About three weeks ago, I had a long conversation with an old family friend who finds herself in a situation something like my own. In both of our cases, we are earning more than any of our siblings, and in both cases, we are the youngest sibling in a set of them. Since she’s substantially older than I am, I was asking her for advice on how to handle some of the issues that this causes - being the figurative “white sheep” of the family, in terms of being different in a good way.

Let me paint a picture of her for you to see, along with a few parallels in my own life; let’s call her Maggie. Maggie is the youngest of five siblings and her current salary is almost as much as her other four siblings combined. She lives about four hours away from her siblings, who all live fairly close to her parents. She’s about 40 years old. To parallel that with myself, I am the youngest of three siblings and my current salary is slightly more than that of my two older siblings combined; I also live about four hours away from my siblings, who both live fairly close to my parents, but I’m about 28 years old.

Here are a few key differences, however: neither of my siblings have ever asked me for a dime, though I did spontaneously (without request) aid one of my siblings in a serious pinch about a year ago. With Maggie, though, she has had requests from all of her siblings for money, though she said that the requests didn’t really start until she had been making good money for several years and everyone had become used to the fact that she was doing very well, which for me would mean that the requests would probably start a few years in the future.

What lessons did I learn from Maggie?

First, just say no. She loaned money to all of her siblings when they started asking, as she felt it was appropriate because she was in a better financial place. However, none of them ever bothered to pay her back a dime and the requests kept coming. She finally spent a day calling all of them and telling them that she wasn’t “lending” any of them another dime, and this resulted in some serious resentment that is still happening to a degree. Her advice? Never start, and if you have, call everyone and tell them that it’s over. If you don’t, they will “bleed you dry.”

Of course, that doesn’t mean that you should shun them, either. Maggie advises to give on your own terms. She does a lot for her siblings, but only at her own discretion. She has given money to them, taken her siblings and their families on vacation, and other things, too, but only because she wanted to, not because she had to. She’s even been a financial angel a time or two, dropping a cash gift when it wasn’t requested but obviously needed. If they ask, though, she won’t do a thing.

She also suggests angel funds for nieces and nephews. Whenever a new niece or nephew has been born, she has started an angel fund for them that they don’t know about and put in a small amount each month. When will they receive it? It’s at her discretion - she’s bought cars on their sixteenth birthdays, paid for a year of college, and in one case helped by giving 10% of a house down payment. Why? Her family is really important to her and this is a way she can give to them when they really need it without any expectations.

In short, the best way to deal with family financial issues is to give on your own terms and never on their terms. If they ask for financial assistance, just give a very clear “no” and move on with life. If you don’t, they will consistently drag you down.

A reader (let’s call him Martin) wrote to me with an interesting scenario about his decision to upgrade his home:

I am in my late 40’s and bought a home 8 years ago in a modest neighborhood and will have it completely paid off in about 10 years. My mortgage payments are around $470/month. I live by myself as my daughter is married. However, since I bought the house, I graduated from law school and am now working as an attorney. Consequently, my income has increased drastically and will continue to do so in the future. I’m tempted to stay in the house since the mortgage payments are so small and put away more money towards retirement, travel, and other things I enjoy. However, as an attorney working for a small-to-mid-size law firm, I’m supposed to market the firm and my own services, and my current neighborhood probably won’t generate much, if any, new clients. It’s blue-collar and most of my neighbors would have little use for an attorney. I’m wondering if it would be better for my career if I moved into a more upscale neighborhood that would help to develop a client database of white-collar individuals and/or businesses.

I know it’s a weird problem and the frugal part of me says to stay in the house I’m in now. So that’s why I’m emailing - to see if there would ever be justification for moving up in value when there’s no actual need for space.

So, let’s look at the important factors here:

A major boost in income Martin’s income is much higher than it used to be, which makes his monthly mortgage payments quite easy to make. It also means that he could easily handle higher mortgage payments.

A change in career - and thus new associates Martin is now associating with a different crowd of people and also trying to cultivate them as clients. His current neighborhood doesn’t facilitate such client growth, so there is some degree of a career advantage in moving to a new neighborhood.

A frugal desire to stay in the current house Martin’s current income enables him to do a lot of enjoyable things - and the low mortgage payment makes these possible. Moving would cut down on these options.

If I were Martin, I would ask myself two questions:

How important is success at my career to my life and values? The email mentions both an enjoyment of traveling and other things that are enjoyed, but obviously he made a mid-life choice to become a lawyer, which indicates some serious interest in cultivating that as a career. Which is truly the top value? Obviously, it doesn’t mean that you should abandon the other stuff, but one or the other should have the top importance.

How much house can you afford? Obviously, living alone means you don’t need a monstrous home, but if you move into a white collar neighborhood, your home will be much more costly than where you’re at now. You’ll probably be looking for a relatively smaller home in an upscale neighborhood, so I would target a few neighborhoods and see what the prices are on target homes in that area. Given the current housing market, it may be a good time to actually move up with so many people moving down.

The real key, though, is where your values lie: do you want to turbo-charge your career or do you want to enjoy other aspects of life more? That alone will tell you whether you should be moving or not.

After a weekend completely off of the internet and off of writing, I had some serious catch-up to do yesterday afternoon here at The Simple Dollar. I take this site pretty seriously as a hobby / side business, particularly as we move into a new house, and I want to consistently write high quality entries, and that takes time and focus.

As I was just settling in to get some writing done, my nineteen month old son woke up from his nap and announced loudly that he wanted to go to the park. I tried to focus, but he kept grabbing my hand, pointing at the door, and saying “Park! Park! Slide!” It didn’t take long for me to relent, put my laptop away, and take my son to the park. It came down to a choice between effectively putting in more work to earn money or spending quality time with my son, and without much question, I chose to spend time with my son.

Why did I make that choice? To put it simply, no amount of money that I could ever earn from The Simple Dollar or any other endeavor will ever be able to buy back my son’s toddler years. Even now, I sometimes miss his infant days, when he would just cuddle in my arms for hours, and I know how fleeting it is. He’s already a little boy, and there’s no turning back the clock to being an infant - that time has passed, and the good memories I have of those times will remain just that, good memories.

Now he’s a toddler, and he loves going to the park and climbing on the small child playset and going down the slide. Right now, he’s too timid to go down the slide by himself, so he can make it up to the top there, but he sits down at the top of the slide and reaches for me. I stand to the side, reach up to him, and he grabs my hand tightly and holds it as he goes down the slide. It won’t be very long at all before he won’t need me to go down the slide - he’ll do it by himself - and then that time will be gone forever and no amount of money will ever bring it back.

Time after time, choices present themselves in your life where you can either make some money or you can do something that is in line with the central values in your life, an opportunity that might not come around again. Take the opportunity every time and leave the money on the table. That’s perhaps shocking advice from a personal finance site, but I mean it more sincerely than perhaps anything I have ever written here.

Yesterday, I could have invested a few hours writing a few stellar pieces for this site that might have picked up a few more readers, or I could have gone to the park with my son. Maybe my choice means that I won’t be able to post a great piece today, but the opportunity to stand there and be able to take my son’s hand as he reaches out for it to go down the slide, that’s worth more to me than the greatest piece of writing that my spirit could ever produce.

As he grows older, my son will probably not remember this day specifically, but he will remember the fact that I consistently made very similar choices, and it will profoundly change him as a person. He’ll be more secure in who he is, feel safer and happier at home, and will have more courage as a person to make wonderful choices in life. With my values, that’s the greatest investment I can make.

With your values, maybe it’s something different, like working on environmental causes or working at a women’s shelter. One individual session might not make a difference, but realizing that fundamental value and making the right choice to reflect that value over and over again will make all the difference in the world. Never, ever let the need to earn some extra money get in the way of that, because it won’t be the extra $20 you remember when you look back on your life, it will be the choice you made to help someone else.

Today is our home inspection, which I’ll go to this afternoon. I am fairly good with identifying some structural and other problems and I’m pretty confident the inspection will be quite smooth, but I hope to learn some things as well.

Health and Wealth One of the best commenters on The Simple Dollar has a personal finance blog of his own, in which he wrote a series about personal finance connected to health issues. I wanted to link to one of the articles, but couldn’t make up my mind which one of the five to link to, but he put them all on one page for the readers. There’s some good basic information here. (@ 60 in 3)

Why You Need More Than An Index Fund This argument is good in one way and weak in another; my counterpoint would be that you should just own multiple index funds and balance it yourself. (@ money mythos)

How to Build Your Own Amortization Schedule I love well-written personal finance spreadsheet tutorials, and this one does a great job of teaching how to build a debt payment schedule in Excel (or the spreadsheet of your choice). (@ wise bread)

The Simple Dollar Retro: Ten Ways To Accelerate Your Net Worth Growth When you start calculating your net worth and looking at the growth (or lack thereof) from month to month, you’re soon going to want to look for ways to accelerate that growth. Here are ten ways to get that growth going up.

About three weeks ago, I made the mistake of loaning a small amount of money to a friend against my better judgement. This friend promised to pay me back in small installments each week over a period of time and we even wrote it down on paper and both signed it. He missed the first payment and the second and has now not returned my phone calls for a week, even though I haven’t mentioned the loan at all on any messages I’ve left for him. I can only assume it’s because of the new issues that this loan has introduced into a friendship that I valued quite highly.

Sadly, this isn’t the first time that this has happened to me, and it was because of this previous negative history of loaning money to friends that led to my reluctance in the first place. After these experiences, I’ve decided to never again loan money to friends, and here’s my reasoning behind that decision.

A continuing fiscal relationship adds a new dynamic to any relationship - a dynamic that is rarely healthy. Prior to the loan, your relationship was one of equals - you would spend time together because you enjoyed each other’s company. After the loan, the relationship changes: now you’re little different than a loan officer from a bank and your friend is a client. Do you really want to hang out with your loan officer? I don’t know many people that do.

A friend’s financial need may impact your own financial situation as well. Let’s say you loan your friend $500 and then the next morning your car breaks down. For many people, they’re going to suddenly be in a bad financial place just like their friend and almost always you’ll come to resent the friend because of the additional efforts and cost. Never, ever loan money unless you’re absolutely sure that you’ll have no need for it.

If you actually feel the need to help your friend out with money, make it a gift, not a loan. Although this still introduces a bit of the “lender-borrower” dynamic, by removing the strings of repayment you make it possible to continue the friendship. If you wish, you can leave it as a “repay me whenever you feel like it” nature, but even then you’ll be introducing a bit of a new dynamic that may be uncomfortable. Instead…

An offer to help with the situation in a non-financial fashion is often more valuable than financial assistance. Let’s say your friend loses their job. You could spend your time helping them to find a new one instead of tossing them some cash so they can “make it.” If they lose their home, you could offer space in your own home for them. Seek ways to help them out of their bind without offering money or items - this way, it is clearly seen as an act of friendship, not as a material connection.

Moral and emotional support is the best support you can provide. Almost always, convincing a person to really spill out what they’re feeling and empty the pressure that’s building up in their emotional well is the best assistance you can provide as a friend. Try to encourage them to talk about the problem that brought them to the point of needing a loan, and listen to what they really have to say.

If they won’t accept that you won’t loan them money, what was the friendship really about to begin with? Think about it: what kind of friend would shun you because you wouldn’t fork money over to them when they demanded it? In my eyes, if a friendship would dissolve because of that, the friendship wasn’t a strong one anyway.

Remember, a friendship whose value you can express in monetary terms isn’t really a friendship at all, so don’t try to inject a financial relationship in there. Just don’t do it.

Yesterday morning, I went to a Target just as it opened looking for some baby wipes for my son. As I strolled through the store, I noticed a small, excited crowd in the home electronics section, so I walked over to see what was going on. The store had received a new shipment of Nintendo Wiis and people were clamoring to get their hands on one.

As I’ve mentioned on here a few times, I’ve wanted a Nintendo Wii for a while and seeing lots of people getting one drove the desire to a fever pitch. There were about six left after the people in line got theirs and so I could have easily reached out and gotten one. We were at a family event, so I could easily visualize taking it back, getting it out, and playing Wii Sports with my sisters-in-law and other family members.

What kept me from doing it, you ask? Here’s what I did instead.

I took a walk around the store. Instead of just grabbing one and rushing for the checkouts as my gut told me to do, I decided instead to take a walk around the store, think about the item, and find the other thing I was intending to purchase (namely, the baby wipes). This gave me a “cooling off” period to get my rampant consumerism in check.

I considered the other things I could do with that $250. I could buy my son a very nice toddler bed with that money. It would buy a piece of furniture or two for the new house. That money could also be used to really stock the pantry when we move with all sorts of cooking supplies that would not only feed another hobby of mine but would feed my family as well. It could pay for part of a lawnmower, too. In short, I thought of many better uses for the money than buying a Nintendo Wii.

I seriously evaluated how much I would use the Wii if I did buy it. In truth, not all that much. It would be a complete blast when friends and family were visiting and I could see my wife and I playing bowling and boxing in the evenings, but other than that it would just sit and gather dust. I can think of many other fun things to do with my wife in the evening and also with visiting family and friends than merely playing with a $250 toy.

I decided not to discuss the purchase with my wife until after I left the store. I didn’t pick up my cell phone and call her because I think there’s some chance she would just tell me to get it, especially since The Simple Dollar is doing well. I knew that if I left the store, then discussed it with her, the odds of spending that unnecessary money were much less, but I could still express my desire to own one.

I gave myself a much lighter reward for making the correct but difficult choice. What was that? I ordered a few purely fun books from PaperBackSwap after we returned from the trip. It didn’t cost me anything, but it was fun and it felt like a reward after being “good” and not spending money - this reward didn’t violate the spirit of not buying the Wii, either, because it didn’t cost anything.

Just a year ago, I would have just grabbed the Wii and headed for the exits. I guess this experience is a clear sign of a change in financial direction.

On Memorial Day, I always find myself reflecting on relatives and friends who have passed away. I try to think of the things they’ve taught me about my own life, my choices, and my values. Here are a few that are particularly relevant here.

My paternal grandfather taught me that being frugal doesn’t mean being poor. He didn’t sit around and complain and dream; instead, he spent every day finding new ways to simply enjoy the world and his life around him. He had an immense garden that he tended to faithfully (and fertilized with compost of his own creation) and he found ways to use and re-use every item he had until it was no longer of any use whatsoever. He did this all with a simple joy and wit that made it seem as though frugality was the most beautiful and highest calling that one could possibly achieve. A frugal life is something to strive for and live with pride, not something to be ashamed of and do out of desperation.

My great uncle showed me that being a successful small businessman meant two things above all: the ability to keep track of every cent and the ability to relate to people. He paid every employee he had quite well and treated them as equals in making decisions, yet every cent that went into and out of his shop was of concern to him. It spoke to his values that every employee his small business ever had plus more than five hundred customers attended his funeral. Respect and treat with fairness everyone you interact with and life will give you back that same abundance.

My great grandmother held her family as the center of her entire life. She would go to incredible lengths for anyone in her family and there was always an extra plate at her dinner table for any sister, nephew, or third cousin twice-removed that might show up at her house. If someone in the family needed something, she would do everything she could to make it happen, from giving them money to calling up the child of one of her old friends and asking for a hand. She was also the most empathic person I’ve ever known; my fondest memory of her was from very near the end of her life, when she was quite sick. I was going through a depressed phase myself, and when I showed up to visit her, she glanced at me once and told the other relatives to leave. As soon as they did, she set her eyes on me and said, “You can’t fool your grandmother. What’s wrong?” And by the time I left her side, the side of a sick, frail, old, wonderful, amazing woman, I felt happier than I had felt in a long time. Find those values that are really central in your life and chase them with all of your heart.

My first cousin was involved in a drug operation and was making a good deal of money, but the whole business began to burn him out and when he tried to get out, it kept pulling him back in. He eventually began to become very depressed and the last time I saw him he locked himself into a room and refused to come out. He hung himself a few days later. Money isn’t the highest value in life.

The son of a family friend committed suicide suddenly because he was involved in a pyramid scheme that had begun to collapse - he had lost every material possession he had, his wife had left him, and he was no longer allowed to see his children. Just before this, he seemed to have everything: a beautiful family, a wonderful home, and all the trappings of a luxurious life. The pain of his choice hung over his family for many, many years. If a financial scheme has an obvious flaw or it seems too good to be true, avoid it like the plague as it will only bring you pain.

My dog Ruby died when I was five; she was hit by a delivery truck. She was a mixed breed dog that was given to my father because the owner didn’t want it, but I can still remember loving that dog so much that I would get up in the morning and run outside in my pajamas to find her - she would run to me and lick my face. Sometimes it is the free things that are the most wonderful of all.

Hope you’re enjoying Memorial Day… I spent this weekend on a road trip with my family, so things may be a bit slow around here today. Things will be back to normal tomorrow. Here’s a few personal finance articles to tide you over.

What Percent Of Your Income Do You Spend On Housing Costs? Our housing payments look like they’ll be close to the national average, as based on the chart in this article. (@ money, matter, and more musings)

Wealth Transparency I’m pretty big on being financially transparent with my immediate family (especially my children as they grow older), so I found this article quite interesting. (@ dual income no kids)

When Do You Appreciate Your Money The Most? Honestly, it’s when I put my son to bed at night. After having been deep in debt and in a very tenuous financial position, I now see how important he really is and I’m glad that I have the financial resources to remain stable. (@ my open wallet)

The Simple Dollar Retro: What Can I Do Today To Make Me Rich In The Future? Most people have a hard time getting started with personal finance and frugality because it’s a slow road. To counteract that perception, I made a list of things you can do immediately to put yourself in a better financial position.