Questions About Strawberries, Compound Interest, Spotify, Carbonated Water, TSP, and More!

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. Dealing with poor credit
2. Compound interest for pre-teens
3. Cost of financial services
4. Handling inevitable market drop
5. Overwhelmed with strawberries!
6. Comparing cellular plans
7. Boullion cubes versus stock
8. Starting over
9. Is Spotify worth it?
10. Another use for old towels
11. Cheapest carbonated water at home
12. Father’s Day gift ideas

I had this great conversation with my two oldest kids about schedules and to-do lists recently.

Both of them have started keeping some form of a schedule and a to-do list in the past year to keep track of their school tasks as they grow toward high school and, eventually, college. They both have paper planners and they both write down assignments in them, with varying degrees of organization.

I showed them my own system, mostly a mix of Google Calendar (for my schedule) and Omnifocus (for my actual to-do list) and they were almost baffled by it.

After some conversation, I came to realize the biggest difference between our lists. At this point, almost everything on their lists and calendars were things that they were told to put on there – explicit directions given by a teacher or a parent. On my list and calendar, there’s almost nothing I was explicitly told to put on there aside from some broad work tasks that I actually broke down myself into smaller tasks (and those are the ones on my list).

That’s some of the difference between the life of an adult and the life of a teenager. Most of what a teenager has to do comes from direction from a parent, a coach, a teacher, or a boss. Most of what an adult has to do is self-directed.

My job as a parent during these years as my children navigate middle school and high school is to teach them how to self-direct. They can do it to an extent, but it’s hard to deny that much of their life is still at least somewhat on rails. I need to teach them how to ride without the rails.

On with the questions.

Q1: Dealing with poor credit

I am never approved. I have poor credit after battling a chronic illness and going through a divorce. I’m trying to rebuild my credit and pay medical bills and no one really wants to help. I am so disappointed that my hopes are built up only to be cut down. It’s degrading.
– Amy

First of all, you have to move away from the idea that people out there want to help you out of the goodness of their heart. A bank only wants to lend you money if it’s very likely that they’re going to make money off the deal. They’re businesses – their purpose is to make money.

What you have to do is put yourself in a position where you appear to be someone that is safe for them to lend money to. Right now, you have bad credit and you’re dealing with a chronic illness. That’s not a picture of someone that a bank will probably feel safe lending money to.

You likely can’t fully control the chronic illness, but you can work on fixing your credit. The most important thing you can do is never ever be late on a bill. Ever. Make every payment on time. Once you’re doing that, try to keep any and all credit card balances well below the credit limit, but still use them regularly – use them for normal purchases, not for things you wouldn’t buy without a card.

Do that for a while and your credit will be good. It takes time, but it does work. That’s when you’ll be able to get loans, because you have a much different story to tell the bank.

Don’t pin your financial hopes on someone else’s decision, ever. Figure out what you can do without the loan you’re trying to get. Assume that it won’t happen, and assume that you have to keep your bills paid. What other options are available to you? That’s what you should focus on right now.

Q2: Compound interest for pre-teens

Any good charts to show my 12 year old the power of compound interest?
– Laura

If I were you, I’d show him a Youtube video on the subject rather than a chart.

, might be a good starting point. I thought this was the best intro to compound interest I found on Youtube.

This illustrates the point really well, too.

If you really want to show your 12 year old a chart, I recommend using an interactive tool you can play around with together. This does a great job, as does .

Q3: Cost of financial services

I’m doing some research looking for how much it costs to have a financial plan put together in the San Francisco Bay Area. Do you have any insight into how much financial planning services cost around SF?
– Emily

The number one thing I recommend for people in your situation is to go to the library first and check out a couple of solid books on personal finance and read them first.

Why? Because financial planning services are expensive, especially in the Bay Area, and most financial plans that individuals will want to assemble are simple enough that a good personal finance book will help you put one in place. It’s far less expensive to read a book and assemble one yourself that you fully understand than it is to pay an advisor to do it, especially considering you might not understand the reasons for it.

If you’re insistent upon hiring a planner in the Bay Area, it appears as though the typical hourly rate is around $300. If you want to pay a flat fee for a financial plan, you’ll be paying around $3,000.

This is why I recommend reading a book and seeing if you can figure it out yourself. If you spend ten hours doing some self-learning in personal finance, you can likely put together a financial plan that handles almost anything that the vast majority of Americans would consider in their plan. It’s the more difficult cases that warrant a financial planner.

Q4: Handling inevitable market drop

I’m 31/M/single. I have been contributing to TSP since I got this job 8 years ago. I have been putting all of my money into L 2050 thus far and it has been climbing nicely. But I know from looking at history and common sense that a stock market correction is going to happen and probably sooner rather than later.

I am worried about losing 40%-50% of my retirement savings when that happens.

What is your recommendation? Should I stick with L 2050 even though it’s going to drop like a stone or should I go into something safer for a while?
– Jason

For those unfamiliar with TSP (Thrift Savings Plan, the US federal government’s contribution-based retirement plan), it functions almost exactly the same as a 401(k). The L fund that Jeremy mentions is the equivalent of investing in a Target Retirement 2050 fund.

Here’s the thing – you are so far from retirement that a stock market correction in the next five years isn’t going to really hurt you.

The thing to remember is that the stock market has historically returned about 7% to 10% a year annually. This is made up of a lot of years of 15% returns or so, some years of about 0% return, and a few years with big 20% to 40% losses. Over the long haul, it averages out to 7% to 10%, depending on what specific number you’re looking at.

You’ve been riding a long wave of above average returns and, you’re right, a correction is due. You can try to guess when the right time to jump into something safer is, and then try to guess when the right time to jump back into something aggressive is, but you’re extremely likely to miss the right time by a year or two on both ends of the equation and miss out on a lot of growth. Plus, you’re going to want to be buying in as much as possible when the market is at its true bottom – you do not want to miss that, and you don’t want to miss buying in every month as it’s starting to rise again.

The only way this works out well is if you guess the top and the bottom perfectly. You won’t. No one can. If you miss each end even by a little, you’ve got a good chance of missing some of the best gains.

Just stay put. There will be a few months or a year or two that look pretty rough, but on the other end of that, you’ll come through with flying colors.

Q5: Overwhelmed with strawberries!

We moved into a house with a big side garden last November. We didn’t really have any idea of how much fruit to expect when we planted strawberries. We filled the whole garden in early April with overbearing strawberries because we really like strawberries. Now we are getting absurd amounts of them, like a pound a day. We are eating a lot of them and giving a lot away but we don’t want them to go to waste and don’t want to deal with a farmers market for 5-10 pounds a week. What should we do with them? We don’t want big projects like canning them or making jam.
– Chloe

There are a lot of things you can do with an abundance of strawberries that don’t require a lot of work.

You can give them to food pantries. They’ll happily accept several pounds of fresh strawberries. The berries will end up in the hands of a family in need.

You can make strawberry wine, which isn’t hard at all. You basically just need a suitable container, some sugar, some yeast, and some water. Here are for it.

You can freeze them. Just wash them right after picking, pat them dry, pull off the stems and hulls, spread them out on a baking sheet, put them in the freezer for 48 hours, then put the frozen berries in a bag together. This enables you to have nice fresh strawberries any time.

You can make “strawberry sauce” for pancakes or waffles or dessert topping. Just mix 1 pound washed and hulled berries, a tablespoon of sugar, and a teaspoon of lemon juice in a blender, pulse until the sauce looks shiny, put the sauce in a jar in the fridge, and use it on pancakes or waffles or shortbread or other desserts. This stuff is easily freezable, too.

That should give you plenty of options for your strawberries!

Q6: Comparing cellular plans

I was wondering if you wouldn’t mind going over the new sprint $15 a month unlimited plan vs AT&T and Verizon and other networks also the benefits of each plan and what works out best in the long run. A lot of readers might be interested in this.
– Clyde

The absolute first thing you should do if you’re comparing cell phone plans is consider coverage. That is hands down the most important thing. A cell phone with a bad signal is useless.

Hop over to and look at some of the coverage maps in the area near your house, near your workplace, along your commute, and in any other places you frequent. You should strongly lean towards the companies that have a lot of green in those areas and avoid companies with a lot of red in those areas. In my area, for example, the only two companies that have solid coverage are Verizon and U.S. Cellular – people who get on other networks often have a miserable time, and it’s just not worth saving a few bucks to have a nonfunctional cell phone.

Comparing cellular plans is a bit of a fool’s bargain because the plans and offerings change constantly. Right as I write this, Sprint’s unlimited plan is the best deal among major carriers. If you are in an area where Sprint’s coverage is good – and you absolutely have to check that map above to make sure, because Sprint’s coverage is the weakest part of what they have to offer – then it’s a great deal. Six months from now, other providers may have a low cost offering competing with Sprint.

The thing to remember is this – when you look at a coverage map, you should be paying notably less for a plan from a carrier with worse coverage nationwide, and you shouldn’t consider a plan from a carrier with bad coverage in your area.

Q7: Boullion cubes versus stock

Why put in all that work to make stock when you can just buy bullion cubes at the store? You can get a bunch of them for just a few bucks and make broth whenever you want.
– Andy

There are a few reasons why I prefer to make homemade stock, though i do use boullion cubes in a pinch.

First of all, homemade stock takes far better. It has a rich flavor that just isn’t matched by boullion cubes. I’ve never found a boullion cube that matched anything anywhere close to homemade stock.

Also, homemade stock is cheaper. It’s vegetable leftovers or scraps that I would normally toss. The only cost to me is a bit of salt, a few peppercorns, and the small amount of energy needed to run a slow cooker for a while. The total cost for a gallon is maybe $0.10 or $0.20.

The only “work” involved is saving scraps in a bag in the freezer instead of throwing them away, dumping that bag into a slow cooker with some salt and a few peppercorns and water, then straining it when it’s done after 24 hours or so.

I do use cubes in a pinch, but I’d far rather use homemade stock.

Q8: Starting over

I am 31/F with a good job making about $80K a year. I was married when I was 22 and my ex husband and I sat down a few months ago and just decided we weren’t attracted to each other any more and agreed to separate and an uncontested divorce is ongoing.

I moved to a new apartment much closer to my job. My job has solid benefits and good health care. I have almost no money in the bank and still have about $43K in student loans to pay off. I furnished my apartment with a few items from the old apartment and Goodwill and a few things from IKEA. I hope to upgrade them soon.

I’ve been learning that most of “our” friends were really “his” friends so I don’t have much of a social network. Most evenings I just come home and make dinner and watch Netflix or read a book.

I don’t know why I am writing. I think I just want someone to tell me it is okay and what to do next.
– Angelina

Things will be fine. You have a good grasp of where your life is right now. You have a great job, a place to live, clothes on your back, and food on your table. Best of all, you have time and tons of options with which to build the life you want to live.

In your boat, the first thing I would do is start building a cash emergency fund in a savings account. Set up an automatic transfer every week from your checking to your savings of $20 or $40 or so, and then forget about it. When an emergency hits, tap that savings account – it’s your emergency fund.

If you’re not saving for retirement at work, start doing so. See if there’s a 401(k) plan at work and start contributing.

As for your social life, I wouldn’t turn to going to bars or clubs unless you really love that scene. Many people turn to the bar/club scene because it seems like it’s what you do when you want to be social, but it’s not enjoyable for lots of people and there are lots of other options. Instead, hit up and see what’s in line with your interests on there. Try some new things and see what clicks with you.

You’ll be fine.

Q9: Is Spotify worth it?

After ditching Pandora (for a number of reasons) I am now using Spotify Free as my “radio replacement” on my commute. I have been enjoying it but I am kind of getting sick of the ads and the weird ordering of the songs and it does eat up a fair amount of my data plan. I am hesitant to switch to Spotify Pro because that’s just another monthly bill. Is there another option out there that I should try?
– Amy

Spotify, Pandora, Tidal, Youtube Music, Amazon Prime, and Apple Music are the big providers of streaming audio these days. (I miss Rdio – RIP Rdio.) They each have their benefits and drawbacks.

My general feeling is that if you’re wanting direct control over what you’re listening to and don’t have a genre preference, the two best ones are Spotify and Apple Music (if you like mostly rap and R&B, Tidal is probably the best, but it’s a pretty mixed bag in other genres).

If you haven’t tried Apple Music, it has a . I tried it and my only complaint is that the desktop interface is clunky, though the mobile one is fine.

Once you’ve burnt up your trial run, though, if it’s a service you’re relying on each day, paying $10 a month for Spotify or Apple Music or Tidal makes sense.

Q10: Another use for old towels

An additional use for old towels is to donate them to the local animal shelter where there is an ongoing need for them.
– Tessa

This is a great idea for old towels!

If you check out the wishlists of most animal shelters, you’ll find that many of them are always looking for old towels and blankets – take the , for example.

I would highly recommend this as a great use for old towels if you don’t explicitly need any for your own personal rag bag.

Q11: Cheapest carbonated water at home

I have discovered that one of the big reasons I have struggled with kicking the soda habit is that I like the fizziness of carbonation in the water. I stayed with a friend for a week and she had a machine that dispensed carbonated water. She said that there was a cartridge she had to replace when a light came on. I am considering such a machine but I don’t know where to start looking. What is the cheapest option that isn’t junk?
– Erika

This over at iFoodBlogger covers things in more detail than I ever could.

What it seems to come down to more than anything else is startup cost versus ongoing cost. Most of the carbonators that have a low startup cost, like a SodaStream, have a high ongoing cost because they use proprietary CO2 canisters.

My recommendation is to go for a low startup cost option, like a SodaStream. Check your local secondhand shops to see if one is available there – they can sometimes be found in Goodwill stores. Use it for a while and see if it’s something you’re going to stick with long term. If you are, you may want to consider a better system to keep long term costs low – the Carbonator mentioned in that article is a good step up, but the startup cost is significantly higher (though the ongoing cost is low).

Q12: Father’s Day gift ideas

I am 13 years old. I found your list of inexpensive Christmas gifts. I want to get my father something cool for Father’s Day. I have $28 to spend I have been saving. He likes working in the yard and watching Netflix shows. Do you have any ideas?
– Daniel

I loved this question!

Daniel, the number one thing I’d think about for a Father’s Day gift for your dad is to think about something you’ve enjoyed doing together with him that he seemed to also enjoy. What kind of things have you really enjoyed doing together over the last year or so, or even when you were younger that you wouldn’t mind doing again?

Start by thinking about those things. Then, see if you can come up with anything that might match up well with that.

Another approach might be a small gift that’s related to the yard work and a promise to spend a day with your father doing yard work. It might not be something you enjoy, but it’s something your father enjoys and if you look for the things he enjoys in it, you might find things you like, too. Consider getting him a pair of new gardening gloves – your money should be able to cover a good pair at a local gardening or hardware store. Then, just spend a day with him helping on a project or two in the yard that he’s been meaning to do, like trimming some bushes or doing some minor landscaping or putting in a flower bed. Do it without complaining at all and look for things about it that you find to be good, and remember that a big part of that gift is time spent with him and the conversations you’ll have.

The best Father’s Day gifts, in my opinion, are ones that enable you to spend time with your father.

Got any questions? The best way to ask is to 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.