About two years ago, I wrote an article detailing my Wii: how do I maximize my gaming dollars on it? This was a popular topic, one I’m often asked about by people my age who still want to play occasional video games but don’t want to break the bank. Many other readers have requested similar notes on a Nintendo DS, either for themselves or for a friend or a child.

What I’ve found is that for my gaming dollar, my Nintendo DSi is the best bargain I’ve yet found. The Nintendo DSi is a handheld console that easily fits in a pocket. Let’s walk through the details.

First, why a handheld console at all? If you’re a video game fan, why not buy an Xbox 360 or a Playstation 3? If you’re more into casual games, why not just play the games available on your cell phone?

The biggest factor that improves upon the consoles is portability, obviously. Most of the time, when I do actually play with my DSi, I’m out and about. I’ll play it on a long road trip. I’ll play it at the doctor’s office. I’ll play it whenever I’m in line. Although those situations make up the vast majority of my playing time, I can also play it at home on the couch if I so choose.

Why not just play the ones on the cell phones? Frankly, it’s the quality of the games. I’ve played a ton of different cell phone games and not many match up to the quality of even the worst games on the DS. The only cell phone that has even a few quality games is the iPhone, and if you’re looking at the iPhone because you want a cell phone that plays good games, it’s vastly cheaper to just get a low-end Verizon phone for your calls and a DSi for your games - and you’ll get both services better than you would with an iPhone.

Obviously, there is the option of simply not playing at all, which is completely worthwhile as well, but I’m fairly obviously writing to people who enjoy gaming and value it as a hobby.

Second, why a DSi instead of a DS Lite? A DS Lite is currently $40 less expensive, plus it has a slot that lets you play older Game Boy Advance titles - a feature that the DSi lacks. So why is a DSi a better value?

The biggest reason is the downloadable software. The DSi allows you to download very, very good games for just a few dollars each (more on them below), with more appearing all the time. Even better, you’re able to download two of them for free when you first get a DSi, and it comes with a free web browser, too (which I’m using in the picture at the top of this post).

The second reason is it functions as an mp3 player. All you need is an SD card loaded up with mp3s and headphones and the DSi functions as a portable music player - another solid argument for simply getting a dirt cheap cell phone in conjunction with this device.

The third reason is a bit of a knock against the old Advance games - the worthwhile games for the Advance are getting difficult to find. At the used game stores I frequent, it’s almost impossible to find any worthwhile Advance games for a reasonable price.

Finding a bargain on a DSi A DSi currently has a list price of $169.99. How can you shave a bit more off of that?

Suggestion one: trade in any older video games or consoles you don’t play with. I traded in my Nintendo DS Lite and several Advance games that I had thoroughly played to get my DSi for free. Another friend of mine traded in several old played-through games to get one. If you have any older games sitting around that you’ve already played through, gather them up, take them to the local gaming shop, and trade them in.

Suggestion two: wait for a sale on Amazon. If you’re interested, use this trick to automatically find a deal on a DSi at Amazon. You’ll have to be patient, but it’s a great way to dig up a deal.

Suggestion three: be patient. Do some comparison price searching yourself and decide if you really want one or not. Spending some time thinking about the purchase has a good chance of talking you out of it if you’re not truly interested.

Starting Out With a DSi
Unlike any other video game console I’ve ever tried, you can get quite a bit of enjoyment out of the DSi without buying anything else. Pick up the console, take it home, and fire it up. When you log onto the DSi Shop, you’ll automatically be given 1,000 free points, which you can use to download software. I strongly recommend spending those 1,000 points downloading the web browser, Art Style: Boxlife and Art Style: Pictobits.

Boxlife is a puzzle game in which you are given a piece of “paper” with tons of squares drawn on it, like a piece of graph paper. You cut the paper along the edges of the squares, then fold the pieces you cut out into cubes - which means that the pieces you cut out have to be of certain shapes. It also features an amusing simple storyline detailing your rise through the employee ranks in a factory. This is a highly addictive puzzle game.

Pictobits is another addictive Tetris-like puzzle game where you have to match up colored pieces. When you do, the pieces disappear and then reappear above, filling in colors automatically in a picture.

Both of these are great ways to spend five minutes juicing up your brain while you’re sitting at the doctor’s office or on the bus, and since you can get them both for free with the purchase of a unit, why not?

Before I discuss any other purchases, I should point something out: I don’t think a video game is a worthwhile purchase unless you get the cost of the purchase down to $1 per hour of playing it. Ideally, I can do better than that, which I’ll discuss below.

If you decide to make an additional purchase with your DSi, I’d recommend getting a single Nintendo points card (SRP: $20), which gives you 2,000 more points with which to download games - and there are plenty of additional worthwhile games to download. I recommend Mario vs. Donkey Kong: Minis March Again (800 points), Dr. Mario Express (500 points), and Art Style: Aquia (500 points), then just hold onto the other 200 points for the future.

What about the DS cartridges? There are a ton of games available for the DS, many of which are awful and many of which are incredibly worth playing. My strategy for maximizing my gaming dollar is pretty simple: I buy and trade used games. Occasionally, I’ll receive new ones as gifts (because my wife and my family know what kinds of games I enjoy) and I’ll cycle them in as well.

Here’s how I do it. Let’s say I go to the used game shop and buy two used games which together cost about the price of one new game. I play through both of these thoroughly until I’m truly tired of both games. Along the way, my kids get me another game for my birthday and I play through that one, too. I’ll then take those three games to the used game store and trade them in for two others that I haven’t played. I’ll play through those two thoroughly, then I’ll take those into the used game store and trade them in for two more. Along the way, I might stumble upon a huge bargain (like recently, when I found a game I really wanted to play for the DS, Fire Emblem, for $5 new) and add that into the mix.

I recently calculated that I’ve invested an average of $6 out of pocket per game I’ve played through for the DS (and that includes the cost of the console averaged into each game) - and I’ve played some games nearly to death. That drops a game down into the used paperback range, since I’ll spend much more time on a game than on a single book.

If you’re looking for games to pick up that really maximize bang for the buck, the six best values I’ve found in DS gaming are Advance Wars: Dual Strike (war strategy; I’ve spent more hours on this game than any other, ever), Elite Beat Agents (rhythm tapping game, often inexplicably available for $5-10 on the discount rack at Target), Mario Kart DS (kart racing with a lot of variety, plus this is a must-buy if you have multiple DS owners in the household), Legend of Zelda: Phantom Hourglass (distinctive and very fun adventure), Final Fantasy Tactics A2: Grimoire of the Rift (adventure/strategy mix, a HUGE game), and New Super Mario Bros. (if you ever enjoyed playing a Mario Bros. game, this will be tons and tons of fun). All of these were well worth the price, especially if you can get them used.

I’ve had tons of fun with my DS Lite - and now my DSi. The best part is, if you’re careful, it can be a real bargain.

Obviously, the big difference comes when you pay into these accounts. With a Roth IRA, you put your money in after taxes - from your take-home pay. With a 401(k), you invest with money before taxes. Thus, a 401(k) investment reduces your taxes today, while a Roth IRA investment reduces your taxes tomorrow.

Many people want a simple answer to the question of which retirement account type is better - but it’s not that simple at all. To truly know which option is the best one would require a crystal ball.

The best we can do is make the case for a future where a Roth IRA is better - and a future where a 401(k) is better. Let’s look at each one.

A Roth IRA Is Better If…
… income tax rates go up from where they’re at now. Let’s face it - the United States is deep into debt. The revenue to pay for that debt will have to come from somewhere. At the same time, income tax rates are currently about as low as they’ve been in decades. What’s a reasonable conclusion from this? The government will raise individual income tax rates gradually over time to make up for all of the rampant spending since the start of the Reagan years.

… your earnings go way up from your current level. If you have higher earnings later in life, it’s likely that most of your retirement savings will also come later in life so that you can have a standard of living in retirement that’s notably higher than what you have now. If you need a lot of money in retirement, it’ll be very useful to have some of that money arrive on your plate tax-free, especially if the income tax rates are higher. In other words, if you have a big entrepreneurial bone in your body, a Roth IRA is probably a better option.

… you have other avenues of income in retirement besides the Roth IRA. Most likely, if your income goes way up, you’re going to have investments of all kinds that earn income for you in retirement. Almost all of that will be taxable income. Again, having some of your income in a non-taxable form means substantially less taxes for you, particularly, again, if tax rates are higher.

… your employer isn’t offering matching contributions into a 401(k). If you’re self-employed or with an employer that doesn’t offer a 401(k) - or doesn’t offer any sort of 401(k) contribution matching - a Roth IRA definitely looks good in comparison, since the 401(k) doesn’t have this huge advantage.

A 401(k) Is Better If…
… income tax rates stay at the same level - or go down. Many argue that the best way to increase revenue is to actually lower tax rates, spurring on business growth. If future governments apply this philosophy, it’s likely that tax levels will either stay steady or decline.

… your earnings decline, stay the same, or only go up at a slow rate until retirement. If you’re not entrepreneurial in any way, shape, or form and you’re not interested in battling your way up the corporate ladder, your income will likely remain pretty steady throughout your life. This means you won’t bump yourself up to higher tax brackets later on and you’ll likely be in this tax bracket (or a lower one) in retirement. Thus, deferring the taxes until then is advantageous.

… your main income (besides Social Security) will be your 401(k). If your income in retirement will mostly come from your 401(k) and not from outside investments, your total tax bill will be limited significantly. You won’t have additional income pushing up your tax burden (which your 401(k) will contribute to).

… your employer offers matching 401(k) contributions. This is free money that blows away any tax benefits that might come from a Roth IRA. If your employer matches your contributions, the decision becomes pretty easy - take those matches all the way to the bank.

What About a Roth 401(k)?
Some people also have the option of a Roth 401(k), which essentially works like a 401(k) except with after-tax money. A Roth 401(k) often ends up being like a Roth IRA that gets employer matching, which means that most of the arguments in favor of a Roth IRA apply to it.

In the end, though, you need to decide for yourself where you’re headed and where you believe the government is headed. Of course, all of this is moot if you don’t start saving right now. Regardless of what you choose, you’ll lose any advantage of either choice by putting off saving while you decide. If you’re unsure, sign up for one plan or another and start contributing. If you change your mind later, switch your savings plan. But, no matter what, start saving now - don’t put it off.

You can get rich in just three weeks with my $99 tape course!

We can eliminate 70% of your debt immediately!

Gold is the only thing that will save you when the economy fails!

Do you smell the snake oil yet?

There are countless sharks in the water that want your money. One powerful technique for selling you something you don’t need is to prey on your fears. Perhaps you fear the government’s long term future (been listening to too much talk radio, haven’t you?). Perhaps you fear immediate personal financial failure. Perhaps you fear your professional failure - and what others might think of you if you’re not successful.

People will prey on those fears. They try to do it all the time. Commercials telling you that you can eliminate your debt. Pitchmen talking about how great an investment gold is. Smooth talkers telling you about their “program” for quick income at home.

Almost all of these plans do two things. They grab onto your fears and they combine it with some sort of widely-spread myth. The myth of the person who got rich quickly. The myth that debt can be whisked away through this or that loophole in the law.

Myths are dangerous things. They’re usually based on information that might have been true a hundred years ago - or are based on extremely rare cases that, again, don’t reflect how you live your life. Yet they persist because they sound good.

Denying Risk Because of Laziness
Early in the chapter, Ramsey goes on a rant about the dangers of denying risk in your life. One point he makes on page 52:

Sometimes risk denial is a kind of laziness, when we don’t want to take the energy to realize that energy is needed to win.

I think this very factor holds people back from a lot of career advancement. They look at the huge amount of energy they would need to expend to get ahead - networking, building a business, and so on - and decide that they’d rather expend their energy doing something else.

Another example: we look at the effort that it would take to keep track of our spending for a few months and get a real grip on our finances - and we decide that the status quo is just fine.

Or we think about the effort that it would take to actually build a price book and figure out which grocery store really is the cheapest for what we buy - so we shrug it off and just go shopping at the Wal-Mart Supercenter.

Laziness is the enemy of success in every area.

Denying Risk Because of the Beat Down
Dave’s rant against risk denial continues:

Other times, risk denial is a kind of surrender in which we settle for a bad solution because we are so beat down or beat up that we wave the white flag and do something stupid.

I’m reminded of those ludicrous debt elimination programs advertised on late night television. “We can eliminate 90% of your debt with our program!”

Well, this means one of two things. You’re either going to file for some sort of bankruptcy protection (which has a whole different can of worms) and pay them for the “help” or you’re going to sign up for their debt repayment plan, where you pay them money for something you could cook up yourself.

Either way, you lose. Why not just make your own debt repayment plan? It’s easy and a lot cheaper than paying outrageous monthly fees for companies to do this for you.

Denying Risk for False Security
Yes, I liked the denying risk theme. Dave goes on to say:

At still other times, risk denial can have an active component in which we search for a false security that simply doesn’t exist.

Gold investing immediately comes to mind. The local talk radio station in Des Moines carries tons of ads for buying gold as an investment, coupled with shows like Glenn Beck which talk breathlessly about the fall of the American government (I wish I were kidding).

Gold sellers prey on that fear, bringing up the old tales about how gold is the safest thing to own when governments are falling. In practice, though, that’s rarely true - gold is scarce enough that most people resort to a barter system until things straighten out, and land, skills, and resources have the real value.

Gold is that false security. It makes people believe that they’ll be safe if the government collapses. In a fearful environment, people seek out that safety.

That’s not to say gold doesn’t have a role in a diversified investment portfolio, but people with enough of a bankroll to need diversification into precious metals probably aren’t reading The Simple Dollar or listening to talk radio all day.

Cash Value Life Insurance Is Junk
This is one of those points that I absolutely love in this book. Dave lays out the case against whole life and universal life insurance on page 58:

All of the [extra payments beyond the price of term insurance] per month disappears in commissions and expenses for the first three years; after that, the return will average 2.6 percent per year for Whole Life, 4.2 percent for Universal Life, and 7.4 percent for the new-and-improved Variable Life policy that includes mutual funds. These statistics are from Consumer Reports, Consumer Federation of America, Kiplinger’s Personal Finance, and Fortune magazine, so these are the real numbers. Additionally, a recent article in National Underwriter, The Industry Mouthpiece, showed charts of returns from fourteen national companies. The returns they show average only 6.29 percent over twenty years. [...] Worse yet, with Whole Life and Universal Life, the savings you finally build up after being ripped off for years don’t go to your family upon your death; the only benefit paid to your family is the face value of a policy [...]. The truth is that you would be better off to get the [inexpensive] term policy and put the [extra payments beyond the price of term insurance] in a cookie jar!

That pretty much sums it up. If you want insurance, buy bread-and-butter term life insurance. If you want an investment, buy an investment from a brokerage with low-cost investments (like Vanguard, for one). Mix the two and you’ll find yourself eaten alive by fees and commissions.

Look, I don’t blame a well-meaning grandparent for buying whole life insurance for their grandchildren. Their heart is in the right place - they want to protect their own children when their grandchildren are young and give the grandchildren a valuable investment when they’re older.

However, I’d encourage them to split that $100 a month into two batches instead of putting it all into the insurance. Use a small part of that money for a small term policy on the child so your own children won’t have a financial burden if the unthinkable happens. The other $93 a month? Put it in an investment account.

Important/Not Urgent
One of the handful of useful ideas in Stephen Covey’s book The 7 Habits of Highly Effective People (which I reviewed a while back) is the idea that our tasks all fall into four groups - Urgent & Important, Urgent & Not Important, Important & Not Urgent, and Not Important & Not Urgent.

Covey argues that the distinction we should make is whether something is important or not (tasks in the Important & Urgent and the Important & Not Urgent groups), but in practice we usually focus on the urgency instead (Urgent & Important and Urgent & Not Important).

This has a huge impact on personal finance. Dave spells it out on page 62:

We take care of the Urgent/Important stuff, but what is Important/Not Urgent [...] is planning. You can pay the electric bill or sit in the dark, but if you don’t do a monthly spending plan, there is no apparent immediate damage.

I think this is one of the biggest reasons people put off financial planning. They are aware that it’s important, but they’re also aware that it’s not urgent.

Since so many of our lives are seemingly in constant “crisis mode” where we move from one fire to the next, we find ourselves falling easily into a situation where we just deal with what’s urgent and don’t even consider what’s important.

The end result? We find ourselves often missing out on many very important things in life because they’re not urgent. We skip playing with our kids because a client is calling us about a minor detail. We gloss over financial planning because there are fifty eight household chores that need to be done.

That lost time costs us. Every month we don’t save directly hurts our retirement. Every week we don’t contribute to our 401(k) hurts us. It comes around.

A Weird Argument for Cash
I think Dave goes off the rails on page 71 when talking about the risk of carrying cash versus carrying credit cards:

The crooks assume that your purse is like all the others filled with credit cards that are over the limit. Look, I’m not making light of crime. There’s a chance you may get robbed, because people do get robbed -whether they carry extra cash or not. And if it happens to you, the cash will be taken. But, trust me, you need to be far more worried about the danger of using credit cards than the danger of being robbed while carrying cash. Carrying cash doesn’t make you more likely to get robbed; on the contrary, the mismanagement of plastic is robbing you every month.

First of all, why not use a debit card instead of cash? A debit card allows you to only access the cash you actually have - the stuff sitting in your checking account. It also has virtually the same consumer protections as a credit card - if someone steals your debit card, just call up your bank and things are secure.

Second, having $200 in your purse (or wallet) makes it just as easy to blow $200 on something unnecessary as it is having a credit card in your purse (or wallet).

A credit card is just an excuse to exercise a lack of self control.

Having a large amount of cash on you is a security risk, no two ways about it. Dave is making the mistake of confusing one kind of risk (the risk of a lack of self control, which can take hold whether you have cash or a credit card in your pocket) with another kind (the risk of having your money stolen, which is much easier to fall prey to with cash on hand than with a credit card on hand).

Do you have any other thoughts on the fourth chapter of The Total Money Makeover? Please share them in the comments - and feel free to respond to any of my impressions as well. After all, a good book club is all about discussion!

On Saturday, we’ll tackle the fifth chapter - Two More Hurdles.

1,100 notes, without any sort of structure at all.

What does it all mean? That’s what I’m really puzzling through right now. I definitely see some huge patterns in the notes, but what’s the big theme really tying all of these ideas together?

Lately, I’ve been taking long walks and puzzling through all of this. I’ll spend an hour reading through note after note after note, then I’ll get up, put on my shoes, and go walking/jogging for a while. Connections pop into my mind when I’m out there and by the time I’m back, I see things in a new light.

It’s coming together. The shapes are beginning to emerge.

Here are some interesting personal finance articles I found in the last week.

The Basics Behind a Budget that Works After reading tons of articles describing different versions of “a budget that works,” I’ve come to the conclusion that no budgeting technique really works for everyone. For me, a much simpler approach works well. (@ simple mom)

Things Wear Out I agree - the best value is an item that simply wears out. It’s worn, well-utilized, and useful until the very end. Like a good pair of shoes. (@ wise bread)

A New Era of Personal Finance The old advice isn’t working any more. (@ saving for serenity)

Why Pursue Financial Freedom? I think different people have different answers to this question. For example, my reason is simply so I can pursue some of my major life goals - writing a novel and having it published and well-promoted - without worrying about an income. (@ get rich slowly)

30 Days to a Better Man This is a set of truly great articles, but a better name for the series would probably be “30 Days to a Better Person” as most of these articles apply well to well-rounded women, too. (@ art of manliness)

Helpful Finance Tips, or Sneaky Payday Loan Ad? Proof positive that you need to be very careful about what you read online. I think the future of the internet is “trusted advisors” - people who build long-term relationships with readers and give them advice on any number of things. I would probably be in that category. (@ red tape chronicles)

Listen In!

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Though I hope you do subscribe using one of the above methods, don’t worry - each episode will be featured in its own post, much like this one, on Tuesday afternoons. The podcast itself may appear earlier than that, however, if you subscribe using one of the above forms, but the notes won’t appear until I post about it here on The Simple Dollar.

Episode Notes
Here are some additional notes that go alongside the comments in the podcast. Approximate times for the corresponding links and notes are listed.

0:00 - The theme song is a snippet of a Camper van Beethoven concert on October 25, 1986, shared via their very open taping policy. Listen to the concert in its entirety.
0:44 - We played Dominion multiple times, Ticket to Ride: Europe, and Torres (I think … I might be mixing it with the previous game night we had).
1:05 - Her family plays the card game 500, which is quite fun.
2:10 - Good card games with kids: slapjack, go fish, and war.
2:18 - Good card games with adults: bridge, gin, canasta, poker, spades, hearts, cribbage, pitch, euchre … a nearly infinite list.
2:44 - My family always plays four point pitch.
2:55 - Monopoly seems to never end - I played a game for more than twelve hours once. Even worse, many people seem to play it without the auction rule - when someone lands on a property and chooses not to buy it, it goes up for auction. Without that, the game really does never seem to end.
3:27 - Ticket to Ride is a great board game that revolves around connecting various cities to one another via train. You essentially play on a map of a continent, with major cities highlighted, and throughout the game you connect these cities. You only have a limited number of connections, though, and other players are trying to do the same thing (and thus sometimes block your connections). It’s incredibly fun.
3:39 - Puerto Rico is a board game in which you’re trying to build a successful Puerto Rican farm while competing against the other players for resources - workers, money, and space on ships to sell what your farm grows. It can be played in an hour and fits three or four people really well.
3:45 - Settlers of Catan is a board game where you’re simply trying to settle on an island by placing just a small handful of towns and roads. It’s really simple and incredibly fun - as I say on the podcast, we played our first copy until it looks…. grizzled is a good word for it.
4:20 - You want a great way to network with someone? Play a game with them. You’ll almost magically open up a bit during the game.
6:25 - I use Gamerz in Ames, Iowa for most of my video game trading.
6:55 - Yes, I know I “overlooked” the social aspect of XBox Live and many online RPGs, but unless you’re (a) willing to give a lot of time to it or (b) have a strong affinity for teenagers being “funny” by yelling racial epithets, I’d suggest skipping it.
8:35 - I turn walks outdoors into a scavenger hunt.
8:50 - Here are ten ways I save money golfing.
10:40 - A preview of next week’s topic.

One thing I’d like to do in a future episode is have an audio reader’s mailbag. If you have a microphone on your computer and can record an MP3 of a simple, short question you might have on personal finance, careers, pop culture, or anything else you’d like me to answer, record it as an MP3 and send it to me. Keep the total recording under 15 seconds, please. Also, if you use Skype, feel free to ask your question that way - my username is trenttsd.

Comments and suggestions welcome.

Michael Jackson got most of the media coverage - and for good reason. He recorded the best-selling pop music album of all time and virtually everyone can recognize the beat of many of his songs. He was simply an amazing performer - here’s my favorite example, actually:

However, I was more shocked and psychically bothered by the passing of Billy Mays. If you don’t know him, he was the ubiquitous television pitch man for a huge diversity of products - most notably OxyClean. His beard, friendly demeanor, pure skill at promoting products, and often nearly over-the-top enthusiasm made him memorable:

Both of these men were fifty years old when they passed away.

Both of these men died of sudden cardiac arrest, a common outcome of heart disease.

Those facts together shook me quite a bit. Fifty years old? I’m thirty - twenty years away from that magic number. Both of my kids would merely be college age when I’m fifty. I have many things that I want to do in life, and the thought that my life could easily end - or my quality of life could rapidly fall - at such an early age made me think quite a bit about the future - and other things I can do now to protect it.

I’ve invested quite a bit of time and energy in my own life - and I’m sure you have in your own - building the foundation for a great later life. My retirement accounts are solid. I have a book in print that pays me royalties and another one on the way. I want to be able to enjoy the benefits of these things in my golden years as I play with my grandchildren. I want to protect my investment.

So I’ve decided to do something about it. For my family, for my health, for my finances, and for my long term future, I’m going to make a number of changes that directly reduce the chances of heart disease - and also help with preventing other diseases, such as type 2 diabetes.

I should note that I’ve already been doing these things in 2009. I made a resolution to improve my health and I’ve lost about forty pounds this year through a mix of more exercise and better eating and I hope to keep up the progress.

I simply started by asking my doctor what I could do to reduce my chances of heart disease as I grow older. He suggested eight things, all of them pretty simple.

First, don’t smoke. Nicotine raises your blood pressure (not good) and the tar reduces your lung capacity and makes exercise more difficult (not good). It also increases your risk of many other diseases, like emphysema.

Second. exercise. If you don’t exercise at all, start really slow. Make a commitment to just walk for thirty minutes each evening around your neighborhood. The goal is to raise your heart rate to a reasonably elevated level for a sustained period, and continuous movement (like walking) is an easy way to get there. If you want to go beyond that, that’s great, but take it slow - don’t dive in and try to run a 5K right off the bat. Just go for a walk.

Third, eat more green things. Eat broccoli, spinach, brussels sprouts, and leafy vegetables. You can start by having a side salad with dinner. I’ve found that spinach is a great ingredient in many, many dishes, for example - just add a bunch of spinach to lasagna, for example.

Fourth, eat fewer meats. Going vegetarian isn’t necessarily the best option, but reducing your meat intake is a good idea. For example, try eating no meats until your last meal of the day - for breakfast and lunch, eat vegetables and fruits and whole grains.

Fifth, eat some nuts. Seriously. Nuts contain fiber and also contain vitamin E, one vitamin that tends to be deficient in modern diets. One great way to do three, four, and five all at once is to make your own granola bars - something I’ll talk about in the future.

Sixth, cut down on your sodium intake. In other words, don’t dump table salt on your foods. Sodium directly raises blood pressure and we already get enough sodium in our normal foods without extra salting.

Seventh, try meditation or relaxation techniques. Stress elevates your blood pressure and causes all kinds of health issues. Take some time to calm down and psychologically deal with the stresses in your life. Here are some great beginning meditation and stress management techniques.

Finally, cut down on your caffeine. Caffeine also raises blood pressure. Many people say they can’t “live” without the caffeine, but coupling caffeine reduction with other diet improvements and a bit of exercise will make the transition easier.

Most of these changes are not very hard to do in your life. As with any behavior change, take it slow. Don’t go whole hog at first. Just start walking in the evening (I do it while listening to podcasts) and maybe substitute a food or two that you eat for something better for you, particularly at dinner. Put the salt shaker in the cupboard and put out granola bars and fruits for snacks instead of cookies.

It’s simple to protect your life’s investment with a few little changes. Today’s the day to get started.

Hold On… What Is Evernote?
Evernote is basically a note manager that synchronizes the notes across computers. You can create and edit notes on any machine with a web browser and several types of mobile phones. You can save pictures, web pages, voice recordings, text - anything you want.

The thing that I find really useful, though, is that if you take a picture of a handwritten note - if it’s legible at all - Evernote will automatically extract the text for you. So, let’s say I’m at a meeting and I’ve jotted down a few notes that I might want to write about later on. I can just take pictures of the notes with my camera, stick them on Evernote, and boom - I’ve got the text.

The best part? It’s free (well, not entirely - there’s some very high level of data beyond which you have to have a paid account (40 MB), but I’ve never reached it). I have upgraded to a premium account there, simply because I have a deep philosophy of supporting what I use, but you can use it to your heart’s content without paying a dime. They pay the bills with a small ad on the site.

Obviously, you wouldn’t want to store highly sensitive personal information on here, but for 99% of the notes you’ll take, Evernote simply works.

Seven Ways I Use Evernote to Improve My Finances
Given that Evernote makes text notes basically ubiquitous, this means I can update them pretty much wherever I’m at. This is perfect for little pieces of personal finance data that you’ll want to retrieve later on. Here are seven examples of how I’m using Evernote in that regard (note that you could also use a pad and pencil for these, but that having them in electronic form is almost always more convenient).

I use it to track my spending on the go. I keep a note going where I just record my expenses. A great example of this was on vacation, where my parents and I had agreed to split all expenses equally. During the vacation, whenever we simply paid for an activity or something else, I jotted it down in Evernote. Then, at the end of the trip, it was quite easy - I just copied the numbers into a spreadsheet and automatically totaled them, easy as pie.

I use it to jot down prices for comparison shopping. Evernote is incredibly useful as a price book. Whenever I’m in a store and I spot a great price on an item, I jot down that price and where I found it. Later, I’ll compare it to other prices, both online and off. If you’re shopping for a large purchase, like a piece of furniture or a television, this can be a great way to compare prices.

However, I’ve found it really useful for little things. Since we split a lot of our shopping for food and domestic items between Fareway (most food), Sam’s Club (some bulk purchases), Target (most household), and Hy-Vee (specialty foods), I find it really useful to keep track of what’s actually cheapest at each store and buy them there. Evernote makes this really easy - I now know that many deli cheeses are cheapest at Fareway, but some upscale cheeses are far cheaper at Sam’s Club thanks to using this technique, and that enables me to easily get the best price on the items that I buy.

I use it to take notes if someone lets me in on a bargain. Let’s say I’m chatting with my neighbor and he mentions that he saw that Lowes is having a sale on lawnmowers this weekend - and I’m in the market for a lawnmower. That can be a very valuable piece of information - and so I immediately jot it down. Later, when I see it electronically, I remember to visit the Lowes website, see what’s on sale, and do some comparison shopping.

Similarly, I overheard recently at the grocery store that one could find $1.50 off coupons for V8 Fusion online. I jotted that down quickly, went home, searched for it, and unfortunately came up short - but it’s easy to see how something like this could really pay off (if someone has a link to $1 off or more V8 Fusion coupons, I’d love ‘em!).

I use it to keep track of potential investments. On Sunday mornings, I’m usually found at the kitchen table reading the Sunday Des Moines Register - and while reading, I usually find out something interesting about some investment. I also find myself reading the Wall Street Journal sometimes at the library, and I always find some interesting businesses or investments in there.

Obviously, I want to follow up, so I just jot down that investment’s symbol on Evernote. Later, when I’m home, I just copy and paste that symbol into Google and into Yahoo! Finance and see what I find. This has helped me become more familiar with the business side - and the product side - of many companies and also led me to quite a few index funds that I’m watching for potential future investments.

I use it to jot down product research notes at the library. As I’ve mentioned many times, whenever we begin to look at a major purchase, I hit the library. I dig out piles of old issues of Consumer Reports and other consumer magazines and go through them, finding out what independent testers have to say about it.

Naturally, I take my laptop along on such journeys, and I find that jotting these things down in Evernote is quite helpful. I’ll type the interesting notes in quickly, take snapshots of anything interesting with my camera, and collect all the research electronically in one place. Later, when I’m at home, I can add to this research. Or maybe I’ll be at my parents’ house and I find something useful to add - I can just log on via the website and add to a note.

I use it to keep a convenient schedule of automated transactions. One note includes nothing more than a list of the automatic transactions that come out of our primary checking account every month - our children’s 529 accounts, my Roth IRA, our car payment, our mortgage payment, and a SmartyPig savings goal (for a better laptop sometime way down the road).

This has come in handy several times. Once, not too long ago, we were in Texas on vacation and I was trying to decide if I should pull some cash out of my checking account or my savings account. I pulled out my list of automatic transactions, did the math, and realized it wasn’t a problem at all to leave the savings alone - we had plenty of buffer.

The best part: if I make a change to the automatic transactions I have, I can just update one text file and I have the info everywhere. I don’t have to write a new note or make a bunch of scribbles on it. It’s clean and just works.

I use it to keep track of gift ideas for people. I keep a constantly running list of gift ideas for people. It’s actually quite easy - I just listen to what people talk about and if they mention anything they like or may want, I jot it down on this note. Then, every once in a while, I’ll go bargain hunting with this note - I’ll update my Amazon deal search filters with these items and I’ll search through several different bargain sites that I look at. Occasionally, I’ll find a hit - and when I do, I might turn a $70 idle wish someone has into a gift from me that only cost $20.

Not only that, this gift list comes in big handy when the holidays are actually close. I’ll get out this gift list just before Black Friday and browse through the circulars on Thanksgiving Day - and sometimes I’ll find an amazing match, connecting a great deal to a recipient who actually wants the item.

To put it simply, the sheer utility of Evernote gives me tons of opportunities to save money. The examples above just scratch the surface.

The only problem is that when I ask for such help, it clutters up the site a bit. Instead of posting about something interesting and useful to everyone, I wind up filling up site space with such requests. Most people don’t mind, but for people new to the site, that’s not really interesting. They’ve come to The Simple Dollar to learn more about their finances and their life, not to fill out a survey or do some other little thing that I need help with.

So, I’ve come up with a solution. Friends of The Simple Dollar.

Here’s how it works. “Friends of The Simple Dollar” is an email list that I’ve set up privately - I won’t share a single email address with anyone else.. Roughly once a month or so (or maybe a bit more often when I release a book or something similar), I’ll send out an email to everyone who has signed up for that list asking for help on something small - filling out a survey, helping me a bit with book promotion, or sharing something of interest. It shouldn’t take someone more than five minutes or so to do the little things I might ask. On occasion, I might send out something special to the list to show my appreciation for your help, too.

So, if you’re willing to give up five or ten minutes once a month to help out The Simple Dollar with such simple things, please sign up to be a “Friend of The Simple Dollar”.

If this isn’t your thing, no big deal - don’t sweat it. I won’t be sending out unique content to the list, just occasional requests for help. I’m just looking for people who enjoy the site, think it provides value, and are willing to offer a bit of a helping hand on occasion.

As always, thanks for your time and consideration!

I’m getting married in September to a woman who just started a Master’s degree program. We have a fair amount in savings and have set some of it aside for the next 2 years of her college expenses. You’ve discussed 529 plans before, and that got me thinking about a possibility. Could I start maxxing a 529 plan and live out of that savings, then use the 529 to pay for her last year of college? I don’t like living out of savings, but that money has already been taxed. Say her last year of school costs $5,000; I’d be saving about $500 in federal taxes by utilizing a 529 plan. But can you put that much in a 529 in a year? Can you turn around and use the money that soon? We live in Missouri, if the state’s plan types are different.
- Michael the Dumb Tech Geek

There’s no limit to the amount you can contribute to a 529 for you or your spouse (provided you’re filing your taxes jointly). An aside: the only limit is that such contributions are seen as gifts in the eyes of the federal government and thus if anyone else contributes, their contribution must stay under the gift tax exclusion ($12,000 this year, $13,000 this year) or be a one-time gift that isn’t repeated over the next five years (allowing up to a $60,000 contribution). Anything over that would be taxable.

However, if you’re saving over that short of a term, putting your money into any sort of risky investment is extremely risky. You sure can contribute to a 529 as you suggest, but you should choose a really conservative option. In that situation, it basically becomes a bank account where you don’t have to pay taxes on the interest earned if you spend it all on schooling.

No matter what you do at this point, you’re not going to earn any major gains either way unless you’re extremely lucky or take on a large amount of risk.

I believe you owe it to your readers to point out that 529s are a big gamble because if your children get a full scholarship or decide not to go to college you could end up paying income tax on the 529 earnings PLUS sometimes a 10% penalty. Whereas the funds you choose to invest in the Roth IRA are guaranteed to retain all the benefits, tax breaks, and flexibility of the Roth no matter what happens with your child.
- Sophie

The only way that occurs is if you have a child that earns more than full tuition, room, and board scholarships for their undergraduate work, doesn’t attend graduate school, and is an only child. Read the details here. If any of those details are untrue, then the 529 works quite well.

On the other hand, when you use a Roth IRA for education expenses, you have to pay income tax on any gains used for education - using a Roth IRA for educational expenses only avoids the 10% penalty. On the other hand, for education expenses, a 529 is tax free.

So, a Roth IRA is preferable for education expenses if you have a child that earns more than full tuition, room, and board scholarships for their undergraduate work, doesn’t attend graduate school, and is an only child, because in that case, the child would have to pay income tax and a 10% penalty to get the money out of the account. Otherwise, the 529 is preferable, because you don’t have to pay income tax at all for education expenses.

I think, for my kids, I’ll stick with the 529.

*Everyone* told me that I would eventually grow apart from my high school friends when I was graduating high school.

I know it’s unusual, but it’s NOT a given that you will lose your high school friends. Maybe likely, but not guaranteed.
- Heather

Here’s a better way of stating it. There are two types of friends people have in life: friends based on the overlap of interests and experiences and friends based on true caring for each other.

Most friends people find in a high school environment are of the former type - you’re friends because you know the same people, go to the same school, attend the same classes, and so on. When those touchstones go away, so do most friendships.

Now, in some cases, those touchstones get replaced by other ones. You stay in the same town, live near each other, work in similar jobs, and stay in similar social circles. If that happens, you’re keeping those touchstone-based friends, it’s just that the touchstones have changed.

My oldest brother is a great example of this. After he graduated, he more or less stayed in the same area where he grew up, and at least some of the group of friends he had in high school did the same. Those guys remain friends to this day. If he moved away, would they remain friends? I’d bet against it - he might stay in touch with one or two of them, but he’d find a new social circle based on common interests wherever he moved.

It’s healthy to have both types of friends - some transient, some permanent. Disappointment comes in when one group is confused with the other.

In Your Money or Your Life long term treasury bonds are suggested as the ideal retirement investment. Their logic supporting that seems to make sense- the returns are predictable (which is important when you’re living off of them) and the principal investment is perfectly safe. Why do you find the stock market to be the better option? Is it just because of the higher rate of returns? Do you worry that the market will fall while you’re “living off the interest” and cut your income?
- Ariel

Your Money or Your Life offers great investment advice for when you’ve actually reached the point when you’re living off the interest - you want the money to be safe.

However, when you’re trying to reach that point, there’s no reason to restrict yourself to ultra-safe investment opportunities. If you’re still employed, you can afford some risk, particularly if the point of living off the interest is a long way off.

So, let’s say you need $25,000 in expenses a year to survive and you figure that your bond investments will return 3%. That means you need to own about $850,000 in bonds - and ideally more than that, so you have some protection against inflation. That’s a daunting number - it’ll take you many years to save it.

During those years, you may (depending on your risk tolerance) find it worthwhile to invest in higher risk, higher reward things. If they pay off, you’ll move that date a little closer. If they don’t, you just delay it a little longer. Over longer periods of time (ten years or more), the stock market tends to return around 7% a year - including dividends and increases in stock value. So, if you have that much time, it’s worthwhile to put some of your money into stocks.

Then, when you get closer, start investing your newer savings wholly into bonds and slowly start moving that stock investment into bonds as well. This way, if you’re getting close, a sudden market downturn won’t hurt you.

When you’ve finally made it, everything is safe and secure in bonds.

here’s a tip that really helped me and my family - RENTING BOOKS. We found the Netflix of books, Bookswim, and it’s been amazing to save money for required school reading in addition to my personal reading. we rent instead of buy - genius!
- Jennie

I hear you can also rent books at your local library! For free!

Okay, enough snark. Jennie does have a great point. Bookswim is basically Netflix for books, meaning you can keep them as long as you want and mail them back and forth for free, only paying the subscription. It’s a reasonable alternative to the library, especially if you’re a slow reader and find yourself always accruing late fees at the library.

However, there are some problems. If I find a book personally useful, I tend to write a lot in the margins - and that’s a big no-no with Bookswim and with the library. I tend to use PaperBackSwap for my book habits. No monthly fee at all. Roughly $2 to send out a book you’ve already read and get another book in exchange for it in your mailbox. If you want to keep a book - say, a copy of a business book that you’ve scribbled all over - you sure can, no problem, no cost.

I think Bookswim does hit a particular niche quite well, one that isn’t met by the library (late fees, long wait lists) or by PaperBackSwap (sometimes limited selection, cost-per-book instead of per month). If you’re an avid reader, it’s probably worth considering.

My high efficiency washer requires HE detergent, so I don’t know if I can use your recipe. What’s the difference?
- Richard Potts

I do not have any direct experience using my homemade laundry soap in a high-efficiency washer.

However, the laundry soap made in that recipe is a formula that does not produce excessive suds, which is the real danger with HE washing machines. It’s also pretty potent.

Thus, the general recommendation I have is to try half a cup of the homemade detergent in a HE load and see how that works for your clothes cleanliness needs.

Do “The Simple Dollar Artists” cater their work for your posts, or do they have a portfolio that always has what you are looking for? Or something else?
- Mol

“The Simple Dollar Artists” refers to a sidebar section on The Simple Dollar where I highlight two artists that contributed a lot of photography and other stock images to The Simple Dollar early on. I wanted some small, interesting items to use as accent pieces for posts - I wasn’t too picky - and so I asked for it. I wasn’t looking for commissioned stuff - I intended it as just a way for people to show off some of their portfolio work, stuff they’d already made that they wouldn’t mind being used on The Simple Dollar.

I was blasted for this and was roundly accused of trying to “rip off” artists, but two loyal readers - Daizy H. and David Herring - stepped up with contributions. All they did was help out a blog that they liked by digging through their collections of their own art, finding five little pieces, and allowing me to use them in posts. In exchange, they both received permanent thanks on the sidebar of The Simple Dollar.

For being kind and helpful, they’ve both had links to their sites that have generated several clicks a day for years, the Google boost that comes from being linked on every page of The Simple Dollar, and a page on The Simple Dollar highlighting their art contributions. Though David’s site is no longer updated, Daizy’s site is actually pretty interesting and I stop in regularly.

In fact, “Daizy” actually asked me to begin using a pseudonym for her because the link was attracting more attention than she wanted. If she’s still reading, I wonder if she considers the deal to be a “rip off”…

Just came across this article on LifeHacker - http://lifehacker.com/5280491/the-road-to-happiness-in-your-work-lies-in-the-hooray-zone - and couldn’t help but think that this is exactly what you’ve done with your writing. What are your thoughts on this diagram?
- Dave

I agree wholeheartedly with that image. With my current job, I think I’m firmly in the “Hooray!” part of the picture. I think I started off in the “what we want to do” circle, moved gradually into the “learn to do it better” part, and eventually moved into “Hooray!” (though I’m still learning).

With my former job, I think I started in the “Hooray!” part of the picture but gradually moved into the “Learn to say ‘no’” part and failed to escape from it. I found myself responsible for stuff that I simply didn’t want to be responsible for that ran contrary to what I loved about the job in the first place and that hurt my enthusiasm for the work quite a bit.

That’s a very good image - a great way of summing up a lot of the ideas I have about work.

Here’s a question for a future reader mailbag; what to do about failed frugal experiments? Or maybe stories of repurposing frugal moves that don’t work into stuff that does.

Tonight’s example: I have a $1.88 packages of noodles, cream of mushroom soup + lox casserole experiment in the crock pot that for various reasons, is not edible. I’m not out a lot of money as these were all pretty much on sale, but i feel the guilt of waste as I scraped stuff into the garbage.
- Betsy

I simply chalk those up to experience.

The way we look at meals is this: if it’s terrible, we’ve learned never to prepare it again. However, it’s still a meal, even if it’s one we didn’t enjoy. It still provided nutrition and sustenance, even if it didn’t provide enjoyment.

I look at it the same way if I try a generic version of a product. It’s a trial run at a low cost. If it works out, great - I’ve found a good long-term solution. If it doesn’t work out, I’m not out too much and I’ve usually been able to use at least some of the product.

Some experiments are going to succeed. Others are going to fail. But those are short term failures - and long term successes. If you have a bad meal or use a bad product, it doesn’t have to ever be repeated - you can go back to what worked before with only a small loss. If it works, though, you’ve found a new routine, likely one that requires less regular spending on your behalf.

One success - because it’s a long term success - is well worth ten failures, in my eyes.

One of our favorite restaurants is cafeteria-style, but they have bus-staff to clear the tables when done. Clearly they’re not providing the same level of service as a sit-down restaurant, but there’s some sort of service. We’d like to leave a little something, but don’t know an “appropriate” amount…something more than 0% but less than 15%. Do you or your other readers have a suggestion?
- Gumnos

I really don’t worry that much about “guidelines” for tipping. Tip whatever you feel like the service was worth.

By “service,” I do mean the whole package. Many people focus really heavily on the table service, but that’s only one part of the experience. If you get no table service but believe you’re getting exceptional value from the food, there’s no reason not to tip a little in any situation.

If you spend $7.95 at a cafeteria and the food was great, I see no problem tipping a dollar. Just make sure that you do it in such a way that it’s not accidentally thrown away - and also be aware that it’s likely to just vanish into the pocket of the first employee that finds it.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

The New Global Student by Maya Frost is one of those books that takes what you think you know about a subject and flips it on its ear. This time around, it’s the standard route that most high schoolers take towards their education: take lots of AP classes, sweat about the ACT and SAT, apply to hyper-competitive colleges and hope you get in, apply for piles of scholarships, sweat out the FAFSA, then go on to college, where you’ll likely be buried in mountains of student loans.

This process is seen as so standard that many people don’t even question whether or not it makes sense to start pushing our fourteen and fifteen year olds through this woodchipper. The New Global Student argues that this path is not the only path - in fact, Frost argues that there is a much better way to help your children transition into the latter stages of their education. Hence the eye-catching subtitle: Skip the SAT, Save Thousands on Tuition, and Get a Truly International Education.

I fully expect that many people will immediately reject the central premise of this book - that the “traditional hypercompetitive SAT/AP/GPA path” can be easily dumped and a new path to educational success can be found. All I can say is this: time and time again, throughout my college career, the people that seemed to have the best grasp of what they needed to do to succeed and the value they could get out of college were people who came in from outside that treadmill.

Ready to dig in? Here are my impressions of and thoughts on The New Global Student.

One: Creative, Not Crazy - Our Family’s Story
In the summer of 2005, the Frost family sold everything and moved to Mexico for a year, then to Argentina. The family had four teenage daughters, including a high school freshman, a junior, and a senior, and they were unable to speak Spanish when they left. Not only that, the girls also spent years in other countries on yearlong exchanges. They did not worry too much about the perfect GPA and they also didn’t take the SAT. You might think that this would blow up all of the girls’ chances of getting into a good school, but instead it did the opposite - it painted very compelling pictures of young women who were experiencing the world, not just pumping up their numbers. Compelling enough to get them piles of scholarships and admissions to good schools.

Two: Beyond Math and Mandarin
Frost’s argument about why all of this works really boils down to two big factors. First, the diversity of experiences forced the children to learn how to be collaborative. They were constantly being put into cultural and intellectual situations where they had to learn to work well with others in order to get through it. In contrast, high school in America - with the SAT/GPA/AP milestones - are highly competitive without much focus on collaboration. The collaborative nature of their high school experience, in other words, was a huge advantage.

Second, the children were heavily ingrained throughout their lives with five key principles: flexibility (independent thinking, eagerness to explore new ideas and places), awareness (ability to intelligently discuss a wide variety of topics, compassion and respect for others), curiosity (an interest in a variety of areas and the ability to ask questions and investigate those areas), trustworthiness (realization of the vitality of being dependable, strong communication skills, complete things on time), and self-direction (establish and move towards goals, internalized work ethic and motivation).

These aspects combine together to make young people who are ready to tackle anything. In my eyes, it’s a great recipe for parenting in the modern world - I strive for all of these things with my own children, even at their young age.

Three: Fego: You’re Soaking in It!
What keeps our children from having these attributes? Frost points at two huge factors.

First, fear. We fear letting go of our kids. We fear not doing enough. We fear taking charge. We fear slowing down. We fear unstructured time and unstructured activities. We fear falling behind. These fears all lead us towards pushing our children hard down that typical path. Instead, we’re better off hammering in the big principles of independent thought and self-responsibility when they’re young and letting go as much as we can when they’re older.

Second, ego. We want to believe that we’re vital to the process of our children’s final steps towards adulthood. We’re not. Once puberty hits, we’re a support staff - we’re no longer absolutely vital to the process. Similarly, we tie our own sense of self-worth to the accomplishments of our children - if our kids get a high score on the SAT or get an A in an AP class, that’s proof that we’re great and something we can brag about to others, right? Wrong. It’s just ego fuel that actually hurts our kids.

Another interesting argument: our children have huge advantages with the advent of computers, the internet age, and the easy access to information. Shouldn’t this mean that they blow us away in terms of intellectual growth at a young age? The problem is that instead of focusing on actually raising intellectually curious and self-reliant kids, we focus on them getting A’s in classes that likely aren’t pushing them very hard at all. So why should they grow if all that matters is that A? Instead, the book suggests using local community colleges to put your child in genuinely challenging classes that really push them - a “B” in a class that really pushes their work ethic and intellect is much more valuable than a cruise-control “A” in every aspect other than the almighty GPA.

Four: AP, IB, & SAT - OMG!
So many students today stress themselves out over taking tons of AP classes and getting a great SAT score. Frost argues that both of these have less value in terms of getting into college than you might think.

First of all, she argues that so many students are taking AP courses that they’re becoming watered down. With B- students taking the courses and sometimes passing, the material may be at a somewhat lower level than before. On top of that, students are now taking three or four AP courses at once. As a result, many colleges are eliminating the credits they offer in exchange for AP courses. In the end, the value of an AP course is lower than it once was, both in terms of what’s learned and in terms of how colleges value it.

A similar phenomenon is happening with the SAT and ACT. High schools are now beginning to require the exams; meanwhile, community colleges don’t require the test at all and most colleges and universities are de-emphasizing the test in terms of admission criteria. In other words, instead of becoming a useful prep tool for college, it’s become so universalized that it no longer matters as much as it once did.

What does matter, then? How can a student stand out? Frost points towards the IB, which provides a rigorous plan of study available in many different nations that, upon completion, is accepted (and often considered quite valuable) for college admission. Plus, the IB de-emphasizes the pressure of AP classes and the SAT, instead focusing on teaching how to learn and how to collaborate, skills invaluable in a person’s career. Another approach: taking the GED as early as possible, skipping the high school “experience,” and moving on to college early.

Five: Meet the New A Student: Artful, Advanced, Atypical, and Adventurous
Frost argues (quite well, with a pile of anecdotes) that a well-balanced student is incredibly well served by spending time abroad during their high school experience. Such an experience provides a huge deal of personal growth, vastly improves personal awareness, and demonstrates on college applications that a student is committed to outside-the-box exploration.

Here’s the thing: people at this age are passionate and that passion floods in surprising directions. If you stifle that passion and attempt to channel it in a way you see fit, you’re likely to see the dam break and see passion flow in a terrible direction. Instead, offer your child as many positive channels as possible and see where their passion takes them. Putting a study abroad experience on the table certainly does that.

Six: The Boldest Advantage: A Yearlong High School Exchange
Almost all parents feel some strong reticence at the idea of sending their child abroad for a year to study. That’s the “fear and ego” mentioned earlier raising its head.

Instead, a study abroad program - if done with thought and planning - is probably the best move you could make for your child. It’ll help you deal with the “empty nest” problem in a cold turkey way, keeping you from being a helicopter parent when your child moves on. It’ll show your child in the clearest way possible that you respect their independence. Most importantly, though, it’ll give your child a huge dose of personal and intellectual growth as they learn about a different culture and different way of life while also continuing their education. Few things set up a student better for college than such an adventure.

How can you make the most of this? Go early (sophomore year is a good target), go long (a full year instead of a semester), and go challenging (a place with a different language and a different culture).

Seven: How to Save Thousands on College: Study Abroad
A similar philosophy applies in college - go early (sophomore year is a good target), go long (a full year instead of a semester), and go challenging (a place with a different language and a different culture). A study abroad program while in college also has an additional benefit: it’s cheap.

Many people scoff at this, pointing toward expensive study abroad packages offered by schools. The truth, though, is that those packages are often glorified travel packages - instead of immersing the student in another culture, it actually isolates them in a vacation-like bubble, housing them with other native English speakers and providing every possible accommodation. Very little actual value is gained.

Instead, consider applying directly to the university you desire to attend as an independent international student. You’ll live in the same housing as students there and will be fully immersed in the culture instead of isolated in a “submarine” of your own culture. Plus, the price is reasonable - often very reasonable. In many cases, it’s far less expensive than the price you’re paying for university at home.

Eight: The Full Family Deal: Sabbatical or Sell-It-All?
A third option - one that works well if you have multiple high-schoolers at once - is to simply spend a year abroad, enrolling your kids in school in that country for a year. This will be something we consider circa 2019, for example, when we have two children in early high school.

Obviously, this doesn’t work for everyone, but it does have certain advantages. If you can find a job in your career in another country, it’s a huge resume booster. If you’re engaged in a creative career, immersing yourself in a different culture can pay real dividends.

This is something that’s at least on the radar for us in several years. If my wife can get a job teaching English in another country for a year, we would be quite interested in pursuing this. I can in theory write from anywhere, too, so that also helps.

One good compromise - a summer-long sabbatical. Rent an apartment in a foreign nation for three months and see how things go. Engage in every activity you can while there - not tourist stops, but the way of life that people have there. Shop at their stores. Eat their food. Learn their language.

Nine: The Get-Real Guide for Bold Parents
The final chapter is something of a clean-up of the many issues brought up by this book. How do you handle the criticism from others who say you’re sinking your child’s chances because you’re not following the “normal” path? What about their safety?

Each of these questions has a very reasonable answer. As for the criticism, such study abroad programs actually vastly improve chances of college acceptance and of growing a student to the point where they can really take advantage of college. With the safety issue, high school students are often more safe abroad than at home - no drivers under the age of eighteen, students are protected from anti-American sentiments by their youth, and students are naturally more cautious because they’re in unfamiliar territory.

Is The New Global Student Worth Reading?
I’ll be honest with you: I’ve been questioning the absoluteness of the high school/SAT/college application/expensive college pipeline for a long time. I’m actually in favor of delaying college for a year or two after high school, allowing other life experiences to fill in the gap. Why not let a student spend a year working hard at a job or for a non-profit in between high school and college, learning what it actually means to earn a paycheck and make ends meet and what the value of a college education actually is. I know I certainly would have benefited from such a sojourn. I’ve also been thinking a lot about traveling abroad for an extended period when my children are older, perhaps spending a year in another country and allowing them to attend school there (Great Britain, perhaps, or maybe a nation where we don’t speak the language natively).

Reading The New Global Student actually knocked down the idea of the standard pipeline even more. It’s loaded with food for thought for any person with children school-aged or younger. Even if you consider the general idea to be nonsensical, there’s enough material in here about how to set the path for your child to excel in their educational and professional career and save money along the way that it’s at least worth a read for specific tips.

For us, it’s opened the door to a lot of discussion about what we can do as parents to prepare our children for this ever-shrinking world.

If you have kids, you owe it to yourself to read this one. It’ll really make you think about their education and how simply connecting the dots might not be the best route.

What is it? For those unaware, Mechanical Turk is a service from Amazon where you can complete simple tasks in exchange for a tiny payment. For example, you might look at an image and describe it in ten words for $0.08. You might fill out a multiple-choice survey for $0.10. You might be asked to write a product review for $2.50. For the most part, the tasks available through Mechanical Turk are quick and very simple. The problem is that, individually, they’re not big earners. You have to do quite a few in an hour in order to earn anything of significance.

Well, can you? I decided to try it out for myself. I browsed around the Mechanical Turk website, signed up, and set aside an hour to try to earn some money there. Here’s a detailed log of my experience.

8:46 AM - Signed up for Mechanical Turk. It took roughly a minute to open an account there - no problem.
8:47 AM - Chose my first task - write a 350-500 word article on “email autoresponder marketing” for $4. I’m just going to churn it out off the top of my head.
9:02 AM - Done - if that type of “off the cuff” writing is accepted, maybe Mechanical Turk is a decent way to earn money. I basically just wrote in a nearly train-of-thought style, something I would consider a weak first draft for The Simple Dollar, but still readable. I’m going to try categorizing some images at a penny a pop for a bit.
9:08 AM - I managed to do six images in six minutes for a whopping six cents. Not a good use of time. Note to future self: stay away from the single-penny tasks.
9:09 AM - After browsing some tasks, I decided to try a series of really short questionnaires from MasterCard for $0.10 a pop.
9:18 AM - I was able to do five of the dime surveys in eight minutes - totaling out to just under $4 an hour. Not good, but it could definitely be worse.
9:19 AM - I decided to try some simple product categorization for a nickel a pop. It seems easy - just look at a picture of an item and come up with some short tags to describe it.
9:25 AM - I managed to complete two of them in six minutes. I actually completed three, but one was lost to the Turk’s horrible page design, which eliminated everything I had filled in because I hadn’t clicked on the “Accept HIT” button. Ten cents in six minutes is not a win.
9:26 AM - I take on a task that involves looking up addresses for wineries at $0.40 a pop.
9:32 AM - Should have read more carefully, as it requires entering a bunch of wines from each winery as well. Six minutes work for $0.40 is NOT a good deal.
9:36 AM - I notice that if I sort by dollar value, some higher-dollar entries will pop up and then disappear before I can accept them - $6 to $10 a pop. Chasing them might pay off, but it seems to be a time waster.
9:37 AM - I take a short test to “qualify” me to do some higher-value HITs. Apparently, they don’t want just anyone writing service reviews. You have to at least be aware of the company.
9:41 AM - I finish the test - but the ones I would be “qualified” to do are now gone.
9:45 AM - I spent five minutes looking at really awful HITs. If they pay a penny a piece, if you can’t do them FAST, they’re not worth it.
9:46 AM - A moment later, I found a service review, enabling me to describe a service I received for $2.55.
9:50 AM - I finished the review, earning $2.55 for four minutes’ work. That task was actually the one I was “qualified” for because of the earlier test, meaning I invested eight minutes to earn $2.55 - or $19.13 an hour. Not bad at all!

And here’s the outcome of that adventure. I spent a total of one hour and four minutes there and earned a total of $7.61 (assuming everything I did was accepted), giving an hourly wage of $7.11 for my effort. I probably could have done better than that if I weren’t logging what I was doing as I went along.

Some tips Here are several things I learned that can help someone interested in Mechanical Turk earn more for their time.

First, it pays to be able to write comprehensible stuff quickly. If you can be given a topic and immediately begin to write something readable on that topic, you can probably do pretty well at Mechanical Turk. The two biggest earners during that hour - the service review and the piece about email marketing - mostly involved me writing off the top of my head. Of course, if you were to focus that ability towards a passion, you could build a great blog on your own that would provide your own steady revenue stream.

Second, the extremely low-cost Turk tasks aren’t worth it. If it pays less than fifty cents and takes more than a couple mouse clicks to complete, it’s not worth it. If you can’t finish a fifty cent task in less than four minutes and move on to the next one, you’re earning less than minimum wage at this.

Third, most of the tasks fit well into short breaks. I can see someone who mans a customer support line or something similar actually using Mechanical Turk to earn a bit of cash during the delays between calls. If you work at a job that has lots of short periods of downtime throughout the day, Mechanical Turk might fit well into those gaps, since the tasks mostly just take a moment or two.

Fourth, tasks that require “tests” seem to pay off. Go ahead and take that test - it seemed to unlock quite a few tasks that paid well. Obviously, they were just trying to filter out people who just wanted to throw themselves at the next available task, enter junk, and move on as fast as possible.

Another big tip: if you do take on a task in the lower price range, look at it first. Are you really going to be able to do this in a time frame short enough that you’ll actually make a reasonable wage for your time? Take my experience with the winery - it seemed, at first glance, that I would just be looking up contact information for wineries - easy enough. What they wanted, though, was a ton of data entry about wines sold at that winery - not worth the forty cents they were paying.

Finally, be patient. If you don’t see anything worthwhile available - meaning nothing that earns more than $0.50 - just hit refresh a few times. Good opportunities seem to pop up all the time, but are devoured quickly. Hitting refresh helps you get your foot in the door with better Turk tasks.

Is it worthwhile? I was genuinely surprised by the experience. If you have the ability to throw down readable writing very quickly, you can earn minimum wage with the Turk - more than I ever expected. Given the short timeframe and the wide variety of tasks available, it’s something that you can sit down and do in short little bits when it’s convenient for you.

Having said that, you can do better than minimum wage with your time. Turk earns well enough that you might be able to fill in spare moments with it - or use it as a stopgap when you’re job hunting - but approximating minimum wage isn’t a good reason to just sit at your computer and click all day. If you have the abilities to earn minimum wage at Turk over an eight hour period, you’d be much better served using that mental energy building something for yourself - a blog on a topic you’re passionate about, a healthy network of people in your field, or something similar.

For me, at least, I don’t think I’ll be returning in the future, but I could see myself using it in the right situation - for example, if I did wind up doing customer service-type work or if I was really in a serious financial pinch. I also might use it if I was bored while watching a television program with my wife - but even then, I’d much more likely spend my time on Twitter or something like that. I value my mental energy at a rate higher than minimum wage.

One Year Ago (June 28-July 4, 2008)
The Minimalist Kitchen: What You Need (and Don’t Need) to Set Up Your First Workable Home Kitchen You don’t need tons of things to cook well at home. In fact, you just need a few items - and the desire to start preparing your own food. Here’s a guide.

No Time for Frugality: Cutting Financial Corners with No Time Investment Many people claim they don’t have time to do anything to save money. In truth, we already have the time, because the best ways to save money involve just slightly tweaking what we already do.

Finding Inspiration for Financial Change What’s your motivation for making good financial choices? For some people, it’s hard to dig up a central reason, but central reasons can be powerful. Here are some ways to find inspiration for real financial change in your own life.

A Clever Trick for Automatically Finding Deals You Want at Amazon Amazon has tons of bargains, but there are so many things going on that it’s easy to lose the deals you actually want in all the noise. Here’s how to filter through all of that and find the stuff you actually want.

The Net Worth Mentality: The Road Less Traveled I often don’t know exactly how much I make. Why? I don’t worry about my paycheck - I just worry about my net worth. Here’s exactly what I mean - and why such a shift in perspective can be life-altering.

Two Years Ago (June 28-July 4, 2007)
Musings On Spending $3 On A Candy Bar This was such a humble, little, simple post, relating an experience I had with my wife and son on a rainy day. Yet, somehow, this one really struck a chord with quite a few people - it probably got me more mainstream attention than anything I’d written up to that point.

SmartMoney Magazine’s “7 Money Mistakes” - And The Simple Dollar’s “7 More Money Mistakes” This was an excellent little article in SmartMoney that I thought deserved some expansion - so I stepped up to the plate and did it myself.

Defining Minimum Acceptable Housing - And How It Varies From Person To Person What might work for minimal housing for a 23 year old single male fresh out of college is going to be vastly different than what a family of four needs. Don’t substitute other’s needs for your own - if you’re 23 and single, you don’t need a four bedroom house.

When Frugality Is Fun I’m much more likely to dive into a frugal project if it looks fun for other reasons. Take my homemade laundry detergent, for example. My wife is a chemistry teacher, so the homemade detergent became a project that we were able to dive into with gusto.

How I Made Brown Bag Lunches Work For Me Eating leftovers for lunch is a great way to save money, but many people go “Ewww…. leftovers…” Here are some ways to get around that little problem.

If you’d like to browse through more of the archives, visit the chronology, where all posts are listed in chronological order.

Eight Ways to Get More out of The Simple Dollar
This is kind of a FAQ for new readers and is posted each week along with the Time Machine. Here are eight great ways for new readers to dig deeper into The Simple Dollar.

1. Subscribe by email or RSS. Visiting The Simple Dollar’s website is great, but for many people, it’s more convenient to receive the articles in another form. It’s easy to join 60,000 other subscribers and get The Simple Dollar’s content by email or in your RSS feeder (if you’re unfamiliar with RSS, check out Google Reader.

2. Comment. Each article on The Simple Dollar has lively discussion. Just click on the green square in the upper right of each article on the website and join in!

3. Read my story of financial meltdown and recovery. The Simple Dollar isn’t based on what I’ve read in books or learned in school. I’ve made a lifetime of financial mistakes - The Simple Dollar is a record of what works for me during the process of getting my life on a better track.

4. Download my free 49 page e-book. Everything You Ever Really Needed to Know About Personal Finance On Just One Page is completely free. It summarizes all of the key lessons I’ve learned along the way about personal finance in one tidy package - in fact, all of the main principles can be found right on the cover.

5. Follow me on Twitter. I post tons of interesting articles, quotes, follow-up material, commentary, and other material on Twitter. Follow me! If you’re unfamiliar with Twitter, it’s essentially an open discussion forum for people to share ideas and thoughts with other like-minded folks - you just choose the people you want to listen to and their ideas and thoughts are all delivered to you on a single page.

6. Dig through “31 Days to Fix Your Finances.” 31 Days to Fix Your Finances is an article series that outlines how you can get a grip on your finances over the course of a month.

7. Send me your questions and suggestions. Send me an email and let me know what you’re thinking, what you’d like to see, and any questions you might have. I try to respond to as many emails as possible and I read them all. I may even use your question in a future article!

8. Email a great article you find to a friend. Find an article that you think your friend would love? At the bottom of each article, you’ll find a link that says “Email this” - just click on that, type in your friend’s address, and send it right along to them!

Dave Ramsey is probably the loudest proponent out there of the “debt is bad” mantra and he makes the case for it loud and clear in this chapter. In his eyes, outside of a home mortgage (and that one should be paid off ASAP), all debt is bad.

I agree completely. The only problem comes in when this mantra is taken too far and overlooks the benefits of establishing a positive credit history. The positives of being debt free heavily outweigh the negatives of being heavily in debt, but being debt free doesn’t mean you should sacrifice a good credit history along the way. Let’s talk about this whole picture.

Not Using Debt Is Ridiculous?
The usage of debt for major purchases is definitely ingrained in the American psyche. At virtually every retailer you visit, there’s an offer to sign up for a credit card or finance the purchase you’re about to make. It seems so natural that many people assume it is natural. On page 19, Ramsey mentions this phenomenon:

[I]n the last several years, I have found that a major barrier to winning is our view of debt. Most people who have made the decision to stop borrowing money have experienced something weird: ridicule. Friends and family who are disciples of the myth that debt is good have ridiculed those on the path to freedom.

Given that financing usually means paying substantially more for the item over the long run, anyone who chides you for paying cash is actually chiding you for paying less - ludicrous, in other words.

My big issue here is how to deal with people who make comments like this. Whenever I’ve faced situations like this, I’ve found that explaining the truth doesn’t work - I’m usually met with a vacant, wide-eyed look that clearly indicates that the other person has no idea what I’m talking about.

Instead, my approach is to simply smile, nod, and do my own thing. Over the long run, my bank account will prove me right in paying cash as often as possible.

Risky Debt
On page 21, Ramsey argues that simply possessing debt is a risk, let alone paying it late:

My contention is that debt brings on enough risk to offset any advantage that could be gained through leverage of debt. Given time, a lifetime, risk will destroy the perceived returns purported by the mythsayers.

This is one of the most powerful arguments against debt, in my opinion. Most of the time, when people make the case for taking on debt, they make assumptions that involve a perfect, trouble-free life.

Sure, it’s easy to make a $400 a month payment given your current life situation, but what happens if you lose your job tomorrow? Or in a year? What if you suffer a major illness? What if your marriage falls apart? What if you get married? What if an unexpected child arrives?

Forecasting payments into the future can be smooth but the realities of our lives are quite bumpy, indeed. Lives don’t follow the smooth lines and curves of a debt repayment schedule, and saddling our lives with such lines and curves might enable us to get a car a bit earlier, but it also adds a lot of stress and worry if our life zigs when we expect it to zag.

Respect your complex, beautiful life and avoid unnecessary debt.

Relatives Shouldn’t Be Lenders
One of my biggest personal standards for money is to not lend money to family. If I decide to give someone a helping hand, it’ll be in the form of a gift, not a loan. Ramsey makes the case on page 26:

Hundreds of times I’ve seen relationships strained and sometimes destroyed. We all have, but we continue to believe the myth that a loan to a loved one is a blessing. It isn’t; it is a curse. Don’t put that burden on any relationship you care about.

Do you love your mortgage lender? How about your credit card company - do you look forward to getting together with them at Christmastime? Ever felt like inviting your car salesman to your New Years’ party?

The reason is that the lending/borrowing relationship doesn’t mix well with great interpersonal relations. If you borrow money from someone, you suddenly have a financial obligation to that person. You have to pay them back or incur some sort of retribution.

Retribution? That’s not exactly a concept that mixes well with close relationships and family events. Nor should it. No one wants to spend time with a person that’s demanding money from them. Thus, after a loan between friends or loved ones, it’s natural to expect that relationship to decay in some way.

No relationship is worth that decay. If you’ve decided that you really must help someone out, make that help into a gift, not a loan.

Look Good or Be Good?
On page 33, Dave digs into the difference between putting up appearances and actually having something to back it up:

Having been a millionaire and gone broke, I dug my way out by making a decision about looking good versus being good. Looking good is when your broke friends are impressed by what you drive, and being good is having more money than they have.

Something has always troubled me about the phrase “fake it ’till you make it.” I can understand it in some situations, where you have to put up a very polished front in order to further your career.

The problem comes when “fake it ’till you make it” becomes a life philosophy. If you find yourself leasing a BMW so that you can “fake it” and put up an appearance of being financially affluent when you’re really not, you’re entering into a trap.

Sure, you might be able to put up an appearance of “making it” with that purchase, but your income will be devoured by that car instead of being able to take advantage of other opportunities. In three years, you’ll have nothing in the bank and a car that just went off lease.

Instead, if you “fake it” a little less, buy a low end car and make it look as nice as you can, you can build up that bankroll, build some security, and eventually purchase that car.

You might be able to “fake it” now, but if you want to “make it” sooner, you’ll tone down on the fakery and keep yourself out of debt.

On Buying a New Car
On page 37, Dave makes a case against buying a new car:

A good used car is as reliable or more reliable than a new car. A new $28,000 car will lose about $17,000 of value in the first four years you own it. That is almost $100 per week in lost value.

I understand where Ramsey is coming from, but it doesn’t take into account several factors.

First, the only cars that depreciate like that were junk to begin with. If you have a car that depreciates 70% in the first four years, that car has a very poor record for long-term reliability. Reliable cars simply do not depreciate that fast.

Second, the first four years are the most worry-free for a car. During that period, they’re under warranty, meaning if something goes wrong, it doesn’t come out of your pocket. Once that warranty ends, you’re on your own. It’s during that warranty period that you can figure out whether the car is actually reliable or it’s not without a cavalcade of big bills.

Third, in a down economy, there are huge incentives to buy new. Sales, rebates, and other offers pop up all over the place, some of them impressive. There are often tax breaks for new car purchases as well, passed by Congress in a short-term effort to boost spending.

I am not saying that buying new is better than buying used. Instead, I am merely saying that it is a mistake to automatically exclude a new purchase, particularly if you can afford it.

Ramsey overstates his case here, though I understand why he does it. A forceful case on behalf of a good principle is a great tactic for convincing people of the principle. I do agree that buying used is often the best deal when buying a car, but to ignore new cars does the buyer a disservice.

Mortgages and Credit Cards
On page 39, Ramsey talks about why you don’t need to build credit to get a mortgage:

You will need to find a mortgage company that does actual underwriting. That means they are professional enough to process the details of your life instead of using only a Beacon score (lending for dummies). You can get a mortgage if you lived right.

Ramsey’s absolutely right here - you don’t need credit to get a mortgage, as long as you have a good housing history and a good record of paying your bills on time. A manual underwriter will dig these things out. An aside: if you’re in this situation, visit your local credit union first. They’re more likely to do manual underwriting.

The problem here is that a mortgage is not the only avenue through which good credit can help you. One’s credit score is used in lots of ways: determining insurance rates, aiding in many job application processes, and so on.

That’s why I think limited use of a credit card is actually a good thing. Leave the card at home most of the time. Only use it for specific purchases that you would otherwise make, like gas or groceries. Then, at the end of the month, pay off the balance in full, which should be trivial since you’re not buying more because of the card.

This accomplishes the big goal of improving your credit score without incurring debt. Having a good credit score improves your hiring chances and makes you eligible for better insurance rates, putting money directly in your pocket. Later, if you do get a home loan, you can simply trash that card if you so with.

If you’re already doing that, you might as well choose a card that helps you in other ways. For example, if you’re buying a card just to buy gas on to help your credit, get the Visa or MasterCard available from your gas station chain of choice (like BP). That way, you’ll get rebates on the gas you buy along the way - another way to save.

The trick is to simply leave the card at home. Don’t use it for any other purchases besides the ones you plan in advance, like gas purchases, and keep it somewhere safe outside of those opportunities.

Do you have any other thoughts on the third chapter of The Total Money Makeover? Please share them in the comments - and feel free to respond to any of my impressions as well. After all, a good book club is all about discussion!

On Wednesday, we’ll tackle the fourth chapter - Money Myths: The (Non)Secrets of the Rich.

While digging through the submissions, I came across this interesting recipe by Wendy T., who states that she’s “writing a cookbook of economical meals for working people - this is one of my husband’s favorites.” Intriguing. Here’s what Wendy offers up:

1 lb ground beef
1 slice white bread, crumbled
1 tbsp ground coriander
1 tbsp ground cumin
1 small yellow onion, minced
2 cloves garlic, minced
1 tbsp olive oil
1 egg, beaten lightly
1/4 cup flat leaf parsley, minced
1/4 cup mint leaves, julienned
1 cup plain yogurt (preferably whole milk)
salt and black pepper

In a small bowl, mix the yogurt, a large pinch of salt, and the mint. Set aside.

Crumble white bread crumbs over ground beef and parsley in large bowl.

Place a large frying pan over medium low heat. Add the olive oil and sweat the onions and garlic until translucent. Add 3/4 tsp salt and the coriander and cumin, and saute a minute more. Cool a minute and then add to the meat-bread crumb mixture. Add the beaten egg and mix with hands lightly just to combine. Form a test meatball and fry - taste for seasoning and add additional salt if necessary.

Form into meatballs. Fry in batches in the pan on all sides until cooked through. Drain on paper towels if necessary.

Serve the meatballs with the yogurt-mint sauce. Delicious as sandwiches with pita or naan bread.

A few things popped out at me immediately that indicated this recipe would be a lot of work. First, the ground coriander - dried coriander in the store is not the same thing at all. Ground coriander needs to be freshly ground or it loses most of its flavor. Second, the julienned mint leaves - meaning you’re slicing the mint leaves into thin strips - will be significant work as well, and likely the most expensive aspect of the recipe if you don’t have a source of fresh mint.

In order to try out the recipe as is, though, I did both of these.

I also went through the cupboard and the freezer to see what we had on hand. The only ingredients that we didn’t already have in spice jars were the mint leaves ($2), the yogurt ($0.99), the onion ($0.30), and the ground beef ($2.49 for a pound of lean meat), for a total cost of $5.78. We did, of course, use lots of spices and other materials we had on hand.

Here are the ingredients as I used them.

(The horse statue in the picture is a Breyer version of Man o’ War, included at the encouragement of my three year old son.)

I made one major change. Instead of mincing the onions, I coarsely chopped them, because I love the caramelized flavor of onions and felt it would add to the meatballs.

Once the work of prepping the ingredients is done, the recipe itself is pretty easy. First, I made the yogurt-mint sauce by putting a pinch of salt, a cup of yogurt, and the mint leaves in a bowl and mixing them.

I then tossed the onions and garlic into a frying pan along with the olive oil and cooked them over medium heat until they were nicely caramelized - taking on a light brown color roughly the same as caramel. I then added a pinch of salt, the coriander, and the cumin, and cooked it for a minute more.

When that was finished, I let it cool for a bit. While doing that, I added the bread crumbs and the beaten egg to the pound of ground beef and mixed them together with my hands, then I added the onion mixture to the meat and mixed that in. The result was a large ball, ready to be shaped into smaller meatballs.

Making meatballs is easy. Just pinch off a bit of the meat - whatever size you like - and roll that bit around in between your hands until it forms a round ball. If you’re not sure what size to make, just divide the ball into equal halves, divide each of those halves into equal halves (four bits), divide each of those halves into equal halves (eight bits), then divide each of those halves into equal halves (sixteen bits). Each of those sixteen bits will make a nice meatball.

So, I rolled up the balls and tossed them into the frying pan.

Obviously, if you chose to mince the onion, you wouldn’t see the large pieces of onion in the meatballs.

I simply browned these in the pan over medium heat, rolling them around about every minute or so. When they became dark brown - the color of a cooked hamburger, roughly - I cut one in half and checked the insides to make sure it was no longer pink. Here they are, about halfway cooked (with some sides looking finished, others still pink, and yet others in the middle):

I chose to serve the meatballs with the mint sauce on the side, a long grain rice and vegetable medley, some steamed broccoli, and a glass of Wandering Grape 2007 Cabernet Sauvignon Shiraz (a free trade wine). Here’s how it looked on the table:

And there you have it!

Did we like it? This meal was a big hit. The kids were not big fans of the mint sauce, but the meatballs were completely consumed with gusto - no leftovers at all. Both my wife and I liked everything - I wound up drowning the meatballs in the sauce after trying them together.

Our total cost for the main course and the mint sauce (ignoring fractional items we had on hand): $5.78. Our cost per meal: $1.45. Not bad. But we can do better - and we can certainly make it less involved.

Changes I Would Make to Save Cost and Time
First of all, I’d skip the coriander and use more cumin as a substitute. If you don’t have a grinder, smashing the coriander seeds will take forever and it doesn’t contribute substantially to the meal, especially when you can easily substitute a bit of cumin for nearly the same effect.

Second, if I was pinched for time, I’d substitute dried mint for the fresh mint leaves. I’d just add dried mint - probably two tablespoons full - to the yogurt to taste and skip the julienning of the mint leaves.

Third, I’d substitute garlic powder for the minced garlic cloves. Although you miss the caramelization of the cloves, you also save the work of peeling the cloves, cooking the cloves, and smashing the cloves.

Fourth - and I did this in my own version above - I’d skip the fresh parsley and use dried. I used 1/4 cup dried parsley and it was perfect.

These changes modify the recipe a bit, but it also reduces the cost and vastly reduces the time. Here’s the new recipe, as I’d do it:

1 lb ground beef
1 slice white bread, crumbled
2 tbsp ground cumin
1 small yellow onion, chopped
1 tbsp garlic powder
1 tbsp olive oil
1 egg, beaten lightly
1/4 cup dried parsley
1/4 cup dried mint
1 cup plain yogurt (preferably whole milk)
salt and black pepper

In a small bowl, mix the yogurt, a large pinch of salt, and the mint. Set aside.

Crumble white bread crumbs over ground beef and parsley in large bowl.

Place a large frying pan over medium low heat. Add the olive oil and gently cook the onions until caramelized. Add 3/4 tsp salt and the cumin, and saute a minute more. Cool a minute and then add to the meat-bread crumb mixture. Add the beaten egg and mix with hands lightly just to combine. Form into meatballs. Fry in batches in the pan on all sides until cooked through. Drain on paper towels if necessary. Serve the meatballs with the yogurt-mint sauce.

I cover time management quite a lot on The Simple Dollar. I write about Getting Things Done and other time management books. I talk about how I manage my own time and some of the techniques I use in my own life.

Almost always, I’ll receive an email or a comment or two about how this has nothing to do with money. On the surface, that might be true - I’m not mentioning the almighty dollar anywhere. If you dig even a little, though, it becomes clear: time management is the same thing as money management, because time is money.

Step back for a minute and think about it.

Each person is blessed with the same allotment of time - 168 hours per week. Bill Gates has 168 hours per week. I have 168 hours per week. You have 168 hours per week. Each of us sleep during some of those hours, leaving us with perhaps 120 waking hours during a given week.

Out of those 120 waking hours, many of us sell the majority of those hours to someone else in exchange for money. We go to work, we work for a while, we go home, and often, some work comes home with us. Add in the hours we burn thinking about work and our time for ourselves grows ever smaller.

Household chores eat up more of that time, as does personal hygiene. Soon, we find that we’re left with just a small pile of hours in a given week to do with what we please.

Those hours are precious. They’re the ones in which we relax. They’re the ones where we interact with friends and family. They’re the ones where we catch up on personally fulfilling hobbies.

But we pay a hefty price for those hours. We invest so much time in work, hygiene, and household chores so that those remaining hours bring us some semblance of joy. Most of our financial choices are intended to either make those free hours more enjoyable or to make them safer.

Whenever we find ourselves wasting time, we take directly away from those precious hours. We get behind at work, reducing our ability to earn more and thus taking away from the enjoyment of that time or the safety of it. We waste idle time at home and then when something truly worthwhile comes along, we can’t participate - we have too many other things we’re behind on.

To put it simply, wasting time takes away from those valuable hours that we work so hard for. It strips away their quality and it strips away their safety. Time management simply seeks to give us more of those hours - or to make the other hours produce more money.

Here’s an example. Some days, when I sit down to work, I make the decision to dive right in. I’ve got some big idea on my mind and I can’t wait to research it or plan out how I might use it. So I’ll rip through most of an article in thirty minutes or so - and then find myself at a dead end. Where am I going with this? I idle for a bit, then eventually delete the article. I’ve wasted forty minutes.

On another day, I’ll start off by making a list of all of the things I need to accomplish for the day. I’ll decide what posts I’m going to write and list the main idea of each one. Then I’ll take each of those ideas and spend a bit of time fleshing them out - is this even worth a post? Is it perhaps more than one post? What research do I need to do to make it work?

That process might take twenty minutes, but I’ve usually discarded three or four ideas along the way and fleshed out three or four more to the point that I know what I’m going to write. From there, I never find myself “lost” at work - I know what tasks I need to do, I execute them, and I keep on rolling to the next one.

I might have spent the first twenty minutes of my day not moving forward at all on any projects, which seems bad. But the time invested in time management pays off - I don’t have to worry about such details as the day goes on, allowing myself to focus on just getting things done. Thus, by the six hour mark, I’m usually far ahead in terms of my work if I’ve done that planning. The big part? I’ve drastically reduced my wasted time.

The end result? If I’m a couple hours ahead, I now have hours I can add to my personal life. Or, perhaps I can use them to work ahead, giving those personal hours more of a cushion in case something happens. Maybe I can spend an hour getting in touch with others, building relationships that will really pay off over time. Maybe I can work on another project that might lead to more earnings or more readers, both of which shore up the valuable parts of my life.

Time is money, and when you manage your time well, you manage your money well, too.

How do you do that? Here are the four most valuable little techniques I’ve found for managing my time.

1. Start your day off with some planning. Make a list of what you need to get done today - usually four or so things. Don’t just make a 1, 2, 3, 4 list, though - investigate each one for a few minutes and make sure you have the information, ideas, and materials you need to actually execute each item. That might mean spending five or ten minutes on the basic framework of a task, but doing that now means you won’t burn an hour chasing snipe later on. Also, that list of things to do will keep you from burning time in the middle of the day wondering what’s best to do next.

2. Alternate between multi-tasking and single-tasking sessions. Multi-tasking works well for some tasks - phone calls, emails, filing, and so forth. Those are tasks that usually aren’t mentally taxing at all, and thus can be done two or more at a time. However, the meat and potatoes of your work usually does require your focus - and doing that with interruptions makes it take longer and reduces the quality of your work. Take a few periods during your day, turn off your communication routes (turn off your phone, close your email program, etc.) for an hour or so and bear down on a task that needs to be done. When it’s finished, go back into multitasking mode and get caught up on your messages and information.

3. Meditate. This sounds counterintuitive, but it really works. It’s easy, later in the day, to “zone out” - you’re mentally (and perhaps physically) worn out. Many people keep pushing, but they find themselves losing three minutes here and three minutes there because they space off - and this will often spread into the evening’s personal time. Instead, try meditating for fifteen or twenty minutes near the end of your work day. Just sit in a chair and relax - here are several great basic techniques to try. I almost always find myself refreshed and alert after doing this.

4. Write down the things on your mind. Keep a notebook and pen near you at all times. Whenever something pops into your head that you need to do later or think about later, jot it down immediately. Then, a few times a day, leaf through the notebook and take care of the things jotted down there. Throw down anything and everything - a word you want to look up, a personal task you need to take care of, a person you want to get in touch with. Getting these things out of your head and onto paper means you can spend far less mental energy trying to remember it - and use that energy instead focusing on your current task and getting that done as well as you can.

Another important tactic is to find ways to spend your free time that simultaneously help you grow as a person and bring you enjoyment. Reading literature that really pushes your mind is one example. Going for a jog is another example. Almost any social activity falls into this group, too - learning how to interact with more people is invaluable. Such activities bleed back into the rest of your day - they increase your energy at work, improve your mental acuity, and raise the bar on your ability to interact with others and network. Putting forth a little effort to find enjoyable ways to spend your spare time that also help you to grow pays off over and over again.

Remember, time is money - so stop wasting it.

The Psychology of the Reminder
A reminder? If a goal is really important to us, why would we need a reminder?

It’s simple. Most of us have really busy lives, and in order to actually make those lives work, we have to adopt some serious routines. If you have only thirty minutes after you wake up and before you’re leaving for work, those thirty minutes are going to have to involve some serious routine - showering, brushing your teeth, eating a quick breakfast, doing one or two other little things, then bolting out the door.

Similarly, any person with children knows how many routines have to go into their life in order to prevent complete chaos from breaking out. There’s a meal routine, a nap routine, a bedtime routine, and so on.

Even our lives out and about are filled with routines - we shop at certain places, get gas at certain places, use the same routes to get places, and so on.

The real kicker is that breaking these routines is hard. Often, it’s not so much the individual act that’s the problem - it’s remembering that individual act and finding a place for it in that busy routine.

For example, I’m trying to find space in my daily routine to (slowly) work up to being able to run a 5K. The problem is, with a thriving writing career, two young children, a marriage that needs care and feeding, a number of other commitments, and personal interests as well, it’s hard to find space for the training.

So I’m using a reminder. I have a single bright note right on my desktop where I can’t miss it that says, “Have you worked towards the 5K today?” I look at it several times a day and, usually the first time I see it, it motivates me to get up and do something to get myself in better shape.

Ten Great Reminders
Different reminders work well for different people and different situations, though. Here are ten things you might want to use in your own situation.

1. The Progress Bar
This works great if you have a specific numerical goal in mind - for example, you have a certain dollar amount that you’re wanting to save, a certain amount of debt that you’re looking to repay, or a certain weight that you’d like to reach.

It’s simple: just bust out a piece of graph paper (like this one). Figure out what number you’re targeting and what number you’re at now. Then, break the difference between the two down into equal pieces. So, let’s say you have $17,000 in debt and want to pay it all off. You might break it into 17 pieces - $1,000 each - or 34 pieces - $500 each - or 85 pieces - $200 each. Let’s say you want to go from 214 pounds to 180 pounds. You might break that into 34 pieces - 1 pound each. You get the idea.

Then count out a line of that many squares in the middle of the paper, then draw a big box around those squares, similar to what you see on the right here. Write the starting number on the left or bottom of the bar, then the finishing number on the top or right of the bar. You can even write in the increments if you want, or just note what each square is worth.

Then put this reminder somewhere where you’ll see it all the time - on the fridge, for example. It’ll serve as a reminder of your progress - plus, it’ll be quite fun when you make some forward progress and get to fill in a square on that bar.

2. The Pointed Note
This is the technique I’m using for my 5K goal. Just write yourself a very pointed note - “What have you done today to move forward on X?” and put it somewhere where you’re going to bump into it over and over again.

This is perfect for a goal where you need to make a bit of active effort each day - like athletic training. It might be easy at first to simply forget about it during a busy day, but that note forces it into the forefront of your mind.

The key is to make the note pointed - it needs to prod you into taking action - and put it in a place where you’ll be reminded of it with ease every day - or at least each day that you’ll need the reminder.

Some ideas for this kind of reminder: a reminder to network, a reminder to engage in athletic activity, a reminder to take another discrete step on a big project.

3. The Big Picture
One of my biggest goals in life is to own a house out in the country on a few acres. I’d like a good-sized yard with plenty of room for a vegetable and herb garden and a small barn in the back somewhere to effectively function as a large shed. I might even raise a few chickens on it - who knows!

To keep this in mind, my desktop wallpaper is an image of a nice house in the country with a small barn and a windmill. Whenever I see it, I know what my big goal is.

This can work for any big goal that requires continual multi-dimensional effort to reach. It might be a country home, or it might be any number of other things - a great career, an amazing car, or a happy marriage. Find a picture that signifies exactly what you want, then put it in places where you’ll be reminded of it time and time again.

That little boost will push you, more often than not, just when you need it.

4. The Effort Tracker
As I start jogging more and more, I find that keeping careful track of my efforts and recording them somewhere is very powerful. I have a Nike+ iPod setup that makes it very easy to record my efforts, keeping track of each run in very careful detail, as well as my best mile and my overall averages.

This type of data is incredibly psychologically powerful. When I finish a jog, I can’t wait to go look at my data. Did I get a new “best mile”? Did my average go up (it usually does)? Did I manage to maintain a steady pace?

Putting this “effort tracker” front and center makes it easy to keep up with my goal. The same is true for any such tracker. Perhaps you use Quicken to monitor your money? Have it start when you start up your computer. Maybe you use a spreadsheet to keep track of your weight? Have that spreadsheet appear on startup. That way, you’re faced with all of that data and all of that forward progress - and psychologically, you want to keep it going.

5. The Public Notice
Constant peer pressure can be a very effective reminder of your goals. If everyone around you knows that you’re attempting to quit smoking, they themselves will become reminders, encouraging you to quit, complimenting you on your good choices, and so on.

Thus, one way to create some powerful reminders around you for your goal is to simply email as many people as you can and tell them in detail about your goal. Tell them what you want to achieve and ask them for their help in getting you there. Ask them to steer you straight if they see you having problems, and apologize in advance if you don’t handle their help well (since such goals can be psychologically stressing).

Once you’ve done this, everyone knows about your goal and you’ve given them all permission to be your reminders. Thus, their mere presence becomes a reminder of what you want to achieve.

You can take this another step and combine the goal tracking with your public notice. Create a blog or a Twitter account to talk about your goal in detail, mentioning your progress with specific data, then ship the URL for that blog or Twitter account to your friends so they can keep tab on your progress (and leave positive comments).

6. The Pestering Email
Another way to keep you on focus is to have an automatic email service pester you with reminders by email of your goals. I do this myself, with Google Calendar. I set various target dates in my calendar, then order the calendar to remind me by email of these goals. Sure enough, they pop right into my email inbox, reminding me quite clearly to keep up with a particular project.

For example, let’s say you want to really grow your professional network. Go into Google Calendar, schedule an entry on Friday to “send an email to an old work associate,” then add a reminder 4 days, 3 days, 2 days, one day, and one hour in advance. Then, schedule it to repeat. Each day, you’ll have a reminder telling you to send an email to a work associate - and when you follow through, you’re achieving your big goal.

For people who live out of their email inbox (as I often do), this can be a great way to keep your goal in mind - and keep moving forward on it, bit by bit.

7. The Buddy
Having a buddy who is also trying to move forward with a similar goal as yours can be a wonderful constant reminder of your own personal goal.

Let’s say you’re attempting to eliminate all of your credit card debt. You announce it to a few friends and you learn that one of your friends is actually attempting to do the same thing. Suggest to that person that you buddy up to motivate each other, share tips, and share your progress along the way.

When you hang out together, you can swap stories about how you’re moving forward. You can give each other tips on how to better accomplish that big goal. You can actually engage in the activities together - jogging in the evening, for example, or going to free events together instead of spending money.

That buddy becomes a walking, talking reminder of your goal and, in a fun way, pushes you to achieving more than you thought possible.

8. The Inspirational Picture
My family inspires me to make almost every good choice I make in my life. They inspired me to take charge of my money. They inspired me to start getting in better shape. They inspired me to take a real swing at writing for a career.

Keeping a simple photograph of my wife and children with me helps keep me motivated to continue making good choices. I have three photographs of them on my desk and I often look at them when I’m having some trouble getting motivated to write. Their faces always help.

Some people get their inspiration from motivational posters. For me, all I really need to do is look at my family and suddenly I’ve got my eye back on the prize.

9. The Repetitive Post-It
When I first made a serious effort to cut my spending, I found it was very hard to break my old routines. I would simply wheel into the bookstore without thinking about it at all and the next thing I knew, I’d be standing in line holding some books.

What really helped was repetitive reminders, which took the form of Post-It notes. I wrote on each one: “Don’t spend anything.” I put them all over. I put one on my dash and one on my rear view mirror. I put one on my computer monitor. I put one on my wallet so I’d see it when I got started in the morning.

Those constant reminders kept the big picture firmly in my head, mostly because the message was nearly inescapable. I saw it all the time and that meant it bubbled up to the top of my mind when I needed it much more often than before. Before long, that reminder was burned into my brain - and the Post-Its had done their job.

10. The Tool Disfigurement
There were times when I would still fall short and find myself on the verge of spending anyway. I’d have an item up there to buy. I’d reach for my wallet, pull out my credit card, and ….

Right there in front of me was all I really needed to see. I’d put the item back and walk out of the store.

What was there? Wrapped around my credit cards was a picture of my son. Yes, the inspirational picture had found its way directly to the tools I used to undermine that inspiration. Seeing my little boy - and reflecting for just a second on him and the good choices I needed to make as a parent - made me step back just long enough for sense to take hold of me.

If you find yourself constantly turning to a tool of some sort to continue a habit you’re trying to break - a bong, a credit card, anything like that - put an inspirational picture there. Put that picture of your kid right on that item and attach it firmly. Make it so that you have to give that reminder a look before you commit that act - and you’ll likely find yourself turning away at the last minute.

Now get out there and achieve something great.

That’s not to say that I had a deprived childhood, though - I didn’t. My parents - my mother in particular - found lots of little ways to get me the things I wanted or needed. We went to the library all the time. I was always allowed to get a book or two from the book order. And when there were windfalls, I would often get something very nice - a new video game, typically, or a few new books all at once.

One thing my parents often did, though, was make Christmas and my birthday into very big events. They would ask me what I wanted months in advance and encourage me to make lists. Since my birthday was in the middle of summer, by the middle of most springs, I was already puzzling over my birthday list, letting it often consume my thoughts. Similarly, I was already getting started on my Christmas list by Labor Day.

My parents did this for what seems like a very good reason. Since there weren’t a lot of resources around to give me a healthy allowance or to buy me lots of things, they would instead channel my childhood desires towards two big days. Then, they would save up their nickels and dimes and try very hard to make my birthdays and Christmases memorable.

This was really effective in my childhood years. Instead of nagging my parents for things I wanted, I’d stew on them. I’d write down a wish list, revise it, and start over again a few times. I’d pore over the Christmas catalogs like a researcher in the library of Alexandria.

What really happened, though, is that these things that I wanted consumed my thoughts for a big part of the year. I’d spend my time stewing over that list, thinking about the things I wanted, and as I grew older, I began to dream about other ways to get them. I started an aluminum can collecting project - one that actually ended quite sadly, I started doing lots of piecework for my father’s fishing business, and I tried several other small-scale entrepreneurial tasks.

But the problem signs were already in place. As soon as I earned anything, I was already plotting about buying one of those things I had wanted and stewed about for so long. I’d take the $50 from aluminum can sales and rush straight to the local department store (Jacks, a now-defunct chain) to buy a video game.

This only escalated throughout my college years, and by the time I was a young adult, I was still focused heavily on the material things I wanted. Of course, then, with a nice income and access to credit cards, it became very easy to just simply go get all of those things I wanted.

And I did.

I bought multiple DVDs and multiple CDs and a video game pretty much every week. I went out to eat all the time. I went to London and stayed in a hotel room overlooking Hyde Park.

In short, I no longer had a wish list. Instead, I just did these things as they came to mind. All that stewing about the things I wanted finally came to fruition.

How I Fixed This
So what did I do to fix this problem?

The biggest realization - for me - was that this was a never-ending road. There would always be something else to want, no matter what I purchased for myself. I would always be wanting something more.

Thus, if that’s true, isn’t all the money spent trying to sate those desires just money wasted? Even worse, wasting all that money meant that I wasn’t achieving the big things I dreamed for in my life - becoming a writer, providing a safe financial foundation for my wife and my kids, owning a nice house in the country.

What I found was that if I cut back big time on my discretionary spending, I didn’t really lose much at all. Sure, there were still many things that I wanted - and there still are - but that would be true regardless of how much I spent. Instead, now I’m actually using and enjoying the things that I buy. On the occasions when I do choose to buy something for myself, I take my time both on the purchase (researching it and choosing the best deal) and on the enjoyment of the item (reading the book, playing through the video game, and so on).

The “wants” are still there, but they no longer run the show in terms of my spending, simply because I realized that no matter how much I spent, the “wants” would still be there - a ghost I could never catch.

The Parenting Hat
So what can we do to help my children out with this issue?

Our first tactic is to simply strongly de-emphasize wants. We don’t ask for birthday lists or Christmas lists. Instead, we just listen to them and note down anything they might mention.

During the lead-up to the holidays, our gift-related conversations revolve around giving. We talk about good, reasonably-priced items that people would particularly like. Instead of focusing on what we want, we focus on what Luke or Brittany might want - and how we can make them happy for a reasonable cost.

Second, we don’t watch many commercials - and we talk about the ones we do. If my son sees a commercial for a toy or a type of junk food that makes him want the item, even though he’s three, we talk about it a bit. I usually point out how only the good side is shown - and how we already have similar things.

A great example happened a few evenings ago. My son saw a commercial for some type of Batman action figure - he wanted one, and he told me loudly. First, I suggested that he instead play with the action figures he does have (mostly leftovers from my own childhood, honestly). He said he didn’t want them - instead, he wanted Batman. So, then, I suggested if he didn’t want them any more, why don’t we give them away to kids who might want them? He didn’t like that suggestion at all, at which point I suggested that he pull out his favorites and we’d get down to business. By that point, he had completely forgotten about Batman and instead found himself excited to pull out the action figures he already had.

I really believe this is the key. Instead of focusing happiness on things he doesn’t have, I strive to focus his immediate joy on the things he already has. That way, he doesn’t have that burning desire for more things.

Let’s get this straight right off the bat. I like what Dave Ramsey has to say when it comes to personal finance. I find much of his material makes a lot of sense and he does a great job of balancing a “coaching” attitude without going too over the top a la Larry Winget.

That being said, I don’t care much at all about his political commentary. I know that his relationship with Fox News pretty much requires a conservative bent, but his political perspectives feel very much out in right field to me with only a tenuous connection at best to his personal finance talk.

Given that, I’m going to completely ignore his politics for this discussion. If it’s not inside The Total Money Makeover, which is an excellent book on debt reduction and focus, I’m not going to talk about it.

Ahem.

So what exactly is The Total Money Makeover all about? It’s just a very straightforward plan for getting in control of your finances, particularly in terms of overcoming a heavy load of debt. Many people have “turned the corner” - meaning they’ve realized that debt is dangerous and are actually committed to spending less - but the mountain of debt they’ve incurred makes it almost impossible to move forward. That’s exactly who the book is written for.

‘80% Behavior, 20% Head Knowledge’
Right off the bat, on the first page of the introduction, the basic idea is made clear:

I am positive that personal finance is 80 percent behavior and 20 percent head knowledge. Our concentration on behavior - realizing that most folks have a good idea of what to do with money but not how to do it - has led us to a different view of personal finance. Most financial people make the mistake of trying to show you the number, thinking that you just don’t get the math. I am sure that the problem with my money is the guy in the mirror.

I wholeheartedly agree with this. All of us know that it’s important to save and can see the numbers on how useful it really is. The trick is actually doing it - and that’s all psychology.

If you don’t truly make up your mind to achieve financial success, you’ll hold back. You won’t save - or you won’t save much. You’ll keep telling yourself that “later” is the right time to do it.

And then you’ll find yourself in ten years having not made any progress on your big goals in life.

The choice to start spending less than you earn is a hard one, but it’s the most important one. That choice has nothing to do with math, with running the numbers, or anything else. It’s inside your head.

If You Will Live Like No One Else, Later You Can Live Like No One Else
That phrase is found at the bottom of virtually every page in the book - it’s basically the book’s mantra. Dave’s take on it is clear: live hard now and you’ll live easy later. My take is a little bit different.

I agree with him largely on the first part: it’s incredibly important to tighten up that spending and get rid of the debt. Doing that requires learning how to spend less - and also not allowing yourself to use that extra money for anything but getting rid of debt and building a future. That requires living “different” in a way - your goals shift from the shiny new car and the shiny vacation to the removal of all of your debt.

On my block, I can certainly say I see a lot of shiny cars - my truck is the oldest vehicle on the block, by far. In the end, though, my truck works - and that’s all I can really ask of it. It gets the kids to daycare and gets me to the library, which is really all I need. As long as it keeps running, we’ll keep it. And that’s living quite different when we’re surrounded by vehicles more than ten years newer than my truck.

It’s the other part that’s tricky. I don’t view the “later you can live like no one else” as meaning I can afford that shiny new car. Instead, I take a perspective closer to Your Money or Your Life - the “live like no one else” in the future for me is complete financial independence, meaning I don’t have to work for money.

That, to me, is “living like no one else.” I won’t have to factor in money at all when it comes to choosing how to spend my time, and that’s my real dream.

A 12% Rate of Return?
One big flashing question mark comes on page xv in the preface:

Sadly, many intelligent but ignorant people seem to think that making a 12 percent rate of return on your money in a long term investment is impossible. And that if I state that there is a 12 percent rate of return available, then I have lied to you or misled you. [...] The S&P 500 is the 500 largest companies traded on the New York Stock Exchange, sometimes called “The Big Board.” So it is widely accepted to be the best average of the market. The S&P 500 has averaged 11.3 percent per year for the last seventy-plus years, as of this writing.

So, I immediately flip to the front and discover that this revision was published in 2007. Something tells me that 2008 hurt those numbers quite a bit.

Here’s the point, though: The Total Money Makeover tends towards the optimistic when it comes to investment returns. While there are certainly long-term stretches (more than ten years) where the market as a whole - or certain pieces of the market - have returned more than 12% annually, the truth is that there is no guarantee that any 10 year, 20 year, 30 year, or any year period will return any percent. Surely, 2008 taught us all that, loud and clear.

Instead of relying on that extremely optimistic forecast, I’ve come to use Warren Buffett’s more realistic (perhaps even a bit pessimistic) forecast that in the future we should expect 7% returns on average. This might be slightly on the pessimistic side, but when you’re making calculations for your future and banking on them, you’re better off being pessimistic (and having more money than you need when the day comes) than optimistic (and having to work for the rest of your life).

Calculating with 12% returns gets people really excited - and it might happen. But my perspective is that using such hugely optimistic numbers puts your future at risk. Better to finish with more than you expect than with less.

Tapes and Books Aren’t the Solution
On page 4, a certain quote really caught my eye:

So my Total Money Makeover begins with a challenge. The challenge is you. You are the problem with your money. The financial channel and some tape sets aren’t your answer; you are.

All the blogs, all the books, all the “tape sets,” all the financial products in the world won’t help if you’re not committed to sucking it up and making it work.

If you’re not willing to look at your behaviors, step up to the plate, and make some changes in your life, nothing is going to change.

This kind of talk generates three kinds of reactions. It makes some people angry - they want to believe that they can suddenly get rich without changing a thing, even though it hasn’t happened yet. It makes some people stick their fingers in their ears and sing “lalalala” - they know it’s true, but they’d rather keep the sinking ship they’re on than try to change anything. And then others embrace it and work hard for something better.

I was in the “lalalala” group for years. I knew very well what I needed to do, I just didn’t want to hear it. I knew on some level that what I was doing wasn’t working, I just didn’t want to think about it.

My epiphany threw me on a new track - the “embrace change” track. I finally woke up and realized that if I didn’t take charge of my situation, I was going to keep sinking slowly. This one choice led to tons of things - I paid off four credit cards, two vehicles, three student debts, totaling $30,000 or so in debt; I bought a house; and, finally, I switched careers, earning less but doing what I love.

All of the moves I made were simply the aftermath of that one choice to really make a change. That choice is up to you - no blog or book or podcast can make that happen (well, except for MY blog or book or podcast … just kidding).

King of Denial
The second chapter of the book focuses on denial - simply ignoring that there are problems. Like I said, I did this myself for far too long. One quote from the chapter took my breath away, though:

For your own good, for the good of your family and your future, grow a backbone. When something is wrong, stand up and say it is wrong, and don’t back down.

Powerful stuff, and exactly right. If you’re not going to take charge of things, who is?

The Pain of Change
Another interesting piece comes in on page 15:

Change is painful. Few people have the courage to seek out change. Most people won’t change until the pain of where they are exceeds the pain of change.

I strongly believe that for many people in a routine of spending more than they own, there’s a “bottoming out” effect, not too different than a junkie. At some point, the problems that have been building for a long while explode - you can’t pay the bills any more (which happened to me), you’re forced into bankruptcy, your family splits apart.

For many people, that final point is painful enough that it tips the scales. Suddenly, in comparison, the big change doesn’t seem so painful any more.

I like to think of it like the Mississippi River flood of 1993, which destroyed my hometown. It kept raining and raining and raining throughout the months of June and July, like debt building up. The river kept rising, pushing against the levees, until that fateful day when the levee broke. Chaos ensued and new patterns were rapidly discovered in countless lives.

Soon, we found that the actual path of the river had changed - in many places, it had found a new channel to flow through. The new patterns of life began to settle in place and soon things began to return to normal - but with some big changes. Levees were rebuilt stronger than ever. People prepared their homes for future flooding.

In short, life took on a new, better, safer routine. When you’re recovering from a financial meltdown and discovering new ways to live, this happens - you begin to discover new, better, safer routines.

And you begin to live like no one else.

Do you have any other thoughts on the first two chapters of The Total Money Makeover? Please share them in the comments - and feel free to respond to any of my impressions as well. After all, a good book club is all about discussion!

On Saturday, we’ll tackle the third chapter - Debt Myths: Debt Is (Not) A Tool.

My wife and I have played it quite a bit on random, and we played it over and over again on our game night. In fact, I’m not ashamed to admit, my wife is quite good at the game and she figured out the first “killer strategy” (if you have the game, that strategy was taking tons of Villages as fast as possible) and then has figured out how to stay ahead of everyone else figuring out how to thump that strategy (our first counter-strategy was lots of Militias, and the response to that was lots of Moats).

It’s a blast - if you like games like Settlers of Catan and Ticket to Ride, it’s well worth trying.

Anyway, here are some great personal finance articles from the past week.

Inside the ‘Circle of Competence’: Buy What You Know Peter Lynch, Benjamin Graham, and Warren Buffett all subscribe to one basic idea: buy what you know. These individuals surrounded themselves with competent information and competent people and if they didn’t know an investment top to bottom, they didn’t invest. Seemed to work for them… (@ newsweek via seth’s blog)

The Benefits of a Gap Year A “gap year” - or a year of following other activities and interests between high school and college - is something I really believe in, and this article sets the case strongly for it. I think a year or two of real-world experience makes college much more worthwhile for many students. (@ art of manliness)

Your Locus of Control Who’s in control in your life? Are you? Or do you jump to attention when someone else hollers? Hint: it’s a lot easier to find personal finance success if you have an internal locus of control. (@ productivity 501)

Sold! Sales Tricks to Help You Land Your Next Job The tricks of a salesman are also similar to the tricks that a person can use to net themselves a sweet job. This article outlines the parallels. (@ yahoo hotjobs via free money finance)

7 Reasons to Stop Tracking Your Finances I don’t track my finances with the detail and fervor that I once did. I find that it’s useful for teaching good habits, but after a while, those good habits are so ingrained that you don’t need the teacher as much any more. (@ saving for serenity)

Be Prepared This is a heart-wrenching story and one that really outlines the need to get your estate planning in order sooner rather than later. (@ gather little by little)

‘Certified Organic’ May Not Be 100% No certification program is perfect, but the “certified organic” label may be further than most. I’m tending more and more towards buying local than just trusting the “organic” label for quality foods. Vive la Picket Fence Creamery! (@ sfgate via bitten)

Ten Things You Should Do When You Get Laid Off This is an excellent checklist to follow if you’ve recently lost your job. (@ consumerism commentary)

Listen In!

Other options for enjoying The Simple Dollar Podcast include:
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Though I hope you do subscribe using one of the above methods, don’t worry - each episode will be featured in its own post, much like this one, on Tuesday afternoons. The podcast itself may appear earlier than that, however, if you subscribe using one of the above forms, but the notes won’t appear until I post about it here on The Simple Dollar.

Episode Notes
Here are some additional notes that go alongside the comments in the podcast. Approximate times for the corresponding links and notes are listed.

0:00 - The theme song is a snippet of a Camper van Beethoven concert on October 25, 1986, shared via their very open taping policy. Listen to the concert in its entirety.
0:22 - Some useful reading on this topic.
1:41 - The frugality lessons my parents taught me.
2:38 - Here are some of the ways they managed to juggle all of these things.
3:27 - The book It Pays to Talk by Carrie Schwab-Pomerantz and Charles Schwab was really helpful - here are my detailed notes on the book.
4:31 - Honesty is absolutely vital when talking about these issues.
6:02 - When I’m trying to calm myself down, I often sing to myself. I usually choose a very calm song - usually, it’s Crash by Dave Matthews Band.
8:58 - It might be worthwhile to get your parents a copy of Start Late Finish Rich by David Bach - here are my notes on the book.
11:30 - Estate planning 101
12:07 - A master information document is unbelievably useful in such situations.
15:22 - A semi-preview of next week’s podcast.

One thing I’d like to do in a future episode is have an audio reader’s mailbag. If you have a microphone on your computer and can record an MP3 of a simple, short question you might have on personal finance, careers, pop culture, or anything else you’d like me to answer, record it as an MP3 and send it to me. Keep the total recording under 15 seconds, please. Also, if you use Skype, feel free to ask your question that way - my username is trenttsd.

Comments and suggestions welcome.