A wise man once said “The man who makes no mistakes does not usually make anything.” It took me a long time to summon the courage to admit that it was my own mistakes that led me to financial armageddon. It required me to admit that not only had I been making mistakes since my earliest days, but also to admit that many of the ideas I had learned in my life and built through my own experiences were completely wrong.

In order to understand these mistakes, I am initiating a ten part series of posts, a part to be posted each weekday for the next two weeks, in which I outline those various mistakes and what they did to pave the road to financial armageddon. More importantly, I hope to learn (and perhaps you will learn, too) how these mistakes can be corrected, not only for myself, but for others around me, such as my children. Hopefully, my mistakes laid bare will bring some insight into your own financial mistakes and perhaps lead you to your own epiphanies.

The best place to start is the beginning. I was born into poverty, a family in which both my mother and father had been raised in poverty, too. Both of my parents were used to the concept of living from payday to payday, never having enough saved for themselves to survive more than a week or two. To some degree, this was out of necessity; there was often not enough money to put food on the table.

At first, you might think that this was a great background to learn hard lessons about personal finance, but instead I watched my parents make mistake after mistake. Perhaps the biggest mistake was that whenever a windfall would occur, they would celebrate by buying things that they didn’t need or buying gifts for us kids; it was because of a windfall that I was able to have a Nintendo and, later, a television in my bedroom.

As a child, I believed that this was a normal situation. I believed that when you had money, you were supposed to spend it on something that brought you happiness immediately. Money was the key to happiness, I thought, because it could get you stuff that you want. I didn’t understand that putting money in the bank might not buy you that immediate burst of joy, but it could provide a steady level of peace in the security that it could provide for you.

Another problem with our level of poverty is that I never really had an opportunity to manage any money of my own until rather late in my teen years. I didn’t receive any sort of allowance and any gift money I received was turned over to my parents for “saving,” which actually turned out to be merely an emergency fund for keeping food on the table.

On the rare occasion that I did have any money, it was usually slipped to me by my grandmother or a wealthy aunt that I had, who would whisper in my ear not to tell my mother and to spend it quickly on something fun. The intention was good; they wanted to bring joy to the life of an impoverished boy. The problem was that it didn’t teach me any sort of financial skill whatsoever. I would go to the store as soon as possible and buy a video game or some baseball cards or something frivolous which brought immediate joy, but afterward I would go back to having no budget.

Another problem is that I believed that accepting help from anyone was bad. My parents were strict libertarians and in many ways I respect their philosophy, but their personal beliefs kept them from ever accepting any handouts or assistance. Even though we would often scrape by on a single part-time income, we were never on welfare or food stamps and we didn’t go to soup kitchens or other such free offerings. The pastor at the local Presbyterian church practically begged us to eat at the church on Wednesdays and Sundays regardless of whether we attended, but my parents refused all handouts. I was led to believe that accepting a helping hand, even in time of dire need, was a sign of weakness.

To summarize my earliest lessons, I believed that money was the method to buying instant happiness and that accepting free things was wrong. I also missed out on any opportunity to learn about personal budgeting or finance simply because there was no opportunity for it.

It wasn’t long before I found myself maturing into my teenage years, where I began to apply some of the lessons learned during my childhood, only to find that I was to continue an already-proud tradition of financial mistakes. What did my transition into adulthood teach me? Read on to find out!

Want to jump quickly to the other Road to Financial Armageddon posts? Here’s an index to help you out.

#1: The Earliest Mistakes
#2: Early Profits … Lost
#3: Cash & College
#4: The First Taste of Real Money
#5: Love & Marriage
#6: The Yuppie Years
#7: Here Comes Baby
#8: Meltdown
#9: The Road to Recovery
#10: What I Learned

After seeing yet another of those ubiquitous CapitalOne “What’s in your wallet?” ads, I decided to write about the one credit card that’s in my wallet (now that I’ve learned some hard lessons about the dangers of them). I route almost every minor purchase I make through a Chase amazon.com credit card for which I pay the whole balance each billing period.

The card offers a points program, 1 point for every dollar spent. Every 2,500 points, they turn into a $25 gift certificate at amazon.com. Alone, that’s not particularly great, but here’s the kicker: for every $1 you spend at amazon.com, you get 3 points instead. That makes the card have a 3% return at amazon.com.

For me personally, it nets about a 2% return in what amounts to cash, because I am a heavy user of amazon.com for all sorts of purchases. We use it almost exclusively for gift-giving purposes, for buying diapers in bulk (it is far easier and cheaper to have a deliveryman dump a monster box of diapers on the front step than having us do it), and for buying lots of bulk groceries and personal hygiene products through Amazon grocery. I would esitmate that roughly 60% of our “household spending” each month goes through amazon. Since “household spending” is by far the largest portion of our use of the card, we easily turn out a 2% return (approaching 3% near Christmastime). Of course, one of the big reasons for this is baby supplies; when our baby gets older, this may be re-evaluated.

How do I select a bonus program that’s right for me? The first thing to do is evaluate your credit card spending over the past few months and see where you use them and what you use them for. I made a list of spending ordered by what I buy and where I buy it.

The next step is to visit the websites of the top places that you use for purchases and see if they have good offers. Many of them are comparable to amazon’s offer. For a long time, my wife used a Target credit card because she lived very close to a Super Target and did virtually all of her shopping there, easily netting her a 2-3% return.

While you’re comparing these, you should also look at the offers from the major credit card companies to see if any offers match your spending profile. Good places to start include Chase, Bank of America, CitiBank, and CapitalOne. Whenever you find one that’s interesting, make sure to evaluate it carefully before signing up. If you’re not earning back at least 1.5%, there is probably an offer out there better for you. For example, My Money Blog recommends a Fidelity Investment Rewards card that generates 1.5% cash back into a Fidelity account (of course, you need a Fidelity investing account first…).

The key thing is to do some research and see whether or not your everyday card is really as much of a benefit as it can be. For me, switching to the Chase amazon.com card has netted a lot of “free” diapers.

Blogging, particularly among a group of bloggers on a specific topic, is a community. We all have the same interests and passions and we find great insight in each other’s thoughts. Naturally, we want other bloggers in this community to succeed, but what can we do to help our brother and sister bloggers? Here are seven tips to make the community stronger.

1. Visit their blogs regularly. I keep a list of about twenty blogs I visit each day, and a similar number that I visit on a weekly basis. I also keep more than a hundred blogs in a site reader tool so that I can follow their posts as well, but I view them as more of an “extended family;” I only visit their site (and give them ad views) if their post really interests me.

2. Be aware of new blogs in the community, and give them a shot. I would describe this blog as a personal finance blog, so I keep a vigilant eye on community sites such as pfblogs and Carnival of Personal Finance. I’m regularly introduced to new sites on these and sometimes find neat posts from people I haven’t read in a while.

3. Comment on posts. If you see an interesting post, don’t hesitate to add a comment to that post. Not only are you starting a potentially interesting conversation, you’re saving a good blog from the dreaded “0 comments on every post? No one must read this awful site” syndrome.

4. If you read a post you really like there, take a look at their sponsors. If an article particularly impresses me, I’ll allow myself to be more open to looking at the information on the site from the sponsors. Sometimes you’ll discover something really useful; I discovered ING Direct this way and, after some additional research, wound up moving my savings account there.

5. Link to posts you really like there in your own blog. If you see a writing in a blog that you really like, don’t hesitate to link to it, particularly if you can contribute a good deal of additional thought to it. Not only are you coming up with a solid post for your own blog, you’re driving some attention to a neighbor who will appreciate it. The key, though, is quality – don’t just link to someone because you can, link because what they did was good and you can add something to it.

6. Add a permanent link to their blog on your own blog. If a blog consistently posts things you find valuable, add them to your site as a permanent link. But don’t add too many – a list of twenty links might be investigated, but a list of hundreds might not. Also, don’t sweat it if they don’t reciprocate with a permanent link; although it’s a nice touch, it might be the case that they’re trying to advertise blogs they like and they’re not as familiar with your blog as with others.

7. Be stingy. Don’t link to everything that a single blogger writes, just link to the posts that really make you think or inspire you. This way, your own readers won’t think you’re a sycophant, but that you are simply showing them the good stuff (which you are, of course). I used to read a blog quite regularly that turned into a “suck-up fest” for another blog… eventually, I just started reading the other blog and didn’t bother with the first.

You’ve patiently waited for the big question: how will these tips help you make money? The biggest reason is reciprocality: if people see you interacting with their blog on a regular basis, they will become familiar with you and want to visit your blog on a regular basis. For me, these reciprocal relationships sometimes develop into friendships as well, a second bonus. A third benefit is that you will likely build up a number of mutual links, pushing your rankings in Google higher in a legitimate fashion. A fourth benefit is that random people that you don’t know will have many more opportunities to stumble across your blog.

In other words, build the community in a healthy, organic fashion and your blog will be built up in a healthy, organic fashion. Plus, you might just make some new friends in the process.

Take the initiative and visit some blogs in your community today!

I grew up in a very poor home. We had so little money that we were required to grow, fish, and hunt for some of our food, and I remember many nights where we had “mystery stew” and other such dishes that were made up of whatever could be thrown into a pot together. To put it simply, there was no money with which I could learn any fiscal responsibility because there was no money, period.

I managed to get into a good school and I wound up with a job that paid more in three months than my entire family’s income was for an average year. But the problem was that I had no idea what to do with the money, and I just went crazy with it, digging myself into a deep financial hole because I had no idea how to manage money at all.

Now that I’m learning good financial planning, my thoughts turn to my own child, who is approaching his first birthday. How do I go about teaching my son how to deal with money? More importantly, what can I do to keep him from making the same mistakes I did?

I’ve been reading several very insightful documents and books on this topic and they all seem to boil down to these essential points:

1. Show your children how you spend money. Take them shopping with them, show them prices on the shelves, and then talk with them about what things cost.

2. Allow them to manage a small amount of money themselves. It can be in the form of an allowance or some other form, but it should have clear limits and they should manage it themselves. Talk to them about how to manage it: should they buy a toy now, or save for something else?

3. Involve them in the finances of the house. Show them what you spend each month and demonstrate that you save each month. Tell them when there are financial problems and when there are windfalls.

My parents never really did any of the above, simply because there was very little money to be had and what little money we did have went into keeping the electricity on and food on the table. There was no such thing as savings plans, and the children weren’t involved in any family discussions.

I think that on my son’s fourth birthday, I am going to give him a piggy bank and start him on a small allowance and see where things go from there.

I used to think that clipping coupons was a giant waste of time. “Coupons encourage you to buy extra junk that you don’t need,” I thought to myself whenever I saw a batch of coupons from the newspaper.

Then I had a baby, and I discovered the true value of coupons. Hint: if you buy diapers, baby food, and formula over and over again, coupons for diapers, baby food, and formula are as good as cash. It didn’t take long for this to spread out over our other purchases and now we have a nice hefty envelope full of coupons that we take on grocery ones with us (another tip: keep an envelope somewhere handy to keep coupons in so that if you see a useful one, you can just toss it in the envelope and look at it the next time you go shopping).

Here’s five quick ways to find coupons without burning a bunch of time hunting for them:

1. Pick up a copy of the Sunday edition of a major newspaper. There’s usually a few included sections of solid coupons. Clipping the useful ones takes just a couple of minutes.

2. Visit the website of your preferred grocery store chain before you visit. Many of them have coupon sections. I usually shop at Hy-Vee, which has a great coupon section.

3. If there’s something you buy a lot of, Google for it and add the word “coupon.” You’ll usually find something in the first few links. Around here, we buy a lot of Gerber baby food and Pampers diapers, so Googling for “Pampers coupons” or “Gerber coupons” usually points you to coupons or an easy method of getting them (like filling out a form or something).

4. Print multiple copies of any coupons that really wow you. We like to make frozen prepared meals about once a week, because we’re often stretched for time as it is and they are extremely easy to prepare. So when we found a $3 off coupon for Bertolli frozen dinners (which are quite good and very easy!), we printed a bunch of them and take one with us during each store visit.

5. Keep an eye out for double or triple coupon days at local grocery stores. There are a couple grocery stores nearby that have regular double coupon days; you can find out when they are by checking this list and then seeing if any of their chains (or subsidiary chains) are near you, then ringing the store to ask when they do them. Here, two different stores have double coupon days on different weekdays, so I often plan my shopping around these. I often get stuff for free (or very close to it) with double coupons – just yesterday, in fact, I got twelve containers of Yoplait yogurt (a popular item around my house) for four cents apiece.

Several months ago, I sat down with my finances and took a good hard look at things. I was in approximately $10,000 of credit card debt spread out over three cards, and that’s not counting my student loans or vehicle loans. I also had no money in savings and – even scarier – I wanted to buy a house within the next two years, even though my finances were screaming “no way!”

It was very intimidating to look at my finances in this way, and it made it clear to me that I needed to make some major changes in my spending and saving habits.

The first thing I did is I made a list of every single thing I had to pay out each month using Microsoft Excel (you might want to use Google Spreadsheets; it’s free and quite useful for tasks like this one). I made four columns: the name of the bill, the amount of the bill, whether it is essential or not (I used “Y,” “N,” and “?” for this one – and I used “Y” for any bills that were loans that I couldn’t just cancel, and I used “N” for non-essential things like my cell phone and Netflix), and if it is a loan, what the percent interest is.

I went through every one that was non-essential and asked myself if I really needed this service or not, or if I could get a reduced plan. I wound up cancelling several services (Netflix; a web hosting service I wasn’t using; World of Warcraft) and reducing several others (a smaller cell phone plan; a reduction in my cable package). In the end, I cut my monthly spending by almost $200, money I could use to help myself get out of debt.

I then went back to my essential bills and looked at the loans carefully. My goals were to reduce or eliminate these while getting some padding in the bank. I decided that my focus should be on paying off any loans that were more than two percent higher than what I could earn with an ING savings account, then I would begin putting a set amount into ING each month and pay off the remaining loans at a rapid rate. I had three credit cards with an interest rate over 10%, so I decided to direct that extra $200 each month into paying those off immediately, starting with the one with the highest rate.

It only took a few months of dedication to this and the balance on my first one vanished, so I was able to remove a bill from my list and dedicate even more to paying off the other credit cards. Thanks to the spreadsheet (and many of the other things suggested at The Simple Dollar), I am now free of credit card debt.

The first step is simply sitting down and being honest with yourself: you’re drowning in debt, but you also have the power to pay it off.

Welcome to the relaunch of The Simple Dollar! For those of you who have never visited before, The Simple Dollar is a personal finance blog centered around the perspective of those of us who have dug ourselves into a deep hole of debt and are just learning the tools to escape from this pit. Focuses include money management, saving, and simple frugality, but we don’t exactly want to give up our lattes and computer games, either.

For those of you who were visitors to the site in its earlier form on BlogSpot, thank you. It was your surprisingly strong support for the site that encouraged me to take the leap from a troublesome hosting situation there onto my own hosting situation. Without your support, I would have never taken The Simple Dollar to the next level.

So, what’s in store? For this first week, I plan on migrating over many of the best posts from the old site, several per day (with a new article or two stuck in here and there). This will enable me to keep some of the best content of the past as I learn the ins and outs of WordPress, which is a new environment for me. Starting on Monday, November 6, I will begin a regular posting schedule here. Don’t worry, my writing will be at least as prolific as ever, and I have quite a few pieces ready to go.

Thanks for visiting The Simple Dollar, and I hope you’ll stay a while.