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. Thoughts on Betterment
2. Swimming pool
3. Free puzzles
4. Evicting a child
5. HSA or FSA?
6. Charitable giving receipts
7. Credit limit increase?
8. Inexpensive ebooks
9. Frugality for other reasons
Over the weekend, I learned a variant of chess called “hostage chess.” It was a brain burner, to say the least.
At the start of your turn, you can swap one of the pieces you’ve captured for one of the pieces your opponent has captured of equal or lesser value. You then place that recovered piece anywhere on the board, ending your turn. Your opponent can spend a turn placing the piece he or she recovered, but can wait to place it until they so desire.
Aside from that, the game plays identically to regular chess. Here’s the rules on this variant.
It is a lot of fun. It’s incredibly crazy near the end as you end up with both sides aggressively going for the king, and a lead in pieces doesn’t mean as much as it does in regular chess.
Give it a shot if you like chess!
Q1: Thoughts on Betterment
Long time reader of your blog. I was hoping you had a review of Betterment on your site but couldn’t find one. I was wondering if you’ve ever considered it or your thoughts on it? I’ve never invested and don’t know much of anything about investing. I have a Roth IRA with Vanguard that I max out every year, but I don’t understand the first thing about what’s happening there. I have about 50,000 in savings right now but it’s earning a horrid 1% interest. I stumbled across Betterment (recommended by Mint.com) and thought it was interesting, especially since everything is liquid so I could access it if needed. Anyways, sorry for the long email, but was hoping you might give me an idea where to look – Betterment or otherwise – to earn a better return.
Betterment provides a very nice set of tools for making the examination of your investment portfolio quite simple. However, they charge an expense for this – they charge 0.3% to 0.9% per year of the assets they’re managing for you.
If you bypass Betterment and just invest directly with the investment houses (as I do with Vanguard), you skip those management fees. However, you have to do much more footwork yourself and if you want to invest with funds created by multiple companies, you have to deal with each company individually.
I think you still have to have some investment knowledge to really use Betterment effectively, but it lowers the bar compared to most other tools I’ve seen online.
It will certainly increase your property value, but it will likely not increase it as much as the cost of the pool.
There are very few home improvements that actually increase home value by as much or more than the cost of the improvement assuming you’re not doing it yourself.
If you’re looking just to increase property value more than the money you’re putting into it, you’re going to want to look at improvements you can do yourself. If you’d just like to have a swimming pool, it will increase your property value, but you likely won’t recoup the cost of it, though you will come closer in climates where you can get pool use all year long (along the southern U.S. border, for instance).
Q3: Free puzzles
While Kenken puzzles aren’t full-fledged experiential games like Carmen, they’re excellent exercises in math, persistence, and problem-solving. They’re free too — www.kenken.com.
… and, similarly…
If you’re looking for free puzzles, you should really check out http://www.websudoku.com/.
Both of these sites provide mountains of free puzzles for you to do if you like sudoku or kenken puzzles. They’re free – you just go there and start solving them.
My father goes through a book of sudoku puzzles a month. I’ve often wondered if there wasn’t a good way to get him to use something like websudoku instead of continually buying the books, but he says he likes using paper better.
I do puzzles of both kinds every once in a while. I used to prefer the sudoku puzzles, but lately I find the challenge of a kenken more appealing.
Q4: Evicting a child
How long after college should I wait before telling my son to move out? He graduated in 2011 and hasn’t found a job yet. He seems to spend a lot of his time on the computer talking to friends. He says his field doesn’t have many jobs. I’ve told him he should get a job of any kind but he says it won’t help his career. I think having him move out would push him to find a job. What do you think?
I agree with you, Emma. If I had a post-education child at home who was not working or spending the equivalent of full-time work searching for a job, I would not have much patience at all.
I think you should set a strict guideline here. Find a job of some kind by April 1 or get an apartment.
It’s very likely that his field doesn’t have job opportunities, but that doesn’t mean he is unable to find work. Long periods of unemployment do not look good to an employer.
Family of 5: 1 husband (35yo), 1 wife (33 yo), 3 kids under the age of 12.
I have used my company’s FSA every year for the last 4 years. I place $1,000 in this account and have never ran out of money. Usually, I’m scrambling to spend it all come the year-end deadline.
I like to think we’re all healthy. I did the online health assessment for my job which states the same but did recommend suggestions to keep my blood pressure and stress levels low.
My kids have the annual dental and vision appointments. I live in an urban low-income neighborhood so most clinics nearby offer package deals for a flat rate, such as an exam, x-rays, cleaning, and fluoride treatment all for $50/person. I usually get this deal. No cavities for either kid. The oldest has sealants. The middle kid may need braces after all his baby teeth fall out in another year or two.
The oldest 2 kids wear prescription glasses. The youngest is 4 yo so he’s not running up an real bills yet. School vaccinations aren’t frequent but they still cost a pretty penny if we don’t get an appt with a low-income health clinic.
My husband and I have had the most dental work but we don’t require any right now other than the eventual wisdom tooth pulling if it starts to cause pain.
My husband and I wear prescription glasses and contacts.
My annual visits include dental, vision, and gyno appts. No medical/health issues for either. Routine preventative care.
My husband’s annual visits also include dental, vision, and annual check-ups. No medical/health issues for either. Routine preventative care.
I run, do yoga, and bike. The kids run around, play organized sports here and there, and just be kids so they are “active”. My husband, not so much. He has had recent chiropractic appts to correct his back but is doing fine right now. Occasionally, his back falls out of alignment and he needs to go in for a few visits to readjust.
I know the HSA plan has a lower monthly premium but higher annual deductible while a regular health plan has a higher monthly premium but lower annual deductible. And, the HSA plan comes with a pre-tax savings account similar to the FSA except I’d no longer have to scramble to spend excess funds since those will roll over to the next year in a HSA.
Family history of diabetes and high blood pressure.
At the time of this email, we will have close to $12K in an emergency fund.
For clarification’s sake, a HSA refers to a health savings account. HSAs require you to be enrolled in a high-deductible health plan. Funds put into a HSA roll over from year to year. A FSA (flexible spending account) doesn’t require enrollment in a specific plan, but funds in a FSA don’t roll over.
The general rule of thumb seems to be that the younger and healthier you are, the more a HSA makes sense, and the older and less healthy you are, the better off you are with a FSA. Both accounts will generally pay for alternative treatments like your husband’s chiropractic appointments.
If you can easily switch between the two plans (in other words, you have an annual “window” to change plans at work), I’d probably use the HSA for now. If you start to see the possibility of consistent health problems in the future, I’d switch to the FSA plan.
The problem with a choice like this is that you never really know what the future holds for you. The “best” choice can’t be made without knowing what the future holds, and a decision like this is one that always looks questionable in hindsight. All you can do is make a reasonable guess on the short-term future based on what you can see right now.
Also, you can use a FSA to help pay for child care expenses, whether you have a HSA or not. Here are some details on that program.
Q6: Charitable giving receipts
We own our home and don’t have student loan interest any more. We give just a few thousand a year to charity. Is it worth keeping track of the receipts? It seems like every year we never come close to itemizing and just have the standard deduction.
The best route for you would be to come up with a system that makes it easy to check these things. Just keep a manila envelope in a safe place in your home and toss charitable gift receipts in it. At the end of the year, total them up and see where you’re at.
In your situation, if you’re not doing anything else that might be deductible, you’re probably just facing a standard deduction each year, but there may come a year where that’s not the case and you’ll be glad to have those receipts.
It’s better to have a very simple system in place than to not track them at all.
In 5 months I’d like to make a large purchase – roughly $5,000. I’ve been saving for this goal and I’m on track to reach it by the time I’m ready to make the purchase. I’m going to pay with a credit card and pay it off in full when the bill arrives.
My question is that the credit card I want to use (Credit Card A) I’ve only had for a few years and therefore have a low limit of $3,000. My other credit card (Credit Card B) that I’ve had for longer has a limit of $13,500.
I would like to use Credit Card A for this purchase, but the limit is not large enough. (It’s a points card and the 5,000 points will go a long way. Credit Card A also offers great protection on purchases and since this is going to be such a large purchase, I’d like to have that extra protection.) Should I contact the company and ask for a one-time limit increase and will this impact my credit score negatively? If I do call and ask for this, are there other things I need to consider and other questions I might want to ask them? Should I mention my high limit with the other credit card company?
I’d simply as for a limit increase. You may have a very slight negative impact on your credit score because of that increase, but it shouldn’t be a very big one. You’re adjusting your debt-to-credit ratio a bit as well as your total available credit, which is what would cause the slight downturn.
It should not add up to enough to have any sort of negative impact on anything you choose to do in your life. You should still have stellar credit for things like insurance rates and so on.
If you’re getting a strong tangible benefit for using card A, I would call up the issuer of card A and ask for that increase.
I rarely buy the latest bestsellers with my Kindle. Most of the time, I look for bargain books or freebies.
I also often look through the classics on Amazon, as they’re usually available for free. Books like Don Quixote are well worth your time, as are the complete works of Dickens.
Q9: Frugality for other reasons
I too have taken this approach of “wearing it out”. My T-shirts are in three categories – 1. can go as a guest to a friends house 2. can work in and still appear in public 3. work in but not go in public. I have T-shirts that are a couple of decades old. I apply this approach to all clothes. Other stuff, once broken and not repairable are cannibalized to fix something else or make something else that can be used in an unique way. And, like you, it is not for the money reasons (as so many people think). It does have to do with reducing the impact on garbage but it also has more to do with not wanting to waste the earth’s resources and trying to minimize the waste and pollution that may have gone into making the object. By doing without, if possible, or by using what you need until it is not possible any more is part of being a responsible consumer, responsible living.
I think frugality and caring for the environment go hand in hand.
The fewer things you throw out, the fewer things wind up in a landfill. That means less polluted ground and groundwater for our grandchildren to deal with.
The fewer things you throw out, the fewer things have to come into your home, too. That means less manufacturing and transportation costs.
I’d far rather pay more for something that will last several times as long.
I think different people are wired in different ways. Some people really get a lot of benefit from power naps. Others do not.
For me, I find that if I take a nap, I wake up really groggy and I am not very productive for the rest of the day. I usually feel completely out of it if I get sleep outside of my normal sleep cycle.
The only time I’ll take a nap is if I’m exhausted anyway and thus I’m not being productive.
Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. 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 many, many questions per week, so I may not necessarily be able to answer yours.