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. Phone coupons and security
2. Life crossroads question
3. Car safety GPS devices?
4. Telling significant other about wealth
5. Escaping poverty
6. Retirement savings when loving career
7. Reusing water bottles?
8. Pyrex question
9. Uses for cheap cabbage?
10. Airbnb and spare bedroom
11. Stop measuring myself by others?
12. Big savings making life miserable
This past weekend, we hosted a birthday party at our home for our seven year old. He invited seven of his friends to the party, which meant that we had 10 children between the ages of six and 11 running around our home for a few hours.
We had a homemade birthday cake that we decorated ourselves. We made homemade pizzas. We decorated our house ourselves with handmade decorations. We came up with party activities that involved making Cartesian diver toys out of used plastic water bottles and making “putty” out of glue and Borax. We made an obstacle course in the upstairs hallway.
Our total cost for everything was maybe $30. The kids – both our own and our guests – seemed to universally love the party. Our seven-year-old said it was hands-down the best birthday he’s ever had and our two older kids agreed that the whole thing was fantastic.
We live in an area where parents often seem to just throw tons of money at children’s birthday parties, but it’s often the simple ones that they really love. You don’t have to do anything too complicated – in fact, they often love just being able to do something simple and new with their friends. Don’t drop hundreds on some sort of “amazing” party. Just have a simple one at home and they’ll probably appreciate it just as much or more.
Q1: Phone coupons and security
I see a lot of information about coupons that you can download to your phone. How do I know my Android phone is secure? Is security even a concern for these apps? I have a passcode for the phone, but I only use it to make calls, text, and look up information on the internet (like when the next train to Boston is expected.). Can you advise?
– Colleen
On Android, it depends on the app. When you put a new app on your phone, it will inform you as to what aspects of your phone that it wants access to. If you’re uncomfortable with that access, don’t put the app on your phone.
I generally don’t allow apps to have access to things like my contact lists and so on. There’s no reason for an app to have that kind of access.
While I haven’t tested coupon apps on Android extensively, I can’t conceive of why they would want access to most kinds of shared information. If it’s requesting that access, just deny it and delete the app. Easy as can be!
Q2: Life crossroads question
I’m a single 31-year-old man with no kids. I live frugally in a large but affordable Midwestern city. In my early- to mid-twenties I was pretty irresponsible with money and wrecked my credit and finances. I’ve spent the last two years working on getting things reset and paying off debts. I’ve got no credit card debt, but I do have about $30,000 of student loan debt from my first stint in college immediately following high school (I dropped out after my sophomore year). I decided to go back to school a couple of years ago and earned an A.A. from a community college, which I paid for out of pocket. I was fortunate enough to get a full-ride scholarship from a local university, where I’m finishing my B.S. I’ve got an emergency fund of $4,000 and recently started putting money into a Roth IRA – I work as a bartender and put 10% of the tips I make every night in an envelope to fund that account – I’ve amassed a little over $1,000 over the last couple of months! I make about $65,000 a year.
I am applying to medical school next year and am unsure what the best path is to balance my immediate, short-term, and long-term goals is. I have a separate savings account I’ve been funding to cover the costs associated with applying (testing, prep, and application fees as well as costs of travel and lodging for interviews) and should have enough that I won’t have to charge anything to a credit card or move money out of any other accounts. Once I start med school, I won’t be able to work very much (if at all) and I will pay for tuition and living expenses with student loans (5.31% is the rate for this year). I want to be prepared for all possible outcomes, so I am trying to consider every angle.
Should I stop saving money for retirement and instead put that money in an account that I can tap into if I run short while I’m still in school? I estimate that I’ll be able to save another $8,000-$12,000 for retirement before I start med school. Saving that amount now, in my early 30s, could be worth as much as $245,000 in retirement according to Betterment’s calculator, assuming average market performance. That’s a pretty significant amount. However, having that money in a low-risk account (versus my IRA which is invested in 90% stocks/10% bonds) might be more helpful to me while I’m in med school than it would be to me in retirement given the fact that my income will increase dramatically after I’m finished with my education — I’ll be able to save much larger amounts, aggressively.
On the other hand, there is no guarantee that I’ll be successful as a medical student, or that I’ll even get into any of the schools I apply to. I’m confident that I will, but I want to be prepared. If I’m not successful, it’s important to me that I’m being responsible. I know that he money I save will be worth less in retirement every year I put off saving, and I don’t want to gamble with my future self’s security.
I’m also on track to beef my emergency fund up to $20,000 by the time I start med school. I’m not sure if there’s conventional wisdom for someone in my situation – is that too much money to have saved for emergencies if I’m living on student loan money? Should I use some of that for living expenses and reduce the amount that I borrow?
– Gary
If you’re going to go to medical school, you’re already making a major life wager that you’re going to be successful in medical school. There’s no point in even going if you’re thinking there’s a significant likelihood that you won’t be successful.
That’s why I would encourage you to treat this endeavor under the assumption that you will be successful. Start making choices right now as though you’re going to be fine in medical school. Adopt that as your full mindset. You will be successful there, period.
So, what can you do to maximize your success there? Having a $20,000 emergency fund is amazing. That’s a great first step. If I were you, I’d focus on keeping my student loans low after that as opposed to saving more for retirement at the moment. I’d leave your retirement as is and start putting away money to cover housing costs when you’re in school, which will enable you to take out smaller loans as you won’t need as much for housing. This will reduce your burden that you’re carrying when you graduate, which will recoup what you’re “losing” from not contributing to retirement savings, and it’ll make your day-to-day life after graduating much easier to manage and give you a wider array of reasonable life options at that point. You won’t have to just take the highest-paying job and can consider what’s best for your career and best for your sanity.
Q3: Car safety GPS devices?
I am a Verizon customer, mostly because no other service reaches our coastal town. But that is not the question of the day. Verizon is pushing the “Hum” a device for ‘car safety’ that tracks your location, calls for emergency help when needed, connects you to a mechanic that provides a quote of what possible repairs should cost, then interfaces with your local mechanic to insure that the correct work is done, and other reportedly delightful interfaces. At $10 a month, is this service worth it? My car is newer, still under warranty, I have AAA, and my auto insurance covers towing. Is the Hum worth my money?
– Ellen
Given that you already have those services, and given that you can install an app like Honk on your phone for free that covers even more aspects of Hum, I don’t see the benefit of Hum adding up to the cost.
That being said, Hum is one of those “peace of mind” purchases. It’s intended to alleviate a particular worry that a person might have. Some people feel significant personal stress about being in those kinds of emergencies or worry about their loved ones being in those situations.
My wife has an Automatic in her car (she received it as a gift) and is glad it’s there for peace of mind, but when I asked her if she would buy it for herself, she said she probably wouldn’t as it doesn’t provide enough peace of mind benefit for her to be worth the cost.
Q4: Telling significant other about wealth
I’ve been following your advice since the mid ’90s! Just kidding – kind of. I’ve been saving about 40% of my income since I graduated college in 1994 and I have really enjoyed The Simple Dollar over the years.
I have been single my entire adult life and never dated anyone seriously. I am now 46 and have been dating the same woman for more than a year. Her income is a little more than mine but we have never really talked about our respective finances seriously. She lives in a nice house, perhaps slightly nicer than mine and with a higher Zillow value. However, based on some experiences, while I don’t get the sense she’s foolish with her money in any way, I do not think she has significant savings beyond a reasonable 401(k). On the other hand, I am pretty close to retiring right now.
I am wondering when I should tell her about this. We have had some tentative conversations about getting married in the next few years and moving in together, probably into her home. Do I wait until we’re married? Do I consider a prenup? I really don’t know what to do here.
– Caleb
A prenuptial agreement makes sense in situations where either partner is bringing significant assets into the marriage and want assets to be distributed non-equally (because they brought in different asset amounts) if a separation or divorce occurs. The question you have to ask yourself is this: If you married her and then divorced her, how exactly would you feel walking away with a roughly equal split of your combined assets? If that deeply bothers you, then you should strongly consider a prenup. Most of the time, when people get married, their assets are roughly similar to begin with, so a prenup doesn’t make a ton of sense, and other couples don’t mind walking away with an equal split in that situation.
At some point before you would be married, you should talk about the financial facts of your respective lives, but I don’t think it should probably occur before there’s a strong mutual commitment to marriage. Without that kind of deep life commitment, I don’t think it’s the other person’s business, honestly. They don’t need to know.
So, if I were you, I’d keep my finances to myself for now and let the relationship play out a little more. If you find yourself engaged to be married, then you should start having serious money conversations and put your cards on the table. If you then feel a prenup is in order, have that conversation then.
Q5: Escaping poverty
Want your thoughts on this article:
Escaping Poverty Requires Almost 20 Years With Nearly Nothing Going Wrong
– Cherie
This article almost entirely agrees with my life experience involving poverty. I grew up in an area where many of the people I knew and my parents knew did not have much wealth at all, and digging out of that situation was very difficult. Most people just accepted it and did the best they could do with what they had without any real hope of building any wealth without a huge amount of luck.
The exception to this is children. Most of the families I knew that escaped a cycle of poverty did so via their children, where the parents committed to going the extra mile to ensure that their children had a real chance at a better life. They did everything humanly possible to get the best job they could possibly get, then continued to live lean lives to ensure that their children had opportunity.
My parents did that for me. There were many periods in my childhood where our sole income came from my father’s side gigs, yet they always ensured that I had educational materials that I needed. I never wanted for a book or supplies for school, ever. That was beyond question. My parents made some serious sacrifices and commitments to making sure that I would have opportunities that they never had, and I appreciate that every single day of my life. If they had not done that, I would likely be working in a factory for little more than minimum wage at this point.
If you have very little income, it takes incredible willpower over a long period of time and a healthy amount of luck to start climbing out of it. Most people I know of in low-income situations basically accept that they themselves will never really escape it and either find what joy they can in that acceptance or channel all of their energy into helping their children escape it – and even that requires some good fortune and hard choices and willpower. That’s just the reality of things.
Q6: Retirement savings when loving career
I am an “x-ray” technician (haha, don’t actually use x-rays very often these days) and have been doing so for the past 17 years. I really like my job. I interact with people all day and get to comfort people sometimes. I like working with the machines and know how to repair some minor problems. I feel like I’m constantly doing different things, too – different imaging has to be set up completely differently.
I actually dread the thought of retirement and want to keep doing this until they kick me out the door!
I have been saving for retirement but I am considering cutting back my savings. I am ahead of the pace that CNBC shows and I don’t want to retire until I have to.
Why should a person save extra for retirement when they don’t want to retire?
– Jana
I’m assuming that, when you refer to the “CNBC pace,” you’re talking about the guidance in this article.
If you like your job, then you should keep working at it until you either don’t like it any more or they push you out the door. You should think of your retirement mostly as a safety net so that you’re not in a difficult situation when you do get pushed out or if you do grow tired of that job. Staying ahead of that retirement pace just ensures that you can keep having the life you currently have if you walk out the door starting at around age 60 or so. It’s a nice safety net to have.
Some people fret about having money left over when they die. I don’t consider that a worry – just set up a will that gives your estate to something you care about. That way, even if you do die early, that money goes toward making someone else’s life better and, at that point, you don’t need it anyway.
Q7: Reusing water bottles?
Is there a problem with just reusing plastic water bottles? Like if I buy a bottle of Aquafina at the gas station or something and just reusing it a few dozen times?
– Jim
Most beverage bottles you buy from the gas station are made from “plastic #1,” a shorthand name for polyethylene terephthalate. While such bottles are fine for one-time use, repeated use causes them to start leaching DEHP (diethylhexyl phthalate), which has a number of known negative health outcomes. DEHP seems to start leaching into the water through micro-scratches in the plastic surface, which start building up through repeated use.
Finding the “safest” water bottle, though, is a rather difficult endeavor. There seems to be general consensus that reusable water bottles made of stainless steel and glass are safe, and stainless steel in general isn’t going to break, so many people point to using a Klean Kanteen. If you decide to use a plastic bottle, it should definitely be BPA-free and shouldn’t be made of plastic #1.
For me personally, I probably wouldn’t reuse an Aquafina bottle unless I were in a pinch. Instead, I have a few reusable water bottles, including one I keep in the car and another I keep with my camping supplies, and I just thoroughly rinse them and reuse them and then clean them regularly. It ends up being cheaper in the long run.
Q8: Pyrex question
I read recently that Pyrex is junk because they changed their glass formula. Do you still think Pyrex bowls are good buys for kitchen use?
– Alex
The whole “Pyrex changed their formula and is now junk” idea came from a change in Pyrex formulation about 15 years ago, in which Pyrex changed their glass slightly so that it was less resistant to rapid temperature changes (aka thermal shock) and more resistant to being dropped. This became big news when Popular Science reported on the change and discussed how illegal drug manufacturers had to switch to lab-grade glass equipment instead of just buying Pyrex at their local department store.
In a typical home kitchen, you’re not going to thermally shock Pyrex enough to cause it to shatter unless you’re trying to do so. You’re not going to sit a Pyrex bowl on top of an open flame or something like that, thus the change in temperature resistance isn’t going to be noticed at home. What you will notice, though, is that you’re less likely to have Pyrex shatter if you drop it compared to Pyrex from 20 years ago.
So, I actually view today’s Pyrex as safer and longer-lasting in a typical home kitchen than old Pyrex. That’s because it seems to me to be way more common to drop Pyrex than it is for a person in a home kitchen to apply enough thermal stress to Pyrex to cause it to shatter.
Q9: Uses for cheap cabbage?
My local store tends to have sales on cabbage for as little as like $0.10 a pound. Looked online for recipes and none of them sound appealing. What can you do with cabbage?
– Jerry
I use cabbage to make homemade sauerkraut. The only catch is that you need a large container in which to do it, like a gallon jar or something, as well as a couple of food-safe weights. This Old Farmer’s Almanac article explains the basics.
I like cabbage slaw made with it, which is basically just a salad made of finely shredded cabbage and a dressing. I like to stir fry cabbage. My wife likes eating cabbage cooked with corned beef in one pot.
I think there’s usually something interesting you can do with almost any vegetable, and cabbage is no different. Just surround it with flavors you like. I like things that mix savory and tart, so it’s unsurprising that I love sauerkraut.
Q10: Airbnb and spare bedroom
We have been thinking of renting out our spare bedroom on Airbnb. How do you protect yourself and make sure you’re not renting to a criminal or a thief?
– Dan
For starters, you can choose to not rent to guests who haven’t been reviewed or that have any negative reviews. That will generally keep undesirables at bay.
However, the odds are that you will eventually have a bad experience with a guest. From what I’ve read, about 1% of guests provide some kind of problem, most of them relatively minor, but on occasion requiring a police call.
However, you’re going to make good money from those who are not questionable in their morals, and that’s honestly most of the people who will rent from you. If we had a spare bedroom, I’d do it, but I would consider it a cost of doing business.
Q11: Stop measuring myself by others?
I am constantly measuring myself by what others are doing. I do it unconsciously all the time and I know it’s not helpful for building anything good for myself but I keep doing it. Whenever I step back and see the pattern I get frustrated but then I find myself doing it again. How do I stop doing this?
– Mark
My number one suggestion for you is to start finding ways to directly measure yourself and put those measurements as front and center in your life as you possibly can so you focus on them as a comparison point. In other words, turn that need you have to always compare yourself to something else into something that’s actually useful.
Let’s say you’re trying to get ahead financially. Figure out your net worth, and then put that net worth front and center everywhere. “My net worth on May 1 is $48,000. Can I do better?” Write that on a note and glue it to your credit card. Put it on your lock screen on your phone. Put it in so many places that you see it all the time and it burrows into your head.
Then, on June 1, sit down and calculate your net worth. Are you ahead of where you were a month ago? Right then and there, you have a comparison where you’re ahead of the person you’re comparing yourself to, and that’s going to build confidence.
A final tip: remember that you are always seeing only one part of the story when you compare yourself to someone else. They may be succeeding in one area of life, but they might be utterly failing in a few others, ones that you don’t see. Don’t view someone as a complete success because they succeed in one area because you don’t know what they’ve sacrificed for success in that one area.
Q12: Big savings making life miserable
I started working here at age 22 and decided I wanted to retire as early as possible so I started saving about 40% of my income in my 401(k) plan which was fine for a long time but now I am 34 and I am miserable. I resent all the money in there and how I feel like I wasted my 20s sitting at home and now everyone around me is marrying and having kids and I am single and have nothing to show for my 20s.
– Caleb
First of all, saving 40% for retirement doesn’t mean you have to sit at home. There are tons of things you can do outside of your home that cost virtually nothing at all other than the cost to get there. For starters, just go to Meetup and see what’s going on in your area. If you’re sitting at home, that’s by choice, not because of your savings rate.
For another, if you’ve been saving 40% of your income since age 22 and you’re now 34, you should have several years of salary in your 401(k) at this point and it should be growing like a runaway train (unless you made some extremely unproductive investment choices). You’re not that far from being able to just walk away from your job. You can probably pull it off somewhere around age 40 or so, at which point you can do whatever you want with your time. Even if you decide to entirely stop saving for retirement, you can probably walk away before age 50.
I’m just not sure what you feel like you’re missing. You mention that people around you are getting married and having kids and you seem to still be single. If that’s bothering you, focus on dating. If you feel like you can’t afford to do it, cut back on your savings rate for a while. Right now, you are way ahead of 99.9% of people your age in terms of retirement savings and you’re almost a mortal lock to retire early. Don’t feel bad about cutting back a little right now and doing things that are important to you in other areas of your life.
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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