Updated on 07.31.14

Reader Mailbag: The Millennium Trilogy

Trent Hamm

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. Donating to charities through businesses
2. Advanced board game recommendations
3. School or buy a house?
4. Rapid car loan payoff
5. Dealing with parental yearning
6. Life is not a test
7. Do extra mortgage payments help?
8. Games with great replay value
9. Handling a cash lump sum
10. Setting priorities in complicated situation

Over the last few months, I’ve been reading Stieg Larsson’s Millennium Trilogy (The Girl with the Dragon Tattoo, etc.). It’s a great page-turner and loaded with interesting characters (some of which don’t receive enough page time – but Larsson was planning a ten book series).

The only problem I have with it is that a lot of the male characters are portrayed as seething with anti-female rage (aside from the main character, who is a thinly-veiled substitute for the author himself). They hate women and they abuse women. On the flip side, there are almost no female villains in the books (I can’t think of any off-hand). I don’t think either sentiment is very realistic… but maybe I’m looking for too much realism in a page-turning mystery series.

Last night, my wife and I ate at Chili’s, because Chili’s was donating 100% of its profits to St Jude’s Children’s Hospital on 9/27/10.

My question: We made a small donation that was added to our bill, as a seperate line item, to St Jude’s. What are your thoughts on making donations through a third party, like Chili’s, or sending a check directly to the charity?
– Robert

I’d prefer to make the donation directly, for three reasons.

First, if I’m making donations myself, I can research and choose the exact charity to give my money to. Some charities are definitely better than others – and some charities focus on areas that I value, while others do not.

Second, if I make donations myself, I can claim the tax deduction myself. If I donate $20 to a registered charity and get a receipt for that donation, that deducts from my taxes, saving me $5 or so (which I could then also donate). In other words, a $25 donation to a registered charity is roughly equal to a $20 non-registered donation at the end of the year when taxes are calculated. In your case, you seem to have been giving the cash to Chili’s, not directly to the charity.

This leads me to the third problem. A donation given through Chili’s mostly just serves as a PR campaign for Chili’s. They’ll use your money to make themselves look generous and good when they collect all of those donations together. I really don’t like being part of a corporate PR campaign, even if it does benefit a charity in the end.

I really enjoyed your game night post. However, it was pretty clear that you were trying to recommend games for new groups. It sounds like you’ve been board gaming for a long time. What games do you play the most in your group?
– Kenny

I usually keep notes on the games we play at our game nights. Over the course of the years that I’ve kept notes on this, our top ten most played games are as follows:

1. Settlers of Catan
2. Dominion
3. Race for the Galaxy
4. Ticket to Ride
5. Agricola
6. Puerto Rico
7. Modern Art
8. For Sale
9. Power Grid
10. Ascension

Just to be forewarn you, some of these games can be pretty complicated and confusing, but they all are well worth spending the time to learn the rules. The simplest one is For Sale; the most complicated is probably Agricola; the one with the steepest learning curve is definitely Race for the Galaxy.

My husband and I are in our late 20’s, renting in inner-city Atlanta for approximately $825 including utilities. Currently, he is employed full time in the government/transit sector and makes about $55K after taxes, with benefits. Since losing my job in March, I have freelanced and have a variable income, never exceeding more than spare change per month, and am currently looking for more work. I use my freelance money to pay my 4 credit card bills at a total of $200/month, for which the total combined limit is $2.5K (and amount owed, in fact, because I keep using them when I run out of money, after paying them. Revolving credit indeed!).

My husband foots everything else, and we otherwise have no debt. The only other regular expenses that I can think of are a shared studio space for him at $50/month, and our internet at $50/month. He has an emergency savings of about $6K, which we rarely have touched, but also don’t regularly contribute to it. Most of our leftovers at the end of the month sort of sit in his checking account, or get used on vetrinary care and other random small/medium expenses. All in all, we follow a budget and we’ve got money left over, but we’re probably using it relatively unwisely.

Through allowances in Georgia aestheticians requirements, I am certified to practice certain forms of hair care. However, I have no place to do so in our current living arrangements. I cannot practice in a salon environment without an aestheticians license (there may be more allowances, but I am unsure), or unless I work as an apprentice with credit hours being put toward licensing. Apprenticeships are hard to come by despite my haircare experience, so I have been looking into schools. We are car-free, so I can’t travel to many of the cheaper schools in the outlying sprawl of Atlanta. There are several schools that are easily accessible, however they are high-end schools with high-end tuition, starting at approximately $15K, all inclusive for the full course and tools.

My husband recently learned that his grandmother has socked away $16K for his education. However, he received scholarships for his BS, graduated three years ago, and has no plans to get his Masters. All technical education and continued learning courses applicable to his work (for which he has been promoted three times) are covered by his employer. On the off chance that we would need to move for his work, his experience in the industry is equivalent or greater than a Masters would be, and he makes for a very qualified applicant in his field. If I were to get licensed, I too could go anywhere with few limitations.

I know you might advise me to take some money out of that $16K to pay off and close my credit cards, or to put the money toward training. However, from the discussions we’ve had with his family about even accessing the money as a down payment, this seems to be a situation in which the $16K is *his* money, for *his* future. I came into this relationships with these cards, have racked them up since being laid off, and also have that whole “my responsibility” thing. I’m fine with carrying $2.5K for a while, and I hope to get more work to make larger payments and stop using them soon.

We have been window shopping properties for about a year, and are looking to make a move now that we’ve got the down payment. A lot of the houses and condos in the inner-city neighborhoods we desire are under $100K, and I have arbitrarily set our max at $175K after some possibly inaccurate calculations. At 5% for 30 years, $175K comes out to be less than what we are paying for rent and utilities. (Correct me if I’m wrong, please!) Though we plan to move sometime in late 2011, we haven’t sought out mortgage approval yet, so I know that we might need to adjust our expectations.

In order to make money in the hair industry, it seems I’d have to spend a rather large amount of money. It feels like a bad idea to take out a loan for a hair degree, especially when we are looking to buy a house at the same time. I’d like to think that we could balance both, but I would probably be unable to earn anything for at least a year while in training (the schedules are pretty rough.) Not as though I make much now, but with my freelancing, it’s at least possible to look for more income. Given all of this, should I pursue training and licensing while putting the house hunting on hold? Should we move to a cheaper rental (I’d hate to move to a “temporary” place)? A combination of these things?
– Jennifer

The “his money for his future” idea is really strange to me. For starters, since you’re married, your financial situations are tied deeply to each other. When you have to bend over to pay a debt, you’re not able to carry some other load, which he will have to carry (and vice versa). Secondly, if it’s his money, he should be able to do with it what he wishes. If you’re currently stuck in a revolving door at that credit limit, it’s a problem that affects you both.

The first thing you guys need to do is completely merge your personal finances. The idea of “his” money and “her” money, aside from a possible small pool of “spending money” for each of you, needs to go out the door. You’re in this together.

I only have a partial picture of your budget here, but I suggest merging your money, getting rid of any and all debts as soon as you can, and establishing small “spending money” pools for each of you that limit your free spending each month.

So, what about the schooling? If you have a hair degree, will you actually be able to use it to earn significantly more than you’re making now? Also, are you going to want to practice this trade over the long haul?

This is very much a trade program, meaning that it pays off if you can find work in that field and stay in that field for a while. If you’re going to invest in that degree, you need to be sure that the field is open to you and that you have the ability and desire to do it – and to do it well. Also, since your shared financial future is on the line here, you need to make absolutely sure your husband is fully on board with this plan as well – after all, you did marry each other. Don’t just insist on it, either – understand what he really wants here.

If all of that is in place, go for it and get that degree.

As for the housing, you should strive to live in the situation that has the lowest monthly cost of living. If you move into an ownership situation, you’re adding maintenance costs and insurance costs on top of what you’re currently paying. Can you afford that? On the surface, the mortgage is cheaper, but the mortgage doesn’t reflect the total cost of ownership.

My husband and I want to pay off our $17,500 (4.5%) car loan as quickly as possible. The payment is $327 per month. I am realizing that car loans must not be calculated the same as my mortgage. When I over pay on my mortgage, the same amount is still do each month, but I see my principal balance going down. With my car, if I send in extra money I see that I owe less (or nothing the next month) but my principal balance hasn’t gone down much. I always still pay at least the minimum. My question is, should we just pay the minimum and be saving up to make a huge payment later, or sending extra money each month? If we send in extra money, how will I know when I am close to paying it off?
– Jen

From your question, it seems as though the statements you’re getting in the mail are not showing that the balance of your loan is going down with extra payments. If that’s not happening, where is your money actually going? Is that extra payment appearing on your bill anywhere? Did your loan not allow you to make early payments?

If I were you, I would quickly call your lender and find out what is going on with your extra payments. Are they being held for future interest?

Once it’s clear as to whether extra payments are actually providing a real benefit to you, move forward as you see fit. If you have an emergency fund on hand, there’s absolutely no reason not to chase debt freedom.

I read with interest the letter from the older couple that wanted to adopt. Their situation was very similar to mine. We tried different was to conceive and didn’t succeed. It was costly and emotionally draining. My wife has pretty much given up but I have the strong feeling to be a parent. As we bought a house this past year, our money is tight. It kills me to think that there are people like us that want kids, and kids that want parents, yet I feel there is some kind of Grand Canyon that separates us. Outside of asking for donations, adopting special needs kids via my home state, or becoming a ‘big brother’, do your readers know of any other means? I coach and referee soccer each weekend…. And when I see the joy of the kids and their parents, I feel such a strong empty feeling inside.
– Ida

The first step I would take in your journey is to get your finances in the best possible shape. You’ve just bought a house and you’ve mentioned that money is “tight.” The truth is that adding a child to your life, no matter whether adopted or not, will put a serious strain on your monthly budget. If you’re having difficulty making ends meet now without a child, it’ll be much harder with a child.

Similarly, you need to both be sure that you’re on the same page with adoption. Your mention of the fact that your spouse has “given up” and your recent decision to stretch your finances for a house seems to indicate that you’re making life choices that move you away from having a child. Sit down and talk about this, openly.

If adoption is truly not going to work for you, your best approach is to simply be involved with youth organizations. Become a Scout Master. Stay involved in soccer. Get involved in refereeing basketball or umpiring baseball.

If you are going to adopt, one approach to consider is a private adoption, where an adoption lawyer helps you through the legal process of adopting a child that you locate yourself (for example, through advertising in newspapers, a la the film Juno).

The biggest obstacle I have to success is that I feel like everything in my life is a test and if I mess up, I’ll somehow fail at life. It makes me nervous about everything. Do you have any suggestions?
– Sam

For there to be a test, there has to be a judge, and only very rarely is someone actually judging you directly on what you’re doing right now.

Think about the people in your life. Do you immediately form a deep negative opinion of them if they make one mistake? Almost assuredly, you don’t (or you have a very small social circle and possibly some problems that need professional help to overcome).

If you don’t apply that strict criteria to others, why are you applying it to yourself? No one is perfect. All we can do is strive to do our best and accept that, yes, sometimes we don’t match up to that.

If you’re having difficulty reaching that own conclusion, you may find some value in seeking professional help through psychotherapy.

I was hoping you could help shed some light on this for me. My husband and I are considering refinancing our mortgage. Details: currently in year 8 of 30, 5.75 fixed rate mortgage, no PMI, with plans to stay in our house for a very long time. We both have excellent credit and no other debt, and our retirement accts are fully funded. We would refi to a 15-yr at about 4%. According to mortgage and refi calculators it would take 3.5-4 years to recoup the cost of the refi.

Seems like an obvious choice but here’s the thing: my stepdad told me that an added mortgage payment of $100 is equal to a 1% rate decrease. Obviously there are different sizes of mortgages and different interest rates on those loans so that advice doesn’t seem like it’s completely accurate. However, it does seem like there would be some truth to it, so I’m wondering if we should forgo the refi and just add to our principal payment (we are already paying an extra $100+ each month) thereby avoiding all the fees associated with the refi. Or does it make good sense to grab the lower rate?
– Angie

Your stepdad is trying to boil some fairly complicated math down to a simple rule of thumb that doesn’t quite hold true. So let’s walk through that math instead.

Let’s say that you have $200,000 left on your mortgage – I’m just making up a number so we have numbers to use. Your monthly payments on that mortgage would be $1,336.76 a month.

You could refinance that $200,000 into a 15 year mortgage at 4%. This would turn your monthly payment into $1,479.38 a month, but you would be paid off in just 15 years.

On the other hand, you could simply make a $1,436.76 payment each month on the mortgage you have now. This would move your payoff date up about three years, making it effectively a 19 year mortgage.

If you add $200 to the payment, making a $1,536.76 payment each month on your current mortgage, you would move your payoff date up another two years, making it effectively a 17 year mortgage.

So, your father is right in that adding $100 to your payment does effectively act as a reduction in how much you owe. However, it does not add up to enough to make up for the savings you’d get from refinancing to a 15 year at 4%. Compared to adding $200 a month to your current payment, the refinance would give you lower monthly payments and two years quicker to your payoff. Unless your mortgage balance is very, very small, you’re better off refinancing.

Like you, I’m obsessed with maximizing the value of my purchases. I like playing video games and I tend to focus on ones with as much replay value as I can find so that the “cost per hour” is as low as possible. What have been your biggest bargain games in this regard?
– Lucas

Excluding free games that I’ve played extensively, like Desktop Tower Defense, the biggest bang for my buck ever for electronic gaming probably has to be Civilization IV. I can’t tell you the number of late nights I’ve spent sitting there building an empire and thinking to myself, “Just one more turn!”

I asked my wife (a pretty avid gamer herself) what her best value game was and she said, without a doubt, Sim City 2000.

In terms of travel gaming – the kind you can easily keep in your pocket – my winner (again, by a long shot) is Advance Wars: Dual Strike.

What do all three games have in common? They’re all turn-based strategy games. For me, those kinds of games are the most fun over the long haul.

My husband and I are both 30 years old. No consumer debt, no student loans. We owe $48,000 at 5.5% on our mortgage – down by one third from when we bought the house 18 months ago. We pay an extra $1000 towards the principal every month.

We also are working towards funding a 6 month emergency stash, saving for a vacation, an eventual replacement car, etc. Everything is where is should be, all our ducks are in a row. Except! We have $25,000 just sitting in an account not earning any interest. When the market started to tank a few years ago we pulled it out and now much, much later the money is still just sitting there. Any advice?
– Nicole

If nothing else, that cash should be in an interest-bearing savings account instead of sitting there earning nothing. Even 1-2% interest is notable on $25,000 – that’s $250-500 a year.

If I were you, though, I’d take that cash and throw it straight towards your various goals, starting with the emergency fund. Get that fully funded and suddenly you have the monthly funds you were putting into that free to put towards the other goals. You’ll reach all of them much more quickly.

You have goals. You’re moving towards them. That’s really the best situation anyone can be in.

My husband and I met in high school and ending up having a baby at sixteen. Since then everyday as been a struggle. I am currently 4 months pregnant and just started a new job as a Pharmacy Tech in August. I am currently making about $1,200 a month and my husband makes about the same. Our daughter is in private school due to the state of public schools in our area, and that costs $550 a month. We live with my mother in law so we don’t have any household bills except food and cell phones. We are trying to buy a house before January. My husband has no debt but I have $15,000 worth of student loans and various medical bills. With my first check I paid about half of my medical bills off and have about $500 left in those types of bills.

I really need help deciding whether buying a house is a good idea before paying off my student loans. We haven’t been pre-approved for a loan yet but are trying to buy a house for around $80,000.
– Donna

With a child coming and a roof over your head for the immediate and indefinite future, I would recommend that your focus be on maximizing your monthly cash flow. That means, rather than taking on the additional bills that a house would give you, pay off that student loans and the other bills first and make sure you can cover whatever the costs will be associated with the baby on the way.

The best thing you can do is to sit down with your mother-in-law and sincerely thank her for helping you guys out. Without her help, you would be in a very deep pickle right now. Talk through the options with her and make sure that she is okay with you staying a bit longer.

If she is, then focus on getting your current debts out of the way and getting your baby delivered safe and sound without any additional debts – and also make sure that you have post-birth work lined up and start saving for a down payment. At that point, you should focus on finding a home.

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. John says:

    If you were to make every male character female, and every female character male, everyone would call it misogynistic. A lot of feminists think the Millennium Trilogy is brilliant, but that’s only because it demonizes men.

  2. daisy says:

    Regarding the extra payments toward the car loan–
    When I got my current car loan, I was told that if I ever sent in extra money, it would be applied to the following month’s payment rather than to principal reduction. However, they told me I could include a letter with the payment and request that any excess amount be applied to the principal. In that case, the amount due the following month would remain unaffected.

    I think this is pretty common practice on loans that charge simple interest.

  3. KC says:

    @ Angie – My hubby & I are in almost the exact situation as you (except we are in yr 2 of 30 @ 5.375%). We looked at the paper work on a 15 yr re-fi at 3.75%. The fees seemed exorbitant, IMO. I shopped around and they were not. It’s my opinion fees have gone up in the past year or so.

    Anyway, I got online with a mortgage calculator and punched some numbers. It wasn’t hard for me to find a safe number that we could afford to add to the principle (monthly or quarterly) and be able to pay off the home in 15 years. Tinker around with the numbers and see what you can afford.

    We decided to go this route because we are thinking of starting a family. Thus we won’t be held to these extra principle payments should we come up short one month. The drawback to not refinancing is that you have to be diligent in making those extra payments for this to work. You say you’ll do it, but it doesn’t get done. However, we like the added flexibility of not refinancing and are pretty disciplined so I think we’ll get it done, unless we have an expensive kid – LOL!

  4. KC says:

    @ Angie – I forgot to mention that you can recast your loan at some point, too, to get lower payment. Usually this can only be done 1 or 2 times during the life of the loan – so I would save it for a while – maybe when you’ve reached 50% equity. It’s usually only a few hundred to recast a loan. Google “recast a loan” to get a better explanation than I can give.

    But Trent is right. The refi may be best for you. But if you need flexibility you may just want to continue the principle payments. Good luck!

  5. Kevin says:

    When people in the US describe “sending in” their mortgage payment, are they literally talking about mailing in a check? Or walking into a bank, meeting a teller, and making a payment? When people say they “missed” a payment, does that mean they literally didn’t mail in a payment, or is it implied that an automatic payment was declined because their account went into overdraft?

    I only ask because here in Canada, virtually all of those types of things (house payment, car payment, etc.) are completely automated. I never have to think about sending in a mortgage or car payment – it just comes out automatically. Is that also the case in the US?

  6. Robert DaVia says:

    Regarding the donation to a charity through Chili’s restaurant: if the donation is listed on the receipt, “St. Jude’s $1.00”, can I not claim that deduction on my taxes?

  7. Jenn says:

    As far as the car payments that Jen asked about… it sounds as if they are applying the extra to her next payment, and advancing her payment due date rather than applying the extra towards the balance of the loan.

    On my last car loan, the payment was $229. If I paid $250, they’d apply $229 to the payment and the remaining $21 to the principle. However, if I made an additional $75 payment the very next day, it would not be applied to the principle, it would be taken off of my next payment. So my account would then reflect that my next payment was only due $154.

    If you don’t go to the bank and pay in person and direct that money to be applied to your principle balance, you will eventually be at the point where you don’t have a payment due for several months.

  8. valleycat1 says:

    re donations – I prefer making donations directly because then all of the $ I’ve just spent goes to the organization, not just a portion of undefined ‘net profit from the sale.’ The same goes to sales as fundraisers – I’d rather make a donation than buy something I probably don’t really need with only a part of the cost going to the group.

    However, if I were planning to go out to eat anyway – or buy a given product anyway, I might choose a place that’s running this kind of deal, but I would not add an additional amount to the check as there’s no real accountability that the $ would be sent.

  9. valleycat1 says:

    Nicole – is that $25.000 your emergency fund & savings toward goals you mentioned? Or is it, as Trent assumed, additional investment funds you moved to keep safe? Regardless, his advice to at least get it into a savings account or money market account is correct – may as well earn a little bit on it while it sits. Or put all or part into an IRA or other retirement plan if you intend it to be long-term investments.

  10. Kevin says:

    In light of your comments about donations via Chili’s, what do you think about United Way campaigns?

    I think it’s a good idea for businesses to have a fundraiser, though I personally give money directly to charities and skip the overhead.

  11. Michelle says:

    Jennifer, I can tell you from experience that a $175K house payment for 30 years, at 5% will not be less than $875. We have a $150K mortgage at 30 years at 4.75%, and we pay $1200. Having a mortgage is not like paying rent, you have the payment on the loan and interest (which could be around $800), then you have taxes, which go into an escrow account and are paid at the end of the year, then you have home owners insurance (and possibly PMI if your down payment isn’t high enough). All of that is considered your “house payment” because it’s all paid at once. That’s the $1200. And unless utilities are included in your new condo, you need to compare the “house payment” I just described to your rent and your rent only. You’ll still have utilities at the new place.

    If you’re serious about buying a house/condo, you need to sit down with someone at your bank and figure out exactly how much your “house payment” will be. DO NOT rely on internet calculators, they won’t give you the whole story.

  12. Milly says:

    @Jenn, I don’t know how things work now, but at one time when we had a mortgage and wanted to make an extra payment towards principal, it was best to write it as a separate check and mark it “for principal only”. With electronic payments, there may be a different way to handle that.

    Most lenders will interpret extra payments in their favor, because if they simply apply the extra money to the next monthly payment, they get the money interest-free and you don’t get any break on the loan. In case of a mortgage, sometimes they will apply extra money to the escrow (money held in trust for insurance and property taxes), which does you no good whatsoever. It pays to be vigilant and follow through to make sure the extra money was applied to principal, until you know the procedure and can trust the lender.

  13. Sharon says:

    Trent, are you stressed about your daughter still? There are a few slips here that I find unusual to you.
    I agree with Jenn about insisting that the car payment extra be applied to principal. In the question it is pretty clear that the money is going on the account, but as next months payment.
    Donna–look into charter schools in your area. investigate carefully. Some of them are great and some no better than public schools in the area but all are free.
    Trent–why wouldn’t she have post -birth work lined up? She has a job _now_ and you aren’t allowed to fire someone just because they have had a baby.
    Regarding adoption: Look very carefully at the the adoption laws in YOUR state. Independent adoptions with just a lawyer or a facilitator are regulated by the state. Also advertising. Attend an orientation session by children’s services or an adoption agency and they should be able to get some info.
    And Trent, if watching parents at the soccer games he coaches makes him miserable, I am not sure that being involved in youth activities is a good cure for the “I don’t have a baby blues.” Every person is different so he needs to think about how the soccer coaching is helping/hindering his emotional life.

    And the question about hair salon school and money…
    Your husband’s income is 55K a year and yet HE won’t pay off your CC out of his salary? Yet your rent is only $825? It seems to me that you should be able to knock that out in a few months pretty easily and then live on your cash income.
    And Trent, the 16K isn’t his money either. As near as I can tell from the question it is the grandmother’s money. Since the familly has to approve the use of the money, it seems she is incapcitated in some way. (but alive). So it sin’t even his money. The family may be looking at issues with “giving” him the money if grandma requires Medicaid to provide care for her. My understanding is that if there are any large gifts in the recent past, they will ask for them back.

  14. KM says:

    The Swedish (original) title of the first book in the series is Men Who Hate Women. So it’s not surprising that it’s a heavy theme in the books.

  15. Gal @ Equally Happy says:

    Hey Trent, have you tried a board game called Descent? For former D&D dorks (which I may or may not be :) this is a really fun one. Campaign mode is neat too.

  16. Carey says:

    Kevin: we mostly do automatic withdrawals here in the states as well. “Sending in” a payment is an anachronism, just like “dialing” a phone number.

    There are a lot of people who still mail in their payments though, and a few who physically take them in to the bank branch. For people who have an unpredictable pay schedule (self-employed, commission workers), it’s better for them to have that control. Others just don’t trust the bank to do the withdrawal correctly.

    I work for a mortgage servicer, and I believe it was only in the last two or three years that the percentage of loans set up for an automatic payment inched above 50%.

  17. cv says:

    For Ida, depending on where you live, you could look into Court Appointed Special Advocate (CASA) programs (there’s a chapter in Silicon Valley that I volunteered with). You’re matched up with one child in foster care and spend at least three hours a week with that child, staying with him or her through different foster placements, changing schools, etc. Depending on the child and the program, you can end up meeting with teachers, social worker, etc. and being really involved in the child’s life, including representing the child’s interests in court alongside the child’s attorney. It’s a huge time commitment, but it can be a years-long relationship that has much more depth than what you might get coaching a big group of kids at soccer on the weekends.

  18. Gretchen says:

    What’s the $25,000 just sitting in savings for (ultimate purpose)?

  19. Rebecca says:

    To Ida: I’m concerned that you consider a “special needs” child from in state one of your ONLY options? What is wrong with that? Special needs kids bring as much joy into your home as a typical child, sometimes even more. It sounds to me like you would prefer a typical child, rather than take on the challenges of a special needs kid. If that is the case you really need to reconsider being a parent at all. Even if you adopted a typical infant, he or she may end up needing special services later. Would you send them back if they did? Even having your own biological child has a chance of needing special care.

    Being a parent isn’t cheap, ever. And it certainly isn’t a sure thing. It is the journey that makes it amazing. And being the parent of a special kid makes it even more so. Yes, you need to be a better parent, but the rewards are beyond imagination.

    FTR, we struggled with infertility, and now have 3 biological kids, 2 boys who are autistic, and a daughter who is NT. And I wouldn’t change anything about them for the world. They are perfect just as they are. They are my greatest source of chaos, frustration, fear and stress, but also my greatest source of joy.

  20. partgypsy says:

    I was going to post but Michelle #8 (true cost of home) and Sharon #10 (grandma’s money) said it better. Hold off on house hunting until have better handle how buying a home will affect finances and what you can qualify for, and whether you really have a downpayment. Have your husband confirm that that money really is going to be given to him for purpose of buying a home. Sounds like it was saved for his education and since he didn’t need it Grandma is holding onto it. A gift is not a gift until it is given.

  21. Jackie says:

    John, I question your statement that feminists love the books (especially that they love the books because they demonize men). I read a lot of blog and follow the feminist community and have only heard horror and disgust at the books and movies because of the violence against women. Feminism is not about demonizing men. It’s about fighting the cultural norms that encourage sexism, violence and mistreatment of anyone on a the basis of sex or gender.

  22. Starla says:


    I am also married and in my late 20’s. I do not understand why you refer to ‘your’ credit card debt. Especially the note where you ‘keep using them’ when you run out of money and ‘have racked them up since you were laid off’? Your husband has a decent income which in my view of marriage translates to you both having a decent combined income. If you didn’t have the cards, and didn’t have income one month would your husband let you starve? This view of marriage/money is totally alien to me. I can understand theoretically that some dual income couples prefer to split bills 50/50. I’ve even heard complicated scenarios where couples determine what percentage of bills each should pay based on the relative income levels they individually make. But in your situation where one partner is making practically all the money I don’t see any reasonable course of action other than combining your finances.

    Also, we just bought our first house for $140,000 a year ago (previously renting for $800/month). The interest rate is 5% for our 30 year note. The minimum monthly payment we send to the bank each month is $1030. On top of that we pay utilities (electric, gas, water, sanitation). The total utility bills average to ~$250 each month for our 1600 square foot house. Plus in the year since we bought the house we’ve replaced the HVAC unit ($4000). Repaired damage to the roof ($900). Cleaned up after a tornado did some damage to our property ($600)…This list goes on and on. I did a lot of research before buying a home, and even so am surprised at the multitude of unexpected expenses. So our required monthly outlay is ~$1280 just for mortage and utilities.

    If I were you I would first off decide whether I am truly married or just have a roomate. I’d put off buying the house, but pretend that my monthly rent payment was $1000-$1100 (so make your rent payment + save an equivalent amount to bring you up to $1100). This will help you guys get a down payment and discover that you really can or can not make a mortgage payment.

  23. e-Fables says:

    Hesitation to pursue a degree (like Jennifer) is really common these days since you have to juggle between work and full-time schooling. If you go to school full time, then you have to live on a loan. That’s not the scary part, it’s the part that you have to pay back the loan without finding a stable job after graduating that freaks you out. It’s kind of difficult to decide whether you should go back to school and terminate the job you have or to work a few years to eliminate debts and build up a saving before going back to school. It’s harder to make up your mind when you have a family to support. I understand Jennifer’s concern about taking out a loan for a degree. I have looked at the tuition number for a degree that I want for several times now but it still send chill down my spine. Getting an education requires lots of thinking nowadays. I’m just not sure how freshly graduated high-school students can just take loans left and right without pondering about it. Students taking loans out like people use credit cards now. The “paying back later” incentive really takes the pain out of paying making people fall deeper and deeper into debt until debts become bondage.

  24. chacha1 says:

    To Donna. Don’t buy a house, for heaven’s sake. And after this child, take permanent measures. You are not yet fully managing your responsibilites as adults and parents, and two kids on less than $30K a year is plenty.

    If you have been looking for a home to buy in the $80K range, you probably have no down payment saved up. If you have not been pre-approved for a purchase that small, you probably have not so good credit. Plus you have a big (relative to your income) chunk of debt.

    Your life will become better and richer when you start thinking of the future. Your future is now tied to the well-being of your kids. You have a duty to put off your own hopes and dreams – including homeownership – until you can manage them responsibly on your own.

    Good luck and best wishes.

  25. Jackie says:

    Does anyone (including Trent) know any blogs, advice or resources for people with underwater mortgages or non-standard mortgages. I have a question similar to Angie’s, but the number don’t work out as simply for a home significantly underwater or with balloon mortgages. I’ve read that 1 in 4 mortgages is underwater, yet I can’t find even the most basic advice on how to deal with it.

  26. Julia says:

    I have the same problem with my car loan. Every time I make an extra payment, I have to check online in a few days and make sure it all gets counted against the principal. If not, I call them and they fix it.

    My bank sends me the payment coupon to include with a check. On the coupon, there is a check box to mark if I’m including a principle reduction payment. But I don’t use that.

    I send my regular payment through my banks online bill pay service. For extra payments, I go to the bank’s website (the bankt that holds the loan) and set up a transfer from my checking account. There they have a place where I enter the payment amount (how much to apply to the regular payment) and the principal reduction amount. Then they add the two together and withdraw that from my account.

    1st time I did this, I thought the “Payment” field was the total to transfer, and the “Principal Reduction” would be subtracked from the “Payment” amount to determine how much to apply to the payment. I ended up making a payment twice as large as I intended.

    Call the bank and find out exactly how they want you to make those extra payments so it’s perfectly clear to them that they’re principal reduction payments. Then keep checking on them to make sure they do it right.

  27. Ashley says:

    @Donna – I would suggest a specific approach at paying off your debt, though I think Trent clearly hit on this. Do some research and complete a proposed budget for your ultimate goal of home ownership. Estimate your mortgage, home insurance, and taxes, etc.
    Personally, I would look into finding a neighborhood where the public school system is acceptable to your standards and where affordable housing is available for way below 80,000.
    Anyway, add your estimated mortgage payment, rough idea of utility payments for that area, and extra expenses. Let’s just say your estimated home ownership budget is 1100 a month. This is AT LEAST how much you should be able to pay toward debt per month right now. This way, you are working toward both goals and preparing for your long term desire all at once. Once the debt is paid off, you are used to the same/similar budget and will be in a far better situation than jumping into home ownership with unnecessary debt.

  28. valleycat1 says:

    I’ve read Larsson’s trilogy – thoroughly enjoyed vol 1; vol 2 was pretty good; by vol 3 I was burned out & tired of him adding one small detail to the backstory lines only by reiterating all that we’d been told to date. (& I was reading them as they came out, not all 3 in a row)

    I read voraciously, & I can only say that any uproar over the contents must be coming from people that only read a little bit.

    Bottom line, it’s fiction. And no one’s forcing you to read the book – if you don’t like the tone or the story line, quit reading.

    … and there’s a lot of fiction – & nonfiction, art, music, drama, etc. for that matter – out there that is provocative or expresses views completely different from mine. But I’m not into censorship, and I believe that by being exposed to ideas different from your own, you either broaden your outlook or deepen your beliefs.

  29. chacha1 says:

    Agreed, valleycat1! Have read the first two “Girl Who” books and did not find them to be either stereotypically feminist (there is plenty of stupid or self-destructive behavior from women in the books), nor misanthropic (the men are not all villains). The third is on my wish list.

    The author was a journalist who was deeply concerned with investigating the various forms of abuse of women. When you study this kind of thing for a while, you get very angry. This comes out in his fiction.

    A similar author in the U.S. is Andrew Vachss.

  30. Amy B. says:

    @Kevin- Seems arcane, doesn’t it? I think the default payment method for mortgages is the old payment coupon book. You can establish a bank draft. My bank charges extra for splitting this payment, or for making additional principal payments on bank draft.

    And for Ida, I like the idea that a previous commenter had about becoming a Court Appointed Special Advocate, it can be a great way for you to be involved in a positive way in a young person’s life. Still, it can also be gutwrenching as you are ultimately not the parent. My Aunt was a long-term advocate for a youth in her town. She saw him through the divorce of his parents, multiple accomodation plans for his developmental delays in the education system, and then into the juvenille court system when he started to act out as a teenager. Still, she loved the experience and having this young man as a part of her life.

  31. Debbie M says:

    @Jennifer, could you rent a place in the suburbs just long enough to get a low-cost hair degree, meanwhile saving for a larger down payment?

  32. GEoff says:

    @Donna – If you do decide to buy a house, make sure it’s in an area with good public schools. That $550 a month that you’re spending on tuition will make a nice dent in your mortgage.

  33. jim says:

    Donna: No don’t buy a house. “everyday as been a struggle” is not a position to jump into home ownership.
    I’d recommend you pay off your student loans first. Stay with the mother in law if you can. Then eventually look at renting a place first if you really feel you need to move out of the Mother in law’s. If you can handle paying all your bills when renting a place for a while then the next step would be buying a house. Theres no need to jump straight into buying a home with the obligation and responsibility of home ownership. Also you might seriously think about moving somewhere with better wages and schools. That would increase your income and cut that $550 /month cost.

  34. Mary says:

    I’ve played Settlers of Catan! It is a great game! Whenever I’ve gone to my friends’ house that is one game we play frequently.

  35. Puma says:

    Regarding the Millenium Trilogy, I consider what Isabella Vanger knowingly allowed to happen to her children to be pretty villanous.

  36. Bill says:

    Settlers of Catan is fun and you can play it online against real people or bots while you learn.

  37. SwingCheese says:

    I agree, chacha1. I’ve read all three of the trilogy, and was pleased with them. We had a book club discussion (about Dragon Tattoo) about the misogyny, and someone pointed out that in Swedish, the title of the first book is “Men Who Hate Women”. I think that Larsson was attempting to draw attention to the violence against women by making that the continual subtext (or major plot point – whichever) in his book. I don’t think that men were demonized – and I consider myself to be a feminist. I loved the books for a host of other reasons.

  38. Amanda says:

    Why can’t you adopt a non-special needs child through your state? There are a ton of kiddos in foster care, and we know a lot of family’s who have adopted children from the foster system (ranging in age from 0-12). There are a TON of kids who need homes, and the adoption process is typically rather inexpensive through foster care.

  39. Sharon says:

    Also in regards to fostercare adoption. Special Needs can mean siblings. I have seen a couple of groups of siblings on the Adoptuskids.org site which state that the kids have few issues but there is three of them so they are having problems finding a home. When I adopt I would love to adopt 2 or 3 and then be done with the paperwork.
    And remember, children services are encouraging adoptions of SN kids. If you feel strongly that you can only handle a slightly higher chance of serious issues …get on the waiting list and wait.
    And if you are willing to adopt boys esp a set of brothers who are 3 years old and older, you can have a whole group to pick from.
    You can also adopt across statelines through the fostercare system. Also if you happen to be part (or all) Native American and have a registered tribe, there are children who are listed as able to go to Native American families only.
    Keep asking. And let the word out you are interested. Things can happen.

  40. Dajolt says:

    Great game list. For those who don’t know it: Half of those games can be played for free online at http://www.brettspielwelt.de. It’s a a fan-based, free website that is supported by users and game companies. You can also look up the game rules there.

  41. deRuiter says:

    Perhaps Jennifer’s in-laws don’t think she handles money well? Living in continuing credit card debt, and constantly charging so you never get ahead is poor money management. Freelancing is all well and good, but a job delivering pizzas, dog walking or flipping burgers would keep Jennifer busy so she doesn’t have time to spend and help pay off the credit cards. What about Jennifer’s unemployment? How is Jennifer spending so much money if she doesn not go to work and gets unemployment? If the marriage dissolves, Granny’s hard earned money would be gone. Perhaps the in-laws are considering that?

  42. G says:

    I am writing about Donna above. This is at least the second time that people have said they live with parents and “have no expenses.” As adults, they should be paying something, besides food, to the parents for rent and utilities. I giuess if the parents have ALL their financial ducks in a row, no debt, emergency fund, retirement savings etc, then it okay to live with the parents without paying. Otherwise these people should pay the parents something, or the burden of their economic situation is falling on the parents, who may not be able to afford it either.

    I don’t mean to sound negative, but there are parents I know who continue to support adult children at the expense of their own financial situations.

  43. rod says:

    Thanks for the knowledge

    New to the site. Great Content

    Rod Busby
    “showing you how to save money while earning an incredible income”

  44. getagrip says:

    @ Angie I was in the same position (with about 10 years into a 30 year) and after running the numbers I refinanced from a 30 yr 5.75% to a 20 yr 4.25% mortgage. I decided against the 15 yr mortgage because it increased my payment even though the rate was slightly better. The twenty dropped my monthly payment and since you’re already paying ahead you may want to see how the numbers work with a 20 yr mortgage and paying ahead as well. One of the big differences is how long you pay. The five years for a 15 over a 20 year mortgage is a lot of money saved in mortgage payments. But it’s sacrificing cash flow over that 15 years as well. I needed a bit more cash flow now, so I choose a refinancing plan that gave me that without really affecting the length of my loan. Either way you can come out ahead in the long run.

  45. Erin says:

    @Jen-To reinforce what others said, I had a similar situation with my car payment. I called them and they told me that I should mail the payment separately with a note that said “apply to principal only”. Otherwise they just applied it to the next month’s payment.

    @Jennifer- I think you need to focus on 1 or 2 financial goals at a time or you and your money will be spread too thin. I agree your husband’s family’s attitude about that money is a little weird but it really is still their money so forget about it and move on.

    From what you’ve said it really doesn’t sound like a good time for you to buy a house with your career plans up in the air. I would suggest getting that ironed out before taking on such a big commitment. Houses come with so many “surprise” expenses.

  46. Cheryl says:

    We adopted our 3 kids thru state DHS. One thing they made perfectly clear when we took the foster parent certification classes the second time: The chances that your adopted child will be dealing with problems due to sexual abuse and/or prenatal drug and alcohol exposure are over 90 percent. Be sure you are ready to deal with that eventuality

  47. reulte says:

    Robert – I would treat that like I treat coupons; if I’m going to buy the product anyway then I’ll clip the coupon. In your case, if Chili’s is a place I’d normally go, then I’d go on a fundraising night. However, I wouldn’t add an extra donation to the check exactly for the reasons Trents gives.

    Jennifer – I disagree with Trent in merging your finances unless that is what you want to do. I’m also confused by your email. If you are planning on moving, will you be moving to a place with easy access to a less expensive school? Is is his family that defines the money as “his” or is it him or is it you? If you come to the decision to use the money to go to school, can you use the money for transportation to one of the less expensive schools (remember to factor in the time traveling)? Can you use the allowances to freelance by going to people’s homes and working? At this point I think you need to ask yourself about more options.

    Ida – I don’t have much experience but do have some friends that fostered a child and then adopted him. Is fostering an option for you? I understand that it’s heartbreaking when you foster a child with the intention to adopt but it doesn’t go through — but life is full of heartbreaks.

    Sam – Most peoples’ worst judges are themselves. Make friends with your judge. Recognize that you can’t succeed without failing. Be as patient with yourself as you are with your best friends. You might find the book Mastery by Goerge Leonard helpful.

  48. Diane says:

    #11KM – Is right – “The Swedish (original) title of the first book in the series is Men Who Hate Women. So it’s not surprising that it’s a heavy theme in the books.”

    Note to Trent: The third book begins exactly where the second left off. Plan to read them back-to-back, if possible. I read a ton and by the time I got the third book, I had read a dozen or so others in between. I’d already passed the second book on to a far-away friend when I started the third, so I found book three to be slow going at first, as I was trying to remember details of book two.

    I also agree with #22 valleycat1 – “Bottom line, it’s fiction. And no one’s forcing you to read the book – if you don’t like the tone or the story line, quit reading.”

  49. Rebekah says:

    Re Millentium Trilogy. Although books stand on their own, without the back story, This trilogy does have one. He witnessed a rather horrific group rape by a group of his friends as a teenager and stood by and did nothing. (I read a link from a swedish newspaper). The guilt haunted him, and strongly influenced the writing of the series. At some point, he went to the woman who had been raped, and asked her forgiveness for not helping her, and if I remember correctly she told him to go to hell.

  50. littlepitcher says:

    @Jennifer–if you combine aestheticians’ training with laser training, you can go into a day spa or plastic surgeon’s office and increase your income.
    @Trent–You don’t see the misogyny because, bless you, you aren’t associating with misogynists. Plenty of men are spoiled brats who hate women because they don’t give in to every scream and squall like Mommy did, and don’t put out like the mannequins in the porns.

  51. Steve in W MA says:

    @The biggest obstacle I have to success is that I feel like everything in my life is a test and if I mess up, I’ll somehow fail at life. It makes me nervous about everything. Do you have any suggestions?
    – Sam”

    This suggests to me that while you have not yet connected your goals with your authentic desires. You are accomplishing things with the mindset of “how will others view me through this accomplishment” and feeling like accomplishing things per se is a value unto itself. Which it can be. But it can also be a limitation. You might benefit from some introspection to discover things that you are truly interested in doing for for yourself and are passionate about. As you connect with some of these authentic goals and act on some of them and achieve some of the smaller ones, your confidence will build and you will be able to make larger decisions that feel connected to your true desires and life will probably start feeling very different, not like a test, but like more of a self-directed adventure or project.

  52. Steve in W MA says:

    To the aesthetician, I would suggest investing money where there is a foreseeable return–hair training–as opposed to putting it into a home. A primary home is primarily an expense. It won’t increase your income or your savings. The training may increase your earning potential if you are intending to follow it up with hair work. So I’d focus on that. Later on you might open up your own salon instead of working through one. Later on you can buy a home once your income is up and once your other ducks are in a row.

  53. Steve in W MA says:

    I do have this to add. For an 80K home, the 30 yr mortgage is less than $600 per month. In that case, it may pay to buy as compared to rent, even if you have other financial goals at the same time, because the costs of renting for $800 a month and buying for $600 a month plus insurance and taxes are fairly comparable.

    As to repairs, the cost of repairs can vary widely, primarily depending on how handy you or your husband are. Many home repairs can easily be handled by the homeowner themselves and don’t need to cost a lot.

  54. Steve in W MA says:

    Donna- not buy the 175K home, buy the 80K home. Just because you can finance the 175K home based on your income doesn’t mean you should spend all that money, because over 30 years that home is going to cost you almost exactly 3x the purchase price. Buy the 80K home and have the option to pay it off faster than the bank requires, and also have the added flexibility of being able to fund your kids’ education and your retirement goals at the same time. The mortgage calculators don’t factor in those other costs of life.

    I would recommend starting to build a monthly budget and allocate all of your income to various expense and savings categories so you hvae better control of the money you bring into your life and don’t fritter it away on less imporant things when more important things need attention. A detailed budget helps with that.

    And get yourself an inexpensive used car so you can pursue your certifications and studies. $2000 should do you fine. Get a 10 year old used Honda Civic, Geo Prizm, Toyota Corolla, preferably with a standard transmission. Buy it from a private party, not a dealer.

  55. Steve in W MA says:

    Donna, if you need money and using the 16K is out of the question for whatever reason, consider getting a peer-to-peer loan at a place like LendingTree to pay for your certifications. I would also consider continuing the conversations with your grandmother in law. The conversation that your hubby could have with Grandma could be something like. “I understand that it is your dream to help provide for my education and you planned and saved for that. I really appreciate it. However, as things are, that money is not going to be used at all. Grandma, my wife and I are a team. I have a secure job and am an expert in my field. I am not going to get more formal education and my job/agency usually foots the bill for my further training. I want to use that money so Donna can get her certifications and contribute more money to our family like she would like to do.Donna and I have decided that if we cannot access any of the money you have put aside for this that we we are going to take out a loan to pay for her certification and training. If I decide to get more education in the future her increased earnings can more than make up for the 16 thousand.” Also, don’t ask for the full 16K. Ask just for the amount of the trainings. That may soften Grandma up. If that doesn’t work, you MIGHT consider asking for the amount of the trainings as a lower-interest loan that you will pay back and present it as a formal letter with a loan repayment schedule attached starting after your certification date.).

    Even if you aren’t able to use any of that 16K, Borrowing money for training that will return your investment over and over is a good investment and is a proper use of credit.

  56. Steve in W MA says:

    Nicole, at least take that 25K and put it in someplace where you are going to get decent interest. SmartyPig probably has the best rates for now and will pay you 1.74% for a liquid cash account up to 50K.

    Your other option might be to invest it in a basket of large dividend paying stocks. If you do that though it won’t be liquid, though your return in the end will probably be higher by a couple of percentage points.

    Since t I would not suggest doing anything with it other than either leaving it fully liquid in a separate account or investing it. Buy your vacations and your emergency fund and your replacement car from your current income and monnhly savings.

  57. Steve in W MA says:

    i meant, “since that 25K represents your former investments and not normal spending funds, I would not suggest doing anything with it other than either leaving it fully liquid in a separate account or investing it. “

  58. Sam says:

    Ida – It seems like you need to do some research about adoption in your area. You have already expressed that you are less interested in special needs children – and that is a valid choice for adoptive parents.

    Rather than going it alone with a lawyer, I would recommend looking at local agencies. Catholic Community Services and other church associated groups often offer reduced adoption fees based on income, without requiring religious affiliation. The agency should provide education about adoption, open adoption, drug/alcohol exposure, parenting, support groups, and many other adoption related topics. They likely would also pair you with a social worker to complete the home study and who also could help you discuss some of your concerns regarding adoption.

    Some organizations have reduced fees for placement of bi-racial or minority children (yuck, but yes, it’s true).

    Don’t forget that there is a tax credit. This year the amount was more that $10k. That is expiring this year, but hopefully we’ll see something similar again in coming years.

    Good luck.

  59. Steve in W MA says:

    It’s Lending Club, not Lending Tree. Jennifer. Sorry I called you Donna.

  60. Valerie says:

    On adoption-
    Consider being a foster parent before all out adopting. Many foster children end up being adopted by their foster parents, and it’s a much less costly process. (For example, the homestudy for foster parenting doesn’t cost anything).

    Second, check out adoptions that are non-traditional. Older children, special needs children, bi-racial children all are very difficult to place for adoption. It’s a horrible thing to think about, but adoption is actually a market, and white babies are the most wanted and so most difficult and costly to get. But, there are many, many children other than white babies who need families, and it can be much easier to adopt one of those children.

  61. LeahGG says:

    Think small. Put up signs in your neighborhood that you’ll cut hair at people’s houses, and put together a kit that will fit into a backpack. Tell the people to wash their hair right before you arrive, charge a few bucks less than the mall haircutters, and voila…
    You’ve be surprised how much money you can make thinking small.

  62. Nicole says:

    This is Nicole from the 25k question – seeing it out there ans answered makes me feel so…silly? We will of course put this moeny immediately into an interest bearing account. Probably with SmartyPig. Later on we can make some real decisions about it, but for now it should be working a little for us. Thank you all for your kind advice!

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