Reader Mailbag: Filling in Weekends

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. Fundraising for starting a nonprofit
2. Thoughts on tiny homes
3. Financial benefits of marriage
4. Cell phone options
5. Student loan question
6. College savings
7. How I make money
8. High cost of living advice
9. Learning about investments
10. Books at library

The old tradition of summer has begun. Our calendar slowly fills in with events and guests and short trips and other things. Before long, our summer becomes more intense than the other seasons because of all of the events.

It’s better to be busy than to not have anyone who wants to see you, I guess, but it often feels like there’s no chance for even a lazy afternoon at home during the entire summer.

Q1: Fundraising for starting a nonprofit
I have been a pastor for the past 16 years. Started right out of college at age 20 and have been loving it. I am currently looking to start a new ministry working with parents with at risk/strong-willed children and starting a new church. The ministry to parents will one day earn it’s own income, since parents will pay for those services.

I was wondering if you have any advice on ways to fundraise or even to starting up a business that come generate income so I can focus what I am really passionate about. I am currently reading 4-hour work week and have read Rich Dad Poor Dad. Just looking for more info and advice.
– Jesse

My initial suggestion is to go to the people that you’ve made contacts with throughout your pastoral career and see if any of them will help you to get started, either through donation or investment. Since you have a lengthy pastoral career to draw on, you hopefully have some people to contact.

I would also look for places to speak to people who might be interested in investing or contributing. Look for Christian or homeschooling parent groups and talk to them about your plans.

If you want people to invest, you have to go to the people who would be interested in what you’re doing. In your case, you’re talking about Christians and parents (ideally, people who are both).

Q2: Thoughts on tiny homes
This is an interesting take on cutting back: Dump Your Mortgage for a 320 Square Foot Home. I’d love to hear your thoughts on it.

– Marilyn

If I were single or just married without children, this would be fantastic. Such a home would be inexpensive, easy to maintain, and still serve all of our needs.

However, with children, I’d be hesitant to live in a home that small. Children need some room and some privacy, particularly as they grow older. That home affords little of either.

Six years ago, I would have loved that house (it’s not terribly different than the apartment Sarah and I lived in at the time). Now, I wouldn’t be able to live there.

Q3: Financial benefits of marriage
I’m sure you may have fielded this question before, but is there a financial benefit to getting married? I’m in one of those modern long-term relationships; I’ve lived with my boyfriend for a couple years now, and we’ve been together for several before that. We’re in it till the end. We both individually fall in the 25% tax bracket ($34,500 – $83,600), and it will be a long time coming before we individually (or combined: $69,000- $139,500) make enough money to exceed those income levels to keep our taxes as low as possible. We’re not going to have kids, so forget any of those financial benefits. Personally, we’re both apathetic about the legal contract that comes with marriage, but my hyper-pragmatic self wants to make sure I’m not missing out on something that could help me add more to my Roth IRA each year. I know there’s probably some legal details that might present obstacles…like leaving money behind to your partner or maybe having access to each other’s financial information (or something?) that we’re losing out on, but I’m not very concerned about those. I guess what I’m wondering about is the cash-money aspect. We are not particularly for or against going to court and getting that signed paper that makes us married. A good, tangible financial impact, though, would be a good fact to know.

– Debbie

Several benefits come with marriage, but you’ve said you’re not interested in some of them (issues dealing with leaving things behind for a partner).

The biggest benefit in your situation for marriage is that many employers make it very difficult to share benefits with anyone other than an actual spouse. This is vital if either one of you loses your job or chooses to switch jobs.

There’s also the legal recourse if one of you does something harmful to the other. If you’re married, you both have more rights during a split than if you’re not married.

There are other minor benefits, but you’re already enjoying many of them due to cohabitation.

Q4: Cell phone options
Do you own a cell phone? I have a cell phone but hardly ever use it. I was thinking about getting rid of it (I have met my contract obligations therefore no fees would be incurred). My plan is around $50 per month. My husband feels that I should keep it in case of emergencies. What’s your take on cell phones? By the way, I live in the country and don’t have cell service at my home so I really only turn my phone on during my commute to work, doing errands.

– Sarah

I don’t use mine much, either, unless we’re traveling. My wife uses hers quite a lot, however, so it makes sense for me to have a second line rather than having a separate phone, at least in our case. We just have a shared minutes plan and she uses most of the minutes.

I think there’s a lot of value in having one for emergency used – a charged phone in the glove compartment can be a real help. However, the day-to-day usefulness of a cell phone depends heavily on how you live. It’s useful for some, not useful for others.

If you don’t find it useful, get a pay-as-you-go phone. You have to use quite a few minutes to get up to the $50 a month level. If you use just a handful, there are many such phones out there that are a better deal for you.

Q5: Student loan question
Currently I have about $30K in private grad school loans at a variable rate (now at around 4.5%, but has been as high as 9%) and about $65K in federal loans (fixed at 5%). During grad school I consolidated several times, not even really knowing what that was, but just doing it when everyone else did. Now that I’m out of school, it seems that many people I know have significantly better interest rates than I do. I’m not sure if this is tied to credit, but I have a great credit score and always have. Anyway, I’m wondering if there’s anything I can do at this point. Can I “consolidate” to a better rate? Are the federal and private loans always going to be separate, or can I consolidate them together? I get tons of offers to refinance my mortgage and tons of credit card offers, but no offers relating to my student loans, so I guess I wasn’t sure if there was anything that could be done at this point.

– Shelly

Generally, public and private loans can’t be consolidated together at a rate that makes such consolidation worthwhile. Some private consolidations do exist, but they generally don’t offer strong rates.

Your best bet is to simply snowball your debts. If I were you, I’d focus on making extra payments on whichever debt has the highest interest rate at the moment. This may switch in the future if rates adjust.

With rates that low, you won’t gain much from consolidation anyway, so I wouldn’t stress out about it.

Q6: College savings
I have two kids — 2 1/2 and 9 months. I would love to start a college fund for them, but we have very little to spare right now. I think we could swing about $50 a month for this. So I’m wondering — should we set up two separate accounts and put $25 in each? Or just one account? At this point, of course, it’s impossible to tell if either or both of them will even want to go to college. I would love your advice on this.

– Jane

I would set up two separate accounts, one for each child. You would be the trustee on both accounts and each child would be a beneficiary on one account.

It’s important to remember that many such 529 plans allow you to use the money for any educational purpose, at any point in life. They might not want to go to college straight out of high school, but many people choose to return to school when they’re older and that money would still be there for them.

I think setting up a 529 is one of the best things a parent can do for a child. I’d highly recommend it, even if you can only contribute a bit each month.

Q7: How I make money
I ran across your website today and enjoyed reading it so much. I read how you got started and it seemed to simple yet genuine. I subscribed and will enjoy reading every day. I just have one question and please pardon me for not really being computer literate, but, how did you make money from your website, “The Simple Dollar”? I understand that the articles are free but from reading how you got started and had your bills paid withing a short time I am very anxious to learn how you earned money from the website. I am in the same situation that you were and you can shed a little more light for me.

– Carolyn

I make money in a wide variety of ways. The biggest one is from the display ads that appear on the right hand column of the site. I do not earn very much from each page that people view – a fraction of a cent – but I have a lot of readers which makes it work.

I earn bits of money from various income streams. My books – 365 Ways to Live Cheap and The Simple Dollar – give me small royalty checks every few months. I sell PDFs that are collections of posts, too. I also earn a bit from Amazon from book sale referrals.

It adds up to enough for me and my family and it enables me to share all of my writings at no direct cost to the reader. It only works, though, because I have a lot of readers.

Q8: High cost of living advice
In Canada cost of living is extremely high, you should check out house prices on Vancouver Island (where we live). If it were you, and you wanted to buy a house and you had the choice, would you stay here or move to Texas? (Our goal is to buy a house.)

– Beth

Is your goal merely to buy any house or does your quality of life have anything to do with it? I’m not sure from your question.

If you’re just looking for inexpensive housing, there are many, many places that are far less expensive than Vancouver – and less expensive than Texas, too. Do some searching about cost of living in various places and you’ll find a wide variety of information.

However, if quality of life is important to you, I’d filter places you might move based on those factors first. What exactly are your requirements for moving to a particular place? What must they have for you to move there? Settle that, then use that as a filter to decide where to move.

I would probably choose Texas over Vancouver, myself. I’d probably enjoy Vancouver more from a cultural perspective, but the weather and the fact that relatives live there would point me toward Texas.

Q9: Learning about investing
I am looking to learn more about investing in the stock market using all types of investment strategies (stocks, bonds, mutual funds, short selling etc.). I have a BA and post-graduate from Simon Fraser in Business Administration and don’t plan to gain any formal certification as the ultimate goal of my studies, but I would like to gain a greater understanding of investment strategies I can apply for my personal finances. What would you recommend for a good online course or very good investment book?

– Matthew

The best one-shot book on investing I’ve ever read is The Bogleheads’ Guide to Investing by LeBoeuf, Larimore, and Lindauer. It’s reasonably entertaining, packs a lot of great information into one book, and presents a healthy moderate worldview about investments.

If you’d like something more course-oriented, I’d visit the iTunes site and dig around in the iTunes U section. There’s a ton of audio in there from courses on investing at various universities. This course on financial markets by Robert Shiller is a good example.

Few things beat a real course (if you actually use it and engage with it), but those resources are a great start.

Q10: Books at library
I enjoy reading your blog – very interesting content! I would love to read your books, but I can’t seem to find them at my local library.

– Carmen

My books – 365 Ways to Live Cheap and The Simple Dollar – are carried at a lot of libraries. I’ve seen them on the shelves at several libraries (what can I say? I often check if I’m at a library).

However, if 365 Ways to Live Cheap and The Simple Dollar aren’t at your local library, don’t hesitate to request them. Simply ask the librarian about how a book can be requested. They’ll happily help you.

I get books via library loan quite often, and sometimes libraries actually end up ordering books based on regular requests.

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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