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. Grocery delivery with small fee
2. Everyday carry?
3. Handling pushy insurance agent
4. Old bank account emergency fund?
5. Emergency fund
6. Constant arguments over money
7. Preparing for interest rate rebound
8. Survivalism and frugality
9. Is laundry service worth it?
10. Financial independence from wealthy parents
11. Best notebook for travel journal
12. Low cost of living retirement
As I write this, I’m sitting in a quiet hotel room with my family. They’re all still asleep, as it’s very early in the morning. We’re in the midst of our family vacation, currently in Toronto.
I’ve learned that on a typical average night, my youngest son and I seem to need the least amount of sleep in our family. I can already tell from his stirrings that he will be the next one to wake up.
It’s just a quiet, peaceful moment. I wouldn’t trade it for anything in the world.
Let’s dig into a few mailbag questions before he wakes up and wants to play.
Q1: Grocery delivery with small fee
In my area the local grocery store is rolling out a delivery service. They charge you 5% of your total ticket (min. $20 purchase) and they deliver it to your door within a certain radius of the store. I’m figuring that doing this will be worth it for me so that I can avoid impulse buys. I just send them my grocery list and they deliver. Impulse buys are more expensive than the fees I think. What do you think?
– Adam
I don’t think this is a particularly bad bargain for a service, myself. In fact, I wouldn’t be surprised if they raise the rate in the future.
Let’s say, for example, that I have 40 items on my grocery list. If I got into my car, went to the store, bought all of those items, checked out, drove home, and unloaded the car, it would easily take me an hour and a half.
Let’s assume that I could add all of those items to my online cart and pay for it by credit card in 30 minutes. An hour later, they deliver the groceries to my front step.
I’m basically swapping that 5% fee for an hour that I could spend doing something else. If my grocery bill is, say, $150, that’s $7.50.
Is $7.50 worth it for an hour of free time? If it’s genuinely valuable free time, yes. If it’s an hour channel surfing or reading pointless websites, no.
I’m generally willing to spend $7.50 for an hour of true quality free time on occasion, particularly when my life is in a situation where quality free time is hard to come by. It has a lot to do with a person’s life situation, I think, as I don’t believe (for example) my parents would make the same trade.
Q2: Everyday carry?
What does your EDC look like these days?
– Harry
Well, as I mentioned at the top, I’m sitting here in a hotel room with my “portable office” backpack beside me and all of my usual stuff on me, so let’s have a look.
In my pockets, I carry my keys, a money clip, a few cards held together with a rubber band (the band provides great friction to keep the cards in place), my cell phone, a pocket notebook, a Uniball 207 Ultra Micro), and a Spyderco pocket knife. I’m not sure which model of Spyderco it is (I think it’s a Tenacious) – I bought it at a pretty good discount at a sporting goods store because the color of the handle wasn’t selling (it’s purple) and I really don’t care about color.
In my backpack, I usually carry my laptop and laptop charger (which I’m using right now). Still in my backpack, you’ll find a backup Thunderwire charger, a backup micro USB charger, my Kindle (which honestly moves between my bedside stand and my backpack quite often), some extra pocket notebooks and pens of the same type as what’s in my pocket, two granola bars (the number varies a lot), a small bottle of hand sanitizer, a toothbrush and some toothpaste, an empty water bottle, and a drawing that my daughter gave me several days ago.
That pretty much covers it. My backpack goes with me any time I suspect there’s even half of a chance that I might work away from home.
Q3: Handling pushy insurance agent
There’s a guy in town who just opened an insurance office and he’s trying really hard to get business, which is cool. The problem is that he pushes WAAAAY too hard for sales. I made the mistake of listening to his pitch once and now he seems to practically follow me around town asking me if I’m ready to sign off on that policy. It feels like I see him several times a week and he’s always almost immediately asking about the policy. How do I politely get him to back off? I might get a life policy but not from this guy.
– Dennis
I would simply take him aside and tell him that he’s being too pushy and that the pushiness is convincing you not to buy a policy from him. This is very hard for some people to do, but it’s a conversation that really needs to happen in some form.
If you’re uncomfortable doing this, find a way to send him an anonymous note. Drop it by his office or in his mail slot and clearly explain that some members of the community are being driven away by his self-promotion practices.
The self-promotion isn’t going to go away unless he’s made aware of the fact that his self-promotion is getting under the skin of his potential clients. As long as he continues to believe that such tactics are helpful to his business, he’s not going to stop with them.
I think that avoidance of such situations almost always backfires. It’s convenient for you in the moment, but it usually ends up making you look pretty bad in the long run. Others see the avoidance and you’re the one that comes off looking rude.
Q4: Old bank account emergency fund?
Several years ago, I switched to a new bank when I moved. I left the old one open with a few thousand in the checking account in case I forgot to switch over any automatic withdrawals and nothing has touched that account in years.
My husband thinks we should just close the account and move the money over to our main accounts. I kind of like having it there as an emergency fund of last resort.
Do you have any thoughts on the matter?
– Carrie
I’m completely in favor of the concept of an emergency fund, but I’m not sure this is the right situation for one.
First of all, I’d ask whether or not that money is earning any interest at all. If it’s not earning any interest at all while it sits there, you should move it into a savings account or some other vehicle where it can earn at least a little interest without losing liquidity. We don’t live in an era of high-interest rates on savings accounts, but 1% is better than 0% on several thousand dollars. $5,000 in a 1% savings account earns $50 the first year, $50.50 more the second year, and so on; leaving it in a 0% interest checking account isn’t wise.
Now, if your question is whether to leave the money in this particular remote bank, that’s a completely different can of worms. I’m not entirely sure what your husband’s objections are to this account specifically. Is it due to the fact that the bank itself is remote so you don’t have easy access to a physical location? If that’s the case, what might either one of you need to do that requires a physical teller?
Unless there is a clear situation where this bank is not useful, I don’t see any problem in leaving it there provided you move it to an account that earns a better interest rate (while still being easy to access).
Q5: Emergency fund size
I am a single mother (husband died in auto accident) with a seven-year-old son. I make enough for us to get by. Our house is paid for thanks to insurance settlement. No debts. My question is how much of an emergency fund should I have? Realize that I need to have some emergency fund but how much?
– Bonnie
If I were a single mother with a seven-year-old son, I would try to have about three months of living expenses saved up in a savings account so that if I ever lost my job, I could take care of things for a while without disrupting my son’s life while I found another job.
The less of an emergency fund you have, the less time you have to find a job without significant disruptions to your child’s life.
I am basing the three-month number on this article from Time Magazine where they estimate that an average job search takes a little over six weeks – a month and a half, in other words. Given your relatively tenuous situation in a single-income household, I feel it’s safe to double that here, particularly since emergency situations often seem to come in groups. I would actually add even more if there were additional children in the house.
Q6: Constant arguments over money
My wife and I argue about money almost every single day and I don’t know how to get it to stop. We are trying to save up for a down payment and we are making progress. The honest truth is that we both make spending mistakes and we both blame the other one for their mistakes as though it’s the other one that’s keeping us from the goals. Every time we try to talk rationally about it one of us says something even slightly blameful and we’re right off to the races again. I don’t know what to do to get things back in a good place.
– Samuel
There are a lot of approaches to this situation. It really depends a lot on your individual personalities.
One way to approach it is to have money discussions in writing, perhaps over email. This gives you the time to read through what you’re writing and ask yourself whether the things you’re saying to each other are really fair or are really the things you want to be saying to one another.
Another approach is to simply use “time outs” frequently during the conversation. If one of you feels that the other has said something that’s going to trigger an emotional response, simply pause the conversation right there before it gets going. Simply say, matter of factly, that the thing your partner just said is something you feel is unfair and that, instead of arguing, we’re just going to put this on the table for a while.
If those things don’t help, you may want to seek out marriage counseling. Most marriage counselors are simply conversation facilitators. They help you figure out how to communicate with each other without anger, something that many couples don’t quite have figured out before they get married and don’t figure out during marriage, either. It’s a vital skill to have, and it can make the difference between a successful marriage and divorce.
Good luck.
Q7: Preparing for interest rate rebound
It’s my belief that interest rates are going to start going up in the next year or two. Are there any good financial moves I can make right now to take advantage of that?
– Everett
Before I answer this, let me make it clear that I am not necessarily convinced that interest rates are going to rebound significantly in the next few years. While I believe our economy has recovered significantly since 2008, I don’t think it’s recovered to the point where interest rate hikes won’t slow it all down very quickly.
That doesn’t answer Everett’s question. What would I do if I believed that interest rates were going to go up in the next month or two?
First of all, I’d refinance any and all debts that I have. I’d refinance my student loans. I’d refinance my home mortgage. I’d even try to refinance my car loan, if possible. The goal is to lock in the lowest interest rate possible, even if that involves reducing the term of the loan and seeing small increases in the monthly payments. Try to get out of any variable interest-rate loans that you might have and get everything into fixed-rate loans.
Second, if I were on the path to home ownership, I would accelerate it a little, even if that meant buying that first home before saving up to 20%. As soon as there is definite word that interest rates are going up, home mortgage rates are going to go up, too. Getting a mortgage without a 20% down payment will usually mean that you have to get mortgage insurance, which is effectively adding another percentage point to your interest rate, but if waiting means adding a percentage point to your interest rate and it’s one that you can’t remove by paying off some of your mortgage, you’re better off making your move sooner rather than later.
As interest rates go up, so will the interest rates offered on bank accounts. I didn’t realize how good things were in 2007 when online banks were offering interest rates in the 5% to 6% range. At that rate, savings accounts return almost as good as the stock market while also being FDIC insured and without any risk of losses. Savings accounts become a very good bargain when their rates creep above 2% or 3%.
Those are moves I’d look into if interest rates go up again.
Q8: Survivalism and frugality
My husband and I aren’t really “survivalist” types, but we both feel like modern life is kind of… fragile. Lots of people have no idea how to grow their own food or take care of themselves and if something happened that caused widespread crisis, like say a pandemic disease or something, a lot of people would be in trouble just because they couldn’t eat or grow their own food.
Because of that, my husband and I practice a lot of things that we think would help us in such situations. We have a big garden, can a lot of our own foods, have a fire pit and many months of firewood, have solar panels on our roof, and so on.
It’s not hard to notice that a lot of the things we’re doing are also making our life inexpensive. We basically don’t have an energy bill at this point. We get our own water from a well with a pump on it. We produce most of our own food. We have very little expenses outside of property taxes and basic clothes and the cost of our van.
I know that people who identify as “survivalist” and people who identify as “frugal” often are politically at odds with each other (at least that has been my experience in other forums), but I think both groups could learn a lot from each other. I feel like we are practicing frugality while preparing for the future.
What do you think?
– Eileen
I agree completely. I think that the skill overlap between people who think of themselves as “frugal” and those who identify as “survivalist” is significant, and if they can keep political issues out of the forum, there is a lot that they can help each other with (I don’t think they’re entirely politically exclusive, either).
I have a friend who would describe himself as survivalist. He gets his water from a well on his property. He has a solar panel system on his roof with panels that he knows how to install himself, along with extra panels in his garage for replacements. He has probably a year’s worth of food in his basement. Although it’s never come up, I’m fairly sure he has weapons and gear for hunting for food. He’s got a huge garden. He’s basically well prepared for major societal changes, should they happen.
I don’t necessarily agree with some of his politics, but we often have discussions (usually via Facebook Messenger) that revolve around various strategies. I have a wider array of gardening knowledge than he does, so he sometimes picks my brains for things like where to get non-hybridized seeds and what varieties work well in an Iowa climate without disease. I asked him tons of questions about his solar panels when Sarah and I were considering them for our roof (we ended up deciding they weren’t cost-effective right now, but they’re temptingly close).
You can put political differences aside to talk about strategies for saving money and removing the shackles of bills from your life. It’s a big part of the reason why I try to keep politics away from The Simple Dollar – people of all political stripes can find use in strategies for saving money, building a better career, and putting themselves in a better long-term life position.
Q9: Is laundry service worth it?
There’s a local laundry service that will pick up laundry on your doorstep, wash it, fold it, and return it to your doorstep for $2 per pound, minimum 5 pounds. I’ve been trying to do the math on this to figure out if it is worth it. Thoughts?
– Fred
This question reminds me a lot of the first question in this post. What you’re really paying for here is time.
From this website, I’d estimate that the weight of a week’s worth of laundry for a single person is on the order of 15-20 pounds and probably half that for a child. So, for my family, a week’s worth of laundry is probably getting close to 50 pounds of clothes, sheets, towels, and so on.
If I were to pay $2 a pound for that service, it would cost me $100 to have them do all of the laundry in my house for a week.
So, the question becomes: how many loads of laundry is that, and how much time and money would it take to do it myself? My experience tells me that this would add up to a load of towels and washcloths, a load of bedsheets, a load of colored clothes, and a load of whites. This would end up costing about $8 or so in total energy use, soap, and water, and would take about two hours to wash, dry, and fold all of the clothes and other items.
So, in this case, my back-of-the-envelope math tells me it would take $92 to save two hours of work. This is not something I’d want to do in our current life situation.
If I were single, though, the equation would change. I’d probably still be doing two loads per week and it would end up eating about an hour of my time. The cost would be about $4. However, I’d only have about 15 pounds of laundry, so the cost would be $30. That means I’m spending $26 for an hour of time saved. This still isn’t worth it to me, but it’s closer.
I just don’t think laundry delivery services are worth it at those prices for most people in normal situations.
Q10: Financial independence from parents
I am a single woman aged 32. I have a solid career in marketing where I make approx. $70,000 per year. This is enough to pay my bills and have a nice life.
Since I reached age 21, my parents have given me $1,000 each per month as a gift, totaling $24,000 a year.
Though I believe I am perfectly capable of living without that money, I find it to be very useful at times. It permits me to travel and to own a much nicer car than I would otherwise own. While I want to be truly “independent” I also don’t want to give up those things.
My parents have stated that they plan on continuing the gifts until they pass away, at which point I will receive a full inheritance as I am their only child. They are very well off but not quite in range of the estate tax.
Given this situation, do you feel that I am financially “independent” while receiving these gifts and knowing that a large inheritance is coming? Does it make sense to try to make them stop giving me money?
I want to feel like I am truly independent, but at the same time I value that money.
– Meghan
My feeling is that if you want to establish true “independence” from your parents, then you should put all of the money they give you into savings for the future and then live off of what’s left. Your actual retirement savings should come out of the “leftover” portion of things.
That probably seems harsh, but I think the best rule of thumb for independence is that your life would almost entirely go unchanged if that income stream completely vanished.
Right now, you’re living a lifestyle that would change if the income stream from your parents vanished. You wouldn’t be able to afford the travel that you take or the cars that you drive. Your current lifestyle is dependent upon money coming in from your parents, because without it you wouldn’t be able to have those things.
You need to decide for yourself how important financial independence really is for you in comparison to the nicer car and the travel. Right now, it feels like you want to have both of them, but they’re incompatible with each other (unless you make some other changes in your life).
Q11: Best notebook for travel journal
I loved your recent ideas regarding a travel journal as souvenir and taping things in there as I find them like menus and napkins and stickers and ticket stubs. Do you have a particular type of journal that you prefer for travel journals?
– Diane
I don’t really have a brand that I prefer. In general, I don’t like journals with really thin paper for the pages as they don’t hold up to having things taped or stuck to the paper. I also don’t like journals with really tight binding – I want to be able to add items to it and still largely be able to close it.
My “budget” choice would definitely be a composition book with graph paper, which you can get at almost any office supply store and many department stores. In fact, that’s what my children are using on this trip for their travel journals.
I am personally using a Baron Fig notebook for my travel journal. I can’t find the exact model on their website, but it’s a softcover notebook measuring about five inches by eight inches that has a dot grid on the inside. I like dot grids because it makes it easy both to write neatly and to draw on pages.
Honestly, almost anything will work for a travel journal. I’d suggest using an ordinary composition book if you’re unsure what to get.
Q12: Low cost of living retirement
I currently live in San Francisco which has a very high cost of living. I am saving about 80% of my income and plan to eventually quit and move to a low cost of living area, likely a Midwestern college town since I grew up in one.
I know that the easy formula is to just compare cost of living numbers for San Francisco to the target city I’m looking at to figure out how much less I’ll need per year thanks to cost of living, but is there anything I’m overlooking in that comparison? Is there a noteworthy factor that doesn’t go into cost of living data?
Thanks in advance!
– James
Cost of living data is almost always an approximation of what the actual cost of living will be like in each area. It’s impossible, for example, to find the exact same house in Iowa City, Iowa as you would find in San Francisco with the same access to services and so on.
From what I’ve seen in general, I think that most “cost of living” indexes slightly underestimate the actual difference between the places. That’s because many of the assumptions rely on having the same exact lifestyle in each place, something I don’t find to be true at all.
From my own experience, the smaller the city/town you live in, the less pressure there is to spend money and the more culturally acceptable and normal and even expected it is to be frugal. This isn’t an absolute thing and it varies a lot from community to community, of course, but those kinds of cultural difference simply aren’t included in cost of living data.
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.
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