Many of these items are used so routinely that we don’t even step back and think about them. We squirt some toothpaste on our toothbrush. We use a big gulp of mouthwash. We dump in laundry detergent up to the line.

Almost every time, though, we use way more of this stuff than we need.

Take toothpaste, for example. If you actually read their suggestion on how much toothpaste to use, it’s substantially less than the amount you probably use. It’s less than the amount I’ve always used, and I use far less than other people I know.

If you go a step beyond that, the back of the package is going to suggest using more than you actually need. Why? If you use substantially more than you need to get the job done, you’ll get the job done and run out of the stuff faster, sending you back to the store to buy more and to cause the company more profit.

I decided to really look at the amounts I was using in my own life and came up with some interesting results on several different things.

Soap I use liquid soap in the shower. I usually squeeze out a pretty big glob onto my washcloth and wash away, not thinking about it. However, if you read the back of pretty much any bottle, they encourage you to use a “small amount” (or some other vague amount). So I experimented a bit. I put just a tiny dot of soap on the wash cloth, about the smallest dot I could make. I lathered it around for a bit and it made a surprisingly large amount of suds. Two dots made as much lather as I would make from a huge squirt. In fact, I found that if I used one of those hand soap dispensers, a single squeeze from that dispenser gave me plenty of body soap for the shower. Using 80% less soap had the exact same results.

Toothpaste I used to squirt a line of toothpaste from one end of the bristles to the other. Reading the back of the tube, they suggest a much smaller amount than that. So I tried different amounts. Eventually, I found the perfect balance for me – an almost circular dot on the toothbrush. This resulted in pretty much the same amount of foam in my mouth (with a lot less over-the-top minty flavor!). Using 66% less toothpaste had the exact same results.

Mouthwash I would usually just pour myself a good mouth full in the bottom of a cup, rinse it around in my mouth for a minute, and spit. However, I was using far too much of it. Using about half as much got the same “burning” effect (yes, I use Listerine). Using 50% less mouthwash had the exact same results.

Dishwashing detergent My dishwasher has two different spots for detergent. Instead of filling up both slots with detergent, I tried filling up just one. I couldn’t notice a difference. What about filling up one slot about halfway? This didn’t quite cut it – it seemed to not work as well. I’ve actually been filling up both slots about halfway now. Using 50% less dishwashing detergent had the exact same results.

Shampoo and conditioner I used to just fill up my palm with shampoo, scrub it deeply into my hair, and rinse. However, my hair is really short. It turns out that just the tiniest dot does the trick – a huge reduction in the amount of shampoo I use. The same is true with conditioner. I’m going to adopt the same “squirt bottle” tactic I use with the soap. Using approximately 85% less shampoo and conditioner had the exact same results.

In fact, the only household product I tried that didn’t succeed just as well without a significant reduction was dental floss. A shorter strand just didn’t cut it.

Each one of these things changed nothing with my quality of life. I just found that if I used a little less up front, I didn’t miss it at all. This means more uses per container of household product – and that means that each container lasts longer.

And that, of course, means money saved without changing a thing about my life.

That’s a win, my friends.

Take a look at how much of this stuff you use. Don’t cut it below what you’re comfortable with, but give it a shot with a bit less. Don’t squirt quite as much shampoo onto your hands in the shower. Don’t put quite as much detergent into the wash. Quite often, trimming a little bit from what you use won’t make any noticeable difference except that you’ll be buying that item a lot less frequently without any change in the way you do things. That means money in your pocket.

Rather than rushing in and just buying the first option we find that minimally matches our needs, we’re being patient. We have the cash sitting there to write a check for the vehicle we want in the price range we want.

Now we wait. And test drive. And wait again.

I have a friend who [in my opinion] is not in very good financial shape and has just borrowed a lot more money from the bank to purchase some more property hoping to make a return on it & for this to help him financially in the long run. It was bought as an investment but I find it very risky. If him or his wife lose their job and are not able to lease/rent the property commercially, then they will be in a lot of trouble. Their finances were not good to begin with and I was horrified that the bank even loaned them the money. If this was 20 years ago, this wouldn’t have been possible, the bank would have never lent them the money but I am finding that banks are more and more willing to put people in financial jeopardy, they don’t care. Although I highly believe in investing money, I don’t believe that going way over your head [even if it is for the right reasons] is ever a good idea. I wanted to suggest that they reduce their costs, pay off a lot of debt before they got into this situation but decided against it.

How do you feel about confronting friends with possible bad financial decisions? Friends are supposed to try to prevent each other from big mistakes but is it crossing the line if we meddle with their bad financial choices?
- Tina

I don’t think you should “confront” your friend about it. The best thing you can do here is to try to help him logically think through what he’s doing a little bit more.

The route I would take is simple. I would tell him that I’m really interested in how he’s able to make these investments and ask to see how he pulls it off because you’re thinking of trying it, too.

As he explains it, ask lots of questions. Make some of them positive ones so he can talk about the positives of what he’s doing, but make sure some of them do address the seemingly heavy risks of what he’s doing, like asking “what happens if you lose your job?”.

At the end, you can simply say, “I’m glad that works for you, but it’s just way too much risk for me. I would never want that much risk on my shoulders, because if even a little thing goes wrong, the whole thing crashes down.” Or something to that effect.

March Madness picks, please (so we can laugh at how awful your picks are)!
- Len

My brackets are usually pretty boring. I have a couple 11s over 6s and one 12 over a 5 (Cornell is the best Ivy League team I’ve watched in a very long time) – other than that, I have almost all the favored teams winning the early rounds.

My Final Four is Kansas, Kansas State, Kentucky, and Duke. I have Kansas and Kentucky in the national title game, with Kansas winning it all.

Of course, most of this will turn out to be wrong, as it does with most of the brackets people pick.

My boyfriend and I are seriously contemplating marriage and therefore are thinking about how we would combine our finances after the wedding. We know that we would like to have children fairly soon and that I would be a stay at home mom, at least for the first few years. So I was thinking that when we get married, we should live off of just his income from the very first day to get a better idea of how things would work and to resist lifestyle inflation.

My thinking is that I want to know that we’ll be okay when we make the switch to a single income – I don’t want to be dependent on both incomes. What do you think of the plan and do you have any suggestions?
- Mary

That makes complete sense. I think that’s a very good plan.

One thing to consider, though, is taxes. When you go to a single income, you will be paying a lot less in income taxes. Not only will your family’s total income go down a lot (meaning you drop into a much lower tax bracket), you’ll also have a bundle of deductions and credits in the form of your baby. That will help some, especially to offset the expenses of the baby.

I would try very hard to not touch your income unless you find yourself not pregnant in a couple of years and want to use a large chunk of your savings to wipe out debt.

I’m debating on cashing out my IRA early (the value is approximately $10,000) and using the funds to pay off two credit cards. Do you have any advice concerning this idea? I know a 10% penalty will be assessed for the early withdrawal, but I’m tired of carrying the debt.
- Rob

There’s not only that penalty, but there’s also the indirect penalty of losing money in your IRA. That means less money at retirement. Yes, the $10,000 doesn’t seem big now, but in thirty years, that money will be on the order of $100,000.

In this situation, the decision should really rest on how much retirement savings you have in total. I would run a retirement calculator both with and without your IRA savings and see how much the removal of that IRA money would actually affect your retirement picture. If it turns something workable into something impossible, then I wouldn’t do it. If you’re okay either way, then it’s more up to you.

Honestly, though, I would be very reluctant to ever take money out of a Roth IRA to pay off consumer debt.

How can I become more responsible for my own finances?

Other than working on our obvious poor communication and the relationship part myself, do you have advice for me?
- Shelly

I excised some of your story, but I think that you really need to get at least some sort of grip on the financial situation in your household.

I’d suggest reading Financial Infidelity by Dr. Bonnie Eaker Weil, for starters. The book covers more or less the exact type of situation you find yourself in – a situation of not trusting your partner when it comes to finances.

At some point, you need to sit down and talk your way through this with him. That means working on your communication, first and foremost. If he refuses to participate, then there are some deeper marital issues going on beyond just your finances, and you should consider seeking marriage counseling.

My husband and I are in the market for a new or late-model used car and have been doing some research on local dealerships. It seems that nearly all of them have switched to a no-haggle system. Is there any way we can still negotiate to save money on a vehicle or are we really locked in on a price?
- Ellie

“No haggle” pricing is nothing more than price fixing. It simply means that they’re part of a large group of dealers and manufacturers that are agreeing to keep their prices at a certain level.

Unfortunately, there’s not much you can do with such dealerships. My own experience – and the experience of quite a few readers – is that their prices are the bottom line, period. They won’t negotiate and will wave at you as you walk off the lot. Your best bet is to search hard to find dealers who don’t do it this way and negotiate there.

I suspect that this arrangement won’t last for too long, as it’s virtually identical to the “trust” situation in the late 1800s. Competition between dealers and manufacturers is leaving the marketplace and they’re all effectively acting as one company. That’s a monopoly.

Today’s post advised a young couple to do something else with the excess over $25,000 in an emergency fund. You also mentioned that you live off of your hefty emergency fund during those months when income isn’t so steady. May I ask the size of your emergency fund? Or, alternatively, how many months’ living expenses does the number represent and what do your monthly expenses total?
- Melinda

Our emergency fund right now covers living expenses for a little over a year. Of course, our living expenses are going to go up a bit when the new baby arrives.

That’s quite a bit higher than I would suggest for people who have a steady job. The regularity of a paycheck means that you don’t have to have cash reserves for the months when income is low.

I will say this: there were several months in the middle of last year where our income for that month was below our expenses. It was made up for by a handful of stellar months. It’s for that reason that we have such a hefty fund – we can live through a run of poor months and still be okay without having to make panic-based career shifts.

My wife and I bought a house about 3 years ago, right at the peak of the housing market. Since then I’d estimate that our home has lost about $50,000 or about 20% of its value. The house is fantastic and we love our neighborhood, so up until now I hadn’t really cared all that much because we weren’t planning on going anywhere.

We’re aggressively saving for retirement currently, but at the same time, we’d like to start putting some money away so that when we’re ready (within 5 years for sure) we can either add on to the house or move to a larger home in the neighborhood. We’re going to start allocating enough money each month so that even if the housing market doesn’t improve we’ll have plenty saved up to move into roomier environs 5 years from now. I guess my question just boils down to where to put the money? Should we be putting it all into CDs or another safe investment like that or paying off more of our mortgage each month? I’m leaning towards a split of 2/3 into cash/liquid investments and 1/3 into paying off the 2nd mortgage for 20% of the house value on the house that’s carrying a 9% interest rate, but I’d be interested to hear what you or your readers have to say.
- Pat

Put it towards whatever earns you the most on interest.

What’s the interest rate on your home loan? Your smaller one seems to be 9% – what’s your bigger one? Do you have any other debts? What’s the best rate you can get on a CD?

The best thing you can do right now is throw your money towards the highest interest rates. If it’s that mortgage, throw all of it towards the mortgage (assuming, of course, that you have some sort of emergency fund).

When you get to the point of buying another home, the equity in your first home will help you to make it happen.

I am looking to shift gears in my career. I currently work at a small conculting engineering company as the resident Quality Assurance person. When I took the job, I had just been let go from a position I hated. This job has been much better, except for the last two years.

Any suggesstions, things/areas I may have overlooked?
- Danielle

I think you’ve got the general picture right. I also think you should seriously look at changing careers.

One big thing I would do is start building up some cash savings right now before you make the switch. Focus on spending as though you’re earning $35K now and sock the rest away into savings. That way, when you actually do make the switch, you’re not at the mercy of Murphy’s Law right off the bat.

Keep in mind that it’ll likely take some time to find a job in that field. Start shopping for one now and recognize that it won’t happen overnight. Good luck.

My parents purchased a whole life policy for me when I was 1. I’m not sure what to do with it. It has a cash value of about $4000 right now, a death benefit of $50,000 and an accidental death benefit rider of $40,000, with a guaranteed purchase option of $10,000 every three years. The current premium is $200 per year. This past year it earned 6% (before cost of insurance was taken out) and is guaranteed to earn 4%. The current premium is $200.

I currently don’t have a term life insurance policy, but will be purchasing one in the next couple of months. I’m not sure if I should cash this out, keep paying, or stop paying and keeping the insurance until the cash value runs out.
- Adam

You need to evaluate whether this policy is worthwhile as it stands right now. It may or may not be, but there’s not enough information in this letter to know.

First of all, are you engaged in any occupations or hobbies that might violate the accidental death benefit rider? In other words, are you doing anything that causes an elevated risk of accidental death? If so, the company may refuse to pay the rider, making your policy only worth $50,000 if you die. If not, it’s worth $90,000.

Then, get some quotes on term insurance for whatever that amount is. Be honest when getting the quotes. See how much your premium would be for a term policy matching the value of your whole life policy.

Once you have that quote, see how much more you’re paying for the whole life policy compared to the term. Is that difference worth the investment benefit you’re getting at this point? Or would it be better to cash out that investment and put it elsewhere?

I saw a horrible message about you on [link to messageboard removed]. Somebody certainly has an axe to grind! Why don’t you go there and defend yourself?
- Kelly

Honestly, I don’t really care.

There are a lot of people out there who use the anonymity of internet messageboards to blow off steam. I run a website that has hundreds of thousands of readers. It’s not surprising at all to me that some of those people blow off steam in my direction. If I spent my time worrying about it, I’d worry about nothing else.

Yes, sometimes in doing that, I overlook actual legitimate issues and complaints. It’s a tradeoff, but it’s a tradeoff that needs to happen to maintain some degree of sanity and personal happiness.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

The only problem is that for the amount of juice you get, juice boxes are ridiculously expensive. From an environmental standpoint, the boxes are really wasteful, too, as they fill up the trash quite quickly.

After having a long conversation with a reader on Twitter about kids and juice, she encouraged me to look into getting the kids litterless juice boxes. They’re made of sturdy plastic, reusable, and basically have the same form factor as a juice box. Instead of just pulling an ordinary juice box out of the fridge, one would just pull out one of these boxes. We could then buy juice by the jug (much cheaper) and fill several reusable juice boxes at once, putting them all in the fridge.

She recommended Rubbermaid Litterless Juice Boxes, as that’s what she uses. These sell for $2.99 a pop on Amazon (though you may find lower prices if you shop around).

I then went to the store and did some price comparisons. Among the flavors of Juicy Juice that our children like, the boxes sell for $0.10 per ounce, where the large containers sell for about $0.075 per ounce, meaning you save about two and a half cents per ounce buying the larger containers instead of the juice boxes. This is without sales, of course.

Each juice box would have about seven ounces in it, and if each child drinks a single juice box a day, how long would it be before we would be cost ahead on the litterless juice boxes?

I decided to calculate the numbers as though we bought ten of the reusable juice boxes, as this would amount to an equal number of boxes that we would get if we bought juice boxes at the store. Total cost: $29.90.

Each day, we would use fourteen ounces of juice in the boxes, thus saving thirty five cents a day doing it this way.

Thus, we would have to use the reusable juice boxes for eighty five days (one a day for each of our two children) to break even. After that, we would save about seventeen cents per reusable juice box emptied.

Given that we have a four year old and a two year old at home (and another one on the way), the numbers seem to indicate that this would be a sensible move. It would give us more control over the juice in the juice boxes (mixing vegetable juice in, for example), save us about seventeen cents for each juice box drank, and they’ll be used for many years to come.

Reusable juice boxes, here we come.

Will they save money for you, though? I think these factors are important.

First of all, do your kids drink juice with any regularity? Ours usually have about one serving a day or so. If it’s a lot less than that, then they’re not worth it. If it’s that much or more, then it probably will be worth it.

Second, do you have multiple children? If you have multiple children, the value factor goes up.

Third, are your children young? The value factor also goes up if you have young children, as they’re likely to use them for a long time down the road. Older children might not.

So that’s what we’re doing this year. We’re going camping with my in-laws, including both of my sisters-in-law AND one of their significant others. With that large of a group, watching such a small number of children becomes easy and rotates easily. With just the two of us… I’m not sure any summer camping trip would be worth it.

The “It’s Too Expensive to Eat Healthy Food” Debate It’s usually not, if you plan for it a little bit – and the long term health costs are certainly lower with healthy food. I think the big opposition to it is that people simply don’t want to eat healthy because their experiences with healthy food were not positive ones and thus they try to come up with excuses for it. (@ casual kitchen)

5 Reasons to Use Tax Preparation Software We’ve been TurboTax users since the first day we had to fill out the forms. It just works. (@ my life scoop)

Made By Hand: In Praise of Amateurs My father did similar things: he could never sit still. My favorite of his projects was the small greenhouse he built so that he could start plants outside in the very early spring. (@ get rich slowly)

How to Make Money on Facebook There are some things that you just shouldn’t talk about on Facebook. This is one of them. (@ brip blap)

How to Tame Your To-Do List It’s all about getting rid of the stuff that isn’t actually important or that you’re not actually going to do. A to-do list is a tool, not something to browbeat yourself with. (@ dumb little man)

Spend a monent and think about what your big goal is. It could be something as down-to-earth as a major home repair. It could be something as horizon-stretching as launching a new career or new business. It could be something completely crazy, like moving to Norway.

Whatever it is, keep that goal in mind as you read the eight tactics below. Ask yourself how you could actually apply each of these tactics towards your goal. By the end, you just might find that you’ve worked out a plan to take you from the mundane here to the amazing there.

Stop Thinking About Failure
What if I don’t succeed?

That’s often the big question that holds us back from taking big leaps in our life. We see something that would require a lot of work and energy and time and we can’t imagine the disappointment and pain if it didn’t work.

To that, I say who cares if it doesn’t work? If this is your dream, the process to get there should be filled with fun for you. Even if the destination isn’t what you dreamed of, the journey there will be fulfilling.

I want to be a fiction writer. In fifteen years of attempts, I have not successfully published a single piece of fiction. I keep writing, though. Why? Because it’s a lot of fun, regardless of whether I succeed or fail. In fact, I don’t even think about failure. It doesn’t matter. I write stuff I like and keep sending it out, at which point I’ve already succeeded. Anything else is just icing on the cake.

Keep Your Goal Within the Realm of Reality
Goals like quadrupling your salary in six months are going to backfire and demotivate you. No matter how good you are, they’re simply not going to happen.

One great way to make sure a goal is realistic is to ask yourself how much of the success of that goal relies solely on you. The more that relies solely on you and not on the actions of others, the more likely you’ll find success.

Another effective tool is to get your goal reviewed, but we’ll talk about that in a bit.

Take Small Bites Every Day
Every day that goes by, you should take some sort of action towards your goal. Take a walk for better health. Read a book for your education. Write 1,000 words a day (as Stephen King famously suggested for budding writers). Do something to stretch your skills or to learn more about the area where your goal is focused. Take an incremental step directly towards your goal.

The big advantage to doing this is that it keeps your goal always fresh in your mind while slowly reducing the size of the iceberg. You’re always moving in the right direction, bringing that mountain in the distance closer and closer and always keeping it in mind.

Find a Mentor
A mentor is someone who can offer you unbiased and worthwhile advice about your goal and your approaches to achieving it. A mentor can fulfill more of a coaching role, pushing you along through the specifics, or more of a guidance-based role, offering you general feedback on your goals and plans to get there.

How do you find a mentor? Seek out people who are successful in your area of interest, as well as people who are knowledgable about the area you’re trying to cover. Places to start might include your doctor, your social network, or your work environment.

Find Positive Support
Having people that you can discuss your progress with and who will support you in a positive way is essential for big goals. Good positive support fills you with confidence and helps you pick yourself back up after struggling with a particular goal.

This might not be your usual social network. Many people are often unhelpful when it comes to the positive support that others need. Do the people around you make you feel good about the things you want to do? If they don’t, it may be time to start seeking out more positive people to surround yourself with.

Remember, a good, valuable friend is one who makes you feel better about yourself and makes you feel ready to conquer the difficult things in life.

Shred Your Routine
When we have a highly established daily/weekly routine, it can often feel impossible to find room in that schedule for the things we dream of doing. Our routine feels natural and it enables us to keep up with the day-to-day ebb and flow of events.

If you want to find room for that goal, shake up your routine. Start doing some things before work instead of after work. Drop an activity or two that’s gone stale for you. Start taking a nap. Stop watching television or surfing the internet as much.

Shaking up your routine makes many things in your life feel new, and that’s a perfect time to start working every day towards a big goal in your life.

Share Your Goal Widely
Turn the people in your life into motivators by telling them about your goal. When you share your goals with the key people in your life, they become a source of motivation to get up and do something.

On one level, you’re personally motivated because you simply don’t want to show failure to the people in your life. On another level, they will often actually motivate you.

Know Your Motivation
Why are you working towards this goal? If it’s just something you want, it’s much easier to put it aside. It is much easier to convince yourself to make the hard choices if you’re making those hard choices for the benefit of others.

Learning something new because it fulfills you is an easy thing to put off. Learning something new because it brings value to others is much more urgent.

Keep that motivation front and center. Use visual reminders of your motivation. Put a picture of someone you really want to impress on the front of your refrigerator if you’re trying to diet, for example. Wrap your credit cards in a picture of your children. These external sources will motivate you to make the little choices that build the foundation of success.

Good luck!

A few months ago (yep, one of those New Years Resolutions!) I pledged to get a better grip on my finances. I found some personal finance blogs to read and decided to start off by simply tracking where our money went.

But it’s impossible!! Every time I sit down with our bank and credit card statements, a big chunk of the money is going away to places I can’t figure out. There are vague entries on the bills and so on.

What can I do?

I’m going to assume Kimberly is single. If she’s not single, the first thing she needs to do is sit down with her partner along with a copy of all of their bills and the suggestions in this post and come up with a game plan they can approach together.

First of all, it’s absolutely the right move to sit down at the end of the month and review your spending. Simply knowing where your money goes can help you figure out some very simple things to do to improve your personal finance situation.

That being said, I think Kimberly’s problem could be a very common one. It’s due to the fact that the statement at the end of the month can only provide so much data.

Take ATM use, for example. If you stop by an ATM and withdraw some cash, you’re suddenly finding yourself with money that can be spent without any real paper trail. If you want to keep track of what you spent that money on at the end of the month, you have to keep the record. Your bank statement won’t be able to help you a bit. Counter withdrawals from a bank have the same problem, as does “extra” cash taken off of your debit card when you make a purchase with it.

To put it simply, whenever you spend cash, there is no paper trail unless you create that trail yourself. Your bank and credit card statements can’t keep track of your cash for you – and if you use cash quite often, you’ll find such statement use pretty much impossible.

You have two choices here.

On one hand, you can change your habits and stop using cash. If you rely on your bank card for most of your purchases, your statement becomes your paper trail for you. It will identify, at the very least, where all of your purchases took place, which, for me, is usually good enough.

On the other hand, you can start keeping a money diary. Just pick up a small notebook and keep it on hand. Whenever you spend money for any reason, jot down the date, the amount, and what it was in your pocket notebook. This might not catch everything (you might just forget about it sometimes), but if you have most of your spending in there as an entry, it can often create the picture you need if used hand-in-hand with your statements.

Which solution is better? It really depends on your comfort level. Try the one that seems the most appealing to you and see if it works. If it doesn’t, try the other one.

Another problem that might be causing this is poorly-worded entries on the bank statement and/or the credit card statement. If Kimberly can’t decipher what some of the entries mean, the data is useless.

If you find yourself with a lot of entries that should have meaning, but do not, you may want to seek assistance with reading your statement. If you still have trouble, you should consider seeking another financial institution. Such entries will always cause you trouble – and they certainly don’t need to be vague or unclear.

Good luck! You’re on the right path to taking control of your finances. Don’t let this little road bump deter you!

This is certainly something that has challenged me over the past few years. I’ve got several hobbies that could seemingly be very expensive on their own but, with some footwork and forethought, I’ve found ways to trim their costs down to almost nothing while still retaining what I enjoy about each one.

Over the last week, I’ve also talked to several people I know who simultaneously have seemingly expensive hobbies yet enjoy them with minimal cost. I made a list of many of these hobbies and the methods used to reduce their costs. If you don’t see your hobby listed below but have a great idea for how to reduce the cost of it, mention the hobby and the cost-cutting method in the comments.

Antiquing Focus on really mastering how to value particular types of items – vintage toys, etc. Save your buying impulses until you’re absolutely sure you spy an underpriced item that you can turn over.

Board games Hit thrift stores regularly as you’ll often find great, complete games for almost nothing. Before you buy new games, attend sessions at your local game store where you can demo such games and try them out. Build friendships with other people who enjoy board games and play their games as often as they play yours.

Camping Buy equipment that will last and will work in lots of environments (so you don’t have to buy multiples). Don’t get too much equipment, as you can make a lot of things with what you find on hand – a tent, a sleeping bag, and a utility tool will work for many people. Don’t buy stuff because you think you might use it or need it.

Coin collecting Know your hobby. Know what rare coins have value, particularly ones that look similar to coins made today. Sift through change you get and find ways to accumulate more change without spending (like getting rolls of pennies or dimes at the bank). Understand what you really enjoy about coin collecting and focus on that.

Comics Check your local library if you enjoy reading comics – they often stock annuals and other collections. Start a “comic circle” where you each buy certain comics then swap them around the circle. For collectors, know the market cold and look in unusual places for bargains, like yard sales.

Cooking Minimize your equipment – you don’t need dozens pots and pans. Cook for yourself, not just to impress others (this improves your skill and saves money on meals). Master the use of ingredients you can easily grow (like our chive patch and our asparagus patch, which require no maintenance at all and just produce free food for us).

Gardening Compost as much as you can as it will reduce your fertilizing costs. Build friendships with other gardeners and share equipment. Harvest seeds and save them for spring.

Golfing Try golfing at the community courses near you instead of at the country club, as municipal courses are often far less expensive and yet still a lot of fun. Once you have a set of clubs, stick with it and only “upgrade” when there are liquidation sales or something else that’s completely exceptional. Don’t be afraid to use “lost” balls – balls hit out in the middle of nowhere and considered “lost” by other golfers – pick them up and toss them in your bag. Get a golf bag with wheels or a pull cart and get some exercise instead of renting a golf cart.

Hunting Handle the meat packing and processing yourself. Don’t buy “special clothes” for hunting beyond what’s required to keep you safe – just add layers in the winter. Focus on specific types of hunting instead of buying a weapon for everything.

Magic: the Gathering Instead of playing in the expensive competitive Standard environment, play Limited instead. Build a “draft cube” (basically, a big, diverse pile of cards) and play using that, particularly when you attend events. Ask to borrow full decks from players that have lots of cards.

Movies Eat a snack and drink a big glass of water before hitting the theater. Don’t buy a DVD unless you’ve already watched a movie multiple times in a theater or as a rental. Swap DVDs (temporarily) with friends. Go to discount theaters instead of “first-run” theaters and you’ll save most of the cost of a ticket.

Pets Volunteer your time at a pet shelter, as it will allow you to bond with lots of pets, help to make sure those most in need are cared for, and also help you to find the perfect match. Learn what an animal’s true dietary needs are and focus on meeting that instead of just buying a big bag of Ol’ Roy – not only is it better for them, it’s often cheaper.

Reading Join your local library – or even volunteer there. Swap books with your friends. Join a service like PaperBackSwap and swap online.

Scrapbooking Keep in mind why you’re scrapbooking – it’s to preserve memories. Don’t spend your money on expensive decorating elements that don’t really mean anything at all. Use highly inexpensive or throwaway items for your decorative elements instead – let that be another channel for your creativity.

Video games Trade games with friends. Play through games all the way before picking up a new one. Buy used games – and trade in any games you have that you won’t likely play again. Never buy new releases – wait until the price starts to drop and you save money while still enjoying the same game.

There are a few themes that run through many of these tips that bear repeating, because they help save money with any hobby.

Build friendships with people who have the same hobby. You can share ideas and equipment with them.
Minimize your equipment. Don’t buy stuff just because you think it might have a use. Go minimal, then expand if you have a true need.
Avoid the “cult of the new.” Never buy a new release. If you wait a little while, you can usually get the same item for less.
Understand what aspects of the hobby you truly enjoy. Maybe it’s just the collecting nature. Maybe it’s just the act of what you’re doing. Whatever it is, spend some time figuring it out, as it will often lead you to savings.

Anywyay, on to some reader maibag questions.

In 2009 we exceeded the income limit for our Roth IRAs. Here are our current yearly investments:

1. Would we be better off increasing our 401k contribution (which may put us under the Roth income cap), maxing out a traditional IRA and converting to a Roth every year or a combination of both?
2. Should we be focusing some of our disposable income on the car loan or mortgage or adding it to one of our savings/retirement vehicles?
- Sean

If you’ve exceeded your Roth limit, I would increase my 401(k) contributions by an appropriate amount so that your after-tax income is reduced by an amount equal to what you contributed to the Roth IRA. So, if you’re in the 30% tax bracket, for example, you should contribute about $7,200 more to the 401(k).

Since I don’t know your overall balances in your various investments, I can’t really say whether or not you’re on good pace for your retirement. However, I think your current level of retirement savings adds up to 12-13% of your income in a year, which is an appropriate amount. Your emergency fund (according to my envelope math) should cover at least three months’ worth of living expenses, so if the balance in that is much above $25,000, I would redirect the excess toward debt freedom. The travel budget is more a matter of personal taste and value.

Overall, I think you guys are in very good shape from what I can see. Good work!

You often advise couples to figure out a post baby budget when they ask you about having their first child or adding an additional. That is at least 5 years away for us and really hard to pin down. If we wanted to be sure we could still afford all of the “fun” things we want and children, it would be easier to save ahead of time and let our bank accounts do the talking. If you tried to set a savings goal for covering the costs of a child, maybe the 1st year of expenses?, what would it be and what would it be comprised of?
- Becky

It depends on the level of quality you want for your children. Are you going to stay at home with them? Are you going to send them to an average day care center? A top day care center? Are you going to hire a nanny? Are you going to have a Graco crib or a custom-made one? Are you planning to breastfeed or are you going to use formula? Each of those things is going to have a radically different cost.

You don’t have to make any sort of final decision at this point, of course. The reason for talking about such things, in your case, is so that you have at least a good estimate on what you need to save. The child care question will be the biggest one, as those options have vast differences in cost – tens of thousands of dollars annually.

Saving ahead for this is a really good idea. If I were you, I’d make the whole thing automatic. I’d probably use SmartyPig for it. Identify a number that you’re shooting for, set it up with a target date five years in the future, and make contributions to that goal automatic. You could even share that goal with overbearing in-laws who keep asking when the baby is going to come.

I quit my job back in January (variety of reasons) and am now signed up with a particular international company. When I am finished with my current job I will be doing something I have NEVER ever done before…commission only sales. *gulp* I am very nervous, but also excited. I really like this new company and I *think* I can do this even though I have no sales background. I’ll be my own boss, which is great, but also overwhelming. My question though is this…how in the world do people who earn non regular income budget and save???

My husband is still working and we’ll get his paycheck regularly but I’ve crunched those numbers and we will be in the red if I don’t make any money. So…on the assumption that I will do a good job and hopefully make some sales, how do I budget?!?!? Again, I’ve never been in this sort of position before. I’ve always had a regular paycheck. I’d like to be as un-stressed as possible when I finally start in my new role and having a plan for budgeting will help (I think).
- Megan

I have a non-regular income. Here’s how I do it.

First of all, I have a really hefty emergency fund. I keep several months’ worth of living expenses on hand in the form of cash. There simply are months where my income is not very high, and during those months, we live out of that emergency fund. It’s fine, though, because those down months are usually months when I’m working on some sort of project that will help turn things around.

How do you get there? When you have a great month, don’t spend it all. Instead, take a very large chunk of it and put it straight into your emergency fund, then forget about it. Keep doing it this way until you have at the bare minimum six months’ worth of total living expenses for you and your husband in that account. In other words, you could make nothing and your husband could lose his job and your account would cover everything from food to bills to even some entertainment – what you spend in a typical month.

During the down months, you may contribute less. During really down months, you may be taking money out of the account. Both of these are fine when you’re working a job with a variable income.

I purchased a car second had about 7 or 8 years ago now, it was $9000 then but it would be lucky to be worth $1500 now. I have full comprehensive insurance on it which comes to a little more than $500 a year. I can’t imagine keeping the car for more than another year, what do you think of changing my insurance to 3rd party instead and saving a couple of hundred? At what point is comprehensive insurance no longer worth it?
- Dan

At this point, comprehensive insurance is overkill. If you do more damage to your vehicle than the blue book value of the car, they’ll just “total” the car and issue you a check for that value. So, in other words, you’re paying more than $500 a year so that, if you get in an accident, they’ll give you a check for roughly $1,000 (depending on your deductible). Unless your odds of a major accident are approaching the 50% mark over a given year, that’s a pretty poor deal, particularly if you have an emergency fund of any kind.

My general rule of thumb is this when it comes to deciding whether to carry comprehensive insurance on a vehicle. Look up the blue book value of the car. Subtract your deductible from that. Then divide that by the annual cost of your insurance. If the number you get is less than 3.5 or so, I would stop carrying the comprehensive insurance.

Why? Even if you were in a serious accident that required a lot of repairs, your comprehensive insurance would likely just pay you the blue book value of the car (minus the deductible). If it’s 3 or less, you might as well cut the insurance and start saving that money in your own savings account.

I have a question that I hope you can anwer from your personal experience with Le Cresuet. I have been saving up and plan to buy an LC enamel french oven and want to purchasse the right piece. My question is about the difference between a round or oval oven. Does the round one heat more evenly and consistently than the oval? Have you tried both, and if so, what do you think? I have read reviews on every site immaginable, but no-one mentions round vs. oval.

I question this because I have used a slow cooker for 20+ years, and have noticed a difference in how things cook in my relatively new oval crockpot. I used a large round crockpot for many years, but unfortunately it broke in the sink. When replacing it, I decided on oval so that larger cuts of meat would fit better. I am using the same recipes, so I know how the dish should turn out. My theory is that the oval shape does not circulate the heat evenly as a round one does. I don’t want to make the same mistake with the french oven, since it would be a very costly mistake.
- Cherie

I have used both round and oval-shaped enameled cast-iron pots. They are spectacular. I use them for virtually everything in my kitchen.

With a round versus an oval shape, what I’ve noticed is that the metal heats up very evenly in the oven. Thus, they do cook a bit differently. There tends to be a slightly cooler spot (usually unnoticeable) right in the middle with either one of them, but that’s true of anything you use. The round pot tends to have a bit of a round cool spot, whereas the oval tends to have more of an oval shaped spot that’s not quite as big around as the circle. For most practical uses, there is no difference between the two (I won’t say ALL practical uses, but I haven’t seen a practical difference).

I think the issue with the slow cooker is more of a brand thing. It’s likely made quite a bit different than your old one and perhaps produces more or less heat than your old one. That likely accounts for much more of the change you’re seeing than the shape of the pot.

How would you recommend adapting the “work hours” [...] for someone who has an instable job, or who is currently seeking employment? My plan was to use a 40-hour “work week” and to pretend my time at home, cleaning, working on my research, etc, is all working towards my greater goals, because finishing school is a gateway to generating income for my dreams.
- Deborah

If you’re in a situation where you have the money to keep the bills paid for the moment, then you should absolutely fill that time with whatever activities put you in place for the career you want.

In your case (as this question was excised from a long email), you’re clearly filling that time with educational purposes that seek to push you not only towards learning valuable things, but towards a degree. That’s unquestionably a valuable use of your time.

I think it makes a lot of sense to, in effect, start getting used to a regular work routine. Putting in forty hours a week (or maybe even a bit more) in a schedule that will match what you’ll experience professionally is a great routine-builder.

One of my long-term goals is to read 1,000 books. While I have plenty of academic works and classics in mind, in terms of finance, personal growth, or any other subject, what would you recommend to a young woman who has just finished an undergraduate degree?
- Deborah

Here are three titles (all linked to my longer reviews) that I would add to your list for personal finance and personal growth.

Your Money or Your Life by Joe Dominguez and Vicki Robin is the single personal finance book I would recommend that you read. It is the book you’ll find at the foundation of my personal finance philosophy.

Mindset by Dr. Carol Dweck is probably the best book I’ve read on what I would generally term “success.” To succeed at anything, you need an appropriate growth-oriented mindset and this is the best scientifically-backed book I’ve read on it.

The Creative Habit by Twyla Tharp discusses making creative thinking routine in your life. Given that professional life is valuing ideas more and more and more, I think this is essential for being a complete, thriving person today.

I would strongly encourage you to check out some of the many books I’ve reviewed on The Simple Dollar. Almost universally, they’re good – though I’ve reviewed a couple of blatant train wrecks, too. Additional selections really largely depend on where you’re going on your life’s journey, but I think those three really are good for everyone to read in your situation.

A plea to share your kraut making experiences?
- Wayne

My father made sauerkraut almost annually when I was growing up and I helped him with the process several times when I was in high school and in college. It’s pretty straightforward, but what set his making apart is that he had a large earthenware crock in which to age the sauerkraut.

I’ve attempted it on my own twice and it’s been a complete failure both times. I attempted making it without the crock, which I think is the chief problem. The first batch I made was inedible. I believe I did not make it briny enough and some sort of growth occurred in it. The smell alone told me I shouldn’t even try it.

The second batch was closer, but it was incredibly, incredibly sour. I could eat it in very small amounts, but it was so far beyond the level of sour that would be enjoyable on anything that I tossed that batch out as well.

I am going to attempt it again later this year after investing in a similar crock to what my father has and following his procedure to the letter rather than attempting to “make do.”

I am a 21 year old college student, I work part time and still live at home.

About a year ago and half ago I totaled my paid off car and had to get a new one. Basically I had to start over. I ended up leasing a car( I know how you feel about leasing a car) however I did it because my parents thought it would be a good idea for me to have a new reliable car and I needed a car right away. Except for registration and such I did not have to put anything down for the car. My monthly lease is about $360.00 for the car. I struggled to make the payments every month as I go to school over full time and work about part time. I told my parents I didn’t want the car anymore as the payments were to much and I was very frustrated that the car would never really be mine even after I made all these “payments” on it. My dad decided that he would agree to make half the payment every month. Well I still have another 17 months before the lease is over. I also have DMV registration coming up which will be about $350 plus a maintenance that will be about $300-400. I guess right now the decision I am trying to make is should I just keep the car for another 17 months and suck it up making half the payment every month and the maintenance and DMV coming due or should I try to find someone to take over the lease and figure something else out?( My parents and I were considering the possibility of having my dad take over the lease and driving the car) I have some savings however if I bought a car cash it would probably eat up all my savings, which is really frustrating Right now I have a lower payment (plus maintenance and DMV of course) however payment toward what…?( as its not really my car) I am not really sure what the best thing to do at this point would be.
- Alan

The real question I have is whether or not you actually need a car. Do you need it to get back and forth to your classes or would public transportation suffice?

If you can survive easily without a car, I’ve got to wonder why your parents convinced you to buy one. I also don’t understand why a college student would purchase a car that has a $360 a month lease on it. That’s the cost to lease a Lexus. If you were going to lease something, I would have thought it would make much more sense to lease a low-end car at $180 a month or so.

I don’t think you should continue the lease on that car if you can possibly do so. You would be much better off in a used car at this point, one with low payments. Your monthly income on a part-time job does not equate to a new car unless you’re spending every dime you make on that car and you’re working 30 hours a week (figuring in gas, DMV, oil changes, maintenance, etc.). I would sit down with your parents and show them the real dollars and cents of all of this.

My husband and I live in SoCal – Long Beach, to be exact. My question is about gardening for SOME of us. We live with – seriously, now – 8 different grocery stores (Fresh & Easy, Stater Bros, Ralphs, Albertsons, Pavilions, Vons, Food4Less, and Trader Joe’s) within minutes of our house. Actually, there are a couple more than that, but those are the stores DH and I frequently go to, in addition to Costco. Because of this, we have a tremendous opportunity to “shop the specials” at grocery stores. Drug stores are the same: several to choose from, in addition to “super-stores” like Walmart, Target, K-mart, etc.

So, considering this, do you feel it’s worth it for us to continue with our yearly container gardening ritual (which neither of us particularly enjoy, but don’t dislike, either), or should we just aggressively and consistently shop the store specials at multiple nearby stores for produce, the way we already do for our other groceries? We do not garden organically, so that is not a factor in our decision.
- Lisa

I think, in your situation, gardening doesn’t save money. Even with a small ground-level garden, there’s an argument to be made that it doesn’t save money in terms of the pounds of food produced (although there’s a real premium on pulling a strawberry from the vine and popping it into your mouth).

Gardening shines when it’s in line with other values that you have – eating well (produce eaten immediately from your garden is more nutritional than produce eaten from your local grocery store that was picked a week ago), the act of gardening itself, or a firm belief in organics and controlling what goes into your plants (we basically grow organic, using a compost bin as the source of our fertilizer). Also, the larger a garden gets, the more cost-effective it becomes to garden because the food density goes up and the cost of tools per square foot is lower.

If it’s not in line with your personal values and it doesn’t save money, I wouldn’t garden. In my own situation, however, it saves us money and it’s in line with some of our beliefs, so we love spending spring and summer days out there.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

If you’ve been reading The Simple Dollar for a while, you know that I love the “Little Book” series by Wiley Publishing. It’s a book series of small, relatively short hardbacks with about twenty short chapters. Each book in the series focuses on a specific personal finance or investment topic, striving to spell it out in plain English. Often, it’s written by a leader in the field, particularly by someone who believes deeply in the methodology being described. Almost unanimously, the entries in the series have been well worth reading, particularly if you have even a minimal interest in investing. The books do a fantastic job of breaking down ideas into little, comprehensible nuggets.

The most recent book in the series that I have yet to review (there are actually two more that have been published very recently that I’ve not even laid eyes on yet) is The Little Book of Behavioral Investing by James Montier, a renowned value investor. This entry in the series focuses on how normal human behavior often works against us when it comes to investing, a phenomenon that’s been covered in other personal finance books. Unfortunately, those other books have often been dry ones, often failing to relate the concepts they talk about to your day-to-day behavior.

Does The Little Book of Behavioral Investing succeed where the others fail? Is it a book worth reading? Let’s dig in.

One – In the Heat of the Moment
Poor decisions are made in the heat of the moment. Just think of impulse buying at your local supermarket. Montier proposes, sensibly, that the route to financial success is almost always preparation of and pre-commitment to a detailed, clear plan. Spend some time figuring out exactly what you’re going to do, what your goals are, and what your parameters are before you even dive in. It’s no different than writing a grocery list before you go to the store – you’re curbing impulse buys.

Two – Who’s Afraid of the Big Bad Market?
When people experience financial loss, they often react much in the same way they do when they’re bitten. They retreat. They certainly don’t want to invest more. Yet, quite often, the correct response to a loss in a stock investment is to invest more because you’re essentially paying a sale price on the same exact company that cost quite a bit more just a month ago. If your fundamental gameplan hasn’t changed, don’t react to a downturn by selling – react to it by buying.

Three – Always Look on the Bright Side of Life
On the other hand, when people see a positive trend, they tend to get overoptimistic. They believe that it’ll continue on forever and they dive in like crazy – often when things are hitting their peak. This is why bubbles form – a good investment reaches a reasonable peak, but keeps on going because the blind optimists dive in, driving the price far above what it should be rationally. When the blind optimists then try to sell, there aren’t enough buyers and the price collapses.

Four – Why Does Anyone Listen to These Guys?
Experts are not perfect. Although they might be more knowledgable about the market, they also tend to be overconfident, as they believe that they know more than the other investors. That’s a bad mix that often causes investment experts to do worse than the average person on the street. Overconfidence can completely ruin any advantage that you might have.

Five – The Folly of Forecasting
No one can predict the future, but lots of people certainly try. Unfortunately, past performance is never an indication of future results. The best thing an investor can do is understand where they are right now. Have they met their goals? If you create a plan in advance and stick to it, you don’t have to try to predict the future.

Six – Information Overload
There’s an overabundance of information available for investors. While on one level that can seem like a great thing, the truth is that it can actually be a terrible thing. People can get lost in the data. They can get sucked into “analysis paralysis,” where they won’t take action until they can analyze all the information – and by the time their analysis is done, the situation has changed. The key here is to focus your analysis on very specific elements that you understand.

Seven – Turn Off That Bubblevision
Many people obsess and stress over every little fluctuation in the stock market, and channels like CNBC fuel the obsession. Unfortunately, such obsession often leads to oversensitivity to little fluctuations and thus causes hair-trigger responses that are usually poor. Turn off the bubblevision and seek out real, hard information that matters to you instead.

Eight – See No Evil, Hear No Evil
Most people look for evidence that confirms the ideas they already have (think about talk radio, for example). However, doing that will often be disastrous for your investments. You should instead constantly look for information that disproves your assumptions. If you think a company is successful, for example, you should seek out signs that indicate that it’s not successful.

Nine – In the Land of the Perma-Bear and the Perma-Bull
Some people believe the stock market is always headed in the right direction (”perma-bulls”). Others believe that the stock market is always headed in the wrong direction (”perma-bears”). Obviously, neither one is right and, obviously, neither one of these folks can ever be a truly successful investor. Every market has ups and downs – if you constantly believe one or the other is about to happen regardless of what’s happening now, you’ll always make mistakes.

Ten – The Siren Song of Stories
A good story is incredibly appealing to us because it makes things that seemingly don’t make any sense make, well, sense. We do this all the time – our memories are a perfect example of this. We take random events in our lives and polish them until they make a coherent story. The problem is that with investing, the data rarely tells a simple story like this. When we try to mold it into a simple story, we overlook big parts of the picture and often end up making poor choices. Don’t worry about the story.

Eleven – This Time Is Different
All markets have bubbles – and those bubbles eventually burst. Every time, though, as people are buying in like mad, you hear stories about how this one is different than the rest because of some reason. That’s basically never the case. What happens, inevitably, is that too many people buy in because they believe they’re going to get rich. Suddenly, there are too many people holding the things they’ve bought and no one’s around to buy them. Every time a market begins to seriously diverge from long-established fundamentals, there’s usually a bubble involved and you’re better off avoiding it.

Twelve – Right for the Wrong Reason, or Wrong for the Right Reason
As was mentioned earlier, we tend to gloss over the past to create nice stories about it. That glossing, mixed with our optimism, often results in our blaming others for the mistakes we made in the past. The truth is much harsher: whenever we lose money, we’re at fault, and there are valuable lessons to be learned from figuring out what exactly went wrong.

Thirteen – The Perils of ADHD Investing
If you’re an attentive investor, it’s often tempting to jump in and make changes all the time. We hear some good or bad news and we want to react quickly to it by buying or selling. Unfortunately, our snap decisions are often absorbed right into the market and the only person that makes money is the stockbroker. If you have a plan in place – and you certainly should – stick to that plan. Don’t let a sudden piece of news or a sudden impulse steer you off of that plan.

Fourteen – Inside the Mind of a Lemming
It often can feel very uncomfortable to zig when others are zagging, particularly when we have money at stake. If we see lots of people doing a certain thing, it’s easy to convince ourselves that it must be the right thing to do. The key here is to step back and look at it objectively without the influence of other people. Make your decision based on the information, not on what everyone else is doing.

Fifteen – You Gotta Know When to Fold Them
A big part of your overall plan – remember, the one you decided on before you started investing? – is when to sell. You should decide before you even begin how much volatility you’re willing to accept and how big the losses have to be before you would sell. The decision needs to be made before you even put a dollar in so you can react in accordance with your plan, not in accordance to your nerves.

Sixteen – Process, Process, Process
What does all of this add up to? You need to always be examining the world around you and, most importantly, you need to try to remove the human element from your investing decisions. Come up with a plan, refine the plan, invest, then stick to the plan. Don’t let your nerves or the actions of others get in your way.

Is The Little Book of Behavioral Investing Worth Reading?
For the most part, The Little Book of Behavioral Investing reiterates much of the basic material on behavior and personal finance that can be found in other books. The Little Book of Behavioral Investing works, though, because it’s written in such plain language and, perhaps most importantly of all, it includes a lot of very vivid explanations and illustrations of our behavioral quirks.

A book on behavioral investing should be something that everyone reads before they jump into the investing pool. The Little Book of Behavioral Investing is as good a place as any to pick up that information. It’s approachable, clear, and, dare I say, fun.

If you’re interested in my reviews of earlier books in the “Little Book” series, here’s a list of those reviews. I’ve almost universally enjoyed them.
The Little Book of Bull Moves in Bear Markets
The Little Book of Common Sense Investing
The Little Book of Main Street Money
The Little Book of Safe Money
The Little Book Of Value Investing
The Little Book That Beats The Market
The Little Book That Builds Wealth
The Little Book That Makes You Rich
The Little Book That Saves Your Assets

My wife and I have two children, ages 2 and 1. We’d like to have more; we both think that four would be a great number, although there’s no particular logical reason for that number. The problem is the expense. With daycare costs, adding each additional child will cost another $260 a month. If we stopped paying extra on our student loans and cut our savings per month to $145, we could afford the daycare for the third child, but a fourth would require more painful cuts. We already live frugally: buy used clothes, drive used paid-for cars, make almost all of our food at home, etc. I’ve looked into second jobs, but there’s very little IT work in the area, other than what I already do. And with our county having the highest unemployment rate in the state, I suspect even paper-route jobs and that sort of thing would be hard to find.

My job pays decently and is very secure: her job also pays well and is less secure, but still not much in jeopardy. In Michigan, that’s significant. We can’t sell the house without taking a loss, but it is big enough—barely—for two more kids. If we need to upgrade the car to a mini-van, we’ll have enough in our car fund that we can pay cash, so that’s not an issue.

I hate to make children about mere numbers, but purely by the math it seems like more children is unwise. On the other hand, I constantly hear stories from other families about how they it “somehow just worked out.” Any advice or suggestions?

Much like you, my wife and I have two children – ages four and two – and another one due to arrive within the next few months. The issue of escalating child care costs is one that we’ve dealt with many times throughout our child-rearing process and, through it all, we’ve come to some conclusions about that very occurrence.

First of all, the idea that it “just worked out” is a bit misleading. What often happens in that situation is that people go through a period of re-prioritizing after the child (or children) arrives, and it’s often a shift that happens without a lot of conscious thought. You choose to eat at home more because it’s easier to corral children there. You don’t go out as often as you used to because of the cost of babysitting. Over time, these shifts just seem completely ordinary – parents adopt a new normal along the way and often feel like it “just worked out.” Our memories often work to make things seem smoother than they actually were.

At some point if you continue to have children, the cost of child care will likely eventually meet or exceed the net cash benefit of one of your jobs. If you have three preschool-aged children (as we will soon), your weekly costs are immense. If you, at the same time, figure up the true take-home of one of the people in the household – after taxes, commuting costs, vehicle upkeep, wardrobe upkeep, and son on – you’ll often see that working outside the home is a financial net negative. Add on top of that the financial benefits of not working (even less reason to eat out, more organized grocery shopping, etc.) and you create a compelling case for one partner to leave the employment scene for a period of time.

What if you can’t afford to do this because you’ll be burying your career path? At this point, it’s really a values thing – your career is more valuable to you than more progeny. It’s one of those value comparisons where there is no real right or wrong answer – however, because it’s such an emotional one, people often convince themselves that one answer or the other is absolutely right for them and thus absolutely right for everyone. It’s not. You have to decide for yourself what you value.

If you decide that more children are the real priority here, then plan for it. That may involve selling the house and moving elsewhere – even to another part of the country. It may involve selling a vehicle. It may involve leaving a job. If your children are your priority, then sacrifice those life elements that aren’t directly benefiting the children.

If you decide that your continued career trajectory is the priority for you, take precautions to not have another child.

Your situation – much like our own – is basically asking you to choose between the two paths. Choosing one path doesn’t necessarily mean abandoning the other one, but it does mean postponing it to a later point in your life and it may mean that you’re unable to pick it back up again.

It seems to me from the email that you’re having a hard time choosing between the two. Right now is the time to sit down, talk with each other frankly about it, and make a choice. Is it career maintenance as the top priority or is it more children?

Give the decision time. Also, perhaps most importantly of all, give each other respect here. There is no right or wrong way to feel about the question and if you disagree, that’s okay. You both have reasonable perspectives on the issue.

You don’t have to make a decision tomorrow on this, but whichever way you choose, it doesn’t hurt to take a serious look at your spending and find ways to minimize it now. Build an emergency fund. Learn to live on a little less. No matter which path you end up choosing, doing that now will help you with the ramifications of that choice.

Good luck.

In the past three months, I’ve paid off all but $2,000 of my credit card debt. I feel happier about my money than I have in a long time. The only problem is that my social life seems to be falling apart. I don’t have as much interest in the things my friends are spending their money and time on and I find myself doing other things a lot. What do you suggest?

Bear with me for a second as I go down a bit of a strange road.

I’ll admit it. I’m not a good housekeeper, and neither is my wife.

Yes, we keep our house reasonably clean and we make an extra effort to clean when guests come over, but on a day to day basis, housework is lower on our priority list than it seems to be for many other people that we know. Quite often, we do minimal cleanup during the week and wait until Saturday for a real housecleaning – and, even then, we don’t scrub the walls or things like that on a regular basis.

Our priorities are simply different. There’s no wrong or right about it. Some people value housecleaning more than we do. A few of our closest friends spend literally hours each day on housecleaning because keeping their house sparkling is a very high priority for them.

So what’s a high priority for us? Time with our kids and with each other. Learning new things. Finding ways to have fun without spending a mint.

If we were to simply follow the lead of some of the people in our social circle, we would probably spend more than we do. One of my closest friends is becoming a small-scale land baron. Another one buys lots of Leroy Nieman serigraphs and, on occasion, original art. Yet another close friend really, really values his three automobiles.

Our money goes towards financial stability, because that’s what we value.

Placing that value highly, even if it’s not in line with what our friends seem to value, hasn’t damaged our deepest, most important friendships. You don’t have to value exactly what others value – you just have to respect it.

Instead, our friendships are usually based on the things we do have in common. Almost all of our friends really enjoy hosting and attending evenings full of board games, usually with a potluck meal. Even though there’s a variety of political perspectives, we all value political discussions that don’t turn into insults, so we often discuss politics together in a setting that would often result in arguments and fights. We all value reading and learning new things. None of us, at this point, is in a bad financial state, as we all have our debts under control.

For all of the things we do differently, we have those key things in common. You don’t have to do what your friends do, and you don’t have to value all of the same things that your friends value.

If you value living frugally, that’s fine. You don’t have to spend like your friends do. Instead, find ways to accentuate the things you do have in common. What do you both value? That’s the basis of a strong friendship.

Kelly, it seems to me that you’ve adopted stronger financial practices as a significant value in your life, and that’s great. It’ll help you to stay afloat no matter what the river of life sends your way.

The question is what else there is in your life. What other things do you value? How do you spend your spare time? What do you think about? There’s a good chance that these things still overlap with your friends – and if they do, seek ways to spend time with them that match up with those values.

You might find that your values actually are pretty far away from some of them and that your friendship was really only based on one value, one that you’ve moved away from as you’ve grown as a person. That’s fine – I discovered that myself when I started re-evaluating my life. If that happens, it simply means that it’s time to start socializing in ways that will help you meet people that match up well with your current values.

I firmly believe that if you surround yourself with people who mostly value different things than you do, you will be unhappy. I also firmly believe that if you seek out groups of people with which you share at least some values, you’re likely to build great relationships and friendships. Even better, if you can seek out multiple groups in this way – a group that matches one value you hold dear and another group that matches another value you hold dear – you’ll not only build friendships and relationships, but you’ll be able to make some powerful connections, too.

Good luck!

One Year Ago (March 7 – March 13, 2009)
A Guide to Making Inexpensive and Delicious Homemade Pizza Our homemade pizza makes several meals for our family for a dollar a pop or less. Not only that, it’s delicious and fairly healthy, too.

Frugality and Feeling Deprived Frugality doesn’t have to feel like deprivation at all if you spend some time reflection on what exactly bounty means in your life.

The Frugal Laptop This worked great for about ten months until a separate hardware issue cropped up with the laptop. I’d still advise anyone to try this, though.

A Step-by-Step Guide to Getting Your Credit Card Interest Rates Reduced This tactic works well, but be aware that many credit card companies might also reduce your credit limit at the same time, particularly if you’ve had a history of being late on your bills.

My Worst Job – And What It Taught Me Those simple, menial tasks that you hate are often the perfect opportunity to show the world that you’re a great worker.

Two Years Ago (March 7 – March 13, 2008)
How I Turned That Ship Around: Another Look At My Financial Meltdown … And The Aftermath When things were at their absolute worst for me financially, here’s the game plan that I followed.

The Financial Recovery Toolkit: Ten Tools I Used In My Financial Turnaround Hand in hand with the above article, here are ten tools I used to make that turnaround possible.

Chipping Away at the Paycheck to Paycheck Routine One big challenge that people have is breaking away from the idea that you have to spend what you earn. Financial security comes from freedom from your work and this is the first step.

The Credit Card Holy Wars: There Is No “Right” Answer … But Here’s My Take Should you have a credit card? Shouldn’t you? I think there are reasonable arguments on both sides of the coin.

Ten Ways to Translate Your Passion Into Additional Income If you’re passionate about something, you already have a leg up over a lot of people in that area. People pay for passion.

Three Years Ago (March 7 – March 13, 2007)
Are Your Friends Always Spending Money? Ten Frugal Activities – And Advice On How To Suggest Them When you begin to turn your financial life around, it’s often a struggle to overcome the social barriers. Here are some tips for making it work.

Why Johnny Can Read: Simpson’s Paradox and the Greatly Exaggerated Death of American Public Education The reason for writing this was an ongoing debate with readers about public versus private school. Is private school worth the dollars?

How To Transition From Car Loans To Paying Cash For Automobiles Paying cash for automobiles is a huge money saver because you’re not paying the interest on the car loans. Here’s how to get there.

Love, Marriage, and Money: Should a Couple Combine Their Finances? This isn’t always a straightforward issue, and it’s not just a trust issue either (which is what people often try to break it down to).

Nine Financial Reasons For Getting Involved In Your Local Community Community involvement can really help out your financial life, directly and indirectly. Here’s how.

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

Nine 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 nine 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 – or other social networks. 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.

I also participate on several other social networks. Feel free to check me out on del.icio.us (it’s where I collect links, from which I select the ones that appear in my weekly roundups), wakoopa (what software I use), GoodReads (what books I’m reading), Facebook, and FriendFeed (which aggregates everything). I also have an irregularly-updated personal site, TrentHamm.com.

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. Become a “Friend of The Simple Dollar.” If you find the stuff on The Simple Dollar valuable and are willing to spend five minutes or so a month to help me out with small things, please consider signing up to be a “Friend of The Simple Dollar”.

9. 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!

And I never got around to posting the other five. Today, I’m completing that post.

So, after you’ve perused the art of the slow cooker and five of my favorite recipes, here are five more for you to try. I have no idea where these originally came from, but each was experimented on and modified more than a few times and seem to only exist on my own handwritten cards.

One big tip! If you’re going to leave these on for more than eight hours, add an extra half a cup of water before you go. The biggest danger for cooking things in a crock pot longer than that is having the food dry out.

Let’s go!

Chicken Chili (our current favorite crock pot recipe)

1 1/4 lbs boneless skinless chicken breasts
2 15 oz. cans great northern beans or navy beans (I prefer to soak dry beans myself)
12 oz. frozen sweet corn kernels
1 4 1/2 oz. can chopped green chiles (or you can chop your own)
3 tbsp. chili powder
16 oz. chicken stock or chicken broth
8 oz. half and half (you can use skim milk if you want it healthier)
1/2 tsp. corn starch (if you want it thicker)
1/2 cup sour cream
1/2 cup chopped onion (optional)

Dice the chicken into 1″ cubes and put them in a slow cooker. Add the beans and corn and optional onions. In a bowl, mix the chili powder, the peppers, the half and half, and the chicken broth or stock (and the starch, if you want it thicker). Stir until well-mixed, then add to the chicken. Cover and cook for 8-10 hours on low. Just before serving, stir in sour cream until consistent.

Wild Rice Turkey

1 1/2 cups wild rice
2 cups finely chopped onion
1/4 cup golden raisins
2 apples, chopped
3 cups chicken broth or chicken stock
1 1/4 tsp. thyme
1 tsp. salt
1/4 tsp. marjoram
3/4 tsp. sage
1/2 tsp. pepper
whole turkey brest (4 lbs. or so)

Mix rice, onion, raisins, apples, thyme, salt, pepper, sage, and marjoram until consistent. Put thsi mixture on the bottom of the pot. Cover with chicken broth/stock and make sure all of the rice is covered with at least a quarter of an inch of liquid – if not, supplement with some water or additional stock. Place whole turkey breast (thawed, of course) on top. Cook on low for eight hours and be sure to check the temperature of the turkey before you remove it (it should be 160 degrees F or roughly 75 C).

Stuffed Zucchini

1 medium zucchini or squash, halved lengthwise, with seeds removed
1 cup tomato sauce
1 tbsp. red wine vinegar
1 onion, chopped
1 tsp. minced or powdered garlic
1/4 cup brown rice (uncooked)
1 tbsp. parsley
1 tbsp. basil
1/8 tsp. black pepper
Mozzarella cheese (optional)

Put the zucchini halves in the bottom of the crockpot. Mix the tomato sauce and vinegar together in a small bowl – a cereal bowl works. In another bowl, combine the onions, garlic, rice, parsley, basil, and pepper and mix thoroughly. Add two tablespoons of the tomato-red wine mix to the onion mix and stir thoroughly. Put the onion mix on the zucchini halves, then pour the rest of the tomato-red wine mix on top. Cook on low for 6 hours.

Three Bean Stew

1 cup dried lima beans
1 cup dried great Northern beans
1 cup dried chickpeas / Garbanzo beans
4 cups water
16 oz. carrots (baby or sliced full carrots)
1 1/2 cups chopped onion
2 1/2 cups or 1 14 oz. can diced tomatoes
2 tbsp. tomato paste
3 garlic cloves, minced
1 tbsp. parsley
1 tsp. basil
1/2 tsp. thyme
1/2 tsp. salt
1/8 tsp. pepper
1 bay leaf

Soak the beans together overnight in water by putting the beans in a pan, then adding water until there’s an inch of water on top of the beans. Drain the beans and place in crock pot. Add the water, carrots, oinion, garlic, parsley, basil, thyme, pepper, and the bay leaf to the crock pot. Cook on low for eight to ten hours. Add the tomatoes, the paste, and salt and cook for another hour on low. Remove bay leaf and serve.

Barbecued Ribs (it doesn’t beat slow-cooked on a grill, but it’s very good!)

4 lbs. baby back ribs, lightly peppered and salted
2 cups catsup
1 cup finely diced tomatoes
1/2 cup finely chopped onion
1/8 tsp. cloves
1/4 cup vinegar
2 tbsp. pepper
1/2 cup packed brown sugar
2 tsp. oregano
2 tsp. Worcestershire sauce
hot sauce to taste

Rub the ribs down with salt and pepper. Put them in a shallow baking pan and bake them in the oven for 15 minutes at 400 F / 200 C. Turn the ribs over and brown for another 15 minutes in the oven. While it’s browning, mix the other ingredients in a bowl. Take the ribs from the oven, place in a slow cooker, pour the sauce over the ribs, and flip the ribs around to coat them. Cover and cook on low for eight hours. Delicious!

Good luck!

I don’t understand how you can recommend that people shop in thrift stores for clothes. The stuff there is usually worn out and just looks bad and outdated. I would never wear that stuff to work.

It sounds to me like you’ve made up your mind about thrift stores and secondhand stores before even stepping inside the door. I’ll make the case anyway.

First of all, I won’t buy the vast majority of clothing on sale at such a store. I’m with Monica on this one – most of the stuff there can be pretty worn out. I’ve seen lots of threadbare sweaters, worn out dress pants, and other items that, if they were in my home, would be meeting the rag bag.

Those aren’t the items I’m shopping for. The reason I go is to look through a long rack of clothes and find two or three items that are barely worn. How do quality items of clothing get to the secondhand store? A person gains or loses a lot of weight. A person passes away. A person decides they just don’t like how the item looks on them. A person is a clotheshorse who only wears an item a couple of times before getting rid of it. Each of these cases can result in some very nice clothes on the rack at the secondhand shop.

If you don’t like the item, don’t buy it. However, there are a lot of gems buried on the racks if you’ll spend some time digging through them.

Second, my biggest focus for clothing buys – once they meet a minimum standard of quality – really is cost per use. Yes, unquestionably, I could go to a store like Men’s Wearhouse, find a high quality article of clothing, and wear it, say, sixty times over the course of several years. That article of clothing might cost me $60, so the cost per use would be $1 per use.

On the other hand, I might find a nice item at the secondhand store. It might have been worn a few times already, so I might only get fifteen wears out of it instead of the sixty I might get from the new shirt. However, that secondhand item only cost me $3. That’s $0.20 per use.

I will take the second item of clothing any day of the week.

What about the time cost? Time cost is one of the first things people mention when they hear a money-saving tactic that they’re unsure about. Human beings are creatures of habit and if we can find a good reason to retain that habit (or even a not-so-good reason), we’ll use it. Time cost is often that reason.

However, in this situation, time cost matters little. I go clothes shopping twice a year, period.

In the spring, I’ll dig out all of my summer clothes (in fact, I’m intending to do this this weekend), determine what needs to go and what can stay, and then figure out if I need to add some clothes to the mix or if I have enough. I do the same thing in the fall with my winter clothes.

Once that’s done, I actually make a shopping list for clothes. I need some number of dress shirts, some number of jeans, some number of shorts, some number of khakis, some number of underwear – you get the idea. Then, I go shopping.

If I use secondhand store clothes in this process, I still just rotate them out at season’s end if they’re too worn, the same thing I’ll do with clothes that are purchased new. I’ll still go clothes shopping twice a year, regardless of whether I’ve bought new or used clothes in the past.

What this comes down to is simple: spending control. I keep a pretty tight rein on my clothes shopping habits. I simply don’t go clothes shopping more than twice a year. Because of that, I don’t devote much time in a given calendar year to picking out new clothes – and I don’t spend nearly as much money, either.

At its heart, an awful lot of frugality and financial success comes down to control over your spending. If you have firm control over how your money leaves your wallet, it’s often shocking how many ways there are to cut your spending without cutting your quality of life one iota.

I understand why such items are for sale – they’re convenient. It’s easier to just grab a bag of prewashed romaine lettuce than it is to grab a head of romaine and deal with it when you get home.

Yet, when you look at the prices, you’re actually paying a significant markup. Two bags of Dole romaine lettuce at my local grocer costs about the same as a single head of romaine. The bags cost about $4.50 together, while the head costs about $1.60 (with some variance, of course, due to weight, sales, and so on). By buying the head, you save $2.90 – or, from a different perspective, you’re paying $2.90 for the convenience of someone else washing your lettuce.

Is that really worth it? I bought a head of romaine lettuce myself, put it in one of those handy bags that they provide, and took it home with me. Upon arriving home, I set a stopwatch for myself, then chopped the leaves off of the head of lettuce, rinsed them thoroughly, rinsed the bag a bit (leaving some moisture inside), then put the leaves back in the bag, tying it. I then tossed the knife in the dishwasher and stopped the stopwatch.

Total time? Three minutes. Actually, it was just a bit shy of that.

Let’s say over the course of the next year, I repeat the same action twenty times. I buy a head of romaine, put it in one of those bags from the store, take it home, chop it myself, and store it in that bag. Each time, I’m saving myself $2.90. Over the course of a year, I spend an hour chopping up the lettuce and save myself a total of $58.

The same holds true for all of those convenience foods.

Apple slices? I found apples I like at the store for $1.29 a pound, whereas pre-sliced apples added up to $4.76 a pound (I found four four-ounce bags of them for $1.19 each). I have a nice little apple slicer, so I’m able to slice up a few apples at dinnertime and completely clean up from it in about thirty seconds. My estimate on this is that buying un-cut apples saves me about $80 for every hour of apple-slicing I’m willing to do.

Celery sticks? I can buy a bag of celery for $1.49 or I can buy about three containers of pre-sliced sticks for $1.99 each. I spend about four minutes cutting the sticks and it saves me $3.47 – or about $52 over the course of a full hour.

I can go on and on with these items, but in each case the central idea is true: the convenience has a really, really high cost, much more than it might seem at first glance.

To me, this type of convenience food is a perfect example of how the little things really add up when it comes to personal finance. There are so many little conveniences that we pay for in life, whether it’s pre-sliced apples or take-out food or a lawn care service. When you actually step back and calculate the hourly rate that these things are costing you, it’s truly astounding. Yet people fill their lives with these conveniences and question those who skip out on them, then they wonder why it’s challenging to make ends meet.

Take a stand today. Slice your own vegetables. Then put that saved money aside for something for yourself.

Time is the one thing I wish I had more of.

I just found out that I will be unemployed come mid-August and I am just wondering what steps I should start taking in savings and job hunting until then. I am currently an Americorps*VISTA, which means that I cannot start a second job until the completion of my term (again, August). I live very simply, but only make about $800/month take-home and have about $1400 in CC debt (started the year at $4000; I’ve been working to get rid of it) Your thoughts?

Related to that, my position generally only winds up taking about 25 hrs/week, while I’m required to ‘work’ (be in the office) for 40. How would you utilize those extra 15 hours?
- Tessa

The first thing I’d do is figure out what I would like to be doing with my time come August. What exactly is the next step for you? If you don’t know, start investing those fifteen extra hours a week (and more) to figuring out what comes next for you.

Once you know, then you should be able to fill in the blanks as to how to fill your time until the change happens. It might mean building up a resume. It might mean spending a lot of time firming up old connections and relationships. It might mean applying for college or for scholarships.

In short, you need to figure out what comes next, make a plan for how to get there, then spend the remaining time executing that plan as strongly as you can. The key, though, comes from you. What do you want to do next?

My husband is irresponsible with money. I knew when we got involved that he had a student loan and some credit card debt (about $5000 dollars combined), and that he felt no obligation to pay these off. He also hadn’t filed his taxes for several years. I probably should have listened to my gut then and run for the hills, but i didn’t, and I’m not looking for marriage advice here. Once we became seriously involved, I made sure his taxes were filed. The government garnished his refunds until the student loan was paid off, and we paid off the cc debt too with the understanding that he is unable to control his spending and should not have access to a cc in the future.

Once again, he got another card, and now has a $2000 balance, and is not making payments. I am done bailing him out. I am just wondering how his bad credit is going to affect me if he doesn’t pay this off? Whether or not we stay together, what can I do to protect myself from his debt? Is there anyway a spouse at the end of her rope can call the credit card companies and get his cards cancelled or say “Stop issuing this man cards!” If we do split up at some point, am I going to be responsible for half of his debt?
- Michelle

The important question is to consider whose names the debts are in. If he’s applying for credit cards on his own, are they just in his name? If they are and you file for divorce, they will remain his debts and are not your concern. If they’re in both of your names, you need to get your name removed from as much of it as possible if you’re considering a separation.

That being said, I think some professional counseling is in order in this situation. Clearly, there are serious trust issues going on in your relationship and your husband has some significant self-control problems. These are the types of issues that need counseling – they will not go away due to your sheer force of will.

If you care for him at all, seek help for him and for your relationship. I can’t tell from your email whether you’re beyond that point or not.

After I finished school I went to work for an outdoor education center for nine months. I loved the job but, wasn’t happy with the management so I came back to my parent’s house and found a job there. It is in a similar field but most of the work is in an office. I originally planed to stay at this job for three or four years but now the program might lose its funding. This wouldn’t affect the funding to my job but it would nearly make it pointless. My supervisor encouraged me to be on the lookout for other jobs. I sent out several resumes to some outdoor education centers and have interviews soon.

Do you think it would be foolish to go back to that type of work?
- Beth

Your father’s frustration is probably stemming from the fact that he does not see you heading down a path that leads you to financial independence. He wants to see you being at least successful enough to fly under your own power through adult life. If you take another minimum wage job and continue to live at home with your parents, you are shifting a significant portion of your life’s expenses off to your parents as well as intruding on the privacy of their adult lives. He likely sees your choice as not moving at all towards repairing that situation.

Regardless of what job you choose, you should be working on a plan to be independent and they should be in the loop about that plan. What form that takes is really up to you, your situation, your skill set, and your passions.

Recognize, though, that your parents are people, too. They’re providing for you now because they care deeply about you, but every time you drink from that well, you leave them less water.

We took up a mortgage of $200k, with $140k being fixed and $60k in what’s called a revolving credit account here in New Zealand. We thought the revolving credit facility would allow us more flexibility if we are disciplined enough with our spending.

For all these, we are paying a service charge of $12.50 a month. To me, the revolving credit facility seems like another good alternative, what do you think?
- Art

It sounds an awful lot like a money merge account, something I wrote about in detail in the past.

In the United States, such accounts are generally pretty expensive and can ring you into the thousands of dollars. For that kind of cost, I don’t view such an account as being worth it unless you have little financial discipline. In your case, I think it actually might be worth it, though.

I’m not entirely sure, though, why you’re taking money out of the account and putting it into a savings account. I’m assuming that this is for extra payments on the mortgage, but if I understand the account correctly (based on my understanding of money merges and the documentation on revolving credit accounts in New Zealand), leaving the money in the account has the same effect of paying down your mortgage faster, plus it decreases the risk that you might go over your credit withdrawal limit. If that’s the case, I would put a severe cap on how much I transferred out of the account, only keeping enough to serve as a true emergency fund.

You don’t talk about Lost enough in your mailbags so I’m going to keep emailing you Lost questions until you answer one. So here goes. Who is the good guy of the series? Jacob or UnLocke?
- Kelly

Neither one is. I think you have a prison-like situation where the inmate (UnLocke) has been held in solitary confinement for a very, very long time. He’s like a rat in a cage. But does that mean the guard (Jacob) is a saint?

I still think there are two real heroes in this series: Jack and Locke. I still believe that to be the case. My belief is that Locke on the island will come back to life at the same time as Locke off the island walks again thanks to Jack’s spinal surgery, and Locke will eventually become the guardian of the island. Jack has been searching for something to fix for the entire series – he will get to fix Locke.

Or maybe I have no idea what I’m talking about and the series will end with a “Cop Rock”-esque singing montage.

My partner has about $8000 worth of credit card debt and I’ve been trying to help her figure out the best way to pay it off. We’re in the process of refinancing our mortgage (to 5.25%) and are wondering if it makes sense to wrap it into our mortgage, since she pays a higher interest rate on the credit card. She also make the monthly mortgage payment (I made the down payment, and am making the monthly payment on a second property we own, so she says it’ll still be her responsibility, as we’re keeping track of who put how much into each property). I’m skeptical, not wanting to add any more debt to our mortgage (and feeling that HER debt being added to OUR total will make keeping track messy), but can you clarify just how much this is or isn’t an okay thing to do?
- Heidi

Yes, in a strict sense, it makes sense to wrap that credit card debt into the mortgage.

The challenge comes in when you look at the self-control issues. If you guys have no credit card debt at all, will she have the spending control to resist simply charging those cards up again for purchases you don’t really need?

I’m not sure about your domestic arrangement, however. You seem to want to distinguish heavily between HER debt and YOUR debt. If this person is genuinely your partner, then that includes your finances. There is no HER debt or YOUR debt. There’s OUR debt – you deal with it together because the debt is affecting you both.

I just realized that paying extra every month decreased my minimum payment amount and not the length of the loan. (Mostly because I just started paying extra.)

I’ve been trying to figure out how early my auto loan will be paid off if I add extra in every month. All of the loan calculators I’ve found online that calculate don’t seem to take into account that the minimum payment amount decreases every month while my payment does not. I keep paying my original amount that included the extra. Is there a formula to figure all this out?
- Susan

It’s simple: ignore the minimum payment. Instead, calculate what your payment should be right now. Tack a small amount on top of that. Pay that amount every month, regardless of what the bill says. Soon, your loan is gone.

If the minimum payment is getting smaller, it’s because the lender wants you to pay on the loan for a longer period in order to maximize the amount of interest they get from you. They don’t mind receiving smaller payments in the short term if it means more income in the long term. Thus, they’ll show you the minimum amount you’d need to pay to stick with your original payment schedule – and if you’ve overpaid in the past, that minimum amount will be nice and small.

Ignore it. Use Bankrate’s great loan calculator and figure out when you’ll get the debt paid off if you add in some extra to each payment.

My husband and I both have student loan debt of $10k each at around 3%, and a mortgage for $140 k at 6.75%. We have the option to refinance down to 5.1% but it would cost $3,000 into the principle. We’ve been paying the mortgage for 2 1/2 years, but have no plans to ever sell. The house is a rental property that we also live in, so the amount of mortgage, taxes, and fees and repairs we pay after the rents come in is only around $400/month, therefore allowing us both to save alot. We have no other debt.

Or would it be better for me to open a Roth IRA, or put my money somewhere else, or even pay my student loan off?? I doubt we would pay the mortgage down because we use the expenses against the income we get from the rents. My personal cash savings is earning no interest in my checking account (i know, i know, but this is why I’m working on this.)
- Danielle

First of all, funding a Roth IRA won’t get you a tax reduction, at least not today. Roth IRAs are funded with after-tax money.

Second of all, if you’re six months away from buying a property with a $25K down payment and have only $32K in joint cash savings, it is probably prudent to hold onto the cash until you have the purchase in hand. You do not want to find yourself in a position without a cash emergency fund, because when things go wrong at an inopportune moment, they can seriously snowball.

If I were to do anything with the savings, I would take $3,000 of it and refinance the loan. If you can drop the interest rate on $140,000 by 1.65%, you’ll be saving yourself a couple hundred a month in loan payments, which would pay back that $3,000 in a year or so and then leave you in better financial shape for the length of the mortgage.

Other than that, I’d sit tight until you’ve bought the property. I don’t see any major reason to change anything, assuming that the property buy is a definite thing.

Read this in your March 5 post: “…when my contract expires, I’m going to simply cancel the phone and get a pay-by-the-minute el cheapo phone.” I’d be curious to know how you go about choosing a pay-by-the-minute cellphone plan when the time comes. My husband and I would like to switch to a prepaid option as well, but each company structures their charges so differently that it’s hard for me to decide which plan would be best for us.
- Lynn

This is one of those times when I turn to Consumer Reports. What do they recommend when it comes to such pay-by-the-minute plans?

Right now, looking it up wouldn’t really help as I won’t be doing it for at least a few months yet. When it gets close, I’ll visit my library and start digging through the back issues of CR to find their most recent article about such cell phones (likely, it’ll be found in their most recent cell phone roundup). I’ll move on from there.

My choice will probably be the best “bang for the buck” phone rather than the cheapest one, at least with the “bang” being call quality. It’s not worth my money if I can’t easily place calls with the phone at my convenience, after all.

I’ve just read a document on “travel hacking” that gives tips on how to maximize your frequent flyer miles for free tickets. One of the tips is to “cycle” credit card applications where you are applying for a new Citi card (to get the American Airlines miles) every 60-90 days. It’s legal, but I wonder what it will do to my credit score. If I don’t need to apply for any loans in the near future, does a decrease in my credit score (now 790 I think) really matter? Thanks for your help!
- Jill

This will have a mild negative effect on your credit rating. However, with a credit rating near 790, I don’t think the negative effect will be strong enough to affect anything you might use your credit rating for.

My concern with such rampant credit card hopping is identity theft. To get each of these cards, you have to apply for a new card, which is another opening you’re giving yourself to identity theft. The threat of theft on any one application or card you have is minute, but if you have lots of cards and applications floating around out there, the chance multiplies.

Unless I’m already flying a lot and can directly save a lot of money by doing this, I would not view it as being worth the combination of time and personal risk. If you fly several times a year already as a normal course of life, then the benefits might outweigh the costs here, but if you’re only doing this to try to build up miles in case you might choose to fly somewhere someday, then it’s not worth it.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

Because so many people care so much for these two children, they’re often the recipient of gifts. Yes, their birthdays and Christmases are full of presents, but it even goes beyond that. Their grandparents often buy them spontaneous gifts. Their cousins sometimes literally give them their old toys and clothes. We even do it ourselves, though our influence is often in the form of books for their bookshelves.

This has a challenging side effect – the kids have accumulated an awful lot of stuff. Their toy boxes are overfilled. Their bookshelves are stuffed with books.

Several problems are made evident by this. First, it’s difficult to keep all of this stuff in order, simply because of the clutter problem. Second, it encourages our children to be overstimulated because as soon as they even have an inkling of being less interested in a particular item, they can just bounce onto another one. Third, they’re often much less enthusiastic about the wonderful gifts that their grandparents give them because they already have so many.

The solution is obvious: reduce the toy count. But how do you do this without upsetting the children?

My goals are very straightforward.

First, I want to reduce clutter. Dealing with clutter means more money sunk into stuff and more time spent cleaning it up. That means less money for the things that are important (like a less stressful career, deeply meaningful experiences, and so on) and less time for them as well.

Second, I want my children to enjoy life with less stuff around them. I do not want them to feel that lots of stuff is the norm.

On a smaller note, I want my children to increase their attention span. With a huge number of toys easily at their disposal, it’s very easy for them to just jump from toy to toy. By strongly reducing the availability of such items, the opportunity to jump around is less.

Here’s my solution for this problem.

First, I’m taking an inventory of which toys they like and play with frequently – and which ones they do not. I’ve actually been making a list of the toys that each child plays with over a multi-week period. If toys are on this list, they’re probably going to be kept. Toys that are not on this list are going to be targeted for removal.

Second, I’ll talk about the process with them. I’m going to ask them what their favorite toys are. I’m going to also tell them that I’m going to take some of the toys that they never play with and give them to other boys and girls that don’t have many toys to play with. Believe it or not, this works very well with our children, even the two year old.

Third, I’ll take advantage of a period when they’re visiting grandparents to reorganize and minimize their toys. When they return from their grandparents, I will have removed many of the toys from their sight, minimizing the clutter. What will remain are the toys I’ve identified as their favorite ones. The toybox will be only about half full (if that) instead of overflowing. The bookshelves will be filtered a bit (though I’m not as interested in reducing their book count).

Finally, I’ll keep the excised toys in storage for a short period, then either yard sale many of them or take them to Goodwill. The reason I’ll keep them in (hidden) storage for a short period is so that if I discover that I removed a toy accidentally that the children really value, I can retrieve it.

One thing I won’t do is discourage family members from giving them gifts. I understand that this is done as an expression of love for children that they don’t get to see as often as they’d like. Instead, I simply want to create a situation where these toys and gifts are deeply appreciated.

For a long time, we did some toy rotations so that the children would always have something new to play with. In my eyes, that doesn’t really achieve the goals I listed above. We still have a lot of stuff. It still doesn’t subtly teach patience and attention to the children.

Any thoughts on this plan?

Of course, me being me, I already have a long list of stuff to do – things that simply require some focused hours and are difficult to do when the family is around. Five years ago, I would have been headed to the golf course or to Prairie Meadows. Times change, I guess.

Lessons for you and me from Warren Buffett’s annual letter Warren Buffett’s annual letter to Berkshire Hathaway shareholders often has a lot of interesting personal finance thoughts in it that go far beyond mere investing. (@ pop economics)

The High Cost of Clutter Every time you buy something new and bring it home, you’re adding to the clutter of your home. It’s one more thing to stuff on a shelf. It’s one more thing to dust. It’s one more thing to maintain. It’s one more thing to take up space. Those are costs, both in terms of money and time. (@ get rich slowly)

6 Ways To Keep The Fire In You Burning This can be a challenge for anyone at times, no matter how much they love what they’re doing. (@ pick the brain)

My Valuable Downgrade “Upon completion of the final draft of my latest novel three years ago, I sent out an e-mail to my family and closest friends. Subject heading: “What Has Mark Been Doing for the Last Six Years?” The message field was empty.” Something about that opening really struck me. (@ soul shelter)

Save Money! Get a College Degree In Three Years If I had not been blessed enough to get scholarships to cover my tuition, room, and board, this is likely the college path I would have chosen. Whether I would have been successful at it is another story. (@ free money finance)

When Your Friends Become Social Sellers and Multi-Level Marketers Quite honestly, I view such a thing as directly cashing in on a friendship, far worse than asking me for a favor. I’d far rather spend an afternoon helping a friend patch up his roof than spend two hours at a Lia Sophia party. (@ consumerism commentary)

Kenny:

I listened to your radio discussion with Vicki Robin and I was really intrigued by the whole five year plan. I have a big dream I’d love to accomplish (being a radio host) but I feel like it’s so far from my life that I’ll never get there. Any ideas?

Scott:

In five year[s] I would like to have built my own house but I don’t even know where to start.

Angela:

I would like to be a writer someday but I’m not a writer.

Monique:

You have the courage and ability to try such a thing. I do not. I might want to be making clothing in five years but I’ll still be working in this office.

Em:

All I ever wanted to do was play in the WNBA. Now I walk with a limp and people shy away from me. I would do anything to be back in the basketball world.

Raghu:

I keep telling myself I will move back to that town and really make a difference there but it is a lot easier to go home at night, take a nap, and watch a movie.

Sean:

Nothing makes me happier than playing the piano. Nothing makes me sadder, either, because I know nothing will ever come of it.

All of these people have a lot of things in common. They have a dream, one that they spend a lot of time thinking about. They’re nowhere near that dream in their day to day lives. They feel as though the gap between where they are now and where that dream is may simply be too much of a bridge for them to cross. So they’re walking in place through a life that has much less meaning for them than they would have ever liked.

I was there once, in a way. I know exactly how it feels to sense that everything you’ve dreamed about in your childhood and in your adult life slipping away from you. I know how hard it seems to fight for it when everything in your life seems to be flowing in a different direction. And I also know how good it feels when you find some success against the current and can feel yourself moving in the right direction towards that dream.

If you know what you truly, deeply want out of life, but you can’t see how you can get there from where you are now, here’s how to get started.

First, get your financial house in order. This is paramount. It is almost impossible to make powerful, positive life changes if you’re swimming in debt and your spending is out of control. Learn how to spend less than you earn. Pay down that debt as fast as you can. It seems difficult, but it actually works quite well in conjunction with the other tips here.

Second, re-engineer your free time and your social circle. If you really want to make this work, you’re going to have to make time for it in your life. For most of us, this probably means some significant changes. Maybe you give up your thrice-weekly raid night on World of Warcraft. Maybe you can cut your television viewing by an hour a day. Maybe you can withdraw fr some of your social commitments.

Once you’ve decided what to cut, it’s just as important to decide what to add to replace it. Obviously, it needs to be something in connection with your dream – but we’ll talk about exactly what to choose in a minute.

It’s important to remember that these choices are simple. They’re little choices you can make every day. “Instead of spending an hour channel surfing or watching SportsCenter, I’ll work on a short story.” “Instead of going out shopping with the gals, I’ll go to the workshop and work on a painting.” “Instead of playing computer games all night, I’ll get intimate with my piano.” They are choices that you make in the normal flow of your life.

Third, find ways to share what you love. If you love a sport, volunteer to coach a youth team. If you love to play a musical instrument, play a song, record it, and share it with others. If you love to write, start a blog. If you love politics, volunteer for a campaign.

If you want great things to happen, other people need to have access to what you’re doing. If you sit in your home playing the piano for your own enjoyment, you’ll never find a way to make a living with it. You have to get out there and find others. Remember, anything anyone does for a living involves relating to others. We all have customers.

Do not worry about compensation at first. Compensation will come once you’ve built a good reputation and used the experience you’re getting to develop yourself into something better.

Fourth, know how to deal with failure. It will not come easy. Success won’t fall on your lap. It takes time. It takes sustained effort. It takes an awful lot of “no” before you start getting “yes.”

If you take into account the entire scope of all of the writing I’ve done in my life, I am a monumental failure as a writer. Any success I’ve seen has come in the last couple of years. Virtually everything prior to that point was met with “no” and “no” and more “no.”

Why? I wasn’t a good writer – I had some good ideas, but I expressed them poorly. When I did find myself able to produce something good, I hadn’t produced enough goodness and hadn’t shared what good I had done widely enough to actually get anyone’s attention.

It would have been easy to quit. But I loved writing – and I still do. It was always something that made me feel better. It brought me personal pleasure just to write. I’d get a rejection letter in the mail and, yes, it would hurt. But that didn’t mean I would stop writing.

I love writing enough that I would keep writing even if no one read what I wrote. The fact that people do read it – and that I earn enough from it to put bread on the table for my family – is incredible icing on the cake.

If you feel that way about something – it makes you happy regardless of what other people think and whether it makes you any money or not – that’s something you need to dig into. Chase it. Master it. Share it. Then worry about the question of making money – if you’re good at it and share it, the answers will be closer than you think.

Good luck.

Let’s say, for example, you’re in the situation that Paul, one of my readers who wrote in recently, finds himself in. He just took out a $219,000 mortgage. His monthly payment on that mortgage is $1,300.89. Paul wants to know whether paying half of the mortgage twice a month will save him a significant amount.

The first thing he needs to do is make sure that his mortgage allows early payments – and how they work. Make a call to your lender and ask them how often interest is compounded (this needs to be daily or compounded monthly based on the average balance of the month – if it only compounds monthly, paying in advance won’t help), plus how multiple payments during a month are applied to your loan (they must be applied as soon as received for this to work). Most loans work this way, but not all.

There are two options with making early payments.

First, Paul can literally make two payments a month – say, on the fifteenth of every month and on the last day of every month. This means, over the course of a year, Paul pays the exact same amount in principle that he would otherwise pay. The only difference is that on the fifteenth of each month, he pays in half of his payment and at the end of each month, he pays in the remainder of his payment.

In my calculations in Excel, I assumed monthly compounding using the average balance of the last month. Using this method, I calculate that this method will save Paul just over two months’ worth of balance on the mortgage. He’d save $2,931.33 in interest, which would mean he would be able to skip his final two payments and make only a partial final payment.

However, a superior method of doing this would be to simply make a payment equal to half of the amount of the monthly mortgage bill every two weeks. Over the course of a year, this adds up to one extra full payment: since there are fifty two weeks in a year, you’d make 26 half payments, and thus 13 full payments.

In my calculations, I again assumed monthly compounding using the average balance of the last month. I calculated that this method will save Paul $41,117.09 over the course of the loan. His final, partial payment would be issued just shy of five years early.

This method falls perfectly in line with many income schedules (the federal government, for example, issues paychecks every two weeks), which means that you can just allot a certain amount from each paycheck directly toward your mortgage and then not think about it again.

For me, at least, twice-a-month payments would not provide enough benefit to be worth the management hassle of them unless it happened to line up directly with my paychecks.

On the other hand, biweekly payments – once every two weeks – do provide a lot of financial incentive to give them a shot. Add on top of that the fact that it’s directly in line with many pay schedules and that would seem to be a winner to me.

In a nutshell, simply paying twice a month doesn’t save much at all, but paying once every two weeks saves a lot. Yes, one or two fewer days per payment can save you tens of thousands at the end of the payments.

Good luck.