We love to link

The digital monks of unvirtuous abbey.

Social wealth.

Turns out that a good number of male opera critics suck and are horrible people.

Urban poverty in black and white.

Messy breakups with exercise.

My body is not an achievement or a work in progress.

Your math education (probably) sucked.

Speaking of education sucking, turns out the Koch brothers are infiltrating public schools.

The war on expertise.

The Data of Hate.

White men in power should be responsible for fostering diversity because they’re not penalized when they do.

Of course, women are also penalized when they interrupt!  These learn to do X more things are always wrong because it’s completely rational to not do X when you’re a woman!  But sometimes maybe you should do it anyway.

dang, this is some good rant

This Texas Politician is fighting for your right to control your body.

More doesn’t make any sense unless all you care about is not letting women have control of their own bodies:  From TEXAS!  (pregnancy loss triggers)

Join the women of color research network.

fortunately, it appears Nicki Minaj and Iggy Azelea are not actually fighting

Yes, these are things we do give a sh*t about.

For women on the internet, it doesn’t get better.

WTF, Science, are you *trying* to be Nature?

These things are related.

how are they defining scientist?

Why a restaurant’s wait time has increased, maybe.

hahaha we’ve all seen this

lamb loves kitteh  (kitteh not so sure)

This post from planting our pennies was just fun!  And yes, this is exactly why it’s great to have it together financially, as commenter Dee says.

Could any of our personal finance readers with opinions (which is all of you…) pop over to What Now? and give her your thoughts on when to make an expensive repair vs. buy a different car?

Ask the grumpies: What to do with a lump sum?

Susan asks:

I’ve just finally unloaded my own slice of the housing crisis (PHEW), a condo in another place, and have been wired the proceeds, which are between $50 and $100k. What’s the best thing to do with that lump?

My only remaining mortgage (PHEW) is the house I live in. It’s for 80% of that house’s value, at 3.4%, and the monthly nut is reasonable, at ~30% of take-home. I have decent? retirement savings between IRA, investment and TIAA-cref accounts, about $70k (I’m 41). My car is paid off, and I have no CC debt or student loans. There are some upcoming expenses for the house that are within our planned budget. We do not have children and do not plan to.

I feel burned from the housing crisis (yet I know it wasn’t as bad for me as others). The proceeds represent my initial investment, so I came out about flat, although that money was locked up (or, circa 2009, nonexistent) for almost 10 years. Because of that, I’m hesitant to pay down principal on my current mortgage, more than the 20% we already have in there. But 2008 wasn’t so kind to investments, either. I know I don’t want to leave this money in checking or my 0.5% savings, so – where does it go?

Standard grumpy disclaimers apply:  We are not financial advisers.  Talk to a fee-based financial planner and/or do your own research before making any life-changing decisions.

You have a few good options.  Three of them jump to mind immediately.

1.  Put more money into retirement
2.  Pre-pay your current mortgage
3.  Put the money in taxable stocks

I do have a quibble with the last paragraph if your question.  Pre-paying the mortgage *can* provide cash-flow liquidity.  If you’re willing to reamortize (aka re-cast) the mortgage, then you can lower your monthly mortgage payments by re-extending the length of your mortgage if you have prepaid a significant amount.  You can do this even if you’ve lost your job, generally for the cost of ~$250.  Only if you’re willing/planning on foreclosing on your house would it make sense to never pre-pay under any circumstances, but since you didn’t foreclose on the condo, it’s unlikely that you’re in that situation.   The *debt* is what you should be focusing on, not the value of your house.  You will have the debt no matter what the value of your house is (absent willingness to foreclose, of course).  Pre-paying here is the safest option– the low risk, low return option.

Your interest rate on your house is pretty small, so it’s not obvious you should pre-pay the mortgage.  With a higher interest rate, it might tip your decision to the mortgage if doing so meant you could refinance, for example, and it would be a safe investment (assuming no plans to foreclose) and would allow you to decrease your monthly nut by reamortizing in the case of an emergency.  In this case, the return is pretty low and this is something you’d only think about doing if you wanted a safer option.  The return is higher than CDs or savings accounts, but you wouldn’t necessarily be able to get all your savings out in case of an emergency (because home equity loans tend to dry up when you actually need them), just enough to give you a somewhat lower monthly payment with re-casting discussed above.  [Note, too, that the earlier you pre-pay the bigger the benefit of prepayment-- you can play with the numbers using the GRS amortization calculator.]

You should think about how quickly you will want this money.  It sounds like you don’t have any major plans for expenditures that you can’t handle.  However, how are you feeling about job risks over the next 15 years or so?  Is there a chance that you or a spouse could lose income?  Is there a chance that you’ll want to move to a more expensive locale?  If you feel pretty secure on that, then putting the money away in a tax-advantaged retirement fund is going to be better than just putting it into the stock market because you will save money on taxes.  However if you see a chance for needing more liquidity, then you would want to tilt towards regular stock investing (keeping in mind that IRA Roth contributions can be taken out tax-free even if their earnings cannot, so they have added liquidity).

You should also think about whether or not $70K in retirement accounts at age 41 is putting you on track for retirement or not.  My druthers is that you could add more to that, but I also don’t know about your lifestyle and your planned expenses, your work situation, etc.  There are a lot of retirement calculators out there with various inputs that you can play with to get a better picture of how much you think you’ll need going forward.  It is unlikely that you have saved too much at this point.  (And if you have, you can always cut down on the retirement savings later.)

If you choose one of the two investing options, what stocks to put it in?  Broad-based low-fee Vanguard index funds if possible.  VTSMX is a good one if you just want diversification, but there are other combinations you can make with VFINX, VGTSX and so on.  You may want to throw in some bond fund, such as VBMFX.  And ask about their admiral fund shares if you invest with Vanguard directly.  With TIAA-CREF you’ll want to talk to an adviser to get numbers on fees for their broad-based indexes vs. their target-date funds.  We can go more into detail on these if you want to add more information about your options.

Personally I like having a secondary emergency fund in taxable stocks (and/or in IRA Roths) that I feel like I could tap by selling off stocks.  So far we have left ours untouched but the fact that it’s there (even when it dropped down to its lowest point in the recession– it has since more than doubled!) always made me feel more secure.

What I would do in your scenario would be to max out all the retirement accounts that I could (and given the sale, you may want to check with a tax accountant or other expert before putting money in the IRA), and put the rest into taxable stocks or (less likely given your situation) mortgage prepayment.  For the retirement accounts, I would either pick some broad-based indexes with low fees from TIAA-CREF, or I’d pay a little bit more in fees to get their target-based fund.  (Their target-based fund isn’t a no-brainer like Vanguard’s is, but if I didn’t want to sit down and create my own diversified sets of funds, I’d go for it.)

But again, you’ll have to think about what your short- and long- term goals and uncertainties are.  The best thing to do will vary based on your needs.  For shorter-term safety but low return:  prepay the mortgage (knowing your can re-cast for a lower monthly payment later, should you need to).  For longer term safety and the highest rewards:  max out your retirement options.  For a secondary emergency fund and somewhat risky growth (which will be correlated with the economy, as you note, but not necessarily your personal situation):  put it in Roths first and the stock market second.

Grumpy Nation:  What advice would you give Susan?  Are there other things she should be considering in this decision?  Bonus points if nobody mentions landlording as an option.  Unless Susan *really* wants to landlord.  Which we doubt.

I trust my body

The great irony is that I learned to trust my body at the point at which it was most broken.

Let’s step back a bit.

I started getting a little chubby around the time when my period started in middle school.  In high school I lost a lot of weight because my religion forbids me from eating poorly prepared food and our cafeteria food was worse than prison-grade, so I ended up doing this kind of feast and famine thing where I’d starve during the week and fill up on the weekends.  This was especially bad between when they stopped providing Total cereal in the cafeteria during junior year and before I was able to ask my parents if I could have a food allowance senior year (money was always really tight at home and I didn’t want to be a burden, plus the dorms only had microwaves and fridges for food preparation).

When I got to college I grew two inches.  People complained about the college cafeteria, but the lettuce was never brown or even yellow.  There was fish!  Nothing sat in tubs of melted grease.  Cold-cuts!  Cheese!  Whole wheat bread!  The milk was never sour.  They served juice made from actual fruit!  No, not as good as home cooking, but the salad bar alone was like heaven after years of starving.

In college I was surrounded by beautiful skinny women who were always complaining about how fat they were.  Everyone dieted.  I resisted, but somehow they got to me (I didn’t even *notice* they’d gotten to me until my first year of graduate school when someone asked why I talked about my weight so much… oh, man, I’d been indoctrinated).  I counted calories.  I ate a lot of sugary things that had no fat because the no-fat diet was in.  I was always hungry.   I don’t remember ever consciously thinking about doing this– if asked, I would have told you I was against diets and poor body images (and happy with my breast size!), and yet, I was doing what everybody else did.  And I continually gained weight.  I was my heaviest weight ever by the end of college (I can *totally* fit into my college clothing, though I don’t because styles change).

Scratch that, I was actually my heaviest weight my first year of graduate school.  BCP and depression and not having to walk very much caused me to gain all the weight I’d lost the summer between college and grad school and some more.  (I’ve seriously blocked this time from my memory.)  After getting the depression under control and moving where I had to walk more to get to school, I dropped some, but was still was heavier than the healthy weight for my height, and not because I had too much muscle.

Then we decided we were ready to have children.  I went off BCP.  I cycled once.  Then twice.  Then not again.  So I went to the doctor who sent me to another doctor.  And then another doctor because my insurance changed, and then another.  The second doctor suggested PCOS (and POF and thyroid).  The third doctor confirmed PCOS.

For a year and a half my body was broken.  Every three months I’d take a provera challenge to get my cycle started again.  I was poked and prodded and found out I had a blocked tube on top of not cycling.

During this time I found out a lot about PCOS.  I found out I’d been doing the diet thing all wrong for me.  No fat was ridiculous for my body and was the reason I kept gaining weight while always being hungry.  I cut out HFCS.  Then sugar.  Then refined carbs.  I upped my fruit, nuts, and full-fat ice cream intake.  I began snacking.  I stopped being hungry all the time.  Sweet things began to taste more sweet and I started being able to appreciate dark chocolate for the first time.  Weight started falling off effortlessly at a pound or two a week.  I stopped having mood swings.  My acanthosis nigricans went away.  I stopped being sad for no reason (other than the infertility-related reasons).  My rational mind had much better control.  Eventually I added Metformin to get the insulin under control and weight slipped off even faster.

The major thing that happened (before the Metformin) was I started listening to my body.  I started listening to my hunger.  I started noticing what foods made me feel crappy later, and what foods filled me up.  I ignored calorie counts (mostly– it’s still kind of ingrained, but now it’s more, is this an 80 calorie hunger=apple or a full 200 calorie=small meal/larabar hunger?), instead listening to my stomach and to my moods.  I learned to recognize when my  blood sugar was dipping and always had something on hand before it could get out of hand.

And listening to my body is so much easier and less stressful than adding up points or calories or trying to be the mental command-economy for my body’s caloric intake and outtake.  I don’t need a calculator, just some mindfulness.

Now, that’s not quite everything.  I still have a very addictive personality and very little willpower.  But I’m also very good at putting in commitment devices in pretty much all areas of my life.  If I’m aware of my triggers, I can keep out of their way.  For example, if there are chips in the house, I will eat them, even though I know I’ll feel cruddy later.  Same with chocolate frosted donuts.  So I don’t keep these things in the house.  I don’t buy them.  DH isn’t allowed to buy them, and if DC1 buys them they belong to hir and I can’t have any.

That’s not to say I never eat junk… but when I get a boxed lunch at work, I give back the chips right away, unless they’re cheetos (I allow myself cheetos of opportunity).  I have rules.  I only eat sweets if they pass a certain quality threshhold (chocolate chip cookies from the good bakery, yes!  from the grocery store, no!), same with pizza (local place, yes!  Domino’s, no!), and with donuts, if there’s a chocolate frosted, I’ll take it, but no other kind.  (When I was pregnant I avoided even the above because of borderline GD with the first and that nasty wheat allergy with the second– I have a lot of willpower when it’s someone else’s life on the line).  When DH bakes something, I’ll usually eat some (and he often cuts the sugar and substitutes wheat flour if applicable).  I keep a bar of Green and Black 70-85% dark in my desk drawer at all times and take a square whenever I have a craving.  I don’t deprive myself, but the junk food has to be really good for it to be worth it, and if it is good enough, then I generally don’t need that much to be satisfied.

We also do psychological things like use salad plates for meals instead of the big plates.  We take multiple little servings so we can better judge when we’re no longer hungry.  Sometimes we freeze a batch of cookies to dole them out in smaller amounts later.  Back before DC1 was so big, we’d take half of a cake we’d just made to daycare so we wouldn’t eat it ourselves.  These things help us to pause so we can listen to hunger and desire.

And no, doing these kinds of things alone probably won’t put most people at the bottom of their healthy range.  (And some of my eating needs are specific to PCOS and my body. YMMV, which is why it’s important for you to listen to you.)  Depending on how much junk I’ve been adding (because with nobody’s life at stake, and DC2 not eating whole wheat, refined carbs have snuck in), how much exercise I’ve been getting, and whether or not I’m hard-core nursing, I can be anywhere within that range, usually between the middle and the top unless I’m on metformin or the baby is getting most of hir calories from me.

But I don’t need to be super thin.

I just need to listen to my body and take care of it so that it will take care of me.

And that fits in with the greater grumpy rumblings philosophy… mindful laziness with a side order of commitment device can do great things, with health, child-rearing, even career concerns.  Figure out what works for your specific situation, set up an environment where it’s easier to achieve those goals, and change things when they’re not working.  Complete flexibility within a rigid setting.  Mindfulness creating a low mental load.  Grumpy rumblings is vast: contains multitudes.

#2 would like to remind everyone that, whether or not you would like to make food and exercise changes, a great thing to have is radical self-love.

Are my coffee orders dickish?

well, are they?

“Can I please get a 20-ounce decaf iced mocha, 2 decaf shots, no whipped cream, for here.” 

Usually the full-caf ones have only 1 shot, but usually not whipped cream on those either (but sometimes).  But they come with whipped cream unless you say don’t.

And for hot mocha, I’ll specify Dutch vs. Mexican.

 

I hate to be That Guy, but yet, I know what I want.  Verdict, readers?

What to do when your car starts looking a bit… worn?

I’ve had my little Hyundai Accent since graduate school.

We paid cash for it new and it’s a great little car.  It’s had batteries and tires replaced and other sorts of mildly expensive routine repairs, but for the most part it’s been remarkably stable.  Well, there was that time a couple years after we got it where we smashed in the front and had to get stuff replaced, but after that it was as good as new.

It still looks mostly fine on the outside.  A few tiny dents and scratches, but no rust or missing paint or big dents or anything.

The inside, on the other hand, is starting to look 70s-style bad.  The glue is coming unglued on the fabric on the doors, leaving it hanging loose.  No tears yet, but I can see them in the future if we don’t do something.  Everything that gets touched regularly is coated in a brown-grey grime.  And then there’s dust and crumbs and other sorts of detritus.  It could use a good cleaning.

Before I let DH at it with a glue gun, any suggestions?

link love link love roly poly link love

There is a lemur on your baby.

Be careful not to let amazon’s smile crowd out your real charitable giving.

This post from what now may need trigger warnings if you didn’t enjoy high school English.

Center of Gravitas reminds us that life may or may not begin at 40.

Donna Freedman with a simple price comparison that could save you thousands.

poor people should just go ahead and die, already [editor note:  note sarcasm here-- we certainly do not advocate death for poor people even if the city of Detroit does]

Second chance animal rescue needs help.  (We checked out the link to the shelter page from pet-finder and it brings you to the same donation page in this post, so it seems legit.)

I WANT THIS LIBRARY SO HARD I CAN’T EVEN

Partner-in-criming a little bit with a friend makes them like you better, but a lot makes you feel dirty.  The bad kind of dirty.  (Also I really like Kelly Haws’ entire line of research– she’s a person to watch.)

But I don’t wanna get up.

Video games and classical music on performance today

My anti-bucket list is about the same as theology and geometry’s.  Tell her what’s yours!

One sentence lessons from literature.

Empowering illustrations.

Fathers’ brains.

Puuurfect reading buddies.

this page is making me laugh

 

Ask the grumpies: Retirement vs. debt

Rented life asks:

If you have credit card debt should you pay that off completely before setting up and contributing to retirement? (And does your advice change is the employer doesn’t offer a plan and your retirement is just whatever you set up?) My friend thinks you should pay off credit card first, no matter what and then when that is gone you can start saving for retirement. I feel that can do more harm than good, waiting to set up retirement until your debts are gone might have you setting up really late or possibly always having to push it off. Who is “right?”

If you get an employer match that is anywhere decent you should absolutely save for retirement up to the match before paying off the credit card.  In fact, depending on the match rate, your credit card interest rate, and penalties, there can be situations in which you would put money in, get the match, then take your original money out minus the penalty and you would still be ahead.

If you’re young (with a lot of earning years left), have high interest debt, and have lousy options for saving for retirement at work (no match, high cost plans at work, etc.) and can (and will) knock out that debt really quickly, and will definitely start putting money away for retirement as soon as you’re done with the debt, then go ahead and pay off the debt first!  This is, in fact, what DH and I did when we got married.  We paid off his (relatively high interest rate) student loans first and were still able to max out our IRAs the next fiscal year.  We benefited more from those 6K getting rid of the debt than we would have putting them in an IRA (especially since it would have been a market peak!  But we didn’t know the tech bubble was going to burst, so that was just luck.)

After those two easy scenarios, there’s a lot more grey area.  And it’s going to depend on your personality and your options what you do.  You will have to sit down and run the numbers, think about the risk, the benefits, and your own personality.  The goal is not necessarily to make the most money on paper, but to get rid of your debt and have enough saved for retirement.  It is far better to make a little less money on paper if it means you’re going to make more money in reality because you actually stick to your goals instead of giving up.

If you’re really bad at doing multiple goals at the same time and you would have to save for your retirement manually (and you don’t get a nice match), then go ahead and focus on the debt.  However, even if you’re bad at doing multiple goals at the same time, if you have retirement through work, you can usually have it auto-deducted so you don’t even think about it.

Similarly, if you know deep down that as soon as your credit card debt is gone or down, you’re just going to spend again until you’re back in the same situation you were in before, put money away for retirement so you can’t touch it.  We don’t understand people who can’t keep from maxing out their credit cards no matter how much they make (and we try really hard not to read their blogs because they’re so depressing), but if that’s you, then you need to contribute the max to your retirement accounts in a way that it’s auto-deducted without you even realizing it’s happening.  That way you can continue to pay off your debt in your 60s, 70s, and 80s, or at least still have something to live on when you’re old after declaring bankruptcy multiple times (as retirement money is protected).

Speaking of which, if you have plans to file hard-core bankruptcy, max out that retirement.  I’m not sure what you should do if you’re planning on doing the lighter kind of bankruptcy… you should probably talk to a lawyer about that.

If your work offers good plans, that’s more attractive than if it offers bad plans.  But, as you note, even if your work only has bad plans, you can still invest up to the IRA or Roth IRA limit with Vanguard.  However it’s more difficult to set up auto-deduction before you see the money than it would be with work, which may interact with your personality type and how many goals you can focus on at the same time.

If you aren’t going to remember to set up auto-deduction for retirement just as soon as you get out of debt, then do it right away when you’re thinking of it instead of paying off debt.

If you are going to be in debt for a long time, then it might also be worth investing in the stock market just to add a little bit of risk to your portfolio, or, as mentioned before, to protect your future self in case of bankruptcy.

There’s probably even more scenarios that I’m not thinking about.  But no, I don’t agree that you should always pay off high interest debt first while ignoring retirement (*especially* if you’ve got a 100% match at work!), nor is it always the best idea to contribute the max to retirement while you’re still paying off high interest debt.  (Heck, if you work for the government, the max you can contribute to tax-advantaged retirement savings might be a lot more than 20% of your income!)

What say you, grumpy nation?  High interest debt?  Retirement savings?  Both?  Neither?  Is it always clear-cut what you should do?

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