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. Future employment looking unlikely
2. Thoughts on Dave Ramsey?
3. Food spoiling in refrigerator
4. Bigger emergency fund?
5. Cashing out 401(k)
6. How unemployment affects the employed
7. Selling secondhand right now
8. Feeling angry at everything
9. Prayer versus meditation
10. Switching to full remote work
11. Thinking about homeschooling
12. Name brand LEDs
Even with the nation (and the world) reopening from COVID-19, for us this still means a summer that’s much different than what we expected. Our children’s summer camp, which they have attended for many years, already closed for the summer. Our summer vacation plans were also completely knocked offline, and we don’t have any plans to travel as a replacement. I was also going to go have a meetup with some distant friends this summer, and that’s canceled.
Our summer is going to be a much quieter one than I would have ever guessed. We will likely do some camping at some point later in the summer, provided numbers trend in a positive direction. We also have some “family projects” that we’re intending to do during these summer months. We’re still practicing a lot of social distancing, mostly in terms of evaluating whether things are worth the increased health risks, and mostly deciding that they’re not (or finding a different way to do those things). For example, unless there’s a big benefit to gathering in crowds, we’re not going to crowded places for a while, not out of fear, but out of an adjustment in the cost-benefit of doing some of those things.
I think this is a story familiar to a lot of Americans and a lot of people around the world. Even as things return to some degree of normal, they’re not really normal. The life cost of COVID-19 is tremendous, and it’s not over. Many people have lost their jobs. Many of us are still apprehensive about old routines or, as it is with us, will likely never return fully to some of our old routines, simply because this break made us realize that we needed some changes.
On with the questions.
Q1: Future employment looking unlikely
Got laid off in March like lots of people. Filed for unemployment which is making ends meet until September or October. But my old job isn’t going to come back. Nothing seems to be hiring. Sit tight? Will there be longer unemployment?
– Axel
First of all, are you absolutely sure there are no jobs available? Have you checked at local grocery stores and other businesses providing essential services? Your old job might not be coming back, but many other areas of the economy are looking for workers.
It’s a different story if you are avoiding some job types and fields primarily for health reasons, but if you judge the risk to yourself to be acceptable, then there are opportunities out there in most areas.
If there are no other jobs — or you don’t find the risk acceptable (which is a completely rational decision) — then you shouldn’t just “sit tight,” either. You should be taking advantage of this time to get yourself ready for what you might want to do after this is over. What kind of skills do you have? What skills can you sharpen? Is there any training you can do at home, or online learning you can do that will help? Even if it’s something as simple as improving your own physical fitness, it’s still something to focus on instead of just idling for months.
What will happen in a few months when the first wave of COVID-19 unemployment benefits start to run out? My guess is that those benefits will be extended (assuming the economy isn’t fully back to normal, which I highly doubt), but I don’t know that. My advice is to prepare for your life as though they won’t be extended.
Q2: Thoughts on Dave Ramsey?
I’ve been listening to Dave Ramsey a lot lately and wanted to get your thoughts on him.
– Steve
Dave Ramsey does a very good job at laying out a clear debt repayment plan for people who are struggling with a lot of debt and offers really good cheerleading/coaching for people moving through that plan. This is what he excels at, in my opinion. He makes the first steps of getting your finances in order seem manageable and approachable and helps people get through those steps.
He generally offers good advice on frugality and is adamant about the need to spend less than you earn, which I wholeheartedly agree with.
There are really only two things I’d say against him — one is kind of neutral and the other is a bit negative. The neutral thing is that he wears his faith on his sleeve. He’s a Christian and he makes no bones about it. If you are not a Christian, there will be aspects of his show that may not appeal to you or may even drive you away.
The negative thing is that he is often far more optimistic about the returns that most people can get with investing without having a hefty bankroll behind them. He often talks about how a 12% average annual return on investments should be a given, and while that’s possible for long stretches for large-scale real estate investors who have the bankroll to constantly be hunting and striking on bankruptcy deals and other opportunities, it’s not something that many investors can do. Most investors should be looking at a 7% average annual return on their long term investments, at least until they have enough in place that they can live off of the returns in perpetuity and have enough beyond that to start making more risky investments. His overly optimistic attitude toward investing nudges people to make financial choices that I don’t feel are particularly wise ones.
On debt repayment, basic financial management, and smart spending choices, Dave is great. For investing, I trust other sources more, like The Bogleheads.
Q3: Food spoiling in refrigerator
How do you keep food from spoiling in the fridge? Lots of things go bad in there before I use them.
– Andrea
It really depends on the kind of food. What kind of food is getting spoiled?
If your leftovers are getting spoiled, make sure to let them cool to room temperature uncovered before covering it and putting it in the fridge. If it’s steaming or hot enough to immediately produce condensation in whatever package you put it in, it’s too hot to be put in the fridge right away. Nothing should be put in a closed container for very long when it’s hot or even when it’s merely warm.
If your fresh produce is getting spoiled, don’t wash it before putting it in the fridge and keep separate kinds of produce away from each other. If you have stuff like spinach or lettuce going bad, dry it off, put it in a fresh dry container with a Ziploc bag, and put a dry folded paper towel in there with it.
If meat is going bad, you need to keep it uncut and fully wrapped until you’re ready to prepare it. Don’t cut up or prepare meat very long before cooking it.
For other things, be careful about checking expiration dates and best-if-used-by dates before buying them. Buy stuff that is far away from those dates if possible, and if stuff is close to the date, use it ASAP when you get home.
That should take care of most spoilage issues in your fridge. It might not be a bad idea to just clean the whole thing out thoroughly, too. Pull out everything, thoroughly clean the shelves and insides, then put everything back.
Q4: Bigger emergency fund?
I am 26, single, live alone, working from home right now. I keep about a month of living expenses in savings at all times. Should I build up more? Been trying to pay off student loans.
– Vince
My general feeling is that, if you would feel more comfortable with a bigger emergency fund, then you should increase your emergency fund. That sense of “feeling comfortable” comes from knowing the risks in your life — and you know your own sense of risk far better than I do. I’d probably aim to have at least another month of living expenses socked away.
My personal approach to an emergency fund is to sock away a small amount each week automatically. I don’t worry about how much is in there; I just know that when things fall apart, I have money to tap. You can set up an automatic transfer from your checking to your savings easily at your bank.
Remember, an emergency fund not only helps you in emergencies but even when there aren’t any emergencies, it provides peace of mind because you know that the emergencies that worry you are taken care of. That has real value.
Q5: Cashing out 401(k)
My wife and I were both laid off in April. We are receiving unemployment but we don’t know if we will be able to return to work so we are trying to plan for what we should do when unemployment runs out. I know that it is a bad idea to cash out your 401(k) but where does that option rank compared to things like losing your home?
– David
It really depends on what you value. What is more important to you? The home that you live in now or having a robust retirement? Still, there are a lot of things you can do well before you have to make that kind of choice.
What you should be doing is evaluating the relative value of the things you own and what the impact is if you stop paying particular bills. What happens to you if you stop paying credit card bills? There’s nothing to repossess, so the real impact is to your credit score going forward (which will get hammered). What possessions do you have that have some resale value that aren’t really all that important to you? Those are things to sell.
Another option to consider is bankruptcy protection. In general, declaring bankruptcy will give you some more breathing room and enable you to keep your house. If it’s looking like your choices are to strip your retirement fund or keep your house, I would look at filing for Chapter 7 bankruptcy in your state. That allows you to keep your house and your car most of the time, provided you’re up to date on payments. You should contact a bankruptcy lawyer at that point if you’ve exhausted other options for keeping the basic bills paid.
Q6: How unemployment affects the employed?
Could you write an article about how high unemployment affects people who are still employed?
– Derrick
This is a really good question, which I spent a healthy amount of time researching this week.
There are a number of impacts. The biggest one is that the job market switches to one where the demand for jobs exceeds supply, so employers can offer less to new employees and be more demanding. People who currently have jobs will feel a little less secure in those jobs, too. This usually manifests itself by people cutting down on their non-essential spending — they pay off debt, build up some savings and hope for the best.
Another is in terms of a sense of well-being. The less secure people feel in their jobs, the less happy they generally feel about things as a whole. Obviously, it’s extremely stressful for the unemployed, but employed people who feel less secure feel more stress as well.
Generally, the government finds ways to nudge people toward spending during a period of high unemployment, which often provides some direct financial benefits to the employed. During recent recessions, that has taken the form of stimulus checks. We’ve already received one and the news, as I write this, indicates a strong possibility of a second one. It also takes the form of very low interest rates, though interest rates right now are about as low as they can get. The low interest rates are a strong encouragement for people to spend, to take out home loans and car loans and such.
Over time, those financial incentives encourage people to spend a little more, which encourages businesses to hire a little more, and eventually, we cycle out of a recession.
Those are the big impacts. Employed people become more nervous about unemployment and shore up their finances. They’re less likely to take major financial and career risks, and they feel more stress and anxiety. The government starts to incentivize spending through tax cuts and stimulus checks and low interest rates, which eventually nudges people to spend, which nudges businesses to hire, and we gradually recover.
Q7: Selling secondhand right now
So normally we have a yard sale in May and that obviously didn’t happen. Goodwill and Salvation Army aren’t accepting donations either. We did a ton of spring cleaning and have tons of stuff just sitting in boxes in the garage and entryway. I have been selling some items on eBay but I don’t know what to do with all of this stuff.
– Jane
If I were you, I would put items up for sale in batches in local buy/sell/trade groups, offering to deliver them to people’s door if they pay you online or leave an envelope with cash in it on their doorstep. This can be done contactless — they either pay you via PayPal, Venmo or they leave cash on their doorstep, and you drop off the item. You can even take a picture of where you dropped it off and send it to them for verification.
You can probably expect to get “yard sale” prices on most items that you sell. Just put up a batch, say that you’ll deliver to the doorstep with no contact on a particular date, and then have a list of places to deliver to on that date.
This will allow you to slowly start going through the items. It’s a good idea to try to bundle things together; you won’t make quite as much money, but it will save you a lot of headaches and time and it will also help you get rid of items that might otherwise go unsold.
Q8: Feeling angry at everything
I feel so angry at everything. Everything has just fallen apart. I see people out there not wearing masks and acting like everything is fine and it just makes me angry. I’m angry at employers not caring about their employees. I’m angry at leaders. I don’t want to feel so angry as it is not healthy or fun.
– Amy
Almost every single person in America is feeling some sort of emotional overwhelm at all of this. Some feel angry, some feel deeply sad, some are struggling with depression, some are in denial. We’re all dealing with everything in very different ways.
The best thing we can all do is offer up a little understanding to our fellow people, even if we might not agree with what they’re doing.
This goes for our public leaders, too. Given the wide variety of state and federal and local responses, there is almost no public leader that doesn’t have someone mad at them due to how they responded in a public health sense or in an economic sense. Those that closed down tighter have people angry at them for the economic impact; those that closed down lightly have people angry at them for the public health impact. A “perfect” response to this is utterly impossible. Although I think that people should hold their leaders up to scrutiny in the aftermath of this, understanding that no one could have responded “perfectly” and many leaders are just doing the best they can to juggle a lot of conflicting matters is important.
What has helped me is to try to put myself in other people’s shoes. I’m an introvert, but how would I be responding if I were really extroverted? How would I be responding if I didn’t have a background in research science? Is this other person really angry at me, or are they angry at the entire situation and I happen to be the person that’s there?
We’re all in this together. We’re all upset. We’re all feeling a lot of emotional responses. We’re all trying to handle it without going completely crazy. A little bit of patience with others and understanding goes a long way. Having some channels for those feelings that won’t hurt others and won’t damage your own future is good, too. Personally, I channel it through journaling and meditation.
Speaking of meditation.
Q9: Prayer versus meditation
You sometimes write about “prayer” and “meditation” almost interchangeably. Could you explain what you mean by that?
– Adam
I basically view them as highly interrelated practices. I believe many forms of prayer can be called meditation, and many forms of meditation can be called prayer. The lines are kind of blurry.
I define a prayer broadly as any attempt to communicate with a higher power. It can be a spoken phrase or done entirely in your mind with or without words.
I define meditation as any form of focused contemplation. Meditation does not require any sort of belief in a higher power — anyone regardless of theology can do it.
So, when you spend time in focused contemplation that involves some form of communication with a higher power, you’re both praying and meditating.
I prefer to use the more general term “meditation” most of the time, but I think that, for a lot of people, the practice makes more sense if they look at it as prayer. I’m often reminded of my great-grandmother, who used to pray the rosary each day. The practice that she followed looked an awful lot like meditation, as she was in complete focused contemplation as her fingers moved across the beads of her rosary.
So, when I suggest people meditate regularly, I am including a ton of different potential practices in that word. I am cautious to avoid tying that practice to a particular religious tradition, although people can definitely do so. For example, if you are a Catholic, try praying the rosary in a very focused way as a form of meditation. If you are an atheist or an agnostic, do a simple breathing meditation where you focus on the in and out of your breath. Both practices will greatly help with focus and calming the mind.
Q10: Switching to full remote work
My employer announced this week that they are moving several teams to full-time remote work and looking at moving to a smaller HQ because our coronavirus stay-at-home was an incredible success. I will no longer have any reason to commute more than once a month. So I have two things to ask about.
One, do I need to keep my car? If I’m only going into the office once a month and I get most of my groceries via bike pannier or delivery, is it worth the money? I don’t go anywhere much, and most things I want to do are within one to two miles of my house. Eleven months out of the year, the weather is nice enough to walk or bike.
Two, what should I be thinking about for a permanent home office? I cobbled together something that I thought would be temporary but now it sure sounds like I’m going to be doing things this way for a long while. How much should I invest in office furniture?
– Adam
With your car, I would make absolutely sure how much use it will get if you no longer have to commute but things return to normal. Do you go anywhere outside of that one- to two-mile radius? If so, how often? If it’s less than every month or two, you can probably make it work by using public transit, ridesharing or renting a car. If it’s more frequent, what is the cost of using things like mass transit or ride sharing or car rental compared to just keeping your car for occasional use? You should think about convenience there, too. I’d start by just noting and keeping track of potential car uses.
With your home office, I’d suggest improving things as you see a need to do so. Without knowing what your temporary setup is like, I would suggest continuing to use that until you begin to see some problems with it, like you’re starting to feel some discomfort or there are things you can’t do. Then, focus on solving the problems that pop up as they come along. I wouldn’t just go buy a bunch of office furniture for the sake of having a “home office.” I would say that when a real problem pops up, solve it well. Don’t go for a cheap solution — solve that problem really well. At the same time, don’t hunt for problems to solve; wait until problems become apparent.
That’s a generally good solution to apply to life. Don’t go hunting for problems, but when real problems pop up, solve them well.
Q11: Thinking about homeschooling
Like a lot of parents, this whole COVID-19 thing has made me think more about the prospect of homeschooling. We did really well over the last nine weeks but we were relying on materials provided by the school. I have a remote work job as an accountant so I do that in the evenings and have been doing the schooling during the day.
We have been looking at the possibility of doing this during the upcoming school year, at least until there’s a vaccine, so perhaps for a single school year. I have looked at the price of buying a full year curriculum and I was shocked as to the expense of it, but the free options like Khan Academy don’t seem too robust and require a lot of screen time.
– Erica
In my experience with families that homeschool, that seems to be the dichotomy. They either go for full curriculums, which are expensive, or they use some free or very inexpensive things like Khan Academy as a backbone and supplement that with their own additional material and activities on an as-needed basis.
I think either can work with a sufficiently motivated parent/teacher. I think that a full curriculum is easier for a parent to manage and teach and it’s more “offline,” but then you’re facing the cost issue.
Given that you seem to want to just do this for a year or two while a vaccine is discovered, I’d probably lean into whatever is most similar to the materials you’ve been doing. Are they pointing kids to Khan Academy-style resources, or is it more of a full curriculum online? If what the school has been doing has been working for you, emulate that.
Q12: Name brand LEDs
You suggest buying a lot of household supplies in store brand form but what about things like LED light bulbs? If those things short out they can burn down your house. Isn’t it better to buy name brand bulbs where there is a big company putting their name and warranty behind it?
– Brian
That’s an interesting point. I don’t know of any data demonstrating any significant risk in manufactured LED bulbs. There are anecdotes out there, but there are anecdotes about all kinds of lighting. I personally witnessed an incandescent bulb come very close to causing a fire when I was a child, for example, but that doesn’t mean incandescent bulbs are unsafe.
LED bulbs operate at low voltage and produce little heat. In general, I believe LED bulbs are safer than old incandescent bulbs because of the heat and low voltage factors.
So, what about the relative safety of name brand LED bulbs versus off-brand bulbs? I actually don’t think there’s much difference. The actual components of an LED bulb are pretty simple, and I have seen no news stories indicating that basic LED bulbs are unsafe, whether store brand or otherwise (and I follow consumer news very carefully). They only tend to get complex when you have ones with extra features, like dimmable bulbs and “smart home” bulbs that can change color with the use of an app. In general, the more complex something is, the more points of failure it has, so you either pay a lot more for something very well constructed or you expect that it will fail sooner.
My feeling is that if you’re just buying an LED bulb to toss in a light socket that will only ever be fully on or fully off — no dimming, no color changing, no app controls, none of that stuff — a store brand LED bulb is fine. If you’re buying a bulb with more features, I’d stick with the name brand, and I would fully document that purchase. (This is a topic I’ll discuss in an upcoming article.)
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.
