Every Sunday, The Simple Dollar reviews a personal finance book or other book of interest.

Daniel Solin’s series of The Smartest X Book You’ll Ever Read have turned me off for their title alone, and thus, to this point, I’ve not read them. The title set off a big “questionable investment planning” warning light inside my mind and, with a lot of other options to choose from, I just kept passing on books in this series.

As is often the case, though, a long-time reader emailed me and strongly encouraged me to give this specific book a shot, mostly because he felt it addressed retirement savings from new angles that he hadn’t considered before.

I do enjoy reading personal finance books, particularly ones that add new ideas to familiar topics, so I headed out to my local library and picked this one up. I do have to say that it did include some ideas and angles on retirement savings that were certainly intriguing and provided food for thought.

Let’s dig in.

One | Rethink Retirement Investing
Right off the bat, Solin makes the vital point that if you don’t protect your portfolio against inflation, you’re going to run out of money much sooner than you would like. Inflation is a force that constantly pushes against your retirement savings, making every dollar you save today worth less when you retire. This is a particular problem for conservative investors who would like to keep their money low risk and “safe” – they won’t lose money, but they’ll often earn at a rate lower than inflation, which means the real value of their money is actually decreasing over time. The best solution, then, is to balance the two – keep a healthy portion of your money in stable things (like cash or CDs or savings accounts or treasury notes), but put some of it into other things with more growth potential that can keep your overall portfolio ahead of inflation.

Two | Stocks Made Simple
Individual investors shouldn’t invest in individual stocks (unless it’s just for fun) because the risk is just too great. You don’t want to bet your retirement on one company lest it turn out to be the next Enron. Instead, you want to mix it up: invest in broad-based index funds, some of them with lower risk and some of them with higher risk. So, for example, your overall portfolio might be 1/3 in cash or treasury notes, 1/3 in a total stock index, and 1/3 in an international total stock index. The key is to buy index funds for your investments – they spread out your risk while also keeping the fees very low. (I do this myself – I have my money with Vanguard.) Obviously, as you move closer to retirement, you’re going to want less of your money at risk, so over time you’ll migrate more and more to cash and treasury notes and less and less in stocks. One easy way to do that is to just buy “target retirement funds” which automatically handle that transition for you (again, making sure that these “target retirement funds” are made up of low cost index funds).

Three | Bonds Made Simple
Bonds are a great way to get solid returns in your portfolio with relatively low risk. Solin recommends that most investors should have at least some of their retirement money in a broadly diversified, low-cost bond index fund. It’s important to remember, though, that bonds aren’t riskless. They have less risk than stocks, but they’re not entirely free of risk. Solin also suggests that investors worried about inflation should not buy TIPS (Treasury Inflation-Protected Securities) because they’re very volatile and they earn very poorly in times of low inflation (like right now, for example).

Four | Cash Made Simple
You should never keep cash in a bank that doesn’t have FDIC insurance, and you should make sure that your cash savings never exceeds the FDIC insurance cap (currently $250,000). Solin encourages searching around for banks if you’re just looking for a place to sock away your cash savings (I suggest using BankRate).

Five | Annuities Made Simple
Solin is a big fan of immediate annuities – annuities in which you give a cash sum to an investment house and receive payments for the rest of your life from them. He argues that they greatly reduce the risk of outliving your money, even if the returns aren’t stellar. Another option is a charitable annuity, where you give a lump sum to a charity and they issue you payments for the rest of your life – this ensures that your annuity lump sum winds up in the hands of a charity you care about instead of a business. If you do get an annuity, though, Solin recommends a fixed rate annuity, not a variable rate one – they carry too much risk. Your annuity should have a fixed rate, period.

Six | Mining Your Money
Do not trust historical returns when you’re trying to figure out how much you can safely withdraw from your retirement each year. Instead, you should simply focus on withdrawing as little as you can get away with each year. Solin suggests aiming to withdraw between 2% and 4% of the total each year – I think that’s a great target (he offers some more math-intensive guidelines as well). He also offers a few exceptions to that “2-4%” rule that involve market timing, a subject that I don’t agree with him on (I don’t think market timing is usually a good move).

Seven | Simple Steps to Stretch Your Money
When you start taking withdrawals, withdraw from your taxed accounts first (like any ordinary savings or investment accounts), then deferred retirement savings accounts (like a 401(k)), then Roth IRAs last. Why? The longer money stays in a tax-deferred account, the longer it has to grow in value without Uncle Sam feeding off of it. If you have a 401(k), Solin recommends rolling it over into an IRA if you can because this gives you more control and the ability to utilize lower-cost investments. He also thinks converting your IRA to a Roth IRA (and everyone with an IRA can do this in 2010) is a good move for almost everyone, but particularly high income earners.

Eight | Social Security and Pensions: Critical Choices
If there is any possible way to delay taking Social Security, do it. If you can wait until you’re older, you’ll get higher payments for life. It can also adversely affect the quality of life of a spouse that survives you. Also, don’t bank everything on a pension because, as we’ve seen recently, companies sometimes aren’t 100% reliable in paying out the pensions they’ve promised. If you do have a pension, avoid taking the lump sum option (if you have it) and take monthly payments instead.

Nine | Is Sixty-Five the New Fifty?
People are living longer lives and staying healthy much longer. What this means, to put it simply, is that if you retire at the traditional retirement age, you’re going to have to cover many more years than the generations before you had to cover for themselves. The solution, of course, is a simple one: work longer. Turn your early “retirement” years into a continuation of your career or the crest of a second one. Don’t rely on age discrimination laws to help you, either – everyone is responsible for keeping their skills up and building their own paths.

Ten | Financial Lifelines for Desperate Times
What if you’re running out of money? A reverse mortgage (meaning you give your home’s deed to someone else and in exchange you receive regular payments) is an option, but it should be your absolute last one. Why? They’re expensive – they’re loaded down with tons of fees and you’ll get nothing close to what your home is actually worth out of it. Instead, seek other options. The AARP is a spectacular resource for the elderly, as are local churches and civic organizations.

Eleven | Care Costs
One of the major costs a person often has in retirement is medical care. Before you even consider retirement, you’ve got to know what your medical care options are when you retire. Is there any continuing coverage from your current job? Can you make ends meet with Medicare? Do you need long term care insurance? Solin spends quite a few pages on long term care insurance and basically argues that the lower your net worth is at retirement, the better an idea long term care insurance is (because if you have more money, you can pay for more care out of pocket).

Twelve | The State of Your Estate
Everyone needs a will, but a will has severe limitations that can hurt you if you’ve spent a lifetime building wealth. A better option for people with a high net worth that wish to pass on their money is to set up a living trust, assign their assets to that trust, and receive payments from that trust until they pass away, at which point their instructions for further management of the trust (i.e., who gets the money) is followed. Also, older couples are very well served by having prenupital agreements that specify that some assets get left to children when one member of the marriage dies.

Thirteen | Wolves in Sheep’s Clothing
If you need financial advice, be careful – there are a lot of sharks in the water. Avoid people who are offering you free things (like lunch) to listen to their pitch. Instead, seek out assistance on your own terms. Look for financial advisors who are fee-based, can explain things clearly, and aren’t seeking to constantly beat the market (such people often wind up way over their heads and you’re left holding the bag).

The book closes with a large handful of appendices and additional documentation for many of the points made in the book.

Is The Smartest Retirement Book You’ll Ever Read Worth Reading?
I think The Smartest Retirement Book You’ll Ever Read is a very strong retirement book for high income earners – the people who aren’t having to make hard decisions about whether to save for retirement or accomplish other life goals. It pretty much assumes you’re going to be socking away plenty and that your questions revolve around where to put it.

If you’re in that group, The Smartest Retirement Book You’ll Ever Read is a very worthwhile read. Solin keeps an eye on the real world (inflation, business failure, etc.) and explains the logic behind every move he recommends in a very clear and straightforward fashion.

If you’re really hitting your income stride and are looking for some sound advice on what investments to put your retirement money in, The Smartest Retirement Book You’ll Ever Read is a pretty strong choice for a good read, in my opinion.

As I’ve said many times on here, my wife and I have a small handful of major goals that we share going forward in our lives.

We both want to eventually live in the country with some wooded area and a small barn.

We both want to focus on raising our children as well as we possibly can.

We both want to achieve complete debt freedom (we currently just owe on our mortgage) to give us even more career and personal flexibility in the future.

Here’s the interesting part: these goals do not reflect everything I want to do in life, nor do they reflect everything Sarah wants to do in life.

Instead, they’re the goals we share together and because we both share them, there’s a lot more power and mutual motivation and mutual benefit in achieving those goals.

How did we get there from each having our own goals? Here’s the process we went through – and are still going through.

We each sketched a picture of what we wanted our future to look like. What did I want my life to look like in five or ten or twenty years? I spent some time really thinking about that question. I made a list of some of the things I wanted to happen in my life over those timeframes. I had career dreams and family dreams and personal goals I wanted to achieve.

We compared our pictures of the future. What we found is that some of our goals overlapped, some of them did not, and some of them were personal goals that affected our partner in various ways.

So, for example, we both had a dream of living in the country with woods and a small barn. I had a dream of building a fully self-sustaining farm there (with wind power, geothermal heating, and so forth), but Sarah didn’t share that vision as strongly: “It’d be cool, I guess, but is it really worth the cost?” I also had career goals that impacted Sarah a little bit (because of the time and energy investment), but not too much.

We agreed to focus on the larger goals we both shared. I listed those above. Those goals are not a list of the goals I came up with – if I listed all of the things I wanted myself, the list would be longer and have a much different flavor.

However, a big lifelong goal that your partner is not on board with is not only much more difficult to achieve, pushing hard for that goal can put problems in your relationship. On the other hand, sharing a goal and both working towards that same goal encourages an environment of mutual support. Focus in on the goals you both deeply share – and you identify those by coming up with your own list of goals on your own, then sharing and comparing them.

Our next step was to settle on a small handful of key goals that we both shared. For us, this was very easy. We had three very obvious key goals that we each individually wanted – a house in the country, complete debt freedom, and strong parenting.

If you find that you’re coming up with a lot of shared goals, that’s a good thing. I recommend settling on just a few – the ones that are most deeply important to both of you.

If you find that you’re not able to come up with shared goals, I would suggest spending more time together and focusing on building your relationship with each others. Not having shared goals is a sign of being on diverging paths in life – and that means if you take your relationship seriously, it needs some work, whether you can see that on the surface or not.

Once you’ve figured out those shared goals, work together to keep them front and center. Remind each other regularly of the goals you share and the little steps you’re both taking to make it happen. If you’re not both engaged with a goal and working towards it, it’s hard to do it alone. You’ve got to be together, and if it’s a goal you both share, reinforcing each other and helping each other should come somewhat naturally.

A final tip: revisit your goals on occasion. We talk about ours all the time. Usually, it’s motivational. Sometimes, we refine the goals a bit – for example, we’ve been thinking about the location we’d like to move to. The key thing, though, is that we talk about it together, cement our bonds to each other, and motivate each other to move forward.

It’s a lot easier to reach for something great if you’re doing it together.

Lately, I’ve been reading the very enjoyable book Stop Getting Ripped Off by Bob Sullivan of The Red Tape Chronicles (a full review will come in a week or two).

The first section of the book discusses at length how people are often stymied at personal finance due to basic math skills. Here’s a quote, from page 7, discussing a simple math problem that involved pulling two numbers off of a list, adding them together, and figuring out what a 10% tip would be:

If you answered this question correctly, consider yourself part of an elite group, because when the U.S. Department of Education asked U.S. adults to answer it as part of a nationwide study, 42% answered correctly. Less than half of American adults were able to pick two numbers from a list, add them, then perform the most basic of all percentage calculations – simply moving the decimal point one column to the left to calculate 10 percent.

You might be surprised by this abysmal performance. But then, if you think about your last dinner with a group of friends, perhaps you won’t be. Remember that dreaded moment when the bill came, and the splitting began? Cell phones and calculators were whipped out. Shrugs swept around the table. Finally, most of you gave up and threw down $20 bills or credit cards.

Sullivan goes on to point out that a dollop of very basic math can keep people out of a lot of financial trouble.

I know from my own experience that many people out there are extremely math-phobic. When they see numbers, they shut down.

Why is this? Some of it is in brain chemistry, I’m sure. Some people simply don’t do well in terms of numbers. On the other hand, I also believe that some of the problem comes from our educational system. I have always enjoyed math, but I had at least one elementary school teacher who was so abysmal at teaching the ideas that I just read the book on my own and asked my father for help. Many of my classmates, later on, who were confused by math recalled being baffled in this teacher’s class and always feeling lost thereafter.

The solution isn’t to just yell at everyone to learn math. Yes, it would be great if we were all very good at such basic math, but the dream doesn’t match the reality.

Instead, I think one solution is to simply have a repertoire of very basic math techniques that help in many situations.

I’m going to point out six of them that I’ve collected over the years, intending to use them in a post like this. If one (or all) of these seem obvious or too easy to you, congratulations – you’re pretty good at math. But each one of these situations has stymied someone I know at least once, so there are certainly a lot of people who could use some tactics like these to help them out.

Please, if you have more simple tactics like these, leave them in the comments.

Figuring out a 10% tip
This is the easiest tip of all and is exactly as described above. If you see a dollar amount with a decimal in it, slide the decimal point one place to the left and drop the right number.

So, if you have a bill for $83.47, just slide the decimal one place to the left – $8.347 – and drop the right number – $8.34. There you go.

Figuring out a 20% tip
Many people want to tip more than that, so here’s how to get a 20% tip. Use the 10% tip trick, then double the numbers starting on the left.

So, if your bill is $34.28, use the 10% trick to turn it to $3.428 and then $3.42, then double each number. 3 becomes 6, 4 becomes 8, and 2 becomes 4. That leaves you $6.84 for your tip.

What if the number doubles into something in the ten spot? Double them all as before, then add on the ones going back the other way. So, let’s say you have a bill that’s $87.65. 10% of that is $8.76. 8 becomes 16, 7 becomes 14, 6 becomes 12. The easiest thing to do – since you don’t have to worry about preciseness, is to just get the first number right. $16 is the first number, and since the second number has a 1 on the front, make it $17. That’s pretty much all you need to worry about – don’t sweat the exact change on a tip.

In fact, for most efforts, this kind of approximation works just fine.

Figuring out which debt to pay first
This one is pretty easy, too. Just call each place holding a debt and ask what the interest rate is and what the balance is, then list them in order according to one or the other.

That’s it. There’s no worrying about it. Listing them by interest rate (biggest first) is very slightly faster for paying off everything, but listing them by balance (smallest first) will allow you to pay off individual debts quicker.

Figuring out how to split a bill evenly
The best solution is to, of course, ask for separate checks for everyone. If that doesn’t work, you’re usually stuck spltting up the bill evenly. Here’s how you do it.

Everyone should pay an equal amount on the bill with at least one person paying cash. Then request change in small bills and when the change comes, split the change as evenly among all the payers.

So, let’s say the bill is $55.82 and there are five of you. Everyone chips in either $15 or $20 and requests change in small bills. When the money comes back, figure out a tip from that – if you’re paying 20%, use the 20% tip trick above and pay $11. If everyone chipped in $15, you would have $8 and some change in single bills to split among you. Give $1 to the two people who bought the most expensive stuff and $2 to the other three who bought less expensive stuff. Walk away, happy.

Figuring out which size is a better deal
The key is to use the price per unit measurement. Go to the store and study the price per pound or price per ounce on the shelf sticker – most stores have it. Make sure the two units are the same. If they are, whichever one has the lowest price per unit is the best deal (assuming you can use it all before it goes bad).

Just ignore the sticker price. What matters really is the price per use of it, and if you can pay less per use, you come out on top.

Figuring out if you can afford a house payment or rent
All you really need to know here is your annual income and the 10% trick and the 20% trick. Take your annual income, use the 10% tip trick on it, then use the 20% tip trick on that, then compare that to your rent or monthly payment. If your amount is higher, you’re probably safe to rent or buy. If it’s not, then you should avoid it.

This is actually really sound – it comes up very close to the 28% of your monthly income that has been recommended for years for people to use to determine if they can afford to rent. All this trick does is make the math a bit easier.

Here’s an example. Let’s say you made $40,000 a year and wanted to rent an apartment that cost $1,400 a month. Can you swing it? The 10% rule on your income takes it down to $4,000, then the 20% rule on that takes you to $800. You probably shouldn’t be swinging it on your own. However, if you have a roommate to split it fifty-fifty with, your monthly rent is only $700 a month, which is less than the $800 you calculated. That would be a much safer move.

This little trick would have saved an awful lot of people from signing bad mortgages in the last decade.

Does anyone have any other similar simple tricks for helping with “life math”?

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 4 – July 10, 2009)
How Low Can You Go? Dal, Chilean Style This is one of my favorite recipe posts I’ve ever done on The Simple Dollar. This is just simply a recipe I enjoyed very, very much.

Can You Actually Earn Reasonable Money from Mechanical Turk? You can if you already have a certain skill set, like the ability to churn out content very quickly. Of course, that skill set can often be used to make better money in other contexts.

Billy Mays, Michael Jackson, Your Heart, and Your Bottom Dollar Take care of yourself. Your life is your most valuable asset.

Seven Ways I Use Evernote to Improve My Finances I use Evernote as a tool in many, many different situations and contexts. It’s most valuable to me as a tool for recording my thoughts and ideas.

The Total Money Makeover: Money Myths – The (Non)Secrets of the Rich The Total Money Makeover is the best book I’ve read strictly on the topic of paying down debt. Ramsey mixes evangelist, cheerleader, and advisor very, very well in this book.

Two Years Ago (July 4 – July 10, 2008)
The Difference Between a Job and a Career A job is something you do just to earn money in the short term. A career is something you build that will earn you money in the short and long term, regardless of the specific job.

Seven Websites That Saved Me Money in the Last Week I still use these websites (and others) to save money all the time. The internet has connected frugal people like nothing else.

A By-The-Numbers Look at Why Saving Is More Important Than Perfect Investment Choices If you save $100 a month, it doesn’t matter how good your investment choices are – upgrading your savings to $125 a month will annihilate any gains you might otherwise make. (That doesn’t mean you shouldn’t do both, of course.)

The First Steps Away from Paycheck-to-Paycheck Living Paycheck-to-paycheck living is a dangerous place to be. It means you’re just a few steps away from financial apocalypse if you lose a job or suffer some other serious crisis.

A Look at the Startup Cost – And Why It’s Usually Good to Go Cheap at First I find it’s always the best bet to spend very little up front on a piece of equipment or an article of clothing if at all possible. If it turns out to not work well or not fit your interests or passions, you’ve not invested much. If you’re really into it, you can upgrade the item later on – after all, you don’t have much invested.

Three Years Ago (July 4 – July 10, 2007)
Ten Frugal Tips For A Great Grilling Experience Summer here means grilling – and lots of it. Here are some tactics I use to make it really go well.

The Gray Area Between Want And Need There are few things that are absolutely “needs” in life. Successfully separating them from “wants” is a key to personal finance success.

Treat It As A Bill: How I Made A Commitment To Saving Work For Me Automatic savings is one of the best things ever created. It simply allows you to save money and build up an account balance without really thinking about it at all.

What To Do If You Disagree With The Simple Dollar – Or Any Other Financial Guru Don’t just assume that someone has all the answers. Find out answers on your own. Read more than one source for anything you want to know about.

One Thing You Can Do Today That Will Put You In Better Financial Shape Tomorrow It’s really simple, but we fail to do it all the time.

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.

2. Comment. Each article on The Simple Dollar has lively discussion. Just click on the green square in the upper right of each article on the website and join in!

3. Become a fan of The Simple Dollar on Facebook. I put up questions and other materials about once every week or two on Facebook (so you won’t be flooded with Simple Dollar updates). Join in the conversation with other Simple Dollar fans and occasionally get some interesting freebies, too.

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!

9. Become a “Friend of The Simple Dollar.” If you find the stuff on The Simple Dollar valuable and are willing to spend five minutes or so a month to help me out with small things, please consider signing up to be a “Friend of The Simple Dollar”.

10. Email a great article you find to a friend. Find an article that you think your friend would love? At the bottom of each article, you’ll find a link that says “Email this” – just click on that, type in your friend’s address, and send it right along to them!

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.

Today’s meal looks like a simple pasta…

… and it is, except that we do something a little different than most people seem to these days.

You see, we’re pretty picky about our sauce. We have found a few store-bought pasta sauces that we like, but they’re often $5 a jar or more. That’s a lot of money to pay if you have pasta with any regularity.

Our solution, of course, is to simply make the sauce ourselves.

This solves several concerns all at once. It gives us complete control over the ingredients for health and flavor concerns, but perhaps more importantly, it reduces the cost of a meal’s worth of sauce down to approximately the same cost as the absolute cheapest pasta sauce on the shelves.

In short, we can make pasta sauce at home that’s tastier and more appealing to us than any canned sauce we’ve found – even the $5-10 sauces – for less than $1 per jar (about $1.80 or so if you include lean ground beef in it, as we do).

The trick, of course, is that we make several batches of it at once and freeze all but one of them. In this example, we’re making five “jars” of sauce with a set of ingredients that’s just shy of $5.

A few notes on the ingredients, before I list them.

The ground beef is entirely optional in this recipe. If you want a meat sauce, use it. If you don’t, don’t use it. We used about 2.5 lbs. of ground beef in this recipe, averaging out to about 8 ounces of it per “batch,” or about 2 ounces per dinner plate for our family. I’d recommend using 2.5 pounds.

Second, we used canned diced tomatoes and sauce because, frankly, the fresh tomatoes aren’t quite here yet in Iowa. In about a month, we would be using fresh tomatoes for all of this, but the tomatoes currently in the store are still what I would consider ridiculously expensive. If you want to use all fresh ingredients, wait until tomatoes are in peak season and use fresh tomatoes for all of it. The price will be very reasonable and the flavor will be sublime.

Here’s our ingredient list.

4 medium onions, chopped
2 cloves garlic, minced
2 28 ounce cans diced tomatoes
1 28 ounce can tomato sauce
1 tablespoon basil
1 tablespoon oregano
2 teaspoons salt
1 teaspoon sugar
1/4 teaspoon pepper
2.5 to 3 lbs. ground beef or ground pork (optional – if you don’t wish to use it, you can certainly add more vegetables)
2 4 ounce cans mushrooms (very optional – we didn’t use them)

You can, of course, add any other vegetables and spices you like. Chopped peppers are a good addition, for example.

First, we chop up the onions. We use an ulu knife (a gift) for this. It’s a special type of knife with a rounded blade that makes chopping vegetables quite easy. You basically grab the knife by the handle and rock it back and forth on the board – it chops vegetables quite well.

We also chopped up the basil and oregano:

We used fresh herbs in this. If you don’t have access to fresh herbs, dried basil and oregano work just fine. We just happen to have oregano all over the place this year (oregano sometimes just goes crazy in an herb garden), so we might as well use it.

Then, cook the meat, onion, and garlic together in a big pot until the meat is browned (or until the onion is browned a bit and really flavorful if you’re not using meat).

It’s cooking!

Once the meat/onions are ready, drain them, then add the rest of the ingredients (except for the mushrooms, if you’re using them). Stir it well, then let it simmer for 45 minutes.

If you have mushrooms you want to add, add them after thirty minutes of simmering.

Here’s the sauce after most of the simmering is finished.

Once it’s done simmering, just split it into five equal batches and freeze four of them.

We happened to have a bunch of leftover Ziploc quart freezer bags, which are perfect for this. Here are our bags, about ready to go into the freezer:

These freeze up really well. If we want to have a pasta meal – or a homemade pizza – that night, we just pull a bag out in the morning and stick it in the refrigerator. By evening, it’s ready to be warmed up to the desired temperature and still tastes great if used within six months or so.

As for the meal itself?

It was delicious. We had bread on the side with it (and some yoghurt after the meal) and it went over very well. We had a small amount of sauce left over, so we also made a lunch that consisted of the remaining sauce and a bit of the remaining pasta.

What did the sauce cost? Here’s our cost on the ingredients.

4 medium onions, chopped – $1.60
2 cloves garlic, minced – $0.50
2 28 ounce cans diced tomatoes – $2.38
1 28 ounce can tomato sauce – $1.19
1 tablespoon basil – $0.05 (from dried, estimated)
1 tablespoon oregano – $0.05 (from dried, estimated)
2 teaspoons salt – $0.02
1 teaspoon sugar – $0.02
1/4 teaspoon pepper – $0.01
2.5 to 3 lbs. ground beef or ground pork (optional) – $4.23

With the meat included, it totaled $10.05, so when you split it into five batches, each sauce batch cost $2.01. Very good for hearty sauce with meat.

Without the meat, it totaled $5.82, so when you split that into five batches, each sauce batch cost $1.16. That’s incredible, considering similar sauces at the store would easily be $5 a batch. We dearly love this stuff and prefer it to any store sauce we’ve tried.

Over the course of the five batches, if you’re normally buying large jars of gourmet sauce at $5 a jar, you’re saving $3.84 per meal. Over the five batches you made, you’ll save $19.20 – not bad for less than an hour’s work!

This is the twelfth 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.

One key theme in this book is the importance of coming up with a “next-action” list, which is essentially a “to-do” list. What makes the idea stand out in this book is that there’s a clear process needed to assemble that list out of the large clump of things floating around in your head and sitting on your desk that you need to do.

One big effect of this is that you often wind up with a pretty big pile of stuff, particularly right after you do a “brain dump” and get all of the stuff you’re supposed to do out of your head. Some of that stuff is a straightforward “next action,” but some of it isn’t.

What do you do with the stuff that isn’t obviously a “next action”? You analyze it and figure out what the next action is in that idea that you have. I really like the example of this that Allen lays out on page 238:

What’s ironic is that it would likely require only about ten seconds of thinking to figure out what the next action would be for almost everything on your list. But it’s ten seconds of thinking that most people haven’t done about most things on their list.

For example, a client will have something like “tires” on a list.

I then ask, “What’s that about?”

He responds, “Well, I need new tires on my car.”

“So what’s the next action?”

At that point the client usually wrinkles up his forehead, ponders for a few moments, and expresses his conclusion: “Well, I need to call a tire store and get some prices.”

In other words, if there’s some vague thing you need to do, you usually just need to think about it for a moment to figure out what the next action step is. Then, add that next action step to your list.

Quite often (in fact, almost always), that next action step leads you down a sequence of actions that leads you to complete that vague thing you’ve been putting off.

For example, in that tire scenario, after calling a few tire stores, the fellow has a list of options in front of him for tires. He can drop that in his inbox if he wants, or he can keep going and set up an appointment to get new tires at the shop he prefers, adding that appointment to his calendar. Once he goes to that appointment, the vague “tires” element on his list – something vague enough that he kept avoiding it – is now completed and it’s one less thing on his mind (and on his “next actions” list).

I do this all the time. Quite often, my initial collection of some idea or some task – usually jotted down in a pocket notebook – is really vague. It’ll be something like “tires” or “chicken alfredo” or “Rudy Jimenez.” When I retrieve that note later on when I’m processing my inbox, I’ve learned that when I see such a vague note, I should spend a bit of time thinking about it and figuring out what comes next. After that thought, I can add real actions to my next action list, like “Set an appointment to get new tires on the Pilot” or “Buy the ingredients for that bookmarked chicken alfredo recipe” or “Call Rudy Jimenez about the youth baseball league meeting.”

If I didn’t do that extra second or two of thinking to turn something vague into a clear next action, I would be a much less efficient and less reliable person. That extra second or two turns things that seem vague and difficult into very clear and specific actions that I can do.

Of course, if you keep carrying this thought process further, you begin to see a different problem. What if you have a vague and amorphous task that seems to get more difficult the more you think about it? Income taxes come to mind – it seems like a simple thing, but if you sit down and start piecing through it, it starts to seem bigger and bigger and bigger.

Quickly, you reach a point where the task seems overwhelming – and that’s the point at which procrastination often begins. On page 241, Allen touches on this:

And so a lot of people [fall into this trap]. Because they’re so smart, sensitive, and creative. In my many years of coaching individuals, this pattern has been borne out more times than I can count – usually it’s the brightest and most sophisticated folks who have the most stuck piles, in their offices, homes, and heads.

In other words, smart, sensitive, and creative people tend to be very good at seeing all of the intricacies of a large problem – and it overwhelms them. Rather than dealing with all of these little elements and details, we put it off.

This is absolutely the wrong approach. If you have one of these fairly large and seemingly complex tasks in your inbox, your best bet is to spend some time figuring out nothing more than what your next action is to move it forward, then add that to your next action list.

In other words, just break it down. Don’t get scared by all of the details you see further down the road. Focus on nothing more than the very next thing that you need to actually do to move this thing forward. When that’s complete, move on to the next step. And the next.

Allen talks about it on page 242:

There is another solution: intelligently dumbing down your brain by figuring out the next action. You’ll invariably feel a relieving of pressure about anything you have a commitment to change or do, when you decide on the very next physical action required to move it forward. Nothing, essentially, will change in the world. But shifting your focus to something your mind perceives as a doable, completeable task will create a real increase in positive energy, direction, and motivation.

That’s why getting in the routine of just identifying the next thing you need to do to move something forward and simply doing it is so powerful. It makes your objectives clear. It gives you something specific to actually do instead of procrastinating. It lifts your mood and your attitude.

To put it simply, it gets things done.

On Tuesday, we’ll talk about the power of outcome focusing.

A couple weeks ago, I posted some links to a discussion concerning whether it was smart or selfish to not have children, as well as a response to that issue.

Since then, the whole matter has stuck in my head. Is it smart or selfish to have children? Several readers have emailed me their thoughts on the subject as well.

In the end, I don’t think you can strictly say whether it’s smart or selfish to have children or not without deeply knowing the people you’re talking about.

First of all, children are expensive. An average child born today will take up somewhere on the order of $300,000 in expenses before they are fully independent (though, honestly, some of that is offset by behavioral choices made by parents). They also require a lot of time, emotional giving, and patience.

Some people – and I would put myself in that camp – deeply want to be parents. It’s a personal goal in their lives. They spend a lot of time focusing on how to be good parents. They genuinely strive to produce good children, not only for the benefit of society, but because it’s a personal drive within the parent.

For me, the price of being a parent is one I’m willing to pay, because being a parent is something I’m intrinsically driven to do. My deepest personal values tell me that being intimately involved with the crafting of the future people of this world – directly, in the case of my children, and indirectly, in the case of many of their peers – is one of the most valuable things I have to do in life. I can equip them with the basic tools they need to achieve things beyond my imagination.

Other people don’t have that drive. Their motivations and goals and aspirations lie elsewhere – in career paths, personal endeavors, or other areas. Without that drive, they tend to see the costs – which are easily calculable – in front of the benefits, which are much less direct at first glance.

I think that many people are on the fence about where they stand. They see the positive experience that some parents have and want that in their life, but they’re also taken aback by the problems and difficulties and social implications of parenting.

My belief is that if you don’t wish to have children, don’t have children. If you think that children are more trouble than they’re worth, you probably should not have children.

I also believe that if you feel driven to have a child, you should do everything you can to prepare to be the best parent you can be. This means spending the time to really figure out who you are, how to control your emotions, how to teach, and most importantly, how to be patient.

The world needs both parents and non-parents. There is a lot of societal value in a wide range of skills, abilities, and thoughts. I absolutely feel that being a parent is a noble choice, but that does not imply that DINKs are not making a noble choice. They’re making a different one in line with their values, goals, and talents.

To put it simply, I think it’s smart to follow your nature and inner drive – whether that leads you to be a parent or not – and it’s selfish to ignore that drive and push yourself in a different direction. If you’re born to be a caregiver, it’s smart to become one and selfish to push away that nurturing side. Similarly, if you’re born without that ability, it’s selfish to try to force yourself into it, but quite smart to seek out and follow your other talents.

The worst thing that either side can do is insult the other and believe that their side of the coin is the only worthy side. We need both parents and non-parents in society – without both, we would see the end of the human race.

Just remember, you don’t have to be in either group. If you listen to your heart of hearts, though, it will eventually guide you to where you should be. Just remember that society needs the caregivers and it also needs those who walk alone and blaze a different path.

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. Borrowing against life insurance
2. Splitting a property
3. Bankruptcy and loan modification
4. Tracking weight loss
5. How much down payment?
6. Helping someone drowning in debt
7. Spousal disharmony and debt repayment
8. Extra payments or not?
9. Is Dave Ramsey worth it?
10. Swimsuits and culture

One of the traditions we have at bedtime at our house is that I sit and sing a few songs to my children as they go to sleep. I usually let them each choose a song, then I choose a song or two.

In the past, they would each pick a child’s song – like “The ABC Song” or “Baa Baa Black Sheep,” then I would sing some song I knew, usually an old folk song or a song that was popular fifteen years ago.

Lately, it’s been fun to watch as my children’s tastes have grown. My son almost always requests one of the old folk songs. My daughter, interestingly, seems to be gravitating to a lot of what I would call the “alternative” hits of the mid-1990s (don’t worry, I’m pretty selective on what songs I choose to sing).

It’s quite fun. I can’t sing well, but I muddle through with light percussion, and if my children know the song well (as my son does with a few of the folk songs), they’ll sing along, too.

I recently graduated college and was fortunate enough to land myself a very well-paying job in a location that I like doing what I want (in the IT field). I have not been so lucky (smart) in the past, however, and during my college career accrued about $4500 in credit card debt that I’m working to pay off now. I’ve stuck to using cash and debit only for now and have been going strong at not accruing more debt for a few months, though I can’t admit I’ve been able to pay my cards off as quickly as I hope because I wasn’t earning income for over a month and before that I was still earning just enough to get by.

As part of my transition from college life to the ‘real world’, my parents have turned everything over to me – including a life insurance policy that they started when I was very young. I have no intention of getting rid of this policy despite the fact that I have free life insurance from my employer for an equal amount. I did however find out that I can take a loan of up to about $6000 from my policy at a 5.5% interest rate. Right now my weighted average of my debts is hovering just shy of 18%..to me, it seems to make sense to take out a loan against the policy and pay off my credit cards, then work on repaying the loan. I already have a plan in place to pay off my debts, but in the meantime it would save me money and would only require one (albeit automatic) payment each month. I also am planning on paying off my cards within four or five months as of right now, but if I can take out a loan at 5.5% it would help me sleep better to build up an emergency fund first and repay the loan at a slightly lower pace until I get a few months of living expenses saved up. What are your thoughts on what I should do with this? Would this have any impact on my credit??
- Dave

Really, all you’re talking about here is refinancing. Instead of carrying unsecured debt at 18%, you’re thinking of converting that to secured (by your life insurance policy) debt at 5.5%.

Reducing $6,000 from 18% to 5.5% would save you $750 over the course of a year. Given the “four or five month” timeframe you’re talking about for becoming debt free, your net savings would be about $200 to $250, depending on how you paid it down.

I would do this move, but not change a thing about my debt repayment plans once I had a small emergency fund – say, $1,000 or so – in place. Get that small emergency fund, get rid of the debt, and move on down the road. You’re in pretty good shape, after all.

I live in Brooklyn where what you get for $300k is almost nonexistent (or a shoebox and shoddily made) and have been talking to friends to see what we can get for $600k instead (sometimes small 2-family homes will still go for that but 3-family homes are going for $850-900k still). I’ve only found some stories that it’s been done and some of the agreements made between the homeowners, but not how to go about it (working with getting 2 mortgages finalized at one time, what to look for in a realtor that can handle both, what the timeline should look like). I recall meeting someone who did this with a 3-family house and then the split the property legally into 3 separate units after the sale.

Do you have any information on it? I know the risks re buying with friends but I do know we’ll both be interested in having a fair agreement contract and working through that stuff. We have about the same amount of money to put in as a down payment ($10k each).
- Jesse

It depends on the type of arrangement you’re considering, which isn’t clear from the question.

If you’re just wanting to buy the house, have everyone live there, and share the mortgage as one unit with the payments “split” among you, that’s a private contract between all involved parties. A lawyer could easily draw this up. However, I really, really would not recommend this because it’s going to be fraught with problems if one of the people involved decides to pull out.

I think, though, what you’re looking for is a way to effectively turn this one house with one mortgage into three properties with three mortgages. That can be done, but it requires that each of the separate properties have certain elements – their own exit, for one. What exactly is required for this depends on the specific zoning rules in your area and you’d want to talk to a real estate lawyer about it.

If you can get the property treated as three distinct properties, then it’s likely that a bank would help you refinance the single mortgage into three separate mortgages. However, if this is your long term plan, I would make sure the agreement for all of this is in place before signing anything at all. In other words, the first step is to talk to a property lawyer – and getting the bank involved would be another part of the equation before you even start looking at the property.

My husband has been disabled for the past ten years. Due to numerous medical bills and loss of income, we were forced to apply for a loan modification with our mortgage lender. I am currently in negotiations with my mortgage lender to modify my mortgage. I was approved for a trial Home Affordable Modification. I have to make adjusted payments for 4 months and then hopefully they will permently adjust my mortgage. My question is: Can I claim bankruptcy during this trial period? Will it effect my loan modification?

Our attorney says that we should wait and see what happens with the credit card companies. Do you have any thoughts?
- Brianna

Borrowes in bankruptcy are not automatically eliminated from the Home Affordable Modification program, so I wouldn’t worry about that.

What I would worry about is filing bankruptcy proceedings in the middle of this would cause some significant additional effort on behalf of the bankruptcy court, which would increase your legal costs (perhaps significantly).

I wouldn’t worry too much about the unpaid credit card debt, either. If you’re up to date at the start of all of this, you’re probably just going to be 90-120 days late at the time your modification finishes up.

The place to look is the contract you agreed to with the credit card company when you opened the card. Most likely, your debt will just be turned over to a collection agency eventually if you don’t pay because, honestly, unless you have a huge amount of debt, it’s not worth it to them.

If you’re filing bankruptcy, you’re going to have severe credit problems in the short term anyway, so that’s not a concern.

In the end, I’d trust your lawyer on this one.

I recently saw a post on your progress for your 2010 goals and saw that one of your goals is to lose 40 pounds. I was wondering if you use any software or systems to track what you are eating, how much you weigh, etc. to keep you motivated and informed as you are improving your diet and losing weight?
- Jenelle

I keep track of my weight in Excel. Not only do I keep track of my daily weight, I also have columns that automatically calculate my average weight over the last 10 days and the last 30 days.

I do this because I’ve learned it’s a bad idea to panic if your daily weight fluctuates a bit, even if it goes up. Food digestion, water retention, and many other things can cause your weight to go up on a day-over-day basis even if you’re eating well and exercising.

So, my focus is generally on making sure that my longer-term average weight is going down.

I’m 24, single and currently employed with a salary in the mid $40k’s. I’m living at home and plan to until I buy a house/condo. I have $10,000 in a savings account and another $13,000 in a money market. Most of my income goes into the MM and I’m planning to use it as the downpayment for my house/condo and let the savings become my emergency fund when I am on my own. I’m wondering what you think is a good amount (%) to put down when I do buy something and if I should use a part of the emergency fund for the downpayment. The only other debt I have is $5k in student loans at 4.5% and currently, my fixed expenses (student loan included) are ~$150/month.
- Nate

You should be shooting to put 20% down and you shouldn’t deplete your emergency fund to do it because when you move in, there will be lots of things right off the bat that you’ll need to do to fix up the house. I would keep an emergency fund equal to two months’ of expenses after your move, so probably somewhere in the $4,000 range.

20% seems like a lot, but if you’re earning $40K a year and you have only $150 a month in fixed expenses, you should be able to save a lot each month toward that goal.

My estimate is that you should be socking away about $1,500 to $2,000 a month, depending on how much you’re spending on other stuff. That will get you to your number surprisingly quickly.

What would your suggestion be for a good friend who’s going through a divorce, is having a hard time with money, but does everything frugally already? My friend cooks his own meals, even builds his own furniture, drives a small car, doesn’t drink/eat out, etc. I hate seeing credit cards and banks eat up 10-30% interest on his debt and late fees, and his credit situation doesn’t warrant him being approved for better credit card or bank offers. I’m torn with what to do, other than help him pay off his debt to improve his credit history and get him back on track.
- Matt

Help him, but not by loaning him money. Instead, do what you can to help him with his burdens as a friend.

Invite him over for meals. Listen to him when he’s frustrated. Offer solutions if you can find them. Offer him some short term living space if he needs it.

There are countless small things a friend can do to slightly relieve someone’s financial or emotional burden in their time of need without just lending them money.

I am working very hard to pay off an auto loan so my husband and I can be 100% debt free. We have money leftover every month, but I always worry about commiting so much money to debt repayment so soon before our next paycheck. What usually happens is that I wait until our next paycheck to pay off any extra toward our loan, and my husband winds up spending our leftover money.

I hate this. I want to be out from under this. My husband and I have $1,000 in an emergency fund and contribute to this fund monthly. What should I do, bite the bullet and pay it off immediately, or put half in our emergency fund and half toward debt repayment? Any advice would be appreciated!
- Rachel

If you’re just looking for a quick fix, the best solution would be to zip off an extra payment as soon as there’s money in the account to spend. In other words, spend it first.

However, doing that just hides the fact that there’s a real problem crouching underneath the surface here. There are some trust and responsibility issues going on with money in your marriage, and if you don’t nip it in the bud right now, you’re going to end up with much deeper problems.

Sit down together and have a serious conversation about what your goals are and what your specific tactics will be for reaching those goals. Quite often, things like this happen because people don’t have goals – or they have goals that are out of alignment with one another.

My husband and I are probably going to buy a house. It’s small, and there’s a chance we’ll only be there 3-4 years, and at most we’ll probably only be there 6-7 years (it’s 2 bedrooms, which if we start a family we’ll likely outgrow). We’re willing to take the buying chance because we’ll be paying much less for the mortgage than equivalent rentals in the area (mortgage plus property taxes will be about $1200 per month, whereas equivalent rentals are around $1500-$1600 per month, and the rent is not a tax write-off), and after a string of bad landlords (including on foreclosed on) we just would really like to own instead of rent.

My question is this: does it make sense to make extra mortgage payments if we aren’t staying there long term? We have good jobs and save a lot, and after funding our retirement accounts we have about $3,000 a month extra to save. Should we put part of that toward paying off more mortgage? It seems to me the real boon of extra mortgage payments is that you save on interest and reduce the length of the loan, but we won’t be there for the length of the loan, so I don’t really see how we’d benefit from extra payments. Your thoughts?
- Valerie

If you get a 5% mortgage, then every drop of extra payment you make is essentially netting you a 5% return on your money for as long as the mortgage exists.

Here’s what I mean. If you owe $100,000 on your 5% mortgage, you are paying $5,000 a year in interest. If you pay off $10,000 of that 5% mortgage, you now owe $90,000 on that mortgage and will only pay $4,500 a year in interest – a $500 savings per year for your $10,000 investment.

Now, you’ll probably put your money to better use by ensuring that your retirement plans are taken care of. After that, though, putting your money into something that returns 5% to you like clockwork until you sell the house is a pretty good choice.

what’s your opinion on Dave Ramsey’s programs? I saw the book review (I read it – borrowed from library) and have seen your arguments/opinions about his ideas toward debt (Snowball, 15%) and some of my friends are doing FPU and/or thinking about it. It got me thinking about it too, but I’m not sure I agree with spending $100 to learn how to manage money when there are a lot of free resources available on the web. Basically — is the program worth it? Have you heard really good or really bad comments about it?

In general, my spending/financial situation is mediocre. I have a 401k, IRA, and E-fund. I’m not bouncing checks but I’m not paying down debts (CC, school loans, car) with the speed that Dave wants me to. Who really benefits from the course? Dave or the attendee?
- Meg

I think Dave Ramsey’s material is just fine. What he provides for people is cheerleading and motivation built on top of a set of very simple but financially sound principles.

Those principles, as you said, are freely available on the web. What you’re paying for is the cheerleading and motivation, in other words.

For some people, that cheerleading and motivation is worth it. For other people, particularly people who are good self-starters, that money is better off being channeled into debt repayment.

Another department where men are able to cheap out over women and then preach like they know something – swimsuits! [...] [I]t’s easy for a man to get cheap decent swimsuits— not so much for women. Once a woman has a good suit that wears well, it will be kept until it either no longer fits (for many reasons) or is falling apart.
- Jean

Here’s the thing, though, with items like swimsuits. I go to the beach or the pool in a pair of swim trunks and a t-shirt and I toss of the t-shirt when I want to swim. A pair of swim trunks costs about $2-3 and lasts me for years.

When someone – male or female – pays more than a few bucks for a swimsuit, they’re not paying for clothing to cover their bodies while swimming. They’re paying for a fashion accessory – a completely nonessential item. $70 spent on a swimsuit that shows off a woman’s figure might be a fun expense, but it’s certainly not required to swimm.

If you think you must spend that kind of money to have the perfect swimsuit to keep up appearances, you’re spending too much time (read: more than zero) and too much money (read: more than zero) worrying about what other people think of you. Think of it this way: if you were going to a completely private beach to swim, would you need that $70 swimsuit?

Update Several readers were upset by this response. My point was that if you’re spending more than $3 on a swimsuit because of vanity, it’s wasted money. What came across is that spending more than $3 on a swimsuit is vanity, which is not what I was trying to say at all. Spending more than $3 for a comfortable suit if you value swimming is a very worthwhile expense. I apologize for my ineloquence and my thick head.

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.