Reader Mailbag: Friends

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. GTD for stay-at-home moms
2. Loaning money to parents
3. Prepaying property taxes
4. Emergency fund or debt repayment
5. Starting a Roth IRA
6. Small business encouragement
7. Thinking ahead for college
8. Out of college, no job
9. Apprehensive about mortgage prepayment
10. CFPA thoughts

As I’ve mentioned before, my wife and I have strongly considered moving to be closer to various family members. What keeps us from doing it? Friends. We have a very wonderful circle of people here and, frankly, neither one of us wants to leave them behind. It really is all about the people for us – we want to move to be near certain people, and we don’t want to move because we’d be far from other people.

I enjoyed your GTD review and am trying to implement it in my life. My problem as a stay-at-home mom is how to organize all the repetitive duties that end up taking up so much time that I can’t even get to look at my next steps action items.
Do you know of other stay-at-home people following GTD and how it works for them?
i.e. Do I have “clean house” as a project and then add “wash dishes” as a next step after every meal? I’m thinking it only makes sense to add special projects like cleaning out closets on project lists…but then I still don’t know how to organize my day to get things done. It seems that the GTD book is more geared toward office life and not home life.
Any ideas?
- Megan

GTD really works when your life is (a) filled with lots of little things that you need to keep track of, (b) appointments, and (c) longer-term projects that can’t be finished in one sit-down session.

I can’t speak for a stay-at-home mom, but my life is loaded with these things, and GTD really helps with them. The “lots of little things to keep track of” is dealt with by writing everything down that comes to mind, putting them all (and any other items I get, like mail) in an inbox, and processing all of it once a day or so. The “appointments” are handled with a calendar. The “projects” are handled by devoting a folder to each one, defining the steps I need to accomplish, and reviewing them regularly so that I’m always taking the next step on them.

I don’t use it for daily routines, though checklists can be helpful for that. The exception is if I’m trying to establish a new one, like practicing the piano or something like that.

It’s up to you, really, whether those things will help you – or help you enough to be worth the time.

Is it unethical to charge my parents interest on a loan? I’m 22 and have *very* robust finances, while my parents have been both unlucky and made some poor choices (though they’ve gotten better in the last few years). My dad recently suggested to me that instead of paying his credit card company interest (~20%, he thinks) on his balance (~$4000), I could lend them the money to pay it off in exchange for something like 10%. If it worked out we’d both be better off. This is money I can afford to lose, and would otherwise be sitting in a money market or bond index fund.

So my question, is it unethical to charge my parents interest, at least more than I’d earn otherwise? While 10% is much lower than their current payment, it’s much higher than I’d earn otherwise. If I’m willing to lend them the money at a lower rate, am I ethically obliged to? I’d value your thoughts.
- Mickey

It’s not unethical to do it. It’s just got a strong likelihood of damaging your relationship with your parents.

Think of it this way. You’re now going to have to enforce the regular repayments (likely to make them bristle). If they decide that they don’t need to repay you regularly, you’re going to bristle up. Neither one is going to be good for your relationship, particularly if the condition continues.

Now, imagine if they default. That’s going to strain the relationship for a very long time in both directions.

For me, it’s never worth it to loan money to people I care about. If I decide someone needs help, I’ll gift them something.

I’ve followed your blog closely but have not seen any info about getting a discount if we prepay property taxes. I read there is a 10% discount if we do this. Have you heard about this?
- Meena

I have never seen or heard of a discount for prepaying one’s property taxes. That’s not to say that there isn’t a municipality or state that offers such a discount.

Regardless, prepaying your property taxes is usually a good idea if you’re not saving ahead for them. That way, you’re not stuck with a huge surprise at the end of the year.

In our area, various payment plans are available without fees being charged on the monthly or quarterly plans. We use the monthly one and have it automatically deducted from our account.

I currently have a debt of $32k an overdraft charging around about 0.88% on my total balance. I have savings which are hard to get to – about $27k which i automatically pay $500/mth without fail.

I want to start saving for an emergency fund since between my hubby and myself I am the bread winner. However, I want to get rid of the debt as quickly as possible. Should I close and settle the overdraft using a loan which will charge me 5.5% per year or shud i just settle the debt using my savings?
- Aldie

I would settle most of the debt using your savings, retaining some of it for emergency fund use. I would probably retain two or three months’ worth of living expenses and put the rest towards reducing the debt.

Of course, once you’ve done that, you should channel that $500/month temporarily towards the debt until it’s gone. Make that in addition to your normal payment, so if you have a payment of $100, pay $600.

Debt freedom is truly great for one big reason: it vastly increases your monthly cash flow, making it possible for you to make a lot of choices you would have never made otherwise.

I recently changed jobs to one with significantly higher pay. I had a small amount ...