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. Collectibles after social distancing
2. “Buy low” makes sense now?
3. Unemployment or comparable job?
4. Food dehydrator recommendation
5. Consider booking flights now
6. Library substitute
7. Debt repayment question
8. Inexpensive home gym options
9. Do short showers save money?
10. Risk to using small insurer?
11. Child moving out
12. Side gig during social distancing
One of the most interesting parts of this period of social distancing is our family’s mild turn toward homeschooling.
In our area, schools are providing quite a bit of online materials, but there are no mandatory assignments. Since we really don’t want our kids to fall behind, we’ve basically built a “school day” structure on weekdays in which our children do the material shared by their school for a few hours with some breaks, then practice their handwriting by writing a letter to someone, then spend some time reading without devices. To replace the social element, we’re encouraging them to play at least a small amount of online games with their friends (usually Fortnite with voice chat or Minecraft with another app for voice chatting). To replace physical education, we’re still doing family taekwondo practice at home and have done some soccer practice in the backyard.
This makes our days very interesting. “School” is usually in session by about 8:30 a.m. and goes until mid-afternoon, during which Sarah and I are both alternating our own professional work with keeping “school” going. I tend to wake up earlier and work best in the morning, so I work early and jump in later on when Sarah needs to get things done (or needs a break).
It’s working. It’s different, but it’s working.
On with the questions. Many of the questions this week deal with practical frugality at home, a topic that I think is on the minds of many lately.
I have a collection of Magic: the Gathering cards worth about $35,000 and sports cards worth about $20,000. Both were appraised by dealers and are insured. I have noticed sharp declines in the online value of both collections since coronavirus hit, particularly the Magic: the Gathering cards. I looked at some websites in each of those collectible markets and it’s hard to figure out what is exaggerated online hype and what is reality. Will these things hold value after social distancing passes?
I think they will. The motivations for people owning both types of collectibles won’t really change fundamentally. People will own sports cards out of sports fandom and nostalgia, and people will buy Magic cards out of enjoyment of playing the game and some nostalgia.
The difference is that all collectibles decline in value during a recession, and we have fallen into the most abrupt recession in recent U.S. history, the speed of which is only comparable to some of the pre-Depression panics. So, collectibles of all kinds have rapidly declined in value, with Magic cards being particularly hard hit because it is much harder to actually play the game face-to-face right now.
As social distancing fades and the economy recovers, people will return to the familiar things they love and I suspect both types of collectibles will bottom out in price and start to climb again.
I’d suggest that you should only worry if you see indications that people aren’t playing Magic any more in any form (look for things like online player counts on Magic Arena) or that all sports take an extended multi-year break (even then, I honestly wouldn’t worry about sports too much, as I’d bet the farm that sports will come back the second it’s possible). I don’t see either of those things happening.
Is this a time to “buy low” in the stock market?
I don’t believe in market timing. If you buy in right now, you might still face a substantial drop in the price of the shares that you buy.
The one thing I will say is this: you are going to be able to acquire more shares for your dollar right now than you were able to two months ago. The problem is that we don’t know whether there will be an even lower price in two months than there is right now.
I look at it much like buying something at a store that has somewhat regular sales. Right now, there’s a 20% off on everything sale. Maybe next month, there will be a 30% off on everything sale, or maybe it will be a 10% off sale, or no sale at all. It’s impossible to know. So, should you buy now? It really depends on the item itself and how much you need or want it. If you do, then the sale is a good thing to take advantage of, and you shouldn’t worry about future sales.
Over the long term — say, 10 or 15 years — the value of the shares will be higher no matter when you buy them. However, the idea that this is the “bottom” and it’s time to buy is an idea I don’t buy into.
Right now is a great time to start contributing to your retirement account, however, and a great time to bump up those contributions. That’s not due to the market being low; it’s due to the fact that the more you contribute early and far away from your retirement date, the more years you have for compound interest to work in your favor.
Like a lot of people, I was let go from my job in late March and applied for unemployment which should last until October and maybe longer. My landlord also cancelled all rent in our building through July so my bills are covered by unemployment. I have a job available doing unloading for a grocery store but I would honestly not be making much more than I am now and there is coronavirus risk. Other hand, there might not be any work for me in three to four months. What should I do?
What do you intend to do between now and August to help you maximize your chances for getting a job you really want that pays well? You need to have a really good answer to that question. If you do, I’d stay at home, ride this out and prep for whatever’s next.
Without knowing what your background is or what your other job opportunities might be, I can’t really suggest a path of career improvement from home for you. It depends a lot on what you already have to build on in terms of skills and work experience.
If you don’t have anything you can do at home to get yourself ready for another job, even if it’s simply getting yourself into really good shape, then I would look very hard at this unloading job. It is extremely hard to guess what the job market will look like anywhere in August, so if you have a decent job available to you now, I’d consider taking it. While it won’t put a lot more money in your pocket, it’s much more likely that it will provide you with a job in August than simply sitting around for four months.
Having said that, if there is any path you have to self-improvement that can net you a better job in a few months, I’d use this rent-free period with unemployment checks to do everything you can toward that self-improvement goal. Treat it like a job and really bear down on it.
If you’re looking for a food dehydrator I highly recommend the Excalibur 3926TB. It’s basically cube shaped and has nine trays inside of it that allows you to dehydrate a ton of food at once and it does a great job with everything. My kids use it to make fruit roll-ups all the time and I dehydrate tons of herbs from our garden and tons of apples from our apple tree in the fall to use in oatmeal and cookies.
That thing looks amazing, but the price is a little high for someone new to food dehydration like myself.
While I haven’t done it yet (for obvious social distancing reasons), my plan is to look for an inexpensive secondhand one and see whether I use it enough to make it worthwhile. This is my typical approach for situations when I want to try something new. I try to avoid investing a lot of money up front, so I’ll buy used equipment or entry-level equipment to start with, and then I upgrade if it’s something I do consistently.
This is definitely something I want to experiment with in the future, though, and I want to get one before our garden crops are ready to harvest.
Flights are really cheap right now even months in advance. If you are thinking of travel in the summer or fall now is the time to do it.
While I would be wary of planning air travel for pleasure, there are people who may have professional or business reasons for air travel and current ticket prices make planning those types of travel in advance well worth it right now.
There are many domestic flights under $100 right now, all across the country, for the next few months. Checking Kayak and a few other sites, I can find a bunch of round trip flights to and from Des Moines, which is a pretty expensive place to fly out of, under $250, even months into the future. Starting from many major cities where there are airline hubs, I can find tons of round trip tickets to other cities for $100 or less on a variety of dates.
If you are really certain that you’re going to need to take a flight in the coming months, it’s a great time to book it. Just plan ahead and take the necessary precautions to maximize the safety of your health.
What is the best option for someone who used to go to the library every week for two new books and a new movie or two and now the library is closed for a long while? This used to be my entertainment routine.
My suggestion is to simply subscribe to a service for a month that provides those entertainment options.
For movies, try Netflix, Disney+, or Hulu. Choose the one that seems to have the most things you’d be interested in watching and subscribe for a month. It’ll cost less than $10, and many of these services have discounted introductory rates for first-time subscribers.
For books, try Kindle Unlimited, which gives you access to millions of e-books for $9.99 a month. You don’t need a Kindle device; it works well on your phone or on a tablet computer. This also seems to have a discounted trial period.
You may also want to check and see if your library participates in Overdrive, which can let you check out e-books and audiobooks for free.
This lets you have unlimited books/movies for a month for about $20 combined, and you can cancel these services as needed. If this is your first month on any of these services, the cost is likely much lower.
I have two credit cards. One has about $3,000 on it and is at 29.9%. Other has $1,000 on it and is at 19.9%. I am getting a tax refund of about $1,300. Am I better paying off the small debt or the big one?
Your best choice is to pay down the $3,000 debt (29.9% APR), regardless. The only reason to choose the other one is if there’s a huge psychological benefit for you in eliminating a debt.
Reducing the bigger debt to $1,700 and leaving the other debt at $1,000 will produce a slightly smaller overall minimum monthly payment going forward than paying off the $1,000 debt and putting $300 toward the bigger debt. If you just stick with the minimum monthly payment, you lose some of the advantage of choosing this path — not all of it, but some of it.
A much better approach is to make a larger payment than the minimum to the 29.9% debt while keeping up the minimum payment on the 19.9% debt. Make it as big as you can reasonably afford, and then when the 29.9% debt is gone, make big payments to the 19.9% debt.
That’s the best path going forward unless you really need that “win” from paying off a debt immediately.
Had a gym membership and used to go three times a week. I miss it bad and push-ups and stuff just aren’t cutting it for me. Need to lift some weights!
Looked into what I need to start an inexpensive home gym and the prices are ridiculous. How can I do this without spending a mint?
Your best bet would be to go out on social media and simply say that you’re interested in buying used home gym equipment if anyone has any taking up space and collecting dust in their garage. The best place to post this is in any local buy/sell/trade groups that you know of.
Don’t be too picky here. It might not be exactly what you want, but if you’re paying a fraction of the cost, you can make it work. Focus on making sure you have the items you need to cover the kind of workout you want to do; if you can get most of them, you can fill in the rest as needed.
Be smart about it. Ask for photos so you can see the equipment. If you decide to go for it, work out either pickup or delivery so you can maintain social distancing (you’ll probably have to kick in some money to get them to deliver, but that may be worth it to you).
In most areas, used sporting goods stores are closed, but that would be a good second option when they start to reopen.
How much do you save by taking a 3- to 5-minute shower versus a 15-minute one?
It depends heavily on how warm the water is, because most of your expense comes from heating up the water. A secondary factor is the amount of water your shower head puts out, as the average American shower head puts out two gallons of water per minute; the typical range is from about 1.5 gallons to about 3 gallons.
It costs about 2 cents (depending on your source of energy and type of water heater) to heat a gallon of water from 50 degrees Fahrenheit to 140 degrees Fahrenheit. The latter is the temperature at which many hot water heaters store hot water, and 50 degrees Fahrenheit is roughly the temperature that water comes into the house, with some variance.
So, if you like a really hot shower, that’s about 110 F. That means that 2/3 of the water coming out is hot water, and 1/3 is cold water. A cool shower is about 80 degrees Fahrenheit, which means that 1/3 of the water coming out is hot and 2/3 is cold.
Let’s assume you have a normal shower head that spits out 2 gallons per minute.
If you take a 5-minute cold shower, you’re using 3 1/3 gallons of hot water, which adds up to a cost of about $0.07.
If you take a 5-minute hot shower, you’re using 6 2/3 gallons of hot water, which adds up to a cost of about $0.13.
If you take a 15-minute cold shower, you’re using about 10 gallons of hot water, which adds up to a cost of about $0.20.
If you take a 15-minute hot shower, you’re using about 20 gallons of hot water, which adds up to a cost of about $0.40.
So, a 15-minute hot shower versus a 5 minute cold shower, under a typical shower head with typical American energy prices, costs about $0.33 more. If both showers are hot, you’re spending about $0.27 more. The water itself is negligible in cost, perhaps adding a cent to the difference between the two showers.
Again, the factors that shift this equation are the heat of the shower, the flow rate of the shower head and the efficiency of your water heater.
Simply put, you’re probably saving about $0.30 on average going from a 15-minute shower to a 5-minute one. If this is an everyday occurrence, over the course of a month, it adds up to $9.
Is it a bad idea to get insurance from a smaller insurance company versus a bigger one like Progressive?
Define “smaller insurance company.” Are you talking about an insurer that has 1-2% of the overall insurance market, something like Hartford, American Family or Assurant? If that’s your definition of a smaller insurer, I wouldn’t skip a beat using it.
On the other hand, if you’re talking about an insurer for which you can find little information online about that doesn’t show up in any reputable comparisons between insurance companies, I’d be hesitant to open a policy with it.
The top 25 property/casualty insurance companies in America make up about 2/3 of the market, and the smallest one on that list has just shy of 1% market share. You can see the list here. If your “smaller insurance company” is on that list, I wouldn’t sweat it. If it’s not on the list, I wouldn’t avoid it, but I would do extra homework to make sure that it’s a legitimate insurance company.
It is worth noting that many insurance brands are actually part of these larger companies. It’s also worth noting that there are a lot of stable insurers that operate only regionally, like Country Financial which operates mostly in the Midwest.
In short, always do your homework when it comes to insurers, but I wouldn’t worry about the size of the insurance company unless it’s one that’s pretty far off the radar. I’d get insurance with most of those top 25 insurance providers as well as many regional ones, depending on rates, of course. There is plenty of competition out there within that pool.
My son graduated from college last May and got a job as a software developer. He lived with us throughout college and still does. We came to an agreement that he would pay us a small amount for rent and share the food and utility costs and he’s been more than generous with that, more than we expected. He’s easy to get along with and we don’t argue or anything and actually spend many evenings together watching movies or Netflix shows.
We agreed last fall that he would aim to move out on May 1. His plan was to get his student loans paid off before moving out, something we agreed was a great goal. Living with us, he was able to put about half of his pay toward loan repayments. He did pay them off and sent in his last payment in March.
When the lockdown hit, he transitioned to working from home, which hasn’t been a problem. He just stays in his room all day and we have good internet. He was looking for an apartment in February but was looking for one to start leasing on April 1 or May 1.
We are trying to figure out the right plan for him to still move out. We agreed that getting an apartment and moving out by May 1 was silly with the shelter-in-place order, but how should we handle this when shelter in place is lifted? We have our own ideas but wanted to hear your input.
My guess is that you and/or your partner and/or your son have a difference of opinion about this or else the solution would be obvious and you’d just go along with what you all want.
I think it is a good idea, obviously, to extend your agreement for him living there for as long as there is some type of stay-at-home order in your area, provided you’re all on board with that. Once that ends, I would probably set a reasonably long timeframe for him to move out into his own apartment, perhaps two months. You want to give him time to find a nice place, and that means he needs some time to look at a few places and then actually go through the process of moving. You don’t want to shoehorn him into just agreeing to the first lease that’s available.
So, if the shelter-in-place order fully ends on June 1, I would give him until August 1 to find a place of his own.
I would encourage him to shop around online right now to have some idea of what he would be getting for his money and so he knows some places to start looking when things start to open back up.
Do you know of any side gigs that can be started during social distancing? I work from home and actually get all my work done in 4-5 hours instead of 8 like I did at the office. I’m bored and want to do something to earn more money.
At home, you can do all kinds of freelance work provided you have some specific marketable computer skills. Start by looking at sites like Fiverr for small jobs that can use your skills well without getting too entangled in big projects.
You might also consider building some websites related to your professional expertise. Are there things that would be useful to others that aren’t well documented online? Create a site that documents that information in a clear and accessible way, include affiliate links to Amazon for revenue, and add some Google Adsense ads as well. All of this can be done from home.
If you’re willing to go out, another side gig might be delivering things for people who aren’t willing to leave their homes. Simply put out the news to as many of your friends and family as you can that you’ll deliver things to them for a certain price, such as delivering anything within 5 or 10 miles of their home within 24 hours. If you can “stack” those types of requests, you can actually make good money doing this by going out, picking up, and delivering several things at once. I would certainly use a service like this.
Just find something that’s within your skill set and comfort zone and make the most of it. Even if you don’t make a killing, you’ll learn a lot about how to market and promote a side gig.
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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