What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Thoughts on caring for parents
2. Wedding question, part one
3. Wedding question, part two
4. Starbucks Visa
5. Books on home buying
6. Frugal running shoes
7. Roth IRA contribution question
8. Roth IRA or bigger e-fund?
9. Unwanted Christmas toys
10. Marketing crocheted baby blankets
11. Where do I get advice?
12. Further areas of philosophy
Here in Iowa, it felt like winter did not begin until about January 12th or so, but when it did, it hit with a vengeance, with many inches of snow and a forecast for the coming week that has wind chills at our home approaching -50F.
When the weather gets that cold, it interferes with all kinds of things. You simply avoid going outside if at all possible, which means that
As I write this, I’m bundled up in multiple layers of clothing with a cup of hot tea on my desk. I feel quite good after getting up quite early to shovel snow. I don’t bother running the snowblower unless we have several inches, as shoveling our drive of a few inches of snow is good exercise.
On with the questions.
Q1: Thoughts on caring for parents
My wife and I are in our forties. We have two adult children that are moved out and on their own. Her parents are both in their late seventies; my parents have been deceased since I was 20.
Her parents are ailing. They’re not in a situation where they need to be in a retirement home, but household tasks wear them out. They live about an hour away and we visit them two or three times a week to help out, as do my wife’s siblings.
We have been talking about the possibility of having her parents move in with us to make things easier on all involved. We are actually set up very well with this, as we have a large main floor bedroom that could be used by them and a main floor bathroom with a shower that could be modified a bit to make it easy for them to use.
Our main worry is that the other siblings will simply stop helping or visiting in any way and just assume we’re taking care of it. They really like the regular visits from their children and grandchildren and we worry that will all dry up if they move in with us. Our secondary worry is financial as it will add some household expenses.
What are your thoughts on this?
In general, if everyone is on board with this, I think multigenerational living is a great approach for everyone involved. The key to making it work is communication – people can’t hold back on their feelings or else you will turn every little molehill into a mountain. You have to listen to each other and genuinely try to be supportive of one another to the best of your ability. If you can do that, it’ll work well.
As for your specific concerns, with your primary worry, one way to handle this is to just simply have regular family dinners at your house. Make it a routine to have people over for dinner a couple of times a week. I don’t know whether your home can support this, but it sounds like it can.
Doing this gives people a reason to visit and see your in-laws rather than just “stopping by.” It’s usually easier to go visit a parent or a grandparent if you have a reason to do so; if it’s just “stopping by,” it’s easy to skip it. If there’s a meal involved, it feels more like a reason to visit. So, if the move happens, just institute some regular meals. Maybe have a regular Sunday evening potluck or something like that, and maybe start inviting a few people over on weeknights on a regular basis. For the extra meal effort, don’t hesitate to ask people to come early to help prep if needed or to bring a side dish – in fact, that’s a good idea, because it invests them in the meal and makes the visit feel more purposeful.
As for the financial concern, talk that over with your in-laws. They will probably want to feel some ownership over the situation anyway. You can simply ask them to pay the energy bill and the internet bill or something like that, something that will partially replace their utility costs at their old place and possibly cut your overall bills, too. They can contribute to buying food, too. This can end up being a money saver for you, actually.
The key with any situation like this is open communication and candor. Everything won’t go perfectly and you’ll all do things that drive the other one crazy. Just be open about it and don’t let it grow into hurt feelings. Understand that everyone loves each other and you all want to make this work.
Q2: Wedding question, part one
I have two wedding-related questions for the Reader Mailbag. One of my best friends is getting married, and has asked me to be a bridesmaid. We are in our mid-to-late 20s. She and her fiance make good incomes and come from fairly well-off families. My friend and I have pretty different approaches to our finances as she really enjoys going out, eating out, shopping, etc. Meanwhile, I’m currently in grad school.
My friend’s wedding will be at a swanky venue in one of the most expensive cities in the U.S. (Note: it’s not a destination wedding, but I don’t live there.) I expect everything about the wedding to be top-of-line. My friend wants all of her bridesmaids to purchase bridesmaids dresses together as a group from the same store, by the same deadline. The store stylist said that this guarantees that all of the dresses will come from the same dye lot. The dress that my friend chose for everyone to wear is $300. It’s not that I don’t have the money for this, but… that’s a lot of money!
I found that same dress, used, in my size online. The used dress is significantly less money than the dress’s retail price. I don’t feel that dye lot matters much, but some online wedding forums warn against bridesmaids purchasing dresses piecemeal to avoid inconsistencies that may show up in the wedding photos. I would feel awkward asking my friend if I can order the dress on my own rather than as part of the group, because I feel like I’d be ruining her expensive photos. Again, it’s not that I absolutely can’t afford it, but it just seems so wasteful to spend hundreds of dollars on a dress when I can find it for so much less. Is this a time when I just need to suck it up and participate in the group order for the sake of maintaining social normalcy? I already feel bad because I’m skipping the bachelorette party which is across the country, so I feel like I’m the odd one out.
If I were in your shoes, I would sit down and talk to your friend about the situation. Simply ask if it is okay for the bridesmaids to buy the dress on their own. If she asks why, simply explain the reason – you’re a graduate student, $300 is a lot of money, and you found the same dress in the same color for much less.
The thing to remember is that if this causes a real issue, then there are issues in the friendship to begin with. A good friend appreciates the situation that their friend finds themselves in and works to find a way around it. A wedding is not made or broken on the dress worn by a bridesmaid.
Just have a conversation. The vast majority of the time, this will be a non-issue. If it is an issue, it’s a valuable indication of the status of the friendship.
Q3: Wedding question, part two
Second, how much would you recommend spending for the wedding gift? I was thinking of something from the registry that’s $100, but a lot of wedding etiquette sites say that if it’s a really good friend, you should be spending closer to $175. I don’t want to seem cheap or send the message that I don’t value her as a really good friend, especially when this is going to be a really nice/luxurious occasion. But there’s also a shower gift to account for…
You should completely ignore “wedding etiquette” sites when they give an exact dollar amount for a gift, especially one as weirdly precise as $175. That’s just weird, bad advice.
Give a thoughtful gift you can afford. Pick something from the registry that you can afford and then also write a nice handwritten note to go along with the gift expressing your best wishes for the couple in your own words with your best penmanship.
Anyone who looks negatively upon a gift given to them is a person lacking in character. Gifts should always be given freely based upon what the giver can easily afford.
Q4: Starbucks Visa
As a Starbucks lover, is the Starbucks Visa worth it? How does it compare to popular cards like the Chase Freedom?
Well, let’s walk through the hypothetical example given in their sales pitch. In that example, you’re spending $525 a month for a year, $25 at Starbucks and $500 elsewhere, so that adds up to $6,300. Let’s say you use the card for two years, so the total is $12,600.
This earns you 64 rewards in the first year and 28 rewards the second year, totaling 92 rewards. A “reward” is a drink or food item at Starbucks and appears to be at least somewhat Starbucks’ choice. Let’s assume these are worth an average of $4 each, so your total rewards are $368 in value.
To get that reward, you also have to pay $100 in annual fees on the card. So, you’re getting $268 in value, all in the form of Starbucks items that you largely can’t select yourself. That’s a little over 2% in rewards in the form of food items that are probably good but you can’t select yourself.
That’s not really the best card deal out there, and it’s going to decline in value each additional year because you only get that big bonus the first year.
I don’t think this card is worth it unless you drink a lot of Starbucks, in which case you might want to rethink how much you’re spending in coffee shops.
Q5: Books on home buying
Do you have any recommendations on books to read to learn about home-buying? My wife and I are planning to purchase this year.
My first recommendation for first-time homebuyers is Home Buying Kit for Dummies by Eric Tyson (seriously). It’s an extremely good guide to what people should know about buying their first home, and Sarah and I read an earlier edition thoroughly when we were considering buying our current home. Ignore the “for Dummies” part – it’s a really good guide.
From there, I’d hone in on which aspects of home buying aren’t crystal clear to you and read articles and find books to fill in gaps in your knowledge.
If I had to pick a second book, I’d probably look at 100 Questions Every First-Time Home Buyer Should Ask by Ilyce Glink. While it’s not as thorough as the Tyson book, it does delve nicely into specific areas of the home buying experience and can complement specific areas of the Tyson book well.
Q6: Frugal running shoes
For a new year’s resolution I followed your advice and started a resolution of running for 1 minute every day this year and running more if I feel like it but not required. It’s been working great! I have been running about 20 minutes a day on average on warm days and at least running a block or two on the really cold days. I thankfully have a spot to run on snowy days.
Anyway I’m writing to ask for frugal advice on running shoes. I used to be a big spender back when I was running and bought expensive shoes constantly. I whipped my finances in shape during a time when I wasn’t running for various reasons but now that I’m back at it, I need to figure out a way to do this without spending $100-200 a month on shoes. Ideas?
Let’s get this out of the way right now: I do not advocate anyone running in worn out shoes. You are begging for various physical problems by doing so. You should be replacing your shoes 300 to 500 miles or every 18 months, because the sole of the shoe simply wears down. Look at the bottom of the shoe and see if you see a lot of creases on the shoe’s bottom and there’s significant discoloring – that’s a great sign of wear and you should probably get new ones.
My recommendation is to find a good mid-cost model that really works well for you, buy a pair of them, and then stalk out bargains on that specific model. I have either personally liked or heard very good things about ASICS Gel Venture, Nike Revolution 4, and Adidas Cloudfoam, all of which are available under $50 a pair with ease, so try those.
Once you have a sub-$50 pair you really like, just watch very closely for bargains on those shoes and buy multiple pairs at once if you find a really good deal. You can watch them on Amazon by using tools like Camel Camel Camel, for example.
Q7: Roth IRA contribution question
I decided to put some money that I got for Christmas from my wonderful generous grandparents into a Roth IRA. I opened one through Vanguard and went to deposit the money and they asked if it was a 2018 contribution or a 2019 contribution. Which should I choose? Not sure of the ramifications.
Since this is a new Roth IRA – meaning you haven’t made any contributions to a Roth IRA in 2018, I assume – and I’m also assuming that (a) you haven’t filed your taxes for 2018 yet and (b) the amount you’re contributing is less than $5,500, then you should make a 2018 contribution.
Each year, you’re allowed to contribute up to $5,500 to your Roth IRA – starting in 2019, that limit goes up to $6,000. That window to contribute starts on January 1 of a given year and ends when you file your taxes for that year early in the following year. So, until you file your 2018 taxes (some time before mid April), you can still make a 2018 Roth IRA contribution, and you should do so because that window is about to close forever, plus it leaves the 2019 contribution window wide open.
This is a great thing to be doing with a gift from grandparents, by the way. While they might want you to do something fun with that money, if you told them that you put it aside for your future, they’ll be proud of you and for good reason.
Here’s another good Roth IRA question.
Q8: Roth IRA or bigger e-fund?
I have about $3,000 in an emergency fund which would be enough to get by for about two months. I am single with a 7 year old daughter. I have about $1,000 surplus in checking. Should I add to the emergency fund or add to my Roth? Nowhere near contribution limits for the year.
First of all, I want to say that I am in awe of what you’re pulling off here. You’re a single mother who not only has a healthy emergency fund, but is also concerned about saving for retirement. You are on the ball and deserve kudos for that.
Second, two months of living expenses is a good healthy emergency fund. If I were in your shoes, I would probably make the Roth contribution with most of the surplus, leaving a little behind in checking as a buffer. Then, I would set up an automatic transfer from checking to savings each week – $10 or $15 or $20 should do. This way, your emergency fund automatically grows slowly over time and if you have to tap it, you know it’s going to refill over time with no further effort.
So, I’d probably contribute around $750 to the Roth IRA, then I’d set up a $20 per week automatic transfer into my emergency fund going forward.
Q9: Unwanted Christmas toys
My kids receive an absurd number of gifts for Christmas each year. For the last few years, my husband and I have actually removed a few items from their “pile” that they were less interested in and put them aside to see if they remember them and if not we quietly sell them and put the money in their 529. We figure the gifts were unwanted.
This past weekend my sister came over and mentioned the toy she had bought for our middle child. It was one he had overlooked and we had put in storage in the garage. We hadn’t sold it yet. He wanted it so we dug it out and gave it to him. My sister was obviously curious as to what the deal was and we explained it to her and she got really mad at us and called us thieves.
What are your thoughts?
I honestly don’t see anything too wrong with your approach. You’re putting the gifts that your children aren’t interested in aside for a while, giving it some time in case they do think about them, and then if they don’t, you sell them off and put the money aside for their college education. It’s not as if you’re stealing their toys or anything – you’re just turning the ones they don’t want into something that will help them for life.
Your sister’s response might have had something to do with the fact that she apparently put a lot of thought into the gift and your child wasn’t interested in the gift, which hurt her feelings. Her feelings were probably hurt even worse when she found out you were going to sell it unopened.
This is one of those situations where you should just give it a little time and talk about it when the situation is less raw. I think your sister will see the sense in what you’re doing.
Q10: Marketing crocheted baby blankets
In late 2018, three extended family members had babies so I crocheted a blanket for each one. The recipients seemed to genuinely love them and two suggested that I try to sell them. I enjoy making them but I don’t even know where to start.
My honest suggestion is that you throw out the suggestion to your social network. Post it on social media along with a picture or two of the baby blankets and say that you’re willing to make them for baby shower or birth gifts. State your price and the dimensions and what kind of customization options you offer.
I’m honestly not sure what to charge for the blankets. That’s something you would be much better at assessing than I am. My suggestion would be to go relatively low in price at first – cover the price of the yarn and make a little for yourself, but not a mint – and then raise it if your blankets become popular.
You might also consider an Etsy account in order to sell your wares.
Q11: Where do I get advice?
You give so much great advice! Where do you go when you need advice?
When I’m in a situation where I don’t know what to do, I usually write it all out. I’m a huge proponent of doing “three morning pages,” which is a journaling technique where you sit down each morning and just brain dump three pages of writing in a blank journal. I try really hard to do that every day, and it often turns into a forum for me to take a problem in my life and turn it over thoroughly with pros and cons. I usually need to really understand a problem first before I can look for meaningful advice on it. Quite often, this process will make the solution to my problem screamingly obvious.
The next step, if journaling doesn’t give me an answer, is always to talk to my wife, even if the advice I need involves her. We communicate with each other a lot – not a day goes by without a few meaningful conversations. Sarah is my primary source for advice on everything.
If I’m still unsure, I usually go to the library and try to research ideas on my own. I tend to trust expert advice from books, where the reasoning behind the advice is usually laid out and I can see how that advice applies to my life.
If I’m still unsure, I usually talk to a few people in my life that I really trust. I have a few “mentors” in the community. I really trust and value the views of my parents and my wife’s parents and my sister-in-law. I talk to them next.
If I’m still not sure what to do, I’ll go talk to a professional in that particular field, but it’s very rare that I get to this point.
Q12: Further areas of philosophy
I have been enjoying your semi-regular series of Saturday articles about how different schools of philosophy provide personal finance guidance. What areas are you planning to cover in the future?
So far, I’ve covered stoicism, Epicureanism, Aristotleanism, and secular Buddhism, for those interested. Dane’s note actually came in before the last one was posted.
Going forward, I definitely want to write an article on transcendentalism, which I’ve touched on indirectly several times. This would cover Emerson and Thoreau (who I hold in very high regard), among others. I can see a useful article on utilitarianism at some point. I want to read more about various Eastern schools of philosophy which, outside of secular Buddhism and a few others, I know little.
Beyond that, it really depends on where my reading takes me. I love reading philosophy, particularly those with a practical angle that provides insights on how to live, and I find that most such schools of thought that deal with the practical in some fashion have a lot of application to personal finance.
Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. 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.
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