Reader Mailbag: Trail Walking

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. Frugal meal tip
2. Picnic planning
3. Roof repairs and homeowners insurance
4. Maternity leave challenges
5. Tax blues
6. Saving on phone service
7. Retirement savings and deductions
8. “Walking Dead” thoughts
9. Gas price recoup
10. Planned spending as saving

After a few months off from hiking trails, Sarah and I spent a ton of time hiking this weekend while our children were visiting their grandparents, and we both may have overdone it.

Sunburn, sore feet, sore muscles… all of the usual stuff.

Even after that, though, I can’t wait to get out there wandering through the woods again.

Q1: Frugal meal tip
I went on a day-trip with my girlfriend to a nice town about 45 minutes away. After walking around for a while and window shopping we decided to get something to eat and walked up to a random restaurant. The prices looked decent on the menu, between $10-$20 for an entree so I figured we’d end up spending about $50 by the end of it with a tip and everything, not great but it’s a solid investment in a solid relationship. We both ordered our meals and each ordered an appetizer first because we were both very hungry. After I ordered the waitress looked at me and said “Anything else for you?” and I brushed it off as courtesy and said “No, thank you.” My soup and her salad came, she couldn’t finish all of hers so I partook and then her entree came and I sat up waiting for my Fish and Chips, and I waited, and waited, and waited and finally thought that either the service was miserable or there was something wrong. I was pretty annoyed- I’m a stickler for customer service. After about 20 minutes I remembered when the waitress asked if I was having anything else and realized she must have not heard me order my entree.

Then it dawned on me. I looked at my girlfriend who had given up on her gigantic meal, I looked at the 1/2 of her hamburger that was still sitting there and realized something. There really wasn’t any need for both of us to go to a restaurant and force ourselves to eat these gigantic portions. Sometimes when we go out to eat we each order something, finish about 1/2 and then take it home to either be reheated or forgotten in the refrigerator. She offered the rest of the sandwich to me, I ate it, and we both felt satisfied, not sluggish with food.

We decided then that it made much more sense for us to just share something if the portions would be huge. Rather then have to carry the stuff home and reheat we can enjoy the closeness of sharing something and both feel satisfied, not stuffed.
– Tim

This is a very good idea!

Here’s the thing with a restaurant: you can always order more, but you can’t order less. If you’re there with a friend, why not just order a single dish and share it? If it fills up both of you, then you’ve saved some money. If it doesn’t, then order a second meal and share that one.

Sarah and I do this sometimes when we’re eating out, particularly at restaurants with a reputation for large portions. We just share a meal and often find that when the plate is empty, we’re both sated.

Q2: Picnic planning
How do you go about planning a picnic and make it not overly expensive or complicated? Every time I try to plan a picnic, it ends up being way more work than I ever wanted.

– James

I stick with simple foods whenever I plan a picnic. It’s never anything complicated: simple sandwiches, a side dish that can easily be eaten with fingers, some beverages, and maybe a cookie for dessert.

We usually pack our picnics in a backpack along with a blanket. We package all of the food in reusable food containers and usually toss in a reusable ice pack to keep things cool.

Just eat simple fare. If you’re having a picnic in a park, there’s no need to have a gourmet meal.

Q3: Roof repairs and homeowners insurance
The roof of our home is leaking in several areas. One of the leaks was actually a result of our chimney taking on some damage during hurricane Gustav or Ike (can’t remember which one). We contacted our insurance agent at that time and they accessed the damage at below our deductible so we never followed through with the claim. It took us a while but we finally had our chimney repaired at a cost of about $3,000. We were not aware of the other leaks when we called our insurance company about the chimney so those were never looked at that time. I thought one of the leaks was just condensation dripping out of an air conditioner vent so I ignored it but after a recent severe rainstorm that “condensation” was all over my kitchen ceiling! I crawled into the attic and discovered one of the attic vents had water just pouring into it. After craning my head in an awkward position I could see that the vent was bent on the inside and that was how the water was coming in. My question is this, since the time frame to file claims on hurricane damage is expired can I still use my homeowners policy to cover the repair of the roof ?

– Jude

First of all, do you know that the hurricane is what damaged your attic vent?

It sounds to me like you’re assuming that your attic vent was damaged by the hurricane, but could it have been damaged by the chimney repairman? Are there other natural events (a tree fall or wind or other such things) that could have potentially caused it? Did that recent storm cause it?

Whether or not this is covered depends on your policy and the person assessing the damage (assuming the insurance company sends someone to examine it). I don’t see any reason not to call them.

Q4: Maternity leave challengs
I know mat leave is set up differently in Canada where I live, but I would like to pick your brains on a childcare issue my husband and I are having now, as we plan for the future. I will get government support for 50 weeks, worth 55% of my income. I don’t expect my employer to top up this contribution at all. After this time is up, I don’t foresee going back to work (at least not full time). My husband, however, wants me to pull in an income, and go back to work. I don’t want to be viewed as lazy – I just want to put child-rearing first. I really don’t want to rely on a public daycare center, or burden our mothers with babysitting. I want to raise our child with the values that we find important, and I don’t want that compromised. Basically, I’m willing to take a financial hit for a better home-life where I can support the family. My husband is employed by my father, and I know that he will be getting a significant raise when I’m off work (he has refused a raise thus far based on that we don’t need more money with both our incomes, and more money in the company is better longterm, as he’s going to take it over one day). We could make it work. I know we hope to have more kids, so any work I do is going to be temporary, to a degree. I would love to work part-time from home while we have just one kid, but I definitely don’t want to go back full time.

Did you go through any of this with your wife while expecting your children? How can we get this figured out so we’re all happy and our family is put first? I have such amazing memories of my mom staying at home with us as kids, and I know times have changed but we can make it work.
– Sharon

My wife planned all along to go bck to work after having our first child. She is pretty dedicated to her work and passionate about it. She’s one of those people who just found what she is born to do and loves doing it.

After our third child, she did take a period of extended maternity leave simply due to the family challenge of having three children that were under school age at the same time. Once the oldest one reached school age, she was immediately anxious to return to work and did so.

This is a really important issue that you and your husband need to discuss carefully and in detail. It sounds like you have very different feelings and desires when it comes to long-term maternity leave, and you need to be on the same page when it comes to such a large issue with regards to your home life and your income level. I will say that, regardless of what you read or what others tell you, there is no right answer here. There is only the correct answer for you and your family.

Q5: Tax blues
After calculating my taxes for 2011, I realized that I earned far more money than I thought with my side business (making wooden furniture). I don’t actually have enough money on hand to pay my tax bill. Thankfully, I have a bit of time to figure things out. Any ideas on things I should follow up on here?

– Ron

You have a lot of options.

For starters, you can easily request a filing extension from the IRS, allowing you to wait until October 15 to file your taxes. This is done with a very simple IRS form. Note! This does not delay your need to pay the taxes, as pointed out by the readers in the comments. You still need to remit some form of payment at the usual filing date. This will just give you more time for things like hunting for deductions and making sure you have your business data in order, which leads to the next point.

You might want to make absolutely sure that there aren’t deductions for business expenses that you’re not thinking about. I usually spend quite a bit of time examining my own business expenses so that I’m sure I’m deducting everything I should, and that time spent almost always pays off in terms of my tax bill.

If you’re still stuck, you can request a payment plan from the IRS. You don’t have to pay a lump sum when filing your taxes. Here’s info from the IRS on payment plans.

Q6: Saving on phone service
I have been following you for about 2 – 3 years now and have really enjoyed incorporating some of your ideas for saving money and living a simpler life into my own life. Here’s my current dilemma: I have a child who has now reached the age at which my husband and I feel comfortable leaving her home alone for short periods of time to run errands, etc. We do not currently have a landline phone and have not had one for about the past 8 years. We were not using it and we were paying roughly $40/month for service so we canceled and have been using cell phones only since then.

Now that we will be leaving our daughter home alone, she needs a phone available in case she needs to call us but I can’t figure out what the most cost efficient thing to do might be – add a family plan and additional phone to my wireless bill, hook up the land line, or find a prepaid cell phone. It seems like no matter which of these options I choose, it is still going to cost roughly $30 – $40/month. There are so many options out there that make it confusing to figure out what will cost us the least amount of money for a phone that is going to be used very little! Can you shed a little light on this dilemma and maybe provide any resources that you may know of to research this further?
– Jill

It depends entirely on whether your daughter is going to use the phone for more than just emergency calls to mom and dad.

If it’s just for such emergency calls, a prepaid phone is going to be the best option for you. There are many phones that you can get for extremely low cost that work perfectly for the purpose of the extremely rare phone call. Many phone operators, such as Verizon, offer $0.25 per minute pay as you go plans that will total up to $100 a year or less for such infrequent calls.

If you’re going to get her a full-fledged phone for other uses, you should be shopping around. You will likely find that adding her to your own plan is probably the least expensive option, though.

Q7: Retirement savings and deductions
I currently make 115,000 a year, married, with 1 kid. I’m debt free, and will begin investing in a Roth IRA. If I invest the maximum allowed (5k for each my wife and I), will I be able to deduct this from my taxable income (i.e., lessen my AGI) such that I will have less income to be taxed, and thus, less tax to owe? If not, can you explain why? Also, if not, would you suggest different avenues for retirement investing (Roth 401k, Traditional IRA, Traditional 401k, other?)

– Jeff

A Roth IRA will not reduce your tax burden this year. Money put into a Roth IRA is post-tax money, which means that you’re paying taxes on it now to provide you with the ability of withdrawing it in retirement tax-free.

What about a traditional IRA? The deductibility of those depends on whether you or your spouse participate in retirement plans already in your workplace. The full details are spelled out here.

If I were choosing between a traditional IRA and a retirement plan at work, it would depend on whether or not the employer offered any sort of matching. If they did, then I would invest in the work plan to get every dime of matching. If not, I would max out the IRA (whether Roth or traditional), then put the rest into the plan at work.

Q8: “Walking Dead” thoughts
You and Sarah watch “The Walking Dead,” right? What did you think of that season finale?

– Arnie

We enjoyed the entire season, actually.

I’ve read most of the comic book/graphic novel, so part of the fun for me has been watching the things that are different between the two. There have been lots of things, such as Shane’s life and the entire character of Daryl, that are different.

The season ended well, moving them clearly towards a new setting and situation. If it goes where things seem to be hinting that they’re going, the next season will be an amazing one (knowing what happens in the graphic novel).

Q9: Gas price recoup
When I read “It will take X amount of time to recoup the increased cost of a hybrid vehicle via saving on gas” does that length of time depend on the price of gas at the moment someone says that? For example if someone had said it would take me 8 years using current prices in January 2012, would the time now using today’s prices, which have increased substantially?

– Linda

It’s usually based on the price of gas at the moment of the calculation.

Because the price of a gallon of gas varies so much, it’s always a good idea for someone writing about such calculations to mention the price of gas (I try to do this) that they’re using in the calculation.

If you see an article with such calculations in it without stating the price of gas, try to base it on the date. Use data like this and look up the gas price as close as possible to the date of the article. Take the current price of gas and divide that by the historical gas price and you’ll get a conversion factor. You’ll want to divide the “x months” mentioned in that article by the conversion factor to get a ballpark estimate of the time in terms of today’s gas prices.

Q10: Planned spending as saving
I’m trying to figure out how much of my income I actually save. There’s the money I put into my 401K, the money my employer contributes, and then there’s money that I put into several savings accounts for various purposes. These savings accounts include an emergency fund, but also a vacation fund, new car fund, home remodeling fund, Christmas gifts fund, etc. Does this still count as “savings” if I plan to spend it at some point, whether in a few months (Christmas) or in a decade (new car)? When personal finance advice says you should put X percentage of your income toward savings, does that mean long-term/retirement savings only?

– Jules

All savings is intended to be spent at some point. Keep that in mind.

Now, when articles talk about saving X% of your income, what they mean by that depends a lot on the author. Some are talking about retirement only, while others are talking about all savings with retirement as a component.

My feeling is that as long as you’re confident that your retirement is being planned for, you’re making progress that makes you happy towards your other goals, and your debt level is dropping slowly, the exact percentage you’re saving isn’t that important.

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.