What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. College and parental assets
2. Best containers for simple lunches
3. Playing the lottery
4. Envelope budgeting without cash
5. Workplace ending 401(k) program
6. Planning ahead for upcoming move
7. Recommended squirt bottle for shower
8. Annoyed by robocalls
9. Time management, philosophy, and money
10. Coworker uses Comic Sans
11. Old magazine conundrum
12. Good audio for sleep?
Last week’s mailbag was kind of a downer, with several heavy questions about families and lives in disarray. As a counterbalance, this week’s mailbag is intentionally filled with some lighter questions about more positive situations, product suggestions, and a couple of really lighthearted things near the end. In the future, I’ll aim to make sure mailbags are more balanced.
On with the questions!
My daughter is 12. My wife and I have a lot of money in various investment accounts and are wondering already about college. We have been saving in a 529 for her to pay for some of her college but we want her to be responsible for some of it too. However, we are pretty certain that our investments will make her ineligible for student aid. What should we do going forward?
It depends upon what kind of student aid you’re hoping to get. If you want your daughter to be eligible for grants and other need-based financial aid, you’re going to have to move that money into assets that aren’t considered in the FAFSA, like retirement accounts and your primary home.
On the other hand, if you’re hoping that your daughter will be responsible for her part through merit-based scholarships and student loans and you plan on co-signing on those loans, your income level largely won’t matter. You’ll still have to fill out the FAFSA, but your financial aid awards will be very loan-heavy rather than grant-heavy.
The question is whether the difference is worth it to you. Do you want to tie up your investment funds in a home or in retirement accounts? If that’s not a problem for you, then doing this will definitely improve your daughter’s chances of getting grants, which will reduce the amount of actual post-college debt she has. If it is a problem for you, leaving the money where it is won’t prevent your daughter from going to school or put you in a financial pickle.
Without a much clearer financial picture, I can’t even begin to guess which choice would leave you and your daughter collectively in a better financial position ten years from now, and even if I did, there would be a lot of guesswork and predicting the future involved.
What do you suggest for containers for simple lunches, usually a sandwich and some carrots and an apple and maybe some chips, and once in a while some leftovers? I have a little reusable lunchbox and I have a leftover container that I use for leftovers but I just use baggies for the others and that seems wasteful.
Pretty much any reusable sandwich sized container will work for a sandwich, and two more can hold your carrots and chips. Assuming you’re not wanting to carry anything that needs to be completely watertight (meaning it’s holding liquid and might wind up upside down), pretty much any container of that size will do. The items you’ll find at the dollar store will be perfect for this.
If you intend to just start using reusable containers for everything, I strongly suggest just getting a lot of the same type so that there are no issues with matching lids to containers and you know everything works. Just get a bunch of these in two different sizes, or else go to the dollar store and get a bunch of identical containers in an appropriate size. Don’t mix up the container types or you’ll just have headaches.
Personally, we’ve started to spend more on containers in order to get ones that have tight fitting lids and are microwave, dishwasher, and freezer safe and very, very reusable. We’re trying to gradually migrate all of our containers to the same model for lid consistency, and we’ve decided on Rubbermaid Brilliance.
My grandpa has bought a lottery ticket twice a week since at least the 1980s. I was figuring up how much money he had spent on lottery tickets since 1985 and if he bought a $1 ticket twice a week for those 34 years, he’d have $3,500, and if he invested that money each year in pretty much anything, he’d easily have $10,000. I brought this up to him and he had a great answer. He said that he didn’t play the lottery as any kind of investment, but as something fun to look forward to. He got to chat with the cashier at the gas station where he always bought his ticket. He got to daydream about having a chance to win enough money to change his life and help his kids and grandkids. He got to look up the numbers each Sunday and Wednesday morning and see if he won. And he actually did win a couple of thousand several years ago, so that actually took care of most of the $3,500. While I think playing the lottery is a waste of money, that actually is a pretty good answer and I wanted to share it with you.
This is a good story, and it makes the point that lottery tickets fall into the same category as the short-lasting treats that we buy for ourselves. Is this really any different than spending $5 on a coffee at a kiosk, or buying a pack of gum in the checkout? You’re basically spending money for a burst of pleasure and then it’s gone.
In the end, that’s what this guy’s grandpa is doing, too. He’s spending a few bucks a week on a burst of pleasure, and then it’s gone.
The important thing is to realize that it’s not the lottery ticket or the coffee itself that’s problematic, it’s that we often get into routines of relying on those bursts of pleasure in a continuous cycle, like a treadmill. We’re wired that way for survival (this is why food tastes good), but when you’re spending money to stay on that treadmill, you’re asking for financial trouble. The best approach is to make sure that a lot of those bursts of pleasure are free ones so that the whole thing doesn’t become a road to financial ruin.
It sounds like your grandpa has enjoyed those lottery tickets. Sure, he might have been better off seeking out free bursts of pleasure, but this one’s not that bad in the big scheme of things. It only becomes problematic if the amount he’s spending starts to escalate.
Love the idea of envelope budgeting but I just use my debit card for everything. How can envelope system work without cash?
You can basically do the same thing by making up a handful of small sheets for each category that you would have an envelope for.
Let’s say that you were going to do the “envelope” system and you had one envelope for rent, one envelope for car expenses, one for utilities, one for food, and one for fun. (This is hypothetical.) If you were doing the full envelope system, you’d put a certain amount of cash in each, then pull cash only from that envelope if you had an expense for that purpose. So, if you needed to pay rent, the cash comes from the rent envelope.
If you’re not using cash, the money stays in your checking account and instead of an envelope for each category, you have a sheet. On each sheet, you start off the month with a total – you might write, say, “Food, Total: $400.” Whenever you want to spend money on food, you look at that food page and ask yourself how much you can spend right now. If you decide to spend $50 at the store on food, you write “Groceries, -$50” and then next to that you’d write your new total, which would be $350 if this was your first food expense of the month.
Basically, each “envelope” transforms into a tally of spending in each category. You just have to work on the habit of not spending money unless you’ve written it down on one of those sheets first.
It was recently announced that our workplace will be ending the 401(k) program at the end of the year. I consider such a plan to be a nice workplace benefit. How much value should I assign to this if I were to negotiate a raise or move to another employer? I’m going to start a Roth IRA next year but this just feels like a salary cut.
If your workplace wasn’t matching any of your contributions and your total contributions each year are less than what you could contribute to a Roth IRA (around $100 a week), it’s not going to make much of a financial impact.
Where it might really matter is if you were contributing more than $100 a week to the 401(k) plan or, even more than that, if the employer was offering matching funds. Obviously, the value of any matching funds is a direct loss, but there’s also a small loss if you no longer have a place for some of your intended retirement savings.
This would not be a “quit my job” change, but it would slightly negatively shade my current job, and I would definitely consider any loss in matching funds as equivalent to a loss in salary. As someone who was actually using the 401(k), I would definitely bring it up the next time you ask for a raise. If your boss doesn’t take this into account, it can be another reason – but shouldn’t be the only reason, by far – to consider shopping around for another job.
I am planning on moving from Minneapolis to Chicago in November. I will be moving to a similarly sized apartment so I plan on taking a lot of my stuff along. I have a friend coming to help me move. What can I start doing now to keep costs low?
First of all, start hunting for large, sturdy cardboard boxes. Ask at local stores for extra shipping boxes – ask at several stores now, then hit some more in a month or so. This will keep you from buying boxes when it gets close to moving time.
Start packing stuff now, especially stuff you won’t actively need in the next two months. Use found materials as you go as packing materials – if you come across bubble wrap and cheap packing paper and other things, use that for packing as you go along. Again, this will save you on last minute purchases.
Depending on how many larger pieces of furniture you’re moving, a simple U-Haul truck will probably handle the move for you. I strongly recommend getting it the day before you move and loading it in advance so you can get an early start the next day or you have some breathing room to handle an issue. Give yourself more time than you need. Have your friend drive the truck, or you can drive the truck while your friend drives your car behind it.
Those strategies will save you a ton over various other approaches to moving. The more that you can do yourself, and the more moving supplies you can come up with for free, the cheaper the whole thing will be.
Also, thank your friend profusely, cover all of your friend’s food and drink during this process, and give that friend a nice thank you gift for this effort.
You’ve mentioned a couple of times that you use a squirt bottle for liquid soap in the shower to keep yourself from overuse. Thought about that this morning when I saw a bunch of excess soap going down the drain when I squirted some on my hand! Got a bottle recommendation?
I use two of these. One holds liquid soap, the other holds the shampoo-conditioner mix that I use. Whenever I buy a new big bottle of liquid soap or shampoo at the store, I just refill this pump dispenser. Works like a champ. I use a single squirt at a time and rarely waste any at all.
I will mention that I have a friend that swears by this mounted dispenser that has three different dispensers in one unit. You mount it on your shower wall and then just push a button of the right type to dispense soap, shampoo, or conditioner. I am very hesitant to switch to this because if I’m not literally screwing this to the side of the shower, I wouldn’t trust it to bear the weight of the soap, shampoo, and conditioner it would hold.
I think both will work fine, but I prefer the standalone bottles. Get three if you use a separate shampoo and conditioner.
Do you have any tips for dealing with annoying robocalls? Both me and my mom get these calls from random numbers that say that our Social Security number has been terminated and there is a warrant out for our arrest, which is obviously nonsense, but I’m so sick of getting the calls. How do you get them to stop?
The best advice I can give is to talk to your phone provider. I’m assuming this is occurring on your cell phone, so call your cell phone provider and ask if they have any tools that can help with this.
If they don’t have any tools, the best thing you can do is just spend some time ignoring any calls that aren’t from known numbers. Make sure that you have everyone you know or who might call you in your contacts list and when there’s a call that’s not a known contact, just ignore it.
It’s very annoying, but there is no simple solution. Eventually, however, they’ll stop wasting time calling you if you’re not answering because it’s a small but real waste of their resources.
I find it interesting that you write about things like time management and philosophy on a personal finance site. The connection seems thin at best to me. I’d love to see a post talking about it.
I don’t think there’s a full post in this subject, but there are certainly a few paragraphs.
For starters, I think about frugality in terms of managing all of the resources we have in life, not just money. Frugality means getting the most benefit out of something based on the amount of resources you invest in it. That means your money, obviously, but also your time, your energy, your health, your skills, and your focus, among other things. Having good habits for managing each of those often means that you are more efficient at applying them and, over time, it feels like you have more of them to spend.
For example, if I’m more focused during my workday, I’m done with my work much earlier in the day, which means that I have time to make a healthy, homemade meal for my family, which is much cheaper than ordering takeout or delivery (and healthier, too). I’m spending more focus and less time on my workday, which means that I have more time later in the day for other things. When I have more time available, I can do things like make dinner, which eats more time but costs much less money and hones my kitchen skills. I think all of that comes together in making a good life – it’s about finding the right balance of using all of those resources you have to maximum effect. In the modern world, I think the average person struggles with their “money” resource the most, but there is a lot of struggle with time and attention, too, and they’re all related.
Thus, I’ll occasionally write about time management practices that work for me, like using a task manager, and about focus practices that work for me, like meditation and writing in a journal and making checklists. Those things vastly improve my usage of non-money resources so that I can be much more thoughtful about my money use.
All of this is pointless, of course, if you don’t have a purpose behind it. Why am I not just playing video games all day long? Why do I want to retire early? The “why” of all of this is the philosophical part. Not only does it tie into motivation for our actions, it also delves into the broader purpose and reasoning for the things that we do. Why do I choose to save for the long term rather than spending it all in the short term? Why don’t I sell all of my possessions and live in a van? In many ways, those questions are pure philosophy, and everyone is going to have their own answer, but I’ve found that the better you understand your own answer to those big “why” questions, the more it impacts the choices and decisions you make every day. Knowing that there are real reasons for why I’m saving for the long term, and knowing those reasons with depth, makes it easier to make strong personal finance choices every day.
So, when you see articles about time management on here, or about things like meditation, or when I get very philosophical, these are the kinds of things that I’m driving at. It’s all about using the resources we have in life to do things that truly mean something to all of us, and there’s no easy path to get there. It’s a journey I’m on – it’s a journey we’re all on.
I have an older coworker who uses Comic Sans font in all of his emails and documents. I know that he does it to seem friendly and approachable, but it comes off as unprofessional especially when emailing customers and several people in the office make fun of it. Is there a tactful way to talk to him about this? He’s a great guy and I know he’s sincere and I don’t want to hurt his feelings.
I think the best way to approach this is to suggest the idea of having a “best practices” document about things to do when talking to customers. One of the items could be an appropriate professional font choice for customer emails and include some recommended fonts (or even choose a standard font for your organization). That way, your coworker is nudged into switching to a different font for customer mail and there’s a good likelihood he’ll just start using it on all emails. (My approach is usually to just send plain text emails anyway, so the recipient can use whatever font they want to display it, and it’s easier for some accessibility issues.)
As for the office joking, as long as it isn’t cruel, I wouldn’t worry about it. The humor is likely more oriented toward the sometimes-less-than-respectable nature of Comic Sans in a professional environment than toward your coworker. If the jokes are mostly limited to the font, don’t sweat it; if it’s bleeding into more general insults about the person, then there’s a bigger problem.
I think the best approach here is to just go with establishing a standard for customer and perhaps in-house communication, and that includes font selection. This just makes the business as a whole look more professional and should solve this issue entirely.
I have a ton of cooking magazines that I’ve saved but I haven’t touched in years but when I think about tossing them I get worried that I’m going to toss some recipes that I really want to make.
This was part of a much longer email on subjects that probably weren’t a good fit for the mailbag, but I thought this was worth responding to.
If you have a ton of old magazines, just set aside a day to deal with some of them. Grab a big pile of them, sit down, look at the table of contents of each one, and ask yourself if you’ll ever have any reason to look at any of this again. If you can’t immediately say yes, toss it. If you do immediately say yes, tear out the pages for that specific article, put them aside, and toss the rest.
If you have a bunch of saved pages at the end, just get a three hole punch and put them all in a three ring binder. That way, your huge magazine collection boils down to a small binder of stuff that’s actually relevant to you.
Recently moved and I’m now in a very quiet neighborhood. Used to live in a noisy area with cars driving by all night and occasional sirens and stuff. Now it’s too quiet and I can’t sleep so I’m reading The Simple Dollar at 2 AM.
My suggestion is to find some audio that’s similar to the neighborhood where you used to live. For example, you might find this hour-long track of ambient city noise to be useful. Turn it up to an appropriate volume on a speaker across the room as you’re going to bed, or play it on your phone next to your head. Here’s a similar two hour track.
If you have Spotify, you might try playing this compilation in a repeat loop as you sleep.
What I would do is that I would do this for several nights, and then lower the volume by a couple of percent the next night, then leave it at that new volume for several nights, then lower it again, and again, and again, so that you gradually adjust to the new quieter sounds of your neighborhood. It’s the radical shift in sound that’s probably making the change difficult.
Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.