Two years ago, I posted a nice long article about what I call “Superman Syndrome” – a tendency for people to try to demonstrate their worthiness to others by buying things for them.

Just yesterday, a reader emailed me about that article:

Superman syndrome is just another example of poor self-esteem and how it can entrap you and your money. It’s no different than keeping up with the Joneses or anything else like that.

It’s true. We only need to impress other people if we feel that somehow we need to impress them, that we don’t have enough already on the table to make them happy and make them want us.

Do you buy clothes because they fit you well and keep you warm, or do you buy them based on how they impress others?
Do you buy electronic gadgets because they fill a real use in your life, or do you buy them with an eye towards showing them off to your friends?
Do you go out to dinner and pick up the tab because there’s a real reason to do so (like you’re treating someone for a special occasion), or are you thinking about how it’ll butter someone up?
Do you throw money into redecorating because it’ll improve how you feel about your living quarters or do you do it to impress and stun your guests?

In other words, is your personal worth based on what you value or what you think others value?

For most of my life, I placed an inordinate amount of value on what others thought of me. I was only cool if others thought I was cool. I was only worthy if others thought I was worthy. Thus, I would strive to make others feel as though I was cool so that, by osmosis, I would feel as though I was cool.

The end result was that I would constantly spend money to make others think I was somehow cool or worthy. I’d take people out to dinners. I’d buy gadgets based largely on impressing others (“This one would be fine for what I need, but this higher model… that’d impress ‘em!”). The list goes on and on.

There are lots of problems with that kind of attitude, of course. I’ll just outline two of the most relevant ones.

First, other people are fickle. You might impress someone one day, but the next day it doesn’t matter. Why? Once a person’s opinion of you is set, it takes quite a lot to alter that opinion, and it’s a change that you usually can’t buy. Sure, in the short term, you can get their attention with something shiny and new, but they’re fickle and they’ll soon revert to their already-established view of you.

Second, the only person that you always have to live with is you. At the end of the day, when you close your door, you’re the only person there. All of the cash you’ve spent trying to impress others has turned out only to drain away the resources you need to do the things you want. You’ve got a shiny car and a lot of cool gadgets that impress people, but when you close that door at night, do you have the life and the career that you want? Are you fulfilled when you’re alone?

It took me a long time to realize that I often wasn’t fulfilled when I was alone – and that, underneath the bravado, the shiny things I owned, and my material generosity, others knew it, too. Their opinions of me weren’t made of the things I bought (for myself or for them), but from my personal character.

Spending time with someone, genuinely listening to them, and helping them when you can (usually in non-material ways) goes far more towards building a positive reputation with others than throwing cash at them – or at things to impress them – ever will. Even better, you can save your financial resources to put yourself in a better position in life, doing whatever it is you dream of doing.

Welcome to this week’s Reader Mailbag!

A note: I get enough questions to do two or three mailbags a week. I’ve considered putting a second Mailbag on Thursdays. Would this be of interest to you guys?

I recall a few months ago you were thinking seriously about cutting out all or most meat from your diet? Where did you get to with this? What was it inspired by? (I seem to remember there was a book that started you thinking about this?)

- Eve

In late 2008 to early 2009, I had a bit of a health scare that prompted me to start exercising more and eating better, a trend I followed during most of 2009. However, during the final crunch for my book, my diet and exercise regimens both went downhill. Now that the book is done, I’m putting both back into place.

I found a lot of inspiration from various books when I got started with this regimen. Two really stood out from the pack: In Defense of Food by Michael Pollan (which I actually reviewed here a while back) and Animal, Vegetable, Miracle by Barbara Kingsolver.

My current plan is the “vegetarian until 6 PM” plan, which bascially means eating vegetarian for breakfast, lunch, and any daytime snacks, then eating a normal dinner.

Your post on Framework and distractions reminded me of an idea I’d heard of – a media fast. To drown out the noise of life and listen to ourselves and what we value rather than media outlets. No tv, no non fiction books, no music with words, no magazines. I’ve been meaning to try it soon for mental health reasons, but it also seems like a very frugal way to spend quality time. Here is a post on it from another blog.
- Amanda

I used to do “media fasts” somewhat regularly in college through the mid-2000s. I would allow myself books, but I wouldn’t watch any television, listen to the radio, read magazines, or use the internet in any fashion. I’ve done many week-long sessions of this, with one session lasting a month.

The biggest thing I noticed is how much the advertising shocks you when you stop doing this. Ads are everywhere, even in the content we read and listen to. It’s amazing how much content is there simply for the purpose of selling you stuff. Once you see it, it becomes hard to trust a lot of the messgaes out there.

I’d love to do it again, but at this point it would require a full-on vacation from The Simple Dollar, which is difficult. With my previous work, I could still easily do my job while doing a media fast, but that’s much harder when you’re basically writing for and managing a media property.

I am currently employed, but at about 1/2 the amount I was making a year and a half ago. I was making $72,000 – which helped me pay off all credit card debt, but I got laid off in Aug. 2008. I was unemployed for about three months and then found another job making around $35,000. My only debt right now is my mortgage – around $32,000 and my school loans – around $68,000 (and also about $300 in credit card purchases from Christmas, but that will be paid off within the month.) I have depleted the majority of my savings – mostly through making purchases that I probably could’ve lived without when I first got laid off, but needless to say I have about $500 in savings right now. That’s some background so here’s where my question begins, I have been making extra payments on my mortgage – my current payment is $300 a month (the joys of small town rural life) and I’ve been paying $65 extra a week – about $260 a month. I am employed in a state job and it looks like there’s a better than average chance that with the economy I could get laid off again this summer. Should I stop making the extra payments on my mortgage (currently 7.5%) and put all of that in to savings (at maybe 1.5% interest at ING), or should I keep making the extra payments until I can no longer make them? I am currently able to put about $200-300 into savings every month.
- Sandy

I would stop the extra mortgage payments (for now) and channel the difference into personal savings for a while.

The big reason for this move is that you need an adequate emergency fund, especially given your current financial situation. An unexpected event, like a car repair or a lost job, can really derail your fairly stable situation, causing you to have to dip into the debt pool to stay above water, and that can become a downward sprial.

How much should you have? I’d suggest having enough in your account to cover three months’ worth of living expenses. Since you’re fairly confident that you’ll be laid off again this summer, I’d probably keep going beyond three months.

So, I would just channel the extra mortgage payment purely into your savings for now so that you don’t have to rely on debt if you’re laid off.

I graduated last December and was blessed to get a job in my new field that began in January. My loans come due in July but I will apply for loan forgiveness with my new job and that will leave me with about $8000 principle. What I am wondering is if it is better for me to just pay it off or make a few months payment because of my credit rating. I use two credit cards monthly but pay my balance in full and I don’t have a car payment or a mortgage. I pay bills to my family where I live but my name is not on any of the utilities. I used to live in my own place so I did have bills in my name several years ago but I have no plans to change my current living situation. I am asking because of a previous post I read where a couple saw their insurance rate increase and their credit rating decrease because they had their bills paid.
- Andy

If you have credit cards and pay the balance in full each month, you’re doing what you need to do to maintain a good credit rating. Thus, I wouldn’t worry about maintaining that rating and instead would focus on getting yourself in the best position.

The advice about maintaining a good credit rating was directed towards people that had absolutely no lines of credit for a period of seven years, at which point their credit report was blank. If you’re paying off your credit card in full each month, this doesn’t apply to you. Even just leaving the card open would suffice.

I don’t know the exact ins and outs of your situation, but debt freedom is certainly a strong path to take in any situation. If you have the financial resources to pay the whole debt off, I’d do so.

I’m a 26-year-old woman working as a part-time music teacher in a local public school district. I’m extremely lucky, because my school district is paying for my master’s degree in full! I will graduate in May from a private university with my master’s in school counseling, with zero student loan debt. However, there is a clause in my teacher’s contract that states that I must stay in my current school district for one year after finishing my degree, or else I will need to pay back half of my tuition. In other words, if I leave my job next year to pursue my career in school counseling, I will owe $24,000 (my entire degree costs my district $48,000). My question is, should I stay one more year to eliminate my debt? Or should I take on the debt, knowing that I could potentially earn $45,000 in a new job? Is it ever smart to have debt? Other information: I currently have $3,000 left on a car loan, but other than that I have zero debt to my name. No credit card debt, no other tuition debt, nothing. I enjoy reading your website, and look forward to your feedback. Thanks so much!
- Jessica

There are two big questions I would think about here. First, how much would I “earn” in total over the next year if I stayed at my current job? That would be your current salary plus $24,000. Second, what’s my ability to actually get a different job this year as well as next year?

I don’t know what you’re earning part time, but if it’s even close to $20,000 a year, I would tend to argue for staying where you are. For one, it sounds like the salary at the other job is uncertain but has the potential of $45,000 a year. In this job market, that might not be a guarantee.

For two, a bird in the hand is almost always worth two in the bush. It’s rarely a good idea to turn away from a good offer to leap into the unknown chasing a potentially great one.

I have been thinking for the past several months (maybe a year) that a career change could be in order for me. I am currently in my fifth year of teaching high school English, a career I entered because of the opportunities to make a positive difference in people’s lives. I also wanted to share my passion for reading and writing, thinking that passion would serve me well in a teaching career.

The thought of making this change scares me, but it also excites me. I feel like I have been “in a funk” for the past few years because I have been so unhappy at work, to the point where friends and family have noticed. I don’t want to say that I am depressed, because I can’t make that clinical diagnosis, but I do feel like the character in the cartoons who has the raincloud directly overhead at all time. Actually my mom emailed me at one point last year and said that she could tell I was unhappy and she supported me in any decision I would make about my career.
- Justin

You should absolutely head towards being a writer. If that’s what you’re passionate about, that’s what you should be doing.

Right now, if I were you, I would spend as much of my time as I can using my current job as a platform to get ready for the next job. Ignore the drudgery of the day-to-day at your current job. View it instead as preparation for your next career. Go home from work each night and write. Write as much as you can. Get stuff down on paper (or in bit form). Start building up a big healthy cash reserve by living as cheaply as you can.

Make your big focus right now moving towards that career you want. Fill your thoughts with it. Spend all your spare time on it. Make it your focus, and cover every base you can before making that leap.

Then, reframe your current job not as your career, but as something you do to bring in cash to support what you’re really doing. You may find, eventually, that you’re earning some from writing and can move on to a part-time position doing something else to bring in supplemental income. Soon, you might be able to do it full time.

But you have to start. Today. If you don’t, you’ll be stuck where you are now, which sounds like a really unhappy place.

I’ve been a follower of The Simple Dollar for 4 years now. I paid off $15,000 in debt incurred from starting a nonprofit and paying its bills when it couldn’t afford to, and being caught in the middle of having to pay my own bills. Your website has kept me very motivated. Discussing Your Money or Your Life and getting the book myself totally changed my financial life. I paid off my credit card debts in 3 years, with a wedding thrown in between for which we paid cash. My savings have skyrocketed, my vehicles are now paid off, and so is my very humble home.

I’m totally motivated to do the cornmaze, but I’m still scared to jump. The corn maze would operate for 1.5 -2 months. Costs associated with clearing and prepping the site will come out of whatever we’ve already saved for the purchase (which I found shockingly expensive: $1,500 an acre to clear, so at this point $15,000). An 8 acre section behind us is available for $25,000 and will be needed to make the maze a decent size instead of 2 acres. We can pay cash for all of it, which will take away from our savings to purchase the property when the lease expires. I’ve discussed my plan with others in the industry, as well as the county agent, feed coop, and the general public, as well as those in education, several of whom I work with. The consensus is that it would be very well received and probably successful. I want to do this, but I’m nervous. I shouldn’t be, I have experience running a small business and have all the resources. Do I just close my eyes and take the plunge?
- Anita

From what I know about corn mazes, they wouldn’t take a lot of time to set up and run. You basically plant a field, grow the corn, then chop down a maze in the corn. You then set up a booth and charge admission.

Since you work in a public school system, you have the summer off, right? Why not just plant the field in the early spring, wait until summer, then lay the groundwork for the corn maze? You can then see first hand whether or not it earns good money. If it does, just work out the remainder of your contract with the school and go with the non-profit full time.

The big thing here is this: there are a lot of businesses that seem really good on paper that just don’t work in real life. The corn maze relies on people (customers) actually wanting to go through a corn maze. It’s often hard to tell if such a market exists in a large fashion without careful market study and, while your advice from people has probably been good advice, it’s really hard to be certain it will work. Since such a side business wouldn’t require a ton of work during the school year, why not give it a shot starting this spring, get the corn maze going in the summer, and see what happens?

I read your website almost daily and one of the themes that you discuss often is having a “big, fat emergency fund”. I certainly concur with this but how big are you thinking exactly? Here is my situation: I’m 39 years old and a single mother of two. I have a steady income and contribute the maximum allowable amount for the employer-based retirement ($16500/annually). I have maxed out the Roth IRA as well and put about $50 per month into each of my children’s 529 accounts. I am focusing more on retirement savings than my kids’ college funds thinking that there are alternate ways to pay for college and my children should contribute to their college education. In addition to the employer-based retirement plan and the Roth IRA, I put an additional $500 every pay period (26 pay periods annually) into a liquid money market account. My available liquid cash is about $31,000. The only major ongoing debt I have is a $1283/month mortgage with an interest rate of 4.625%. I should be able to pay that off in about 10 years. I pay my credit cards off in full each month.

Would love to hear your thoughts on this.
- Tas

My general rule of thumb for emergency funds is to have 2-3 months of living expenses saved per person in your household. Thus, if you’re single, 2-3 months might cut it. If you’re married, have 4-5 months or so. If you have kids, make it last even longer than that.

It sounds like you’re probably somewhere in the ballpark with that amount right now. It’s really hard to tell without more specifics on your life.

What do you do beyond that? You have to sit down and start assessing the goals you have for your life. Do you want to live elsewhere? Do you want to travel? Do you want to support certain causes? Do you want to start a business?

These are decisions that are up to you, but once you have a great emergency fund in place, they become real questions that you have to think about.

I have a question that has several different parts. First, I’m moving this year to a new city and out on my own for the very first time. I’ll be living by myself in an apartment and I’m so excited! I would like your advice for stocking a kitchen for one who likes to cook without spending a mint. I have been given leave to shop our house and I will definitely be doing that, taking my mother’s china and so forth, but there are other things I’m going to need and I’ve started a list. I definitely intend to hit the yard sales in a major way but somethings I’d like to purchase new, like knives for instance. I remember you wrote an article about buying a new knife. I don’t want an extravagant fabulous one but neither do I want cheapie cheapo. What do you recommend and how many for a moderate cook? What other things would you recommend buying new for and what do you recommend looking for in yard sales? I really appreciate any feedback.
- Sue

For plates and flatware, you can probably find appropriate material at yard sales if you look around. A simple set can often be found on the cheap from people who have upgraded their plates and flatware.

As for pans and knives, stick with buying the minimum number of items at first and study them carefully. 95% of what I do in a kitchen in terms of cutting, for example, is done with a single knife – my chef’s knife. 90% of my kitchen cooking is done in an enameled stainless steel pot – yes, everything from frying an egg to making soup. You really don’t need fifteen different kitchen implements to do variations on the same task.

In terms of bang for the buck, I usually trust Cooks Illustrated for buying kitchen items. I would probably point you towards the three piece Fibrox set to cover all of your knife needs (between the chef’s knife and the paring knife, you probably won’t need more).

As for pots and pans, I’d trust Cooks Illustrated’s Ideal Cookware Set a la carte. I would probably just get a piece at a time – and I’d start, honestly, with the enameled French oven. We have two of those and we can pretty much cook everything in them.

If you can find items similar to what’s on that list at yard sales, good luck. Once, I found a bunch of All-Clad stainless steel stuff at a yard sale, but I didn’t have cash on hand to buy it. I asked the people to hold them for me while I went to get cash, but when I got back, they had sold it because “they didn’t know if I was really coming back.” (Needless to say, I immediately left and didn’t buy a thing from them.)

How about them Saints?
- Michael

All I have to say about the Super Bowl is this. Almost three months ago, Evan wrote in with the following question, which appeared in Mailbag #89:

Peyton Manning or Tom Brady?

My response?

Drew Brees.

I think the Saints had more to play for than the Colts did and that made all the difference in the world. New Orleans should be a fun place between now and Fat Tuesday.

Got any questions? Ask them in the comments and I may address them in a future reader mailbag.

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

1/2 Price Living by Ellie Kay has a particularly noteworthy subtitle: Secrets to Living Well on One Income. A quick read of the back makes it clear who Kay is talking to – people who want to give stay-at-home parenting a go.

I picked up this book (off of PaperBackSwap) because my wife and I are discussing the possibility of trying out stay-at-home parenting for a year – the year in which we have three preschool aged children at home. According to our math, after all of the tax implications and the like, our finances would only slightly be better if my wife worked full time during that year. Of course, the math rebounds strongly after that one year (when our oldest goes to school) and the year after that (when our daughter goes) and, add on top of it the fact that my wife really loves her job, we’re still not fully committed to a plan yet.

Thus, as we often do when we’re piecing through such decisions, we turn to the books, and 1/2 Price Living was one of them.

Did the book provide any lasting value for us, or did it just repeat ideas found elsewhere? Let’s dig in and find out.

1. Mommy’s Gone Wild: Why Live on One Income?
An awful lot of parents wish they had the financial wherewithal to stay at home with their children, particularly when they’re young. Ellie quotes a survey by ClubMom that indicated that 89% of mothers would choose to stay at home if it was financially feasible for them – and there are an awful lot of dads who would do the same. Ellie doesn’t really dive into the issues of whether or not stay-at-home parenting is the right choice, instead focusing on making the book a guide for people who have already made that decision. This is a wise choice, because the actual decision-making process concerning stay-at-home parenting is fraught with a lot of emotion for a lot of people, an element that doesn’t belong in a book that needs to be breaking down some hard facts.

2. I Can’t Afford to Stay at Home: Working Girl vs. Girlie Mom
The big block that most people find in their way when they consider being a stay-at-home parent is the financial question. How can they possibly afford to stay at home? Two big factors pop out here. One, work is often not as lucrative as we think, once we subtract taxes, commuting costs, eating out costs, clothing costs, and so on. Two, staying at home trims your family’s budget substantially because of the home economics of it – meals are made at home, for example, and more planning and thought can be put into grocery trips.

3. Half the Income, All the Benefits: Seven Steps to Come Home
The big key to making all of that work, though, is to plan, plan, plan. If you don’t have a clear gameplan in place, it’s very hard to make the financial transition to one income successfully. Ellie has a nice set of worksheets in this chapter to help guide through the transition, but the big idea is that you need to do a before-and-after budget and carefully think about the real changes to each category. What will change? How can you make that happen?

4. The Family Meeting: Half the Work, All the Fun
One big part of this process is regular family meetings. There will be a lot of changes in your life if you choose to do this and many of them will involve all of the family members. Set aside a meeting time to discuss all of this stuff. Lay everything you can think of on the table and let everyone else do the same. Talk through this – it’ll help you see things you hadn’t thought of.

5. Chopping on a Chewstring: How to Cut Your Food Bill in Half
Ellie advocates “layering” for savings, using a large number of techniques to apply them all to the same item (store coupons, manufacturer coupons, store flyers, and so on). That works to an extent, but the real winners (in my experience) involve figuring out which store is the best to shop at and also, perhaps most importantly, using a grocery list.

6. Three, Four, or More: A Clotheshorse’s Guide to Outfitting Ponies
Start at the secondhand stores – and plan ahead. These are two key pieces of advice for dressing your family on a budget. We take these both deeply to heart already. Many of the clothes my family wears come from secondhand stores – in fact, my daughter’s favorite dress is a secondhand one. If you spend some time actually doing it, you’ll be amazed how many great items are stuck in there alongside the overly-worn stuff.

7. Scrambled Nest Eggs: How to Make Cake When Your Savings Takes a Beating
This chapter mostly just reviews various places families can sock away their money, from retirement accounts to certificates of deposit. Having a cash reserve can be a make-or-break thing for stay-at-home parents, so the advice in this chapter is useful in a very basic way, but it shouldn’t be substituted for any sort of thorough money management primer.

8. The Wednesday Factor: Half-Price Shopping to Maximize Savings
If you’re going to spend money on stuff – from amusement parks to travel to eating out – Wednesday is usually the best day of the week to do it, for several reasons. Many places cut prices on “hump day” to try to spur business in the middle of a work week. Similarly, many competitive businesses operate on a weekly cycle and Wednesday is usually the best day to jump in on that cycle. If you’re going to do something, do it on Wednesday.

9. Taming the 800-Pound Gorilla: Ten Steps to Simplify Home and Hearth Savings
The biggest step? Pay everything on time. After that, the keys to housing savings revolve around saving, saving, saving and spending as little as you can. Why? You are far better off writing a check for home improvements or other such big expenses than taking out debt for them. If you keep on top of the little things each day, it’s easier to stay on top of the big things.

10. That’s My Business: How to Own a Home Business That Doesn’t Own You
Many stay-at-home parents engage in starting a side business to fill in the time gaps they sometimes have during the day. This chapter provides a huge list of ideas for starting such a business and offers some general advice on how to make it work. It can work – among the stay-at-home parents I know, at least two of them have some sort of side business that they’ve started.

11. Fiesta or Famine: How to Finish Great, No Matter Where You Start
Here, Ellie goes down a spiritual path, citing how her faith played a central role in making stay-at-home parenting possible for her. While that’s admirable, the intense focus on specific Christian ideas and texts could be a bit alienating to non-Christian readers.

12. The Porpoise-Driven Life: How to Restructure Vacations and Build Memories
The good financial advice returns here with a detailed discussion of how to have low-cost vacations on the cheap. The biggest piece of advice in the chapter is to “double-up” – traveling with others can almost always drastically reduce the cost of a vacation, assuming of course that the people you travel with are of a similar mindset as you .

13. The Sowing Club: The Benefit of Sharing and Stewardship
The book closes with a discussion of the value of good character and being an active part of your community. I find that, time and time again, being involved in the community in a positive fashion goes a very long way toward building a successful financial life, because the support of others around you makes all the difference in the world.

Is 1/2 Price Living Worth Reading?
If you’re considering being a stay-at-home parent – and troubled by the financial and other personal implications of that – 1/2 Price Living is a really worthwhile read. It gave us quite a lot to think about as we puzzled through our decision. If you’re in a similar boat, I would consider this a nearly essential read.

I had one big quibble, though: most of the book assumes that it will be the mother that chooses to be the stay-at-home parent. I actually know more fathers who are doing the stay-at-home parenting right now. Assuming that the mother will be the one to do this is a bit… outdated, I think. If this book gets a revised printing, I would strongly suggest toning down the “mommies club” language in the book, as it could be pretty off-putting for fathers who are considering staying at home.

That’s not to say that the advice isn’t spot-on, useful, and thought-provoking, because it is.

We all have lives that are chock full of distractions.

Television. Radio. Magazines. The behavior of other people. The comments of our friends and family. We use all of these things as cues for how we should behave. Often, we even try to think ahead about these things and use them as a behavior guide.

I’ll hear my mother’s voice all the time, for example, when I’m at the grocery store. I’ll think about my friends and their reactions when I look at cell phones. You can’t help but get at least a few cues planted in your head when you read a magazine or watch a bit of television – beyond the ads, the material itself puts such ideas in your head.

All of these cues add up to a big influence on our decision-making process.

There’s another big factor, too – the short amount of time we have for such decisions. We make thousands of little choices each and every day. In order to make so many snap decisions, we have to rely on our almost instinct-like quick thoughts to make many of them. We don’t spend ten minutes at the grocery store comparing two different versions of the same item. Instead, we combine together the cues we have in our head – and various pieces of information about the state of our life, from what we have in our kitchen to what we have in our bank account – and make an instantaneous decision. We put an item in the cart and keep going.

This quick decision phenomenon is simply a constant in our lives. A day doesn’t go by when we aren’t making hundreds, if not thousands, of them. At the same time, we have countless cues about what decision to make thrown at us around the clock.

The end result of all of this information and all of these choices is that it’s incredibly easy to make some poor choices along the way. Every single person does it. I do it (particularly when I’m in a bookstore, for example).

Here’s the big secret, though. The big framework for personal finance success is to override those cues in our decision-making process.

How does one do that?

First, you have to spend some time figuring out what’s truly important to you. This is purely a soul-searching adventure, but for most people, there’s a group of one to four things that really form the center of their lives. These things bring them lasting happiness and fulfillment.

It can be a real challenge to find these things. There are many things in life that seem to fulfill us at first glance, but really don’t bring any lasting joy. I put them into a category I call “time fillers” – things we do that fill our hours without really fulfilling us.

Spend some time teasing apart the things that really matter from the things that don’t. One great way to start is to ask yourself what your most enjoyable moments and things of the last year were. Make a list of them and start looking for commonalities. My list quickly fills up with great books I’ve read and moments spent with my family, for example.

Second, isolate what’s really at the center of those things. Again, for me, it’s my family and reading/writing. Those things are really the two things I’m most passionate about with my time.

Let’s dig a little deeper here with the reading element of things. I love reading books and, for a long time, I confused that love of reading with a love of buying and owning books. Thus, I would go to bookstores and allow that passion for reading to take over, causing me to way overspend.

In truth, though, it’s the act of reading that I love. I really don’t care much at all whether I own the book I’m reading or whether it’s a library book, or whether the book is used or new.

Once I realized that, my bookstore spending went down. Way down. Instead, I started doing most of my book browsing at the library or on PaperBackSwap.com or in my friends’ book collections.

Once you’ve figured out those true key central values in your life, use them as the first filter for everything that you do, especially spending money.

When I go to the grocery store, for example, the first thing I ask myself is whether or not my family will get genuine value out of this item. Thus, my shopping starts in the fresh produce area (and I shop at farmers markets during the summer).

Does my family get genuine value out of “premium” toilet paper? Not really. Then why spend more on it?
Does my family get genuine value out of a new digital camera? My old one takes great pictures. So why spend the money on it?
Does my family get genuine value out of a round of golf on the weekend? Maybe once or twice when I take my son and/or daughter out with me, but not every weekend, not by a long shot. So why spend money on this, especially when there are much less expensive ways to relax?

Here’s the big idea: once you’ve figured out what really matters in your life, start passing everything you do through those filters. Cut your spending hard on the areas that don’t matter and you’ll find that you have the money you need for the things that do matter, plus you’ll be able to be debt free and start building up savings for yourself (which itself is a protection for the things that matter most to you).

Note: I’m giving a talk on Monday evening concerning the above topic. As I was sketching out the notes for the talk, I decided it would make a pretty good post, too.

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 31 – February 6, 2009)
It Can’t Love You Back People and relationships are always more valuable than things.

Life Advice to a Graduating College Student This is the type of stuff I wish I had put on my lap when I was about to graduate from college. I was sorely lacking in the “real life” mentors.

The Bills Your Parents Didn’t Have I actually think this is one of the biggest reasons young people struggle financially today. They simply have a big stack of bills that their parents didn’t have at the same stage in life. Our parents didn’t have cell phones. Our parents didn’t have a ‘net bill, either. Our parents didn’t have outsized housing costs, either. That all makes a huge difference.

My Own Private Frugality Not only a nod to one of my favorite movies, but a peek at the truth of frugality: it works a little different for everyone.

The End Is the Beginning How do you keep personal finance fresh after striving for success for so long?

Two Years Ago (January 31 – February 6, 2008)
Online Personal Finance Analysis Tools: Some Thoughts on Quicken Online, Mint, and Wesabe I still stick with my basic conclusion: these tools are great, but the potential danger in aggregating so much data about ourselves in an online environment is worrisome to me.

Little Steps: 100 Great Tips For Saving Money For Those Just Getting Started If you just want a big ol’ bunch of money saving tips, this is the post for you.

Monday Morning: Setting Goals for the Week Ahead This is more or less how I start off most weeks. I find, time and time again, that it gets me in the right mindset for the week.

Nine Tactics for a Frugal Valentine’s Day These are the tactics I use each year when planning Valentine’s Day with my wife. Remember what the purpose of the day is and you can’t fail.

You Can Do This It’s very difficult to start over and adopt new habits. But if others can do this, you can do this.

Three Years Ago (January 31 – February 6, 2007)
Don’t Know How To Cook, But Want To Learn? Here Are The Only Two Books You’ll Ever Need The best books bridge the gap between recipes and how to cook, teaching you the techniques while you’re making interesting and enjoyable dishes.

Child Is Father To The Man: When Financially Stable Children Want To Help Their Parents Prepare For The Future My tactic is to just talk to my parents about it and let them know that I’m in their corner. I think it helps that I really have no interest at all in “my piece” of any estate they might have. I just want them to enjoy their later years without worry.

Ten Tips For A Cheap And Memorable Super Bowl Party Our Super Bowl party involves people coming over to our house, hanging out, playing board games with the football on in the background, and just having a laugh with friends.

Three Money Lessons My Grandfather Taught Me He passed away twenty five years ago and I still miss him.

How Common Cognitive Biases Affect Personal Finance The methods we use to deal with everyday life almost always fail us when it comes to real life.

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!

It’s the refrain of countless Americans of all ages – and it was my refrain, too.

It’s easy to see why, too. At first glance, personal finance looks like a bunch of boring and un-fun stuff. Paperwork. Sacrifice. Living in an un-fun way.

On the other hand, living a big spending lifestyle seems quite fun, as you don’t have to think about the stuff that you want. You just go and get it until the money (or, quite often, the credit) runs out.

I’ve been there. I spent myself into five figures of credit card debt.

What I found when I got there is that I didn’t really have the stuff I wanted most in life. Yes, I had an iPod and a huge DVD collection and a nice vehicle in the driveway. What I wanted, though, was a writing career and the flexibility to do what I wanted during the day and a lack of fear of checking the mail.

At the same time, though, I didn’t want to give up my lifestyle. I pretty much thought that buckling down and living frugally would mean that my life would begin to be incredibly boring. I’d have to give up all of the stuff I loved, right?

Here’s the truth: I didn’t give up a single thing that I loved. Yet I managed to get out of debt in just a few years and find the career of my dreams.

What’s the catch?

There is none.

All you have to do is one simple thing. Step back for a moment, look at your life, and ask yourself what elements of it actually matter to you. What brings you genuine, lasting happiness in your life? What do you do that you’ll remember in five years?

Figure that out. Make a list, if you want.

If you simply look at your life through that filter, it’s easy to see that a lot of the day to day stuff really isn’t all that important. Sure, there are a few key things that are, but those key important things vary for all of us. For me, it happens to be the time I spend with my family and the time I get to spend reading and writing. Those things bring me genuine, lasting joy.

Everything else? It doesn’t really matter in the big scheme of things.

All of those things that don’t matter are the things that I cut my spending on to the absolute minimum. I don’t get a life-affirming rise out of eating at Applebees, so I’ll save $20 and eat at home. I don’t really need the ultra-premium toilet paper since the quality of my life isn’t judged by my bathroom experiences, so I’ll buy low-end toilet paper and I’ll buy it in bulk.

If you value going out with your friends, it becomes a lot easier to do that when you’re not dumping money into your household budget on unnecessary premium products. If your art is the center of your life, it becomes a lot easier to make the leap into an art career if you aren’t tossing cash towards an oversized apartment and the finest decorations from Pier One. If you love to travel, it’s a lot easier to take amazing trips (and actually afford them) if you aren’t pouring money down the rathole of your energy bill because you’re using energy inefficient lighting and don’t have a programmable thermostat.

Once I figured that out, the rest was easy. I took all of that money I shaved from the stuff that doesn’t matter to me and I threw it directly into my debts. Once they were under control, I put it towards doing the things that I loved – reading, writing, and spending time with my family. Eventually, those three things became my lifestyle without any real financial worries to boot.

So much of our day to day lives really doesn’t matter in the big scheme of things. So why spend money on it? Put that money towards things that do matter – peace of mind, your passions – and you’ll find a much better life without giving up even the littlest bit of what you really care about.

Fifteen years ago, I didn’t believe I had the financial resources to go to college. Instead, I spent my time thinking about a future where I took a few classes at a local community college and worked at a local factory.

Ten years ago, I was a college student. I was working towards a degree in computer science and had dreams of working at Microsoft.

Seven years ago, I was working in a genetics research lab. I was single, living in an apartment, didn’t own a vehicle, and couldn’t imagine being married.

Five years ago, I was working for a nonprofit organization. I was married, living in a different apartment in a different city, and couldn’t imagine having a child. I also couldn’t imagine being debt free.

Three years ago, I had a child. I was also near debt freedom. I was spending most of my spare time writing, but I couldn’t imagine a situation where I would be able to make a full time career out of it. I also couldn’t imagine being able to manage more than one child or live anywhere other than the little apartment we were living in.

Eighteen months ago, I had become a full time writer. I had a second child. We had moved into a house. At that point, I couldn’t imagine writing a book, editing it appropriately, and getting it published – it seemed like an unimaginably huge endeavor. I also couldn’t conceive that we would have a third child, as two seemed to keep our hands full.

Today, I have a book already in print, a second book that’s finished and due out in a few months, and a third child due in just a couple of months.

What can’t I imagine happening next?

Here’s the truth: an awful lot of lives go through the same progression as my own. Not in the sense of the specific things that change, but in that the specifics of their life change so drastically in even a few years. And we don’t see it coming, either.

At each of those times above, I thought my future would go on more or less the same way that it was going right then. I was repeatedly wrong.

The best thing you can do with your money and with your skills is prepare for change. Why? Because things will change.

You’ll lose a job. You’ll change careers. You’ll find a partner. You’ll have a child. You’ll move to another state. You’ll find a new passion. You’ll get sick. You’ll get well. People will leave your life. People will enter your life.

Things will change.

It’s this simple fact of life that leads me towards believing that the best personal finance tool that people can have is a big, fat emergency fund.

With a nice, healthy cash reserve in hand, a person can roll through these changes with ease. A job loss doesn’t mean an apocalyptic disaster in your life. A choice to try a new career becomes exciting and fun instead of scary. Falling in love and moving across the country becomes a whirlwind adventure instead of an exercise in tightrope walking. Opportunities spring up and you can take advantage of them instead of having to run away in fear.

Never, ever let debts and a lack of money on hand keep you from jumping on board with your dreams when the chance comes along. You have the power, right now, to get things under control, eliminate that debt, pick up some new skills, and be ready for the inevitable changes that will come your way.

When that chance comes, you’ll be ready.

Pam writes in:

I have been a stay at home mom for most of the last 19 years. Our oldest son started college this year. We still have our other son who is 16 and our daughter who is 13 at home. I have returned to work part time as a caregiver and my husband is pushing me to work full time. I don’t want to and think it is counter productive because I believe I already have a part time job saving us money. I work very hard at keeping our expenses low. I only spend about 90.00 a week for our family of 5 on groceries, pet food, toiletries. We eat very healthy home made meals. Over the years people have commented to my kids that we must be rich because we have all this nice stuff and I don’t work. Well I do work. I work hard at getting the things we have for much less than most people pay. My husband makes about 60,000 a year and has full medical, dental and vision benefits and pension through work. So as you can see we are far from rich. I have taken on extra hours at work for the last 6 weeks or so and have noticed that our grocery bill has gone up by at least 50.00 a week and commented to my husband about that. If I were wonder woman I know I could continue to save us money and work but I am not.

Here’s the situation as I see it. Both you and your husband want you to choose a path that puts the family in the best financial situation. Since your husband works, he sees work as the best way to put your family in that position. Since you’ve been a stay at home mom, you see the various home economics you do as the best way to achieve it.

The real solution to this whole question, though, is the numbers. That’s where you have to start.

First of all, you have to both be in agreement that the goal is to maximize the difference between what you spend and what you earn, a number I like to call “the gap” (a term I use many times in my upcoming book). If you return to work, the amount you bring home will go up, but so will the amount you spend. If you stay at home, the amount you earn and spend will stay roughly the same.

So, the question really is whether or not the amount you bring home will match the amount you save from working.

This is where the calculator is going to come in handy because you need to carefully calculate an accurate budget for both scenarios. How will your true spending change if you return to work? You know from experience that your return to part time work has raised your food budget by $50 a week – that’s $200 a month. What will it go to if you work full time? I’m pretty sure your food budget will go up even more than $50 a week from where it is now if you do. What other elements of your household budget will be adversely affected?

There are several other factors to consider, too. What costs are there associated with your work? I’m not sure what caregiver means, as it could mean anything from an in-home daycare to something like hospice work. In either case, extra work will mean extra expenses for that, such as supplies for in-home child care to transportation costs for hospice work.

What about taxes? Every dollar you bring in is taxed at the highest rate. Thus, the first $7,900 you earn will have 15% go to federal income taxes, and every dollar beyond that will have 25% go to federal income taxes. You may also have state taxes, and you’ll certainly have FICA taxes, which tack on another 15% or so.

Figure up all of these factors with real estimates. I honestly don’t know how it will all turn out for your case (as there’s not enough data here), but I will say that I wouldn’t be surprised at all if the numbers are close.

Of course, in a few years when your children are independent, the equation will shift in favor of you returning to work – and you should return to work at that point (if you want to, of course). Your total family cost for food and household supplies will drop drastically, for example. That, however, is a bridge to cross in several years.

The way I would do it is to simply make two budgets and make direct comparisons between the two so that the costs and benefits of your returning to work are clear.

Good luck.