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. Storage areas
2. Recovering drug addict
3. Hourly pay calculations
4. Magic: the Gathering collection
5. Tax refund confusion
6. Adjusting a sleep cycle
7. Parental gifts and financial disagreements
8. Open marriage financial worries
9. Raising credit scores legitimately
10. Paranoid about retirement savings
Our town regularly hosts a pancake breakfast for charity. Our family goes to each one.
When we first started attending, I barely knew anyone there. A couple people I didn’t know greeted us, but aside from them, I don’t think we spoke to anyone.
This time? I knew a ton of people. I kept saying hi to everyone and chatting with different people. I spent more time talking to people than eating pancakes.
Being a part of a community is far more fun than avoiding it.
Q1: Storage areas
How do you keep stuff in storage without it turning into chaos? It seems to me like most people either have this ultra organized system or they have a bunch of random boxes and a big mess.
We do this by trying to minimize what we have in storage. If something’s in storage for very long, we donate it or sell it.
Our storage space consists of a shelf in the garage (which has several plastic tubs on it) and then some closets which contain things like winter bedding and the like.
The best solution for storing stuff is to get rid of it instead.
Q2: Recovering drug addict
For the last several years, I have been dependent on a number of substances: meth, bath salts, heroin, alcohol, and methadone. I have been completely clean for almost two months by my own choice, not because of anyone else.
Anyway, I wanted to tell you what I’ve been doing that’s helped me in several ways. Each payday I would usually go spend $100 or $150 in cash on various things for the weekend partying. Instead of doing that, I’m taking five or six or seven $20 bills each payday and putting them in a glass jar. That jar is stuffed full of $20s and it really fills me with hope to look at it. I am going to take some of it and put it in a savings account soon, but the sight of it makes me feel good.
That’s amazing, Terry. Not just the money, but the freedom from addiction, too. That’s an amazing turnaround.
Given your situation, I think the inspirational value of having cash in that jar is probably worth more than what you’d get from it in a savings account. If I were you, I’d keep it mostly full most of the time.
The biggest financial step you can take from here is probably to make sure your credit is okay. I’d look at it via AnnualCreditReport and just make sure you know everything that’s on there, good or bad. Time will be the best healer here, but eliminating things that shouldn’t be there is also good.
Q3: Hourly pay calculations
I had a question regarding calculating hourly pay. I have weighed hourly pay against commute time, housing costs, etc. for some time now, but am currently at a job in the education field where much of the benefits come from … well, the benefits. I make above $45,000 pre-tax, but have lots of “perks” that make it hard for me to get a sense of what my real hourly rate is.
These perks include about 5 weeks of vacation a year, not including major holidays and 10+ days around the winter break, ample sick and personal leave, paid maternity leave (at some point!!) and FMLA, over 100% match to a 401c3, excellent health insurance rates for my self-employed spouse, a gym membership and regular pilates and yoga classes for free, an on-campus CSA drop-off, free parking and use of campus facilities (like the gym, as mentioned above), free attendance at on-campus cultural events such as film screenings, massages, banquets, author talks, and library events, etc. etc.
If I were to leave my current job, I might make more money up front, or save on my 20-30 minute commute, or find a good rate on health insurance, at a similar position. However, I feel like I’m in a good position regarding benefits, and wondered if you have an adapted calculator for determining hourly pay while including benefits.
Some of those are very hard to calculate and have a lot to do with how much value they bring to you. If you wouldn’t use a service anyway, then the value isn’t too high.
For things like insurance, you can price it compared to a self-insurance policy. I would also include the full value of the retirement match.
Unless you’re getting a huge salary bump, it’s probably not worth leaving this job, even with the commute.
Q4: Magic: the Gathering collection
I recently bought a collection of Magic: the Gathering cards at an estate auction for very little. No one bid on it at all and I don’t think anyone even looked at them beforehand, so I got it for the opening bid. Anyway, the collection has several thousand cards in it. The cards all have the year 1994 or 1995 on the bottom and some don’t have a year at all. I’m not sure how to begin valuing this collection. I don’t want to take it to a dealer because they’ll probably try to rip me off.
If I were you, I’d either take the pile of artifacts (they have brown frames) or lands (they have grey frames) and look them each up by name at a site like eBay or Coolstuffinc. I can tell you real quick that some of the artifacts you should be looking for are anything with the word “Mox” in the name or “Black Lotus,” and the lands you should be looking for are “Library of Alexandria” and any lands that have a striped text box. Those will be worth quite a lot. Also, dig through the blue cards and see if you have any named “Time Walk” or “Ancestral Recall.”
There are other cards you could have that would certainly be valuable, but those would be the biggest ones.
As for having a dealer look at them, go ahead and do it. Watch what they’re doing. They’ll likely sort some of the valuable ones out for you. Then, say no to their offer, then look up the cards they pulled out on your own.
The vast bulk of these cards won’t be worth much. You’re just looking for the handful of gems in there.
Q5: Tax refund confusion
I am a little puzzled. My husband and I got zero refund this year. We make decent money but not outrageous. We have one child and a house so I was expecting to get something back. Both our W-2 are set to 1. I contribute to FSA both medical and for daycare. What am I doing wrong?
There are a LOT of potential reasons for this. This page gives you a list of just some of them.
One consideration is how you filed. Did you use a program like TurboTax or did you have a preparer do it? I would cross-check using the other method if you feel something is really wrong.
You’re probably not doing anything wrong, though. You likely just had a change of some kind in your life that you overlooked.
Q6: Adjusting a sleep cycle
Up until last week, I was a stay-at-home mother but now my kid has started kindergarten. I’ve got a job that lets me work from 9-2 part time here in town thanks to a friend, which is just about perfect. Anyway, our big problem is sleep cycle. Both of us would stay up until about 11 and then I would wake up at around 7 and he would wake up at around 10 – I would get lots of housework done between 7 and 10. Now, he needs to wake up at 6:30 or so. I’m doing fine with this but he keeps wanting to stay up with me in the evenings. He’ll stay in his room but he’ll sing and jump on his bed until 10. Any suggestions here?
If I were you, I’d start going to bed earlier with your child and waking up earlier. Instead of going to bed at 11, go to bed at 9. Then, instead of waking up at 7, wake up at 5. You’re still getting the same 8 hours of sleep, but now you’re in a routine that encourages your child to go to bed earlier, too, and you’ve just moved some of your “alone time” for projects to the morning rather than the late evening.
I’d do this gradually, and moving through the fall with the shift in daylight hours is a good time to do it.
Our children have an adjustment between summer break and the return to school. It’s usually about an hour, as their bedtime has slipped back about an hour during the summer months.
Q7: Parental gifts and financial disagreements
My father is 60 and my mother is 56, and they have very little saved up for retirement. My dad had to cash out his entire 401k about ten years ago when he lost his job (he had six kids to feed, and my mom was a stay-at-home mother at the time). He’s since returned to work but he only makes about $35k per year. My mom makes about $5k caring for an elderly woman. (These numbers are estimates, but I think they’re close.)
For Christmas, my siblings and I want to give our parents money instead of gifts. Between the six of us, I think we could give them about $5000 – $7000. I suggested that we put the money in a Roth IRA, as my dad’s retirement savings are minimal and my mom has none. My brother, however, believes financial institutions are on the brink of collapse and that “the only safe investment is gold.”
What do you think we should do?
Put it in a Roth IRA and put your brother’s contribution to it into a rare metals fund.
For example, if you’re opening a Roth at Vanguard, use the precious metals fund for part of it. I’d probably just fund this to the minimum and put the rest in a balanced target retirement fund.
So, if you were able to raise $6,000, I would put $3,000 in that metals fund and the other $3,000 into a Target Retirement 2020 fund at Vanguard.
Q8: Open marriage financial worries
My wife and I have been discussing the idea of an open marriage. Are there any legal or financial preparations we should make in advance of this type of thing?
You would want to talk to a marriage lawyer in your state. Different states have different laws about finding fault in a divorce and such an arrangement may turn out differently in each state.
Remember, an open marriage can work for some people, but it can be a disaster for others, and it’s usually impossible to put the genie back into the bottle.
Be sure this is what you want and that you’re not just doing it to try to “save” an ailing marriage.
Q9: Raising credit scores legitimately
My husband and I have finished graduate school and have worked part time jobs for about a year while looking for full time work (academia is flooded right now with unemployed job seekers). Finally, we have both found full time teaching jobs that will start shortly. Because of our time being underemployed, our credit scores are fairly low- around 600. We need to raise them to purchase a house, since our new jobs are in a city about an hour away.
We will work and save for a year and had already started paying down debt, so our scores will be improving, and with our new salaries and benefits we anticipate paying off most of our non-student loan debt within the year. We’ve researched how to raise our scores, but my question is this: How quickly can they be raised? To qualify for a good mortgage we have to be above 630, so they need to go up almost 30 points in a year. I’ve tried to research this online but all I find are scam websites that want money to supposedly raise our scores overnight, which I know is bogus. I thought you might be able to help!
Thirty points in a year is completely reasonable provided you’re not late on any payments, you diligently pay down your credit cards, and you don’t add any more debt.
Basically, you’d be spending the year helping your credit score in almost every way it can be helped. You’d improve the length of your credit history as well as your debt-to-credit ratio.
I’d use AnnualCreditReport to make sure that you’re not missing anything that’s showing up on your report, too.
Q10: Paranoid about retirement savings
I’ve been putting away the maximum amount I can for retirement for the last six years. I’m 29 and I already have almost twice my annual salary saved for retirement. Problem is I can’t stop checking the balance and I constantly feel sick that everything is going to collapse and I’ll lose everything.
This kind of repetitive checking is mostly a nervous habit. It’s just a cycle that you need to break.
If I were you, I’d make it a goal not to check my balance each day. I’d cut it down to monthly, in fact. Set a personal goal each day not to look at the balance.
At first, it will be hard. As time goes on, it will get easier and easier to do. Checking will seem less and less urgent.
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.