If you’re a recent college graduate, you’re probably struggling with finding a decent job in this down economy. In fact, it’s tough for anyone right now. Just like with personal finance, most of us will shrug our shoulders, accept the circumstances, and assume there’s nothing we can do but wait out the storm (and complain about taxes).

Stop complaining and start dominating

The reality is that it’s actually possible to improve your personal situation and get the job of your dreams, within a year of college. My friend Charlie Hoehn was able to do exactly that, and I asked him to write an ebook on how he did it. I’m putting it up here for you because it’s one of the better things you can read during this recession.

The ebook contains the techniques he used to guarantee himself any kind of work he wants over the next decade — pretty cool since he’s continuing to work with me on several new projects. And as an added bonus, I’ve included a short video of Tim Ferriss and me discussing how Charlie approached us, and why his technique was especially effective.

How Charlie made the approach

Rewind to about a year ago, when I got an email from somebody named Charlie Hoehn. He’d recently graduated from college and wanted my help to work with Tim Ferriss. He mentioned that he had some feedback for “I Will Teach You To Be Rich,” and in a followup email, he sent me several details. It ended like this:

How I can help you: The answer to this is something I’ve struggled to come up with for both you and Tim Ferriss….shooting/editing video, and creating niche social networks…

Only a few months later, I left this LinkedIn testimonial for Charlie:

“Charlie is one of the most talented marketers and entrepreneurs I’ve ever worked with. First, some of the results he helped drive:

* He was one of the chief strategists to make my book, I Will Teach You To Be Rich, a New York Times bestseller, Wall Street Journal bestseller, and #1 Amazon bestseller
* Wrote scripts, filmed, and edited comedy videos that were collectively seen over 80,000 times
* Managed a team that created several new innovative strategies for book marketing

More importantly, Charlie understands the importance of blending strategy with rapid tactics. I feel comfortable calling him, giving him a high-level idea, and asking him to come back to me in 48 hours with a proposal for how to implement it. In fact, after working together, he now suggests ideas to me, then implements them completely on his own. He’s resourceful (he’ll take a high-level idea and flesh out every detail/resource needed to dominate it), detail-oriented (he edited our videos even further when I thought they were good enough), and versatile enough to create marketing strategies and write comedy videos. A true gem. I highly recommend him.”

How did Charlie do it? How did Charlie end up working with me, Tim Ferriss, Tucker Max, and several other popular personalities?

As iwillteachyoutoberich readers, I thought you’d enjoy this because it’s a fresh spin on the popular drivel of “find your passion and the money will come.” WTF does that mean? Where should you start?

What you’ll find in the 30-page ebook

• Why CareerBuilder and Monster are useless during a job hunt (page 8 )
• The most painless method for getting a job right out of college (page 9)
• The best graduate school you can attend… free (page 11)
• Specific email script to reel employers who “aren’t hiring” (pages 13 and 27)
• Using specific skills to earn more…which seems obvious, yet most people never do this (page 19)
• How to fix the mistake that affects many college graduates in their job search (page 21)

Enter your email below to get:

• A downloadable copy of this ebook (completely un-DRM’d — sent immediately)
• Continuing interviews with successful entrepreneurs who are working their dream job.
• Case studies of people in their early 20’s who have accomplished, in just a few years, what most people accomplish in 10.
• Specific tactics and scripts to implement the principles in the ebook

Today’s post is by a 26-year-old who works in television and is engaged to a guy without a job (and a wedding looming). Notice how her costs are extremely low and she’s very conscious about her spending…but is she missing the bigger picture? Let me know in the comments.

* * *

Day 1
10 a.m.: It’s Monday and I just made it to work. My fiancé, T., has recently moved to my area and really needs a job. Unfortunately he just dropped out of school for two reasons: 1) We were four hours apart and 2) The profession he originally wanted to go into — culinary arts — would mean we wouldn’t see each other much.
1:01 p.m.: Drive home to heat up leftovers of pineapple marinated pork and au gratin potatoes. The really beautiful thing about being engaged to a culinary school dropout is that he can cook. T. and I fiddle with some electronic equipment so I can get a work task done.
7:13 p.m.: Get home from work. T. and I cuddle in bed for a while. He makes pork and mushroom dumplings and steams rice for dinner. The meal probably cost about 25 cents per serving. Not too bad for a couple on a budget.
10:47 p.m.: We start watching “Smart People,” starring Sarah Jessica Parker and Dennis Quaid. I fall asleep soon after the movie starts. I’m pretty sure T. played Halo 3 well into the night…Total daily spending: $0.

Day 2
9:51 a.m.: Get to work early and eat strawberry whipped yogurt from Aldi’s (49 cents) While I’m eating, I check my accounts online… 401k is in the tanker, but am I really surprised? (Right now my vested total is $3,200, which is much less than I contributed.) $779.23 in my checking account; $4,252.07 in my online savings with 3% interest; $452 in my Ameritrade account I opened only because it was part of Suze Orman’s Save Yourself plan, which offers $100 if you deposit $50 into the account for one year. Not a bad return.
10:30 a.m.: Peruse over daily newspaper and notice a few jobs T. might be interested in. Long story short, we met four months ago when we were both in a mutual friend’s wedding. Six weeks later we got engaged. My dad still doesn’t know about it because he hasn’t been answering his phone. T. was going to school in a city four hours away, but quit and moved in with me last month. He is now looking for work. I am terrified that he’s going to have a very difficult time, as he now has looming (huge) student loan payments and no degree. He really needs to find a job.
11:15 a.m.: Call a few moving companies. T. and I are moving to a condo less than a mile from where we live now. Rent is $700 for a 680-squre-foot one-bedroom, plus the third month is totally free. I’m quoted $260 for a two-hour move, and the movers provide wardrobe boxes. Not too bad. Another place I called charged $120 an hour, plus an hour charge alone for travel time!
12 p.m.: Check the county web site to find out requirements for getting a marriage license. T. and I want to get married at the courthouse to wed as soon as possible. Apparently it costs $93 for the license and $30 to have a deputy clerk perform a ceremony after a three-day waiting period. Much cheaper than an actual wedding! My mom still has no idea we are planning to elope.
1:47 p.m.: T. picks me up and we go for lunch at a nice steakhouse. We get calamari, prime rib, steak, and sodas for $24.60 including tip. How, you ask? I bought a $25 certificate at Restaurant.com for $2. We saved about 50% and got a luxury meal. I confess, I do eat out with coupons. We are trying not to eat out as much, but if we do it at a discount it’s a little less of a blow.
2:15 p.m.: Talk to T. about getting married, and possible moving and wedding dates. This stuff really stresses me out, and I hate paperwork!
3 p.m.: When I return to work I discover my purchase of a 53-piece flatware set has arrived. I paid $19.99 for it.
4:24 p.m.: Check credit card statement. So far I’ve charged $139.76 worth of items including groceries, Body Shop toner and a facial mask, a prescription for acne medication, that flatware set, and a new 2009 Entertainment book. I’m trying to cut down on spending…However, I just charged $544 for my auto insurance six-month premium and my card is automatically billed for my cell phone plan. That should be about $80. Yikes! If I don’t charge anything until my next statement, the balance will still be at least $763. I’m really hoping visiting my parents for Thanksgiving won’t be too expensive. Luckily, I used credit card rewards points to purchase my flight and already paid for the rental car. Total daily spending: $24.60 (lunch at steakhouse).

Day 3
9:49 a.m.: Get to work. T. and I had a fight last night stemming from his getting friendly with my roommate, who I’m not on good terms with. Neither of us slept very well and I barely spoke to him. I’ve decided that I’m not going home for lunch to see him. Instead, I’ll run errands!
9:55 a.m.: Re-checked credit card statement… Forgot that T. and I ordered our wedding rings and my card’s been dinged for one of them already. It’s $39.99 off Amazon.com. So much for keeping the bill under $800…
11:04 a.m.: Chat with coworkers about weddings. One woman says wedding planning is the most stressful thing you can ever do. Another agrees with me on a courthouse wedding. In fact, she wanted to do it over Christmas, but since her boyfriend’s family couldn’t come — nixed the idea. Apparently her sister was able to do a wedding with 425 guests for $4,500. That’s amazing!
12:30 p.m.: Get Body Shop facial products and my wedding ring in the mail. The band pretty closely matches my engagement ring and fits perfectly. All for under 40 bucks. Not too bad.
1:56 p.m.: At Target. A few weeks back I received coupons for up to $30 in gift cards if I 1) transfer or bring in a new prescription and have it filled and 2) join Target’s Pharmacy Rewards program (must have Target’s credit card). Did that and walked out with my $9 prescription (paid for with my Health Savings Account card), $30 gift card and a $2.68 hot dog and drink combo. Is it bad that I eat lunch at the Target snack shop?
2:10 p.m.: Text from T. He has a job interview as a cook  at a nursing home. Good news: full time, with benefits. I’m keeping my fingers crossed. It’s been a difficult and stressful month.
7:12 p.m.: Arrive home to roses on the nightstand and a leg of lamb in the oven. T. is trying to get back on my good side with a home cooked meal and flowers! Okay… It works. Total daily spending: $51.67 (wedding ring, prescription, hot dog and soda) T.’s spending: About $30 ($20 lamb, sack of potatoes, roses from grocery store).

Day 4
10:02 a.m.: Drive to work (late) while eating a hot dog and chugging a can of Aldi’s GT Cola.
11:37 a.m.: My 2009 Entertainment book has arrived! I can’t help but look at all the great coupons in there. I see at least five restaurants that we can definitely go to in the near future. The $20 investment is well worth it.
2:15 p.m.: Our photographer brings me two desserts from a shoot. (I work at a TV station.) I drive home quickly and eat banana creme brulee with T., then stick a berry crepe thing in the fridge.
4 p.m.: Stop to fill up my Toyota Matrix after a meeting across the street from my office. Gas is $1.95 a gallon, and my total is only $20.56!!!
10:21 p.m.: Just got home from the Media Battle of the Bands event. My coworker’s wife was singing in one of the bands. There was free sushi there so I definitely took advantage. T. had a couple drinks. Spent $20 on cover, $6 for parking, and T. spent about $15 on drinks. We don’t do this very often. Total spending: $81.56 (Entertainment book, gas, going out) Dinner was free, though.

Day 5
8:46 a.m.: Wake up and immediately check my bank account activity online. It’s payday so there is now close to $2,000 in my account.
9:30 a.m.: I feel guilty about spending so much money last night. Not to mention the fact that we went out for lunch the other day on top of that. I’m really hungry and I brought another dessert to eat from yesterday’s shoot but it’s terrible so I throw it out.
1:55 p.m.: T. found out that they hired someone else for the cook position before looking at his resume. The receptionist told him that the guy who got the job was unqualified and that T. should have gotten hired. I’m really disappointed to hear that, because that would have been a good solution for T. He loves talking to elderly people and making food, so I’m sad. His cooking really is amazing. This is very scary. We need to get married soon so T. can be put on my health insurance plan through work. That doesn’t sound romantic at all, but it’s what we have to do.
2:03 p.m.: Tears well up in my eyes, but I really don’t want to cry in the office. Thank God no one else is around.
2:05 p.m.: Still hungry, but will wait to eat until I get home later.
3:19 p.m.: Go home for lunch. Make a lamb leftover sandwich and chat with T. We agree to have a “no spending” weekend of more leftovers and job-hunting for him. Our plans include Target so he can apply for seasonal work.
4:45 p.m.: T. went over to a swanky bar & restaurant club and they’re interested in having him work in the sushi room. He has worked in a sushi place before, so let’s see what happens…Total daily spending: $0.

Day 6
8:35 p.m.: Have not left the house except to check the mail and find soda left in my car. I’ve had a craving for it all day. We had leftovers for lunch (I think we’re going to have that leg of lamb until we leave for Buffalo.)
9 p.m.: Break down and buy a night guard for my teeth and replacement toothbrush heads on Amazon.com. T. says I grind my teeth really hard. That’s probably why I had a cavity a few months ago. So I realized that the cost of getting a bite plane far outweighs the disaster of having my tooth enamel ground away. Total daily spending: $32

Day 7
11:09 a.m.: Just returned home from CVS’ing while T. is sleeping. He needed more contact solution and I saw the online ad and had to go. With the Extra Care Bucks rewards program, it was FREE. I also got a few other free items: deodorant, soda, Q-Tips, and make-up. Most of the items were free after ECB’s. That means you pay for the items, and get the amount back in Extra Care bucks, which you can spend on on ANYTHING in the store at another time. It’s a great way to rack up free toiletries. My total was $55.78. However, I got $47.95 in ECB’s. That’s my best day yet doing this. I’m not nearly as good as some of the Super Moms, but I’m getting there! I also saw a coupon for a $25 CVS gift card with a transferred prescription. Perfect! (Since I just transferred my prescription to Target, I’ll transfer it back to CVS and get $25 more in free gift cards)
3:13 p.m.: T. and I spend a few hours fishing off an old bridge this fine Sunday afternoon. Spending time with him is priceless, and in this case, doesn’t cost a penny. It makes me think about how the simple things in life really are the most rewarding. Total daily spending: $55.78 (but got $47.95 back to spend).

In sum:
Total weekly spending: $245.61 – $60 in very unusual expenses (wedding ring, night guard) – about $75 in eating/drinking out. Because my fiancee does not have a job, we should not be spending money on that right now and I feel guilty. Most of the expenses were necessary though (gas, groceries, toiletries). However, out of the deal I got $30 in Target gift cards and close to $50 to use at CVS so I’m not doing as bad as I thought. This was a very valuable experience for me, as I got to see where I can cut back and be a smarter consumer.

* * *

To be featured anonymously in a future Money Diary, click here.

I get this question a lot. “I’ve already set up my automatic infrastructure and I’m investing money every month. My 401(k) is maxed out and I have sub-savings accounts set up. What else should I be doing?”

So you’ve already handled the basics of personal finance: automation, negotiation, using my Scrooge Strategy advanced tactics, and you’re earning more. Maybe you have $10k in your account and you’re wondering what you should be doing next.

There’s always more to do. But be clear: Lots of people expect that after you handle the basics, you beat the next Mario level and get access to “secret” personal-finance investments.

While many people want “secret” alternative investments — despite all evidence pointing out that they don’t beat the market for individual investors — the truth is much more prosaic. It’s not sexy, but it will make you rich. Today, if you’re already handling your finances and are looking for the next step to get ahead, I’ll show you how to use the 10 Year Savings Strategy to leave your friends in the dust.

Step 1: Admit you’re like everyone else

If you’re already handling your money, you make more than you spend each month, and you’ve even implemented a Conscious Spending Plan and investment (as described in my personal finance book), this is for you.

The 10 Year Strategy involves asking people ten years older than you what they wish they’d saved for, and starting to save for that.

Sounds obvious, but it requires admitting that despite your superior financial abilities, you’re still going to have the same expenses as everyone else. Young people love to pretend we’re going to millionaires, work from the beach, and somehow magically make money and have low expenses all our life.

Here is what will happen to you as you get older:

1. Yes, you WILL have a nice and very expensive wedding (even if you’re a hypocrite and think you’ll have a “small, beautiful” wedding)
2. Yes, you WILL have kids and want to buy them nice stuff
3. Yes, you will need things like family health insurance and life insurance and homeowners’ insurance and family vacations and other things that you can’t predict right now because you’re not in that life situation
4. Yes, these expenses WILL come up. People like to believe they’re the exception. BUT YOU’RE NOT. YOU WILL HAVE KIDS. YOUR KIDS WILL BE WHINY AND REQUIRE LOTS OF DIAPERS. THEY WILL POOP ALL OVER THE PLACE AND REQUIRE 10X MORE PAPER TOWELS AND CLOTHES AND CRIBS. PLEASE BELIEVE THIS.

How The 10-Year Savings Strategy works

From my book:

If you’re in your 20s and you ask someone in their 30s what they wish they’d saved for, they’ll say things you’d have NEVER thought about:

• Diapers
• Homeowner’s insurance, health insurance, life insurance
• Family vacations

I want to show you how much this will affect you, so yesterday I put out a quick survey to people in their 20s, 30s, and 40s. I got over 2,000 responses, and the results are fascinating.

What people wish they’d saved for in their 20s, 30s, and 40s

Really fascinating data in there.

People in their 20s wish they’d saved more for travel, in their 30s it starts switching to retirement, and by their 40s, people are predominantly concerned with retirement. When we’re younger, we save for ourselves, and as we get older, we increasingly care about saving for our family. These trends are similar for nearly everyone.

As I wrote in my book, “…ask your parents what they worry about most. I’ll bet you their answer is, simply, ‘money.’”

So you’re making more than you spend, possibly maxing out your investment accounts, and this sounds reasonable. So why don’t people do this? Let’s take a quick detour down whiner’s lane to see why most people don’t take the simple step of implementing the 10-Year Savings Strategy.

Why they don’t do it #1: “I hate the President / bailout / taxes”

I recently did an online web chat with over 600 people from a newspaper site. I was walking them through some of my Save $1,000 in 30 Days tips, and yet many of them wanted to complain about taxes, bailouts, furloughs, and the government. As you know, I have little patience for people who debate minutiae and get nothing done. For every single complainer, have they ever read one good personal finance book? Have they maxed out their accounts or, if they don’t have enough money, earned money on the side?

Of course not. Because it’s easier to complain and to point fingers than to do anything about your money.

Here’s a common exchange I have with complainers:

• Complainer: “Hard to save when the governor is taking 50% in taxes and wasting it!!!!!!!”
• Seemingly calm yet-about-to-explode Ramit: “Yeah, that really sucks…so what do you suggest?”
• Complainer: “Who knows. But this state is headed for DOOM!!!!!!!!”

Others complain that they simply don’t have enough money to save significant amounts of money. “If that’s true,” I tell them, “then you simply need to earn more money.” They don’t like to hear that. Often the responses are:

• “Craigslist is only paying $10/hour” (So? You have to start somewhere. Or you can develop your skills to get a higher-paying job. Or network. Just get off your ass! Note that my readers have earned thousands and thousands of dollars following my strategies to earn more.)
• “Easy for u to say but u dont have kids” (True. I wish it were easier, but it’s called “work” for a reason)
• “I’m too exhausted after work and kids to get a part-time job” (That’s your choice, but f you make no changes to your work situation, why do you expect your finances to change?)

Complaining is fun for about 10 seconds. Then you realize that these same people will be complaining for the next three decades, while you’ll quietly be automating your money and growing your bank account and investment accounts each month — automatically.

I can’t emphasize this enough: Complaining is contagious. Even though I’m an eternal optimist, even I find myself complaining about the world when I get around these people, so I avoid them like the plague.

Yet there’s an even more insidious type of excuse that is all-too-common, especially online.

Why they don’t do it #2: “That’s too simple”

This excuse is common around programmers, kooky Ron-Paul/real-estate/gold fans, and reddit users. “Oh Ramit,” they chide, “long-term indexing doesn’t work! You’re just telling losers to stay losers by trying to “match” the market. You need to invest in [insert crazy investing strategy here, including "only alternative energy stocks" or "only bonds" or "opportunistic stock purchasing with alternative strategies including hedge funds and private equity"].

For many people, especially those who deal with highly technical information in their day jobs, something must be difficult to be useful. Yet as a professor in the much-maligned communications department at Stanford told me, “The value of this material is not in the difficulty, but in the usefulness.”

There are some valid reasons for this skepticism — including the fact that most personal-finance advice is terrible, boring, and trite — but to object to the overall strategy is to throw the baby out with the bathwater. Many of these people love timing the market (even though market timing doesn’t work). They love the allure of hedge funds (even though hedge funds are not as impressive as you think).

Yet they insist that the current buy-and-hold strategy doesn’t work and that saving for expenses ten years down the road is “not enough.” Unfortunately, you can’t simply be skeptical and call that a strategy. To have any credibility, you need to show me real, peer-reviewed research showing that your strategy is better than the time-tested approach of low-cost indexing. Otherwise, you’re simply another pie-in-the-sky dreamer.

Let me add one more thing: Nobody cares what you think. Or what I think. What matters is if you’ve executed on your plan. If you ask these people if they’ve invested using their “alternative” strategies, the answer is invariably this: “Oh, uh…not yet.” Try it. It’s fun to ask.

A few months ago, I wrote how I intentionally bulked up by strategically gaining 25lbs in one year using psychological techniques including commitment and attribution theory.

I picked one person to help me: my co-worker, Brian. No, he isn’t a huge bodybuilder. And no, he doesn’t read Men’s Health every day or bring a giant jar of creatine to work every day. But out of all the people who offered advice, Brian is the only person I know who consistently goes to the gym almost every single day. I’d rather learn from the person who is boringly disciplined rather than someone who has sexy ideas.

I didn’t pick the person who had the fanciest weight-training strategy. I picked the guy who went to the gym every day.

Here’s another example from Ian Rogers:

I told Kid Rock I was doing the Cool J workout and he laughed, “You are the worst spokesman for his book! Just what he needs, a skinny white kid telling people, ‘hey look at me, I did the Cool J workout!’ That’s like me wearing Russel Simmons clothes!” Probably true. But I’m also probably one of the only people on earth who did everything the book told me to for six months. I completed the LL Cool J Platinum Workout 100%. In its entirety. End-to-end. Anyone else? Anyone?

Exactly. It’s not about the difficulty, but the fact that you need to get it done. So if this seems too simple and you dismiss it, good! The ease of it is a barrier that’s caused you to select yourself out of it. The rest of us will get it done and scoff at you 10 years from now.

When you pick advice to follow, think carefully about how practical it is and how readily you can implement it. You know all these investment sites and blogs? How many of their readers have actually implemented the advice? How many of you have?

The point is action, not ideas. If your neighborhood skeptic hasn’t taken measurable action and isn’t willing to show you what exactly he’s done with his own money, politely smile and calmly walk quickly. And then handle your own finances while he exists in Kooky Kook land.

The survey responses above are all iwillteach readers, which means they’re (1) nerdy and (2) far ahead of most people in their finances. But even they wish they’d saved more money. You can always save more. When you get down to the nitty-gritty, you notice the differences in what they wish they’d saved for, and in how you approach it (savings account, CD laddering, investing, etc). But if you simply save for the big things in your next 10 years, you will be ahead of the game by far.

Yet most people constantly look for the fanciest next thing…instead of focusing on tried-and-true techniques. If you’d done this 10 years ago, you would quantitatively be ahead AND you’d feel great. But you can always start today.

What are you going to do today?

If you’re not earning more than you spend, automating your money, and maxing out your accounts, that can be your first goal. This is the majority of iwillteachyoutoberich readers.

If you’ve done all that and are looking for the next step, implement the 10-Year Savings Strategy using sub-accounts.

One more thing: You can’t just scoff at this for being too easy and do nothing. You have to consciously choose:

1. I’m going to do this within the week
2. I’m not going to do this because I’m going to do another strategy within the week
3. I’m not at this stage yet…I’m going to pick up your book (or another book, or just do it) and get there

Note: There is no #4 (”I’m not going to do this at all…I’m just going to do nothing”) because that is a cop-out for losers. Get it done.

To implement the 10-Year Savings Strategy…

Now that you know what to do, I run a premium savings program at http://www.scroogestrategy.com — one premium, super-tactical tip per week. I include 2 tips specifically on The 10-Year Savings Strategy, including an in-depth exploration of the best way to implement it, including:

• A script of what to ask people 10 years older than you
• Psychological techniques to get you to take action implement The 10 Year Savings Strategy
• Pre-built spreadsheet of expenses to use

Plus, a super-tactical savings tip every week. Use ScroogeStrategy.com to start saving hundreds today.

I’m working on a new post to give you a strategy to leave your friends in the financial dust.

But first, I need your help to tell me what you wish you’d saved for 10 years ago (surveys take less than 1 minute).

• If you’re in your 20s, click here.
• If you’re in your 30s, click here.
• If you’re in your 40s, click here.

Look for the post soon.

Here’s a good example of how you can get many fees waived in 2 minutes with a phone call. (It’s kind of curious that people email me instead of the company directly, but…)

From: Stephen T.
To: Ramit

Hey Ramit, enjoyed your book and it’s been a great help.

I signed up at myfico.com to get my credit information, and this morning (a month later) got a happy note from them telling me they’d billed me $89 for the next year. I’d rather not use their service for the next year.

Perfectly reasonable request. So what should he do?

From: Ramit
To: Stephen T.

Call them

Sent from my iPhone

Let’s see what happens…

From: Stephen T.
To: Ramit

Hey, just an update on the MyFICO billing. I called them per your suggestion and they immediately offered a refund, and processed the refund while I was on the line. Impressive customer service.

Thanks!

Since you’ll be setting up an automatic monthly review of your finances (as I illustrate in extreme detail in my personal finance book), charges like this will never, ever slip past you.

Also, CALL COMPANIES — it saves you a LOT of money. No need to be scared. In fact, when I call companies, they get scared. Once you realize that you have the skills and leverage to get most fees reversed, your interactions with companies will be a lot more pleasant (since you’ll dominate them). Read more about negotiating fees.

Today’s post is by a 25-year-old who lives at home with his parents in an attempt to save money to buy a house. Meanwhile, he obsesses over small expenses thinking that they affect his housing fund.

* * *

Day 1
3:45 p.m.: I read my email while taking a break from work and I find out I’ve been chosen to do the Money Diaries. Oh jeez! Why today? I just spent $107.00 on the Inazuman DVD Box Set. I suppose I still have time to cancel the order but the demand for Japanese TV shows in America is small so I think I’ll make this my only real purchase of the week.
4:30 p.m.: I left work at 4 and carpooled home. It’s been a month since the coworker chipped in anything, so he gave me $20. I think what with gas going down I might want to tell him he now only has to pay me once every 5 weeks or so. Sure that’s less money coming in but honestly, I feel bad taking too much money for what is essentially a mile out of my normal commute.
4:45 p.m.: I get home and the giant box from DeepDiscount’s DVD sale is on my bed. Luckily they are all presents (Christmas time) bought by my siblings for each other under my credit card account. This of course means that I have now find a way to collect almost $400 from them. Why I lend money to relatives I will never know. My brother will probably pay me back after the first of the year unless he gets some seasonal work or sells something on eBay, but everyone else should pay me back within a week.
5:56 p.m.: Dinner is over and I finished my exercising. I’ve decided that even though there are a few things I could buy that I genuinely need, I’m not making a special trip out. I resigned myself to the comfort of my bedroom, my TV and DVD player for some entertainment. Ah yes, that TV was literally funded with my first paycheck at my current job. Why I didn’t save that money and buy it later I don’t know. At least I didn’t put it on a credit card. Total Spent Today: $106.95

Day 2
7:38 a.m.: I check my budget for the month on my work PC while I wait for some of my systems to come up. It looks like buying all my Christmas presents in November was as dumb an idea as buying them all in December except I get to skip the stores for a month. While I’m nowhere near maxed out, I will probably have to tap into savings to cover the bills next month. I guess I should just leave the CC home for a few weeks. Also on the way to work I debated going through the drive-thru at some fast food place to get a breakfast sandwich but for the sake of my wallet and my waistline I didn’t. I also got my eBay invoice. $22 in fees this month. Not too bad but it’s been a slow month for acquiring merchandise I guess.
9:02 a.m.: After getting a big project at work rolling, I check the email yet again and find out that the Inazuman set has shipped so no chance to cancel it now. Oh well, if I don’t like it I suppose I can sell it.
10:30 a.m.: I give in to my hunger and eat an apple from my lunch. This of course means that I now have an inadequate lunch and since tonight I work late I will have to pick up a side dish somewhere.
1 p.m.: I got back from lunch without too much damage. I walked around the mall eyeing a few items here and there. Steve & Berry’s was having a final closeout of shirts for $1 a piece as they are closing tomorrow. While it is tempting to find a few shirts for lounging around, none are work appropriate and I pretty much picked out all the casual ones I wanted last week. I also walked around the dollar store and Target. Normally I love to browse their stationery and pen section to see if there are any good new pens on the market. I instead went straight for the cafeteria and bought a Popcorn Combo for $1.58 including tax. I ate half of the popcorn and put it in the back seat of my car. I’ll save that for tomorrow’s snack I guess.
5:30 p.m.: I’m getting my haircut tonight by the same barber who cut my hair when I was one year old. At least she gives us all a good deal so I paid about $8 for mine.
8 p.m.: Same old nightly routine in my parents’ house. I live in my bedroom as I have since I was back in school. Despite making more money than both my parents combined, I just can’t seem to find a place. Perhaps it’s because I refuse to buy into slums, or maybe because I spent every dime I had in college.
10 p.m.: After talking with a friend about car insurance, I decided to give Progressive a try. Looks like my insurance can be cut in half next year from what I paid this year. I’m not sure if it’s because I turned 26 or because my car will be paid off, but I look to pay about half with Progressive compared to what I paid last year with Encompass. That will certainly be nice as my car insurance is set to expire in April and that’s also tax time. Total spent today: $9.58

Day 3
9:38 a.m.: A coworker mentions that GMAC is desperate for money and their CDs are much higher than even ING Direct. This may be worth looking into. Granted with what little savings I have, it may just make more sense to stick with ING. The differences equal only a few dollars but I’ll have to look into it and do the math. Still, I should work on a rent/housing fund if I ever want to get out of my parents’ house this decade.
10:23 p.m.: I just got the $25 from Amazon refunded to my credit card for the DVD they never sent me. I’m kind of glad they didn’t give me store credit as I would’ve spent that so fast it would make your head swim. I have $75 in Amazon gift certificates now. I don’t know what I’m saving them for (maybe a Kitchen Aid Mixer?) but it seems silly to give Amazon free interest on holding my money. Perhaps I should just use them along with my next order and put the cash in a separate account at ING. That might make sense I guess. Of course the worst part was my CC has about $1,500 charged to it this month. Eek!
1 p.m.: I had a craving for a Wendy’s Frosty but it was too packed so instead I ate the leftover popcorn. At least I didn’t spend any money outside of maybe 3 miles worth of gas, which is pretty cheap now.
2:58 p.m.: I’m thinking of converting my Electric Orange I just started a couple weeks ago to get the $25 sign up bonus into a future housing fund. Maybe if I can get my car paid off I can start making say $400 a fortnight to it to pay for housing. The only problem is that it doesn’t earn all that much interest but I do need to keep it somewhat liquid, I guess. I am so envious of my friend in Nebraska with her lovely apartment at $350 a month. Why is it that everything here is $650 a month and up for garbage? I don’t even live in a city!
5:20 p.m.: I filled up my gas tank at $2.099 for regular at Mobil. Of course after I drive another 3 miles or so towards home I realize that Shell just dropped down to $1.999! So basically I spent 81.29 cents more because I didn’t wait to check the price. I guess that’s just more bad luck than anything else. Still, it’s amazing to fill my tank up from half way for less than $20.
5:45 p.m.: In today’s mail I found out the hinges I bought to repair my desk’s keyboard drawer came in. While I did have to pay $20 including the shipping, I guess they are worth it since these are solid brass and were the only ones I could find (online or off) that were the same size. The only problem is the brass doesn’t match the rest of the black hardware and I am tempted to replace all the other hardware since the brass looks much nicer. Total spent today: $17.06

Day 4
8:30 a.m.: I’m sitting at work completely and totally exhausted. I guess it will be a frugal Friday as my friend I usually hang out with at least once a week is at seminary in Pennsylvania this weekend. Perhaps I’ll take her our for lunch/dinner next Wednesday as I have the whole day off.
1 p.m.: Since I didn’t pack a decent lunch, and I desired something hot, I got three breadsticks from the Pizza Hut Express. Not only is that $1.78 spent that I did not plan, but it’s also 450 calories I now have to burn off.
3:32 p.m.: Well, I get to leave in 28 minutes and while the prospect of spending a Friday night home with my family is not my idea of a good time, unfortunately none of my friends seem to want to go out or even come over to my place. Of course, when you live at home in your mid 20s your friends start to get the idea and stop coming over. Total spent today: $1.78

Day 5
1:30 p.m.: Slept in today and outside of going to Stop & Shop to take advantage of their sale on Pepsi, I haven’t spent any money. This morning my parents and I went for a drive to look at the neighborhoods of some houses for sale as well as some apartments. More than half of the houses needed a lot of work (something I’m really not ready to do at this point in my life) and quite a few were in areas where kids are constantly hanging out. I don’t have a problem with kids normally but honestly I’d rather live in a neighborhood full of old people. They make less noise and cause less trouble. Plus my town has a bit of a juvenile delinquent problem and they tend to congregate closer to downtown so I guess I should look more towards the higher priced outskirts.
2:30 p.m.: I realized with all the spending I’ve done this month I’ll be getting something around $50 in rewards from my credit card. I have made a vow that I will put all these rewards together and use them on something I really, really want and thus use them as a sort of forced savings plan. I wouldn’t mind a Kitchen Aid mixer, despite not having my own kitchen yet. I just have to be good and not spend it on DVDs, books, video games or other forms of entertainment. Honestly, I just need to keep my eye on my spending and I’ll be fine. Total Spent today: $4.20 – Hmm, maybe I won’t do so bad this week.

Day 6
I am so glad this week is about over. I did manage to go an entire day without spending money. I decided to play handyman and went to my grandmother’s house to get some projects done that she’s been needing help on. I did some weatherstripping as well as moving some stuff out of her garage into the basement. The best part was that I got to stay for dinner. I did check some sales papers and outside of a few non-essential items, I don’t see anything I really need to buy this week. Total spent today: Nothing!

Day 7
1 p.m.: I took a trip to Best Buy on my lunch break and picked up two 50 packs of DVD-Rs for $10 each. Including tax I spent $20.98, which is a fairly good price. I debated on not buying these but I figured they are at least $14 less than the Taiyo Yudens I normally buy and they don’t go bad so it was certainly worth it, to me.
4 p.m.: Well, I’m going to go straight home tonight and just relax doing nothing. I can’t really go out and I can’t really spend any more money. I can tentatively say, unless I go out to eat on Wednesday, that I won’t be spending any more this week. I can at least guarantee today, though. Total spent today: $20.98

In Sum:
All in all I spent a grand total of $160.55 this week. What’s even more sad is that the depreciation of those items are pretty close to 100%. Granted, I did have daily living expenses such as food, gas and a haircut but this week keeps me $160.55 further away from ever getting out of here. In my defense I have some automatic savings already in place for the house but still, that $160 would be better in my high interest savings account than in the form of DVDs and cheap snacks. Maybe though, I’m being too hard on myself. Perhaps I’m viewing this as an all or nothing game where I must either spend it all or save it all. Where is that happy medium? I hope someday to find out.

* * *

To be featured anonymously in a future Money Diary, click here.

Save $500+ this month using my premium savings tips at ScroogeStrategy.com.

“It’s easy enough to point out the insignificance of planting a garden, buying fewer clothes, or using fluorescent bulbs…But the ecological irrelevance of these practices was beside the point. What downscalers offered was not a better way to reduce emissions, but rather, a way to reduce guilt. In 2007, we asked environmentalists in focus groups about green consumption. None thought that consuming green would do much of anything to address a huge challenge like global warming. They did it anyway, they said, because it made them feel better.”

What is the point of saving money on obsessing about small expenses like lattes? Is it to truly save money, or is it to reduce guilt?

I’m curious to hear what you think, although iwillteachyoutoberich readers are self-selected against small frugality.

I’ve always believed that you can’t out-frugal your way to rich. And it’s not just about the math ($3/day doesn’t really add up to that much). More importantly, it’s about the psychology of big wins: Most of us are never going to completely stop spending money on the things we love — especially daily things like our morning coffee — so exhortations to “just stop buying those lattes” are invariably meaningless. Plus, there’s the Paradox of Choice: The more things we worry about, the less we do of anything at all.

And then there’s guilt.

If there is one thing I hate, it’s behavioral change based on guilt. Yes, guilt can cause you to change your eating habits or spending, but the attitudinal and behavioral change is usually short-lived and ineffective.

In Guilt and Our Choices, I wrote:

In college, I never understood the jackasses who would say they had “tons of work to do” and that they “should work” and would go to the library for 13 hours, where they would chat on AIM, read maybe a total of 25 pages, and come back telling everyone they’d been at the library “all day” (wipe brow). This smacks of stupidity and when I saw this, I thanked god that he made me a tall but frail man, because if I were Mike-Tyson-sized, there would be some trouble for everybody.

I’ve found that guilt is a hugely insidious influence for people, especially people our age. We’re making decisions about classes, careers, money, and life because of guilt in a hugely disproportionate way. How many people do you know that major in econ because they’re guilty about their parents paying $160,000 for them to attend college? Or they go to law school? Or choose some particular job because they “should”?

How much of “saving” money is about guilt? Do we feel guilty about splurging for dessert or buying those jeans…but then do it any way? How many friends do we know who say, “Yeah, I really should save more money…”

Or do we create a conscious spending plan, decide strategically what we love and what we don’t, and spend accordingly?

I’m curious to hear what you think about guilt and spending. What do you do? What do your friends do?

Today’s post on mental accounting is by Claire, who holds an MBA and other degrees from Stanford and Oxford.

Belsky and Gilovich have a big job ahead of them. In only 215 pages, they want to explain to you why you’re an idiot. Sometimes.

Promising to give you “lessons from the new science of behavioral economics,” Why Smart People Make Big Money Mistakes was right up my alley. I love learning about the motivations behind spending, saving, and doing dumb stuff with money. This book promised to answer some of those fascinating money questions. Why are so many of us willing to spend so much more for a product bought on credit than with cash? Why do business executives spend ever-increasing amounts of money on failing products or money-losing corporate divisions? Although originally written in 1999, the book holds a wealth of wisdom for all time.

Learn Mental Accounting:

Behavioral economists say that mental accounting works like this: let’s say you have bought a $150 ticket to a concert. When you show up at the door and realize you have lost your ticket, do you buy another? Probably not.

But let’s say you hadn’t bought the ticket yet, and you show up at the door of the concert hall to buy your ticket. Unfortunately, you realized you’ve lost $150 in cash since you walked from your car. LUCKILY, you still have enough in your wallet though to cover the cost of the ticket. Do you buy the ticket? Yes.

Why?

Both scenarios are a loss of $150. However, in the second scenario you separate the losing of the $150 from the purchasing of the ticket. In the first you consider the cost of the event as a total of $300 and retch at the high cost.

It turns out that Mental Accounting is a huge contributor to the low rates of savings in the US (in 1999 it was 4% in the US and over 15% in Japan).

When Do You Use Mental Accounting?

How can you know if you are more likely to be affected by mental accounting? Here are some clues:

• You don’t think you spend, but you have trouble saving
• You have savings in the bank, but your credit cards aren’t always paid off
• You spend more with credit cards than with cash
• You’re more likely to spend your tax refund than your savings on a new itouch

Things You Should Know about Mental Accounting:

• We have a tendency to value money differently depending on where it comes from. If you win $50 in the lottery – considered “found” money – you more likely to spend that on garbage than the $50 you earned on the job. If you get  tax refund – you’ll run out and spend it instead of saving.

• We are victims of the concept of “relative cost”. You want to spend $10,500 dollars but the used car dealer says  it’ll be $500 extra this time of year. Mental accounting tells you that $500 in compared to the cost of the car isn’t that bad. But you want to buy a washing machine for $500 – you show up and they say it’s now $1000. Do you buy it? No. Mental accounting tells me that’s crazy talk.

• Plastic equals fake money:It sounds like the oldest most overused money trick but it still holds true – people do spend more with credit cards. When the weight of your wallet doesn’t change, you are less likely to think you’ve really spent anything.

How can you fix the problem of Mental Accounting?

• Do what the book says: “Imagine that all income is earned income.” You worked for granny’s xmas check, so don’t waste it.
• Pretend you don’t have the plastic. Although Belsky and Gilovich haven’t gone all Dave Ramsey on us and told us not to use credit cards, they are saying we should stop and think: would I buy this if I was using cash?
• Use mental accounting to your advantage by automatically funneling money out of your paycheck (Ramit does this, and has told you to follow suit)
• Remember that money is money. $3,000 more on a $200,000 house isn’t less money than $3,000 more on a $3,000 dining room set.
• Record keeping is the key to success – I’ve always claimed this, and this book enforced this more than anything. (Yes, we’ve regressed back to Ramit’s dreaded David Bach latte factor.) Little things can add up. $10 a day in extra soda, gum, magazines and lunch out is $3,500 bucks a year.

Did I like it?

Oh yeah.

Will you like it?

If you want to learn about your mind, and not crunch numbers, you’ll get a kick out of it. Heck, win it here.

Take away point?

Money is money is money. Your mind, however, can be on crack.

Claire is an author of the upcoming book, Over-Choiced, and has been featured in such publications as Business Week and The Huffington Post, and at her money-saving blog, Choyster Cash. Get “Why Smart People Make Big Money Mistakes” on Amazon.

Thanks for helping out.

The 60-second survey is here. Over 1,000 responses in less than 12 hours. You guys are ridiculous. Thanks.

Any time you make a major purchase, there is a huge amount of money to optimize. And buying a house is the best example of this.

Even though buying a house is usually not a good investment, once you have a mortgage, you can optimize the hell out of it.

Today, Andy Jolls from videocreditscore.com is going to show you one way to save $71,000+ on your mortgage.

Dominate Your 30 Year Mortgage in 25 Years

01:16 — Typical Mortgage Payments
01:36 — Extra Payments
02:07 — $71,000 Savings
02:23 — What if your credit is worse?
03:29 — Scrooge Strategy members can learn more

Today let’s see some real world examples of how you can save money on your biggest-ticket item: housing.

Instead of paying off your mortgage once per month, set up a system to pay it twice per month. I’m not telling you to double your payments. I’m saying that paying every two weeks WILL mean several years less of payments.

Here’s how it works with Bank of America [Countrywide] and I’ll assuming it works this way with others. BofA has a plan (PayPlan/26) which means instead of making 12 payments a year you are paying 26 payments a year. Note the math. It seems like you should be paying 24 payments a year, but that’s not how the calendar works, so you make extra payments. But, that’s a good thing. It’s like you are making 13 payments a year [the way BofA does it, more on this below*] Let’s take a look.

Scenario 1: Typical Mortgage

APR: 6%, $300K, 12 monthly payments of $1798.65, total interest paid over 30 years, $347,514.57

Scenario 2: Making an extra payment each year

APR: 6%, $300K,? 26 bi-weekly payments of $899.38, total interest paid over 25 years, $276,591

You just saved almost $71,000 in interest payments. Wow, that’s like 18,000 lattes or one every day for the next 50 years.

What’s happens if you have bad credit and have higher interest rates than 6%. Moving to every two weeks helps even more. At a 7% interest rate, you will shorten your loan by 6 years instead of 5 years for the 6% rate. Better yet, you save from paying $98,545 in interest.

Scenario 3: Making extra payments each month

Okay, this doesn’t save you a lot more, but you stop payments 5 months sooner and your interest payout is $273,852 for an extra savings of $2739.

The problem with the scenarios above is unless they are automated, most of us will never do it. That’s why the BofA PayPlan/26 plan is great. It’s automatic.

Here’s what sucks about the plan. One, they charge a $4 fee every month. Okay that’s $2600 over the course of the loan. But, the bigger issue is this. They don’t apply your mid month payment right way, rather, they hold your money like a bank and then make a payment with your two payments at the end of the month. Thus, the plan really is a 13 payment plan. This is pretty downright snaky in my book and I think [hope] the regulators jump on this. According the scenarios above I should be saving another $2739, but I’m not.

I’ve seen many posts that complain about the fact that the banks charge for this service in many different ways. I agree with these complaints, but I want to point out that I disagree with the advice most posters give. They say, get a bunch of envelopes and be disciplined about this. I just don’t think “discipline” is realistic for most busy people. (Note from Ramit: See Personal finance is not about more willpower.) Sure, I’m bummed about paying $2600 for something I should be able to remember to do, but that $2600 is saving me $71,000. So, it’s a tradeoff I willingly accept.

But all this said, the upside totally outweighs the downside. It’s an automatic way to save you more money than you could save almost anywhere else and you’ll be paid off 5 years earlier.

###
Andy is an ex-FICO executive and Chief Educator at VideoCreditScore.com. Check out these videos:

• Do apartment evictions impact your credit score?
• Avoid Cell Phone Scams
• Student loan debt vs. credit card debt
• How to translate your credit score into an interest rate.

See the specifics: If you liked this, Andy recorded a more in-depth premium video for Scrooge Strategy members, which shows specific tactics, phone numbers, and an additional tip for saving $117,600 on the lifetime of a typical mortgage. Sample screenshot:

My Scrooge Strategy members get proven, specific tips like this every week — and if the tips aren’t useful for you, you get 100% of your money back. See how to focus on the big wins and save thousands — no risk.