What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Balancing loans and opportunities
2. Percentage-based automated savings
3. Getting guest posts published
4. Moving with no money
5. Value in Black Friday?
6. Virtual assistants?
7. Bulk buying turkeys?
8. Cutting off brother
9. Free background audio without distraction
10. What’s happening in America?
11. Rising cost of meat
12. Car loans and differing opinions
One of my least favorite aspects of the calendar year is the semi-annual clock shifting when Americans set their clocks back an hour in early November and then set them forward an hour in the early spring. I don’t like either shift in the least.
The reason for that is that for the two or three days after the shift, I just feel out of whack. My sleep is off and my routines are off and I’m just less productive. As a result, I get behind on the things I’m working on, so for the next few days I’m working overtime to catch up.
What’s the point of this? To me, the switch to and from Daylight Savings Time is far more of a drawback than any benefits that it might bring. I hope that someday the switch in time will be abolished.
Q1: Balancing loans and opportunities
I’m 24 and a couple years into my career. I’m looking to optimize student debt repayment (approx. $23,000 with fixed rates between 3-6% remaining after paying down a little more than $6,000) and investing in my Roth IRA/401k. I’m currently making around $50,000 before taxes, which translates into about $2,800 a month after taxes, deductions and 5% towards my 401k to get my employer match. I also work overtime and have a side hustle that brings in some extra money. I pay my credit cards off every month to build credit and do my best to be frugal. I’m lucky to have low rent of $525 and will be reduced to $287 when my significant other moves in in a few months. My biggest expense besides rent is being a car owner since I commute to work in a big city.
This gives me the wonderful opportunity to aggressively pay down debt and invest at a young age. I understand there’s a lot of advice about paying down debt entirely before investing, but I do not want to miss out on the opportunity cost of not investing.
I’d love to max out my Roth IRA in 2017, but I’m not entirely sure if it’s realistic until my rent goes down further. I’m currently putting $500 a month towards my loans ($200 of which is an extra payment going towards my highest interest loan) and between $200-$400 towards my Roth depending on the month. I have a solid emergency fund ($6,000), but I’d like to pad it a bit more. My Roth is invested in Vanguard index funds.
Should I be doing things differently? How should I be allocating my money to optimize my debt repayment and investments simultaneously?
– Noelle
If I were you, in your current situation, I would be striving to save 10% of my income for retirement including employer match. So, overall, you should be saving about $5,000 total including that match. If you do that, you’re going to be very well on pace for retiring (and possibly retiring a little early).
I’d then take the rest and use it to eliminate that debt as fast as possible. Getting rid of your debt is going to free up a lot of options in your life, making it easier to take career risks or make life changes.
It can be tempting to save even more for retirement, and you can certainly do that after the debt is paid off. However, it’s worthwhile to remember that every dollar you put toward debt repayment effectively earns a return equal to the interest rate on that loan.
Q2: Percentage-based automated savings
There is a way to automatically save based on percentages! I use the Qapital app for that. You can specify that you want to save a certain percentage of your income (and even specify to only save that percentage if the deposit is larger than some chosen amount). While you don’t earn interest on your savings like you would with Ally, etc. it automates things nicely. I’ve combined using Qapital for automated savings and then monthly transferring those savings to my high-yield destinations.
– Megan
Qapital actually does offer this feature! I spent some time looking into this bank and it seems to be a “tinkerer-friendly” online bank that enables you to do a lot of interesting things, like tying automated financial rewards into other goals by linking apps together and so on.
It’s definitely an interesting prospect. I often wonder with things like this whether or not they’ll remain an independent bank or whether other services will either buy them out or copy their services. As of right now, it seems to stand alone in terms of some of the features that it offers, particularly the integration with other apps and services.
Q3: Getting guest posts published
I just read this article 5 Strategies for Building The Simple Dollar (ed. note: this is an older interview I did with a site that covers blogging strategies) and thought it was so helpful, thank you! Just curious, once you had the posts written, how did you go about getting them published/guest writing on other blogs?
– Tammy
Here’s the thing to remember with guest posts: almost everyone who writes guest posts targets popular websites, but those same websites are getting targeted by everyone who wants to submit a guest post. We get dozens upon dozens of unsolicited submissions a day at The Simple Dollar and simply weeding through them at all is a significant task.
The reality is that sometimes guest post submissions don’t even receive a look, no matter how good they are. There simply isn’t the time or resources available at popular websites to read through the flood of unsolicited submissions.
Other approaches work better. Start your own website with your own content and promote it. Build relationships with people before suggesting a guest post idea. Those strategies are almost always going to build better results than writing a post and then sending it to endless websites hoping someone will post it.
Q4: Moving with no money
I have been unemployed for almost a year and have almost no money. I got a job several hours away and I need to move but I have almost no resources with which to do so. How can I move and find a new place to live with no money?
– Terry
This is a perfect time in your life to ask for some timely help. It is people who are making positive steps in their life that tend to get help from friends and family in a time of need, and that’s clearly where you’re at. Ask for help. Ask your friends for any help they can provide in making your move work out. Ask your family members, too.
Another step is to talk to the human resources department at the new job you’re moving to take to see if they have any assistance they can provide with moving, such as short-term housing or other tools.
You should also sell off as many of your possessions as you can and go with minimal stuff. That way, you have some pocket money and have lower requirements for living when you reach your destination.
Good luck! This sounds like an awesome step that might be a little tough on the transition but will turn out quite well!
Q5: Value in Black Friday?
The Black Friday deals are ramping up. Can’t go to the usual websites without seeing lots of talk about it. Seems like a bunch of junk to me. What’s the value?
– Damon
A lot of it is junk. For someone who is careful with their money, Black Friday is actually fairly useless because it’s just sales on stuff you don’t need and don’t really want, so why spend the money?
The useful part of Black Friday for me is checking whether or not any offerings actually match the things on my holiday shopping list. I try to decide on my list beforehand along with gift ideas for each person so that when Black Friday rolls around, I’m just looking to fill in a few gift slots. Sometimes a Black Friday sale matches up well and sometimes it does not.
I almost never buy stuff for myself on Black Friday because, frankly, I don’t need the stuff and it doesn’t really match my few pre-existing wants.
The thing to remember with Black Friday is that it’s mostly targeting people who make poor money decisions or else have tons of extra money to spend without any initiative to save.
Q6: Virtual assistants
Have you read the 4-hour work week by Tim Ferris? If so would like to know your thoughts and what principles you think would be actionable? Your thoughts on creating a muse and the use of virtual assistants? This seems like something for large city dwellers.
– Tom
I’ve read the book in the past and I gave it a brief review when it first came out. I felt as though it was a book packed with a lot of good ideas that worked best as a “buffet dinner” of ideas where you simply chose ones that worked well for you. The book is loaded with things that could be actionable depending on a person’s situation.
As for virtual assistants, I have used them in the past when I was managing all aspects of The Simple Dollar and was getting overwhelmed with the busy work. The usefulness of virtual assistants is highly dependent on the quality of the assistant, and the ones that are really good at it are going to have other career opportunities because they’ve got characteristics needed for success.
The book is good, but don’t take all of it as a recipe for life. Pick and choose tactics from it. I think many of them are very good, but they each don’t apply to everyone.
Q7: Bulk buying turkeys?
The grocery stores in my town get into a crazy price war over turkeys each year. We usually buy one for our Thanksgiving dinner but what about the idea of buying two or three and eating them at other times during the year? A big roasted turkey can provide a lot of meals and the cost per pound is so low!
– Anna
I don’t think there’s a thing wrong with buying multiple turkeys, putting the extras in the freezer, and eating them throughout the winter, perhaps once a month.
A turkey can provide a ton of good meals, both in terms of directly eating the turkey meat as a main course as well as utilizing that meat in various soups and stews and other dishes (like turkey tetrazzini), as well as using the remaining bones for a poultry stock that can be used in even more things.
The only concern I’d have is that you might get sick of turkey, so I wouldn’t buy too many of them. Buy three, perhaps, and spread them out across the winter so that they don’t stay in the freezer too long.
Q8: Cutting off brother
I am 26 and my younger brother is 21. I am engaged and getting married next year. I have a great job at a bank and make the best money I have made in my life.
My mom raised the two of us alone and she died when I was 19 and my brother was 14. The state never took him away so I basically “raised” him through high school while I went to college.
He went to college in 2014 and failed out after two semesters. Now he is just kind of drifting. He works at jobs for a while and then loses them and then finds another one. Mostly he just comes to me for money when he needs it and pulls out a lot of guilt trips about how mom died and how he needs the help.
I feel like he needs to fly on his own but I don’t know how to do this without sending him into a downward spiral. Help?
– Tony
There’s no easy way to do that, unfortunately.
In my own experience with relatives and friends who have been struggling in similar ways, the best suggestion I have is to transition things into non-financial assistance. Offer him a lot of help, but help in a way that doesn’t involve putting cash in his hand. Drive him to classes or to work. Give him a couch to sleep on. Put a warm meal in his belly. Listen to what’s bothering him.
If you simply respond to situations by putting cash in his hand and then shooing him out, you’re never going to really help him break his life cycles. That requires something more.
The thing is, my experience has shown me that people in such cycles are actually yearning for that more personal help. They want someone to listen. They want someone to break bread with them. They want someone to drive them to work. The money is just a bandage that doesn’t fix the wound and they know it, too.
Good luck.
Q9: Free background audio without distraction
I work in a very quiet office. The walls in here must be soundproof or something because it is dead quiet in here. I don’t like to be interrupted so I keep the door shut with a DND on the door unless I’m open to talking to people. But the silence is just uncomfortable.
I tried listening to podcasts but they just distract me. Same with music. Do you have any ideas for free background audio that isn’t distracting?
– Michael
I actually find myself in this boat quite often. When I’m actually focused on writing, I want some ambient noise in the room, but nothing that’s distracting. Podcasts and the like constantly take me away from my train of thought.
My best solution is to use Calm.com. The site basically gives you your choice of several full-page animations accompanied by background noise. It’s things like a soft rainfall or a crackling fire or gentle waves on a beach. I often find myself setting one of those and letting it play all day long.
While the site does offer a meditation service that’s pretty good, the actual ambient noise seems to be completely free.
Q10: What’s happening in America?
That thing you wrote about dealing with change was weak. When are you going to take a stand against what’s happening in America?
– Alex
I have received tons of these messages this week, particularly in the last day or two, so I feel I should answer them.
My answer is simple: I’m not. I’m going to sit back and watch and listen. I’m going to learn as much as I can about what’s happening and why it’s happening. I’m not going to fall into the easy trap of forming an opinion without a lot of evidence backing up that opinion. I honestly haven’t formed any real opinions yet, because I see a lot of complex stuff going on at once and I haven’t had time to process or understand it. I just know that instant knee-jerk opinions are usually wrong.
The only comment I have about the changes of the last week is that people should be kind to each other. I don’t have respect for anyone acting cruelly toward other people, regardless of the reason, and the outcome of a political election is definitely not that reason. I’ve seen this cruelty from across the political spectrum, and it disgusts me. Not only is the cruelty itself disgusting, it’s happening in an environment where many people – human beings just like you and me – are scared about what’s going to happen in terms of their lives. Whether that fear is warranted or not, that fear is real, and cruel behavior in that environment makes it even more disgusting.
Be calm, cool, and rational. Let your emotions chill a little bit, whether they’re positive or negative. Take this time to learn as much as you can, particularly regarding the reasoning behind people you disagree with. You’ll be better for it, whatever may come.
The Simple Dollar is not a politics site, nor will it ever be. There are occasional times where government policies do become important and we’ll talk about them when it happens, but the focus is never on the politics. It is a site for everyone about personal finance issues, because we all share common ground in a desire to improve our financial state and the lives and opportunities of ourselves and our family. Part of that is being cool, calm, and rational about our finances and our emotions, and that stretches to all aspects of life. Be cool, calm, and rational and never stop learning.
Q11: Rising cost of meat
I went to three different grocery stores in my town today. The least expensive ground beef I could find was $4.49 a pound and the least expensive chicken breasts were $2.49 a pound. I shop at cheap grocery stores not Whole Foods. How is a person supposed to eat with those prices?
– Andy
First of all, you’re naming two relatively expensive options for beef and chicken. Instead of buying ground beef, you could buy other cuts and prepare them differently. Consider buying stew meat, for example, or whole chickens. You’re desiring one specific cut.
Second of all, a diet with large quantities of meat in it is expensive. It is way cheaper (and healthier over the long term) to get your protein for a meal from a pound of dry beans that costs $1 than it is from a pound of meat. One strategy you might be overlooking is cutting down on the meat intake.
Another factor is the stores you shop at. You might be avoiding Whole Foods, but that doesn’t necessarily mean you’re shopping at a discount grocer. I went to a nearby Fareway after reading your question and checked their prices on ground beef (as low as $2.89 a pound) and chicken breasts (as low as $1.99 a pound). There are big price variations from store to store and area to area.
In short, shop around, consider different cuts, and consider some dietary changes. Those moves will help you stretch your food dollars.
Q12: Car loans and differing opinions
I’m deeply disappointed in your decision to run an article from a contributor on how and why to get a car loan. What a terrible idea! Anyone who has ever listened to Dave Ramsey for 5 minutes or who has an ounce of common sense would never do that. Unbelievable! And so disappointing!!
– Alex
For starters, I do not believe that car loans are something that should never be used. If you are freshly out of school and have just picked up your first job, then a car loan is definitely appropriate. If you’re exiting a period of unemployment and have sapped all of your assets to keep food on the table for your family, then a car loan is definitely appropriate. If a life crisis has sapped your savings for a replacement car and you need one, then a car loan is definitely appropriate.
Dave Ramsey often speaks in absolutes that ignore the variety of situations that people can find themselves in. Sure, the ideal path to financial success is one where you don’t get a car loan, but not everyone can follow that ideal path. People are sometimes unemployed for long periods, or have to spend all of their car savings to take care of a very sick child, or are new to professional life, or are new to making better financial decisions. All of those people (and others, too, who find themselves in life situations with their savings depleted and with a need for a car) may be striving for a better financial path but find themselves in a situation where they need a reliable car without the assets to afford it.
Those people, in order to continue a positive financial journey, may need some advice on how to get a better car loan. If they can find one at a lower interest rate, that loan is going to cost them less money over time and enable them to get on board a better financial path.
If you’re already in decent financial shape and aren’t pushed up against a wall needing a replacement car without the money to outright buy it, then yes, you should be saving up to replace your car because you’re going to eventually need to do that. You should be dropping a small car payment in the bank every month so that you have that money available to you. That is far and away the best way to minimize the long-term cost of a car purchase because interest is going to be working for you instead of against you. But not everyone who needs a reliable car in the very near future has done that preparation or even could have done that preparation, and thus advice on a better car loan is useful to them.
Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.
The post Questions About Meat Costs, Black Friday, Virtual Assistants, and More! appeared first on The Simple Dollar.
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