One big problem that many people have when they adopt a frugal lifestyle is the perceived reduction in enjoyment they’re going to have in their hobbies. Entertainment spending is one of the obvious places to cut in a budget because it’s not a base need, but it is a very painful cut. If done recklessly, it can certainly reduce one’s enjoyment of day to day life.

This is certainly something that has challenged me over the past few years. I’ve got several hobbies that could seemingly be very expensive on their own but, with some footwork and forethought, I’ve found ways to trim their costs down to almost nothing while still retaining what I enjoy about each one.

Over the last week, I’ve also talked to several people I know who simultaneously have seemingly expensive hobbies yet enjoy them with minimal cost. I made a list of many of these hobbies and the methods used to reduce their costs. If you don’t see your hobby listed below but have a great idea for how to reduce the cost of it, mention the hobby and the cost-cutting method in the comments.

Antiquing Focus on really mastering how to value particular types of items – vintage toys, etc. Save your buying impulses until you’re absolutely sure you spy an underpriced item that you can turn over.

Board games Hit thrift stores regularly as you’ll often find great, complete games for almost nothing. Before you buy new games, attend sessions at your local game store where you can demo such games and try them out. Build friendships with other people who enjoy board games and play their games as often as they play yours.

Camping Buy equipment that will last and will work in lots of environments (so you don’t have to buy multiples). Don’t get too much equipment, as you can make a lot of things with what you find on hand – a tent, a sleeping bag, and a utility tool will work for many people. Don’t buy stuff because you think you might use it or need it.

Coin collecting Know your hobby. Know what rare coins have value, particularly ones that look similar to coins made today. Sift through change you get and find ways to accumulate more change without spending (like getting rolls of pennies or dimes at the bank). Understand what you really enjoy about coin collecting and focus on that.

Comics Check your local library if you enjoy reading comics – they often stock annuals and other collections. Start a “comic circle” where you each buy certain comics then swap them around the circle. For collectors, know the market cold and look in unusual places for bargains, like yard sales.

Cooking Minimize your equipment – you don’t need dozens pots and pans. Cook for yourself, not just to impress others (this improves your skill and saves money on meals). Master the use of ingredients you can easily grow (like our chive patch and our asparagus patch, which require no maintenance at all and just produce free food for us).

Gardening Compost as much as you can as it will reduce your fertilizing costs. Build friendships with other gardeners and share equipment. Harvest seeds and save them for spring.

Golfing Try golfing at the community courses near you instead of at the country club, as municipal courses are often far less expensive and yet still a lot of fun. Once you have a set of clubs, stick with it and only “upgrade” when there are liquidation sales or something else that’s completely exceptional. Don’t be afraid to use “lost” balls – balls hit out in the middle of nowhere and considered “lost” by other golfers – pick them up and toss them in your bag. Get a golf bag with wheels or a pull cart and get some exercise instead of renting a golf cart.

Hunting Handle the meat packing and processing yourself. Don’t buy “special clothes” for hunting beyond what’s required to keep you safe – just add layers in the winter. Focus on specific types of hunting instead of buying a weapon for everything.

Magic: the Gathering Instead of playing in the expensive competitive Standard environment, play Limited instead. Build a “draft cube” (basically, a big, diverse pile of cards) and play using that, particularly when you attend events. Ask to borrow full decks from players that have lots of cards.

Movies Eat a snack and drink a big glass of water before hitting the theater. Don’t buy a DVD unless you’ve already watched a movie multiple times in a theater or as a rental. Swap DVDs (temporarily) with friends. Go to discount theaters instead of “first-run” theaters and you’ll save most of the cost of a ticket.

Pets Volunteer your time at a pet shelter, as it will allow you to bond with lots of pets, help to make sure those most in need are cared for, and also help you to find the perfect match. Learn what an animal’s true dietary needs are and focus on meeting that instead of just buying a big bag of Ol’ Roy – not only is it better for them, it’s often cheaper.

Reading Join your local library – or even volunteer there. Swap books with your friends. Join a service like PaperBackSwap and swap online.

Scrapbooking Keep in mind why you’re scrapbooking – it’s to preserve memories. Don’t spend your money on expensive decorating elements that don’t really mean anything at all. Use highly inexpensive or throwaway items for your decorative elements instead – let that be another channel for your creativity.

Video games Trade games with friends. Play through games all the way before picking up a new one. Buy used games – and trade in any games you have that you won’t likely play again. Never buy new releases – wait until the price starts to drop and you save money while still enjoying the same game.

There are a few themes that run through many of these tips that bear repeating, because they help save money with any hobby.

Build friendships with people who have the same hobby. You can share ideas and equipment with them.
Minimize your equipment. Don’t buy stuff just because you think it might have a use. Go minimal, then expand if you have a true need.
Avoid the “cult of the new.” Never buy a new release. If you wait a little while, you can usually get the same item for less.
Understand what aspects of the hobby you truly enjoy. Maybe it’s just the collecting nature. Maybe it’s just the act of what you’re doing. Whatever it is, spend some time figuring it out, as it will often lead you to savings.

For the first time in almost two years, I didn’t set my alarm this morning. I woke up about an hour and a half later than I usually do and I felt really groggy. I’m not really sure what to make of that, considering that by now I figured my biological clock would have been set to just wake me up at the appropriate time.

Anywyay, on to some reader maibag questions.

In 2009 we exceeded the income limit for our Roth IRAs. Here are our current yearly investments:

1. Would we be better off increasing our 401k contribution (which may put us under the Roth income cap), maxing out a traditional IRA and converting to a Roth every year or a combination of both?
2. Should we be focusing some of our disposable income on the car loan or mortgage or adding it to one of our savings/retirement vehicles?
- Sean

If you’ve exceeded your Roth limit, I would increase my 401(k) contributions by an appropriate amount so that your after-tax income is reduced by an amount equal to what you contributed to the Roth IRA. So, if you’re in the 30% tax bracket, for example, you should contribute about $7,200 more to the 401(k).

Since I don’t know your overall balances in your various investments, I can’t really say whether or not you’re on good pace for your retirement. However, I think your current level of retirement savings adds up to 12-13% of your income in a year, which is an appropriate amount. Your emergency fund (according to my envelope math) should cover at least three months’ worth of living expenses, so if the balance in that is much above $25,000, I would redirect the excess toward debt freedom. The travel budget is more a matter of personal taste and value.

Overall, I think you guys are in very good shape from what I can see. Good work!

You often advise couples to figure out a post baby budget when they ask you about having their first child or adding an additional. That is at least 5 years away for us and really hard to pin down. If we wanted to be sure we could still afford all of the “fun” things we want and children, it would be easier to save ahead of time and let our bank accounts do the talking. If you tried to set a savings goal for covering the costs of a child, maybe the 1st year of expenses?, what would it be and what would it be comprised of?
- Becky

It depends on the level of quality you want for your children. Are you going to stay at home with them? Are you going to send them to an average day care center? A top day care center? Are you going to hire a nanny? Are you going to have a Graco crib or a custom-made one? Are you planning to breastfeed or are you going to use formula? Each of those things is going to have a radically different cost.

You don’t have to make any sort of final decision at this point, of course. The reason for talking about such things, in your case, is so that you have at least a good estimate on what you need to save. The child care question will be the biggest one, as those options have vast differences in cost – tens of thousands of dollars annually.

Saving ahead for this is a really good idea. If I were you, I’d make the whole thing automatic. I’d probably use SmartyPig for it. Identify a number that you’re shooting for, set it up with a target date five years in the future, and make contributions to that goal automatic. You could even share that goal with overbearing in-laws who keep asking when the baby is going to come.

I quit my job back in January (variety of reasons) and am now signed up with a particular international company. When I am finished with my current job I will be doing something I have NEVER ever done before…commission only sales. *gulp* I am very nervous, but also excited. I really like this new company and I *think* I can do this even though I have no sales background. I’ll be my own boss, which is great, but also overwhelming. My question though is this…how in the world do people who earn non regular income budget and save???

My husband is still working and we’ll get his paycheck regularly but I’ve crunched those numbers and we will be in the red if I don’t make any money. So…on the assumption that I will do a good job and hopefully make some sales, how do I budget?!?!? Again, I’ve never been in this sort of position before. I’ve always had a regular paycheck. I’d like to be as un-stressed as possible when I finally start in my new role and having a plan for budgeting will help (I think).
- Megan

I have a non-regular income. Here’s how I do it.

First of all, I have a really hefty emergency fund. I keep several months’ worth of living expenses on hand in the form of cash. There simply are months where my income is not very high, and during those months, we live out of that emergency fund. It’s fine, though, because those down months are usually months when I’m working on some sort of project that will help turn things around.

How do you get there? When you have a great month, don’t spend it all. Instead, take a very large chunk of it and put it straight into your emergency fund, then forget about it. Keep doing it this way until you have at the bare minimum six months’ worth of total living expenses for you and your husband in that account. In other words, you could make nothing and your husband could lose his job and your account would cover everything from food to bills to even some entertainment – what you spend in a typical month.

During the down months, you may contribute less. During really down months, you may be taking money out of the account. Both of these are fine when you’re working a job with a variable income.

I purchased a car second had about 7 or 8 years ago now, it was $9000 then but it would be lucky to be worth $1500 now. I have full comprehensive insurance on it which comes to a little more than $500 a year. I can’t imagine keeping the car for more than another year, what do you think of changing my insurance to 3rd party instead and saving a couple of hundred? At what point is comprehensive insurance no longer worth it?
- Dan

At this point, comprehensive insurance is overkill. If you do more damage to your vehicle than the blue book value of the car, they’ll just “total” the car and issue you a check for that value. So, in other words, you’re paying more than $500 a year so that, if you get in an accident, they’ll give you a check for roughly $1,000 (depending on your deductible). Unless your odds of a major accident are approaching the 50% mark over a given year, that’s a pretty poor deal, particularly if you have an emergency fund of any kind.

My general rule of thumb is this when it comes to deciding whether to carry comprehensive insurance on a vehicle. Look up the blue book value of the car. Subtract your deductible from that. Then divide that by the annual cost of your insurance. If the number you get is less than 3.5 or so, I would stop carrying the comprehensive insurance.

Why? Even if you were in a serious accident that required a lot of repairs, your comprehensive insurance would likely just pay you the blue book value of the car (minus the deductible). If it’s 3 or less, you might as well cut the insurance and start saving that money in your own savings account.

I have a question that I hope you can anwer from your personal experience with Le Cresuet. I have been saving up and plan to buy an LC enamel french oven and want to purchasse the right piece. My question is about the difference between a round or oval oven. Does the round one heat more evenly and consistently than the oval? Have you tried both, and if so, what do you think? I have read reviews on every site immaginable, but no-one mentions round vs. oval.

I question this because I have used a slow cooker for 20+ years, and have noticed a difference in how things cook in my relatively new oval crockpot. I used a large round crockpot for many years, but unfortunately it broke in the sink. When replacing it, I decided on oval so that larger cuts of meat would fit better. I am using the same recipes, so I know how the dish should turn out. My theory is that the oval shape does not circulate the heat evenly as a round one does. I don’t want to make the same mistake with the french oven, since it would be a very costly mistake.
- Cherie

I have used both round and oval-shaped enameled cast-iron pots. They are spectacular. I use them for virtually everything in my kitchen.

With a round versus an oval shape, what I’ve noticed is that the metal heats up very evenly in the oven. Thus, they do cook a bit differently. There tends to be a slightly cooler spot (usually unnoticeable) right in the middle with either one of them, but that’s true of anything you use. The round pot tends to have a bit of a round cool spot, whereas the oval tends to have more of an oval shaped spot that’s not quite as big around as the circle. For most practical uses, there is no difference between the two (I won’t say ALL practical uses, but I haven’t seen a practical difference).

I think the issue with the slow cooker is more of a brand thing. It’s likely made quite a bit different than your old one and perhaps produces more or less heat than your old one. That likely accounts for much more of the change you’re seeing than the shape of the pot.

How would you recommend adapting the “work hours” [...] for someone who has an instable job, or who is currently seeking employment? My plan was to use a 40-hour “work week” and to pretend my time at home, cleaning, working on my research, etc, is all working towards my greater goals, because finishing school is a gateway to generating income for my dreams.
- Deborah

If you’re in a situation where you have the money to keep the bills paid for the moment, then you should absolutely fill that time with whatever activities put you in place for the career you want.

In your case (as this question was excised from a long email), you’re clearly filling that time with educational purposes that seek to push you not only towards learning valuable things, but towards a degree. That’s unquestionably a valuable use of your time.

I think it makes a lot of sense to, in effect, start getting used to a regular work routine. Putting in forty hours a week (or maybe even a bit more) in a schedule that will match what you’ll experience professionally is a great routine-builder.

One of my long-term goals is to read 1,000 books. While I have plenty of academic works and classics in mind, in terms of finance, personal growth, or any other subject, what would you recommend to a young woman who has just finished an undergraduate degree?
- Deborah

Here are three titles (all linked to my longer reviews) that I would add to your list for personal finance and personal growth.

Your Money or Your Life by Joe Dominguez and Vicki Robin is the single personal finance book I would recommend that you read. It is the book you’ll find at the foundation of my personal finance philosophy.

Mindset by Dr. Carol Dweck is probably the best book I’ve read on what I would generally term “success.” To succeed at anything, you need an appropriate growth-oriented mindset and this is the best scientifically-backed book I’ve read on it.

The Creative Habit by Twyla Tharp discusses making creative thinking routine in your life. Given that professional life is valuing ideas more and more and more, I think this is essential for being a complete, thriving person today.

I would strongly encourage you to check out some of the many books I’ve reviewed on The Simple Dollar. Almost universally, they’re good – though I’ve reviewed a couple of blatant train wrecks, too. Additional selections really largely depend on where you’re going on your life’s journey, but I think those three really are good for everyone to read in your situation.

A plea to share your kraut making experiences?
- Wayne

My father made sauerkraut almost annually when I was growing up and I helped him with the process several times when I was in high school and in college. It’s pretty straightforward, but what set his making apart is that he had a large earthenware crock in which to age the sauerkraut.

I’ve attempted it on my own twice and it’s been a complete failure both times. I attempted making it without the crock, which I think is the chief problem. The first batch I made was inedible. I believe I did not make it briny enough and some sort of growth occurred in it. The smell alone told me I shouldn’t even try it.

The second batch was closer, but it was incredibly, incredibly sour. I could eat it in very small amounts, but it was so far beyond the level of sour that would be enjoyable on anything that I tossed that batch out as well.

I am going to attempt it again later this year after investing in a similar crock to what my father has and following his procedure to the letter rather than attempting to “make do.”

I am a 21 year old college student, I work part time and still live at home.

About a year ago and half ago I totaled my paid off car and had to get a new one. Basically I had to start over. I ended up leasing a car( I know how you feel about leasing a car) however I did it because my parents thought it would be a good idea for me to have a new reliable car and I needed a car right away. Except for registration and such I did not have to put anything down for the car. My monthly lease is about $360.00 for the car. I struggled to make the payments every month as I go to school over full time and work about part time. I told my parents I didn’t want the car anymore as the payments were to much and I was very frustrated that the car would never really be mine even after I made all these “payments” on it. My dad decided that he would agree to make half the payment every month. Well I still have another 17 months before the lease is over. I also have DMV registration coming up which will be about $350 plus a maintenance that will be about $300-400. I guess right now the decision I am trying to make is should I just keep the car for another 17 months and suck it up making half the payment every month and the maintenance and DMV coming due or should I try to find someone to take over the lease and figure something else out?( My parents and I were considering the possibility of having my dad take over the lease and driving the car) I have some savings however if I bought a car cash it would probably eat up all my savings, which is really frustrating Right now I have a lower payment (plus maintenance and DMV of course) however payment toward what…?( as its not really my car) I am not really sure what the best thing to do at this point would be.
- Alan

The real question I have is whether or not you actually need a car. Do you need it to get back and forth to your classes or would public transportation suffice?

If you can survive easily without a car, I’ve got to wonder why your parents convinced you to buy one. I also don’t understand why a college student would purchase a car that has a $360 a month lease on it. That’s the cost to lease a Lexus. If you were going to lease something, I would have thought it would make much more sense to lease a low-end car at $180 a month or so.

I don’t think you should continue the lease on that car if you can possibly do so. You would be much better off in a used car at this point, one with low payments. Your monthly income on a part-time job does not equate to a new car unless you’re spending every dime you make on that car and you’re working 30 hours a week (figuring in gas, DMV, oil changes, maintenance, etc.). I would sit down with your parents and show them the real dollars and cents of all of this.

My husband and I live in SoCal – Long Beach, to be exact. My question is about gardening for SOME of us. We live with – seriously, now – 8 different grocery stores (Fresh & Easy, Stater Bros, Ralphs, Albertsons, Pavilions, Vons, Food4Less, and Trader Joe’s) within minutes of our house. Actually, there are a couple more than that, but those are the stores DH and I frequently go to, in addition to Costco. Because of this, we have a tremendous opportunity to “shop the specials” at grocery stores. Drug stores are the same: several to choose from, in addition to “super-stores” like Walmart, Target, K-mart, etc.

So, considering this, do you feel it’s worth it for us to continue with our yearly container gardening ritual (which neither of us particularly enjoy, but don’t dislike, either), or should we just aggressively and consistently shop the store specials at multiple nearby stores for produce, the way we already do for our other groceries? We do not garden organically, so that is not a factor in our decision.
- Lisa

I think, in your situation, gardening doesn’t save money. Even with a small ground-level garden, there’s an argument to be made that it doesn’t save money in terms of the pounds of food produced (although there’s a real premium on pulling a strawberry from the vine and popping it into your mouth).

Gardening shines when it’s in line with other values that you have – eating well (produce eaten immediately from your garden is more nutritional than produce eaten from your local grocery store that was picked a week ago), the act of gardening itself, or a firm belief in organics and controlling what goes into your plants (we basically grow organic, using a compost bin as the source of our fertilizer). Also, the larger a garden gets, the more cost-effective it becomes to garden because the food density goes up and the cost of tools per square foot is lower.

If it’s not in line with your personal values and it doesn’t save money, I wouldn’t garden. In my own situation, however, it saves us money and it’s in line with some of our beliefs, so we love spending spring and summer days out there.

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 book or other book of interest to readers of The Simple Dollar.

If you’ve been reading The Simple Dollar for a while, you know that I love the “Little Book” series by Wiley Publishing. It’s a book series of small, relatively short hardbacks with about twenty short chapters. Each book in the series focuses on a specific personal finance or investment topic, striving to spell it out in plain English. Often, it’s written by a leader in the field, particularly by someone who believes deeply in the methodology being described. Almost unanimously, the entries in the series have been well worth reading, particularly if you have even a minimal interest in investing. The books do a fantastic job of breaking down ideas into little, comprehensible nuggets.

The most recent book in the series that I have yet to review (there are actually two more that have been published very recently that I’ve not even laid eyes on yet) is The Little Book of Behavioral Investing by James Montier, a renowned value investor. This entry in the series focuses on how normal human behavior often works against us when it comes to investing, a phenomenon that’s been covered in other personal finance books. Unfortunately, those other books have often been dry ones, often failing to relate the concepts they talk about to your day-to-day behavior.

Does The Little Book of Behavioral Investing succeed where the others fail? Is it a book worth reading? Let’s dig in.

One – In the Heat of the Moment
Poor decisions are made in the heat of the moment. Just think of impulse buying at your local supermarket. Montier proposes, sensibly, that the route to financial success is almost always preparation of and pre-commitment to a detailed, clear plan. Spend some time figuring out exactly what you’re going to do, what your goals are, and what your parameters are before you even dive in. It’s no different than writing a grocery list before you go to the store – you’re curbing impulse buys.

Two – Who’s Afraid of the Big Bad Market?
When people experience financial loss, they often react much in the same way they do when they’re bitten. They retreat. They certainly don’t want to invest more. Yet, quite often, the correct response to a loss in a stock investment is to invest more because you’re essentially paying a sale price on the same exact company that cost quite a bit more just a month ago. If your fundamental gameplan hasn’t changed, don’t react to a downturn by selling – react to it by buying.

Three – Always Look on the Bright Side of Life
On the other hand, when people see a positive trend, they tend to get overoptimistic. They believe that it’ll continue on forever and they dive in like crazy – often when things are hitting their peak. This is why bubbles form – a good investment reaches a reasonable peak, but keeps on going because the blind optimists dive in, driving the price far above what it should be rationally. When the blind optimists then try to sell, there aren’t enough buyers and the price collapses.

Four – Why Does Anyone Listen to These Guys?
Experts are not perfect. Although they might be more knowledgable about the market, they also tend to be overconfident, as they believe that they know more than the other investors. That’s a bad mix that often causes investment experts to do worse than the average person on the street. Overconfidence can completely ruin any advantage that you might have.

Five – The Folly of Forecasting
No one can predict the future, but lots of people certainly try. Unfortunately, past performance is never an indication of future results. The best thing an investor can do is understand where they are right now. Have they met their goals? If you create a plan in advance and stick to it, you don’t have to try to predict the future.

Six – Information Overload
There’s an overabundance of information available for investors. While on one level that can seem like a great thing, the truth is that it can actually be a terrible thing. People can get lost in the data. They can get sucked into “analysis paralysis,” where they won’t take action until they can analyze all the information – and by the time their analysis is done, the situation has changed. The key here is to focus your analysis on very specific elements that you understand.

Seven – Turn Off That Bubblevision
Many people obsess and stress over every little fluctuation in the stock market, and channels like CNBC fuel the obsession. Unfortunately, such obsession often leads to oversensitivity to little fluctuations and thus causes hair-trigger responses that are usually poor. Turn off the bubblevision and seek out real, hard information that matters to you instead.

Eight – See No Evil, Hear No Evil
Most people look for evidence that confirms the ideas they already have (think about talk radio, for example). However, doing that will often be disastrous for your investments. You should instead constantly look for information that disproves your assumptions. If you think a company is successful, for example, you should seek out signs that indicate that it’s not successful.

Nine – In the Land of the Perma-Bear and the Perma-Bull
Some people believe the stock market is always headed in the right direction (“perma-bulls”). Others believe that the stock market is always headed in the wrong direction (“perma-bears”). Obviously, neither one is right and, obviously, neither one of these folks can ever be a truly successful investor. Every market has ups and downs – if you constantly believe one or the other is about to happen regardless of what’s happening now, you’ll always make mistakes.

Ten – The Siren Song of Stories
A good story is incredibly appealing to us because it makes things that seemingly don’t make any sense make, well, sense. We do this all the time – our memories are a perfect example of this. We take random events in our lives and polish them until they make a coherent story. The problem is that with investing, the data rarely tells a simple story like this. When we try to mold it into a simple story, we overlook big parts of the picture and often end up making poor choices. Don’t worry about the story.

Eleven – This Time Is Different
All markets have bubbles – and those bubbles eventually burst. Every time, though, as people are buying in like mad, you hear stories about how this one is different than the rest because of some reason. That’s basically never the case. What happens, inevitably, is that too many people buy in because they believe they’re going to get rich. Suddenly, there are too many people holding the things they’ve bought and no one’s around to buy them. Every time a market begins to seriously diverge from long-established fundamentals, there’s usually a bubble involved and you’re better off avoiding it.

Twelve – Right for the Wrong Reason, or Wrong for the Right Reason
As was mentioned earlier, we tend to gloss over the past to create nice stories about it. That glossing, mixed with our optimism, often results in our blaming others for the mistakes we made in the past. The truth is much harsher: whenever we lose money, we’re at fault, and there are valuable lessons to be learned from figuring out what exactly went wrong.

Thirteen – The Perils of ADHD Investing
If you’re an attentive investor, it’s often tempting to jump in and make changes all the time. We hear some good or bad news and we want to react quickly to it by buying or selling. Unfortunately, our snap decisions are often absorbed right into the market and the only person that makes money is the stockbroker. If you have a plan in place – and you certainly should – stick to that plan. Don’t let a sudden piece of news or a sudden impulse steer you off of that plan.

Fourteen – Inside the Mind of a Lemming
It often can feel very uncomfortable to zig when others are zagging, particularly when we have money at stake. If we see lots of people doing a certain thing, it’s easy to convince ourselves that it must be the right thing to do. The key here is to step back and look at it objectively without the influence of other people. Make your decision based on the information, not on what everyone else is doing.

Fifteen – You Gotta Know When to Fold Them
A big part of your overall plan – remember, the one you decided on before you started investing? – is when to sell. You should decide before you even begin how much volatility you’re willing to accept and how big the losses have to be before you would sell. The decision needs to be made before you even put a dollar in so you can react in accordance with your plan, not in accordance to your nerves.

Sixteen – Process, Process, Process
What does all of this add up to? You need to always be examining the world around you and, most importantly, you need to try to remove the human element from your investing decisions. Come up with a plan, refine the plan, invest, then stick to the plan. Don’t let your nerves or the actions of others get in your way.

Is The Little Book of Behavioral Investing Worth Reading?
For the most part, The Little Book of Behavioral Investing reiterates much of the basic material on behavior and personal finance that can be found in other books. The Little Book of Behavioral Investing works, though, because it’s written in such plain language and, perhaps most importantly of all, it includes a lot of very vivid explanations and illustrations of our behavioral quirks.

A book on behavioral investing should be something that everyone reads before they jump into the investing pool. The Little Book of Behavioral Investing is as good a place as any to pick up that information. It’s approachable, clear, and, dare I say, fun.

If you’re interested in my reviews of earlier books in the “Little Book” series, here’s a list of those reviews. I’ve almost universally enjoyed them.
The Little Book of Bull Moves in Bear Markets
The Little Book of Common Sense Investing
The Little Book of Main Street Money
The Little Book of Safe Money
The Little Book Of Value Investing
The Little Book That Beats The Market
The Little Book That Builds Wealth
The Little Book That Makes You Rich
The Little Book That Saves Your Assets

Anthony writes in:

My wife and I have two children, ages 2 and 1. We’d like to have more; we both think that four would be a great number, although there’s no particular logical reason for that number. The problem is the expense. With daycare costs, adding each additional child will cost another $260 a month. If we stopped paying extra on our student loans and cut our savings per month to $145, we could afford the daycare for the third child, but a fourth would require more painful cuts. We already live frugally: buy used clothes, drive used paid-for cars, make almost all of our food at home, etc. I’ve looked into second jobs, but there’s very little IT work in the area, other than what I already do. And with our county having the highest unemployment rate in the state, I suspect even paper-route jobs and that sort of thing would be hard to find.

My job pays decently and is very secure: her job also pays well and is less secure, but still not much in jeopardy. In Michigan, that’s significant. We can’t sell the house without taking a loss, but it is big enough—barely—for two more kids. If we need to upgrade the car to a mini-van, we’ll have enough in our car fund that we can pay cash, so that’s not an issue.

I hate to make children about mere numbers, but purely by the math it seems like more children is unwise. On the other hand, I constantly hear stories from other families about how they it “somehow just worked out.” Any advice or suggestions?

Much like you, my wife and I have two children – ages four and two – and another one due to arrive within the next few months. The issue of escalating child care costs is one that we’ve dealt with many times throughout our child-rearing process and, through it all, we’ve come to some conclusions about that very occurrence.

First of all, the idea that it “just worked out” is a bit misleading. What often happens in that situation is that people go through a period of re-prioritizing after the child (or children) arrives, and it’s often a shift that happens without a lot of conscious thought. You choose to eat at home more because it’s easier to corral children there. You don’t go out as often as you used to because of the cost of babysitting. Over time, these shifts just seem completely ordinary – parents adopt a new normal along the way and often feel like it “just worked out.” Our memories often work to make things seem smoother than they actually were.

At some point if you continue to have children, the cost of child care will likely eventually meet or exceed the net cash benefit of one of your jobs. If you have three preschool-aged children (as we will soon), your weekly costs are immense. If you, at the same time, figure up the true take-home of one of the people in the household – after taxes, commuting costs, vehicle upkeep, wardrobe upkeep, and son on – you’ll often see that working outside the home is a financial net negative. Add on top of that the financial benefits of not working (even less reason to eat out, more organized grocery shopping, etc.) and you create a compelling case for one partner to leave the employment scene for a period of time.

What if you can’t afford to do this because you’ll be burying your career path? At this point, it’s really a values thing – your career is more valuable to you than more progeny. It’s one of those value comparisons where there is no real right or wrong answer – however, because it’s such an emotional one, people often convince themselves that one answer or the other is absolutely right for them and thus absolutely right for everyone. It’s not. You have to decide for yourself what you value.

If you decide that more children are the real priority here, then plan for it. That may involve selling the house and moving elsewhere – even to another part of the country. It may involve selling a vehicle. It may involve leaving a job. If your children are your priority, then sacrifice those life elements that aren’t directly benefiting the children.

If you decide that your continued career trajectory is the priority for you, take precautions to not have another child.

Your situation – much like our own – is basically asking you to choose between the two paths. Choosing one path doesn’t necessarily mean abandoning the other one, but it does mean postponing it to a later point in your life and it may mean that you’re unable to pick it back up again.

It seems to me from the email that you’re having a hard time choosing between the two. Right now is the time to sit down, talk with each other frankly about it, and make a choice. Is it career maintenance as the top priority or is it more children?

Give the decision time. Also, perhaps most importantly of all, give each other respect here. There is no right or wrong way to feel about the question and if you disagree, that’s okay. You both have reasonable perspectives on the issue.

You don’t have to make a decision tomorrow on this, but whichever way you choose, it doesn’t hurt to take a serious look at your spending and find ways to minimize it now. Build an emergency fund. Learn to live on a little less. No matter which path you end up choosing, doing that now will help you with the ramifications of that choice.

Good luck.

Kelly writes in:

In the past three months, I’ve paid off all but $2,000 of my credit card debt. I feel happier about my money than I have in a long time. The only problem is that my social life seems to be falling apart. I don’t have as much interest in the things my friends are spending their money and time on and I find myself doing other things a lot. What do you suggest?

Bear with me for a second as I go down a bit of a strange road.

I’ll admit it. I’m not a good housekeeper, and neither is my wife.

Yes, we keep our house reasonably clean and we make an extra effort to clean when guests come over, but on a day to day basis, housework is lower on our priority list than it seems to be for many other people that we know. Quite often, we do minimal cleanup during the week and wait until Saturday for a real housecleaning – and, even then, we don’t scrub the walls or things like that on a regular basis.

Our priorities are simply different. There’s no wrong or right about it. Some people value housecleaning more than we do. A few of our closest friends spend literally hours each day on housecleaning because keeping their house sparkling is a very high priority for them.

So what’s a high priority for us? Time with our kids and with each other. Learning new things. Finding ways to have fun without spending a mint.

If we were to simply follow the lead of some of the people in our social circle, we would probably spend more than we do. One of my closest friends is becoming a small-scale land baron. Another one buys lots of Leroy Nieman serigraphs and, on occasion, original art. Yet another close friend really, really values his three automobiles.

Our money goes towards financial stability, because that’s what we value.

Placing that value highly, even if it’s not in line with what our friends seem to value, hasn’t damaged our deepest, most important friendships. You don’t have to value exactly what others value – you just have to respect it.

Instead, our friendships are usually based on the things we do have in common. Almost all of our friends really enjoy hosting and attending evenings full of board games, usually with a potluck meal. Even though there’s a variety of political perspectives, we all value political discussions that don’t turn into insults, so we often discuss politics together in a setting that would often result in arguments and fights. We all value reading and learning new things. None of us, at this point, is in a bad financial state, as we all have our debts under control.

For all of the things we do differently, we have those key things in common. You don’t have to do what your friends do, and you don’t have to value all of the same things that your friends value.

If you value living frugally, that’s fine. You don’t have to spend like your friends do. Instead, find ways to accentuate the things you do have in common. What do you both value? That’s the basis of a strong friendship.

Kelly, it seems to me that you’ve adopted stronger financial practices as a significant value in your life, and that’s great. It’ll help you to stay afloat no matter what the river of life sends your way.

The question is what else there is in your life. What other things do you value? How do you spend your spare time? What do you think about? There’s a good chance that these things still overlap with your friends – and if they do, seek ways to spend time with them that match up with those values.

You might find that your values actually are pretty far away from some of them and that your friendship was really only based on one value, one that you’ve moved away from as you’ve grown as a person. That’s fine – I discovered that myself when I started re-evaluating my life. If that happens, it simply means that it’s time to start socializing in ways that will help you meet people that match up well with your current values.

I firmly believe that if you surround yourself with people who mostly value different things than you do, you will be unhappy. I also firmly believe that if you seek out groups of people with which you share at least some values, you’re likely to build great relationships and friendships. Even better, if you can seek out multiple groups in this way – a group that matches one value you hold dear and another group that matches another value you hold dear – you’ll not only build friendships and relationships, but you’ll be able to make some powerful connections, too.

Good luck!

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 (March 7 – March 13, 2009)
A Guide to Making Inexpensive and Delicious Homemade Pizza Our homemade pizza makes several meals for our family for a dollar a pop or less. Not only that, it’s delicious and fairly healthy, too.

Frugality and Feeling Deprived Frugality doesn’t have to feel like deprivation at all if you spend some time reflection on what exactly bounty means in your life.

The Frugal Laptop This worked great for about ten months until a separate hardware issue cropped up with the laptop. I’d still advise anyone to try this, though.

A Step-by-Step Guide to Getting Your Credit Card Interest Rates Reduced This tactic works well, but be aware that many credit card companies might also reduce your credit limit at the same time, particularly if you’ve had a history of being late on your bills.

My Worst Job – And What It Taught Me Those simple, menial tasks that you hate are often the perfect opportunity to show the world that you’re a great worker.

Two Years Ago (March 7 – March 13, 2008)
How I Turned That Ship Around: Another Look At My Financial Meltdown … And The Aftermath When things were at their absolute worst for me financially, here’s the game plan that I followed.

The Financial Recovery Toolkit: Ten Tools I Used In My Financial Turnaround Hand in hand with the above article, here are ten tools I used to make that turnaround possible.

Chipping Away at the Paycheck to Paycheck Routine One big challenge that people have is breaking away from the idea that you have to spend what you earn. Financial security comes from freedom from your work and this is the first step.

The Credit Card Holy Wars: There Is No “Right” Answer … But Here’s My Take Should you have a credit card? Shouldn’t you? I think there are reasonable arguments on both sides of the coin.

Ten Ways to Translate Your Passion Into Additional Income If you’re passionate about something, you already have a leg up over a lot of people in that area. People pay for passion.

Three Years Ago (March 7 – March 13, 2007)
Are Your Friends Always Spending Money? Ten Frugal Activities – And Advice On How To Suggest Them When you begin to turn your financial life around, it’s often a struggle to overcome the social barriers. Here are some tips for making it work.

Why Johnny Can Read: Simpson’s Paradox and the Greatly Exaggerated Death of American Public Education The reason for writing this was an ongoing debate with readers about public versus private school. Is private school worth the dollars?

How To Transition From Car Loans To Paying Cash For Automobiles Paying cash for automobiles is a huge money saver because you’re not paying the interest on the car loans. Here’s how to get there.

Love, Marriage, and Money: Should a Couple Combine Their Finances? This isn’t always a straightforward issue, and it’s not just a trust issue either (which is what people often try to break it down to).

Nine Financial Reasons For Getting Involved In Your Local Community Community involvement can really help out your financial life, directly and indirectly. Here’s how.

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!

A long time ago, after posting several articles about using a crock pot to save money and still produce great, quick meals, readers asked me to post ten of my favorite crock pot recipes. Since digging through my recipes and typing them out again in an comprehensible format takes a while, I started by posting five of them.

And I never got around to posting the other five. Today, I’m completing that post.

So, after you’ve perused the art of the slow cooker and five of my favorite recipes, here are five more for you to try. I have no idea where these originally came from, but each was experimented on and modified more than a few times and seem to only exist on my own handwritten cards.

One big tip! If you’re going to leave these on for more than eight hours, add an extra half a cup of water before you go. The biggest danger for cooking things in a crock pot longer than that is having the food dry out.

Let’s go!

Chicken Chili (our current favorite crock pot recipe)

1 1/4 lbs boneless skinless chicken breasts
2 15 oz. cans great northern beans or navy beans (I prefer to soak dry beans myself)
12 oz. frozen sweet corn kernels
1 4 1/2 oz. can chopped green chiles (or you can chop your own)
3 tbsp. chili powder
16 oz. chicken stock or chicken broth
8 oz. half and half (you can use skim milk if you want it healthier)
1/2 tsp. corn starch (if you want it thicker)
1/2 cup sour cream
1/2 cup chopped onion (optional)

Dice the chicken into 1″ cubes and put them in a slow cooker. Add the beans and corn and optional onions. In a bowl, mix the chili powder, the peppers, the half and half, and the chicken broth or stock (and the starch, if you want it thicker). Stir until well-mixed, then add to the chicken. Cover and cook for 8-10 hours on low. Just before serving, stir in sour cream until consistent.

Wild Rice Turkey

1 1/2 cups wild rice
2 cups finely chopped onion
1/4 cup golden raisins
2 apples, chopped
3 cups chicken broth or chicken stock
1 1/4 tsp. thyme
1 tsp. salt
1/4 tsp. marjoram
3/4 tsp. sage
1/2 tsp. pepper
whole turkey brest (4 lbs. or so)

Mix rice, onion, raisins, apples, thyme, salt, pepper, sage, and marjoram until consistent. Put thsi mixture on the bottom of the pot. Cover with chicken broth/stock and make sure all of the rice is covered with at least a quarter of an inch of liquid – if not, supplement with some water or additional stock. Place whole turkey breast (thawed, of course) on top. Cook on low for eight hours and be sure to check the temperature of the turkey before you remove it (it should be 160 degrees F or roughly 75 C).

Stuffed Zucchini

1 medium zucchini or squash, halved lengthwise, with seeds removed
1 cup tomato sauce
1 tbsp. red wine vinegar
1 onion, chopped
1 tsp. minced or powdered garlic
1/4 cup brown rice (uncooked)
1 tbsp. parsley
1 tbsp. basil
1/8 tsp. black pepper
Mozzarella cheese (optional)

Put the zucchini halves in the bottom of the crockpot. Mix the tomato sauce and vinegar together in a small bowl – a cereal bowl works. In another bowl, combine the onions, garlic, rice, parsley, basil, and pepper and mix thoroughly. Add two tablespoons of the tomato-red wine mix to the onion mix and stir thoroughly. Put the onion mix on the zucchini halves, then pour the rest of the tomato-red wine mix on top. Cook on low for 6 hours.

Three Bean Stew

1 cup dried lima beans
1 cup dried great Northern beans
1 cup dried chickpeas / Garbanzo beans
4 cups water
16 oz. carrots (baby or sliced full carrots)
1 1/2 cups chopped onion
2 1/2 cups or 1 14 oz. can diced tomatoes
2 tbsp. tomato paste
3 garlic cloves, minced
1 tbsp. parsley
1 tsp. basil
1/2 tsp. thyme
1/2 tsp. salt
1/8 tsp. pepper
1 bay leaf

Soak the beans together overnight in water by putting the beans in a pan, then adding water until there’s an inch of water on top of the beans. Drain the beans and place in crock pot. Add the water, carrots, oinion, garlic, parsley, basil, thyme, pepper, and the bay leaf to the crock pot. Cook on low for eight to ten hours. Add the tomatoes, the paste, and salt and cook for another hour on low. Remove bay leaf and serve.

Barbecued Ribs (it doesn’t beat slow-cooked on a grill, but it’s very good!)

4 lbs. baby back ribs, lightly peppered and salted
2 cups catsup
1 cup finely diced tomatoes
1/2 cup finely chopped onion
1/8 tsp. cloves
1/4 cup vinegar
2 tbsp. pepper
1/2 cup packed brown sugar
2 tsp. oregano
2 tsp. Worcestershire sauce
hot sauce to taste

Rub the ribs down with salt and pepper. Put them in a shallow baking pan and bake them in the oven for 15 minutes at 400 F / 200 C. Turn the ribs over and brown for another 15 minutes in the oven. While it’s browning, mix the other ingredients in a bowl. Take the ribs from the oven, place in a slow cooker, pour the sauce over the ribs, and flip the ribs around to coat them. Cover and cook on low for eight hours. Delicious!

Good luck!

Monica writes in:

I don’t understand how you can recommend that people shop in thrift stores for clothes. The stuff there is usually worn out and just looks bad and outdated. I would never wear that stuff to work.

It sounds to me like you’ve made up your mind about thrift stores and secondhand stores before even stepping inside the door. I’ll make the case anyway.

First of all, I won’t buy the vast majority of clothing on sale at such a store. I’m with Monica on this one – most of the stuff there can be pretty worn out. I’ve seen lots of threadbare sweaters, worn out dress pants, and other items that, if they were in my home, would be meeting the rag bag.

Those aren’t the items I’m shopping for. The reason I go is to look through a long rack of clothes and find two or three items that are barely worn. How do quality items of clothing get to the secondhand store? A person gains or loses a lot of weight. A person passes away. A person decides they just don’t like how the item looks on them. A person is a clotheshorse who only wears an item a couple of times before getting rid of it. Each of these cases can result in some very nice clothes on the rack at the secondhand shop.

If you don’t like the item, don’t buy it. However, there are a lot of gems buried on the racks if you’ll spend some time digging through them.

Second, my biggest focus for clothing buys – once they meet a minimum standard of quality – really is cost per use. Yes, unquestionably, I could go to a store like Men’s Wearhouse, find a high quality article of clothing, and wear it, say, sixty times over the course of several years. That article of clothing might cost me $60, so the cost per use would be $1 per use.

On the other hand, I might find a nice item at the secondhand store. It might have been worn a few times already, so I might only get fifteen wears out of it instead of the sixty I might get from the new shirt. However, that secondhand item only cost me $3. That’s $0.20 per use.

I will take the second item of clothing any day of the week.

What about the time cost? Time cost is one of the first things people mention when they hear a money-saving tactic that they’re unsure about. Human beings are creatures of habit and if we can find a good reason to retain that habit (or even a not-so-good reason), we’ll use it. Time cost is often that reason.

However, in this situation, time cost matters little. I go clothes shopping twice a year, period.

In the spring, I’ll dig out all of my summer clothes (in fact, I’m intending to do this this weekend), determine what needs to go and what can stay, and then figure out if I need to add some clothes to the mix or if I have enough. I do the same thing in the fall with my winter clothes.

Once that’s done, I actually make a shopping list for clothes. I need some number of dress shirts, some number of jeans, some number of shorts, some number of khakis, some number of underwear – you get the idea. Then, I go shopping.

If I use secondhand store clothes in this process, I still just rotate them out at season’s end if they’re too worn, the same thing I’ll do with clothes that are purchased new. I’ll still go clothes shopping twice a year, regardless of whether I’ve bought new or used clothes in the past.

What this comes down to is simple: spending control. I keep a pretty tight rein on my clothes shopping habits. I simply don’t go clothes shopping more than twice a year. Because of that, I don’t devote much time in a given calendar year to picking out new clothes – and I don’t spend nearly as much money, either.

At its heart, an awful lot of frugality and financial success comes down to control over your spending. If you have firm control over how your money leaves your wallet, it’s often shocking how many ways there are to cut your spending without cutting your quality of life one iota.