When to buy a new computer? And the laptop I ended up buying

My laptop has some sort of hardware issue that causes it to occasionally die even when it’s just sitting there.  This wouldn’t be such a big problem but my work computer, over which I have zero administrative control, has been pretty unworkable for months because of some sort of disagreement Symantec is having with Dropbox and our university IT’s unwillingness to install a patch.  At least that’s my understanding as to why my work computer will just randomly blue screen of death.

The laptop is only 4 years old, but I need a computer at work that won’t up and die on me when I’m in the middle of a complicated Stata thing.  It is a huge PITA to get everything open again and back to where I was when I’m in the middle of programming, especially when I’m trying to balance an away server with my desktop Stata.

Update:  The choice was taken from me– on January 6th, 2020, my laptop met its final end after half a day of shutting itself down every 20 minutes.

I ended up getting a Dell XPS 13, which is on the top of several “best laptops” lists and DH says has the best components of any of the best laptops at a similar price.  Irritatingly, it has also updated its ports and only has two thunderbolt ports and a newfangled little usb.  But DH says we’re better off buying new cords and other accessories than getting a worse computer with more ports.  It does mean that I will have to get a wireless (bluetooth) mouse, which I find somewhat irritating and I went with a 1TB harddrive so I could just not have an external dropbox harddrive, which was not cheap.  I paid an additional $25 to expedite shipping a week earlier because I need a working computer at work.   After taxes and without any software or accessories other than a 3 year subscription to McAfee (my university no longer provides discounted anti-virus software), my total cost was $1,834, which is not cheap, but also not as bad as it could have been.  I really hope it lasts longer than my previous laptop!

I will be getting additional software, but through the university.  It’s about time I upgraded to Stata 16 anyway.

The new laptop is super tiny.  It’s about the same size as my ipad pro though shaped a bit differently.  Very bright, good resolution.  A high quality product all around.  All the random cords we bought seem to be working– plugging in a second monitor just worked without any jiggling… it was almost Mac-like.

How do you decide when to get a new personal computer or laptop?

 

Where did Debbie M’s donation go?

Debbie M won our “most commenting of 2019″ contest.  That means she got to pick where we donated our previous month’s blog earnings to.  How much did we donate?  We topped it up so that we could give $50.

Where did she pick?  Rainforest Foundation, Inc.

According to Debbie M:

They work with indigenous communities to help them continue preserving rainforest habitat. This protects the environment, fights climate change, and protects human rights. They explain all this better themselves: https://rainforestfoundation.org/what-we-do/

Here’s their Charity Navigator site.

Don’t forget to increase your 401k/403b/457 withholding for 2020 (if that’s something that works with your financial situation)

The annual limit for your standard 401k/403b/457 goes from $19,000 to $19,500 from 2019 to 2020.  That means you have an additional $500 (or $1000 if you’re working for a state institution that has both 403b and 457) that you can put away for retirement in a tax-advantaged fashion.

I went on the awful university internal site and figured out how to futz with my 403b withholding (it took about 20 min and a ton of googling to figure out– this is still better than the paper way we had to do it before which always took at least an hour, including finding the forms and the addresses the forms needed to be sent to), from 2111.11 to 2166.66 given my 9 month salary.  Then I went to the easy and painless 457 site and futzed with that withholding (5 min, most of that digging out my password).  Then we determined that DH had to email their admin person in order to futz with his 401k, so he did that (20 min, mostly determining he couldn’t do it himself online).

So now we have an additional $1,500 going towards tax-advantaged accounts for 2020!

When was the last time you changed your retirement contributions?

What is the right level of spending when you’ve met your goals and still have some leftover?

Putting away $36K into DC1’s 529 account (and lowering our emergency fund to less than half of what we need in there before I stop getting paid for the summer) has had the intended effect of making me feel artificially less wealthy.  I’m no longer mentally thinking about things to buy (ex. expensive electronics) other than things we’d be buying anyway on a smaller income (ex.  summer camps that aren’t Interlochen or Concordia).  I’m still doing just-got-paid and making-me-feel-better charitable contributions, but they’re (combined) more in the hundreds/month than the low thousands unlike my first paycheck of the year donating.

I don’t think this money move has got us donating less, but I do suspect it’s got me spending less because I’m back to the default of “if we don’t need it, don’t buy it” rather than an underlying “looking for places to send money to”.  When I see an amount in my savings account that I can’t really comprehend and I don’t know where to put it… it makes sense that when all else fails I might want to spend it.  To be honest– I feel a lot less guilty when I see a reasonable amount in savings that I can understand.  Or when I do have excess money in cash, it is earmarked for something like an upcoming sabbatical.

Sidenote:  If you’re in the 24% tax bracket and ever want to feel artificially low income, just read the case studies in Bogleheads.  So many people with inherited wealth spitting out enormous dividends or salaries above $500K/year.  Even though that’s such a tiny proportion of the population.  If you’re in the 24% tax bracket, you’re still pretty high income.

But what is the right thing to do?  For other people, I war between “If you are meeting your financial needs/goals, do what you will with the excess” and “Nobody needs that much excess.”  I’m fine with Ariana Grande’s panegyric on spending, but not ok with people buying politicians.  And I feel sick (and like getting out pitchforks) when I see the price tags of some of the things that rich people buy and don’t even use.  There’s also the environmental waste of disposable purchases.  And yet, it isn’t my money, so “an it hurts no one, do what you will.”  And yet, I am so strongly in favor of inheritance taxes and higher marginal tax rates.

And maybe what other people should do isn’t as important as what keeps me feeling safe and not squicky.  We probably should replace broken appliances before they start giving me rashes, but there’s something to be said for repairing instead of replacing.  I don’t want stuff we don’t need.  But I don’t regret the iPad Pro purchase which has been great for editing and reviewing other people’s papers, or even the Remarkable purchase though I’ve ended up not really using it.  And I love our Honda Insight with the second level trim.  When I want it, should I got it?  Or should I exercise some self-control and put off the purchase until it’s something we really want?

The best way to curb these spending impulses is to just not have money burning a hole in my bank account.  But should we do that and continue to stockpile money for a rainy day even though we don’t think we want to retire early (still, it would be nice to retire anywhere in the country we want to, not just our current LCOL location).  There’s also the very real fact that the owner of the company where DH works is going to die one of these years (he’s in his 80s) and while we almost spend less than my take-home pay, it would be nice to not have to make any sacrifices while DH decides what to do next.  But this has become much less of a concern since my last raise– we no longer need to have, for example, a full salary’s worth of dividends spitting out each year to cover the gap.  I’m high income on my own even if we’re in a lower tax bracket without DH’s income– we move back to upper-middle-class, which isn’t really a hardship if we don’t get used to higher levels of spending.

When we’re not artificially cash-poor, these are questions we have:

  • Will we keep our ancient fridge until it completely dies?
  • When should we replace our functional computers with faster versions?
  • Should we send our kids to expensive national camps that require plane trips when there’s less-acclaimed versions we can drive to (probably not)?  What if there aren’t substitutes we can drive to (maybe?)?
  • Should we try to pay someone to take care of anything?  But what?
  • Should we eat out more?  Try a meal service?  Eat at the fancy restaurants in town when they’re not paid by my department?  Even though they’re not as good as the fancy restaurants in the city but cost about the same?
  • Should we take more real vacations that aren’t connected to conferences?  But what about the time costs?

And the big one:  Should I hide money from myself?  Or should I be fine with the additional spending that comes with having cash on hand?

If you don’t need to exercise self-control, should you?  When your needs and strongest wants are being met, how do you decide what to spend on?  How do you decide how much to spend on your wants?  How do you prioritize your wants?  What happens to your spending when you get a big income shock?  Do you hide money from yourself?

Ask the grumpies: Is chasing credit card rewards worth it?

Leah asks:

Are rewards credit cards overrated? Should I be chasing rewards, or is it not really worth my effort?

We don’t think it’s worth it for us other than the initial picking of some decent card (DH has one that gives 2% cash back and has no annual fee which seems to be as good as it gets without any hassle) to use as your primary card.

If you’re into travel, then maybe there’s some credit card rewards that are worth it– a lot of bloggers seem to believe so and post about their travel hacks.

(Of course, credit cards also pay handsomely for recommending their card to other people, so there’s an incentive for bloggers to recommend specific cards.)

But that still doesn’t mean that churning is necessarily worth your time and effort– that’s an individual decision.  It may be still in your best interest just to pick a single travel card and accumulate points on that.

So, I guess it’s best to figure out how much you get from signing up or whatever it is for if you see a deal.  Or maybe just read about someone’s travel hack on a blog.  Then take that number and think about how that compares to the effort of following the rules of the card to get the bonus and of remembering to cancel on the right date (and the risk and cost of forgetting to cancel or not spending enough or spending too much) and what you’re forgoing from your previous card.  Then think about the cost of looking for these kinds of deals.  Maybe that money saved/earned is worth it to you, maybe it’s not.

For me, our primary card is DH’s 2% cash back card.  He has a backup card that I think is also 2% but in points, which I find annoying since the value of points could change at any time.  My primary card is 1.5% cash back but has no foreign transaction fees.  My secondary card is 1% cash back but has 5% back on selected purchases up to $300/year (currently that’s been spent because of our kitchen renovation corresponding with 5% back from Home Depot).  None of these have annual fees.  We don’t do much vacationing (though we’ve started doing more), but with our travel plans it generally seems like paying cash six months in advance is a better deal than using points when all four of us are going somewhere (this is especially true around Christmas).  We get enough points from work travel to fly DH’s mother in whenever we need emergency childcare because we’re both out of town for work.

So… is credit card churning worth it?  That’s a personal decision that depends on how much you hate hassle and what your opportunity costs from the next best no-hassle alternative are.  For us, it’s a no-brainer.  For someone who does a personal finance blog, perhaps a no-brainer in the other direction.

So… do some chasing at the beginning to pick a good card for your needs and wants.  Maybe re-evaluate every few years to see if there’s something better out there.  But in general, unless you enjoy chasing rewards (or get rewarded for blogging about them), the potential benefits may not outweigh the hassle.

What kind of credit card rewards do you all use?  Do you find chasing rewards to be worth it?

Should I put lump sums in the 529 instead of dollar cost averaging?

One of the reasons this blog seems to have become a spendapalooza is that there’s really not any obvious place for extra money to go.

But there actually is one place for extra money to go– the kids’ 529 plans.  (A 529 plan is an awesome way to save for college or vocational school such that the earnings are tax-free.  But, it’s a good idea to max out your retirement before setting money aside in 529 plans because retirement accounts aren’t included in college financial aid calculations and you can take out loans for college but you can’t for retirement.)

In the past, I’ve always said, “and the kids’ 529s are on track to pay for the school of their choice [by the time the graduate college].”  What I mean by that is that we’ve been putting away $750/month in the accounts, even in the summers when I don’t get paid.  (It used to be $500/month, but we increased it when we paid off the mortgage and stopped paying for daycare.)  But we haven’t *actually* put enough money to be able to cash flow the remainder of the cost of (a four-year private) college yet.  We’re just on track to.

Over the next 4 years before DC1 starts college, $750/mo works out to $36,000 (actually a little less than that since it’s November, but it’s an estimate).  Over the next 8 years before DC1 ends college, it would be $72,000.  (That’s a LOT of money!)

We could just put in $36K (instead of $9,000) over the course of this year and then either start contributing again once we know where DC1 is going to college or not based on the cost of hir chosen school.  (Given hir struggles in English, it is likely that HMC is out, but also out with HMC is its insanely high $72K/year tuition.  I told DC1 we could get hir a unicycle anyway.)

Doing it this way loses some dollar-cost averaging benefits, but it gains the benefits of a longer period of untaxed earnings.

There are some wrinkles to doing BIG 529 account transfers.

The first is that even though the account is a custody account and doesn’t actually belong to the child, it still is subject to the annual gift tax.  For 2019, the amount that can be given annually without tax is $15,000.  Each parent can give that amount, so a married couple can give $30,000 in one year.  $36K is more than $30K, but there’s a loophole with the 529.

This wrinkle has its own wrinkle:  An individual or couple can give a larger lump sum, so long as the total given in that five year period is still less than 5 times the annual exclusion.  So DH and I *could* give $150K this year so long as we didn’t contribute again for another 5 years.  (Of course, that’s a moot point because we don’t actually *have* $150K to give, but you get the idea.)  That means when DC1 actually gets into college, we should be able to continue to contribute to hir 529 without penalty.

So our plan is to do a lump sum of $36K this month to DC1’s account (this gets rid of all our excess cash and digs pretty deep into our emergency fund, but the emergency fund doesn’t actually have to be full until May since we can cash flow most emergencies when we’re both being paid).  Then we will stop contributions to hir account entirely.  We will continue as normal with DC2’s account (contributing $750/month) until we build up excess cash and I start to feel like forcing DH to buy all the Apple products again.  At that point we will re-evaluate and decide whether we want to do a lump sum to DC2’s account or if we just want to increase the monthly contribution.  I’m sure I will post about what we end up doing.

In ~4 years when we know where DC1 is going to college, then we’ll decide whether or not to start contributing to that 529 plan again, and we will have a better idea about how much DC2’s account can bear without going over.

Grumpy Nation, I don’t have a good question for this post.

Things we’ve loved this past year

The best purchase we have been enjoying has been TSA Pre.  I didn’t appreciate how much I would appreciate it.   Similarly, I continue to be delighted to take toll-roads with a toll tag for the city nearest us.

Having a battery that can fuel a phone or laptop during travel has been really great.  I’ve also been able to occasionally help out fellow travelers.  We have bought several Anker products (amazon link) and have been very happy with all of them.

This kit to make a music box (not sponsored) is probably the coolest kid’s present this year.  Even after the music box has been created, it provides hours of fun choosing different songs.

DH wants to give a shoutout to this guy who organizes boxes of electronic components (I guess the actual organization is done in China, according to the box, also, not sponsored).  DH is in love with a box of resistors.  It brilliantly stores resistors on labeled sheets of paper in little plastic bags in a little box.  If DH hadn’t stumbled on it online, he would have done what all of his former labs have done and bought a fishing tackle box or cabinet and sorted them that way.  This is much more compact and it’s much faster to find things.

This backpack from Tom Bihn (not sponsored) has made traveling much easier.  I’ve stopped taking my own bag and use DH’s backpack instead.

Last year I suggested that DH buy me some bras, figuring he’d get something to his taste (Sorry!  The TMI was only in my brain though :/.).  Instead he went to a department store and got boring but very supportive bras in my size that cost quite a bit more than the kind I used to pick up for myself at Target.  Things I would think of as Grandma-style or for women with larger busts than what I have.  And… it turns out that’s what people (my shopping buddy, my sister… though to be fair, I WENT bra shopping with my shopping buddy and did not get this kind even with the lady at the bra store measuring me and hard selling) have been meaning when they’ve been telling me I need better bras for my clothing to fit better.  So… lesson learned.  Pay more for better bras and better bras aren’t ones that look fancier, but ones that have more coverage.  And how is it that DH is better at buying women’s underwear than I am?

While we’re on the subject of women’s clothing, I got some amazing tights from Target online.  The brand is A New Day (not sponsored) and all of the tights I got from them have been crazy amazing, from the plain black, to the patterned, to the super soft super warm fleece lined tights that are warmer than a lot of pants.  No tears yet! 100% recommend (and we don’t get any kickbacks from Target!)

What things have you loved this past year? What purchases have made your life easier or better?