海角大神

The more of life I experience, the more I realize that the most valuable thing a person has in their life is time. The cost of a book is trivial compared to the value of the time spent reading it. The cost of raising a child in terms of dollars is far less than the value of the time spent rearing the children.

Time is the one thing I wish I had more of.

I just found out that I will be unemployed come mid-August and I am just wondering what steps I should start taking in savings and job hunting until then. I am currently an Americorps*VISTA, which means that I cannot start a second job until the completion of my term (again, August). I live very simply, but only make about $800/month take-home and have about $1400 in CC debt (started the year at $4000; I鈥檝e been working to get rid of it). Your thoughts?

Related to that, my position generally only winds up taking about 25 hrs/week, while I鈥檓 required to 鈥榳ork鈥� (be in the office) for 40. How would you utilize those extra 15 hours?
- Tessa

The first thing I鈥檇 do is figure out what I would like to be doing with my time come August. What exactly is the next step for you? If you don鈥檛 know, start investing those fifteen extra hours a week (and more) to figuring out what comes next for you.

Once you know, then you should be able to fill in the blanks as to how to fill your time until the change happens. It might mean building up a resume. It might mean spending a lot of time firming up old connections and relationships. It might mean applying for college or for scholarships.

In short, you need to figure out what comes next, make a plan for how to get there, then spend the remaining time executing that plan as strongly as you can. The key, though, comes from you. What do you want to do next?

My husband is irresponsible with money. I knew when we got involved that he had a student loan and some credit card debt (about $5000 dollars combined), and that he felt no obligation to pay these off. He also hadn鈥檛 filed his taxes for several years. I probably should have listened to my gut then and run for the hills, but i didn鈥檛, and I鈥檓 not looking for marriage advice here. Once we became seriously involved, I made sure his taxes were filed. The government garnished his refunds until the student loan was paid off, and we paid off the cc debt too with the understanding that he is unable to control his spending and should not have access to a cc in the future.

He still sent away card applications from time to time and was always rejected due to his poor history, but after paying off these loans, he sent away another application and was granted a card with a $10,000 limit. Within no time, he maxed out his card, once again with no concept of having to pay off the balance.

Our mortgage is in my name ($110,000 left) , my car is paid off, his car loan is in my name($9000, he does pay this), I carry no cc debt. We have an 18 month old. We both work. We do not have much money at the end of the month. He undermines my attempts to cut down our monthly expenses (ex, if I call to cut down our cable package, he calls and has it reinstated. Or, currently he has signed himself up with *three* different 36month term cell phone contracts!) I am working on building an emergency fund (it is still quite small at the moment, but growing)鈥�Anyway, I could not bear the thought of his cc balance sitting there with a 20% interest rate, so I paid it off with my line of credit (5%), and have taken over making these payments. Once again, the condition was that he would absolutely not have access to a credit card.

Once again, he got another card, and now has a $2000 balance, and is not making payments. I am done bailing him out. I am just wondering how his bad credit is going to affect me if he doesn鈥檛 pay this off? Whether or not we stay together, what can I do to protect myself from his debt? Is there anyway a spouse at the end of her rope can call the credit card companies and get his cards cancelled or say 鈥淪top issuing this man cards!鈥� If we do split up at some point, am I going to be responsible for half of his debt?
- Michelle

The important question is to consider whose names the debts are in. If he鈥檚 applying for credit cards on his own, are they just in his name? If they are and you file for divorce, they will remain his debts and are not your concern. If they鈥檙e in both of your names, you need to get your name removed from as much of it as possible if you鈥檙e considering a separation.

That being said, I think some professional counseling is in order in this situation. Clearly, there are serious trust issues going on in your relationship and your husband has some significant self-control problems. These are the types of issues that need counseling 鈥� they will not go away due to your sheer force of will.

If you care for him at all, seek help for him and for your relationship. I can鈥檛 tell from your email whether you鈥檙e beyond that point or not.

After I finished school I went to work for an outdoor education center for nine months. I loved the job but, wasn鈥檛 happy with the management so I came back to my parent鈥檚 house and found a job there. It is in a similar field but most of the work is in an office. I originally planed to stay at this job for three or four years but now the program might lose its funding. This wouldn鈥檛 affect the funding to my job but it would nearly make it pointless. My supervisor encouraged me to be on the lookout for other jobs. I sent out several resumes to some outdoor education centers and have interviews soon.

Everything is going great except that my Dad hates the idea. The problem is they pay minimum wage or just above it. Very few of these places offer health benefits but they all offer room and board. I don鈥檛 have any debt so I really don鈥檛 see much of a problem with the low pay. I also think the quality of life, free house and food make up for it.

Do you think it would be foolish to go back to that type of work?
- Beth

Your father鈥檚 frustration is probably stemming from the fact that he does not see you heading down a path that leads you to financial independence. He wants to see you being at least successful enough to fly under your own power through adult life. If you take another minimum wage job and continue to live at home with your parents, you are shifting a significant portion of your life鈥檚 expenses off to your parents as well as intruding on the privacy of their adult lives. He likely sees your choice as not moving at all towards repairing that situation.

Regardless of what job you choose, you should be working on a plan to be independent and they should be in the loop about that plan. What form that takes is really up to you, your situation, your skill set, and your passions.

Recognize, though, that your parents are people, too. They鈥檙e providing for you now because they care deeply about you, but every time you drink from that well, you leave them less water.

We took up a mortgage of $200k, with $140k being fixed and $60k in what鈥檚 called a revolving credit account here in New Zealand. We thought the revolving credit facility would allow us more flexibility if we are disciplined enough with our spending.

This is how it works, the monthly repayment of the fixed mortgage are deducted from the revolving credit account. All our income will go into this account, and we can draw up to 60K from this account for our expenses. The idea here is that if we are able to keep the account in positive, we鈥檒l not be paying any interest, but once we go negative, we will be charged interest for the credit.The 60K available in that account also serves as emergency funds for us. So far, we have managed to keep the balance at zero (i.e. no interest charges). We channel our surpluses into a saving account, and will be using them to pay off the fixed mortgage (in parts) when it鈥檚 due.

For all these, we are paying a service charge of $12.50 a month. To me, the revolving credit facility seems like another good alternative, what do you think?
- Art

It sounds an awful lot like a money merge account, something in the past.

In the United States, such accounts are generally pretty expensive and can ring you into the thousands of dollars. For that kind of cost, I don鈥檛 view such an account as being worth it unless you have little financial discipline. In your case, I think it actually might be worth it, though.

I鈥檓 not entirely sure, though, why you鈥檙e taking money out of the account and putting it into a savings account. I鈥檓 assuming that this is for extra payments on the mortgage, but if I understand the account correctly (based on my understanding of money merges and the documentation on revolving credit accounts in New Zealand), leaving the money in the account has the same effect of paying down your mortgage faster, plus it decreases the risk that you might go over your credit withdrawal limit. If that鈥檚 the case, I would put a severe cap on how much I transferred out of the account, only keeping enough to serve as a true emergency fund.

You don鈥檛 talk about Lost enough in your mailbags so I鈥檓 going to keep emailing you Lost questions until you answer one. So here goes. Who is the good guy of the series? Jacob or UnLocke?
- Kelly

Neither one is. I think you have a prison-like situation where the inmate (UnLocke) has been held in solitary confinement for a very, very long time. He鈥檚 like a rat in a cage. But does that mean the guard (Jacob) is a saint?

I still think there are two real heroes in this series: Jack and Locke. I still believe that to be the case. My belief is that Locke on the island will come back to life at the same time as Locke off the island walks again thanks to Jack鈥檚 spinal surgery, and Locke will eventually become the guardian of the island. Jack has been searching for something to fix for the entire series 鈥� he will get to fix Locke.

Or maybe I have no idea what I鈥檓 talking about and the series will end with a 鈥�Cop Rock鈥�-esque singing montage.

My partner has about $8000 worth of credit card debt and I鈥檝e been trying to help her figure out the best way to pay it off. We鈥檙e in the process of refinancing our mortgage (to 5.25%) and are wondering if it makes sense to wrap it into our mortgage, since she pays a higher interest rate on the credit card. She also make the monthly mortgage payment (I made the down payment, and am making the monthly payment on a second property we own, so she says it鈥檒l still be her responsibility, as we鈥檙e keeping track of who put how much into each property). I鈥檓 skeptical, not wanting to add any more debt to our mortgage (and feeling that HER debt being added to OUR total will make keeping track messy), but can you clarify just how much this is or isn鈥檛 an okay thing to do?
- Heidi

Yes, in a strict sense, it makes sense to wrap that credit card debt into the mortgage.

The challenge comes in when you look at the self-control issues. If you guys have no credit card debt at all, will she have the spending control to resist simply charging those cards up again for purchases you don鈥檛 really need?

I鈥檓 not sure about your domestic arrangement, however. You seem to want to distinguish heavily between HER debt and YOUR debt. If this person is genuinely your partner, then that includes your finances. There is no HER debt or YOUR debt. There鈥檚 OUR debt 鈥� you deal with it together because the debt is affecting you both.

I just realized that paying extra every month decreased my minimum payment amount and not the length of the loan. (Mostly because I just started paying extra.)

My original car loan- $9,815.43 for 4 years (48 months). My original minimum payment was $252.36. I now pay $275.00 a month.

I鈥檝e been trying to figure out how early my auto loan will be paid off if I add extra in every month. All of the loan calculators I鈥檝e found online that calculate don鈥檛 seem to take into account that the minimum payment amount decreases every month while my payment does not. I keep paying my original amount that included the extra. Is there a formula to figure all this out?
- Susan

It鈥檚 simple: ignore the minimum payment. Instead, calculate what your payment should be right now. Tack a small amount on top of that. Pay that amount every month, regardless of what the bill says. Soon, your loan is gone.

If the minimum payment is getting smaller, it鈥檚 because the lender wants you to pay on the loan for a longer period in order to maximize the amount of interest they get from you. They don鈥檛 mind receiving smaller payments in the short term if it means more income in the long term. Thus, they鈥檒l show you the minimum amount you鈥檇 need to pay to stick with your original payment schedule 鈥� and if you鈥檝e overpaid in the past, that minimum amount will be nice and small.

Ignore it. Use Bankrate鈥檚 great and figure out when you鈥檒l get the debt paid off if you add in some extra to each payment.

My husband and I both have student loan debt of $10k each at around 3%, and a mortgage for $140 k at 6.75%. We have the option to refinance down to 5.1% but it would cost $3,000 into the principle. We鈥檝e been paying the mortgage for 2 1/2 years, but have no plans to ever sell. The house is a rental property that we also live in, so the amount of mortgage, taxes, and fees and repairs we pay after the rents come in is only around $400/month, therefore allowing us both to save alot. We have no other debt.

I have personal cash savings of $15k, and we have a joint cash savings of $17k. My husband has cash savings of around $5k (we only mingle part of our finances for the purposes of paying the mortgage, which doesn鈥檛 work for everyone, but works for us.) We both work in stable jobs and make ~$40 k each, although I don鈥檛 want to work in the corporate life forever. We have so much in cash because we are looking to buy another rental property this year. (we will need about $25 k for this)

We both currently have 401ks, I have $12k in mine, and my husband has $16k. I鈥檓 26 and he is 28. I am thinking about opening an IRA and to fund it for 2009 so I can get the tax reduction. I have no idea what funds to pick from the list at Vanguard. I鈥檓 pretty comfortable with risk because this money is for retirement, but I don鈥檛 have very much time to devote to looking at my investments all the time. My 401k is just in a mix of funds that were picked based on my time until retirement. I am thinking of putting in the full amount for myself, $5,000. It should take around 6 months before we finalize a property purchase and have to come up with the down payment, so I can build that cash in my account back up.

Or would it be better for me to open a Roth IRA, or put my money somewhere else, or even pay my student loan off?? I doubt we would pay the mortgage down because we use the expenses against the income we get from the rents. My personal cash savings is earning no interest in my checking account (i know, i know, but this is why I鈥檓 working on this.)
- Danielle

First of all, funding a Roth IRA won鈥檛 get you a tax reduction, at least not today. Roth IRAs are funded with after-tax money.

Second of all, if you鈥檙e six months away from buying a property with a $25K down payment and have only $32K in joint cash savings, it is probably prudent to hold onto the cash until you have the purchase in hand. You do not want to find yourself in a position without a cash emergency fund, because when things go wrong at an inopportune moment, they can seriously snowball.

If I were to do anything with the savings, I would take $3,000 of it and refinance the loan. If you can drop the interest rate on $140,000 by 1.65%, you鈥檒l be saving yourself a couple hundred a month in loan payments, which would pay back that $3,000 in a year or so and then leave you in better financial shape for the length of the mortgage.

Other than that, I鈥檇 sit tight until you鈥檝e bought the property. I don鈥檛 see any major reason to change anything, assuming that the property buy is a definite thing.

Read this in your March 5 post: 鈥溾��when my contract expires, I鈥檓 going to simply cancel the phone and get a pay-by-the-minute el cheapo phone.鈥� I鈥檇 be curious to know how you go about choosing a pay-by-the-minute cellphone plan when the time comes. My husband and I would like to switch to a prepaid option as well, but each company structures their charges so differently that it鈥檚 hard for me to decide which plan would be best for us.
- Lynn

This is one of those times when I turn to Consumer Reports. What do they recommend when it comes to such pay-by-the-minute plans?

Right now, looking it up wouldn鈥檛 really help as I won鈥檛 be doing it for at least a few months yet. When it gets close, I鈥檒l visit my library and start digging through the back issues of CR to find their most recent article about such cell phones (likely, it鈥檒l be found in their most recent cell phone roundup). I鈥檒l move on from there.

My choice will probably be the best 鈥渂ang for the buck鈥� phone rather than the cheapest one, at least with the 鈥渂ang鈥� being call quality. It鈥檚 not worth my money if I can鈥檛 easily place calls with the phone at my convenience, after all.

I鈥檝e just read a document on 鈥渢ravel hacking鈥� that gives tips on how to maximize your frequent flyer miles for free tickets. One of the tips is to 鈥渃ycle鈥� credit card applications where you are applying for a new Citi card (to get the American Airlines miles) every 60-90 days. It鈥檚 legal, but I wonder what it will do to my credit score. If I don鈥檛 need to apply for any loans in the near future, does a decrease in my credit score (now 790 I think) really matter? Thanks for your help!
- Jill

This will have a mild negative effect on your credit rating. However, with a credit rating near 790, I don鈥檛 think the negative effect will be strong enough to affect anything you might use your credit rating for.

My concern with such rampant credit card hopping is identity theft. To get each of these cards, you have to apply for a new card, which is another opening you鈥檙e giving yourself to identity theft. The threat of theft on any one application or card you have is minute, but if you have lots of cards and applications floating around out there, the chance multiplies.

Unless I鈥檓 already flying a lot and can directly save a lot of money by doing this, I would not view it as being worth the combination of time and personal risk. If you fly several times a year already as a normal course of life, then the benefits might outweigh the costs here, but if you鈥檙e only doing this to try to build up miles in case you might choose to fly somewhere someday, then it鈥檚 not worth it.

Got any questions? Email them to me or leave them in the comments and I鈥檒l attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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