海角大神

What鈥檚 inside? Here are the questions answered in today鈥檚 reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.

How to find a housemate
Getting neighbors involved
Building credit from nothing
Charities and taxes
A 203(k) mortgage
Suggest some board games
Investing extra money
Writing online for money
Giving up cable for Netflix
Dealing with bad credit

Due to some medical results and the recommendations made to me because of them, I鈥檝e been eating a plant-based diet for a month now (that鈥檚 right 鈥� no meat or animal products, at least as far as I could reasonably tell).

It鈥檚 actually been easier than I thought it would be. The first two weeks were the hardest. At this point, I鈥檓 not really bothered by it at all, though cheese still sounds really good. I really wonder if I鈥檒l feel the same way in a few months.

Q1: How to find a housemate
I have thought about this for about a year and I think I am finally ready to rent out a spare room in my house. I have a 3 bedroom, 1 bath home near Pittsburgh PA. The house and room are great: can be fully furnished, lots of living space, large yard and ample off street parking. The problem I am having is how to go about finding a housemate. I have asked all my friends and family if they know of anyone looking for a place, unfortunately no one does. I put an advertisement up on craigslist. I put really nice pictures and tried to showcase how large the room was and hardwood floors. I had a few people interested, but no one ever showed to see the place. Do you have any suggestions on where I can list my room? Or should I just keep posting on craigslist? The room is 120 sq feet with a large closet and ALL utilities are included for $450 a month.
- Barb

If the $450/month rate is comparable to what similar rooms are renting for in your area (and Craigslist can help you figure this out), then the problem is probably with your salesmanship.

If you say 鈥測ou get a 120 square foot room,鈥� that鈥檚 going to sound like a prison cell to some potential renters. What other amenities is the person going to have if they rent the room? Will they have bathroom access? What about a kitchen? How much is the square footage including the closet? Is there parking available? What other amenities are nearby?

If you want renters, accentuate every positive you can think of about the room and the area you鈥檙e in. You want to entice them to check your room out.

Q2: Getting neighbors involved
I live in a high-rise in suburban NJ 鈥� great building, nice neighbors, love my apartment 鈥� we鈥檝e just been told that due to neglected maintenance, we鈥檙e being hit with a special assessment and the recent condo board meeting was not pleasant.

I鈥檓 very interested in frugality and going green, both for the planet and to save $$$$, but am stumped as to how to make this effort larger than just my one-bedroom.
- Jay

If you have a good relationship with your neighbors, talk to them about fixing this 鈥渘eglected maintenance鈥� problem together from a saving money perspective, as it鈥檒l help everyone involved not only avoid future assessments, but also likely reduce their own cost of living.

I鈥檇 start the ball rolling by talking to the neighbors you know the best and seeing what they think. If they鈥檙e all positive, have a meeting somewhere and come up with some plans for addressing it. You can utilize the condo board meeting or do it on your own.

I would advise not pitching the 鈥済reen鈥� aspect of this as being environmentally conscious is apparently very politicized and can get a very negative response from some, as has been my experience recently.

Q3: Building credit from nothing
I am a recent college graduate who is engaged to be married in June of 2011. My fiance also also graduated recently and was lucky enough to obtain a job making 50,000 to 60,000 dollars a year (varies based on the availability of overtime). I have not found a full time teaching job yet and currently make approximately 1,500 dollars a month working part-time. Financially, we are doing well and have about 18,000 dollars in savings. Our only debt is my student loan debt; he has none. The problem we are facing is credit. We want to buy a home before June; however, my fiance has absolutely no credit to speak of. I have been building my credit since I graduated highschool but have no full time job. The mortgage broker we spoke to practically treated us like children and left us feeling pretty hopeless! I feel like we have spent the last year putting the pieces of a puzzle together to realize we were missing the center piece! Without rambling any longer, my question is: What should our next step be? Try to build his credit (he has been denied a loan, credit card, etc)? Wait until I secure a full time job? Your input would be greatly appreciated!!
- Priscilla

You will have some difficulty building a strong credit rating for your partner before June, no matter what you do. A strong credit rating comes from having a long positive credit history.

The best way to get the ball rolling on that, of course, is to start immediately. If he has already been denied for a loan and a credit card, his best move is probably to attempt to get a secured credit card. A secured credit card basically means that he pays the credit card holder a deposit in advance of getting the card, which protects the issuer from this person with poor or no credit from charging up the card and then refusing to pay.

Get that card, then use it regularly for some routine purchase, like gas, and then pay the full balance off each month. What you鈥檒l find is that over time, his credit will improve and he鈥檒l eventually be able to get an unsecured card.

The key is for him to keep paying his bills on time. Gradually, his credit will go from nonexistent to good and he鈥檒l be eligible for other loans.

Q4: Charities and taxes
I made some contributions to a charity for a few years. I stopped giving to this charity about 3 years ago. I want to know if I can still claim tax benefits.
- Javier

Sorry.

reports the following:

Contributions must actually be paid in cash or other property before the close of your tax year to be deductible, whether you use the cash or accrual method.

In other words, to claim a deduction on your 2010 taxes (due next April 15), you have to make the deduction within the 2010 tax year.

Q5: A 203(k) mortgage
I have been dating a wonderful girl for the last 6 years and we have recently gotten engaged. Now that we are engaged we can seriously consider one of the things that I have looked forward to for a long time, getting married and buying a house. I have been doing a lot of thinking on the matter and I have developed some questions. Currently she lives with her parents and I live with mine (it is a great way to save money) and we are both financially responsible as we are on aggressive plans to pay off our student loans as well as saving for retirement and the short term. I feel that I have a good idea of what we can reasonably afford without putting us in a bad spot. Let鈥檚 say we have $10,000 for a down payment.

In our area one can find a nice-ish house in a good neighborhood for $85,000 to $100k (probably toward the higher.) I would say that these are within our price range. One can also find a house in a good neighborhood that is in need of updating/repair for about $60,000. She and I both like the idea of buying a house that needs some updating so that we could put our own touch on the place we will call home. In this area there is a plethora of homes that were built 50-80 years ago and for the most part they are in need of the same kind of updates (bathrooms, kitchens, flooring.) I feel that these are the types of updates that I would be willing and able to do with the help of family members and a friend or two.

So one might say that buying a 鈥榝ixer upper鈥� is a no-brainer for someone like me鈥�.The problem: How does one finance these expenses? I am still in the early stages of my research on mortgages and buying a home (hence this email.) One thing that I found interesting is the FHA 203(k) mortgage, it appears that with some restrictions and a few steps, the government will back the mortgage, which will be more than the cost of the home, to allow for repairs. To me the 203(k) loan sounds like it鈥檚 right for us but I am hesitant. The information on HUDs website is informative but I need an opinion. Another option would be to put a small percentage down on the home and take the remainder of our savings and put it toward the upgrade costs. The problem with this is the time it might take to get the upgrades done. What are your thoughts on the matter? I feel that either way we are looking at an $80-$100k mortgage but the difference in houses could be big (given the potential cost savings of doing the work on our own.)
- Bill

A 203(k) loan is more or less what you describe. A lender lends you an amount greater than the value of the home (but backed by the government), with the additional money going to make repairs on the home. Ideally, this brings the value of the home up more than the costs of the material for the repairs (you鈥檙e adding sweat equity).

There are some risks here, though. The big one is that if you鈥檙e unable to follow through with the repairs for whatever reason (health, etc.), you鈥檙e underwater on that mortgage. You鈥檒l owe more than the house is worth if you can鈥檛 put in your own sweat equity.

If you鈥檙e willing to accept that risk 鈥� and it sounds like you鈥檙e in the best position you could be to accept it 鈥� then I鈥檇 go for it. It鈥檚 a great opportunity for someone with home improvement skills to turn those skills into home value.

Q6: Suggest some board games
Some friends of ours invited my husband and I to dinner a few months ago. After dinner we played some board games of theirs that I鈥檇 never heard of and had a blast! Since then, we鈥檝e dined and 鈥済amed鈥� with them several times and tried a lot of games. I found out eventually that they got the idea of playing board games and having dinner parties with them from The Simple Dollar, which is how I found your site!

I am wondering if you could suggest some games for us. We would like some games that could be played in an hour or less that my husband and I could play and we could also easily play with another couple. What would you suggest for us?
- Kelly

Here are four board games that can be played in an hour or less, work well for two players and also work well with four players, and 诲辞苍鈥檛 have overly complex rules. I own all of these and enjoy playing them all.

involves planning a journey around the United States (or Europe, if you get the Europe version). Each player has a set of secret goals (say, 鈥�Houston to Seattle鈥�) and earns points at the end of the game if they鈥檝e completed those secret goals by connecting enough cities together to build a path between those cities (say, 鈥淗ouston to El Paso to Phoenix to San Diego to Los Angeles to San Francisco to Portland to Seattle鈥�). You have to 鈥渂uild鈥� each leg of that route simply by drawing cards and collecting sets of the same color (say, to build 鈥淗ouston to El Paso,鈥� you might need a set of three cards of the same color, or another one, like 鈥淪an Diego to Los Angeles,鈥� might require a set of four yellow cards), and when you complete that set, you discard that set and mark that route on the board.

is a card game where each player assembles their own deck of cards while the game goes on. There鈥檚 a set of available cards for all players to buy from, and those cards each have special abilities on them (like 鈥渄raw two more cards鈥�). Once you鈥檝e bought a card, you add it to your deck. You buy new cards using cards in your deck that have coins on them, so you might play three 1-coin cards (called Coppers) to buy a card costing 3 coins (鈥淰illage,鈥� for example). Some cards are worth victory points and, at the end of the game, each player counts up the number of victory points in their deck. The game ends when a certain number of cards have been purchased from that shared pool.

is a game in which you鈥檙e trying to prevent the spread of a few terrible diseases across the world 鈥� in effect, you鈥檙e acting as a member of the CDC. You do this by traveling around the map (the board is a world map) and 鈥渄isinfecting鈥� cities that have disease markers on them. Each turn, though, the diseases grow and expand to more cities. You鈥檙e working with the other players as a team in this game.

is a game where you build the board as you go along. The board is made up of 72 little tiles and each turn, you turn over a tile and play it next to one of the tiles already in play and build what effectively looks like a town. You also have a small number of little 鈥減eople鈥� tokens; you can play one of them on the board each turn. The more 鈥榮tuff鈥� (road, buildings, fields) around your little people at the end of the game, the more points you earn.

Q7: Investing extra money
I鈥檝e just started doing this roughly 1 year after buying my first house. Every quarter year I鈥檓 taking any money in excess of $5k out of my bank account that I use for paying bills/etc. and putting it into online savings. The money there is split into 25% to pay extra on my mortgage, 25% 鈥榤e money鈥� which will likely not be spent often anyway, and 50% to TD Ameritrade. With the TD Ameritrade 50%, I am using 20% for individual stocks I choose, 20% for index funds, and 10% on bonds or something else secure. I鈥檇 buy these in probably $2k chunks so the fees 诲辞苍鈥檛 eat up the profits. So far I鈥檝e got enough to put an extra $500 towards the mortgage for awhile every month and made 10% on XOM. The only part I鈥檓 not sure about is if I should be investing in bonds as a 27 year old when I鈥檝e already got and employer who contributes 15% of my pay whether I match or not to a profit sharing retirement plan that invests in mutual funds. This is already a pretty stable investment and it dwarfs my TD ameritrade account so I鈥檓 thinking maybe I should be more aggressive with trading. I鈥檓 also a bit conflicted trying to define what counts as 鈥榤e money鈥� but thats a different subject.
- Rob

Whenever you invest money, you should have a goal in mind for what you鈥檙e going to do with it. That way, you can make intelligent investment decisions with that money.

If you 诲辞苍鈥檛 have a goal in mind for money you鈥檙e thinking of investing, I would invest that money in whatever offers the best possible return without putting your balance at risk.

For many people, that means paying down debts. It sounds like you have an outstanding mortgage, so if I were you, unless you have a specific goal with that extra savings, I would sock at least some of it straight into that mortgage (or other outstanding debt).

Why do it this way? If you have a 6% mortgage, an extra mortgage payment in essence returns 6% a year until the mortgage is paid off (and you get the money back at that time in the form of not having to make the last few payments). You won鈥檛 lose principal on that investment, either, which you very well might in other investments.

Q8: Writing online for money
Seeing as how I鈥檓 only 23, I realize I鈥檝e got some time on my hands to get started on my career. The thing is I just 诲辞苍鈥檛 know where to turn. I feel so lost. I love the outdoors, I love photography, but most of all, I want to start a family. I鈥檓 only 23 but my boyfriend and I are ready to get married. We鈥檙e just in the process of getting our financial situations in order (as I discussed in my previous question you answered). I dream about being a wife to the best man and friend I鈥檝e ever had, and raising our children together. This possibility is always in my mind when I think about possible careers. I鈥檝e thought about starting a blog or some sort of online free-lance writing (so that hopefully once I have children I can have an established at-home business) but I just 诲辞苍鈥檛 know what sites to trust, or where to get started.

I鈥檓 currently majoring in journalism in school simply because I think it鈥檚 a broad, widely useful major, and not because I鈥檓 especially interested in it. My dream would be to hike trails across the US, and when I begin having children, I would love to write about my experiences and post photographs of my travels. Seeing as how I鈥檓 a student and must work as much as possible to support myself, traveling and writing at this point in my life is just an impossibility. I suppose my question to you is: How would you get started? I鈥檓 not looking to be rich or work my life away, having a family has always been a dream of mine. I just want to get into the blogging or web writing field, but I鈥檓 not sure which sites are trustworthy, or how to pick a focus for my blog.
- Rhiannon

For a blog to be successful, it needs two ingredients. It requires enough passion from the creator of the blog to keep updating it consistently. It also requires a topic and an angle on that topic that provides some sort of value for the reader: it helps them with their problems, it entertains them, or something along those lines.

Those two points have to be addressed before anything else. If you 诲辞苍鈥檛 have those two, you鈥檒l never be able to build an audience for your blog because there will never be anything there worthwhile enough for them to visit.

If you have those two, then everything else flows from that. If you鈥檙e providing something people want, people will come, and if you have passion, you鈥檒l be able to keep doing it.

Find those two things before you do anything else or you鈥檒l find yourself wasting your time.

Q9: Giving up cable for Netflix
I read in your post that you are giving up cable in favor of netflix. We are considering doing that, but I have a couple of questions. There are a few TV shows that we love and follow. Mostly Supernatural on CW and Haven and Warehouse 13 on SyFy. I鈥檓 not sure how we could follow those shows without cable. Right now we DVR them and watch them on the weekends. Any suggestion for that?
- Christina

Is your ability to watch those few programs worth your cable bill? I can鈥檛 answer that question for you.

What I can say is this: you鈥檙e effectively paying to watch them now. If you join a service like Netflix, such shows will eventually be available on DVD, allowing you to watch them in that form a year or so after their air date.

It鈥檚 because of Netflix that my wife and I are finally watching Battlestar Galactica all the way through. Sure, it鈥檚 not fresh and hot, but it鈥檚 just as entertaining as it would have been a few years ago.

Q10: Dealing with bad credit
Back in 2006, i opened a wellsfargo gold card and in sept 2007 i got offered to upgrade to a platinum card. I took the offer of course and end up having a $4 balance on the gold card that i was never aware of. Found out about it almost a whooole year later. Paid it off but now it is showing a charged off. I think it is hurting my credit score so what can i do about this?

*note: Sam actually attached his credit report to this email, and I鈥檓 not including it to protect his privacy.*

I attached the overview just so you can look at it and see maybe it鈥檚 not the card but the Debt to credit ratio instead?? I鈥檓 not sure and that is why i鈥檓 asking for you help.
- Sam

First of all, never send deeply personal information to someone you 诲辞苍鈥檛 personally know. I wouldn鈥檛 send anything like this electronically, period, unless it was encrypted. Sam did edit some key pieces out of his credit report, but there was potentially enough info there for me to dig into his identity if I so chose.

Now, as for his question. Your routes out of this are to either wait on the card to fall off of your credit report, which should happen in about four years. Alternately, you can contact Wells Fargo and/or the credit reporting agencies and request that the item be removed from your credit report, which they most likely won鈥檛 do.

Your best time to get this removed has already passed, which was the moment when you first discovered and tried to resolve the problem. Now that you鈥檙e considered fulfilled in Wells Fargo鈥檚 eyes, there鈥檚 not much incentive for them to issue such a change on your behalf (this is true of any business).

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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