Reader Mailbag: Education Begins at Home

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. Buy or rent and commute?
2. Advice to younger self
3. Handling angry coworker
4. Credit cards for other debts?
5. Handling too many vegetables
6. Promotional emails
7. Evicting a child
8. Investing small amount for retirement
9. Getting funding for a dream
10. Is television really that bad?

My son’s kindergarten teacher told me something a while back that’s stuck in my mind for months now. She simply said that the single biggest predictor for academic success for kids is the involvement of the parents. Are you discussing educational things at home? Are you aware of and involved with their education? Do you encourage them to do educational things at home?

It all starts at home. If you want to see certain traits in your children, it’s up to you to make sure they appear. Don’t expect the school district to magically turn your child into an academic success if you don’t do anything about it at home.

Q1: Buy or rent and commute?
My fiance and I are getting married this fall, and we’re deciding whether to rent or buy when we officially combine households in the summer when his current lease is up He currently commutes more than an hour each way to work, and I commute 30-45 mins each way, so we’d be moving much “closer in”. Ideally, we would prefer to purchase a home, since we would both rather that a monthly housing check go toward building equity in our own place rather than building wealth for someone else. However, we are income-rich, cash-poor at the moment (paying all cash for our fall wedding + sending his child from a previous marriage to college in the fall), so there’s no way we could put 20% down on even a very modest townhome in an area a reasonable distance from our two workplaces. He has a federal job in which, barring catastrophic failure of the federal government, he should be secure for the next 15-20 years, and that also means we won’t be moving from the general area any time before he retires – we’d just be looking to move to the most bikeable, walkable, enjoyable area within a 30-mile radius of our jobs (the closer, the better).

Normally, without at least a 10% down payment, I’d lean toward renting for at least a year so that we can build a down payment after the big savings hit of our wedding. Renting would also give us a chance to really narrow down the pros/cons of a specific neighborhood, since we’re hoping for a place that’s got good access to biking trails and public transportation and is not terribly congested for everyday errands. Problem is, foreclosures have driven the rental market here sky-high, so to rent an even smaller place, we’d be paying more in rent each month than we’d pay in mortgage + PMI + taxes on a bigger place…so there isn’t really that much chance to spend a year or two saving lots of money by renting unless we squeeze ourselves into a one-bedroom place, which is not ideal at our ages and wouldn’t allow his daughter to stay with us on vacations from college. I’m also concerned that the market is rebounding, so one or two years from now, the same homes might be much more expensive, and interest rates might not be as low, so any opportunity to save would be offset by the higher prices. However, I hate to throw away PMI each month, too….so in general, I’m really torn!

Can you suggest other pro/con factors that we should take into consideration before we decide to buy vs. rent?
– Lynn

Without knowing more details about your life, I think you’ve covered most of the important pros and cons.

The thing that would push me toward buying is the fact that your total monthly cost of owning a home is less than your total monthly cost of renting, as per your calculations above. I’m not sure that you’re including things like property taxes and utilities in those calculations, but if it’s close at all, I’d lean toward buying.

The reason for that is that if you’re essentially spending a certain amount of money to live somewhere each month, and one of those options builds equity while the other does not, you should choose the one that builds equity.

Q2: Advice to younger self
If you could go back in time and tell your younger self how to improve himself in terms of financial awareness and investing what would you tell him and why?

– Steve

The single piece of advice I’d give my younger self is to avoid all consumer debt. No credit cards, no loans to buy furniture, nothing.

I would tell him that student loans are okay to finish your education and a mortgage for your first home is okay, as is a loan for your first car. Other than that, personal debt is just far more of a negative than a positive.

Almost no investment you make will help you as much as freedom from debt will. If you’re far in debt and paying several percent interest, you have to invest and earn several percent interest on an equal amount of money just to break even. Live lean for a while instead, then start investing without that debt hanging over your head.

Q3: Handling angry coworker
I work for [a company that does creative work]. The work is highly collaborative. We spend a lot of time working in pairs or in groups of three on projects, constantly pushing each other to do better work.

One of the people in our office is jaw-droppingly talented. He sees things that none of us sees and puts out solutions so quickly and so accurately that the rest of us are just in awe sometimes.

There’s a problem, though. He has extreme anger issues. About twice a week, he’ll have a titanic meltdown where he just explodes at someone for not being good enough. He’ll say that he solves all of the issues at work and he’s tired of doing everything. He will usually end up berating a few people so intensely that they leave in tears. A few people have quit.

He does do more of the work, but that’s because his mind can come up with things and implement them in five minutes that some of us couldn’t do in two or three days. He’s just a genius.

Management puts up with his rages because of his talent, but it is really hard to deal with. I don’t like going into work because I don’t want to deal with these explosions. Other than that, I love my job. Is this something worth quitting over? How should I deal with it?
– Angela

Sit down with your immediate supervisor and talk about a plan for handling this. Obviously, the management team is going to be aware of the fact that their top performer has anger issues and that it may be driving away other solid performers. They don’t want to see those solid performers leave.

At one job that I had several years ago, we had a dysfunctional person on staff. Our immediate supervisor gave us a lot of leeway when interacting with this dysfunctional person. We were allowed to leave work for short periods to avoid potential confrontations, for example.

Assuming that the coworker is going to be retained no matter what you do, the best thing you can do is come up with a plan that gives you and other coworkers some breathing room. For example, you might want to have an informal plan where a worker who has just been berated can escape the office for a while to get their mind back on track. Work with your supervisor on this, because a good solution that can make everyone feel better is something that will help everyone in your workplace.

The best solution would be to send this top performer in for some anger management, but it sounds like that’s not in the cards, unfortunately.

Q4: Credit cards for other debts?
We are diligently and aggressively paying down about $10,000 worth of credit card debt accumulated during graduate school and a few years afterwards. The CC debt should be paid off by this time next year (hopefully earlier, though). After that’s paid, we have a private student loan we’d like to tackle. The current payoff amount is around $9,000 and it has a 9.9% interest rate. We’ve had lots of success transferring high interest credit cards to lower interest ones and knocking out debt with either 0 or 1.9% rate, so we’re considering paying the full balance of the loan off with a credit card and then paying the credit card, rather than the loan company. We could have it gone within a year if we do it. What do you think?

– Linda

In my eyes, that’s a fine plan.

Essentially, you’re just shifting debts around to reduce the interest rate you’re paying, which is a solid debt repayment strategy. In this case, you’re shifting student loan debt into credit card debt, which is a good thing because student loan debts are very difficult to discharge, even in bankruptcy. They just stick with you. Credit card debt is much easier to handle in a situation of severe financial distress.

I’d make this move.

Q5: Handling too many vegetables
I joined a CSA a few months ago and the first few shipments have been awesome. In terms of the cost of the vegetables, it’s really a great deal per pound. But that’s also the problem. There are so many vegetables that we just can’t eat them all. We threw out about ten pounds of vegetables a few days ago and it felt like a giant waste. Do you have any suggestions?

– Shelley

I’d simply learn how to preserve some of the stuff coming in from the CSA. Freeze some of it. Can some of it. You can even share some with neighbors, if need be.

Of course, this works well here in Iowa because our CSAs are seasonal. In some southern areas, CSAs can go year-round (or nearly so). If this is the case for you, preserving isn’t going to help, so I would suggest finding a neighbor to split the CSA with.

For example, if you’re paying $300 a month for this abundance of vegetables and fruits, see if you can find a neighbor or friend to pay $100 or $150 a month for a third or a half of your share. This way, you have a more manageable amount for yourself and your friend is getting a reasonable amount, too.

Q6: Promotional emails
Another good tactic is to unsubscribe from promotional emails. I get 10-12 per day, all from companies I’ve ordered from in the past. Each one has some kind of offer – free shipping, percentage off, etc. I’ll catch myself looking for something to buy just because I don’t want to pass up such a great deal!

– Andrew

This is a good idea if you’re getting such promotional emails mixed in with your normal email.

My tactic is to use a special email address just for these kinds of promotional emails. If I sign up for a customer rewards program, for example, I’ll use that other email address. That way, the promotional emails go straight into a separate account.

When I am considering making a purchase, I go into that account and search the emails to see if there are any coupons available. You’d be surprised how often I actually find a useful offer using this tactic.

Q7: Evicting a child
I have a 28 year old son who lives in our basement. He hasn’t even looked for work in three or four years. We have insisted over and over again that he try to get a job, but he mostly just spends his days playing computer games and reading books from the library.

My husband wants to make him move out, but he has no way to feed himself with no income or keep a roof over his head. I’m just not sure what to do.
– Lois

My suggestion would be to save up a lump sum – say, two months of living expenses in a small apartment – and then kick him out with that lump sum in hand.

If you don’t do this, you’re going to have him living in your home for the rest of his life. He does not believe he has any reason to move out, and you’re not giving him one. He has shelter, food, water, entertainment, and clothing. Why leave?

If you can’t do that, then cut off his services. Eliminate his cell phone and internet access, for starters. Tell him that they have a cost and he’s old enough to start covering that cost.

Q8: Investing small amount for retirement
I’m a college student looking to invest $1,000 for retirement. I currently have no debts, nor am I considering accumulating any in the foreseeable future. I’m on the hunt, but currently unemployed, so my first choice of a Roth IRA is currently ineligible. What would be your advice as to where I should stick this money? I’m intending to leave it there for the long term.

– John

You can have a Roth IRA whether you’re employed or not. Roth IRAs are independent of employer. You set Roth IRAs up yourself with your brokerage of choice.

In fact, that’s exactly what I suggest. Open up a Roth with a good brokerage (I suggest Vanguard or Fidelity), put the money into that account, and invest it in a target retirement fund that aims for the age when you want to retire.

You may find, though, that you want to hold onto that money until your employment situation gets resolved.

Q9: Getting funding for a dream
I have a really really good idea for a simple product that I think lots of people will use, probably most Americans and Europeans. I don’t even know how to start with this, though. What should I do to get funding to start making this thing?

– Andrew

The first thing I would do is try to prototype it. Can you try building a version of the item yourself?

If you don’t have this level of technical skill, you’re going to have to partner with someone to move forward, whether it be a person with that level of technical skill or a company.

If that’s you’re situation, you’re going to want to make sure that person doesn’t steal your product. The best protection you’d have in this case is a nondisclosure agreement. Your first step here is to look for a lawyer that focuses on intellectual property to help you draft such a thing (and perhaps give you additional suggestions on what to do with your idea).

Q10: Is television really that bad?
I hear so often that TV is terrible for you. I watch a lot of TV. I love TV. And I’m also not sure what else to do at night. Every day I get up early and go for a run around the river, make a nice breakfast and pack a nice lunch, go to work for 9 hours, read during my lunch hour, ride my bike to and from work, and make dinner with my boyfriend. Sometimes we’ll have dinner with friends, but we always end our day with a couple hours of TV on Hulu.

It seems like people are against TV because (1) the commercials (but we have Hulu programmed to only show previews for shows and movies) and (2) it takes time away from more important things like spending time with loved ones, getting exercise, reading, being outside– all things that I do every day.

By the end of the day, I don’t usually feel like playing games, and if I feel crafty, I do crafts while I watch TV. It doesn’t seem like my lifestyle is unhealthy in any way, except that it is so ingrained in me that watching TV is a bad thing.

Can you tell me other “healthier” ways to veg out at the end of the day– Or tell me that my lifestyle is balanced enough that 2-3 hours of TV per day isn’t so bad?
– Charlene

I don’t think television in moderation is inherently bad. You’ve named most of the criticisms I have with it – the commercials and the time consumption (it’s a pretty sedentary activity, both from a physical and mental perspective). I’d add a third – the product placement in the programs, which is advertising that you can’t really avoid.

I think the big concern people have with television is that it takes away from the balanced life you describe. Many people are employed nine hours a day and also enjoy an hour commute. They also sleep eight hours a day, and spend an hour on hygiene, an hour and a half on food prep and eating (across all meals), and an hour on household tasks (I’m estimating here to make a point). That leaves two and a half hours for other activities a day. If you fill those remaining hours with television, your life consists of work, sleep, television, and basic life maintenance. That’s it. That’s a pretty tiring life.

In my own life, I watch very little television. Sarah and I watch perhaps three programs (half an hour or an hour long) per week together, and Sarah watches perhaps one or two more beyond that. I mostly do this because I’d simply rather be doing something else. Television in abundance just isn’t my thing.

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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