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. Helping partner build credit score
2. Rechargeable batteries
3. Job and heavy course load
4. Renting a mailbox
5. Reading time
6. Thrift clothes for tall folks
7. To sell or not?
8. Car search in new location
9. Sell now or later?
10. How do you find bargains?
On Monday at about noon, my stomach took a giant lurch. I quickly began feeling tired and mentally out of it. By Monday evening, I barely wanted to leave my bed. I spent most of Tuesday crawling back and forth between the bathroom and my bed.
As I write this Wednesday evening, I’ve lost about twelve pounds, I still hurt all over, and I’ve realized how important it can be to have posts written in advance. I spent most of my “advance” posts over the Christmas holidays, which mean that when I got sick, I didn’t have more than two or three posts written ahead.
This is one of the realities of writing for a constant deadline. Sometimes, you just get sick. Sometimes, your kids get sick. You’ve got to be able to plan for it and deal with it.
Q1: Helping partner build credit score
My boyfriend is 29 years old and has never had any significant financial accounts in his name. He’s had savings and checking accounts with two different banks over the years (currently at my Credit Union), but no credit cards and his credit report does not show any reports (either positive or negative) from his previous bank or any utility companies. In fact, it has very little on it at all other than his previous addresses and an old debt from a medical bill that is paid and just hasn’t fallen off the report yet. We tried using Credit Karma and they said he had too little credit history to even give him a credit score. He recently applied for a credit card (the Chase Amazon card) and was turned down because he had no credit history.
I plan to sell my house (I own it and he lives with me and pays half of the bills) in the near future and we will be moving to a neighboring town, where we will rent for a few years and eventually may want to buy a house together. I have very good credit and could easily get approved for an apartment or mortgage on my own, but if we go in on something together we don’t want his lack of credit history to hurt our chances of being approved. What should he do to start building a credit history? Would a “starter card” with a yearly fee be the only way to go? It doesn’t seem like he’ll be eligible for any decent cards. He’s extremely conservative financially, we’ve lived together for several years and I trust him with money. Could I put some of the utilities in his name? Would that even affect his score?
There are a lot of things you can do in this situation.
For one, you could get a card yourself and add your boyfriend as a user on that card. Check with your credit card company to make sure that authorized users you add to your cards have the credit reported to the credit bureaus.
You could also get him his own secured card. This wouldn’t have a yearly fee, but it would require you to pay money up front as a security deposit on the card. Most large banks have such an offering.
Don’t worry about the interest rates on such cards. He shouldn’t be using it for many purchases (though using it for a few is a good thing) and he should be paying off the balance in full each month. If he does that, then there’s no reason to worry about the interest rate because he won’t be paying any interest.
Q2: Rechargeable batteries
I have been thinking lately about getting some rechargeable batteries and wondered if you have posted anything about the cost comparison between getting some decent rechargeable batteries and just buying the standard type. I guess just the standard sizes are what I’m most concerned about (AA, AAA, C, D, and 9volt). I have also been concerned about how well they would perform if you don’t use them frequently (I.e. Flashlights that you only use periodically during power outages etc.)
I am a big fan of batteries, made by Sanyo. I have had good experiences with them over and over again.
Most of the time, rechargeable batteries for “C” and “D” size come in the form of an adapter, which looks like a “C” or a “D” battery, but just contains two or three “AA” or “AAA” batteries. There are eneloop adapters for both of these sizes.
I do not have any experience with 9 volt rechargeables. The only items in our home that use a 9 volt is our smoke detectors, and I don’t use rechargeables in those.
Q3: Job and heavy course load
Right now I’m 19 and a sophomore at a college studying mechanical engineering. It’s a rigorous college, but I like it and I’m doing pretty well. The only part I don’t like is the undue financial strain it’s putting on my parents. We’re not a rich family. My dad’s getting up there in years and being a firefighter is starting to take a toll on him. My mom is self employed in property management, and while it brings in some money it’s sometimes not enough, especially now as she’s trying to refinance her buildings.
I want to get a job. Right now I have some scholarships helping me out but it still comes down to about $12,000 a year for college, not including living expenses, food, etc. I feel guilty every time I get money from my mom and I know that they could be using it to help elsewhere, as my little brother still has to get through college. Every time I try to bring the subject up, my parents tell me it’s not a good idea, and that school is my job until I graduate and I must concentrate on that.
What do you think I should do? My average course load is between 17 and 19 hours for the next two years, and I also have a position as a service coordinator for the local chapter of Alpha Phi Omega service fraternity. Is it worth it for me to get a job to help with the cost of school?
During my fourth semester in college, I took on a 19 credit course load and worked an 18 hour a week job and another 12 hour a week job. It was a complete disaster. I didn’t do either of the jobs well and I had my worst academic semester of my entire college career. I was stressed out constantly and exhausted by the end of it.
If I were in your shoes, with a similar courseload to what I had and a job as a service coordinator, I would not add additional responsibilities to the pile. I’d stick with what I have, use student loans to finance the experience, and try to create fantastic results for both the classwork and the service positions. (A reminder: an “A” alone isn’t necessarily the best result from a class. You’ll get much more value out of building relationships with classmates and with the professor and teaching assistants along with the good grade.)
If you come out of college with a solid GPA, a lot of professional s, and an interesting resume with a variety of activities and accomplishments, you’ll be primed to get a good job. That is the focus here above all else.
Q4: Renting a mailbox
I started blogging myself in August and ocassionally have readers or sponsors send me packages in the mail. This looks like it might increase a bit in the coming months, but practically we’re looking at two to four parcels a month, average. I feel a bit uneasy about always giving out my home address to people, many of whom I only know online and only a little at that. I would feel more comfortable with a PO Box, but am concerned about the cost.
The local post office rents their smallest size box for $13 per 6 months, which is quite reasonable, but it is significantly out of my way and annoying. I had a PO box there a few years ago and hated going there to see if there was anything I wanted, and the junk mail piled up so that it filled up fast and I usually had to wait in line to get a pile of my mail–most of it circulars that I would toss.
I’ve called around to most of the private mailbox rental stores in my area and the best price I could find is about $10/mo, which is significantly more, but they do have an email service to let me know when something comes and it is directly on my way to work. It is a local shop and I know the people who own it, and like supporting local businesses.
My question is, is it worth it to spend the extra to get a convenient mailbox (that’s $120 per year!!!) or should I go with the annoying but cheap option? Or not sweat giving out my home address for a few packages a month? I’m trying to save money and pay down my debt, not spend more. Am I making too much out of this? I would appreciate your perspective.
For me, it would really depend on the volume of mail I was receiving. If I was making a trip to pick up a package once a month, the trip out of my way to the post office would be worth it.
On the other hand, if this is a daily or a thrice-weekly occurrence, I would go for the more convenient pick-up option, even if it were more expensive.
Let’s say, for example, that the more convenient pick-up saves you ten minutes per package. If you’re receiving one package a month, that’s two hours (120 minutes) of time over the course of the year. The box is costing you $94 more than the post office, so you’re spending $47 per hour of time saved.
Now, let’s say you’re receiving packages three times a week. That’s 26 hours (1,560 minutes) saved by having a more convenient pickup spot. That breaks down to $3.61 spent per hour saved over the course of a year.
For me, the cutoff for something like this would be between $5 and $10 an hour, depending on environmental factors and other concerns. So, for me, if the packages were coming in much more frequently than weekly, I’d rent the more expensive and more convenient box.
I make it an effort to set aside one hour each weekday for reading related to Money360. I shut off all distractions and read a personal finance or a time management book.
Also, every single day, I set aside at least an hour devoted to reading for my own enjoyment or growth in other areas. I often exceed this because I’ll take a book with me whenever I go out and about, so I’ll get in fifteen minutes at the doctor’s office or something like that. Usually, this hour is in the evening when other households might be watching television or something.
This adds up over time. On top of that, because I’m such a practiced reader, I can read pretty quickly, allowing me to go through more books than I would if I didn’t practice so much.
That’s really all there is to it.
Q6: Thrift clothes for tall folks
I have been selling clothes on Ebay for about two years. I make about $500.00 per month and am looking for a way to earn more. In your article today you mentioned that tall clothing for men are scarce or hard to find, so that led me to wonder if that’s a niche I should research. If you don’t mind, my question is: how much do you pay in the thrift stores for shirts, tshirts, pants, shorts etc for tall men? This would also help me decide if buying these items for resale would be worth it.
Finding good tall clothes at thrift stores is completely luck-based, but when I do find them, they’re not usually premium priced over anything else. They’re usually hung on racks alongside non-tall items.
The question for you would be whether or not the additional time you spend seeking out good tall clothes that you could likely eBay at a small premium is worth it.
My perspective is that it probably wouldn’t be worth it if you were just hunting for tall clothes. However, if you use thrift stores as a general resource, identifying both tall and regular items that are sell-able, I think you could turn a reasonable profit. You’re essentially acting as a clothes filter in that situation.
Q7: To sell or not?
My fiance and I are living together in a house in Toronto, Canada, which we bought one year ago. We bought it for $415,000, which for our neighbourhood, is a great price. I absolutely love our community – very warm, supportive, good shops etc, and good schools (for the children we’re planning to have in the next 2 years). I’m 30, he’s 32. We have a great relationship (lots of love, and good teamwork), and I’m so excited for our life together. There are two issues for me: current stress based on our present situation, and difficulty knowing what to do for future planning.
Currently: My fiance has no debt (aside from our shared mortgage; $1800 per month, variable rate… a good one, just can’t remember the number at the moment). My fiance makes a good salary (80,000) and has started some investments for our future. Me, on the other hand, I don’t have a good track record for being smart with money, but I’m working hard to change that now in my life. I have a large student debt (40,000 interest at prime through my father’s line of credit, and a personal line of credit 12,000 interest at prime). In addition, my employment has been unstable (a difficult market at the moment for Social Workers) so I’ve been building a Private Practice (which I love, and wish to grow!). Luckily I have a small client base, and I’m working right now on increasing this through an Online Counselling service. I’ve also been working odd jobs part-time for extra income, but most of the money goes towards paying my debt payments, and not towards our life (which causes me frustration). And to top if off, we’re getting married in April … luckily with financial help from our parents… but we’ll have to cover a large chunk ourselves (10,000). I’m not sure there’s any more solutions, per se, for this current situation other than continuing to work hard and communicate with my fiance about finances. What do you think?
WIth regard to the future: as I mentioned, I love our home and our neighbourhood… and I don’t want to move anytime soon. I know from our friend’s experiences that house-hunting in this area is very difficult, and we’d never be able to find another home with these perks for this price. There were lots of strange factors that led to our home purchase, which I won’t go into now… but it was unique, and not likely to happen again. However, my fiance wonders if we should sell our home in the near future and use profits to pay down some of the debt (which I admit, is huge and weighs on us). If it were just me, I’d say sure… but given we want to start a family, I feel being in a good neighbourhood is more important. But I don’t want to push for staying here if there are reasons I’m not seeing which could damage our future financial situation. Finally, when we do have children, I will not be eligible for social assistance because of my unstable employment, therefore we’ll only have one income (and maybe some extra from my private work, if I can afford the time). If you have any insights or advice, I’d appreciate it.
The thing you need to keep in mind is that working to pay off your debts is working toward your shared life. Every hour you spend paying down those debts is an hour that will eventually improve your situation. It reduces that debt load and also brings forward the date that you’ll be able to be rid of all of them.
I am worried that you are living a bit beyond your means. The debt load you have is pretty high, you’re working at a job that seems to be relatively low income, and you’re spending more than $10,000 on a wedding.
If you’re feeling like your debts are insurmountable, which seems to be the reason you wrote this, part of it might be your lifestyle level. There are ways to reduce your lifestyle level without selling your home, particularly if it is somewhere you want to live long term.
Q8: Car search in new location
At the end of October, we moved about 150 miles away from our then current home to pursue a new job in a new market that offered significantly more opportunities then where we were. Along with it came a 50% raise (and minimal increases in living expenses) – my old job (that I quit to move) is still paying me to consult. In a lot of ways, I have more money than I’ve ever had in my life and projects that were on hold (new bed for the kids, clothes, etc) due to money are finally getting fulfilled.
However, being 150 miles from “home” has presented its own difficulties. We find ourselves driving back to visit family and friends every couple weeks (especially during the holidays). However, because everyone we knew was within 20 miles of us, our car was never purchased with all the miles we’re putting on it in mind. Plus, it’s not all that comfortable for long trips, and lacks adequate trunk space for packing for overnight trips.
So here is the basis of my question(s): how do we even start the car searching process? I want decent gas mileage and decent leg room in the cabin and would like something we can fit more than a few blankets and a suitcase into. Since it will also be my wife’s primary vehicle, reliability is a must as well. I have to admit, I’m overwhelmed just looking at the options and not sure where to start.
The other half of my question is: We had to take out a small loan (4,000) to move here – knowing we would be able to pay it off quickly. I have the money to pay off the loan, some savings, some extra money in my checking account, which would give me about 10,000 to pay on a vehicle (if I didn’t pay off the loan). Would it be better to pay cash for the vehicle and make payments on the loan, or better to take out a small loan for the vehicle and pay off the moving loan? I have no idea what interest is on a car loan (have never had one), but the moving loan is at 11%. Otherwise, the only other debt we carry is school loans which are currently in deferment.
Your best move would be to pay off the loan, buy a lower-end vehicle that you can afford to pay for with cash, and then start saving right now to replace it. That way, you avoid debt, which is just money lost to the bank, and you also avoid depreciation on a higher-end car.
As for your specific car choice, we find ourselves in a similar boat. All of our extended family lives about four hours away from us, so we often find ourselves on road trips to visit people. That’s a long car ride, particularly with three kids.
What we’ve found is that the two most important factors on the trip are reliability and fuel efficiency, assuming that we have minimum space for our legs and our belongings. Most of the time, we make that trip in our Prius, which gets great gas mileage and is very reliable. It has enough leg room for me, too (I’m 6′ 6″).
I’d suggest just going to the lot and focusing on fuel efficient cars that you fit comfortably into. Test drive a few to get an idea of what you like in terms of comfort, then shop around for the best deal on some of the models that fit your needs.
Q9: Sell now or later?
I am potentially facing the issue of selling my condo at a loss or renting it out at a loss. I have applied for a job within my current organization in another city roughly 1.5 hours away so commuting for me would not be an answer. The city I would be moving to is a lower cost of living area but my salary would also drop approximately $5000.00. I figure I will be bringing home $1450 ($200.00 less) every two weeks after taxes and pre-tax items. I have lived in my condo for 5 years, but I just refinanced in April to a 20 year mortgage with a 4.875% interest rate.
If I would sell today I think I would break even on what I owe on the mortgage $140,000; however, to pay realtors, closing costs etc. I think I would have to bring $8,000 to $12,000 to the closing table. I have that amount but I would be left with little or no emergency fund. If I try to rent the condo I would probably get $1100-1125 per month in rent. My known costs would be the mortgage of $1048, condo fees of $335 and payment to someone to manage the place of $125. I would be short approximately $485.00 per month. I believe I can make up the $485.00 by changing some lifestyle habits, not paying extra principle on the mortgage and cutting back on saving for a new car which I will not need in the next 4-5 years.
The big kicker is if I took this job it would probably only be for 5 to 7 years and I would likely move back to where I live now and move back into the condo if I keep it. Strictly on the basis of money would you sell at a large loss now or have the losses over a few years? I don’t expect rents to go up that much because of the size of the condo, the lack of a dishwasher (I can’t add one) and the laundry is down the hall. Also as an FYI the condo is not underwater but I have lost approximately $75,000 (all equity from the sale of a previous property I put in at closing) in value since my purchase.
In the new job I would be doing what I actually want to be doing in my career right now. I would be away from a lot of the bureaucratic issues I am facing right now and I would get out of a job situation that I am not a 100% happy in. The job is in a city I use to live in. I have friends there, a church family that I miss and I will be closer to my immediate family. I miss the sense of community I use to feel in that city. There is a lack of that in the metropolitan area I live in right now.
The decision of whether to sell would hinge on a lot of factors that you haven’t really specified here.
How likely is it that you’ll move back there in five to seven years? Are there other opportunities besides the career path you’re on that would cause you to move back there? How is the market for rentals in that area? Are there a lot of rentals sitting unoccupied or are they in high demand? How much of a shortfall would there be on the mortgage payment if you rented out the property (after taxes and after management fees, assuming you go that way)?
The less likely I was to return to the area, the more I’d lean toward selling. The more likely I was to rent it, particularly at a price that would pay most of or all of my mortgage, the more I’d lean toward keeping it.
This is one of those situations where there is no strict right or wrong answer because we can’t see the future. We don’t know where our path leads. All we can do is give it our best guess and move forward from there.
Q10: How do you find bargains?
What I’ve never really been able to understand about frugality is how people find all of these amazing bargains. Let’s say I need a new kitchen knife. I do some research and find some potential knives that I might by. Then, I go on amazon and a few other sites and find prices and then I do the same thing in local stores. Usually, I just buy the lowest priced one I find, but I never seem to find these amazing discounts people seem to find. How do they do it?
When you hear about a big discount, it’s often on an item that the person wasn’t necessarily planning on buying. They just happened to find that bargain, had enough sense to see it for the bargain that it was, and had the resources to pounce on it.
It gets much trickier when you’re looking for a discount on a very specific item. The more narrow the item you’re looking for, the harder it is to find a big bargain in that specific area.
What I often do is wait. If there’s an item I would like to replace but I can hold off for a while, I sit on it and look for a bargain for as long as I can.
Sometimes, it pays off. For example, I mentioned how I waited around for the right price on a blender. Our old blender had a broken lid (which meant that it would splatter if you used it) and a motor that had a very loud whine to it that started after my son dropped it on the floor. However, it was still usable, so we kept using it. I started watching a variety of places very carefully for a discount on a really good reliable blender that wouldn’t easily break and might survive a bump and would also blend anything we threw in there (our old one was dodgy at times when it came to blending perfectly), but I knew I could just go buy a $30 replacement for it at Target if we needed to switch it.
What happened? After some waiting, I found a wonderful new blender on sale at a local food store that was going out of business and had marked it way down – something like 70% off the sticker price. About a day after that, I found an even better price on Craigslist for a similar blender.
People find bargains through a mix of serendipity and patience. You can’t wake up one morning and expect to find a huge discount on the specific item you want.
Got any questions? Email them to me or leave them in the comments and 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 hundreds of questions per week, so I may not necessarily be able to answer yours.