Reader Mailbag #96

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 recently found out that I am pregnant with my first child. I looked up your past articles on caring for infants inexpensively. You said that you invested in a safe crib and never regretted it. I was wondering what kind of crib that was and what your impressions are of different cribs. For example, my sister just uses a Graco pack’n’play and a friend of mine recently bought a mini crib. These aren’t as solid as the more expensive sold wood cribs though. Is a larger, more solid wood crib worth the mark up?
– Gwen

When our first child – our son, Joe – was born, we spent a lot on various things for him. We spared no expense on countless things from bottle warmers and wipe warmers to educational videos and several pounds of blankets.

The sturdy wooden crib is one of the few things I don’t regret in the least. We purchased a handmade wooden crib with a detachable front side that allows us to easily convert it to a daybed.

Right now, our two year old daughter is using it (after our son used it for years, he upgraded to a “big boy” bed when his little sister was ready for a crib). She jumps on it. She climbs on it. She’s bitten it. She’s shaken it. I’ve never worried in the least about the crib supporting her and keeping her as safe as possible. We intend to keep handing it down as well, with our next child taking it in the near future.

Get a good, stable crib. You’ll never worry about it collapsing – and it never will. It’ll last through every child you have and will likely have significant resale value when you’re done with it. You might want to start by checking Craigslist for options.

One question I’m looking into right now is home warranty insurance. What do you know about these services/companies?
– Beth

Home warranty insurance is offered by a plethora of companies. We had a policy ourselves when we first moved into our house, as the previous owners had purchased a year’s worth of coverage as bait to sell the home. We used it once, on our washing machine.

What we discovered is that, based on the prices they wanted for a single year of coverage and the deductibles of our policy, we were far better off simply putting that money into an emergency fund. On our one repair, we ended up footing most of the bill ourselves because of the deductible. Even taking into account every single repair that would have counted under such a warranty since it expired, it would have saved us roughly 10% of what it would have cost us.

Yes, it wouldn’t be bad to have if there were several major home crises at once – and I mean major. However, events that would cause such disasters often fall under a homeowners policy rather than any such home warranty insurance policies.

I’d skip it and get a big, fat emergency fund instead.

At the beginning of October I made the commitment to myself to get control of my finances and improve my health. I’ve made a lot of progress so far, but I’ve got a long way to go.
One of the ways I’ve made significant changes for both financial and health reasons is that I’ve stopped eating most of my meals at restaurants. I’ve committed to teaching myself to cook healthy food and to eat at home for nearly all meals. I’ve gotten several good ideas and recipes from your site, but I do have to questions:
1. What spices would you recommend to a novice cook to keep on hand as “basic spices”?
2. Where would you recommend that novice cook purchase those spices?

– Cormac

I actually wrote an article a long time ago about ten spices that make cooking at home much more pleasant for a beginner.

As for a supplier, the selection at the local grocery store will work to begin with. If you want to grow past that, I would recommend attempting to grow the herbs you want yourself. We grow several of our most frequently used herbs in our own garden and dry them ourselves for winter use.

If money is really no object, you could probably work out a relationship with a local greenhouse and just buy from them regularly. This would easily be the most expensive option available to you, but it’d perhaps be the least hassle while also providing you with ultra-fresh herbs.

Do you typically think up a post idea and then just publish it right away or do you let it marinate for a while and then maybe schedule out the post to publish at a predetermined time?
– Credit Card Chaser

I rarely just come up with a post idea, write it, then post it immediately.

My usual posting routine works like this. I maintain a big idea list and add ideas to it all the time (and also cut ideas that I didn’t like). When it’s time to do research, I grab a big pile of those ideas and hit the library, seeking out any answers I might need and collecting information.

When I write posts, I’m usually writing about a week in advance (on average). Thus, the posts I’m writing today often won’t appear for a week – with some variation on that, both ways. This gives me some breathing room against personal emergencies – I don’t like my personal concerns to affect a steady diet of articles for my readers.

On rare occasions, when something really strikes me or something is particularly topical, I’ll substitute a freshly-written article into the queue and move the article that was supposed to appear to the end of the queue – about a week away.

I am a graduate student earning my Masters degree in library science and I wonder if you have some tips for all of us. (Many of my grad student friends read you, which is how I heard about your blog in the first place.)

Most of us are fairly composed in our spending – we try to cook at home and I’ve personally cut back on things like going to the movies. However, we’re still people, so sometimes we spend too much at Target or eat out a few too many times.

I guess the crux of my issue is advice for managing expectations regarding debt and debt payment as a student. When I started school I had to buy a car; I did a lot of research and purchased a new Subaru Forester instead of a used car. I’m extremely pleased with my purchase and know I made the right decision, but I now have a car payment on top of a medium amount of undergraduate loans and a lot of consumer debt on credit cards. (I lived in San Francisco for two years and charged a lot. Plus, as a student I sometimes need to charge expensive items like car repairs or plane tickets.) I can pay all my bills every month and have enough to live on, but I feel a lot of anxiety about all my debt and the small balance of my savings account.

Is graduate school a time where the rules change and I don’t need to be as concerned with my “debt snowball” repayments or other expenses I’m racking up (like tuition)?
– Leslie

I think graduate school is a time to live as inexpensively as possible, keep your student loans in forebearance, avoid consumer debt like the plague, and prepare yourself as thoroughly as possible for your coming career.

One of the biggest mistakes that people often make during their educational careers is that they utterly believe they will have a good paying job when they graduate and they act accordingly now. During my years as a student and in the research world, the one constant I saw time and time again is that you can never rely on your future to go the way you intend it to. I’ve seen incredibly bright minds go jobless for years. I’ve seen people go through more than a decade of schooling, only to do a 180 and wind up in a completely different area.

If I were you, I wouldn’t worry about those loans as long as they’re in forebearance. Of course, I’d also pair that move with a concerted effort to live as cheaply as possible. From my perspective, going out to eat regularly and carrying significant credit card debt as a graduate student is more of a concern than student loans in a holding pattern.

At some point (maybe it was on Twitter?) you said that you set annual reading goals for yourself, like the number of books you intend to read this year. What’s your annual goal for 2010?
– Bill

This year, my goal is simply to devote an average of two hours a day devoted to personal reading – in other words, reading things not directly related to The Simple Dollar. Along the way, I’m going to alternate between fiction and non-fiction.

One big reason for doing this is that I view extensive reading to be a vital part of the personal growth of anyone who writes for a living. I also strive to read regularly in front of my children so they can observe that reading is part of a normal adult’s life. Beyond that, I simply enjoy to read.

I’ve actually penciled in a one hour reading session each weekday in the middle of the day, which should bring the goal within trivial reach.

I’ve made many goals like that in the past, and one of my problems always seems to be keeping track of how I’m doing with them.

Yesterday I sat down and wrote a small website to help me with that, and I thought that you might find it useful as well:

– Eric

That’s an awesome tool – incredibly simple to use without needing any sort of login or anything like that. I’ve actually bookmarked three of them to keep track of some of my 2010 goals.

Is anyone else using this? If you are, mention how you’re using it in the comments.

Do you have a good recipee using the crockpot to go from dried beans to cooked beans? mine ended up overcooked and mushy?
– Marie

Cooking beans in a crockpot is really simple if you actually just convert the typical way of cooking dried beans to the crock pot. Based on your statement, my guess is that you didn’t pre-soak the beans. Here’s how I cook beans in a crock pot.

First, dump the beans you want to cook in the pot in the evening before you wish to cook them. Add enough water to cover the beans by three inches, then leave them to sit overnight.

In the morning, dump off all of the water and strain the beans – a colander works well for this. Then, put the soaked beans back in the crock pot and again cover them with water with about two extra inches of water on top. Then just cook it on low for eight hours. This will get most beans to a nice level of tenderness.

If you’re finding the beans too mushy after following these steps, you might be cooking a particular type of bean too long. Reduce the cooking time until you find the right amount for what you’re cooking. Alternately, you may want to extend the time for some beans that might still be overly firm after eight hours of slow cooking.

My boyfriend and I will be getting married in the next two years, so we have plenty of time to plan. The issue is this: his family will expect a traditional wedding, while I want a nature-oriented (definitely near water) and very simple wedding. In addition, my family and friends live across the country, so while his very large family would all be planning to attend, I would have five people from back home that we’d be flying in (and that would be a big chunk of our budget).

I’d like to have a simple ceremony – basic less than $100 dress, suit for him vs a tux, simple dresses for my bridesmaids and I don’t care if they match, simple bouquets, and just coffee and some sort of dessert afterward. They will also want me to register, which I disagree with for personal reasons (grew up very poor, and registering asked people I cared about to buy me things they couldn’t afford, in fact said I expected a gift other than their presence).

I know his family will flip, and even offer to pay for a more expensive wedding, but I do not want that. How do I best cope with their reactions?
– Monica

What I don’t see in this entire statement is perhaps the most important question of all: what does he want?

It’s clear what you want from your wedding – you want a simple ceremony, and you’re apparently willing to fight his family over this. But by doing this, you’re putting him in a difficult position of having to choose between what you want and what they want without any regard at all for what he might want.

Your first step in solving this situation is to sit down with your husband-to-be and figure out exactly what he wants from the wedding without injecting what you want over the top. Remember, it’s his day as much as it is your day.

If you are in agreement about what you both want for the wedding, then you’re in alignment. Talk to the family together – or even let him lead on it.

If you’re not in agreement, you have to settle that issue first. Talk through it and figure out a solution that works for both of you, then stand up for that solution.

It’s your – you and your husband’s – day. You’re inviting others to participate in that day. Keep that in mind and don’t bow to what others want. The only other person that really matters is your husband-to-be, so focus on that.

My husband and I are thinking of starting a CD ladder this year. We don’t have a whole lot to start with and so are looking at CD’s without a minimum startup amount. I have been looking around at rates and for the 1 year ING seems to be the best for for the 2-5 year CD’s Ally is the best. My question is, would you recommend having the one year at ING and the others at Ally? Or just going ahead with all of them at Ally even though it isn’t the best for the one year?
– Shawn

There are several issues floating around here.

First of all, you need to figure out exactly what your goals are with this ladder. Are you saving for a particular goal, are you supplementing an emergency fund, or are you merely investing in cash? These goals would change how you invest in the CD ladder. A particular goal will have a particular timeframe and you’ll need to orient the length of your ladder toward that goal.

The real issue at work here is whether or not the extra effort that will go into transferring the money between institutions (from ING to Ally, in this case, when the one year matures) will actually earn you enough to make it worthwhile. Given the fairly small difference between the ING and Ally offerings in one year CDs (as I write this) and the fact that you’re investing a small amount, I don’t believe it’s worth the effort at all.

Let’s say you’re buying a $1,000 one year CD. If you invest at ING and make an extra 0.2%, you’re only earning an extra $2 on your investment. If that extra $2 causes you to spend significant extra time cashing out the CD, transferring funds to another bank, then initiating a new CD ladder there, plus dealing with yet another source of interest income when you file your income taxes the following year, it’s not worth it, at least in my eyes.

Got any questions? Ask them in the comments and I’ll try to include them in a future reader mailbag.

Loading Disqus Comments ...