Chris Anderson’s most recent book, Free, argues that the future of many forms of commerce revolve around giving away their products to consumers without any financial cost to the buyer. Anderson believes pretty strongly in this principle – in fact, you can read the full book for free over at Scribd.

I agree strongly with Anderson, actually, It’s hard to beat “free” in the eyes of a consumer. My free “Everything You Ever Really Needed to Know About Personal Finance On Just One Page” has been downloaded roughly 35,000 times, while my $2 “31 Days to Fix Your Finances” document has been downloaded about 2% as often (and has been available for longer). The difference? Free versus $2.

Many people seem to view free things as a tremendous bargain. There are countless “freebie” websites out there that will gladly point you in the direction of free things – product samples and the like. Visiting a grocery store on a Saturday afternoon will often load you up on free samples, especially if you go to a warehouse club like Costco or Sam’s Club. There’s mountains of free content online – you don’t have to pay a dime to read The Simple Dollar or virtually any other blog, and most media sources have large websites with lots of free content.

I don’t view them as a bargain at all. Instead, it’s just another type of value exchange – the consumer pays a cost, but not directly out of their wallet.

Take the free grocery store samples, for example. These samples are given away as an enticement to get you to buy something impulsively. The items that are sampled often have a nice fat profit margin for the store, so not only are you buying something you didn’t want, you’re overpaying for the item, too. “Well, I’m not going to buy it…” If that’s true, it’s not in the economic best interest of the store to give away the sample. Samples are free, but they result in elevated prices and impulse buys for you.

What about product freebies? Fill out a form and get free stuff in the mail, right? Sure, you can get a four pound bag of dog food for free, but then you’ll find yourself with a mailbox full of advertisements for the product, coupons for the product, constant visual reminders to buy the product. You might get a free item to use, but you give away some of your mindspace to a product that you’re interested in enough to actually go get the freebie. Companies that do this do it because they have a huge advertising budget, and that huge advertising budget comes from the difference between the value of the product and the price you pay.

What about the dentist? The dentist gives me a free toothbrush every time I visit, right? How can that be bad? The reason a business gives away a freebie is to get repeat business, and their margins are fat enough that they can advertise by giving away their product. Your dentist gives you a toothbrush because it’s a reminder of the dental visit and it subtly encourages you to go back. The toothbrush manufacturers give (or sell at extremely low cost) toothbrushes to dentists because it gets that brand’s foothold in your house. Again, you pay the cost by becoming accustomed to a particular product.

This blog is yet another example. I write these articles and give them to you to read for no financial cost. However, the site is supported by advertisements. Advertisers pay me to place ads on the site in the belief that you’ll either click through to investigate the product or the name/image of the product will stick in your mind. Without their support, The Simple Dollar couldn’t run. In effect, you “pay” the cost by seeing those little ads on the site. It’s very similar to why some magazine subscriptions are lower than the cost of shipping them to you, like a subscription to Entertainment Weekly or Real Simple for $5.

Freebies aren’t a bad thing. We have a free calendar on our wall and mostly use free pens from hotels. Freebies can provide enough usefulness to overcome their drawbacks for you (for example, hundreds of thousands of Simple Dollar readers must feel this way).

But it’s important to recognize that a free item isn’t free. You’re always exchanging something for it – ads in your visual area (like those on freebie pens), product familiarity, or inflated prices.

There is no such thing as a free lunch.

One of my passions is food. If you’ve been reading The Simple Dollar for long, you know that I love spending a couple of hours in the kitchen preparing an interesting meal. My food articles seem to always grab some acclaim – I think it’s because I bring a bit of extra passion to the table when I write about culinary delights.

Unsurprisingly, this means that I also read quite a bit about food as well. I read several food magazines and visit quite a few food blogs on a regular basis.

Recently, I read an article on Michael Ruhlman’s blog about his negative impressions of the Cheesecake Factory. This was followed by tons of comments from people who found the food at the Cheesecake Factory to be wholly unacceptable for their standards. One even went so far as to essentially question the sanity of their own mother for enjoying regular dinner dates with their friends there.

An aside: I admit I’m happiest cooking food in my own home. When I eat outside the home, the experience, to me, is a combination of food and people, leaning towards the “people” side of the equation. When I eat outside the home, rarely do I remember the food – I remember the dinner conversation. I’ve eaten at a Cheesecake Factory twice – I don’t remember what I ate one of the visits, and I only remember my dish at the other visit (fish tacos) because it became something of a conversation subject. While I don’t remember a great meal from the Cheesecake Factory, nor do I remember anything exceptionally poor, as opposed to plenty other particular restaurants and bistros that shall remain nameless.

This made me start to think about why people would innately criticize a perfectly good meal. What exactly would cause a perfectly good restaurant like the Cheesecake Factory to get such a bad rap in those circles?

What I realized is that the problem has to do with internal scales of quality.

I’m happy eating what I prepare at home. Most of the time, I’d judge those meals as being around a 6 on my scale of good meals – perfectly good. On occasion, I’ll reach an 8 or so.

What’s the 10 on that scale? There are a few meals that my mother prepares that are up there on my scale, but they’re helped by the “comfort food” factor. Aside from that, my definition of a 10 comes from eating at Aunt Maude’s, a wonderful restaurant in Ames, Iowa that I highly recommend to anyone who visits there. The atmosphere is nice without being pretentious and the food is excellent.

Someday, I fully intend to dine at a restaurant that’s off the high end of my scale. I’d love to enjoy a meal at one of the S. Pellegrino 50 at some point.

However, I have no interest in going to those restaurants more than once or twice in my life.

Why is that? It’s pretty simple. If I dine at an incredibly high end restaurant once in my life, it’s a truly unique occasion – one that I don’t even use in my personal idea of what’s good and what’s bad. I could dine at Per Se once, be utterly blown away, but that one experience wouldn’t change the fact that I still view dinner prepared in my own kitchen as a “6.”

But what happens if I go there twice? And I dine at a few other restaurants on that list? I go to one every few months – and that standard starts to enter my scale. Suddenly, the meal in my own kitchen goes down to a “2″ – I’m no longer nearly as happy with it.

Instead, my idea of a great meal is boxed in at the $250 a plate price at Per Se. Everything else is judged by that level of quality – and, unsurprisingly, everything else falls short.

If I reached a point where I judged all my meals by restaurants on the S. Pellegrino 50 list, I’m going to be unhappy with almost every dining experience and I’ll go broke chasing a “decent” dining experience.

The high end experience, taken once, is something to always remember. It’s a life-affirming experience, something to enjoy and cherish.

The high end experience, taken on a regular basis, drives you to disaster. It undermines your enjoyment of the simpler experiences in life.

When you reach the point that dinner with your mother at the Cheesecake Factory on the occasion of her birthday at her request becomes intolerable because of the quality of the food, you’re riding a very dangerous line. You either need to have an enormous bankroll devoted to chasing exquisite dining experiences or bankruptcy will be finding you soon.

Peak experiences are great things. They’re things to enjoy and truly savor in life and if you can truly afford it, go for it. But they have a dangerous side as well. When those peak experiences become your new standard, you begin to ride a very expensive track. Not only that, the peak experiences are no longer peaks – a dinner at Per Se no longer takes you to another world. It becomes ordinary, and some of the value is lost.

This philosophy holds true for any experience in life. Vacations – a European trip once a decade or so can be a true peak experience, but one taken every year starts to become the standard, and an expensive one. Even things as simple as coffee: if you enjoy an expensive cup at a high end coffee shop every day, suddenly that’s your standard, you’re burning through piles of cash, and ordinary coffee is no longer good enough.

When a peak experience becomes an ordinary experience, you not only lose money, you lose happiness, too.

This is the seventh of twelve parts of a “book club” reading and discussion of Dave Ramsey’s The Total Money Makeover, where this book on debt reduction is teased apart and looked at in detail. This entry covers the eighth chapter, finishing on page 150. The next entry, covering the ninth chapter, will appear on Saturday.

I’m a big believer in the unpredictability of life (in fact, this unpredictability is a major theme in my upcoming book). Life deals you things you don’t expect all the time, from small (like an unexpected wet diaper on your way out the door) to big (a sudden death of a close relative) and from good (finding a $100 bill in a parking lot) to bad (breaking your big toe after dropping something heavy on it).

Yet, even given that hugely unpredictable nature in life, most people do not have an emergency fund. Many of those who do only have a tiny fund. What happens to them if they lose their job and can’t get another one for a year? What happens if their child is invited to go to a very prestigious music school? What happens if one of them falls down a flight of stairs and has to spend six months in a wheelchair?

The solution to all of these things is a big, fat emergency fund. A big healthy wad of cash in the bank makes all of these problems easily bearable. For Ramsey, this is the next step after your debt snowball is done and all you’re left with is a mortgage – get a big chunk of change in the bank for those rainy days.

How Big?
One big point of contention about emergency funds is how big they should be. Dave offers his opinion on page 133:

A fully funded emergency fund covers three to six months of expense. What would it take for you to live three to six months if you lost your income?

I think it’s key here to point out that by “you,” the quote most likely refers to the full spending of a household – if it doesn’t, then you might be building an emergency fund that’s too small.

Three to six months? Think about how much you spend each month, then multiply that by, say, five. That’s quite a serious chunk of change. For us, it would probably be somewhere in the ballpark of $20,000, with almost half of that being our mortgage and homeowners’ insurance.

Is it enough? I think you have to look at it from the perspective that no amount will cover every possibility that could happen. Instead, you should be seeking an amount that’s large enough to cover every doomsday scenario you can reasonably think of. Consider the people around you and their most desperate moments. How much would they have needed in those situations?

Easy to Access
Dave basically argues for a savings account on page 137:

Keep your emergency fund in something that is liquid. Liquid is a money term that means easy to get into with no penalties. If you would hesitate to use the fund because of the penalties you’ll incur to get it, you have it in the wrong place.

That basically means a savings account. It’s accessible at any time without penalty and it doesn’t fluctuate in value.

Obviously, you want it to be as safe as possible. This eliminates stocks – they’re inherently risky and fluctuate too much. The value of bonds can fluctuate, too, though not nearly as strongly. You don’t want to lose your balance once it’s invested.

At the same time, you want to be able to get at it without a penalty of any kind. Dave argues that this is a black mark against certificates of deposits. I disagree with that. With some careful planning, you can use certificates of deposit in a “ladder” system and never have to crack one. I like this idea because it helps you get a better rate of return and it’s a psychological barrier that keeps you from digging into it.

Dave points towards money market accounts, another little hint that this book was written prior to 2008. Money market accounts might have great returns sometimes, but they’re not as safe as FDIC-insured savings account. Even better, if you hunt around, you can find FDIC-insured savings accounts that have a nicer return than pretty much any money market account and come with the insurance.

Three Months? Six Months? In the Middle?
The entire point of an emergency fund is to absorb risk, and some families are simply more at risk than others. On page 139:

For example, if you earn straight commission or are self-employed, you should use the six months rule. If you are single or you are a one-income married household, you should use the six-month rule because a job loss in your situation is a 100 percent cut in household income. If your job situation is unstable or there are chronic medical problems in the family, you, too, should lean toward the six month rule.

Personally, I feel as though children are a significant risk addition to one’s life. An adult can go out there and get a job. A three year old can’t do the same – they’re wholly dependent on the adult. Thus, if you have kids, I’d lean strongly towards a bigger fund.

I also think that six months isn’t necessarily the maximum. If all of your household income comes from freelancing, you have three kids, and there may be health issues in your future, six months probably isn’t enough. I’d have more than that – a year’s worth, perhaps?

We have about ten months’ worth of purely liquid cash sitting there for emergency purposes right now. That’s an amount that feels right for us, with the majority of our household income coming from freelancing and two children under the age of four.

Is Everybody on Board?
One issue I see readers writing to me about time and time again is the question of what to do when their partner isn’t on board with the financial changes they want to make. Dave hits on this a bit on page 142:

I don’t suggest you clean out your savings [down to $1,000 in order to pay off debt] if everyone isn’t having a Total Money Makeover.

I go further than that: if you’re in a relationship and your partner is not on board with making financial change, you’re wasting your time with it. Their actions will undermine everything you do and you’ll find yourself constantly at odds and angry with each other without making a drop of additional progress. That’s a dangerous recipe, right there.

If your partner is not on board with making some real financial changes, your focus shouldn’t be on charging full steam ahead without your partner. Instead, your focus should be on talking through your situation with your partner. You’ve got to understand where they’re coming from. Just pushing what you want won’t cut the mustard here – they’ll just see you as pushy and you’ll make negative progress, or you’ll get an act that makes it look like they’re on board when they’re really not.

Talk about your money. You’ve got to, or none of this will work.

Women and Men?
Are women more suited to have emergency funds than men? On page 144:

God wired ladies better on this subject than He did us. Their nature causes them to gravitate toward the emergency fund. Somewhere down inside the typical lady is a “security gland,” and when financial stress enters the scene, that gland will spasm.

The argument here is that by their very nature, women are more likely to see the value in an emergency fund than men. Men tend to be task-oriented, while women tend to be process- and security-oriented.

I think there’s actually something to this. I’m all in favor of gender equality, but different does not mean unequal. Different means that each side has traits that are beneficial. Guys are better at focusing in, at breaking down barriers. Women are better at planning and cooperation, at building fortresses of safety. Different attitudes are useful in different situations.

I see this in my own marriage. I’m far better with specific objectives with my children. I thrive on having a series of tasks to do or a game to play or something like that. My wife, on the other hand, seems to thrive more on nurturing. She holds them and is patient when they’re hurt, where I’m much more likely to look for how to solve the problem. When Joe bumps his knee, my wife is more likely to hold him while I go searching for a Band-Aid.

The emergency fund is definitely in her court, not mine. I see the value of it and I contribute to it, but it’s clearly more a part of her elemental nature.

Why Do All This?
If the future is so unpredictable, why waste our lives right now putting so much effort into scrimping and saving and planning for that future? On page 146:

What used to be a huge, life-altering event will become a mere inconvenience. When you are debt-free and aggressively investing to become wealthy, taking a few months off from investing will put a new engine in a car. When I say the emergency fund is Murphy-repellent, that is only partially correct. The reality is that Murphy doesn’t visit as much, but when he does we hardly notice his presence.

A big emergency fund means that the bad events in that unpredictable future don’t wipe away all of the good things you have in your life.

Without an emergency fund, a job loss means panic. It means scrambling madly for work – any work. It means you might lose your home or your car. It’s scary.

With an emergency fund, you can roll with the punches. You can patiently dig for the right job. You can even give your dreams of freelancing a shot right now – after all, you’ve got time.

Without an emergency fund, a dead car means panic. It means you have to throw yourself further in debt, with even more monthly payments than before.

With an emergency fund, you just make the call and fix the problem. No big debts. No monthly payments. Just smooth sailing.

You’re left with unexpected events – but only the good kind.

Do you have any other thoughts on this chapter of The Total Money Makeover? Please share them in the comments – and feel free to respond to any of my impressions as well. After all, a good book club is all about discussion!

On Saturday, we’ll tackle the ninth chapter – Maximize Retirement Investing.

Since I’ve been dropping little hints for a while now that I’m deeply engrossed in my second book, several folks have emailed and Twittered me asking for more details. Here’s what I’ll say about it (for now).

This book is complicated. It’s the hardest thing I’ve ever written in my life by far. If you had been able to peek at me over the last few weeks during my work day, you would see me surrounded by books filled with bookmarks in them and some of the titles would have probably shocked you (without the context). I have about 2,000 notes that I’m mostly trying to organize in a coherent fashion. I know the big theme of the book – it revolves around the connection between money and happiness and has a tentative one-word title – but getting the specifics in order is a real challenge.

Right now, I’m focused on interviews in an effort to clarify how some more vague ideas directly connect to how we live our modern lives. Some by email, some by phone, a few by video – they’re coming together.

I’ve written (in a strong first draft) some big sections of it and I’m now stitching a lot of those pieces together, often using those interviews as the glue.

If you thought my first book was lightweight, I think this book has some danger of falling on the opposite end of the spectrum. I think my second draft will focus on making some of this stuff much more tangible to daily life than it seems right now.

I think you’ll like it. It’s easily the most profound thing I’ve ever done in my life. When I finally have a draft that I’m happy with, I’m going to be incredibly impatient to see it in print.

Now … *ahem* … here are some interesting personal finance articles.

Back to the Basics: Menu Planning Menu planning is part of our weekly routine here. This is a very nice description of how to put one together, along with a lot of tasty food photography. (@ simple mom)

The Killer and the Poet: How to Get Rich as a Copywriter Ogilvy on Advertising is a great book for any writer to read because, in the end, a writer is a salesman. You’re trying to “sell” your idea, and the better you do it, the more successful you’ll be at spreading ideas. (@ copyblogger)

Overcome the Fear of Failure The fear of failure holds a lot of people back from leaping into something they’re passionate about. Overcome it. (@ christian pf)

Is Materialism As Prevalent As People Say? I think one’s perspective depends heavily on who they communicate with on a daily basis. If you surround yourself by genuinely non-material people, you’ll think that everyone’s less material. That’s why it’s valuable to expose yourself to a wide cross-section of society. (@ the happiness project)

Mommy, I’m Bored! 25 Frugal Ways to Beat Summer Boredom I have two young children at home and on long summer days it can be a challenge to keep them engaged. The real problem is that their attention span is relatively short. You can’t do many activities that last for a long time, which means you have to think up lots of activities. (@ wise bread)

Use Twitter to Find a Job Twitter has endless useful things you can do with it, but the real key is to just dive in and converse with people on things that interest you. You should follow me on Twitter here; I post lots of stuff, most of it pretty worthwhile (I think). (@ my life roi)

Saving for the Short Term I actually started writing an article in response to this, but I decided to actually use some of what I wrote for my book. In a nutshell, I think short term goals trump long term goals. (@ get rich slowly)

Learn to Celebrate the Small Victories I agree – celebrating the small victories is key. Just keep the celebration in line with the victory, and don’t let that celebration undermine the victory, either. Don’t spend to celebrate paying off a debt and don’t drink to celebrate a month of sobriety. (@ dumb little man)

The eighth episode focuses on the ten personal finance and personal development books that made a difference during my personal, financial, and professional turnaround. Hopefully, some of these can help you in your own life. Total length: 20:24.

Listen In!

Other options for enjoying The Simple Dollar Podcast include:
Listen to this episode on a separate page
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Though I hope you do subscribe using one of the above methods, don’t worry – each episode will be featured in its own post, much like this one, on Tuesday afternoons. The podcast itself may appear earlier than that, however, if you subscribe using one of the above forms, but the notes won’t appear until I post about it here on The Simple Dollar.

Episode Notes
Here are some additional notes that go alongside the comments in the podcast. Approximate times for the corresponding links and notes are listed.

0:00 – The theme song is a snippet of a Camper van Beethoven concert on October 25, 1986, shared via their very open taping policy. Listen to the concert in its entirety.
0:30 – This pretty efficiently summarizes what, why, and how I read.
1:37 – Here’s my extremely detailed review of book #1.
2:31 – Some tips on finding your core values.
2:50 – Here’s my review of book #2.
3:31 – Some notes on this kind of intensity.
4:08 – Here’s my review of book #3.
4:31 – Seven big additional tactics along these same lines.
6:11 – Here’s my review of book #4.
8:38 – Here’s my review of book #5.
10:11 – Here’s my review of book #6.
12:08 – Here’s my review of book #7.
12:11 – I absolutely loved the opportunity I had to sit down and talk with Amy.
12:50 – One example – I found the flexible casserole recipe surprisingly useful.
13:39 – Here’s my review of book #8.
14:46 – Here’s my review of book #9.
17:15 – Here’s my review of book #10.
17:55 – Deliberate practice is key.
19:40 – Here’s that radio show, if you didn’t hear it.

One thing I’d like to do in a future episode is have an audio reader’s mailbag. If you have a microphone on your computer and can record an MP3 of a simple, short question you might have on personal finance, careers, pop culture, or anything else you’d like me to answer, record it as an MP3 and send it to me. Keep the total recording under 15 seconds, please. Also, if you use Skype, feel free to ask your question that way – my username is trenttsd.

Comments and suggestions welcome.

Haruki writes in:

I am putting 15% of my salary into my 401(k) which gets a 5% match from my employer. I also contribute the max to my Roth IRA.

I followed up with Haruki and found that his salary is $46,000 per year and he’s twenty seven years old, just for calculation’s sake.

So let’s put all of the math together. Haruki contributes $5,000 a year to his Roth IRA. He also contributes $6,900 to his 401(k) and his employer contributes $2,300 to his 401(k), too. Added together, Haruki’s retirement savings each year is $14,200 – 30.9% of his salary.

I think that’s excessive, and I told Haruki why.

First, saving 31% of your income for retirement will give you an abundance in retirement savings. When you finally retire, even if you step away at the minimum possible age that you can access your retirement savings without penalty, you’ll have more than enough for retirement. For some, this seems like a problem they wish they would have, but having excessive income in retirement means excessive taxes in retirement. In short, if you have a mountain of cash in your 401(k), you’ll be paying more taxes upon withdrawal than you ever would if you were more careful about your life’s financial plan.

Second, when you hit your “number,” you’ll likely be many years short of retirement. If you’re saving this much for the dream of retiring early, you might not wind up happy. When you do hit your “number” – the amount you need to have to live sustainably in retirement – and you’re much younger than your retirement age, you’re stuck. You’ll have all the resources you need, but they’re locked up. Of course, you can use your Roth IRA contributions for a few years, since you can withdraw your contributions without penalty, but it won’t cover you for more than two or three years.

The big reason, though, is that excessive retirement savings takes away from your other life goals. Dropping that 401(k) contribution back to 10% gives you another 5% of your salary – $2,300 pre-tax – to save for other life goals without diminishing the quality of your retirement. Instead, start socking that money away for other goals: a big fat emergency fund, a home down payment, a small business you dream of starting, a vacation, or whatever it is that really makes your life worth living.

Haruki is doing tremendously well – this is not a criticism of his saving habits, which are stellar. If you have the capacity to save more than you actually need for retirement, that’s awesome. It’s not a bad thing.

Instead, take some time to step back from your retirement savings Think through your life goals and make some serious, well-informed decisions. Here’s how.

First, calculate your “number.” In other words, figure up how much you’ll need to live on sustainably in retirement. There are tons of different calculators and calculations out there – your best bet is to use several and trust the one that estimates the largest total amount – then add 10%. CNN’s retirement calculator and MSN’s retirement calculator are both useful places to start, but try running your numbers through every one you come across.

Next, calculate how much you need to put away each year to reach that goal at your target age. Assume a 7% annual return on your investments, which is what Warren Buffett suggests is the long-term trend for stocks. One way to get a bead on this is to tinker with the numbers on retirement calculators – set the annual rate of return to 7% and play around with the annual contributions you would need to make to get to your target number. This will give you a good savings number to shoot for each year.

Once you’re sure that you’re saving enough for retirement at the age you want to retire, target the rest of your savings towards other goals. Save for a home, for a car, or for a small business. Give money to a charity. Our goal is a home in the country with a barn in the back which we want to make as green as possible – we want to shoot for near self-sustainability. We also want to do some serious volunteer work in retirement.

What if extra retirement savings makes you feel more secure? If that’s the case – and you don’t have any other goals you’re strongly pushing towards – then feel free to contribute more towards your retirement savings.

In the end, it’s worth your while to make sure that, if you’re focused on saving, that your savings are helping you truly fulfill your dreams. Good luck!

I’ve seen it over and over again: the person in the office with self-confidence is the one that gets the plum assignments. The promotions. The raises. The recognition. The others, who sit back quietly, get left behind (and sometimes resent it).

For a long time, I was one of the resentful folks. I had a hard time speaking up in group situations and I hated presenting. The first time I had to give a major presentation to a group and interact with them, I went to the bathroom repeatedly and threw up until I was dry heaving because I was so nervous and so unconfident.

What I’ve learned over time is that the person that appears confident is often not as confident as they appear. They just simply do a few things well. They walk in a way that appears confident. Their eyes seem alert. They stand tall. They have a faint appeal that you can’t quite put your finger on. You feel fine talking to them, but not to most people.

They’re not wired differently than you. They just do a few clever things.

Over time, I’ve figured out how to make many of those things quite natural for me – and most of the techniques I use are somewhat unusual. Here are ten of them. Each of them will help if you have problems with appearing confident, as I sometimes do.

1. Pick a spot.
When you first walk into a room, look around with your head completely level. Find a spot in the room that’s exactly at your eye level. It can be something on the wall, an object hanging from the ceiling, or something else. Pick something you’ll find visually interesting, if you can find anything. Once you’ve found your spot, remember it. Then, whenever you’re nervous, sweep your eyes to that spot.

What this does is it allows you to keep your nervous tic of staring at the floor or looking away from someone – something that can be very hard for an introvert to break – and redirect it in a bit of an optical illusion. By keeping your eyes up at eye level – which they will be if you look at that object – you appear to be looking at another person. That is a subtle cue of confidence – you’re looking for others, thus you must be socially accepted.

Obviously, you shouldn’t stare at the object, but knowing it’s there and looking at it from time to time when you’re nervous is a vast improvement over casting your eyes down, which signals a complete lack of confidence.

2. Improve your posture with duct tape.
Yes, duct tape. Masking tape or electrical tape or even Scotch tape will work, too. You’ll need a friend or a spouse with this.

Stand up as straight as you can, with your back vertical and your arms at your sides, relaxed. Then, have a friend take a strip of duct tape and run a three inch strip down your back. The top of it should be on the center of one of your shoulder blades and end three inches below it. Then, that person should put a second strip, starting at the center of your other shoulder blade and going straight down for three inches. Take a third strip and apply it horizontally, connecting the tops of the strips, then a fourth strip connecting the bottoms of the vertical strips. You should have a rectangle on your back, nearly square in shape.

Here’s the thing. As you go through your day, every time you attempt to slouch, that tape will tug at your skin, resisting a poor change in posture. It’s not painful (unless you have excessive hair back there), but it is enough of a physical reminder to cause you to naturally keep a good posture.

This works great before a big meeting, but it also works great for training by doing it every day for a few weeks. You’ll naturally exercise some muscles in your back, making them stronger, and allow other muscles to relax and slightly weaken. What will happen is that your muscles will begin to find that a position of good posture is the natural one and that’s how you’ll begin to sit and stand.

Good posture gives the appearance of confidence, and this is a great little way to create that appearance.

3. Carry a flask – whether you drink or not.
I was at a conference chatting with a really solid presenter from Oracle whose name I can’t recall right now – let’s call him “Jim.” After a really great presentation, I started chatting with Jim and discovered that we knew a few people in common, so after the chat, we agreed to go get a drink together.

On the way, we both needed to stop to use the restroom. When I was finished, I walked out to see Jim taking a big slug out of a flask he had pulled out of his front pocket. I jokingly said, “Whoa, cowboy! Getting an early start?” He smiled, swished the liquid around in his mouth for a minute, then spit out some blue stuff. He grinned and said, “Listerine.”

It was a trick of his. Whenever he was about to meet with some people, he’d head to the bathroom, take a slug out of his flask, swish it around for a bit, then spit it out. He’d follow it with a bit of water to get any bad taste out, then look in the mirror to make sure there wasn’t any food in his teeth.

Doing that simple routine made him feel better. He could be sure his breath didn’t smell at all, his mouth felt squeaky clean, and he was also confident there was no food on his face or in his teeth. All around, it really gave his confidence a bump.

Good advice. I actually started just keeping a travel bottle of Listerine with me, but this is a great use for a flask since they’re designed to fit well in a pocket.

4. Go for a thirty minute fast walk three times a week.
Walking improves your health. We all know it – and it’s absolutely true. Thirty minutes walking instead of watching a television show will help you lose weight, feel better, and all that.

But it has an extra confidence booster in it as well.

If you make an effort to walk as fast as you can on your walks, the speed of your natural, normal walk will increase, too. It’ll feel more natural for you to go faster, so you will. You’ll strengthen all the appropriate muscles and, soon, the way you walk across a room will look much more confident than before without any conscious effort on your part.

5. Memorize a person’s eye color with one extra adjective.
I have a hard time looking people in the eye. Mostly, it’s because my eyes sometimes have problems focusing well, especially in the evening, but there’s also an aspect of low confidence there, too.

I’ve found a solution that works well in both regards. It gives me a reason to look people in the eye on a regular basis (making me appear confident) but not too much (making me appear creepy).

All I do is this. When I first meet a person, I look into their eyes until I can describe their eye color with one noun and at least one descriptive adjective. Their eyes are “cloudy blue.” Their eyes are “mocha brown.” Once I’ve figured it out, I’m free to look away.

Then, if I can’t recall immediately their eye color, I know I should look back. In practice, this means that I tend to look at their eyes directly several times early on in our conversation, but not too much at one shot. Instead, I alternate it with the first trick, swiveling my eyes to an object at eye level in the room.

What does this do? It creates an impression that I’m interested in what they’re saying and also fully engaged in the larger event – very confident – when in truth I’m not confident at all.

6. Keep a chamomile tea bag in your wallet.
Chamomile tea is an effective natural relaxant. It is the single best natural way I’ve found to calm myself down in any situation that makes me nervous. If I feel awkward, I’ll just find some hot water, put it in a cup, dunk in a bag of chamomile tea, let it steep for a couple minutes, then drink it down. Calmness washes over me.

It really helps with appearing confident, too. I tend to get quite nervous during social events – and it shows. I talk too fast, look away, and generally hide from conversation. In short, I need to calm down. When I’m calm, my speech gets a bit slower, I’m less nervous around other people, and I’m more willing to engage others – all signs of confidence.

Chamomile is a natural calming agent that’s pretty much socially acceptable in any situation, so it’s a great “secret weapon” to have in your pocket.

7. “Hi, I’m Trent Hamm.” Period.
Whenever I would introduce myself to people, I often found myself saying things like, “Hi, I’m Trent Hamm and I work on this project and I wrote this document” or something to that effect. In my nervousness, I felt the need to include what amounted to a short resume with my name.

I believed at the time that it would do a good job of laying out who I was to people, but what it actually does is shows that you’re not confident already in who you are. If the other person doesn’t know who you are, they’ll either ask for information – or they’ll hold it in and believe they should know who you are. In either case, you seem more intriguing and in control.

So, next time you introduce yourself, stop with your name. At the very least, it opens the door to more conversation.

8. Hit Google News.
Whenever I enter a group, I usually stop and check the news to see if any major events have occurred really recently. This gives me something to break the ice with almost every time – I can simply use a major news event or a popular culture event to open with.

I usually read the top stories and see if there’s anything of strong general interest there. If it’s a slow news day, I’ll check the entertainment and sports news. In some groups, I’ll check other news sections, too – technology works well in some groups, and business and money news works well in other groups. If I see something interesting but I don’t understand a big piece of it, I take another few seconds and hit Wikipedia to give myself enough context that I’m not clueless.

Having a current event or two in my head gives me something to say when I’m standing there wondering what on earth I should be talking about. Quite often, the person who comes up with conversation topics is often the person who comes off as confident, as many other people are often standing around just as nervously.

9. Take five deep breaths.
If you’re feeling overwhelmed with a situation or you’re about to step out into a room where you have to start speaking very quickly, just pause for a moment and take five deep breaths.

The intake of a lot of oxygen does several little things to your biochemistry, all of which are helpful. It lowers blood pressure. It increases alertness. It reduces anxiety. In short, it’s a very simple thing that helps in almost any situation that makes you nervous.

I find that any time I know I’m going to be speaking soon, I do this. It always helps, without fail – I feel better right after doing it.

10. When in doubt, ask a question.
So, your breath smells good. Your posture is good. You naturally walk with confidence and introduce yourself with confidence. You do a bit of small talk with current events. Then….

The best thing you can possibly do is lead the conversation. The best way to do that is to simply ask a question and then listen to the response. Ask them what they do. Ask them about their biggest project. Ask them what they think of the meeting, or of the last speaker. Ask them what hotel they’re staying at and if they like it.

Then, listen to what they say. Almost always, you can follow up on something there. You can relate your own experience or thoughts. You can ask another question. You can dig into information that you actually want to know more about.

Line this up with the other techniques (the eye technique and good posture) and you’ll look confident no matter how you feel inside.

Good luck.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

I love gum. I know buying it in bulk is cheaper than at a liquor store, but does anyone else have ideas beyond that?
- Michael C.

First of all, don’t bother trying to make it at home. The best recipe is comparable to Fruit Stripe gum – it tastes awful and has bad texture after about thirty seconds.

Your best plan is to buy in bulk. At my local Sam’s Club, there’s tons of gum for sale in bulk (by the box) that’s cheaper per pack than what I seem to find in grocery stores (where the low-end packs seem to be around $0.80).

There’s also Candy Warehouse, which directly sells bulk candy, but the prices, though lower than at the local liquor store, are a bit higher than what I’ve noted at Sam’s.

So, what I’d do is this: if you have a warehouse club membership or a friend who does, shop for gum there. Otherwise, Candy Warehouse is a good option.

How would you decide how much to invest and how much to spend if you had a good (?) chance of dying pretty soon, but also a reasonable chance of surviving? The fanatic saving for retirement seems like a bad idea if you’re putting all your money into a future you probably won’t live to see. But if you do manage to, you don’t want to then starve to death on a street corner.
- Laundry and Dishes

Depends entirely on whether you have dependents or not and also on the exact nature of your illness, at least from my perspective.

If you don’t – and you’ll be able to actually function well if you survive – then I’d spend away. If you do survive, you’ll be able to build your savings back up with further work.

If your illness might make you incapacitated for a long time, you’ll probably want to leave your savings alone. Similarly, if you have dependents, limit your spending, as your savings will help them in the aftermath of your passing.

Do you know of groups that have meetings for people interested in reducing debt or improving personal finance habits?
- Salvatore

I sure do. There are a wide variety of groups on debt reduction and saving money in most cities of decent size. However, there doesn’t seem to be an overriding organization that collects all of these groups. Many of these are self-started.

So, how do you find them? I’d suggest three ways.

First, hit meetup.com. Meetup has tons of local groups that are meeting on tons of different topics. Dig around a bit – there are groups on debt, on investing, and many other areas.

Second, check your local library. Many larger libraries have interest groups on all sorts of topics, plus many other community groups will post flyers there. Check out the bulletin boards as well as the library’s schedules.

Finally, check the largest church in your community. Many large churches have groups and classes on all sorts of topics and they’re usually open to anyone who cares to attend.

What made you decide to start a blog on this topic?
- Lily

Well, as I’ve mentioned, I’ve been writing since I was pretty young. I tried various online writing exercises in college, then I tried a parenting blog in late 2005 and early 2006 that was just taking off, but some of the readers were extremely … creepy.

I decided to give blogging another shot in October 2006 – and the timing perfectly coincided with my own experiences with figuring out my money and the experiences of the people around me showed me that a lot of people were going through similar money struggles. So I started The Simple Dollar.

Quite seriously, it’s all about following my interests and passions as well as looking at what other people might value. I could sure write a navel-gazing site, but who would want to read it and how would it really connect with anyone and provide value in their life?

I am in my early 30s, own my own apartment, am employed, have good credit and a family that is financially well-resourced and stable. I am dating a man, also in his 30s, who is a financial mess. He works his butt off following his passion, but does not generate a ton of income (he has trouble paying rent and is often behind on bills). He has credit card debt from his 20’s (he admits he was stupid about it at the time), and his family always on the brink of financial disaster. On the plus side, he is a hard worker and does not spend frivolously. He also respects and supports me, makes me laugh and challenges me, and may be the love of my life. I love that he follows his passion and I support him in that.

What questions should I be asking myself (and him) as our relationship continues? I want to go with my heart here, but my head is worried I could be walking into a life of debt and money anxiety.
- Brooke

You need to be talking about your money together as soon as possible and quite regularly, too. This is clearly an issue of concern for you and also a concern about your future lives together.

Clearly, he comes from a background that didn’t think about money at all, and you came from one that did. It might make sense for you to manage your shared finances – and you each have a certain amount to spend freely each week/month.

Whatever the best solution is, you need to talk about it, very clearly, and you need to come up with a clear solution that protects your futures together. I’d suggest that you read Smart Couples Finish Rich.

ELCA’s articles on doctrine are so vague and unsure. They can’t articulate or explain anything very well. Is that because they think any religion’s as good as their own?
- Michael

This comment comes from an earlier Reader Mailbag where I mentioned I was an ELCA Lutheran.

The ELCA puts more emphasis on one’s personal faith than on a greater church. In general, with the ELCA, the individual is more important than following dogma. Thus, the church documents can be pretty vague in places – it’s left to individuals and individual congregations to make up their own mind.

From that respect, ELCA churches are much less about following some explicit set of beliefs than it is about a group of people who support each other in their own personal journeys.

I think that’s a much healthier perspective than one that forces a strict set of beliefs upon people.

My husband and I have no credit card debt. Our only debt is our mortgage which is at an interest rate of 6.625% (we can’t refinance at this time). In my mind it makes sense to dump all extra money into paying down the principal on our mortgage because that’s like getting a 6.625% return on our money. Right? We have chosen to do this rather than open any investment accounts which may or may not get a 5-6% return on our investment. What are your thoughts on this strategy?
- Emily

If you’re saving for retirement at the same time, it makes sense. You’re right, for most purposes, your payments are an investment that returns 6.625% after taxes (although you might be losing a bit on any tax deductions you get from mortgage interest).

If you’re doing this in lieu of retirement savings, that’s a mistake. Retirement savings, socked away now into a tax-advantaged account like a 401(k) or a Roth IRA, have much longer to build via compound interest. Plus, if you’re investing over the truly long term – more than ten years – well-diversified stocks will return at least the amount you mention (some may shout about how the value of some stock index is barely changed from ten years ago, but they’re ignoring dividends).

If you’ve covered your retirement, getting rid of your mortgage as fast as possible seems like a good plan to me.

Do you have any suggestions for free downloadable enjoyable games?
- Mol

Most of the free games worth playing aren’t really downloadable – they’re usually played in a web browser. Also, it really depends on what kind of games you like.

My favorite free game – and it has been for a long time – is Desktop Tower Defense, which has sucked down more hours than I care to admit.

Several of my friends are Peggle addicts. The full game costs $20, but you download a free trial that has lots of levels in it.

Here are several more classic games that are free – and these games ate up quite a bit of my childhood years.

What did you replace your passion for playing golf with? I know it’s an expensive habit, but I’m having a hard time giving it up!
- Karl

I found other avenues of competition, mostly games of various kinds, and I started hiking more.

The games really helped feed my competitive urges and provided similar careful thinking about my next move that golf provided. I started playing games like Settlers of Catan and Puerto Rico with my wife and with other friends.

The hiking helped feed my enjoyment of the outdoors. In fact, I came to find that I enjoyed the woods far more than the golf course – more alive, more beautiful, and filled with more interesting sounds than some drunk yahoo yelling and the noise of a lawnmower.

Why does it seem to always take two days for my comments to show up?
- Cindy

I generally approve all comments once a day, usually in the mornings. Sometimes, if there’s a conversation that’s interesting, I approve them a few times throughout the day.

Regular commenters are often auto-approved – that’s why sometimes you’ll see comments go up even though yours is still awaiting moderation.

On the weekends, I’ll often skip a day or approve on a more haphazard schedule, as weekends are usually filled with all kinds of family activities.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.