Reader Mailbag: Basic Manners

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Bills in collection
2. First steps toward reading
3. Freelance work and being assertive
4. Network marketing thoughts
5. Bedtime reading
6. Finances, style, and a relationship
7. Premarital money to-dos
8. Cloud security and personal information
9. Certified pre-owned car question
10. Retirement or house?

The other day, I watched a person drop a bunch of their items on the street while talking on a cell phone. Another person stopped and gathered up the items while the cell phone talker just kept talking, and when the cell phone talker got her items back, she just walked away. No thank you, no nothing.

The person who helped had a bit of a stunned look on their face. When I approached, I said thank you to the helper, and she said, “At least someone is a human being around here.”

It doesn’t take much to say “please” or “thank you” when someone does something for you or when you’re making a request of someone, but it can often make a difference between someone walking away feeling good about themselves versus someone walking away thinking you’re a self-absorbed jerk.

Q1: Bills in collection
I am working part-time (less than 20 hours a week) and currently seeking more gainful employment. I don’t make enough to get by and rely on help from others to pay my bills right now. I’m truly broke (like using coffee filters for toilet paper broke). I have debts that are in collections, and I can’t make payments on them. Is there something specific I need to do in regards to those accounts? Should I call the agencies and tell them there is no way I can make payments right now, or will that just encourage them to begin harassing me again (at the moment they seem to have given up on getting anything out of me)?

– Tanya

If you can’t afford to make payments on a debt that is in collections, then you’re either going to have to declare bankruptcy, negotiate with that debt collector, or avoid it until the debt goes away. If you truly cannot pay the debt, I don’t see how contacting them really improves your situation.

Most likely, if they’re not harassing you, they’ve assumed that you can’t pay the debt. They may try to sell your debt to a different debt collection agency who then may try to contact you again, they may just try again in the future, or they may just give up on you.

What you need to decide is what your approach will be if you are contacted about the debt. If I were in your shoes, I would simply tell them that I cannot pay this debt and that they should no longer contact me except in writing.

Q2: First steps toward reading
I know you’re an avid reader and you have children of an age where they’re learning how to read. What did you do to get the ball rolling? I have a three year old and I’m starting to look for some basic things to do to start the process of learning how to read.

– Megan

The first step is to just read to them a lot, particularly from books that are constructed with simple words. Books by Dr. Seuss are a good starting point, but there are a lot of great books for young children and very early readers out there. As you read, point to the words on the page as you’re reading them.

Another tactic we’ve found a lot of success with is flash cards for simple “sight words.” All we did is take a common list of sight words and make a flash card for each one. We just made them on card stock, making about eight cards to a page. Then, we’d run through this stack of flash cards with them a few times a day. We started with a small stack of simple words, gradually added harder words to the stack, and eventually began removing the ones that they knew every time instantaneously.

A final thing you can do is show your own passion for reading. Read something that interests you when your child is in the room. Instead of flipping on the television when everyone’s in the family room, pick up a book and read it. Your children will pick up on those cues more than you think.

Q3: Freelance work and being assertive
I’m a trained copy editor and article-writer with lots of professional experience, both full-time and freelance. I’ve written brochures and resumes, previews and reviews for arts/entertainment events, and MANY interview-type articles where I speak to artists, business owners, chefs, and other interesting people on assignment for various small publications in my area (and a few prestigious regional magazines). I have lots of copy-editing experience for small publications and book publishers (I proofread their book catalogs) and more.

I’m not very confident or assertive. How can I ask someone to provide a reference for me when I’m not sure they would, and when our work relationship ended on terms that I’m not sure were excellent? The editor of one state tourism magazine loved my monthly column and communicated with me a lot for about 2 years. Then she shifted things so that I reported to an art director instead of her (the editor), but never told me that — she just stopped being at all friendly or conversational in her e-mails to me, and started to say “why don’t you ask the art director about that” until I figured it out. It felt awkward, and after another 6 months or so I had enough work on my plate that this job made the most sense to let go of, so I sent this editor a nice 1-paragraph e-mail stating how wonderful it had been & that I was grateful for the opportunity, hoped to work together in the future, was giving her 2 months’ notice so she could fine someone, etc, and her only response was: “I’m fine with that.” I got very insecure about that being her only reply, and I’m still afraid to approach her for a reference. Another of my most prestigious former employers, owner of a small free monthly publication, loved my work and I did great copy-editing & writing for them, but our work relationship ended due to them ceasing to pay me. They still owe me for my last 2 months of work, and expressed indignation that I politely refused to extend them any more “credit” and copy edit a 3rd issue for them once they had stopped paying me. I don’t feel great about using them as a reference. What does a person do to get good references when maybe the endings were awkward?
– Sylvia

The general rule is to simply avoid getting references from those situations. It’s hard to tell what they’ll say about you, so it’s not even certain that the reference would be a good one anyway.

Often in those situations, there are other things going on that you’re not aware of. In the first example, there may have been a shake-up in the organization that your original contact was unhappy with and they bundled you in with their negative feelings on the shake-up. With the second one, it looks like a company was treading water and were bothered that you wouldn’t throw them a small life preserver (I’ve been in situations like that, actually).

Your best bet if those situations come about is to actually address them when you feel the situation changing. Just simply tell the person that you’re getting a sense that something’s changing and you want to know if you can help, even if it’s just listening. You’d be surprised how many things can be defused with contact like that. I can certainly say I wish I knew that trick earlier on in my career.

Q4: Network marketing thoughts
Have you researched or reviewed LIFE Business and their 8 f’s? I have family members who have gotten involved in this program which seems to have its roots in Amway and similar sales models. It seems like a repackaging of the pyramid model for making money. Guy on top makes lots and as you get others below you you make more and more, but they say it is not like that at all. It is supposed to be a way to make a good income and have financial independence.

– Wilson

From their FAQ: “LIFE offers members the opportunity to profit from the sale of LIFE’s materials through a competitive compensation plan. LIFE’s goal is to flow the money typically spent on marketing and advertising to the leaders who help build the customer base for LIFE materials. Further, the founders of LIFE are dedicated to serving in the field alongside LIFE members – a unique situation that enables the compensation structure to maintain as its chief consideration the flowing of profits to the field and not to corporate shareholders, investors, or other interested parties, as is true with most companies. What this means is the LIFE compensation plan can offer one of the highest margins in the industry, with a pay plan that provides 50% of sales on a graduated bonus chart, and additional bonuses (upwards of 15% at the time of this writing, with plans for more depending upon profitability) in additional bonuses for developing leaders in the field, all while keeping prices competitively low.”

In other words, it’s pretty much a typical network marketing plan, like Amway, Pampered Chef, and so on. In each case, you make a little bit of money through the hard work of selling a product (in this case, leadership materials), but you make a lot more money by recruiting lots of people to sell that product and put you down as their referral.

I don’t like these businesses because eventually the people selling the product come knocking on my door and I don’t like to be sold products I’m not interested in, particularly when friends are trying to do the selling. It feels like they’re cashing in on my friendship with them, and most of the time a lot of the money from that sale is going to whoever that “friend’s” referral is, not to my friend.

Q5: Bedtime reading
How long do you read to your kids before bedtime? What do you read to them? Do you focus on picture books and use the pictures as a visual guide or do you just read the text to them? Does it change based on age? I’m trying to get a feel for reading to my twin sons who are 1.

– Randy

A typical bedtime involves me reading three short books, one selected by each of our children, that are roughly age appropriate. Our oldest, for example, chooses from books that are far more advanced than the ones our youngest chooses from. We also read a chapter from a longer, ongoing book. The book reading process takes from twenty minutes to half an hour each night.

The first three books are heavily picture-oriented and we certainly do use the pictures as part of the reading process. I hold the book so that all three kids can see the pictures and I point at the words on the page as I read them. We also talk about what’s going on in the picture and (if the book is new) guess what’s going to happen next.

With the chapter book, I take a more passive approach. I usually dim the lights and use a small light to read that one by while the kids are each nestled in their individual beds. The focus here is on the story and using imagination a little bit more. If I use a word they’re unfamiliar with, they know they can stop me and I’ll explain what I mean.

Q6: Finances, style, and a relationship
I am in a committed relationship since a year and we are planning to get married sometime by the end of this year. I had a two fold question regarding my gf. Before I start, I love her dearly and I know she is the best, most innocent and pure person I’ve ever met.

My gf, for some strange reason has this strong perception that unless something is bought from an expensive store it is cheap stuff. She is a big fan of Yankee candles and buys a lot of $25 candles. I am confident that neither she nor I can make out the difference if a yankee candle or any other *decent* candle has been burning in the room for an hour. I beg for her to buy stuff like this at discount stores. I try to get her to buy the very same yankee candles at TJX/Marshalls that cost 1/3rd the price. But she believes those are *all* inferior candles and dont smell the same. Of course, candles is just one example, this goes on with almost any product. Now I am not cheap, I believe in good quality and buy mostly good branded clothes, but I don’t see any difference in a Calvin Klein pant at Filenes or at Macys, she does.

I know I might get a lot of dirt for this but my gf has a really bad sense of style. She insists on wearing clothes that a lot of people have told her that they wouldn’t wear it if people paid them to wear it. She does not appreciate me pointing out if something she’s put together is not looking good. There are multiple times when I am embarrassed by the things she wears. Please dont get me wrong, I truly understand each one has their own style but somethings are just flat out no-no. One example, she uses pink, italics, font size 13, font: Curly as her office signature. I’ve tried to make her understand, sent her numerous articles to show how this is not acceptable in an official email. But she refuses to make a more subtle signature. She loves my dressing sense and allows me to show her what to put together time and again. She has been stopped by absolute strangers on the street and told that she looks stunning (true story). Almost everytime she wears something I buy for her she has received loads of compliments. She insists on making me pick all her clothes from now, but she will not throw some of the things that will make people from 1990s cringe. We almost broke up because she wanted to use her 100% polyester blanket over using one of my 100% cotton blanket – because I don’t like anything she owns.

I’ve tried being subtle, I’ve tried having her ask any of my/her friends for second opinions, I’ve tried to tell her indirectly – but it always falls on deaf ears. I am worried that this is slowly starting to build up in our relationship and might cause problems in the future. I do accept that I personally love constructive criticism a little too much, I believe it is what helps one improve themselves. I just wish she was the tinniest bit more open to constructive “suggestions”.
– Mark

It might be that you love her dearly, but this doesn’t feel like compatibility. If you don’t feel like you can sit down and talk to her straight out about these issues, then you’re going to have a disastrous time when major issues like a sudden unemployment or an unexpected pregnancy happen later on, particularly when those issues bring up deeply mixed feelings for you.

A relationship works when both people can really put everything they’re feeling on the table at any time. The further you are from that, the more strain your relationship is facing.

It sounds like she has personality traits that bother you. If you can talk about them with her, you can get past them as a couple. If you can’t talk about them with her, they are going to fester and drive you apart. It’s the communication that makes the difference, and that’s what is lacking here.

Q7: Premarital money to-dos
My fiance and I are engaged to be married in the fall of 2012. We’re both 40, and we’ve spent the last couple of years digging out of pretty deep financial holes — mine, from a two-year stint of full-time elder care of a parent followed by unemployment; his, from a previous marriage that involved profligate spending and enormous consumer debt. Using You Need A Budget software individually, we have finally found a budgeting system that really works for us, and for the most part are doing well: I have paid off all of my credit card debt, and I’m close to paying off just about $1500 of other old medical bills and collection items. I’m employed full time, make $70K annually, and have a $22K car loan at 0% for 4 more years and a $52K mortgage at 7.5% on a condo worth about $100K with 20 more years on the mortgage. I’m in the process of refinancing the mortgage, not so much to lower the payment but to reduce it to a 15 year mortgage with no PMI. He makes about $100K annually, has $10K in remaining credit card debt, and no other debt, and he rents a small house that is over an hour in traffic away from his job. Neither of us has much retirement savings at all, though we both work in jobs that will provide modest pensions assuming our pension system doesn’t collapse. He has 20 years of pension credit, while I only have 7. His son, who lives with him half time, is a high school senior and may attend college in the fall.

It’s difficult to prioritize from among our financial goals, but in short, they are:
Short term: fund our wedding, find a home for the 3 of us closer to his job after his son graduates high school, fund 1/2 of his son’s college tuition/room/board, get out of debt
Long term: save for retirement, buy investment real estate properties, travel both before and during retirement.

We have banked and budgeted separately until now, but we just opened our first joint checking and savings account for our joint wedding savings, and we both share and talk about each other’s YNAB budgets. Aside from writing down our financial goals more specifically, building a joint budget that points us toward our goals, and supporting each other in sticking to a joint budget, what else should we be planning before the wedding? Where can we find more about how to budget for our changing tax situation, since we’ll be taxed for the whole 2012 year as married rather than just the months after the wedding? Should we adjust tax withholding now, and if so, in what direction? Should I add him to my existing deed and/or mortgage, or would we need to take out a whole new mortgage jointly? We agree that we want transparency and joint decisionmaking regarding money, but are there any downsides to joint banking? (I’ve read in two different places online that “separate bank accounts are a good idea if one partner entering marriage has credit card debt that the other does not want to absorb”…but I don’t see how joint vs. individual accounts makes any difference in that equation!) Do you recommend any books or blogs that focus specifically on finances for couples?
– Jennifer

The best book for couples I’ve read is Smart Couples Finish Rich by David Bach. It’s really a solid book for the financial issues that a couple will have as they come together and as they stay together.

Be aware that much of the financial advice pertaining to couples that you read operates under the assumption that there’s a better than 50/50 chance you’ll wind up in divorce. That’s a painful reality to hear about when you’re moving toward your first marriage, but that’s the truth of it. Advice pointing people toward maintaining separate accounts is great advice if you’re assuming that the marriage will likely end in divorce.

While that may be great financial advice, it does run contrary to the elements that make a marriage work: openness, honesty, and communication. Shared banking pretty much goes hand in hand with these traits. It requires you to be honest and open with each other about your finances and to communicate about them. Separate banking doesn’t preclude them, but it makes it much easier to back away from such openness when it becomes challenging or inconvenient.

Q8: Cloud security and personal information
How secure do you think it is to save information about yourself online? For example, let’s say I wanted to create a draft of my will using Google Docs. Would this kind of thing be secure there?

– Andrew

Google Docs works great for creative collaboration or sharing. That is what it is designed for. If a security breach happens with a short story you’re working on, it’s really not a significant deal.

However, if a security breach happens with your social security number, your bank account information, and so on, it’s a gigantic deal.

Thus, you should always minimize the access and availabilty that others have to such information. I’m wary about having such information on my own computer, for example, let alone on Google’s servers or anywhere else like that.

Q9: Certified pre-owned car question
My husband was recently in an a car accident. Luckily, no one was seriously hurt, however, my husband’s car was totaled. We expect to get about $5,000 from the insurance company for his car. We also have $1,500 saved for a car so far and about $1,200 from a work bonus. That leaves us about $$7,700 to buy a “new” car. We were planning on/looking at buying a certified used car. What is your opinion of the whole certified pre-owned car process & value…is it worth it, or is it just a way for dealerships to make more money? What advice do you have for first time car buyers?

If we do decide to go the certified used car route, most of those cars start at about $10,000. We have a large emergency fund ($12,500 + growing) which we can pay from. However, my husband is trying to build his credit history so we can eventually get approved for a mortgage. I have a great credit history & score (764), however, I am a SAHM with no income, and my husband has only had a credit card for a few months. We were thinking about making up the difference by getting a car loan from USAA, however, I’m hesitant since we can “borrow” money from our emergency fund with no interest. If we can get a good interest rate on a car loan through USAA, do you think that it is worth it to take one in order to help build my husband’s credit history/score? If so, at what interest rate do you think would it be worth it?
– Kelly

What’s your priority? If your priority is price above all else, then avoid the premium that comes with the certified pre-owned label and shop around carefully for cars without it. You’ll find lower price points on cars without that label, and if you can find some warranties and guarantees pertaining to the vehicle, so much the better. If your priority is avoiding a lemon, however, then the certification process is worth it.

I basically view it as gambling. If you buy a used car, you have some chance of getting a bad used car with a lot of problems. It’s a relatively small chance, but it’s still there. The certified pre-owned label basically says, “Pay a little more and drastically reduce the chances of getting a lemon.” Is that worth it to you? It’s not something you can really run the numbers on, not even on the aggregate. It really comes down more to what you personally value.

In your situation, I would probably avoid debt when buying this car. I’d buy a car that actually costs significantly less – say, $5,000 or so – and then start saving seriously for the replacement for that car. The $5,000 car won’t last as long, but it also won’t depreciate quickly and the insurance should be really low, making it easy to save up for the next car. In three or four years, you’ll get $500 or $1,000 in trade value for that car toward your next one, you’ll have the $2,500 you saved from the first purchase, and you’ll have the money you saved up along the way, which should be more than enough to get you to the point where you can pay cash for that certified pre-owned.

Q10: Retirement or house?
Here is a question I have about prioritizing between a house and retirement. In working on my our next budget my wife and I had in mind that two priorities were we would increase our contributions 1) retirement savings and 2) buying a house. We had a 3-5 year plan of moving from our current townhouse (owned) into a single family. After talking to a few people we realized it might be advantageous to take advantage of the current interest rates and move that time line up to 1 year. We will have about enough to make a 5% down payment with our current plan. We are considering not increasing retirement contributions (currently at about 7%) and instead increasing the down payment. This would give us closer to 7% down payment thus reducing PMI.

Second option, this one I know I saw in the reader mailbag the other day but I did really feel like there was an exact answer. Given the above situation would you recommend using some money from our emergency fund to have a larger down payment and avoid PMI. Current emergency fund is about 4 months. We both work (different companies and industries) so the chance of both of us loosing our jobs at the same time is slim.
– John

Are you going to sell the townhome when you move? If so, how much are you expecting to raise from that sale?

If you’re planning to sell it, you may be able to avoid PMI entirely when you make this move. After all, the value of the townhouse is likely more than 20% of the value of the home you wish to buy. This would be an issue to talk over with a potential lender, simply to find out if a bridge loan (which is what it’s called when you borrow money against your first home to help buy the second) would work for you. If this is the case, I would increase retirement savings right away.

If you’re going to try to keep the townhouse while also buying the new home, I would keep saving for a while. I’d wait until I could avoid PMI without stripping my emergency fund, but I would leave my retirement contributions as-is.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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