Charlie writes in (this is an excerpt, because the full story is quite long):

What I finally realized is that I usually buy stuff because it makes me feel like this is all worth it for a while, that all the work I’m doing isn’t just going to feed Uncle Sam and to keep a roof over my head and cheap food on the table. But then I get the bills and I feel even worse than I did before.

The ups and downs of buying stuff (up) and then seeing the new wear off and facing the bills (down) is a rollercoaster, but at least it’s better than the mundane shuffle through life of just paying the mortgage and going to the grocery store and going to work over and over and over again. A completely frugal life is the most mundane thing I can imagine.

I think you’re going about this from completely the wrong perspective, Charlie.

First of all, frugality is not about giving up the things that bring you joy in life. It’s about figuring out what actually does bring you joy in life and accentuating that, then cutting back sharply on the things that don’t matter as much to you.

For example, if you don’t watch much television, a frugal decision would be to get rid of your cable box and just use the over-the-air signals – or, perhaps, selling your television off entirely.

A key part of that statement – perhaps the key part – is the if you don’t watch much television part. If you do enjoy television and you watch it multiple hours per day, then you shouldn’t cut back on it. You might, however, find that you don’t watch your premium channels much, so you might get a cheaper package – or you might not.

Another example: if you’re not home during the day, why would you bother to heat or cool your house during those hours? Get a programmable thermostat, install it, and set it to turn off your air conditioning or furnace during the hours where you’re not at home. Why? Because for virtually everyone on earth, keeping their home at a perfect temperature when no one is there is not a key value in their lives.

There are some things I don’t hesitate to spend money on. I will buy expensive cheeses and other ingredients for great home-cooked meals. I don’t skip on kitchen implements – I get stuff that will last forever. I don’t mind buying a book that I know I’ll re-read in the future. I’m currently shopping for a piano and I will happily pay the right price for the right piano.

Aside from that, though, I unabashedly cut corners. I make my own laundry detergent because, frankly, buying Tide doesn’t improve my quality of life. We use cloth diapers for our baby. I use vinegar to mop the floor. We have a single television in our house and it’s an old CRT television that has a discolored screen on one side of it. This stuff isn’t really important to me at all – so why would I spend anything more than the minimum on it?

Hand in hand with that is big, long-term goals. My wife and I have some large, long-term goals that are deeply fulfilling to both of us. Foremost among them is our long-talked-about home in the country, with trees around and a small barn in the back. We both want this deeply.

I have a picture that currently serves as my desktop wallpaper on my main computer I use for work. It depicts nothing more than a nice-looking farmhouse-style home surrounded on two sides by trees, with a red barn off to the left. It has a long driveway leading up to it and on the driveway, you can see a child running towards the cameraperson. That’s exactly what I’d like to have. (I’d happily shre the photo, but I think I’d get into copyright trouble if I did.)

I know that every time I choose not to have something that’s important to me, I take one step in that very long journey towards that dream we share. I look at that photo sometimes as I’m checking account balances and I feel very warm inside knowing that all of my little choices are slowly adding up to something we’ve both wanted for a very long time.

That feels good. That feels really good.

The combination of these two factors is that frugality enables me to reach for the big things I want out of life without giving up the little things that genuinely matter. The drawback? I’m not buying products that aren’t important to me.

Some drawback.

Many newer readers of The Simple Dollar haven’t been exposed to the hundreds of great articles in the archives of the site, so this is a weekly series that highlights the five best posts from one year ago this week, two years ago this week, and three years ago this week. I call it … the Time Machine.

One Year Ago (July 25 – July 31, 2009)
Does Earning More Trump Frugality? To me, it’s kind of like asking if you still need a hammer after you buy a chainsaw. They’re both useful tools for getting the job done that can be used in concert for some amazing things.

Makers and Managers: What You Are, and How It Can Help Your Career I am 100% a maker. I do not like being a manager – at all. This fact actually explains a lot about my career path and the directions it has taken over the years.

John’s “Campground” – Some Thoughts on Investing with Added Personal Value John is investing his money in land – and, eventually, into the structures he’ll build on that land. He enjoys the process deeply and will someday have a great deal of financial value there.

Passion by the Hour In my eyes, the things you’re passionate about are the things that you can dump tons of time into while still deeply enjoying yourself. If you can channel that into earning income in some way, you’re far ahead of the career game.

Rule #7: Watch Your Progress – But Make It Fun. While keeping track of your progress towards big goals can be really empowering, it can also feel like drudgery. The best way is to keep your end goal in mind and recognize that you really are taking steps that will get you to where you want to be.

Two Years Ago (July 25 – July 31, 2008)
Some Thoughts on Being Broke and Being Poor I don’t address poverty on The Simple Dollar. I do address the state of being broke, which is more of a state of resource mismanagement than a lack of resources. The vast majority of people in the United States are broke, not poor. They have the resources needed to make it, they’re just dealing with the results of mismangement of resources in their past.

Overcoming a Habit of Lying to Yourself About Money Deceiving yourself is one of the most dangerous things you can do. Almost every time you see someone under a mountain of debt, some sort of self-deception is at the root.

Class Warfare and The Simple Dollar So often, people want to view personal finance advice as some sort of rich versus poor battle. In truth, both sides of the coin want the same things: more time and more security.

How to Deal with a Partner That Hides Money Problems Sunshine is the first step in the process – all of the issues have to be out on the table so that you have a starting point from which to build.

The Single Biggest Money Mistake I’ve Ever Made I think the real root of it all is that I listened to other people instead of to my own heart.

Three Years Ago (July 25 – July 31, 2007)
Which Is Best: Paying Off Debts Now – Or Avoiding Future Ones? Reasonable protection against future debts – i.e., an emergency fund – is an essential first step, but at some point you round the corner and start paying off the debts you have now.

Applying Jerry Seinfeld’s “Chain” Concept To Personal Finance The “chain” idea is still one of the best ideas I’ve ever heard. I’m using it right now with my piano lessons.

10 More Ways To Entertain Young Children For $1 Or Less (Without The TV) The best way to entertain your children in a valuable way is to just spend time with them. It really doesn’t matter what you’re doing.

Personal Finance In A Family Crisis For me, family crises are what emergency funds are made for. Sometimes, things happen – you have to fly to another part of the country to be with someone, fifteen sad people are sitting in a kitchen and someone has to come up with lunch, and so on.

Is It Worth Higher Prices For A Quality Shopping Experience? For me, once you reach a minimum level of quality – the store is clean and you can actually find what you’re looking for – then additional quality doesn’t really add anything beyond a higher price at the register.

If you’d like to browse through more of the archives, visit the chronology, where all posts are listed in chronological order.

Ten Ways to Get More out of The Simple DollarUpdated!
This is kind of a FAQ for new readers and is posted each week along with the Time Machine. Here are ten great ways for new readers to dig deeper into The Simple Dollar.

1. Subscribe by email or RSS. Visiting The Simple Dollar’s website is great, but for many people, it’s more convenient to receive the articles in another form. It’s easy to join 60,000 other subscribers and get The Simple Dollar’s content by email or in your RSS feeder (if you’re unfamiliar with RSS, check out Google Reader.

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4. Follow me on Twitter. I post interesting articles, quotes, follow-up material, commentary, and other material on Twitter. Follow me! If you’re unfamiliar with Twitter, it’s essentially an open discussion forum for people to share ideas and thoughts with other like-minded folks – you just choose the people you want to listen to and their ideas and thoughts are all delivered to you on a single page.

5. Read my story of financial meltdown and recovery. The Simple Dollar isn’t based on what I’ve read in books or learned in school. I’ve made a lifetime of financial mistakes – The Simple Dollar is a record of what works for me during the process of getting my life on a better track.

6. Download my free 49 page e-book. Everything You Ever Really Needed to Know About Personal Finance On Just One Page is completely free. It summarizes all of the key lessons I’ve learned along the way about personal finance in one tidy package – in fact, all of the main principles can be found right on the cover.

7. Dig through “31 Days to Fix Your Finances.” 31 Days to Fix Your Finances is an article series that outlines how you can get a grip on your finances over the course of a month.

8. Send me your questions and suggestions. Send me an email and let me know what you’re thinking, what you’d like to see, and any questions you might have. I try to respond to as many emails as possible and I read them all. I may even use your question in a future article!

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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.

After returning home from two weeks of vacation, my wife and I planned out a very nice summery meal that would have made a great post for the Summer Meal Series. It required one key portion of the meal – either a pork shoulder or a few chicken breasts, depending on which way you wanted to go – to cook all day on low in a crock pot, then be used at the end of the day.

Yesterday morning, my wife and I woke up and planned out our day. She volunteered to get the pork shoulder cooking in the crock pot, after which we’d spend a pretty typical summer day at our house. She went downstairs, put it on to cook, and went on about her business.

That evening, we pulled the shoulder out of the crock pot and began to shred it with forks, which was part of the recipe (don’t worry, I’ll likely use it again near the end of the series!). We both noticed that this piece of meat had to be the toughest piece we’d ever met – it simply was not tearing apart at all.

Then Sarah realized what had happened.

Instead of setting the crock pot to cook on low all day, she set it to merely keep food warm all day. The shoulder we had in front of us was warm but completely uncooked. And, naturally, because raw pork had been sitting warm all day, it was a health hazard and had to be tossed out.

It’s now 6:45 PM. Our children are getting very hungry for supper and we want to get something tasty and kid-friendly on the table as quickly as possible. What do we do now?

We brainstormed. In about two minutes, we took a lightning-fast inventory of the refrigerator (remembering, of course, that we were pretty low on food since we had just returned from a two week trip) and the pantry. And we came up with a plan.

Tuna melts, with side dishes of sweet potato fries and a salad.

As we were preparing this substitute meal, Sarah suggested that I write about this entire endeavor. “Why not? These kinds of things happen sometimes in the kitchen, and we are coming up with a quick and fairly tasty substitute that isn’t just calling for delivery.”

We had the full meal on the table by 7:10 PM. Here’s what we did (I don’t have as many pictures as normal, of course, because we were running on extremely pinched time).

The ingredients for the tuna melts were simple. Buns, tuna, mayonnaise, tomato, pickles, and cheese.

All you do is take two cans of tuna, toss the contents of the cans in a bowl, and add a bit of mayonnaise. The amount you add is really up to you – the more you add, the runnier it will make the sandwiches. Then, swipe two teaspoons of pickle juice from the pickle jar and add it to the mix. Stir, stir, stir.

We then sliced up two tomatoes. On each sandwich, we put a big teaspoonful of the tuna mix, a slice or two of tomato, and a slice of cheese. These made for nice little sandwiches.

We then wrapped the sandwiches in aluminum foil and baked them in the oven at 375 F (about 190 C) for 10 minutes. In the end, we just had a plate of wrapped sandwiches on the table.

What about the sweet potato fries? Whenever we get a bargain on a bunch of sweet potatoes, we pre-make them into batches of sweet potato “fries” that our family loves. All we do is slice them lengthwise into quarter-inch fry shapes, then soak these fries in water for 30 minutes. When they’re done soaking, we pat them dry and put them into freezer bags in small bunches, freezing them.

When we pull them out of the freezer, we dump the contents of the bag into very warm water until we can separate the fries. We then dredge them all through a bit of olive oil, lay them out on a cookie sheet, and sprinkle a bit of salt and pepper over the top. They go straight into the oven under the broiler for about a minute, then we pull out the sheet, flip over all of the fries with a spatula, then put them back under the broiler for about a minute.

Once that was done, we left the fries in the oven to cook while the tuna melts were cooking – 375 F for 10 minutes. They were done perfectly – crunchy on the outside, a bit soft just under the crunchy, and a firm center. (I’m not the biggest fan of sweet potato fries, but my wife and children love the things.)

What about the salad? During the ten minutes that the other items were in the oven, I pulled out a lettuce mix we had picked up on sale at the store for a dollar, put it in a bowl, and put a bit of dressing in the bowl (actually, more than a bit – I poured in more than I intended to in the picture below).

I then added a few pinches of shredded cheese and a few leftover tortilla chips to give the salad a bit of crunch. I tossed it all together with a fork, leaving us a salad.

And that was our meal, from panic to dinner table in about 25 minutes.

It was a hit. Our children liked every meal element, as did my wife. I don’t like sweet potatoes myself, so I merely ate a tuna melt and a big pile of salad for dinner.

Here’s the big lesson to take home: a disaster like what happened at the start of this post is not a reason to order food and pay exorbitant costs for it. Be a little flexible. See what you can put together with what you have on hand. Most of the time, if you’re handy in the kitchen, you can quickly put together a reasonable meal in as lttle time as it would take for the deliveryperson to arrive – and much cheaper, too.

Along my financial journey in life, I made a great number of mistakes. In this ten part series which runs from July 19 to July 30, I’m going to focus on ten of my worst mistakes and the difficulties and successes I’ve had in overcoming those mistakes.

I had no specific goals, either in the short term or the long term.

That’s not to say that Sarah and I never thought about the future – we certainly did. The problem is that it was always in the sense of vague things that would happen “someday” and didn’t require any sort of active response today.

We dreamed of having a house of our own. I had a dream of a different career. We had dreams of having a certain number of children and providing all sorts of wonderful things for them.

Those are certainly great goals to have, but they’re so unspecific that they don’t mean anything. Worst of all, they didn’t require us to do anything today to start moving towards them, which enabled us to keep wandering through life.

A good goal, no matter how big it is, gives you an exact target to shoot for, a way of measuring your progress towards that goal, and the possibility of activity today to move you towards that goal. None of our goals back then had any of these things, which is why they weren’t really goals at all, but pipe dreams.

What woke me up and made me realize that something was wrong with this type of goal-setting was the fact that we were actually moving further and further away from these goals as time went on. As we got more into debt, we moved further away from having a house of our own and further away from my dreams of being a writer. We certainly weren’t doing a good job of financially providing for our son.

As we grew into our late twenties, we began to see that our big “dreams” were slipping away from us. It was a very, very painful time, one that shook us into making some serious changes in our lives.

What changed? One big change is that we started talking about these kinds of things in more detail. What did we both really want from our lives together? What do we need to do to get there? What can we do today to start moving us there? Addressing these questions with seriousness helps you quickly figure out what things you really want from life and whether you’re willing to work hard to have them.

The lack of goals earlier on in our lives cost us dearly. If we had these types of specific goals with specific plans in mind when we graduated from college – or even earlier – I shudder to imagine where we would be at right now.

How can you avoid this trap?

First, set the kind of concrete, tangible goals I describe above. As I said, a good goal gives you an exact target to shoot for, a way of measuring your progress towards that goal, and something you can do today to move towards that goal. If you’re having difficulty coming up with these things, it might be a sign that this isn’t really a key goal in your life (which isn’t a bad thing at all – getting rid of goals that you’re not committed to makes room for the goals you are committed to).

Second, constantly remind yourself of that goal. No day should pass without at least a bit of reflection on what you can do today to move towards the goal – and actual action on that idea. Again, if you’re not willing to take the daily action, it’s time to reflect on whether or not those goals are really in line with what you want out of life.

Finally, be willing to share these goals with others. Support from those most important to you can really make a difference in terms of whether you can achieve the things you dream of. Talk to those people about your goals and how you plan on getting there. Don’t be afraid to ask for help, particularly through the rough spots. It’ll make more difference than you can imagine.

Along my financial journey in life, I made a great number of mistakes. In this ten part series which runs from July 19 to July 30, I’m going to focus on ten of my worst mistakes and the difficulties and successes I’ve had in overcoming those mistakes.

I surrounded myself with friends who constantly encouraged poor financial choices.

Most of my social circle during my early professional years consisted of people who placed a great deal of social worth on consumption. Respect and friendship were doled out based on the elecronics you owned, the clothes you wore, the golf clubs you had, the places you ate at, and so on.

If you showed up to a social event with a new cell phone or a new driver, the gang would gather around you with high-fives and looks of awe and respect and envy for the items you had.

On the flip side, if you had an old cell phone or didn’t wear great clothes or used old golf clubs or hadn’t eaten at the best restaurants, you were gradually excluded from the conversation and, eventually, excluded from the social events as well.

I made a valiant effort for a few years to run with this crowd. I dressed wonderfully. Sarah and I ate at tons of nice restaurants. I had the latest gadgets, including piles of video games. I went out with the gang a few nights a week. The list went on and on.

It was just a giant game of oneupsmanship. Rather than building real relationships based on the realities of our lives, everyone just talked about stuff – and who had the best stuff. Why talk about long term goals when you could brag about your new golf club? Why discuss how to get ahead at work when we could trash talk someone for wearing slightly worn clothing?

In order to stick with this crowd, though, a person had to spend – and keep spending. Every single person in that group was living beyond their personal means. I suspect that some of them had parental help, but I’d be willing to bet all of us had some level of credit card debt.

What happened to this social circle when I finally got some sense about personal finance and realized I was driving my future into the ground? Almost universally, I was dropped from the group. They laughed at the idea of making a meal at home when you could be dropping $100 for a plate at a steakhouse. They stared at my beat-up cell phone. Soon, they stopped calling and inviting me to do anything with them.

Yeah, it hurt. What I realized from the experience, though, is that these people weren’t my friends. They cared about stuff, not about me. They only wanted people around them to reinforce the over-the-top spending decisions they were making.

Think about it this way. It’s a lot easier to spend $3,000 on a handbag if you have a circle of friends that talk reverently about said handbag and will ooh and ahh over it if you buy it, compared to, say, a circle of friends that wonders why on earth you would spend $3,000 on a handbag.

My current circle of friends is much, much different. We get together for regular potluck dinners. We play board games around the kitchen table. We have conversations about life goals and about ways we can maximize our bucks and our time. We share clipped coupons with each other. We laugh together and goof off together.

In short, it’s an environment that supports a healthy flavor of personal finance management. We don’t socially reward over-the-top consumption. Instead, we socially reward insightful discussion, good humor, and good life choices.

Having such a circle makes it so much easier to be in financial control. There is no social expectation of spending. Instead, there is a social expectation of rational use of money and time, of investing for the future and thinking about the future, of exploring the handful of hobbies that are actually important to each of us.

My biggest mistake was not investing the time to find a social circle that matched these values to begin with. Instead, I simply started hanging out with the first people that I had even the smallest interest overlap with and I wound up adopting that group’s values for a while rather than seeking out others that may have matched my own.

How can you avoid this trap?

First, don’t believe you have to change who you are or what you value just to match what your social circle wants. If you’re buying things or doing things that mostly only serve to impress your social circle, it’s a great sign that you’re perhaps not in the right circle of people.

Second, seek new friendships in the right way. Let your own true values and interests lead you to these people. Engage in groups that match the things you want to do – don’t engage in activities just because that’s where you think people are. The bar/club scene come to mind – I’ve met so many people who basically can’t stand going there, but they continue to do so simply out of a desire for social interaction. Broaden your horizons and start seeking people based on what you value, not based on what you think they value.

Finally, don’t hide who you are. This doesn’t mean you have to hang out all of your dirty laundry, but it does mean that you shouldn’t have to hide some significant aspect of what you value or who you are. If you’re in a group that won’t like you because of some aspect of who you are, it’s time to find a different group. If you’re in a group that won’t respect you because you’re goal oriented or in charge of your finances, then it’s time to find new friends.

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. A pile of problems
2. Financially helping a boyfriend
3. Vinegar and water for cleaning
4. What debt comes first?
5. Subsistence farming
6. How much term insurance?
7. Thoughts on iPad
8. Entrepreneurship gone bad
9. Cell phones gone wild
10. Powdered homemade laundry detergent

Taking a five day trip, followed by a two day break, followed by a six day trip, all with three children under the age of five, is not a good idea. I officially need a vacation from vacation.

I’m having severe financial troubles and have no clue as to how to proceed. I’m 48 and unable to work due to disability (but I have been denied several times for disability benefits). My husband, who is 43, has been unemployed for a year and a half. He was working at California Closets in the shop previous to that. We have been living on his unemployment check ($1600 per month) and now that has ended. We’ve moved in with my parents and have applied for food stamps. It simply can’t get much worse than this. Oh but yes it can. We have about $10,000 in credit card debt and $2500 in medical bills. (I know, I know…. stupid!!!) We had been keeping up with these payments when he was receiving unemployment but now cannot pay them and are accruing late fees. We can’t even file for bankruptcy because we did that 4 years ago when our business of 10 years (retail bookstore/gift shop) failed. I’m mad at myself for letting things get this bad and I feel helpless and stupid that I’ve made so many poor financial decisions in the past. If you were in my situation, what steps would you take. What should I do?
- Kim

The absolute first thing you need to do is to figure out what work you’re capable of doing. If you’re being denied disability benefits, clearly there is an opinion out there that you are capable of some level of work. Seek out employment services that can help you with this, because it can sometimes be difficult to make a good self-assessment in a situation like yours.

You also need to remember that the debts you have now have no collateral, so not paying them for a while won’t result in repossession of anything. It will result in further damaged credit and a good deal of harassment, however.

You’ve got a rough road ahead, at least in the short term. Patience will be your best friend here.

I bought a house last year with my boyfriend of 3 years. 1 month after closing he was laid off from work. Unemployment insurance gave him enough to pay bills/mortgage. He did not want to share any financial information with me, and I knew he had debts. I offered to help out with budgeting and his general financial well being and he was against it.

I work in a creative field and am lucky to have a comfortable income. Last year I got a significant raise and have been saving a lot, I did not make much money previously. Also I am frugal, coupon cutter, and am upset that my boyfriend did not care about his finances. What should I do? We are not married, and the mortgage/bills need to be paid. How long am I suppose to cover him? He thought we would be married by now, but being laid off sort of paused our lives. Not being able to get married is upsetting to him, making him feel like a failure. I feel I am in a tough situation. Our families act like we are married, but we do not combine finances. I also do not want to be the sole provider. I can afford the total mortgage on my own, does that mean we should keep the house? I did not plan for this at all. I have 2 thoughts: #1-I work hard for my income and do not want to carry him. #2- I get upset that all these fees, interest charges, could be money for saving to have a child, so if I don’t help him out, it would effect me in the long run.
- CM

How long are you supposed to cover him? The answer to that question is the same as another: how long do you think this relationship is going to last?

Your last paragraph seems to hint at some very serious trust issues in your relationship, as well as some incompatible values. If you can’t get those things on the same page, your relationship is not going to be one for the long term, and you’re better off moving on now.

If you are thinking this is going to be a very long-term relationship, then his debts are effectively your debts, because they steer what you’re going to be doing in the future.

If you’re sticking around out of some kind of obligation to take care of him, you shouldn’t. He’s an adult and can make his own choices in life.

You need to answer for yourself whether this is a relationship that is going to last. If it is not, move on.

What proportions are best for floor cleaning w/ vinegar & water? thanks for your advice….using this will be so much better than the expensive Swiffer products & other harsh, harmful & costly products.
- Donna

I usually use equal amounts of water and vinegar, and use full-strength vinegar on tough stains. I do this on both hardwood and linoleum surfaces and I haven’t seen a problem yet.

Considering the huge jugs of vinegar you can get for just a little bit of pocket change, this is a pretty cost-effective way to get the floor clean. You don’t need too much of the liquid as long as you have a good mop to work with.

Actually, that brings up another good point – the better your mop is, the easier the cleaning is, regardless of what cleaner you’re using. I trust the recommendations in this article over at Real Simple.

I am 25, recently married (2 months ago), my wife is 26. I currently work in web development making $44,000 per year (about $2600 per month after tax). My wife is a high school english teacher and unfortunately was part of budget cuts this past school year and is now unemployed. She is collecting unemployment now until we can find her a new job (it may not even be this fall given the job market) So she will be collecting unemployment at about $1860 per month.

My question is what should I do with the money? I’ve contemplated knocking off the car loans to get them done with, but don’t want to reduce our savings too much to do it. What’s your take on the situation?
- Erik

The first thing I would do is make sure you can make ends meet with your current income level, and also with the income level that you’d have if your wife’s unemployment runs out. If you’re not going to be able to make ends meet easily in those situations, I wouldn’t use up the emergency fund too much.

If you do decide that paying off debts is a good move – and it certainly might be, because it will improve your monthly cash flow and your long term net worth if you don’t have to dip into debt in the future – I would pay off the lowest balance one first, because that will provide the most direct benefit to your monthly cash flow.

I’d also encourage your wife to take on any work that would bolster her resume, even if it’s unpaid. Things like working at educational-based summer camps, getting involved with America Reads/America Counts, or anything along those lines can be a real boon. The more experience she gets teaching children and the more things she gets on her resume, the more likely it will be she can find a teaching job down the road.

I am a 20 year old girl living in an apartment in Raleigh NC with my boyfriend. I work part-time as a nanny to pay the bills and he works part-time at a moving company so we have a very modest income and no savings. We have a shared dream of some day, hopefully sooner than later, moving into a moderately sized house on a large area of land where we can grow our own vegetables in a greenhouse and raise a family and perhaps even adopt a few more dogs and some chickens. The problem is is that I have no idea where to start. I’ve been a city girl all of my life and because I am not going to college and I am underemployed, home ownership is still a distant dream. Do you have any tips for me as far as how to become a subsistence farmer with little experience and no money?
- Melissa

Trying out subsistence farming with little experience and no money is pretty much begging for absolute failure.

If you want to learn the ins and outs of small scale farming – and you’re only working part-time – get a part time job for a small-scale farm. Tell them your story and that you’re willing to work hard in order to learn how it all works as something of an apprentice.

I can tell you from experience that if you want to grow lots of fruits and vegetables or raise animals, nothing trumps experience. The more experience you have, the easier it will be to start things on your own without a long series of outright failures.

I work at a relatively stable job and my employer offers a life insurance policy of 6X times my annual salary for just $8.23 per 2 weeks. I plan to purchase this policy as the premium is so low for such huge coverage. However, I fear that this policy would lapse if I get laid off. And so, I wish to purchase term insurance from a 3rd party such as Metlife or such Insurance companies.

Can you offer any thoughts or opinion on this matter? It would really help me.
- Indrajeet

That plan makes quite a bit of sense. In essence, you’re spreading out the risk.

Obviously, the plan offered by your workplace is less expensive than virtually any other life insurance you’ll probably find. It comes with a risk, though – if you lose your job, you lose the insurance. Splitting the policies in this way spreads out the risk.

My only suggestion would be to keep a careful eye on your employment status and get an additional policy if you lose your job.

I’m starting a four-year PhD course in September. I’ve just finished my undergraduate course (graduating with a First) and in total I’ve read over 550 papers (and that’s just the ones I kept track of in my EndNote library!). At the moment I print out most papers that I read, carry them around, read them, highlight bits and make brief notes on them, and then put them in a big pile. I’ve been wanting for a while to make this (a) easier, (b) more environmentally friendly (although I do recycle all of the paper afterwards) and (c) reduce my hugely high printing costs.

What do you think? It’s not necessarily your place to advise I know, but I was trying to apply some of the principles I’ve learnt from your blog, but still don’t know what to do!
- Robin

Before you worry at all about what to buy, make sure that you really understand your need first.

From what I understand here, you’re struggling with the ongoing cost of printing out research papers for your studies. Based on my own experience, you’re probably annotating them in some fashion. You also need the papers to be very portable.

A tablet computer does solve most of those concerns. However, don’t just limit yourself to the iPad. There are a lot of other tablet computers out there (like these). A netbook may also be a great solution for what you’re trying to do.

The real danger I see here – and it’s one that I’m guilty of myself – is seeing a particular gadget or other item and imagining in your head all of the problems that it could solve in your life. The problem with that kind of thinking is that often, you’re not solving real problems, just imagined ones.

Your best bet is to always go through your life and just look for things that pop up again and again that could be done in a better way. If you think to yourself every night that your bed is uncomfortable, a mattress might be a good buy. On the other hand, watching a mattress ad and thinking to yourself, “That looks comfortable… I’d better buy one,” is not a good personal finance solution.

For me, at least, I’ve had an ongoing list of features I’d like to see in a tablet computer, a list I’ve kept for years. These are all things I do all the time that would be massively simplified with a tablet. As the apps from the iTunes Store get more and more robust, I’m beginning to believe that the iPad actually is that device.

In December 2007 I bought a franchise. It was in an area that was a passion for my wife and I while fulling a dream of entrepreneurship. Unfortunately the economy decided to poop on my dreams. Essentially we opened our doors for business in November 1st 2008, and closed them Oct 28th 2009. We filed bankruptcy and our house was lost in foreclosure. That was all settled in February, all except for one small detail. WE have an $80,000 SBA loan held against an investment property that my in-laws own. I could have let that mortgage go and saved our own home in the process but chose to keep the debt and do what I feel morally obligated to do. My in-laws would have had to either pay that debt or lose the rental.

How can I deal with such a LARGE debt?
- Aaron

To put it simply, you deal with it slowly but surely.

Paying off this debt is all about cash flow, period. The less you spend in a given month, the more you have to contribute to that debt.

Right now, you have a handful of major expenses eating up your cash flow. $925 a month for rent? You’re significantly delaying the payoff date of your loan by moving out of your in-law’s house. $1,200 a month for child care? Given the other opportunities your wife would have to save money as a stay-at-home mom (for example, babysitting during the day, preparing home-cooked meals, etc.), is that really saving you money?

What about that $330 a month car payment? Do you need a car that requires $330 a month? Wouldn’t a low-end used car get the job done and let you channel $250-300 more per month into that loan?

If you’re reacting to these comments with defensiveness, you’re thinking about this the wrong way. Paying off a giant debt means making hard choices, ones that sometimes make us uncomfortable. Yet, the debt is also making you pretty uncomfortable, too. You have to answer some hard questions about what’s best for your entire family.

Potential entrepreneurs: Aaron is the face of exactly why it’s so important to have all of your ducks in a row before you jump into business ownership. The more debt you take out at the start, the bigger the risk is, and Aaron’s story shows loud and clear how painful the downside can be.

I recently visited the Verizon store with my husband (a minor stuff hoarder and chronic upgrader) We were replacing the 2nd phone he ruined due to water. (fishing and then walking in the rain). Before we were married, I was fine with dial up internet, one home phone and no TV. Now we have Verizon FIOS bundle with HD, sports and outdoor TV, internet, land line phone and 2 cell phones. Anyway, back at the Verizon store, he wanted a droid because it takes pictures you can send to your email and it is new cool technology. (I suggested he just take our camera with him and he rolled his eyes) With quite a bit of effort, I was able to pull out all the costs from the salesman. It is an extra $10/month just to have the droid, another $30/month to have internet service and it costs to send the photos or text. I went from spending $30/month on all this a few years ago to $250/month with growing costs on all this technology that just makes my life more complicated. I love my husband and want him to be happy and am fine with having these things now. We can afford it but deep down, I have difficulty with my feeling that we are being blindsided and ripped off.
- Laura

You’re not being blindsided or ripped off. It sounds like you have two top-of-the-line phones with unlimited data plans and unlimited texting. Those are all going to cost you – and those are all unnecessary services.

It sounds like your husband has a gadget addiction and, even more worrisome, he doesn’t take care of the gadgets he already has. You’re being blindsided and ripped off, but it’s not by Verizon. It’s by an addiction to gadgets.

You have a choice to make. You can either just sign off on all of this stuff or you can have a sit-down with your husband and make some hard choices together. It’s up to you.

Trust me, though: gadget escalation gets more and more and more expensive. There really is no limit to it except for what you impose on yourself.

Curious if you have ever tried the powdered versions of the homemade laundry soap. I love the homemade soap concept (especially having a 5 month at home, so we need perfume and dye free soaps) but the idea of storing 5 gallons seems like a headache. Seems like I could store a pretty big supply of powdered detergent in a small Tupperware. Any experience on this?
- Jeff

You can certainly make powdered soap, but it takes a bit longer to make.

Just use my homemade laundry detergent recipe. Just use the three solid ingredients:

1 cup washing soda (I use Arm & Hammer)
1/2 cup borax (I use 20 Mule Team)
1 bar soap (I use whatever’s cheap, in this case Pure & Natural)

Grate that bar of soap with your finest grater until it’s basically powder, then put it in a large quart jar along with the other ingredients. Shake the jar thoroughly – for two or three minutes – until everything’s evenly distributed. Keep a lid on the jar and put it in your laundry room.

When you’re about to do a load, use two tablespoons of the powdered detergent. Start filling the machine with water, add the detergent, wait a moment, then start adding the clothes. You’ll be good to go!

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.

Along my financial journey in life, I made a great number of mistakes. In this ten part series which runs from July 19 to July 30, I’m going to focus on ten of my worst mistakes and the difficulties and successes I’ve had in overcoming those mistakes.

I treated my credit card as my emergency fund.

In late 2004, the brakes failed (in a nearly catastrophic fashion) on my 1997 Ford F150. For whatever reason, the brake cylinders chose to collapse as I was attempting to stop at a stoplight. I nearly caused a very large accident, but I managed to get stopped after swerving into another lane and running a red light.

The repair bill was pretty significant – about $300 more than I currently had in my checking account. I remember standing there flipping through the four or five credit cards I had at the time, trying to figure out which one had enough available credit to cover that bill.

Personal finance 101 would have kept me out of this situation, but I didn’t have enough sense to have planned a bit for this brake problem. Instead, I believed that having some credit available on a credit card was just as good as an emergency fund.

That’s just horrible, horrible planning. Here’s why.

Let’s say, on average, I have a major emergency that costs $1,000 once a year in my life. A car breaks down. A job is lost. A family member is ill and you need a plane ticket. There are countless emergencies that can happen in life, so I’m just using that $1,000 once a year emergency as an example.

If you sock away $20 a week into a savings account earning 1% interest, you’ll have that $1,000 once a year when you need it. The brakes aren’t a concern, nor is that emergency flight you have to take. Plus, you’ll earn a small amount of interest on that money – $5 to $10.

If you just spend that $20 a week on something unnecessary – and that’s what you will spend it on, because almost everyone has $20 worth of fat in their weekly budget – when the emergency comes, you’re putting that $1,000 on a credit card. At that point, you’re now making $80 a month payments on that credit card instead of socking it away. Even worse, you’re paying 20% interest or so on that credit card, meaning that over the course of the year, you’ll have to make two or three extra $80 payments just to cover the interest. And while you’re making those $80 payments, you’re not socking away $20 a week for the next emergency, so when that next one hits, you repeat the cycle. You’re giving away $200 a year to the credit card companies and forgoing some savings account interest as well.

We’re not even talking about the extra risks of relying on credit cards. What happens if the emergency hits and you’ve already got a hefty balance on your cards? What if the bank lowers your credit limit and then suddenly your transmission falls apart?

None of these risks – and countless others – apply if you simply have a cash emergency fund.0

My first mistake was not having a cash emergency fund, of course. This put me up for all kinds of risks, ones that came to a head with my own financial meltdown in early 2006 when I could no longer pay my bills.

The second mistake, tied directly into this mess, was carrying a balance on my credit cards. Credit cards are a great tool, but they’re really only useful if you don’t carry a balance forward from month to month on them. If you start carrying a balance, you’re going to pay dearly for that balance in the form of very, very high interest rates.

Add the two together and you’re running on pure borrowed time, hoping that you don’t ever have more than one or two emergencies at once. Because when that happens, you’re going to find yourself in a bad place, with damaged credit, banks harassing you for their money, and a big helping of added stress in your life.

How can you avoid this trap?

The answers are really found in the mistakes I mentioned above.

First, don’t carry a credit card balance. I think credit cards are a fine tool to have if you can use them responsibly, and responsible credit card use means never carrying a balance. How do you do that? Never put anything on that card that you don’t have the money in your checking or savings account to cover.

Second, start building a cash emergency fund. The easiest way to do that is to set up an automatic savings plan. Open a savings account at a particular bank of your choice, then set up an automatic transfer from your checking account to that savings account. $20 a week is a healthy place to start because after a year, you’ll have $1,040 in your account (plus some more thanks to interest). Use that cash when something unexpected gobsmacks you.

The biggest thing, though, is to recognize that emergencies happen – and they happen more often than most people think. Our minds do a fantastic job of making our crazy disorderly lives seem pleasant and ordered. The biggest crisis in the world seems like nothing more than a speed bump after a little bit of time. Allowing yourself to be comforted by this and thus using that comfort as a reason not to build an emergency fund is one of the biggest personal finance mistakes that people make.

All through my life, I’ve spent time memorizing various poems. The Road Not Taken by Robert Frost. anyone lived in a pretty how town by e. e. cummings. Pioneers! O Pioneers! by Walt Whitman (probably my favorite).

I like the way the sounds roll off the tongue and paint pictures. I like reciting them (or pieces of them) to my children. I like the flavor of the words.

How to Adopt an Attitude of Gratitude Lately, I’ve been focused on seeing the good in every situation. There are many situations where it’s easy, but if you look deeply, there is good in every situation. (@ dumb little man)

Wants that Morph Into Needs This is lifestyle inflation and it’s one of the most dangerous opponents people have to building a sustainable free life. (@ personal finance advice)

See The Impact When You Donate To Charity I think the big reason that many people struggle with charitable giving is that it feels like a “give and see nothing in return” exchange. I don’t think there’s anything wrong with wanting to see what your money is going for. (@ christianpf)

I’m So Judgmental. I Want to Conquer This! Any Suggestions? Everyone has their own path. You can’t fairly judge others by the path you’re on. It’s like comparing a track sprinter’s times to that of a cross-country skiier. (@ happiness project)

It’s So Easy to Talk About Lunch I love this. If you want someone to talk, give them something very easy to talk about. Seth suggests talking about what to have for lunch, because everyone has an opinion. (@ seth godin)

Ask Unclutterer: Encouraging kids to help out at home My technique is to do it in very small timed batches. Our kitchen clock has a countdown timer, so we’ll designate a very specific task – “Pick up the Lincoln logs!” – with a very specific time frame – “Can we get it done in five minutes!?” – and then set the timer. The immediate focus and the short term really helps our kids (ages four and two) to take care of their stuff. (@ unclutterer)