Sarah and I have a lot of similar ideas when it comes to personal finance.

We both believe in saving for the future.

We both believe in spending far less than we earn.

Here’s a tricky one, though. We don’t mind spending on the things we value, but we both cut down hard on the things that don’t matter.

What’s tricky about it? What happens when we differ in opinion on the things that matter?

I’ll give you an example. Sarah loves chocolate. She is passionate about high-quality dark chocolate. She has a few brands that she buys regularly and when she does, she’ll slowly eat pieces off of a bar of it, savoring each bite and making it last for several days.

I know how much she loves it and I don’t mind a bit if she occasionally buys a bar of the good stuff.

On the other hand, she completely sees it as a splurge and often makes herself feel guilty about spending the money on a bar of high-end chocolate (think $5-10 in price).

So the strangest thing happens when we happen to be near a chocolatier. She’ll go in, inspect the wares on offer, and convince herself not to buy (though she really wants a bar). At the same time, I completely don’t mind if she gets a bar of it – and I do see how much she enjoys it.

So we’ll end up having a polite disagreement, each of us arguing the opposite of what we would naturally want. I’ll encourage her to get a bar of chocolate and she’ll state the opposite viewpoint, arguing that $9 is too much to spend for just chocolate.

We tend to do the same thing but in the opposite way in bookstores. I’ll see a title that I want to read, but I’ll talk myself out of it due to the price. If I haven’t picked up a book in a while, Sarah will actually encourage me to pick it up.

Our usual resolution to these “conflicts” is not to buy. Instead, it winds up just being someting of an affirmation that we care about each other when I argue that she should get chocolate or she argues that I should get a book.

What’s the lesson here? You can find a lot of value in not buying things. So many times, people see not buying something as simply having nothing.

The truth is that not buying is often something in itself. It’s a bit of self-esteem from your willpower. It’s the promise of using that money for something strongly life-affirming in the future. It’s packaged with a bit of good feeling that your partner wants you to be happy.

And it increases the sweetness of the splurge later on. Sometimes, I will buy that book, and because I’m not buying a book every week (or even every month), my enjoyment of that book is much higher. Sometimes, Sarah will go ahead and get that piece of chocolate, and the delicate bitterness of the deep dark cacao spreads across her tongue with the glory of the return of a long-absent but much loved queen.

A library with an efficient website completely changes how you use the library.

Here’s what I mean. Let’s say I’m visiting one of my favorite book blogs and I read about a book that seems intriguing. Rather than buying it immediately, I can follow a nice two-step process to allow me to read it first. First, I hit PaperBackSwap just to see if a copy is floating around there. If not, I hit the website of my local library and put the book on reserve (often, I’m #4 or so in a queue for anything new or popular). When it becomes available, I get an email saying “Stop by the reserve desk and pick up the book!” and boom – I have the book in my hands.

So, yes, on occasion, I do still buy books, mostly ones I know I’ll read and re-read and won’t be available on PaperBackSwap for a long time. But such services allow me to read to my heart’s content without dumping big cash into books any more.

The Benefits of Working from Home This makes a great case for the benefits of working from home for both employers and employees. The only catch is that it requires a very self-directed employee to really work well. (@ workawesome)

The 50-Percent Solution One sentence here really intrigued me: “I picked up the habit of buying multiples of something I like when I was younger.” I picked up a similar habit, actually. I think it was mostly observing that running out of something important can really cause problems, but there are better solutions than “just buy two.” (@ get rich slowly)

America’s Top Stores “Four chains earned outstanding scores for merchandise quality: Costco (watches and jewelry, personal-care items, hardware, home décor, kitchenware, electronic entertainment such as music and DVDs, and sporting goods and toys), Dillard’s (men’s, women’s, and children’s clothing; personal-care items; home décor; and kitchenware), Macy’s (home décor and personal-care items), and Sears (hardware).” That’s an interesting mix. I had some disastrous experiences at Sears about five years ago. (@ consumer reports via consumerist)

Finding Self Employed Health Insurance This is something I’ve looked into over the last several months as my wife and I make decisions about what’s best for our three kids, particularly during their pre-school years. (@ frugal dad)

Eating Yourself Into Debt It’s easy to vastly overspend on food and food-related expenses. It’s not just overconsumption that’s the culprit, either. (@ man vs. debt)

This is the first 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.

The first question a lot of people are going to ask is why am I writing a fourteen part series on a time management book on a personal finance website. Sure, there’s the obvious maxim that time is money, but what does that actually mean in people’s lives?

This book has changed my life radically over the past several years and has made my current life possible. The best way I can think of to explain how it has helped is to use my own life as an example, and so I’ll be doing that over and over again throughout this series.

Right now, I have three young kids at home that each require some time and focus and attention, as well as a wife and a marriage that need care and feeding. I have a writing career that involves having written two nonfiction books in the last two years (and working roughly on a third), writing short stories and polishing them for publication, and kicking around a novel. I also write two articles each day for The Simple Dollar, deal with the cavalcade of email and comments that produces, and manage advertisers and other demands related to that. In order to remain a good writer, I need to read quite a lot, too. I’m on multiple volunteer committees in the local community. My son is in a t-ball league, my son and daughter will soon be in a soccer league, and they’re both in a dance class. I share responsibility for maintaining the house with Sarah, with my part usually focusing on meal preparation (which I take pride in) and general cleanup. I have several friendships to maintain. Over the next three months, I have trips to Minneapolis, Indianapolis, Chicago, and Decorah (IA) planned. I also have a series of speaking engagements and book signings and other media appearances related to the book scheduled. I’m also learning the piano with weekly lessons and taking time to practice whenever I can.

Whew. How is all of that even possible? When I write it down, even I can scarcely believe that I pack it all in.

The thing is it’s not possible without a system of time management that actually works. If I didn’t have a good system in place, I simply wouldn’t be able to do all that stuff. Something would have to go, and it would hurt to remove any of it.

Allen sums this up pretty well on page four:

A paradox has emerged in this new millennium: people have enhanced quality of life, but at the same time they are adding to their stress levels by taking on more than they have resources to handle. It’s as though their eyes were bigger than their stomachs. And most people are to some degree frustrated and perplexed about how to improve the situation. [...] A major factor in the mounting stress level is that the actual nature of our jobs has changed much more dramatically and rapidly than have our training for and our ability to deal with work. In just the last half of the twentieth century, what constituted “work” in the industrialized world was transformed from assembly-line, make-it and move-it kinds of activity to what Peter Drucker has so aptly termed “knowledge work.”

Allen hits on two big factors here.

First, we tend to take on more than we can chew. Modern lives are so full of possibility that many people want to jam them full with as much as possible. We want a great job that pays well, but we also want the freedom to enjoy the rewards of all of that hard work. We feel personal responsibility towards causes, towards our family, and towards improving ourselves. Add that all together and you have days without much breathing room at all.

Another interesting factor is the blurred line between work and personal life. Many, many people are tethered to their jobs. Everyone who works at home, is self-employed, or runs a business can attest to this, as can anyone who carries a work cell phone with them everywhere they go and constantly receives calls about work-related issues. From a writer with a home office to a nurse constantly on call, we all have blurred lines between our work life and our personal life. We mix together work tasks and professional tasks constantly, like answering an urgent call during dinner with friends or picking up a birthday cake during our lunch break at work.

Allen argues that the most effective way to deal with all of this is to find ways to get the most done with minimal effort. He points to the idea of being “in the zone” – and reaching it as often as possible – as the key to success. On page 9:

There is a way to get a grip on it all, stay relaxed, and get meaningful things done with minimal effort, across the whole spectrum of your life and work. You can experience what the martial artists call a “mind like water” and top athletes refer to as the “zone,” within the complex world in which you’re engaged.

My days are pretty much constantly filled with being “in the zone” or trying to find a way to get there.

What exactly does that mean? I can’t really say what it means for others, but I certainly can describe what it’s like for me.

When I’m in the zone, I usually lose all track of time. That’s a big reason why I maintain my schedule electronically so that when an event occurs, it alerts me in various ways (usually a loud beep) to interrupt me and get me to my appointment. I also somewhat lose track of the mechanics of what I’m actually doing. So, for example, when I’m writing, I will lose all track of the fact that I’m sitting at a computer and typing. I get lost completely in the words and don’t notice anything else for long chunks of time. Also, when I pop out of the zone, I’m usually stunned at how much I’ve accomplished while in the zone compared to the amount of time that has passed.

In other words, when I’m in the zone, I’m incredibly productive, to the point that it’s very useful for me to arrange my other life activities to maximize the amount of time I’m in that state.

Thus, the best time management scheme would be one that is focused entirely on maximizing the amount of time I’m in the “zone.” And that’s exactly the point of Getting Things Done.

The entire idea rests on one core principle: dealing effectively with internal commitments. In other words, if something is on your mind, it’s going to make it much more difficult to get into that zone state. If you’re trying to remember the three things you need to get at the store and also remember to make it to your kid’s soccer game at 6, it’s going to be hard to drill down into the task you need to work on right now.

(There’s also another big factor here: the money. If you’re consistently able to get into “the zone,” you’re going to be much more productive and produce higher-quality stuff. This sets you directly up for better performance marks, pay increases, and the potential for better, higher-paying work. It can also make the non-professional elements of your life work much better – for example, practicing the piano works much better if I don’t have anything else on my mind.)

Allen touches on the basic requirements for managing commitments on page 13:

Managing commitments well requires the implementation of some basic activities and behaviors:

- First of all, if it’s on your mind, your mind isn’t clear. Anything you consider unfinished in any way must be captured in a trusted system outside of your mind, or what I call a collection bucket, that you know you’ll come back to regularly and sort through.

- Second, you must clarify exactly what your commitment is and decide what you have to do, if anything, to make progress toward fulfilling it.

- Third, once you’ve decided on all the actions you need to take, you must keep reminders of them organized in a system you review regularly.

In other words, if something’s on your mind, you need to get it out of your mind and into some sort of external system that you trust and that you review regularly. If you don’t, all the stuff you’re trying to keep in mind will make it harder for you to devote your maximum brainpower towards the task at hand, which is really needed to help you get into that “zone” state where your productivity goes up, your quality of work goes up, and your stress about it goes down.

The interesting thing, though, is that all of the stuff we store in our mind boils down to action. We keep facts in our mind to help us with a project (an action). We remember an appointment because we have to go to it (an action). We make a project plan so that we have an orderly flow of actions. It’s all about managing your actions – nothing more, nothing less.

Allen spells it out on page 19:

In training and coaching thousands of professionals, I have found that lack of time is not the major issue for them (though they themselves may think it is); the real problem is a lack of clarity and definition about what a project really is, and what the associated next-action steps required are. Clarifying things on the front end, when they first appear on the radar, rather than on the back end, after trouble has developed, allows people to reap the benefits of managing action.

The best way I can make this idea clear – and it’s a powerful idea – is to give you an example from my own life.

It’s 2:55 PM. I have an hour-long teleconference at 3 that I’m going to have to focus on. I also need to do a load of laundry, get supper started and in the oven, and get in some piano practice between now and five o’clock, when I have to go to a t-ball game. There is pretty much no way to slot in all of those projects because none of them fit before the conference call and the rest take more than an hour combined (and I have only an hour after the call), so something’s going to have to go.

Or is it? What I can do is simply identify the “next action” for each of these activities.

Finding the sheet music I want to practice with and setting it out on the keyboard is the next action for the piano practice, and it takes a minute or so.
Starting a laundry load, which is the next action in the “do laundry” project, takes about three minutes.
Pulling chicken out of the freezer and putting it on the counter to thaw is the next action for preparing supper, and it takes about thirty seconds.
My next action for the conference call is to get out my note-taking software and dial in. I focus entirely on the conference call and it’s over at four.
I then head downstairs and put the laundry in the dryer, the “next action” on the laundry project, taking about a minute.
I then walk straight to the keyboard, sit down, and am completely ready to begin banging out “Fur Elise,” which I do for twenty minutes or so.
I then go upstairs and proceed into the next action for making supper, in which I assemble a casserole and get it in the oven. It’s ready at 4:40 and the next action is to bake it, so I preheat the oven.
I then go downstairs and pull the clothes from the dryer, folding the items that need to be folded and changing my shirt, taking me until about 4:50.
I go back upstairs, where the oven is preheated, and put the casserole in the oven to bake while I’m at the t-ball game.
I walk out the door and drive to my son’s game, arriving on time with all of the projects completed.

By focusing on the “next action” and not stressing out on the projects as whole items, I was able to accomplish more than I thought.

It goes even further than that, as Allen explains on page 23:

For example, in the last few minutes, has your mind wandered off into some area that doesn’t have anything to do with what you’re reading here? Probably. And most likely where your mind went was to some open loop, some incomplete situation that you have some investment in. All that situation did was rear up out of your [short term memory] and yell at you, internally. And waht did you do about it? Unless you wrote it down and put it in a trusted “bucket” that you know you’ll review appropriately sometime soon, more than likely you worried about it. Not the most effective behavior: no progress was made, and tension was increased.

So, unless you have all of the things you need to do out of your head and somewhere else, the undone things interfere with your progress on the immediate action you’re tackling right now.

So, in that example above, if I don’t have a trusted system for getting all of those plans and next actions out of my head, I wouldn’t be able to concentrate well on that conference call because my mind would wander into those undone things. I wouldn’t be able to concentrate on my piano practice. I also wouldn’t be able to make a great supper for my family – I’d likely botch something while my brain wandered through the things I need to do.

If I know it’s all recorded and down on paper, my mind doesn’t wander. And if I’ve extracted the next action for each project I’m invested in, I don’t have to worry about those, either. I simply think about the item I’m tackling now on my current to-do list and nothing else has to eat up my focus. I can get in the zone when practicing the piano and really grow my playing skill. I can get in the zone on that conference call and wow the people I’m talking to, which helps my career.

Next time, we’ll look at the second chapter, which covers the five stages of mastering workflow – in other words, how exactly do you take the garbled collection of facts and ideas and things to do that eat up your short term memory and actually deal with them all in any sort of coherent way?

About once a day, I hear from someone who lists off a bunch of their investments, says that they don’t think their financial advisor is doing a good job with their money, and asks me what they should do.

My first advice to them is usually to dump their advisor and handle their investing themselves. It’s actually incredibly easy to do this given all of the investment tools available to people online today.

Don’t get me wrong: there are a lot of good financial advisors out there that actually do help people through tough spots and get their finances straight. However, there are a lot of mediocre ones out there that just sit on a person’s money drawing a commission while doing nothing for them. Even worse, there are some truly poor ones out there who actively do you a dis-service.

Here’s the thing, though: that statement is true of anyone who provides a service, not just investment providers.

When you hire someone to mow your lawn, some of them will do an immaculate job. Some of them will do a job roughly equivalent to what you will do. And some of them will drive the mower over your rose bushes.

When you hire a plumber, some of them will fix the problem you called them for in a jiffy and fill the remaining time performing maintenance. Some of them will fix your problem and then loiter. Others will attempt to fix your problem and wind up flooding your basement.

There are great people, there are mediocre people, and there are awful people, no matter what you’re trying to accomplish.

In fact, it doesn’t matter what the task is – as long as there is a minimum level of qualification (and I mean minimum), the biggest difference between the people you hire is the kind of person they are. Are they the person who goes the extra mile? Are they the person who is there to collect a paycheck (which is fine for some jobs, but not for others)? Or are they the person who is grossly negligent?

I have a few little tests that I use whenever I hire someone for any purpose, whether it’s an accountant or a gardener.

First, never hire someone going door to door. Find out about services independently and contact the service provider yourself. I almost always use my social network first to ask for leads before turning to the “Russian roulette” game of the yellow pages.

Second, get away from negativity, fast. One key thing to ask someone when you’re thinking of hiring them for a task is what they expect from the customer. This is usually an open door for a negative person to start blasting away at some of their “awful” customers from the past. If you start hearing this kind of negativity from anyone you’re considering hiring, back away quickly.

Third, ask them what they can do better than a competitor. If they can’t come up with anything, then they likely don’t pride themselves on their work, so if you don’t get an answer, reconsider your choice. If you’re proud of your work, you can almost always come up with some element that you do well.

You should also ask them about their experience. If they can’t quantify their experience in any reasonable way, then be wary. Many people will put up a big false front of experience just to try to get a job, which is inherently dishonest. I’d far rather hire someone new who admitted they’re new than someone who tries to vastly overblow their experience, because honesty is key when you’re hiring someone.

Finally, describe the job you want them to do and ask if they’re up to it. If their immediate reaction without asking any sort of follow-up is “Yeah, sure, no problem,” then I get nervous. That means they’re claiming to be able to easily do something without knowing what it is. This can be fine for things like mowing a simple yard or replacing a kitchen faucet, but if the job seems complex to you at all and they’re not asking any follow-up questions, consider someone else.

If a person manages to get past these five red flags for me, I’m usually at least somewhat confident in hiring them. What red flags do you have when hiring someone?