Reader Mailbag #86

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.

Can you tell me a little more about how banks like ING work? If they don’t have a physical branch how do I get my money? Do I need to keep my current bank and just transfer the money around? I generally have several different saving account that I use for saving for specific purchases or vacations. Once I meet my savings goal I simply switch to whatever I’d like to save for next. My current problem is this: my bank has recently switched from a $100 minimum for penalty to $250. This means I now need to save $250 over my goal or close my account each time I reach a goal to avoid a service fee. I feel like I never actually have all of my money. I’m under the impression that online banks such as ING have much smaller fees. Any advice?
– Dana

ING Direct – and other such online banks – basically provide all of the services of a typical bank without a brick-and-mortar location. Typically, at least some of that savings is passed back to the user in the form of better service in other areas and high interest rates.

So how do you bank with them? Most of the interaction with such banks is done online. They all have a very full featured online bill pay service, for starters. Many online banks issue paper checks (not all – ING’s Electric Orange doesn’t) and if they do not, they allow you to fill out a check online and have it sent to a business for free.

When you’re out and about, most such banks have an enormous ATM network that allows you to get at your money without a fee at many, many ATMs.

I found that, for me, I was happy enough with ING’s service that I switched to using it as my primary bank, even without a teller window available to me. We did eventually decide to open a free checking account at a local bank for emergency reasons and so we would have access to a paper checkbook, which made it easier to do things like order a magazine subscription from the neighbor’s kid for a school sale.

would you consider making another blog or on occasion posting a few short stories? I enjoy reading short stories a lot and I’m sure many of your readers would be interested in reading a few of them.
– Alexandra

I’ve been debating whether or not to post some of these stories online or not – I’m actually fairly torn on it. If I did, I would put them on my personal blog.

Why am I torn? A big part of me would like to succeed as a fiction writer on my own merits, without the success of The Simple Dollar influencing it. I feel as though I might be able to “get away” with substandard fiction if publishers believe I can bring a built-in audience to the table.

On the other hand, I know that sharing what I write here on The Simple Dollar has led to a lot of great feedback – both negative and positive – and it’d be great to open up my fiction writing.

I still haven’t made up my mind, to tell the truth.

Can’t Laurenly also build her credit score by having an apartment lease, utilities, internet, etc. in her name? Does paying for those things not factor into a person’s credit score as much as a credit card?
– Chelsea

Sometimes they will, sometimes they won’t.

Different utilities and rental companies have different practices on how often and how much information they provide to reporting agencies. Many of them – perhaps most of them – only report delinquent accounts and don’t report positive payment. Others do full file reporting, which means they report everything, good or bad.

You can ask your utilities which method they use and they may or may not tell you. Either way, though, I wouldn’t expect a utility payment to be the source of financial recovery.

I know the local library is one of your favorite resources — it’s one of mine, too! However, I live in Philadelphia, where, if the economic situation doesn’t get better *fast*, the libraries and recreation centers will all be closed as of the beginning of October, which means we’ll lose all the great free resources the libraries ofer, as well as the free or cheap resources offered by the rec centers.

Short of personally balancing the state and city budgets (I’m no economist), what can the people in Philadelphia (and any other city or town in this situation) do in the absence of these resources until they re-open (assuming they do!)?
– Laura

Utilize used book stores. Trade the books they have with their neighbors. Use services like PaperBackSwap.

People who want to read can usually find a low cost way of doing just that. A library is a tremendous service, but lack of a library is only a small obstacle in the face of a focused and resourceful reader.

For other community services, just get together with your neighbors that miss those services and co-op them. Start your own basketball league and enroll people in the neighborhood to coach and referee. You don’t need a bureaucracy to make this happen – it’s not like they’re ripping up the basketball courts.

I vaguely remember you answering this question elsewhere, if so, please remind me. If not, will you please tell me the pros and cons and differences between copper, stainless steel, and non-stick cookware? I am at the point where my first purchased pots (purchased in one of those large sets that you abhore) are starting to crack on the handles. Over the past year I have become relatively proficient in the kitchen and want to upgrade some of my cookware as it breaks or needs replacing. I’d like to replace it with something high quality, but is the mark up on copper really worth it?
– Gwen

Most lower-cost nonstick cookware is covered with a nonstick coating – Teflon is a common one. This coating usually lasts for a few years, but begins to peel – and when it begins to peel, you shouldn’t use the pan any more, as Teflon isn’t something you want in your food.

Alternately, high-cost nonstick items are covered in a baked enamel or porcelain finish. These are usually quite expensive, but they won’t peel and can last for a very, very long time if cared for.

Now, about copper versus stainless steel. Copper has much better heat conduction and heats more evenly, which means that things will cook a bit faster with it and the stuff cooked inside will heat evenly. However, stainless steel is cheaper and looks pretty – it’s all shiny! Many pots and pans can be found that are made of copper with a stainless steel lining, which kind of gives the best of both worlds. Some cooking mavens will grumble about tin-iined pans, but they’re hard to clean and they occasionally have to be re-tinned, which is a real pain.

The best thing you could get, in my opinion, is copper with a stainless steel lining – but these can be breathtakingly expensive. From there, you can kind of go down the scale. I’m not sure what you’re looking to spend, but that’s my thumbnail guide.

Also, if you’re used to cooking with nonstick, cooking on stainless steel is very different – you have to heat it first with nothing in it, then add the oil and other ingredients.

What percentage of your readers are from outside U.S? When you write a blog, have you ever stopped to consider whether certain US centric references that you make may not be familiar for readers outside US?
– Prasanth

My readership is roughly 85% within the United States.

I typically don’t worry too much about focusing on issues that are strictly within the United States. I believe I talk about universal concerns often enough that when I do dig into U.S.-specific issues, it’s appropriate for my audience.

To put it simply, I really don’t worry about it too much. I just focus on being me.

I have a firm grasp on my finances and would like to start helping other people get their finances in order. Do you have any suggestions on how to get a personal finance consulting gig going?
– Austin

If you actually want to get into a career of financial planning, be very, very careful. Such industries are incredibly highly regulated and you should have proper certifications and such before embarking in it.

Sometimes people think, “Well, he can do this website, so why can’t I throw out my shingle and consult?” Well, on every single page of The Simple Dollar, I make it clear that this site is for entertainment purposes only and any information or suggestions taken should be followed up with one’s own research. On top of that, this is a free website – I’m not charging for services as a consultant would be.

If the idea of being a planner interests you, look into proper education for it. Start off by digging deep into what it means to be a certified financial planner.

Is it worthwhile to invest in art?
– Shanya

If you’re investing in art because you believe it will return aesthetic appeal and enjoyment to you over a long period of time, by all means, invest.

If you’re investing in art for a financial return, don’t waste your time unless you’re treating it as tantamount to gambling. The art world is fickle – and an art purchase for investment assumes that someone will want to buy the art in the future, which is far, far from guaranteed.

Yes, by all means, if you have art that appeals to you and you can easily afford it, buy it. It will add true enrichment to your life.

But if you’re looking to turn a buck, stay away from the art world unless you’re working for Sotheby’s.

You mentioned attending SXSW recently. I also know you’re really into playing board games with your family and friends. Have you ever gone to GenCon? It’s not that far from Iowa.
– Ron

I confess – I am strongly considering a trip to GenCon in 2010. My wife is planning a short trip next spring or summer to visit her sisters, leaving me with the kids – and also with a ticket to have my own fun solo trip. GenCon is likely that destination.

I have several friends in the area that are considering going, so I will likely pool up with them at least for the trip.

If I do decide to go, I’ll let people know on The Simple Dollar so we can meet up if readers wish to.

How do you discover the personal finance books and other books you write about?
– Gil

I usually carefully follow the new releases and sales rankings on Amazon to see what’s new in the genres I follow.

If a major release is coming down the line, I’ll try to request it at my library. if that doesn’t work, I’ll attempt to request a review copy, but I don’t particularly like doing that as I feel slightly obligated to give a positive review.

I also listen carefully to reader recommendations. Sometimes – more than once, actually – I’ve suspected that an author of a book is posing as a reader and trying to pitch me on reviewing their book. If I get that vibe, I’ll usually blacklist it. I don’t like those games.

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

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