Reader Mailbag: Getting Things Done

Over the years, I’ve received literally hundreds of requests for a detailed review and discussion of the well-known productivity and time management book Getting Things Done by David Allen, which was a truly life-changing book for me. Without the techniques in the book, I would have never found the time management skills or the information management skills to make The Simple Dollar work.

So, in a few weeks, I’m doing just that. I’m going to be running a twice-weekly series in June and July (and maybe into August) that discusses Getting Things Done in detail, along with a lot of specifics on how exactly I use the information in the book (think: pictures).

Time is money, after all, and perhaps the discussion will help you to figure out how exactly you can maximize the value of your time and perhaps find the space to start a big new adventure in your life.

I currently rent an apartment, my employer will be having me travel over the next year spending a few months in various locations. I’m trying to figure out if it’s in my best benefit to not renew my lease and live off of my travel expenses and save the money that I would have paid in rent. Of course I would have to pay for storage and moving my belongings to storage. My concern, which I need to talk to my supervisor about, is that I may come back to my office here for a week or so over the year and would need to stay in a hotel if I had no place, that would be at my own cost since this is my home office. Also I know moving into and out of storage would cost money. Looking for a new apartment when I return would also take time (i.e. money). Do you have any suggestions?
– Mike

You’ve got the right first step. Talk to your employer about temporary housing while you’re in town during this extremely travel-heavy year. I would think that would be a completely reasonable “perk.” I’d also ask for some short-term housing when you return from all of the traveling. After all, you’re agreeing to a year of traveling and life instability; I think these requests are pretty reasonable.

If you can get this, then I wouldn’t renew the lease. I’d probably try to get rid of as much of my stuff as I possibly could (ideally by selling it), stripping things down to the bare minimum to set up an apartment in a year or so, then put that stuff in the smallest storage space possible.

Just be absolutely sure this is what you want to do. Everyone is wired differently for this kind of thing. I can say from personal experience that this kind of year sounds incredibly difficult and unenjoyable to me.

I own a house (13 years now) w/ a mortgage in another state with a tenant that has a Lease, option to buy. This has been in place for 7 years now and working fine. The Lease has taken care of the payment, taxes, & insurance. In our agreement the Leasee is responsible for any & all repair & maintenance expenses. Recently the tenant has been coming up short of being able to make the payments (due to unemployment). We have talked and he recognizes that he is in danger of both of us loosing the house as I am in no position to make up his shortfall as I am also unemployed. The mortgage balance is ~85,000 and reasonable to the value of the place and for the neighborhood, however the market that is severely depressed where it is located. During the BOOM it was valued at over $250,000. If I go through proceedings to take the house back from the lease, and put it on the market to sell, it may still end up being a short sale, will be lucky if it covers the mortgage.

It’s a small house on acre of land in a reasonable neighborhood and just a couple blocks from a major highway for commuters. Have already talked to the bank extensively and they are not interested in any sort of negotiations or help, nor are there any “programs” available to help either the tenant or me. We have the funds in CD’s to pay off the mortgage. But it would take all of it. Have a 401(k) that I can take a loan from to buy / save a house.

I don’t know that I would ever want to return there and live on the property… I am torn as to whether to fight to keep the property or to let it go. If I do let it go, should I just turn it over to the bank (letting the tenant know of course) or evict the tenant ($$) and then try to sell the house and hope for enough to cover the mortgage? All the while, trying to keep the bank from foreclosing anyway?
– Cheryl

The first step I would take would be to get an estimate on what the house might sell for. During the boom, your house was worth $250,000, but what is it worth now? Do the research and find out.

I’d also find out if the tenant actually has an interest in buying, as he has an option to buy. It doesn’t sound like he is, but it’s hard to tell for sure unless you ask.

If you can sell the house, pay off your mortgage, and end the lease while breaking even or winding up money ahead, I’d go that route. In your current situation, you need to maximize your cash flow, and a tenant that is unemployed is not helping with that.

I could really use some advice. I am 28 years old and I graduated from law school 2 years ago. Due to the tremendous slow down in the legal sector, I’ve spent the majority of the time since I graduated looking for work. Fortunately, I live with my boyfriend so my monthly expenses are pretty low, and about a year ago, I found a job that now pays around $59K. Now, I am trying to decide a plan of attack for the $183,000 I owe in student loans. I have two private loans: on the first, I owe roughly $59K with an interest rate of 9.25% (minimum payment $460), and on the second, I owe $16K is at 4.25% ($53). The remaining student loan debt is around $108K is federal government loans that are consolidated at 7% ($530). I also have some credit card debt – around $3,500 at 8.9%, and while my loans were in a 3 month forbearance period, I stashed away an emergency fund of roughly $6K and less than $1K in a Roth IRA (I don’t qualify for my employer’s retirement program).

Lately, I’ve stopped saving to focus on paying off my credit card, and I plan to wipe that debt out by the end of the summer. After that, I intend to focus on paying down the $59K private loan. My question for you is whether I should resume saving in my emergency fund or retirement account or focus on paying down my student loans. When my federal loans come out of forbearance at the end of summer, I’ll only have about $400 left each month for debt repayment or savings. I am constantly searching for higher paying jobs, but hiring in the legal sector is still very slow and extremely competitive. I’d like to continue working at my current job until I find a higher paying job, but although my job is fairly secure, it supposed to be temporary. I serve at the pleasure of a judge for as long as she’ll have me but clerkships don’t usually last more than two years.

I know that accumulating all of this student loan debt was probably a pretty terrible idea but I’m stuck with it now. And as I have made some very stupid financial decisions in the past because I was too foolish to ask for advice, I’d really appreciate any suggestions or recommendations you may have. I know that you may have other readers in shoes similar to mine who may also benefit from your analysis.
– Kristen

First thing: forget about the past. It’s water under the bridge. You can’t undo what happened, so don’t spend your time worrying about it at all.

Instead, focus entirely on your financial situation now.

Do you have an emergency fund that can help you get through a job loss, a car repair, or any major problem like that? If you don’t have at least two months’ take-home worth of cash sitting there for easy access, focus on your savings first. Your $6,000 is a very good start towards this, of course.

Once you have that, I would start putting at least some towards the Roth IRA each month. The annual cap on the Roth is $5,000, so I would contribute your monthly savings into that as long as your emergency fund is up.

If you have that cornered, focus on your debts, starting with the highest interest rate debt. Because student loan interest rate is tax-deductible, I’d pay off the 8.9% credit card before paying off the 9.25% student loan. After that, I’d just move down the line, throwing as much at each debt as possible.

My question is centered around our home ownership situation. Two months before I met my husband in summer of 2007, he purchased the condo we now live in for $251,000. We live near Microsoft headquarters in Washington state. Because of higher interest rates at that time and his 10% down payment, our mortgage payment is about $1,900 per month including PMI, HOA dues and water/sewage/garbage. Moving right along, assessments were conducted on our condo complex, and it was determined in fall of 2008 that the complex required a 4 million dollar renovation (replacement of siding, roofing, windows, balconies), with our part of the price tag being $39,000. We, and many other homeowners simply did not have the cash to pay that amount upfront. The HOA was able to secure a loan, and we now pay $367/mo. toward our $39,000 portion. The payments are bundled with our HOA dues, and the interest rate for our renovation loan is 7.5% for five years. That has bumped our basic housing cost including mortgage, dues and renovation up to $2,300/month. This doesn’t include any of our other regular monthly costs such as food, fuel, electric, etc.

Meanwhile, our condo has severely depreciated. Fortunately, my husband is still gainfully employed and I have kept a part-time job that I’ve had since graduate school. Our combined income is at about $85,000 annually. We have 6 months of emergency savings, plus approximately $25,000 in savings on top of that. I have $40,000 in student debt and am making my payments. We do not hold any credit card debt or other debt.

Trent, it’s gut-wrenching to know that we’re paying such a high price on a home whose value is so much less than the inflated price my husband paid. We do well with savings, but it’s all going to go toward paying our renovation cost (because it’s got the highest interest rate and we’d like to pay it off before the interest rate goes up in 2014) rather than saving for a down payment on a house. We don’t want to walk away from what we owe, but given the circumstances, it may be about six years before we could afford a down payment on another home, and I am afraid that the value on our condo may not recuperate in that time. The depreciation in our condo of $50,000 plus our renovation cost of $39,000 puts us way underwater. (An important aside: the condo complex across the street had a structural renovation from apartments to condos 2.5 years ago, and the job was shoddy, and the contractor for the original project fled to Mexico,so now they need a $4 million renovation, too…those owners are staging a mass foreclosure, and I imagine the failure of those condos will further depreciate our condo’s value since it’s now on the local news.).
– Maria

You’re in a mess.

You’re right in that the value of your condo probably won’t recuperate in six years. It will likely recover some value over that period – after all, you do have a condo near the Microsoft HQ – but it’s hard to tell how much.

However, it’s hard to tell whether or not walking away from this will actually save you any money in the long run. It will devastate your credit, of course, which will bump up your insurance rates. It may also make it harder to sign a lease. There’s also the question of what you would do for housing over the next six years – not knowing the Seattle area rental market, you may or may not be able to find something that matches your current residence.

If I were you guys, I’d probably stick with my current situation and focus on paying down the debt on the condo. Keep your nose out in the job market and see what you can come up with.

I am a soon-to-be (5/8/10) college graduate, and I will be starting graduate school in the fall. Since I am pursuing a bioscience Ph.D., I am granted a full tuition waiver and a stipend of ~$26,000. Graduating from a private university, I have $40,000 in loans. This is a loan from my university at 1% simple interest, and I can have the interest deferred until January of 2014. There are no penalties for paying early, and the payments are calculated to be ~$350 per month to pay the loan back in 10 years. Since I have a steady stream of income from my graduate work, I would like to begin paying off the loan as soon as possible. Should I put money into the loan each month starting in September to pay down the principle, or should I put the money in a high-interest savings account and make a large payment with the first bill in 2014?
– Andrew

You should save money in a savings account. A 1% student loan should be an incredibly low priority for repayment. You can easily earn more than that with your own savings. I would pay that loan off as slowly as possible.

In fact, some people do this as a money-making venture, taking advantage of zero percent balance transfers on credit cards, putting the money in a savings account, and then paying the amount back after nine months, pocketing the interest.

Are you going to be doing a book tour of any kind for your upcoming book release? If you’re anywhere near me, I’d love to come!
– Shelley

Although I haven’t set anything up outside of central Iowa yet around the time of the book’s release, I am planning on visiting several Midwest cities throughout the summer.

If you know of a venue in Minneapolis, Chicago, Madison, or Indianapolis that would fit well for a book signing / presentation this summer, please let me know. I’m pretty flexible with the travel dates (for the most part), as I’ll be tying these trips in with visits to family members and friends in the area. In fact, if you have an opportunity anywhere in the Midwest, let me know, and I’d be willing to travel to the coasts for certain opportunities.

I am currently discussing joining a group that will represent me in setting up speaking engagements so that I don’t have to directly set them up myself.

If I hammer down any specific speaking dates or book signings this summer, I’ll let you all know.

I love reading your e-mails and find many of the ideas/thoughts intriguing. I too am a writer and have small children at home. Most days I am overwhelmed by the amount of things I have to do (maintain the house, pay bills, etc.), my work and the things I want to do (spend focused time with my children, pursue writing avenues outside of my current contract to do more of the kind of writing I would like to do, etc.), not to mention just taking some time for me to relax and recharge. At the end of the day, many times I feel as if I haven’t got a whole lot accomplished and what I did do wasn’t to the best of my ability. Would you mind sharing an example(s) of what your daily schedule looks like, so I have something to wrap my brain around?
– Wendi

I usually segment my day pretty strongly.

I usually have a morning segment, starting as soon as my immediate morning tasks are done, where I buckle down and focus on my work as tightly as I can. I have a set checklist of things that I need to do each day (write two posts, etc.) and I work through that list during a morning session.

I usually also have an afternoon session where I’m free to explore other things. Sometimes during that period, I’ll write more posts for The Simple Dollar. Sometimes, I’ll chase other writing opportunities. Other days, I might just walk away and take my kids to the park or something.

The evenings – usually starting at 5 PM – I focus directly on my family until my two older children are in bed. Nothing interrupts this – nothing.

After that, I’ll sometimes (if I have enough energy) get a jump on tomorrow’s morning checklist.

I was married for 31 years, and lost my husband to a heart attack. He was an only child, and his parents made investments in his name when he was young. For 31 years, I lived in a fairy tale world (although I didn’t realize it). My husband always told me that we would be taken care of in our old age. I purchased a print shop with money his mother loaned me (his father is deceased), with the unspoken rule of “pay me back when you are able. The loan was set up so that, when his mother died, the loan would transfer to my husband, so it would be “my” shop paying “us” back the loan.

Fast forward to now. I have been widowed for three years. My mother-in-law is 90. I found out that I am not going to be taken care of “in my old age.” Plus I had to sell our real estate to her to pay for the loans she made to me for the shop. I am 55 years old, and owner of a print shop that is barely making ends meet. I know I’ll never make back the money my mother-in-law loaned me, but I’ve accepted that. What scares me, however, is that I have no real estate, and only $20,000 in CDs, $10,000 in a Roth IRA and probably close to $20,000 in my husband’s IRA. I am completely out of debt (no credit cards, etc.), but I don’t know how I am going to live in the future. I am trying to sell the print shop but, even if I sell or close it, I will be lucky to come out without owing money.

I would appreciate your thoughts.
– Susan

Obviously, in this situation, you’re going to need to work for quite a few years from here on out.

What skills do you have? You own a print shop – what transferable skills did you pick up from the print shop? How can they be employed at the print shop or in someone else’s employ?

What is the value of the print shop if you were to sell the business – or if you would liquidate it? You should consider this part of your retirement.

If you’re unsure about the print shop business, I’d sell it, sock away that money for your old age, and then look for work that employs your skill set.

If you feel guilty about the money situation, talk it over with your mother-in-law. It’s likely she lost a son too early and is completely understanding of your situation, especially given the conditions under which she loaned you the money. She may have viewed the entire thing as a gift.

I have a close cousin that is having serious money struggles right now. He’s barely able to make his bills, and even then only with his parent’s help usually. His wife is a spender and refuses to grasp the reality that they just don’t have money to spend right now. His marriage seems to be falling apart as a result. He doesn’t know a lot about personal finance, and aside from referring him to your site, which I plan to do, do you know of any good “one-stop-shopping” personal finance books that would be good to pass his way? Maybe something about basic personal finance with emphasis on saving when there’s not a lot of money to save? He’s 38 years old with no health insurance (self-employed), no retirement and no savings and I’m worried about his future.
– Erin

I don’t think the “nuts and bolts” personal finance books help much at all unless you’ve decided in your mind that you’re going to take control of your money. That’s a very personal decision and it can be a very difficult one.

Honestly, the book I would give him would either be Your Money or Your Life or my own upcoming book, The Simple Dollar. Both books, I think, make a strong case for why you should take control of your finances, which is what I think a lot of people struggle with.

You’ve given some great music recommendations in the past – you turned me on to Aimee Mann, after all. Who have you been listening to lately?
– Shanya

I looked at my iTunes library and extracted all of my played songs over the last year. I then sorted these by artist to find out who my top-played artists were over the past year. They were, in order (with links to YouTube so you can hear the song):

1. Kate Bush (most played song: Wuthering Heights – Kate is officially my “writing muse”)
2. Blind Melon (most played song: No Rain)
3. M. Ward (most played song: Absolute Beginners)
4. She & Him (most played song: Sentimental Heart)
5. Vampire Weekend (most played song: Mansard Roof)
6. Cat Power (most played song: I Don’t Blame You)
7. Jeff Buckley (most played song: Hallelujah)
8. Gillian Welch (most played song: Revelator)
9. A Fine Frenzy (most played song: Rangers)
10. Regina Spektor (most played song: Fidelity)

Interesting list. I don’t know if I would have guessed these artists as my top ten, but it makes at least some sense to me.

In any case, head over to Pandora – you’ve got some listening to do!

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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