Planet Money

Charlie writes in (this is an excerpt, because the full story is quite long):

What I finally realized is that I usually buy stuff because it makes me feel like this is all worth it for a while, that all the work I’m doing isn’t just going to feed Uncle Sam and to keep a roof over my head and cheap food on the table. But then I get the bills and I feel even worse than I did before.

The ups and downs of buying stuff (up) and then seeing the new wear off and facing the bills (down) is a rollercoaster, but at least it’s better than the mundane shuffle through life of just paying the mortgage and going to the grocery store and going to work over and over and over again. A completely frugal life is the most mundane thing I can imagine.

I think you’re going about this from completely the wrong perspective, Charlie.

First of all, frugality is not about giving up the things that bring you joy in life. It’s about figuring out what actually does bring you joy in life and accentuating that, then cutting back sharply on the things that don’t matter as much to you.

For example, if you don’t watch much television, a frugal decision would be to get rid of your cable box and just use the over-the-air signals – or, perhaps, selling your television off entirely.

A key part of that statement – perhaps the key part – is the if you don’t watch much television part. If you do enjoy television and you watch it multiple hours per day, then you shouldn’t cut back on it. You might, however, find that you don’t watch your premium channels much, so you might get a cheaper package – or you might not.

Another example: if you’re not home during the day, why would you bother to heat or cool your house during those hours? Get a programmable thermostat, install it, and set it to turn off your air conditioning or furnace during the hours where you’re not at home. Why? Because for virtually everyone on earth, keeping their home at a perfect temperature when no one is there is not a key value in their lives.

There are some things I don’t hesitate to spend money on. I will buy expensive cheeses and other ingredients for great home-cooked meals. I don’t skip on kitchen implements – I get stuff that will last forever. I don’t mind buying a book that I know I’ll re-read in the future. I’m currently shopping for a piano and I will happily pay the right price for the right piano.

Aside from that, though, I unabashedly cut corners. I make my own laundry detergent because, frankly, buying Tide doesn’t improve my quality of life. We use cloth diapers for our baby. I use vinegar to mop the floor. We have a single television in our house and it’s an old CRT television that has a discolored screen on one side of it. This stuff isn’t really important to me at all – so why would I spend anything more than the minimum on it?

Hand in hand with that is big, long-term goals. My wife and I have some large, long-term goals that are deeply fulfilling to both of us. Foremost among them is our long-talked-about home in the country, with trees around and a small barn in the back. We both want this deeply.

I have a picture that currently serves as my desktop wallpaper on my main computer I use for work. It depicts nothing more than a nice-looking farmhouse-style home surrounded on two sides by trees, with a red barn off to the left. It has a long driveway leading up to it and on the driveway, you can see a child running towards the cameraperson. That’s exactly what I’d like to have. (I’d happily shre the photo, but I think I’d get into copyright trouble if I did.)

I know that every time I choose not to have something that’s important to me, I take one step in that very long journey towards that dream we share. I look at that photo sometimes as I’m checking account balances and I feel very warm inside knowing that all of my little choices are slowly adding up to something we’ve both wanted for a very long time.

That feels good. That feels really good.

The combination of these two factors is that frugality enables me to reach for the big things I want out of life without giving up the little things that genuinely matter. The drawback? I’m not buying products that aren’t important to me.

Some drawback.

Mary and her husband set out to build a stock portfolio worth $25,000 as a college graduation present for each of their children. That’s a lofty goal. How did they do it? In her entry to the GRS video contest, Mary explained:

Here’s how Mary describes her method in a post at her site, Frugal to Rich:

When our children were born and people wanted to get a gift for the baby, we asked family and friends to give us the gift of money that we would invest for them. We felt this was a much wiser choice than some new toy that would soon be worn out or in which they would lose interest.

We set up a very low cost stock index mutual fund (such as VFINX), along with a general stock mutual fund for each child and started investing.

When the children were old enough to start working, we wanted to really encourage their frugal living and investing, so we made them an offer they could not refuse: For every dollar they contributed to their savings, we would match it — so they would double the amount of money they had to invest!

When Mary’s kids graduated from college (debt-free!), she and her husband transferred portfolio ownership.

I think this is a fantastic idea. It’s a great way to teach children about frugality, investing, priorities, and more. Do you know anyone who’s done this with their children? What other effective ways have you seen to teach kids about saving and investing?

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Related Articles at Get Rich Slowly:

• Beat the Market with Lazy Portfolios
• Workshop for Kids
• The Lazy Way to Investment Success
• Index Funds: Why Choose Anything Else?
• How to Build Wealth, Ignore Wall Street, and Get on With Your Life

Many newer readers of The Simple Dollar haven’t been exposed to the hundreds of great articles in the archives of the site, so this is a weekly series that highlights the five best posts from one year ago this week, two years ago this week, and three years ago this week. I call it … the Time Machine.

One Year Ago (July 25 – July 31, 2009)
Does Earning More Trump Frugality? To me, it’s kind of like asking if you still need a hammer after you buy a chainsaw. They’re both useful tools for getting the job done that can be used in concert for some amazing things.

Makers and Managers: What You Are, and How It Can Help Your Career I am 100% a maker. I do not like being a manager – at all. This fact actually explains a lot about my career path and the directions it has taken over the years.

John’s “Campground” – Some Thoughts on Investing with Added Personal Value John is investing his money in land – and, eventually, into the structures he’ll build on that land. He enjoys the process deeply and will someday have a great deal of financial value there.

Passion by the Hour In my eyes, the things you’re passionate about are the things that you can dump tons of time into while still deeply enjoying yourself. If you can channel that into earning income in some way, you’re far ahead of the career game.

Rule #7: Watch Your Progress – But Make It Fun. While keeping track of your progress towards big goals can be really empowering, it can also feel like drudgery. The best way is to keep your end goal in mind and recognize that you really are taking steps that will get you to where you want to be.

Two Years Ago (July 25 – July 31, 2008)
Some Thoughts on Being Broke and Being Poor I don’t address poverty on The Simple Dollar. I do address the state of being broke, which is more of a state of resource mismanagement than a lack of resources. The vast majority of people in the United States are broke, not poor. They have the resources needed to make it, they’re just dealing with the results of mismangement of resources in their past.

Overcoming a Habit of Lying to Yourself About Money Deceiving yourself is one of the most dangerous things you can do. Almost every time you see someone under a mountain of debt, some sort of self-deception is at the root.

Class Warfare and The Simple Dollar So often, people want to view personal finance advice as some sort of rich versus poor battle. In truth, both sides of the coin want the same things: more time and more security.

How to Deal with a Partner That Hides Money Problems Sunshine is the first step in the process – all of the issues have to be out on the table so that you have a starting point from which to build.

The Single Biggest Money Mistake I’ve Ever Made I think the real root of it all is that I listened to other people instead of to my own heart.

Three Years Ago (July 25 – July 31, 2007)
Which Is Best: Paying Off Debts Now – Or Avoiding Future Ones? Reasonable protection against future debts – i.e., an emergency fund – is an essential first step, but at some point you round the corner and start paying off the debts you have now.

Applying Jerry Seinfeld’s “Chain” Concept To Personal Finance The “chain” idea is still one of the best ideas I’ve ever heard. I’m using it right now with my piano lessons.

10 More Ways To Entertain Young Children For $1 Or Less (Without The TV) The best way to entertain your children in a valuable way is to just spend time with them. It really doesn’t matter what you’re doing.

Personal Finance In A Family Crisis For me, family crises are what emergency funds are made for. Sometimes, things happen – you have to fly to another part of the country to be with someone, fifteen sad people are sitting in a kitchen and someone has to come up with lunch, and so on.

Is It Worth Higher Prices For A Quality Shopping Experience? For me, once you reach a minimum level of quality – the store is clean and you can actually find what you’re looking for – then additional quality doesn’t really add anything beyond a higher price at the register.

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

Ten Ways to Get More out of The Simple DollarUpdated!
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5. 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.

6. 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.

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This summer, I’m going to be posting a series of fifteen low-cost, tasty, and easy-to-prepare meals that are literally straight from my own kitchen.

After returning home from two weeks of vacation, my wife and I planned out a very nice summery meal that would have made a great post for the Summer Meal Series. It required one key portion of the meal – either a pork shoulder or a few chicken breasts, depending on which way you wanted to go – to cook all day on low in a crock pot, then be used at the end of the day.

Yesterday morning, my wife and I woke up and planned out our day. She volunteered to get the pork shoulder cooking in the crock pot, after which we’d spend a pretty typical summer day at our house. She went downstairs, put it on to cook, and went on about her business.

That evening, we pulled the shoulder out of the crock pot and began to shred it with forks, which was part of the recipe (don’t worry, I’ll likely use it again near the end of the series!). We both noticed that this piece of meat had to be the toughest piece we’d ever met – it simply was not tearing apart at all.

Then Sarah realized what had happened.

Instead of setting the crock pot to cook on low all day, she set it to merely keep food warm all day. The shoulder we had in front of us was warm but completely uncooked. And, naturally, because raw pork had been sitting warm all day, it was a health hazard and had to be tossed out.

It’s now 6:45 PM. Our children are getting very hungry for supper and we want to get something tasty and kid-friendly on the table as quickly as possible. What do we do now?

We brainstormed. In about two minutes, we took a lightning-fast inventory of the refrigerator (remembering, of course, that we were pretty low on food since we had just returned from a two week trip) and the pantry. And we came up with a plan.

Tuna melts, with side dishes of sweet potato fries and a salad.

As we were preparing this substitute meal, Sarah suggested that I write about this entire endeavor. “Why not? These kinds of things happen sometimes in the kitchen, and we are coming up with a quick and fairly tasty substitute that isn’t just calling for delivery.”

We had the full meal on the table by 7:10 PM. Here’s what we did (I don’t have as many pictures as normal, of course, because we were running on extremely pinched time).

The ingredients for the tuna melts were simple. Buns, tuna, mayonnaise, tomato, pickles, and cheese.

All you do is take two cans of tuna, toss the contents of the cans in a bowl, and add a bit of mayonnaise. The amount you add is really up to you – the more you add, the runnier it will make the sandwiches. Then, swipe two teaspoons of pickle juice from the pickle jar and add it to the mix. Stir, stir, stir.

We then sliced up two tomatoes. On each sandwich, we put a big teaspoonful of the tuna mix, a slice or two of tomato, and a slice of cheese. These made for nice little sandwiches.

We then wrapped the sandwiches in aluminum foil and baked them in the oven at 375 F (about 190 C) for 10 minutes. In the end, we just had a plate of wrapped sandwiches on the table.

What about the sweet potato fries? Whenever we get a bargain on a bunch of sweet potatoes, we pre-make them into batches of sweet potato “fries” that our family loves. All we do is slice them lengthwise into quarter-inch fry shapes, then soak these fries in water for 30 minutes. When they’re done soaking, we pat them dry and put them into freezer bags in small bunches, freezing them.

When we pull them out of the freezer, we dump the contents of the bag into very warm water until we can separate the fries. We then dredge them all through a bit of olive oil, lay them out on a cookie sheet, and sprinkle a bit of salt and pepper over the top. They go straight into the oven under the broiler for about a minute, then we pull out the sheet, flip over all of the fries with a spatula, then put them back under the broiler for about a minute.

Once that was done, we left the fries in the oven to cook while the tuna melts were cooking – 375 F for 10 minutes. They were done perfectly – crunchy on the outside, a bit soft just under the crunchy, and a firm center. (I’m not the biggest fan of sweet potato fries, but my wife and children love the things.)

What about the salad? During the ten minutes that the other items were in the oven, I pulled out a lettuce mix we had picked up on sale at the store for a dollar, put it in a bowl, and put a bit of dressing in the bowl (actually, more than a bit – I poured in more than I intended to in the picture below).

I then added a few pinches of shredded cheese and a few leftover tortilla chips to give the salad a bit of crunch. I tossed it all together with a fork, leaving us a salad.

And that was our meal, from panic to dinner table in about 25 minutes.

It was a hit. Our children liked every meal element, as did my wife. I don’t like sweet potatoes myself, so I merely ate a tuna melt and a big pile of salad for dinner.

Here’s the big lesson to take home: a disaster like what happened at the start of this post is not a reason to order food and pay exorbitant costs for it. Be a little flexible. See what you can put together with what you have on hand. Most of the time, if you’re handy in the kitchen, you can quickly put together a reasonable meal in as lttle time as it would take for the deliveryperson to arrive – and much cheaper, too.

Along my financial journey in life, I made a great number of mistakes. In this ten part series which runs from July 19 to July 30, I’m going to focus on ten of my worst mistakes and the difficulties and successes I’ve had in overcoming those mistakes.

I had no specific goals, either in the short term or the long term.

That’s not to say that Sarah and I never thought about the future – we certainly did. The problem is that it was always in the sense of vague things that would happen “someday” and didn’t require any sort of active response today.

We dreamed of having a house of our own. I had a dream of a different career. We had dreams of having a certain number of children and providing all sorts of wonderful things for them.

Those are certainly great goals to have, but they’re so unspecific that they don’t mean anything. Worst of all, they didn’t require us to do anything today to start moving towards them, which enabled us to keep wandering through life.

A good goal, no matter how big it is, gives you an exact target to shoot for, a way of measuring your progress towards that goal, and the possibility of activity today to move you towards that goal. None of our goals back then had any of these things, which is why they weren’t really goals at all, but pipe dreams.

What woke me up and made me realize that something was wrong with this type of goal-setting was the fact that we were actually moving further and further away from these goals as time went on. As we got more into debt, we moved further away from having a house of our own and further away from my dreams of being a writer. We certainly weren’t doing a good job of financially providing for our son.

As we grew into our late twenties, we began to see that our big “dreams” were slipping away from us. It was a very, very painful time, one that shook us into making some serious changes in our lives.

What changed? One big change is that we started talking about these kinds of things in more detail. What did we both really want from our lives together? What do we need to do to get there? What can we do today to start moving us there? Addressing these questions with seriousness helps you quickly figure out what things you really want from life and whether you’re willing to work hard to have them.

The lack of goals earlier on in our lives cost us dearly. If we had these types of specific goals with specific plans in mind when we graduated from college – or even earlier – I shudder to imagine where we would be at right now.

How can you avoid this trap?

First, set the kind of concrete, tangible goals I describe above. As I said, a good goal gives you an exact target to shoot for, a way of measuring your progress towards that goal, and something you can do today to move towards that goal. If you’re having difficulty coming up with these things, it might be a sign that this isn’t really a key goal in your life (which isn’t a bad thing at all – getting rid of goals that you’re not committed to makes room for the goals you are committed to).

Second, constantly remind yourself of that goal. No day should pass without at least a bit of reflection on what you can do today to move towards the goal – and actual action on that idea. Again, if you’re not willing to take the daily action, it’s time to reflect on whether or not those goals are really in line with what you want out of life.

Finally, be willing to share these goals with others. Support from those most important to you can really make a difference in terms of whether you can achieve the things you dream of. Talk to those people about your goals and how you plan on getting there. Don’t be afraid to ask for help, particularly through the rough spots. It’ll make more difference than you can imagine.

I do my best to cover a variety of topics here at Get Rich Slowly. Personal finance is a v-a-s-t topic, and there’s a lot of specialized knowledge. But there’s no question I have blind spots. Because Kris and I have no kids, I don’t write much about children and money. Student loans are another blind spot for me.

Still, I know a lot of GRS readers have questions about student loans. You folks e-mail me all the time with questions I can’t answer. But I finally realized that instead of ignoring your queries, I should put a few of them out for reader comment.

For example, Megan recently wrote looking for advice on coping with student-loan debt. Here’s her story:

I got my degree from a small private university in Wisconsin, a school that I loved, but that in the end cost me $55,000 in student loans. That total (as I just calculated) is up to $63,630(!) because of interest since I graduated in 2008.

After taxes, I only make $1280 a month, and my loan payments total about $637 each month — almost 50% of my income! I can make the payments no problem, but it leaves very little money left over for savings, retirement, and even just fun money. A second job isn’t very feasible since I’m in the military and I can get (and have been) called into work at a moment’s notice.

Do you have any tips or advice on what I can do about my loan payments? Right now, the majority of my loans are on ten-year repayment plans, which I like since I don’t want to be in debt forever. Consolidation would lower my payment, but nearly triple the interest I’ll have to pay over the years, and would also increase my payment plan to 30 years. (I’d be 54 by the time I’d pay them off!)

Is there any other way to get through this that I just don’t know about?

Again, I know very little about the ins-and-outs of student loans. Based on the information Megan provided, though, I agree that consolidating the loans probably isn’t a good idea. I’d rather keep the ten-year term. (If she’s disciplined, though, Megan could consolidate and then opt to make accelerated payments on her loans, much as Kris and I chose to do with our mortgage.)

In either case, part of the problem will fade with time. Some of this is a function of time. Megan will eventually take higher-paying jobs, and as her income increases, she’ll be better able to handle her student loans. The $637 monthly payment that seems like a stretch on a $1280 monthly income will seem very manageable on $3000 a month or $5000 a month.

Until then, however, it’s vital that she keep her other expenses in check. She should do what she can to avoid the “lifestyle inflation” that often comes with an increased salary. Instead of spending her raises, she should be especially diligent about using them to pay off the student loans, and to save for retirement.

Because I have no experience with student loands, I don’t have any specific advice for Megan — just these general thoughts. Do you have advice for Megan? Is there anything she can do to decrease the drag her student loans place on her budget until she’s able to earn more money? Are there any other student-loan tips or tricks you can share?

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Related Articles at Get Rich Slowly:

• Ask the Readers: So Much Debt, So Little Time?
• Federal Student Loan Consolidation Primer
• Reader Story: Tackling Debt Through Volunteer Work
• How Many Credit Cards Should You Carry?
• Reader Story: How I Paid Off $18,000 in Student Loans While Still in Graduate School

Along my financial journey in life, I made a great number of mistakes. In this ten part series which runs from July 19 to July 30, I’m going to focus on ten of my worst mistakes and the difficulties and successes I’ve had in overcoming those mistakes.

I surrounded myself with friends who constantly encouraged poor financial choices.

Most of my social circle during my early professional years consisted of people who placed a great deal of social worth on consumption. Respect and friendship were doled out based on the elecronics you owned, the clothes you wore, the golf clubs you had, the places you ate at, and so on.

If you showed up to a social event with a new cell phone or a new driver, the gang would gather around you with high-fives and looks of awe and respect and envy for the items you had.

On the flip side, if you had an old cell phone or didn’t wear great clothes or used old golf clubs or hadn’t eaten at the best restaurants, you were gradually excluded from the conversation and, eventually, excluded from the social events as well.

I made a valiant effort for a few years to run with this crowd. I dressed wonderfully. Sarah and I ate at tons of nice restaurants. I had the latest gadgets, including piles of video games. I went out with the gang a few nights a week. The list went on and on.

It was just a giant game of oneupsmanship. Rather than building real relationships based on the realities of our lives, everyone just talked about stuff – and who had the best stuff. Why talk about long term goals when you could brag about your new golf club? Why discuss how to get ahead at work when we could trash talk someone for wearing slightly worn clothing?

In order to stick with this crowd, though, a person had to spend – and keep spending. Every single person in that group was living beyond their personal means. I suspect that some of them had parental help, but I’d be willing to bet all of us had some level of credit card debt.

What happened to this social circle when I finally got some sense about personal finance and realized I was driving my future into the ground? Almost universally, I was dropped from the group. They laughed at the idea of making a meal at home when you could be dropping $100 for a plate at a steakhouse. They stared at my beat-up cell phone. Soon, they stopped calling and inviting me to do anything with them.

Yeah, it hurt. What I realized from the experience, though, is that these people weren’t my friends. They cared about stuff, not about me. They only wanted people around them to reinforce the over-the-top spending decisions they were making.

Think about it this way. It’s a lot easier to spend $3,000 on a handbag if you have a circle of friends that talk reverently about said handbag and will ooh and ahh over it if you buy it, compared to, say, a circle of friends that wonders why on earth you would spend $3,000 on a handbag.

My current circle of friends is much, much different. We get together for regular potluck dinners. We play board games around the kitchen table. We have conversations about life goals and about ways we can maximize our bucks and our time. We share clipped coupons with each other. We laugh together and goof off together.

In short, it’s an environment that supports a healthy flavor of personal finance management. We don’t socially reward over-the-top consumption. Instead, we socially reward insightful discussion, good humor, and good life choices.

Having such a circle makes it so much easier to be in financial control. There is no social expectation of spending. Instead, there is a social expectation of rational use of money and time, of investing for the future and thinking about the future, of exploring the handful of hobbies that are actually important to each of us.

My biggest mistake was not investing the time to find a social circle that matched these values to begin with. Instead, I simply started hanging out with the first people that I had even the smallest interest overlap with and I wound up adopting that group’s values for a while rather than seeking out others that may have matched my own.

How can you avoid this trap?

First, don’t believe you have to change who you are or what you value just to match what your social circle wants. If you’re buying things or doing things that mostly only serve to impress your social circle, it’s a great sign that you’re perhaps not in the right circle of people.

Second, seek new friendships in the right way. Let your own true values and interests lead you to these people. Engage in groups that match the things you want to do – don’t engage in activities just because that’s where you think people are. The bar/club scene come to mind – I’ve met so many people who basically can’t stand going there, but they continue to do so simply out of a desire for social interaction. Broaden your horizons and start seeking people based on what you value, not based on what you think they value.

Finally, don’t hide who you are. This doesn’t mean you have to hang out all of your dirty laundry, but it does mean that you shouldn’t have to hide some significant aspect of what you value or who you are. If you’re in a group that won’t like you because of some aspect of who you are, it’s time to find a different group. If you’re in a group that won’t respect you because you’re goal oriented or in charge of your finances, then it’s time to find new friends.

This article is by staff writer Adam Baker. Baker previously featured an article on his own blog entitled “How I paid off $15,000 in 9 months by selling my Stuff on Ebay“.

There I was, bustling around the kitchen making lunch for my daughter when our late morning routine was interrupted:Boom! Boom! Boom!

Milligan and I glanced toward the front door where the thunderous pounding had originated. “Holy cow!” I thought to myself, “There are only two groups of people who knock like that! This may not be good…”

Luckily, as I slowly opened the door, there was a stocky little lady in her late forties or fifties (with no badge). “Afternoon,” she said. “I’ve some packages for you… several packages for you. I’m gonna need some help carrying these around to the door.”

I started to tell her she must have the wrong house before I caught myself. “Whoa, that was fast”, I thought. Only 48 hours earlier, I’d been sitting in front of my computer cautiously ordering over 300 boxes of various sizes from United States Postal Office.

Free Boxes from USPS
For a while now, I’ve be aware the postal service provides free boxes when you ship through its Priority or Express Mail. Back when Courtney and I were purging all of our possessions in preparation for the year we spent traveling abroad, we had even stopped by our local post office to pick up several dozen of them.

But I recently discovered that the USPS will actually ship the boxes to you…for free! In fact, it’s painfully easy. Currently, there seems to be two different ways to order free boxes:

• The USPS Online Store. If you’re willing to take 30 seconds to register an account on usps.com, you can order directly from the post service. This gives you access to dozens of different box and envelope sizes. The website quotes you 7-10 business days, but my huge order only took 48 hours! Here’s the direct link to access the Priority Mail section of the USPS Online Store.

• USPS-eBay Partner Website. Alternatively, you can order free boxes with only your eBay account (no separate account needed with USPS). These boxes are also only for Priority Mail, but are branded with both the USPS logo and eBay’s logo. Unfortunately, you can only order 6 different sizes with your eBay account, but there is a decent variety offered. For more information, check out the eBay Supplies partnership on USPS.com.

When you order online, you can select between a pack of 10 boxes or a pack of 25 for each different box size. You can also order between 10 and 100 envelopes in a single batch. I personally ordered an assortment of 25-packs from each site and received them all within two business days! Now I’ve just got to get through all these boxes!

The Catch?
While the boxes are really 100% free, you can only use the free Priority Mail boxes for… Priority Mail. USPS is very strict on this rule. You won’t be able to use the boxes to ship Media Mail, First-Class, or Parcel Post. However, if in a fit of frugality you decide to use the boxes to wrap Christmas presents, you should be okay as long as no family members are undercover USPS agents!

Priority Mail is the default shipping method for many people who buy and sell on eBay. Packages normally arrive inside the 2-3 day quoted time frame, and the delivery confirmation and tracking (both free when ordering postage online) are important to a smooth transaction.

Whenever Courtney and I ship packages, whether it be through eBay or for family/friends, we almost always send them Priority Mail. So for us, we’ll eventually weed through our new shipment of free boxes!

Avoid the Post Office Altogether!
If you’re shipping a package via Priority Mail, the ability to order free boxes online means you can avoid the post office altogether! You could order the boxes, pack the item at home, print postage online, and even schedule a pickup for your outgoing shipment. That’s right: USPS will come pick up deliveries that contain at least one package that is Priority or Express Mail.

I have to admit that being at the post office isn’t one of my favorite pastimes. Courtney and I will continue to sell our unneeded stuff on eBay (we also sell stuff for our extended family); the process will just no longer include any trips to the post office. Being able to go through the entire shipping process from our home office is much simpler for us!

Oh — and if you know anyone in the Indianapolis area who could use some free boxes, let me know. I have a couple extra laying around!

Photo by Courtney Baker.

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Related Articles at Get Rich Slowly:

• Cheap Moving Boxes
• How to Use the Amazon Marketplace for Fun and Profit
• What To Do About Stolen Mail?
• How to List an eBay Auction for Maximum Profit
• How to Get (Nearly) Free Stuff from eBay

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. A pile of problems
2. Financially helping a boyfriend
3. Vinegar and water for cleaning
4. What debt comes first?
5. Subsistence farming
6. How much term insurance?
7. Thoughts on iPad
8. Entrepreneurship gone bad
9. Cell phones gone wild
10. Powdered homemade laundry detergent

Taking a five day trip, followed by a two day break, followed by a six day trip, all with three children under the age of five, is not a good idea. I officially need a vacation from vacation.

I’m having severe financial troubles and have no clue as to how to proceed. I’m 48 and unable to work due to disability (but I have been denied several times for disability benefits). My husband, who is 43, has been unemployed for a year and a half. He was working at California Closets in the shop previous to that. We have been living on his unemployment check ($1600 per month) and now that has ended. We’ve moved in with my parents and have applied for food stamps. It simply can’t get much worse than this. Oh but yes it can. We have about $10,000 in credit card debt and $2500 in medical bills. (I know, I know…. stupid!!!) We had been keeping up with these payments when he was receiving unemployment but now cannot pay them and are accruing late fees. We can’t even file for bankruptcy because we did that 4 years ago when our business of 10 years (retail bookstore/gift shop) failed. I’m mad at myself for letting things get this bad and I feel helpless and stupid that I’ve made so many poor financial decisions in the past. If you were in my situation, what steps would you take. What should I do?
- Kim

The absolute first thing you need to do is to figure out what work you’re capable of doing. If you’re being denied disability benefits, clearly there is an opinion out there that you are capable of some level of work. Seek out employment services that can help you with this, because it can sometimes be difficult to make a good self-assessment in a situation like yours.

You also need to remember that the debts you have now have no collateral, so not paying them for a while won’t result in repossession of anything. It will result in further damaged credit and a good deal of harassment, however.

You’ve got a rough road ahead, at least in the short term. Patience will be your best friend here.

I bought a house last year with my boyfriend of 3 years. 1 month after closing he was laid off from work. Unemployment insurance gave him enough to pay bills/mortgage. He did not want to share any financial information with me, and I knew he had debts. I offered to help out with budgeting and his general financial well being and he was against it.

We also had a very tough year personally, family-wise. He never budgeted or practiced being frugal before we met, and continued this after we started living together. It is 1 year later and he just got a job that pays very little. I calculated he can pay the mortgage with little left over for bills (his half). Then there is no money for food, paying off debt ect.

He is continuing to look for a better job. He finally let me in on his finances. He has 7K in CC debt, with ridiculous interest rates. I am having him do a balance transfer on a 0% CC (if he gets approved), or a lower interest CC. Also there is about $600 in other debt (doctors, things that aren’t financed). He had said he never thought about all the fees, and money he was giving away with his spending, and bad CC’s rates. He has 1K in savings and a 401K from a previous job. He has cut his spending, created a budget, understands this is a problem, and we are on the same page now, but much damage has been done. He has no money coming in to pay his debts.

I work in a creative field and am lucky to have a comfortable income. Last year I got a significant raise and have been saving a lot, I did not make much money previously. Also I am frugal, coupon cutter, and am upset that my boyfriend did not care about his finances. What should I do? We are not married, and the mortgage/bills need to be paid. How long am I suppose to cover him? He thought we would be married by now, but being laid off sort of paused our lives. Not being able to get married is upsetting to him, making him feel like a failure. I feel I am in a tough situation. Our families act like we are married, but we do not combine finances. I also do not want to be the sole provider. I can afford the total mortgage on my own, does that mean we should keep the house? I did not plan for this at all. I have 2 thoughts: #1-I work hard for my income and do not want to carry him. #2- I get upset that all these fees, interest charges, could be money for saving to have a child, so if I don’t help him out, it would effect me in the long run.

How long are you supposed to cover him? The answer to that question is the same as another: how long do you think this relationship is going to last?

Your last paragraph seems to hint at some very serious trust issues in your relationship, as well as some incompatible values. If you can’t get those things on the same page, your relationship is not going to be one for the long term, and you’re better off moving on now.

If you are thinking this is going to be a very long-term relationship, then his debts are effectively your debts, because they steer what you’re going to be doing in the future.

If you’re sticking around out of some kind of obligation to take care of him, you shouldn’t. He’s an adult and can make his own choices in life.

You need to answer for yourself whether this is a relationship that is going to last. If it is not, move on.

What proportions are best for floor cleaning w/ vinegar & water? thanks for your advice….using this will be so much better than the expensive Swiffer products & other harsh, harmful & costly products.
- Donna

I usually use equal amounts of water and vinegar, and use full-strength vinegar on tough stains. I do this on both hardwood and linoleum surfaces and I haven’t seen a problem yet.

Considering the huge jugs of vinegar you can get for just a little bit of pocket change, this is a pretty cost-effective way to get the floor clean. You don’t need too much of the liquid as long as you have a good mop to work with.

Actually, that brings up another good point – the better your mop is, the easier the cleaning is, regardless of what cleaner you’re using. I trust the recommendations in this article over at Real Simple.

I am 25, recently married (2 months ago), my wife is 26. I currently work in web development making $44,000 per year (about $2600 per month after tax). My wife is a high school english teacher and unfortunately was part of budget cuts this past school year and is now unemployed. She is collecting unemployment now until we can find her a new job (it may not even be this fall given the job market) So she will be collecting unemployment at about $1860 per month.

We currently have the following debt:
Mortgage: $276,000 (bought house last year at 5%)
Car Loan: $7,000 (at 5.9%)
Car Loan: $3,200 (at 5.2%)
Student Loans: $11,000 (about $184 per month)
No other debts. We have about $14,000 in retirement savings, and another $27,000 in high yield savings accounts (at 1.3%). I try to sock away $1,000+ per month into those savings from our monthly income.

My question is what should I do with the money? I’ve contemplated knocking off the car loans to get them done with, but don’t want to reduce our savings too much to do it. What’s your take on the situation?

The first thing I would do is make sure you can make ends meet with your current income level, and also with the income level that you’d have if your wife’s unemployment runs out. If you’re not going to be able to make ends meet easily in those situations, I wouldn’t use up the emergency fund too much.

If you do decide that paying off debts is a good move – and it certainly might be, because it will improve your monthly cash flow and your long term net worth if you don’t have to dip into debt in the future – I would pay off the lowest balance one first, because that will provide the most direct benefit to your monthly cash flow.

I’d also encourage your wife to take on any work that would bolster her resume, even if it’s unpaid. Things like working at educational-based summer camps, getting involved with America Reads/America Counts, or anything along those lines can be a real boon. The more experience she gets teaching children and the more things she gets on her resume, the more likely it will be she can find a teaching job down the road.

I am a 20 year old girl living in an apartment in Raleigh NC with my boyfriend. I work part-time as a nanny to pay the bills and he works part-time at a moving company so we have a very modest income and no savings. We have a shared dream of some day, hopefully sooner than later, moving into a moderately sized house on a large area of land where we can grow our own vegetables in a greenhouse and raise a family and perhaps even adopt a few more dogs and some chickens. The problem is is that I have no idea where to start. I’ve been a city girl all of my life and because I am not going to college and I am underemployed, home ownership is still a distant dream. Do you have any tips for me as far as how to become a subsistence farmer with little experience and no money?
- Melissa

Trying out subsistence farming with little experience and no money is pretty much begging for absolute failure.

If you want to learn the ins and outs of small scale farming – and you’re only working part-time – get a part time job for a small-scale farm. Tell them your story and that you’re willing to work hard in order to learn how it all works as something of an apprentice.

I can tell you from experience that if you want to grow lots of fruits and vegetables or raise animals, nothing trumps experience. The more experience you have, the easier it will be to start things on your own without a long series of outright failures.

I work at a relatively stable job and my employer offers a life insurance policy of 6X times my annual salary for just $8.23 per 2 weeks. I plan to purchase this policy as the premium is so low for such huge coverage. However, I fear that this policy would lapse if I get laid off. And so, I wish to purchase term insurance from a 3rd party such as Metlife or such Insurance companies.

So, I am wondering if I should reduce the coverage of my employer-sponsored life insurance policy to 3X times my annual salary and get the other 3X times my annual salary from a 3rd party insurer.

Can you offer any thoughts or opinion on this matter? It would really help me.

That plan makes quite a bit of sense. In essence, you’re spreading out the risk.

Obviously, the plan offered by your workplace is less expensive than virtually any other life insurance you’ll probably find. It comes with a risk, though – if you lose your job, you lose the insurance. Splitting the policies in this way spreads out the risk.

My only suggestion would be to keep a careful eye on your employment status and get an additional policy if you lose your job.

I’m starting a four-year PhD course in September. I’ve just finished my undergraduate course (graduating with a First) and in total I’ve read over 550 papers (and that’s just the ones I kept track of in my EndNote library!). At the moment I print out most papers that I read, carry them around, read them, highlight bits and make brief notes on them, and then put them in a big pile. I’ve been wanting for a while to make this (a) easier, (b) more environmentally friendly (although I do recycle all of the paper afterwards) and (c) reduce my hugely high printing costs.

After asking around on various internet forums it seeems that a tablet computer would be a good bet, and most people seem to suggest the iPad. Leaving aside the issue of whether the iPad is the best device to purchase, the question is: should I buy one?

I’ve tried to crunch the numbers. Assuming I read around 200 papers a year, and using a rough length of 20 pages per paper it will cost me around £100 a year for paper and printing costs.

The price of the iPad in the UK (including academic discount) is £429. Working on the price saving above for one year leaves £329, or if I carry it through for all four years of my PhD then that only leaves £29! That’s ignoring the other uses of the iPad – both those related to academia (such as proof-reading coursework) and non-academic.

If I only count one year’s savings then the price that’s left (£329) is just under one hour’s work a week for a year (based upon my PhD stipend and the hours I’m meant to do) – which seems very reasonable.

However, this is a substantial financial outlay at the moment, especially as I’m getting married next year (projected to cost around £3000) and then setting up home with my new wife.

What do you think? It’s not necessarily your place to advise I know, but I was trying to apply some of the principles I’ve learnt from your blog, but still don’t know what to do!

Before you worry at all about what to buy, make sure that you really understand your need first.

From what I understand here, you’re struggling with the ongoing cost of printing out research papers for your studies. Based on my own experience, you’re probably annotating them in some fashion. You also need the papers to be very portable.

A tablet computer does solve most of those concerns. However, don’t just limit yourself to the iPad. There are a lot of other tablet computers out there (like these). A netbook may also be a great solution for what you’re trying to do.

The real danger I see here – and it’s one that I’m guilty of myself – is seeing a particular gadget or other item and imagining in your head all of the problems that it could solve in your life. The problem with that kind of thinking is that often, you’re not solving real problems, just imagined ones.

Your best bet is to always go through your life and just look for things that pop up again and again that could be done in a better way. If you think to yourself every night that your bed is uncomfortable, a mattress might be a good buy. On the other hand, watching a mattress ad and thinking to yourself, “That looks comfortable… I’d better buy one,” is not a good personal finance solution.

For me, at least, I’ve had an ongoing list of features I’d like to see in a tablet computer, a list I’ve kept for years. These are all things I do all the time that would be massively simplified with a tablet. As the apps from the iTunes Store get more and more robust, I’m beginning to believe that the iPad actually is that device.

In December 2007 I bought a franchise. It was in an area that was a passion for my wife and I while fulling a dream of entrepreneurship. Unfortunately the economy decided to poop on my dreams. Essentially we opened our doors for business in November 1st 2008, and closed them Oct 28th 2009. We filed bankruptcy and our house was lost in foreclosure. That was all settled in February, all except for one small detail. WE have an $80,000 SBA loan held against an investment property that my in-laws own. I could have let that mortgage go and saved our own home in the process but chose to keep the debt and do what I feel morally obligated to do. My in-laws would have had to either pay that debt or lose the rental.

Fortunately I still have my day job (they allowed me to go part time while starting the business) and it has kept us afloat. We lived with my in-laws for about 6 months until my family’s sanity was just about gone… Now we are currently renting very close to my office at a pretty good price for the area, $925, any lower and the places get much less safe and with a 4 and 2 yr old, that’s not something I will risk for $150-200. My wife has just gotten a job at my work and so the kids are hitting daycare.

Hear’s the breakdown. Between us we will be making about 75-80K a year (without any bonuses). $1108 a month for SBA, $925 for rent, $330 for my wife’s car and $1200 (OMG) for daycare. I think we went to every daycare possible within 15 miles…

I sold my car, and got a cheap motorcycle to have something to drive. We don’t have cable or home phones and the only extra we have is internet (got a great promo deal after pestering Comcast for a couple of weeks…). I am building my e-fund, albeit slowly, but this extra $80K SBA loan is killing us. There are no other debts and I just want to be done with it so I can move on, pick up the little, tiny, demolished pieces of my dreams put them in a box of mementos and stick it in the attic. Oh wait I rent and apartment now… Stick it in the storage unit then.

How can I deal with such a LARGE debt?

To put it simply, you deal with it slowly but surely.

Paying off this debt is all about cash flow, period. The less you spend in a given month, the more you have to contribute to that debt.

Right now, you have a handful of major expenses eating up your cash flow. $925 a month for rent? You’re significantly delaying the payoff date of your loan by moving out of your in-law’s house. $1,200 a month for child care? Given the other opportunities your wife would have to save money as a stay-at-home mom (for example, babysitting during the day, preparing home-cooked meals, etc.), is that really saving you money?

What about that $330 a month car payment? Do you need a car that requires $330 a month? Wouldn’t a low-end used car get the job done and let you channel $250-300 more per month into that loan?

If you’re reacting to these comments with defensiveness, you’re thinking about this the wrong way. Paying off a giant debt means making hard choices, ones that sometimes make us uncomfortable. Yet, the debt is also making you pretty uncomfortable, too. You have to answer some hard questions about what’s best for your entire family.

Potential entrepreneurs: Aaron is the face of exactly why it’s so important to have all of your ducks in a row before you jump into business ownership. The more debt you take out at the start, the bigger the risk is, and Aaron’s story shows loud and clear how painful the downside can be.

I recently visited the Verizon store with my husband (a minor stuff hoarder and chronic upgrader) We were replacing the 2nd phone he ruined due to water. (fishing and then walking in the rain). Before we were married, I was fine with dial up internet, one home phone and no TV. Now we have Verizon FIOS bundle with HD, sports and outdoor TV, internet, land line phone and 2 cell phones. Anyway, back at the Verizon store, he wanted a droid because it takes pictures you can send to your email and it is new cool technology. (I suggested he just take our camera with him and he rolled his eyes) With quite a bit of effort, I was able to pull out all the costs from the salesman. It is an extra $10/month just to have the droid, another $30/month to have internet service and it costs to send the photos or text. I went from spending $30/month on all this a few years ago to $250/month with growing costs on all this technology that just makes my life more complicated. I love my husband and want him to be happy and am fine with having these things now. We can afford it but deep down, I have difficulty with my feeling that we are being blindsided and ripped off.
- Laura

You’re not being blindsided or ripped off. It sounds like you have two top-of-the-line phones with unlimited data plans and unlimited texting. Those are all going to cost you – and those are all unnecessary services.

It sounds like your husband has a gadget addiction and, even more worrisome, he doesn’t take care of the gadgets he already has. You’re being blindsided and ripped off, but it’s not by Verizon. It’s by an addiction to gadgets.

You have a choice to make. You can either just sign off on all of this stuff or you can have a sit-down with your husband and make some hard choices together. It’s up to you.

Trust me, though: gadget escalation gets more and more and more expensive. There really is no limit to it except for what you impose on yourself.

Curious if you have ever tried the powdered versions of the homemade laundry soap. I love the homemade soap concept (especially having a 5 month at home, so we need perfume and dye free soaps) but the idea of storing 5 gallons seems like a headache. Seems like I could store a pretty big supply of powdered detergent in a small Tupperware. Any experience on this?
- Jeff

You can certainly make powdered soap, but it takes a bit longer to make.

Just use my homemade laundry detergent recipe. Just use the three solid ingredients:

1 cup washing soda (I use Arm & Hammer)
1/2 cup borax (I use 20 Mule Team)
1 bar soap (I use whatever’s cheap, in this case Pure & Natural)

Grate that bar of soap with your finest grater until it’s basically powder, then put it in a large quart jar along with the other ingredients. Shake the jar thoroughly – for two or three minutes – until everything’s evenly distributed. Keep a lid on the jar and put it in your laundry room.

When you’re about to do a load, use two tablespoons of the powdered detergent. Start filling the machine with water, add the detergent, wait a moment, then start adding the clothes. You’ll be good to go!

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.

This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and getting her kids to eat kale at Childwild.com.

Travel is a gift. We get to see new places and cultures, meet new people, and expand our lives. Most of us, when we’ve put the time and money into traveling somewhere special, want to treasure the memories.

There’s a large industry to support that desire. Gift and souvenir shops in the United States pull in over $17 billion a year, according to Hoovers. And gift shops are just the tip of the iceberg. Souvenirs range from cheap t-shirts with cheesy slogans to beautiful handcrafts made by local artisans.

Here in Buenos Aires, I can shop at an open air market for leather goods, a national speciality. Or I can cram my bag with the country’s signature cookie, the alfajore, on sale at the airport’s duty free shop.

These options all have one thing in common: they cost money. Sometimes a lot of it. Prices are often marked up to take advantage of travelers’ relaxed grip on their pursestrings. In the seaside town my mother lives in, locals sneer about “tourist taxes” on the picaresque New England crafts and gifts visitors buy.

What’s a frugal traveler to do?

For starters, here are some simple, free ways to capture the magic of your experience:

• Photographs: Most people these days have a camera, even if it’s only the one attached to your cell phone. If you’re taking a large or exotic trip, you might want to consider investing in a decent camera. Photographs last a lifetime, and with digital technology you can take as many as you want for no more cost than the initial investment in the camera. Better yet: They’ll bring back the memories of your personal trip, not the generic tourist scene a postcard or T-shirt conjures up.
• Scrapbooks: The everyday stuff you pick up can be priceless scrapbook material. Like photographs, these are more personal than a published guidebook, because they show where you’ve been and what you’ve done. They don’t have to be elaborate works of art either. I’m not much of a scrapbooker, but in the weeks we’ve been in Argentina, I’ve collected bookmarks, cafe menus, and ticket stubs to paste into my journal from this trip. I still enjoy leafing through similar travel journals from trips I made ten years ago. I’m sure I’ll treasure this one too.
• Journals: Journaling your trip can take many forms. I’ve kept daily diaries whenever I’ve traveled. Other travelers I’ve known have kept detailed itineraries of their trips, so they can look back and remember every play they saw and meal they ate. Still others use their spending logs to jog happy memories. A few created photojournals that are just a few lines of text around daily images.

If you’d like to do some shopping while you’re traveling, you can stretch your souvenir dollars to get the most value. One easy way to do that is to avoid shopping in the main tourist areas; step off the beaten path when it’s safe to do so. If you speak the local language or have local friends, you’ll have an easier time finding authentic deals and avoiding traps.

Remember, too, that in many parts of the world, haggling is the norm. The price you’re quoted for your treasure is probably higher than you’re expected to pay. Don’t be afraid to negotiate. Guidebooks or friends can tell you if haggling is typical in the areas you’re visiting, and how to go about it.

Choose your souvenirs carefully. Ask yourself, is this something I’ll want to own, once I’m home? A box of beautiful artisan-made jewelry is just junk if it’s gathering dust in a closet. Only buy things that you’ll truly value and use, just like you would at home.

Travel can be a great place to take care of some shopping needs. Since my husband is badly in need of a new wallet, he’ll probably buy one here at the open air market this weekend. Visiting an open market is a lot more fun than visiting a mall, and he’ll save money by buying what he needs here where leather goods are relatively inexpensive.

Apply the same rule of thumb to gifts. We all want to bring a little something back for the loved ones we’ve missed while we were away. But there’s no law that says we have to take a pile of stuff with us. Choose something small that they’ll appreciate and use. I’m taking my mom some Argentine wool, for example. My mom is mad for knitting, and Argentina is famous for wool. It’s an ideal gift, and an inexpensive one.

Let the market work for you. Most places have a few products they’re well known for. Here in Argentina, those things include leather, wool and wine. Buying these local specialties can be a great value. You’ll get great quality, for less money than you’d pay for those goods if you bought them from an import shop at home. In many cases, you’ll be able to get things you can’t get back home for any money.

The trick, of course, is to shop just like you would at home: Seek out the best bargains on good quality items. Don’t go for overpriced, cheaply made junk just because it has “Made In The Country I Traveled To” stamped on it.

Choose quality over quantity. Whatever you buy on your trip, you’ll have to bring home with you. Rather than weighing down your suitcases with Stuff, choose a few simple, small gifts and souvenirs. Or just stick with the inexpensive, creative options I talked about first. I haven’t met a grandparent yet who wasn’t happy receiving a photo album of their grandchild’s recent adventures as a gift.

Finally, remember: Less is more. You’re unlikely to get home and wish you’d bought more of those adorable little carved wooden statues of pigeons. The less money you spend on souvenirs, the more money you’ll be able to put into savings for something really precious: your next trip.

Photo by Di the Huntress.

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Related Articles at Get Rich Slowly:

• The Frugal Photographer
• The True Cost of Souvenirs
• My Frugal Life
• Money and Values: When Frugality Goes Too Far
• Save Money with a Frugal Buyers Club

Along my financial journey in life, I made a great number of mistakes. In this ten part series which runs from July 19 to July 30, I’m going to focus on ten of my worst mistakes and the difficulties and successes I’ve had in overcoming those mistakes.

I treated my credit card as my emergency fund.

In late 2004, the brakes failed (in a nearly catastrophic fashion) on my 1997 Ford F150. For whatever reason, the brake cylinders chose to collapse as I was attempting to stop at a stoplight. I nearly caused a very large accident, but I managed to get stopped after swerving into another lane and running a red light.

The repair bill was pretty significant – about $300 more than I currently had in my checking account. I remember standing there flipping through the four or five credit cards I had at the time, trying to figure out which one had enough available credit to cover that bill.

Personal finance 101 would have kept me out of this situation, but I didn’t have enough sense to have planned a bit for this brake problem. Instead, I believed that having some credit available on a credit card was just as good as an emergency fund.

That’s just horrible, horrible planning. Here’s why.

Let’s say, on average, I have a major emergency that costs $1,000 once a year in my life. A car breaks down. A job is lost. A family member is ill and you need a plane ticket. There are countless emergencies that can happen in life, so I’m just using that $1,000 once a year emergency as an example.

If you sock away $20 a week into a savings account earning 1% interest, you’ll have that $1,000 once a year when you need it. The brakes aren’t a concern, nor is that emergency flight you have to take. Plus, you’ll earn a small amount of interest on that money – $5 to $10.

If you just spend that $20 a week on something unnecessary – and that’s what you will spend it on, because almost everyone has $20 worth of fat in their weekly budget – when the emergency comes, you’re putting that $1,000 on a credit card. At that point, you’re now making $80 a month payments on that credit card instead of socking it away. Even worse, you’re paying 20% interest or so on that credit card, meaning that over the course of the year, you’ll have to make two or three extra $80 payments just to cover the interest. And while you’re making those $80 payments, you’re not socking away $20 a week for the next emergency, so when that next one hits, you repeat the cycle. You’re giving away $200 a year to the credit card companies and forgoing some savings account interest as well.

We’re not even talking about the extra risks of relying on credit cards. What happens if the emergency hits and you’ve already got a hefty balance on your cards? What if the bank lowers your credit limit and then suddenly your transmission falls apart?

None of these risks – and countless others – apply if you simply have a cash emergency fund.0

My first mistake was not having a cash emergency fund, of course. This put me up for all kinds of risks, ones that came to a head with my own financial meltdown in early 2006 when I could no longer pay my bills.

The second mistake, tied directly into this mess, was carrying a balance on my credit cards. Credit cards are a great tool, but they’re really only useful if you don’t carry a balance forward from month to month on them. If you start carrying a balance, you’re going to pay dearly for that balance in the form of very, very high interest rates.

Add the two together and you’re running on pure borrowed time, hoping that you don’t ever have more than one or two emergencies at once. Because when that happens, you’re going to find yourself in a bad place, with damaged credit, banks harassing you for their money, and a big helping of added stress in your life.

How can you avoid this trap?

The answers are really found in the mistakes I mentioned above.

First, don’t carry a credit card balance. I think credit cards are a fine tool to have if you can use them responsibly, and responsible credit card use means never carrying a balance. How do you do that? Never put anything on that card that you don’t have the money in your checking or savings account to cover.

Second, start building a cash emergency fund. The easiest way to do that is to set up an automatic savings plan. Open a savings account at a particular bank of your choice, then set up an automatic transfer from your checking account to that savings account. $20 a week is a healthy place to start because after a year, you’ll have $1,040 in your account (plus some more thanks to interest). Use that cash when something unexpected gobsmacks you.

The biggest thing, though, is to recognize that emergencies happen – and they happen more often than most people think. Our minds do a fantastic job of making our crazy disorderly lives seem pleasant and ordered. The biggest crisis in the world seems like nothing more than a speed bump after a little bit of time. Allowing yourself to be comforted by this and thus using that comfort as a reason not to build an emergency fund is one of the biggest personal finance mistakes that people make.

All through my life, I’ve spent time memorizing various poems. The Road Not Taken by Robert Frost. anyone lived in a pretty how town by e. e. cummings. Pioneers! O Pioneers! by Walt Whitman (probably my favorite).

I like the way the sounds roll off the tongue and paint pictures. I like reciting them (or pieces of them) to my children. I like the flavor of the words.

How to Adopt an Attitude of Gratitude Lately, I’ve been focused on seeing the good in every situation. There are many situations where it’s easy, but if you look deeply, there is good in every situation. (@ dumb little man)

Wants that Morph Into Needs This is lifestyle inflation and it’s one of the most dangerous opponents people have to building a sustainable free life. (@ personal finance advice)

See The Impact When You Donate To Charity I think the big reason that many people struggle with charitable giving is that it feels like a “give and see nothing in return” exchange. I don’t think there’s anything wrong with wanting to see what your money is going for. (@ christianpf)

I’m So Judgmental. I Want to Conquer This! Any Suggestions? Everyone has their own path. You can’t fairly judge others by the path you’re on. It’s like comparing a track sprinter’s times to that of a cross-country skiier. (@ happiness project)

It’s So Easy to Talk About Lunch I love this. If you want someone to talk, give them something very easy to talk about. Seth suggests talking about what to have for lunch, because everyone has an opinion. (@ seth godin)

Ask Unclutterer: Encouraging kids to help out at home My technique is to do it in very small timed batches. Our kitchen clock has a countdown timer, so we’ll designate a very specific task – “Pick up the Lincoln logs!” – with a very specific time frame – “Can we get it done in five minutes!?” – and then set the timer. The immediate focus and the short term really helps our kids (ages four and two) to take care of their stuff. (@ unclutterer)

This is a guest post from Jeff Yeager, author of the newly-published The Cheapskate Next Door. Yeager calls himself the Ultimate Cheapskate — and his wife agrees. Yeager is also a contributor at Wise Bread and on the Early Retirement forums.

“Sure, we could afford to spend more, but why would we? It wouldn’t make us any happier.” — Those are the words I’ve spent the last two-and-a-half years traveling the country to hear. It’s a simple but rare statement, given that nearly half of all Americans say that they literally live paycheck-to-paycheck and have little if any savings.

How can some people live not only within their means, but substantially below their means — even when their incomes are often less than the national average? And here’s the biggest question of all: How can some of those same people insist that they’re happier — joyous, really — because of their thrift and frugality?

I traveled thousands of miles — nearly 3,000 of them by bicycle! — and surveyed more than 300 of my beloved “Miser Advisers” to find the answers. In my new book, The Cheapskate Next Door, I share what I discovered about people and families — many of them just like you — who not only know how to stretch their money, but who are more content and happier because of it. The book also includes hundreds of their practical, money saving tips — ideas that anyone can use every day.

Some of what I found may not surprise you. These frugal folks:

• Despise debt and have found creative ways to eliminate it from their lives.
• Differentiate between “needs” and “wants,” and between “affordability” and “borrow-ability”.
• And, yes, most own and still wear at least one article of clothing dating back to the Carter administration (or earlier).

But other findings surprised even me, The Ultimate Cheapskate.

For example, only about 10% of the thrifty people I talked to have a written household budget (“we live our budget — it’s second nature — we don’t waste time writing about it,” one cheapskate said). While they have savings in the bank, less than 15% have a formal “emergency fund” (“an emergency fund is for people who don’t have their financial house in order otherwise,” another cheapskate said). And more than nine out of ten say that they think, worry, and stress-out about money less — not more — than their non-cheapskate peers.

The Cheapskates Next Door are 100+ times more likely to have a dog or cat adopted from a shelter than one purchased from a pet store, are far more likely to own a crock-pot (or several) than an IPod or flat-screen TV, and they divorce at less than half the national average.

These aren’t your miserable, Scrooge-like cheapskates. These are folks who know what’s important in life, and they skip the rest. Here’s a glimpse inside the mind of the Cheapskates Next Door:

• Cheapskates say, “The Joneses can kiss our assets.” Cheapskates are highly self-confident and proud of their frugal lifestyles, caring very little about what others think of them and even less about things like buying designer brand names and keeping up appearances with the Joneses.
• Cheapskates are immune from buyer’s remorse. Most shoppers eventually regret nearly 80% of the discretionary items they buy; but cheapskates are “premeditated shoppers” and, because of it, are largely immune from buyer’s remorse. Nearly 90% of the cheapskates surveyed say they “never” or “rarely” regret a purchase. And they don’t shop for “recreation” or “therapy,” which is one reason they prefer shopping at thrift stores (with a more certain selection of merchandise) than wasting time shopping at yard sales.
• Cheapskates appreciate appreciation (and depreciation, too). Other than when buying a house, most people usually don’t think about whether something will increase or decrease in value after they buy it. Cheapskates are tuned into appreciation/depreciation, often preferring to buy antique furniture (like the Amish do) that will retain/increase in value, and buying everything from cars to computers to clothing used, rather than new, so that the first owner pays for most of the depreciation.
• Cheapskates know that the best Things in life aren’t things. Social science has shown that Stuff tends to disappoint us over time, but experiences — how we spend our time — is what adds true value and meaning to life. Cheapskates value their time, and the things they can do with it, more than money, and the things they can buy with it.
• Cheapskates answer to a higher authority. For most of the cheapskates polled, it’s truly not about the money. Nine out of ten cheapskates say that their decision to live a more frugal life isn’t about trying to amass a big savings account; rather it’s primarily grounded in some higher ideals, such as religious beliefs or environmentalism. That’s why, of the cheapskates polled, they donate nearly twice as much to charity as the average American.

While most of the cheapskates I surveyed are lifelong devotees — having practiced frugality since long before the recent recession made it more fashionable — I kept asking myself while I was writing the book whether or not thrift is truly here to stay, particularly for the nouveau cheap. Will conspicuous consumption spring back to life faster than you can say “bailout” or “liar loan?”

I’m not at all confident about the answer. But the very last question in my survey was a hypothetical: Someone drops a million bucks on you tomorrow, how would it change your life? More than 9 out of 10 cheapskates, in so many words, said that it wouldn’t change their lifestyles in the slightest.

“Honestly,” one couple told me, “it would just serve to reinforce what we have already learned — that we have Enough right where we are, and we realize that is a gift most people don’t ever choose to receive.”

J.D.’s note: Though I haven’t had a chance to read The Cheapskate Next Door, I liked Yeager’s earlier book, The Ultimate Cheapskate’s Road Map to True Riches [my review].

Also: By a happy coincidence, Mr. Jeff Yeager, the Ultimate Cheapskate, passed through the Portland area on his cross-country bicycle book tour yesterday. He and I spent a couple of hours cycling through the Oregon countryside while chatting about frugality and other related subjects. Here’s a poor-quality photo of us crossing the Willamette River by ferry:

Dig my gigantic helmet and my awesome reflective vest. We sure look like a couple of dorks!

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Recently, I came across (via jason kottke) a brilliant commencement speech given at Princeton by Jeff Bezos, CEO and founder of Amazon. The main focus of Bezos’ speech was the difference between gifts and choices. Here’s an excerpt:

What I want to talk to you about today is the difference between gifts and choices. Cleverness is a gift, kindness is a choice. Gifts are easy — they’re given after all. Choices can be hard. You can seduce yourself with your gifts if you’re not careful, and if you do, it’ll probably be to the detriment of your choices.

He goes on, near the end, to illustrate the idea a bit more directly:

How will you use your gifts? What choices will you make?
Will inertia be your guide, or will you follow your passions?
Will you follow dogma, or will you be original?
Will you choose a life of ease, or a life of service and adventure?
Will you wilt under criticism, or will you follow your convictions?
Will you bluff it out when you’re wrong, or will you apologize?
Will you guard your heart against rejection, or will you act when you fall in love?
Will you play it safe, or will you be a little bit swashbuckling?
When it’s tough, will you give up, or will you be relentless?
Will you be a cynic, or will you be a builder?
Will you be clever at the expense of others, or will you be kind?

When I was in college, I took a course on the theory of programming languages – fairly arcane computer science stuff. For some reason, I just got the material. It just really, really clicked in my mind.

At the end of the semester on the day of the final, there were two people (myself and one other student) in the class who had cinched an A regardless of our performance on the final, which was obviously a relief. I vaguely knew the other student, so after the final was over, I caught up with him just to somewhat debrief on the class with someone else who really got it.

What I came to find out is that the other student with an A had put an absurd amount of work into the class. He had studied and studied. He had stayed up late working on every project. He told me, quite sincerely, that he had invested more time in that class alone than he had in all of his other classes combined that semester.

My ability to get an A in that class was a gift. His ability to get an A in that class was a choice.

Every single person out there has gifts. Some of us are very gifted with the ability to make friends easily. Other people have an innate understanding of a particular topic. My mother and my grandmother and my uncle all share a gift for sketching, a gift I simply do not have. They could (and still can, in my mother’s case) sit down with a pencil and a sheet of paper and make an amazing sketch of almost anything you can name. My mother virtually never does this, but on the few times I’ve seen her do it, I’ve been blown away at the quality of what she can produce.

Every single person out there has a life full of choices. You’re choosing what to do with every moment of your life, whether it’s work or practicing the piano or watching The Real Housewives of Duluth, MN.

Quite often, a series of choices can make up for the lack of a gift possessed by another. The story above about the student in my computer science class is a perfect example of this. I find it’s true in my own life, too.

I have always had a very difficult time being social with people I don’t know very well. It is only through a conscious choice to continually work on my social skills that I have been able to engage successfully with groups of new people and build quite a few great positive relationships in my community. By no means am I a social master, but for a very introverted guy like myself, the ability to walk into a community event, greet and be greeted by several people, and usually have one long conversation or two before I ever reach my seat is a sign that a series of conscious choices can make up for a missing gift.

However, the real home runs occur when a person knows their gifts and makes choices to accentuate that gift.

All you have to do is look at the truth of how the top people in any field have reached that point. Yes, they’re resting on some natural gifts, but those gifts are virtually always cultivated by countless hours of practice and other hard choices. Kobe Bryant didn’t wake up one morning being the best basketball player in the world. He has natural gifts, no doubt, but he constantly makes very difficult choices in terms of his practice regimen, his diet, and other areas of his life. The result? Five rings, a pile of awards, a ticket to the Hall of Fame, and more money than he can count.

In other words, people pay money to see the results of gifts matched with choices. The real message here is that gifts are certainly a help, but it is choices that really take you places.

That’s why I’m a firm believer that people should follow their passions. A passion means that you’ll constantly be making those hard choices that build something exceptional. Like that student in my class who stayed up all night working on theory of programming language projects, the results of chasing a passion are usually very strong.

Combine them with a few gifts and you have something amazing. Something people will pay money for.

It’s Tuesday afternoon. What choices will you make today to build that amazing future? Will you choose to spend less money? Will you choose to stay up all night getting that project you’re working on just perfect? Will you go home tonight, pull that canvas out of the closet, and put some paint on it?

The choice is yours.

This post is from GRS staff writer April Dykman.

I’ve discovered that one of the biggest benefits to being a full-time freelancer can be one of its drawbacks: setting ones own schedule. Don’t get me wrong, it’s the reason I wanted to get into freelancing in the first place, but I keep wondering if I’m working enough. Am I getting enough done in a day? How often should I take a break, and for how long?

It sounds like a minor consideration, but breaks during the day can have a positive effect on productivity.

Work like Leonardo
In many work environments, there’s an expectation that working longer and harder equals greater productivity. Whether explicit or implicit, the employee who works through lunch, evening hours, and weekends is often perceived to be more productive than an employee who takes regular breaks and works more reasonable hours.

But rewarding the nose-to-the-grindstone mentality results in bad judgment calls, mistakes in execution, less creativity, and more aversion to risk. Jim Loehr and Tony Schwartz write about the importance of mental recovery in their New York Times Bestseller, The Power of Full Engagement:

The key to mental recovery is to give the conscious, thinking mind intermittent rest. In his provocative book, How to Think Like Leonardo da Vinci, author Michael Gelb poses a wonderfully revealing question, “Where are you when you get your best ideas?” Gelb has asked this question to thousands of people over the years, and the most common answer he gets include ‘in the shower,’ ‘resting in bed,’ ‘walking in nature,’ and ‘listening to music.’ We ask our own clients a similar question and their answers have ranged from taking a jog to meditating to dreaming to sitting on the beach. ‘Almost no one,’ Gelb writes, ‘claims to get their best ideas at work.’

Gelb also notes that as prolific a scientist, inventor, and artist Leonardo da Vinci was, he took regular breaks and naps, even to the frustration of his employers. Da Vinci wrote, “It is a very good plan every now and then to go away and have a little relaxation…When you come back to the work, your judgment will be surer, since to remain constantly at work will cause you to lose the power of judgment.”

Power napping around the world
In some countries, the afternoon siesta is part of a normal workday. Greece, Italy, and Spain incorporate the lunchtime nap, and have lower incidents of heart disease. A study by the University of Athens showed that working men who took a nap during the day had a 64% lower risk of dying from heart disease.

Long working hours and high stress levels in Japan have led to the creation of a new official cause of death — karōshi, or “death from overwork.” In response, some Japanese companies have started to limit overtime hours and bring the power nap into corporate culture. In fact, an an employee’s dedication to their job is often judged by the frequency in which they engage in inemuri, or “sleeping while present.”

Coming to America?
At the average American company, it’s socially unacceptable to take a nap during the day. (Though it is okay to fuel up on coffee and Red Bull, which is nowhere near as effective in revving up after the afternoon dip in energy.) But that’s starting to change.

Snoozing in the middle of the workday was once seen as lazy, but more and more companies are realizing that naps increase productivity, thanks to studies like NASA’s that showed that a nap of just 26 minutes can boost performance by 34%. Napping rooms have started to pop up in the U.S., from small companies like Yarde Metals in Pelham, New Hampshire to giants like Nike. U.S. trucking and rail industries have napping policies, and many hospitals are starting to look into it. Procter & Gamble, Cisco, Stanford Medical Center, Carnegie Mellon, and the Jetsetter Spa at Miami International Airport have installed EnergyPods, napping chairs with noise-canceling headphones and gentle wake-up calls.

How you can recharge
If your employer has yet to embrace corporate napping, you could still get some shut-eye if you have an office (with a door) or live near work. Sleep scientist Sara Mednick and author of Take a Nap! Change Your Life, recommends a 20-minute nap sometime between 1 p.m. and 3 p.m., right after lunch. Any more than that, and you might have a hard time getting back to work.

If a nap is out of the question given your schedule or work environment, Loehr and Schwartz recommend taking recovery breaks during the day. Walk outside for some fresh air, chat up a coworker about something not related to work, or eat your lunch at a nearby park.

As for this type-A personality, I’m starting to build breaks into my schedule every two hours to recharge and avoid burnout. Leonardo da Vinci would approve.

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Along my financial journey in life, I made a great number of mistakes. In this ten part series which runs from July 19 to July 30, I’m going to focus on ten of my worst mistakes and the difficulties and successes I’ve had in overcoming those mistakes.

I bought many expensive (and inexpensive) items without adequate time to enjoy them.

One of the most cathartic things I did in the immediate aftermath of the choice to turn my financial life around was to simply go through our apartment in order to collect stuff to sell in order to give a big initial boost to our debt repayment.

What shocked me wasn’t so much the amount of accumulated stuff, but the amount of stuff that I owned that I had invested virtually no time or energy in. Piles of unplayed video games, some still in shrink wrap. Mountains of nearly-new paperbacks, many with just some sunlight exposure, most of them unread or barely-started. Piles of CDs listened to maybe once or twice. Multiple sets of golf clubs – and piles of golf balls. A large trading card collection and a large vintage baseball card collection, neither of which had been touched in years. A closet full of nearly-new clothes. Pieces of computer hardware uninstalled.

Simply put, there were tons of things that I had purchased and barely used. Why? I had so many things that I could be using that I didn’t have nearly enough time for them all.

Obviously, my situation is a bit extreme, but over the last few years, I’ve been repeatedly shocked to find how many of my friends and family members have done similar things on a much smaller scale. Unused exercise equipment. Unused DVDs. Barely-worn clothes jammed in the back of an overstuffed closet. Video game consoles played for about five hours and then stuck into a closet. One friend had a never-used Dyson vacuum cleaner in the closet that had been sitting there for more than a year.

These experiences reveal several very vital personal finance mistakes.

First, I used shopping as a substitute for actual entertainment and other experiences. Instead of enjoying the things I already had, I devoted time and energy into the acquisition of more things. A much more worthwhile use of that energy would have simply been directed towards enjoying the already-acquired items.

Second, those purchased items, left unused, are an incredible waste of an investment. As soon as most of the items were purchased, they became much less valuable, passing from “new” to “used” in terms of resale value. They then sat around for a long time, doing nothing more than taking up space, not even repaying some of their value in terms of the entertainment or joy they could provide. Even if I had just mindlessly bought a new game when I defeated the previous one or bought a new book when I finished the one I was on or bought a new CD when I had listened to the one I previously purchased a few times or bought a new DVD when I watched the last one I bought, I would have been in much better financial shape. This doesn’t even touch on the fact that I would have been even better off wisely using rental strategies and other techniques to still get all the enjoyment I would ever want with even less financial investment.

Finally, the clutter of unused stuff takes up time, space, and energy. How do you keep 500 DVDs organized? It’s much, much easier to keep ten organized. It takes less time and space. It takes less maintenance to dust them and keep them clean and presentable. The same is true for everything else in your home. The more you have of something, the more time it takes to maintain it – and the more it costs to maintain it, too.

What can you do to avoid this trap?

The first step is to get your shopping habits under control. Eliminate the purchases you’re making that don’t directly address needs. If you’re buying something that you’re not going to go home and use immediately, reconsider the purchase. Consider instituting a “one in, one out” policy for your non-essential items. In other words, if you buy something new, you have to swap out or sell something old to make room for it.

The second step is to seek out less expensive sources for the things that you do actually buy that fulfill needs and direct wants. If you’re a movie fanatic that buys four DVDs a week, subscribe to Netflix instead. If you’re an avid reader, hit the library to get your new release fix. If you’re a gamer, join GameFly. If you like music, use services like Pandora. Join community groups that focus on your particular hobby. Look for online groups that seek out bargains in your area of interest.

The next step? Thoroughly use items you acquire before you move on to another one. If you pick up a book, read it (or at least give it a fair shot) before getting another one. Even better, get rid of the items that you won’t pick up again. Make your collections consist of the ones that you truly love and intend to revisit with some frequency in the future.

Doing this for the things you accumulate will make a tremendous difference in your financial state as well as the space, time, and energy you have to devote solely to maintain your stuff.