Most articles focus on the financial nuts and bolts of the things you should have in order before you consider buying a home. You’ve got to have good credit. You’ve got to have a down payment. You’ve got to know the housing market. And so on.

Yet those aren’t the only important things to be thinking about. Here are four somewhat unorthodox things I would strongly suggest any prospective homeowner seriously tackle before buying a home.

Save a significant amount each month like clockwork for at least two years.
A mortgage payment requires financial discipline as well as enough money, period. Can you cover the mortgage? The insurance? The taxes? The constant expenses that go with homeownership?

Use a mortgage calculator to figure up what your monthly mortgage payment will be. Tack 50% on top of that for insurance, taxes, and other expenses. Subtract your current monthly rent payment from that.

If you can’t save that amount each month, then you’re not ready to buy a house of that size.

People will give all sorts of reasons why such a statement isn’t true.

“You really don’t need that much money each month.” Let’s hear that refrain again when your hot water heater fails at the same time as you need a new lawnmower and your lawn needs re-seeding.

“Our lifestyle will be different when we own a house.” In what way? The only major change will be that you have less spending money and, most likely, more room to store stuff.

Such statements are merely ways to pass the buck on to your future self, the responsible one who owns a house and makes more money and makes all of the payments. If that person doesn’t exist now, merely owning a house won’t make that person exist in the future. Don’t ever base your plans on what you hope might happen someday.

Take responsiblity now. See whether or not you actually can make it work in terms of your month-over-month finances. If you can’t do it now, then you won’t be able to do it then.

Sell off all of your stuff that you don’t use.
The less stuff you have, the less space you need. The less space you need, the smaller house you need. The smaller house you need, the more likely it is that you’ll be able to afford that house.

Go through your closest. Pare down. Get rid of stuff that you don’t use.

If you sell off a lot of your stuff that you don’t use, you’ll not only realize you don’t need as much space as you thought you did, but you’ll also find that you suddenly have some cash in hand that can help you move towards actually owning a house.

Even better: the less stuff you have, the easier (and less costly) it is to move.

I’m not arguing on behalf of selling off stuff that has value to you. I only suggest that you go through your closets and cupboards and get rid of the stuff that you don’t use. It’s just sitting there taking up space, convincing you that you need more living space, when in fact it could be money in your pocket and freedom in your life.

Fix some stuff.
If you’re a renter or you live at home, it’s easy enough to call a landlord or a parent when there’s a problem. “The toilet seems to be broken.” “There’s no hot water.” “Why won’t the dryer dry my clothes?” “There’s water flooding the basement.”

Here’s the catch: when those things happen in a house of your own, it’s up to you to fix it. If you can’t, you’re going to be shelling out fistfuls of cash to pay someone to do it.

When you’re living in such an environment, you’ve got a perfect opportunity to learn how to do such things with something of a safety net. When the toilet breaks, try to fix it yourself. Watch some YouTube videos on toilet repair. Identify what parts you need, find a good hardware store, and pick them up. Give the repair a serious attempt all by yourself.

If you can’t do it, then report the problem. Don’t just walk away, though – watch and learn from someone who can do it. Watch your landlord or the repairman. Try to figure out where you went wrong and how you can avoid it next time.

Even if you fail, you’ve learned some things. You’ve learned how to use tools. You’ve learned how to identify problems. You’ve learned what the equipment looks like. This will make solving future problems much simpler and much more cost-effective, especially when you’re living in your home and something goes wrong for the first time.

Figure out why you’re buying a home – there are lots of bad reasons and non-reasons to buy.
Don’t buy a home because that’s what you’ve been told you’re “supposed” to do.
Don’t buy a home because that’s what you think you’re “supposed” to do.
Don’t buy a home because it’s a good investment for the future. It’s really not all that great of an investment.
Don’t buy a home because you might get married and have kids someday and you need the space for this hypothetical future.
Don’t buy a home because you think it will lead you to some sort of idealized suburban life. A home won’t change who you are.
Don’t buy a home because you’re trying to “keep up” with someone in your life. It’ll make you fall further behind in the long run.

Buy a home because you it truly makes sense financially and you’re ready (and excited) to deal with the challenges of homeownership. Buy a home because it’s better for your housing dollar than the other options available to you.

Buy a home because it’s what you want and it’s what you can handle, not because it’s what others want.

I started using Quicken 2010 recently. I like it. I don’t love it. It does enough frustrating things to sometimes make me not want to use it, but every once in a while, it just clicks and enables you to see some great financial overviews.

The best part? For the first three and a half months of the year, we spent less than we earned even if you include the check written for our new vehicle. That was perhaps the best thing that Quicken showed me.

A more detailed review might be forthcoming if I can find enough truly useful things to say about it.

A year ago, I decided to cut entertainment from my life because I wasted a lot of time on it.

Any Suggestions ?
- Andy

You’re in a pretty tough spot for financial success because you’re inherently tying your own happiness to material things. That’s a pattern that can be very difficult to break – trust me. However, you will be much more happy and much more capable of achieving financial success.

I strongly encourage you to spend your spare time not playing with your PS3, but exploring other interests. Try things that have intrigued you in the past but you passed up on because of the influence of others or your own lack of self-confidence.

As long as your sense of happiness and normalcy comes from material things, you will always find it difficult to succeed financially.

I know you are a fan of Magna-Tiles and I am interested in getting some for my daughter for her fourth birthday. I have found several different sets. I am assuming you recommend the $100 set and if I was to choose today, I would go with the clear colored plastic. But since you recommend them I thought I’d ask for particulars. Any insight would be appreciated, as always.
- Ian

My children received the Magna-Tiles 48 piece set (the colored plastic, not the translucent kind) as a Christmas gift a couple years ago. They’re four and two now and the Magna-Tiles are unquestionably their favorite toy. They constantly drag out the set, build all sorts of structures, and then are happy to do it all again the next day.

There are plenty of tiles in the 48-count set to build lots of things and it alone will give you a good indication of whether your children “click” with Magna-Tiles or not. The 100 piece set is quite a bit more expensive.

As for us, a larger set of these tiles is something we’re considering for a future gift for our children.

I have read quite a few bolg but want to ask you the question about how many children one can have and whats the effect of the no. of children in overall finance in you perspective.

Because I personally think that the population can cause the more effect on overall finance of the individual as well as society as resources are limited. This I can surely tell you with my personal experience as I am leaving in India.As you are now moving to your thired child how can you see your personal resposibilty towards controling the popuation overall. Certainly the more no of people adding the stress to resources which ultimately increase the prices of commodities and affect the finance overall.
- Parag

The concern about how more children will affect the world is a macroeconomic question. The information to look at is global population growth rates, which peaked at 2.2% at about 1960 and has declined to around 1% today and is steadily declining. If current trends continue, we will be at zero population growth by 2030 and will possibly dip into negative growth at that point.

The individual decision whether or not to have kids is a microeconomic one, though it’s connected to the larger question. Undoubtedly, society (in a global sense) has changed since 1960 and the value placed on having children has declined. Many more people consciously forego having children. Usually, it’s because they have other interests and values to pursue in life, interests and values that were quite possibly not available to the average person fifty years ago.

My belief is that not having kids for the environment’s sake is simply an easy answer to the complex decision of becoming a parent. The problem with that decision is that many people who are capable enough to understand how complex and challenging it really is often choose not to have children at all, feeling that their life energy is better spent elsewhere. If you’re intelligent enough and insightful enough to seriously begin to question the ecological implications of having a child, you’re the type of person that should be a parent, because what children need more than anything are stable and intelligent guiding hands toward adulthood, and the children that receive that are the ones who inevitably end up moving the world forward.

Adoption might be the best overall answer here, but that has its own problems, mostly borne out of a draconian adoption system.

I have been living in my current city ever since I moved to the US. I however had been lucky to visit other friends in different cities throughout the country. Right now I’m working as a IT contractor for a bank as a help desk analyst. I’ve always wanted to try and move to a different city, for example a city like Chicago. The only thing is that I also have a side mobile dj business. I’ve started this business several years ago and the community now knows me. I feel that if I move, I would have to start from scratch all over to build my clientele. I’m in a niche market in my city so there aren’t too many mobile djs like there are in bigger cities so this gives me an advantage. I guess what I’m trying to say is that I have the fear of moving because I feel I would have to start all over again in a new city with my mobile dj business. This has been something I’ve always wanted to do as a child and hopefully one day will be able to do it full time. What should I do?
- Lee

It’s easy: stay where you are and try to build a reputation beyond your city’s borders. Be the absolute best DJ you can be. Use the internet to promote yourself. Hand out cards like crazy when you put on a good show to spread your name around. Do everything you can to maximize your word of mouth.

If you really want to do the mobile DJ thing full time, you have to focus on it. Make everything about the venture as high quality and impressive as possible. Eventually, word of mouth will build for you and you’ll find gigs outside of your local area.

It sounds like you have something of a healthy start where you’re at right now. That’s why you should stick there. Just kick it up a notch.

Lee also asked me something of a follow-up question…

I really don’t know what to do with my life. I went to college and studied Mass Communication. I then moved up to New Jersey to work for a small television production company. I ended up getting burned out and then came back to my hometown. I then worked for the local NBC affiliate here. It was fun however I felt I didn’t have a life as television is a 24/7 business. Afterwards I took some time off and then decided I wanted to be in the travel and tourism business. I worked for AAA in customer service and really had a great time doing that and did that for several years, however the pay wasn’t that great. My brother who works for the same bank that I do recommended my name to a manager who was looking for someone in technical support. I went for the interview and got the job. Today I work on the help desk troubleshooting computer problems. I enjoy certain aspects of the job, but other times I feel its so boring and it feels like a dead-end job. I am very customer service driven and am a people person. I sometimes contemplate going back to AAA but then I think about the amount of money I’m getting paid now. I just don’t know what to do? I have looked into other fields of study but don’t know if I want to start back all over again. I’m soon going to be turning 30 and feel pressured that I haven’t done anything with my life and all my friends are getting married and know what they are doing with their lives. Any or all help would be most appreciated.
- Lee

I think the answer to the previous question is what you should be looking at. You dream of doing the DJ business full time, but you’re letting your energy and focus drain away in all of these other areas.

Stop.

Find a job that pays reasonably well that you can do while keeping as much energy and focus and time as possible for the business you dream about. Don’t let that job grind you down. Do what you need to do there and focus your thoughts and energy on building what you really want. Look at the other job as something you spend time each day doing simply to keep food on the table. You. Are. A. DJ. The other job? It just helps pay the bills.

I am hitting the time of year when recruitment season is on in my chosen profession, and every year I face a dilemma about what to do. I love my job, but it is a non-union job and I am making about 20k less than I could be. The problem is, the union jobs are very hard to get. Last year was the first year I even got on the eligibility list and then they did not have jobs. The other issue is that I have certain freedoms in my non-union job that I would not have if I took a union contract, such as more money to spend on supplies and equipment, and a boss who pretty much lets me do whatever I want to. I feel in some ways that the union job would constrain me in ways that would affect my quality of life. But 20k is a lot of extra money. I am doing okay on what I am making because I am careful, but there is no denying that 20k plus the union benefits is a big deal. I have a special qualification that is in greater demand than the general one and I have been told it is likely the union will offer me at least a half-time position for next year. Everyone is saying take it and thank your lucky stars. But my problem is that when I think about what my ideal job would be, it pretty much is the job I have right now, but with more money. And that is not really a possibility. I am torn, as I am every year at about this time, about what to do. I know I will get a 2% raise this year if I stay at my current job but that still will leave me very under-payed. On the other hand, except for the money issue, I really do love the job…
- Joanna

What do you need the money for? Do you have financial needs that are un-met?

If you’re happy with your job and the state of your life right now, don’t switch. You’re switching for money, which mostly just means more stuff and more taxes, and giving up big aspects of your job that you like.

Do you really need the money? From this, I don’t think you do, at least not in comparison with the personal value you get out of your current job. I’d stay there.

My brother-in-law and his wife are trying to buy a home, but have no down payment. They need $5,200 and have asked us for it. DH and I have been blessed recently with decent-paying (albeit time-consuming and sometimes stressful) jobs. They have very low-paying jobs that they love and live on government assistance. On the one hand, I feel like their lifestyle is a choice that they have made (to work fun jobs in exchange for living on less money). On the other hand, they are family and we want to help them. They are not entirely frivolous with money, but they do enjoy nice things that even we can’t afford (flat screen TV, $18k new car, etc.) We technically have the funds, but it would take every dime of savings and leave no emergency fund for us (not even a baby one.) We are still working on our own debt repayment from college, but with our new jobs we should be able to be debt-free by fall 2010. What would you say to someone with great cash-flow, but little savings in this case?
- Em

Don’t loan money to family members.

Think about it this way. Do you have lots of strong, warm, fuzzy feelings for your lenders? Probably not. You view them as a necessary evil and see them as just a source for cash.

Is that the type of feeling you want to add to your relationship with your brother-in-law and his wife?

If you want to give them the money, give them the money. Call it a one-time gift. Or give them part of the money. Just don’t become their lender.

The Tea Party movement is getting a lot of attention in the media right and while I don’t buy into the whole “real America” aspect of it, I am interested in smaller government and less taxes. I heard someone quoting numbers like “we pay over 70% of our income to taxes” which sounded a little high to me – he was even including sales tax. How would you compute how total tax you pay (income, FICA, social security, state, local, sales, etc)?
- Lisa

On a direct basis, most people don’t pay 70% of their income in taxes. Income, FICA, state, and local taxes rarely add up to 40% or more – on occasion they do, but not always. Property taxes can take another 5% or so, as can sales taxes.

The idea that taxes take up 70% of a person’s income comes from indirect taxes. If a corporation pays 10% of its revenue in income taxes, then 10% of the sticker price of an item you buy from that company goes to taxes. If your local grocery store has to pay some proportion of their employee’s income in payroll taxes, that’s reflected in higher prices on the shelves.

Does that add up to 70% of our income? I think you could argue about that until you’re blue in the face, but I at least see where they’re coming from. They’re simply moving all business taxes and other such taxes onto the customer’s tax burden.

We have an aggressive plan to pay off our mortgage in the next seven years (we just bought a place last month). One option we have been debating is to re-cast the mortgage for a lower amount by paying down around 20% of the mortgage. The other option is to make extra mortgage payments but keep the loan amount the same. Is there one option you would recommend over the other?
- Sag

Most likely, the first option is better.

Your best bet is to pay as much extra as soon as you can if your goal is to pay off the mortgage as fast as possible. If you can afford to throw a significant amount at the mortgage right now, that’s a better move than doling it out slowly over time.

Why? The lower your principal on your loan is, the less interest you’re charged each month. If you knock off 20% of the balance of the mortgage right now, your monthly interest payments go down 20%. So, let’s say you hypothetically have a payment of $1,000, of which $800 is interest and $200 is principal, if you make that big payment now, your future payments immediately jump to $640 interest and $360 principal.

Do you drink? What’s your take on alcohol?
- Aaron

I drink small amounts, usually socially. I like to drink a glass of red wine with dinner and I’ll sometimes have a beer at a social occasion. I do enjoy making my own beer, but I mostly just share it with friends.

I don’t really feel the need to always drink at a social occasion – in fact, at most of the ones I attend, I don’t drink.

Moderate red wine consumption may help protect against certain cancers and heart disease, and can have a positive effect on cholesterol levels and blood pressure. And, again, I’m talking about moderate – a glass with supper.

I have no interest in getting “drunk” and losing control of my faculties. That’s just unpleasant to me.

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.

After seeing more than a hundred comments and several dozen emails about the rewashing Ziploc sandwich bags article from last weekend, I felt it was appropriate to address the most common follow-up question:

You’ve mentioned yourself in the past that you re-wash Ziploc bags! What gives?

I do, in fact, rewash those large, ultra-durable gallon-sized Ziploc freezer bags. Those bags have a very different cost proposition than the cheap, flimsy sandwich bags. I think it’s only fair to run through the calculations on these bags as well.

As before, let’s get the data.

First of all, according to my own experience, you can wash and re-use a single Ziploc gallon-sized freezer bag an average of nineteen times, for a total of twenty uses. My test, as with the sandwich bags, is seeing whether or not the bag will hold water afterwards.

I also timed how long it took to handle each individual bag to properly clean and dry it. In order to get it clean and also get it appropriately dry, you have to pre-rinse the bag a bit, then carefully spread it across as many dishwasher tines as it will fit around. With some practice, I was able to get this procedure down to about twenty seconds a bag, just the same as a sandwich bag.

How much water and detergent is used to wash a bag? I could fit eight bags on the top rack of our dishwasher. According to my calculations, the cost to run a full load is 15.6 cents worth of detergent and water. This means each bag uses 0.9 cents’ worth of detergent and water to get clean, again, the same as a sandwich bag.

Several people wondered about the details of this calculation. I am able to get eight Ziploc bags on the top rack of the dishwasher. Imagine putting the bags in there in a three-by-three pattern, then taking out the central bag because it would cover up the spout connecting the top and bottom shelves. That gives you eight bags which, on the whole, take up half of the space in a dishwasher load. Since a load would cost 15.6 cents, the eight bags themselves cost 7.8 cents to wash, averaging out to 0.9 cents per wash.

How much do such Ziploc gallon freezer bags cost? You can get 152 Ziploc gallon freezer bags for $10.98 at my local Sam’s Club. This calculates out to a price of 7.2 cents per bag.

If you can’t already tell, the math in favor of washing bags is much better for gallon freezer bags than it is for sandwich bags. Let’s do the math.

Over twenty uses of a Ziploc freezer bag, you can either buy twenty of them at 7.2 cents a pop (total cost: $1.45 after figuring in rounding) or you can buy one of them for 7.2 cents, do nineteen washes at 0.9 cents a pop (total cost: 24.3 cents), and invest six minutes and twenty seconds in the washing.

Thus, the savings for rewashing gallon Ziploc freezer bags (assuming the 20 seconds per wash I state above) is $11.46 per hour of washing effort.

Many people claimed the time investment per bag is less – it might just be that I’m painfully slow at this. If you spend only ten seconds per rewash, then the savings is $22.93 per hour.

This is much more palatable for my time investment than the dollar and change per hour that you would earn rewashing Ziploc sandwich bags. Add on top of that the environmental factor – putting plastic in the garbage isn’t the best environmental choice – and I’m pretty happy rewashing the gallon freezer Ziploc bags. The sandwich bags? Not so much.

Another note: the best solution for sandwich bags is to minimize their use. Use sturdy, reusable containers instead, like Rubbermaid containers, that are practically invincible. These will easily hold sandwiches and the like. The only time I use Ziploc sandwich bags is when our children leave the house without us and have a brown bag in hand, because if I sent reusable containers with them, the odds aren’t the best that I would ever see the containers again.

My wife is literally due any day now. She’s no longer working as per her doctor’s request – instead, she’s staying at home, resting a lot, and doing some “nesting”-type activities to get ready for the child’s arrival.

I can’t wait.

Photographing Children- Portraits After my recent mention of expensive child photography in a reader mailbag, another thoughtful reader sent along this great article on planning your own photography. The only thing I would miss, quite honestly, are the class photos. We actually do this type of thing for many family photos and other such things. (@ more style than cash)

Are You an Over-Buyer or an Under-Buyer? It depends on the item. I tend to underbuy until I understand intimately what I’m buying and why, at which point I sometimes overbuy. (@ happiness project)

Job satisfaction: A study in favor of an uncluttered, detached career This is a really fascinating study that seems to indicate that job satisfaction is tied to the ability to detach yourself from your work when you need to. I’ll say that when I couldn’t do this, I was much less happy than I am now that I’m able to do so. (@ unclutterer)

It All Boils Down to Responsibility I don’t necessarily think it’s an “evil” thing for adult children to receive money from their parents. However, if that money is enabling them to live an unsustainable lifestyle, that child is going to have some incredibly serious problems if the gravy train goes away. (@ one frugal girl)

Meet our new automobile, a 2004 Honda Pilot, which we purchased as a replacement for our ailing, rusty 1997 Ford F-150 pickup:

We purchased it a few weeks ago, paying cash, while simultaneously selling off our truck. Perhaps most interestingly of all, we found the vehicle on Craigslist, bought it locally, and got a very good deal on pretty much the exact vehicle we wanted.

Why Did We Buy?
Our 1997 Ford F-150 was approaching 200,000 miles and was having quite a few issues, including some significant rusting, engine problems, starter problems, a damaged flywheel, and a few other things going on with it. Not only that, we had a third child on the way, so we knew that we would need at least one vehicle that would comfortably seat all five members of our family, as neither of our vehicles did this really well.

Our primary buying concerns were space and reliability. We wanted a model that had a track record of reliability that also afforded the space for three children at a minimum (and perhaps one or two more).

Deciding What to Buy
We started by looking at Consumer Reports, J.D. Power, and other consumer publications that offered survey-based ratings of both new and old models. We actually began our search in late 2008 (!) by simply collecting data on all vehicles that could seat six or more and were made between 2000 and 2009. This pretty much restricted us to vans and SUVs.

We then began to rate them based on other criteria. How reliable were they according to the survey data? What was the gas mileage like? Does the brand or the model have a history of expensive repairs?

We wound up developing a spreadsheet of various van and SUV models, which I separated into three classes – Strongly Interested, Possibly Interested, and Avoid. The “strongly interested” models (of which the Honda Pilot was one of the top entries) were ones that had a history of reliability and at least passable gas mileage. The “possibly interested” ones had a few question marks but would have been acceptable purchases. The “avoid” models were ones that just weren’t up to snuff.

We then used various pricing sites to come up with prices that we were willing to pay for the models, particularly the ones we were interested in. We did not anticipate much value for the truck – we were largely assuming we would just buy the replacement and find the best way to offload the truck, even if it meant simply throwing a sign in the window and parking it somewhere.

The Search
We then spent fifteen months looking regularly for the right vehicle. We received lots of calls from local dealerships. I test drove quite a few vehicles along the way, as did Sarah. (One lesson learned – I don’t fit well in a Dodge Grand Caravan.)

As time went on, we started to look more and more into “alternative” pathways for buying a car. I discussed the ins and outs of this with a friend of mine with some legal expertise who advised me that I’d largely be fine with direct buys as long as we researched the vehicle ourselves and had a notarized and well-worded bill of sale.

Along the way, we saved diligently for the purchase, putting more than a healthy car payment away each month so that we could pay for the right vehicle completely out of pocket when the time came. We kept this savings entirely separate from everything else and never looked at it as part of our emergency savings.

One weekend, Rachel (click that link to find out more about her) showed us a local Craigslist entry for a 2004 Honda Pilot. The owners seemed to be asking a very reasonable price for the mileage and condition claimed, so my wife elected to give it a look.

My wife inspected the vehicle, test drove it, got the VIN number, and had it inspected. She reported to me that the previous owners were seeking to sell mostly because they needed to improve their monthly cash flow and debt situation – meaning, of course, that they still owed money on the car. She also reported that the vehicle was in stellar condition, as it turned out that the previous owner actually worked on automobiles for a living.

We obtained a vehicle history report for the VIN and didn’t discover any obvious red flags. We met again, where the owner expressed interest in buying my truck at the same time, in effect turning it into something of a vehicle swap with cash added to it. He wanted a vehicle for some very local commuting and, after driving it a bit and poking around under the hood and under the vehicle for a while, said he thought he could patch it up for a year or so and then he would probably sell it for parts.

The Sale
I contacted a lawyer about what steps to take to ensure that this purchase would be successful. He advised us to draw up a very specific bill of sale which indicated the specifics of the sale, that we do the transaction at the bank where the owner’s loan was held, and that we get the bill of sale and a lien release both signed and notarized while there.

So that’s exactly what we did. We conducted the full transaction at the bank, handed over a check, signed the papers, and drove off on our new Pilot. We wound up paying about $1,500 under the blue book value for the vehicle. We received the title within two weeks of the sale and I paid the appropriate taxes and fees at the county offices shortly thereafter.

Are We Happy?
Absolutely. The vehicle has run wonderfully since the purchase and has met our every need. It has plenty of space in the second row of seats for our three children and enough space in the back to haul bicycles (which we’ve already done). We received a full maintenance schedule with the vehicle and figure that we’ll be due for our first significant maintenance in late summer.

In short, we’re thrilled with the purchase. Our patience and diligence paid off – we got the vehicle we wanted for a great price and we were able to just go write a check for it, easy as pie.

Each year, my wife and I give a certain portion of our income to charity. We usually select a few charities to help out at the start of the year and donate a significant amount to that small handful of charities. This helps us budget our charitable giving throughout the year.

But it’s not always that easy.

Our first attempt at dealing with charity was simply to give away our entire annual charity budget pretty quickly at the start of the year. That way, we would find it very easy to simply tell charity requesters that we’ve already given all of our money for the year.

But we ran into a few problems along the way.

What about unexpected events? Things like the Sumatra earthquake in 2004 or Hurricane Katrina or the Haitian earthquake in 2009 are simply massive human disasters where immediate donations are really vital to help people survive an unexpected disaster.

What about small charities with social ties? I have enough nieces and nephews and friends to know that there’s usually a regular deluge of fundraisers and other such minor giving situations throughout the year. I’m not going to hide from the girl down the street that plays with our kids almost every day when she stops by selling Girl Scout cookies. I’m going to stop by the bake sale held by the parks and recreation department to help keep youth sports free (or as low cost as possible).

We both wanted to give in both of these areas. We wanted to help out the community fundraisers throughout the year and to donate some money to big disasters, but we didn’t want that money to impact our financial state, either.

Our solution was a charity account.

Starting last year, we started putting a small amount each month into a “next year’s charity” account. So, right now, for example, we’re funding a “2011 charitable giving” account. We adjust that amount a bit based on our income, but once January 1 rolls around, that account is locked. The amount in that account is what we’re going to give to charity for the year.

We immediately donate about 40% of it to charities we know we wish to support so that we’re sure those charities are supported.

The rest of the money is doled out throughout the year at bake sales, emergency fundraisers, and countless other little things where charitable giving comes up.

At the end of last year, we still had a fair amount in the account, so we divided up the remainder and donated it between Christmas and the new year.

This leaves one final question: how do we deal with charitable requests we don’t wish to give to?

We’re honest and straightforward with them. Yes, it might be a cause that we would like to give money to, but a person simply cannot give money to every charity in the world. I particularly do not like giving to charities that make unsolicited phone calls – if a charity calls and interrupts time I’m spending with my kids, I’m not going to donate to that charity, for example. If I do believe in the cause, I’ll find another avenue to donate, one that doesn’t support such intrusion.

How do I know if a charity is legitimate? I usually don’t sweat it when it comes to local charities. I don’t demand paperwork at the bake sales, for example. With larger charities, I use Charity Navigator to ensure that the charity is legitimate and uses most of the donated money for the reasons stated.

For quite a while on Facebook, I’ve been following a friend’s attempts at getting into better shape. He’ll post several updates about going to the gym regularly, how great his diet is right now (“I just ate two grapefruits for lunch.”), and so on.

Then I’ll see an update along the lines of “Too tired to go to the gym this morning.” This will often be followed in a day or two by something like “That new KFC sandwich is awesome!”

A few days after that, I’ll see some deeply remorseful entries (“Why do I keep failing myself?”) and then some serious resolve to make it all work again.

And the cycle repeats itself.

His desire is in the right place and, overall, he’s making positive progress. The only problem is that this progress is very much in the “five steps forward, four steps back” mold.

One step forward is better than “five steps forward, four steps back.” On the surface, the accomplishment is the same, but underneath it, the “five steps forward, four steps back” approach leaves you worn out mentally and physically and reduces your ability to really trust yourself.

I shot my friend an email and (besides asking if I could mention his story very non-specifically on The Simple Dollar) suggested that he try just accomplishing one thing in a week. Pick one very simple goal for the coming week and accomplish it. Let everything else just flow according to routine.

Guess what? About a week later, he posted that he had kept his eating under 2,500 calories each day this week and it was easier than he thought it would be. All he really did was just start off each meal with some very low-calorie foods, allowing himself to get partially full on them.

One simple strategy, one change that he can repeat and repeat and focus on and repeat some more until it becomes a normal part of his life.

I’m a huge believer in this “one change at a time” philosophy. I’ve seen it work time and time again in my own life. If I take on three or four big projects or changes in my life all at once, I usually end up failing at all of them. If I merely take on one at a time, I see success.

I’ll use a couple recent examples from my own life. Last summer, I simultaneously tried to take on a stronger exercise routine, a book manuscript, and a community organization goal all at the same time. The stronger exercise routine failed completely, the community organization initiative was mediocre at best, and the book manuscript wound up being almost a month late.

On the other hand, I’ve been completely single-minded about getting everything ready at our home for the baby and I’ve felt that I’ve been pretty successful at that. Things feel like they’re coming into place quite nicely, with most of the “big” things on our list taken care of.

Don’t worry about a big transformation in your life. Most big transformations never work over a short time frame. Instead, pick one little thing to change and focus in on that change like a laser beam.

I have more great ideas for projects than I ever possibly have time to complete.

I have a 2004 Santa Fe which is getting to be too small for my family. We have three kids now and plan to make it 4 and 5 in the coming years. (Though not within a year or so for the next one.)

We have excellent credit — probably mid- to high-700s.
- John

Drive it into the ground, then make the switch.

Of course, while you’re doing that, make payments as though you had purchased a new van. Set up an automatic transfer of $300 a month into a savings account to simulate a car payment.

If you make the current vehicle last three more years, then you have $10,000 in that savings account with which to buy your next vehicle. If you’re buying a late model used vehicle, then you’re probably paying for most of it right out of pocket – no payments, no interest rates, no anything.

We did virtually the same thing recently, and I’ll talk about that in a post in the next few days.

I am interested in using a site like Mint.com to help me keep track of where my money is going and to help me save. My boyfriend thinks that I would be potentially putting myself in a position for easy identity theft with something like that. What are your thoughts?
- Lauren

Mint, Wesabe, and such sites have absolutely stellar security practices. My concern would have nothing to do with their actual security practices at all.

My security concern would be with the fact that no point of security is perfect and the more points of security you open your information up to, the more likely there is to eventually be a failure. Assuming all security points are equal, the person with one security point open is more secure than the person with five open.

Is Mint worth opening up your personal information to another security point? For you, it might be; for me, it’s not. I strive to minimize the amount of information availability, even with reliable places. At some point, every security system fails because human beings are fallible. Mint does not offer enough value to me in order to add that additional risk.

I’m struggling with clutter, too. But in my case, it’s just me (I live by myself at the moment) – so there’s no conflict with another human about what stays/goes. I do have some pack-rat tendencies and where I don’t keep things for sentimental reasons, I seem to keep things because I always have “I may have another use for that” thoughts. I am a big arts-crafts person, and so a lot of the things I hold on to are because I can envision using them in a project – but of course there are a million more projects than I’ll ever have time for.

Help!?
- Adeena

The best way to think about clutter is to view the stuff you buy as a complete loss the second you buy it. It’s a sunk cost – it’s water under the bridge.

The fact that you paid $20 for a DVD three years ago does not mean it’s worth even a cent right now. It’s only worth a cent if someone’s willing to buy it. That $20 is lost.

As for donating stuff, Goodwill only takes things that they think they can sell. On top of that, you can get a receipt for all donated stuff and use it as a tax deduction in 2011, which will save you some money.

A few years ago, I begna aggressively paying down debt. I paid it all off- except one credit line (unsecured) for $17,500 Cdn. I decided it was fine to leave it unpaid as I had no savings and started putting excess cash into a retirement account.

But I wonder if I should maybe try to get a second job as well. I am scared I have no savings, just credit. Would you do that if you were me? Here’s the kicker- I am trained as financial planner – as if I had anything to invest.
- Danny

If I understand this right, you’re taking night classes to get your degree while working at a well-paying job during the day. I’m not entirely sure how a second job would fit into that equation.

Your focus should be on nailing solid grades and getting that diploma so you can eventually work forward towards an MBA. It sounds like you’re happy in your career and want the degree so that you can move forward. I don’t know the specifics of your field, but I would guess that if you’re working towards this diploma, you’ll eventually work towards the MBA.

So, no, I wouldn’t get a second job. I’d nail that diploma. I’d also live cheap while I was doing this and set up some automatic transfers from your checking account so that you can get an emergency fund built up.

My younger sister is finally graduating from college (5 years, 4 schools, 3 majors). Her degree will be in Business and she likes event planning and currently works for Lowe’s with some hopes to move up to Manager. I remembered reading a book review that you said you recommended for young woman entering the business world after school but can’t seem to find it on the website.

What book or books would you recommend that I get her as a graduation present? She is already pretty frugal, babysits and cleans my Grandma’s house for some extra cash. She is a typical blond who sometimes lacks common sense.
- Ryan

I would get her two books.

First of all, I’d pick up Your Money or Your Life by Joe Dominguez and Vicki Robin. It’s simply the best money book I’ve ever read because it’s, in the end, not really about money at all. It’s about life.

Second, I’d give her Michael Masterson’s Automatic Wealth for Grads. This book does a great idea explaining the things a self-motivated person should do straight out of college to build a strong financial position for life. It’s not easy right out of the chute, but it’s well worthwhile.

I have been at my current job as a event floral designer/event planner for a year and a half and I love it–I truly enjoy what I do. The only problem is that I bring home about $23000 per year working 40 hours a week (the maximum hours allowed by my employer). This is below my income potential (I brought home about $36000 at my last job in a different industry) and I know with my skill set and experience I could earn more. However, in my industry I would have to spend a much greater percentage of my time doing the parts of my job I dislike and find exhausting in order to increase my income, and I would have to find a different company to work for, as there are no opportunities for increased pay at my current job (advancement, yes, just not more money). It is also very difficult to find jobs in this specialized industry and many colleagues are currently out of work. So, do I leave my job and find one that pays more, even though I would be giving up a job I currently love? Or do I stay with the job I love and just learn to live on very little?
- Becky

This is the eternal problem. Quite often, the parts of our job that are the most fun are the parts that don’t bring home the bacon.

Take writing. If I just sat here and wrote all day, doing nothing but creating, I wouldn’t make a dime. It’s the other activities – talking to advertisers, negotiating book deals, dealing with comment approval, and so on – that puts the food on the table. I don’t like that other stuff at all, but it’s part of the equation. I have to do it in order to be able to spend swaths of my life doing the other things I enjoy.

At some point, you have to decide what your own balance is. Usually, the more “not fun” stuff you take on, the better you get paid. The more you reject it, the less you make, but the more time you get to spend doing the things you want. There is no “answer” per se – it’s about what each individual person wants in their life.

I am not sure if you have covered this yet before, but what is your feeling about Certified Pre-Owned cars. We are looking at buying a used car and it will be our (me, wife and 2 kids) only car. I commute to work every day on bike and the car is mostly for around town and road trips. I just want to know whether you think it is worth the extra money. Thanks!
- Jim

In my book, “certified pre-owned” is basically a substitute for a trusted mechanic. If you have a mechanic that you trust, you can take a car you’re considering driving to them and they’ll effectively “certify” it for you.

What you’re buying is a seal of approval saying that the automobile appears to be in good working order. Dealerships are quite happy to sell this seal of approval because it means they make more money for not that much more work.

Most used cars on a reputable car lot aren’t going to break down the second you drive them off of the lot or else the dealer’s reputation would be in the toilet. That doesn’t mean that “certified pre-owned” isn’t worthless – it’s often a guarantee against something they missed. But you can often get an effectively similar guarantee from a trusted mechanic.

Is it worth paying a thousand or two more for? If you don’t have a good mechanic in your corner, sure.

Would you replace a 15 year old dishwasher that still works but has a lot of rust on the racks (which I’ve heard can be painted over) because you could get a great deal on it now (that won’t be available in the future) rather than waiting for it to completely breakdown?
- Suzi

I’d probably replace (or at least fix) the racks, but not the dishwasher itself. I wouldn’t want to eat off of dishes that sat and dried on a rust-covered rack.

My solution would be to run down to the local hardware or RV store, pick up some liquid electrical tape and a good wire brush, stop by the grocery store and pick up some unsweetened Kool-Aid, then go home and brush as much of the rust off of the racks as I could. I would then pour six packets of the unsweetened Kool-Aid into the soap holder in the dishwasher, run the dishwasher with nothing in it, then brush the racks again (the citric acid in the Kool-Aid will help with the rust). Then I’d coat the racks in the liquid electrical tape to give them a cleaner, dishwasher safe coating.

Of course, I’m assuming there’s been no other problems with the dishwasher than the rusty racks.

I am entering a very transitional phase in my life and I am a little lost about how to go forward. I am getting divorced, I am graduating from college next May, I’m looking into getting a Master’s degree, my car will need replacing in the next 2-3 years. I just recently completed baby step 1 of Dave Ramsey’s plan. I have a small (about $1800) credit card debt, other than that I have a HUGE pile of student loan debt. Graduate school applications and the GREs will cost almost $1000, not to mention the cost of moving across the country or even overseas next year. Should I just keep making the minimum payments on the credit card and stockpile cash? How should I handle saving for a new car? I don’t mind driving an old car as long as it is reliable, I just don’t want to ever have car payments again. A stipend for a graduate student is barely above poverty level, so is it wise for me to consider going to graduate school when I have so many financial responsibilities? I’m just feeling like there are n things to spend money on, and only n-1 amount of money coming in!
- Ellen

For one, if you go to graduate school, you’ll most likely have forbearance on the student loans. You won’t have to pay them until several months after you actually graduate. Keep that in mind.

If you’re going to graduate school, do you really need a car? I was close with several graduate students who lived in the graduate student housing at Iowa State University back in the day and virtually none of them owned a car. The ones who did rarely used it for anything at all. Is it possible for you to go carless for a few years? There would be no payments, no insurance, and no registration costs, either.

If I were you and I were passionate about the field I was in, I would focus on getting into graduate school. If I accomplished that, then I would go absolutely minimal. I’d sell everything that wouldn’t fit into a bag or two, travel to that school by plane or bus, and live in the graduate student housing that existed there. I’d just forget about the car entirely until I actually needed it.

In a couple of months I’m moving from one side of Australia to the other, to an area with a lower cost of living and I hope, a better lifestyle for myself and my daughter. Estimated relocation costs have ranged from $2,100 – $2,900, and I want to spend the next month or so selling/giving away any items that I don’t really need to minimise the amount of furniture & belongings that have to be transported.

I’m hoping that this approach is good common sense, but I’m wary of either going overboard and ending up having to replace a lot of items that I could have moved, or of paying to move things that I might have been able to do without or replace cheaply. Do you have any ideas on how I can assess my belongings for their ‘move-worthiness’?
- Jay

Have you already purchased a place to live there? If I were you, I’d go very small when I moved. Find a very small house that has just the bare minimum amount of space.

Then, I’d sell almost everything before I left. Get rid of all of it that doesn’t have personal value. Then, when you arrive, decorate with minimal cost using Goodwill and so forth and upgrade piece by piece from there if you see a need to do so.

This will drastically reduce the cost of moving, increase the amount of money you have before you leave (because of all of the stuff you sold off), and allows you sto start from scratch and re-do your house in a realistic fashion that matches the new life you’re trying to create.

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.