This is a really interesting story that I thought I would share with all of you. I do have a few comments below, but I thought I would let Kelly tell her story (I edited this email a bit to eliminate some privacy concerns and polish a few tiny grammar issues):

I wanted to write to you and tell you that your site convinced me to quit my job and make some other big changes in my life. I have been trying to get ahead for a while now but I didn’t know what to do. Your site helped me a lot and thank you.

I am twenty years old. I did not go to college after high school mostly because none of my friends did. I stayed in my home town and got a job about thirty miles away making $12 an hour as a factory worker. It didn’t have any health insurance or anything so there were no real benefits other than $12 an hour for someone out of high school. I thought about taking some classes at a college but every night I came home really tired and so I never did anything.

It took me about forty five minutes to drive there every day and I used a gallon of gas each way plus I paid about a dollar in toll each way. That means $8 each day plus my car insurance and all the extra miles on my car.

When I read your site about figuring what your time is worth (note: I’m guessing this article) I spent some time thinking about it and with the cost of my car and the insurance and the gas and the time to go to work I realized I was wasting a lot of time and money. In fact I figured out that my real hourly wage at work was about $7 an hour for a job I hated.

So I started looking around town and I found a job as a waitress at a restaurant that paid $4 an hour plus all tips. I trained there on Saturdays and Sundays and found I could make $10 an hour easy working there and way more on busy shifts. Plus I could walk there since it was only four blocks away and get there in ten minutes.

I quit my job at the factory and now I’m working four weeknights and a weekend night at the restaurant. Even though it pays less on paper than my old job I have more money in my pocket because I don’t spend money on the car and I don’t buy my lunch in the cafeteria because it’s free at work. I sold my car too and I signed up to take some classes at the college during the week days using the car money. I can take the city bus to classes and back home, then walk to work.

Before I read your site I thought I was doing the right thing working at the factory but I felt like I could not do anything to help myself. You got me to think about what else I could be doing and that the best paying job isn’t always the one that will give you the most money. I am taking English classes now and I can already write better than before. I want to try to become a technical writer.

This email was one of the best things I’ve read since starting this site - I feel like something I’ve written went out there into the darkness, touched someone, and profoundly changed them. Some thoughts:

She traded her car for an education To me, this spoke highly of the maturity of this twenty year old. When I was twenty, I can’t say that I would have made such a choice - it takes some serious bravery to go without a car in those heady youthful times. The truth is, though, that it was the right choice - with her job and her classes available by foot and by public transport, she doesn’t have a major day-to-day need for a car right now, and the ongoing cost of the car (insurance and any payments she might be making) would just drag her down. Plus, that car money opened the door to education.

She likely also came up with health coverage Depending on the college (I got the impression that it was a smaller liberal arts college, not a community college, but I may be wrong), she might have access to health coverage via her student fees at the school - at the very least, access to a student health center. If that’s the case, then she is in substantially better shape than before having no health coverage at all.

She’s investing her energy in herself instead of giving it away to a factory During the daytime hours during the week when her energy and focus are peaking, she’s attending classes to better herself. Her job, in terms of when her concentration is peaking, is secondary, as it should be when you have a job to afford to live, not trying to build a career.

She quit her job to take a lower paying one - and it was probably the best personal finance move of her life.

At the start of the month, I announced that my wife and I were attempting an ultra-frugal month where we would try out a number of highly frugal activities to see how it would go. Let’s go through each pledge to see how it went.

We will only drink water and milk at home. We did this, only excepting a bunch of free soda that was given to us at the end of a graduation party. Since the purpose was to reduce our expenses on beverages, I consider this a success.

We will only go grocery shopping twice the whole month. We mostly accomplished this goal. We took only two “real” trips to the grocery store, with one additional stop at the town grocery in the small town we live in to get some more milk for our son because we thought his whole milk was going bad before the expiration date - we are very careful with milk, smelling it and such before pouring any for ourselves or our son.

We will do all of our produce shopping at the local farmer’s market We accomplished this in part. We partook in everything available at three different local farmer’s markets, but many items simply aren’t in season in Iowa yet, so we did supplement it with a bit of produce from a local supermarket.

We will only do free activities (with a couple necessary exceptions) We did not pay for a single activity the entire month, not even related to graduations and family reunions.

We will read at least one hour per day as a family We averaged this, but we did not read that much every single day; some days we spent with family, and at least one evening we were at the park for more than three hours and Joseph was asleep before we got back home.

We will not use the clothes dryer This one didn’t go as well - several times, the laundry line was full, and another time weather prevented laundry line usage.

We will not eat out at any point (excepting meals related to the graduation and freewill meals) We nailed this one with only one exception, and that involved entertaining a friend.

We will not prepare a meal that costs more than $3 per person Success! Some meals actually were below $1 a person (homemade French toast, for one), which made us very happy.

We will buy no entertainment or hobby items I bought one single entertainment/hobby item the whole month - but it was a graduation gift for someone (The God Delusion by Richard Dawkins, if you must know).

We will not run the air conditioner unless the temperature exceeds 90 degrees Fahrenheit This happened twice, and thus our A/C only ran twice, as far as I know.

We will not watch anything but broadcast television My wife watched The Colbert Report once without thinking about it; other than that, I don’t believe we watched any cable. According to my notes, the television was on seven hours this month, and four of those were devoted to Lost.

We will attend fifteen community meals We had a hard time finding enough freewill dinners to attend, because it turns out that many of the ones I knew of were actually seasonal ones and don’t happen during the summer. We didn’t even come close here, unfortunately, but it appears there are more regular ones in the town we’re moving to.

Although we didn’t quite make it on a few points, we still see May as being a very successful experiment. We are planning on trying July as a “no television” month (excepting testing cable connections and such after we move) because we’ll be busy with house stuff and other things.

The Simple Dollar subscribes to Consumer Reports and eagerly awaits each new issue. After receiving and absorbing it, I post the highlights for all to enjoy.

This issue of Consumer Reports was loaded with lots of variety - these are usually the issues I like best, because they’ll test all sorts of interesting stuff. Here are the ten things that stood out to me in the issue.

The cheapest sunscreen lotion was among the best Reviews like this are why I love Consumer Reports. While Neutrogena Ultra Sheer Dry Touch SPF 45 was the best one tested, the substantially cheaper No-Ad SPF 45 fared almost as well and was about four bucks cheaper per fluid ounce. (p. 6)

When you go to book a hotel room, ask whether there are charges beyond room occupancy and sales tax and nix anything you don’t want. Hotels today often pile on the “options” without even asking you, and most of the time you never use them. So ask and save. (p. 13)

The Ritz-Carlton is the best hotel, but the most expensive Microtel is the best budget hotel chain, and Drury Inn/Suites is the best sub-$100 deal. Howard Johnson is apparently the scariest. (p. 15)

JetBlue is the best air carrier? Was this article assembled before their recent meltdown in New York? I do have to give props to their number two, Midwest Airlines. I’ve used them before and the experience was the nicest I’ve had on a domestic flight. (p. 19)

Hebrew National, Nathan’s Famous, and Boar’s Head dominate the hot dog rankings You basically can’t go wrong with these three brands, as all of their entrants made the top six hot dogs out of 23 tested. I am very partial to Hebrew National; if I’m going to enjoy a hot dog (great lunches while watching baseball), it had better be a good one. (p. 22)

Michelob Ultra Amber is the best “light” beer, but… “Light” beer doesn’t really mean much at all. The light version of one beer usually has fewer calories than the regular version of another, but not all light beers have fewer calories than all non-light beers. (p. 24)

There’s a huge digital camera writeup There were lots of models that were roughly equivalent, though, so the conclusion and recommendations of the article didn’t really mean a whole lot. If you’re thinking of buying a camera, it might be useful to pick up the issue on the news stands and make sure your desired model isn’t near the bottom of the list, but 80% of the list was very close in ratings. (p. 30)

Most software supplied with digital cameras is terrible. Microsoft’s default Photo Gallery program in Windows is better than most of it and Apple’s iPhoto is even better than that. I didn’t even bother installing the junk that came with my latest digital camera. (p. 39)

Cabot decking stains blow away all competition. It’s pretty much as simple as that. Cabot decking stain has a score 20 points higher than the next closest non-Cabot brand. (p. 48)

Summer is the time to buy indoor furniture. Isn’t that convenient, considering right now is the time we’re moving and have very little furniture? The article gives a schedule of when to make most major purchases the year around. (p. 52)

We requested that about eight little things be fixed and they said yes within hours, so that’s easy. A handyman should be able to take care of all of it with a few hundred dollars at Home Depot and an afternoon in the house.

The “Once A Month, Check It” Technique For Avoiding Expensive Repairs My father gave me his copy of the things he does each month for home maintenance not too long ago, and here’s a post on the topic. My list is actually quite a bit longer than this one - I remember my father spending an entire Saturday doing it, and his list has about thirty things on it. Should I post the list? (@ no credit needed)

When To Replace A Car My rule of thumb is “don’t replace a car until you can afford a replacement out of pocket.” But I’m a big advocate of saving for car replacements so you don’t have to deal with a junker on its last legs. (@ bluntmoney)

A Week of Frugal Food Given the fact that the author was a graduate student, I expected to see the dreaded word ramen, but this article was surprisingly interesting and useful. (@ an english major’s money)

The Simple Dollar Retro: Paying Cash Versus Going Into Debt: Looking At The Numbers I’ve always liked this article: the post itself makes a good point, but the comments are crazy - I particularly liked the guy who advocated putting the car on a credit card. Let’s just say I hope nothing goes wrong for him while he has a huge credit card balance.

Today, I stumbled across a very interesting tool at the New York Times website that attempts to place you in one of five socioeconomic groups (upper fifth, upper middle class, middle class, lower middle class, bottom fifth) based on a number of factors (occupation, education, income, and wealth). I’m quite happy to share my results with you:

Occupation My primary occupation and side businesses all place me in the upper middle class range.

Education I received a bachelor’s degree, which puts me in the “top fifth.”

Income I used our whole household income estimate for 2007, which includes my primary employment, my wife’s primary employment, and income from my side businesses and investments. This puts us just in the “top fifth.”

Wealth Because we’re just now digging out of some stupid financial decisions, we are decidedly in the middle class range for wealth.

Average Overall, this tool identifies my family as being “upper middle class,” even though our wealth is decidedly “middle class” at this point. I would conclude that our other socioeconomic factors (our job, our education, and our income) all indicate that our wealth should move into the upper middle class range as our life goes on and perhaps even into the “top fifth” range and thus the tool has a bit of an age bias (it’s hard for young people to have accumulated the wealth that is identified as “top fifth” unless your last name is Rockefeller or something).

What else can we learn from this tool?

Education is a major key to upward mobility Assuming that education plays a significant role in class mobility as indicated in this article, the best way you can position yourself to move up in class is by working hard and getting an education. Completing a bachelor’s degree puts you in the top fifth in education simply because only 9% of Americans actually manage to acquire one. So, get an education.

Jobs that require you to use your mind generally have more prestige than manual labor jobs This isn’t surprising, but intellectually challenging jobs populate the upper third of the job prestige list, while physical labor jobs populate the bottom (craftspeople are somewhere in the middle). If you feel you only have the skills for physical labor, one potential way to move up is to look at a trade that mixes physical labor with basic problem solving, like carpentry, plumbing, electrical work, and so on. If you’ve got such a job and are looking to move up, it will likely require getting more education. In short, always work to improve yourself by learning new skills.

There is some age bias here As I mentioned above, younger people are inherently hamstrung by the wealth column, as most of us twenty and thirtysomethings are dealing with a very large debt load and not that many years in the workplace building up our wealth. In other words, the longer you’ve been earning money and not spending more than you earn, the more likely you are to be moving up in class due to the net worth bias.

This tool lays out exactly how to get ahead in America: get an education, constantly look for ways to improve yourself and aim upwards, and spend less than you make. If you do those three, you will move up through the classes. The people that fail to do these things are downwardly mobile.

A reader (let’s call him Ralph) wrote in with the following interesting situation (that has some parallels to my own):

About a year ago my wife and I bought a new house with no money down and a 30 year fixed rate mortgage locked in at 5.5%. This meant of course that we would be paying PMI for the first twelve years or so of the mortgage assuming the value doesn’t go up.

About a month ago, I switched jobs and literally doubled my salary. We have no intentions of changing our lifestyle at all and we plan on just investing the extra income but we are trying to decide what to do with it. Should we use it to pay off our mortgage above everything else? Should we invest it? Should we just pay it off down the PMI rate and then invest it?

We both have student loans that are around 4% but no other debts at all.

Ralph is in a pretty exciting situation that’s going to open a lot of doors for him in the long run. Suddenly, he’s in a position to start saving 80% or so of his previous take-home pay, which is going to make an enormous difference in the long run. Plus, they have no credit card debt, which would be the first major obstacle to overcome. They’re really in great shape here.

First of all, I would build up a nice hefty emergency fund, probably as much as six months’ worth of take-home. Given that you’re intending to live on your previous take-home, I would just have the fund include that amount plus your wife’s take-home. Put this money in a savings account that earns 5% APY (like HSBC Direct) and just let it sit there to protect you against a rainy day.

Second, I would pay the house mortgage down to 78% and get off the PMI. PMI averages around 0.5% of the value of the mortgage each year with no real return, and by accelerating the payments you can get out of PMI pretty quickly (just a few years), giving yourself several years where you don’t have to pay the PMI that you would have to if you didn’t pay ahead. This can net you 5% of your mortgage value. Even if you’re tempted, though, don’t stuff the emergency fund in here to get it over with, because I’ve seen time and time again that when I use my emergency fund to get something paid off, I need that fund the very next day.

After that, spend some time figuring out what your goals are. For some people, it is being completely debt free, so if that’s the case, focus on paying down your highest interest debt (in this scenario, your house) and then follow it with lower interest debt. You may also want to sock cash away so that you can pay cash for an automobile purchase (put the cash in a high-interest savings account until you’re ready to just write a check for the automobile). Investing is another option at this point - start building an investment portfolio, but know what your goal with the money is before you start (retiring early, building a dream home, etc.).

In short, if you’re actually committed to using the extra money to get yourself on a solid financial plane, the ability to use 80% of your salary solely for this purpose will help quite a lot. Good luck!

I am a huge proponent of cooking at home using as many basic ingredients as you can. Not only is it less expensive, it’s also potentially much more healthy than eating prepared foods, and with practice, it doesn’t really require all that much effort, either.

Since writing several posts about my passion for cooking and the cost benefits of it in the past, I’ve exchanged many emails with readers who have wanted to know more. One reader asked a particularly interesting question that I thought I would share with all of you (I added a link to an earlier article to clarify):

You talked about good cookbooks for learning before, but you also talk about how you didn’t actually learn how to cook from them. What did you actually learn from? How do you actually cook? What books do you use for reference? What ones are in your kitchen right now that you use regularly and inspire you to cook even when it takes a lot of time?

First of all, I now rarely use recipes when I cook. Recipes are truly great for learning how to make something, but once you’ve made it several times, digging out the recipe is usually a waste of time. Unless I’m learning a new technique or trying something completely outside of my experience, I don’t use recipes at all, and I quite honestly feel awkward sharing recipes on here because I usually do them completely on the spur of the moment. It is for this reason that I recommend cookbooks that cover a lot of techniques without getting complicated instead of books merely full of recipes.

That doesn’t mean that I eschew cookbooks - I really love ones that are full of creativity and technique and really inspire me to try new things - and also show me how to do it. I don’t like cookbooks that merely tell me how to follow a recipe, but instead break it down into things that I can learn and take away from the material to try with other things.

Having said that, my kitchen bookshelf actually only has four books on it. Most of them are stained, spotted, discolored, and otherwise made to look disgusting; for that reason, I actually keep them in a cupboard out of sight. I mostly rely on them for two things: inspiration and technique. If you’re just looking for recipes to follow, well, these books might not be the best help in the world.

Joy of Cooking This was the book that taught me how to cook, but it was like drinking from a fire hose. It’s basically a general reference for American cuisine and is almost always my starting point if I don’t have a clue where to start looking. If you are thinking of buying a copy, avoid the 1997 edition as it is quite different from the others and from my eyes not nearly as useful; the link above goes to the 75th Anniversary edition, which is much better.

The Silver Spoon I am a sucker for Italian food and there is simply no better reference for Italian cuisine than The Silver Spoon. Some of the recipes in here are pure craziness, but almost all of them have a nugget or two of technique or inspiration that can be pulled out and combined with other things. This is perhaps the best “bag of tricks” I have in my cupboard.

The New Best Recipe Most of the time, I prefer to experiment in the kitchen, but when I actually follow a recipe (usually because it has to be good), I turn to this one for recipes on most things. I also use it as the starting point for interesting variations - for example, I love to make homemade brownie recipes with Kahlua or raspberry liqueur or Irish cream mixed in, but the foundations of the brownie recipe come from this book.

Happy in the Kitchen I found this one wandering through the food section at a Barnes and Noble. Most of the time, I’ll grab a cookbook I haven’t seen before, browse through it, realize it didn’t surprise me at all, and drop it back on the shelf. I did that with this one, figuring it would be just another collection of recipes, but what I found was actually a collection of crazy and simple techniques. This is one that has found me plowing through each section doing things that seem bizarre (chicken sausage with a Saran Wrap casing, for example) but that turn out amazingly well. If I’m ever wanting a creativity boost in the kitchen, this one does the trick.

In all honesty, I have never kept another cookbook in my life - my wife keeps a few semi-random ones, but the rest have just simply gone away.

One final element, though, is perhaps the most essential of all (at least for me): an online subscription to Cooks Illustrated. I used to subscribe to the print edition, but the online archives are much more useful to me (mostly because they’re searchable). Cooks Illustrated is pretty much the only cooking magazine worth bothering with. You can try out their archives with a free 14 day trial.

Other than Google, these are all the resources I use in the kitchen. There are a few other books I am interested in acquiring, but those are mostly left for gift-giving occasions (a cookbook is a great gift, trust me).

I’m supposed to go pick up the home inspection report this morning. The inspection last night was quite interesting and I wound up with about ten pages of notes on it. It was just as I predicted - nothing big, but tons of very small nit-picky stuff - lots of fifteen minute tasks, about 90% of which I could easily do myself. I called our agent afterwards and after hearing the list, he suggested that we ask for a small cash stipend to take care of it ourselves and then just hold that cash for a serious repair.

Don’t Be Fooled Into Thinking An Oil Change Every 3000 Miles Is Necessary I do my own oil changes (would this be an interesting photo diary) and after checking my car’s manual, I discovered that my truck should have a change every 5,000 miles. So, compared to where I was two years ago (paying for an oil change every 3,000 miles), I’m saving a ton of cash. The key point is to check your manual to see how often it needs an oil change. (@ generation x finance)

12 Cheap Ways To Keep Fit And Stay Healthy My favorite, when I was in high school, was to push-mow the yard at a brisk pace. This always got me sweaty and the endorphins really flowing. I haven’t done it since then, but on some level I’m really looking forward to it with our new house. (@ the digerati life)

How To Use Credit Cards To Simplify Your Finances I’m a big fan of using credit cards for the convenience factor, but one should never, ever use them if they don’t have the cash on hand to back the purchases up. (@ money smart life)

The Simple Dollar Retro: How To Feel Happier About Not Spending Money More than one person lately has commented to me that they feel unhappy when they’re frugal and they feel happier when they’re buying stuff. This is basically my answer to that idea.