Questions About FDIC Insurance, Envy, Goal Journals, Soap, and More!

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. FDIC and NCUA insurance
2. Good tactic for controlling envy
3. Beer, soda, and hobbies
4. Applying for business credit card
5. Glass or plastic in freezer
6. Saying no when budgeting
7. Question about UTMA/UGMAs
8. Setting up home office
9. Goal journal suggestion
10. Mortgage with plenty of cash
11. Job with no challenge
12. Soap tip

I woke up this morning with the intent of finishing off a few final edits for this mailbag and putting it up for you all to read, but I was utterly distracted by the devastating news coming from Las Vegas.

I can’t help but feel like we are in a cycle of disasters right now. Between Hurricane Harvey hitting Texas, Hurricane Irma hitting Florida, Hurricane Maria hitting Puerto Rico, the multiple earthquakes in Mexico, the wildfires in Montana and California, and now this tragic shooting? Those things are just in North America, too, in the last five or so weeks.

It is easy to get lost in negative feelings and get a sense that things are just falling apart and that the devastation is just too much to do anything about. However, the truth is that nothing is fixed without a helping hand. We don’t recover from devastations without working together and helping each other.

Do something. If you’re not able to donate money, that’s fine. Organize a fundraiser. Organize a community event. Donate clothing and food. Start somewhere, even if it’s tiny.

I rarely mention anything religious on here, but I do know I have a lot of readers who happen to be Christian. At moments like this, I ask you to remember James 2:20 – “But do you want to know, O foolish man, that faith without works is dead?” It is not enough merely to pray. Do something.

Need a starting point? The place that needs the most help right now is Puerto Rico in the wake of Hurricane Maria, and the place to start is at United for Puerto Rico. If you can’t donate money yourself, look for a way to help locally, through a fundraiser or community event. If you can’t find one and don’t feel you have the skills to start one, then consider donating to a local cause, like a food pantry or clothing pantry, because those places are feeling the pinch, too, as food aid is very spread out right now.

Do something. It’s the only way anything changes for the better.

Q1: FDIC and NCUA insurance

I did find one article regarding looking for a new financial home that is a bit misleading. [You] made some excellent points on things to look for when shopping around for a new bank/credit union. [You] did mention to run away from anyone not FDIC insured.

I believe it is correct to run away from a bank that is not FDIC insured. However, credit unions are not FDIC insured, they are NCUA insured.

I have been blessed with the opportunity to work for both a community bank and a credit union and can tell you there is virtually no difference to the consumer experience. But, the article discounts the credibility of any credit union because they are not FDIC insured, when in fact the NCUA offers the same guarantee. Great article, excellent points, I do not want to take away from that, decided not to leave a comment but saw an email inquiry instead.
– Kevin

Kevin’s point is 100% spot on. Much like banks offer FDIC insurance to guarantee your deposits in the face of bank failure, the NCUA offers similar insurance for your deposits in the face of credit union failure.

Thus, when you’re considering a bank or credit union for your deposits, you should consider it an absolute requirement to use an institution that offers FDIC insurance (for banks) or NCUA insurance (for credit unions). This is something that basically all reputable institutions offer as a matter of course in America, but it’s something that you should not live without. It’s worth a few seconds just to make sure.

Both types of insurance offer similar deposit protection. Your deposits up to $250,000 are insured against the failure of the bank by an independent organization. Typically, if a bank or credit union does fail, you wind up with a new account at another bank or credit union with your previous balance up to the limit of the insurance.

Q2: Good tactic for controlling envy

Something which helps me is to tell the friend who has bought the expensive thing that I really envy them. Somehow it makes the feeling less painful. To say it in a jokey way is easier.
– Jeanine

This isn’t just a great tactic for controlling envy, it’s a great tactic for controlling many negative emotions. Simply admitting that you’re struggling with that emotion can often make people around you sympathize and even help you overcome it in that moment.

The problem, of course, is that it’s hard to express such things or admit to them. It took me a long time to figure out that I’m usually better off just expressing an emotion, by saying that I’m frustrated or I’m angry. Not only does it actually defuse the emotion quite a lot, it usually makes sympathizers out of the people around me.

It’s definitely a tactic I turn to sometimes in difficult situations, and situations where you feel envy are definitely difficult situations. Great tactic!

Q3: Beer, soda, and hobbies

You don’t drink soda as it’s too expensive – but you brew and drink beer! Really??
– Jed

I don’t drink soda frequently because of the long term health costs, which is similar to why I don’t drink beer frequently, either. Neither one is healthy in significant quantities – they’re an occasional treat.

I enjoy making both of them, actually. I happen to enjoy the process of making beer more, though, as most of the time with soda making, you just make a fairly simple syrup and add it to seltzer water and stir it for a bit. Beer making is simply a more interesting process to me.

I do have a homemade citrus cola recipe that I really enjoy and make every several months. It’s very similar to this one, except I use a bit of grapefruit zest, too.

Q4: Applying for business credit card

I am applying for a business credit card. If I just established my business a couple of months age, is it a good idea to use my personal income as the annual income?
– Linda

You need to enter the income of your business.

Don’t stress out about it, though. Many business card applications typically include an additional section for cards being used for new businesses, which ask you about your own personal financial state. You’re essentially going to wind up “co-signing” for the card, in other words, because your business doesn’t have any sort of credit history.

So, be honest in describing your business, and be honest in describing yourself. Unless your personal credit is extremely problematic, you’ll end up getting a card.

Q5: Glass or plastic in freezer

I have a question about freezing food. I often freeze food in 1 – 2 cup canning jars so I can put soups or stews directly into my lunch bag from the freezer. I was wondering what your thoughts are on freezing meals in glass vs freezer bags. Do you have a preference?
– Cindy

I prefer using glass in the freezer, but it has a few additional problems.

First of all, you have to use tempered glass in the freezer. Never, ever use glass containers that aren’t marked as freezer safe. If they’re not freezer safe, they have a very good likelihood of shattering.

Also, food expands a little in the freezer, so you need to make sure not to fill up glass containers all the way to the top. I leave an inch or so of breathing room around the top before I close it.

Plastic is more convenient for freezing, but all things being equal, I prefer to freeze things in glass containers because there is less chance of the container leaching into the food. We use a mix of both.

Q6: Saying no when budgeting

Do you have any advice on saying no to events when you’re on a budget? I don’t want to be dishonest with friends, but if I say that an event doesn’t fit in my budget, I’ve had multiple friends jump in and say they can pay for me. If I were in true financial straits I would see no problem with that, but I am in a pretty good financial place; I just don’t want too many trips to the movies or whatever it is to impact my larger financial goals. What do you do in one of these situations?

In my case, these aren’t usually events that are more than twenty dollars a piece, but if I say yes to every invite I get it would start to put a strain.
– Patricia

I usually pick and choose in these situations. Sometimes I’ll go along with such events; other times, I’ll bow out. I usually just pull it out of my hobby/entertainment budget when I’m flying solo and such choices present themselves – if I have money in my entertainment budget for the month at that point, I often say yes.

So, my suggestion is to budget for it. How much are you willing to spend a month on such events? $50? Figure out that amount and then make your decisions based on that amount. That lets you accept about three such invites a month (or so). If you have some left over at the end of the month, roll it forward.

Another good strategy is to think in advance about lower cost alternatives. If a movie night is suggested, be aware of some dollar theaters in the area and suggest a movie showing at one of those. If someone suggests going to a restaurant, know a few really good cheap ones in the area and suggest one of those. This keeps your cost low, and I’m willing to bet some of the other group members will appreciate it, too.

Q7: Question about UTMA/UGMAs

My wife has 3 UGMA/UTMA’s totaling just under $50k. She is 30 years old, but has not spent or withdrawn any of these funds since she hit the termination age limit (which is 21—we live in IL). She was told by a broker at one of the institution that holds these funds that she needs to transfer the funds out an UTMA/UGMA since she is over the age limit. So now we’re wondering what to do with these funds and what the tax penalty is for transferring or withdrawing the funds. Ideally, we’d like to transfer $5,500 to an IRA and spend the rest on a down payment for a house. What are the tax repercussions of doing that? Is there something else we should be doing with these funds instead? Is there a certain time limit around transferring these funds? Obviously we’ve waited years to deal with them. Any thoughts on what to do would be extremely helpful.
– Millie

So, let’s back up. UGMA and UTMA refer, respectively, to the Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA), which allow a minor to own stocks and other investments in an account without a trust. Generally, the money in these accounts is used for college expenses, but not always.

What happened in this situation is that someone opened some accounts for the person in question when they were a minor, transferred some investments in there, and now, as a 30 year old, the beneficiary is trying to figure out what to do with it.

Given that you’ve hit the age limit on the accounts, that I don’t know what’s in the accounts, and that the rules are a little different from state to state, I encourage you to talk to a tax professional about these accounts. Your goal there should be to assess how much in taxes and potential penalties you may have to pay when you empty out these accounts.

The uses you describe are very good uses for the money, but the first step is getting the money out and ensuring that any tax liability is taken care of first.

Q8: Setting up home office

I have a consulting side gig that’s starting to take off a little bit. I have come to the realization that I need a stable place to work besides the living room chair or a coffee shop table. I currently live in a 1BR apartment with my wife without any obvious space for a home office. How did you do this in the past when you and your wife had a small apartment?
– Terry

As with you, I mostly did my work in a comfortable chair in the living room as we didn’t really have space for a home office. As with you, I also found that I needed a place for my work stuff and some sort of “mental switch” for work mode versus home mode.

What I ended up doing is designating a backpack as my “portable office.” I kept everything related to my work in the backpack and took it with me almost everywhere. I wrote a lot at the library in study rooms. I wrote a lot in the shelter house at the town park. I did write some at home, too.

What I found was that I began to associate the presence of that backpack with “work time.” It became something of a mental switch for me. If that backpack was nearby or open, I was “working.” When it wasn’t around, I wasn’t working.

Q9: Goal journal suggestion

You mentioned trying out several journals for goal setting. Which one is the best one?
– Terry

I’ll say this: any goal-oriented journal or planner works well if you put time into it yourself. That’s the key factor, not the journal. Are you actually using it several times a day? Are you keeping it updated?

I’ve used four different journals/planners for goal setting in recent year: the Passion Planner, the Panda Planner, the SELF Journal, and the Full Focus Planner. I have a hard time saying which one is the “best” one, and actually comparing them all would take a very long post (that’s definitely an article on the “someday/maybe” list).

I think the Passion Planner is great if you’re trying to launch your own side business or small business. I think the Panda Planner is probably the best if you’re just trying to balance and be successful at a lot of existing obligations. I think the SELF Journal is best if you’re trying to succeed at a small number of goals – 1 to 3 – over the next few months. I think the Full Focus Planner is best if you’re trying to succeed at a larger number of goals – 6 to 10 – over the course of a year or so. I’d suggest choosing the one that sounds like the closest fit for you.

Again, I think they’re all pretty solid journals and they’re all helpful, but it’s more about what you put into them than what they do for you.

If there is a lot of interest in a more detailed comparison (probably including a few more options), please let me know via a Facebook message and if I hear a lot of positive feedback, I’ll prioritize it. (Such a comparison feels like it would be a lot of work if I’m going to make it worthwhile, so I want to be sure people want such a thing before I write it.)

Q10: Mortgage with plenty of cash

I am 30, my wife is 29. I am the only grandchild of my wonderful grandparents, who recently gave us enough money to buy a house (and they’re handling all the taxes). We were already shopping for one, so now we’re wondering what we should do. We have decided that we’re not letting this gift allow us to buy a more expensive house. Our question is whether we should still get a mortgage or not. That way we can stow away some of this money for emergencies and for taking care of the house. Thoughts?
– Stephen

It depends on the rest of your financial state. Do you have any other debts, particularly those with a higher interest rate than a potential mortgage? Do you have any other emergency savings? Are you focused on buying a house equal in value to the gift, or are you looking at less expensive houses?

My advice to you would be to use that money immediately to pay off any remaining debts that you have, especially anything with an interest rate above 6% or so. Then, make sure that you have about six months of living expenses in an emergency fund. Then, take the rest of the money and use it as a super-large down payment on the house – probably 60% or more.

At that point, many financial institutions will be happy to work with you unless you have truly terrible credit. A relatively small mortgage on a house where most of the value is already covered in cash is a really good deal for a bank.

If your grandparents ask, lay out what you’ve done with the money. They’ll likely be very impressed with the decisions, because those kinds of decisions are the ones that put you in a strong financial position. You are, after all, essentially buying the house with their money, then taking out a small home equity loan to pay off your other debts and have an emergency fund. In other words, not only do you have a house to live in, you also used it as a tool to further improve your financial state.

Q11: Job with no challenge

I hate my job, not because it is stressful, but because there is very little to do. I probably spend 5-10 hours out of a 40 hour week working. I handle everything that’s thrown my way and step up for extra tasks all the time but there’s just not that much to do. Part of it is that the previous person in my job must have been really incompetent because he seemed to struggle to get this done even in 50-60 hours a week so they think that’s what it takes. While I am bored, it seems like a really dumb move to go to my boss and explain this to him.

So, what do I do? I mostly spend the day reading books and websites and waiting for stuff to do.
– Jeffrey

I am assuming that you do enjoy your job when you’re actually busy, but you don’t enjoy all the downtime and it makes you not feel very good. Assuming that is true, you probably don’t want to quit your job. Instead, you just want to find a good channel for that spare tim.

If I were in your shoes, I’d probably invest the time starting a side gig of some sort. Write a book. Build a website. Launch a consulting business. Use that spare time to make more money in a different area or else raise your profile in your field really high.

If you don’t have a good idea, I recommend this strategy: get involved in a social media platform of your choice related to your career, and spend your spare time raising your profile as high as possible on that platform. Treat it like a game, where your score is your number of followers. Jump into conversations. Be really helpful to others. Plan out insightful things to say rather than off-the-cuff comments. You’d be surprised at the opportunities that knock on your door if you have a nice social media following.

Q12: Soap tip

A tip for your readers: you are probably using way way way too much soap when you wash your hands or take a shower. If you have enough soap to make a thick foam, that’s way too much soap. It’s going to waste and not doing anything. To wash your hands, you need less than a single pump from a dispenser. To take a shower, you need about five drops on a washcloth from a bottle of liquid soap or just a little bit of soap rubbed onto the washcloth from a bar. A little bit of soap goes a long way to get germs and bacteria off your body and hands, and using extra is just dumping money down the drain for no good reason.
– Diana

I was really interested in this topic, so I did some homework on it. (I find little behavioral things like this quite interesting.) My motivation isn’t so much to use the least amount of soap, but to use the right amount so that I minimize the chances of illness.

It turns out that good hand washing technique is actually the most important factor in getting your hands clean (and, I would presume, your body in the shower). You should be shooting for 20 to 30 seconds of active scrubbing of your hands. That seems to be a bigger factor for hand cleanliness than soap – scrubbing with water for that long is actually going to make your hands cleaner than washing for just a few seconds with soap.

Also, the idea that you only need a single pump may or may not be true. Dispensers vary in the amount of soap they dispense. In general, you need somewhere between 0.7 and 1 mL of soap to thoroughly cover your hands. Some dispensers put out that much with a single pump, while others do not.

Another “trick” is the idea that foam soap is somehow “more soap” than ordinary liquid soap. It’s not. Foam soap is essentially the same as ordinary liquid soap but with air bubbles spread throughout it.

Your best bet, unless you know your dispenser well, is to use two squirts. Even if it’s a low volume dispenser (0.4 mL), two squirts should give you enough to thoroughly wash your hands. More than that is excess.

In the shower, it’s harder to really measure things well. However, I’d again say that the biggest factor is the length and vigor of scrubbing, not the amount of soap, and that bottled soap (and shampoo) encourages you to use more than necessary.

In my eyes, the biggest factor here is to adopt whatever strategy results in the best long-term health and the lowest likelihood of getting sick. That, to me, is the motivation to use two squirts of soap and to scrub them for thirty seconds in the bathroom because, in reality, you get your hands cleaner that way. It’s far better than four or five squirts and five seconds of “washing.”

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.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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