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. Car upgrade question
2. Two dollar bills
3. Homeschooling costs
4. Rewarding academic excellence
5. Preparing for coming child
6. Leaving behind a family heirloom
7. Bill arrangements and guilt
8. Wedding gift for frugal couple
9. Beginning gardening tips
10. Khan Academy on personal finance
This weekend, my parents are coming to visit for a long weekend (for them). I love seeing them, as do my children.
For me, the biggest challenge is to make sure as many of the household tasks that would normally be done during the weekend are actually done during the week so that they’re not sitting around twiddling their thumbs while we get caught up on laundry or grocery shopping or other tasks like that.
I usually end up trying to compress five days of work into four or so, leaving me ample time to take care of such duties.
It makes for a busy week, but it’s worth it to have a great weekend.
Q1: Car upgrade question
I have a 2000 Volvo S40 and it seems to average about $2,400 in repairs/maintenance per year. I believe I could sell it for around $3,500-4,000. At what point is it better for me to sell it and get a newer/more reliable used car or is it a guessing game? I fear selling it and buying an older Civic that could have just as many issues as my current vehicle.
Generally, I stick with cars until they reach a point where it’s obvious that something needs to change. By that, I mean that the car repeatedly fails when I truly need it to operate. All cars are going to have an issue once in a while, but if it becomes anything approaching a regular thing, I’m looking to move on.
It’s really hard to say what a “good” amount is for annual maintenance and repairs on a car is. It varies between models and how much you drive it and what you consider “maintenance.” Is gas maintenance? How about oil?
It really is a guessing game. If the car you have seems to be pretty steady and is as reliable as you need, I wouldn’t sell.
Q2: Two dollar bills
My mother-in-law gives our kids two dollar bills for their birthday and tells them not to spend them because they’re rare. If they’re rare, how does she get them all the time? Is this really true?
The $2 bill is currently in active production by the U.S. Mint. It is seen as relatively scarce, though, because it has the lowest circulation of all in-print paper currency in the United States.
Because they’re printed with less volume than other denominations, they’re often seen as a novelty and some people believe that they’re out of print or particularly rare. $2 bills are not rare, they’re not worth more than face value, and they’re not out of print.
If your mother-in-law enjoys giving them out, let her have fun with it! You don’t need to stress out about saving them as a collector’s item, though.
Q3: Homeschooling costs
Your back to school article reminds me once again of one of the many reasons we chose to homeschool our two youngest children. For less than the cost of the clothing, school supplies, and mandatory school purchases like the buzz book and the band shirt and gym clothes, I could purchase an entire homeschool curriculum and pay for all the related expenses including field trips and social activities as well as extracurriculars like sports teams! While this may not be the best choice for all families, it is certainly a viable choice for those on a tight budget, especially if there is one parent at home. Those two homeschooled kids just completed taking their bar exams after graduation from top tier law schools, so it seems that they got the academics they needed as well as having vital social relationships.
I don’t have any particularly strong feelings one way or another about homeschooling. Just like public schools, some homeschoolers are very good at what they do and some are not. Some public schools are very good and some are not. It’s all about the specific situation.
It is difficult to homeschool children if both parents have careers, though. This is a big reason why families who might otherwise prefer to homeschool instead choose to use public or private schooling.
We’re lucky to live in an area (central Iowa) with very good public schools when compared with both statewide and (particularly) nationwide standards. I feel good about the public schools here. I wouldn’t necessarily feel the same way in other areas of the country.
Q4: Rewarding academic excellence
Is it okay to reward kids for doing well in school? My wife says it’s a bad idea but I don’t think it hurts anything.
I think spontaneous rewards, such as dinner at a local restaurant or a new pack of their favorite kind of trading cards, are a good solution.
I don’t think expected or planned rewards, such as telling your kid you’ll give them $20 for every A, is a good idea, as it changes the reward from feeling good about the “A” to feeling good about the cash they’re going to receive.
A good grade itself should cause a good feeling and be its own reward. If you want to celebrate a bit, that’s fine, but it should be spontaneous, not a planned thing with a set reward at the end.
Q5: Preparing for coming child
I somewhat confused about what to do in my situation. While I feel fortunate to be where we are, my wife and I have some decisions to make. We have about 20k in savings, and about 50k in total student loan debt, and 15k on a car loan (0% interest, our other car is paid off). We make a combined 98k per year. We are expecting our first child sometime next week!
Which begs the question – what should we do with the money we have stashed away? The Dave Ramseys of the world would suggest using most of it to knock out our debt. However, we’re currently living in a cramped townhouse (2 BR, with one of those rooms being an open loft space) and would like to move in a year. We own our current house and would not make anything in a sale – we intend to hold as a rental. At this point next year, we project to have about 50k in the bank in projected savings. I suppose at this point it’s the age old question – should we crush our debts with this money or use as a down payment for our next house?
Keep that money liquid for now until you’re in a comfortable routine with the baby and you’re sure of the baby’s health. Expenses will change drastically during this transition period, so having that cash buffer is good.
After that, spend some time re-assessing your goals because, again, things will change once you’re dealing with the routine of a baby. A baby alters all kinds of life plans in ways you don’t see quite yet.
The “perfect” financial move would be to get rid of that debt before you do anything else, but the “perfect” move doesn’t always mesh with the realities of life. Get used to the baby, then re-think this issue. If moving seems like the right move, then do it, but do it sensibly.
Q6: Leaving behind a family heirloom
I have a set of dishes that’s been in our family since the 1860s. They were given to my great great great grandmother for her wedding. We use them on very special family occasions.
I was an only child, as was my mother, so handing them down was easy. Now I have three children. How do you decide who to give this kind of sentimental item to without causing family strife?
If there’s an item or two of deep sentimental value that several people you love all wish to receive when you pass, I suggest putting them all up for auction and splitting the proceeds among the appropriate people.
In your situation, that would mean that the heirloom dishes would be auctioned off with the other items in your estate upon your passing. Since the proceeds of the sale are split among your children, they can theoretically use those known proceeds for bidding on the item if they so choose, so it doesn’t necessarily “lock out” the child with the least amount of income to spend.
Another option is to sit down with all of the children, tell them that you wish they could all have it, and then suggest using a truly random method to figure out who gets the dishes. You can use a die roll or some other method of randomization to do it.
Unfortunately, the other options available to you are likely to wind up with hurt feelings.
Q7: Bill arrangements and guilt
My girlfriend and I are living together for about a year now. she is a teacher, I’m in advertising. We are splitting our costs for rent, food, energy etc. in half, so everyone is treated fair. Her income is pretty low, so in a good month she is able to safe 100 Dollar. My income is almost double, so I do well in paying down my mortgage (for an appartement I rent out), build up our emergency fund (almost 10.000 Dollar) and save for a downpayment for our future home (although we are not engaged yet).
I sometimes feel bad splitting our bills in half, considering I do so well financially (and eating a lot more than her). But she is insisting on this practice. For this, I give her big credit.
Sometimes I throw away a receipt for food on purpose so we can’t split it. I don’t think that this is a dealbreaker, is it? Also when we are eating out I sometimes pick up the check, but I ask her if that’s ok (mostly it is).
Here is my question: am I wrong feeling guilty? Or is there another way we can arrange to pay for our bills?
I think you’re doing fine. You have a strong and independent woman in your life who wants to be able to take care of things on her own and not be dependent on you. You should never feel guilty about that.
At some point, though, your expenses are going to become truly shared, and when that happens you’ll need to rethink the whole idea of individually paying for things because the money will come out of the same pool. This will happen gradually if you stick together long enough.
You feel guilty because you care about her, which is great, but these types of money decisions, for now, are wholly her own. Let her make them and abide by them without guilt.
Q8: Wedding gift for frugal couple
My wife and I have long been friends with a couple that are very strict with their money. They budget and are very careful about how they spend every dime. Their wedding is coming up and I’m honestly at a loss as to what to get them that they would genuinely enjoy. Thoughts?
I wrote an article about this a while back.
Generally, the best option is to buy them an experience or service that supplements an interest that they have. If they like to camp and hike, buy them a 2014 National Parks pass. If they like to eat, buy them a gift certificate to a nice restaurant. Think of their interests, think of an experience that matches that interest, and go from there.
These are the types of things that frugal people will enjoy and appreciate, but never really splurge on themselves. They will often view physical items as more of a hindrance, as frugal people are often either very selective about what they buy or let the price do the talking. An experience, though, is hard to overlook.
Q9: Beginning gardening tips
I am trying to plan for a garden for next summer. This summer for my 1st try, I tried lettuce and tomatoes. The lettuce was nasty and bitter. I have researched a little and figured out might be the soil. So my question to you is do you have any books on gardening you refer to regularly? A friend suggested the victory garden books. I just don’t want to waste money buying several books that are not helpful.
My favorite single book on gardening is Rodale’s Illustrated Encyclopedia of Organinc Gardening. I think it’s the best single volume on gardening out there if you’re already familiar with the basics of gardening.
I don’t really know what level of expertise you have or what you’re looking for, but if you’re looking at soil acidity, you’re a bit beyond the basics, so that would be a good volume for you.
For specific questions, I often use internet searches. I find the big Rodale book helps with general information and planning of a garden more than anything.
Q10: Khan Academy on personal finance
I know you’re a big fan of Khan Academy as you’ve pointed them out several times in the last month. What do you think of their personal finance section? Are their videos worthwhile?
Those videos are quite good. If you like watching videos to learn about a topic, they’re a good place to start when it comes to money.
I’m pretty big on Khan Academy. The site does a great job of teaching on specific topics and really carrying a person through from the very basics to advanced ideas.
Naturally, there are some things that are hard to teach in that format, but for things like learning math concepts, history, science, and other such things, it works really well.
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.