Earlier today, I linked to an article at Free Money Finance that included a quote from Mary Hunt:

Get into the habit of quickly calculating the annualized cost of things and you’ll achieve an effective way to get mindless spending under control.

After reading this, a reader wrote in to me and said:

I can see how a tip like that could be useful, but I’m really awful at mental math and it seems unreasonable to futz around with a calcluator to do the math. How do you do this kind of math?

First of all, I’ll admit that I’m good at mental math. It was something I practiced a lot when I was very young and I can still do things like add a series of numbers or multiply two multi-digit numbers in my head. Thus, I usually do the math in a strange fashion in my head that really is hard to explain or make rational to others.

Instead, I asked a few people on Facebook and Twitter how they did this kind of math and they all responded with more or less the same technique.

First, they figured up how much a week of such purchases costs. If you do this thing once a week, it’s easy. If you do it more than once, double it or triple it – whatever’s appropriate. If you’re unsure about the pennies, round to the nearest dollar. So, if you get a coffee and a bagel for $5.46 three times a week, round the amount to the nearest dollar (down to $5) and multiply that amount by three, giving you $15.

Next, add two zeros on the end. That’s easy enough. If your current amount is $15, your new number is $1,500.

Finally, divide that number in half. If you can’t do it quickly, feel free to adjust the number from the second step. So, for example, if you have a hard time dividing $1,500 in half (it’s $750), just add $1 to the original $15 and divide that resulting number in half – $1,600 divided in half is $800. I suggest adjusting up if you rounded down in step one or adjusting down if you rounded up in step one.

That’s it – you have a very quick thumbnail of how much this expense costs you over the course of a year.

What if the expense is monthly? Slap a zero on the end and you’re getting close, but it’s a bit higher than that, too.

The thing to keep in mind is that this is a rough estimation, just to let you know the approximate amount you’ll be spending on this routine if you keep it up. Being able to come up with a rough estimate quickly is key. This way, you can do the math in your head while standing in line, giving you time to rethink the whole thing.

What’s the real benefit for doing this? If you do this type of calculation, you can quickly put your impulse spending in context. $750 a year spent on bagels and coffee could be half of an extra house payment. Paying off the house sooner makes it easier and more attainable for you to jump into the career you’ve been dreaming of for years. It might also open the door to having a child sooner than you think.

If you decide to go ahead with the purchase after doing this calculation and weighing the options, that’s great – you’ve weighed the options and chosen the option that provides the most value to you. However, denying yourself that opportunity often puts a big restriction on your big dreams.

Yep, a bit of mental math can make all the difference.

Preparations for the baby are seemingly endless. I have a giant list of things to do before the arrival and it feels often like I add two for every one I manage to cross off.

One item I’m ready to add to the top of the list: a great night of sleep.

13 small things to simplify your workday The one thing that always amazes me about my workday is how much I can get done if I get into a flow, but how easy it can be to get interrupted and how hard it is to get back into that flow. (@ zen habits)

What am I Doing With My Life? I ask myself this question quite often. The answer is sometimes really enlightening, but it can sometimes be really painful, too. (@ soul shelter)

Tax Audit Red Flags I avoid most of these naturally except for the “wild swings in income” part. That’s par for the course when you’re self-employed, I think. (@ bargaineering)

How to Self-Diagnose Your Financial Health These are all good metrics for determining whether you’re in good financial shape or not. I tend to rely on the “change in your net worth” metric, myself. (@ get rich slowly)

A Simple Trick to Stop Spending For me, simply calculating the annual cost of a purchase really makes me re-think whether I need that purchase to begin with. (@ free money finance)

5 Simple Ways to Cut Your Spending and Still Enjoy Your Life These are some great tactics for people who are just beginning to reform their spending habits. (@ pick the brain)

One of my mentors once told me, quite insightfully, that most people make almost all of their decisions based on whatever is easiest in their life. At the time, he was referring to college life – he argued that people who filled their dorm room with distractions and entertainment were more likely to do poorly in classes than people who had a dorm room filled with books and other learning materials. Why? Because when a person is sitting around in their dorm room on a given evening, a bit on the tired side from a long day, they’re going to grab whatever’s easiest. What’s easier? Picking up the remote to watch a television show or picking up a textbook? What if the television isn’t in the room?

His argument wasn’t that television and other entertainment should be banned in the dorms. His argument was that we have a lot of control over what is in our environment and our environment shapes what we wind up doing.

This carries through to personal finance. If the path of least resistance is to just go buy stuff, swipe the plastic, and walk out, it’s a lot easier to buy without thinking. If the path of least resistance is to maintain your bank account that’s loaded with fees, money is going to seep out of your account.

In other words, an awful lot of personal finance success (and success in other areas) revolve around making the good choice as easy as possible. Here are some examples of how to do this.

Remove your credit card numbers from online sites. Turn off that “one click ordering” at Amazon. Delete your web browser cookies. Doing this will make it harder to order online, convincing you to not buy or find alternate (and often less expensive) means.

Cut up your credit cards (and your debit cards, too). Make it difficult for yourself to acquire the cash with which to make purchases. If you literally don’t have the cash, you’re not going to go on a shopping spree, are you?

Install a programmable thermostat. You can save a lot of money by keeping your thermostat properly adjusted, but that requires remembering to do it multiple times a day. If you forget, you waste energy – and that’s a cost. The path of least resistance is to set the cycle of temperature adjustment once and then forget about it, which is exactly what a programmable thermostat allows.

Make meals in advance. It’s easy to talk ourselves into eating out because that has less “resistance” than going to the effort of preparing food. Eliminate that resistance by making meals in advance, or at least portions of meals. Prepare casseroles and freeze them. Make a batch of breakfast burritos and freeze them, too. There are countless things you can do to make it very easy to prepare an inexpensive and healthy meal very quickly.

Cancel your premium cable channels. If you mostly just turn on the television and surf to see what’s on, why are you paying for premium channels? Whether you have them or not, you’ll find something to watch among the eighty other channels you have.

Leave books out and available. Choose some books you really want to read, then check them out from the library. Leave these books in the places where you sit most frequently and you’ll find that you’re much more likely to pick them up and read a few pages. It’s incredibly cheap entertainment and it’s often a great way to get exposed to new ideas and help you grow personally and professionally.

The same thing applies to diet (get rid of unhealthy foods in your home and stock up on healthy stuff) or exercise (leave your exercise gear out front and center) or quitting a bad habit (dump out all the alcohol or drugs or cigarettes) or anything else you want to change in your life. The more resistance you eliminate to the things you want, the easier it becomes to reach them.

What resistance to your big goals can you eliminate today?

Over the past few weeks, I’ve read dozens of articles that repeat the same refrain: healthy, low calorie meals cost more than high calorie meals. Fresh, healthy foods with a low caloric density are more strongly affected by inflation and carry a higher cost per ounce than processed foods with a high caloric density. A quote:

[L]ow-calorie foods tend to be rich in nutrients like vitamins and minerals. Conversely, high-calorie foods are rich in calories, but tend to be low in nutrients. The study found that lower-calorie foods cost more per calorie, while more calorie-dense foods showed a lower cost per calorie. Bargain shoppers get a better deal purchasing high-calorie foods rather than low-calorie foods. This study then explored the effect of inflation on the lower- versus higher-calorie foods.

The researchers found the price of calorie-dense food was less likely to rise as a result of inflation. During the 2-year study, the price of high-calorie food decreased by 1.8 percent, whereas the price of low-calorie foods increased by 19.5 percent. Considering most bargain shoppers are trying to stretch their incomes as far as possible, the findings may help explain why the highest rates of obesity are among people in lower-income groups.

Based on a standard 2000-calorie diet, the researchers found a diet consisting primarily of calorie-dense foods costs $3.52 a day, but a diet consisting primarily of low-calorie food costs $36.32 a day. The average American eats a variety of foods throughout the day, spending $7 a day.

“If you have $3 to feed yourself, your choices gravitate toward foods which give you the most calories per dollar,” Drewnowski said. “Not only are the empty calories cheaper, but the healthy foods are becoming more and more expensive. Fresh vegetables and fruits are rapidly becoming luxury goods.”

In the short run, if you’re looking solely at putting enough food on the table to feed your family, the processed foods with a high caloric density are a better bargain. You will get full from a meal of processed foods for much lower cost than you will from a meal of fresh foods.

In the long run, however, the reverse is true. High caloric density foods (which have a low nutritional density) drastically increase an average person’s risk of many ailments, from heart disease to diabetes. These illnesses result in not only high medical costs, but also a drop in productivity and earning potential. That’s a serious cost.

What we’re left with is a choice to make every time we visit the grocery store. Do we spend less at the grocery store today while increasing our odds slightly of a very expensive future? Or do we spend more today and keep our future odds of good health in better shape?

I don’t think there necessarily is an automatic choice here. Many people are in poor financial shape and can’t afford the fresh fruits and vegetables. I certainly ate my share of ramen noodles when I was in college, for example, and the only way we kept fresh fruits and vegetables on the table when I was growing up was our own garden.

Instead, I offer a very simple solution to this problem.

When you go grocery shopping, start with the fruits and vegetables. Look for the items that are on sale or have a natural low cost. Grocery flyers can help in this regard. You might find that spinach is on sale for $0.49 a bundle or that bananas are on sale for $0.19 a pound. Whatever it is, stock up. Buy plenty of whatever has a good price on it.

From there, plan some meals around those items. If you’re using the store flyer, you can use recipe websites and other resources to find simple meals that incorporate those vegetables and fruits that are on sale. If spinach is on sale, for example, you might try something as simple as wilted spinach and garlic or something like chicken florentine. Or, better yet, start a few meals this week off with a simple spinach salad with just a little dressing on top. Boom – cheap food that’s actually pretty healthy, too.

You don’t have to plan every meal around what’s on sale. Just try to incorporate what’s on sale into a couple meals in the coming week. By doing that, you’re making your diet healthier without escalating the cost or moving to a “boring healthy” diet and you still have freedom to eat pretty much whatever you want most of the time, whether it’s healthy foods or otherwise.

Just remember this: every time you choose to eat a cheap, unhealthy food, you’re essentially passing on some cost to your future self. This makes the total cost of the food more balanced than you might find on the sticker. Your best bet is to put in some extra footwork and find cheap foods that are also healthy (meaning cheap now and cheap later) and one great way to start is to use the grocery store flyer, start your shopping with the fruits and vegetables, and plan meals that incorporate those that are on sale.

Good luck!

When I was younger, I used to have a great deal of resentment towards rich people. I often felt like they were greedy. I believed that they had somehow “cheated” to get where they were at. Yet, at the same time, I desperately wanted what they had, too.

Today, I no longer feel that way. Instead, I recognize that the vast majority (I’m not saying all, but most) of wealthy people I’ve met have done things I really admire.

They busted their butt. Most of them worked incredibly hard to get where they are, even if you don’t see it on the surface. Famous actors take years of acting lessons and often spend many, many years taking on awful roles and working for peanuts before they get their break. Businessmen often spend many years in school and give every ounce of themselves to build a business up in the face of stiff competition. Sports athletes – particularly the top ones – practice in a way that can just blow your mind.

Sure, they were lucky, but they usually did things to make that luck for themselves and they took advantage of it when it came along.

They bargain hunt, just like I do – they look for bargains in their employees and their assets just like I look for bargains in my food and toiletries. They seek to maximize their bang for their buck.

All of these things are things I admire and strive for in my own life – and they’re often major elements of how the people who have become very successful live their lives.

The truth of the matter is that my earlier resentment of people who have achieved success came down to two things: my own jealousy and my own impatience.

The flaws came from within me, not from them. I allowed myself to waste my emotions, my energy, and my passion along the useless roads of resentment and jealousy and impatience.

That wasted energy could have gone toward building a great career, building great relationships with people, or towards building my own luck. But, for a long time, I didn’t choose that.

When I finally started waking up to this, sometime in 2005 and 2006, things began to change in my life. I stopped wasting my energy on a lot of frustration and resentment and started using it on creating my own luck. That, along with a healthy dollop of responsibility for my finances, has put me in a much better place in every aspect of my life.

If you find yourself feeling resentful and angry towards people who have the things you wish you had, step back for a second. Usually, the problem is within you. Jealousy. Frustration. Impatience. Put those feelings away and start asking yourself what you can do to get where they’re at.

Negative feelings are destructive. They’ll burn you up and leave you in a mess unless you figure out how to channel them correctly to push you forward. Then you’ll take off like a rocket.

Right now, as my wife approaches the end of a challenging pregnancy, I’m doing a lot of planning for the next six weeks so that you’ll continue to have fresh posts to read while the baby arrives. This means a lot of extra writing right now to ensure this happens.

However, I still might miss a post or two if the baby arrives very quickly or something like that, so if you see a day without a post, you can be pretty sure that I’m holding a tiny baby instead of writing.

I am looking for a cost-effective data storage/back-up solution. Currently I have photos, music files, and financial docs on my laptop hard drive, and I back up periodically to an external hard drive. However as I get more and more financial information electronically now, I am considering whether I should have some off site back up solution. I’ve been looking at services like Carbonite that offer online data storage for ~ $50-$60 / yr. Any thoughts on whether or not to sign up for this?
- JT

I back up static information to DVD-Rs. Things like photos, music files, home movies, and so forth are static – they’re not going to change. I make an annual DVD-R set with all of these documents on it and I make monthly “additions” on CD-R. This costs me maybe $5 a year.

For data that changes a lot, I usually just keep it backed up on a flash drive. I back it up regularly, encrypt it, and keep it on my keychain.

As I’ve said many times on here, I don’t trust sharing lots of personal data with additional companies unless there’s a deep need for it. My financial information in particular is something I don’t like to share.

My father passed away in 2006. For many reasons, including being financial naive, I did not take inventory on what he left behind. He left my mother 4,000 shares of Hudson City stock (HCBK) and I want to help educate her so we can maximize its potential.

Right now she gets paid a dividend four times a year which she uses to help pay her home taxes. A third party administrator who worked with my dads company is advising my mother and wanted to reinvest in more HCBK stock. Here is where I get lost and have questions. Shouldn’t she diversify? Is that not the case because my mom is semi dependent on the dividend payments? My feeling and advice would be to hold with belief it will get back around the 19.15 price it held in Sept 08 and at that point sell half investing the earnings conservatively because my mom is 59. As my financial where-with-all has grown, I am far from an expert and don’t feel totally comfortable providing this advice. I guess I am looking for some reassurance before I suggest things to the professional. Ultimately I just want to do what is best for my mother and would appreciate any thoughts you had based on the information provided.
- Ed

I agree with you that diversity is good. If all of the money is in one particular stock, you’re completely out of luck if that company goes out of business.

However, I think you’re focusing on the sticker price of the stock way too much. It’s pretty clear that your mother isn’t going to sell the stock unless she’s desperate. Instead, she seems happy to be receiving the dividends from it.

Thus, if she’s going to invest more, I’d suggest identifying and then investing in a company that issues a healthy dividend like clockwork. Don’t worry about the stock price at all – just focus on finding a healthy company to invest in.

I’m a recent college grad who just started working and I’ve got about 20k in loans (6.8% interest rate) with no other significant debt. Using a debt snowball calculator I figured that I could pay it off in 30 months using about 15% of my gross salary. However, right now my parents are letting me stay at their home for free for the next five months. I figured I’m saving anywhere from 700-1100/month by living with them. I’ve already got about 1k in my emergency fund. Should I use my extra money I’m saving in rent to pay off my student loans faster or use it to build up a bigger emergency fund?
- Bryan

I’d probably put aside some amount for the expenses you’ll have starting out living on your own – a deposit on an apartment, for example, and a bus pass, and basic kitchen supplies and an initial food purchase to fill your cupboards. I’d put aside $1,000 for that outside of your emergency fund (and perhaps more, depending on where you live).

Since you have no assets, I’d probably put a bit more in the emergency fund, enough to cover at least a month of living expenses after you move out.

After that, I would pay down the debt. Debt freedom is definitely a worthwhile goal.

What do you think about life insurance and prices? Is it possible for me to buy life insurance through my business to insure my son because he completely refuses to buy it himself even though he has a family of 7. If something happened to him, we would feel responsible in caring for his family. Personally, I don’t think that is quite fair.
- Rosalie

I agree with you that he should take out some life insurance on himself. It is the responsible thing to do, especially with a number of children.

If he’s not going to do it, you absolutely can take out a life insurance policy on him with you as the beneficiary. This is to protect yourself in that situation. If he passes, you can then use the money in whatever way is needed to secure the situation for your grandchildren. I’m not sure this is an expense for your business. I’m pretty sure that this would be a personal expense.

As for what to buy, just buy a term policy. Don’t worry about any of those policies that have some sort of investment package tied in.

Recently I’ve been very focused on improving 2 aspects of my life – my physical fitness, and my career. I’ve made strides on both, having lost about 20 pounds and sitting about 10 pounds from my target weight, and I’ve done it by making what I hope are sustainable, gradual changes. This has GREATLY increased my energy level, and given the the confidence to tackle my career goals, as I’m actively looking for the right move for a new job.

I’m on a great path, but I need a little motivation along the way. Any thoughts would be greatly appreciated.
- Matt

Honestly, I use time as a motivator. It really works well for me.

What do I mean by that? I promise myself blocks of time doing something that I deeply personally enjoy guilt free if I accomplish certain things. So, for example, if I get twenty articles finished this week, I’m going to spend half of Saturday doing something fun. If I keep on my weight loss pace, I’ll allow myself two hours one evening doing something purely fun instead of washing dishes or something.

If I waste time, I usually feel guilty about it. If I do this, however, the guilt is gone. I just get to enjoy myself because I know I worked for this free time.

This really works well as a motivator for me because I don’t want stuff. I want time.

I’ve gotten my credit card debt to $2,700 from $6,000 this February. I have $5,800 in a 401K, and about $1,500 in a checking account. I’m also going to need about $1,000 in repairs to my car soon. My credit card company (Citi Visa) mentioned the other day some program they have to help pay off the balance of the credit card. I don’t remember the specific details, but it was an incentive to pay more than the minimum payment. Their deal is that every time you pay more than the minimum payment, they would reduce the amount you owe by a certain percentage. They cap the incentive at 20% of the existing debt I believe. It sounds like this could save me up to $500 or so.

My question is if I do something like this, would it count as a settlement and affect my credit rating? Part of their program requires you to freeze your credit card usage until everything is paid off.
- Joe

It depends on the specifics of their offer. You need to ask them specifically how this is reported on your credit report.

They may view this as an internal program and will just report that your debt is being paid and the balance is going down rapidly. On the other hand, they might report it with some sort of notice that could result in a negative on your credit rating.

You have to read the terms of the offer. You should start by simply calling them up and asking specifically how this is reported on your credit report.

I’m 25 and live alone (well, with a roommate) in the Los Angeles area. I have a good job and make what was a good salary when I started, before three years of “cost-of-living” raises that didn’t live up to the name. I have no debt except for very easy informal school repayment to my parents, and I have a 3-month cushion saved (though I’ll feel much better when I get up to 6 months).

So the question is – how do I reconcile the two goals and/or cut my entertaining expenses? Is there a solution I’m missing? Or is there nothing more I can do other than start making more money?
- Ashley

It sounds to me that the problem isn’t with you, it’s with your budget. You’re putting an unrealistic “cap” on your entertaining budget and feel disappointed whenever you exceed it.

Clearly, by the way you live your life, you value these entertaining experiences. They’re one of the key parts of your life. I’d encourage you to go ahead and spend roughly what you’re spending on it. What you need to guard against is escalation of that spending.

The warning bell for me is that you say you’ve “trimmed everything as tightly as I can.” This is very rarely true in anyone’s life. Are you buying generics? Do you have a programmable thermostat? Have you disconnected your cable television? Do you still have a landline phone? Are you making inexpensive meals at home (think vegetarian, particularly vegetables bought on sale)?

There are many, many ways to make cuts to your spending in other areas, the areas that aren’t important to you. Look deeper.

How do you steel yourself against all the unsolicited advice offered as comments to your posts? I recently read the frugal pet tips post and found myself getting increasingly irritated as people offered up advice you had in no way requested and that had nothing to do with frugal pet ownership, like don’t get one since you have a baby on the way and pleeeeeeease don’t tie up the dog all day in the yard.

Anyway, it’s really a question that needs answered since you have a billion subscribers and questions but just wanted to show some solidarity – maybe it doesn’t tick you off, but if it does, you’re not the only one!!!
- Kelli

When people read an article I’ve written, they filter it through their own experiences and then offer up a comment based on the mix of the article and their own experiences. Most of the time, it’s because they genuinely care (yes, there are some people out there just trolling, but most commenters care or they wouldn’t bother).

The person who writes in with concern about the baby has probably witnessed an aggressive dog biting a child. There are vast differences in dog breeds in terms of their behavior and I have no interest at all in getting any dog that’s aggressive at all. I have negative interest in a “guard dog.”

The person who writes in with concern about tying up a dog has seen a neglected dog tied up outside all day and felt a lot of sympathy for that dog and wants to make sure that I wouldn’t treat a dog like that (I won’t – the only time the dog will be tied up is when they’re on a leash for a walk.)

They’re seeing my situation, reflecting on their own experiences, and sharing their thoughts and concerns. Yes, sometimes they go off the train of thought. Yes, sometimes it can be frustrating (for me, too). Usually, though, they’re saying something of some degree of value and they obviously care about something. In short, I don’t mind them at all as long as they’re not attacking anyone.

Sometimes, such comments seem like an attack on me. They seem to be assuming that I would engage in the negative behavior they’re describing. That used to bother me a lot and I would respond pretty defensively. For example, I could easily see the above comments as saying “Trent, you’re so stupid you’d get a pit bull and put it by your baby” or “Trent, you’re so cruel that you’d get a dog and tie it up outside all day.”

But the more I thought about it, the more I realized that most of the time, people writing such things aren’t even thinking about that in that way. They’re expressing concern about something that bothers them and not even thinking that they’re implying that I would do such a thing. They’re just relating a concern they have that has little to do with me other than to just give me something to think about. And that’s cool with me.

I have a question about the relative benefits of moving. Here’s our situation: My fiance and I are 31 and 27, respectively, and live together in the Bay Area. He is an IT professional (he makes $65-70K) and I am a PhD student (I make $30-35K). I hope to finish my research and PhD thesis in late 2010 or early 2011. After that, I’ll look for a permanent research position in the Bay Area. Because the market has gone down so much, we want to buy a house, but we can’t yet afford the size of house or the neighborhood we desire. We rent currently (with a housemate) and have been saving as much as possible for a 20% down payment on a house we hope to purchase when I am permanently employed. We have $80K saved, but our target house price will be $500-600K, so we need $100-120K.

We seemed to be on track to saving enough money until our housemate indicated that he wanted to move out, to a place with cheaper rent. If he moves out, we’ll probably have to pay his portion of the rent (it’s a fancy place, our landlord prefers “established couples” and didn’t want us to have a housemate in the first place, and I don’t think he’d allow us to sublet or add a new person to the lease). This means that our rent as a couple would go from $1533 to $2295 per month, which directly impacts our ability to save for a down payment. We could move to a cheaper apartment, but it would only be for about a year, and the considerable expense of moving and hassle of changing our address several times in a short period of makes us hesitant. Do you think (if we can’t convince the landlord to let us get a new housemate) that we should stay put and pay more rent or make the effort to move, even if it’s just for a year?
- Ann

It depends on how much you save. If you’re willing to live in a tiny apartment for a year, you’ll be able to save quite a bit over the next year and probably buy sooner than you might otherwise be able to. If you’re not willing to do that, then you’ll live better for a while, but will be in financially worse shape over the longer haul.

Whenever I read a question like this, I always think of the old Dave Ramsey nugget, “Live like no one else so you can live like no one else.” If you want something exceptional in life, you have to make some sacrifices along the way.

If I were you, I’d get a tiny apartment for the next year. If you have too much stuff, rent a storage place for the extra stuff (or sell off a lot of it – even better). Handle as much of the move yourself as you can before hiring a moving service. Put some sweat equity into it.

My credit is apparently good enough now that a company called me this week wanting me to refinance my 30 year fixed mortgage (24 years to go) at 6.375% to a 15 year fixed mortgage with a rate much closer to 4%.

Your opinion? Do you have other suggestions for me?
- Joyce

This might be an opportunity to roll some of that credit card debt into the mortgage. Call the people who offered the refinance and ask if you can refinance for more so you can take the difference to pay off some or all of the credit card debt. It really depends heavily on what your home is worth whether this will work or not.

I’m fairly surprised that you can’t use an older stub for income verification in this situation. Have you checked to make sure that you can’t use an older stub?

If you have to wait until June until you can get the refinance, I would probably try to apply for the new card right now to minimize the impact it will have on your credit rating later. You can then transfer the balance to the card to eliminate interest for now, but I would still try to take out extra on the home mortgage to pay off that credit card debt.

Remember, your entire goal is to minimize the interest you’re paying each month. I think, given the information you provided, that this is the best route to take.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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

Change is hard. Once a person has established a certain way of going about things, altering that path is very difficult. That’s why people who want to get financially ahead often find themselves sinking deeply into debt. That’s why people who want an awesome career sometimes find themselves working at a dead end job they hate. That’s why people who want to look great wind up overweight and out of shape.

Routines are hard to break. Individual, specific routines might be easy, but they’re like a single thread in our lives, lives made up of a lot of routines. Those threads in our life, taken as a whole, are very difficult to break.

Switch, by Chip and Dan Heath, focuses on this very situation. The subtitle explains it very well: “How to Change Things When Change Is Hard.” The Heaths’ previous book was one of my favorite books I’ve ever read, so I was eager to see what they had written and see if some of their ideas overlapped what I had learned about changing many of my own spending habits.

1. Three Surprises About Change
The first surprise about change is that the problem usually isn’t people, it’s the situation. If you want change, you’ve got to change the situation a bit. The second surprise? The lack of initiative for change often isn’t laziness, it’s exhaustion from butting your head against the wall too many times. The final surprise is that resistance to change is often lack of clarity – we often don’t know specifically what we need to alter in our lives.

2. Find the Bright Spots
As a whole, society focuses on failure. Think about politics, for example – when was the last time you heard something positive about whoever’s been elected? We do this in our own lives, too – we focus on our failures and then believe that our failures define us. Instead, we should look at the bright spots and focus on the small successes. Instead of feeling like a loser because we spent more than we should have or ate more than we should have, we should instead look back in a positive way at the times where we succeeded in spending less or eating less.

3. Script the Critical Moves
Spend some time thinking about the moments where you have to make a critical choice. Think about them well in advance. Envision yourself making the “good” choice. Keep that in your mind and repeat that positive scenario over and over. What you’re effectively doing is training your mind to begin to see the “right” choice as the normal, natural choice, so that when the difficult choice comes around, it’s not really all that difficult of a choice.

4. Point to the Destination
I often talk about painting a picture of where you want to be in five years. That’s the idea here. Envision where you want to be at the end of the journey. Sketch it out in detail, particularly in the multitude of ways it will improve your life. Keep that vision of your future life front and center as you begin to make the hard choices you’ll have to make along the way.

5. Find the Feeling
Fill your life with as many positive emotional experiences as you can that revolve around whatever change you’re trying to elicit. If the change is making you sad, your approach isn’t working. The change should make you happy and lift you in a positive direction. Find the elements of your change that really make you feel good, then seek those out and keep those front and center. For me, the great feeling when improving my finances was looking at my account balances, so I unabashedly did that as often as possible. If you’re exercising, perhaps you feel best right at the end of an exercise session – so when you think about exercising, focus directly on that feeling.

6. Shrink the Change
If you can find instances of the type of change you’re looking for in the habits you already have, you’ll feel a lot better about yourself overall and about those activities that already exhibit that change. In fact, you’ll often be driven to engage in more of those activities. For example, when I realized how inexpensive of a hobby reading really is, particularly in the form of reading library books, I dove into the hobby, meaning that my time spent on leisure’s cost per hour went down drastically. I was very happy, proud of myself, and enjoyed the financial fruits of the change, too.

7. Grow Your People
If you want results, surround yourself with people who are actually getting the results you desire. If you want to lose weight, have a social circle filled with people who have either lost a lot of weight and kept it off or maintain a healthy weight to begin with. At the same time, focus on building a growth mindset, not only in yourself, but the people around you. Encourage any notion at all that you can change who you are, what your skills and talents are, and what your “destiny” in life is – because you certainly can.

8. Tweak the Environment
The biggest step you can take towards adopting a new behavior is to make the path to the new behavior as easy as possible. If you want to exercise more, get all of your gear and clothes out the night before and put them right by the door. If you want to spend less money, cut up all of your credit cards, throw them away, and delete your account information at your favorite online sites. Make the path to the bad habit harder and the path to the good habit easier.

9. Build Habits
If you’re attempting to build a new habit, one great way to do this is to set up an “action trigger.” Define when exactly you’re going to engage in this new habit. For example, I might say that I’m going to exercise right after I drop the kids off at daycare, and I focus on that action trigger several times over the weekend. Then, on Monday, when I drop the kids off at daycare, I’m very much compelled to exercise because I believe that’s what comes next in the routine. I’m essentially injecting something new into the mix.

10. Rally the Herd
Whenever you’re trying to change your ways, enlisting the help of those around you is always worthwhile. They can provide countless nudges in the right direction, from simply asking you about your goal to nearly dragging you out the door to take care of business. They can point out specifically when you’re about to make a mistake and celebrate with you when you achieve something big. The people around you are a powerful mold for your behavior.

Is Switch Worth Reading?
I certainly found Switch to be a thought-provoking read. It’s quick-paced, packed with a lot of good ideas, and is really accessible to everyone’s life, because virtually everyone would like to change something in their lives.

Over the next few months, I’m going to attempt to throw as many pieces of this book as I can at my exercise habits, which seem to constantly ebb and flow. I can envision a lot of ways to make this work and this book has given me a pile of ideas to try.

It’s a book that I’m going to keep around to read again, which is about the highest compliment I can give to a book.

I’ve long been an advocate of a “money buddy” – someone close to you who is going through a similar financial experience as you who can support you through the (sometimes) difficult challenges ahead while you also support them. Usually, a good money buddy can already be found in your social network – a sibling, a cousin, or a close friend who seems to be going through fairly similar financial troubles as you are.

There are a lot of benefits for finding a money buddy, both directly financial and psychological. Here are twelve potential benefits of a money buddy. Remember, you don’t have to use all of these – just select the ones that fit and work well for you and your buddy.

Relieve each other of a secret burden. Sometimes, financial problems can be a very secret burden, something you’re ashamed to tell others. When you have a money buddy, you have someone that you can tell about it, relieving all of that tension and built-up angst. That person is a willing ear and a shoulder to cry on.

Provide positive reinforcement of each other’s progress. A money buddy can serve as a cheerleader for every good move you make. It can be hard to make big changes in our spending, but when someone’s there motivating us and encouraging us to make the hard choices, those hard choices become a bit easier.

Share membership at a warehouse shopping club. You can split the cost of a warehouse shopping club with your money buddy, reducing the annual cost of a Sam’s Club, BJ’s, or Costco membership by half. You can also use your money buddy to split some of the multi-packs or jumbo packs sold at such stores.

“Eat out” at home together. A big part of the appeal of eating out is the social interaction. Replace a regular “eating out” night with a meal at home with your money buddy. You can either prepare the meal together as a team or alternate meal prep work.

Engage in new inexpensive hobbies together. It’s a lot easier to get involved with a new hobby if you’re doing it with someone else. Explore a new hobby with your money buddy, taking the time you spend on that hobby from something expensive that you used to do.

Search for enormous bargains in concert with each other. When you need a new freezer or a hot water heater or a car or any other significant purchase, shop together for it. Four eyes have a lot better chance of spying a big bargain than two eyes do.

Share larger items and possessions. Share a lawnmower. Share a snowblower. Share a trailer. These items can easily be used by both of you, particularly if you live fairly close together.

Give advice from fresh eyes. When you’ve reached a point of financial indecision (“Which debt do I pay off first?” “What bank should I use?”), a money buddy is a great source of a second set of eyeballs to look at the situation and make a great decision.

Carpool. If you work at the same place (or near each other), carpooling can save you both quite a bit of money. Even if you can only do it “sometimes,” each time you manage to do it, one of you is saving gas, maintenance costs, and wear on your vehicle.

Share frugality tips with someone who wants to hear them. Quite often, frugality tips can be a lot of fun when you discover them, but it can be even more fun to share them with someone who’s also figuring out new ways to live and save money.

Hold each other accountable for goals set. If you set a goal for yourself, share it with your buddy and remind each other of your goals regularly. Simply knowing that your buddy knows of your goal and is watching your progress towards it can be a great motivator.

Celebrate victories together. If you achieve one of those goals, you have someone already there that knows what hard choices you’ve made to achieve it and is ready to celebrate with you. There’s no one better to celebrate with at the top of thte mountain than someone who’s been there all the way through the journey.