This is the fifth 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 sixth chapter, finishing on page 108. The next entry, covering the seventh chapter, will appear on Saturday.

One thing that Ramsey excels at is urgency. His entire persona, from his written words in the book to the things he says on the radio, practically demand urgency. “You have to do this now.”

He’s right, though. If you’ve found yourself in a personal finance situation where everything falls apart if you lose your job tomorrow, fixing the problem is urgent. You’re being utterly held hostage by your job and by Lady Luck. Too many people find themselves in this situation and view it as normal.

If you lost your job tomorrow and had the engine fall out of your car the day after that, could you survive for three months without work and still hit all of your bills and get that car on the road? If the answer’s no, it is urgent. You’ve got to change something.

Baby Steps?
Dave lays out the importance of baby steps for pretty much any major life initiative, on page 93:

They way you eat an elephant is one bite at a time. Find something to do and do that with vigor until it is complete; then and only then do you move to the next step. If you try to do everything at once, you will fail. If you woke up this morning and realized you needed to lose 100 pounds, build your cardiovascular system, and tone your muscles, what would you do? If on the first day of your new plan you quit eating, run three miles, and lift all the weight you can lift with every muscle group, you will collapse. If you don’t collapse the first day, wait forty-eight hours for the muscle groups to lock up and the cardio to go crazy, and you will be bingeing on food shortly thereafter.

I’ve written about this phenomenon on my personal blog, where I sometimes write about the challenges I face getting in shape. It’s absolutely true: you’re far better off taking steps that are too small than steps that are too big, because those giant steps are the ones that are likely to make you trip and fall.

This basic idea applies to anything you want to do in life. Want to be a writer? If you get up and start in on a schedule of pumping out 4,000 words a day, you’re going to burn out quickly. Instead, just practice the craft and write short things. My writing practice, to tell the truth, is often on Twitter – can I get across an interesting idea in 140 characters? Doing so improves me as a writer.

Want to be a golfer? If you start playing 72 holes a day, you’re going to get sick of it fast (and probably tear something). Instead, just focus on smaller tasks – go to the driving range for two buckets. Build your skills slowly and don’t burn out.

It’s true over and over again: baby steps work. I think the big reason people don’t do this is that they want results now and then they way overdo it, undoing any good they might have done.

The Power of Clear, Written Goals
Written goals are vital at every stage and in every aspect in life. From page 98:

Brian Tracy, motivational speaker, says, “What does it take to succeed on a big scale? A tremendous God-given talent? Inherited wealth? A decade of postgraduate education? Connections? Fortunately for most of us, what it takes is something very simple and accessible: clear, written goals.” According to Brian Tracy, a study of Harvard graduates found that after two years, the 3 percent who had written goals achieved more financially than the other 97 percent combined!

Writing down your goals makes them real – and makes them powerful.

I’m going to admit something here, something fairly goofy. I usually have somewhere between five and ten personal goals going at any one time. Each of them are very action-specific: “I am going to run a 5K by the end of the year.” “I’m going to write a truly great book.” … and so on.

Each day, I write down each of those goals, pen on paper. Seriously. Doing this every day hammers those goals into my mind and I see those goals in every action I do. Three of my goals are health-related right now and I can’t help but see them when I make a decision about what to eat or what to drink. I look in the fridge, the goals float through my mind, and I choose a spinach salad for lunch instead of a grease-filed choice.

It works. Without this, I wouldn’t have made The Simple Dollar work. I wouldn’t have written a book last year, and I wouldn’t have been well into writing another book this year. I wouldn’t be able to read two challenging books a week. I wouldn’t be a good father – or at least not as involved as I am.

Get Current
There’s a big baby step before you dive in on the $1,000. On page 101:

Before we get to Baby Step One, you will have to do one other thing. You will have to be current with all your creditors. If you are behind on payments, the first goal will be to become current. If you are far behind, do necessities first, which are basic food, shelter, utilities, clothing, and transportation.

If you’re behind on your bills, you have to get caught up before doing anything else. Doing anything else puts the cart completely before the horse.

Many people think it’s “impossible” to get current once they reach a certain disastrous level. That’s usually not true, but you’ve got to be proactive. Call up the people you owe that you’re late with and start negotiating. They’re going to listen because it’s in their best interest to listen – if they don’t, they’re not going to get anything out of the money they owe you if you run away or declare bankruptcy.

No situation is impossible, particularly if you’re willing to step up to the plate and try to take things on head first.

Baby Step One: Save $1,000 Cash As a Starter Emergency Fund
Why $1,000? Why not dive into paying off debts? Dave makes a good case for emergency funds on page 102:

It is going to rain. You need a rainy-day fund. You need an umbrella. Money magazine says that 78% of us will have a major negative event in a given ten-year period of time. The job is downsized, rightsized, reorganized, or you just plain get fired. There’s an unexpected pregnancy [...] Car blows up. Transmission goes out. You bury a loved one. Grown kids move home again. Life happens, so be ready. [...] Now, obviously, $1,000 isn’t going to catch all these big things, but it will catch the little ones until the emergency fund is fully funded.

One of the most frequent things I hear from readers is that they don’t see any reason to not use their credit card as an emergency fund. “I have tons of credit left, so that’s my emergency fund,” they’ll say.

Here’s the problem with that: credit is not cash. Your credit line is completely at the mercy of the credit card company. Sometimes they slash credit limits. Sometimes they outright cancel cards. These things often happen right at the moment when you’re in trouble and most “need” that limit.

On the other hand, cash is constant. A big company can’t take your savings away from you on a numerical whim. If everything goes bad, your credit cards can go poof – but if you’ve saved up an emergency fund, it’s there for you.

What Isn’t an Emergency?
Another “problem” is that people substitute irregular bills for emergencies. On page 104:

Most of America uses credit cards to catch all of life’s “emergencies.” Some of these so-called emergencies are events like Christmas. Christmas is not an emergency; it doesn’t sneak up on you. [...] Your car will need repairs, and your kids will outgrow their clothes. These are not emergencies; they are items that belong in your budget. If you don’t budget for them, they will feel like emergencies.

An expense that you know is coming isn’t an emergency. You know that your car will need maintenance, so an oil change or a minor repair isn’t an emergency. You know your father’s birthday is coming up, so a gift isn’t an emergency.

The real problem here is information management. I think many people wind up treating expected things as emergencies because they simply lose track of that information. They forget that their father’s birthday is coming up, so they don’t put aside cash for it. They forget that their car needs regular maintenance.

What’s the solution to that? Dave points to a budget, but I don’t think that’s really enough for many people. I suggest using a calendar – if an irregular bill is coming up, write it on the calendar. Even better, write a reminder a few weeks ahead of it on the calendar, too. This way, you can see that irregular expense coming and can plan for it instead of going “OH NO!” on the day of the event and just throwing plastic at it.

Get It Fast
On page 105:

Twist and wring out the budget, work extra hours, sell something, or have a garage sale, but quickly get your $1,000. Most of you should hit this step in less than a month. If it looks as though it’s going to take longer, do something radical. Deliver pizzas, work part time, or sell something else. Get crazy. You are way too close to the edge of falling over a major money cliff here.

You’ve got to get hardcore, in other words. I think this works well for a short-term burst – like getting that $1,000 – but it’s not sustainable because to do it you have to upset the apple cart on a lot of behaviors and routines in your life – and that runs completely contrary to the idea of taking little steps.

For me, selling things worked well for this step. I had a big, fat DVD collection full of movies that I rarely watched, so I sold most of them off. I had a ton of video games that I either didn’t enjoy or had already defeated, so I sold them all off. I had a lot of CDs that I knew I’d never listen to again – off they went!

Those moves not only gave me that emergency fund, but it also kicked out some of the debt that was floating around. Even better, it freed up a lot of room in our tiny apartment – eliminating a bunch of non-decorative stuff that just caught dust did wonders for things!

On Saturday, we’ll tackle the seventh chapter – The Debt Snowball.

Over the last few weeks, I’ve been surprised to find that several people that I used to know quite well in the past are quiet regular readers of The Simple Dollar. People from college, people from high school, and people from my earlier professional life are actually readers – something I would have barely believed a little while back.

So, if any of you are lurking out there and would like to get in touch, please drop me a line. I’d really love to hear from you!

First, I have a pair of new articles up at OPEN Forum.

The first is 8 Simple Rules for Practicing Frugality while Traveling for Your Business, which offers up several tips for saving money when you’re out and about on business travel.

The other one is Getting Maximum Value from Your Local Small Business Association, which talks about the value of building small business connections in your local community, even if your business is online-based and not connected to the community.

And now, for some personal finance articles of interest.

Not Much Convenience in Convenience Foods A powerful argument that convenience foods aren’t really convenient in terms of effort. They’re only convenient in that they just require almost no kitchen expertise. In other words, they don’t prey on time, they prey on ignorance, and people that pay more for the convenience foods are paying for that ignorance. Really interesting perspective. (@ grist via bitten)

How You Grow Your Income by 10% or More a Year I think the big factor is being missed here. The article describes how exactly to do this if you’re in a stable career – a typical office job. But one big way to get there is to try out a scalable career (perhaps as a side job). (@ free money finance)

Free Marriage Counseling: Do It Yourself Here’s the thing: most counseling boils down to just having a conversation where both people feel safe and some guidance is offered. Very rarely does a counselor actually make a decision – they just guide participants to their own decisions. So what’s keeping you from doing it yourself? (@ art of manliness)

6 Sure-Fire Ways to Stop Feeling Jealous Jealousy drives a huge number of workplace and personal problems. If you’re feeling jealous of someone, you need to deal with that jealousy. (@ pick the brain)

How Giving Changes Everything Giving of yourself comes back to you multiplied – I’ve found this to be true again and again and again. (@ zen habits)

Having It All This article by Erin Doland is fantastic, outlining in detail the life-changing value of minimizing clutter in all aspects of your life. (@ unclutterer)

The seventh episode focuses on lying to others – and to yourself – about money. I relate several personal stories about lying from my own life, the consequences of those lies, and techniques one can use to overcome them.. Total time: 14:20.

Listen In!

Other options for enjoying The Simple Dollar Podcast include:
Listen to this episode on a separate page
Subscribe via iTunes
Download this episode (right click and save)
Subscribe in the media player of your choice

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.
0:12 – Some thoughts on how to deal with a partner that lies about money problems.
0:54 – Hi “Darren” and “Billie”! I think they actually read The Simple Dollar on occasion and they’re quite okay with me sharing aspects of their personal story.
1:24 – Some of the things that “Billie” did for money are on this list of side businesses you can start.
1:52 – “Darren” and “Billie” wound up using this technique to dig out of their hole.
2:07 – On the other hand, I would be utterly shocked if “Sharon” read this site. If she does, I’d be willing to bet she’s a comment troll.
4:22 – This was one of the earliest things I wrote about on The Simple Dollar.
4:40 – The impact of lying on your career is sort of like the inverse of what Keith Ferrazzi talks about in his excellent book Never Eat Alone.
5:12 – This is one of the twelve bad habits that hold good people back.
5:38 – Here are some notes on lying to yourself about money.
8:11 – Tracking your spending is also the way to get a grip on budgeting.
9:11 – I’m not talking about eliminating all fun in your life here. I’m talking about when a treat stops being a treat and instead becomes an expense.
11:28 – Visual reminders of goals are really powerful.
12:08 – Here are some tips for defining and accomplishing microgoals.
13:22 – I opened our financial matters to our wife in much the same way as I describe here.
14:03 – Next week: the ten personal finance and personal development books that have shaped my life from my financial, personal, and career bottoms until now.

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.

“They pick me [to be tested for steroids] every time. I don’t know why. I don’t know if it’s because I’m a big guy, or what, but all I know is all they are going to find is a lot of rice and beans.”
- David Ortiz in The Boston Globe, March 11, 2005

I’ve been a baseball fan my entire life, and my favorite (non-Cub) player for many years has been David Ortiz, the designated hitter for the Boston Red Sox. Prior to their World Series win in 2004, the Red Sox were my American League club of choice, simply because, as a Cubs fan, I empathized with the long, long history of painful losing moments that Red Sox fans witnessed. Ortiz’s playful attitude and amazing performance in the 2004 American League Championship Series cemented the guy in my heart.

Another big reason I’ve always been able to identify with Ortiz is his background. How could a white guy from the rural Midwest identify with someone who grew up in the Dominican Republic? We both grew up poor. We both were blessed with some great opportunities in our lives and we pushed ourselves to make the leap to do something we dreamed of. We both keep big parts of the way we grew up in our hearts.

That’s why I loved that quote from Ortiz that starts this article. When I first read it, I printed it out and posted it on my desk at work. At the time, it made me think of the value of keeping in touch with your roots.

I love going back to my hometown. Wandering around the pasture behind my in-law’s house, eating fried catfish my father cooks, and going to the hometown festival each September are wonderful. Time and time again, I see some of the good lessons I learned pop through. I see it in my actions, my values, and my personal choices, and whenever I go back there, it still feels in some ways like it fits like a glove.

As time went on, that quote began to change for me. I went through my financial meltdown and started to come out clean on the other side, and one day I looked at that quote again.

“They pick me [to be tested for steroids] every time. I don’t know why. I don’t know if it’s because I’m a big guy, or what, but all I know is all they are going to find is a lot of rice and beans.”
- David Ortiz in The Boston Globe, March 11, 2005

Here was Ortiz, earning millions of dollars a year, and he was feasting on a diet of rice and beans. Ortiz could afford any food he wanted, but a sack of rice and a bunch of beans were good enough to fill his belly.

For me, that quote became a symbol of the idea that you don’t need to spend money just because you have it. Instead, focus on what you actually value in your life. I don’t need to go out to an expensive restaurant when a big old plate of beans and rice at my dinner table with my family all around me will do the trick.

I carried this throughout my life. I severely cut spending in every area that I didn’t feel was vital to my life. I focused instead on my key values – my family, my writing career, and learning and growing as a person.

I didn’t need a shiny BMW in the driveway, even if I could afford it.

I didn’t need to go golfing at a great course every weekend – instead, I went when it was really fun, with my father-in-law and my wife at a local nine-hole golf course.

I didn’t need to buy new books every week – instead, I started using the library and PaperBackSwap.

I didn’t need to do all these things to enjoy my life, and by scaling back in those areas, I found that I had plenty of room to focus on the things that really did matter to me.

Life goes on. I make a big career switch and become a writer. Then, suddenly, in late fall 2008, I have something of a health scare. I got a virus that left me feeling tired all the time and suddenly I really thought about my own mortality more than I thought.

And then I saw the quote again.

“They pick me [to be tested for steroids] every time. I don’t know why. I don’t know if it’s because I’m a big guy, or what, but all I know is all they are going to find is a lot of rice and beans.”
- David Ortiz in The Boston Globe, March 11, 2005

Ortiz plays professional baseball – he’s in pretty good shape. He goes out there every day, takes batting practice, stretches out, gets his sweat up and his metabolism going, and he plays the national pastime.

The fuel he uses to do this is nothing special – just staple foods without lots of additives. Rice and beans and exercise.

The recipe was simple for me. Just cut back on the fatty foods – the cheeses and the soda – and replace them with healthier options – water and, yes, rice and beans. It’s a simple choice that’s also an investment – it improves my health now and it extends my lifetime and period of quality life later.

The next step: add some exercise. I don’t have to go out there and kill myself, but I do need to go out there and move. Just go take a walk three to five times a week. Get the fluids moving in your body. Stretch your muscles. Raise your heart rate a little.

The end result? I’ve lost about forty pounds in 2009 and I feel quite good. I have more energy than before and some days I feel completely on top of the world. My values, my career, my money, and my health seem to all be falling in line.

Sometimes, you find the inspiration you need from the most unexpected places.

Over the last year, I’ve been gradually moving away from a paper calendar (I used a Moleskine desk diary for it) to using Google Calendar for keeping track of all of my appointments, important dates, and other such information. It’s been a slow process – I’ve been using paper calendars for more than a decade, so the transition wasn’t immediate and I often fell back to using the paper calendar.

There were several big reasons that finally made me transition completely. What I found, though, is that most of those reasons actually directly helped me manage my personal finances, believe it or not. It turned out that my money was one of the biggest reasons to finally make that transition.

Here are nine ways I use Google Calendar to make my personal finances that much easier. Many of these can be done using paper calendars, but in most cases, GCal makes it easier to do them.

1. Keep track of bill due dates
This is perhaps the most obvious use of using a calendar for personal finance. When you know a bill’s due date, add it to your calendar, then pay the bill when you see it’s coming close to its due date. So, for example, our mortgage payment is due on the 28th of each month, so on my calendar, on the 28th of each month, there’s a note that our mortgage payment is due. It helps me keep track of our payments.

How can I do this? It’s simple. Log onto Google Calendar. First, I recommend creating a new calendar specifically for bill due dates if you haven’t already – this makes it easy to highlight them. Then, click on the day the bill is due, create a new event, and add the appropriate information – the amount and the type of bill, at the very least. If this bill recurs on a regular basis, make the bill a repeating event. You might also want to add an event reminder so you’re emailed a few days in advance of the bill due date.

Free from Broke offers a nice visual guide to adding a bill due date to your calendar.

2. Plan ahead for gift-giving occasions
My family has always been really into gift-giving and it’s considered a serious faux pas to forget someone’s birthday. In order to make sure I don’t forget a parent or a niece or a nephew, I schedule all of those important days right into Google Calendar.

How can I do this? I use almost exactly the same technique as for the bill due dates. I have an “Important Personal Days” calendar and I add birthdays, anniversaries, and the like to that calendar, scheduling them to recur every year. I also have two email reminders for each one – one about twelve days in advance, and another about five days in advance.

3. Pencil in key dates for sales
Let’s say I’m shopping around for a washing machine, and I’m looking for the best deal I can get. I discover that the local appliance store is having a sale on washing machines next month and given that their prices are already decent, I want to take a look at their numbers. But I might forget the sale! Not any more – I just pencil in the dates of the sale in the calendar, reminding me to check out the sale during that time frame.

This works for any sale that you come across. But, as with any sale, it’s important to distinguish between buying something because it’s on sale (bad) and buying something you already need and taking advantage of a sale to do it (good).

How can I do this? Again, this is just a simple scheduling of an event, except that I set the event as a multi-day one, with the start date and the end date matching those of the sale. Since this isn’t too regular, I have a “Miscellaneous” calendar where I put such events.

4. Keep track of milestones for big goals
As I’ve mentioned a few times on here, I have a handful of pretty big goals: finishing my second book (here’s my first one), running a 5K, and saving for a van. For each of these goals, I have some milestones along the way. I try to make my best attempt at a 5K each week, for one, and I have a word count goal on the first draft of my book each week, too. So I schedule these milestones. I just create an event each Friday saying something like “Book word count target: 30,000.” On Sundays, I have a “Walk/run your best 5K” penciled in.

How can I do this? Just pencil in your milestones whenever they occur. I have a “Goals” calendar that I put these under. Why so many calendars? It allows me to make groups of things appear and disappear at will when I’m looking at the calendar, which makes it very easy for me to keep track of what’s going on.

Dal, Chilean style, with chickpea curry, which I discussed in this earlier article.

5. Schedule meal plans intelligently
Remember my post about making multiple casseroles? As I mentioned there, it’s usually worthwhile to eat those casseroles within two months or so. So, in that example, I made four casseroles on a Thursday afternoon. We ate one that Thursday night, then I actually scheduled the casserole again for three weeks, six weeks, and nine weeks later. Then, when we sat down to plan for the week, my calendar would show me that we already have a meal in place for one night that week, meaning we can plan for fewer meals and save money at the grocery store.

If you do these in multiples, it gets really neat. Let’s say you cook six pounds of chicken breasts on a Tuesday in a slow cooker and freeze four and a half pounds of them. You’ll want to use these within a month or so, so I’ll mark down the following Tuesday, the Tuesday after that, and the Tuesday after that that we have 1 1/2 pounds of cooked chicken that need to be used. This keeps us from “wasting” food in the freezer. You can do the same thing with any frozen item you buy in bulk – for example, we often buy beef in bulk from a local butcher because of the quality and low prices, so in order to avoid freezer burn, I’ll pencil in when we should use the meat. Again, having this information right there drastically reduces our grocery bill and fits in perfectly with planning ahead for meals, which is itself a huge money saver.

How can I do this? I use a “dinner” calendar to manage these things. I just create recurring events for both of the cases above, and when we plan meals once a week, I create events with what we plan for meals those days. I usually label any ingredients we need to use by saying “Ingredient: ” right in the name of the event. That doesn’t mean that we’ll use the ingredient on that exact day, but it works as a reminder when I sit down to exactly plan meals that we have, say, chicken breasts to use that week already in hand. I schedule a meal each night and include the recipes in it – we even usually pencil in a “leftovers” night about every third or fourth night. This really works well.

6. Plan ahead for scheduled maintenance
Home maintenance saves you money, period. Taking a bit of time on a regular basis to do things like change furnace filters, check fire alarms, check vents for clogging, and so on can make an enormous difference in the life of your appliances, the appearance of your home, and the energy efficiency of your home.

I speak from experience here. When we first moved into our home, we didn’t realize that our dryer occasionally ejected a very small amount of lint into the ventilation, which led directly outside the house. After several months of use, our dryer seemed to not work very well. We had to run it two or three times to dry a reasonably-sized load. We puzzled over this and considered calling a repairman, but my two year old son actually figured it out. He came walking over to me with some lint in his hand one day. I asked him where he found it and he walked me straight to the vent. A few finger sweeps later and the dryer suddenly ran as good as new.

The problem is remembering the numerous little home and auto maintenance tasks you need to take care of. The solution? A home maintenance calendar, which tells you when you need to change filters and when you need to do a walkthrough to check on things – and, yes, when you should check vents. I made a big list of home and auto maintenance tasks – picking out the ones you use and scheduling them can save you some serious change over time.

How can I do this? Again, with a “maintenance” calendar. These are almost all recurring events on different schedules – some every month, some every three months, some every six months, some every so many weeks (so that I don’t have days LOADED with tons of such tasks). If I see some maintenance tasks for that day, I just do them and then I know that things are being maintained.

7. Take control of your portfolio planning
I often encourage people to just put their retirement savings in a “target retirement” fund and just forget about it, but many people like to have more control than that. They want to balance things themselves. Perhaps they want more risk than those plans give, or maybe they want less risk. They might also want low risk investments in their retirement accounts but very high risk investments in their taxable accounts.

Either way, rebalancing those investments regularly is key. On a regular basis, it’s important to sit down and think about whether or not your investment allotments match up with what you really want to be doing. You might change your contributions significantly – or you might even actually move your investments around.

It’s important to do this regularly, and that’s what a recurring event is very useful for. I “rebalance” every three months or so, mostly by just altering my contributions. I’m fine with using a “target retirement” fund, but I actually enjoy digging in and tinkering with things myself.

How can I do this? If you’re involved enough in your investing to rebalance it regularly, just set up a recurring event with a reminder of what you want to be doing, as a note. So, you might have a “Rebalance my Roth IRA” event, with a note that says “I want to have 10% in this fund, 20% in this fund, 30% in this fund, and 40% in this fund.” I actually keep mine on my “maintenance” calendar.

8. Set up seasonal reminders
Different times of the year bring different things we should think about with our personal finances. Charles Schwab has a very useful article listing many of these seasonal concerns, some of which may apply perfectly to you.

Some things we all might want to do: get a copy of our credit report every four months from the FTC at AnnualCreditReport.com (you get one from each of the three agencies each year for free, so just get one from one agency in January, another from another agency in May, then again in September), start budgeting for the holidays in the spring or summer, plan seasonal charitable giving or volunteer work, and so on.

How can I do this? I put these in my “miscellaneous” calendar, but many of these are recurring. For example, I remind myself a few times during the summer to look for Habitat for Humanity dates, and I also prod myself regularly to put aside money for and shop ahead for Christmas. I also snag my credit report like clockwork and I also remind myself to occasionally touch base with my parents about their financial needs (a will or a master information document or anything else like that).

9. Remind yourself of the things that really matter
If you’re putting forth this effort into saving money, you ought to be doing it for a great reason. For me, my children are my big motivation – I want to make a truly great life for them. Of course, a great life means that I spend a lot of quality time with them, so I plan ahead for that. Aside from the “evening block” that’s devoted every day to family time, I often pencil in other events. Some of them are known – soccer practice and the like – but others are surprises, like whisking my kids away for a long afternoon at the Science Center of Iowa or going to story time at the library.

Make sure you’re taking time out for the things that actually matter in your life. It’s easy to see the big reasons before we get started, but often when we’re involved with projects and get so drawn in, it’s sometimes hard to remember to take time for the reasons why we’re doing this.

How can I do this? I have a calendar called “Family” where I schedule things like this. When I look at the week ahead and see a trip to the library or a trip to the Science Center or something like that, I feel like my week is more … complete.

An effective calendaring system has almost unlimited uses. Just remember that it’s a tool – the calendar doesn’t have meaning, your life does.

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.

Being fat is voluntary. People make a choice to eat unhealthy and not excercise. Therefore, it should never be covered by the Americans with Disabilities Act.
- Lindsay

This was such an egregious comment that I felt the need to clearly respond to it.

Being fat is sometimes voluntary, but in many cases it is not. Many illnesses bring on unwanted and unwarranted weight gain – my uncle’s liver problems caused him to gain huge amounts of weight with basically no change in diet or activity, going from a formerly rail-thin person to someone who was very overweight. Many medications bring on unwanted weight gain – many thyroid medications, resulting from conditions present at birth, result in excessive weight that’s far beyond the choice of the person.

The problem with being overweight is that sometimes it is the result of personal choice and sometimes it is not – yet it is often assumed that it is due to poor choice, a trap that Lindsay falls directly into.

Yes, it’s true that an overweight person might result in a greater cost for a business that might hire that person – they’re statistically more likely to have heart disease, etc. However, one could make the same argument for a female – they’re statistically more likely to have children than men, thus they’re more likely to need maternal leave and incur replacement costs. Yet the former argument is accepted, while the latter argument is sexist?

Forms of discrimination that are clearly based on factors that are beyond a person’s choice – sex, skin coloration, ethnicity – are clearly frowned upon in modern society. Just because we went through revolutions throwing off racism and sexism doesn’t mean that there aren’t still big forms of discrimination out there.

The way I see it, a person is a person, and as Martin Luther King said, a person should be judged by the content of their character. Being overweight might mean that they have some personal issues – or it might just mean that they were born with a thyroid condition. Either way, what matters is how they treat others and what they produce with their time.

I live in Chile and i’m planning on getting a macbook laptop in my next trip to the states.
i was wandering, considering the vast world of choices available in the computer world, if it was really worth it.
- Ricardo Carrasco

I think it really comes down to how vital a computer is for the work you do.

If you’re just checking email or web surfing for convenience, there’s no reason not to just get a netbook and call it good enough. If you’re going to be doing Photoshop and intend to use it as your primary workstation, then a Macbook makes more sense.

For the work I do, which is slowly expanding into lots of videoconferencing, podcasting, video editing, image editing, and so on, I’m saving for a Macbook Pro for my next portable computer purchase. My desktop Mac is simply the best computer I’ve ever used – to have that portable would be invaluable.

You wrote an article some days ago: “Using Consumer Reports to Assemble Your Grocery List” which talks about Consumer Reports, but you have previously deleted your earlier content pointing to them. Your reason for doing so was “Consumer Reports has asked me to eliminate the content of my summaries and any other references to the content of Consumer Reports. I have complied.”

Now if they (Consumer Reports) do not want to be mentioned then why have you mentioned them again?
- Tordr

Over time, Consumer Reports is figuring out how the internet works.

When I first started blogging, they were pretty agreeable to most writing about their publication. In 2008, possibly because of online backlash about their child safety seat articles, they suddenly went through a very draconian phase, where they complained loudly about all “unofficial” mention of their work.

Since then, they’ve taken a more open turn, encouraging people to write and discuss CR information – a policy that’s much more reasonable.

For organizations rooted in old media, the transition to a world where people will quote and talk about your information freely is a hard one. CR is figuring it all out, one step at a time.

I’m a little puzzled about the Twitter goal. I can understand that increased blog subscriptions probably means increased traffic/profit (and I’m not knocking that). I don’t understand what benefit you derive from 25,000 Twitter followers, unless it’s mainly that it increases recognition of your work.
- bethh

The Twitter goal – frankly, all my goals – come back to one thing: reaching as many people as I can with ideas about managing their money a little better and perhaps putting their life on a new path.

The numbers themselves are mostly goals, to give me something clear and tangible to strive for. In both cases, it keeps me focused on writing and sharing good, worthwhile, valuable stuff that people can actually use and relate to. I use readership numbers because if I’m picking up new readers, I’m doing something right.

High targets – like 25,000 Twitter followers in a year and 100,000 site subscribers in a year – make me really think about what I can do to strongly appeal to people: make personal finance accessible, make it interesting, and make it applicable to real change in people’s lives.

Any income that I earn follows from that. The content leads everything else.

I am planning on starting a loan for my last year of college. I have been paying college with my own money through my Amex Blue Cash (to get cash back) but I pay it off monthly. My limit is just enough to pay for monthly tuition plus $100 for myself, but sometimes, this isn’t enough. I tried raising my limit but Amex denied me. Does it make sense to apply for a new CC before applying for a student loan? Will it hurt my credit score (because of the hard pull) or will it help it (because my overall limit will increase)? What is the smarter thing to do?
- Carlo

The hard pull’s effect is pretty small and pretty temporary. If you’re approved for a new card, the increase in your credit limit should be much more of a boon to your credit score than the short-term negative effect of the hard pull.

I’m not sure why Amex denied you, though. Unless you’re not disclosing some other aspect of your situation, you would seem like a good target for raising a credit limit. The fact that you were denied seems to indicate that your credit – for some unspecified reason – is worse than you’ve said.

If that’s the case, applying for a new card can be a risk. If you get denied for it, you get the negative ding of a hard pull without the benefit of an increase in credit limit.

Your best bet, then, would be to put the card aside for a while and just pay your monthly tuition directly. That way, you’ll be utilizing 0% of your credit limit, which should help your score.

Where would you recommend for buying larger sized shoes? My husband wears a 15 EE, and he could probably go a size up… It’s the largest we can find in a store. He needs waterproof boots that breath. I got him a pair at Sportsman’s Warehouse, and his feet are white and peeling from sweat after a day on the lake (he’s on the rescue squad and sometimes he’s out there for 12+ hours multiple days).
- Deborah

I wear a size 16/17 (depending on manufacturer). For my own shoe needs, I watch eBay carefully – that’s how I picked up a really good pair of running shoes for just a few dollars that fit me.

For dress shoes, I’ve had real problems. I found a mediocre pair through a “big and tall” website, but they’re massively uncomfortable and don’t look all that good, either. I’m stuck when it comes to this category – I may end up going to a shoemaker.

When I was younger (junior high) and my feet first grew to this size, my family used a catalog from Eastbay to buy my shoes. I’m pretty sure they still sell a lot of models going up to size 18.

I am currently a PhD English student, so while a lot of my assigned reading is in hard copy books, most of my reading is actually in PDF files culled from library databases. I should state now that I don’t have a lot of money, I am paying my tuition fees and living expenses while *not* working since I’m in school, and the campus has a pay-to-print policy. Because academic reading requires annotating, I print the PDFs, annotate them by hand, and type my notes to prepare for papers. Is there a way to put digital annotations on PDFs? I have already tried in Adobe, but unless the document author authorized the comment feature, I can’t figure out a way to do it. My other option is the Kindle, which supposedly can save annotations and export into a word document, but costs $450… can you help sort this out?
- Shevaun

Well, if you’re using a Mac, it’s easy – Preview allows you to annotate PDFs to your heart’s content. I use this feature myself sometimes.

If that doesn’t work (because of restrictions on the PDF), you could select all the text, copy it out to Microsoft Word, then add the notes yourself.

If that doesn’t work, you can try installing Ghostscript, which can often extract the text from PDFs – from there, you can get them into Microsoft Word.

However, if the pages are images (as is the case sometimes, particularly on older papers), you’re pretty much stuck printing them off.

My neighbor has a riding lawnmower, while I have an old beat-up pushmower. During the winter, though, I have an awesome snowblower and he has a scoop shovel. I’m thinking about suggesting some sort of sharing arrangement, where I can mow using his mower (saving time) and he can blow his snow with my snowblower (saving him time), but I don’t know how to propose it. Any suggestions?
- Charlie

Invite your neighbors over for a barbecue and simply make your proposal over a big hamburger. It’s that simple.

Really, there’s no need to overthink it or be nervous about it at all. If it works out, great. If it doesn’t – you still have your own mower and you still have your snowblower – no harm done.

Just suggest it simply – “Hey, I’ve got an idea. I’ve noticed you’ve got that sweet riding lawnmower … and I’ve also seen you scooping snow in the winter. How about we make a little arrangement that helps us both? In the winter, you can borrow my snowblower to clear your sidewalk and driveway. In the summer, you’ll lend me your riding mower to mow my yard. I’ll keep the rider filled up with gas. What do you think?”

Another tip: don’t be insulted by a “no.” Your neighbor might be scooping snow by choice (as it is good exercise) and might not want a lot of extra miles on their rider – a completely understandable position. If you get a “no,” don’t sweat it – just say you thought you’d throw the idea out there and move on with life.

What do you listen to during the day when you write? Or do you write in silence?
- Frances

I listen to a handful of podcasts, usually first thing in the morning. Most of the podcasts I listen to are pretty short daily ones (a format I considered for The Simple Dollar podcast). For instance, this morning I’ve listened to PTI, Marketplace, Marketplace Morning Report, The B.S. Report, The Writer’s Almanac, and Fresh Air. I have a pile of weekly ones as well that I listen to throughout the week.

Honestly, I don’t pay full attention to most of them. They float in one ear and out the other, but they provide good background noise.

The interesting part is this: about four or five times a day, a point will stick into my head and worm its way up to my conscious thought, usually about a minute after the point is made on the podcast. I’ll back up the podcast, listen again, and usually wind up jotting down a note for later.

Once I get tired of podcasts, I listen to music. I usually fill my afternoons with solid music from one artist – Old Crow Medicine Show, Dave Matthews Band, Regina Spektor, Neko Case, and so on. I’ll say, “Today… is a U2 day” and just shuffle songs from that artist.

How come you never talk about investing in rental properties?
- Shiloh

Frankly, it usually seems like more of a hassle than it’s worth.

One of my best friends owned a rental property for two years. He hired a management company that he thought would take care of everything and just expected checks to roll in.

What he found, though, is that the property was a constant hassle. The renters figured out who actually owned the property and constantly complained directly to him. He’d then refer the complaint back to the management company.

Then, there were constant additional expenses – something needed repaired, something needed replaced.

In the end, he was only making a tiny trickle of income from the property and he was investing a ton of time in it. So he sold the property, only breaking slightly above even on it.

I’ve talked to several other readers who have rental properties and most of them share the same notes. The exceptions are people who own quite a few properties, deal with them themselves – effectively, they’re landlords and that’s their life. Those people love it, since all they have to do is deal with these little details.

Since it’s not something that seems like an exciting route to explore – and it’s an area I certainly won’t be writing about from my own experience – I’m letting this sleeping dog lie.

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

Every other Sunday, The Simple Dollar reviews a personal finance book.

If you’ve been reading The Simple Dollar for a while, you’ll know that I’m a fan of WiseBread. It’s a “group” personal finance blog with a small pack of contributing writers, some of which I quite like (like Philip Brewer).

10,001 Ways to Live Large on a Small Budget is something of a compilation of the “best” of Wise Bread, along with contributions from several other top personal finance bloggers (myself included – my contribution to the book was Everything You Ever Really Needed to Know About Personal Finance, which appears on pages 199 to 205). Most of the contributions are lists of frugal ideas or other personal finance concepts, each of them actionable – the titular “10,001″ comes from a liberal accounting of these tips.

The book itself comes off much like a thick magazine – glossy pages and lots of relatively short, independent articles with specific action tips.

Thus, instead of a full-on review, I just picked out ten of my favorite pieces from the book, tried to find the originals online, and offer my thoughts on them. If you like these ten pieces, you’ll likely enjoy the rest of the book.

12 Affordable Ingredients that Add Gourmet Flair to any Meal
Contributed by Linsey Knerl
This is really an awesome list of ingredients to have on hand to make more upscale meals at home on the fly. We usually have most of these things on hand, but often we grow our own substitutes for these – for example, instead of shallots, we have green onions from our own garden.

Eight Natural Ways to Make Water More Flavorful
Contributed by Xin Lu
Water is the ideal beverage – it’s practically free and it quenches your thirst. The only problem for many people is that it’s bland and boring – so people skip water and drink sodas or coffee or other beverages. If you’re trying to cut other beverages out of your diet for health and financial reasons, try some of these great tactics to kick boring water up a notch.

Make Your Clothes Last Longer (without spending big)
Contributed by Andrea Dickson
I basically tend to wear my clothes until they’re ready to fall apart – ask my wife; sometimes, she’s not impressed with that at all. These tips do a great job of extending the lifespan of clothes, whether you choose to wear them that long or not.

25 Great Gifts for $5 or Less
Contributed by Julie Rains
I find that pretty much anything homemade, if done with thought and care, can make a great gift but not cost you too much in terms of money. For example, I can make homemade dry pasta and homemade pasta sauce quite inexpensively, package them well, and it becomes a really cool gift for someone.

10 Ways to Simplify Your Budget
Contributed by Leo Babauta
Many people fail at budgeting because they make it way too complicated. The end result? They simply don’t follow through with it – it becomes a dead document that means nothing at all. Leo has some really good tips for making a budget actually work in the sonc

10 Ways for College Students to Eat for Free
Contributed by Margaret Garcia-Couch
College can be tough. You’re trying to get by on pennies without racking up any more debt than you have to, and many students do this by eating cheaper. However, college has a big advantage – you can often eat for free if you plan ahead and know what you’re doing. I wish I had done things like this more often.

How to Find Savings in Every Room
Contributed by Myscha Theriault
I like tips like these. They’re simple, apply to almost everyone, and just work without too much effort or thought. I believe that many people are turned off from frugality because their first taste of it is some tip that looks like a giant time investment and without experiencing how useful frugality can be, they don’t think it’s worth it (for good reason). That’s why the best frugality tips for beginners are really simple ones, particularly ones with big bang for the buck. Why do you think I talk about light bulbs all the time?

21 Great Uses for Beer
Contributed by Paul Michael
I often have really cheap beer in the fridge for various purposes (mostly because some of my guests seem to actually prefer Natural Light to a great craft beer – to each his own, I guess). Sometimes, though, I pop open a can – but not to drink it. I use it for other things, like beer batter or flavoring rice.

How to Have a Frugal Vacation and Still Treat Yourself
Contributed by Nora Dunn
My favorite advice for a cheap vacation is to stay with friends and family. Choose destinations where you already know people, then call them up and let them know you’re thinking of a vacation there. You might just find yourself with free housing and a very hospitable host. Of course, you should always return the favor when this comes up!

55 Ways I Saved (or Considered Saving) Time and Money Planning my Wedding
Contributed by Sarah Winfrey
A wedding can be a gigantic money suck – that’s why there are lots of lists of tips on how to save money on weddings. This is one of the most complete ones I’ve ever seen. My attitude is this: a wedding is about people, not about stuff. Don’t blow exorbitant amounts on stuff.

Is 10,001 Ways to Live Large on a Small Budget Worth Reading?
Did you find the articles above worthwhile? Does the idea of a magazine-format book seem appealing to you – a bunch of unrelated articles on money-saving topics? If you’re saying yes to both, you’ll probably find 10,001 Ways to Live Large on a Small Budget very worthwhile.

I’ll be honest, though. I’ve been a long-time reader of Wise Bread and some of the other blogs touched on in the book and I found that I’d already read most of the book. It had a very, very familiar tone for me. That doesn’t mean it wasn’t worthwhile, it just means that the best audience for this book is people who have never read Wise Bread (or other personal finance blogs) too much.

10,001 Ways to Live Large on a Small Budget has great content. I look at it as a knock-’em-dead issue of a great personal finance magazine. If that’s up your alley, check this one out.

Lately, I’ve been thinking a lot about the costs and benefits of speeding. Is pushing the pedal a bit actually worth it? Or are you better off staying inside the speed limit?

In order to start cranking the numbers on this, I had to use a few assumptions. Let’s walk through them.

First, I figured that you have 1/4% chance of receiving a speeding ticket for each mile you’re over the speed limit for an hour. So, if you drive 68 in a 65 zone for an hour, you have only a 3/4% chance of receiving a ticket. On the other hand, if you drive 82 in a 65 zone for three hours, you have a 12 3/4% chance of receiving a speeding ticket.

Second, I figured the cost of a speeding ticket is $200 and has a ten minute time cost. The ticket itself will cost you less than that, but the raise in your insurance rates will eat the rest.

Third, I figured you lose 1% fuel efficiency for every mile per hour over 65. I’m using government estimates for this figure.

Fourth, I’m using a figure of $2.50 a gallon for gas, and I’ll use a car that get 25 miles per gallon for the calculation.

Got that? Let’s get cracking.

Is it more efficient to drive 80 miles per hour or 65 miles per hour on the interstate? Let’s say you’re making a 200 trip on the interstate.

If you go 65, you have zero chance of receiving the speeding ticket. You’ll consume 8 gallons of gas and arrive in three hours and five minutes, costing you $20.

If you go 80, you have an 11.25% chance of receiving a speeding ticket. If all goes perfectly, you’ll consume 9.4 gallons of gas and arrive in two hours and thirty minutes. However, if you receive a ticket, you’ll arrive in two hours and forty minutes – that’ll happen 11.25% of the time. So, combining the odds of the two, an average trip driving 80 will allow you to arrive in two hours and thirty one minutes (saving thirty four minutes) and cost you $46.03.

So, driving faster saves you thirty four minutes but costs you $26.03 – an hourly rate of $45.11 for driving slower.

What about going 70? You have a 3.75% chance of receiving a speeding ticket. If all goes perfectly, you’ll consume 8.4 gallons of gas and arrive in two hours and fifty one minutes. However, 3.75% of the time, you’ll receive a ticket and arrive in three hours and one minute and drop $200 on that ticket. So, combining the odds of the two, an average trip driving 70 will allow you to arrive in two hours and fifty two minutes (saving thirteen minutes) and costing you $28.55 (costing an average of $8.55 more). Your hourly earnings from driving 65 instead of 70 is $38.91.

What about going 66? Only a completely malicious cop bent on getting their quota would give you a ticket then – you have a 0.75% chance of getting a ticket over three hours. If all goes perfectly, you’ll consume 8.1 gallons of gas and arrive in three hours and two minutes. However, you have a 0.75% chance of getting a ticket, and if you do, you’ll arrive three hours and twelve minutes and get a $200 ticket. Combining the odds, on an average trip going 66, you’ll arrive at three hours and a bit over two minutes (saving a bit under three minutes) and spending $21.70. Your hourly earnings from driving 65 instead of 66 is $36.50.

Here’s the data up through 120 miles per hour. The data in the “TRIP COST” column is the total cost (gas plus odds of a speeding ticket) of an average 200 mile trip on the interstate at that speed in a 25 miles per gallon car. The “SPEED COST” indicates the total cost you incur by going that speed instead of going 65. The “MINS SAVED” column tells you how many minutes you save by going that speed instead of 65. The “HOURLY” column indicates the hourly wage you earn by simply going 65 instead of speeding. So, for example, if you go 120 miles per hour, your trip costs, on average, $126.94, which is $106.94 more than you’d spend if you drove the speed limit. Driving this fast saves you 84.6 minutes on average, though, so if you drove the speed limit instead of going this fast, you’d earn an hourly rate of $75.83 for your time.

Conclusions
First of all, each mile per hour you speed is more costly than the one before it. Going from 70 to 71 is more costly than going from 69 to 70. That’s fairly straightforward, though.

Second, if you look at it in terms of an hourly wage, speeding can be pretty costly. Remember, we’re talking about after-tax dollars here, not the raw amount you bring home. Thus, a $36.50 hourly rate for the two minutes and forty eight seconds you spend driving 65 instead of 66 is more like $50 or $55 an hour in pre-tax money. The chances of a speeding ticket are more costly than you might think.

Third, this doesn’t include a “wear and tear” factor. Continually speeding puts additional wear and tear on your car – an amount that’s hard to quantify. With an enormous pool of real-world data, one could come up with a factor for this, but it would simply serve to make the cost of going faster even higher.

Fourth, this is all about probability. You’ll hear from people who claim to always drive eighty and never get a ticket. Others may get a ticket going 37 in a 35 (the ticket said 42, but I was going substantially slower – an officer was pretty obviously trying to get a quota filled). One lucky person is a great anomaly, but it doesn’t change the simple fact that the faster you go, the more likely you are to get a ticket.

Finally, some people with a high value on their time can justify speeding. If you are hurrying to a place so you can start billing $100 an hour, there might be a great justification in speeding. However, the more you push it, the less you actually gain, because the hourly cost for each mile per hour goes up.

However, on most road trips, you’re better off setting the cruise control at the speed limit and just cruising along. Getting to Aunt Melba’s ten minutes earlier isn’t worth the potential cost for most people.

The comments on this one should be fun. All I suggest is that you shouldn’t get bogged down in picking apart the assumptions, because even radically changing them still results in the same conclusions. I tinkered with and researched the assumptions extensively for this post and found that even if you modify the assumptions radically, the conclusions still hold.