Why do you shop at your preferred grocery store?

Think about it for a minute. What reasons do you have for shopping at one store over another? Is it purely the prices? What about the location – is it because it’s close to your home? Cleanliness (like my Aldi story a while back)? Store organization? Convenience? Shopper rewards programs? How they treat their employees? How their company behaves? Availability of certain specific goods? Cost to get in the door (a la Costco and Sam’s Club and B.J.’s)?

All of these (and more) are factors when you choose where to shop. Some stores are going to excel in one area or another and do poorly in other areas. A store that excels on prices will often tank in other areas, like employee treatment (like Wal-Mart). A store that excels on prices and employee treatment fails on cost of admission and organization (like Costco). Experiences in some of these areas will also vary from place to place.

My choice of store centers around a handful of factors. At minimum, a store has to have a certain level of cleanliness or I’ll turn around and walk out.

I won’t bother to go more than about three miles farther than the nearest grocery store to shop, but that rule includes Hy-Vee, Wal-Mart Supercenter, Aldi, Fareway, Dahl’s, Sam’s Club, Super Target, and Cub Foods, so there’s plenty of choice in that range.

I tend to prefer stores where it’s easy to find what I want – the more bad experiences I have wandering around trying to find something, the less likely I am to come back, even if the prices are great. After that, prices rule, in my book.

I’m not too worried about the shopper’s reward policies or their corporate behavior, and the cost of entry issue mostly comes down to “do I save money over the long run.”

What am I left with? I have a handful of stores I prefer to shop at (topped by Fareway) and another handful I’ll stop at for specific sales or specific items.

That’s great and all, but why am I writing about this?

First of all, the sticker price is rarely the bottom line. Almost always, if I strictly chase the absolute lowest price on an item, I end up costing myself more because of the additional costs.

For example, I won’t drive an extra ten miles (and spend that extra time) to save an extra dollar. The automobile wear-and-tear and maintenance costs will eat the savings and you’ll have spent a chunk of an hour chasing that imaginary dollar. I’ll happily spend an extra dollar at a different store to save me that twenty minutes and the wear on the car.

Second, a bit of planning trumps most of the other factors. Be patient on your staples, for example, and don’t be afraid to buy a lot of them when the right price comes along. This requires some planning, of course, but it allows you to buy the items you need from locations that are acceptable for you, ethically or otherwise.

An example: I would have to drive significant extra mileage to hit a CVS (around here, DrugTown is the most common drugstore chain) in order to take advantage of their bargains. What I’ve learned, though, is that patience, planning, and coupon use often trumps their bargains elsewhere, which enables me to not have to spend time and money traveling to CVS to get a “bargain.”

So what’s the best solution?

For me, it’s simply a matter of knowing and using a small handful of local stores, being patient, and hitting the good sales there hard.

Knowing two or three local stores makes them convenient and increases my ability to find things in those stores, making shopping trips faster (and time is money).

It also allows me to narrow my searches for sales. I only really pay attention to a few different grocery store flyers when planning my grocery shopping. I pay attention to coupons, but only in the sense of “this is a coupon for a staple, let’s clip it and see if it eventually matches a store sale.” This attitude saves a ton of time.

In a nutshell, patience trumps “super” bargains for me in that it saves me time and allows me to be choosy about where I shop so I can take advantage of the other aspects of grocery shopping (like convenience and being able to easily find items).

My four year old son and three year old daughter have been playing the board game Kids of Carcassonne almost constantly the last several days. They’ve roped grandparents into playing it, parents into playing it (I’ve played it countless times), and are even playing it just against each other.

I couldn’t be prouder.

This week, I tried to link to some blogs that I haven’t linked to before. There are a lot of good people out there writing personal finance stuff and I tend to link more to sites of the people I read frequently. This week, I made an effort to explore some other sites.

10 Key Characteristics of Debt-Free People (of Modest Means) I think nine of the ten apply to me. The one I disagree with is self-confidence – I really don’t have much because I have a very hard time reading other people and understanding where they’re coming from. (@ len penzo)

Investing Fiasco or Reminiscences on the Past There’s something about her writing style I really like… the phrase “banks were growing like mushrooms after the rain” made me really smile. (@ the kitchen sink)

What does Bush Tax Cuts mean to an average Joe? What did I get out of this article? The people that really benefited from the Bush tax cuts were people making more than $68,000 a year. Everyone else got … pretty much nothing. (@ wealth informatics)

10 Reasons Not to Buy a New Car I’ve become fairly ambivalent on the new vs. used issue, assuming that neither choice causes you to go into any sort of debt. (@ grad money matters)

Many financial “gurus” are in the seminar, coaching, and classwork business. They come up with course materials and attempt to sell them at a very high price to individuals who are scared for their financial future.

Some of these coaching programs are reputable ones. Many of them are not. Almost every week, I receive an email or a note from someone telling me about how these courses have made their life worse. Here’s one such story, from Ann (with specific references edited out, because I’m not interested in a specific libel war):

I take responsibility for the mistake I made in signing up for the coaching program, after expressing interest in [his] programs on his website. I was vulnerable after the death of my mother and wanted some guidance in dealing with a small inheritance.

The more I engaged with the various people at [that organization], the more I felt I’d been completely scammed. Overpriced, simplistic e-courses, coaching that is nothing but more sales pitches, shady business practices … you name it.

In the end, at least it woke me up and I took back some power by insisting that they give me my money back. I did eventually get most of it back, though still feel ripped off. These guys employ the worst business practices I’ve ever seen in my life. Refusing to respond to phone calls. No refunds after 3 days after enrolling, when how could you possibly know the program would be like at that point? Any reputable business is happy to keep their customers happy. Talking to these guys was surreal.

Through this experience, I lost every ounce of respect I had for [that person]. It truly was simply a scam. [...]

Like I said, I know it was my responsibility that I made the mistake of getting into the stupid program. It’s just horrible to see how these people prey on vulnerable types. They literally refused to provide me with a breakdown of the costs for the program components. What they were pro-rating me broke down to something truly outrageous like several hundred dollars an hour for coaching. A total scam.

For anyone who fell for the sales pitch, go after your money! I stood up to them and it did work. It also helped that I disputed the charges to them on my credit card, based on the fact that I didn’t receive the product I was sold. This did work.

This happens with an uncomfortably large number of personal finance courses out there. I have heard many, many horror stories that match Ann’s or worse, including people who have dumped (literally) tens of thousands of dollars into coaching and classwork only to find themselves worse off than they were before.

What’s the reason for this? Quite simply, such programs are sold as having all of the answers you need – but they don’t provide answers that you don’t already have. The material that makes up almost all of these seminar and coursework programs is information that you can gather on your own on the internet or from your local library. They’re just packaged together well.

The biggest thing that such courses provide that you can’t always find elsewhere is cheerleading. They take ideas that are already out there – like spending less than you earn, avoiding debt, and so on – and couple them with a strong “you can do it” attitude. Many of them also include some one-on-one coaching.

For some people, that’s really helpful. For many people, though, that same coaching benefit is available on blogs like The Simple Dollar for free My twice-weekly mailbag, for example, is the equivalent of someone standing up at a seminar, telling their problem, and having the people in the room talk about it.

My simple advice is this: never, ever invest in a course or a coaching system where it’s not absolutely clear in writing what you will gain from that course or coaching system. Make sure that you’re actually gaining something far beyond what you already have access to for free (or minimal cost) via sites like The Simple Dollar or the books at your local library.

If you want additional help or are interested in camaraderie, try to find a money buddy in your life or see if there are any personal finance groups at your local library or your local community center.

The route to personal finance success is not found by dropping hundreds or thousands of dollars on classes and coaches. It’s found from a desire for change inside of you and a willingness to step up to the plate and make changes in your own life. Spending thousands won’t give you that, and the exact things you need to do to actually make financial success happen can be found for free or very low cost elsewhere. That money spent on coursework is money that could be better used putting your financial life together.

Yes, there are good courses out there that help people, just as there are some sharks in the water. Even with the good courses, though, there’s a lot of expense for the coaching and coursework and, at the same time, a lot of opportunity to do it yourself.

Telling you this is literally costing me thousands of dollars. I’ve been asked to be an “affiliate” for many such courses, where I get paid a chunk of the money earned in order to convince people to take such courses, and I’ve even sat in on a few and read the materials from several of them. I won’t do it for one simple reason – I don’t talk about things on here that I myself wouldn’t use. And, to put it simply, I never have and will not use money courses until I’ve exhausted every resource available online or at my local library.

Reading For a long time (about two years), I got in a rut of reading very generic horror and fantasy novels. I would go to the bookstore, pick out two or three, and blow through them in a week, enjoying the rush but completely forgetting about them within three days after finishing.

This routine was fairly expensive. The books I was reading were in mass market paperback, so I could pick them up for $7 each, but the cost of three of them a week was $20. That’s $1,040 a year.

I decided to focus on reading some fiction that would make me think about the world and stick with me longer, so I adopted a list of Pulitzer Prize winners for fiction as a reading list. The problem was that when I first went to the bookstore to find early entrants on the list, they were unavailable. I eventually turned to my local library (and to PaperBackSwap) to read the books – and the cost of reading went down with this new challenge.

Gaming For several years, I was a heavy player of Magic: the Gathering, a collectible card game (J.D. at Get Rich Slowly also played). My wife also played, but not as competitively. It can be addictively fun to play, but in order to keep playing and acquire new cards to change the gameplay, a player has to purchase new packs and single cards. This can really add up if you’re not careful, to the tune of hundreds of dollars a year.

At some point, I began to realize that the person I most enjoyed playing with was my wife and that we really enjoyed playing with a mix of older and newer cards. This led me to discover a new way of playing which didn’t require me to buy new cards at all. Instead, we just continue to play over and over again with a big pile of cards I already own, removing the expensive collectible nature without removing the aspects that make the game fun. That’s a big chunk of savings right there.

Gardening Until very recently, my wife and I would buy lots of starter plants and seeds each year to get our garden started – and that would be a real cost.

Recently, though, we’ve become more and more interested in trying heirloom varieties – ones that you can actually save the seeds from and grow again next year if you like them. The startup cost is a little higher, but once you find varieties you like, there’s much less cost from year to year.

Our plan now is to start growing everything from seed in our basement in February under a grow light so that we can put very healthy starts from our own seeds in the garden in late April or early May. No more expensive starts, no more trips to the store to buy seeds.

What’s the point of these three stories? In each case, I had a hobby that required a significant amount of upkeep cost to keep the hobby going – new books, new cards, and new seeds and starts. In each case, by seeking out new challenges within that hobby, I took a serious whack at those ongoing upkeep costs, and yet I’m still deeply enjoying those hobbies.

If you have a hobby that has a significant upkeep cost, ask yourself if there isn’t a better way of doing things. Is there a new challenge or a new angle you can take on that hobby? Do you really need new equipment all the time, or is there a way to reuse what you have?

Research is your friend. Visit websites where others practice the hobby you enjoy. Ask them for ideas on how to save money on the upkeep costs. Look for specific ways of enjoying your hobby that minimize those upkeep costs – particularly those that provide you with a new challenge.

After I finish writing this post, I’m going to retreat to the basement and practice my piano playing on an old keyboard using sheet music given to me by an ex-piano teacher – and I’ll enjoy it greatly.

Over the past few days, we’ve had a few houseguests. Wait, scratch that – a lot of houseguests. We had so many people visiting that people ate meals in shifts. Every bed was full, as was much of the available floor space.

Amazingly, though, we managed to get through all meals here at our house – we didn’t eat out or have our guests eat out for any meal. We entertained at home as well, and our total cost was surprisingly low.

How did we pull this off? We used a bunch of different tactics in tandem to make all of this work.

We relied on a lot of food that was in season. Sweet corn and tomatoes were both served, and tomatoes were also used as components in multiple meals. Since these are easily found in abundance and at a low price right now, having them on hand saved a great deal of money.

We also relied on food prepared earlier and frozen. Elements along these lines included barbecued shredded chicken, seasoned ground beef, and bread. Each of these elements were prepared early in the week and frozen in advance of guests arriving.

The key, of course, was detailed advance meal planning. Make a meal plan as early as you can and determine which elements of those meals you can prepare in advance and freeze. This enables you to prepare great meals at home, even for large groups, within a reasonable time, instead of leaving people to spend all day in the kitchen when everyone wants to socialize with family and friends (which often leaves to people deciding to eat out).

Most of our meals were modular and served buffet-style. Tacos. A wide variety of items grilled all at once. Barbecued shredded chicken sandwiches. Each of these meals were served in a buffet-style, with lots of options to allow each person flexibility on what they had for their meal. Vegetarians? Check. Big eaters? Check. Picky eaters? Check. “A little bit of everything” eaters? Check.

We asked for – and received – some early help. My mother arrived two days early and was charged with a simple task that made everything so much easier. She simply spent two days going to local parks and other activities with her grandchildren, enabling Sarah and I to spend those two days getting ready for the onslaught of guests. If you’re planning a big weekend and need such help, don’t be afraid to ask.

Warehouse clubs were our friend. We needed an abundance of lettuce, milk, wine, salsa, wheat bread, and other staples. Since we were buying for a large group, it made a lot of sense to head directly to our local warehouse club and stock up on these items. We estimate that, based on comparable items at other local groceries, we paid for our club membership this weekend alone. If you’ve got a big group coming and you don’t have a club membership, the savings for the coming weekend might pay for your annual membership.

Bookend such events with plenty of sleep. How exactly does that save money? Well, for starters, you’re much more on top of things mentally and able to deal with the inevitable requests from a lot of guests if you’re well-rested. It also enables you to (inevitably) stay up late with all of the guests and still be able to rise early enough to get things going in the mornings. Thus, sleep in advance of the arrivals is a very good idea. Instead of staying up all night the night before people begin to arrive, plan ahead for the things you need to do and get a long night of sleep before people arrive. You’ll be much more ready to handle requests without emergency runs to the store if you’re in full mental order, plus you’ll be able to stay up late without being in a tired stupor. Sleep trumps all.

And, with that, I’m leaving to take a nap.

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. Married couple getting started
2. Investing for 11 year olds
3. A debt and family mess
4. Dealing with discouragement
5. 457 or Roth IRA?
6. Fixing credit
7. No-knead bread
8. Cash-only budgeting
9. Which debt repayment plan?
10. Selling stuff before moving

Since Thursday, we’ve had family as guests at our home, culminating with a Sunday brunch and early afternoon where we had twenty or so guests at our house. It’s been fun – and tiring, too.

I recently married. My now-husband and I have lived together for several years, so we’ve already merged some of our finances and have had candid discussions on financial goals. Fortunately, we have similar goals, saving and spending habits, and general outlooks on money. We’d like to create a strong financial plan to help us pay down my husband’s student debt, save for a house, and save for retirement. We just don’t know where to start. Do you have any books or resources you would recommend to help us get smart and build a strong financial future?
- Tori

It sounds to me that you’re wanting to create a formal financial plan on the order of a business plan. That’s really a good idea, especially for people who are very plan-oriented.

If that’s your goal, I’d suggest reading How to Be the Family CFO. It essentially takes the elements of personal finance and treats them in a business context – plus it’s a pretty readable book. It does a great job of transforming one’s financial situation into a clear business-type plan.

I think it’ll meet your needs quite well.

My [eleven year old] son is close to reaching $1000 in his savings account and is interested in investing it. Any suggestions? I’ve recommended either his college 529 or perhaps a Roth IRA in his name but he seems more interested in investing it in a company.
- Tas

If he’s interested in individual stock investing, I’d say go for it. It’s his savings, after all.

The first thing I’d do is sit down and make sure he understands that there’s a lot of risk involved in investing in individual stocks. They’re very volatile and he could easily end up losing most of his money in a day or two. Make it clear that it will be his loss and you won’t wave a magic wand to fix it if he loses it. Talk about diversification a bit – the idea that if you don’t put it all at risk in one place, you won’t lose everything if that one place goes down. You should also mention that individual stock investing comes with fees every time you buy stocks and every time you sell stocks.

If he still wants to go through with it, open an eTrade (or other brokerage) account together. Encourage him to read and study and learn. Do it together, but let him make the decisions about the money.

Yes, he might lose some of the money. He might gain some, too. In either case, he’ll be learning and spending his time on something positive.

I am 25 years old, and I live in Denver, CO. I am renting an apartment with my boyfriend, there are times when I cover majority of the rent, because of his medical bills (he has terrible back problems, even though he has insurance, we still pay quite a bit out of pocket). We have separate checking and saving accounts. He is a bar manager, and makes a decent hourly wage, plus tips. I am still in school, taking yet another attempt to finish my degree. My parents divorced two years ago, and my father is not in the picture, left my mother penniless, and every once in a while I try to help her out. I also pay her cell phone bill (mine and her total at about $110 a month, we are on a family plan with t-mobile). My father also bought me a car for my 21st birthday, financed it, and I was the co-signer on a loan. He said he would help me build my credit. After he left, he stopped paying for the car, and didn’t even tell me about it, let alone forward the bill. The car got repossessed, he filed for bankruptcy, and I am left with $10,000 debt which I am unable to pay off. Me and my father are not on good terms, since then. I got behind on my credit cards, to a point where I could not catch up. Some of them I am paying off through Credit counseling, others are charged off. The total amount is hovering right about $4500, I have a list with all the phone numbers and addresses to the creditors/collections. I am a full time student, I was lucky enough to get scholarships, so my tuition and books are paid for. At the beginning of the summer I have decided to go back to my old, short lived stunt with exotic dancing. It proved to be profitable. I know I made a lot of money, yet I have no idea where it went. I spent it, somewhere. My nightly earnings can be anything from $200 to $1500 a night, depending on a night. Then a friend of mine offered me a job as a middle manager at a local movie theater. I would be making $10.25 an hour, 40 hours a week, on top of 18 credit hours at school. I am comfortable working at a strip club, until I finish my degree, as it is flexible schedule, and I can focus on school. But even with my income, even at it’s highest I still struggle financially. My share of the rent is $475, sometimes more, depending on his situation. My credit counseling costs me $129, and cell phone $110. I do not drive, but do get a bus pass for about $50 a month, unlimited to go anywhere (Denver has a great public transportation system). Any suggestions?
- Kasha

I think you’re doing well. You’ve clearly got a good deal of self-awareness and understanding of the issues going on in your life and what you need to do to fix it.

The solution, obviously, is to maximize your income, doing the work you choose to do, and directing that income towards clearing all of the debt that’s in your name. It’ll take some time, but it’ll be worth it – you’ll come out on the other side with a clean slate and a clean conscience.

The only obvious suggestion I can make is that your cell phone bill seems really high. Are you using an iPhone? If I were you, I’d downgrade to something basic and use a more basic plan with limited minutes and limited data usage. The $60 (or more) you would save per month can help you to make a real dent in your debt load.

Good luck.

My husband and I had a huge savings and the only debt we have is my student loan debt and our mortgage. I was laid off but my husband found a position that gave him enough of a pay increase that we had very little net income loss. Our emergency fund had over 20K and we were starting to move more towards retirement savings. After I was laid off I got pregnant (not planned/not unplanned and very welcomed). After looking at my pregnant belly I was always passed over for some ‘other qualified candidate’. Ultimately this was a blessing as our son arrived 3 months early. Due to his and my medical bills we saw our emergency fund drop to half of what we had previous (we did pay as much as possible out of our monthly income but this is what you plan on the emergency fund for right?). This was/is still plenty for us – more than 3 months expenses etc. However after July and August our emergency fund is at 0. HVAC clogged and flooded our downstairs and while homeowner’s insurance is helping we are still left with the bulk of the expenses plus my son needed medical care and other unexpected and budgeted expenses.

My question is – HOW do I prevent myself from being discouraged? At the moment I know I should be thrilled that we did not put a dime on a credit card but I”m terrified of having no savings. At the same time it almost makes me wonder why we worked so hard and had so much in savings just to see it quickly go away. Lastly I’m of course worried my son will require some other treatment that is expensive and now we have no option but to do a payment plan with the hospital or incur credit card debt.
- Katharine

Instead of being depressed at how quickly your savings went away, imagine your situation if you had no savings at all. What would you have done if you had not had an emergency fund with the early birth of your child, the HVAC clogging, and the insurance not paying up?

Your emergency fund turned a situation that could have been completely disastrous into something that you easily handled. Yes, you now don’t have an emergency fund, but this experience alone should tell you how valuable such a fund is.

Start socking away for that new emergency fund right now. Throw every dime you can spare in there. That way, if/when the next emergency happens, you’ll easily be able to handle that one, too.

Both my husband and I work for a local governments and participate in a 457 plans (there is no match from either employer). We are married with two young children and are 37 and 39 respectively. Between the two of us we make about $95,000 per year. I have a retirement plan at work but my husband does not. My question is – I have read a lot on your blog about people saving for retirement and that Roth IRA’s are great options. I know we contribute to our 457 pretax dollars so there is a benefit there. I also know that the Roth IRA’s have tax benefits on the other end when you take the money out. How do you know what is a better use of your money. Which plan is really the better “deal”.
- Lisa

There’s no way of knowing for sure because we don’t know what tax rates will look like in thirty years. If you have a crystal ball and can tell me, I’d love to know!

The reason I tend to encourage the Roth IRA is because income taxes seem to be pretty low right now compared to historic numbers, and on top of that, we’re spending much more than we bring in. What’s the inevitable solution to both of these situations? Higher income taxes.

I believe income taxes will be higher in 30 years than they are now. Because of that, if given a choice, I’d rather pay taxes on the money now (at a lower rate) than in 30 years (at a higher rate). This leans me towards a Roth IRA.

I have recently started back to college on the 23rd to obtain my degree in nursing. I already have about 2k in student loans so far and this semester I decided to take out another thousand in subsidized student loans, about 200 of that will go to cover books. This is mainly what my question is about. I have been asking friends and family but they really can’t give me any advice: Is it a good idea to use the remainder of this student loan and partial amounts of other student loans to make sure that my car is in good working order, that I have insurance for the car, make sure I can pay for an internet connection during the semester and things of that nature while I am in school? I have a part time waitressing job, but when I figure out my hourly rate plus tips, it doesn’t even equal out to minimum wage, and I still have rent and electricity to pay for. Also, at some point, would it be a good idea to use a student loan to pay down on my consumer debt so that I can get my credit looking good enough to secure a job once I graduate? There are a LOT of places that are using credit as a qualification for employment and I’ve already been having trouble finding work as a result of how bad mine is at this point.

So far, I have kept my student loans at a minimum (I have about 68 credit hours on my transcript) and I’d like to keep it that way, but I am having a very hard time keeping things going while I am in school, and this time, I just want to graduate and move along with my life. I need to do a lot of things, but don’t want to hurt myself in the long run. Could you please help?
- Ami

My first question would be whether or not you actually need that car for school. Do you? Is it possible that you could use public transportation or a bicycle to take care of your travel needs? If you can get by without a car, that’s exactly what I’d do. I’d either sell the car to help pay for school or get rid of all insurance and taxes on it and park it somewhere for a while.

Of course, given your shaky credit situation, the proceeds from your car might be better served going towards your consumer debt, simply to make sure you’re up to date on it.

You need to minimize now and, for most students, a car is a want and not a need. Get rid of it if you can.

I’ve been researching no-knead bread to save money on buying loaves. Have you ever tried this technique? If so, what are your thoughts on the method? How about storage? We are a family of two and we don’t eat a ton of bread every day.
- Rita

I’ve tried it twice. Both times, I thought it was good, but I preferred my regular bread-making techniques because I felt they produced better bread.

A lot of the “oohs” and “aahs” about no-knead bread (read about it) comes from the fact that it’s seemingly pretty easy and thus less daunting for a new baker. Add in the fact that it does taste better than the bread you typically purchase at a store and it seems like a winner.

I’d just rather do the kneading and produce the wonderful loaves I make using my own techniques.

My wife and I are considering moving away from the use of credit and/or debit cards and going cash-only. My concern with doing this, however, is the added difficulty with keeping track of our spending. We keep a monthly budget, and track all of our spending. Currently most of our spending is via credit/debit so I simply download the recent transaction history once a week or so, import into MS Money and spend a few minutes putting each transaction into the appropriate category. I do a very bad job of tracking our spending when cash is used, and worry that this will be worse if we move to a cash-only system.

Do you have any suggestions on how to best track cash spending? We do not like the Dave Ramsey envelope system for various reasons. So far the only thing we have come up with is saving receipts, and going through them later to record the amounts spent towards each category, although not all places give receipts (such as the farmer’s market). I also considered keeping a small notepad with me to record the transactions. I do not have a Smartphone, otherwise I would probably try coming up with some method of tracking using that.
- Jonathan

I used the notepad solution myself when I was attempting to get a strong picture of my spending. I found that it really did the trick.

For me, though, one side benefit was that I hated to write stuff in the notebook. It felt like a failure if I spent cash and had to write it in the notebook. Thus, the mere presence of such a tracking notebook made me more careful about my spending.

I don’t trust my ability to keep track of the receipts, plus, as you mentioned, not all cash transactions generate a receipt.

We’ve started attacking our debt, Dave Ramsey style, beginning with the car loan first. We have $4,300 left to pay on our car loan – should we dip into our savings and pay it off with some of that money (we have a 7-month emergency fund saved up). OR are we better to keep that money in there, untouched, and pay off what we can each month? Once the car loan is paid off, should we attack our student loans next or are we better off saving as much money for the new baby? Since our interest rates are so low on the student loans, we’re not sure which strategy is better.

We have the following debt:
Mortgage ($175,000) at 5.875%
Car loan ($4360) at 2.9%
Student loan ($10,267) at 2.6%
Student loan ($20,394) at 1.6%
- Erin

Generally, I feel a family should have two months’ worth of living expenses for each person in the household saved as an emergency fund. If you have more than that, I would consider doing something different with it.

Your interest rates on your debts are so low, though, that you don’t need to be rushing to pay them off. My priority really would be the mortgage here because the interest rate is so much higher than the other ones. Yes, you get the “success” feeling from paying off a debt, but the interest rates are low enough that you’re not gaining much over simply leaving cash in a savings account.

However, if you’re expecting a baby, I would save for baby expenses before tackling any of these debts. I also wouldn’t lower the emergency fund below six months’ worth of post-baby expenses.

I am a incoming college freshman. As part of my packing process, I went through all my stuff and decided what to pack and what not to pack. I am also an aspiring minimalist, so I am getting rid of a lot. About half my walk-in closet is filled with stuff I no longer need. I have outdoor equipment, books, clothes, shoes, and jewelry to sell. I am wondering what the best way to get rid of it is. I was weighing the options of Ebay v. a physical garage sale. I think I’d probably be able to get a better price for my lightly-used outdoor gear online, but a better price for some of my clothes in a garage sale. What do you think?

Also, another complicating factor is that I am going to college across the country, so ebay may not be a good option because I won’t be able to ship right away.
- Erica

Don’t worry strictly about price – keep in mind that there will be effort involved in selling the items either way you go. However, if you decide to have a yard sale, the additional effort per item will be very small. If you sell on eBay, the additional effort per item will be larger – dealing with buyers, packaging each individual item, and so on.

Whether that additional effort is worth the money is really up to you. For me, honestly, it wouldn’t be unless I was sure I was going to make a lot more on eBay. Of course, there’s also the possibility that you could price items at your yard sale at a price close to what you would net on eBay (after all the fees and shipping costs) and only use eBay if that doesn’t work.

In any case, I encourage you to sell as much of the stuff as you can. You won’t need or have room for most of this stuff at college and the cost to ship it is prohibitive. Sell it and move on.

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.

Every Sunday, The Simple Dollar reviews a personal finance book or other book of interest.

When I went to college back in the late 1990s, my school was pretty much selected for me due to the scholarships I received. I didn’t have any financial resources of my own to help me get into college, nor was the internet widely available and full of easy resources to learn more how to acquire them. In short, I was left with a decision that seemed pretty much made for me.

Looking back, I realize that the decision was not as clear-cut as I originally thought. With my academic qualifications and financial state, I could have chosen from a lot of different schools, and the choice among schools was actually quite a bit different than I thought.

In short, when my children choose a college, the process will be a lot different than my own process was – more open ended, more thorough, and with more ideas out there on the table.

This, of course, brings us to this week’s book review, Debt-Free U by Zac Bissonnette. The idea behind this book is that many of the standards and reasoning people use to select a school and pay for it are way off base. Instead, what makes or breaks success in life is the person and the opportunities they have available to them. Because of that (and some research to back it up), the book comes up with some interesting conclusions on the entire college selection process.

1 – How Much Can You Afford, and Where Will You Get The Money?
Bissonnette focuses this chapter on the idea that scholarships are overrated and loans are dangerous. So, how should one pay for college? The old fashioned way – by saving for it and paying for it out of pocket. Work a second job. Don’t fall into the trap that you have to go to the most expensive school you can find in order to get a “good” education. Most of the rest of the book focuses on these latter points.

2 – Student Loans and Stagnant Wages: A Dangerous Cocktail for Future Graduates
So, why no student loans? Anyone under the age of about 40 probably knows the answer: they can be a punishing load after you’re out of school. Not only have you sacrificed years of income in order to get that degree, you’ve also got huge debts to pay back. Often, even with a much increased earnings potential, it’s a zero sum game – or worse. The better approach is to pay as much out of pocket as you possibly can.

3 – Does It Really Matter Where You Go to College? The Solution to the College Funding Nightmare
That’s great, but great colleges aren’t cheap. Bissonnette’s argument against that is that the idea of a “great” college is overrated. Most people who are successful in their field don’t come from “great” colleges – they come from all over the place. What makes a success story isn’t the school the person goes to, it’s the person. Instead, you should seek out the schools that leave students with the lowest debt burdens after college, which are mostly large state schools.

4 – How to Make Any College an Ivy League College
But how do you get the “ivy” experience at Big State U? It’s all about how you approach it. A great college experience that you can base a career on comes from connecting with people and building your skill set at every opportunity. Networking, acquiring unique experiences, and building specific skills are the trademark of success, not the name on the degree that you get.

5 – Why Large Public Universities Are Better Than Private Colleges
Most of the time, big state schools offer the best opportunities to do those very things, given the large number of people there. There are countless opportunities at a large school that just can’t be found elsewhere. Simply due to the sheer numbers, you’re much more likely to find experiences that really click with you and enable you to build skills that match your talents and interests at big state schools – and that’s what draws attention in the workplace.

6 – The Community College Solution
Another advantage of a big state school is that it’s often easy to transfer community college credits. That means that while you’re in high school, during the college summers, and perhaps even during a year or two between high school and a four year college, you can get general education requirements out of the way at a very inexpensive rate at your local community college, drastically reducing the cost of a four year school.

7 – Make Money, Prepare for a Career
This was my favorite chapter because it so directly matches my own college experience. As established earlier in the book, the best way to maximize the value of college is to earn money while there to reduce your tuition bill. Also mentioned earlier, college is the time to have great experiences and build skills that translate to the post-college life. Why not do both at the same time? Seek out paid internships or work-study positions. See if you can find a job with a professor who is engaged in a field that interests you. Ask, ask, ask – it never hurts.

8 – How Your Child Can Save Money While He’s in College
The stuff here is basically personal finance 101 – avoid credit cards while in college, read your college bill carefully and ask about any and all fees you don’t understand, and so on. It’s valuable, though, because these types of tips can make an enormous difference on how much you have to take out in student loans and how much debt you’ll have after college. The lower both numbers are, the better.

9 – Invest in College-Town Real Estate
This chapter felt really out of place, because the rest of the book talks about great ways to minimize expenses and thus reduce any debt you have to incur after college. This chapter really speaks to people who already have a lot of money and are looking for someplace to sink it. Why not buy your child a condo as a gift as they leave for college? They can live there while in college, then rent it or sell it after school is over? Good idea, but it speaks to people with a lot more money than I ever dreamed of having in college.

10 – It’s Not Just a Personal Finance Issue: How to Solve the College Crisis
Bissonnette has a lot of good, if overly grand, ideas here. There’s just one that I really, really wish would take hold in society – I wish society would stop stigmatizing financial prudence. I understand why it won’t happen – marketers don’t make money from financial prudence. Still, if everyone were financially sensible, society as a whole would work much better.

Is Debt-Free U Worth Reading?
If you have children and have at least some intent of directing them towards higher education, or if you’re a high schooler or early college student with the ability to read and digest more than one viewpoint, Debt-Free U is a very, very worthwhile read. It’ll provide a ton of food for thought for your college planning process.

As with any book like this, though, couple it with your own homework. When you’re making such a huge choice, get information from lots of different sources – make this book part of your education about college choices, but never make one book the be-all end-all. It’s very solid and has a lot of great ideas on maximizing every dollar from your college education, but it deserves to be coupled with additional reading, as does any book on a major life decision.

About three months ago, my four year old son saw a toy at a store. He mentioned that he had played with it at a friend’s house and that he wanted one.

But rather than demanding it this minute, he asked how much it would cost. Then, he asked how many allowances he’d have to save to be able to afford it.

He waited the necessary six weeks’ of allowance (plus some pocket money put into his bank by Grandma), then happily went to the store and bought himself a Zhu Zhu Pet. The weird little electronic hamster has spent the last few weeks constantly running around on our floors – and I couldn’t be prouder.

No, I’m not proud that he got a Zhu Zhu Pet – my primary concern there is that I’m going to accidentally step on it and hurt my foot when he’s sending the toy all over the place and I’m walking through the entryway or the dining room.

I’m proud of other things.

I’m proud that he didn’t have a meltdown in the toy area, demanding one now, which is something that we witnessed two other children doing that very day.

I’m proud that he didn’t simply ask for or expect for me to just buy that toy for him.

I’m proud that he knew to save diligently for it and not to spend money along the way – he even pointed out that if he saved his “pocket money” too and went without the small stuff, he’d get the pet sooner.

I’m proud that even though he was really into saving for the toy, he still put money from his allowance aside for college and aside for his favorite charity.

How did we get to this point? I really attribute it to three things.

First, we bring home the point time and time again that everything costs money and that Mom and Dad have to work to earn the money they have. Whenever we consider any purchase of any kind, this is an idea that’s brought up. We also talk about how the more money we spend, the more Mom and Dad have to work, and we also point out that as he gets older, he’ll also be working for money.

Second, we do not give in to any sort of meltdown, crying, or whining. We leave, period. Neither Sarah nor I have any problem with just walking out of the store if either of our two older children melt down, particularly over a material desire. (Our youngest one is four months – the only reason he melts down is when he wants milk or a diaper change.) Our older kids have learned that crying and such only makes their case and their situation worse, so they’ve largely abandoned it. Yes, they still do it sometimes – they’re four and three, after all – but it’s not something that happens often, and it’s usually when they’re tired and acting more on raw emotion.

Third, we help them mark their progress towards specific savings goals. For example, when saving for the Zhu Zhu pet, we made it clear to our son that he would need $8.50 for the pet ($8 for the item, $0.50 for taxes). Each week, they get a small allowance – $0.50 for spending as they wish, $0.50 for saving for a goal, $0.50 for a charity, and $0.50 for college. Each week, he diligently chose to put the free spending money and the saving money into the saving for a goal slot in his bank. Then, he would ask how much more he’d have to save and he started to get quite excited when he was close to the goal. The clear marking of progress – talking about it, seeing money build up in his bank – excited him far more than the delayed gratification brought him down.

It works. If you want your kids to learn how to save, start young and be diligent. Our four year old gets it – it can be done!