Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creativity.
- Charles Mingus

One of the biggest challenges I have in my life is balancing the simple and the complex. I tend to oscillate back and forth between the two.

What usually happens is that I’ll have a period that’s simple for a while. I’ll have ample free time, even after spending a significant amount of time with my children. My finances are in good shape. Everything is good.

Because everything is flowing along so well, I get a desire to seek out new challenges. I’ll take on a few new things in my life – committee responsiblities, a work-related project, a new book, an increased social calendar, and so on.

And then things get more difficult.

I’ll start finding that I have less and less time to enjoy the things that most matter to me in life. I’ll be worn out in the evenings and have much less initiative to take care of things that need to be done. I’m less focused on my day to day choices and I become a lot more prone to spending extra money that I don’t need to spend. I feel more stress and less happiness.

My response is to start tossing stuff. I’ll schedule fewer social activities. I’ll not renew my commitment to a civic project that I’ve worked on for a while. I’ll put that partially finished manuscript somewhere else for a while (yes, I have two partially completed books that are just sitting there waiting to be finished). I’ll get back in control of my finances and revitalize my commitment to keeping organized.

Then, suddenly, I feel better again.

Here’s the amazing part: I would not do it any other way.

Why? My life improves when it is simple, but without adding complexity to it sometimes, I can’t discover new things in life and I can’t really keep in touch with what’s most important to me.

To me, a truly great simple life keeps you constantly in touch with what’s most important to you without drowning you in the things that are less important to you. The catch, of course, is that if you don’t expose yourself to new complexities sometimes, your life becomes a boring routine.

This “boring routine” is one of the things many people criticize and complain about when it comes to living simple or living cheap. They strip their lives of a lot of relatively unimportant things (a good move), but they don’t bother to continue to grow from there.

A simple life does not have to be a boring life.

A truly engaging and life-affirming simple life is one that constantly takes on new challenges and activities, but doesn’t object to tossing out some along the way, even things that have been with us for a long time but reflect a phase in our life that’s past.

A truly great simple life doesn’t try to “have it all,” but tries to have as much as we want of the things that really matter to us, above all else.

A simple life doesn’t waste time, money, energy, or resources on less important things when more important things are neglected and unused.

In the end, a simple life is one in which a person has spent a lot of time reflecting on what genuinely matters in that person’s life and what does not, and then doesn’t waste that life on the things that don’t matter.

And, with that, I’m going to go put on an old cowboy hat and a poncho and play “Jedi knights” with my son and daughter with lightsabers we made ourselves out of rolled-up newspaper. It might not be important and meaningful to anyone else in the world, but it’s important and meaningful to me (and probably to them, too). Why don’t you go do something that truly means something to you, too – and toss some of that less important stuff out on the curb while you’re at it?

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. Replacing cable
2. Do-it-yourself wills
3. My no-generic items
4. Money goals after retirement
5. Tipping tip
6. Frugality and building relationships
7. 401(k), Social Security, and taxes
8. Selling a used car
9. Freezing baby food
10. Which card to pay off?

In case you are wondering, I get somewhere between 150 and 200 questions a week for the reader mailbags that I do. I can realistically only answer 20-25 of them.

When I get a question, I usually read it. If it’s someone going through something life-altering or very urgent, I’ll answer directly to them immediately. If not, I file it away in a folder. When I get ready to assemble a reader mailbag, I go through that folder and decide for each mail that I read whether a question makes for good mailbag fodder. If it does, I put it in the mailbag column I’m writing. If it doesn’t, I archive it. I usually do not get through everything in the mailbag before the column is full, so I leave the rest for next time.

Sometimes, I’ll pull out a question, start answering it, and find that it goes on for several paragraphs. I usually spin these off into their own posts.

If I don’t get to a question you asked, I apologize. It’s simply a matter of numbers. I could almost do nothing but reader mailbag posts at this point and still not answer them all. I usually just pick the ones that I like for some reason or that I think will provide an interesting answer.

I noticed you talked about possibly going “Cable-free” in your most recent entry. I agree! I use Netflix to get a movie fix, but there is also a great program called “PlayOn”. It works with the PS3/Xbox 360. It lets you stream Hulu, CBS, and a few other types of programs straight to your TV through the PS3. A little application gets installed on your PC, and then streams to the PS3. Check it out, I think you can get a free 2 week trial, too, before you buy. When I bought it, I think it was $30. One-time fee, no subscription. However, I have heard rumors of possibly free content on Hulu turning into paid content, so I don’t know how that would effect this program.
- Josh

The current generation of home video consoles – particularly the PS3 and the Xbox 360 – do a really good job of streaming media to your television for a very low cost. Netflix, for example, offers a streaming service with every subscription, even the $9 a month one (which gets you one disc at a time and unlimited streaming). If you have one of those consoles, it lets you access a good chunk of Netflix’s library while sitting at home – you just choose the item you want and you’re watching it within a minute or two.

There are several options out there for streaming other kinds of media to your PS3 or other console, too, like Hulu.

A friend of mine recently bought a Playstation 3 because of these arguments. He has no intent of playing games with it. He’s using it to watch Netflix ($8.95 a month) and Hulu (free) on his television at his convenience, as well as watch DVDs and Blu-Ray discs. Considering he’s doing this at the same time as getting rid of his cable box (that had a DVD player in it, since he doesn’t own one), he estimates his break-even point will be in about five months and he’s not going to miss any programming that he actually cares about. Sounds like a good move to me.

Is there a simple, frugal way to do a will for yourself? I have a few assets, no spouse or children. I would want my estate to go to my sibling,
- Mary

You can certainly write a will yourself. All you essentially have to do is list your assets, name your beneficiaries (your sibling), name your executor, and have two witnesses sign it in front of a notary. The difficulty with this is that if anyone chose to challenge this will, the witnesses would have to testify to your state of mind, and lawyers are creative folks who will find a reason to challenge if someone is paying them to find it.

I don’t think in your case you have too much to worry about, but you might want to consider using a service like LegalZoom as a compromise. They’ll help you set one up for a pretty reasonable price.

I know you have experimented in finding ways to save money – making food at home and making your own laundry detergent for example. A few weeks ago I recall you saying you hadn’t found a way to make a cheap shampoo so this created a question for me – What are some of the items you do not buy used or make or refuse to use the generic of? I know some people find it gross to wear shoes from the thrift store but I find that they can be a good buy for nice shoes. I personally love soda so while I am cutting it out if I’m going to buy a drink its going to be a big name brand.
- Katharine

I won’t buy generic garbage bags. I’ve had too many disasters with garbage spilling all over the floor due to cheap bags.

I am very picky about dairy-based food items. I won’t buy them if I can’t clearly see that they don’t have rBGH or other added growth hormones in them. I’ll often choose organic milk because of this.

I strongly prefer local produce when in season, to the point where I’ll happily pay more for something grown locally that morning rather than something grown far away a week ago.

If I’m buying pure luxury items, I don’t skimp. For example, I figure if I’ve decided to have a good beer, I’m not going to go cheap and get something awful. I’m going to get something tasty.

I think that largely covers it, at least in terms of the examples I can think of.

Everyone agrees that during our working years it makes sense always to try to spend less than what’s coming in. But what happens after retirement? My wife and I have small pensions, I have Social Security (she may start collecting in two years, or may wait), and we both have saved money in various retirement vehicles. The usual advice I’ve seen is to take out no more than 4% of savings each year. But that’s with the goal of preserving principal, as I understand it. We could live comfortably now taking no more than that (though we expect our medical expenses to increase as we get older). We do not have heirs we need to provide for. The causes and family we care about we’d rather help now while we’re living.

Our question is: How do we set money goals now? A lifetime of frugality means we don’t want to throw away the money we’ve slowly acquired, but we also don’t want just to sit on it. There aren’t a lot of material things we need and don’t have. We could travel more, we could go to more concerts and theater, we could buy art, but we don’t feel stongly impelled to do so. We’re lucky to be happy with the things we have!
- Michael

If you’re happy with what you have, don’t spend it. Hold on to it, make sure that you’re both sustained through any lifespan that you might have, and then give a large gift to a charity in your estate.

Now, that doesn’t mean you can’t help a charity now. For example, some charities can borrow against such pledges for improvements now without taking a dime from you or can move forward with projects based solely on pledges. Other charities offer charitable annuities, where you give them some lump sum of money and they give you payments for the rest of your life. I know, for example, that Consumer Union (the makers of Consumer Reports) do this.

My concern would honestly be that you have enough money to splurge on stuff for the sake of splurging now, only to find one of you alone in fifteen years without enough money to make ends meet. I don’t think that’s a fate either one of you want. I’d consider an option that allows you to give while you’re alive without abandoning your security.

I live on Long Island, NY and when out eating with friends, we just double the sales tax on the bill. Our sales is 8.625% and that would bring the tip to 17.25% which is great since we usually tip between 15 and 20%. If the service was lousy, go back to the 10% rule!
- Barbara

That’s a good strategy in a locale that has a good interest rate, so I thought I’d share it.

One thing I’ve seen recently is that some restaurants are starting to add a 15%, 18%, and 20% calculation to the receipt to aid in tipping. I am actually strongly in favor of that as it makes such calculations much easier.

I usually give the low one – 15% – for bad service (unless something degrading happened). I give the high end for great service.

I became frugal months ago, I like it and I feel I’m doing the right thing.

I don’t care about people’s opinion, but you always suggest building relationship with other people, everything goes smoothly until they know I’m frugal, then they start to have this bad image about me.
- Al

I don’t think there’s a need to bring up one’s frugality in an environment where you are establishing a relationship with someone unless it’s a “frugalites anonymous” meeting.

I’ve often heard that you should avoid talking about money, politics, sex, and religion when you’re first getting to know someone because those issues are sensitive and rife with disagreements. Frugality would fall under the money category.

You can certainly talk about some of the techniques that you use for things in life, but you don’t need to lead with them. Just focus on other areas of conversation and if you feel uncomfortable talking about something, lay low during that part of the conversation.

I have a question about my 401K that I wonder if you have any experience with. I currently contribute 17% of my check each week. That means I max out the yearly $16,500 contribution sometime in September every year. I also meet the Social Security tax limit at about the same time. This means for about the last 10 weeks of the year my weekly pay check is about $400 per week higher. However, I have been wondering if I would be better off tax-wise reducing my weekly percentage to have a smaller amount taken out year round. Or does it all equal out when my yearly federal taxes are done?
- Danielle

I don’t believe it would make any difference at all in terms of the total taxes you pay. However, it might result in a situation where your employer is not withholding adequate amounts from your paycheck over the course of the year, but most employers usually strive to withhold enough to ensure their employees get a refund at the end of the year, so your result would likely just be a change in the size of your refund (or the amount you pay in) versus the size of your checks throughout the year.

Another difference it would make is in terms of equaling out your paycheck over the course of the year. Depending on how you budget, that could be important, too.

I don’t think it’s something to stress out about in any case. The amounts we’re talking about are very small in terms of your annual income.

I have an older British sports car that I’m no longer interested in. I would like to sell it, and use the money to help replace my older everyday vehicle.

This all leads to my question for you: Do you have an recommendations/advice/strategies for selling a used car?
- Jay

The biggest thing you need to do is to determine the price that you minimally expect to get for the car. You seem to expect more than $5,000 but you’re willing to take less than $7,000.

My suggestion would be to figure out what you want to get out of it, add on about 15%, then list the car widely. If it doesn’t sell for what you want, keep trying.

I would also make sure that you’re not overvaluing the car. What is the car’s blue book value? Use KBB and get a good estimate.

We are expecting our third child this December and I am already starting to get the nesting urge! I consider myself pretty hand in the kitchen and cook all of our meals at home. I am not, however, confident in my freezing abilities and I would love to begin thinking about preparing some frozen meals for the cold winter months when I’m A) too pregnant and exhausted to cook or B) have just given birth!! I am looking for information such as: what containers work best for freezing, how long do frozen meals last, what recipes work well for freezing, can you freeze contents that you put in the crock pot, etc. I guess I’d love to see kind of a “Freezing 101″ post!!
- Carrie

I have indeed frozen baby food in the past and it does work. My intent is to have a more detailed post about this when our youngest gets old enough for baby food (probably this winter), but for now, here are a few tips that address your specific points.

You can freeze stuff in about anything. We’ve used baby jars and ice cube trays in the past and both have worked just fine – just make sure you label stuff. The frozen food usually works well for about three months, from our experience. You can freeze about anything that would be all right for a baby to eat – just avoid the potential allergy foods. We’ve frozen stuff prepared in a crock pot before without any problem, as crock pot food is usually cooked at least as well as other foods.

The real key is to just make sure it’s pureed to a point that your baby can eat it. The younger the child, the more smooth and water-like it needs to be. Don’t hesitate to add water to any puree you make.

Good luck! Look for a better guide this winter!

I have just transferred a cc debt ($4800) to a new card with 0 interest for 18 months. I have another cc with about 4k on it with 16% interest. I have $300 a month to put toward these 2 debts. How should I divide the amount between the two?
- Henry

The first thing I would do is figure out what happens when that balance transfer expires. The big question is what happens if you haven’t paid back all of the transferred balance. Are you responsible for all of the back interest or not? You may have to call them to find out if you can’t get this information from the documentation.

If you will get dinged for that back interest, compare that interest rate to your 16% card. Which rate is higher? Pay down the higher debt.

If you won’t get dinged, pay down the 16% card first.

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.

Connie writes in (I edited her question a bit to protect privacy):

I recently married a business owner who had a net worth of around $10 million before we got married. He has lived in the same medium-sized town all of his life and has kept many of the same friends since his school years. Lately, though, he has noticed that a lot of them seem resentful of him. I asked a few of my friends about this and they said that the feeling in the community was that he was being wasteful and ungiving with his money. I don’t feel that’s the case at all. He gives substantially to our church and to several charities. It is hurting him to watch some of his friendships fall apart because of this greed. Do you have any thoughts about this?

I certainly do.

First of all, I think there is some inherent distrust of the rich in the mainstream of American society. People assume that if you have accumulated money, then you are either using it in some unworthy way or you’re a miser, both of which are negative stereotypes. Many wealthy people solve this by either being extremely public with their giving (Andrew Carnegie, Bill Gates, people who donate to universities to get their name on the door), being extremely quiet about their wealth (John Madden, for example), or just not caring what other people think (every ostentatious display of wealth you can imagine).

A big part of that is that for many people, having $10 million is an enviable position to be in. There is, flat out, going to be a lot of envy of your position. People imagine all of the things they could do with that kind of wealth – both selfish and charitable – and they feel some sort of resentment towards others who don’t do the same (even if, often, it’s not what they would actually do with their wealth). “This person doesn’t share my values,” they think, or they feel simple jealousy.

Obviously, at some point, your husband has done something to not conceal his wealth. Maybe you live in a very high-end house. Maybe you drive expensive cars. Whatever it was, it made clear to your friends that you had significant money. Because of that, what you’re now seeing is a mixture of envy and jealousy and opinions on what your husband is doing.

Yes, it’s not nice. But at the same time, it’s human nature. No one is immune to jealousy or envy. Your husband’s success has made him a target for this.

Another thing to consider: has money changed your husband from the kind of person that he used to be? It could very well be that the wealth in his life has altered his values, his political beliefs, his ways of interacting with people, and so on. I’m not saying that they have, I’m merely saying that it’s something to think about. A good source to look at here is old friends that have been there for the long haul – ask them what they think.

So what can he do from here? He has several options.

He can just ignore it and go on with his life. This falls into the “just not caring what other people think” category. He can continue to do exactly what he’s doing now and decide that the friends who are falling into the jealousy trap aren’t contributing positively to his life (because, honestly, if they’re making him feel guilty about the things he’s worked hard for in his life, they’re not being good friends at the moment).

He can make a very public display of charitable giving. He could give a chunk of his wealth to some sort of civic charity, like sponsoring a building for the Boys and Girls Club or something like that, and do it in a public way. Alternately, he could just make an effort to just donate as he’s donating now, but make it more public. This will smoothe some matters, but this still won’t make everyone happy – there will be people jealous of the reception he gets for his giving, too.

He can temper his public displays of wealth a bit. Whatever he’s done to make people think that he’s rich, he can just pull back on a bit. If it’s the car, get a less flashy car next time. If it’s the house… well, there’s probably not much he can do there. He can dress a bit more in time with how everyone else dresses if clothing is the problem. If you’re wearing a large ring, you can save it for special occasions. (I don’t know what triggered the response, so I’m guessing in the dark here.)

He can focus on actually shoring up the individual friendships that matter to him. Instead of fretting about this privately, he can instead focus on the friends that are actually closest to them. Have him sit down with them and talk through this stuff. It can sometimes be hard for males to do this kind of thing, but if it’s deeply bothering him, he should do it.

He can re-evaluate what he values and how he treats others. This works best if you come to the conclusion that, yes, wealth has changed you in some not-so-positive ways. Introspection and a serious focus on improving yourself can go a long way.

If I were you, I’d probably use some combination of these tactics. I don’t think he should bend over his life for these folks, but I think there’s something to be said for not making ostentatious presentations of your wealth. Similarly, I think there’s real value in always shoring up the relationships that deeply matter to you – and sometimes accepting that other relationships have moved on.

For those of you who don’t have a lot of money, put yourself in this man’s shoes for a moment. Yes, it would be wonderful to be financially secure for life, but what would you do if that security meant that many of the people you’ve had relationships with most of your life no longer were close to you? What price does wealth have? What’s the best way forward? I don’t think the answer is exactly the same for everyone, but spending a moment in someone else’s shoes can make for some surprising insight.

How do I deal with stress? My best way of dealing with stress is to be active, not to be passive. I’ve found that every time I respond to stress in my life by just sitting around or doing nothing, it just makes the stress worse. I’m almost always better off doing something physically or mentally active or directly attacking the source of the stress.

How to Dry Fresh Herbs We have a ton of herbs this year, as our perennial herbs went berserk and attempted to take over our entire garden. Thus, this type of advice will have us sitting pretty with oregano and a few others for a long while. (@ bargaineering)

How to Get Your Spouse On Your Financial Team For us, the real key for getting on the same financial page is to simply talk it out. In fact, my mother says that Sarah and I tend to talk things “to death.” It works for us. (@ consumerism commentary)

Best Freelance Advice Ever If you’ve ever considered self-employment or freelancing, the advice in the comments on this article could be utterly invaluable. I bobbed my head in agreement with many of them. (@ freelance switch)

Earning more money: Finding the right idea While I don’t think the ideas here are 100% perfect (I think some of the stuff he is against works very well for certain paths – it just doesn’t work for every path), I do think working through the ideas here can really help anyone who is struggling for ways to earn more. (@ i will teach you to be rich)

13 Pay-What-You-Want Restaurants This idea works only if the customer is willing to name a fair price for what they get. I know many people who would go there, order food, and pay a cent or nothing at all. I think non-profit restaurants will work, but I think it will require minimum prices. (@ coupon sherpa)

See an online job scammer at work As time goes on, I’m finding myself trusting unmoderated sources less and less and people that I trust more and more. (@ red tape chronicles)

5 Strategies for a Happy Marriage: Secrets every bride and groom should know A happy and successful marriage will be one of the best financial moves you ever make. An unsuccessful marriage can end in complete financial disaster. Better do it right, I think. (@ pick the brain)

This is the thirteenth 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.

It is easy to set big, audacious goals for ourselves like “spend more time with our kids” or “get our finances in the right order.” The big problem, though, is that such goals often seem enormous and vague. What can you really do to make these things happen?

Allen touches on this on page 250:

“Create a way to regularly spend more time with my daughter” is as specific a project as any, and equally demanding of a next action to be determined. Having the vague, gnawing sense that you “should” do something about your relationship with your daughter, and not actually doing anything, can be a killer. I often work with clients who are willing to acknowledge the real things in their lives at this level as “incompletes” – to write them down, define real projects about them, and ensure that next actions are decided on – until the finish line is crossed. That is real productivity, perhaps in its most awesome manifestation.

The solution to such a big, vague project is to focus on a very small handful of things.

First, what’s the outcome you want from this? Do you want a better relationship with your children? Do you want to have a grip on the money that’s going in and out of your accounts? You need to spend some time imagining what you want at the end of any idea for life change that you have. The more specific you are, the better.

Next, what’s the next step you can personally take to get there? If you want a better relationship with your children, the first step is to push away from your desk and spend some time with them – and then start doing that regularly. If you want to get a grip on your finances, the first thing you need to do is select a software package to help you figure this out. You need an action step that you can actually do that will start moving this initiative forward.

That really covers it. Just execute that next step, then ask yourself “what comes next?” again and again until you’re there.

What if you have no idea what you want? Allen addresses that on page 251:

As an experte in whole-brain learning and good friend of mine, Steven Snyder, put it: “There are only two problems in life: (1) you know what you want, and you don’t know how to get it; and/or (2) you don’t know what you want.” If that’s true (and I think that it is) then there are only two solutions:

- Make it up
- Make it happen

In other words, if you don’t know what you want, it’s time for some soul-searching. A person without a goal is a person idling and not growing. Even if the things you want are mundane, they’re still goals. You can still focus on them, achieve them, and grow as a person.

On the other hand, if you know what you want and can’t figure out how to get there, start breaking that big thing you want down into smaller bites. Focus on nothing more than the absolute next step you ned to take to get there – something so small you can accomplish it in an hour.

Both of these things might require some help from others during the thought process – and that’s not only okay, that’s encouraged. Others can almost always offer very good help when it comes to figuring out such significant things in our lives.

There’s another interesting problem, too: on our way to achieving any big goal, an awful lot of steps are pretty mundane.

In order to be a great basketball player, you have to spend hours in a gym making shot after shot. You have to run all the time to keep yourself in pristine shape. The end product – being great at a sport you care about – seems wonderful, but the work to get there can be really mundane.

In order to be a great parent, you have to spend a lot of time with your children, not just hovering over them or trying to be their friend, but encouraging their problem-solving skills and their independence. You have to change diapers and deal with disciplinary issues over and over again. The end product – a child who is self-motivated to maximize their own potential – is a great target, but the work to get there is mundane.

To accomplish something big like this, you have to revel in the mundane. You have to know and appreciate how those endless free throws or those infinite diapers or those countless time-out sessions are pushing you towards your goal. Allen riffs on this on page 252:

My clients often wonder how I can sit with them in their offices, often for hours on end, as they empty the drawers of their desks and painstakingly go through the minutiae of stuff tha they have let accumulate in their minds and their physical space. Aside from the common embarrassment they feel about the volume of their irresponsibly dealt-with details, they assume I should be bored to tears. Quite the contrary.

Allen’s big goal is to be a good time management consultant. One of the mundane details of doing this is that he has to sit in people’s offices while they do their collection brainstorm for the first time and sift through mountains of junk on their desks. The thing is, though, that the mundane step here, if executed well, brings him closer to his goal. By focusing on that mundane detail and looking for ways to do it as well as possible, he inches towards something enormous.

One of my big goals is to be a writer that positively affects people’s lives. In order to get there, I have to do a ton of mundane work, from dealing with correspondence to doing interviews to reading contracts. Sometimes, I want to blow it off. Other times, though, I recognize that really nailing this little step helps me build to my dreams. I focus in on that task and get a great deal of personal joy from doing it right.

That’s the power of outcome focusing.

On Friday, I’ll share the five biggest ideas to take away from Getting Things Done.

An obviously upset Sam writes in:

You think your world is all rainbows and puppies. Guess what? Karma will eventually bite you in the [rear]. Seven months ago I got fired from my job for no fault of my own the company was going under. Now I cant pay my bills and Im going to lose my house. Your life isnt a real life.

In 2006, I did not have enough money to pay my bills even though I was working at a great job and everything seemed (on the surface) to be great in my life. My dreams of being a writer were quickly disappearing, as were my dreams of ever being able to adequately take care of my child. I reached a point where I had fleeting thoughts of whether I could kill myself for the insurance money to put my son and my wife on a better track and give them a life that I felt like I was incapable of helping them with.

Guess what? I got out of that situation. It wasn’t easy. I had to face a ton of my own flaws along the way, most of which are still a difficult part of my own life.

The biggest thing I learned is that no one is perfect, and every single person is in a situation that they can improve. Period. There are no exceptions to this. No one is living the best life they could be living. Why? Because, again, no one is perfect.

I’m certainly not perfect. I spend too much money on books and games. I have a hard time resisting a delicious well-prepared meal. I spend far too long on important decisions, to the point that I lose opportunities because of it. I get very down on myself and my own abilities all the time (truly, thank goodness Sarah is there to help me with this). I talk myself into purchases that I shouldn’t make. I lose track of routines that I really, really tell myself that I want to establish. I regularly find excuses to avoid social interactions that I should engage in simply because they make me uncomfortable.

I know very well that I can improve in each of those areas if I put my time, focus, and heart into it. I can cut my entertainment spending (and I’ve been doing pretty well at this as of late). I can eat better. I can be more decisive. I can focus on the good things that I do and not my failings. I can avoid making unnecessary purchases. I can convince myself to do that daily walk. I can go to that dinner party and interact with people.

What does this have to do with karma and me being “lucky,” though?

First of all, the best method to keep karma at bay is to constantly try to improve yourself and your own situation. Look at the areas where you don’t do well and strive to improve them.

Here’s a good exercise: imagine where you’d be if you suddenly lost your job. Would you be able to pay your bills for the next few months? If not, then you’ve identified a weakness, one you can solve by saving some money each week.

Here’s another one: imagine someone might offer you a great job in two weeks. Would you be presentable enough for them to take interest in you? What skills would you be able to say that you had? Would you have a great resume on hand to give them? If you answered poorly to any of these questions, then you have a personal weakness, one you can work on. Make that resume. Keep yourself presentable and sociable. Make a good resume and keep copies with you wherever you go.

The truth of the matter is that bad karma happens to all of us sometimes, but the truly devastating effects of that bad karma are often directly connected to our own choices. If we’re flying high and don’t prepare for the inevitable fall, things will hurt when we fall from that pedestal. If we’ve already fallen and aren’t preparing ourselves to rise again, we’ll stay down for the long count.

It is about us. It is about what we choose. It is about overcoming our individual flaws – and we all have them, and we all have different ones – and making the best of what we have.

No one does this perfectly because no one is perfect. One thing we can all do, though, is strive to improve ourselves and our situation no matter what that situation currently happens to be.

Don’t spend a second worrying about what or how someone else is doing. You can’t control that. What you can control (at least to some extent) is your own situation. Take charge of every element that you can and walk forward with it.

What can you do, right now, to start improving your situation? That’s the only question that matters.

Yesterday, I posted an article about setting goals with your partner. In the comments, Brittany left a wonderful question that I felt deserved a post all its own:

What if you have your shared goals, but one partner doesn’t have the financial gumption to see it through? I’m not married, not even engaged, but I’m in a relationship that looks like it might be heading for the long term. But my partner is awful with money and even worse with savings. We have a few shared long/medium-term goals (and one is a life goal of his, so I’m positive it’s not my goal I’m just calling “ours”), but my partner isn’t making any progress towards the goal. He’s far more likely to make a bunch of little frivolous purchases now (”Eh, it’s just $10… its just $20… I’ll save when I have a reasonable amount to save.”)

Normally I try not to push the “gospel of frugality” on anyone, just live my example and take satisfaction from people’s faces and questions when I get to say things like, “Yeah, I know my car (a PT cruiser) is a bit silly-looking, but I paid cash for it when I was still working for minimum wage, so…” But I also don’t have a vested interest in others’ financial futures.

Everything else in the relationship is great, but I can’t see myself becoming financially involved with someone who doesn’t share my financial views (even though this seems like a silly reason to break things off). How do others handle their partners not being on the same financial page as them?

First of all, I would move forward very slow in this relationship. Clearly, the values you have and the values your boyfriend has are in signficant conflict – and if you’re seeing this that early in the relationship, you need to move forward slowly and not jump into anything. I would also, for a very long time, keep your finances as separate as possible.

Value conflicts are the core of virtually every relationship problem out there. Value conflicts are actually resolvable, but they require a willingness by both partners to work through that value conflict, compromise on a solution, and work together to make sure the solution holds.

It sounds as though your partner is not interested in or engaged in long term goals or puts a much higher priority on his own goals than any shared ones you have. That’s in direct conflict with where you’re standing – it sounds like you’re goal-oriented (at least to some significant degree) and are also willing to compromise on the goals you’re both working for.

The only way to resolve this, then, is to simply do what I mentioned above: work through the value conflict, compromise on a solution, and work together to keep that solution in place.

The first part is working through the value conflict. A big part of that is trying to make sure you both understand what each of you value, and how you each act is a very big part of that understanding. By his actions, he seems to put value on short-term rewards for himself.

You can’t really be judgmental here. We all think our values are the best way of doing things or else they wouldn’t be our values (the DINK post from last week is an example of that). The trick is to recognize that not everyone shares our values – and no one likely shares your exact set of values.

Discussions like this are usually painful because when someone you care about says that they don’t share your values, it often feels judgmental no matter how you word it. You have to make it clear that you want to understand what he values and you want him to understand what you value, no judgments or anything.

This requires the ability and willingness to communicate. If you can’t get to this point in the process, then there’s a communication breakdown in a way that will make this relationship very difficult going forward. It will likely require one of you subjugating what you value to the other one, and that’s an unhealthy relationship that either ends up in therapy, an explosion, or with someone in misery for a long time.

The only way relationships work is through compromise – you agree to certain arrangements that allow you both some freedom to retain your values but also respects the values of your partner.

My wife and I compromise on a lot of things. For example, Sarah likes the television series Bones – and I can’t stand it. Sometimes, when I go downstairs after putting the kids to bed, she’s watching an episode of it. Our compromise is that I can just go read a book or something if she’s in the middle of an episode.

However, if I’m doing something similarly engaging that she’s not interested in – say, playing an online game with some friends or something like that – she’ll do the same. She’ll go read a book or something like that.

She doesn’t demand that I stop playing so we can watch Bones. I don’t demand that she stop watching Bones so we can do something more interesting together. We compromise.

Here’s another example that’s money related. Sarah is very, very conservative with investment choices. She does not like her retirement savings to be at risk, even if that means earning less. She would far rather put away more for retirement now and have it be at less risk than put away a little less now and have to take on risk to reach her retirement goals.

I feel differently. I don’t mind some investment risk if the term is really long. Since I’m in my early thirties and don’t intend to touch any of that money for at least thirty years, I have no objection to putting a hefty portion of my retirement into stocks – even foreign stock indexes.

Our compromise? It’s a simple one, actually. She handles her retirement accounts as if I didn’t exist and she was solely responsible for her own retirement. I handle my retirement accounts as if she didn’t exist and I was solely responsible for my own retirement. She has her money in some pretty conservative stuff. I have a target 2045 retirement fund (2045 is a bit past when I actually expect to retire). Add the two together and we have a mix – the majority of the money is pretty conservative (all of hers and a slice of mine) and some of it is in high-risk high-gain areas.

In none of these cases are Sarah and I getting exactly what we individually want. What we do have, though, is respect for what we value and some ability to express that value.

That’s exactly what you guys need to strive for if you want to make this work: respect for what you each value and some ability to express that value. That’s compromise.

So, if you’re a long-term planner and he’s a short-term person who aims to live life fully now, one thing you might want to consider is a “free” account – an amount of money set aside each week/month that he can do whatever he wants with. Perhaps you can even have a small account like this for yourself, if you wish.

That account, though, is the limit of what you can spend frivolously. The money beyond that is set aside for the long-term goals that you guys share.

If your partner rejects such a conversation or any such attempt at a compromise, your relationship is not on a good foundation. If you’re willing to accept his values and bend on yours, then he should be willing to do the same. If he won’t, then he’s requiring you to subjugate your values to what he wants – and as I said above, that won’t end well.

Where can you start? Sit down and talk about this. Try to really figure out what he values. Suggest a good compromise that allows you to keep some significant degree of what you both value. Keep your end of the bargain and live up to the compromise – and see if he’s doing the same. If he’s not, then I would back away slowly from the relationship.

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. GTD and privacy
2. Planning for a long trip
3. GTD and prioritizing
4. Overcoming jaded partner’s money attitudes
5. GTD and daily routines
6. Hopping into an IPO
7. Reporting a tiny income
8. Stagnant savings
9. GTD and “books to read”
10. Student loans and house savings

It’s strange – there haven’t been many comments on the posts, but I’ve had more reader comments and questions directly emailed to me about the Getting Things Done series than almost anything else I’ve ever done on The Simple Dollar.

This further mystifies me, because I have a hard time figuring out what ways to tell if a post is a hit or not. I usually rely on comments, but quite often the number of comments have little to do with whether the post actually provides valuable information or entertains readers.

In the end, sometimes I just have to guess what you’d like. In truth, that starts by just thinking about what I’d like to read. I very rarely post something that I wouldn’t enjoy as a reader.

So, today, I’m including a few of the better questions I’ve received over the course of the GTD series, along with plenty of non-GTD questions, too.

I´d like to ask you about GTD and what you do to keep your privacy, since you have your life, your wants and to-dos on one inbox, someone can see when entering your office or home, or when some friend ask you to see your cool new phone with your tasks in there.

Also on this issue, how do you keep your spouse/girlfriend from seeing your task/project about her surprise party or to buy some gift for her? Because I keep this out of GTD so she doesn’t see it but since it’s out of GTD I tend to forgot and would like to know how you deal with it? And since your series is finishing I thought that’s a good thing to talk on the GTD series.
- Marcio

I generally don’t keep what I would call private information in my inbox. Virtually everything in there is pretty mundane – I guess if snoops want to know about my desire to read Reality Hunger, they can know.

If you do have a lot of personal information in your inbox and it worries you, keep your inbox offline and in a locked drawer in your desk.

As for such surprises, I usually handle all of that in my calendar. I have most important birthdays in my calendar, as well as reminders two weeks in advance of really important birthdays. I don’t think it would spoil a surprise for my wife if she knew I was thinking of her birthday two weeks out (in fact, she’d probably be happy to know it). If I’m doing something complicated that requires secret planning, I just keep those plans in a project folder put in a private space where she’d never look.

I’m transferring from a nearby state college to a private college in the fall. I will be graduating in either two or three years after that, depending on how some of my credits transfer. I paid very little in tuition at the state school, and only had to take out a loan for $1500 with 6.8% interest. I paid the loan down to $700 over the last year, even though I don’t have to pay anything until after I graduate (though the interest still accumulates). At the school I am transferring to, I’ll owe almost $3000 on a subsidized loan (the government pays the interest until I graduate) and and another loan for $1000 at 6.8% (not subsidized). I’ll also have to pay another $4000, but it looks like my uncle is going to contribute the $4000 so all I’ll have left are the loans.

My question is what I should do about paying off the loans vs. saving for the trip. I haven’t touched the $5000 since I deposited it, and like having that money there as both an emergency fund and assurance that I’ll be able to take the trip. But I can’t help but feel that it makes more sense to pay off the loans, or at least the two I’m paying interest on. However, I’m nervous that if I put that money toward my loans, I’m going to have a hard time rebuilding to $15,000 plus paying off the other loans I’ll likely acquire within the next 2-3 years. I really don’t want to put off the trip any longer, it’s one of those things that has to be done before I actually settle down or I’ll never end up going. I’m hoping you’ll have some insight and the kick in the butt I’ll need to do the financially sound thing.
- Sarah

You don’t have what I would ever call life-stifling student loans. The $1,000 at 6.8% is a little high, but even that one isn’t bad at all. Your total debt (just shy of $5,000) is an amount you can pay off in a year when you start your professional career.

If you were in a truly bad student loan debt situation, I’d encourage you to rethink your Europe trip plans. But those aren’t bad student loans.

Focus on saving for the trip. Make the minimum payments on the debt. Enjoy this opportunity in your life. Come back refreshed and ready to take on the world.

Thank you for writing your series on GTD.
I have a dilemma that perhaps you and your readers can help with.
Here’s the scenario:
It’s 6pm. I’m not yet done with the task I’ve been working on but it’s my usual time to go home. I have 3 choices. Part of me wants to stay and keep working cause I know I’ll feel better when it’s done.
Part of me wants to go home and tackle my next actions list there.
Part of me wants to go to the gym.
How to pick which of these 3 to do?
- Julia

Allen spells out how to decide between such choices on page 92 of the book:

1 | Context
2 | Time available
3 | Energy available
4 | Priority

You’re currently at your desk with your supplies out, which means that the context of the current situation suggests that you finish the task.

I’m assuming that you have a healthy workplace, of course. If you have a draconian workspace with inflexible hours and a boss that is going to essentially punish you for stepping up to get things done, context really doesn’t matter. In that case, context doesn’t really matter and you move down to the next criteria – time available. If you don’t have anything scheduled for that evening, that criteria goes out the door and you move on to energy available.

Do you have the energy to go to the gym? If you do, I’d go to the gym. If you don’t, I’d go home and do household chores.

So, here’s how I’d do it. If you have a good workplace and a job you value, stick around and finish the task. If you’re in a worse position professionally, go to the gym if you have the energy for it. If you don’t, go home and handle what chores you have energy left to do.

Several years ago, his parents filed for bankruptcy – his dad lost his job, though found another briefly, but they also had a few years of back taxes and poor spending habits. During that time, my boyfriend would sometimes even pay for groceries and Christmas gifts from money he earned. Though he was skeptical, his parents encouraged him to go to college, telling him that he will be able to get by with jobs and loans, and if anything bad happened they would be there to support him. He’s been struggling financially for years, but it has finally hit him hard now. This is the third time he’s been unable to pay rent (He has been able to make payments in the past, they were just late). He offered to pay what he has now, a little less than half, and the landlord is generously okay with that for now. This only leaves him with $66.

Understandably, he is very jaded and very depressed, which makes it even harder. It is difficult for him to focus on school (as well as even get courses that he needs to graduate). I almost forgot to mention, he hardly has any extra expenses- just rent, food, utilities, etc. I think I covered everything. It seems like there isn’t anything he can do- he’s completely trapped.
- Ellen

First of all, sitting at home being jaded and depressed will absolutely not solve these problems. That is usually the worst possible response a person can make to a difficult situation. Everyone faces challenges in their lives – those that allow themselves to be jaded because of them tend to succeed much less often than those who do the best they can to overcome whatever hand life has dealt them.

The first thing he should do is go seek steady employment, even if he views the job as “beneath” him. There are lots of jobs out there if people are willing to work them, but in a world where almost every high school graduate goes on to college and then expects a college job with a college degree, a lot of jobs are seen as being “beneath” people. I see this all the time from people who write to me complaining about their unemployment in a career path where the entry-level wage is $30,000 a year. They’ve not looked outside of this path for work.

He shouldn’t be afraid to look for minimum wage work. It will get him out of the house, interacting with people and earning some money with his time. Yes, the job might be boring or he might see it as demeaning or something like that. Here’s the thing: it’s not demeaning. It’s an opportunity to turn the ship around. When you’ve fallen to the ground, you don’t jump back on the ladder several rungs up. You grab on to the bottom rung and start climbing again, looking for every chance you have to pull yourself up.

He should take that money and stick it in a savings account and continue to live as cheaply as he can. Then, the next time when one of these emergencies hits, he can just handle it without blinking an eye. The first time a car failure or something like that happens and you can just handle it, the world seems a lot more manageable.

Just take it a step at a time.

How much detail do you put into your calendar and your to-do list? Do you list everything that you intend to do in a day, like taking a shower?
- Mark

I don’t include established habits – like bathing – on my calendar or my to-do list. These things are just part of my morning routine and come naturally without even really thinking about them.

What I do add is a reminder of any routines that I’m trying to build. For example, if I’m attempting to establish a habit of a daily three mile walk, I make sure this is constantly on my to-do list (and marked as important).

If something reaches the point where I’m just doing it anyway, then I eventually delete it from my to-do list.

Currently my only form of investing in the stock market is through a moderately aggressive 401k at work, and my wife similarly is investing in a 403b. Neither of us know much about the specific make-up of these allocations. I know very little about actually buying a specific stock through a brokerage, and I only keep up with news on the stock market as much as the mainstream news covers it. However, a company that I have been a customer of for about 8 years, and which I believe in very strongly, is about to go public. My wife and I have always thrown out the idea of buying stock in the company when it became available, and now that time is here. We could potentially feel comfortable investing $1000 to $3000 of our current savings into this company as a long-term investment and still leave us with over 3 months expenses in our emergency fund. We have alot of student loan debt, and although we arent paying it off aggressively, we do make our payments and contribute a bit extra here and there.

The question is not necessarily should we do this, although that could be up for debate. However, any advice or resources a beginner in this kind of investing could turn to? Aside from this strong inclination towards a certain company, I don’t think we’d ever feel inclined to gamble in the stock market, and I know little about the logistics of actually buying a stock. We’re not considering this in order to make a quick gain (I realize those type of expectations are foolish), but in reality would be in with this company for the long haul.
- Nick

Oh, come on, Nick! You’ve got to tell us what this IPO is! (I’m kidding. A little.)

If I were you, I wouldn’t really view this as an investment per se, because the risk involved in investing in an IPO is pretty stiff. However, if you truly believe in the company and have the discretionary income to invest, I encourage you to go for it.

In 2002, I knew a few people working at Google and was absolutely convinced that I should invest in their IPO, but I convinced myself (right or wrong) that I didn’t have the adequate funds to do it. I still regret it.

If you can swing an investment without upsetting the ship – and it certainly sounds like you can – give it a shot.

I am working in the US from last 3 years on a work visa and have a stock trading account with Scottrade with a portfolio of few stocks. I also get quarterly dividends on some of the stocks I own.

I wanted to check on how the US IRS Tax rules apply on these dividends once my work assignment completes and I return to my home country? In that scenario, I will have no income to report in the US but will have some dividend income (approx 500-600 USD per year) thru the stock portfolio i have with scottrade. Does that qualify me to report and pay the taxes in the US as my income in US would be way below the tax bracket where income taxes are applicable.
- Sandeep

You are required to report it. You almost assuredly won’t have to pay any taxes on it.

Dividends are taxed as ordinary income. If you file a return on this income (which you should), your standard deduction will be significantly larger than the $500-600 a year you’re earning in dividends. End result? No taxes.

Yes, you should report that income to the IRS. No, you won’t have to pay taxes on it.

My mother and father are retired and they are selling their home. They will be walking away with a nice chunk of money which I have referred to as their NEST EGG. My mother is 63 and my dad will be 65. They are not huge money gurus and don’t really have any plans for the potential $250K-$300K they could walk away with from the selling of the house.

Do you have any advice/suggestions?
- Alex

For starters, it’s not going to be taken away little by little by Uncle Sam. Let’s say they have $250,000 in a savings account that earns 1% interest. That means they’ll be taking in $2,500 in interest each year. They will only be taxed on that interest earned. Depending on their tax bracket, Uncle Sam would take somewhere around 15% of it. In the end, they’d still earn about $2,100 a year from that money after taxes and the balance wouldn’t be touched.

If you want better returns than that, you’re going to have to take on some risk in some form or another. They could use that money to buy a very long term treasury note that would return about 3% on their money – $7,500 a year. The risk there is that the rates on treasury notes will probably go up in the next five years or so, so one option would be to wait with the money in savings for a few years and hop in later on.

Another option is to put it in a riskier investment, like a stock index fund at a brokerage. What happens there is that you’re at the mercy of the stock market. If the stock market has a good year, it will probably make about 15% a year and sometimes more. If it has a bad year, it could lose 15%. If it has a disastrous year (like 2008), it could lose 40%. Over the very, very long term, Warren Buffett has publicly estimated that a person should average out to about 7% a year going forward, but that’s a prediction (albeit one from one of the best investors on earth). The problem is, though, that some of those years are going to be +18% and others are going to be -18%.

You could also mix the investments. If you put half of it in savings earning 1% and the other half in the stock market, a good stock market year would earn you 9% overall and a bad stock market year would send you down 10%.

The problem with the risk is if your parents are relying on this money to support them. If they are and the money’s in the stock market, a swoon at the wrong time would be devastating. If they at least have a healthy Social Security check coming in, then they can feel at least a bit better about it.

You mentioned that whenever you have a book you want to read, you make a note of it and toss it in your inbox, then you keep a list of them? How does that work? I don’t get it.
- Erica

I do keep a list of books I want to read, films I want to watch, and games I want to play.

My “films I want to watch” list is actually my Netflix queue. If I see a note about a film, I just add it to our queue (we’re thinking strongly of going cable-free and are seeing if Netflix streaming and 1 disc at a time for $9 a month works for us).

For my books and games, I usually just add them to my Amazon wish list (with a comment if I wish) and/or to my library queue. In the past, I kept these in a Word document. The advantage of using a wish list is that if a family member is stymied as to a gift to get me, my wish list usually has a giant bundle of things on it.

I am 24, two years out of college, and have pretty good job security making $52.5K per year. Including rent, car payments, student loans, and everything else, my monthly fixed expenses are about $1570. I put gas, food, and weekend expenses on my credit card, and pay it off each month. That ends up being around $700 or so per month. I end up saving around $500 per month after all expenses, including my 6% 401k contribution which is the max my company matches.

Now, here is the issue: my loans. I have a little over $50K in student loans, and about $11K in car loans. Half of the student loans are at 2.8% interest, while the other half is at 6.5%. My car loan is at 5.74%. I would like to have enough money to put a down payment on a house in the next five or so years. So, should I continue making the minimum payments on my loans and putting that $500/month into a savings account for a house, or should I use it to put a little extra into my loan payments? Right now I am just putting that money into a savings account. Basically, what should I be doing different in order to better prepare myself for the future?
- Kevin

The interest rates on your loans are low enough that if you’re considering buying a home in the next five years, you’re better off just making the minimum payments on your loans and saving for a down payment.

Here’s why. As the money sits in your savings account, it’s earning about 1% return. Then, when you go to make that down payment, you’re reducing the amount of your mortgage by some significant amount, which means that the money you invest at that time will essentially earn a return for you equal to your mortgage interest rate. The absolute lowest amount you’ll likely get for a mortgage rate is 3.75% (on a 15 year) – and in five years, I’ll almost guarantee it’ll be more than that, probably significantly more. If you don’t have the 20% down, you’re likely going to be taking on an extra loan at a higher rate or paying PMI, which means an interest rate higher than your base rate because you didn’t save.

In other words, you’re better off saving for that down payment now and paying minimum on those loans. Even if your plans do change, it’s still not an enormous loss if you choose to channel that saved money into debts later on.

Obviously, the best choice in terms of maximizing every dollar would be to live in the cheapest apartment possible, pay down your debts ASAP in order of interest rate, and then start saving, but that plan may exceed your time frame depending on what else is going on in your life.

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.