This is part of an ongoing series about how to trim the budget of the average American. As this series focuses on such broad-based tips, some will work for you and some will not. You’re invited to mention in the comments the tips that you found to be the most useful for inclusion in a comprehensive budget trimming guide at the conclusion of this series.

Housing – household operations – $984

Household operations? Think housecleaning services, nannies, babysitters, child care, and the like – services people pay for to keep their household running efficiently.

Quite often, these expenses are purchased in order to buy time for other things, like leisure or spending time with family – and that’s understandable. However, there are still many ways to peel back a bit more on the average household operations budget.

Make sure you’re actually utilizing the time you’re saving. If you’re paying for a housecleaning service just so you can sit around each evening and do nothing at all, you might want to reconsider your choices, particularly if you’re swimming in debt. Household services are fine if you actually need the time for something positive and productive in your life, but if you’re not utilizing that time, it’s probably time to reconsider the whole thing.

Cut back on housecleaning services and see if it makes a difference. If you pay for a housecleaner, reduce the frequency of the visits and see if it makes any sort of impact on your life. You might find that with just a bit of casual picking up, you don’t really need that much time from the housekeeper, thus saving you money.

Buy services in cooperation with your neighbors. A few houses on our block negotiated with a lawn treatment service in order to get a reduced rate for all of them. If you utilize services that people you know also use, look into negotiating for a better group rate for all of you. This particularly works well if you’re a new customer or if you overlap geographically in a way that’s convenient.

Look for opportunities for a more flexible working schedule. A more flexible working schedule allows you to rely on childcare and other services less, directly saving you money. Look for telecommuting opportunities, alternate work schedules, and so on.

Start a babysitting co-op. In order to reduce babysitting costs, several families in our area have a babysitting co-op. One weekend evening (often, it’s Fridays) on a rotating basis, one of the sets of parents offers free babysitting for all of the other parents in the co-op, giving those parents a date night or an evening to take care of other business. The babysitting service rotates through all of the families, and each week, all families always have the option of using the service provided by another family. This saves on “date night” babysitting costs for all of the families involved.

Alternately, start a direct babysitting exchange. Another family I know has a direct exchange with another family. One Saturday a month, they watch the children of their partner family. Another Saturday a month, that partner family watches their children. This gives both sets of parents one free weekend day to take care of projects or spend time together without the children – and it’s free. This is often much better than hiring a babysitter each month for a full day.

Try doing things for yourself. Instead of hiring a lawn treatment service, I got a small fertilizing and seeding cart and learned how to do it myself. I just spread seed and dry compost in the spring and more dry compost in the fall using my spreader. It takes about an hour and just replaces my exercise session for the day – and there’s no service fee nor no cost for the fertilizer.

Always shop around. Sometimes, the service you want for the price you want isn’t available when you want it, so you wind up with your second choice (paying more or receiving a lower-quality product). If you find yourself in that situation, always put yourself on the waiting list, then switch when the opportunity comes around. Just because there isn’t a slot for you right now doesn’t mean there won’t be, and you can often improve your “bang for the buck” by being patient and switching when there’s an opportunity.

I want your help! In the comments, please let me know which of the tips you find most useful for trimming these costs. I’ll include the top choices in a comprehensive budget trimming guide at the conclusion of the series.

Six years ago today, I wrote that in my personal journal.

It was the first sign that I was able to find that there was some level of serious unhappiness with my career, my financial state, and my spending choices.

Over the next two years, I spent a lot of my time – and a lot of my money – chasing things. I would throw myself into something I had discovered, toss a lot of money (and often a lot of time) at it, and then discover that it really didn’t bring me much happiness at all.

So I’d chase something else with my money and with my time.

Golf. Video games. Gadgets. Alcohol. Trading cards. Sports equipment. Audio equipment. Piles of new books. DVDs. Trips.

The list goes on and on.

I wanted something, but I didn’t know what it was.

It turns out, after digging myself into an even larger debt hole, that the very thing I was searching for was a simpler life, one with fewer debt responsibilities and with more career and personal freedom.

Many readers of The Simple Dollar stumble across this site because they’re in that very situation. They’re drowning in debt. They’ve got a job that they have to keep, putting them completely at the mercy of their boss. They’re unhappy with how things are, so they find themselves leaping from thing to thing, throwing money into fleeting interests. I see it over and over again in the emails I receive.

Here’s the solution. Sit down and figure out where you want your life to be in five years. Sketch it out in detail. Specify the things you really want from your life in that period. Focus on the core things that you truly want when you think about where you want your life to be in the future.

When you’ve set down those key things on paper, let everything else go (unless it’s a required responsibility). Stop spending money on things that don’t bring you closer to that goal. Every time you spend a dollar, look at it in terms of that big picture you want.

Nothing else matters.

When you start putting that kind of attitude front and central in your life, it becomes much easier to do things that might otherwise seem difficult. Instead of just jumping from thing to thing and feeling a lot of stress and unhappiness about the state of things in your life, you begin to feel a unity in your work, your financial choices, and your personal choices.

It took me two years to really figure this out, and it took a few more to really bring it to fruition.

But when I compare my life now to the way it was then, I can’t believe how far I’ve come. I don’t really care about – or even remember most of – the things that seemed so important to me at the time. Instead, as I began to really figure out what my real goals were – what I really wanted in life – and put those goals front and center in every aspect of my life, all of the distractions and unnecessary spending just melted away.

Start today. Spend an hour thinking about exactly how you want your life to be in five years. Focus on the things that actually bring you happiness. Break it down to the real key elements, the biggest things that you’d like to have in your life then.

Then put those things at the center of your life and discard everything else. It’s surprisingly easy to do it if you sit down and start.

This is part of an ongoing series about how to trim the budget of the average American. As this series focuses on such broad-based tips, some will work for you and some will not. You’re invited to mention in the comments the tips that you found to be the most useful for inclusion in a comprehensive budget trimming guide at the conclusion of this series.

Education – $945

Education is another expense that varies widely from family to family. Many families have no education-related expenses at all. Other families have multiple children in college or on the way and are in a much different situation.

Obviously, education spending is an area where I think it’s a strong investment to spend if you need it. Education can have an enormous positive effect on your lifetime earnings beyond the personal growth that education can trigger.

The question here is how you can maximize your education dollars. Here are several suggestions for doing just that.

Keep in mind that college success isn’t a matter of getting into the best school. The Wall Street Journal found that, although attending college is important, what’s more important is drive and ambition: “When comparing students who graduated from elite colleges, as measured by students’ average SAT scores, with those who graduated from less-selective schools, the researchers found no significant income differences between the two sets of students. In fact, being rejected by an elite school where students had higher SAT scores was a better predictor of higher earnings than the competitiveness of the college the student actually attended. The findings suggest a student’s innate ambition, as reflected by his or her willingness to stretch in applying to exclusive schools, is a factor in career success.” In other words, if you want your child to succeed, don’t throw money at test preps or admissions for the right college or pressure to choose the right major.

Help your child find their passions. Hand in hand with the above idea is the idea that students who are driven are the ones who succeed. How can you help your student tap into some sort of internal drive? Help them figure out where their passions lie and then give them the support and room they need to chase those passions. This is a big part of parenting – in my opinion – as your child begins to grow up, through adolescence and puberty. If you can help your child find that passion, that passion can carry them to great heights – and help greatly with the value of the education they’ll get.

Stay on course. The most expensive thing you can do in college is switch majors – it almost always tacks on more semesters to your experience there, and thus a lot more expense, too. Again, this is an example of why it’s incredibly valuable to help your child figure out their passion as early as possible – not only does it fuel their drive, but it also helps them find a major they’ll stick with.

Apply for as many scholarships as you possibly can. Yes, this can be a giant time sink. However, it’s almost always a profitable one, because there are a lot of scholarships out there that don’t even receive enough applicants to pay out all of their money. Ask around your social network. Ask at your place of employment. Ask at your church and any other social organizations you belong to or your child belongs to. In particular, look for scholarships that take advantage of special traits of your child: their ethnicity, their accomplishments, their socioeconomic status, and so forth.

Focus on top public schools, particularly ones in your state. If you’re looking for a school to aim for that maximizes “bang for the buck,” the top public school in your state is almost always a great target. Many top public schools are very competitive with private institutions, but beyond that, they offer much more affordable rates than private schools, particularly if you’re a resident of that state.

Start saving as early as possible with an open-ended 529. A 529 savings account plan enables you to put cash away for your child’s (or your own) future college education. The earnings in such accounts are tax-free if the money in the account is used for educational purposes (and if it never gets used, you merely have to pay taxes on the earnings plus a 10% penalty). If you’re sure that educational spending in some form or another is coming for your child (or for you), you’re better off opening such an account now and starting an automatic investment plan.

Shop around for textbooks. Many students make the mistake of rushing headlong into book buying – and when they do that, they overspend. Find out what books you actually need for your class, then take the time to shop around for them, particularly looking for used ones. Check online book resellers and auction sites. Take a look at the bulletin boards at your school. Spending a bit of time doing this can save you 75% easily on your books over the sticker price.

Take challenging courses in high school, both for the AP credit and the experience. Many high schools offer AP courses and courses that are dual-listed with a local college. Attempt to take as many of these as your student can handle, particularly in areas where their skills are the highest. These classes not only help you earn AP credit or college credit (saving on tuition later on), but also help you gain the skills you need to succeed at the college level.

Take general education classes at a community college over the summer. Many lower-level general education classes can easily be taken at a community college and transferred. Take advantage of this – community college classes are usually incredibly inexpensive and if a few of them over a few years can shave a semester off of your college tuition, jump on it.

Take advantage of education-related tax benefits. If you’re attempting to get an education – or one of your dependents is – the IRS gives you tons of tax benefits: the Lifetime Learning Credit, student loan interest deduction, the American Opportunity Credit (?), and so on. These credits and deductions can literally save you thousands of dollars each year when you file taxes. Here’s a great overview of some of the tax advantages for education.

I want your help! In the comments, please let me know which of the tips you find most useful for trimming these costs. I’ll include the top choices in a comprehensive budget trimming guide at the conclusion of the series.

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.

If I have to get an auto loan to finance purchasing my next car, I can get one through my credit union (running about 5%, with an active checking account) or through the dealership (special 3%APR on 2010 models). I prefer your route if saving up and paying cash for a late-model used car. However, if one has to choose between loans, which is better – the credit union or the dealership? My parents always strenuously argued against dealership loans, and I had the vague impression it’s like buying batteries at the gas-station convenience store: you can do it, but you’ll pay a premium. OTOH, the dealership rates look awfully tempting. What are the pros and cons of each?
- Kathi

The big disadvantage of dealership loans is that they almost always carry more hidden fees than a credit union loan. Before you sign any contract, read the agreement carefully. It only takes a few fees adding up to a few percent of the car’s price to undo any interest rate advantage you might get.

Your parents’ wariness against dealership loans is probably largely based on such hidden fees. Added on top of that, unless you buy when there’s a strong financing deal going on, dealership loans don’t offer great rates, either. Thus, the general consensus is that if you’re not digging in and studying what you’re doing, you’re better off using a credit union for such purchases.

The big thing to remember is this: read the contract before you sign. If you don’t know what something is, find out – preferably from an independent source.

I appreciate the idea of shopping bulk and then cooking and freezing, but this plan depends on two things: having a car to do the shopping, and having a good-sized freezer to do the storing. What frugal cooking advice would you give to someone who has neither? (I live in a city, so no car needed, and I have a mini-fridge with a freezer about 12?tall x 18?wide x 45?deep)
- Enma

In your situation, one of the best things you can do to reduce your food bill at home is to buy plenty of dried beans and rice and use them in lots of different meals. Buy these items in bulk rarely when you have access to appropriate transportation – especially the rice, since a big bag of rice can be heavy, but it can save you a lot per pound.

Complement these items with plenty of fresh vegetables. Use your grocery store flyers and choose items that are on sale to make the centerpiece of your meals that week.

Given your situation and the fairly short shelf life of fresh vegetables, I would suggest perhaps shopping just for fresh items two or three times a week, hitting the specials at different stores each time. This will allow you to eat very fresh stuff, have some variety, and keep it cheap.

In your last Time Machine post I was following a few links and came to your post of 101 goals in 1001 days. I was very inspired and started my own list. I noticed that the end of your 1001 days is coming up in January. Are you going to give us an update?
- Sarah

It’s close enough to the end that it’s probably appropriate to comment on my 101 goals in 1,001 days list, so here goes.

I accomplished 52 of the items. The biggest reason I didn’t accomplish the rest of the items was the change in family dynamics after the birth of our second child, which actually altered things more than the first one did (since just trading off with the child didn’t just leave the other parent free to do things). Some of them – like the travel-related ones – became more difficult after changing careers and buying a house, both moves that were done to allow me to focus more on my family. A few were complete pipe dreams, but I still came surprisingly close to reaching them, anyway. One, for example, was to reach 100,000 subscribers to The Simple Dollar when, at the time, I had 8,212 of them. I really didn’t expect to ever accomplish it, but I came much closer than I would have guessed, as I now have about 72,500 or so.

When the deadline hits, I’ll do a final count and then take care of #26 – donating to a charity for each item I missed.

I’ve been thinking of changing from the Fidelity debit card I have to a similar credit card with cash back. I’m worried about possibly losing my debit card and having money hijacked out of my account. Should I make the switch?
- Dale

If the debit card has a Visa or MasterCard logo attached to it, it affords the same protections as credit cards of the same type. Most of the horror stories floating around out there concerning debit card fraud occurred in the early days of such debit cards before Visa and MasterCard had extended such protections to the cards. However, you should always use your debit card as a credit card when making purchases. Tell the retailer and sign the receipt – don’t use your PIN, ever.

If you are uncertain exactly what protections you have, check out your bank’s web site – in this case, Fidelity.

That being said, no matter what card you’re using, you still need to be vigilant. Keep an eye on your account and make sure you know exactly what every charge is. The second you see a charge you don’t know, call your bank.

My view is that, all things being equal, a credit card is a bit safer than a debit card. For example, MasterCard’s liability statement clearely states: “Zero Liability does not apply to MasterCard cards if a PIN for a debit transaction is used for the unauthorized purchase.”

I have 4 student loans which have gone into default and been thrown to the collection agencies, roughly a couple of months ago. I had been granted economic hardship deferments for the last 4 years, but the time came to make the hard decision to just default – especially since I moved out of the country (yes, I was one of those people, but not just to escape debt – it was also a personal career move).

How would you handle it?
- Jessi

Once your debt is in collections, it begins to function a bit differently. In essence, the people that originally held your loan have given up hope of collecting anything from you. Usually, they sell your debt to a collection agency for some small amount of what you owe and then that agency tries to play hardball with you to get you to pay up – that’s their business.

When you’re in that situation, you do have some bargaining power. Since they paid a discounted rate for your debt, you can negotiate with them to pay a smaller amount to get rid of your debt. Try negotiating. Offer what you have. Insist that they mark the debt as paid on your credit reports, however, so that this episode can be put behind you.

The problem, however, is that your credit will be damaged for seven years for going into default. It will be hard to get loans in the United States, your insurance rates will be high, and you may have some difficulty getting a domestic job, since many employers look at credit reports to get a bead on your reliability.

I’ve recently discovered your blog and all thanks to you have learnt quite a bit about money. I’ll be glad if you can devote a post to fixed monthly income for young people. Let me elaborate a bit.

I’ve searched annuities and it seems like they’re only offered to old retired folks. Is there a monthly fixed income option available for young folks like myself? I don’t want the stress of handling the money myself, I’ll just blow it all off on friends and end up in debt. This has happened before and I can’t trust myself again. Please let me know what you think. Thanks!
- Keen

Annuities are marketed to older folks, but they’re available to everyone. They’re usually marketed to older people because they’re often the ones who have significant money in the bank and also yearn for the simplicity of an annuity.

If this is a path that’s of interest to you, do some research and find a few reputable insurance houses that sell annuities. Contact them, get some quotes, and find out what sort of deal you can get.

I would probably not put all my eggs in one basket, however. Consider putting some of the money into something else, like a long-term treasury note, that pays out money over time.

Regarding kids and cars: My wife and I both have two very small 2-door cars (both fairly new). These were purchased when we had just first met each other, and we were both in a pinch with our old vehicles. Our cars both work great and there’s no immediate need to replace them. However, in the long term we will obviously be wanting to get something slightly larger for when kids arrive (in about 5 years). Our biggest concern is that we don’t want car payments with kids, or have to worry about getting something else when kids arrive, since income might be dropping with only one of us working. Hence, we’re thinking of selling my car (which is worth a fair bit more than what I owe on it), and getting something slightly larger. When kids come, we have exactly what we need, and no car payments.

I was just curious about your thoughts regarding longer term planning and kids (another example, is it worth getting a bigger house right off the bat if you know you’re going to need the space in the long term).
- Scotty

If your cars are fine right now and you don’t have kids right now, I would just sit tight for the time being. There’s no reason to upgrade.

Instead, I would suggest driving the cars until they’re starting to show significant real problems, then sit down and have a discussion about the purchase. Are you actually close to having children, or is it still a mirage in the future (as it is now)?

Another note: unless your cars are two-seaters, you’ll be fine with a child at first in a small car. We fit two adults and two kids in a Toyota Prius without any difficulty and plan to fit our third child in there as well.

What do you think about signing up for bank accounts at banks that offer bonuses (say, $100 for a new checking account) and then closing the account after meeting the requirements (500 dollars in the account for six months or whatever) to get the bonus?
- Sean

I don’t have any problem with this. You’re doing exactly what is asked of you in exchange for the value in question.

Banks spend this money in order to acquire new customers and have more cash sitting in their reserves. A growing bank is also more appealing for mergers and the like, even if that growth is sometimes a bit of a mirage.

In other words, by having your account open for that time, you’re providing the value that they need for that account. They need a customer for a certain period – you need the cash. I see no reason not to do this.

Besides, you might actually discover that the bank is better in some ways than your current one, so there would be no reason not to switch at that point.

Where do you suggest you should invest your money? We have been investing in the stock market for the past 15 years (in stocks, bonds and mutual funds) and have not made any money (and have lost a significant amount over the years). I have read that investing in CD’s or a savings account will not keep you ahead of inflation. So we are at a loss as to where to invest our hard earned money. Thanks!
- Robert

If you’re looking for an investment that’s just guaranteed to beat inflation by a little bit, TIPS (Treasury Inflation-Protected Securities) are exactly what you’re looking for. When you buy a TIPS, it promises to pay you a certain (pretty low) interest rate for whatever period you buy it for. However, the federal government adjusts the value of that TIPS upward in times of inflation (and downward in times of deflation). That adjustment is directly tied to the Consumer Price Index.

The stock market is notoriously risky, and it looks like you happened to sit on the market through the end of a bull market, a big bear market, another bull market, and then the biggest downturn since the Depression. Quite often, people make the wrong moves at the wrong time in a panic – they’ll sell out of stocks and buy bonds right at the time it’s starting to get close to the bottom and most professional investors have already switched gears to buying again.

If you’re just looking to match inflation and aren’t worried about the big gains, put your money in TIPS and don’t worry about it.

I am just out of college and was recently offered the option to invest in a Variable Universal Life Insurance plan as a retirement/investment vehicle through my workplace. The investment plan seems reasonable, but I had never heard of these vehicles before. Preliminary Internet research seems to indicate they are beneficial under a certain set of circumstances, but I’m looking for some disinterested 3rd-party gut-check opinions.
- Alex

This article from the Consumer Federation of America is the best summary I’ve read on VULs. To put it simply, they’re not worth it, because often their benefits rely on an assumption that the tax laws in the United States will never change – and they change all the time.

Even if everything did go as assumed, such policies are at best comparable with buying a term life insurance policy and a Roth IRA with the money tossed into premiums.

Unless your employer is paying for a lot of the policy, I would probably skip it and find other ways to insure and invest.

My 10 month old daughter got hurt in her day care. They called us promptly and we went and picked her up. She had a bump right in the middle of her forehead (about the size of a quarter) with a minor scratch in the middle of the bump. Her teacher told that she might have fallen against the edge of a wall or another kid might have pushed her or something. The center manager said it happens all the time and expressed surprise saying that my daughter didn’t get hurt sooner. I found that to be odd. We called the doctor’s office and they said my daughter’s situation does not warrant a visit and she should be fine (and she is). The reason i write this is because of the way the manager talked to us and they weren’t apologetic at all. I felt that is kind of rude…What should i do in this situation?
- Amy

I felt similarly the first time my child was bumped at daycare. My son was about a year old and got a nice scratch on his cheek from another child wielding a block.

Here’s the thing, though. Not long afterwards, our son spent some time playing with another child his age right under my own supervision. Guess what? Even though my eyes were right on them, the other child inadvertently swung around and bumped my son on the nose really hard, resulting in a lot of tears and a slightly bloody nose.

Children are going to get bumps even if they play by themselves. When children play together, that’s even more likely. Unless you literally stand at your child’s side constantly, at some point, they’re going to get bumped or scratched while under your supervision. The same is true no matter who is watching your child.

My son is four. I’ve seen him get whacked, bruised, bumped, and scratched more times than I can count. I’ve seen bloody knees, bruises, and scrapes. Most of them happened while I was watching him. Just yesterday, he slipped and fell on some ice and wound up with a very red elbow.

Given that, I do think the daycare provider probably handled the situation poorly. My reason for being concerned with the daycare would have nothing to do with the bump itself, but in the dismissive attitude toward parental concern. I would probably continue to use the center if I had no other thing to be concerned about, but I would also watch how other parental concerns are handled.

My husband and I made the decision that after we had our second child, I would transition to being a full-time parent. This would have many benefits: great quality time and quantity time with our children, a household manager to make sure everything is running smoothly, and less stress on the family as a whole. We have a strong social support system, and I truly love being a full-time mom to the girls which I was able to experience during maternity leave. Of course, it will have a financial impact as we both earn roughly the same amount. We are not quite able to spend less than he earns, but we have planned for this gap. We have been attacking our debt for a few years; we carry no credit card balances and both cars are paid off. We only have our mortgage and some student loans left. We have a healthy emergency fund, some retirement savings, great life insurance, and a fund to cover the “gap” for three to four years. I do earn some additional income which is very part-time, and I plan to gradually increase my efforts in this area. In addition, I noticed during my maternity leave that we are able to cut more costs when I am home (e.g. less convenience foods, less fuel purchases, etc.). I feel like we have thought about our decision from all angles and have covered the bases, but obviously I am no longer objective. I know financially this decision flies against some traditional wisdom (Dave Ramsey would probably say to keep going on the debt), but we can never get back this time when our children are little. What are your thoughts?
- Heather

In my opinion, you should go for it. As you said, you can never get the time back, no matter what you do.

Some suggestions, though. First, I would try very hard to maintain connections within your career path and stay up to date on what’s happening in your field. Don’t fall out of touch with these people and these connections as you’ll probably need them in five or ten years.

Second, spend some of your time making sure your relationship with your partner doesn’t suffer. The dynamics are going to change dramatically, in ways you can’t see yet. Set aside some time to spend with just your spouse doing something you both enjoy – and don’t feel guilty about it. Talk about how you’re both feeling when it gets tough, and there will be times when it is tough.

Finally, don’t feel guilty about your choice. There are going to be times where you’re going to feel the pinch and you might feel some regret about quitting. Don’t dwell on what could have been and let it bring you down.

Got any questions? Ask them in the comments and I’ll try to include them in a future reader mailbag.

Every other Sunday, The Simple Dollar reviews a book of interest that’s not directly related to personal finance, but can provide deep insights into the elements of personal success.

One of my favorite books I’ve ever reviewed for The Simple Dollar is Twyla Tharp’s excellent The Creative Habit. In fact, it’s one of the few books that’s found a permanent place in my home after having read it for a Simple Dollar review.

Naturally, when I found that Twarp had written a follow-up of sorts, entitled The Collaborative Habit, I couldn’t resist. Simultaneously knowing the high esteem I gave to her first book and also recognizing the ever-increasing importance of collaboration and collaborative work in modern personal and financial success, I couldn’t wait to tear it open.

Much like its predecessor, The Collaborative Habit is notable for its exquisite design and layout. It’s crisp, clean, easy to pick up, and incredibly easy to annotate with your own personal notes and thoughts. Also like its predecessor, it’s not terribly long – it gets right down to the point and the only anecdotes it offers up are ones that get right to the heart of the matter.

The $64,000 question, though, is whether or not it really says anything useful to us. Let’s dig in and find out.

What It Is, Why It Matters, Why It’s the Future
In its simplest form, collaboration means working with others towards a goal that would be difficult to complete without multiple contributions. It goes beyond that, though – collaboration also has the potential to improve what we ourselves individually contribute to the goal. Many people resist collaboration because interacting with people can be difficult, but that in itself can be a reward if we step back and ask ourselves whether we might be the ones at fault – at least in part – and work ourselves to overcome those faults.

Collaboration Is Second Nature
The core of any great collaboration is, in her words, “a clearly stated and consciously shared purpose.” In other words, collaborations work best when you all have the same end result in mind. Collaborations are often undermined when others are secretly working towards other goals and purposes. How can you overcome this? The biggest step anyone can take to make collaboration work well is to establish a routine of work in which each member contributes – without that, collaboration falls apart. Set that before you ever continue or else you will either fail or have to run a marathon to achieve some semblance of success. Another important element is a champion – someone who pushes and inspires the members of your team.

Partnerships Challenge and Change Us
Many collaborations are merely partnerships of two people. A marriage is one such collaboration, as are dance partners and, often, tech startups. The key to a successful partnership is to not have a partner that’s just a duplicate of you, your ideas, and your perspectives. They should be different than you. They should challenge you. They should regularly see things in a different way than you. This forces you to grow and gain something personal beyond the mere outcome of the collaboration.

Working with a Remote Collaborator
The vast majority of my own collaborations are with remote collaborators – and they can be difficult. The key, I’ve found, is communication – and it’s a key that Twarp strongly agrees with. However, that communication shouldn’t boil over into dealing with the individual problems of your collaborator. Instead, focus on maximizing what you are bringing to the table and focus entirely on what your collaborator is bringing to the table. If they produce something that’s subpar for their portion of it, do your thing with what they’ve brought to the table. The other option is to slam on the brakes – and that ends in disaster almost every time.

Collaborationg with an Institution
When you collaborate with an institution, it’s often important to lead with exactly what you need from that institution in terms of resources. State it up front and clearly, so that they know exactly what you will need to carry out your parts of the collaboration. Also, continuing the thread of working with people who aren’t producing at first, if you give your best with what they’ve provided, you’ll often push others to step up their game as well. Your peak performance is a motivator for others to bring out theirs.

Collaborating with a Community
A community is a group of impassioned people. When you collaborate with them, the trick isn’t so much finding good output, it’s channeling that output into something usable that pushes both you and the community forward. In general, the more you ask – and the more you produce in response to their requests – the more you’ll get back from the community. This chapter is really spot-on for anyone who is involved with interacting with a large community – like a blog readership, for instance.

Collaborating with Friends
The biggest key to collaborating with friends is precise communication. Why? Without it, it’s easy to miscommunicate something and, because you’re friends, the other person will attempt to pick up the slack and quite possibly move in the wrong direction with things. Not only that, a collaboration gone bad between friends can often strain a friendship, something that isn’t a desirable outcome for anyone.

Flight School: Before Your Next Collaboration
The biggest thing to think about before you collaborate is whether or not you’re really up to the collaboration and what it will take to make it succeed. We’re very good at deceiving ourselves – it’s easy to just blow this off and just believe we’re completely up to it. Spend some time and ask yourself – seriously – whether or not you’re capable of giving what needs to be given to pull off the collaboration.

Is The Collaborative Habit Worth Reading?
Tharp’s writing is incredibly strong in one key category: it makes you completely rethink what you’re doing in your normal course of activities. Rather than just giving me a checklist to follow, The Collaborative Habit really made me re-think some of the collaborative projects I’m working on – and the results have been profound.

I made the choice to back out of at least a few collaborations and focus more intently on some others. In one collaboration, I’ve adopted a much clearer communication policy because I found that at times we were going in different directions. I’ve also started scheduling more phone calls with people I’m working with remotely on various things.

If the measure of success of a book is whether or not it causes you to rethink things you’re doing in your life and to actually take action and make changes, then The Collaborative Habit is definitely a success, at least to me. If you’re involved with many collaborations in your own life, I suggest picking this one up.

This is part of an ongoing series about how to trim the budget of the average American. As this series focuses on such broad-based tips, some will work for you and some will not. You’re invited to mention in the comments the tips that you found to be the most useful for inclusion in a comprehensive budget trimming guide at the conclusion of this series.

Housing – household furnishings, equipment – $1,797

This category focuses entirely on furniture, decorative items, and some minor household items (like computers), but excludes major appliances (they have their own category). In other words, when you look around your house at the things that are there mostly for decoration, comfort, and communication and not for essentials like eating, heating, and cooling, you’re looking at this category.

How do you save money in this category, then? Here are ten effective ways to trim your household furnishings budget.

Plan, plan, plan. Before you ever even think about shopping for home decoration and furniture, make a plan. Know what you want in a room. Don’t use a store catalogue for this. Instead, focus on how you want a room to look. This way, you have an internal guide to help you find the things you want.

Hit estate sales, auctions, and so forth with your plan in mind. Once you know what you’re looking for, look for the inexpensive places to find it. Estate sales are almost always great places to find furniture and decor at a low price.

Shop at the end of the month for furniture – and negotiate. Quite often, stores (and individual salesman) have a monthly sales quota that they must meet to receive a bonus or some other perk – or perhaps to maintain employment. Take advantage of this and shop late in the month, and when you find a piece you want, negotiate.

Don’t finance smaller purchases – like furniture. If you can’t pay cash for it, don’t buy it. This is particularly true with items like furniture, which tend to wear out gradually rather than needing a sudden replacement.

Focus on functionality. Yes, we all like beautiful furniture. Yet, the reason we have furniture is functional – it provides a place to sit or it provides a place upon which to sit things. Whenever you get the urge to buy something new, ask yourself if you’re just spending money to make things prettier – and if you are, if that’s a good choice.

Give it another six months. Whenever you first make the decision that you need to replace a major furniture item, give it six months before you make the switch. Since the item likely does not require immediate replacement and is merely showing wear, keep using it while you carefully shop for a replacement and can identify a good deal on what you want.

Don’t make your house look like the Pottery Barn. In other words, don’t buy expensive home decor just because it’s decor. Instead, focus on ways of decorating your home that express you. Instead of salivating over some overpriced decoration that appears in hundreds of other stores, focus on more unique and distinctive decorations, some of which you can be involved in the creation of. A tasteful frame and a photograph that truly means something to you is an inexpensive and meaningful home decoration that always works, for example.

Move the furniture instead of buying new furniture. If a room looks stale to you, it doesn’t mean that you need to replace everything. Rearrange the furniture. Repaint a single wall. Reinvigorate what you have instead of shelling out the cash.

Instead of buying a new computer, reinstall the operating system. Quite often, when people think they need a new computer because the old one is “slow,” it’s a matter of a lot of unnecessary software and other unnecessary junk running on the machine. Instead of just buying a new computer, give reinstallation a shot.

Disguise it, don’t replace it. You have an ugly couch. That doesn’t mean it’s simply time to replace it. Instead, find ways to accentuate it – use pillows, throws, and other items to bring out the best in something. A nice throw is a lot cheaper than a new couch.

I want your help! In the comments, please let me know which of the tips you find most useful for trimming these costs. I’ll include the top choices in a comprehensive budget trimming guide at the conclusion of the series.

Many newer readers of The Simple Dollar haven’t been exposed to the hundreds of great articles in the archives of the site, so this is a weekly series that highlights the five best posts from one year ago this week, two years ago this week, and three years ago this week. I call it … the Time Machine.

One Year Ago (January 10 – January 16, 2009)
Children, Christmas, and the Materialism Battle I had mixed feelings about a video showing fifty children go CRAZY on Christmas morning after receiving a Wii – so I wrote about it.

The Selling of Gold I found the strong-arm selling of gold during the height of the financial crisis (and the selling is still going on) to be rather questionable at best. Here’s why.

Advantages We all have various advantages and disadvantages in life – there is no equality unless we’re all the same person. The person who succeeds is the person who doesn’t use those advantages and disadvantages as an excuse to not do anything and complain.

Review: Scratch Beginning An excellent book, and a review that started a great discussion.

The Secrets to Entrepreneurship? Or More? Many of the “secrets” for succeeding in entrepreneurship are the same as the “secrets” for succeeding in life.

Two Years Ago (January 10 – January 16, 2008)
The Basics: Eight Tactics To Use When You’re Just Starting To Turn Things Around I speak from experience – big time – with this article. Those first few months after making the commitment to change can be very exciting – and very difficult.

Airport Frugality in the Era of New Security Regulations After watching an airport security person dump out my bottled water, I realized that most of the usual frugal tactics don’t work when entering an airport. So I adapted my choices a bit.

My Favorite Bargain: The Free Newspaper I read CityView and Juice (the two free Des Moines papers) almost every week. They’re both worthwhile and CityView in particular has some very good articles. See what your city has.

Changing Values, Changing Priorities We all change and grow. Almost every time, we’re far better off embracing those changes than fighting them.

Maximizing the Free (or Nearly Free) Things That Make You Feel Good A walk in the woods. An afternoon spent playing with the kids. Cleaning the kitchen with the radio on. They make me feel good – and they’re free (or close enough to it).

Three Years Ago (January 10 – January 16, 2007)
Why Income Inequality Matters: Motivation Instead of being upset or depressed that you’re not earning as much as someone else, use it as a motivator. People all over the world use the financial success of the United States as a motivator, for example.

Afraid To Talk About Money With Your Spouse? Ten Tips For “The Talk” It’s often hard to break down the wall and have that first serious conversation with your spouse about money, especially when there are financial problems. Here are some tactics for making it work.

When Your Income From Investments Covers Your Living Expenses: The “Crossover Point” This is pretty much my ten year personal finance goal (well… ten years, with a lot of hope). I dream of the day when our living expenses are covered by savings and investments.

The Treasury Note Retirement Plan I know of at least two separate people who have done this, and it’s worked very well for them.

How To Quit Your Job In One Year: A Step By Step Guide I came amazingly close to following this plan myself, as I quit my job about thirteen months after writing this post.

If you’d like to browse through more of the archives, visit the chronology, where all posts are listed in chronological order.

Nine Ways to Get More out of The Simple Dollar
This is kind of a FAQ for new readers and is posted each week along with the Time Machine. Here are nine great ways for new readers to dig deeper into The Simple Dollar.
1. Subscribe by email or RSS. Visiting The Simple Dollar’s website is great, but for many people, it’s more convenient to receive the articles in another form. It’s easy to join 60,000 other subscribers and get The Simple Dollar’s content by email or in your RSS feeder (if you’re unfamiliar with RSS, check out Google Reader.

2. Comment. Each article on The Simple Dollar has lively discussion. Just click on the green square in the upper right of each article on the website and join in!

3. Read my story of financial meltdown and recovery. The Simple Dollar isn’t based on what I’ve read in books or learned in school. I’ve made a lifetime of financial mistakes – The Simple Dollar is a record of what works for me during the process of getting my life on a better track.

4. Download my free 49 page e-book. Everything You Ever Really Needed to Know About Personal Finance On Just One Page is completely free. It summarizes all of the key lessons I’ve learned along the way about personal finance in one tidy package – in fact, all of the main principles can be found right on the cover.

5. Follow me on Twitter – or other social networks. I post tons of interesting articles, quotes, follow-up material, commentary, and other material on Twitter. Follow me! If you’re unfamiliar with Twitter, it’s essentially an open discussion forum for people to share ideas and thoughts with other like-minded folks – you just choose the people you want to listen to and their ideas and thoughts are all delivered to you on a single page.

I also participate on several other social networks. Feel free to check me out on del.icio.us (it’s where I collect links, from which I select the ones that appear in my weekly roundups), wakoopa (what software I use), GoodReads (what books I’m reading), Facebook, and FriendFeed (which aggregates everything). I also have an irregularly-updated personal site, TrentHamm.com.

6. Dig through “31 Days to Fix Your Finances.” 31 Days to Fix Your Finances is an article series that outlines how you can get a grip on your finances over the course of a month.

7. Send me your questions and suggestions. Send me an email and let me know what you’re thinking, what you’d like to see, and any questions you might have. I try to respond to as many emails as possible and I read them all. I may even use your question in a future article!

8. Become a “Friend of The Simple Dollar.” If you find the stuff on The Simple Dollar valuable and are willing to spend five minutes or so a month to help me out with small things, please consider signing up to be a “Friend of The Simple Dollar”.

9. Email a great article you find to a friend. Find an article that you think your friend would love? At the bottom of each article, you’ll find a link that says “Email this” – just click on that, type in your friend’s address, and send it right along to them!

This is part of an ongoing series about how to trim the budget of the average American. As this series focuses on such broad-based tips, some will work for you and some will not. You’re invited to mention in the comments the tips that you found to be the most useful for inclusion in a comprehensive budget trimming guide at the conclusion of this series.

Cash Contributions (optional retirement and cash savings) – $1,821

The average American family contributes $150 a month to their retirement plans and/or to their personal savings – and that’s a commendable thing. In fact, this is one part of a budget that should grow bigger while other parts grow smaller.

So, rather than focusing on “trimming” this section of the budget, I’ll instead mention strong techniques for maximizing the “bang for the buck” one can get from their personal savings and retirement dollars.

Start (and maintain) a cash emergency fund. Having some cash in a savings account at your bank can make an enormous difference when an actual crisis comes about. If your car breaks down and you have $1,000 saved up in cash, it’s not a worry – but if you don’t, you’re going to be paying some serious finance charges. Saving a bit now for emergencies actually saves you a ton of money later on.

Find a bank that doesn’t bleed your savings with fees. ATM fees, maintenance fees, access fees – banks love these fees. It’s one way banks make money. Of course, some banks put fewer fees on the backs of their customers – and if your bank is loading you down, you can find financial benefits from finding a better bank.

Open a Roth IRA. For most people (those earning under $100,000 a year, roughly), the Roth IRA is a great way to start saving for retirement, even if you don’t have much to save. It’s easy to set one up through Vanguard or Fidelity or your investment house of choice. They’ll just take a bit of money from your checking or savings account each month and invest it for you for your retirement. Then, when you’re 59 1/2, it’s all yours – tax free.

If you’re unsure of your retirement investments, choose a “target retirement” fund. If you’re trying to piece through complex and confusing investment choices in your retirement plan and can’t make heads or tails of it, a “target retirement” plan is usually the best choice for you. It automatically maximizes your risk when you’re young – keeping you heavy in stocks – and then scales back to more safe investments when you get closer to retirement. It does the leg work so you don’t have to.

Automate as much of your savings as possible. Automatic savings plans make it incredibly easy to start saving. Simply instruct your bank to take a small amount from your checking account and put it into your savings account (even if they’re at different banks) each week. You won’t miss $10, but at the end of the year, it’s turned into $520.

Set up savings plans today for your big goals tomorrow. Dreaming of taking your whole family to Disneyworld in a few summers? Start saving now. Set up a savings account at an online bank and instruct the bank to take $40 from your checking account a week. In two and a half years, you’ll have $5,000 for that trip. You won’t have to go into debt to do the things you want to do – and starting now means you only have to spend lunch money each week to get there.

Look for a bank that offers a strong interest rate on savings – and keep much of your savings there. You don’t have to keep your savings at the same bank as your checking account. You need good customer service and low fees for your checking account. For savings, the interest rate matters a lot more. Shop around and find an account that offers a great interest rate, then open a savings account there. Not only will your money earn more, but you’ll find it’s much easier to save if it’s not easily accessible at the ATM with the card in your pocket.

Lock up some of your savings in CDs. If you have quite a bit of savings – more than a couple months’ worth of living expenses – consider putting the extras into CDs. CDs – certificates of deposit – are basically like special savings accounts with your bank. In exchange for agreeing to not touch the money for a certain period of time (say, a year), the bank gives you a much better rate of return on your money. If you don’t need that cash right away, put some of that extra cash into CDs and earn a little more with it.

I want your help! In the comments, please let me know which of the tips you find most useful for trimming these costs. I’ll include the top choices in a comprehensive budget trimming guide at the conclusion of the series.