Each Sunday, The Simple Dollar reviews a personal productivity, personal development, or business/entrepreneurship book of interest.

When I was a young boy, my grandmother passed away very suddenly, on Mother’s Day, actually. While I don’t remember her passing away very distinctly, I do remember my grandfather living alone afterwards, and I remember that he just seemed different – sad, and a bit withdrawn, almost as if he were just going through the motions. It was less than a year later that he passed away, too.

It said on his death certificate that he died of cancer, but even through my seven year old eyes I could tell that he died of a broken heart.

My grandfather’s final months are the earliest memory I have of someone suffering through a life-altering and painful event. Since then, I’ve witnessed many others – and experienced some myself. Some people handle them well and recover in a short while, often taking away some valuable lessons from the experience and using that experience as motivation for success. For others, such experiences can be the beginning of a long downward spiral.

What’s the difference? What enables some people to turn those negative experiences around and use them to build character and fuel greater success in life? After the Darkest Hour by Kathleen Brehony addresses that very question, offering a great deal of insight into how to channel the power of a painful event into something positive.

Part One – Reflections on Suffering

The Truth about Life – Everyone Lives a Drama
Everything changes. Change is the natural state of things – people change, situations change, lives change. An inherent part of that change is loss – we lose what we once had, and sometimes that loss can be deeply painful, but that loss is something that happens to everyone. While we can’t control the loss, we can control how we respond to it – the death of a loved one may be out of our hands, but it’s up to us to figure out how to respond. In that loss, though, new doors open, and often in the most painful of moments, we find that we have opportunities and experiences that are new and valuable and important. A death can bring about a reconciliation. A disaster can bring about help from unexpected places. A personal crisis can bring your true friends to the forefront.

Lead into Gold, or the Alchemical Process of Making the Best from the Worst
Here, Brehony largely focuses on the analogy of alchemy to recovery from a bad situation. In both cases, you’re attempting to turn lead into gold – one literally and one metaphorically. What’s key in both is the idea of transformation – you go through the flame and come out on the other side, transformed and better than you were before.

Brick Houses and Straw Houses: How Prepared Are We for Hard Times?
Brehony argues here that the most valuable thing we can have to prepare for a bad situation is a strong sense of self-worth. People who enter into a downward spiral after a disaster often have low self-esteem – they believe that the bad event was largely their own fault or else made worse by their personal faults. Instead of picking up the pieces and moving on, they blame themselves, making for an even worse picture of themselves. The key thing to remember is that most bad events are not your fault, and to convince yourself that it is is not only bad logic, but mentally unhealthy and even dangerous.

Beyond Resilience
Some people are simply more resilient to disastrous events than others. After the Darkest Hour points to seven personal characteristics that show up in resilient people: insight (asking the tough questions and seeking answers), independence (standing alone and having reasonable boundaries), relationships (having fulfilling ties with others), initiative (pushing oneself to understand the world around them), creativity and humor, morality (having a strong sense of right and wrong), and a general resilience made up of persistence and flexibility. Focusing on these traits in the good times will make it much easier for you to weather the bad (plus, they make it easier to deal with day-to-day life).

Rowing versus Flowing: Luck, Destiny, and Free Will
Another challenge that people face is distinguishing between luck, destiny, and free will. Quite simply, the decisions and actions of others are almost always entirely out of our hands – we can hope to guide them, but the choices they make are often up to them. A concerted effort to help is a wonderful, powerful thing, but you are not the person to blame if that help is left unused. That choice not to use the help is in the hands of the other person.

Part Two – A Dozen Strategies for Growing Through the Pain

1 – Discover a Larger Perspective
No matter how devastating something seems, in the greater scheme of things, it’s not really that big of a deal. Consider the entirety of the human race, for one – the great suffering that others have experienced. Or, go beyond that and recognize how tiny humanity is compared to the whole universe. Solace in a higher power is also powerful – spirituality and religion can be a big help in putting your personal problems in perspective.

2 – Turn Toward Compassion and Help Others
Instead of wallowing in your own self-pity, look to those around you who may also be suffering and try your best to help them through this crisis. When you complement your own suffering for compassion for others who are suffering, it can make your own suffering much more manageable. One effective way to do this is to get involved with volunteer work, helping out those who are less fortunate than you.

3 – Recognize and Stop Self-Imposed Suffering
Many people take bad situations and use them to beat themselves up, offering these situations up as “evidence” of their own personal failings. If you’re experiencing something difficult in your life and find yourself using that difficult experience to “prove” that you’ve somehow failed, try stepping back and looking at the situation more carefully. Quite often, you’re not the one at fault at all, and you’re merely letting your own self-esteem down.

4 – Practice Mindfulness
Be mindful of what you’re feeling and thinking. Don’t let your emotions get the better of you. Instead, practice calmness. Brehony encourages people to take up meditation, observing their own breathing and simply get in touch with how they’re truly feeling. She also encourages yoga as an opportunity to be mindful of one’s current situation and personal feelings.

5 – Grieve
Don’t try to bottle it all inside when something bad happens. Allow yourself to grieve. Cry. Let that pent-up energy flow out in a non-destructive way. Find a shoulder to lean on, if you need one. Talk about what you’re feeling, and remember the positives of the life that person led or the situation that has now ended. I’ve always found that a wake helps more than anything for a funeral – get everyone together who cared about the deceased before the funeral, and share food, drink, and remembrances.

6 – Build Good Containers
“Containers,” in this context, refers to stored-up love and positive feelings that you can tap into when you need them. In other words, spend time when you’re happy building deep and strong relationships with your family and your closest friends, and then tap that positive relationship when you’re facing a disaster. Reciprocate, too – be there emotionally for your friends and family when they need that shoulder to lean on.

7 – Count Your Blessings and Discover the Power of Optimism
It’s often hard to think of the positives in a negative time, but stopping for a moment and thinking of all of the positives in your life when something’s wrong can be a great way to put that negative experience in perspective. Think of all of the people you care about, and those who care about you. Think about all of the great experiences you’ve had, and the experiences you’ve got planned for the future. Your life is filled with great things – step back and look at them when the chips are down.

8 – Find Courageous Role Models and the Hero Within
Brehony suggests also finding a few personal heroes, particularly ones that have overcome personal tragedy to accomplish great things in their life. For example, I often use FDR as a personal hero, and I reflect of the dark times of the early 1920s when he was struck with Guillain-Barre Syndrome and largely became confined to a wheelchair. He nearly died, found himself with a body unable to do what he wanted, and nearly gave up. But he recovered and went on to guide the United States through the Great Depression and almost all of World War II. Many others have survived situations when the chips are down and gone on to much greater things.

9 – Keep a Sense of Humor
Laugh. That seems impossible during some of the saddest times, but laughter is often the best medicine for what ails you. Above, I mentioned the idea of a wake for a person who has passed on. Take that opportunity to tell humorous stories about that person, ones that will get everyone to laugh about a fond or funny memory. I remember my family having many informal wakes for people – recently, we had a wake for my deceased uncle that was filled with laughter, which helped everyone deal with the situation.

10 – Express Your Feelings
When you’re feeling pain, it’s healthy to find ways to express it. Start a journal and write down exactly what you’re feeling. Dig into an art form that has meaning for you. If all else fails, just call on someone who’s willing to be an ear and talk it all out. Say what’s on your mind and in your heart – just get it out there, so it doesn’t sit inside of you and weight you down.

11 – Silence, Prayer, and Meditation
For some, introspection may be the answer – I know that for me, silence, prayer, and meditation all help in times of crisis. It provides a chance for me to reflect on what’s really happened – what I’m missing now, what I’ll do next, and what I still have in my life to cherish. For me, such meditation is part of the grieving process, making it easier for me to internalize what happened and move on.

12 – Come to Your Life like a Warrior
Negative events are something to be conquered and something to gain experience from, much like a warrior on a difficult quest. Face this negative event like an enemy – focus on it intently, defeat it, and learn from it. Treating a negative situation with intensity and all of the strength you can muster can help you build a path to success beyond the situation.

Some Thoughts on After the Darkest Hour
Many of the techniques discussed can be a strong part of daily life, even if you’re not suffering from a negative situation. I meditate and pray daily, and I make an effort to work on many of my personal relationships, too. There will come a time when this effort put into relationships will pay off – people will be there for me when I need them, and my own routines of reflection will enable me to internalize the pain.

One of the big meta-themes is that the process of internalizing pain is often fertile ground for growth. When something bad happens and you deal with it in a healthy and successful fashion, you often will find that doors are open that were blocked before, either by the pre-existing situation or by your own attention in different directions. If you let the pain obscure these doors, you miss out on potentially great events.

Is After the Darkest Hour Worth Reading?
After the Darkest Hour is the perfect book to read if something very painful has just happened in your life and you’re having a very difficult time internalizing it, falling into traps of blaming yourself and surrounding yourself with negativity. We all weather painful events in life, and there are two outcomes from it: you can either let it drag you down or let it lift you up – this book does a very good job of pointing you to the latter.

After the Darkest Hour is one of those books to keep in mind for when the situation happens. Most of the time, it won’t have any value to you at all – it doesn’t really help when things are going well at all. The information inside really only steps up to the plate when things are at their worst: someone you deeply care for dies, you’ve lost a key relationship, or something else crucial in your life is lost. In those situations – particularly when you’re finding your negativity and pain festering and perhaps building – After the Darkest Hour can offer some excellent advice. This is a great one to check out from the library during those key moments.

Over the past month, I’ve been doing quite a bit of traveling – family-related trips, vacations, and so on. That basically means that I’ve been managing my writing and other professional obligations out of my travel bag for the most part.

How do I do that? How do I manage to keep up with my writing, keep adequate research materials with me, keep track of my ideas and ongoing projects, and manage all of it effectively enough so that I can sit down anywhere and get right down to business.

While figuring out how to write this post, I started by simply making a list of the little things that really add up when taken as a whole, and when I had them all written out, I realized that it might be really effective to just list them all. So, here are ten productivity tips I’ve found that help me keep my ideas and writing straight as a writer on the road.

Get a good messenger-style bag. This has made all the difference for me. Up until recently, I used a backpack as a travel bag and it would quickly descend into chaos, with items floating around all over the place in the bag, making me dig forever for the individual item I needed. Recently, I moved to a messenger-style bag, with a large single pocket for my laptop, a few magazines and books, and some papers, and a side panel with a ton of additional pockets. This has made traveling far easier than before.

Utilize those pockets sensibly. One challenge with having a lot of little items and a lot of pockets is that you forget what pocket you put your things in. What I’ve found is that putting stuff into pockets so that just a bit of the item is peeking out is really useful for finding stuff. When I open up the bag, I can see at a glance where my small notebook is, my pens are, my current reading is, my memory stick is, my USB mouse is, and so on.

Use Backpack to manage notes for projects and meetings and store to-do lists. For simple personal to-do notes, I still use Remember the Milk (which does that job fantastically), but for collecting notes for work projects and making more complex to-do lists, I’ve fallen in love with Backpack. I can use it anywhere I have wi-fi access and it does a stellar job of storing all of the data I need in one place. I actually prefer it to most offline tools – plus, if my laptop has a hardware failure, I don’t lose those notes or project ideas.

Keep a pocket notebook and pen with you always – it’s even more important on the road. Without the familiarity of your normal work environment, it’s very easy to lose ideas through the cracks. This makes the idea of a pocket notebook even more paramount. Keep it with you – along with a good pen – to jot down any ideas that creep into your head that merit any follow-up whatsoever. Then review your jottings once a day or so.

Keep at least one item with you that inspires ideas. When I’m at home, I have all kinds of books and other materials to help inspire my ideas. On the road, such items are unavailable to me. Because of that, it’s vital for me to include at least one item in my travel bag that’s not strictly there to aid as research material, but there solely to inspire my ideas. For me, it’s often recent issues of magazines related to personal finance in some way – Consumer Reports, Money, The Economist, BusinessWeek, or something like that. If I need inspiration, I leaf through those and try to find ideas to riff on.

Distinguish quickly between things that can easily be done on the road and things that can’t. Whenever I’m struck with inspiration, I have a tendency to want to start digging into a hot idea immediately. Of course, there are some ideas that simply don’t work out of a travel bag. The key is to distinguish which is which as quickly as I can. I ask myself a few key questions: to do this well, does it require research materials I don’t have? Are there supplemental materials (such as pictures) I’d need to create elsewhere? The key to staying productive is knowing what you can actually do in your given situation – and figuring it out quickly.

… but don’t abandon a great idea just because you can’t do it right now. What I do for those things is open up a document on my laptop, sketch down all of the details I can, then save it in a folder of things to look at when I get back to the office. A good idea is a terrible thing to waste, but so is chasing something that’s really beyond your means to complete successfully.

Make your work environment as conducive as possible – wherever you are. For me, that means controlling the sound, and that means having a pair of very good headphones that cancel out external sound and only allow in what I want (usually calming music that helps me to write). For you, it might mean other things – a picture of your family or the right kind of beverage might be the key. Make sure whatever it is you need to make your work environment a success is in your travel bag if possible.

Know where to find the things you need to work (such as wi-fi). For me, wi-fi is essential to the work I need to do, so I made a master list of chains that give away free wi-fi to patrons, and I keep it in mind when I’m out and about. Because of this inventory, I often keep an eye open for Panera, Caribou Coffee, and Fazoli’s when I’m traveling, with several other lesser options, and use those places as my “home away from home.”

If all else fails… If I know I’m going to need a piece of information that’s only stored electronically, I make a printed version before I go. I keep a paper copy of my schedule, key phone numbers, maps of each route I’ll need to know, a to-do list, and other such materials so that if an electronic item stops working, gets damaged, or fails in some fashion, I’m not completely lost while on the road. This has saved me more than once.

I get asked to review all sorts of crazy personal finance books, plans, programs, and schemes all the time, ranging from the reasonable to the completely outlandish.

For the most part, all of these programs share more or less the same content. Get your spending under control, call up your creditors and negotiate lower rates (or in some cases a balance reduction), adopt a very strong debt repayment plan, and kick it in the teeth. A few of the programs involve some legal manuevering in which you attempt to buy your bad debt from the creditor (and then obviously dismiss it), but the legal gamesmanship there is murky, dealing with legal nuances that are far from clearly explained.

This is the meat and potatoes of personal finance, and it’s pretty much true across the board. Spend less than you earn and get rid of bad debt and plan for the future. Most of it boils down to nuances of those two statements – earn more, spend less, pay off debt, invest, and so on.

In truth, the big difference between most personal finance books, programs, and other materials is in how they’re packaged. Dave Ramsey’s stuff is packaged in the guise of a straight-talking Christian. Suze Orman paints the picture of a successful career woman dispensing this advice. Jim Cramer plays the role of exciting enthusiast. David Bach plays the role of the “friendly teacher” who tries to make something complicated into something simple.

And you also have the people that use other methods to convince you. Kevin Trudeau, for instance, plays the role of the insider who is letting you in on “secrets” (often making over the top and potentially false claims along the way) – and that appeals to some people.

Here’s the truth: almost all of these programs work. They all deliver most of the same information, they all agree on the basic principles, and they all offer a program that will get you into a better financial place.

The only real difference between most of them is in minor details – and in how they’re presented. That’s really it – the little details and the presentation.

So how do I pick the best program if they’re all largely the same? Here’s where the library plays to your advantage. If you’re stuck in a financial hole and need help digging your way out of it, head down to your local library. They have a mountain of books and workbooks on personal finance topics. Dig through several of them and find the one with a voice that clicks for you. It might be the Christian-edged straight shooting of Dave Ramsey. It might be the liberal themes of Your Money or Your Life. You might find what you need in the strong “coach” voice of Larry Winget.

Your local library is the place to find out what works for you. When you do find the right one for you, though, it can be worth your money to buy that program for your own use. That’s so you can get away with writing notes in the margins, underlining key pieces, filling in the blanks in workbooks, and so on.

For me, it happened to be Your Money or Your Life that clicked when I needed it, though I found Dave Ramsey’s material to be influential, too. I found it by realizing I was in financial trouble, going down to the library, checking out a pile of personal finance books, and reading through them until I found one that really made sense for me.

If you’re worried about your personal finance situation, don’t run down to your bookstore and pick up a book for help. Instead, read the free articles that are out there and hit the local library. Then, if you find a book or a program that really clicks for you, then buy it for your own long-term use.

Before I got control over my spending, I used to splurge all the time on small things that I wanted.

I’d buy a new book (or three) every Friday in order to “reward” myself for getting through another work week.

I’d often buy a new CD or DVD whenever I received a paycheck.

Whenever I’d hit a personal or work milestone, I’d usually buy a video game as a reward for myself.

It was easy to justify these purchases. I worked hard and earned a good salary. I deserved some of these items, particularly after getting through some obstacle in my life – even the routine ones, like finishing a work week.

At first glance, this doesn’t seem like that big of a deal, but when you step back and look at it from a wider perspective, it’s clear how big this “reward splurge” problem really was.

Let’s say I bought $25 worth of books each Friday. Let’s also say I received two paychecks a month and bought a DVD for $15 with each one. And let’s also say I’d buy a new video game once a month, for $50.

Right there, $180 gone each month. Boom.

Do that month in and month out for four years and you’ve spent $8,640. Just on silly little “rewards” for ordinary life accomplishments.

The amazing part is that I know of people who are far worse. One of my closest friends in my college years went on to buy a new video game every weekend (about $50 a pop) and about twice a month would buy a box of trading cards (about $100 worth). Another lady I knew used to spend about $200 on new clothes each Saturday afternoon – it was her way of “release” after a week of hard work.

This is the worst type of financial leak – unnecessary spending that’s become a part of a routine and tied to a sense of accomplishment. Not only does it cost a lot of money over time, it also reduces the actual good feelings a person gets from the accomplishments themselves.

One of the best personal finance moves I’ve ever made was breaking this habit. I stopped buying things to “reward” myself and instead started putting that money towards repaying debt. I didn’t let my reading down, either, because I started getting heavily into the local library and the amazing usefulness of interlibrary loans.

It’s not a simple routine to change, though. Here are four tactics to use while breaking yourself of this costly habit.

Find non-purchase methods to celebrate your successes. Instead of heading out to buy something expensive, why not go home and have a nice romantic dinner with your spouse? Spend some time playing with your children, or spend some time doing something personally important and enjoyable. I often find a bigger positive rush and “rewarded” feeling from

Always ask yourself why you’re making a purchase. If the reason revolves around a routine or a self-reward, that’s a sure sign that you shouldn’t be in the store. It’s fine to occasionally buy yourself unnecessary things, but if they’re tied to a part of your routine, that’s dangerous and should be avoided.

Break up the part of your routine that causes you to splurge. If you find yourself stopping each Friday to pick up some sort of splurge item, do something else on Fridays that takes you away from the temptation. Take an alternate route to work on Fridays – or use Fridays to find a better optimal route to and from work (preferably one that doesn’t take you close to the places you might stop). If you go out on Saturdays to shop, instead stay at home and find a personal project to work on.

Keep an entertainment portion of your budget. If you still want to splurge but want to control it, keep a portion of your budget for entertainment and make all splurge purchases come out of that portion.

My father has the most innate, natural grasp of mathematics of anyone I’ve ever known. He can’t tell an equation from Greek, but when you back away from explaining things in terms of equations and instead talk about it conceptually, he understands intuitively a great deal of mathematics. Conceptually, he understands it as well as I do, and I took quite a bit of advanced math in college.

Not only that, he’s incredibly quick to pick up anything. He can fix a radio, dress and skin a rabbit, read a Pulitzer Prize-winning novel, run a trot line, entertain a dozen people, and conduct a very interesting debate about politics, often all in the same day.

The kicker is that my father never had the opportunity to even complete high school. He quit because he had a sick father who was unable to work and three siblings who needed food on the table.

Every so often, I try to imagine him as a teenager. He made the choice to do what he needed to do for his family without skipping a beat, and he likely never knew or saw that he had the opportunity to do great things with his life. He had all of the tools he needed right between his ears, but fate dealt him a different hand.

Bad Luck That Changes a Life
Quite often, the only difference between the people we look up to and the people we look down upon are a handful of little events. A parent that cared a little more. An unexpected death. A bad test result with no positive reaffirmation to get up and give it another shot. A lost promotion. A hurtful comment at an emotionally weak moment. A flash of anger, by them or by someone else. A bit of peer pressure. The opportunity to make a connection with someone who can open a door.

Our lives are full of these little events, most of which are out of our control. It’s those events – and how we react to them – that determine much of what we have in life, and what we work for.

Hard for Some, Easy for Others
Some people are “lucky” in that they wound up on the right side of most of the coin flips in their life. Others are “unlucky” in that some events in their lives led them down a path away from where their dreams might have taken them.

Take my father, for example. What might have happened to his life if he had completed school? Might he have met a teacher that inspired him or recognized his natural talents? That one moment in time – the sickness of his father and his caring for his family – changed his entire life. He wound up never really leaving the town he grew up in and before he knew it, he was married, working in a factory and as a commercial fisherman for his “side hustle.”

What would have happened if he had stayed in school long enough for the math to click into place for him? What if a teacher sees that natural skill and pushes him to pursue it, making a few phone calls and getting him some scholarships that get him into the nearby university? His life follows a completely different path.

But his life – and his moral character – didn’t lead him down that path. Instead of being a “lion of the community” and living in a nice house, he lives in the same small old house that I grew up in, one in sore need of repair in places. Instead of going to the Lion’s Club, he has a beer with his friends at a picnic table. All because he had a hardship hit his life, and he made the courageous choice to give up his path and do what needed to be done.

Take another situation that pops into my mind. One of the most bright and cheerful and wonderful women I know, the third child of five, contracted polio as a child and, by early adulthood, was confined to a wheelchair and eventually required a great deal of equipment and medicine to even go through life. Through all of this, she’s maintained a sunny disposition. Her dream as a child was to have a house full of children, but life didn’t allow her to play that card. She has three beautiful sisters, all of whom had multiple children, and when you look back at their childhood and high school pictures, you see four equal young women, all with great opportunity in front of them. Three of them got to live their dreams, the fourth wound up with polio.

It’s so easy to look around and see those who wound up with lower-paying jobs and a different social outcome and draw some negative conclusions about them. They didn’t work as hard, or they didn’t apply themselves, right? Only rarely is that actually the full picture.

Never Give Up
Most of you reading this site – and me included – are among the lucky ones. We’ve either not had many hardships in life or we’ve had enough positive luck to counteract the hardships.

But for those of you who have been knocked down by life, here are some lessons I’ve learned from the people in my life who have faced terrible luck and rolled through it to find whatever may come.

Don’t blame others. If something devastating has happened to you personally, don’t spend your time blaming others for it. Your problems and challenges in life are not their fault. I happen to be deaf in one ear, which means that in some situations I simply can’t hear people speaking on my left side. This is not their fault, and blaming them for me not hearing their comment is foolish.

Get back up and try again. If you fail at what you’re trying to accomplish or if life knocks you down, don’t curl up into a ball and give up. Get right back up and give life another swing. I’ve watched many people give up on life because they hit a rocky patch – even after they came out the other side of it, they wallowed in self-pity and refused to get back up again. The mistakes and bad breaks of your past have nothing to do with your present.

Don’t be too proud to ask for help. When something disastrous befalls you and you’re having a hard time picking up the pieces, ask for help. Ask your family for help. Ask your true friends for help. They will be there for you when you need them, and they want to help you when the chips are down.

Make your mind up about others based on who they are and how they act, not by how they look or what they own. This is true for everyone. I’m reminded of a small company I’m familiar with. At one of them, the most naturally gifted person in the building is the janitor. He’ll often trudge by a group working on a project together and, off the top of his head, suggest an amazing solution for it. He does it so often that many of the workers there actually seek out the janitor for input on what they’re working on. But the company can’t promote this man, oh no, they can’t. He’s a lowly janitor who doesn’t have a degree. Even the people who ask him for help sneer about him behind his back.

As for me? If I were to start a competing business, that janitor would be the first person I’d want to hire. He wears shabby clothes, talks slowly, and pushes a broom all day, but underneath that he has tremendous gifts, ones that are often ignored because people can’t get past their first impression.

Jealousy does nothing more than drag you down. It’s easy to feel jealous of the successful person. We envy them and try to find explanations for how they found success while we did not. Doing that is a waste of time. Focusing on the fact that someone else had better luck than you did is time spent not focusing on the aspects of your life that you can control. Don’t worry about the guy who just got promoted – worry instead about what you can do to snag the next one.

One left a sweater sitting on the train
And the other lost three fingers at the cannery
Everything’s so easy for Pauline
- Neko Case, Margaret vs. Pauline, from Fox Confessor Brings the Flood

One question I often get from new and expectant parents is how much they should be saving each month for their child’s college education. Obviously, if you’re looking at paying for college eighteen years down the road, there are going to be a lot of unknowns: how will college funding change by then? How much will tuition go up? How will parent contribution expectations change?

Even with those kinds of variables, you can still come up with a reasonable college savings plan for your child, even at birth. Here’s exactly how we made the calculations for our own daughter at birth.

First, how much do you want to save?
This is more of a personal question than anything, as different parents have different philosophies and there is no real right or wrong, just different styles.

Some parents believe in a philosophy of no college savings for their child, believing that the lessons learned in paying for one’s own college career are quite valuable. The knock against this is that many students who are put into this position leave college with a tremendous amount of debt.

Other parents believe in a philosophy of paying for all of college – or as much college as possible. Doing this ensures that the child gets into the “real world” with as little burden as possible. Of course, the argument here is that it makes a college education seem much less valuable to the student and has been shown to result in worse grades as well.

Many parents wind up somewhere in the middle, setting a goal of 1/3 or 1/2 of college expenses. For us, we’ve adopted the philosophy of paying for 1/3 of tuition and all textbooks and other educational expenses (like a computer). We want our children to have to work for it, but we also want to take the edge off of their financial burdens.

Action Point #1 Sit down with your spouse and figure out how much of your child’s college education you want to cover. There’s no correct answer for this, only what you feel is right.

Determine a dollar amount
Once you know the percentage of college expenses you want to cover, you’ll need to come up with a target dollar amount. The first step is what college or university would you like your child to attend, realistically? Some families might insist on Ivy League, others might think the local state university is the right choice. For me, I’ll use the school I really wanted to attend (but simply couldn’t afford): MIT.

I discovered that tuition and fees at MIT cost $34,986 for 2007-2008, with a total tuition, room, and board cost of $44,936, but that the average student receives $28,000 in scholarships. That leaves a remaining cost of essentially $17,000 for tuition, room, and board. They also estimate $2,800 for additional college expenses, such as textbooks and supplies and other activities.

Action Point #2 Pick a “target school” and obtain tuition, room, board, fee, and other expense estimates for the most recent year, as well as an estimate of the average scholarship package that a student receives.

Since my wife and I intend to pay 1/3 of the tuition, room, and board and all of the additional college expenses, we would be on the hook for about $8,500 a year in today’s dollars.

But then there’s inflation. It’s reasonable to expect a 6% annual inflation rate for these expenses. Given that, we should expect to come up with about $25,000 a year for our child’s expenses, totaling $100,000 over the four years they’re in school.

Ouch.

Action Point #3 Calculate the portion of the education you intend to pay for, then adjust that amount for the correct number of years of inflation (6% a year is a reasonable calculation).

What’s the plan to reach that amount?
In essence, to follow our plan, we need to save $100,000 over the next eighteen years. Thankfully, we have mechanisms like 529 plans to save for college without having to worry about taxes, but that’s still a mighty goal.

If I assume an 8% annual return on my investment, I need to put away $215 a month from birth to have $100,000 when the child turns 18. If I assume only 7% annual return, I need to save $238 a month.

Of course, I can also assume that I will use other methods to help cover this amount. I might plan to use home equity to pay for some of that amount. There may also be other opportunities for assistance – for example, grandparents may wish to contribute to a 529 as well. You might also decide that you’re aiming unrealistically high with your school selection and choose instead to use a lesser school for your estimates. This may move your estimate downwards.

The key is to figure out how much you need to be saving, starting today.

Action Point #4 Estimate how much you need to be saving per month, then start a savings plan (like a 529) and sock that money away.

One key thing to remember, however, is that if you don’t meet your goal, it’s not necessarily the end of the world. Most likely, if you are making an aggressive plan right now, one that assumes strong accomplishment from your child, your child will choose a different path, one that doesn’t require quite as much outlay from you. Even if they meet or even exceed your expectations, you’ll still be able to help them along their way.

The most important thing is to start as young as possible. If you wait until your children are even eight years old to start saving for that $100,000 goal, you’ll have to save $555 a month to make it with 8% annual returns. If you wait until they’re twelve, you’ll have to save $1,093 a month.

The earlier you start, the easier it will be to help your children with college. If you have young children – or even a child on the way – get started today.

One of my readers related a story to me over a long conversation that, rather than posting a bunch of long quotes, I’m going to paraphrase.

This reader, who we’ll call Maggie, receives an over-the-top lavish gift from her great aunt each year. Her aunt loves buying the perfect gift for everyone in her family and, because she’s well off, she can afford to spend the time and the money in order to find that gift.

What I found interesting is that even though quite often the gift was a truly thoughtful and beautiful gift, Maggie reacts to it with only mild happiness towards the gift. I would have been ecstatic to receive the most recent gift – an Amazon Kindle with a $250 gift certificate to the Kindle Store – but Maggie did not.

In fact, what she felt was a mix of feelings, and most of them were negative. She knows her aunt loves her without the lavish gifts. She thinks that the money spent on the gifts would be better served going to charity or even kept in her aunt’s coffers so that she’d be okay in the event of something awful. She appreciates the gifts, but often finds much more meaning in the much less expensive gifts given to her by her mother, which are usually handmade or are extremely carefully thought out. And she also finds it difficult to relate to the life of a person who can throw around money so easily, buying everyone in the family gifts that push into the four figures for every holiday and birthday.

Maggie’s aunt has her heart in the right place, don’t get me wrong. It’s awesome that she’s so giving of what she has. But Maggie might better be served giving smaller gifts and instead perhaps putting the money she wants to give to her family into accounts for each of them, to be given when she passes away. This way, the aunt gets the joy of giving thoughtful gifts, is able to show her love through her largesse and make the recipient’s life more enjoyable, and doesn’t have to deal with the side effects.

Are you like that aunt, giving sometimes over-the-top gifts to the people you care about? You might be surprised to find out that sometimes the gift isn’t really all it’s cracked up to be, like the gifts from Maggie’s aunt. Here are six things to consider.

Overspending is not love.
Maggie knows her aunt loves her regardless of the gifts that she receives from her. This love isn’t formed under the Christmas tree. It’s formed with phone calls, afternoons on the front porch, family reunions, and big life events. Maggie doesn’t love her aunt because of Amazon Kindles – she loves her aunt because her aunt has been there for the big moments in her life and has been there for her when she needed her. That’s what love is, not stuff.

Overspending puts you at risk, and that hurts the recipient.
While Maggie’s aunt might be in a very strong financial position, many big gift-givers are not. Consider what happens if you give an expensive gift, then find yourself declaring bankruptcy soon. You’ve just given a second gift to your recipient: guilt. Your loved ones do not want to see you in a financially pinched situation where it’s difficult for you to live your own life. Don’t stretch things just so you can buy a gift that’s actually beyond your means, because the consequences will hurt both you and the recipient.

Overspending can create family rifts in unexpected places.
Imagine, if you will, Maggie’s mother. She might truly wish to be able to afford such lavish gifts as Maggie’s aunt tosses out, but she cannot. So she may feel inferior and guilty because of it. Imagine, for example, Maggie herself, who receives the items but then wonders whether the money used might not have been better used somewhere else. Little tics like that add up over time, over a period of many years where expensive gifts are sent and little bruises add up. I’ve watched it happen in my own family over similar circumstances – little, seemingly insignificant things build up and erode away a once-strong relationship.

Overspending can create inflated expectations.
Alternately, imagine one of my old school pals whose grandparents got into a routine of giving him amazing Christmas gifts. One year he received a Nintendo from them, followed later by a Sega Genesis and then the following year a computer. He loved those items, but he also came to expect something awesome from his grandparents, so when their financial situation changed and they skipped Christmas one year, he accepted it on the surface, but on a lot of levels he was hurt by the change. He had spent months looking forward to a great Christmas surprise that suddenly had disappeared. While this may seem like a greedy child, it actually was not – he didn’t actually care that much about the items themselves. He mostly felt, through the emotional lens of a child, that he had somehow done something wrong and let them down, and it really dragged him down for quite a while.

Overspending doesn’t compensate for other mistakes.
Many guys tend to try to cover up for a big faux pas by buying an exorbitant gift for their wife – it’s so common, it’s often joked about in pop culture. While the gift might be appreciated, it’s not the gift that brings about the forgiveness for the mistake – it’s the fact that the husband seems to be truly showing regret. Instead of feeling like an exorbitant gift is in order, perhaps a more direct and true showing of your feelings might actually be what’s needed – and it might save a pretty penny, too.

Overspending can send the wrong message to others.
One year, I splurged on my nieces and nephews and bought them some stellar Christmas gifts. I found out much later that other members of the family didn’t interpret these as gifts for children, but as attempts as showing other family members up by buying the “best” gifts for the kids. What was intended as a gift to make a child happy instead turned into underlying resentment and some form of “Christmas Cold War” that wound up basically eliminating our family’s gift exchanges after a few years.

If you’re tempted to really splurge on a special gift for someone, think carefully about the reason you’re doing it and the potential consequences. Not only might the purchase be the wrong financial move, it also might be the wrong choice for everyone involved, including the recipient.

Because of this, I encourage people to give carefully considered gifts, not exorbitant ones. A well thought out $20 gift for someone is almost always better than an off-the-cuff $100 gift, any day of the week.

Every once in a while, I get an email from a reader that rips my heart out. Through a long series of choices and decisions and life events, they’ve reached a financial situation that’s almost impossible for them to dig out of. It usually involves children, a mountain of bills, and a job that doesn’t pay very much. Often, these people are hoping I have some sort of magic wand to fix their problems. The truth is, I don’t.

These emails are usually prefaced with the statement that most of the articles they’ve read don’t help very much. And they’re right. Most articles assume that you have significant leverage in your life, that there are many changes you can yet make to free up money and turn your life around.

But what do you do if it seems like there’s nowhere else to turn? You’ve already cut every corner you can, but there’s still a giant pile of bills sitting in front of you. Where do you go from here?

Here are nine options to look at when the going gets truly tough.

Sell your home
Most people blanch at this idea, thinking they could never sell the home they worked so hard to get. Quite often, though, it’s that very home that’s strangling your finances by saddling you with an enormous mortgage payment. It may be a good idea for you to look at lower-end housing until you can get your financial life straightened out. For example, renting an apartment can easily shave hundreds of dollars off of your monthly bills compared to house payments.

First step: Contact a real estate agent and get a realistic estimate as to what your house might sell for. Does that pay off your mortgage and (hopefully) some other debts as well?

Get a boarder
One opportunity to bring in some extra cash is to get a boarder, a person who will rent out an unused room in your home. One good place to look is at the local college, which often has students in need of housing. This can easily earn an extra $150 a month or so (or more, depending on your area) with very little interference in your day-to-day life (in fact, good boarders can often be a help with household maintenance). Another avenue is to see if there are family members and friends who may be interested in moving in with you and sharing at least some portion of the financial burden.

First step: Look for opportunities within your social network to find a boarder, whether it be a family member or a friend.

Take on a second job
One solution for the short term might be a second job. Many people work a normal job during the day, then supplement that with a second job in the evenings or on weekends. One of my friends has a job as a computer programmer during the day and a security guard in the evening, for example. It’s a good idea to find a second job that doesn’t tax you in the same way your first job does – for example, if you work a mentally challenging primary job, don’t get a second job that also taxes your brain or you’ll not do either job well. Remember, though, that the point of the job is not to finance your spending, but to dig you out of this debt hole.

First step: Do a tentative job hunt for work during your spare time, just to see what’s available. Good places to look are grocery stores and department stores who may need overnight stockers, for starters.

Start a side business
Another effective way to start pulling in some extra money is to start a simple side business that easily matches your skills. Let’s say you truly enjoy spending time with children, and you have free evenings. Why not put out the word to your social circle that you’re willing to babysit in order to help pay some bills? Perhaps you enjoy woodworking; why not look to that as a way to make something that others might buy? Make a few samples and show those to others.

First step: Canvas around your life for a way to make a few extra dollars in your spare time with things you already enjoy doing.

Sell your car
Ask yourself this: do you need your automobile to get back and forth to work? If the answer is no, strongly consider selling your car. Not only will this get rid of payments, it’ll also eliminate your auto insurance costs and your costs for your license plates as well. No gas. No maintenance, like oil changes. No repair bills. Those changes can make a huge impact in your monthly spending. And, on the rare occasions when you do need a car, you can just rent one for a short period of time.

First step: Look into opportunities for selling your car locally, either directly (meaning you manage the sale) or through a dealer in some fashion.

Cut out the unthinkable
Many people who have trimmed away all the fat they think they can trim away haven’t even actually started. You don’t need your cable box – that’ll save you $50 a month. Your cell phone? Another $50 a month – you can get a pay-by-the-minute phone for emergency uses. Do you need your home phone line? Do you need your television at all – after all, it’s a pretty big energy guzzler? Do you need ‘net access? If your gut response is “That makes life no fun!,” ask yourself if your debt situation is making your life fun.

First step: Start ditching services, and start by looking at everything short of electricity as non-essential.

Negotiate with your creditors
Quite often, many of the bills people face are for unsecured debt, which sometimes can be negotiated. Call the creditors for any debt you may have, tell them simply that you’re in dire financial straits and may be considering bankruptcy, and offer to negotiate. See if you can get a reduced payment plan or get some of the balance discharged. If you feel like the conversation is a waste of time, wait a few days and try again. Remain polite, no matter what – you’re essentially asking them to give up their business’s profit margin, after all. Remember to ask how any changes will affect your credit – if it really won’t change much and will negatively impact your credit, don’t do it and move on to another creditor.

First step: Identify your unsecured debts (medical bills, credit cards) and find contact information for some of them.

Sell your possessions down to the bare minimum.
Got a lot of DVDs or CDs? Sell ‘em – all of ‘em. Got lots of clothes? Cut your wardrobe down to the minimum and carry the rest to the consignment shop. Got a large collection of some form of collectible? Liquidate the whole thing. It’s going to be hard, I know, but this stuff is holding value, and that value can be used to help get rid of some debts and make it possible for you to sleep at night without the fear of losing the things that really matter, like your home or your mortgage. Ask yourself what’s more important, your home and your marriage or your Doctor Who Season 2 DVD set.

First step: Clean out some of your collections, particularly the entertainment-oriented ones. Sell the box sets on eBay and take the rest to a used media store.

Look into bankruptcy
Bankruptcy is sometimes the best option if you’re simply faced with far more bills than you can currently pay. This is often the best choice if you’re making a reasonable income and live in a mortgaged home. The biggest drawback here is that it’s a nuclear bomb on your credit report – you’ll essentially be starting from scratch with building your credit, and that bad credit will adversely affect loans you can get and your insurance rates. However, it does help eliminate most of your unsecured debt (meaning debt besides your mortgage and car loans).

First step: Contact a reputable bankruptcy lawyer and get a consultation. Bring in as much documentation as you can about your current financial picture (the current statements of all debts, estimates of all of your bills, and a list of all significant assets, for starters).