Reader Mailbag: Impromptu Travel

What’s inside? Here are five word summaries of the questions answered inside this mailbag. Click on the number to skip straight to that question.

1. Co-signing with bad credit father
2. How many people read TSD?
3. Removing stains from cloth diapers
4. Percentage for emergency fund
5. Personal loan for adoption
6. Gloom, doom, and e-funds
7. Difficult job search
8. Frugality, clutter, and hoarding
9. Regular IRA versus Roth IRA
10. Which debt to pay first?

This weekend, we went to a wedding of an old friend in the middle of Wisconsin. On the way back, Sarah says, impromptu, that we should stop for the night and visit family. My work plans involved us going home, of course, so I’m writing this mailbag on the road between wireless hot spots, sitting in the front seat of a cramped Prius.

My Father is a retired teacher who started in real estate about a year before the current economic crash. He had three houses that he owned and was renting out to tenants. Once the real estate market crashed, he was unable to make a living in real estate and tried to get back into teaching, but hasn’t been able to get much more than temp sub positions.

Recently he asked me if I’d be wiling to co-sign a new mortgage with him. He wants to leave his area (southern California) and move to an area where the housing market is better and prices are cheaper (Arizona). Since his credit is completely obliterated by the foreclosures, he would never be able to buy any time soon. He’s looking for a small, cheap house that he can live the rest of his life in. He would make the downpayment and all mortgage payments, I would simply assume the risk. I’d love to help my dad out, but how would having two mortgages affect my credit? Would co-signing with someone who has lousy credit affect my credit? Is it even necessary to co-sign, would it be better for me to put the mortgage in my name and treat it like my dad is renting from me? If, god forbid, he were to pass away, which would it be better to have the house totally in my name, or be a co-owner? I know you’re not a real-estate expert, but I’m sure you’ve done some research on this, so any advice would be greatly appreciated!
- Matt

If you cosign, the impact on your credit will be relatively low unless your father stops paying the bills. Then, if you do not, your credit will be in the hurt locker.

If he passes away, the same is true – if you’ve signed the mortgage, then it’s now your mortgage. Better keep up the payments! Of course, if you’re not specified as an owner of the house, the only thing you lose by not paying at that point is your credit.

I am generally extremely hesitant to encourage people to cosign on any loan with family members outside of a parent cosigning a college loan for their children. So often, such arrangements end in fights and broken relationships. It’s just not worth it.

I believe you mentioned it in the past, but out of curiosity, about how many people follow your site or subscribe to it?
- Brandon

I have about 82,000 subscribers. About 28,000 of those get The Simple Dollar by email – the rest get it by their RSS reader (like Google Reader).

The site gets about 700,000 visitors per month, though that varies a fair amount from month to month.

In addition to that, I have a lot of additional readers that are hard to quantify because my site’s content is syndicated elsewhere. For example, I get a lot of readers because my site’s content is syndicated at the Christian Science Monitor, as you can see here. Those numbers are extremely difficult to quantify in any reasonable way.

As a fellow laundry soap maker and cloth diaper user, I’m wondering how you deal with the stains in newborn diapers. I’m wondering if there is an easy method that I hadn’t thought of yet.
- Christina

I turned to Sarah, the resident expert on this:

“It depends on the cloth diaper, but I have the best luck just using a mix of washing soda and Simple Green. I rarely have any trouble with stains when I use the two of them as a mix.

I use about two teaspoons of Simple Green to 1/4 cup washing soda. Usually, I put the Simple Green in a spray bottle and spray it about 12-14 times right into the washing machine when it’s filled with water, then spread the washing soda evenly on the water surface.

I usually don’t have any stains at all when I’m done. If I do, I just repeat the Simple Green and washing soda.”

So there you have it, from our resident cloth diaper washing expert.

I graduated from college last May (i.e. ‘09), and am lucky enough to have a job, but I still have considerable student loans and am trying to establish a nice emergency fund. In general, I have pretty good control over my finances, but I have a question I would like your advice on. I just received a bonus at work, and recently had a birthday, so I have a little extra cash than I usually do, and am trying to distribute it effectively. About what percentage should I put towards loans and about what percentage should I put towards my emergency fund? When a person has a little extra cash like this, what percent do you recommend on a little splurge? Although I know it must be done, after getting this money, it can be a little depressing putting it all towards debt retirement and a savings account, as I have done in the past.
- Tim

If you have no emergency fund, it should probably all go towards your emergency fund. I usually recommend that a person have about two months’ worth of living expenses in their emergency fund if they’re single.

If you already have that, then I’d focus more on the debts, starting with the highest interest one.

With splurging, I don’t think it matters too much as long as you’ve thought it out and stick to a consistent policy. My wife and I don’t splurge, per se, but we do often decide on “splurges” together and save towards them and windfalls usually are used to boost that savings to some degree.

My husband and I racked up some major credit card debt several years back (about 34k). We haven’t used credit cards for nearly 2 years now, and 6 months ago we enrolled in a debt management plan through CCCS to simplify and lower our payments; it’s been tight, but we’re doing it and are determined to follow through and not accumulate any more consumer debt. My husband recently ...