I would have expected that he would be frightened of our children, but he actually seems to like them very much. Whenever he sees them, he hops toward them and he happily eats everything that they feed them.

The pet rabbit was basically a compromise with regards to all of the various concerns we had about a pet: indoor allergy worries, maintenance, and other things. After a lot of research, a rabbit seemed like the best option.

The Benefits of a Reverse Mortgage Broker If a reverse mortgage broker takes 10% of what you get from this but helps you find a reverse mortgage that pays 20% more, then it’s worth it. (@ dumb little man)

The Worry That You’re Doing the Wrong Thing Right Now I think we all have this worry fairly regularly. I can certainly say it’s something I struggle with, my wife struggles with, and many of our friends struggle with. (@ zen habits)

Four Simple Steps for Coping with Significant Life Changes Significant life changes almost always come with personal challenges. This is some great advice for overcoming those life changes. (@ unclutterer)

Polishing perfect The perfect is the enemy of the good. That idea is worth keeping in mind no matter what you’re doing. No matter what you do, there comes a point where further effort is pure diminishing returns. (@ seth godin)

The post The Simple Dollar Weekly Roundup: Pet Rabbit Edition appeared first on The Simple Dollar.

If that family adopted just a few frugal practices and were able to switch their food spending to the USDA’s low-cost plan, the family is now spending just $826.60 per month on food.

That simple shift results in a savings of $425.40 on food each month.

I certainly don’t have to tell most of you about the power of frugality, of course. Most of you know the mountains of savings a person can incur if they’re careful with their spending.

The challenge is that many people believe that a focus on investing means that you don’t have to worry much about frugality. After all, in the eyes of quite a few people out there, you simply can’t earn huge returns with frugality.

So, we’re going to stick just with this $425.40 per month that you can save just via food and not even deal with the money you can save on your energy bill, entertainment expenses, household supplies, automotive expenses, and other categories each month. This is just to show how important that $425.40 is per month.

For calculation’s sake, let’s remind ourselves that $425.40 per month is worth $5,104.80 over the course of a year.

Now, let’s say you actually have some money to invest. You took that money and did the obvious thing with it and stuck it into a very broad based index fund – the Vanguard Total Stock Market Index. Since 1992, this fund has returned 9.02% annually, which is a very nice return.

That’s the easy route – anyone could do this. Now, let’s say hypothetically you could spend ten hours a week focusing on investing strategy and find a way to earn 10.02% annually. If you were actually able to consistently beat the total stock market index by 1% year in and year out, you would be a total financial genius and ought to be working on Wall Street, but I’m trying to give investments the benefit of the doubt.

How much money would you have to have in investments to make those ten hours a week spent on investment management worth more than the ten hours a week spent on frugality?

Your target additional earning here is $5,104.80 – except, it’s actually more than that. If you’re investing these sums of money, you’re almost assuredly in the 33% tax bracket, so the amount we’re actually looking at is $7,657. Remember, money saved via frugality isn’t money you have to pay income taxes on.

So, how much money would you have to have invested in order to earn a $7,657 annual return by beating the Total Stock Market Index by 1% instead of just investing in it?

The answer is $765,700. If you have three quarters of a million dollars in your investments and you have the ability to find a way to consistently beat the market by 1% a year, only then can you earn as much via investing as you can via simple frugality.

Given that 72% of American households live paycheck to paycheck, I think it’s pretty safe to say that the vast majority of American households don’t have three quarters of a million dollars laying around to invest.

I’m not saying that investment is a worthless thing to think about. What I’m saying is that for most American families in their current situation, a focus on frugality is going to earn them much greater returns than investments will, and that statement will hold true for many years. If a family is very responsible with the money they save from frugality and use it to pay off debts and invest instead of finding other methods to inflate their lifestyle, then they will reach a point where investments matter more.

The truth is that it’s only a tiny minority of Americans have enough liquid wealth on hand to make their time spent managing investments worth more than their time spent being frugal once they have an initial automatic investment plan set in place. After that, almost all of us are far better off reading the grocery store flyer and making sure our tires are inflated than reading the latest mutual fund data.

The post Looking at Frugality as an Investment appeared first on The Simple Dollar.

Understanding the ins and outs of the various financial options before us is a vital part of personal finance. Without that knowledge, it would be extremely easy to make poor choices that, while they probably won’t lead us to financial ruin, may lead us to poor returns or the unavailability of funds when we need them.

Naturally, that means research. It means finding several sources of information about an issue, reading them thoroughly, and studying up on any terms that you don’t know.

Much of the time, those sources you find will largely be in agreement on the course of action that you should take. It’s a good idea to pay off high interest debt, for example – most personal finance writers will completely agree on that statement.

Sometimes, though, the sources don’t agree. You’ll read one plan of action from one source and another plan from another sources. Sometimes you’ll even find three or four ideas out there floating around. You might find two or three articles or books that advocate one thing, then you’ll find two or three other sources that talk about something completely different.

How do you figure out what’s right? Having such conflicting perspectives can be really, really confusing.

Whenever I find myself in a situation where I’m trying to figure out the best solution but I’m presented with several different plans for solving the problem, I rely on a few specific tactics to figure things out.

First, do I fully understand all of the plans presented to me? I try to understand what each plan is all about. How does it work? What does the person following the plan need to do?

Next, I try to figure out the risk involved with each plan. Which plan involves more risk for me personally? If I lost my job in a year, which plan would have me in a worse position? I tend to be risk averse, so plans that would leave me in a bad place should something difficult happen in my life are plans I don’t pay much attention to.

After that, I try to figure out if the author of the article has a hidden motive. This is particularly true if there’s a specific financial product involved, such as an insurance package.

Health insurance, for example, can have lots of different approaches, some of which are going to be unbiased and some of which are going to be shaded by the author’s interest in promoting a particular package. The Simple Dollar has a very strong health insurance guide, but you should always look for multiple sources and make sure you understand the issues thoroughly.

Most of the time, even when an author’s agenda is obvious, they’re not doing it for malicious intent. People can often be true believers in something and believe it is the right solution for everyone, even when it’s not.

Another factor I try to look at is the time in which the advice was written. While a lot of older advice is still fantastic in many regards, the time and place in which an article was written can have a great deal of impact on the advice. Advice on homebuying and flipping homes from 2005, for example, might not match what makes sense in 2013.

For me, these four factors usually eliminate most of the bad advice I might receive and often helps me figure out which is the right path.

A final note: most of what I read in terms of financial advice is good advice. It usually comes from people who want to provide you with genuine assistance. The challenge comes from outdated (but not intentionally wrong) advice, advice from true believers in their product, advice from people with different risk tolerances, and advice that I don’t fully understand. If I can overcome those obstacles, I virtually always find the right answer for me.

The post When Personal Finance Advice (or Other Advice) Conflicts appeared first on The Simple Dollar.

I could go on and on with this list. Suffice it to say that we use a fair amount of AA and AAA batteries around our home.

At our house, we use rechargeable eneloop batteries. These work wonderfully for our needs. They tend to last a very long time on a single charge and recharge quickly.

The problem with rechargeable batteries – at least ones that are well made and hold charge – is that they’re expensive. An eight pack of eneloop batteries costs $20, making the batteries cost $2.50 each. If you really shop around, you can find them for as low as $2 each, but you have to really watch for sales.

On the other hand, you can buy a jumbo box of Maxell AA batteries for $0.29 per battery.

In other words, you can buy seven Maxell AAs for the cost of one eneloop AA.

But that’s not all! You have to also pay a small amount to recharge an eneloop each time. According to my observation, it takes about 450 watts to recharge an eneloop battery, which adds up to about $0.06 per recharge. If you add in the cost of the recharge, the eneloop doesn’t get cheaper per use until after the eighth recharge.

It takes that long for the rechargeable batteries to start beating the generic batteries.

Where the rechargeables start to really come through is when you start looking at a lot of recharges. Let’s say you take a single AA eneloop and you’ve recharged it 30 times. Since an eneloop is usable out of the package, that’s the equivalent of 31 batteries.

If you use the cheap Maxell batteries, that’s $0.29 times 31 batteries, adding up to $8.99 in total expense.

On the other hand, with the eneloops, you’re paying $2 up front for the battery and recharging it 30 times at $0.06 per charge, totaling $1.80 for the recharges, bringing you to a total cost of $3.80. It’s about $5 cheaper once you get to the thirty recharges mark.

Here’s the scoop: rechargeable batteries can end up saving you money but you have to commit to the routine. When a battery runs out of charge, you have to get in the routine of charging it. You need a system in place so that you’re not left without batteries when you need one.

Our system was simple. We switched pretty much everything all at once. When we ran out of batteries, we bit the bullet and loaded up on eneloops up to the count that we thought we needed, along with a charger. Our goal was to have enough batteries so that when we need one, we can just put the old one in the charger and grab a new one out of the drawer, which meant that we needed a few extra AA and AAA batteries.

The up front cost of this was almost $100. That’s a painful amount.

What happened after that makes it all worthwhile. When our batteries run out, we put four of them in the charger, use up maybe a quarter’s worth of electricity, and we have four perfectly good batteries. We put them in the drawer and just grab them as needed.

It will take us ten or so uses of each of these batteries to get the cost down to where it should be. That will likely take us about fifteen months, based on our usage and our battery replacement habits. After that, it’s incredibly cheap.

What’s the lesson here? If you can pay more up front for lower upkeep costs over time and you’re sure that you’ll use the item enough that you’ll easily recoup the upkeep costs, go for the more expensive up front cost.

The lower your maintenance costs and your replacement costs as time goes forward, the more flexible your monthly budget becomes. At this point, for example, we don’t buy batteries. In exchange for that, our energy bill is just a touch higher, but it’s essentially unnoticeable. We’re essentially spending less money in perpetuity.

It just takes a while to recoup the extra cost.

The post Breaking Even on Rechargeable Batteries appeared first on The Simple Dollar.

For the last several nights, our evening meal has been accompanied by a salad prepared entirely from greens cut from our garden within fifteen minutes of serving the salad.

The leaves are crisp and flavorful. You scarcely even want to put anything else on the salad because the flavor and texture of the salad greens come through in every bite.

Gardening is wonderful.

Q1: IRA worry
I have my IRA with [a major investment house]. This plan contains all of my monies and accounts from previous employees that I combined into one single account, to reduce the paperwork and overhead. I don’t currently contribute to this fund as I contribute to an alternate employee plan instead.

The plan is invested in five mutual funds.

I recently reviewed my first quarter statement and noticed some charges. I don’t know if these charges represent fair value or if I am paying too much. Can you help?

The account balance as of 01/01/2013 was approximately $72,000. I made no contributions (I contribute to an employee plan instead). The account balance as of 03/31/2013 was approximately $76,000. This represents an increase of just under $4,000.

In the statement, however, includes Transaction Details with five separate examples of “Mortality & Expense and Administrative Cost Charges”, where I seemingly sold units of each of the five funds for a dollar amount of approximately $55 each.

This concerns me. If I am paying that much per quater, am I paying $1,000 a year in fees? Is that high? Is that a fair price?
- Stephen

You’ll want to call their customer service line and figure this out because there are a lot of possibilities here.

My gut reaction is that these are annual charges that are tossed on your account once per year, probably early in the year. I don’t know this, of course.

If these are quarterly charges, you should really seek out a new investment firm to do business with. I’ve used Vanguard for a long time and they’ve never hung me with anything like that.

Q2: Replacing a toilet
Our toilet in the downstairs bathroom has started to leak around the base and there are also some problems with flushing it. My husband and I turned off the water and have decided to replace it. Is this a task we can handle on our own without a repairman?
- Marjorie

Almost anyone can replace a toilet if they take it slow and have the right tools. This video does a great job of explaining the full process.

There’s really nothing complicated at all about the whole process. You just turn off the water, unscrew the water feed, make sure every drop of water is removed, remove the nuts at the base, lift off the toilet, remove the wax and wax ring below the toilet, put the new wax ring on, put the new toilet on top, put the nuts back on, reattach the water feed, and that’s it.

If you just move through it all slowly, it’s very easy.

Q3: Foreclosure or not?
Can you please offer a direction on this issue? I took out a very high interest rate mortgage before the economy tanked, thinking that I could refinance in three years after paying off bills. Well after the economy tanked I now owe much more on my home than it is worth (about 30,000). I have a 9% interest rate with a second of 6%. The mortgage is not Fannie or Freddie Mae. The mortgage company does not have to deal with me in any way and you can’t get past bill collectors. I can afford the mortgage now but I can’t make any headway since every penny goes into interest. In 3 years I retire and will definitely lose the house.

My question is do I go ahead and let it go into foreclosure or continue to put all my money into a house that I know I will lose? The house is probably going down in value because I can’t afford ordinary upkeep or any renovations.
- Enid

If you can’t afford this house and you know that you’re going to lose it one way or another, then I’d move on now. Make sure you’ve secured housing elsewhere, then just hand the keys to the bank.

There are a lot of steps you can take if you want to try to fight for this home, but it sounds like you are already significantly behind on your payments to begin with as you’re interacting with bill collectors. It also sounds as if you are pretty certain you don’t have a path to owning this home.

If that’s the case, your best route probably is to exit the situation as quickly as possible so you can deal with the bad credit now rather than later.

Q4: Pension or 401(k)
My new job seems to offer a choice to new employees. You can either get into the company’s pension plan or they will provide some matching into a 401(k). Both require some contribution from me. Which is better?
- Danny

Unless there was something exceptional about the pension program, I would virtually always choose the 401(k).

401(k) plans are pretty much always entirely independent of the future of the company. Assuming the 401(k) is run by a major investment house, it’s likely to be pretty secure and is probably insured by the SIDC.

Pension plans have an unfortunate history of sometimes being tapped by companies when they’re in trouble. A 401(k) protects you from this kind of nasty surprise.

Q5: Retirement plan for older folks
My parents are both going to be 60 in the next year and I’m trying to write out a plan for them on what they should withdrawal when, and from what account. I was hoping you could give me some advice on what I’m trying to plan.

Both my parents are eligible for social security, with payouts as follows. Father: 959 @ 62, 1271 @ 66, 1678 @ 70. Mother: 1497 @ 62, 2044 @ 66, 2768 @ 70. My father has $122K in PERS. My mother has $409K in her work retirement account (average 6% return), $11.6K in a roth IRA, and about 20K in a savings account.

I was curious if I should have them live off of their savings/roth/retirement account/pers until they are both 70, and then claim social security?

That way they would be living on $56,341/year until 70 from retirement accounts, and then $53,352/year for the rest of their lives from social security. Am I considering this properly? I want to make sure I write the correct plan for them!

I do realize I’m not including state/federal taxes (Ohio), which I probably should set aside 30-40% of the above just going to taxes (although I’m not sure how to figure this out, and google hasn’t helped me).
- Ellen

That’s probably the correct plan for them, as it keeps them with a pretty steady income stream throughout most of their lives.

However, I would encourage you to set up the plan so that they’re not actually spending that full amount each year, particularly before age 70. You want to make absolutely sure they don’t “run out” before their Social Security kicks in at age 70.

I would design the plan so that their income is below $50,000 until age 70. That way, when they do hit 70, it becomes something of a raise and they still have further backup in their retirement accounts.

Q6: Sell first or move first?
My husband and I want to move to a rural area outside the city. We’ve already started shopping a bit for houses mostly to get a bead on what we want.

My question is whether we should try to sell our home and then move or whether we should move then try to sell. We have enough money in savings for a down payment for this new home.
- Naomi

If you can afford the mortgage payments on two homes at once for a little while, waiting until after you move to sell your house is probably the best option.

The big reason is that an empty house looks a lot bigger when people are walking through. It also looks a lot cleaner and visitors are less distracted by your home decor choices.

Sarah and I want to be moved out of our current home before it ever hits the market.

Q7: Free financial counseling?
My boyfriends student loan debt and small fixed income is ruining our relationship. He lies awake at night sweating because he is so stressed out about it. His health is declining. It is horrible to watch, but he isn’t doing anything about it. He is not organized enough to take control and make up a spreadsheet, and I don’t have the financial knowledge to do it for him. Is there a free financial counselor or other service we could use to help him set up a plan so he can see a light at the end of this tunnel?
- Mary

There are quite a few reputable credit counseling services. I would stick to this list from the Department of Justice.

Different credit counselors have somewhat different approaches, so it’s hard to guarantee what you’ll get, but most of them will set you up with some sort of plan that can help you move toward paying off your debt. Some will try to negotiate with your creditors.

Many of these services will charge you a fee of some form, but that is often wrapped into the plan that they set up for you.

Q8: Trying to understand treasury bills
I recently came into a nice pile of money and I want to invest it securely for several months. My father-in-law has always talked about buying treasuries so I looked online and found that you can invest in treasury bills for short terms. I don’t understand what it means, though. What does it mean when it has a 0.08 discount and a 0.08 coupon equivalent?
- Darren

Let’s say you’re buying a $10,000 treasury bill with a 0.08 discount. That 0.08 means that over the course of a full year, that investment would earn a 0.08% return, which isn’t much at all. They’re about as low as you can go, really.

If you invest $10,000 in this, you’re earning $10,000 times 0.0008 (the actual return) over the course of a year, which is $8. Per month, that’s a $0.67 return. You’d earn $0.67 a month if you put $10,000 in this investment. Not good.

You would be far better off putting any amount under $250,000 – and I’m assuming this amount is less than that – in any FDIC-insured savings account at this point. You should only consider treasury bills if their rates are beating FDIC-insured savings accounts.

Q9: Best use of money post-college
My husband and I will by next month have paid off one of our student loans, freeing up about $130 in our budget. My husband has a pension through work (he is required to invest 7% I think) and I have a SIMPLE IRA (I invest 3% with a 3% employer match). My husband would like to use the extra cash to invest in our respective Roth IRA accounts – we have not been able to make contributions that last 6 months due to having a baby. Should we put $65/month in each of our IRA’s or should we put the entire $130 into his or mine? We also have other student loan debt [$7700] that has very low interest rates [under 2%]. And we just had a baby and are contemplating opening at 529 college savings account. Where is the best spot for our money, paying off the low interest student loans, saving for our retirement or saving for college?
- Pearl

I would split the money between the two Roth IRAs. The reason for that is to protect each of you individually in the event that you’re separated or divorced. While that might not seem likely, the reality is that many marriages end in divorce.

If you do stay together, then it makes little difference where you put the money. All the separation does is protect you against that outside chance of divorce.

I would put saving for college as the lowest priority. I’d probably put saving for retirement as the highest priority due to the very low interest rate on the student loan, provided that it’s a fixed rate and not a variable one. If it’s a variable rate loan, I’d switch my focus back to it should interest rates ever rise.

Q10: Tithing concerns
I am dating a woman who is an active member of a different church than my own. We both tithe 10% of our income to our church. How should we plan for this when we’re married?
- Adam

I’m going to assume that you’re attending different churches after you get married. Otherwise, this really wouldn’t be a question.

If that’s the case, I would tithe 10% of your income to your church, and your wife should tithe 10% of her income to her church.

Still, if you are independently holding religious views that are different enough from each other that you can’t attend the same church, I would be very careful about marriage. The issue of a significant portion of your family income going to a religious organization you don’t believe in is going to grate on both of you over time. There’s also the spiritual compatibility concerns. Be very sure about this before you make a commitment.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. 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.

The post Reader Mailbag: Fresh Salad Greens appeared first on The Simple Dollar.

What made you shift from not paying attention to what you spent to worrying about spending a nickel extra on toilet paper?

It would be easy to answer this with a broad answer of saying that it had to do with the realization of my responsibilities as a parent and with changes in my personal values and beliefs.

Looking back, though, I think it had to do with something much more “real” and practical than that.

For several months – just shy of a year, actually – I made a habit of writing down every penny that I spent. If I spent a quarter on a piece of gum, I wrote it down.

I kept track of this in my pocket notebook. It wasn’t really hard. I just had to make a routine of jotting down every single expenditure in that notebook. If I didn’t have time immediately, I jammed a receipt in there and wrote it down.

What I found is that as I was writing down each expense in that notebook, I became really critical of that expense.

I’d write down $100 spent at the grocery store and I’d think to myself, “Really? I blew $100 at the store. Why?” Then I’d find myself studying the receipt and questioning a lot of the items on there. “Did I really need that item?” “Couldn’t I have just bought the generic?”

Over a period of time, I began to really question everything I spent money on. It became a very natural thing to look for a lower-cost alternative.

I wanted badly to reach a point where I wasn’t shaking my head at myself whenever I wrote down an entry in that notebook.

Eventually, I reached that point, more or less. I went weeks without writing down anything that made me uncomfortable or made me want to seek out a lower-cost alternative. It was at that point that I put the habit aside.

That period of time reshaped the way I think about spending. Every little dime matters and, as you’re spending money or considering it, it’s worth thinking about whether or not there’s a better way to go about this purchase. Do I really need to buy this item? Is there a cheaper alternative that’s just as good?

Forcing yourself to go through every single expense is a real eye-opener. It’s not just a matter of buying the slightly more expensive toilet paper. It’s about dozens – even hundreds – of those types of decisions we make each week, and they really add up, on the order of hundreds of dollars per month.

Try it. Get yourself a little pocket notebook and a pen and take it with you everywhere. Write down every single little thing you spend money on. As you’re actually writing it down, think about whether that was a good use of your money. Was there a better way to do it that achieves the same or similar results with less expense? Did I really need to buy that item or service?

The amount of waste will probably shock you.

The post The Psychology of Writing Down Expenses appeared first on The Simple Dollar.

Naturally, this average does include bundles of premium channels that many households subscribe to, HD service (which the providers charge more for), DVRs, and other such perks.

Still, $128 a month just to have something to watch on the television? Ouch. There’s got to be a cheaper way.

Here are some of the best alternatives out there to paying a hefty cable bill each month.

Over-the-Air Signals ($0 per month)
This has a small up front cost, of course. You may have to erect a small antenna of some kind to help you pick up the signal, plus you may need a small digital converter box.

Once that’s in place, though, you can obtain a bunch of digital channels over the air for free, particularly if you’re close to the city where the station comes from. I have a friend in Des Moines whose only television service comes via over-the-air signals and he gets about 18 different channels, including an all-weather channel, an all-children channel, and every major broadcast network.

Netflix ($8 per month)
Netflix requires that you already have some form of broadband internet service. If you have that in place, there are a lot of simple ways to have Netflix appear on your television. Many different DVD players, video game consoles, and other set-top boxes work with Netflix.

Netflix provides a ton of full television series, lots of movies, and even some original programming that doesn’t appear elsewhere (House of Cards, for example, and the fourth season of Arrested Development).

The drawback here is that you won’t find the latest cable programs on here. If you don’t mind that, Netflix will provide you more television content than you can probably ever watch.

Amazon Prime ($80 per year)
You can pretty much duplicate everything said about Netflix with Amazon Prime. The primary difference between the two is programming (Netflix has a small edge here with the original shows and a few other things) and the other perks of Amazon Prime (two day shipping on pretty much everything, the Kindle Lending Library).

Hulu Plus ($8 per month)
This is another streaming service that offers the latest episodes of quite a few currently running series, which is something the other streaming services don’t offer. There’s also a free version of Hulu with ads and a much more limited selection of programming.

If you’re really wanting to follow certain shows, Hulu might be an option for you.

Online Streaming from Sports Leagues (varies from league to league)
If you’re a big sports fan, the major sports leagues offer streaming packages that allow you to view their games over the internet (yes, this one also requires broadband). The prices and offerings vary greatly from league to league, but if you’re primarily keeping cable for sports programming, this is almost certainly a way to save some money there.

News Programming (free)
The major cable news networks all offer free video streaming of some form. All of them offer full streaming during major news events, but during downtimes, their service varies and seems to change quite a lot. Still, during periods of breaking news, you can rely on the internet if you prefer to watch your news.

Toss the Television Entirely
Alternately, you could cancel the cable and not replace it with any other service. Those evening hours when you watch television can easily be filled with other activities.

It’s all up to you. With these options, I’d think twice about spending $128 a month on television programming.

The post Cost-Effective Alternatives to Cable and Satellite Television appeared first on The Simple Dollar.

Leslie writes in:

My daughter is turning sixteen this August. We’re going to buy her a used car as a gift, but we’re struggling with how much of the expense of the car we should handle versus how much we should require her to cover. Do you have any insights or books about this?

You and your wife are doing the right thing in terms of figuring out in advance what you should expect to cover when it comes to the cost of the car.

The first question you need to ask yourself is whether or not an after-school job is appropriate for your daughter. For some teenagers, it makes a lot of sense. For others – particularly those heavily involved in after-school activities – it can add even more burden to a heavily stacked life.

I think that a time-limited after school job is a good idea for most teenagers. Many local businesses will often find work for students in this type of position. Ten to twenty hours a week is a healthy number.

So, let’s say your daughter is working fifteen hours a week and thus bringing home roughly $100 a week. That adds up to about $400 a month.

The next step I would take is to walk through the various costs of owning a car and think about how they apply to your daughter.

For example, if my child was earning $400 a month, I would expect them to cover all fuel costs on the car. I think this would be a given. It would help them to directly see the cost of driving and that every mile counts.

What about insurance? Auto insurance tends to be a pretty significant cost for teenage drivers. In this position, I would show my child the actual impact of adding them as a driver and adding their car to your insurance plan. It will go up quite a bit.

Should your daughter pay for this? I would not expect a teenager working fifteen hours a week to cover insurance at this point, as it would likely be pushing them toward additional working hours that they don’t really need to be stuffing into their life at this point. If you did want them to cover it, I would probably stick with a percentage of the difference that they’re adding to the bill.

For example, if your insurance cost goes from $300 to $550 thanks to the new driver and new car, the difference is $250. If you have them pay, say, 25% of this, they’d have to cover $62.50. I think a low percentage here is reasonable, as you want them to get a taste of the cost of insurance but you don’t want to overburden their situation.

This is also a very good opportunity to shop around for auto insurance. The Simple Dollar has a great auto insurance guide that can help you navigate the process.

Another factor is maintenance. Quite honestly, I would teach them how to do most of the maintenance themselves. If you don’t know how to do it, there’s no better time to learn.

Why do this? For one, the cost of maintenance is far less if you do it yourself. For another, it’s good knowledge to have for situations where you don’t have the option of taking it somewhere to have someone else do it.

For my children, if they do it themselves, I’d split the cost of the materials with them. If they’d rather take it to a shop to do it, I probably wouldn’t help, because it would show that they’re not interested in learning. The goal would make self-maintenance and learning the path of least resistance for them.

To summarize, I’d make them pay for the gas, I’d cover most of the insurance but make them pay a pretty tiny percentage of it, and I’d split the maintenance costs with them provided they’re learning how to do it themselves. This assumes they have a job – if they don’t, then I’ll be covering all of it or they won’t have a car (which is another decision entirely). The primary goal here is to make sure they deeply understand that every mile they drive has a cost, so they should budget their miles like they budget their money.

The post The Teenager’s Car Conundrum appeared first on The Simple Dollar.

1. Sir David Attenborough on conservation

“The question is: are we happy to suppose that our grandchildren may never be able to see an elephant except in a picture book?” – Sir David Attenborough

This is a powerful call to pay attention to conservation. Do we have the right, as humans, to exterminate other species for no real purpose?

2. Find a penny, pick it up…

Is it worthwhile to pick up a penny fallen on the ground? I still do it. I just drop it in my change jar on my dresser and if/when it ever fills up, I’ll take it to the bank (though sometimes I scavenge it for short-term things, like buying lemonade from a child’s lemonade stand on my block).

Thanks to Steven De Polo for the image!

3. Emerson on hard events

“Every calamity is a spur and a valuable hint.” – Ralph Waldo Emerson

If your life goes sour, it’s a great chance to figure out what you’re doing wrong and can do better.

4. John Fogerty – “The Old Man Down the Road“

This is one of those songs that just takes me directly to a specific place and time. It makes me think of childhood sleepovers, actually. I’m amazed how art can just sometimes take you somewhere else.

5. Dudley Field on the power of disagreement

“I have never in my life learned anything from any man who agreed with me.” – Dudley Field

If all you listen to is people who reinforce what you already think, then you’re not learning anything.

6. Andrew Solomon on affection and kindness

“I believe that the same way that we need species diveristy to ensure that the planet can go on, so we need the diversity of affection, and diversity of family in order to strenghten the ecosphere of kindness.” – Andrew Solomon

Our lives are made richer by the people around us.

7. The Piano

This is an amazing animated short film. Animation can convey some incredibly powerful emotions and ideas.

8. William Blake on enough

“You never know what is enough, until you know what is more than enough.” – William Blake

I crossed that line a few times in my life. Now I prefer to stay far away from it.

9. Water spigot

A water spigot has provided many hours of fun for my family, many gallons of water for my garden, and many quick cooldowns on a hot day. So simple, yet so useful.

Thanks to Robb North for the image.

10. Sam Harris on kindness to others

“Every person you will pass on the street today is going to die. Living long enough, each will suffer the loss of friends and family. All are going to lose everything they love in this world. Why would one want to be anything but kind to them in the meantime?” — Sam Harris

Put others in this perspective today and see if it changes how you interact with them.

The post Ten Pieces of Inspiration #130 appeared first on The Simple Dollar.

They don’t think of breakfast as a time to eat a sugar-laden concoction that comes from a box with a bunch of cartoon characters on it. They think of breakfast as time to eat a quick meal before they head off to the day’s activities.

Right now, our three children are out in the yard playing. I have a window open so I can hear if there’s an extreme crisis, but they seem to be doing just fine on their own. In fact, as I glance out there, they seem to have turned a cardboard box they found into some sort of throne and are playing a game where someone is the “king” or “queen” and can give orders to the others. Honestly, it’s not too different than the games I used to play when I was their age.

It’s a nice summer day. They’re not inside where they would likely be playing with a toy or a game that someone bought for them and they’re not in the television room watching a show. They’re outside. Having fun. With a cardboard box.

In fact, I can’t actually think of what else I would want them to be doing right now. They’re reusing an old cardboard box. They’re engaged in social, imaginative play. They’re outside getting some fresh air, but the spot where they’re playing is mostly shaded, so they’re not getting baked in the sun.

To me, this is frugality. Their memories of childhood, or at least a significant part of them, won’t revolve around stuff. It’ll revolve around things like spending an afternoon playing with their siblings outside using a cardboard box.

For lunch today, we’re going to have leftovers paired with some salad made out of lettuce and other greens cut from our garden just before the meal. Again, if I know my children, they’ll gobble most of it up. They’ll probably dislike one or the other of the elements presented to them, but it’s no big deal.

A bit later today, they have swimming lessons at the public pool in a nearby town. These lessons cost a pittance and our children are learning to swim well. Afterwards, there’s time for an “open swim” for the children, so they’ll splash around in the pool quite a lot and show off their swimming moves.

The late afternoon will involve time spent at a wonderful local park. The park will probably be empty because other children aren’t out enjoying it. Either Sarah or I will take them there, while the other one stays at home to complete tasks around the house or to start preparing supper.

Our dinner will likely be cooked on the grill and it will probably again feature some vegetables from our garden. Our asparagus is starting to thin out, so this might be the last time we have a good handful of those to eat. We’ll wrap them in aluminum foil with a couple ice cubes and a pat of butter and they’ll end up delicious. We’ll probably pair that with some fish that my father caught (as fishing is his primary hobby these days) and gave to us for the freezer. Again, our children will gobble this up.

Tonight, at bedtime, they’ll wear some oversized hand-me-down t-shirts as pajamas and kick back in their beds. They’ll hear several bedtime stories from our collection of gifted books and from library books as well as a chapter from a longer book and by the end of the last story, two of the three of them will be asleep (this is basically a guarantee as of late). The other one is pretty content to read to himself before he drifts off.

I’ve heard from some readers as of late describing my children’s life as somehow deprived. To me, their childhood seems wonderful. It brings back a lot of memories of some of the best parts of my own childhood.

If we need to spend money, we do so. If we have a really good reason to buy something, we do it. That doesn’t mean that our day to day lives have to involve a litany of organized activities and name-brand products.

They’re learning through their everyday lives that you don’t have to buy stuff or pay for experiences to enjoy life, to eat healthy and balanced meals, to use your imagination, or to build strong friendships. I can’t think of anything else I’d rather teach them.

The post Frugality and Children appeared first on The Simple Dollar.

I’ve used all kinds of equipment to shave with, too – old-fashioned safety razors with individual blades, fully disposable razors, disposable razors with cartridge-based systems, and fully electric razors, too.

Some of these are far cheaper than others. Some of them work better than others, too.

What’s the best option for a frugal person? Here are my thoughts on each experience.

Skip fully electric razors unless they’re a gift.
With a fully electric razor, you’re essentially paying a large up-front price for a lot of shaves. A good electric razor often costs $100 as a baseline and most of the highly recommended ones are now creeping toward the $200 mark.

Once you own it, though, the maintenance cost is almost invisible. With the multiple electric razors I’ve used, I’ve been able to shave ten times or so between charges and a single charge eats perhaps a dime of electricity (cost per shave is $0.01). You will need a replacement head roughly every eighteen months, which will set you back $30 to $50 depending on your model (cost per shave is $0.05 to $0.10 – let’s call it $0.07).

So, excluding the cost of the electric razor itself, your cost per shave is somewhere in the $0.08 range. But what about that up front cost?

Let’s say the electric razor lasts for five years. Based on warranties and other articles, that’s a reasonable assumption. This would mean it got you through 1,700 shaves. If you’re investing $150 in the razor, that means you’re paying about $0.08 per shave for the razor itself.

So, if you buy the electric razor, your cost per shave is about $0.16, but if the razor is gifted to you, it’s about $0.08 per shave.

Skip disposable or cartridge-based razors unless you have a sharpener.
You can get 30 Bic TwinSelect disposable razors for $9.57, which adds up to about $0.32 per razor. I can usually get three shaves out of a low-end disposable, dropping the cost down to $0.11 per shave. If you go with generics here, you can easily get that down to about $0.08 to $0.09 per shave. That cost is comparable to using an electric razor that someone purchased for you.

With a cartridge-based system like Gilette Fusion, I can get about seven shaves per cartridge. The problem is that a sixteen pack of these cartridges at my local warehouse club is about $44 – or $2.75 per cartridge. At seven shaves per cartridge, the cost per shave goes down to about $0.39 per shave. Ouch. Pricy.

The trick here is to use a disposable razor blade sharpener. This has made an enormous difference.

Using one of these after each shave (I do it in the shower) takes about three seconds. It seems to extend the life of a cheap disposable razor to about fifteen shaves, dropping the cost of a generic disposable down to about $0.02 per shave. With a cartridge-based system, I’ve been using the same cartridge I got with my Gilette Fusion for Christmas virtually every day using the razor sharpener. We’ve almost reached the six month mark and it still works fine without nicking or cutting me. I just use it after each shave. It is getting a bit rougher than it used to be so I will have to move on to the second cartridge, but it’s dropped the price per shave for the cartridges down into the $0.02 to $0.03 range.

This, of course, doesn’t include the prorated cost of the sharpener, which cost $20. However, the item is basically indestructible, which means that I’ll continue to prorate it down. If I use it for seven years (which seems very possible), it will have dropped to one cent per shave.

To summarize, if you have a sharpener, a disposable or cartridge-based razor can do a great job for a very low price.

Safety razors are very cheap, but they have a learning curve.
What about safety razors? The nice thing about a hefty all-metal safety razor is that the replacement blades are really cheap. I can use a safety razor blade twice before it starts cutting my face and blades cost about $0.10 each, which drops the cost per shave down to $0.05.

I have attempted to sharpen them using the razor blade sharpener mentioned above and I’ve found that it will generally add about two more shaves to a single blade, bringing it up to four shaves and a cost per shave of around two and a half cents.

A new safety razor can be expensive, but it’s also something that can often be found used without too much searching. I’ve seen them in secondhand shops and yard sales before, though probably not as frequently as I once did. A good safety razor, like this model, requires an initial investment of around $30.

What about technique?
With everything but the electric razor, I usually shave in the shower with a bit of soap on my face without any problems at all and I can usually do it while rinsing soap from the rest of me. I can usually tell by feel where I need to touch up, though a small mirror in the shower can help.

Thus, I don’t have the expense of buying shaving gel or cream. Sure, I am perhaps using a tiny amount of soap in the process, but it’s usually left-over lather.

Conclusions
The cheapest option, if you’re paying for everything yourself, is to get a razor blade sharpener and some cheap disposable razors, shave in the shower with a bit of soap so you can avoid the cost of shaving cream, and sharpen the razor after each use. This keeps the cost down in the $0.02 per daily shave range.

If you have an electric razor you’ve been gifted, use it until the head wears out. In that case, the cost is about $0.01 per shave, which is very cheap. After that, assess whether a new head is worth the cost depending on how many uses you got from the first head.

I’m really not sure what to recommend about the cartridge heads. Like I said, I’ve been using a single cartridge for months with a sharpener and it still seems to be doing a decent job. I might not be as discerning about it as I might otherwise be. My feeling is that if you have cartridges already in the cupboard, get a blade sharpener and use them in conjunction with the blade sharpener, then make your own assessment when the cartridges run out. If you think they provide enough value, continue with them.

With a safety razor, it’s a good solution if you’ve already got the razor and you have a good source for cheap replacement blades. A sharpener will help some with reducing costs, but it’s not the runaway success it is with disposable razors.

Good luck!

The post The Frugal Shave appeared first on The Simple Dollar.

This is his primary hobby. He actively hunts for deals on these comic books, participates in many forums about them, organizes and stores them, and so on. It’s his passion.

Having observed this hobby for a long time, I can say without question that he spends thousands of dollars on it each year.

At first glance, a person might think this is a wasteful hobby. Thousands of dollars a year on comic books?

Here’s the catch: his collection is retaining at least all of the value he’s putting into it.

Just like many of us, he’s spending a lot of money each year on something that entertains him. He gets a great deal of personal enjoyment from it.

The big difference is at the end of the day, he can sell off the items he has been purchasing and not only recoup his money, but likely make a nice return on all of it.

Whenever we spend a dollar, we get something in return for it. Sometimes, we’re buying a service, which means the only value we get in return is whatever the service is worth to us. At other times, we buy consumable things – food, electricity, and so on.

At other times, though, we spend our money on things for personal enjoyment. We buy books or DVDs or golf clubs.

The problem with many of these purchases is that they depreciate rapidly almost the second we buy them. When we pop the wrapper off of a DVD, it loses most of its value. We can only sell it for a portion – and usually a small portion – of what we paid for it. That money’s gone. The same is true for a book or for golf clubs.

One great way to find financial success is to find things you can purchase for personal enjoyment and fulfillment that won’t depreciate in value, or at least won’t depreciate very much.

Collectibles – provided that you know the field intimately – can be one example of this. Many collectibles with a stable and broad set of potential buyers can retain their value for a long time.

What kinds of collectibles? Comic books are just one example. Trading cards are another. Art is another, for that matter. Sports memorabilia is certainly one.

Other hobbies along these lines include any hobbies where you make things that can potentially be sold (meaning you buy supplies and increase their value), hobbies where you can ply a trade, or hobbies that directly revolve around earning more money (such as stock investing or frugality).

A big part of these kinds of hobbies is that much of the enjoyment tends to come from hunting bargains, craftsmanship, and participating in the community of other hobbyists.

It usually does not come from buying the latest and greatest thing. Hobbies that continually require you to buy new things (without actually making things that you can sell for a return) tend to be money drains.

This isn’t to say that hobbies that cost money are bad things. It merely means that you should be wary of them and it might be worth your time to look for alternate hobbies that involve things that retain or produce value.

If you want to live a more financially stable life, one of the first places to look is at your hobbies. Are you spending your money on things that maintain their value or produce value to make up for the cost? Or do your hobbies mostly absorb money? Thinking about those questions might lead you down a much more stable life path.

The post Hobbies That Retain or Create Value appeared first on The Simple Dollar.

One of my favorite things to do with my kids on a rainy afternoon is to play a board game with them.

We play very simple games with our youngest child – things like Candy Land and Hi-Ho Cherry-O! – and while those are pleasant experiences, it’s clear that their biggest value is teaching things like taking turns and basic pattern matching.

With my two older kids, though, we play much deeper games. I’ve played chess and checkers with them, of course, but they’re also playing things like Settlers of Catan and Ticket to Ride (both of which are great games for adults that kids can also manage to play, too).

Family Game Night – or, in this case, Family Game Afternoon – is a hit with all of us. If you can pick up a good game at a thrift shop, it’s also a very frugal way to have a lot of fun with your family.

Q1: In favor of a smartphone
You seem to be very negative about the cost of smartphones. I think they’re well worth it. I am a 26 year old Kiwi living in Munich, Germany, which has a great public transport system of trains, underground, buses and trams. It actually makes little sense to have a car in Munich as the public transport is so quick and reliable, while at the same time parking is a nightmare to find and costly to use. I have three jobs which leaves me little time at home. We have an internet connection at home, but not a landline (smaller monthly bill). I do use my Smart Phone for business purposes, however I would like to share my reasons below for why I use a Smart Phone also on a personl level. As an extra note, I would like to mention that I have had my current Smart Phone for 3 years now (paid in full) and am only contemplating a new phone now as I seem to be having a few problems with my battery and OS.

+ It’s great on public transport. For someone that does not have a car, but does have the convenience of very good public transport, I spend a large portion of my day travelling by train, underground, tram and bus. A smart phone comes in handy as I am able to check the news and my emails/social media. This allows me to stay informed of whats going on in the world (making me look and feel more well rounded) and saves me time by utilising otherwise wasted time keeping up to date with family and friends which then does not cut into my work time or my private time.
+ Can be used as an e-reader. I can use my phone to read books, just as I would use a Kindle. This means I am carrying less items with me (great for your back) and producing less waste.
+ Interactive Map. Sometimes I get lost. This shows me exactly where I am and in which direction I should continue. LIFESAVER!
+ Shared Calendar. I share my calendar with my fiancé. This way we both know what is going on and evenings don’t get double booked. From a financial point of view, reminders of bill payments can be added to ensure joint responsibility/awareness. Reminders can be set for specific activities that need to be done.
+ Apps. Seriously genius for those on the go and to keep track. My fiancé uses his to track his Iron Man training, which he can then compare with others through his Smart Phone. This helps him train smarter and assists in motivation. Public Transportation Apps also help me to get places more efficiently with less waiting time.
+ Keeping in touch. Whatsapp, Viber, Skype etc. can be used on your smartphone. These applications are free to use (or at very minimal cost) and require the use of an internet connection and a smartphone. With these applications I keep in regular contact with my family and friends across the globe. The cost of the phone and internet connection is far less expensive than if I needed to keep in contact by calling from a landline or by post, it is also instantanious.
+ Photos. The quality is great on Smart Phones. I find it encumbersome to take our camera with us. We went to a wedding on the weekend and I didn’t even bother taking it out of my bag as I could just use my phone. Video qulaity is also quite high.
- Reggie

I agree with you that there are a lot of uses for a smart phone. Still, nothing you mention is life-breaking and all of those things can be taken care of with other items.

It’s the expense that’s the issue here. The smart phone itself is either costing you a premium upon purchase or you’re getting an old one that’s sluggish to use. The real expense, though, is the data plan. It’s another monthly bill that a lot of people don’t need.

If you’re actually using all of these features and many of them are used to help out with your actual professional life, then your company should be paying for the phone.

The only case I can see for paying for your own smart phone is if you’re self-employed and actually need these features to maintain your income. Otherwise, it’s an entertainment expense and you should be cutting your other entertainment spending accordingly.

Q2: Summer break activities
Our kids and I are off from school for the summer. Our parenting philosophy is to wear them out with activity all day long so that they sleep well and feel good, but that means coming up with activities. Got any cheap ideas?
- Amy

There are lots of suggestions out there. Here’s a list of 100 of them.

My big suggestion is mileage club. Mileage club is an activity that’s been a huge hit with our family each of the past few summers.

It’s pretty simple. Each person gets a “punch card” (which is basically an index card) with the numbers 1 to 20 and their name on it. For each quarter mile that they walk or run, they get a punch on that card. Completed cards can be traded for different rewards.

If you set some interesting goals for them that really hit upon their other interests, they will get really into it. It’s also a good way for you to motivate yourself to exercise.

Q3: More money causes stress
First off I should say that I am debt free and have been for over five years now. I rent an apartment by choice, save 35% of my pay and have what I would consider a good paying job. I’ve found more and more that money doesn’t drive me and while I think I could switch jobs to something higher paying it just doesn’t motivate me. And that’s where the realization comes in.

I received a small bonus a couple of weeks ago and caught myself saying “What the heck am I going to do with this money?” When I stepped back I realized that every time I’ve received an unexpected windfall it winds up being a small source of stress.

I’m at a point in my life where I’m buying very few “luxury” items. With every purchase I make a concerted effort to understand what’s behind my desire and to determine if the purchase will be worthwhile long term. Therefore each windfall isn’t seen as an “Oh, I get to buy X” experience.

I’ve also got enough savings to last me 8 months unemployment and stocks that could be cashed in on top of that. Retirement is being saved for at a steady clip and honestly I don’t see the point of retirement in the first place.

So each time I find myself with unexpected cash in hand it stresses me out as I try to figure out how best to use it. Ridiculous, right?

I understand my reaction is absolutely limiting my earnings and ability to grow my wealth. I was wondering if you’d ever noticed such a reaction in your journey through financial maturity and if so how you were able to get through it.
- Jim

I actually find more money to be relaxing at this point because I view it as an even bigger buffer against financial disaster. My goal is to reach a point where I don’t even have to work any more so that the buffer is big enough to last for the rest of my life.

If it’s causing you stress, try to think about it in a different way. What are your really big goals in life? Do you want retire at 45? What is it that you want?

Whenever you’re money ahead, that extra money is another piece in the puzzle of achieving that goal.

Q4: Robert Kiyosaki
What do you think of Robert Kiyosaki? My friend gave me a copy of his book Rich Dad Poor Dad and I was wondering what your thoughts were.
- Jeff

Kiyosaki mixes some really good advice with some questionable things.

He’s completely right when it comes to the idea that you should be investing your extra money into things that will earn a nice return for you.

What I found strange about the book is that he advocates living lean to do this, but then on the next page he basically makes fun of frugality and lauds people driving expensive cars. This never made any sense to me.

He’s also hyper-aggressive with regards to his investment advice. Many of his ideas only really work when you’re capitalizing on a housing bubble or some other investment bubble. If things aren’t zipping along with tremendous growth, it won’t really work.

Q5: Financial stress or paranoia?
I am a fairly long time reader of your blog and greatly enjoy finding new ways to be frugal and save money. My husband and I were pretty foolish with our money as single adults and newlyweds (credit cards and student loans) but we are now completely debt free except for our mortgage.

My husband is a Sgt in the Marine Corp and we have six children. He joined the Marine Corp as a 24 year old married man with a baby on the way and we have expanded our family every roughly ever 18 months since then (I realize this sounds like a lot of kids but we both come from families of six or more children so we knew we wanted a large family also).

My husband works hard and has been promoted on or ahead of schedule for his specific job. Because military pay is convoluted and confusing, suffice it to say that we receive not quite $4,800 a month. We have a $10,000 emergency fund and just under $30,000 in Roth IRAs to which we contribute $300 per month. We also put away a little in a TSP but we don’t need the tax benefits and I am ashamed to admit that I don’t really keep track of it since it only holds a couple thousand dollars at most. We tithe our income at 10% which is the one absolutely non-negotiable item in our budget (for both of us). I KNOW that the benefits of tithing have ALWAYS far out weighed the monetary costs throughout the years that we have faithfully paid it. We are currently getting ready to sell our home since my husband has orders for this summer. We bought our house because of an assignment to recruit in an area without base housing where the rent for a home large enough for our family far exceeded our housing allowance.

Lately, I feel a lot of financial stress and guilt for not doing better and I wonder if it is unwarranted. I mean, we have SIX children. We don’t have any non-mortgage debt. We are not contributing 10% to our retirement but we are contributing SOMETHING (about 6.5% when you count the TSP). Our emergency fund isn’t as large as you recommend but it’s at least 3 months of our living expenses and I actually use the “Rich on Any Income” budgeting method where you put away money each month for car maintenance and Christmas and other irregular expenses. My husband tends to be a little bit more of a spend thrift than I am (although he REALLY is trying very hard and does really well compared to most people I know) so I need to budget “mad money” for him for the sake of a happy marriage.

We only spend about $800 a month on food which seems to be in line with what families with half our children spend (I realize I could spend less here but we love trying new things and it would lower our quality of life). I cut everyone’s hair in our family including my own. We do hand-me-downs (clothes, furniture, &c) and make our own Christmas presents. We own both of our vehicles. We don’t even have a TV, let alone cable. I mostly shop at thrift stores. Our one huge “splurge” category each year is travel. We spend about $3000 per year on plane tickets because I want my children to still be close to their extended family even though we move around so much and generally live far away. I could save more money but I’d REALLY have to scale back our lifestyle which isn’t exactly glamour as it is. I know the future is important but so is the present, right?
- Denise

I think you’re doing fine, particularly considering you have six kids at home.

You have no debt besides your mortgage. You’re contributing to retirement. You have a solid emergency fund. You save for irregular expenses. That paints a very solid financial picture.

Yes, you could do better – but so could everyone. There is no perfection when it comes to personal finance and perfection is the enemy of the good. Don’t try to chase perfect. Instead, stick with the positive progress you’re making right now.

Q6: Parent helping child
My father passed away very suddenly about three months ago. We’ve already taken care of helping Mom with finances and with the beginnings of transition into life alone and she’s adjusting as well as we could hope. A week or so ago, she called all of the kids and told us that she wanted to start giving each of us $1,000 a month to help us out. She has plenty of money – Dad was well insured and they had saved for retirement and own some rentals. She said that she would not take no for an answer with this because she says she has more money than she knows what to do with and wants to see us have great lives without stress.

So, now we’re getting $1,000 a month more in income, but I don’t want to get used to it or treat it as lifestyle inflation. What should we be doing with it?
- Kelly

Your parents raised you right. This entire story is a description of a great parent-child relationship from top to bottom. You’re independent, understand the consequences of outpatient financial support from parents, and there is deep mutual care on both sides. Kudos to both you and your parents here.

If I were you, I’d establish a giant long-term goal for yourself. Maybe it’s early retirement. Maybe it’s a big house in the country. Maybe it’s seed money for a small business. There are lots of possibilities here.

Once I had a goal in mind, I would use all of that money to save specifically for that goal. Put it into a savings account or into a stable investment account. If you can, make this transfer completely automatic so you don’t have to think about it.

Don’t use this money for anything else other than that goal. Deal with your life as though that money didn’t exist and wait until the balance is high enough to launch whatever goal you have in mind.

Q7: Credible consumer credit agency
My husband and I are in our mid 40s, and have been stuck in a cycle of debt for years now. We have accumulated over $100,000.00 in credit card debt. We own our home, with 15 years left to pay on our mortgage which we were able to refinance at 2.95% recently. Our cars are paid for, but getting older, and we have 23 months left to pay off our student loans that we consolidated and re-financed through Sallie Mae for 20 years when we were young parents and struggling to pay them (big mistake). We can manage our debt, but can’t seem to get out of it. We are at the point that about half of our take-home pay is spent on making our minimum payments, and often that doesn’t leave us enough money for regular expenses that come up for us and our 3 teen-aged children. Though we try to budget, we end up continuing to use our credit cards each month to make ends meet: at best treading water or digging ourselves a little deeper all the time. We used to have good interest rates on our credit cards, but most of them have been raised in the last few years to the double digits, and some are ridiculously high (the worst one is 22.90% with an $10k balance). We have a good income, and make sure to pay all of our bills on time to avoid late fees and penalties, but we are getting no where fast. I realize that this is not sustainable. I live in constant fear that we’ll have an emergency that will push us over the edge. We have about $1,500.00 in savings that I try not to touch, but sometimes have to.

I’ve tried calling our credit card companies to have our interest rates lowered, but am told that our debt-to-income ratio is too high an they can’t lower our rates. I have heard that there are consumer credit agencies that could help us get lower interest rates so that more of our payments would actually go toward paying down our debt, and we could possibly lower our minimum monthly payments so that we create a sustainable budget and stop using our credit cards each month. I am afraid of scams and dishonest agencies. I am not interested in a settlement or bankruptcy, as I feel we are morally obligated to pay back all the money we’ve borrowed. Do you have any suggestions?
- Charlotte

I’d start with the list of approved credit counseling services provided by the Department of Justice.

You should be aware that credit counseling services aren’t a magic wand that fixes everything. They may or may not be able to get the credit card companies to lower your interest rates for you.

Before going this route, I’d try playing hardball with the credit card companies on the phone. Simply tell them that you’re in danger of missing payments because of the crushing interest rate. If the first person won’t help, talk to a supervisor. They can change your rate.

Q8: Simple?
Are you familiar with Simple? What do you think?
- Aubrey

My feeling with Simple is similar to my feeling with Mint. This is what online banking should be like.

However, is it worth it to switch accounts and share my personal information with yet another service? They have to be providing some sort of genuine value for me to feel okay sharing my SSN and other such data with them.

As cool as they are, they’re not yet providing anything that’s actually saving me money or doing anything I couldn’t do with a pocket notebook. For me, that’s not enough to share my data with yet another company.

Q9: Career change advice
I just had a phone interview for a job that I see as a step up from my current one in both title (it’s a PR and marketing manager role) and responsibilities. It’s for a non-profit that offers services in which I truly believe. The job itself would be challenging and would take me out of my comfort zone, but I know the woman who would be my boss after having worked as an intern for her at her previous job years ago. I have a lot of respect for her and see her as a mentor. She actually came to me to apply for the position.

So, what’s the problem? Well, the pay. Yes, it’s a non-profit, but I was stunned at the pay scale the HR person revealed to me on the phone (mid to high thirties). Even at the highest end, it would be considerably less than what I’m making now, which is in the mid-forties (not a lot, but livable). I feel like I’ve come so far to even make my current salary, that taking a step back would be difficult both financially and mentally.

However, my current job is not going anywhere. I feel like I’ve hit a wall, skills-wise. The only good thing is the pay and the ability for me to work from home. But management has made it very clear that I have no career path, and if I were laid off tomorrow, I would probably have difficulty finding a job in the same field (editorial) that pays as well in my own city.

I’ve already been asked to come in next week for a face-to-face interview. I feel like my chances are good (I don’t mean to sound cocky), and while I could probably get them to go up on the pay a bit, it still wouldn’t come near what I’m making now, which I would gladly take. I don’t want to waste their time, but I have a nagging feeling I should consider the job because it has more of a future than the one I have now and it would be worth taking a few steps back for the experience and the job title.

(A little financial background: My husband (age 41) and I (age 33) currently make about $85,000 a year. We have about $95,000 in student loan debt, which we are aggressively trying to pay down. That is our only debt. We are also trying to save aggressively for retirement and for a down payment on a house. Taking a pay cut would certainly affect these goals.)

What are your thoughts? I appreciate any advice you can give!
- Camille

If you feel it’s a good career move and the drop in income isn’t going to do anything devastating to your personal finance situation, I’d make the switch.

Your situation is a poster child for why it makes sense to always spend less than you earn. Opportunities like this come up in life quite often and if you’re spending so much that you’re pushed up against the wall all the time, you can’t make these kinds of moves. You’re stuck.

Spending less gives you freedom. That’s something that all the spending in the world can’t give you.

Q10: Pay subsidized or unsubsidized first?
I have several student loans all within a stone’s throw of 7% interest. I know I should pay debts off in the order of interest rate, but should I prioritize subsidized or unsubsidized student loans first?
- Ben

The only difference between subsidized and unsubsidized loans is whether or not they accumulate interest when you’re in school or not. If you’re out of school for more than six months and are currently employed, there’s no real difference between them.

Still, I’d pay off the unsubsidized ones first. The reason is that you might be in a situation where you return to school in the future (you never know…) and, with a subsidized loan, the interest will pause while you’re in school. With an unsubsidized loan, the interest won’t stop.

That’s enough of a reason to pay off the unsubsidized loans first, in my opinion.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. 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.

The post Reader Mailbag: Board Games with Children appeared first on The Simple Dollar.

If there is some aspect of your life that’s bothering you, know this: you cannot expect it to improve if you keep doing the same things you’ve always been doing.

Even if your fairy godmother showed up and waved her wand to give you what you wanted, you would rather quickly wind up back in the same place you were before.

Lasting life improvement only occurs when you permanently change some aspect of how you live your life.

This is the reason many lottery winners wind up broke. In their lives, they were accustomed to living paycheck to paycheck. If they had money after the bills were paid (or sometimes before the bills were paid), they spent it. Suddenly having millions in the bank did not change this fact.

This is the reason many people who go on programs like The Biggest Loser eventually revert to their previous weight. It was (relatively) easy to temporarily change when there was a coach yelling in their ear, but when that coach went away, all they had was the life guidelines they had used before – the ones that had led them to being overweight.

You have to change your daily routines if you want to see big lasting changes in your life.

For me, every single positive thing that’s happened financially in my life over the last several years is attributable to one change in how I did things. All of it boils down to one thing.

Spending money is a bad thing.

That’s the one change. Whenever money leaves my pocket, it’s a failure.

Sometimes, money leaves my pocket to pay for the bills. I can tolerate that, but I’m happy when I find ways to reduce those bills.

Sometimes, money leaves my pocket for non-essentials – hobby spending and the like. I am extremely critical of my hobby spending. In fact, the best way I’ve found to keep from beating myself up about hobby spending is to give myself a “hobby allowance” each month and essentially view that as a bill of sorts.

I stopped viewing spending money as a pleasant thing.

What will it take for you to change the way you live your everyday life? Whatever aspect of your life you’re unhappy with, there’s something in your everyday life that’s at the root of it.

Are you willing to find what that is and then find a way to change it?

The post If You Don’t Like the Way Things Are, Why Are You Still Doing Things the Same Way? appeared first on The Simple Dollar.

That single fact is often more than enough motivation for me to put down whatever I’m doing and go spend time with them.

Before I know it, they won’t want to spend an hour playing with their dad any more and it’s at that point that I’ll really miss those lost opportunities.

You can’t get this time back, no matter what you do.

11 Fast, Cheap Ways to Look Younger I’m often shocked at the cost of beauty products. Maybe some of these tips will help take the edge off of those costs for some. (@ prairie eco thrifter)

Summertime Money-Saving Tips I always like lists of frugality tactics. Sure, I might already know most of them, and some might not apply to me, but if I just find one or two new angles, then reading the list was well worth it. (@ wallet blog)

Feeling Blue? Four Alternatives to Retail Therapy to Reduce Sadness Retail therapy is absolute poison to healthy personal finances. Any alternative is welcome. My alternative? I read a good book. If I can get lost in a great story for a while, I usually wind up feeling better. (@ hull financial planning)

The Five Greatest Personal Development Strategies That Actually Work Every day in which you don’t try to improve yourself in some way is a bad day. (@ pick the brain)

The post The Simple Dollar Weekly Roundup: Childhood Edition appeared first on The Simple Dollar.

First of all, this family had two early elementary students in the home and didn’t have any support structure around them. Because of their two jobs, there was no one at home when they got off of school, so they had to go to an after-school daycare each day, which cost their family $125 a week for 36 weeks a year. That’s $4,500. There was also summer child care, which was about $275 a week for 10 weeks a year – another $2,750.

Second, they both had to have cars for their commute. While they both drove old cars, she was still commuting about twelve miles a day, five days a week, fifty weeks a year. That’s 30,000 miles a year. If the car gets 30 miles to the gallon, that’s 1,000 gallons of gas alone, or $4,000. If you figure in all of the other maintenance needed for a car, plus depreciation of the car’s value, plus insurance, plus vehicle registration… it’s easy to put another $2,000 a year on top of that, giving them $6,000 in vehicle costs.

Third, the awkward hours meant that it was hard to always present a home-cooked meal. They used their slow cooker a lot, but sometimes it was much easier to go out or eat convenience foods because without very quick meals it was hard to have any family time during the week. She estimated that $50 was wasted on quick foods in an average week, adding up to $2,500 a year.

Finally, there were taxes. Her husband made $60,000 a year, so a quick tax calculator told me that they were instantly saving at least $2,500 a year in federal taxes by her not working. Depending on their state, there were likely some state income tax savings, too.

Adding those numbers up, you quickly get to a total of $18,250 in savings just from these factors. Since her job made $22,000 a year, all she had to do was find ways to save an additional $3,750 a year by being frugal and it made more sense for her to stay at home than to work, which she said was quite easy.

She reports that their finances are in better shape than ever before and their home life is a lot better, too, because she fills her days with taking care of household tasks and frugal projects. She does things like making homemade laundry soap, preparing all meals from scratch and making extra batches, planning meals carefully, and so on. The best part, she reports, is that she now has more family time than ever before.

Does she plan to return to work? Her plan is to return to the workforce when her children are old enough to stay at home alone.

Sandra’s story illustrates an interesting aspect of personal finance that isn’t always considered.

Quite often, it’s simply assumed that more money is the way to go when it comes to improving your financial standing and, thus, your life.

That’s not always the case. Here are some factors, when combined, that might point to a situation where one income makes more sense.

One income is substantially lower than the other one. When this is true, that second income is technically bearing much of the weight of the income tax in the family because it’s that income that is in the highest tax bracket in the family. Regardless of what it says on the pay stub, that income is bearing a 25% or 30% or even a 33% income tax hit at the federal level and possibly more at the state level. Why do I say that? If that second income goes away, there’s actually going to be more left from the first paycheck (or, more likely, in the form of a tax return).

There are child care costs being paid by the family. Child care eats away at a second income. It’s a pure drain that can be alleviated by having a parent at home whenever child care is needed.

One or both jobs require a commute. Staying at home doesn’t require a commute. You can easily eliminate a car in this situation, particularly if you live within reasonable walking or biking distance of services.

Family logistics mean you use a lot of expensive “convenience” services and products. Does your family ever eat out simply because it’s logistically easier? Do you sometimes grab fast food because it’s quick? Do you grab lunch at work because you don’t have time in the mornings to prepare a brown bag lunch for yourself? All of those are signs that family logistics – brought on mostly by that second job – are making your life more expensive.

The more factors you see here that cause you to nod your head, the more you should look at whether or not a one income household might fulfill your needs better and perhaps put you in better financial shape, too.

The post Is a Second Income Worth It? appeared first on The Simple Dollar.

Everything is going along perfectly. Savings are building up. Debts are going down. Financial goals are being reached (or at least approached). It’s all chugging right along.

Then something happens.

Someone gets sick or, even worse, passes away. A car’s engine block fails. Someone gets fired or laid off from their job.

That smooth forward progress you’ve been making? It’s just been rudely interrupted.

Whenever that happens, it can often feel like you’re just not making any progress at all over the long run.

After all, this bad event caused you to fall far back on your progress. It might have even caused you to end up roughly where you started.

When you look at it through that lens, it does look painful. All of this effort… and for nothing?

I’ve been in this situation personally and professionally. I’ve worked hard and made enormous progress on many different things in my life, only to watch all of that progress fall apart because of something outside of my control.

It hurts. It’s frustrating. It leaves you wondering what the point is.

When I’m in those moments, I want to give up. There were many moments like that during the growth of The Simple Dollar, for example.

Every time I faced a crash, every time things fell apart, one simple thought kept me from giving up.

Where would I be right now if I had never bothered at all?

Your car just failed. What would your situation be like if you hadn’t spent the last few months getting your financial house in order?

You just lost your job. Where would you be without that emergency fund you diligently built up over the last six months?

It might feel like your progress is being undone, but actually the opposite is true. It’s your progress that is making this disaster much smaller than it would have otherwise been.

Bad things happen in life. One of the biggest reasons for keeping your financial house in order is so that you can build things up during the good times so that you’re protected during the down times.

If something bad happens and knocks you back to where you started, that means your effort worked like a charm. It turned something that could have been truly disastrous into something you could handle with relative ease.

That, my friends, is tremendous progress. It’s something to be proud of.

More importantly, it’s something worth repeating.

The post The Big Crash appeared first on The Simple Dollar.

A quick aside: you can easily calculate your net worth by adding up the value of all of your assets – your bank accounts, your retirement accounts, your home’s value, your car’s value, etc. – and subtracting all of your debts from that – your mortgage, your student loans, etc. It doesn’t take long at all provided you have all that information at hand.

Still, your net worth provides only a small part of the overall picture. While it represents your financial state, it does not represent all of the value in your life.

Your net worth does not represent your health. You have the physical and mental ability to take on lots of things in life. Because of your physical and mental health, you can take on more work and earn more money, but just as importantly, you can take on many challenges that life hands you.

Your net worth does not represent your relationships. You have family members and friends with whom you have deep personal ties. A good friend can help you when you’re down and be your most powerful supporter when you’re charging ahead. A good family member is someone you can turn to any time you need a little boost in life.

Your net worth does not represent your freedom of choice. Every day, you can choose how to spend your time. You can choose who to love. You can choose almost everything about your life. What you do is up to you, and that’s a powerful asset to have.

Your net worth does not represent your time. Hand in hand with choice is time. Every day that passes is filled with hours that you can use in a multitude of ways – some good, some bad. It’s an incredibly valuable resource, but it’s one that isn’t directly represented in anyone’s net worth.

Your net worth does not represent your talents. All of us have skills and talents and things we’ve learned that we can bring to the table. Some of us are exceptionally skilled at certain things, but you would never know it from looking at a balance sheet.

Our lives are full of elements that aren’t properly assessed in our net worth when we look at that net worth as a standalone number.

So, is net worth still a useful number? Absolutely. If you draw on all of these assets that are not on your balance sheet, you can unquestionably raise your assets and lower your debts because of the actions you take.

Use your physical and mental health to work a little more and bring in a little more income.

Tap your relationships for spending advice and professional advice and work with some of those people to save money by purchasing things together and sharing tools.

Use your freedom of choice to make more sensible purchases and back away from the less sensible things you can do with your money.

Use your time in a way that results in an improvement of yourself, not just in ways that fill the hours or bring minor pleasure.

Utilize your talents to open opportunities and strengthen relationships in your life.

All of these things are assets that we have, but we have to use them in order to see any impact on our net worth. In that sense, our net worth is, in part, a reflection of all of those assets. We can’t directly see the time or the relationships we have when we look at that number, but we do see how those things have impacted our lives.

Whenever you feel like your financial state is troubled, step back and look at the other assets you have. You have a ton of assets that you can draw upon to help fix up your financial state. The only question is whether you’re going to use those assets to help yourself or whether you’ll just let them wither on the vine.

The post The Assets You Have That Don’t Fit on Your Balance Sheet appeared first on The Simple Dollar.

I have this minor irrational fear of fog. Whenever a day is foggy, I do not want to go out in it.

I think it’s because my range of vision is so limited in the fog. I can’t see what’s ahead of me or behind me and I have this strong sense that somehow I’ll become lost, even though it’s ludicrous.

This morning is foggy. I guess I’ll write. Inside.

Q1: Pre-conception college fund
My husband and I have two new nephews who are 6 months old and 9 months old. We’ve discussed the idea of starting a college fund for each of them but we are unsure of how to go about it. We want to be able to start them each with a small amount of money (lets say $100 each) and we want to be able to put a small amount into each account each month. We want the account to have stipulations for each of them (for example, they can only use the money for college and if they don’t go to college then they can use the money towards a down payment on a home at a certain age). We realize these accounts will in no way fully fond college for either of them, but we’ve both been bogged down by student loans and know that even little amounts can help out.

We don’t currently have any children of our own, but plan to start a family in the next year or two. We’ve discussed starting a college fund for our future children now, again starting small and adding a small amount each month. I’m thinking the best way to do this would be a CD until we actually have a child.

Any ideas greatly appreciated (types of accounts to use, brokerages to go through, limits on use, etc.). We are also unsure of how to tell their parents that we’re doing this for them. We know one set of parents will be very thankful, but are afraid the other set of parents will find some way to be offended by it.
- Julie

You can start 529s for your nephews. This article can provide full details on how to do this. If this is primarily for education, then that’s the route I would take.

You can also start a 529 now for a child you haven’t had yet. Just name yourself as beneficiary and then, when the child is born, switch the beneficiary to your child, which is completely allowed.

If you’d rather have a more general savings vehicle, you can certainly use savings accounts or CDs instead of a 529, but if the saving is for education, the benefits of a 529 make it the best choice for most people.

Q2: Using tax refund effectively
This year we received about $5000 back from federal and state combined. Below are some details about our financial situation.

I stay home with our son, so we are currently living off of my husband’s income (which ends up being about $4200/month). I have been able to find odd jobs on the side, but nothing that brings in any steady income. Our debts add up to about $15,000; that breaks down to $8k for a car loan with 6.8% interest rate and $7k for two student loans ($2500 @ 4.75% and $4500 @ 6.8%). We have a credit card with a great rewards program that we pay off in full every month, and about $1500 in a savings account.

My husband has a stable job, but recently applied for his dream job (and is waiting to hear back about a second phone interview), meaning we could end up moving in the near future from Denver to either San Francisco or Seattle (both of which have a higher cost of living that our current city).

So…with all that in mind…what do you think would be the wisest use for our tax return?

I was originally in favor of putting it towards to car loan, which would bring the balance down to about $2000, which we could then pay off in six months or less. With a potential move in our future, I’m wondering if it might be a better idea to build up our emergency fund and put it into savings. If he gets the job, the company will pay all costs associated with moving, but I’m a bit anxious about the higher cost of living.

My husband is in favor of buying us each a new phone (ours are each over three years old and are starting to die), and then splitting up the rest between the car loan and savings.
- Margie

If I were in your situation, I’d pay off the higher interest rate student loan.

From what you’ve posted here, it’s your highest interest debt (it’s tied with your car loan, actually) and, although you do get a little bit of tax help from it, it’s a pretty tiny amount. I’d pay it off for one simple reason: it eliminates a monthly bill.

That way, from here on out, you can take the money you used on that monthly bill and use it for other things – paying off other debts, building an emergency fund, and so on.

Q3: Ashamed of using aid
My younger sister is 25 years old. She has two children. Her husband died in an auto accident about a year ago. She’s trying desperately to make ends meet but she refuses to use things like SNAP or food pantries or things like that because she says she’s not poor. Please tell me how I can convince her to take advantage of these things.
- Brian

Those programs are actually made for people like her. The situation you’ve described is the poster child for why SNAP and food pantries exist. They’re made for people who are struggling in their situation and, ideally, will use that help to boost themselves back onto a stronger path.

Yes, some people use those programs as part of a cycle of dependency, but that’s not the purpose of the programs. The purpose is to make sure that no one has to struggle to get food on the table for their children. She should never have to struggle for that, ever.

You can’t make her go, of course, but you need to make it clear to her that the real purpose of such programs is to help people in her exact situation. That’s why they were created.

Q4: The four percent rule
A lot of books seem to quote the 4% rule as fact. Where does it come from?
- Larry

It comes from statistics, actually.

Let’s say you have $1,000,000 in retirement savings and it’s all in a very broad stock market index fund. 4% of that is $40,000. So, let’s say you take out $40,000 a year to live on. If you then look at every single thirty year period in the history of the stock market, you have about a 95% chance of still having money after 30 years of doing this. That’s the 4% rule – it gives you a very nice likelihood of being able to live out the rest of your life in retirement if you just take out 4% of your retirement balance each year.

You can run those numbers for yourself over at FireCalc. Put in $40,000 as your annual spending, $1,000,000 as your total, and 30 years as the length.

Q5: Dan Ariely
More and more when I read your posts I am reminded of the books Dan Ariely has written (such as Predictably Irrational). Are you familiar with his work? I know he does a lot of TED talks and he teaches a free online course through Duke University. If you haven’t checked him out, I think you’d find his work very interesting.
- Susan

I’ve read both of his books and I’ve included some of his TED talks in my “pieces of inspiration” columns. He’s a pretty fascinating guy.

Ariely’s work focuses on why we make decisions that are sometimes “irrational,” meaning they aren’t the most beneficial choice for us in a given situation. Why do we choose to overspend? Why do we choose to eat unhealthy food? Those are irrational choices.

He offers a lot of reasons for those choices. Usually, it comes down to using the wrong cues and the wrong information as the basis for our decisions.

Q6: Look for job now?
My current job is on really shaky ground. Our boss has told us that a big round of layoffs is coming in October and I’m pretty sure my entire department is getting removed. This is a new situation for me and I’m wondering if I should be job hunting now or if I should focus on getting the best possible recommendation and maybe salvaging my current job.
- Mike

You should be job hunting now.

You’re currently employed, so that gives you a leg up in the process. Your company has known issues that will probably lead to your unemployment soon, so any supervisor that isn’t evil will understand why you’re applying elsewhere right now.

You’re in a great situation to find yourself a new position, so I would do it now. You have until October. Good luck.

Q7: Slow cooker oatmeal recipe
I need your oatmeal recipe. Love the stuff. Need more excuses to be able to indulge.
- Angela

Take some butter and coat the inside of your slow cooker with it. You don’t need a bunch, you’re just looking to make sure that the oatmeal doesn’t stick to the inside of the slow cooker.

Add six and a half cups of water, two cups of steel cut oats, two cups of milk, 1/4 cup light brown sugar, and a teaspoon of vanilla extract to the cooker. If you want any fruit, add up to a cup of it. Put your slow cooker on low, leave it on overnight, and you’ll have great oatmeal in the morning.

I’ve noticed that when the air is drier, it’s better to use a bit more water than that, up to about seven and a half cups. Feel free to experiment.

Q8: State income tax
Why would a person ever choose to live in a state with state income tax?
- Robbie

States get their money one way or another, either through state income tax, local income tax, sales tax, property tax, or something else. Virtually every state in the country is within 5% of each other in total tax burden for their citizens, as you can see here.

Those taxes do affect you one way or another unless you literally buy nothing at all and are homeless. If you rent your dwelling, then the property taxes are affecting you in the form of higher rent. If you’re in a high sales tax area, everything you buy costs more.

Some states use a state income tax and thus have lower property taxes and lower sales taxes. Others don’t have an income tax but have various local taxes. The state will get their money.

Q9: Donating unwanted books
On getting rid of books, the local public library is a good place to drop them off.

Either they will add the books to the collection, or if they are not appropriate, the Friends of the Library will sell them and give the proceeds to the library for new books! And they will send a thank you for [the X number of books] for your tax purposes!
- Trevor

If you’re not selling them in a yard sale or swapping them at a used book sale, the library is absolutely a great place for used books.

My local library will pretty much accept any books. If they can’t put them directly on the shelves, then they’ll put them out during the library sale, as you mention.

My only problem is that if I give away fifty books, I wind up bringing home plenty to replace them from the library book sale.

Q10: Focus
How do you focus when working at home? Whenever I work from home, I find myself constantly distracted by things and I can’t get anything done.
- Danielle

I have a spot in my home where I work. That’s what I do there.

When I really need to focus, I turn off my cell phone, unplug my internet service, and bear down on the task at hand. The fewer distractions there are at hand, the easier it is to focus.

There are usually a few household tasks floating around in my head that can distract me. I try to take care of those early in the day so that they’re a non-issue.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. 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.

The post Reader Mailbag: The Fog appeared first on The Simple Dollar.

For three days in a row, we’ll make some sort of meal at home. We’ll have spaghetti or a stir fry or some grilled fish or something else. As I’ve mentioned many times, the actual meals we have tend to depend a lot on what’s in season, what’s coming out of our garden, and what’s on sale this week at the grocery store.

Almost every time, we have somewhere between a half and a third of the food we prepared for the meal left over at the end of the meal. This goes into the refrigerator.

The next day, for lunch, anyone who happens to be around eats some of the leftovers for lunch. Most days, that means me. Many days, Sarah takes some leftovers to lunch with her.

Those leftovers aren’t necessarily what we had the night before. It might be what we had two nights ago, for example, or even three nights ago (as that’s our cutoff for when leftovers have to go).

Every fourth night (roughly), we’re facing three days worth of leftovers in the refrigerator. The oldest of those meals is about to get tossed out for being too old, so we need to do something with it.

So we have smorgasbord night.

It’s pretty simple. We pull all of the leftovers out of the fridge and put them out on the table. Everyone takes what they want and fills their plate, then we microwave that plate.

We usually let the children go first and let them pick whatever they want, then Sarah and I usually eat whatever is the oldest that’s left over.

This works really well. Everyone in our family is happy with smorgasbord night.

Why is everyone happy with leftovers? There are three reasons, really.

First, there’s almost always something that everyone really likes among what’s available. Our children have different food tastes. For the most part, they don’t all like the same things. Smorgasbord night means that they’re able to choose something that they like. As for me, I’m not very picky as long as it doesn’t involve the dreaded sweet potato, so I don’t mind going last when choosing what to eat.

Second, it’s about as cheap as a meal can get. This is excess food that would otherwise go to waste. If we can consume most of it on smorgasbord night, then it’s essentially a free meal for our family.

Third, it requires very little time. It takes about a minute to pull the leftovers out of the fridge. After that, it’s literally a matter of just serving it. There’s virtually no prep time, meaning we can spend the extra time that evening doing other things. Smorgasbord night often seems to line up very well with board game night or other such family activities.

If smorgasbord night makes our family’s evening meal practically free and everyone’s happy with it, it seems like a no-brainer to me.

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