This summer, I’m going to be posting a series of fifteen low-cost, tasty, and easy-to-prepare meals that are literally straight from my own kitchen.

One of my favorite ways to start a great meal is to look at the grocery store flyers.

This week, for example, I noticed that one of the grocery stores I regularly shop at had both chicken breasts and small soft tortilla shells on sale. When I see a combination like that, one thing immediately pops into my mind:

Chicken fajitas.

I love fajitas. They’re full of carmalized vegetables and all sorts of interesting flavors. Plus, they’re not all that hard to cook – all you really need is a skillet and a bowl.

The method I use is based loosely on the method described in one of my favorite cookbooks, The Best 30-Minute Recipe. I basically took their “Skillet Steak Fajitas” recipe and started modifying it, adding techniques and flavors I’ve found in other places.

Here are the ingredients:

20 ounces boneless, skinless chicken breast (you can have a little more or a little less)
1 tablespoon olive oil (for marinade)
1 tablespoon vegetable oil (for cooking)
2 bell peppers, cored and sliced thin
1 red onion, sliced thin
1 tablespoon water
1 teaspoon chili powder
2 tablespoon lime juice (lemon juice can work in a pinch)
1 tablespoon minced fresh cilantro
1 teaspoon Worcestershire sauce
1/2 teaspoon brown sugar

You’ll also need some fajita shells, the number depending on how loaded you make the fajitas.

The expensive part of this recipe is the chicken and the fajita shells. Everything else is largely flavoring or fairly inexpensive vegetables. Thus, this is a perfect recipe to make when chicken and fajita shells are on sale. Or, even better – plan ahead a bit and pick up one of them on sale, then wait a while for the other one.

The first step is simply to cook the chicken breasts in a skillet.

A few things to notice here.

First, I used the vegetable oil in the skillet before I started cooking. This keeps the chicken from sticking to the pan while cooking and helps a bit with the caramelization.

Second, I sprinkled some black pepper on the chicken as I cooked it. This is just pure flavor.

Also, note the meat thermometer over to the right. If you’re cooking any kind of meat, you need to have a meat thermometer to ensure that it’s well-cooked. Poultry needs to get to 180 F to kill off any harmful bacteria. I check it regularly while cooking and pull the meat off when it gets above 175 F (the temperature continues to go up a few degrees after you pull it off because the hotter portions on the outside continue to distribute heat to the inside).

While the chicken is cooking, I chop up the two peppers and the onion:

You can see my copy of The Best 30-Minute Recipe in the background there. The “bookmark” in it is actually a homemade sleeve for my favorite chef’s knife, made out of some spare cardboard and electrical tape. Seriously.

Keep the onion pieces fairly large. My pieces may be on the large side of what you’re looking for, but you can easily cut them too small. You want them to brown a bit when cooking – they’ll be delicious.

I also made the marinade that the chicken will soak in:

This is just a combination of the remaining ingredients: the olive oil, the chili powder, the juice, the cilantro, the Worcestershire sauce, and the brown sugar. Just put it all in a bowl, mix it around until it looks fairly consistent, and wait.

The cilantro came freshly out of our garden:

We have a ton of cilantro this year because we had a lot of extra “volunteer” cilantro from last year, far beyond what we expected. Time to make salsa, perhaps?

So, what’s next? When the chicken breasts are finished, pull them out of the skillet and put them directly on a plate. You can just let this plate sit out, or you can put it in the oven at 180 F or so for a while – either one is okay.

Your next step is to cook the vegetables. Just toss ‘em all in the skillet together!

You’ll want to do this over medium heat. Ideally, the leftover drippings from the chicken helps to brown the vegetables and infuse an amazing flavor into them.

Keep cooking the vegetables and stirring them regularly until the onions start to get nice and brown around the edges. It’s really up to you how long you cook them – just cook them until you’re happy.

While you’re cooking them, it’s time to tear apart the chicken breasts.

What I do is use two forks. I use one to hold the breast in place, then I use the other one to tear the chicken to shreds, usually by pulling that second fork through the chicken away from the first fork. It shreds pretty easily.

What this leaves you with is chicken with lots of soft tendrils coming off of it. Those tendrils increase the surface area of the chicken – and that’s when magic happens! When the chicken pieces are tossed into the marinade (which is what you do after tearing it up), those soft tendrils absorb and hold that marinade, adding tons of flavor to the chicken.

That’s pretty much it. Get your tortillas out, put some meat on them, put some vegetables on them, and eat!

What about that “poor man’s” Spanish rice on the side there, though? It’s really easy, too. Just cook a cup of brown rice according to the directions on the rice you purchase. However, replace half a cup of the water with about 3/4 of a cup of salsa (whatever you happen to have on hand works) before you even start cooking it. Cook the rice, fluff, and serve.

If you’d like, of course, you could just eat the rice with the fajita ingredients on top and skip the tortillas entirely (which is essentially what my son did).

The batch above made enough for two adults and two children for dinner, two adults for lunch the following day, and two adults for lunch a later day (the remnants were frozen). Our cost per meal wound up being less thn a dollar. Yes, that plate above cost less than $1 worth of ingredients.

That’s cheap, tasty, and healthy. And pretty easy, too.

This is the sixth entry in a fourteen part series discussing the time management classic Getting Things Done by David Allen. New entries in this series will appear on Tuesday afternoons and Friday mornings through July 16.

Last time, we focused on going through your mind, your home, and your workspace to collect together all of the loose ends and undone things in your life. Getting these things into one central location makes it possible to direct all of your energy and mental focus on dealing with these things directly instead of having to keep them in your mind.

What do you do after collecting all of those things, though? Quite often, the reason all of these loose ends were out there is because you didn’t have any sort of process for dealing with them. The “process” part of Getting Things Done deals with that very problem. On page 119:

When you’ve finished processing “in,” you will have:

1 | trashed what you don’t need;
2 | completed any less-than-two-minute actions;
3 | handed off to others anything that can be delegated;
4 | sorted into your own organizing system reminders of actions that require more than two minutes;
5 | identified any larger commitments (projects) you now have, based on the input.

What you basically do is this: you go through each item in your inbox and ask yourself a series of questions about it.

Let’s walk through each of these steps.

Does This Item Require An Action From Me?
An awful lot of stuff that will be in your inbox doesn’t require any action from you, now or later on. Some of it will be outright junk. Other things just need to be filed away. Some of it might be stuff that you’ll do someday, but it’s just a vague idea you want to sock away (like the name of a book you might want to read someday). A few of the items might be things that you want to examine at a specific point in the future, like an agenda for a meeting that’s happening in a week and a half, for example. But none of this requires any action from you – you just have to deal with it.

Here’s what I do.

I chuck a lot of it straight into the trash. I usually leaf through magazines, tear out what I might reference in the future, and chuck the rest. I chuck tons of junk mail. I chuck some statements. I chuck ideas that once seemed good but now seem pretty poor on reflection. All of it goes right in the trash, no questions asked.

I keep some lists of “future stuff.” For me, the big one is a list of books to read someday which I keep on my computer. Sometimes, when I have a spare hour or so, I’ll go through that list, edit it, and reserve some of those books at the library. But when I’m processing, they just go on the list. I’ll add movies I’d like to see to my Netflix queue. I also keep a big list of “someday” ideas – things I might come back to down the road – which I also keep on my computer. During my weekly review sessions, I’ll look at that “someday” list and, every once in a while, something will just “click” and I’ll pull it off of the list to actually engage in.

I file a lot of the documents. When I’m processing, I just toss stuff to be filed for later (like statements and so on) into a wire basket that sits on top of the filing cabinet. Then, when I’m all done, I file what’s in that basket.

I put some items in a tickler file. A tickler file is basically just a file with a date on it – the date at which I’ll need to look at that item again. I check such files during my weekly review and pull out any ones that are due to come up in the next week. This isn’t the place to put items for the calendar – in fact, most items in the tickler file are things that are associated with specific events I place on my calendar. Quite often, when I put something in the “tickler,” I also write a note to myself to add something to my calendar and toss that note in my inbox.

At the same time, I ask myself another question about each item…

Could I Do This in Two Minutes or Less?
Many of the items in my inbox are very quick things, like calling someone up or sending an email to someone or taking food out of the freezer for supper. If I see a task in front of me that I can do in just two minutes, I do it immediately. This often takes care of many of the items in my inbox.

I don’t spend a lot of time thinking about whether it’ll take two minutes or not – I just trust my gut instinct and run with it. If it takes five minutes instead of the two I’m expecting it to take, then it’s not the end of the world.

Can I Delegate It or Defer It?
Is there someone else that could be (or should be) working on this item I have in my hand? Sometimes – like when I’m going through some of the mail that’s found its way into my inbox, I find stuff that Sarah should look at. I sometimes find work-related tasks that need to be passed on to others. Maybe I just need to send out invites for a party (and the invites are sitting there in my inbox). In any case, doing that gets it out of my inbox and on to the appropriate person.

Similarly, I ask myself if this is something that can (or should) be done later, preferably at a specific date. Appointment notes are key examples of this, as I’ll often write down appointments in my pocket notebook and just toss the page in my inbox. Specific documents that are needed at a specific date are usually tied to an appointment and I put them in a folder for that week that goes in my filing cabinet – and I mention that document in my calendar.

Yes, a calendar is key. Anything that’s happening on a future date is recorded in my calendar and saved in one specific place. We’ll get to the specifics of that later on.

What’s Left?
What’s left at that point are longer tasks and projects, which should be a much smaller pile of things to do. I handle these separately by keeping a “next actions” list (one item on the list equates to one undealt-with item from the inbox) and a series of “project” folders in my filing cabinet, with the project folders coming together as described in the earlier piece about project planning.

In effect, this is the process I go through once a day with the stuff that I’ve collected in the inbox on my desk during that day. Of course, when you’re doing all of this for the first time, there’s going to be a giant mountain of stuff and processing all of it will take hours.

The Biggest Key Thing…
… is that nothing goes back into your inbox. Allen spells it out on page 124:

There’s a one-way path out of “in.” This is actually what was meant by the old admonition to “handle things once” [...] Where the advice does hold is in eliminating the bad habit of continually picking things up out of “in,” not deciding what the mean or what you’re going to do about them, and then just leaving them there. A better admonition would be, “The first time you pick something up from your in-basked, decide what to do about it and where it goes. Never put it back in ‘in.’”

Yes, sometimes it can be important to do an emergency scan of your inbox, but that’s because you’re looking for a specific item or you’re trying to fill a tiny sliver of time. Once a day (at least), you should sit down and process through that inbox, and when you do that, you should not put anything back into your inbox once you pull it out and start to look at it. Deal with it now, even if it’s tempting to move on to something else.

So, in the end, we have two steps out of our five key steps for managing all of the things you have to do in your life.

Collect, which simply means keeping all of the stuff you need to do in one place and (more importantly) keeping it out of your head so you can focus fully on the task at hand.
Process, which means taking all of that stuff you collected and determining what needs to be done with each item, including doing the short ones.

Next time, we’ll look at chapter seven, which focuses on the “organize” portion of this system, where we talk a bit more in depth about the various places you put stuff when you’re processing.

As many of you know, my new book, The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams is due to be released at the end of this month and should be available in bookstores all over the United States in early July. If you’d like, you can preorder the book at Amazon.com or preorder it from Barnes and Noble.

To put it simply, The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams tells the story of how I got into financial trouble and how I escaped from it. Intertwined with that story are the details on how exactly I did it, along with some really fascinating research into the deeper causes of my mistakes and how others make similar mistakes. Each chapter ends with five specific steps you can take to move forward in your own journey in line with the focus of that specific chapter – getting your debt under control, reassessing your career, figuring out what life you’d like to have and setting tangible goals to reach it, and so on.

Rather than just tell you all about how wonderful I think the book is, I decided instead to share the book with some readers of The Simple Dollar and let them tell you about their experience with the book. A few months ago, I sent an email to all of the friends of The Simple Dollar asking for twenty five volunteers to get a free early copy of the book. All I asked is that they read it, they tried out the ideas at the end of one of the chapters of their choice, and after a couple of months, they let me know their thoughts on the book and how the tactics worked in their own life.

So far, I’ve received 12 stories – a nearly 50% success rate, which is unheard of considering the effort I asked of the readers. I was hoping for three stories, not twelve, to tell the truth – that was the response rate that my publisher seemed to think that I would get in response to such an effort.

The variety of the stories really inspired me, too. Most of the people chose different chapters and came at things from entirely different angles, with all of them getting something out of the book. The stories peeked into such a wide variety of lives – different ethnicities, different stations in life (from fresh out of college to retirement age), different ambitions, different life goals, and different beliefs. Yet they all were able to find value from stepping back and re-evaluating where they were heading – and perhaps looking at it through a new light.

I have done no editing (with one minor language exception and one misnumbering of a chapter from the book in the middle of a paragraph) to any of these stories aside from editing a few personal greetings and other such notes from the beginning and end of them.

Here are the stories I’ve received. I hope you find some of them as powerful (and often poignant and sometimes humorous) as I did. Click on the name to jump down to their story.

Natasha discusses playing the “why’s” game from Chapter 17 which helped her effortlessly trim money from her food spending.
Sheila rethought her shopping experiences based on Chapter 8 and started planning more carefully for them, saving hundreds of dollars.
Rafal used five different tips from five different chapters to reinvigorate his career and build a personally valuable community of people around him.
Jaclyn used the advice in Chapter 8 to not only re-evaluate her money, but to minimize some negative relationships in her life.
Tonyre-establish a much deeper relationship with his wife using the advice in Chapter 13, starting with a intimate discussion about personal finance.
Christina, a married blogger, used Chapter 17 to seek out positive motivators in her own life instead of the negative ones which were sapping her energy and spirit.
Paul, a recent divorcee, used some of the ideas in Chapter 8 to add freedom to his life, including stepping up to the plate and tackling a triathlon.
Jess used the ideas in Chapter 17 of the book to address the personal, psychological, financial, and physical clutter in her life.
Mary used Chapter 13 as motivation to sit down with her boyfriend, only to discover they’d both been “secretly” lending money to the same person!
Brenda used Chapter 3 to get control over the chaos in her life – along with a realization that not everyone else has their life figured out, either.
Jessica used Chapter 14 to help her get a grip on the idea that retirement is coming, but that it doesn’t have to be doomsday for her life.
Michael used Chapter 10 to launch himself into an entirely new career path once he realized what the common thread between his passions was.

Natasha
… on Chapter 17, “Holding You Back”

My husband and I are in graduate school (and therefore aren’t earning much money while racking up student loan debt) but our goal is to buy a house when we’re all done, so we need to pay down our student loans and also save up for a down payment.

We’ve kind of kept a budget but not really done much other than track our spending and shrug when we go over. But we started to cull everything we could from our budget. No more cable television, no Netflix, no video game subscriptions, nothing superfluous. And from there, we started seeing where we could save money elsewhere, starting with our cell phones. We dropped our expensive plan (and phones) for a pay-as-you-go option, and are saving $60 a month that way, which I’m auto-depositing into our savings account. Taking Trent’s advice from this chapter to declutter, we’ve gathered together piles of books to sell online, which is on track to earn us about $250, which will go right into our savings. The biggest problem for us is food, not only for the money, but for the time and energy it costs. As I mentioned earlier, we have a budget, but food is where we consistently go over. And when we go over, we just…keep going over. So to address this barrier, I played the “Why’s?” game Trent mentions in his book.

Why do we spend so much on food?
Because we like to eat out.
Why?
Because cooking is hard.
Why?
Because picking recipes and getting all the ingredients together takes too long.

And this is where I had my A-ha! moment. We did make a huge production out of meals and grocery shopping, and had built our own barriers to make eating out much more attractive. So, we established a meal plan. I’ve planned a menu that we’ll recycle every week (same thing every Monday, etc.), with the proviso that we’ll refresh the menu when we get sick of it. This works in a couple of ways. #1: We always know what we’re going to eat, and there’s always something planned with all the ingredients in the pantry so there’s less temptation to eat out. #2: Shopping is way faster because it’s just the same list each time and we don’t have to worry about cobbling together whatever we have to make dinner; it’s all there and ready (utilzing the second tip in this chapter to establish a passive barrier). So, now that I’ve addressed the food budget barrier, we’re putting it into practice, and will at least hopefully stay on budget (saving us an average of $100 a month) or maybe even save money if we can streamline errant shopping trips and frequent meals out (saving potentially $400 a month).

Sheila
… on Chapter 8, “Frugality as Framework”

For my “test drive” of The Simple Dollar, I chose to work on Chapter 8, “Frugality as framework.” It seemed like a natural place to start, since frugality has become necessity for my husband Steve and I. I lost my job in June 2009, just three months after we married and some months before my husband would earn his provisional green card. With neither of us able to find work and having fallen victim to a (hopefully temporary) glitch that has caused me to lose my unemployment benefits, we find that we are having to rely on savings and need to stretch every dollar we can.

The first action step in this chapter is “Don’t give up the things you love.” Sadly, I’ve failed miserably at this one — we’ve had to give up nearly everything that we have enjoyed. My husband has had to sell most of his trap shooting and reloading equipment and I have stopped horseback riding, unable to afford the dressage lessons and fearful of hurting myself and generating additional medical bills. My husband is a real foodie, so we have tried to maintain quality of life in that department. After all, eating good food will keep us healthy and will help to keep Steve happy.

The second action step Trent suggests is “Find inexpensive ways to enjoy the things important to you.” We have had a bit more success in this area. Although Steve can no longer afford ammunition and shooting fees, he has been spending more time coaching the son of a friend. Our friend is more than willing to provide a huge back yard for a range, some ammunition, and boxes of clay birds in exchange for expert coaching for his son, who has been struggling academically and is finding better focus in his studies since he has been doing trap shooting. Steve also loves movies, and rather than going to the theater (too costly even for matinees), we have begun in the last month to borrow movies from friends and from our public library. We enjoy snuggling with our dog on the bed and watching a good film. We both enjoy the outdoors, and we take more frequent trips to area parks for hikes and to stroll through the botanical garden. Steve is getting better about suggesting free and cheap dates, since I planned the first few, and we’ve had a really good time.

Trent’s next action step for this chapter is to “cut back hard on the things that matter less.” When all my jeans ended up being more holey than godly, I re-read this chapter for Trent’s suggestions. I went to the thrift store to look for replacements, but I didn’t find any that fit me, so I found inexpensive carpenter jeans ($15/pair) at Target, and later I found a pair of imperfect jeans at another store for about the same amount. Steve and I began making our own laundry soap last year, using instructions provided by Trent on the Simple Dollar website, and it works just as well as the Seventh Generation detergent we had been using. As an added bonus, we’ve started to make batches or laundry detergent more frequently, swapping bottles of it with friends in exchange for homemade breads, gourmet dog treats, and other things.

Action step #4, “Never go shopping without knowing exactly what you want,” has been a lifesaver. My husband has always had a difficult time restraining himself at the grocery store, sometimes spending up to $500/month for the two of us. I started using a slow cooker and the book Fresh from the Vegetarian Slow Cooker this past month, and I began to plan meals for the week and build a shopping list accordingly. I am good at sticking to a list, and so I do nearly all the grocery shopping now, and we’re down to about $300/month in grocery expenses. There is still some room for improvement, as Steve did pick up some snacks and protein drinks that put the total up a bit. But we are doing much better, and Steve has loved nearly all the dishes I have prepared.

I laughed at Action step #5: “Use the thirty-day rule for any unplanned purchase.” Being unemployed, we have to put nearly everything on a wish list for when one of us is employed, not a 30-day list. That means parking the second car that now needs repairs, since we can certainly make do with one. I put off buying new clothes and getting a haircut (I trimmed it myself) for over 12 months. If there is anything that isn’t an absolute necessity at this point in my life, I have just given up on having it at all. If and when one of us finds a job, I will appreciate the income so much more, and it will be so much easier to say “no” to impulse buying — not only because of having been through a tight spot, but also from the great practical tips in this chapter.

Rafal
… on five tips from five different chapters

It was extremely difficult to take 5 action steps from one chapter. So I did not. You will ask – why? You have sent me that book in the very special time for me. It is my second job – I’m here for 3 months – after 4 months unemployment. I had to quit my last job due to economical breakdown. However I am living alone, debt free, trying to implement life hacking & personal finances tricks for a while. While I had my first job for little over year – I was keeping track on my income and expenses using Buxfer. As long as I was earning good money for my hard work it was a pleasure to take care about finances. Then it got complicated – and I’ve lost the track – some of the actions you’ve suggested were already taken and I had a lot of them in mind all the time – but I made some decisions which from financial point of view were terrible – I’ve moved again to the another flat with bigger rent – but I don’t regret It. Still… there were 5 actions to be taken.

The first thing that looked like something I always wanted to do was “unwinding” 5th point of 5th chapter . After I come back I try to do the laundry and dishes. It’s terrible thing to start, but as soon as you get your hands wet – it’s mechanical activity. It was also connected with one of the New Year Resolutions – simple sticky note attached to my kitchen with “Keep counters clean” reminder. Every night before the sleep I used to prepare counters for the next day.

Next chapter – about communities – I think that I’ve made my homework long ago – in Poland we’ve got Blip.pl – very similar to Twitter – but the local community in my city is really strong. We meet for a beer once in a month or so, we also travel to other cities to meet other members – it’s a great network of people having fun and helping each other. That’s how I’ve found this month my next flat. I’m moving out from the expensive one ( I’ve also got the place from a friend from that network) to cut back costs to the flat with a friend of mine who is moving to my city – pretty good deal as it will be twice cheaper. To be honest major part of my friends I hang out with were met on Blip during last two years –we are having a good time, and if there is a need – we support each other. Countrywide.

Chapter 7th “Minding the gap” is something I think was doing for a long time – maybe not exactly that –but still I was doing my budgeting in 60%’s style. Now I’ve decided to get back to Buxfer. I’ve imported statements from accounts ( pretty messy thing, as I was not writing down expenses for about half a year) – but after weekend spent on it – It was clear what I was spending money on. Mostly bills, food and investment vehicles I’ve signed up during my first job. I’ve swept dust away from several banking accounts ( I’ve got my own System for keeping separate money for current month and rest of them) and got back to use it as I used to. Good thing is that after short analysis of my bills I’ve found out that I got used to being frugal and there were only small amount for cost that could be reduced. The biggest one is my flat that I’m changing right now. That decision was clear for a long time for me, that it has to be taken, but now I was even more motivated. When I’ve jumped back into fixing and changing – It was logical next step.

And now for something completely different – what was my System? I had several accounts – one for Income, two for Current month – main account (only this was supposed to be used with debit card and ATMs), backup money for that month, and savings accounts (goals dedicated and “regular savings”). It was working well as long as I had motivation to make the money transfers between them. Now – I’ve got one.

What else I can say? I’ve managed to sell some slogans I was writing on Blip.pl to be used on t-shirts in a shop owned by a girl I’ve met on Blip.pl. That not a big income – but to be honest – I’m very proud that I’ve signed that deal as it will be my first passive income. I’ve already decided that money will be split equally – half for the fun and the second half for the investment. I always wanted to learn how to trade stocks – and I thing I can use that small amounts to buy some.

The book was very motivating for me, because of the author – which for me is an example, that if you try, other also tries to help you. Right now I’m thinking about switching my jobs either to the other company, or starting something own. Pretty though decision, but right now I’m having savings good enough for 3-4 months of living and I guess I’m about to use it.

Jaclyn
… on Chapter 8, “Frugality as Framework”

The opportunity for me to read and write a story about my experience with your new book could not have come at a better time in my life. I am 27, a recent University graduate (for the second time) and about to get married in September, and also horribly in debt.

About 6 months ago I decided I needed a change in my life. I was buying things to fill a void in my life and I realized that things could not fill that void. Having the latest clothes, the newest gadgets and the fanciest home furnishings did not bring me joy. I was burdened by all of theses things and the incredible amount of debt that came with them. Unfortunately I have lived like this for so long that letting go of my attachment to things has been quite difficult.

I decided to start my journey with the chapter on frugality, mostly because I thought that this would take me most out of my comfort zone. My fiance and I set up a budget together and it was pared down to only the most basic of necessities. Any extra money remaining at the end of the month was going to go against debt. We were already putting $2,500 of our monthly disposable income (a total of $6000 a month) against debt but I wanted to see if we could do better. We had already focused on big wins so it was time to delve into the details. We followed the steps at the end of chapter 8, here was our experience.

1. Don’t give up the things you love: This was really important to me, I knew that if I wanted to continue my new behaviors I would have to enjoy my life! We decided on a $200 a month each for spending money, which might seem like a lot but from how much we were spending it seemed impossible to me. I thought about that things that bring me true joy and decided that I would have to spend carefully on only those things if I wanted to be able to enjoy them. I decided to keep up my quilting class, which I love, and also my exercise group. These things were important to me and have a fixed cost so if I wanted to continue I had to keep paying.

2. Find inexpensive ways to enjoy the things important to you: Aside from the quilt class and my exercise group I could find ways to cut costs on everything else that was important to me. I like to go out for coffee with my girl friends so I made a rule that I could only have tea rather than an expensive specialty coffee. I like to read books so I made a rule that I couldn’t buy any books, I could only request them from the local library for free. It became a challenge I quite enjoyed to focus on the important things and drop all the unnecessary spending on those things.

3. Cut back hard on things that matter less: Cable television is not important to me at all so it was cut out completely. I also do not enjoy going for lunch with some of my negative coworkers so I started packing my lunch every day. I was no longer going to spend money on things that did not bring me joy. I thought about every purchase and wondered if I could find a way to hold off, or eliminate it completely.

4. Never go shopping without knowing exactly what you want: I became the master of lists. We sat down on Sunday night and planned our meals for the week, only necessary things went on the grocery list. Likewise with household items, a running list was kept on the fridge of things we needed. I did not browse stores for the sake of shopping, I had a purpose or I didn’t go. It was actually freeing.

5. Use the thirty day rule for any unplanned purchases: As a recovering shopaholic I used this quite frequently. Often I would find myself wanting something and would think of many reasons why I needed it. As these things came up I told myself that I could put them on a list and at the end of the 4 weeks if I still needed them I could purchase them. I just looked at my list again today and not one thing on these is necessary, I am so happy I didn`t spend my money on any of those things!

So how did we do? Well we managed to save an extra $1000 in the past 4 weeks, I also had $25 remaining of my $200 spending limit. Overall I feel lighter, like a weight has been lifted and I am so excited about the future!

Tony
… on Chapter 13, “The Personal-Financial Boundary”

When i got the book i started to look at the chapters to see what would be the most important one for me at this time. I decided that the best thing was to find one that would work for my wife and i. I settled on chapter 13, The Personal-Financial boundary. The reason that i picked this chapter is i have always struggled talking to my wife about financial matters. I tend to hold things back and not let her worry about things. I am the type that i like to just take care of it. The thing that helped me out a lot was the ability to have certain things to discuss, and not just we are screwed and we got to do something. Those are the times that i tend to get to and that will in turn come to a lot of yelling and hurt feelings. With Trent giving his own story about talking to his wife Sara it helped me see a connection with me and my wife. I thought it was wonderful that you were not afraid to give us true feelings and exactly what went on with your relationship with your wife. At the end of the chapter you give five steps to Getting Our Relationship on Track, Here is a break down of what we did.

1) Set Aside time to talk to your partner about money and about life.
This was a great chance for us to just talk. With having a little one around we find it difficult to just talk about us. We have been married for almost 4 years and we take time regularly but this time it was different. We were able to see goals that we both have in mind and how we want to accomplish them. We were able to see what things we can improve on and what things we are doing great. To share with you one goal that we both have set is we want to get into a house, we currently live in a condo, in two years. We have a lot of things that we both want to accomplish to see that happen, but being on the same page now is a great help.

2) Recognize that your partner is human and makes mistakes, just as you do.
This was the most important aspect for me. Looking at myself and trying to put myself into my wife’s shoes with things helps. I try on my part to not spend money but at times i struggle when my wife wants to spend something. It is easy for me to say no to things, but often times i give in. My wife is much better at saying no to items but i am the one who says to just get it. By looking at myself with the mistakes i am the one who needs to change.

3) Confess mistakes to your partner and work with your partner to fix them.
This past month there have been somethings that i wished i had not done, but my wife was there to say we can get through it, together. This chapter made me realize that we must work together to get through things and doing it together is the only way to do it.

4) forgive the debts and misdeeds of those who we care about and attempt to re-establish a connecting with them.
When i read this i found it interesting that sometimes money or other items, can get in the way of our relationship. We do not have anything that gets in our way with relationships in this matter, but the key that helped me realize is when you are in a position to help someone who you love that is in need you should do it, with no strings attached.

5) Set aside time to build and rebuild the relationships most important to us.
This past week i received a text message from a friend that i worked with for a very long time. We had lost contact with one another for some time. He is getting married and asked for our address. We talked how we need to get together and do lunch. Reading the book realized that over the years that i have cut short good and long friendships, do to my lack of not keeping in touch. We both agreed that it had been to long and that we both need to get together and do something. I have realized since i have been married that i often put my family way above others, which is good, but i often looser other ties i need.

Trent, i enjoyed reading what i have with your book. With reading tons of finical blogs and books this one i feel ranks near the top and one that i plan to read and refer to friends. Most books i have read go into numbers and how to just get yourself out of the debt you are in. I feel some books need to go into a mental thinking of getting out of debt. Your book hits this criteria on the head very well. I feel that getting out of debt the first step needs to be a behavioral charge first, then start crunching the numbers. This past month has been wonderful for my wife and i. We take more time to talk financial matters. When we are out shopping we always ask if items are needs or just a want. My wife always asks if we have the money for a particular item. I have come to the point where i need to be honest with her and not cover things up. I plan to re read the book again and continue to apply the principals that you have given to help with our journey out of debt. Your story has inspired my from the beginning and it is my wish that i can start to see changes in my life to see great things and take control of my life.

Christina
… on Chapter 17, “Holding You Back”

My husband and I made the pledge to get out of debt back in 2001. For the next couple of years, we tightened our belts and slogged through car loans and student loan debt.

We became debt-free except for our house, and it has opened so many doors for us. We were able to build the home of our dreams near our family. We’ve been able to purchase two vehicles with cash. We’ve been ready for emergencies and been able to fund home improvement projects with cash. We’ve been able to afford for me to stay home with our three boys. We’ve been able to give to others and save for retirement.

Some people think that frugal living is about deprivation. I see it as a tool to get to the life you want to lead.

So why would someone like me, who now has a frugal living blog called Northern Cheapskate, be interested in Trent Hamm’s new book, The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams?”

The answer is simple: Because we’re not finished yet. We’d like to get rid of our mortgage, do some traveling, and secure our retirement. That means we still have more work to do.

If there’s anything I’ve learned from our journey to being debt-free, it’s that there is always more to do and always more to learn.

The “Holding You Back” chapter of Trent’s new book really resonated with me. I’m a stay-at-home mom raising a 5-year old and twin 3-year-old boys. I’m the “chief financial officer” in our home – the keeper of the budget – the one who clips coupons and watches for ways to pinch pennies so that we stay on top of our goals. I started the blog to keep me focused on those goals and have been surprised to be able to earn a little bit of money from it – as well as getting the chance to explore writing opportunities.

Despite all these blessings, I still find myself slipping into a negative attitude about things. I can clearly identify goals for myself and my family, but I catch myself replaying negative tracks that stop me from making them happen: “I don’t have time.” “I’ll get to do that when the boys are in school” “I don’t have xyz thing that would make this such-and-such task easier.”

Trent’s book reminded me to ask myself why I’ve set up these impediments to my success. I realized that it’s not enough to make goals if I fail to take the action needed to complete them. I need to break these tasks into smaller ones and string them together to reach the bigger goals.

One of the things I’ve started doing since reading this book, has been to try to focus more on all of the positive things in my life. Each night before I go to bed, I try to think of three positive things about my day. This has really helped me stay positive and to focus on what matters most to me: my family.

I loved The Simple Dollar book just as much as I love The Simple Dollar blog because Trent is constantly challenging me to think about what things my family and I place value on. There’s no point in achieving financial success if you don’t know what you’re doing it for.

Paul
… on Chapter 8, “Frugality as Framework”

As I am a recent divorcee trying to get my life back in order, I felt that Chapter 5: Frugality as a Framework would be a good one to attempt to implement this first month. It has helped change how I do things and makes me regard each purchase I make more carefully. It has helped me purchase with a purpose, rather than on a whim.

For example: the fourth principle, to shop knowing exactly what you want, has forced me to be more purposeful in my food shopping. I have been making meal plans and food lists, not necessarily written down, but at least in my head. I know what I am buying and why I want that and how much to get before I enter the store. This has kept me from making unnecessary purchases, but also speeds up my shopping, as I don’t waste time wandering around the market trying to figure out what to get. It also simplifies things at home, as I know what I’m going to eat and how much I will refrigerate or freeze for later.

As another example, I have recently started training for a triathlon. This can be a very expensive sport. However, by applying principles 2 and 5 from this chapter, I have been able to not only distill the sport to what its essentials are for me to meet my goals, but also to put off purchases that I can save for, lessening the impact of choosing this ambitious goal.

By setting up a framework of frugality, by making that my mindset, I approach most purchases in a new light. I see things not as needs but as competing wants and take into account the impact on my fiances each want might have. For example, when mapping out my meal plan for the week, I acknowledge that I need to eat but what I eat is based on my wants, not my needs. I weigh the costs of certain meals and will perhaps decide to eat something fancy next week while eating more frugally this week, or try to find a cheaper way to make that meal that is normally fancy but costly.

All of this will impact me in the long term both by helping me save money but also by helping me feel like I require less money to begin with. It’s easy to live life fully without living it as a spendthrift. By taking these steps, I can see even more how to live each thing, even small regular things like eating lunch, with purpose. By adding these purposes up, I find that I am designing a lifestyle that will help me to live a fuller life in the long run. The framework of frugality is freeing: it frees us both from the demand to make more money because we use what we have wisely, and it frees us by allowing us to live a decisive life rather than in the captivity of circumstance.

Jess
… on Chapter 17, “Holding You Back”

The action steps in the chapter “Holding You Back” were really influential in shaping my mindset financially and personally. While my finances have improved leaps and bounds since reading your blog (and others) two and a half years ago, I occasionally stumble across a financial dilemma. Should I go out with friends for dinner, or should I stay in and cook? Where are my financial pitfalls?

Asking myself “why?” makes me pause and contemplate the options. Nine times out of ten I pick a choice that is financially smart, and occasionally I splurge—a friend’s having a bad day, I’ve had a bad day, a celebration, just because. The chapter reminded me that this questioning can be applied to the personal realm too. Why do I feel bad about a conversation that just occurred? Why do I feel so tired this morning? Why did I do x instead of y? Doing this, mostly subconsciously, has made me pick and choose smarter, go to bed earlier, and think positively.

It’s amazing how re-framing of something from the negative to the positive really influences our behavior. I have subtly become a much more optimistic person because of this effect. Instead of telling myself, “I can’t” or “I don’t,” I tell myself the reverse. Instead of, “I can’t run,” I told myself, “You can run. You need to take it slow and steady, and you can walk some too. You can read on how to prevent injuries.” It was just a matter of understanding my capabilities and expanding them. Today I ran 3.17 miles for the first time in my life, and I’m running my first 5K on June 26. The power of positivity is incredible! I already want to begin training for a 10K and beyond.

This chapter is an excellent reminder that we have choices. Sometimes choices can be overwhelming if we have too many options. But we always have a choice between being happy or being frustrated or sad—to some extent—and we almost always have a choice between spending and saving. I’m amazed to see how many people have convinced themselves that they “need” certain goods or amenities, though a change in perspective would really highlight the unimportance of those material goods.

On a final note, I address the issue of decluttering. I despise clutter. That being said, I still have piles of books, piles of papers, things that need to be addressed and taken care of. But decluttering matters in the long run: is this essential? can I cull it? what purpose does this serve? I even went so far as to declutter my book collection—something I never thought I would do. Instead, I have kept only the books that are most important to me and that I pick up again and again. I have culled expensive bookstore trips altogether and check books out at the library or retrieve them through PaperBackSwap.com. It’s really a matter of prioritizing your space, your life, and your sanity.

Mary
… on Chapter 13, “The Personal-Financial Boundary”

I put in to action the five steps from Chapter 13: The Personal-Financial Boundary. My boyfriend and I have been dating for two years and had yet to ever talk about money. We just went about doing our own thing; paying what we needed to, when we needed to. We never had extra money to go out to dinner or have a date night, let alone save for our long term future goals of a wedding or children. After reading The Simple Dollar I got the courage to sit down and have “the talk”. We talked about where we were financially, what we wanted to do short and long term. We talked about things we could do to increase the gap between what we were spending and what we were making. We discovered that we both had been borrowing money to a mutual friend of ours, that we both had some old debts. Getting past the fear of the conversation was the hardest part, and the tips in The Simple Dollar helped us get on the road to financial freedom!

Brenda
… on Chapter 3, “A Visit from the Black Swan”

I have been a regular reader of the Simple Dollar blog for over a year now. I have found incredible utility in many of Trent’s tips, tricks, and insight, and this book is no exception. There is a lot of material that has the potential to make my life easier and more financially secure, and that is incredibly valuable. However, I think that the most striking passage in this book is not a suggestion or an action item at all. I was most influenced by the anecdote where Trent details his darkest hour—the day he realizes what a financial mess he is in and the effect it will have on his infant son.

As an avid reader of personal finance literature, it very often seems to me that the person giving the advice has everything figured out. If you check your thermostat, negotiate your interest rates, and cut your cable subscription, you too can have all of this and more! Unfortunately, we all know that it doesn’t quite pan out so simply. Oftentimes, I have found myself despairing trying to negotiate the difference between the way I am and the way I “should” be. I think my acute perception of that gulf is what made this particular passage so meaningful to me.

See, by sharing the guilt and the embarrassment and shame of being in that situation, I realized that Trent didn’t always have it all figured out, either. At one point, he was in as bad of a financial state (if not worse!) than many of us. Many times, it feels like there is something essentially different about me—some sort of hubris or flaw—that put me in this situation. I think that maybe I am just not one of those people who can figure it out. But seeing Trent and reading about HIS despair and seeing what came of it tells me that that simply CANNOT be true.

The essential difference, as far as I can see, is merely effort and will. I am sure that Trent’s path to financial success was not easily envisioned during that fateful night. There was not a ten step plan that arrived on his doorstep the next day, and there was no “quick fix” to the situation. But what this book has shown me is that there is hope. The road will be messy and I will have to find my own way, but if Trent could feel that way and figure it out, I can harness my effort, and my will, and my ingenuity to figure something out, too. And that, honestly, is more inspiring than I can express.

More than anything over the past month, I focused on building a personal notebook. In the chapter “A Visit from the Black Swan” there is an action item that suggests carrying a notebook with you to collect information. I am the kind of person that navigates life via post it notes and I am constantly losing them and anxiously digging through my stuff for crucial information. I thought a pocket notebook would be a perfect way to cut that bit of chaos out of my life. In the same chapter, Trent suggests a focus on eliminating debt and automating savings. I thought that implementing a notebook would help to remind me that I am working on this in my life and focusing on where I spend my money. Also, Trent suggests using a 30 day list for any larger purchases in the chapter “Frugality as Framework,” and this notebook is the perfect place for that list to live.

The notebook I designed has several different sections. Primarily, I have been using it as a place to track purchases and keep track of my budget, my automated savings, and my bills, so I can make sure that I am paying everything on time, and so I have the information to process where my money actually goes. It’s pretty hard to change the way you spend your money if you don’t know where it is going in the first place. To start, I have just been writing down everything I spend my money on rather than trying to adjust spending habits. I have found that it is very helpful for me to observe myself before I start making massive changes. Having a predetermined place to write everything down allows me to do that.

Also, the notebook has a notes section for a variety of different information. I have a place to put books I encounter that I would like to read, and a place for long term projects, and a little calendar and a section for ideas. I am apparently too married to the idea of post it notes to rid myself of them, but the front of my notebook is a handy place to put a post it note with all the short term things I need to take care of. Plus, it’s been really nice to have someplace to check every time I need to hit the paperwork and it has saved me from having to take multiple trips from the library because I have all the books I wanted to check out in one place!

Overall, it’s been pretty simple to implement something like this into my life. I already carry a purse, so a small notebook isn’t a huge addition to my regular accoutrements. I love having one place to go to for everything, and even when I DO forget and write something down on a post it, at the very least, I can shove it in the notebook and it doesn’t get lost in my purse! This has been a GREAT way to see where I am spending money, and I like the fact that I can look back at my habits over the past month and try to adjust or eliminate superfluous spending.

Over the long term I expect to continue to use this notebook. I am trying to develop the habit of putting all receipts into it as I purchase things and then doing a notebook check every evening to eliminate any crucial to do items and update my register. In the scheme of things, this was a very easy fix for my information management needs! And portable, to boot!

I think that it would be fair to say that I have been on a personal quest for financial and personal integrity over the past year. After wallowing in my dead end job for a couple of years after college, I woke up to the fact that my 90k of student debt was going nowhere fast on my 30k a year salary. Over the past 12 months, I haven’t fixed things, per say, but I am at least heading someplace. I think the next step in my journey is to define “someplace” and start to design a lifestyle and a career that appeals to ME. I am hoping to tackle the chapter “The Power of Goals in a Random World” over the course of the next two weeks and do some serious and concrete planning from June 18-July 1 in order to round out the first half of the year 2010. I think that my efforts will be much more effective if I am working to get somewhere besides “not in debt.” I have found that I have been much more successful when I focus on the positive goal (i.e., focusing on being healthy and fit instead of losing weight) and I think that if I start working towards goals that will satisfy me, challenge me, and grow me as a person, some of the financial barriers to my debt repayment will ease as I open up new avenues for income and for community in my life. At any rate, I plan to use Trent’s action items in this chapter to start thinking about what the “ideal” someplace is for me and to start identifying things I can do to make that happen over the next six months to a year!

Jessica
… on Chapter 14, “Recasting Retirement”

In chapter 14, “Recasting Retirement,” Trent explains that life doesn’t end at retirement – it is truly a chance to put more time and effort into the hobbies and skills you didn’t have time for before. Sufficient planning for retirement is a necessity if you want to take full advantage of its opportunities. Here are the steps Trent recommends we take towards retirement, and how they’ve impacted me in the past month.

1. Spend some time thinking about what you would do with your time if you had a small supplementary income to help you live the life you wanted to lead as long as you stayed productive.
This idea was immediately valuable to me, simply because I hadn’t considered it before. Personally, if I had a supplementary income, I would put my efforts towards helping others. I enjoy organizing, and would love to start a side-business helping people declutter and get organized in their homes. I am also very passionate about helping parolees rejoin and become contributing members of society. I would love to set up a half-way house, and work very hard on helping ex-cons find employment.

2. Plan ahead for your second act.
I am a librarian – which means that I have a knack for organizing things, as well as multiple opportunities not only to network with other professionals, but also to expand on my communication skills. In order to plan ahead for my second act, I need to excel in my career and make as many contacts as possible. Already, this action item gave me the incentive to form a much-needed plan for working on the skills I’ll need during retirement. I’ve been able to come up with a list of opportunities I’ll need to jump on if they’re ever offered to me in the future, such as attending and/or presenting at networking events, conferences, and workshops. I’ve also started looking into becoming a prison librarian, because I feel very strongly that if a convicted felon has adequate access to an education, it’ll put them on the path to becoming contributing members of society once they have been paroled.

3. Take advantage of all matching funds in your 401(k)/403(b).
Thankfully, I already had this one covered.

4. Open a Roth IRA for additional retirement savings.
At the present time I’m not in a position financially to open or contribute to a Roth IRA, but I intend to do so as soon as my husband and I have the extra income. Right now we’re focusing on padding our sad little emergency savings account, as well as paying off some medical bills.

5. Make a master information document.
For the past month I’ve been working on this master information document, trying to pull together any and all information needed in case I were to pass or be severely incapacitated. In the long run, I know my husband and I will be very glad to have this information readily available to our family members. We plan on purchasing a fire-proof safe, so that we can keep this information protected in the event of a catastrophe.

Overall, I feel that these steps helped me to overcome some of my fears about retirement. In training your mind to always look forward, and try your best to be prepared for whatever life throws at you, we can feel secure in knowing that we’ve done all we can to deal with the inevitable bumps in the road. After reading this chapter, it is so nice to imagine what my life might be like when I retire – I look forward to a time when I can put my heart and soul into helping people with my passions and skills.

Michael
… on Chapter 10, “The New Career Rules”

The chapter that resonated with me most strongly was “The New Career Rules.” I put the chapter’s Five Steps into action for a few weeks and was really pleased with the results. The step that benefitted me the most was to discover what I am passionate about. I already engage in a wide range of activities, so that part wasn’t hard. The challenge was finding the common theme, which turned out to be writing. I want to be a writer. Step three was to join my passion with the transferable skills I already have. I was able to combine my GIS skills with writing to join a tech startup part-time as a marketer and publicist, something I’m really excited about. I also have been diligently pursuing freelance income as a writer. Finally, I’ve been writing every day, and I’m already improving. That’s really exciting for me because I wasn’t sure if I would be able to go from “good to great.” That’s step four. Step five, to turn my passion into a career, has not happened yet, but I have more options now. Because I’ve taken these steps, I’m more likely to be ready when I’m given a great opportunity.

What’s inside? Here are summaries of the included questions in five words or less.
1. Downgrading a car for e-fund
2. Handling an increase in income
3. Dealing with financially unsound parents
4. Starting out with a Roth IRA
5. Quicken or GnuCash?
6. Preparing for a second baby
7. Buy CD or pay debt?
8. Minimizing impact of car payment
9. Getting a detailed insurance policy
10. Retirement or student loan repayment?
11. PS3 games

Seemingly endless rain. What I wouldn’t give for a nice, dry day. The only problem? After all this rain, the first couple warm days without rain are going to be insanely humid.

I have about $4000 in credit card debt and I’m about to lose my job due to the owner’s decision to sell the business. I’m currently a student living with my parents so I’m not too worried about the job situation but I would really like to wipe out most of the debt in one fell swoop. I’ve been considering selling my fully paid for Honda and replacing it with a sturdy volvo I’ve seen for sale. The net cash gain would probably be about $2500-$3000. Now here’s the rub. I really love that Honda(her name is Lola). But I understand that a bit of sacrifice now for the sake of my sanity and financial security probably wouldn’t kill me. I know the numbers sound like small potatoes but without any source of income for the time being, it could make my emergency fund go a long way.
- Matty

The first thing I would do is get a vehicle history report on that Volvo and make sure there’s nothing fishy going on with it. I’d also test drive it and take it to a dealer to make sure it’s not got anything hidden that will blow up in your face.

If both of those things pan out, then it’s probably a good move in your situation to downgrade. It’ll gain you some cash and likely also help with your insurance a bit, too (since the car value has dropped).

The other option, of course, would be to just get a job anywhere, even a minimum wage one, which would allow you to keep the Honda at least, but might restrict your free time.

My husband recently graduated with a masters degree in teaching and, in an incredibly lucky turn of events, got a job right out of school. We’re thrilled not only for getting his career off to a good start but also at the prospect of having two salaries. Throughout our marriage we’ve always survived on my single salary (currently $54,000/year) and his part-time work while he was touring as a musician. He will start out at around $40,000/year which will increase with experience. We’re facing student loans (we will owe about $32,000 at 6.8% interest rate) and we have a 30 year fixed mortgage towards which we pay about $1500/month. We still owe about $230,000 on the mortgage. Other than that we have no debt. We do use credit cards for the rewards/convenience but always pay them off each month and never carry a balance. We own one car which we bought used and paid for in cash so we have no car payments. Mortgage payment plus other expenses of insurance, utilities, food, etc come to approximately $2200/month. In terms of retirement savings I contribute 8% to a 401k through my job (current balance $48,000) and we each contribute $100/month per person to Roth IRAs. We are 31 and 33 years old so have a long way to go before retirement. We have about $13,000 in the checking/savings and $17,000 invested in a money market fund. We are not very savvy with investing – we mostly put money somewhere and just let it do its thing. We live a fairly frugal lifestyle but are comfortable with occasional spending.

What would you do in our situation?
- Penny

The first thing I would do is just sit down and have a long talk about what you both really want over the next five years or so. Do you really want children? Sooner? Later? Is the camper bus really a big dream or is it just a whim? What about the shed rebuilding? What about the idea of a new home?

Be honest with each other. There’s likely things that one of you is really into that the other one is kind of “meh” about. The best thing you can do for each other and for your relationship is be honest about how you feel about future goals. Don’t feel bad about saying that you don’t feel too hot about saving for the next year for some project you’re not all that interested in.

What you’ll find is that – if you give it time and careful thought and mature discussion – one or two strong mutual goals will emerge that you both believe in and are passionate about. That’s where your planning should be focused.

Give it time. Give it honesty. And don’t be upset with each other if something you want doesn’t completely match what your partner wants. You might just find that there are things you both hold dear, and the rewards of those far outweigh the individual things you each want.

About me: Come from a family perpetually in debt. My father is the only income earner, and he supports my mother and two younger sisters. I left home at 18 and racked up a whole bunch of my own debt while in university. I smartened up just before graduating, opened an RRSP, started an emergency fund, started saving etc. 3 years later, I’m pretty comfortable – have a small mortgage in Vancouver, paid off $10 000 of my consumer debts and only student loans left to go! I was even able to go back to school with some of the money I saved while working.

I’ve suggested renting out the extra bedroom they have, but they are resistant. My mother has health problems and is unable to work long periods of time. She used to do some babysitting, but hasn’t in a while. To make things worse, my sister is starting university in the fall (though living at home while in classes). She has enough scholarships to pay for one semester of classes. I’ve encouraged her to get a part time job during the summer to save up money for future tuition but she has not wanted to. My parents are encouraging her to take out student loans instead. They’ve even asked ME to take out student loans and “lend” them the money – I refused.
- Michelle

You made a good move there, refusing to lend money to your family members. One of the worst things you can do with a family relationship is turn it into a lender-borrower relationship. Think about it: who loves their lender and invites them to dinners and parties? If I were you, I’d assume that any money you’ve already given them won’t be paid back. Think of it as a gift and just forget about it.

The question is what you should do going forward from here. I don’t think you have any sort of responsibility to begin supporting your family. You absolutely should not lend them any money at all for the reason mentioned above. You also absolutely should not do anything that puts you even in a slightly more challenging place.

If you still feel an obligation to help, help via one-time gift, like you did with the single check you already gave them. Whether or not you do that, of course, is up to you.

I am looking to start my own IRA but I have heard some stuff that makes it seems a little more complicated. I was under the impression that a Roth IRA was kind of just a set it and forget it type of account. I’ve been reading into it more lately and found that this isn’t really the case. I don’t know if I’m the only person who was thinking this but I thought it may be beneficial to your readers. What I’m asking I guess is how exactly do I setup a Roth IRA and what should I be investing in? Are there suggestions for investments when you get all of your stuff setup?
- Brandon

The Roth IRA certainly can be a set it and forget it kind of account if you choose it to be. My own Roth IRA through Vanguard, once I had it set up, has needed no changes in years. I just selected an appropriate Target Retirement fund, set it to withdraw $100 each week, and sat back and forgot about it.

Assuming you’re using it for retirement and not some sort of gamesmanship (there are some somewhat kooky plans out there that try to exploit specific loopholes in the Roth laws which rely on those tiny loopholes remaining open for years – don’t bother), the best thing to do is to simply open up a Roth IRA account at an investment house you trust, select a Target Retirement Fund from their investment offerings, and then set up an automatic investment plan to put money into that target retirement fund.

That’s really all you need to do. It is pretty automatic once you get it into place. Just pick a company, sign up, select an appropriate Target Retirement Fund, and set up automatic contributions. Done.

In a recent Reader Mailbag, you recommended Quicken in response to a list of criteria for personal accounting tools. I was wondering whether you had any experience with GnuCash (www.gnucash.org). I’ve not got enough experience with it to know whether it meets the criteria, but it is free (and Free Software – meaning those with programming skills have the ability to make changes), and does seem to do a lot. If you are familiar, where do you see it lacking (as compared to Quicken or more generally)?
- David

GnuCash is a solid accounting program – and it’s free – but it doesn’t match what Quicken does.

The big thing that Quicken does that GnuCash does not – and this is huge for new users – is that it automatically downloads your financial data for you from your banks, credit cards, and so forth. Transaction data is often included in this. This drastically reduces your bookkeeping time once you’re used to the procedure.

GnuCash does several things well, but the sheer accounting work that has to go into it drives away a lot of users. And for me, who did all of this by hand for many years? I used Excel, quite honestly.

On your blog, you’ve mentioned that you did a lot of little projects to prepare for baby #3, and — being in a similar situation myself, although for me it’s baby #2 — I’m curious to know what they were. I’m also curious about which ones were the most useful in retrospect. I am getting hit with that serious 3rd trimester nesting urge, and I’d like to put it to good use. Last pregnancy, I was doing things like dusting the window blinds — something that wasn’t especially useful.
- Emily

I’ll just list the projects we took care of during the run-up to the arrival of baby number three.

We signed up for a 529 for him (putting myself as beneficiary, then switching that after he was born). We did everything we could to acclimate the older children to the idea of a baby, including reading lots of books about babies and new baby siblings. We pulled lots of baby clothes out of storage and hit quite a few yard sales and consignment shops to replace some of the more well-worn items. We pulled the old bassinet out of storage, cleaned it, and set it up, and also came up with a long term sleeping plan for the three kids. We pulled out our old breast pump, fully cleaned and sterilized it and all of the bottles, and did some maintenance work on the AC adapter. We washed and prefolded all of our cloth diapers, setting the adjustable ones to the smallest setting.

I’m sure I’m forgetting something, but all of these things happened during the months leading up to the birth of the third child.

I’m an undergraduate student and will continue with a PhD after graduating next year. I’ll be leaving my alma mater with around $15-20k in Federally subsidized loans and won’t be required to make payments until six months after I cease being a half-time student. As far as I can tell, the government pays off the interest at the lowest rate so long as I’m in school. I will be paid a stipend of $25-30k during my PhD schooling (5-7 yrs.)and intend to save a significant amount towards these loans and financial independence. My question is this: if I have around $6k in savings right now, would it make more sense to invest in a moderate-return CD or similar option, or should I apply it directly to the loan capital? I’m pretty sure a 33% dent in the principal would be fantastic, but the opportunity for seven years of interest is also appealing. Can you shed some guiding light? I currently have taken three discrete subsidized Stafford loans with fixed rates of 6.8, 6 and 5.6%.
- Joe

First of all, make absolutely sure that your interest is being paid while you’re in school, because that completely changes the answer to the question.

If the interest is being paid while you’re still in school, then you should hold onto that money until you finally graduate because your loans won’t be growing at all. You can buy a CD if you wish, invest it in the stock market, whatever you feel is appropriate with that $6K (it mostly depends on your risk tolerance and how long you’ll be in school for the Ph. D.).

If the interest is not being paid while you’re in school, you should pay down the highest interest student loan, but you should save at least $1,000 of that money for an emergency fund for yourself so you’re not tapping credit cards to deal with an unexpected expense. Why? Very few investments will top the 6.8% guaranteed you have on your loan.

My 12-year-old car (given to me by my parents) is about to die. Though I haven’t gotten it formally checked out, I know there are problems with the engine and transmission, and I have this feeling that it won’t make it through the summer. It has 195k miles on it, so I think it’s past the point of trying to fix it any more.

My question is this: Should I save up as much as possible to have a larger down payment, or should I throw as much as possible at my credit cards to have a lower debt:credit ratio and improve my credit rating? I’ve never financed any sort of major purchase before, but I do have a decent credit score (708 as of two months ago). I’m looking at a used car (certified if I can find it!) in the $12k range. I guess I’m just basically nervous about having this new large monthly expense and am looking for the best ways to minimize it.
- Larissa

In your situation, you shouldn’t buy a $12,000 car right now. You should get something much lower that you can drive reliably for just a few years, then replace it with that $12,000 car.

Doing that saves you money on financing the car and on auto insurance as well (since you’ll probably only need to carry liability insurance on it). That money can be channeled towards paying off your existing debts (and a $1,000 emergency fund, too, which will keep you from tapping credit in emergency situations).

Look lower-end for now for your car. You can save up for it if you wish, but don’t worry about a small loan for it, because if you have decent credit at all, it’ll be lower interest than those credit cards. Then, once that’s taken care of, snowball. Get rid of that high interest stuff first and whittle through everything else. You’ll have much more money to do this quickly if you get a lower-end car for the time being, taking you to debt freedom much faster. When you’re there, then think about a higher-end car.

I am trying to do some emergency planning, and as part of that my goal is to understand all of my insurance policies thoroughly. I have checked my insurer’s website, but they only have generic information and say to contact your agent for more details. I have tried my state’s (NJ) Department of Banking and Insurance, but there is no standard there, either. I e-mailed my agent with some questions, and she called me back instead of e-mailing her response. Is there a good way to get a complete guide to what a person’s insurance will cover in the event of a claim? It is all well and good for my agent to tell me somethings over the phone, but I will have no proof of what was said if there is a problem. Do you have any advice on how a person can obtain, in writing, exactly what will be covered by their insurance if a claim is filed? I am referring mostly to my Renter’s policy, but would like something similar for any policy I own.
- Tracy

Call your agent and ask for a copy of the policy, point blank. If they won’t provide this policy, then you shouldn’t be doing business with that company.

The agent wanted to call you because the agent is a salesman and it’s much easier to make a sale by talking to someone than it is by sending them emails. Pretty much any insurance agent will do the same thing – because, in the end, they’re salespeople.

If you can’t acquire a copy of the policy you’re looking to buy, something is really fishy and I would run away from the situation.

I am a 23 year old AmeriCorps volunteer. I currently have $2,000 as an emergency fund. I also have roughly $25,000 in student loan debt. I receive $1,000 a month for a living stipend before taxes, and will receive a $4,725 Education Award (to pay back federally backed student loans) in August.

However, I also understand the importance of saving money for retirement, especially in my early twenties. Optimally, I would like to open a Vanguard Target Date Roth IRA and start socking money away as I am able. However, the minimum initial balance is $3,000. Do you know if Vanguard or any other reputable agencies offer IRAs with a lower minimum initial balance (possibly with the requirement of automatic fund transfers)?
- Alex

When I started with Vanguard, I didn’t have the $3,000 I needed to get into the fund I wanted, either. However, there’s a much easier way to do it: the Vanguard Star Fund.

The Star Fund is a composite of several different Vanguard index funds. What makes it noteworthy, though, is that it has a minimum of $1,000, not $3,000.

When I signed up for Vanguard, I first saved cash in a savings account until I had $1,000, then I contributed all of that to my Roth IRA and bought Star, setting up an automatic investment plan to keep building from there. When I reached $3,000, I just switched it to the Target Retirement Fund of my choice.

As for the student loans, I think you’re doing the right thing paying the private one off now, a bit at a time, as you’re doing.

All right, ‘fess up. What PS3 games do you own?
- Kevin

A surprisingly large number of people wanted to know this after my post yesterday in which I discussed trading my Nintendo DS for a Playstation 3. So, here are the games I traded for (all used, of course) when I got the Playstation 3, with links to Wikipedia for details. I picked up Red Dead Redemption, MLB 10: The Show, Final Fantasy XIII, Uncharted, and Skate 3. I still have some store credit remaining, too. RDR and MLB 10 seem to be the popular online games with my group, so those will be the ones I’ll mostly play, I’d imagine. My plan is to just trade them as I play through them and maybe receive a few more as gifts for various gift-giving occasions.

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.

Not too long ago, I traded in my Nintendo DS and the games I had accumulated for it for a Playstation 3 and a handful of used games. I did this for two reasons, mostly. One, I don’t play the DS much at all since I’m not traveling (when I am out and about, I usually use my iPod Touch). Two, I have several friends to play against in various online games.

When I picked out the titles I wanted to trade for, I mostly thought about my friends and the games that we could play together (or at least discuss and compare achievements on). I selected a handful of titles that I thought I could play in the evenings after the kids are in bed some nights (they’re mostly parents, too, and would also play in the late hours).

Of course, after making the trade and contacting my friends, they were ecstatic. But after a few days, we all started comparing games and they also sent me to some Playstation 3 review sites.

What I ended up finding was a long list of titles that intrigued me. Some of my friends already owned some of them and others just seemed like fun. I wound up making a long list of potentially compelling titles.

It was at that point that I had a realization. At most, I’ll be playing this four or six hours a week, late in the evening with some pals. I’ll likely never have enough time to fully play through the titles I already have, let alone the titles on that list.

I might wish that I have more time to play because, quite frankly, it’s fun to play such games with old friends that are spread all over the country. It’s entertaining, interactive, and a great way to maintain a connection with people that I might otherwise lose.

But the truth is that six hours a week is probably going to be the absolute maximum cap on the time I would be able to play – the equivalent of a “poker night” with those guys when we happen to be spread out across the country.

I would simply be spending a lot of money on things that I wish I had time to play – not on things that I actually have time for.

To put it simply, that’s an incredibly poor way to spend your money. Never, ever spend your money on things that you wish you had time for.

If you wish you had time to exercise, don’t buy exercise shoes. Instead, find the time to exercise and start walking and jogging in the shoes you already have, then think about buying shoes if you need them.

If you wish you had time to cook at home, don’t blow $500 on kitchen implements. Instead, start making meals at home on whatever cheap pans you can get at the Goodwill Store. If you find yourself getting used to it and cooking at home a lot, then upgrade.

If you wish you had time to travel, don’t buy tons of travel guides. Instead, focus on getting your life under enough control so that you have the time and resources to travel.

The solution to not having enough time for the things you want to do in life is not found through buying stuff just in case you have time to do it. In fact, the solution is the opposite: invest your money and your time into building the kind of life where you have the freedom to do the things you want. Live way below your means. Knock your job out of the park. Do what you’re passionate about.

Then, when you do find yourself in a secure place with more free time, you’ll have the time to do the things you want to do – and the financial resources to actually do it.

Until then, don’t delude yourself with the power to buy. Buying stuff is not a substitute for having the time to enjoy it.

Everyone says that time is money. Well, there’s truth in the reverse, as well. If you spend your money wisely, money becomes time. You can spend your time doing things you care about if you’re not constantly chasing the dollar.

The Rewards of Routine Maintenance This article meanders in a few different directions, but the part that intrigued me is that of “missing” bills even though you can pay them just because you’re disorganized. That used to happen to me fairly often, actually. (@ get rich slowly)

“I Can’t Do My (business, art, purpose, mission) Without Funding First!” There are very few dreams that you can’t chase in your spare time on a shoestring budget. If you have the passion and even a bit of talent, it will click and good things will happen. If you keep telling yourself you need funding first, is it really your dream at all? (@ pick the brain)

Choose to Spend Time on High Impact Activities For me, the “high impact” activities are usually those that would otherwise be called “important but not urgent.” I almost always feel like I’ve really accomplished something whenever I knock out some of those types of activities. (@ dumb little man)

Starting a Household Ledger – With Pen and Paper An older couple I used to know pretty well did this. They kept a ledger on their front table and when either one of them spent money, they recorded it in the ledger. Whenever new money came in, they recorded it in the ledger. It seemed to work really well for them. (@ frugal dad)

Frugal Web: Is A Penny Worth A Stoop? I often bend over to pick up pennies. We have a penny jar in our bedroom, so I just toss the pennies (or other loose change) in my pocket and toss it in the jar. When the jar fills up, we cash it in and suddenly we have $30 or $40 we didn’t have before. (@ frugal for life)

Is Goldline a Scam? I don’t think comparing Goldline to ETFs is a true comparison. Some people literally want the gold in their hands, not just an investment. (@ bargaineering)

This is the fifth entry in a fourteen part series discussing the time management classic Getting Things Done by David Allen. New entries in this series will appear on Tuesday afternoons and Friday mornings through July 16.

Last time, we discussed what exactly you need to have in place to get yourself organized (time, a bit of space, and a few supplies). What’s the first step in that organization process? Collecting. In other words, now is the time to corral all of that stuff you’ve got floating around in your mind and in various places.

What exactly does that mean? To put it simply, you’re just going to spend time gathering all of the stuff you need to do and haven’t yet completed into one place. A lot of it is going to be in your head, but you’re going to want to get it out of there. Other things will be spread throughout your house. Quite a few will probably be on your computer. Some may be in your car. Some may be at work.

It takes longer than you think. Allen, on page 104, estimates a few hours:

When I coach a client through this process, the collection phase usually takes between one and six hours, though it did take all of twenty hours with one person (finally I told him, “You get the idea”).

Most people expect that the process will take just a few minutes, but it doesn’t work like that, not if you’re thorough. The first time I thoroughly did this (sometime in 2005), it took me about four hours to put everything down.

Every once in a while, I do the whole thing again, just to make sure nothing I need to be addressing has fallen through the cracks. It still takes me about two hours to collect everything.

Now, it’s important to note that I’m collecting stuff for both my personal life and my professional life. I work from home, so the line between the two in terms of my “to-do” lists is often incredibly blurry. Many days, I practically alternate between “work” tasks and “personal” tasks. Plus, with the type of work that I do (it amounts to being a freelance writer when you bundle everything together, I suppose), there are always lots of little things I need to be remembering, so my collection time for professional stuff might be longer than it is for others.

Still, even if you’re unemployed, the collection process should take a good hour, minimum.

Another important part of this equation is that all you should be focused on is collecting stuff, not actually doing stuff. It can be really tempting when you’re collecting together all of the stuff to actually do many of the simple tasks, but that’s actually counterproductive because you never actually end up collecting all of the stuff you need to collect. Allen explains on page 105:

There are very practical reasons to gather everything before you start processing it:

1 | it’s helpful to have a sense of the volume of stuff you have to deal with;
2 | it lets you know where the “end of the tunnel” is; and
3 | when you’re processing and organizing, you don’t want to be distracted psychologically by an amorphos mass of stuff that might still be “somewhere.” Once you have all of the things that require your attention gathered in one place, you’ll automatically be operating from a state of enhanced focus and control.

The interesting part about this really is the sense of control and freedom you get when everything is collected in one place… but I’ll get to that again in a minute.

So How Do You Actually Do It?
Rather than go into great detail about how Allen explains it, I think it works best if I explained exactly how I’ve done it in the past that worked well for me.

First, I just sat down with a big, thick notebook in front of me and started thinking of all of the stuff left undone in my life. Each item took up a full page in that notebook, giving me plenty of room to jot down any notes about it that I need to remember.

As I wrote down a task, I literally tore the sheet out of the notebook and tossed it in the inbox on my desk.

What did I think about? Allen offers a list of things to think about several pages long, starting on page 114 of the book. Here’s a sampling from the “personal” part of the list:

Projects started, not completed
Projects that need to be started
Commitments/promises to others:
- Spouse
- Children
- Family
- Friends
- Professionals
- Borrowed items
Projects: other organizations
- Civic
- Service
- Volunteer
Communications to make/get
- Family
- Friends
- Professional
- Initiate or respond to:
=== Phone calls
=== Letters
=== Calls
Upcoming events [...]

This giant list goes on for several pages. I simply spent a moment thinking about each item and jotting down everything that came into my mind related to it. I didn’t worry about duplicating items, either, because I can deal with duplications later on when I process the pile. My goal is to collect everything, not to worry about organization.

After that was done, I toured my house, visiting every single room in it. I looked into cabinets and closets and dresser drawers. Whenever I saw something that needed to be done, I jotted it down in that notebook (one item per page), and when I returned to my office, I tore out all of those pages and tossed them in my inbox. In some cases, I actually picked up the physical item, like mail and magazines and such.

Key places to look include your email inbox (print off all emails that require some action), desk drawers, countertops, closets, the inside of any and all cabinets, the little drawers in your end tables, the top of your refrigerator, the back of the laundry room, and so on. Every place where you’ve hidden away stuff because you were unsure how to deal with it is a key place to look. And if you’re like virtually everyone else in America, you’ll find a lot of stuff you haven’t dealt with.

The first time I did this, I had almost 1,000 things in my inbox. I’m not kidding in the least – it was an amazing pile of stuff. And here’s the thing – you probably will, too.

In fact, one common problem is that you completely overwhelm whatever you have set up as an “in” basket. Allen is there for the save, on page 108:

If you’re like 98 percent of my clients, your initial gathering activity will collect much more than can comfortably be stacked in an in-basket. If that’s the case, just create stacks around the in-basket, and maybe even on the floor underneath it. Ultimately you’ll be emptying the in-stacks, as you process and organize everything. In the meantime,though, make sure that there’s some obvious visual distinction between the stacks that are “in” and everything else.

I certainly had several stacks. At the time, we still lived in the old tiny apartment, so the stacks took up much of the kitchen table for a day.

It’s easy to get overwhelmed when you see that kind of accumulation. I was a bit overwhelmed at first, but what I found was that when I realized that everything I needed to take care of in my entire life was in those piles and I didn’t have to think about them at all any more, it became much, much, much easier to deal with all of it. I didn’t have to have items stuck in my head to remember them any more and for the first time in a very long time, my mind wasn’t crowded with lists of things left undone. That filled me with a lot of physical and mental energy as I began charging through the big pile of stuff, processing all of it.

What usually scares people about the pile is that they’re not sure what they’re actually going to do with all of that stuff. “Where will all of this stuff go?” they’ll ask themselves. Allen riffs on this on page 118:

When you’ve done all that, you’re ready to take the next step. You don’t want to leave anything in “in” for an indefinite period of time, because then it would without fail creep back into your psyche again, since your mind would know you weren’t dealing with it. Of course, one of the main factors in people’s resistance to collecting stuff into “in” is the lack of a good processing and organizing methodology to handle it.

And that’s exactly what will happen next – building a good organizing and processing methodology to handle all of that stuff in your inbox.

Next time, we’ll look at chapter six, which focuses on the “process” portion of this system.

My office is a mess. I don’t feel like cleaning it – I’d rather play with the kids right now. So I say, “I will clean it in the future,” and I go play. A week later, my office is still a mess.

You’re not saving for retirement. You’re also spending as much as you bring in because you’re going out a lot and you just picked up a big HDTV and those car lease payments are whittling you down. So you say, “I will start saving in the future.” Five years later, you don’t have a dime in retirement.

I’m overweight. I was in pretty good shape, but my exercise routine was blown away by the writing, editing, and promotional work for my upcoming book. I’d like to run, but there is so much else to do. So I say, “I will go exercise in the future,” and I work on other things. A month later, I still haven’t started that exercise routine.

You’re in a truckload of debt, but there are a bunch of things happening this summer that you want to do. So you tell yourself, “I will come up with a debt repayment plan in the future.” A year from now, your debt situation is worse (if that’s possible).

I need to redo our will to account for our newborn son. It’s one of those “important but not urgent” tasks, so I’ll tell myself, “I’ll adjust the will in the future.” A month later, it’s still not done.

Going back to school. Looking for a different job. Taking charge of our spending. Kicking a smoking or a drinking or a drug habit. Rebuilding a relationship with our father or our mother or our sister or our brother.

There are countless things that we ought to be doing now, but instead of doing them, we simply say, “Our future self will do it.”

Guess what? Our future self is pretty unreliable, too. He/she doesn’t think that the task in hand sounds like much fun, either, and he/she is just as likely to put it off as you are.

Actually, your future self is even more likely to put it off than you are because you’ve already established a pattern that putting off that important thing is okay.

If you want to actually succeed in life, stop relying on your future self to take care of things. Now.

If you’re in debt and want to fix it, start fixing it now.

If you’re overweight, start eating better and exercising now.

If you’re not saving for retirement, set up retirement savings now.

If you want to get household tasks done, do them now.

Don’t find excuses to not do them because you want to do something “fun” today. There will always be something fun to do, which means there will always be a reason to avoid making the hard changes.

If you won’t make the change, your future self certainly won’t, either. By skipping out now, you’re telling your future self that not doing it is just fine.

Are you going to do something today, or are you going to give you and your future self permission to never actually get around to it?