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 (August 1 – August 7, 2009)
Putting the Strength of Weak Ties to Work Our lives are loaded with “weak ties” – people we know, but not well. There is a ton of value in maintaining those ties, strengthening them a bit when you can, and

Thoughts on a Low Grocery Bill You know, if you spend a bit of extra time and can trim $30 off of your weekly grocery bill thanks to coupons and meal planning and flyer watching, that’s $120 a month. That’s almost $2,000 a year. That can be a game changer if you do something worthwhile with that money.

Faith as a Guiding Financial Principle If your faith holds deep meaning for you, it can be a powerful tool for helping you make better choices. When you see someone talking about their faith and relating it to personal finance or personal growth, just remember that the faith is a powerful tool for some, but if it’s not a powerful tool for you, that doesn’t discredit the advice at all. You just need to seek the things that are important to you.

The Short Term and the Long Term Choice Quite often, we are faced with choices where one side is beneficial in the short term and the other is beneficial in the long term. A balance is healthy, but the more often you’re able to make the long term choice, the better life you’ll build for yourself.

The Netflix Culture of Excellence – and How to Capture It In Your Own Life I was utterly inspired by this article about how Netflix encourages the best from their employees.

Two Years Ago (August 1 – August 7, 2008)
The Status Quo Bias and Switching Jobs or Careers So often, we are afraid of making what would be a very good career change for us because our minds are wired to be afraid of such change. Overcoming the status quo bias in our careers

Balancing Personal Principles and the Bottom Dollar: The Cost of Healthier Food Choices One of the most challenging aspects of frugality and food is that the cheapest food is often the least healthy. It’s produced in factory settings with chemically-treated ingredients that have been stripped of most of their nutrients and combined with other ingredients to make it taste good. Raw foods are almost always substantially more expensive. How can you balance these facts?

The Frugal Introvert: Fifty Ways to Have Fun By Yourself on the Cheap I’m an introvert and I find a great deal of value in activities that I can do alone. Here are fifty things that can be done alone without shelling out the cash.

Is College Really Necessary For All High School Graduates? Whenever I think about this topic, I think of the pile of friends I have that have struggled finding work with their college degree. Then I think of a family member who is making a very good living plying a trade without any sort of college degree.

Looking at Debt Repayment as an Investment In my eyes, debt repayment is an investment. You can’t change the past, after all, so if you’re facing a debt, an extra payment against that debt is an investment because it reduces your repayment amount.

Three Years Ago (August 1 – August 7, 2007)
A Guide To Setting And Reaching A Net Worth Goal Net worth is an incredibly powerful personal finance metric. Here’s how to set a realistic goal and some tactics for reaching that goal.

The Debt Entrapment: When Your Debt Forces You To Stay At An Untenable Job Debt isn’t just money you owe. It’s freedom you’ve lost.

Freshly Graduated And About To Get A New Job? Here Are Seven Things To Do To Get Started On The Right Financial Path The choices you make right out of college can set the financial tone for your whole life. Making the right first step can be absolutely invaluable.

Seven Ways To Save Money While Cooperating With Your Neighbors – And How To Get Started Our neighbors have been an invaluable resource since we moved in. Getting to know your neighbors is well worth your time.

The New Person At Work Is Getting Paid More Than I Am! How Can I Handle It? Remember, jealousy almost always kills any good thing. The grass is always greener on the other side.

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!

Every Sunday morning for the next few months, I’m going to “riff” on a chapter from my book, The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams by reflecting on particular pieces of it that I’ve had further reflections on or particularly excite me, including some elements that were removed from the final draft. You can find out more about the book by reading some of the life-changing experiences the book has given readers or reading the Amazon reviews.

Our lives are far more random than we think.

Our brains are wonderfully complex machines that do a very neat trick for us: they take all of the randomness that goes on in our lives – both good and bad – and they make it all seem very normal and smooth and predictable. On page 25, I delve into this idea a bit:

In Nassim Nicholas Taleb’s book, The Black Swan, which discusses unpredicatble events and how we handle them, he identifies this part of human nature as the narrative falacy. “The narrative fallacy addresses our limited ability to look at sequences without weaving an explanation into them, or, equivalently, forcing a logical link, an arrow of relationship, upon them. Explanations bind facts together. They make them all the more easily remembered; they help them make more sense. Where this propensity can go wrong is when it increases our impression of understanding.”

To put it simply, our lives are chock full of random events of all kinds, but our minds, to make some sense of our lives, attempt to construct a story that makes it all make sense. The problem with this is that quite often, random events don’t make any sense at all – they just happen.

The Simple Dollar is an obvious example of this. I can easily write a two or three sentence story about how I founded the site (I was in debt, I wanted to share the story, I loved to write, people started reading and sharing with their friends). The reality of it, though, was much, much more herky-jerky than that. The flavor of the site changed over time as I figured out what and how I wanted to write. The site’s growth wasn’t smooth – it grew completely in fits and starts with lots of mistakes and stumbles and disasters and complete revamps of what I was doing along the way.

Yet, when I look back without taking a sharp critical eye to all of it, it seems smooth and natural, like it all just neatly progressed from an idea in my head to something I spend my time doing.

How does this impact our personal finances? For starters, this is the reason why many people don’t have emergency funds or just pretend that their credit cards are their emergency funds. They glance back at their past, see that it looks pretty smooth, and think that they don’t really need one. What’s actually happend, though, is that their mind has glossed over all of those bumps in the road.

The flip side of this is also true: luck favors the prepared. As I state on page 32 (right next to a reference to one of my favorite movies of all time):

Luck has very little to do with a four leaf clover in your pocket. Instead, luck is simply finding ways to take maximum advantage of the numerous random positive events in your life, as well as opening yourself up to more possible random events, from noticing a great sale to having a powerful idea.

In the past, I even made a detailed list of tactics for improving your luck.

Fortune always favors the prepared, whether it’s bad luck (where the prepared have an emergency fund and a network of people to help deal with it) or good luck (where the prepared have all sorts of tactics available to maximize an opportunity). If you’ve prepared, the randomness of your life has much less negative impact and much more positive impact, and the end result of that is that you look like one lucky duck to the people around you.

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

One of the best parts of summer is when fresh tomatoes start coming in from the garden. This past week has seen the first of our tomatoes and we were eager to sample them at the end of a long day of outdoor fun.

Of course, another part of eating frugally (beyond the garden) is preparing meals in advance and in bulk. One thing my wife and I like to do is to make a huge batch of burritos, eat them for a meal, freeze the leftovers, and save the frozen ones for the future, thawing them individually for lunches down the road.

Today, we’re going to do both.

The source for the tomatoes is obvious (the garden) and the applesauce is 100% natural – literally ground-up apples, also easy enough. But what went into the making of those burritos?

When we woke up that morning, we put three pounds of chicken into the crock pot. You can choose whatever chicken pieces you wish to include as long as they’re de-skinned and you’re willing to de-bone them after cooking. If you like all white meat, use breasts; we like a mix of pieces ourselves.

Usually, we buy chicken in bulk when we find a sale on it, buying 15-20 pounds of various pieces, keeping them in the freezer, and using them slowly over time as we need them. This reduces the cost of each meal substantially.

So, back to the chicken:

We literally put the chicken into a slow cooker, set it to “low,” and allowed it to cook all day (8 to 10 hours). In addition to the chicken, we also added three cups of fresh salsa and stirred it in with the meat. You can add any vegetables you like – we added a diced onion and a bit of leftover bell pepper, too.

We spent the day having fun. When we were in the house, the smell of the simmering chicken and salsa was delicious.

At about five in the evening, we removed the lid from the crock pot and began the next step: shredding the now-cooked chicken.

The shredding process is simple. Just take two forks, use one to hold a piece of chicken in place, and literally use the other to shred the chicken by sticking the chicken in the meat, then pulling the fork away from the stationery one, shredding the meat into small, uneven pieces as you pull. The big reason to do this is to increase the surface area of the meat, which allows it to sop up more of the delicious remaining salsa.

At this point, you have a bunch of moist, delicious-smelling cooked and shredded chicken soaked in salsa and with a lot of cooked vegetables around it. Time to start assembling burritos.

The process is quite easy. Just take two or three tablespoons full of meat/salsa/vegetable mix from the crock pot and spread it across the center of a tortilla, like so. The above picture is a pretty chicken-heavy one, for example.

You can also put a bit of cheese on them – or a lot, as you wish. Just use whatever type of shredded cheese you like. We used a sharp cheddar and used a healthy pinch of cheese on each one.

We had three pounds of meat, plus all the salsa and vegetables, so we had a lot of mix to use.

We stacked them high on one plate, then stacked them high on a second plate (the one originally used to shred the cheese). In all, we made twenty five burritos as depicted here. Some were wrapped in wheat tortillas, some in white – we simply used what we had purchased on sale and with coupons.

Now, for a final touch – a bit of grilling.

We just put a bit of canola oil in a skillet, just enough to coat the bottom and sizzle a bit on medium-high heat, then tossed in four burritos. With a spatula, we pressed down on the tops, then after a couple of minutes, we flipped them. We kept flipping them until both sides were a beautiful golden brown and the insides were nice and warm.

Then we repeated until all the burritos were cooked.

Six of the burritos went away at meal time, leaving us nineteen more for the freezer. We wrapped them individually, dated them, and put them into frozen storage, to someday be thawed and cooked for a delicious quick lunch.

The cost per burrito? $0.30.

The fresh tomatoes were a sublime match to the burritos. We originally planned to have fresh strawberries as well (we have a bunch of everbearing strawberry plants this year), but our daughter ate the majority of the ones we’d picked and cleaned as an afternoon snack, so we broke out the applesauce as a vegetable accompaniment.

Delicious, simple, quick, and cheap. What more could you want?

Chris emailed me with the following question. I originally planned to include it in a reader mailbag, but I felt such strong sympathy for his situation and others in that type of situation that my answer to him kept growing and growing until I realized that it was a full post all its own.

I am 34/ male. I feel very awkward in public. I don’t read books, I think what others might think why I am reading this book. I don’t browse stuff on my iTouch as I think others might look at what I’m browsing/ reading. The only thing I can do is: quickly browse my iTouch playlist, put my headphones on and listen. I even turn the brightness down in my iTouch so others can’t see anything (just in case!). I have always been like this as far as I can remember. This causes me to waste a lot of time and I want to change this. What do you recommend? Any courses I should take or books I should read or sites I should visit?

Chris, you’re clearly suffering from a severe case of social anxiety. I’ve suffered from it in the past as well and I have multiple friends who have the same thing in various degrees of severity.

Social anxiety is incredibly painful – and it’s also incredibly costly. By being so reclusive in social situations, you miss out on countless chances to interact with people, build friendships and relationships, and grow as a person.

I overcame my own social anxiety mostly through a ton of practice and a lot of failure. Among the first things I did was work on creating a false appearance of confidence in public places. I didn’t feel confident at all – I felt like I wanted to do much like you do, hide somewhere and reveal as little as possible about myself.

The first thing you need to think about is what is the worst case scenario and is that worst case really so bad. I found that most of the time, I was being reclusive and afraid for no good reason. The worst thing that can happen if someone sees what you’re listening to on your iTouch is that they just think “I don’t like that music” and they move on with their life. In the end, that’s almost indistinguishable from what’s going on now – and arguably better than looking like the guy who’s being ultra-secretive with his iTouch. On the other hand, the best result is someone peeks, likes what they see, and says so, giving you the opportunity to meet and relate to someone else.

For most little things like that – what book you’re reading or what music you’re listening to – there’s almost no social drawback from letting others see what you’re reading or listening to as compared to intentionally trying to hide it. Just simply imagine watching someone else who is just sitting there reading a book or listening to music or someone trying to hide what they’re reading or listening to.

In fact, that points towards the first tactic of getting over social anxiety (at least for me): change your attitude. Look around you. Watch what they’re doing. Are people being condemned for what they read on the bus or what music they’re listening to or what clothes they’re wearing or what they’re saying (within reason – I mean, there’s probably condemnation for the lunatic yelling on the bus)? No, there’s not. It’s seen as normal – likely more normal than the person trying to hide everything about them.

You’re not perfect, but no one else is, either. Every single person in the world makes social gaffes. Guess what? Your life won’t end if you do, too. In fact, most of the time, social gaffes end up being a positive – they’re endearing to others who recognize that the other person is human and makes mistakes just like they do.

Start small. For you, not hiding your iPod Touch might be a first success, or openly reading a book that interests you. Next, make it your mission to say hello to at least one person you don’t know each day. Or two. Or three.

Move on from there to watercooler-type discussions. Focus on actually going to such informal social gatherings and listening. Encourage yourself to make one comment a day – focus on that. You don’t have to be the talkative one, but just focus on that one small step.

For me, the thing that helped a lot was participating in a social group. In your case, the best option for that would probably be volunteer work, like working on a Habitat for Humanity house. These types of situations foster the types of simple and easy social interactions that you’re striving to practice. A day building a Habitat house not only helps the world, but it helps you break through your social anxiety.

Have something to say. Read the news each day and be aware of what’s going on politically and culturally around you. You don’t have to have mountains of arcane knowledge, just know what the top headline or two of the day is and something about it, or the top sporting event of the day. Do you want to know a big reason why sports are popular? It gives people something to talk about in uncharted social situations.

Ask questions. If you don’t know what to say to someone – and I certainly don’t sometimes – a question usually works very well. Something simple always works, like “do you know what the weather is going to be like today?” or “did the Cubs manage to win yesterday?” or “That’s a beautiful coat. I’d love to buy one like it for my sister. Where did you get it?” You give the other person something easy to talk about, they’re likely to eventually respond with a question, and you’ve started a conversation.

Seek out someone else who is shy. For the longest time, this really, really helped me in social situations and I’ve built a few lifelong friendships out of it. When you’re at an event with a lot of people, look for the other person or two who look like they don’t want to be there. Go up to them and flatly say, “Man, I don’t do well in these kinds of social situations.” Then, follow that with a question and you’ve probably found someone to talk to, someone relieved to not have to come up with something to talk about.

I do not recommend turning to psychological assistance for this. Your question comes off as someone who has some social awkwardness, not as someone who has deep underlying issues. You already have the desire to overcome that awkwardness, and there are a lot of personal steps you can take to start overcoming it on your own without psychopharmacology and expensive bills. Only seek professional help if you’ve tried in earnest many times to overcome this and failed to make any progress at all.

Little steps make all the difference here. It takes a long time to overcome social anxiety, but the rewards of overcoming it are great in almost every aspect of your life: socially, professionally, personally, financially, and otherwise.

As I’ve mentioned a few times on here, I’ve been taking piano lessons since early February. When I come home, though, my materials are mostly books I’ve been gifted or printed out from various places and I practice on an old electronic keyboard or by walking to a local church and practicing on the older piano in their basement.

While I’m not at all what I would consider good at this point, I can see that I’ve started to build some skill at piano playing over the past several months. I can read simple sheet music and play it. I can play a handful of simple songs from memory. By simple, of course, I’m referring to songs people know – like “Where the Saints Go Marching In” or “Fur Elise” in fairly simple arrangements without a lot of flourishes or anything.

It feels very good, and it’s particularly fun to set goals for myself, like “I want to play Song X from memory without errors” or “I want to be able to open this music book to a random page and be able to play what’s in there.” I’m looking forward to being good enough and confident enough to play in social situations – I’m not there yet, but I can see it down the road.

What I’ve really learned from this is that it’s really empowering to learn a new skill – and it doesn’t have to be all that expensive, either. There are so many new skills anyone can learn out there that the only thing missing is your motivation. You don’t need money – for many skills, you just need time and a little bit of motivation.

Skills pay off in a lot of ways, too. Yes, sometimes they’ll turn into a career, but sometimes they’ll just help you to assist a friend or work through social awkwardness or help add some spice to a social situation (like piano playing, for example). Those things have great value as well – there are few things more valuable than a strong social network.

Most people, when they think about skill-building, envision a classroom, a teacher, a bunch of expensive supplies, and tuition bills. That’s only true if you’re looking to earn some sort of certificate to write about on your resume, but it’s certainly not needed to build many skills you might wish to have. Instead, here are five free resources anyone can use to start building up many of the skills they might want to learn.

Hit the library. There’s a “how-to” book on virtually anything you would like to learn about at your local library – and if it’s not there, they can probably get that book via interlibrary loan. I glanced at the self-teaching piano books at the library recently and there were dozens of them – in fact, I checked out two of them myself, just to read different angles on the ideas.

Hit Freecycle. If you need equipment, one great place to start looking for it is Freecycle. Basically, Freecycle is a resource for people looking to give away unwanted things – and many of those things are quite nice and useful. Subscribe, pay attention, and you’ve got a good chance at finding the things that you need. I’ve walked away from it with multiple items over the past few years.

Request use of public facilities. Many communities have facilities available for many, many different activities, from basketball and tennis courts to churches with pianos sitting in their basements. If you need equipment to do what you want to do, spend some time studying what’s available to you already.

Participate. If there are groups in your community focused on whatever skill you’re trying to build, whether it’s public speaking or woodworking, make an effort to join that group. Don’t be ashamed of your “new” status or your lack of equipment. Quite often, if a new member joins a group like that and shows some passion and initiative, the other group members are often really happy to help the new person get rolling.

Trade. If someone else has access to the training or equipment that you need to use, work out a trade with that person. Could you swap some of your already-existing skills for access to that training or equipment? A good old-fashioned barter usually leaves both participants in a much better place.

Most of all, just do it. If you’re sitting there dreaming about some skill you want to build, I can only guarantee one thing: continuing to sit there and dream about it won’t build the skill. Get up and start doing it. I can’t tell you how long I dreamed about starting to play the piano, but it wasn’t until I started actually doing it that anything happened.

You’ve got to do it to be able to do 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. Balancing limited income and values
2. Getting started with a Roth
3. Balancing social obligations and money
4. Investing for non-retirement goals
5. Economical recipe collections
6. Overpaying for life insurance?
7. Student loan dilemma
8. Daycare options
9. Cloth diaper recommendations
10. Huge student loans versus retirement

Just a rhetorical question to think about: if you moved into a new home and discovered that your best friend was allergic to some aspect of that home that you couldn’t change, what would you do? Would you try to move again? Would you accept that the friendship would probably end?

Those kinds of things are never easy to answer, but I see those kinds of situations pop up all the time. We are all faced with really hard choices in life, no matter what our specific situation is.

The more reader emails I read, the more sympathy I feel for everyone involved. The situations usually come about as a result of a lot of choices. A little more understanding never hurt anyone.

My wife and I are in a quandary. We live in coastal (read: expensive) California and bought our first house, a modest townhouse in a nice neighborhood, in October after finding out we were expecting our first child. A while back we went through some of your exercises to determine our values and priorities.

I’ve done everything I can think of to reduce our fixed costs: reduced insurance coverages, pared back our cell phone plan, minimized our internet service, made energy efficiency improvements to our home, etc, but the savings aren’t enough to free up money for our interests. I feel like maybe we’ve exhausted other remedies. With the money remaining to us, some of our favorite things feel like an impossibility. We can’t afford to shop at more expensive natural grocers anymore, farmers markets bleed us dry because we’re like kids in a candy store. Blogs like “Cheap healthy Good” are helpful, but even those ingredients tend to add up, and that still doesn’t solve our dining out issue, which we’ve agreed to cut out entirely to our extreme displeasure. Any suggestions you could offer on how to balance our value of food with our newly restricted budget would be much appreciated!
- Brad

If you’re living in a coastal California community, live in a furnished home, and are making it on $3,500 a month, you’re doing incredibly well for yourself. I’m genuinely impressed that you’ve managed to make ends meet while retaining any ability to entertain guests at all.

The difficulty is that you’re living in an area with a very high cost of living. Maintaining a life in an expensive community while also entertaining and dining out regularly is a set of choices that is simply beyond your means.

This leaves you with a few hard choices to make. You can live in a less expensive community. You can reduce the amount you spend on entertaining (probably through entertaining less). You can reduce the cost of each time you entertain by moving more towards potlucks, etc. than dining out. You can do something to raise your income level, whether through another job or a business or something.

I can’t tell you which choice to make, but one of those choices will have to be made. You seem to be consistently spending more than you’re earning and it’s eaten through your savings and is about to start sinking you into debt. Make the choice before you go down that road.

I graduated from college in ’09 and was blessed by my grandparents to have my federal student loans immediately paid off. Since then I have begun a 5-year graduate program. In my field, we are paid to go to grad school so while I have a rather small budget I do have income. At the beginning of the month I immediately pay rent (my only monthly bill), send 10% to my church and sock 20% away for savings. I have always been a frugal person so even on a small budget I find that I usually have a couple hundred dollars left at the end of the month that gets added to savings. In the last year I have a sizable emergency savings account ($5,000) which seems more than adequate considering that I am single with no dependents or debt and a paid graduate program.

My thought was to stop saving more for an emergency savings fund and start saving so that I can open a Roth IRA retirement account. From what I can see it will take ~$3000 to open an account which will take me roughly a year to save for. I do not intend to put the whole 20% I had been saving directly toward retirement, but rather portion it out into other financial goals. Am I missing anything to consider before I begin routing 10-15% of my income to retirement?
- Rachel

Why would it take you $3,000 to open a Roth IRA?

I’m guessing that you went to Vanguard (that’s who handles my Roth), looked at the funds available, and observed that virtually all of them have a $3,000 minimum. I would suggest starting with the Vanguard STAR fund, which has a $1,000 minimum balance and is well-diversified. Once you reach a $3,000 balance in the STAR fund, you can move the money to whichever fund you wish to have your money in.

Before the $1,000 mark, you’re probably better off just keeping the money in cash.

We are in our mid-30s and have a 1 year old daughter. We live in a small condo outside a large city and our daughter goes to daycare 11-hrs a day, 4-days per week (my husband works 5-days, I work 4). We are both only children with hobbies we love and most enjoy spending our free time together with our baby at home. Exhausted at the end of the work day, our main free time is on weekends. My question for you surrounds the myriad of social invitations we receive: not only weddings, baby showers, etc…, but going out for dinner with friends, visiting others’ homes, staying with my parents for the weekend (they live 1.5 hrs. away). It may sound as if I don’t appreciate having a great social network, but it has become overwhelming for us and our friends and family do not seem to grasp that we need time to ourselves and that many of these outings are costly. Given the choice of attending a graduation party at a catering hall with 100 other people and loud music or spending time at home, enjoying each other, reading to our child, engaging in our various hobbies, we’d pick staying at home every time! (The graduate, in this instance, has basically threatened us into attending her party even though she knows it’s not really our thing.) I have slowly been attending graduate school to begin a career in elementary school teaching, but have put it on hold due to expense, so we’re really trying to cut back. In addition to not really being excited about attending these outings (perhaps we’re just anti-social), the cost really does add-up. Before we alienate everyone by declining their incessant requests to visit, attend parties, etc…, any suggestions?
- Beth

If it’s something that’s not fulfilling to you, don’t attend the event. Being close to your family is not a requirement. If it does not bring positive value into your life, don’t throw time or money or effort into it.

Having said that, I think there’s a happy middle ground here. To put it simply, if I want someone at an event, I don’t care if they bring a gift or anything else. If I invite someone to a birthday party, they don’t have to bring a gift. They can if they want to, but they don’t have to. The same goes for any event in life. Gifts should never be an obligation – if they are, then they’re a cost of admission, not a gift.

The best thing you can do is talk these things out. If you feel uncomfortable doing so, then there are other problems at work in the relationships beyond the ones mentioned above.

My question is on investing for something other than retirement. I recently opened a High-Yield Checking Account and Brokerage Account with Schwab in an effort to both earn some interest on the money in my checking account and get some investing experience. I don’t have a lot of money to devote to this at the onset (between $1,000 and $2,000 when I fund the Brokerage Account, adding about $100 a month thereafter), and I’m not terribly well-versed on the finer points of investing. What I’m wondering is, if I’m looking to potentially use this money before retirement (say, to buy a house in 5 or 6 years), how should I go about investing it? Most of the information I’ve been reading has been geared towards investing for retirement, and this money is separate from my retirement accounts, as well as my more short-term savings goals.

I’d love any advice you could give me, even if it’s just to suggest a book or two that would give me more information on this. I would really like to have a solid understanding of the different types of investments before I dive into this venture, but I’m not sure how exactly to go about finding the information I need.
- Katie

Your best bet is to just pick up a general investing book and read it cover to cover. I recommend The Bogleheads’ Guide to Investing as a great book to get started with.

As for a more specific answer, the best approach is to treat your investing as though you’re going to be retiring in five or six years. In other words, your investments should be fairly conservative at this point. Why? If the stock market has another 2008 in a few years, your five to six years will become ten to twelve years because you’ll lose half of what you’ve saved.

I would probably stick with index funds (which are basically big collections of investments, so you own only a little bit of a ton of different stocks, different bonds, or different commodities, depending on the specific index fund). Buy mostly conservative ones – bond funds and the like.

My biggest challenge is in the area of finding reliable, “you don’t need to be Cordon Bleu trained”, recipes that actually contain protein and no tater tots! :)

Do you have any thoughts/cookbooks to recommend?
- Celia

I’m guessing that you’re vegetarian. The best cookbook for beginning cooks with a focus on vegetarian dishes is How to Cook Everything Vegetarian by Mark Bittman, which focuses pretty much exclusively on easier dishes with fresh ingredients. It’s the only strictly vegetarian cookbook on my kitchen bookshelf.

The most important thing to learn about cooking is that recipes are generally just suggestions. You’re almost always well-served by substituting things in-and-out as you desire. The advantage of being skilled in the kitchen is that you easily understand how to substitute things, like how to substitute a few grated potatoes for tater tots, for example.

Practice in the kitchen is more important than recipes.

What is a good resource to learn about different kinds of Life insurance?I’m paying almost 1500 dollars for our family of 5 in universal life insurance that a friend sold to us but feel that its the wrong thing for us.But I don’t know who to ask for more info and would just like to know more about all types of insurance.Any suggestions?
- Preethy

Over what period are you paying the $1,500? That makes a huge difference.

I generally don’t recommend that people get anything other than term life insurance. The only exception to that would be insurance for newborns, often purchased by a doting grandparent.

The reason is that the investment potential of the insurance isn’t very good, especially during the first decade or two of the insurance. Almost any diligent investment plan will beat the investment potential of such insurance.

Why do people still get it? It can be good in a few situations, like a grandparent picking it up for a grandchild. At first, it’s a gift to the parents, protecting them from the financial burden of losing a child early. As it grows, it becomes a gift to the grandchild. Also, it’s often a product that earns a very nice commission for the salesperson, so they often pitch it whenever they can.

As it stands now, my tuition for the next eight semesters will be around $9086. I have four more semesters of state financial aid and a university scholarship at $6000. I also qualify for a Subsidized Federal Direct Loan at $4250 a semester and an Unsubsidized Federal Direct Loan at $6000 a semester.

Should I go ahead and take the full amount of Subsidized Federal Direct Loan and put the excess in my savings account to gather interest and then use it when I need it after my scholarships run out? Is there some other option you believe would be more advantageous?
- Justin

That’s probably the best option available to you. It’s essentially taking out a student loan this year for your education bill next year.

There are a few things I’d worry about. First, I’d make absolutely sure that you never touched a dime of this during the passing year. Don’t get tempted to spend it or else things will end badly. Second, before you take it out, make sure that you will have enough to cover your schooling during the following year.

In short, you don’t want to take out this debt and then not wind up in school the next year.

My wife and I have a 1-year old who goes to daycare (one that is very hard to get in). I’m currently unemployed and have been freelancing while looking for a permanent position; my wife works full time but is worried she may get the axe. We have a large chunk in savings (ING at a decent rate) that we are loathe to use except for emergencies.

What do you think about this? Have you already discussed this? I’m betting it’s a discussion many new parents are having.
- Choi

I wouldn’t worry about the friends at your child’s age. I have a four year old and a two year old and their friendships are extremely fluid at this stage. Even my four year old just moves on with life if he doesn’t see his friends or they move away. What’s important is the social skills – the ability to meet people, interact well, and form new friendships.

As for whether it’s better for your child to stay in daycare while your wife seeks another job, I think that more depends on what her goals and values are – and yours, too. Does she want to be a stay-at-home mother? If she does – and you can financially swing it – why not use that opportunity to let her be a stay-at-home mother?

More than anything, this seems just like a value conflict between you and your wife that you should talk through carefully so that you’re on the same page. It may be that your wife really does wish to be a stay-at-home mother but isn’t doing it for various reasons.

You often refer to how your family uses cloth diapers for your kids. We do this as well. I have kept track of all the diapers I have bought and sold, and I figure with my first son, we will just about break even over the cost of buying disposables. Now that my second son is due in about a month, we will finally start to actually save money! But I’m trying to figure how the cost of water and electricity figure into the equation. We have a top loader washing machine, and just the standard dryer. I wash the diapers in hot water with two cold rinses to get them really clean. Have you ever figured out what the cost is to wash the average load of laundry? I would also be curious to hear what brand(s) of diapers you use — there are a ton of options out there!
- Juli

There is such a huge variance in the cost of a load of laundry that such a calculation is almost meaningless. You have to pro-rate the cost of your washer into each load. Water prices vary greatly, as does the amount of water used in a given load (though in any case, this is still a small cost). The cost of detergent varies enormously. There’s just no consistent way to calculate it.

A friend of mine wrote a guest post on The Simple Dollar about such costs and she basically concluded that the first child is a wash and that the second child generates very nice savings, even with all sorts of costs figured in. Disposables really, really add up.

As for what we use, we use BumGenius diapers. They were initially expensive, but they’ve held up through three kids very, very nicely and are about as convenient when using them as disposables are.

Currently I owe $95,955 in student loans – all loans are issued through the federal government and have been consolidated. My current interest rate is fixed at 5.250% and the loans are in forbearance until March 2011. The only other debt that I have is $1300 dollars in monthly credit card bills that I pay off in full each month – I use my credit card because it earns me airline miles, and so far I’ve booked 2 free tickets back home to California!

Can you please help me!
- J. P.

Your credit score isn’t devastatingly bad at all. You’re in an area where you probably wouldn’t get the absolute best home loan, but you’d likely get a pretty good one. The best part is that your credit rating will slowly go up as you consistently keep your bills paid.

I think your plan in paying off your student loans slowly is a good idea considering you have that payoff option. Make sure you know exactly how that plan works (it seems straightforward).

I think you’re doing the right things overall. Keep it up. When you get your raise, amp up your savings for the house down payment and make sure you have no other debts.

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.

About a year ago, I decided to get a low-end smartphone, mostly so I could check and make sure The Simple Dollar was still up and running from the road and perhaps tweet on occasion. I wound up with a low-end Blackberry that I got for just a few dollars and got the low-end data plan from our cell phone provider (because I didn’t intend to use it too heavily).

I chose that Blackberry sight unseen, mostly because I’d read reviews of it and it seemed like a ridiculously good deal. And it was – I could resell the thing right now for roughly what I paid for it.

There was a huge problem, though, one that I should have known about in this situation.

My fingers are huge (I wear a size fifteen ring and I can make a normal can of soda actually disappear within my cupped hand). The buttons on a low-end Blackberry are tiny. Whenever I would attempt to do anything on the device, my fingers would hit two buttons almost every time. Dialing a number – let alone anything else – was virtually impossible for me.

Within three months, I was pretty much avoiding using the phone (to the annoyance of my wife and to people who would text me or call me). I’d use it when I had to, but the usage was really frustrating.

So, over the last few months, I’ve been carefully looking for a low-end phone compatible with my cell network (mostly talking to friends who seem to be great at finding electronics deals) with the caveat that it must have reasonably large buttons and, a few days ago, I switched to a phone that I can actually use – a Samsung Acclaim (no, not an iPhone or a Motorola Droid X or some other over-the-top overly expensive phone).

This whole escapade taught me a few lessons.

First, know exactly what you’re buying before you buy it. If you can, use it as much as possible first. Fifteen minutes of using that phone would have told me that it wouldn’t work for me, and it was due to a feature that would have only been covered in a very thorough review of the phone. Which brings us to…

Second, look for thorough reviews and read them carefully. A thorough review would have been very clear about the button size on the phone rather than simply talking about the user interface and information straight from the press release. If you’re looking at an item you’re going to rely on and use frequently, trusted and detailed reviews are vital. I usually start with Consumer Reports and move on from there.

These two tactics alone would have gone a long way towards ensuring that I made a wiser purchasing decision with my initial phone. However, there are a few more useful things to mention about all of this.

I used my social network as a shopping buddy. I have a few friends who do things like buying and selling new and used electronics on eBay and other such sites. Whenever I need electronics, I usually shoot them an email, as well as emails to anyone I know who has recently purchased a similar item, just to see what bargains they found in their search. Almost always, they find something for me that I would have never stumbled upon on my own.

Whenever you’re about to make a purchase, don’t be afraid to email your friends and colleagues about it. Mention what you’re buying, why you’re buying it, what features you’re looking for, and ask them what suggestions they have or deals they’ve found recently. You’ll be shocked at how much useful information you’ll get back.

Of course, the flip side is true. Whenever a friend emails me with such questions, I do my best to give them an answer with as much information as I have. It’s through this exchange of value that relationships are built – and it’s also through this exchange that I can ensure that the next time I have some sort of purchase in mind, I’ll have plenty of people willing to give me a useful response.

I thought carefully about the features I needed. Mostly, I needed larger buttons and the ability to check The Simple Dollar from the road with enough richness that I can be sure all of the features of the site are working. I don’t have much need for a lot of the flashiness that other phones have. The phone I wound up with actually is a bit more feature-rich than I actually need, but I couldn’t argue at all with the price.

At the same time, I didn’t need to spend money on extra features. By being up front about the features I needed, the search process for the right phone at the right price became much easier. I wasn’t “amazed” or “taken in” by some of the features of higher-end phones. I simply looked for the best price on the features I wanted, which turned out to actually be very cheap, indeed. Any “extras” I happen to get beyond those key features – for free – are just a bonus.

As some of you know, I have an off-and-on side gig writing for OPEN Forum, a website that focuses on small business issues. I mostly write about small business frugality – how to reduce your spending without reducing the quality of your business – but I often touch on other topics. Anyway, here are a few of my most recent articles on there.

Making Continuity Sales Work For You Continuity sales occur when you’re able to sell an ongoing series of items. Think of a punch card where if you buy X items, you get 1 free, or when you buy a package of coupons for the same item.

The Power of 2: Business-Building Relationships in Your Community A few weeks ago, I reviewed the excellent book Power of 2, and in this article, I talk about how the ideas from that book apply well to small businesses.

Is the Nonprofit Boom Right for Your Business? There is a lot of value for a small business using some of their proceeds for charitable purposes – or even becoming entirely nonprofit.

Beating the Competition with Frugality Frugality is an incredible tactic for small business success, and here I lay out why.

With that, here are some personal finance articles I’ve enjoyed over the past week.

A Frugal Daughter’s Guide to Back to School Shopping I’m just about to get my first dose of “back-to-school” shopping, as my son is attending preschool for the first time this fall. We’re rumored to have a supply list in the next week or two. (@ frugal dad)

3 Reasons Why Most People Will Never Earn More Money — And What You Can Do About It! So many things that business and career experts recommend is a complete waste of time. (@ man vs. debt)

Reader Story: Widowed Young This is something that my wife and I have greatly feared over the years. (@ get rich slowly)

How To Make A Dream Reality: Fear vs. Courage It’s a lot harder to accomplish a goal if you’re afraid to start tackling it. (@ pick the brain)

the manifesto of encouragement On the flip side of that fear, it often takes just a little encouragement to cause a dream to get off the runway. (@ white hot truth)