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. Early or late retirement contributions?
2. Purchases for infrequent use
3. Used car seats?
4. Excessive leftovers
5. Friends want me to spend
6. Value of “one bag” living
7. Buying a house on $35K
8. How to avoid drive-thrus
9. Medical insurance difficulties
10. Budget brands?
11. Starting career advice
12. Thoughts on taekwondo
One of the most enjoyable parts of writing this mailbag column is the wide variety of comments and questions I get from readers. I usually try to keep the stuff I choose for the mailbag at least somewhat within the realm of personal finance, maybe slipping in one or two questions or comments a week that aren’t related to the topic, but I get quite a lot of great stuff from readers that covers completely different topics that I just can’t reasonably fit into the mailbag.
For example, just in the last week or two, I’ve received the following notes from readers:
– A reader wrote in to talk about the joys of playing Magic: the Gathering with her son and how they were building Commander decks together.
– A reader wrote in to encourage me to pick up some of the writings of the philosopher Byung-Chul Han, particularly his essays Psychopolitics and The Scent of Time (which I’m currently reading).
– A reader has been trying to get me to debate him concerning a number of hot button political issues.
– A reader has been writing to me consistently for weeks asking for step-by-step help in getting a batch of homemade kombucha to work.
– A reader invited me to his dynasty fantasy football league.
That’s just over the last several days. Honestly, I love this kind of thing, because it represents human connection. There’s a sharing of ideas and interests and a sharing of concern behind all of it that goes way past merely writing about financial issues, and it means a lot to me, even if it’s not fodder for the mailbag.
Speaking of the mailbag, here are this week’s questions.
Q1: Early or late retirement contributions?
Is it better to contribute to a Roth IRA early in the year or as late as possible? I have money set aside for my 2019 Roth contribution but I don’t know if I should do it now or wait.
– Brian
Unless there’s some specific reason that’s unique to your situation that points to waiting, you should put those savings in there as soon as possible. The longer the money is invested, the more time you have for compound interest to work in your favor.
Having said that, investment markets are unpredictable. There’s always a chance that right after you put your money in, the markets dip. Remember that this could happen no matter when you put your money in there. You could put your money in now and immediately see a dip, or you could wait until next February to put it in and immediately see a dip.
The difference is that, on average, it’s much more likely that the investment you’re putting your money into will go up in value over that period. If you wait, it’s very likely that you’re going to miss out on growth.
Put your retirement money away in retirement accounts as soon as you can. Don’t sit around holding them, because you’re usually doing nothing more than missing out on growth if you do that.
Q2: Purchases for infrequent use
I’m considering purchasing a pair of bowling shoes. I only bowl once or twice a year, but it seems like it’s a wise investment since I could get a pair of perfectly good bowling shoes for around $25 instead of paying $3 or so each time to rent them. How do you view rarely used purchases like this that, while adding to the “stuff” you own, will eventually pay for themselves?
– Adam
My philosophy on purchases like these is similar to yours. I try to look at the total cost of ownership of the item over an extended but still reasonable period of time, like five years, and I figure out which is going to cost less. I also consider how frequently I’ll actually use the item, and it basically has to be annually at the very least and preferably much more frequent than that. That type of thinking requires full honesty to be valuable.
So, in your situation, is it cheaper to rent shoes for $3 a pop twice a year for five years or buy a pair of shoes for $25 once? Well, the cost for rental over that period is $30, so I’d probably swing toward buying a pair, assuming that I’m bowling twice a year. If you assume that it’s actually going to be much less than twice a year, you’re going to be better off renting.
I usually use a five year measure for calculations like this, because I figure it’s pretty hard to predict accurately what my life will be like beyond that time threshold and it’s also probably a reasonable guess as to the wear and tear that an item can take. Usually, with a five year calculation, it’s obvious whether it’s a good move or not.
Again, in this situation, those bowling shoes aren’t going to be worn out after ten wears, so it’s likely you will be able to continue wearing them at that point or they’ll have some minor secondhand value. This pushes the pendulum even more toward buying them.
Q3: Used car seats?
I am expecting in November. My husband and I are starting to pick up baby items from FB Marketplace and Craigslist. Whenever a carseat is listed on Marketplace someone always comments that you shouldn’t buy used carseats because they’re not safe. How are used carseats not safe?
– Amy
A carseat is one of the few baby options I wouldn’t buy used. The reason is simple: a big part of what’s protecting that baby when they’re in the carseat is plastic, and you don’t know how that plastic has been treated. There’s some chance that the plastic has become brittle and could easily crack or break in a severe impact, just when you need it the most.
This can happen, for example, if a carseat has been left in the sun too much over the course of years. It’s not an issue of negligence – it’s an issue of you not knowing the history of that carseat. It may have had years of sunlight exposure, rendering the protection that it offers your child much weaker.
Most baby items are fine to buy used – clothes and baby monitors and things like that. Those aren’t things that will cause calamity if they fail and it’s usually obvious if they’re doing their job or not.
A car seat, though, is something you should invest in. 99.9% of the time, it won’t matter, but 0.1% of the time, it matters more than anything else and you’ll never, ever want to skimp on that situation.
Q4: Excessive leftovers
On any given night we will have 2-7 people at our house for dinner. By default we cook for 7 but that means that many nights we have a ton of leftovers. We eat leftovers for lunch every day but they still get tossed a lot. We can’t give them to the food pantry either. Ideas?
– Andy
My first suggestion would be to simply have a “leftover buffet” night for dinner twice a week or so. On, say, Wednesdays and Saturdays, just pull out all leftovers, put them on the table, and let people assemble their own plates of leftovers and heat them up (or heat up the hot items before putting them on the buffet). That way, the leftovers get consumed directly and you have a “free” dinner.
Another suggestion is to frequently make meals and side dishes that are easy to “remix” into another meal if you have a low turnout. For example, if you make a bunch of spaghetti, you can save it for two nights and then mix in a few additional spices, put it in a greased 9″ by 13″ pan, put a couple cups of mozzarella and provolone shredded cheese on top, and bake it for 30-45 minutes, covered for the first half, to make a nice spaghetti bake. We also often have plain vegetables as a side dish and save the leftovers to make quick soups later on, for example.
A final suggestion is that on nights where you have a low turnout, simply prep leftover plates for the next night and have the same thing for dinner again, or prepare a different dinner the next night for just the two who ate the night before.
I don’t think you need to feel obligated to have a fresh meal on the table for whoever happens to show up each night.
Q5: Friends want me to spend
I’m 23 and got a nice job out of college paying $45K per year. Several of my friends from college are in the same area and have jobs as well so it’s fun to hang out with them, but it feels like they want to blow their income as fast as possible. They go out drinking and to clubs constantly, upgrade their phones all the time, ride around in Ubers when they have cars, and throw money at stupid stuff. I want to get rid of my student loan debt and start saving for a house and I’m already contributing to retirement so I can get out of this as young as possible. It’s not like I’m avoiding fun but there’s a ton of stuff to do that doesn’t cost $50 or $100 for an evening. When I suggest anything else other than clubs or an expensive restaurant, I get ignored. Do you have any suggestions?
– Amy
Find new friends? I mean, that sounds fairly cold, but it sounds like your values are diverging from the values that your friends hold, or perhaps they were always divergent and the income just exposed it.
While I don’t mind being acquaintances with people with drastically different lifestyles than my own, I have found it’s far more pleasant and easier to have close friends who have similar values and lifestyles to my own. That way, I’m not pushed to overspend constantly just to spend time with my friends. I have been in situations where it felt like I had to pay some kind of admission fee (in the form of going out when I didn’t want to) just to hang out with a friend and if I wasn’t willing to do that, that person wouldn’t hang out with me. That just isn’t worth it.
I’d suggest digging into activities that you feel internally interested in doing. Find groups in your community that match up well with that by using things like Meetup and there you’ll find people who are also interested in what you happen to be internally interested in. Get involved in those groups. You’ll find it’s not too hard to build friendships that way.
Q6: Value of “one bag” living
I found your post on “one bag” living to be interesting but not practical. It’s not like more than maybe 0.001% of your readers will actually ever do it. What is the practical value of such an article?
– Ollie
The practical value of it is that it really shows you how few items you actually need to have a happy and comfortable life, and when you realize that, you begin to realize how much extra unnecessary stuff you have and how much that stuff is costing you, both in terms of the stuff itself and the space you’re paying for to store all of that stuff.
Let’s say, for example, that you decided to try it for a month. You packed a big duffel bag full of stuff and aimed to live solely out of that bag for that month. During the month, almost everything you use comes out of that bag – other than maybe a few kitchen items, you really don’t use anything else in your home.
At the end of the month, you’re left asking yourself what the point of all of that other stuff is. Why have any of it if you’re able to have a great life without touching it? Why have shelves full of books and DVDs you never touch? Why have a television if you have a good life not watching it? This is likely to lead you to start downsizing your possessions, recouping some money along the way, and it’s also likely to lead you to question almost all of your physical purchases.
If you keep going in that direction, you’ll find that you likely have excessive living space and can easily be satisfied with a smaller home or apartment, and if you downsize that, then you’re on the way to some serious financial improvement in your life, as you’re losing far less money to utilities, insurance, property taxes, and so on.
Q7: Buying a house on $35K
I am a single woman with a four year old child from a previous marriage; the father is not involved and avoids paying child support. We live in a small apartment in [a large city with a moderate cost of living]. I make $35K per year. My mom lives about five miles away and takes care of my son when I’m working and he’s not in preschool as she has a pension that’s enough for her to live on because my father died in the workplace. I would like to be able to afford a small house for us and get out of this apartment building before he’s too old because there’s kind of a rough culture of teenage boys here. I would like to be in a house in four years. I have no debts and am saving about $200 a month for emergencies.
– Carrie
First of all, I’d contact a lawyer and do what you can to get child support. The cost of supporting your child should not be borne solely by you and he’s legally obligated to provide financial help here even if he’s uninvolved.
Second of all, $200 a month in savings that’s also used as an emergency fund isn’t adequate to get to where you want to go in four years. I looked into your area and a small starter home is going to run you in the $300K range now and will probably be closer to $350K by the time you want to buy. 20% of $350K is $70K. If you’re saving $200 a month, you’ll get to about $10K in four years if there are no emergencies. To get to $70K in four years, you need to be saving around $1,500 a month and have no emergencies that tap that money. Considering that you’re making about $3,000 a month before taxes, that’s an extremely difficult proposition.
Thus, to make it to your target, you’re going to have to do some radical things. The first thing I would do is sit down with your mother and discuss the option of cohabitation for a few years, with you splitting up the housing costs. If she could move into your apartment or you two could move into her dwelling and it’s a tenable situation for a few years, you’ll both save a mint. If you’re paying $1,000 a month in rent and it suddenly drops to $500 a month, there’s $500 a month toward savings, and probably more than that because you’ll have lower utility bills and you can more easily share food costs.
You may find that after you buy that starter home, it may make sense to have your mother continue to live with you to keep costs manageable going forward, at least for a while.
If you can swing something like that, use a lot of smart frugal tactics like sticking with store brand items when shopping, get on that child support issue, and keep working at your career to move toward a better salary, you can make this work. Without those kinds of big changes, this probably isn’t a realistic goal.
Q8: How to avoid drive-thrus
How do you stop relying on the convenience of drive-thrus? I understand that it’s way cheaper to make meals at home but when I can just go to a drive-thru and get a quick meal and have it eaten before I even get home or eat it right when I walk in the door and there’s no cleanup because I just toss the wrappers, it’s hard to convince myself to make a big mess making a meal at home.
– Leon
There are a few good strategies for solving this problem that work well for different people. I suggest trying one for at least 30 days, see if it clicks with you or merely causes frustration, and either stick with it if it works or move on to another if it doesn’t.
First, try simply packing a meal for yourself at home before you leave in a small cooler. Make something simple that you like – a sandwich and some baby carrots and a drink or whatever. Pack the individual items in reusable containers and put them in something insulated with an ice pack to keep it cool. Take that meal with you when you go out and save it at your desk or in a work fridge until you’re ready to leave, then eat that on the way home. You can do the meal prep the night before while watching a television show and if you use reusable containers, cleanup is really just a matter of popping stuff in the dishwasher and wiping off the table (which you’d need to do anyway). If you want, you can designate Fridays as “eat out” days and keep it as a treat for yourself for getting through the week.
Another thing I strongly suggest is to simply get better at cooking at home. Cooking seems very difficult at first and even easy things like scrambled eggs feel like a giant mess and a big time and energy investment, but once you get more practiced, it stops feeling so challenging. Start by making really simple meals that you like – grilled cheese sandwiches or scrambled eggs or spaghetti.
Another strategy is to cook things in advance, make individual meals out of them in reusable containers, and keep them in the fridge. For example, you could make a huge batch of spaghetti one night and pack three or four individual meals of spaghetti with a breadstick in resealable containers in the fridge. Then, you can take them to work with you and you’ll also know that one is just waiting for you when you get home.
Yet another strategy is to use a slow cooker. Start a simple “dump meal” before you leave (a “dump meal” means you just dump several ingredients in there and turn it on low) and you’ll have a hot home-cooked meal waiting for you when you get home. Slow cookers are great for stews, chili, soups, and simple casseroles; it can also make a mean pot roast.
The goal of all of these things is to either put something in your hands directly so that you’re not tempted to stop or have something at home waiting for you so you’re not tempted to stop.
Q9: Medical insurance difficulties
I am covered by [a major medical insurer] through my workplace. A few months ago, I had a procedure done that my doctor’s office informed me would be fully covered by my insurance. They filed this with the insurance and the insurance company came back saying that the procedure wasn’t medically necessary and wouldn’t cover it, so my doctor is now billing me for it at the tune of $30K. I don’t even know where to start. Should I contact a lawyer?
– Petra
Without seeing the bills and documentation, I can’t give you full advice on what to do. However, my first step would be to document every single detail that you can recall about this entire process, including dates and what you were told by both your doctor’s office and insurance. If you have any supporting documents, such as receipts and printed information about the procedure or about the costs, that’s all valuable here.
Then, I would go through the process of appealing this claim with your insurer, providing a copy of all of that documentation. An appeal should definitely be your first action.
If you find that your appeal is denied, you should then discuss the matter with your doctor and attempt to get their bill reduced.
If you’re still finding that you’re paying an excessive amount, then I would take all of this documentation to a lawyer and get legal help. It very much sounds like you were given inaccurate guidance from a doctor’s office and a lawyer can usually help here.
Q10: Budget brands?
Are there any “budget” brands you trust for making high quality stuff? Meaning brands that are cheap in price but the quality of their stuff is good?
– Darren
The store brands at most department stores and grocery store chains fit that bill. For the vast majority of product types, the store brand is as good as most of the name brand options. They might not beat some of the really high end premium versions of those products, but the store brand is usually as good as 80% of similar items on the shelf.
For things like charging cables and basic electronics like computer mice or keyboards, I’ve found that Amazon’s “generic” brand, Amazon Basics, is really good for the price.
For many different kinds of smaller electronic items, like external batteries for charging devices on the go or headphones or things of that nature, I strongly trust Anker. If there’s an Anker option for a small electronic device, you’re probably getting great bang for the buck with it.
Those are the ones that immediately come to mind as brands that I strongly trust that consistently provide good bang for the buck across a wide variety of products.
Q11: Starting career advice
My oldest son is about to graduate from college with a degree in electrical engineering. I am collecting career advice from some people I respect to pass along to him. What advice would you give to a fresh college graduate in a technical field today?
– Robert
First of all, treat the first decade of your career as an opportunity to build skills and relationships above chasing salary. A killer resume ten years from now will be worth a lot more than earning an extra $5K or $10K right out of the gate. If one job pays a little more but feels like a dead end, while the other job pays a little less but feels like it’s overflowing with opportunities and ways to build relationships, take the latter job in the first decade of your career.
Second, if your workplace offers a 401(k) plan, take advantage of it immediately and contribute as much as you can stand. You will never regret this. Just do this and then start off with smaller take-home checks – they’ll still be a lot more than what you had in college. Pay yourself first.
Third, no matter how tough a situation is, don’t burn bridges, even if it would feel good. If you’re moving on from a position, do it as gently as possible and be as positive and flexible as you can on your way out.
Finally, eat healthy, get some exercise, get plenty of sleep, and don’t work too many hours. If you don’t do those things, you’ll be far less productive during your work time, the quality of work you produce will be lower, and you’ll have a harder time picking up new skills. If your workplace is obsessed with 80 hour workweeks, carve out as much of that 80 hours toward self care and rest that you can reasonably get away with.
Q12: Thoughts on taekwondo
I was wondering if you could share your thoughts on taekwondo from the perspective of both a parent of a student and as a participant with an eye toward cost. Is it worth it? Do your kids get value out of it? How about yourself?
– Brenda
I attend a local taekwondo school with the rest of my family. It was an activity that my two oldest children wanted to try and the family plan isn’t much more expensive than just the two of them participating, so when our family schedule lined up and our youngest was old enough, we all joined. In effect, our third family member was half price and the rest of us are effectively going for free, and the price has actually gone down as some family members have reached black belt rank (and those who haven’t are at a belt rank approaching black).
First of all, if you’re new to martial arts of any kind, it’s something you should shop around for. Any city of any size likely has a few martial arts schools; a larger city likely has some dedicated taekwondo schools with branches in various locations. Different schools offer different prices and different philosophies.
Taekwondo is a martial art that’s focused on fast, high kicking. That means that it really works hard on agility and balance. There’s also an emphasis on forms, which are sequences of kicks and other movements that are memorized and done from memory, which challenges a person’s memory while physically exerting themselves.
Our family’s interest in martial arts lies much more in the realm of “self improvement, character building, self defense, and fitness” rather than “training to fight.” There are definitely martial arts schools that are very focused on simply training to fight, preparing people for things like mixed martial arts. There’s nothing wrong with that, but it’s not what Sarah or I were looking for in a school. We wanted a school where the merit wasn’t in whether you defeat someone in a fight, but whether you’re working hard and genuinely improving yourself so that you’re better at the techniques, better in all around fitness, and better in character than you were the day before. Again, I have nothing against a school focused on fight-focused training, but it’s just not what I’m looking for or what I would direct my children toward until they’re old enough to make those kinds of choices for themselves. Perhaps someday they’ll take what they’ve learned and move in that direction, and I’m fine with that.
When my oldest son and daughter began expressing a genuine interest in taekwondo, we shopped around for local schools that offered dedicated youth programs and were focused on a self-improvement type of martial art philosophy, and we found one that we liked that had classes near us, and over time, we all joined up.
I think it has genuinely helped our children improve their ability to focus, their ability to overcome challenges, their character, and most definitely their ability to defend themselves and get out of a threatening situation. As a parent, I’m thrilled with the impact taekwondo has had on them.
As for myself, I joined because I agree in a deep philosophical way with the goals and direction of the school, as well as the fact that I was looking for a fitness program for myself and an opportunity to mutually encourage my family to be more fit. This hits all of those marks and with family rates, it’s pretty inexpensive. If you divide our session fees by five, there’s absolutely no way any of us could be in a sport or a fitness program at these rates.
If someone is interested in taekwondo or martial arts in general, I’d start by figuring out why you want to do it. What are you hoping to get out of it, or what do you want your child to get out of it? Self-discipline? Fitness? Self-defense? Character? What are the one or two things you want most for yourself or for your child that you hope martial arts can provide? Start from there and shop around at a lot of schools in your area. They’ll all have different philosophies and centers of focus – some of them will line up well with your own goals and philosophies, while others will go in a different direction (not wrong or bad, just different). Find some that match what you want, price compare them, and give one a try for a session and see if it’s right for you.
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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