What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Frugal gifts for adult children
2. Eliminating a collection
3. Maximizing income in graduate school
4. Inexpensive learning games for kids
5. House savings in early twenties
6. The basics of Medicare
7. Helping religious friend
8. Creative acting games
9. Refusing employment
10. Bigger house?
As many of you have noticed, the administrators of Money360 (I’m just a writer… thankfully) are slowly redesigning various aspects of the site. This is an ongoing process and will remain somewhat in flux for a while.
While I don’t know specifically how they’re evaluating the changes, I know that they are using usage patterns and statistics and individual feedback to evaluate the changes that they’re making, and that some changes will go away and others will stay. And, yes, I’m offering my two cents along the way, too.
I’ve passed along some of the thoughts that have been sent to me to the redesign team so that they clearly know what long-time readers think, both positive and negative, about the ongoing site redesign.
Q1: Frugal gifts for adult children
We have chosen to give our adult children AAA PLUS memberships (not cheap but worthy). First they wouldn’t normally buy this for themselves, second, it says I love you, be safe on the road because I love you; and third there are other AAA discounts at restaurants and stores. AAA includes automatic life insurance after you’ve been a member for 10 yrs (I think this is still true). My father started this tradition of giving me AAA for Christmas the first year I went to college and was driving away from home. I am passing it on and my children are 29 & 30 yrs old with great jobs.
This is a really solid gift idea for parents with successful children and it’s one I’m likely to steal.
I agree with you in almost every respect here. It’s a gift that does say “I love you” and, while it might be a “boring” gift, it’s often hard to really get “fun” gifts for adults unless you know them very well and also know what they have. Successful adults can usually just buy the things that they want, after all.
It’s a very practical gift but, to be honest, I really appreciate those, as do many people. It’s something that isn’t showy, but it is incredibly useful when you need it.
Q2: Eliminating a collection
My New Year’s resolution this year was to de-clutter our home, and my first big initiative is to get rid of some of our collections. For example, I don’t think we’ve watched a DVD in a year, so I’m getting rid of our DVDs. I haven’t listened to a CD since I don’t know when, so I’m getting rid of our CDs.
What’s the best way to get rid of these collections and see some return on them?
It really depends on how much time you want to invest in selling them. The more time you invest, the more you’ll get from the items, but past a certain point, you won’t make minimum wage for your time.
My approach would be to pull out everything of individual value from the collections, like box sets, and sell the rest of them as one giant lot either on eBay or Craigslist. I would not charge more than a dollar and a half per DVD and I wouldn’t charge more than about $0.50 per CD as a lot or else your lot won’t sell.
If you want to sell them individually, you can do so and earn more per CD or DVD, but you simply won’t earn much more for them and you have the headache of dealing with all the individual sales, which gulps down the money.
For the “bigger” items, I’d list them individually on Craigslist for a reasonable price ($2 per disc for DVD sets and maybe $1.25 per disc for CD sets). If that doesn’t work, sell them on eBay.
Q3: Maximizing income in graduate school
For grad school, I chose to participate in a summer program so I wouldn’t lose any teaching time during the academic year. I was able to stay in my apartment for the first summer, but the commute was over an hour each way. During the second summer, my homework load became ridiculously heavy – I couldn’t spend 8 hours in school, 2.5 hours commuting, AND get homework done. I did some research and found a campground about 10 miles off campus, and upon further analysis, realized that it was actually less expensive to spend the remaining 3 weeks living in my tent (I’m an avid backpacker anyway) and biking to school rather than commuting from home (even with my fuel efficient car). For my final summer, I had the “option” of commuting or living in my tent…you can probably figure out which one I did
When I was in college, I spent a calendar year living in an apartment with several other people. We essentially loaded the place up with lofts, bunk beds, air mattresses, and the like.
It got our rent down to well under $100 per person including all the utilities.
We each had a couple of plastic tubs for our stuff that we kept in one of the rooms and that pretty much took care of our possessions.
College is a great time to make choices like this, as are early periods of employment. What we “deserve” to have sometimes doesn’t line up well with reality.
Q4: Inexpensive learning games for kids
When I was a kid, I used to play lots of great learning games on the computer. I played the Carmen Sandiego games, I played Math Blaster and Algebra Blaster. Where are these games today? Everything seems to be so violent and non-educational.
Games like Where in the World Is Carmen Sandiego? and The Oregon Trail are still available, but they were last revised between five and ten years ago and are starting to look a bit dated. I’m watching these along with the development of my children and hoping that they release freshly updated versions soon.
If you’re looking at other platforms, there are versions of these games available for the iPad and the Wii.
I agree with you that there’s a decided lack of really engaging educational software. I played through all of the Carmen Sandiego games, Oregon Trail, the Math Blaster games, and several others like that. I loved them when I was a kid, and because of them I had a familiarity with a lot of geographical locations, history, artists, writers, and other things that I would have never been exposed to otherwise.
Q5: House savings in early twenties
What is the best savings vehicle to sock away money for a down payment on a house? I’m 24 and I’ve maxed out my Roth IRA, have gone up to my company-matched Simple IRA (at 3%), set aside a number of various saving accounts through ING (such as extra health care money, various car expenses, and general 3month safety savings). I’m looking to buy a house in the near future so I was wondering where I should be setting aside any extra money that I’d like to be saving for a down payment (essentially a nest-egg). I’m young enough that I could invest it, but that’s definitely risky. However, I suppose I could put it in a CD or Money Market. Thoughts?
It depends entirely on how soon you expect to actually be using this money.
What does your timeline look like? Are you looking to be dropping a down payment in a couple years? Or is this ten or fifteen years out?
The longer you’re expecting to wait until your start date, the more I’d lean toward putting your money in a stock index fund. If you’re looking at less than five years, I’d put all of it in savings. If it’s between five and ten years, I’d split it up. More than ten years and I’d probably put all of it in stocks. Every few years, I’d rebalance this arrangement by moving money out of stocks and into savings.
Q6: The basics of Medicare
This year I have seen a ton of commercials for supplemental insurance that goes with Medicare. I am ten years away from Medicare and I have no earthly idea how it works! I wonder if this might be helpful to your readers (other than me!).
When someone reaches 65 do they have to apply for Medicare, or is it automatically “there”? What are all these supplements and “Part D’s” and other things like that. I am clueless about the whole system! Does one need to buy these supplemental plans? What does Medicare pay for?
I think the federal government provides a great summary of how Medicare works, and, in true Simple Dollar fashion, we’ve also written an article about Medicare. Both of these resources explain how the various parts of Medicare work in pretty clear language.
Medicare supplements are packages that private companies sell to improve the medical coverage offered by Medicare. They’re essentially a form of insurance – you’re paying in advance for better medical coverage should you need it.
Do you need supplemental insurance? You’re going to hear arguments about that until the cows come home. I think it depends a lot on the person, what their needs are, how reputable the supplemental coverage is, and what company is providing it.
Q7: Helping religious friend
I have a friend whois in a very deep financial hole, but her response so far has been just prayer. She believes God will send her an answer. When I suggest gently to her that God helps those who help themselves, she gets angry and says that nothing like that appears in the Bible. What can I do to reach her?
If you want to go with well-worn analogies, I’d suggest this one: you can lead a horse to water, but you can’t make him drink.
If I were you, I’d pick up a good personal finance book, probably one with a bit of a religious overtone, and just give it to her. State that you might be working on God’s behalf here, but you think this book will help. A great suggestion here would be The Total Money Makeover by Dave Ramsey.
Once you’ve done that, back off. Your friend has to figure out what to do on her own. You can’t make her make the difficult realizations and choices she needs to make.
Q8: Creative acting games
I know you get questions somewhat similar to this often, but I’ve got a new twist on it that I’d like your opinion on! I purchased The Werewolves of Miller’s Hollow on your suggestion and my friends and I loved it; so much, in fact, that we purchased the expansion pack soon after! We play it all the time. However, the best part of the game for us is the improvisation/character creation/roleplaying that occurs when trying to weed out the Werewolves. We are a theatre troupe, so the explanations can get out of hand in the best way possible. Do you have any suggestions for games that have similar creative freedom?
Werewolves is probably my favorite large party game. If you get above ten people and want everyone to be playing a game together, it’s a really good choice.
The only experience I’ve had like Werewolves is The Resistance and/or The Resistance: Avalon. They each only work with up to ten, but they don’t require a moderator and they both provide much of the same acting and convincing of others that Werewolves provides. Also, much like Werewolves, you can get as into the role as you desire.
That would probably be my recommendation for you. Nothing else really comes to mind.
Q9: Refusing employment
Last June, our 23 year old son moved in with us. In theory, it was a temporary thing so that he could search for a job after college. The problem is that he’s barely searching. He won’t get a job of any kind and really won’t look for one. He spends the afternoon playing computer games then goes out with friends at night.
What can I do to get through to him?
My first question is where he’s getting the money to go out every night. Where is that income coming from?
If you’re providing it to him, cut off the water. Don’t buy gas for his car. Don’t give him pocket money. Cut it out. If you keep doing these things, you give him little incentive to search for work.
If you’re not providing it, where is it coming from? If he can go out every night on his own accord, he should be able to support himself in some fashion.
Q10: Bigger house?
I’m married with 3 kids (11, 7, and 4). We live in a house which is about 1500 sq feet. My husband and I have the master bedroom, of course. Our two little ones share the 2nd biggest bedroom of the house. Our oldest has his own room which also happens to be the smallest bedroom of the house (he doesn’t mind since he has his own space). We have a 3 bedroom 2 bath home.
I’ve had several people mention our need to upgrade to a bigger house in the event family or friends would like to visit or if we decide to have a 4th baby (this is honestly still an option). I don’t care too much about having a big house because with that comes more cleaning, upkeep, etc. Mostly his family comes to visit but they are ok with getting a hotel room(s). We just recently got our mortgage modified to a permanent monthly payment of $935 (includes taxes and insurance). We are saving more and investing more in our retirement. Other than having a 4th baby, which I honestly don’t think is reason enough, I can’t see their point.
I don’t think getting married, getting a new job, and/or being pregnant justifies taking on debt. And, I don’t enjoy the idea of buying a bigger house just to have to downgrade later in life when the kids leave the nest. What do you think?
Our house is similar to yours. It has a fourth bedroom which I’ve turned into an office, but aside from that, our situation is similar. We have three kids in one bedroom for now, with the other bedroom serving as a guest bedroom until the kids start expressing desire for a change.
I don’t think there’s anything wrong with this kind of situation. I shared a room with both my older brothers until I was six or so, then with just one of my brothers until I was nine or ten. The only reason I wound up with a room to myself is because they moved out.
My wife and I are considering moving to a more rural area, but having enough bedrooms for each of our kids to have their own is not a requirement for the move.
Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. 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.