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.
2. Historical figures worth reading about
3. To move or not?
4. Establishing routine with children
5. Target credit card
6. Online overspending
7. Hitting bottom
8. Podcast organization?
9. Splitting home rent
10. Extra books
We’ve spent the last few days camping near beautiful Lake McBride here in Iowa.
I love camping in the fall. The fall colors decorate the trees. The evenings are chilly enough that you really enjoy the campfire and the sleeping bag, but the days are warm enough that you can feel completely comfortable in jeans and a t-shirt.
I’m fifty something so it’s been a while since my kids had to do fund-raisers. A money saving idea is to purpose in your mind NOT to participate in them from co-workers. They will soo get the idea to not even ask you. Twelve dollars for cookie dough for playground equipment at the day care?? Then folks feel guilty for not putting their name on the list knowing as they sign up “I shouldn’t be doing this (budget wise). The next day the co-worker came in with $30 coupon books for his older child. It takes practice to say “no” to these. Gift wrap was big one year when you can get a ton cheap at the dollar store. Personally I’d rather give directly to the fund raise and bypass the gimmick. Then again you never know if any of that money goes to what is was set up for.
Sarah and I have mixed feelings about this.
If a kid’s parents are just shoving a fundraiser in our face, we absolutely just say “no” and walk away. There’s no reason to toss money into that.
On the other hand, we occasionally have kids that come to our door. They live in the neighborhood and they’re often summing up a lot of courage to go door-to-door asking for people to support their fundraiser. That kind of experience is a valuable one in a child’s growth, and so we often end up buying something inexpensive from them.
It really depends on how it’s presented, I guess. If the child is putting themselves on the line and putting in the footwork for the sale, it’s a lot different than some adult just badgering me about their kid’s fundraiser.
Q2: Historical figures worth reading about
I love reading history and historical biographies. I particularly enjoy finding biographies of people who clearly have a story that relates to the world today. I know you’ve read a ton of biographies. Do you have any suggestions along these lines?
My biggest suggestion by far is to read about William McKinley.
His campaigns for president in 1896 and 1900 are the first ones that will really remind you of modern campaigns. His campaign manager, Mark Hanna, will remind you eerily of Karl Rove. The entire sense of a “nation in transition” of his era is very reminiscent of today.
I’ve read a ton of books about McKinley; the most enjoyable was The President and the Assassin. Though it’s not the most thorough, it is the most enjoyable.
Q3: To move or not?
Currently my wife and two boys (6months and 2 1/2) are living in one of the most expensive areas in the world – just north of Sydney, Australia. We LOVE the location and LOVE the lifestyle (including great in-laws who help a ton with the kids and what not – more on this). The problem is that it is expensive. Two and a half years ago we bought a new 2b/2b apt at a discount off the plan for $600,000. We did this largely to gain some stability instead of renting and be closer to our family – they’re about a half-mile up the road. Having two young children this has been great. Financially we’ve been breaking even while my wife was able to take 3 months off with our first child and 1yr off for our second. For debt, we have made no progress on our 600,000 mortgage (part of debt to family for low interest and fortunately an apt right next to ours and exactly the same just sold for $630,000 about 6 months ago – housing has remained very strong in Sydney) and a $10,000 car loan. We have $15,000 in savings. We have currently decided to move in with our in-laws for as a temporary situation to figure out what we’re going to do – something has got to change very soon. This allows us to save and extra $550/wk that we would be paying to our mortgage (and, in Australia, the interest that you pay off on an investment property is a tax deduction – a bit different to the US – so we’ll get a sizeable tax return in a year’s time). So our in-laws are amazing for helping us out like this. It will certainly let us stop the bleeding and even get ahead a bit but it is very short-term solution (6-12mo – depending if they can put up with us).
Now that our baby making phase is coming to a close we are starting to look around corners and realise that it isn’t very sustainable for us to live where we are. To move up to an apt with a 3rd bedroom we are looking at $700,000+ (no way can we get even a townhouse) and rent is only marginally cheaper which doesn’t seem worth it w/o gaining any equity. While we haven’t made any headway on our mortgage fortunately we’ll essentially get the money we’re forking out in mortgage payments back when we sell. It is just expensive here.
So, not unlike many other young families we are looking at moving to an area that is less expensive. There are certainly areas around Sydney that offer improvement. We would be in a situation where the cheaper the living the further we would be from family and friends. I know that you just wrote about this in your move that you made away from your family and friends and it was really inspiring.
What is unique in our situation is that we have a connection just south of Washington DC that presents a possible exciting work opportunity for my wife. (I’m American and she is Australian so it is ironic that she could be the one finding work in the States.) I know that N.Virginia is still a pretty expensive area but definitely cheaper than where we are now. We met in the States and have always said that we wanted to raise our kids in the States but we were hoping to do it when they were a bit older. This is an opportunity that we weren’t really expecting.
Finally, the question: We’re having a really tough time trying to really think it all through to weigh out what is the better situation for us. I’m hoping that you might be able to lay down some parameters you might be looking to have/questions that you would need answers to in order to make an educated decision.
The tough parts are in regards to the cost to move and that we have a pretty stable situation here for the kids. We would likely be making a bit more money in the future here when my wife goes back to work full time but we wonder that, when the kids get into school (and the value of having the in-laws for help greatly decreases), the high cost of living, and the commutes we’d likely have with our jobs we might be missing out on an opportunity that could be a grind for a year or two and but be significantly better than what is on the horizon for us here. How would you think this decision through? I definitely don’t expect you to help with the decision but just help on how to weight it all up.
If I were in your boat, I would just make a giant list of “pros and cons” for each of the options and use them as a basis for comparison.
I’d focus on things like total income, cost of living, availability of family for support, cost of annual travel to spend time with family, taxation, quality of life, and so on.
Some of those you can figure out through research. Others require soul-searching. Your final answer will really boil down to how much you value the non-financial things.
Q4: Establishing routine with children
As our baby has grown into a toddler, we’ve had a difficult time establishing a bedtime routine that really works for him. It seems like his bedtime is really variable and that ends up making some mornings disastrous. Some evenings, he’s really energetic and other evenings he’s falling asleep on the floor.
At our house, the bedtime routine is very clear and it starts at a pretty precise time each night. We start our routine at 7:30 PM, which seems perhaps a bit early, but our goal is to ensure that our children get a full night’s sleep.
Our routine starts with a bath, followed by putting on pajamas, brushing teeth, then gathering around for bedtime stories, then some quiet songs and other things, then the lights are off and the children are expected to go to sleep.
The kids are rarely energetic at this point, as most of the latter part of the routine is pretty calm. If they are still energetic (and this usually just applies to our youngest one at this point), we sit in the room until he falls asleep (I usually read).
Q5: Target credit card
Every time we go to Target, the cashiers are always plugging their Target credit card where you get 5% off every time you shop there. We probably go to Target twice a month for groceries, dog food, cleaning supplies, etc. We probably spend $50-100 every other week there. We’ve always shied away from picking up an extra card – we use another card that has a decent rewards program, though it is less than 5%. We always pay off our existing account every month and would do so if we had another card. My wife and I both have excellent credit ratings. Are we leaving money on the table by not signing up for this card or would the small ding in our credit for opening up a new account and the hassle of an extra card counterbalance any savings?
It depends on how much you shop at Target and what your threshold for “hassle” is. If you spend $200 a month there, the card will save you $10 a month.
I wouldn’t worry about the “ding” on your credit. It will be incredibly small unless you start carrying a massive balance on this new card.
Given the amount, I would probably find the card worth it.
Q6: Online overspending
How do you keep from spending too much at online stores? Every time I am at a computer for very long I seem to find myself clicking and buying something at Amazon almost without thinking about it.
I avoid keeping my payment information stored at online sites. If they want to store it, I delete it.
This way, if I want to buy something, I have to dig out a credit card to pay for it, which usually breaks my focus on the computer for long enough to make me second-guess the purchase.
If that doesn’t work, run a website blocker, which will help you block out the temptation. Again, it injects just enough of a stop for you to re-think your potential purchase.
Q7: Hitting bottom
Until about 3 years ago my husband and I were doing OK financially, at least we thought we were. In reality we were blissfully ignorant about just how precarious our situation was. We had 2 incomes, 1 child, flexible work schedules and my dad who provided free childcare 3 days a week. We were getting by. When our son was born we signed our daughter up for reduced daycare through my husband’s job, relied on my dad to watch our son still and struggled a bit with the extra expense but managed to squeek by. Then my husband was laid off and we not only lost our reduced daycare but his flexible schedule (which allowed us to use daycare only 3 days a week) and he took a significant pay cut with his new job (which thankfully he found rather quickly and was only out of work for a bit over a month.)
The same week that my husband started his new job my aunt suffered a stroke and my dad needed to be with her (she has no other family) and I was laid off from my job. In losing my job we again lost a flexible schedule, we lost our health insurance (we were able to get coverage through my husband’s new employer but the plan was significantly different and no longer covered our son’s prescription formula which cost us over $600/mo) but we ultimately lost my dad as a full-time sitter as well.
We spent the next 2 years struggling and living paycheck to paycheck and ultimately made the difficult decision to sell our house, pay off our mortgage entirely (we were hit with penalties because we had fallen behind on payments) and moved about an hour from my friends and family to a new home that we were able to pay cash for. Unfortunately,neither of us had gone through the home buying process before (our previous home had been passed down in my family) and we seriously miscalculated the expenses involved in buying, selling, moving and again dealing with the mortgage fees. We had enough money to just pay for the new house with nothing left over. (We had calculated about $30k extra in our pockets to pay off all of our remaining debt and allow us to start a savings plan.)
Since our move in January, I feel like we have had one crisis after another that has put us further behind financially, including a surprise hit in both state and federal taxes from my time on unemployment. (I am no longer collecting but was while I was still in my old residence and was still trying to find work.)
I feel like I have done everything possible, short of selling my wedding rings, to get caught up and each time I take 1 step forward I feel like I end up taking 3 steps back. I sold my car and paid off some stuff and bought a clunker with the proceeds. I’ve essentially given up all social outings etc that cost money except rare opportunities for discounted passes for the kids. We use coupons, shop sales and only buy what we NEED for the kids and nothing more. (I even broke 2 teeth and have been suffering without seeking help because we don’t have the $ for the copay.) I make my own laundry soap and dishwasher detergent, we don’t have a house phone and have recently given up cable and internet.) I do have a pay as you go smartphone with a shrinkage plan that is currently at $50/mo but will shrink to $35 with regular payments.
We are living paycheck to paycheck (literally scraping together change to pay for gas for my husband’s commute) and just can’t make headway. I’m no longer able to work due to numerous back issues so my picking up an additional income is no longer an option. My husband is applying for a 2nd job but I’m worried about the toll this could take on his health and his absence from the kids.
My husband reminds me that we are mortgage free so we are better than we were a year ago but this is really taking a toll on me mentally. I am losing sleep and suffering anxiety as I worry about what’s next in our world. I know we just have to get our debts paid off and we’ll be able to survive although not truly thrive financially, but I feel like we keep incurring new debts while trying to pay off the old.
If you own your home, you’re in far better shape than most people. If a true disaster strikes, you could tap that equity. The fact that you’re not tapping that equity indicates how good your situation is.
You have a pretty nice level of security right now. What you need is patience. Things are heading in the right direction, but it’s just not a quick process.
Instead of thinking about your progress on a week-over-week or a month-over-month basis, focus on comparing where you are now to where you were a year ago or two years ago. That type of comparison really shows off how far you’ve come.
Q8: Podcast organization?
I’ve started listening to podcasts on my way to work each morning using the iPod Touch my wife gave me for my birthday. It’s a lot better than the morning zoo radio shows! My question is how to keep them organized. Is there a trick to just listen to the new podcasts each morning?
My technique is to only store the latest copy of any given podcast on my iPod, which is what I use when I walk. That way, I know I’m listening to the latest things. There’s nothing newer available.
That being said, I subscribe to more podcasts than I have time to listen to. This means I miss out on episodes sometimes, but I really don’t worry about it too much. I’d rather have more episodes than not enough when it comes to something that’s free and doesn’t take up physical space.
For you, you should just look for a few more podcasts to listen to and just update your iPod each night.
Q9: Splitting home rent
How should two people split the “rent” if one of the tenants owns the house? A good friend of mine is looking into purchasing a house with the intention of sharing it with me until he starts a family. I figure that between the mortgage interest deduction (which he will take since he already itemizes) and the fact that he is building equity means that I should pay less than half of the mortgage payment, perhaps significantly less. I’ve found tons of articles online offering advice on how to split rent but nothing addressing the possibility of one tenant being an owner. Do you think it would be fairer to look at this from a market perspective (i.e. I pay something comparable to what I would pay if I were renting another house in the area, regardless of the mortgage) or within the context of the house itself (i.e. determine a percentage of the mortgage for each to pay and stick to that)?
If he is the owner, then you are essentially a renter. He can charge you whatever he wants, and you can take it or leave it.
On the flipside of what you’re saying, if you miss a payment, you’re not really risking anything at all. It doesn’t affect your mortgage. It doesn’t affect your credit. There’s little risk on the line for you. For him, missing a payment can be a real problem.
I think splitting it is reasonable. A 60/40 split or more is generous.
There are lots of options.
If you want a return on them, the easiest method is probably a yard sale. Some used bookstores will give you a small amount for them, too. You can also swap them using services like PaperBackSwap.
If you just want them gone, you can donate them. See if your local library wants a look. You can also simply donate them to your local Goodwill store.
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.