Updated on 05.03.10

Reader Mailbag: Starting Over

Trent Hamm

I had forgotten the rewards and challenges of having a newborn. In some ways, both the challenges and the rewards are amplified by also having a four year old and a two year old at home.

My son is 20, and is a straight A student at college but doesn’t feel that he knows what he really wants to do. Everything, academically, comes easy to him. (I know he doesn’t like manual labor. LOL.) How can he decide what he really wants to do with his future when he’s got a ‘surplus’ of brains but a lack of motivation? (He actually asks me these questions, and wants to find a “passion” but hasn’t found one at this point of life yet.) We’re not wealthy, just conservatively ‘comfortable.’ I try to expose him to a variety of opportunities to explore, but he’s so ‘frugal’ (from us) that he doesn’t want to explore options as much as I would like. Do you have any suggestions??
– Carolyn

What does he talk about? What does he spend his free time reading about or learning about when there’s no requirement to do so?

Whatever that is, it’s your first clue as to where he should be headed. If he’s constantly following politics, for example, then he should delve into politics. If he’s constantly writing, then he should be a writer. If he’s constantly tinkering with things, then he might want to consider engineering.

One of the biggest shames of our culture is that we send kids to college who have no idea what they want to do with their lives, so they go and spin their wheels for years, racking up expenses and debts.

I live in a low-income urban environement and am looking for Personal Finance material that is directed at low-income folks. As I have begun to do some one hour classes I am realizing that the issues are very different. If you can point me in a direction that would be awesome.
– Andrew

Most of the resources designed for low-income people aren’t centralized at all. There is no “one stop shop” for such resources, as most resources are either created by small groups that don’t market themselves well or are written for a very broad audience.

One place worth looking at is MyMoney.gov. Again, some of the material there isn’t written explicitly for low-income people, but there’s a lot of good content there.

Also, CNN Money’s Money 101 has a lot of good resources, but you definitely have to pick and choose among them.

wondering how much you spend a week on groceries – prior to the new addition (congrats by the way.) And what you include as groceries (ie. would you include baby stuff like wipes).
We’re a family of 4 – 3 yr old girl and 1 yr old boy.

– Jordan

I calculated this a while back and found that our spending is roughly on par with the national average for a family of four. However, I think what we spend that money on is atypical.

We do a ton of things to reduce our spending – grocery lists, meal plans, and so forth – but we also buy things like fresh saffron, fresh morels, Maytag blue cheese, organic milk, grass-fed beef, and so on. I’ll do things like buy a bottle of brandy to aid in making coq au vin and include the cost of that bottle in our monthly food accounting.

Our “food” spending does include a few non-food items. I don’t go through grocery receipts and excise the three or four non-food items purchase, like a tube of toothpaste or something like that. So our true food expenditure is probably lower.

I have two almost maxed out credit cards with interest rates of 14.4% and 11.4%. I would like to get a credit card with a 0% balance transfer option so I can transfer/ close out one of them. I have applied for two so far and keep getting denied. Am I hurting my credit (which is good despite my amount of debt) by continuing to apply for different 0% cards? Should I just bite the bullet and try to pay them down at their current interest rates? I have been trying to pay them down (paying more than minimums) It just doesn’t seem like I am getting anywhere.
– Kay

Applying for a credit card lowers your credit rating by about 5 points for 6 months – here’s the details on a hard credit pull versus a soft credit pull.

I do find it a bit odd that you haven’t had any success at all applying for a 0% balance transfer option, though.

If I were you, I’d check my credit report at AnnualCreditReport.com (the one that’s actually run by the FTC and is actually free) and make sure there isn’t anything you don’t know about on that report.

I am a soon to be college graduate (2 weeks away!). I am on an active job search, but I haven’t had any offers yet. Right now, my plan is to live with my parents for a few months while I work an hourly job at a restaurant, save money, and keep searching for a job. My family has started to ask me what I’d like as a graduation gift, and I’m at a loss as to what to tell them. I used to be a gadget freak, and I still have a weak spot for those things but right now I’m doing fine with what I have currently.

Since I’ll be living at home and putting my current apartment stuff in storage, I don’t have an immediate need for anything apartment related. I’m having a hard time thinking of something practical that would help me in this transitional period of my life. Do you have any thoughts?
– Phil

Don’t go for stuff, go for experiences.

Instead of asking for a material item, ask for a ticket to De Gaulle Airport and a pass on Eurorail. Get your passport and backpack around Europe for a few weeks after graduation, just seeing things. It might very well change your ideas about the future.

Similarly, you could turn this into a volunteer project. Work at a Romanian orphanage for six months. Work in a small African village. These things are golden on a resume, plus they’ll give you a new perspective on the world.

This is probably one of your best windows in life to really grow as a person. Take advantage of it.

I am 41 and my wife is 27. I have no debt while she has over $100k – mostly student loans, a reasonable car loan ($5k) and no credit card debt. The loans range from 2% to 8% with monthly payments of $1050. We both earn $80k a year in secure jobs. I have about $200k in savings and she has none, but our 403b is quite generous: 12% of annual salary a year from our employer with nothing required from us.

I handle the finances and in past years I’ve worked down her debt with some success. Meanwhile she tried her hand at a doctoral program that added $27k to her existing debt. She has since dropped the program and those loans are now due for repayment.

My question is more philosophical than mathematical. How much responsibility should I take for alleviating her loans?

1) I can pay the minimums with her money, knowing it will take decades for her to be free of debt and her lessened income will impact our choices.

2) I can decimate my savings, leaving us both to start out at zero again, assuming I will never be able to make up that ground and will eventually become a financial burden to her in old age.

3) I can continue to do what I can where possible to pay down the debts and “buy” her loans on occasion to lessen the interest burden, thereby improving her situation while hampering my own ability to save.

Personality wise, she’s the spender and I’m the saver. She always assumes more money is around the corner, whereas I’ve been laid off and gone through the economic downturns both personal and global. She hasn’t given up on the doctorate either, just postponed it.
– Leigh

It sounds as though you don’t have merged finances at this point, which is fairly unusual for a marriage. It took my wife and I a year or two to get everything in line, but once we combined our finances, it was really a good thing.

If you’re truly committed to your marriage and your finances and life are bound together for good, then her debts are effectively your debts because they affect your household cash flow and savings potential. The sooner you get rid of them, the better.

If you don’t feel that confident, then there’s a marital issue involved that you should work through.


We live in Baton Rouge (just moved here) and are thinking about changing from Regions to this bank. (as well as opening an account at a local credit union).

A 4.01% checking account is amazing!
– Trish

This offer is just like many other promotional interest rate offers. They look great until you break down the specifics.

The big catch here is that “0.10% APY will be paid on the entire balance in any cycle where the requirements are not met.” That’s an awful APY.

What are the requirements? The big one is that you must have a “minimum of 12 check card purchases” each month. I very rarely reach that number in a given month. If I do, it usually means that I don’t have a good grip on my spending.

Of course, not having a grip on your spending means overdrafts. And if you don’t overdraft but don’t use the card enough, you get only a 0.10% APY. For me, that’s too many requirements on my spending just to earn a bit more interest on my checking account.

Twenty year son wants to move out and in with a friend. Advantages and disadvantages of this? Friend owes him money and son does not have full-time career or job yet nor does the friend.
– Chris

If neither one of them has a full time career or job, how are the bills at this apartment getting paid? Food? Electricity? Rent?

I’ve got to assume that someone external is writing the checks for these things, and I think that’s a very bad idea. It sets up a pattern of financial dependence that doesn’t really give the person who is dependent any motivation to break free from. Why should they? They’re not working and the bills are getting paid.

If he gets a full time job, there’s nothing wrong with him renting an apartment with a friend and you might even give him a bit of financial help when he leaves. But an ongoing financial dependence is not a good thing for either of you.

I don’t understand why people buy lottery tickets. Talk about an awful investment.
– Andrew

Why do people gamble at all? There’s usually two reasons. One, it’s an enjoyable pastime for them – they love the game. Second, the reward curve is uneven, giving the player the potential to multiply his money. Unfortunately, the multiplication is usually zero, but most people are a bit overconfident about such things.

The big issue is, from a societal standpoint, that people who are able to step back and carefully think through such decisions generally do not participate in lotteries and instead invest their money elsewhere. At the same time, that skill of analysis helps them to earn more money in their life.

Yes, lotteries are not a good way to spend your money if you look solely at costs and returns.

How’s the baby? We want updates!
– Kellie

He’s doing quite well. He’s home from the hospital – as is Mom – and he seems to be doing well.

He currently has his days and nights mixed up, meaning he’s up a lot during the night and sleeps a lot during the day. We’re trying to use light signals to help with this, keeping him in bright rooms during the day and dim rooms at night.

He’s already a surprisingly sound sleeper – when he’s asleep, he tends to stay asleep very strongly until he decides to wake up. Our oldest child is a very light sleeper, but our daughter sleeps similarly deeply.

We like him. He’s a keeper.

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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  1. Kelly says:

    I don’t think every kid who graduates high school is ready to go right on to college. My brother went from high school to college majoring in Plastics Engineering. He did well with Computer Aided Drafting and Design classes in high school and thought this was something he would like to do as a career. He was wrong. The math classes were too challenging for him and he really blew off a lot of his courses and ended up dropping out after a year. He joined the work force for about 5 years and decided that he’d like to be a teacher. He worked full time night shift while going to classes during the day, often only getting 3-4 hours of sleep a day.
    He completed his BS degree in Elementary Ed/Special Ed in 2004 and in 2009 completed a Masters degree in Educational Leadership. He is currently working on becoming certified as a principal and plans to work towards a doctorate as he’d like to become a Superintendent of a local school district.
    Some kids have no problems transitioning from high school to college. Most kids aren’t quite ready to make that leap.

  2. Richard | RichardShelmerdine.com says:

    The very first 20 year old sounds EXACTLY like me one year ago. I wouldn’t be surprised if he was my Dad lol. You just have to let them figure it out for themselves sometimes. Be there for them when they need you and be understanding. He’s 20 now.

  3. Ellen says:

    For Leigh – My suggestion is that both you and your wife sit down together, figure out your monthly expenses vs income (exluding her debt payments) and then decide together how much of the remaining amount can go toward her debt paydown, & whether you (both, not ‘you’ personally) want to use a portion of your liquid savings to reach that goal. And talk about the ‘spender’ vs ‘saver’ issue. This isn’t something that you, Leigh, should take care of for her – she incurred the debts so either she takes individual responsibility or you two work it out together.

    Based on what you wrote to Trent, it doesn’t sound like paying everything off immediately from savings would totally ‘decimate’ your financial situation (if you as a couple decide that would make you both more comfortable), unless your actual retirement savings are not at the total level they should be.

  4. Sarah says:

    We are a family of 4 (2 adults, 4 y.o. and 2 y.o.) and never spend more than $300/month on groceries (this includes food, cleaning products, diapers, toiletries, etc). We also live in San Francisco where food tends to be a little more expensive. I couldn’t spend $700/month on food if I tried. We eat healthy so I buy a lot of produce and leaner cut meats, etc but even then I could never spend that much. We eat out MAYBE once a month and spend no more than $40 so that’s not affecting the numbers that much either. $700/month is Crazy! Try couponing combined with sales and often you will end up getting stuff free. It works and it really doesn’t take much extra time.

    Chris- If your 20 year old son wants to move out, let him. But don’t support him financially. Yes, it might be hard for him but he’s got to learn. My parents’ rule was that once we turned 18 we could live at home for free IF we were going to school, or we could live at home and pay $300/month rent if we weren’t. (Or of course we could move out).
    My older brothers didn’t want to do school and didn’t want to work and they certainly didn’t want to pay rent to live at home so they moved out. And they learned REALLY fast that it costs money to live. My oldest brother ended up moving back home, paying rent to my parents, and thanking them for the lesson and the cheap rent. The other brother learned really fast too, and he got motivated fast to go look for a better job. Fortunately he found a decent one before things got bad.
    Don’t be afraid to let your kids experience life. It’s good for them.

  5. Steffie says:

    We take a chance on the lottery when it is a really big amount, more than 100k. We spend $5.00, comes out of our fun money budget. It is fun to dream about winning a vast fortune, buying multiple cars, fur coats, never having to work again etc. We have the will power to not spend the ‘rent money’ on the possibility of winning, we know the odds are against us.

  6. Johanna says:

    @Leigh: Since you and your wife have separate finances, how are you dividing the household expenses? Since the two of you earn the same income, but you don’t have the student loans to pay, you should be paying a larger portion of things like rent/mortgage, utilities, food, and entertainment. Having her be responsible for 100% of her loan payments and 50% of everything else would be fine if you two were just roommates. But since you’re married, you’re a family, and all members of a family are entitled to approximately the same standard of living.

    (Think of it this way: If neither of you had student loans to pay, but she earned less than you did, you’d divide up expenses in proportion to your incomes. At least, I hope you would.)

    What worries me most is that you say you handle all the financial decisions, including decisions involving her money. If her money is hers and hers alone, then she needs to be the one making decisions about it. Has she delegated this responsibility to you, or did you take it from her? Have you tried to get her involved in her own finances, or are you happy to keep her in the dark?

    To answer your question, though: You say her loans have interest rates ranging from 2-8%. That’s a pretty big range. It doesn’t make much sense to pay off a 2% loan out of savings, but with an 8% loan, it might make more sense.

  7. AJ says:

    Trent, how can you possibly come to the conclusion that ‘using a debit card 12 times a month’ means that you MUST be overdrafting? I, for instance, have to refill my car’s gas tank roughly twice every week (thanks, 40-mile commute), so that’s usually 7 transactions right there. Throw in a weekly sandwich at Subway or something, and you’re pretty much at 12 right there.

    (We’ll just ignore the fact that I tend to buy fast-food considerably more than once per week…)

    But, anyways, 4.01% is considerably more than the, what, 1.4% you can get elsewhere nowadays? Probably worth it if you have to make 10+ transactions a month anyway.

  8. kelsey says:

    @ Carolyn:
    Emphasize to your son that he doesn’t have to choose the thing he wants to do for the rest of his life. He could change his mind several times in the next 5,10,20 years, switch careers, go back to school later on, etc. Personally, I think he needs to choose a field of study that will get him job skills, or alternately, take classes that interest him and take internships/jobs on the side that will help him explore and build his resume. He should certainly go for his dreams and find his passion, but he also needs a plan B. If he’s figured out his goals by graduation – great. If not, gaining some basic skills can get him a job that he will at least enjoy working at for the short term, while he figures out what he wants to do.

  9. Leah says:

    to the college student who doesn’t know what he wants to do, I suggest he either volunteer or get some jobs. I did several jobs in high school and college that helped me narrow quite a bit. I still have moments of angst about my “life plan,” but there’s a whole list of things I know are not for me thanks to work study. In fact, I found my passion through work study jobs. I worked in tech support and as a teaching assistant in intro science labs. With all the jobs I had, I found my favorite part was always teaching other people something. It didn’t matter what it was: how to use your computer, how to set up a good experiment, etc — I just know I like teaching.

    I tried to fight that urge for a long time. Becoming a teacher felt like a fall-back, especially since I was a straight A student and could probably do lots of “more challenging” and more lucrative jobs. But I just haven’t enjoyed any of those, and I’m going back to school at 27 to get my teaching license.

    I really think the only way to know what you really want is to get out and experience some things. College is a great place for doing internships and having a lot of different experiences, as you’re not dependent on having a specific paycheck yet. So, college student mom, have your son try out new things. Something will stick. And if nothing sticks right away, it’s honestly not the end of the world. He’ll figure it out, and it’s your job to let him out into the world so he can figure things out on his own.

  10. J says:

    @Carolyn — It’s time for your son to go out and explore on his own, as well as get into the world of “adult responsibility”. A 20 year old at college should definitely be exploring without having to ask Mom. Also, keep in mind that his passions will change over time. More than likely, he’ll graduate and do … something. Maybe he’ll find his passion there, maybe not. But at some point he has to go find his way in the world on his own. Maybe he’ll be OK with a decent “day job” and do art on the side. Or something. But he should be finding what to do, not you. He’s not a little boy any more.

    @Leigh — I have a very strong suspicion that your financial issues are marital issues in disguise. In a marriage, the partners need to be on the same page financially. You may need to spend more, she may need to save more. But it sounds like your situation is pretty much guaranteed to generate loads of resentment along the way. Talking about money regularly with your spouse is a very good thing, and from your letter it appears that you aren’t talking at all. Communication is really the key to making any relationship thrive.

    @Chris — That sounds like an excellent idea for your son. Make it clear that the bills are all his and his buddy’s and let them work it out. Nobody learned to ride a bike without falling over a few times.

  11. Maureen says:

    For Phil: I totally disagree with Trent’s advice. I don’t think that a tour of Europe, although tempting, is a wise use of time or money at this point. Save the vacation for later, Europe will still be there. Right now you are wise to focus on launching your career.

    Perhaps you could ask your parents to help you build up a working wardrobe (depending on your line of work).

  12. Matt Maresca says:


    Not too long ago, I was in the same position as your son. I was in college and everything came fairly easy but I could not find a passion. I had no clue what I wanted to do with my life. I knew I wasn’t a typical 9-to-5 kind of guy, but I didn’t know what would keep my interest. I experimented with a few things that didn’t really work out, but now I have several passions.

    My suggestion to your son would be to write down everything on his mind for 30 minutes every morning. This is a technique in a book called “The Artist’s Way”. It helps spark creativity and teaches you a lot about yourself. Tell him to just write whatever is on his mind and just keep the pen moving. I did this for a while and ideas always started sprouting after the first or second page. I always left my 30-minute writings with a greater sense of myself. I really think this would help him.

  13. Michael says:

    I am 32 yrs old, married (wife stays at home), w/2 kids (3 and 1 yrs old) and 1 on the way, have no debt other than my house ($90K owed on a $180 valued house in this market), make $91K in my stable engineering job, invest 12% in my 401K (plus 50% company match of 4%) with total retirement of about $90K, have 6+ months expenses in savings and really HATE debt (that includes the house). Can someone persuade me not pay my house off even aggressively (I’m paying an extra $550/mo) by temporarily discontinuing giving to my 401K and putting that towards the house?

  14. jgonzales says:

    On the bank account issue, check to see if you meet the 12 charge requirement consistently before switching. I know we do, but that is because we run nearly everything on our debit card, just in smaller amounts. Without even trying, I can get to 12 charges without going over my budget, mostly through gas for both cars and groceries.

    If you meet the requirements, then I’d say go for it, because that’s an amazing rate!

  15. Nicole says:

    I disagree with Trent that you need to figure out what you’re doing with your life before going to college. College is a great time to explore your options. A good college will teach someone to train their thinking in a specific discipline (“think like a mathematician” “think like a creative-type” “think like an engineer”) opening them up to a world of opportunities once they graduate. And yes, more exploring and more choices. People do completely change careers several times in their lives and there’s nothing wrong with that. He doesn’t have to figure out what he’s doing. He’ll still be employable without focus and if he needs more education once he has focus, he can get that. He may even end up in a career that hasn’t been invented yet. It is hard wondering what you’re going to do with your life when you’re a talented junior or senior, but he will end up doing something and maybe he’ll figure out a vocation and maybe he’ll just have a job, but either way that’s ok so long as he keeps learning and growing and enjoys life along the way.

    And yes, I recognize that my middle class upbringing gives me those beliefs about school. When your parents are middle class and not working class, getting specific job training doesn’t seem as important as being able to adapt… probably because we have more slack and can take more risks. (DH, who comes from a very different background, and I were discussing our parents’ different views on what college is.)

  16. Brittany says:

    @Phil– A plane ticket and a Eurorail pass? While I’m all about traveling as a growth experience, I know very few relatives willing to shell out that kind of money as a graduation gift. Egads. However, have you considered asking for a “delayed” gift for when you do move out on your own? For example, ask for a nice pots and pan set for, but ask them not to purchase it until you actually move out on your own–then you don’t have to store it, but your family is still able to give you a practical, worthwhile gift to help get you set up after graduation. A really outstanding choice might also be asking for a few good pieces of professional clothes–after you find a job (so you know if you need a suit or just dress slacks and polos).

    This is something that would probably only be appropriate for close relatives, but I had a few friends who moved back home temporarily that this worked really well for. One even lived at home for a year, but is getting ready to move to Texas to live with me–when she comes, she’d bringing a brand-new nice vacuum cleaner that she’s getting now as her graduation gift from last year.

  17. Brittany says:

    And at Chris… your sondoesn’t have a full-time job, but does he have a job? Cut the purse string as Trent suggests, but if he’s even working part-time, encourage him to move out! First off, it’s definitely possible to make ends meet on part-time minimum wage work if you’re a single person with no dependents. (This will teach him to be frugal and responsible.) Second, this is possibly, but hard. (This will encourage him to explore more lucrative options/find a career path if he wants to improve his situation.)

  18. Honey says:

    I think the idea that it is even possible for everyone to find a job that they enjoy is not valid. My boyfriend dislikes working at any job – as soon as he is getting paid for something and *has* to do it, then he resents it. This is why he became an attorney – he figured that if he hated everything he might as well make as much money as possible. Now he realizes there are degrees of hating your job and money isn’t as important as he thought it was, but the fact that he knows there are jobs out there he’d hate less than the one he has now doesn’t mean that he would like any other job.

  19. Anna is now Raven says:

    @Carolyn: Like Nicole, I disagree with Trent that students need to figure out what they want to do with their lives before going to college. Many, perhaps most, students find their way after they’re in college, or even much later. Too-early decisions are often based on insufficient evidence or limited experience, and thus can lock a person into a lifetime of frustration.

    For example, both my sons (1) majored in fields far removed from their current occupations and (2) worked for a while in fields unrelated to their majors before settling down in fulfilling careers. None of that study was wasted, even though it may seem irrelevant, and none of the experience was wasted, either.

    As Trent says in another reply up above, and has said in other posts, experiences of all kinds are valuable. That applies to careers as much as to any other part of life.

  20. matt says:

    Have to agree with #14 Honey, I love my field of work, but hate my job and would likely hate any job, as you are required to do stupid mundane things like ‘status reports’ and attending useless meetings. If I could do anything, I would play in the lab all day, not possible in the real world, even if i ran my own consulting operation there would be things to do that I would dislike. I tend to think its called ‘work’ for a reason, and that’s why you are getting paid. If you are spending the money on college you should at least get a degree in something useful, tangible, and marketable, even if its not your passion, then you would have something to fall back on. Pick a job field that is palatable with only a bachelors degree and work your way backwards from there. Always time in the future to jump ships.

  21. chacha1 says:

    “he’s a keeper” LOL! I think that’s the first time one of Trent’s posts has made me laugh. Good job. :-)

  22. prufock says:

    My brother was planning to get married this year, and I had saved up some money ($500) for the bachelor party and wedding gift. Now the wedding is off, and I’m not sure how to direct the money. I can roll it into my own debt repayment, or make it a gift to him to furnish his new place (not sure what he needs, if anything), or pay for some sort of trip. He has a three-year-old daughter, and I also considered putting into a college account for her, but that seems like such a deferred payoff. Another option would be to put it down on HIS debt, but that also seems like an invisible gift. Right now it’s just sitting there in the bank.

    Just curious if you or the readers have any creative suggestions for how to roll the money.

  23. Jackie says:

    12 transactions doesn’t seem difficult at all. Depending on your budget scheme and how you distribute your money. 12 debit transactions is just 1 trip to the gas and grocery stores each week and just one other purchase. How does trent get by without those things?

  24. I saw a package of morels in the grocery store the other day and about died because of the price tag! Don’t buy them from the store! Get out in the woods and find them! I’m sure they grow where you live! I used to find them by the grocery sack full back home…

  25. Dee says:

    @18 prufock

    I like the idea of using the money to do something with your brother. A short trip or fun experience might help him feel better about the breakup of the marriage.

  26. Tanya says:

    To Carolyn and anyone else with an 18-24 year old, I highly suggest checking into AmeriCorps*NCCC. I’m an alumni so I obviously have some bias, but it’s an awesome program and it’s going to be expanding. Here’s a link for the NCCC. Please take time to check it out! http://www.americorps.gov/about/programs/nccc.asp

  27. Gretchen says:

    Even if you don’t make the 12 transactions (I agree with other comments that you can do 12 and still have control over your finances), what’s the worst that happens?

    They aren’t charging you and most banks don’t have interest bearing checking anyway.

    The problem with #1 going to Europe is if any of the jobs comes through, he won’t be here to interview/start right away.

  28. Jane says:

    We have a checking account that gets the 4% and we have NO problem with the 12 transactions. Do you buy a soda or coffee once in a while? Charge it rather than pay cash. Like others said, gas and groceries should get you halfway there. And Trent’s fear of overdraft is silly. Because we have such a great rate, we have almost $20,000 in our checking account – basically no chance of overdraft, barring theft. We couldn’t find any low-risk investment that beat the interest rate on the checking account, so we’ve decided to stick our emergency fund there.

  29. Johanna says:

    I don’t know if Phil is actually interested in volunteering overseas, but for anyone who is: Please be careful, and do your homework. A lot of volunteer opportunities can end up doing more harm than good (or at least harm as well as good).

    You could be undercutting the local labor market and taking away someone’s job. A local person who knows the language and the culture could probably do the job better than you could, anyway. The time and money that it takes to train you, house you, and supervise you could be better spent on something else (like hiring a local person). And if you’re not interested in staying any longer than a few months, they’ll just have to train someone else when you leave.

    I’m not saying that overseas volunteer work is always bad. But if you’re primarily looking to get an “amazing experience” for yourself, or something nice to write on your resume, then that means you’re primarily thinking about yourself, not the people you’re supposedly working to help, so you could end up doing things that are in your best interest but not theirs.

  30. Doug says:

    @Phil – I too am a college almost-graduate (although I do have have a job lined up.) My parents were at a loss for what to get me for Christmas so they got me a plane ticket to anywhere in the continental US. (They felt like further would be too expensive for what they had budgeted.) I haven’t used it yet or even figured out where I’m going to go, but I’m looking forward to it!

  31. cathleen says:

    On a side note, what are the odds but I know 3 people who have won big in the lottery. (I do know a lot of people :)
    The big one? My husband’s childhood neighbor, an 80 year old man, very wealthy I might add, who always bought lottery tickets. He won $36 Million, died 3 years later.

  32. Ellen says:

    #18 – How you use the found $ depends entirely on your relationship with your brother & your respective financial positions. It doesn’t make a lot of sense to be gifting someone else who might not really need anything if you’re carrying debt.

    A couple of alternative ideas to consider:
    If you really want to do something for your brother (&/or his daughter) how about splitting the cash – use part for them & the other part toward your debt.

    OR, set the money aside in an interest bearing vehicle, to be used if he gets married in the future.

  33. Johanna says:

    Another thing, since Trent specifically mentioned orphanages: Orphanages give a lot of people a warm fuzzy feeling, so it’s easy to get money and willing volunteers for them. But a lot of children in a lot of orphanages have living relatives, or even living parents, who would love to care for the children but lack the means to do so. Wouldn’t it be better to take the money spent on building and staffing the orphanage and instead use it to support the community in general to help keep the children with their families?

    Same goes for international adoption, only much more so.

  34. Crystal says:

    Carolyn…I was/am in the same boat as your son. Honor student with no idea what I want to be when I “grow up”. I do love blogging but I have a day job too. I think you just need to let him figure it out on his own. As long as he knows he needs to pay his own way in life, he’ll be spurred to take care of business while he figures out his passions. I wish us both luck!

  35. KC says:

    Concerning low-income personal finance, I was a head librarian for a branch in a working class urban setting for a number of years. We had the standard personal finance books (Dave Ramsey, Suze Orman, David Bach, etc). But the books that got the most use were ones focusing on improving credit scores, avoiding debt collectors, bankruptcy, and foreclosure. It was my experience that many of our customers that were interested in personal finance were at that point out of desperation. They’d hit rock-bottom and didn’t know what to do. In other words many people weren’t just interested in eliminating debt or spending less/saving more, but they were dealing with the real effects of too much debt (collectors, bad credit, foreclosure, bankruptcy). You might try some of those areas for help and visit your local library – they’ll have plenty of free resources – just ask your librarian.

  36. For: Andrew

    Hey I know what you mean about financial advice for us low income urban environment folks and wanted to invite you to my own blog where I discuss many subjects geared to this audience. We have a bit different/more radical approach but I believe you will find it quite useful:

    “Because ridicule is the most effective form of education”

  37. Garry says:

    About the 20 year old son who’s not sure what to do.

    Try the Johnson O’Connor Research Institute. I was that “not sure what to do” kid 30+ years ago and do not regret doing JO one bit, in fact I just reviewed my results again a few days ago, and today I’m doing pretty much what I planned to do back then. It’s not terribly expensive ($600), which is cheap considering that it’s good for a lifetime.


    “The Johnson O’Connor Research Foundation is a nonprofit scientific research and educational organization with two primary commitments: to study human abilities and to provide people with a knowledge of their aptitudes that will help them in making decisions about school and work. Since 1922, hundreds of thousands of people have used our aptitude testing service to learn more about themselves and to derive more satisfaction from their lives.”

  38. heather t says:

    Congrats on the new baby!

  39. Leigh says:

    To: #4 Johanna @ 9:34 am May 3rd, 2010

    -Since you and your wife have separate finances, how are you dividing the household expenses?

    We have it 50/50. I know that sounds selfish, but there is a history where, before she was at this earning level, I was the sole support. I handle all the big expenses and have given her a car, multiple computers, furniture, etc. All things considered, we have an equal standard of living.

    -Have you tried to get her involved in her own finances, or are you happy to keep her in the dark?

    She happily delegated the task to me and I happily took it. Deep down she knows it’s best, being that I’m the one careful with money. She doesn’t want to be involved. She just wants enough for lunch out with the girls, sodas at work, a nice wardrobe, fancy hair, etc.

    I realize it sounds quite uneven, but the challenge is that she took on most of this debt before I even knew her. I married her with debt and accept my part in working it down, but believe — due to our age difference — that I also owe her that I not be a burden in my old age.

    Thank you for responding. You’ve given me much to think about.

  40. Leigh says:

    #8 J @ 10:02 am May 3rd, 2010

    – I have a very strong suspicion that your financial issues are marital issues in disguise.

    I think we’ll always have different monetary philosophies. I believe in preparing for future scarcity and she feels the paychecks will always be coming. If we are blessed, she will be correct. If not, I prefer to be prepared.

    But I’m open to the fact that I could be even more generous. It’s just difficult to be so, knowing how much has already been given.

  41. Amy B. says:

    @Leigh- My husband and I have a similar spread in age, and also took our time to merge our finances. From my experience, there can be a lot of reasons this can take some time, and different levels of debt can be one of them.

    If I were in your shoes, I’d ask you and your wife to seriously consider a job change to one where part (or all) of her student loan debt could be forgiven after a number of years of service. Not the easiest thing to find, to be true. But, it might be the long-run best course of action to boost the bottom line.

    Good luck.

  42. GayleRN says:

    @Leigh,it sounds to me like there are marital issues that need to be addressed. I’m picking up on some fear that at some point she would leave because you are so much older than she and would presumably become decrepit and undesirable. Maybe if you had lots of money she would stick around, right? These things aren’t necessarily logical, but they can be there. There is also a somewhat paternalistic slant to your list of possible solutions. At no point do you give any indication of what your wife thinks should be done.

    The bottom line is that the loans need to be paid, they will burden your finances and thus the relationship until they are gone. Sit down together, figure it out and get started. To be perfectly honest I don’t see why at your income level you can’t get rid of them in just a few years and have done with it.

  43. littlepitcher says:

    @Andrew–stretcher.com (The Dollar Stretcher) has a contributors’ forum with sections for the disabled and those on food stamps, among other categories. The ideas tossed out on the forum come from all walks of life and low-income people are encouraged to share and take what they need from the range of solutions offered.

  44. reulte says:

    Carolyn — your son doesn’t need to know what he wants to do for the rest of his life before finishing college or even before getting a job or a career. I went to college and started a degree in something I enjoyed in high school (biology) then fell in love with anthropology. I ended up graduating from college with a double degree. Over the years I have tried various jobs — some of which fit me better than others and not all in my areas of study. Since I am so close to retirement in my current job (which has nothing to do with either subject!), I will work for 3 more years then return back to college for a graduate degree in zooarchaeology and to heck with the job market. I only discovered this was what I want to do because I’ve kept a well-read, constantly thumbed and updated notebook of articles relating to the subject… and it’s one of the few pieces of “clutter” that I’ve kept over the years. I’ve paid money to travel to relevant seminars and sites during my personal time.

    I’d ask him to do at least a summer of work — the kind of work you do without a degree. At this point in his life it may be more motivating for him to avoid menial labor than it is to work towards some personal fulfillment.

    Phil — I have to agree with Trent to some extent. If you hae the money and can match what your family can give you — then take the time to travel. Perhaps even travel related to your degree. Interested in architecture? Then find a well-known architect whose work you admire; make an appointment with him, prepare appropriately and go.

  45. Tracy W says:

    If you are going to go to college without knowing quite what you want to do, do a maths-heavy course, if at all possible. After reading and writing skills, maths skills seem to be the most important ones for opening doors in the future. I have several friends who couldn’t do the courses they wanted to do because they didn’t have enough maths background and didn’t want to take the time to go back and acquire it. I had the maths background, and after I finished my engineering degree I did a knight’s move to economics (yes, that was the official name), and get a post-grad degree in that in only two years.

  46. Margo says:


    I’m concerned that your wife incurred $27K in debt for an unfinished doctoral program. If you pay significant portions of her loans, then she goes back for another year of the program…will it cause problems for your relationship if she postpones it again? Would you consider it unforgivable? If so, don’t pay back her loans. Keep adding to your savings until she gets serious about loan repayment and then consider helping accelerate those repayments.

  47. Jeanne says:

    Trent, laughed out loud at your comment that the new baby is a “keeper’… where would you send him if he weren’t (just kidding!)? i’ve asked my sis the same question about her hubby (is he a keeper?) and for the 13 years they’ve been together, her response has always been an emphatic YES! Heartwarming to say the least.

  48. SLCCOM says:

    Lucky baby! My big brother wanted my Mom and Dad to take me back to the hospital and get their money back!

    This business about “taking a break” from a very expensive Ph.D. degree when there are a lot of school loans to pay back doesn’t play well with me. The odds of her actually finishing are very low, so that is money down the toilet. If I were inclined to help her pay her student loan debt, I would make her continuing school as a condition.

  49. Anna is now Raven says:

    After reading all the comments from and about Leigh and his wife, I have to say that she sounds like a very immature dilettante.

    “She happily delegated the task to me and I happily took it. . . . I’m the one careful with money. She doesn’t want to be involved. She just wants enough for lunch out with the girls, sodas at work, a nice wardrobe, fancy hair, etc.”

    All that—in addition to starting and then dropping an expensive PhD program!

    Mrs. Leigh needs to grow up and take some responsibility for herself. Leigh could help her do that.

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