Reader Mailbag #8

Each Monday, Money360 opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently.
How to set up multiple savings accounts from within ING Direct
A book you should read before talking to your family about money
Personal finance explained on five business cards

And now for some great reader questions!

You say that Lost is the only [television] show you watch. Do you not have cable? Is your TV digital-ready?
– Jeff

This question more or less follows up on this article about financial reasons to turn off your television, where I mentioned that we watch very little television at all.

My family has one television in the home, in the family room in the basement. Most days, it never turns on – the majority of the days when it is on, it’s used for playing games on the Wii or, about once a week, watching a DVD. The only time we turn it on other than that is in the evening when we’re doing mindless tasks like folding laundry, when there’s a major news event (and we cycle through the news networks), or when Lost is on. That’s it.

When the children are awake and in the house, the television basically never turns on unless it’s by request to watch one of several DVDs that our son has received as gifts over the last year or so. With the weather being nice, he hasn’t requested watching one in weeks.

We’ve seriously contemplated having the cable taken out because of how little we use it, but we have the cable in a package deal with internet and telephony and our bill would only go down $10 if we removed it.

How do you keep track of your to-do list?
– Martin

I’ve been using Next Action for a long time to manage my to-dos – before that, I used Remember the Milk (which I stopped using after some data loss a long time ago).

Recently, though, I switched to using a Mac and I’ve been slowly converting things to iGTD. I really like the interface and I’ve settled into it for day-to-day stuff related to Money360, but I have so much stuff still in Next Action that the full transition is taking a while.

If I were to start all over again from scratch, if I were on a PC I’d use Remember the Milk. On a Mac, I’d use iGTD.

I am looking to purchase a few suits for a new position that I have at work. I am hoping to find something of quality that will last a while. Any recommendations on purchasing suits, dress shirts,etc? Do I go for what I can afford now- or try to save a little more and purchase something more expensive for the long run? How do you get past name brand=high quality? Any help would be appreciated.
– Alex K

Go for quality and durability. I don’t have any specific brand recommendations – my suggestion is to find the best-dressed person in the office and ask them where they go for clothes. Go there and get yourself a quality wardrobe that will last.

This will be a significant upfront investment, but having quality clothes that make you gently stand out in a positive light – and that will last you a long time – will pay big dividends over the long haul in an office environment.

Is homemade beer cost-effective to make?
– John

It depends entirely on what kind of beer you drink. If you’re a “six of Miller High Life” kind of guy, it’s cheaper to just buy the stuff by the case at your local liquor store. In other words, if you drink primarily mainstream American pilsners and other pale beers – Miller, Budweiser, Busch, Old Milwaukee, Natural Light, PBR, etc. – brewing your own isn’t very cost effective.

On the other hand, if you are a person who enjoys an occasional beer but is partial to craft beers, microbreweries, and higher-end stuff, home brewing can save you money and be a lot of fun. As I type this, in fact, I have a batch of nut brown ale aging in the bottles, a batch of oatmeal stout in the glass carboy fermenting, and I’m going to brew up another batch next Monday when my sister-in-law comes to visit – that’ll be an attempt at a wheat ale with some coriander in it.

In each of those cases, homebrewing is significantly cheaper than buying six packs of the beer in stores and I get much more enjoyment out of the homebrewed beers as well. Of course, one extra “cost” of this hobby is that I tend to share my batches heavily with friends and family – giving away a bottle here and a six-pack there cuts into the profit margins, but doing that also helps build friendships, too.

I also noticed that you don’t seem to get 8 hours or sleep a night. Do you ever find yourself suffering for it, or are you one of the lucky ones who can get by on less?
– Laura G

My sleep actually varies. Right now, I will go through strings of about five hours of sleep a night for a few nights, then have a “catch up” night where I sleep eight or nine hours. After two or three days of five hour nights, I really start feeling the effects – I get very sleepy during the day and usually end up taking a brief nap in the afternoon. If that happens, I make sure to go to bed early that night.

When I was in college, I tried a lot of radical sleep schedules. I did one where I only slept in short naps every four hours around the clock (it actually worked for a while until societal needs forced me off the schedule). For about two semesters, I was largely nocturnal, taking two evening classes and three early morning classes and sleeping from about 10 AM to about 5 PM every day (yes, and starting the day off with supper). If you work at it and don’t have societal constraints, you’ll often find that alternative sleep schedules make you really productive.

The best way I’ve heard for subtly adjusting your sleep patterns is to alter it slowly. Start going to sleep about thirty minutes earlier and set your alarm to get up thirty minutes earlier, then see how productive you are during those morning thirty minutes. Then, if you actually want to reduce your sleep, start going to sleep a bit later until you find a point that works for you. If you find yourself getting drowsy a lot, pull back – being awake more hours doesn’t help if you’re sleepy during those hours.

You have a two year old child and a younger girl. Do you know of any good children’s books that teach frugal values?
– Milton

josephMy son has a pile of books that teach all kinds of lessons, from colors and numbers to the value of friendship. Only one sticks out at me as showing frugal values, though, and that’s Joseph Had a Little Overcoat. It’s a story about a farmer named Joseph who buys himself a nice overcoat, but when it wears out, Joseph doesn’t toss it out. He finds other uses for it – a jacket, a vest, a scarf, a necktie, a handkerchief, and finally a button. Eventually, the button falls apart, too, but Joseph is still left with something – a really great story (the book itself).

I think overall it’s just a bit over the head of my son at this point (he’s two and a half), but the idea of the book is fantastic from a frugality standpoint.

What do you think about couples cohabitating before marriage? Morally and financially? Do you think it is a good idea?
– Andrew

I have no objection to it morally or financially, and for many couples I think it can be a good idea. Marriage is intended to be a lifelong commitment, so to rush into it without knowing what day-to-day home life with your partner will be like seems to me to be risking an awful lot. You’re far better off finding out that there are deep incompatibilities before your wedding day than afterwards. Note that I’m talking about sharing a domicile here – living as roommates. I’m not talking about sexual , which is an entirely different can of worms that hinges heavily on a person’s individual beliefs – and an issue that I’m not going to touch on here with a ten foot pole.

What about gold investments? How much should I have in gold?
– Mac

For 99% of the investors in the world, gold’s not a necessity. It’s merely just another way to diversify, just as bonds and real estate are, and throughout history, most of the time gold has underperformed everything.

Gold has a lot of hype right now because it’s had a very nice run over the past few years, but it’s mostly driven by three things: a dropping dollar, an increase in the real cost of oil, and a herd of new investors driven by speculation and fear. All three of those effects are temporary and over the next decade or so, gold will correct itself to historical norms – which means that gold’s definitely not a good place for a novice investor to put his or her money right now.

If you have a huge portfolio, a small amount of gold is fine simply for diversification, but for most investors, there are far better things to do with your money. Buy some well-diversified international stocks instead.

Is it possible to make bread (or pizza) dough in advance and then refrigerate or freeze to bake later? In the case of pizza, can I prep the whole thing, freeze it, then bake later?
– breena

Homemade pizza and bread dough are incredibly frugal ways to save some money at home. You can make them for pennies and get a lot of enjoyment out of them.

You can freeze both bread and pizza dough in advance, but when you unthaw it, you need to let the yeast get going and rise again, so you’ll have to put it in a relatively warm place for an hour or two after it’s unthawed.

Another great way to freeze pizza dough, though, is to make a bunch of crusts up in advance, roll them out, and then bake them on a pizza stone for about eight minutes with no toppings, just long enough for the dough to just barely start forming a crust. Then you can freeze these wrapped in Saran Wrap quite easily and when you want to make a pizza, pull it out, put the toppings on, and then throw it straight in the oven.

Would you ever discourage your kids from marrying someone who does not make as good an income as they do or what they are accostomed to?
– Michelle

No, absolutely not. Once you’ve got enough income to eat and keep a roof over your head, extra money doesn’t mean nearly as much as a healthy relationship with someone you truly love.

The only way I’d ever advise my child not to get married is if I felt that the person they were considering marrying was not going to love them with their whole heart. If that potential partner showed signs of meanness, cruelty, or untrustworthiness, I’d certainly talk to my child seriously about it. Not having enough income? Not really much of a worry at all.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

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