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. Is it time to retire?
2. Money for parties at work
3. Boyfriend kicked me out
4. Great job offer… but scared
5. Dental plans for self-employed
6. Laundry drying strategy
7. Cheap children’s birthday parties
8. Finding people dedicated to saving
9. Starting a free blog
10. Exit interview questions
11. Ending credit card dependence
12. Different writers
My latest frugal experiment is to try to figure out a low-cost balm to use after shaving. For many years, I have applied a small amount of Nivea after-shave balm to my cheeks. A single bottle lasts for a long time, so I don’t think it’s a big expense, but I was curious as to whether I could make something myself for less expense.
Turns out… I can’t. I have tried a few different recipes and mixes and I haven’t found anything that doesn’t either sting like crazy or smell like alcohol.
Although I like to experiment with frugal solutions, sometimes I just can’t find anything that really works better than what I was already doing.
On with the questions.
I’m 58 and can retire in 2 years. My husband is 59 and can leave now with full retirement (he has to retire in 2.5 years). We have about $800,000 in deferred comp savings plans and will both have pensions when we retire. We have no debt but anticipate replacing 20+ year old vehicles soon and might buy/build a home that fits our needs as we age and use current home as a rental to cover the new home’s mortgage. We’re both in decent health now but anticipate health issues in the next 10 years with high health costs due to family histories. How do we know when it’s okay to retire? We’ve lived well below our income and thought we’d feel confident about retirement. And while we’re far ahead of the norm for retirement savings, we don’t really know if now is the time. What do we need to know/have in place before we walk away from high stress jobs that pay really well.
If I were you, I would take advantage of your health insurance and go to each of your doctors and request a very thorough physical, as much as you can get, to assess your current health and the likelihood of major health problems in the next decade or so.
Then, I’d use that assessment to figure out the next step. If you’re very healthy, then I would consider making the leap to be much more safe.
The thing to remember is that you will have Medicare when you retire, and you can buy Medicare supplemental insurance. Your key should be to avoid periods of minimal insurance unless you are strongly assured of your health.
How do (or I guess did) you handle money for parties at work? Like when someone is having a baby and they throw a little baby shower for her at work and ask everyone to contribute $20 for a big gift like last week at work when everyone chipped in for a breast pump machine? Or when they have a retirement party and want everyone to chip in? Or when someone has their kid do a fund raiser? Do you just say no all the time? What about the social backlash? Worth it?
I viewed such expenses as the cost of being in an office environment, unfortunately. There are a ton of little expenses like this that come from working in an office – the cost of commuting, (often) the cost of parking, the cost of eating out for lunch with coworkers, the cost of matching office dress code, and so on. I consider little expenses like these to be part of that.
If I were you, I’d budget and plan for such expenses, viewing them as part of professional networking. In the end, that’s really what you’re doing – you’re maintaining relationships at work at a cheap cost, so that Jim from human resources or Nancy from accounting doesn’t think you are a jerk and will work easily with you in the future and won’t spread negative gossip about you.
This is one financial perk of working at home – you don’t have to deal with any of those costs any more.
I am 26/F and work as a waitress. My boyfriend and I had a big fight before work last week and he said we were through and I thought he was just blowing off steam but I came home and the locks were changed. I got the police and landlord to let me in to gather up my personal belongings but he still have a lot of stuff that is shared and I am living out of my car. I do not make enough to afford an apartment and I have no living relatives to stay with and no friends good enough that I could move in. What do I do?
Unless you have some clear documentation of what is yours and can demonstrate that ownership, it’s probably a lost cause to reclaim it at this point. You can make a list of shared items and request that he turn over enough to equal out the value, but if he won’t, your only recourse is to get a judge’s order, which will likely have legal costs especially if you don’t have clear documentation.
As for what to do next, you should consider looking for waitressing work in a lower cost of living area, perhaps one that’s closer to friends where you could “couch surf” for a while as you pick things up and figure out what’s next. This might involve moving to another city, but it sounds like you have no ties where you’re at, so it’s not a big deal.
If I were in your shoes, I’d try to get a few shared items from your ex, sell off what you can’t easily fit in your car, then head to another town where you know people and the cost of living is more palatable.
I am 26 years old and live in a house that I rent cheaply from my parents. I started working at my current job shortly after graduation and make about $38K per year. I took it because the experience is tremendous in my field.
My boss has been actively helping me find a better job (yes he’s that kind of guy) and he got me an interview with [a large engineering firm]. I figured I had zero chance but they gave me a job offer. $80K starting, killer benefits, great opportunity to move up from there. My boss says I should negotiate a bit for salary and then take it.
The thing is, i don’t want to take it. I do not know anyone in that city or anywhere close to there. The job seems exciting but really intimidating. I have no family or social structure there. I am afraid my life would become nothing but work and I will burn out and hate my life.
I feel like I want you to talk me into taking this job but I don’t know what to do.
OK, ignoring all of the factors outside of the job (not knowing anyone in the city, basically), is this a job you’d be happy with? In other words, if you could magically do this job where you live now, would you take that job?
If it’s a “yes,” then you need to at least give this job a shot. Go there, give it a year, and see how everything works out. If you’re really worried about it failing, talk to your current boss and see whether you can work out a situation where you come back to something like your old job if it doesn’t work out.
When you take this job, go in there with a plan. First of all, take maximum financial advantage of it – contribute to the retirement plan, get every drop of matching, etc. Live in a small apartment. More importantly, make it your goal to find people that you’ll enjoy hanging out with that will become a social circle or “family” for you. Start by hitting Meetup.com and seeing if you can find any groups in that city that might match your interest. Try to make a big healthy list, then check them all out shortly after getting there. Keep going to the ones that click (or seem like they might click) and don’t sweat the others. If you’re religious, definitely join an appropriate group for that.
Do everything you can to start building an independent social circle and life for yourself in this new city. Make it a daily – or at least several times a week – requirement that you’re building a new life for yourself in this city. Put everything you can into not feeling alone and feeling like there’s more to life than just going to work in this city.
If, after a year, it doesn’t work out, well, take advantage of that parachute and return home.
If you don’t do this, you will always wonder “what if,” and that kind of regret isn’t something you need to have for the rest of your life.
We are self-employed. Do you have any suggestions for what to do for when we need to take a trip to the dentist? Are dental plans a good idea?
I’m going to be honest: most dental plans are very limited on what they cover and how much of it that they cover to be worthwhile for most people if they’re paying out of pocket. They usually only step in for disastrous coverage unless you have a very expensive plan.
If I were you, I would “self insure” for dental work. I’d settle into an annual checkup routine paid out of pocket, and then I’d triple that annual cost for both of you and divide it by 12. I would automatically put aside that much for “dental insurance” so that you can pay for dental care out of pocket. Just keep up with routine maintenance on your teeth (brushing, flossing, annual checkups) and you’ll usually be fine. On average, this is far more cost efficient than a dental insurance package out of pocket.
Ava had a second question.
Also, I like hanging laundry out to dry if weather permits. Do you know if line-drying laundry instead of using the dryer is significantly cheaper?
The energy cost of a dryer load is somewhere around $0.60, although it varies with the age of the dryer and the size of the load and the efficiency of the dryer.
Having said that, there are a couple of additional factors to consider.
One, tumble dryers are hard on clothes and are likely to damage them far more than line drying. In other words, if you line dry, your clothes will last longer. That lint trap in the dryer is little bits of your clothing, after all.
Two, dryers eventually fail and then you have to pay for a replacement. Let’s say you can get 10 years of daily use out of a $500 dryer. The replacement cost of that dryer is somewhere around $0.15 per load in additional cost. That cost disappears with line drying.
Given those factors, you’re likely saving a dollar or two for every load you hang out on the line, or more if you’re hanging out some fairly pricy garments.
What are some good ideas for cheap birthday parties for kids? I have a four year old and a two year old and soon birthdays are going to be more than just having grandma over for cupcakes and a couple of presents. Our oldest has already received a couple of invites for parties at the park and she will want something similar when she turns five. How can one keep this cheap but let her have fun with her friends?
One word: sleepover.
Most of our children’s birthday parties have been in the form of sleepovers with a few of their friends. They’ll have several friends come over to spend the night and we basically have a fun dinner of their choosing (often it’s homemade pizza) and then we let them plan out what else that they want to do (a few simple activities or else just free play). We fill up the family area in the basement with sleeping bags and let them watch movies or play video games until late in the night. It’s a super inexpensive party but our children love it.
If we do something more extravagant than that, it is considered one of their birthday gifts and they receive noticeably fewer gifts. We generally only give a few gifts for their birthday anyway, as we tend to lean toward a small number of “good” gifts than a lot of lesser ones, and if they do something besides a normal sleepover, it’s considered at least one of their gifts. Occasionally our children will choose a more expensive activity, but usually they prefer a sleepover.
Sleepovers are fantastic. If you do something like homemade pizza and a simple activity or two, the cost is pretty minimal and the children all seem to have fun. We recently had a sleepover for our youngest child’s birthday in which we just had pizza for supper, a couple of really simple activities, and then let the children just play together and stay up late, and every single child had so much fun that they literally didn’t want to go home the next morning. It’s inexpensive and every single child seems to enjoy it. So, that’s my recommendation for cheap children’s birthday parties.
How do you find other people who earn a high income and are dedicated to saving a large portion of their income? I make $80K per year and save about 50% of my income. I would like to find friends on a similar career path who don’t spend all of their money.
The best success I’ve ever had at finding people with a similar financial perspective as my own is by going to free cultural events in my area, particularly ones that give windows to socializing.
Book clubs are great, especially ones run by the library so you can just check out the books. Presentations and speeches at local universities and libraries are great. Meetup groups are great. Civic organizations can be great, though they vary a lot in my experience.
Basically, if it’s a social event that doesn’t involve spending money and offers at least some direction toward self-improvement, you’re probably going to find like-minded people there. It’s never a guarantee, of course, but the people in the room are much more likely to be of a “saver” mindset than you’ll find elsewhere.
Where and how can I start a free blog?
I would recommend starting with either WordPress.com or Blogger.
WordPress is a much better tool for blogging. It’s just more robust in terms of actually writing posts and designing your blog than Blogger is, and you’ll find support to be much better, too.
So why use Blogger? WordPress.com is fairly difficult to monetize, especially when you’re starting. In other words, unless you’re fairly popular, you won’t make any income with a WordPress.com blog. (It’s worth noting that WordPress is also a software package; WordPress.com is just a site that lets you have a free blog using the WordPress software. If you later on decide to host the site yourself, then you have much more freedom when it comes to ads.)
Blogger is a solid tool (not as robust as WordPress.com) but it does have the advantage of allowing you to do all kinds of things to monetize your site. It is worth noting that you won’t make much money at first no matter what – it takes a long time to build an audience and they won’t just magically appear.
My recommendation? Use WordPress.com, don’t worry at all about making money at first and focus entirely on building an audience, and then figure out what to do when you do have a healthy number of readers.
I recently turned in my resignation at work, telling my boss I would work as long as needed up until June 15. They’re using me the full time which is fine and they’re putting me on a lot of documentation tasks which is fine. My boss keeps asking me why I quit (better job, ed by headhunter and got the new job quickly) and I know it will be asked in my exit interview. Do I have to say anything?
Your goal with an exit interview should be to leave on a positive note with references and connections to the company intact. You should not be burning bridges on your way out the door no matter what went on there.
I don’t think you need to keep it a secret that you had a great offer from another organization unless there is some hidden legal issue that you’re not mentioning. Most companies will respect that.
I would encourage you to not worry about the exit interview and to be honest but positive during it. Don’t go scorched earth negative if the interviewer asks for criticism of the company – try to state both positive and negatives about your time there. Going strongly negative doesn’t benefit you or the company.
I am 26/M married with two kids. I pay for everything by credit card and sometimes overspend what we have and that means we now have about $12K in CC debt. Need to stop overspending with the card. Using only cash makes sense but seems awkward. Using only debit card makes sense but afraid of identity theft and having my bank account cleaned out. Solution?
Cash is inconvenient, but it’s the best solution here. It forces you to stay within your means and it’s impossible to have your identity stolen with cash transactions. Just simply hit an ATM or visit a bank location before you shop for groceries or other needs.
Your goal here should be to train yourself on how to live within your means so that you’re not just racking up expenses on your credit card. For you, that means starting by being very careful about unnecessary expenses for a while until you get a firm grip on how money flows into and out of your checking account. You’re far better off letting a balance build up in that checking account than having it drain to empty every pay period.
You may eventually return to using a credit card, but for now, you should stick to cash and learn the lessons that cash can teach you.
I was disappointed reading TSD’s email this morning. The use of the term mansplaning is offensive, even though the author mentions that it’s not about mansplaning… I knows this article wasn’t written by Trent, and it’s your business to run. But I might not be the only one.
I receive an email like this about once a week, so I wanted to step in here and clarify a bit about how Money360 works.
I (Trent) started Money360 as a solo project in 2006. For the first several years, all articles on the site were written by me. By the end of 2011, the burden of running the site solo (with a couple of virtual assistants) was more than I wanted to deal with (in particular, Thanksgiving 2011 was a disaster, with a hacker attacking the site and thus directly attacking my family’s livelihood). So, I sold the site to its current owners, who retained me to write for the site for a very long period of time. I am under indefinite contract to write for Money360 with them, meaning I’ll probably keep writing until I decide not to (which, hopefully, means we’ve reached financial independence).
Now, the company that currently owns the site gives me a ton of free reign to write what I want to, as long as I write consistently. They just say, “You need to write 6 articles per week” and have a certain word count (so that I don’t write two sentence articles and call it good enough). Other than that, they give me almost no suggestion or direction in terms of what I write about aside from occasionally sending me links or suggested books to read in a “here’s something you may want to write about” or an idea for a post, but I’ve never been required to write about any of them.
However, TSD is a business, and having all of the site’s writing come from one person is a risk to that business. If I were to get hit by a truck and I were the only writer for the site, they’d be in a pickle. So, the site has a roster of other writers who post articles with some regularity. You can usually tell who wrote what because the author’s identity is identified at the top of the article (on the website) or the bottom (in the email newsletter). If it doesn’t have an identification, it’s usually written by me (Trent). The site owners simply need to have other writers ready to go in case I can no longer (or choose to no longer) write – it covers their risk.
Obviously, I’m not going to 100% perfectly agree with other writers, nor are they going to perfectly agree with me. We’re going to have different tones and different word choices and different experiences and different ideas. I write with a Midwestern earnest tone that has definitely earned me some good-natured teasing from other writers in the past. I generally write without irony or “snark” (though I definitely can use irony and “snark” if I so choose) and try to be as genuine as possible in what I write. Other writers may do things differently, both in tone and in terms of what they write about.
Rest assured, regardless of your feelings about other writers, I will be writing six articles a week for the site for the foreseeable future. I write a “reader mailbag” on Mondays and regular articles on Tuesday through Saturday, one per day. Though I know that many readers have tuned in to Money360 since it was a solo site and are mainly here for my articles, I hope that you’ll find things you like by the other writers as well.
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.