I’m starting to move towards cast iron. Cast iron doesn’t stick at all as long as you treat it well when you first start using it – that means coating it in vegetable oil, baking it, then cooking bacon or something similar in it a few times and only washing it with water and a brush.

Teflon is cheaper and doesn’t require the up-front work, but Teflon also peels after some use. That means it gets into your food and it also means that anything you cook in the pan immediately starts sticking once the Teflon peels away.

I think I’ll pass on that. I’m in the process of slowly moving my pots and pans to cast iron.

You always suggest weird board games. Why don’t you just play normal games like Pictionary?
– Shawn

I’ve played a lot of Pictionary in my life – as well as many of the other typical party-style games – and what I’ve found is that I have a lot more fun when I play something like Ticket to Ride or Settlers of Catan or Puerto Rico instead of Pictionary.

First, Pictionary really only seems to flex the right brain – the purely creative side. I enjoy things that make you think strategically and creatively, which is what games like Ticket to Ride do well.

Second, Pictionary – and many other such games – are difficult to play with a small group of two or three people. Many other games suit small groups very well. If there are twelve people looking to play a game, Pictionary works well, but I rarely am in those types of situations.

Finally, games like Ticket to Ride reduce the impact of luck. Sure, there is some luck, but unlike games like Pictionary, luck doesn’t define whether you win or lose. With Pictionary, it’s all about whether or not you’re lucky enough to have a good artist on your team, the die rolls, and the cards you draw. Very little decision-making is involved, and I usually wind up feeling that all I did was shout out guesses and it had little impact on the game as a whole.

Another big reason I mention such games is that they’re unfamiliar. Everyone’s heard of Pictionary, but not many people have tried games like Ticket to Ride or Agricola.

The short story is that my divorced parents are each in financial ruins. When is it the kids’ responsibility to support the parent??
– es

That’s purely a question of family dynamics. I don’t want my children to ever be responsible for me. When my dotage sets in and my health fails, I absolutely do not want to be any sort of burden on my children. The guilt would drive me crazy.

On the other hand, if my parents need help, I want to help them. They don’t expect it, but they’ve done so much for me that I want to help.

Other families have a different dynamic. Perhaps the parent-child relationship has been poisoned along the way by various things. Perhaps there are different values overriding the situation.

If you do not want to help your parents in their dotage, that’s your own call. I don’t believe you should feel obligated to do so if it’s not something you want to do. It’s the end result of a lifetime of interactions.

If you reach a point of true financial independence, would you quit writing The Simple Dollar?
– Jenny

I’m honestly not sure. My big question would be whether or not I still had anything to say that was of value to anyone. If the answer is “no,” I’d just archive the whole site and leave it up for others to read and get value from.

I would still write – I love to write. I just might focus on other areas – fiction, food, sports, gaming, or some other area of passion for me.

One possibility might be that I would just slow down my posting rate here to start other things. I might go to one post a day or three to four posts a week and use all that spare time to launch other endeavors.

The last thing I would do is retire into idleness, I can tell you that. I’m not wired to sit still.

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