Updated on 02.08.12

Reader Mailbag: Time Conflict

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. Using wedding money wisely
2. Percentage of savings for retirement
3. Asking for wedding money tactfully
4. What to do with savings?
5. Self-employment advice
6. Retirement Roth versus 529
7. Repayment troubles
8. Windfall options
9. Debt snowball or not?
10. Prioritizing reading

What do you do when you have a family commitment on the same day as something you’ve been planning to do with a friend for months? What if the two events are two states away from each other?

My solution right now involves a one-way flight and an extremely tightly booked day after my family commitments are complete. Family comes first, of course, but some creative thinking (and a bit of hyper-rushed travel) can make everything work.

Q1: Using wedding money wisely
I am getting married in June (huge wedding, not our choice!) and we conservatively anticipate receiving about $15,000 in gifts from our family and friends. In the past year, we have moved across the country to be closer to family and have finally in the last 6 months or so settled into our new routine. We bought a home, actually the one that we were renting. The owner wanted to sell and offered us first chance, she gave us owner financing, and counted all of our rent as a down payment. The house is livable but needs significant updates to all of the bathrooms and the kitchen. I found employment, but have significant travel everyday. Because of this, we had to trade in my car and get something more reliable for the winter weather and the route that I drive.

Our debt is as follows:
Student Loan 1: 10,000 @ 8.5%
Student Loan 2: 10,800 @ 6.8%
Student Loan 3: 7500 @ 6.8%
Car Loan: 14,000 @ 4.99%
Mortgage: 143,000 @ 5%

I am the breadwinner, my salary is $43,000. My fiance works part time at a university and is going to school for his master’s degree (free while he is employed there). We live off of my salary and save his. We do have an emergency fund saved up ($1000) and then other money in an online savings account for any other life events (approx 15,000). I pay $1000 a month towards debt (not counting the mortgage), which is the minimum on everything except for the SL at 8.5%. We have lived very frugally for the past 4 years and will probably always do so.

My question is: should we use the wedding money to pay down the loans as much as possible, or should we put that into savings and use it for repairs on the house? I feel guilty using the money to pay down the debt, but I know it’s probably the better choice for now and repair/update the house at a later time. I would love to buy new bedroom furniture (everything we have are hand-me-downs and nothing matches, plus we need a new mattress) and possibly renovate 1 or 2 of the bathrooms. It is MY student loan debt, but I’m also supporting the whole household. My fiance is fine with paying off the loans, but I’m feeling guilty.
– Marjorie

It really depends on how urgent the updates you need to make are. You say the house is livable, but that it needs updates. Is this for the purposes of decor? Or are there really important functions missing?

If it’s mostly decor, I wouldn’t make that a high priority unless you’re looking to sell the place fairly soon. I’d pay off the debt first.

If you’re in a position to sell soon or these repairs will make a significant functional improvement, then I’d go for the home repair.

Q2: Percentage of savings for retirement
We often hear of retirement savings goals such as: if you begin saving for retirement at age 20 you should strive to save 10% of your gross salary, if you begin saving for retirement at age 30 you should strive to save 15% of your gross salary, etc. When you think of the percentage of savings, should this be for a pre-tax account such as a 401K, a 457, or a pension plan or a post-tax account such as a Roth IRA? Or is it a combination of both?

– Kelly

Those numbers are very simplified “rules” for people who just want a quick answer without digging in deeper.

If you want to break down those numbers, my impression is that they assume you’re talking about an equal mix of pre-tax and post-tax savings. I would assume that of any simplified numbers bandied about for retirement.

I would never bank my entire retirement plan on such a number, though. Use some retirement calculators and get a strong sense of what you need for retirement.

Q3: Asking for wedding money tactfully
My fiancee and I have been dating for ~4 years. We both went to college and thanks to incredible parents, both managed to graduate without student debt. We’ve had our small debt struggles with credit cards, but we’ve got our act together for the most part. We currently rent in a not-too-desireable part of town, and as we both have fairly entry-level positions, it’s difficult to save the kind of money necessary to make a down payment on a house in a better area.

Her sister, who herself has been through 2 weddings, reccomended that for our wedding, we should ask for ONLY what we ABSOLUTELY need for our registry and ask for the rest in cash to put towards a home. This struck me as great advice, as in our 4 years together, we’ve accumulated more than we need without registering for things like tortilla warmers or color-coordinated coffee makers. However, I’m stuck trying to figure out how to ask in a classy, tactful way that doesn’t come off as a charity case. Do you have any reccomendations on how one might go about mentioning, on an invitation or otherwise, that this is our gift of choice?
– Pete

There is no real classy, tasteful way to say “give me money.” Not only does saying so imply that you’re expecting a gift, it’s also implying that you’re dictating what type of gift to give.

The best thing you can do is say nothing at all about gifts in the invitation. Set up a simple registry at a common place like Target. Then, tell your innermost circle that you’re hoping for money to help for the down payment. The word will get out to a lot of people.

Then, just be happy with the gifts you receive. After all, people are giving you things. If you don’t like them, return them and use the store credit on essentials, then bank the money you saved on essentials.

Q4: What to do with savings?
What should I do with the money I have in my savings account? I know it is low yield to keep it in a “high yield” savings account, but I am already maxing out my contributions to my IRA. Should I invest it? Where should I invest it if I do?

– Shelley

It depends on how much risk you’re willing to take on and how “locked down” you’re willing to allow that money to be.

Savings accounts don’t offer a great return, but there’s virtually no risk involved and you can take your money out as you please. With other investment options with a better return, you tend to lose one or both of those things.

For example, with stocks in large blue-chip companies, you take on risk in exchange for a higher average return. With a certificate of deposit, you lose the ability to take the money out freely for a somewhat higher return. With real estate, you lose on both counts but have some very nice long-term potential with the money.

The real question to ask yourself is why you’re saving this money. If it’s still more or less an emergency fund, leave it in the savings account.

Q5: Self-employment advice
My husband is about to graduate from grad school and will be self-employed upon graduation. I am wondering if you have any good resources for self-employment, and especially regarding affordable health insurance options for the self-employed. He is currently getting health insurance from his school, and I am on my employer’s policy, but I too would like to make the switch to self-employment (most likely working with my husband) within the next few years, or even being a stay-at home mother if we are able to afford it. We live in an expensive part of the US, and want to watch our expenses as much as possible. Going without insurance is not an option for us–I had a very expensive health situation over the last 5 years that has proven to both of us the need for good insurance. My health issues have recently been resolved, so I do not have any pre-existing conditions anymore. My husband has been healthy since I have known him.

– Catherine

I would start with the National Association for the Self-Employed when looking for options. There are a lot of options out there, and those options vary wildly from state to state.

I explored the options available in Iowa several years ago and we made the decision to stick with my wife’s work insurance for as long as she continues to choose to hold that position. Prior to that, I worked at a job with mediocre health insurance, so we were already using her insurance.

That’s not to say there aren’t good options available for the self-employed – there certainly are. I found the most luck starting with the NASE, though.

Q6: Retirement Roth versus 529
We are hesitant to put money into a 529 fund for our daughter when retirement amount may still not be enough. There are no loans available for retirement, as they say.

A Roth is almost as good as a 529 – except you can’t take the earnings out tax free for college, and it counts as income for the child – so no financial aid can be obtained. The upside is it can be used for school (I will be over 59.5 when daughter enters college) or retirement – whichever is needed more.

Certainly we could look for ways to save and afford to do both 529 and Roth, but I am not sure my family feels that is the way they want to live. We already do live fairly simply, but we could do much more. It might not feel like a positive to them, so I plan to identify areas one by one and see how far I can get them (and truth be told- myself) to agree to change.

Any advice?
– Oswald

You’ve basically summed up the benefits and drawbacks of a 529 versus a Roth for education. It’s flexibility versus better tax benefits.

If you’re asking which is better, you need to sit down and assess what your retirement looks like if you put all of your Roth money towards your child’s education. Assuming you do that, do you like your retirement picture?

If you do, I’d put that money into a 529 instead and then benefit from the taxes. If you don’t like that picture, then I’d try to balance it, probably committing more toward the Roth knowing that it’s more flexible.

Q7: Repayment troubles
I wrote to you last spring about advice regarding student loan repayment and starting a new business. Since then, I’ve moved to Canada, gotten married, and started my business, which I now work on full time. I have a steady client base, and am planning to expand more this year. I make approximately $300-$500/month at the moment.

Thanks to the low cost of living in our city as well as a wedding gift from my parents, we’ve actually been able to save nearly $30,000 in the 7 months we’ve been here. I have started to make payments on my student loan debt (all from law school) of $145,000. However, my husband’s contract may be ending at the end of June. I’m not sure if I should continue making payments on my loans or if we should continue to save for our potential “emergency” (unemployment). If we continue to save and defer the loans (the loans are currently on forbearance/income-based repayment, although I’m still trying to pay down interest), we’ll probably have approximately $35,000 saved by the time his contract ends.

My questions are the following: Should I stop making payments on my loans for now? Should I try to find some sort of part-time job to add to our emergency fund/throw at the loans (keeping in mind that most jobs here require you to be bilingual in French and English, and while I can speak French proficiently, I’m not bilingual)?
– Monica

My big question is whether or not you’re going to stay in the area you’re in when your husband’s contract runs out in June.

You seem to be in Quebec. Does it look likely that you’re going to be leaving Quebec at that time? Is your client base local or is it internet-based?

If you can retain your business through this transition and your business is growing, I’d put all my efforts into building it. You already have a start, after all. If you’re going to lose that base, I’d get a part-time job as soon as I could to get more short-term cash on the table before you leave.

Q8: Windfall options
My wife and I were gifted $15,000 by my grandmother recently and have a couple options. This is half of what we make in a year together so it would be easy to blow it on a bathroom remodel, but instead, I’d like to do something smart. We have only two debts: my wife’s $8,000 student loan and our $132,000 mortgage. The loan could be paid off instantly and the $150 to $200 we pay on that monthly would be freed up and that would be wonderful, but I could also refinance the house. We have a 4.875% rate, but rates are even lower than that at the moment. Our current mortgage payment is $1,004. But even if we only shave $50 off our monthly mortgage payment, that seems like it would add up to a whole lot more saved in the end compared to paying off the student loan, no?

– Charles

The question is would you honestly save that extra $50 a month, or would it end up being spent on something unimportant?

The best thing you can do right now is put yourself into a repayment plan that will take you to debt freedom the fastest. Refinance not into another 30 year, but into a 15 year or something. This would actually raise your payments a bit, but it would get you in a far better position sooner rather than later.

If I were you, I’d pay off the $8,000 debt, then refinance into a shorter term mortgage with a much lower rate. You’ll probably not see much change in your monthly payments for now, but you’ll be free from debt a lot faster.

Q9: Debt snowball or not?
I’m pretty new to your site but I have enjoyed it for the last couple of months. I have a couple of questions for you. My wife and I, along with our 4 young children have recently started on Dave Ramsey’s plan. We are currently on Baby Step 2 (debt snowball). We have approximately $14,000 in CC debt, and about $4,500 in student loans, along with about $4,000 left on our van payment.

I have also been trying to save a little money for different expenses I know we will have at some point (future car, car/home maintenance, etc). This is where my question comes in. Is it wise to do this while going through the debt snowball? Or since I already have the $1,000 EF in place, should I be putting every other possible penny towards the debt?

I mentioned the $4,500 in student loans my wife and I still have. I also have about $40,000 in other student loans but I do not have to currently pay on them because of the income based repayment plan I am on. My wife makes decent money but it is all “under the table”. So they only look at my salary when calculating my monthly payment. I am hoping to get through the debt snowball in about a year, then build up the EF to about $15,000 then try and payoff the $40,000 extra in loans I have. The loans are accruing interest but I am not obligated to pay anything on them unless our household income jumps. My wife plans to go back to teaching in 3 or 4 years so at that point I would have to pay at least something on them. My other question is would you stick with the plan I have in place as far as paying the loans back, or would you lump them in to the debt snowball?
– Andreas

First of all, you need to be very careful with “under the table” income. If the IRS hears of it from anyone – and there are a lot of people out there who quietly report such things – you guys will be in a world of hurt.

That being said, I would lump all of your debts into the debt snowball. If the interest rate on those debts is higher than the ones you’re currently paying, then I would make extra payments toward those student loan debts.

Eventually, you will have to start repaying them, and if you can keep that interest in check now, you’ll be better off for the long haul.

Q10: Prioritizing reading
I know you’re a voracious reader like me and I’m going to guess that you have a long list of books that you want to read like I do. How do you prioritize them? How do you decide what needs to be read next?

– Ivan

I keep a stack of about ten or fifteen books on my bedside table or on the front page of my Kindle. These books are ones that have been on my mind lately that I’m wanting to read. I rotate books in and out of this grouping pretty regularly.

When I finish a book (which happens once or twice a week), I just look through the books that are right there and pick the one that intrigues me at the moment.

That’s really all there is to it. I don’t really prioritize beyond that, but I’m usually happy with what I’m reading.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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  1. Steven says:

    It depends on what the family obligation is. If it’s something that can be done without me or be postponed, then I’d follow my plans as planned. If it were something that I couldn’t get away from, I’d contact my friend and let them know the situation to see if our plans could be modified or delayed. If fulfilling both required an undue amount of stress or worry, I probably wouldn’t end up enjoying myself in either situation. This is the consequence of filling every minute of your schedule. Eventually there will be conflicts. Glad I leave my schedule as open as possible…

  2. Michelle says:

    Q7 – FYI Trent, Quebec is not the only place in Canada where jobs require employees to be bilingual in French and English.

  3. SwingCheese says:

    Oops – I meant my response for Q3, not Q5. But since my comment is in moderation, who knows if this will even be anywhere near my original response :)

  4. josh says:

    @Q9 – I wonder where Dave Ramsey stands on tax evasion? I am guessing he is against it.

  5. Suzanne says:

    Q3: You are not supposed to ask for wedding gifts, especially in your invitation. That is tactless. If you want to register for a few select things, then great. You’ll probably be given a wedding shower and in that invitation your registry can be mentioned.

    The majority of our gifts at our wedding were cash. I don’t think you have anything to worry about. Just make sure you have the bird cage or box secure…there are so many stories of people’s wedding money being stolen because no one was watching it!

  6. Tracy says:

    I am totally baffled by the answer to Q7 – it didn’t seem like Michelle asked anything about building/investing in her business at all.

    She asked if she should pay down her student loans or save for her husband’s potential term of unemployment.

    I’d say temporarily put the extra money into savings – if it turns out your husband’s contract is renewed, or he finds another position quickly, you can do a lump sum payment to your student loans. If not, that cushion will come in very handy.

  7. AnnJo says:

    Q9, Andreas, I would also read the fine print of your student loans and see what they say about the consequences of fraud and perjury (which is what you are doing when you falsify your income statements by failing to disclose your wife’s income).

  8. AnnJo says:

    SwingCheese, do you mean to say you’ve had a comment clear moderation once it went into it? I don’t think I ever have. It seems to me they go in there for random reasons and stay there forever.

  9. Izabelle says:


    I believe Trent misread the question!
    IMO, I’d say keep the loans deferred and build up the emergency fund. Then you’re more likely to be in a position to be able to pay at least minimum payments until your husband finds work again. If you put the money on the loans, you’ll have less debt but much less wiggle room to meet your basic financial obligations – including loan payments.

  10. MattJ says:

    #8 AnnJo:

    I definitely have had comments come out of moderation – it happens weeks or months after the comment is made. The only way to know is to search through the archives.

    Pete (Q3):

    If you decide to follow Trent’s advice and register with the idea that you may decide to return a lot of gifts, don’t register at Target. Their return policy is notorious (a google search with the words ‘target registry returns’ will confirm). Find another store to register at, and check their return policy.

  11. Kevin says:

    AnnJo I’ve never had a comment come out of moderation either. (And none were rude or profane)

  12. Gretchen says:

    When Trent was still doing the year ago recap, I still had a comment in moderation.

    On browning meat before putting it in the crockpot.

  13. Tracy says:

    You are dangerously risque, Gretchen! Next thing you know you’ll be talking about carmelizing onions.

  14. Telephus44 says:

    I had a comment come out of moderation once after 3-4 months.

    Q1 – I’d pay off the first student loan and then put the remaining balance towards something “fun” like the new mattress and/or some of the remodeling. That’s what we generally do with “extra” money. It’s psychologically hard for me to just put it all towards savings/debt, but at the same time I don’t want to blow it all, either. I just make sure that the “fun” thing is something that makes sense – something we’ll use for a long time, or would be incredible useful, even if it’s not a “need.” This year we’re using a part of our tax return for a new dining room set. Ours is a hand me down that neither of us like the style of, it’s scratched and needs to be reupholstered, the leaves for the table are from a different set, it doesn’t sit flat – sure, it’s useable, so a new one isn’t a “need” but it would really improve our quality of life.

  15. Gretchen says:

    The problem with Target registries is that, imo, the whole point of a registry is to replace things you already bought from Target.

    (plus the return policy).

  16. valleycat1 says:

    Q10 – prioritizing reading (I’m assuming you’re speaking purely of reading outside of work or school requirements). I’m with Trent on this. And per Alan Jacobs in The Pleasures of Reading in an Age of Distraction: read at whim. I keep a lot of books on my e-reader under a category of new/to be read, and browse the library or bookstore shelves for books as well. I have eclectic reading tastes, and read either purely for pleasure or to learn new information, so having a number of books available lets me choose what appeals to me most at the time.

    There are too many new books and authors unknown for me, and more entering the market all the time, for me to create a reading list and work my way down it, regardless of how it might be prioritized.

  17. Johanna says:

    When my cousin got married recently, she registered at Target. She didn’t have a lot of items on her registry, though, so I got her a gift card. In her thank you note, she let me know that she would spend it on “something for the apartment.” I assume that that means groceries, toilet paper, or other necessities. I’m fine with that.

  18. AnnJo says:

    Telephus, although the style issue may be a deal-breaker, have you considered refinishing and reupholstering your current set?

    Reupholstering many dining room chair seats is incredibly cheap and easy – I used mismatched but complementary discarded fabric swatches from a custom furniture store and ended up with a really interesting and attractive custom set. I have no upholstery experience, but had no trouble figuring it out. It might be harder if you have padded backs and/or arms.

    And while refinishing takes a little effort, it will solve the problem of the mismatched leaves and often give you a truly beautiful surface. (I refinished an old oak table once and by happy mistake used spar varnish as the final finish coat. It was a smidgen more glossy than I would have wanted but in 20 years of use afterwards it never was scratched or marked in any way.)

    Obviously, if what you have is a poor quality veneer, refinishing won’t work, but if it’s solid hardwood (walnut, cherry, teak, oak), you can get fine results.

    Anyway, just a thought. Buying new quality sets is pretty expensive; I think if I were in the market, I’d shop garage and estate sales for a quality set I liked and could refinish and/or reupholster if needed to suit me.

  19. Jamie says:

    Q3 – I’m currently the Maid of Honor for a wedding taking place in England; as you can imagine,we’ve had to do a lot of research on tact and tradition and propriety.

    I believe that it is fine to mention your registry on your Save the Date cards, but not in the actual invitation.

    There are amazing website capabilities now where you can set up a special page for your wedding online, with various “accounts” that people can donate to for different purposes. I think this would be an ideal way for you to collect money for your home– You can have one link to your actual registry and another link to the account, where anyone can donate any cash amount.

  20. Tamara says:

    “Classy” and “asking for money” are mutually exclusive.

  21. Jayme says:

    Q1 – pay off the loans in a heartbeat! If you went all drastic on them, you’d be debt free (except the mortgage) in probably 2 years. Then you’d be able to do whatever renovations you want or buy whatever furniture you want.

    Q3 – agreed. there’s not a great way for that. we were in a similiar position, so I just kept my registry small and exactly what we needed. People got us other stuff that we didn’t want (but you can’t control that). If someone asked, I had my sister & mom instruct people that we were also saving for new furniture at INSERT STORE NAME here. So we got ALOT of gift certificates to that store, which we’ve used for new furniture and carpet.

    Q9 – I’m not sure your question was fully answered. If you know you need car repairs, include that in your budget even while paying off the debt. The alternative is that when those car repairs hit, you’d have to take out of your emergency fund, stop paying on debt to build the fund back up.

    But for things that are future like a new car, Dave would teach to do without while you eliminate that debt. Then buy a car for what you can afford – even if it’s just a $1,000 beater car that only gets you a couple of years of use. If you’ll really be out of debt in a year, then whatever you were paying against the debt just snowballs into the car purchase.

  22. Mister E says:

    I really don’t think that it’s a good idea to broadcast to the world that you’re taking money under the table.

    What’s next – “so I’ve got a nice side income happening what with selling cocaine and all, but retirement plans are hard to come by in this line of work, advice?”

  23. Bill says:

    Q8 I think you got poor advice on this one. If you and your wife are only making 30,000 a year combined and you are paying 12,000 a year on your total mortgage payment you don’t have a lot of breathing room. I would not advise refinancing into a 15 year loan to maintain a larger cashflow buffer between your debt payments and total income. I would pay off the student loan and free up $200 of cash each month and also refinance your existing mortgage into another 30 year. I don’t see why you couldn’t do both. You should be able to get a 3.75% rate with no points and save about $90 a month. Take that $290 in savings and pay it toward the mortgage when you can but you retain the option to use it for other expenses if unforeseen things crop up.

    Far too often people make the mistake of choosing a 15 year loan over a 30 year because of the “total interest expense” that is calculated using minimum payments on both. The correct comparison is the interest expense on the 15 year versus the 30 year with accelerated principal payments. The 15 year will still be better but the gap is much smaller than most believe. For example my local credit union offers 20 year and 30 year mortgages at the same interest rate. You’d be a fool to take the 20 year loan, you can simply choose the 30 year option, pay the difference in payments as a prepayment each month. Your 30 year loan now takes exactly 20 years to pay off and costs the exact same amount but you have the very valuable option to make a lower payment if necessary along the way.

  24. Tom says:

    I think Trent’s advice to Q3 is excellent. I especially liked the advice to chat with your close friends in order to informally spread the word (this too requires some amount of tact to do it right). Just be grateful for everything, even those people who neither stick to a registry nor give you cash.

  25. Courtney20 says:

    “I believe that it is fine to mention your registry on your Save the Date cards, but not in the actual invitation.”

    No, no, no. The only place it is appropriate to mention your registry in writing is on a shower invitation (which should never be sent by the bride or groom), or your wedding website.

    Save the Date cards are intended to help out-of-town people made advanced travel plans and ensure that there are no event conflicts when the invitations go out ~2 months before the date – NOT to convey your desire for gifts. Wedding invitations are intended to invite people to your joyous moment – NOT to convey your desire for gifts.

  26. Tom says:

    Q6 you said:
    A Roth is almost as good as a 529 – except you can’t take the earnings out tax free for college, and it counts as income for the child – so no financial aid can be obtained.

    First of all, you probably won’t be immediately disqualified from financial aid by having some money in a Roth IRA.
    Secondly, the Roth IRA can only be in your child’s name and have money contributed to it if your child has an income. Otherwise it’s your asset, which has less of an impact on Financial Aid than a student child’s asset.
    Finally, you’re saving money for your child’s schooling so they (or you) won’t have to take out loans later, right? You do realize that most financial aid is in the form of student loans, right?
    The 529 is probably a little bit of a better way to game the FAFSA system (even better if you can get a state tax break), but you really shouldn’t concern yourself with that.
    I think you should ensure you’re saving enough for your retirement before you start earmarking money for your children, because you’re absolutely right that there aren’t loans for retirement. It would be foolish to haphazardly save money without a goal, then wipe out a large amount of retirement savings so a child could go to college.

  27. jim says:

    Q1 : Go ahead and pay off the loans. No reason to feel guilty about it. I assume your house isn’t falling down or in severe disrepair. If you have real safety problems or a major issue with the house that could cause further damages and expenses then you should address that as a priority of course.

    Q2 : The 10-15% retirement savings numbers are based on how much you’d have to save during a working career to end up with enough money to replace around 40-75% of your working income. The goal is to have enough money piled up at retirement so you can sustain your living style and not run out of money. Saving 10-15% should mostly get you there. The % numbers are based on saving in 401k/ IRA style accounts. A true defined benefit pension is a very different beast. If you have a pension then you may not need to save as much for retirement. It all depends on how your pension works. The bottom line goal is to save enough towards retirement to be able to replace most of your working income.

    Q3 : I agree with Trents advide to tell a few close people and let / ask them to ‘spread the word’.

    //rant mode // Personally I really think people need to stop worrying about what others think is “tacky”. Its just stupid for us to all play this convoluted game where you do a registry for junk you don’t really need, they go to a store and pay too much for stuff you don’t need, they wrap it all up nicely, you open it and feign happiness then rush to the store to return it for the cash you wanted in the first place. Maybe thats not “tacky” but its stupid. // rant off//

    Q6 : Retirement savings should come before college savings.

    Q9 : Tax evasion is never a good idea. I know several people who have been caught by the government eventually. Stop cheating on your taxes.

  28. Courtney20 says:

    Jim – I don’t think people should register for things they don’t need. What *I* hate is the fact that registries have turned into a huge quid pro quo – I invite you and therefore you buy me something. It’s icky. Whatever happened to a couple being joyful that someone is there to share their day with them, and a guest that gives freely as they choose? Yes, registries can be helpful (and so can cash). But it’s ultimately up to the guest to choose how and what they give.

    Q9 – ditto on the “stop cheating on your taxes” statements. You know there’s a financial incentive for someone with sufficient detail regarding your situation to turn you into the IRS, right?

  29. Honey says:

    Re: Q3: My fiance and I have been together 6 years, are in our early 30s and have both lived alone prior to moving in together, so we also have a bare-bones registry for actual items. Since we are also hoping to start looking for a home right after the wedding mania is passed, we chose to register with Honeyfund, which is sort of like registering for cash. You can register for, say, 20 “gifts” of $100 and when your guests visit the website, they get to download a pretty certificate to include with the check and you can also track what gifts have been received this way (if you care about that, I haven’t checked since setting this up).

    The nice thing about Honeyfund is that because they never hold any of the money, they don’t take a comission. There are lots of services that let you register for cash for a house downpayment, but most of them hold the money for you, which means they take a cut off the top. Honeyfund doesn’t do that, which makes them different and, IMO, much better!

  30. Baley says:

    I agree with Jim. The reason we make registries is because people WANT to buy us something we want. It’s not that we expect a gift as a ticket to come to our wedding. A registry simply makes it easier for people to shop for the couple. I really appreciate knowing where someone is registered because I’m going to get them a gift anyway. It would be really nice if people could ask for what they want (money) without people getting all huffed up about it.

  31. Courtney20 says:

    Baley – like I said, registries can be helpful. I had one when I got married. Asking for money can be helpful too (we got plenty of that, even without asking). But they’re *not* appropriate on a wedding invitation.

  32. Baley says:

    Yeah, I didn’t put my registry info on my invitation, but I have gotten invites from people who include their wedding website on an insert with the invitation (which then directs people to registries), and I found that helpful, especially when I wasn’t invited to a shower. I just wish it wasn’t such a horrible taboo. When you know everyone wants the information, why is it so wrong to give it to them in an easily accessible location? The only reason it’s wrong is because of etiquette. And that kind of irritates me. Some etiquette rules are silly and only inconvenience everybody.

  33. Kevin says:


    “What I hate is the fact that registries have turned into a huge quid pro quo – I invite you and therefore you buy me something.”

    The wedding gift is traditionally a quid pro quo for the fancy, expensive dinner, not the mere “invitation.” The reception dinner usually costs $50-$100/plate, so it’s not unreasonable for the newlyweds to expect a thoughtful token gift. After all – they just spent $200 feeding you and your spouse.

    If you don’t like it, decline the invitation and save them the cost of the unappreciated plates of catered food.

  34. Jackowick says:

    Q1: I’d double the emergency fund and if possible wipe out one full debt obligation.

    I’d also be tempted to buy a new bedroom set, but it’s just smarter to get rid of some debt and work on home repairs first; those give you peace of mind and also add more to stabilizing home resale value than a new dresser and bedposts.

  35. Courtney20 says:

    Kevin – woah, I never said I don’t bring a gift. Beyond even a “token” gift usually, and usually off of a registry. I don’t believe it’s a quid pro quo and especially not for the “cost of my dinner”. My gift budget and your wedding budget are mutually exclusive. When my parents chose to have a very nice reception for my wedding, I didn’t EXPECT that our friends who had all just graduated from college with us were supposed to go broke buying a gift. When my sister got married at the courthouse with a cake afterwards, I didn’t get her a gift from the dollar store.

  36. Steve says:

    @Q6 – Both the question AND the answer are wrong on this one.

    Money in your Roth account does not count as a student asset; and as a retirement asset, it doesn’t count as a parental asset either (at least in the federal formula). I am not even sure that money in the student’s account is considered an asset by the FAFSA formulas. The ONLY advantage of a 529 over a Roth is that the 529 earnings are tax free when used for college no matter the age of the parents. But since you will be old enough to withdraw from a Roth for any reason by the time your kid gets to college, that vehicle is strictly better. It has essentially the same tax benefit, but is far more flexible, and has a lesser effect on the student’s financial aid.

  37. Monique Rio says:

    Re: Asking for money instead of gifts, we had a Facebook event page for our wedding and when I started getting questions about what we wanted/where we were registered, I sent a message to the guests that if they wanted to get us something, we’d prefer money that would go toward instruments and a trip to Europe or to give a donation to one of two organizations we belong to. I also let my parents know, so they could let the people not on Facebook know. No one died. We didn’t lose any friends over it. We now have some nice recorders that get a lot of use, and a couple instrument kits.

    I don’t see how having a registry at a store is any better than asking for cash.

    Would I put it directly in the invitation? If I was planning to put where we were registered in the invitation then, yes, I would.

  38. Katie says:

    Uh, no, that is actually not what the gift is “traditionally” for. Yes, we’re all aware there’s some non-linear reciprocity expected in hospitality and entertaining, but the idea that it’s a straight quid pro quo of dinner for gift is ridiculous. I’ve heard this logic before, and I find the idea that you should be buying your wealthier friends (who thus spend more on dinner) a more expensive gift pretty appalling.

    Couples should throw a wedding they can afford because they want to celebrate with people they love; guests should give gifts they can afford because they want to honor and celebrate the marriage. That’s it.

  39. jim says:

    Baley said : “The only reason it’s wrong is because of etiquette. And that kind of irritates me. Some etiquette rules are silly and only inconvenience everybody.”


    People should be able to do their own wedding the way they want without being judged failures because they broke one of the tons of different etiquette rules bout the ‘proper’ way to do things.

  40. jim says:

    I agree with Steve #36 comments about Roth vs 529 on Q6. However one point is that 529’s often have extra tax benefits due to state level tax deductions or credits. So a 529 can have extra benefit because of that. But it varies state to state and some / many 529’s have no special state level tax treatment.

  41. Mister E says:

    I’m sure different people will have different experiences, but at my wedding most people gave gifts (at my wife’s shower) AND cash (in the envelope at the wedding).

    Not everyone gave the $100 per person in cash that you’re “supposed” to, but most did and some even gave more.

    A few people brought gifts to the ceremony, but it was very few.

    And I’ve always understood that the cash at the ceremony was, in theory, supposed to pay for your plate.

  42. Kai says:

    I don’t tend to go for things which have no reason other than an outdated ‘etiquette’ claim, but do you really see no validity in not demanding gifts?
    I certainly see no problem with having a registry ‘if you want to get a gift, here are some things we would like’, and mentioning it on a website or something.
    But when I receive an invitation that says (in some cutesy rhyme or whatever) “we’d really like to receive some cash!” or has a bunch of registry listings, it definitely comes off as a “BUY ME STUFF!!!”.

  43. SwingCheese says:

    AnnJo, et al: I’ve never had a comment go into moderation before, and as I didn’t use profanity, I’m not sure why this one did. I did tell the writer of question 3 that asking for money makes them sound like a spoiled, entitled, immature person. But I feel that way about everything. Weddings are not *supposed* to be for gifts. They’re *supposed* to be about celebrating the young couple on the beginning of their life together. Now, most people choose to give gifts, but that is their choice. It should not be voiced as an expectation by the couple. That is…well, it’s spoiled and immature.

  44. SwingCheese says:

    Let me rephrase: I feel that asking for either money or gifts for your wedding comes off as spoiled and immature. I don’t feel that way about “everything”.

  45. jim says:

    SwingCheese. Nobody is saying that someone should demand or expect gifts. Its a matter of telling people your preference for the nature of gifts … IF and only IF the people want to give gifts in the first place. I take it for granted that gifts are optional and at the discretion of the giver. I thought that was a given?
    Simply pointing people to a registry is not saying you expect to get a gift.
    If you don’t provide a registry then people will pester you to let them know what you want for gifts. Personally I appreciate a registry. I also have absolutely no problem with someone saying they’d really prefer cash over gifts. None of this is saying that anyone’s demanding gifts or acting entitled to them.

    Side note : comments here are routinely moderated for no reason whatsoever. Its not about cursing, its just picky / flakey software that doesn’t always work well and randomly decides something is objectionable that is actually totally harmless. If you put any links in the comments then that would also likely trigger moderation.

  46. SwingCheese says:

    Jim, I’ve noticed that people frequently write out links in their comments – that explains why. As for the other, it is my opinion that including a registry on your invitation or as part of the card is the same thing as asking for a gift. If someone approaches you and asks if you’re registered somewhere, then you are free to tell them whatever you want for a gift. (If you want money, you can tell them that, too, though I personally think that asking for money is tacky.)

  47. Kai says:

    I think the difference is between letting people know you have a registry or prefer cash or whatever, which is helpful, and putting it right in your invitation, which comes off as “come to my wedding – and BUY ME STUFF!”

  48. jim says:

    Its never come across to me as any kind of “BUY ME STUFF” entitled, spoiled “demand”. Why would people perceive it that way?
    How is telling people by word of mouth (or whatever) that a couple has registered at Macy’s so much better than putting it in print?

    Its just simple and practical to include info on the registry in the invitation as far as I’m concerned. Its no more demanding than the invitation itself as far as I’m concerned. The invitiation is saying they want me to spend a few hours of my weekend and possibly drive or fly half way across the country. How is being asked to fly halfway across the country OK, but them also mentioning that a toaster oven from Macy’s would make a good gift a horrible taboo injustice?

  49. David says:

    Your best bet is that either you or the bride have European ancestry – Polish, Greek, Turkish…

    In the wedding traditions of those countries, it is customary for guests to pin hard cash (or the equivalent thereof) to the bride’s dress in the course of one of the dances following the ceremony. And quite right too, I thought to myself when as best man at my Turkish friend’s wedding I watched his wife collect almost as much money on her dress as that dress had cost in the first place, which was almost enough money to buy a small flat in North London or a small street in North Carolina.

    Let’s face it – you and I are hopeless at buying suitable gifts for people even (or especially) people we love. Every Christmas, for example, this fact oppresses us for so long that the term “festive season” becomes a hideous joke.

    As I and my siblings grow older and more cantankerous, becoming grandfathers and grandmothers and great-aunts and great-uncles of ever-more-sophisticated whatsits and great-whatsits, we adopt this rule. Anyone with ostensibly fewer wrinkles than us gets the folding stuff as a gift; anyone with the same number of wrinkles as us is allowed to give us back what we gave them last year once, but if they do it twice (and we remember) they pay a forfeit.

    There can be no more useful nor appropriate gift for a pair of newly-weds than the folding stuff. I suspect that only the industry that supports wedding registers is actively opposed to this premise. Though I suppose also that there may be some newly-weds who would prefer that I gave them a $50 wombat-depoucher than a $50 bill. By the time they have opened the third wombat-depoucher, they may conclude as I do that there comes a point at which credulity must make a stand.

  50. Raya says:

    I wouldn’t say that letting people know you prefer money instead of gifts is bad, or not classy, or whatever. I think it’s very easy to understand why the family-to-be would prefer money. I don’t see why the guest invited would feel offended, I mean you’re spending money on a gift anyway – so what does it matter if you give the cash to the store or to the couple?

    Me, personally, whenever I can I prefer to give money. You can’t go wrong with that. And you can always ad a token, something really small but sentimental, to the cash-gift.

    That being said, I think Trent’s advice with the inner circle and all is probably the most tactful way to do this if the couple is sensitive about asking for money.

  51. Kevin says:

    @Katie and Courtney20:

    Don’t shoot the messenger. I didn’t make this up, the “gift/reception meal” guideline is a well-established tradition. I didn’t say you had to like it (I didn’t even say *I* liked it) – I just said that’s the ettiquette. How you think things “should” work is utterly irrelevant to how the tradition has conditioned people to “expect” it to work.

  52. Katie says:

    Kevin, you do realize that traditions and cultures aren’t the same everywhere, right? And that even within a culture, people can have differing opinions of how things work? And even more than that, that things can change? Stunning, I know, but it’s true.

    And yeah, I know you didn’t make the guideline up because, as I said in my comment, I’ve heard it before. It seems common in certain social groups (though definitely not the one I grew up in, so let’s not pretend this is universal). I still think it’s appalling.

  53. Riki says:

    There’s a great website about etiquette: search for etiquette hell and you’ll find it.

    She addresses wedding etiquette very well.

  54. getagrip says:

    Q2 I echo jim’s comment in #27 above and would also add that it’s based on the general view of retirement in that you work into your sixties and then retire from full time work and live off your savings and investments. It’s also based on you getting 15-20% of your salary from social security. It’s not a bad goal to have when young because it gets you saving and thinking about the future so even if you don’t follow a general path, at least it puts you in a position where you have options.

    One nice thing about saving any percentage is you get used to not living on that percentage, that’s a part of what you won’t need in retirement. In other words, if you’re saving 10% of your salary, you’re only living on 90% so at worst that’s what you would need going into retirement to maintain your standard of living. Generally people need less than that because unless they’ve really given in to lifestyle inflation they aren’t saving for the kids college, aren’t typically feeding the family and paying for all their care, aren’t paying social security or medicare once retired, generally have paid the mortgage off and hopefully reduced debt, etc.

    With respect to what counts for that percentage, to me it depends. If you have a defined benefit plan can you take money with you or roll it into something else if you quit? If you can’t maybe you shouldn’t count it or at least not fully rely on it. Do you get matching dollars from the company? I tend to count that as extra though others might count it as part of the percentage.

  55. Courtney20 says:

    Kevin, I defer to Miss Manners on this who says: “Getting married does not grant people license to distribute bills to those who are minding their business. A wedding invitation is merely an offer of hospitality. As such, it must be answered, one way or the other, and it should also prompt a letter wishing the couple happiness. There is nothing wrong with also sending a present, but that is certainly not required.”

  56. Sara says:

    Q3: Yeah, there’s really no classy way to ask for cash gifts. Trent’s suggestion to let your inner circle spread the word is probably the best way to go. How much are you expecting to get, anyway? Do you really think it would add up to enough for a house down payment? I would suggest a registry on Target or Amazon. I believe they both allow you to put gift cards on your registry, so perhaps this would encourage people to give you gift cards instead of stuff. Obviously, you can’t use gift cards towards a down payment, but you can use them to purchase other household necessities (like groceries and toiletries) and save the money you would have spent on that stuff.

    Q4: Maybe it’s just me, but it seems like Trent always gives the same non-answer to this type of question: “It depends on what you’re planning to do with it.” I think a lot of people ask this type of question because they have enough emergency fund money in savings and want some practical advice on how to start investing in stocks, bonds, mutual funds, etc. I hope some day Trent will consider writing a post on how to get started. Every time I have tried to give advice on this type of things in the comments, I have gotten stuck in moderation for some reason, so I’m not going to bother trying.

  57. SLCCOM says:

    Q9, When you don’t report your income, not only are the tax authorities going to be after you, which you will PROFOUNDLY regret, but your wife is cheating herself of the Social Security benefits she will eventually want.

    There aren’t a lot of things stupider than evading taxes. Which reminds me — I need to write to the IRS about somebody (else; not you) who is doing just that. Thanks for the heads up!

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