Reader Mailbag #93

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 am 50 years old, live on SSI, have $25.00 in savings. My SSI is $845.00 per month. I rent my apartment. On housing, so thats a great dicount. I have nothing else. My family is my two children, both adults and moved out, the last one left 2 months ago. How do I manage my money so I can eat all month? Each month I start with $645.oo. And I am backed up on utility bills. I refuse to turn on my heater this year. So far, we havent frooze. (I have two cats). Please advise
– Jana

Since you’re on SSI and under age 65, you must either be disabled or blind. However, since you were able to write this email, you do have some capacities for earning additional income, plus you have internet access.

My suggestion would be to seek out simple online opportunities to earn a few extra dollars. Given the unknown nature of your disability, I’m going to assume that sustained tasks – like starting a blog – might be challenging. However, simple independent tasks (like sending this email) are within your means. Plus, it sounds like you’re able to mostly make ends meet with what you have, so you only need a limited additional boost.

Why not give Mechanical Turk a try? Whenever you feel up to it, you can sit down at a web browser and earn small amounts for simple tasks. I was able to earn a little over $10 in an hour doing it a while back, so it’s not too bad. Plus, it’s something you can do when it works for you and your health conditions.

You might also want to take advantage of any charitable offerings available in your area. Is there a food pantry from which you can get food to supplement what you have? Are there assistance programs for your energy bill? You may want to simply call them and see what you can learn. Many people are too “proud” to take charity. Others use charity as a tool to get by without doing anything. My belief is that if you need it, you should take it – and it sounds like Jana does need it.

Good luck.

You often mention that you’re a big fan of board games and card games. My family has a Christmas tradition of playing Trivial Pursit. Some of us would like to find a different game to play at our big Christmas gathering, perhaps also giving it as a gift. Do you have any suggestions?
– Erin

You’re clearly looking for more of a “party” type of game rather than one that requires a lot of strategy and deep planning. Usually, with such games, many people play it simply to socialize. If that’s the case, two games immediately come to mind.

The first is Apples to Apples. The game is really simple. There’s a big pile of red cards from which everyone gets a hand of seven cards. There’s also a big pile of green cards. Everyone sits around a table and the players take turns being the judge. The judge turns over the top card in the green stack which has an adjective on it (like “funny” or “smelly” or “obnoxious”), then all of the other players pick a red card from their hand (which has a noun on it like “stand-up comics” or “my feet” or “Rush Limbaugh”) that they think best matches the green card. After everyone has played a red card face down, the judge shuffles all of the played red cards, turns them over, then decides which one is the best match (with all of the players trying to make their case for why their card is the best one). The judge picks the best red card and whoever played it gets to collect that green card and keep it in front of them. The first one to some certain number of green cards (seven or so) wins. It plays really fast and can be a lot of fun with a big group.

The second is Wits and Wagers. It’s a trivia game like Trivial Pursuit, but each question is answered with a number (like “In what year was Columbus born?” or “How many baseball players were in the Hall of Fame as of 2008?”). Each player writes down an answer on a piece of paper, then the answers are lined up on a board. The players are then allowed to bet on which answer is right or that the right answer is between any two answers. The person with the most money at the end of a certain number of questions (usually seven) is the winner. It plays in about an hour, there’s a bit of gambling fun involved, and it’s not ruled by a painful die roll like Trivial Pursuit is.

My question for the reader mailbag is, when buying gifts for people, do you work to a dollar limit? Obviously all of these questions include the disclaimer assuming you can afford it, but do you just buy a gift you think somone will really like, regardless of the cost? Or do you try to spend approximately the same on people who fit into a particular ‘category’ relating to how close to you they are? [Example, do you spend the same amount of money on both your children/all your parents and in laws/your close friends etc?] What if you find a really really great gift for someone important (even Sarah?) for only $3? Do you then feel obliged to go out and get them some other things as well to make the money the same, even though the thoughtfulness will probably get drowned out by the other things? Please share all your thoughts about this.
– Katie

I don’t usually worry about a dollar limit at all unless it’s for a gift exchange where a dollar limit is specified, as is the case with the gift exchanges with my extended family.

Honestly, the thought of “what if the recipient thinks I’m cheap?” never really crosses my mind. I just try to find a gift that genuinely matches the person I’m giving it to. If I feel like giving them something more, I do so, but it has nothing to do with the price tag. I think my thought and care in most of the gifts I give comes through to the recipient.

On top of that, almost all of the people I exchange gifts with feel much the same way: they’d rather give an interesting or thoughtful gift than one that meets a price tag. If you’re surrounded by people who are obsessed with how much something costs, then you’re likely surrounded by people who turn Christmas into Debtmas, ruining the joy of the season.

Me and my wife are in the process of buying town home in NJ and are looking at mortgage rates with several firms. I received a note from a company called American Federal Mortgage offering a rate of 4.75% on a 30 year loan with no points. This rate is by far the best we have heard in the last week or so talking to Wells Fargo and looking at bankrate trends.

My question is, how safe is it to get a huge mortgage (~300K, i am putting 20 down) from a company such as American Federal Mortgage? Will I be better off going for a slightly higher interest rate but with a bigger more established firm like Wells Fargo?
– Pankaj

If you’re not dealing with someone local (which I prefer if you’re getting competitive rates – if your loan stays local, it’s much easier to sit down with someone and talk about it if there are problems), you’re basically just shopping for the lowest rate among larger banks. That’s often done with tools like Bankrate.

However, having the lowest rate by a few hundredths of a percent doesn’t mean too much if you’re going to get socked with fees. Don’t be afraid to request a description of charges and fees from all lenders you’re considering and also ask for guarantees that cap the amount of your fees in total.

If one bank is seemingly far ahead of the curve when it comes to rates, I would make sure that I knew the business was reputable and I’d also carefully read over my HUD statement before I closed on the house to make sure there weren’t any sneaky fees tossed in there. Unless you plan on living there forever or your mortgage is enormous, it’s not worth thousands in fees to get a 0.25% lower rate.

My girlfriend’s car will cost $2000 to repair and it’s only worth around $5000. She will graduate in 7 months and has a $70k/year job lined up with a $6k signing bonus. She also has about $10k saved up but will need a lot of that to live on for the next 7 months. What should she do about the car? Thanks.
– Greg

Repair the car.

I think the underlying assumption here is that Greg assumes his girlfriend will obviously upgrade her car that’s “only” worth $5,000 the second she gets out of school. Coming from a person who is currently driving a truck that’s worth somewhere around $1,000, I really find that a strange perspective.

You don’t need a brand new car just because you’re earning a good salary. In fact, that brand new car will eat away big time from your other goals via car payments, much higher insurance costs, and so on. Hold onto that used car for as long as you can, then replace it with the car that’s the best value for you in your situation then – and pay cash if you can.

You’ve mentioned your distaste for Craigslist. Why? Is it from a bad experience (a la Aldi) or another reason? I’ve had very good experiences on Craigslist, made quite a bit of money, and found some great deals. I’m curious why you’re so against it.
– Michelle

My problem with Craigslist is the signal-to-noise ratio. For every interesting and useful offer to be found there, you have to trawl through acres of stuff that’s irrelevant and self-promoting. Even using the search doesn’t often lead you to what you want.

In large cities, there’s a lot of signal (good stuff), but it’s buried under a ton of noise (stuff that’s useless). In smaller cities, there’s just a little signal – often not enough to bother visitig with any consistency.

A better-policed Craigslist would be an incredible resource. The way things are now feels like I don’t get much benefit for the time invested there.

How do you handle Christmas with your kids? Do you have them make a list? Do they write letters to Santa? Do they pore over toy catalogs?
– Jim

My children are four and two, so actually making a list is beyind them, as is writing a letter to Santa. We have asked them what kind of things they’d like for Christmas and received a few vague answers, but I think they’re mostly just happy to open a few gifts on Christmas morning. We try to keep it as low-key as we can within our family.

As for the toy catalogs, we intentionally don’t receive any in the mail and if we do wind up with any, we throw them away. I have no desire to have my children covet the contents of what amounts to a glorified marketing flyer.

I don’t mind it at all if they hear about something they want from their friends or from other sources, but just simply browsing through lists of stuff to decide what they want is just encouraging pure consumerism.

Aren’t you better off hiring someone to do things for you like housework and using your time to earn a lot of money?
– Tess

That might be true if you were infinitely capable of turning every hour of your life into cold, hard cash. Unfortunately, the vast majority of people simply aren’t in that position. In fact, many people who think they are in that position often aren’t actually in that position.

Take my own life. One might argue that I’d be better off hiring a housekeeper because I can earn more during a productive hour of writing than it would cost to pay that housekeeper. The catch is this: not every hour of my life is a productive hour of writing. Sometimes I simply can’t write well – at other times, I’d rather not be writing. At those times, I’ll do housework or find other ways to spend my time.

In effect, if I hired a housekeeper, it would do nothing at all to increase the number of good writing hours per week. It would just give me more hours of leisure, something which I’m not interested in paying a high fee for at this stage in my life.

It seems in these difficult economic times there are more and more “internet opportunities” popping up every day. One that appears to be gaining in popularity is HubPages. Since there seem to be a good many aspiring bloggers who read your blog, I thought you might want to do a post or a reader mailbag with your thoughts on this website and those similar. Since you always share wonderfully insightful comments, I thought this might be a topic you’d like to tackle.
– Susan

Sites like HubPages, Squidoo, Mahalo, and the like all operate around a simple premise. You go there, create a page on a topic that you know something about, and they do the rest, adding advertisements to the page and so on. Then, you earn some portion of what the page brings in.

It seems good in theory. All you have to do is write and they handle the rest. However, there’s a catch: most people earn almost nothing doing this. I’ve experimented with several different sites and have never earned more than a penny or two for multiple hours of invested time at each site.

Yes, if you continued to work at it and built lots of top-quality pages, interlinked them a lot, and convinced other sites to link to your pages, you’d likely see your income on such sites take off. But if you’re going to all that work, why are you letting those sites take a big cut of it? Why not just start a site yourself and reap all of the rewards?

If you have just a little bit of time, you’re better off doing something like Mechanical Turk, which I mentioned in the first question. If you have a ton of time, start your own site.

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

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