My four year old son thinks that the way you get a new video game is by trading for it at the used video game store.

At dinner time, they both eat exactly what their parents eat – and that’s considered normal, as opposed to making them a special kid-friendly meal that racks up the extra food dollars.

My two year old daughter thinks that the best way to get a new book to read is to go to the kids room at the library.

They both think that a spectacularly fun evening involves going to the local park and eating a picnic.

The only time they’re spoiled on the things they want is their birthday, Christmas, or when Grandma comes to town. After all, that’s why they have an allowance.

My four year old is saving for charity and has already made a contribution to his college fund.

What do these things have in common?

Obviously, all of these are choices that save money, at least, compared to the “typical” way of acquiring things. We usually make a point of these things that we do that save money. For example, when we take a bunch of canvas bags into the grocery store, we tell them that we save $0.05 for each canvas bag we use in the store, which helps shave a bit off of our grocery bill. We compare the park down the block to other kid-friendly places we might go and talk about how the park is free.

I already see these types of ideas showing up in my son’s thinking. One of the first things he asks when he’s considering an item is how much it costs, and he’s begun to understand that some things are bargains, some things are not bargains, and if you’re patient, sometimes you can find big bargains on the things that you want.

More importantly, these are all choices that set up a standard of financial responsibility. Our children see frugality as normal. We make dinners at home – dinners at home are normal and eating out is a very special treat. Making your own meals at home is normal – it’s normal to see a parent in the kitchen preparing some dish or another. It’s normal to spend a couple hours in an afternoon at the library. It’s normal to spend an evening at the park (and, frankly, it’s really weird that we’ll go to a park and our children will be the only ones using the play equipment on a beautiful evening).

They see such choices as the norm. They do not see rampant overspending as the norm. When we do make a major purchase, our children are probably getting sick of the dinner table conversation about which particular one to choose (our discussion about replacing our television is entering year three or so). A big part of that talk? The best bang for the buck.

In the future, the key part will be why we’re doing this. When I was growing up, we practiced a lot of frugality, but the “why” of practicing that frugality was often simply that we didn’t have enough money to go around. Gardening and reusing things and the other tactics we used weren’t part of a big overall goal – they were just methods we used to make ends meet.

For us, frugality enables us to spend far less than what we earn without giving up things that are really important to us. We don’t have to do it – we choose to do it because of the life it’s creating for us. That difference will change the rules of the game as we grow older, enabling us to retire earlier and do incredibly powerful things with our time. Our choices now are opening up giant windows of opportunity down the road, just in time for our children to see the real benefits of a frugal life.

The family that saves together dreams together.

Over the past few years, several personal finance bloggers have written books, myself included. J.D. from Get Rich Slowly put out Your Money: The Missing Manual. Ramit from I Will Teach You to Be Rich put out a self-titled book. Just last Sunday, I reviewed a book by Rachel Singer Gordon (a.k.a. Mashup Mom). I haven’t even really scratched the surface, either, with multiple books out there by writers with strong online followings like Liz Pulliam Weston and Bob Sullivan.

Why? What’s the reason for a blogger to write a personal finance book? After all, the second we put content to paper, someone’s going to be out there yelling “Why buy this book when you can get this stuff for free on their website?”

This is an issue I’ve actually talked about many times behind the scenes with various bloggers (yes, including ones mentioned above). All I can do is mention my own reasons for writing personal finance books when I also have a blog out there.

Different people roam the shelves
The biggest reason I write books is simply to reach a new audience. There is some overlap between the people browsing the personal finance section in a bookstore or a library and the readership of The Simple Dollar, but that overlap is fairly small. Many of the people out there in the bookstores or the libraries have never heard of The Simple Dollar or a word of what I’ve written.

I know from the (literally) tens of thousands of emails I’ve received over the last couple of years that the things I’ve written on The Simple Dollar have really resonated with people and helped change their lives in a positive fashion, even for people who have already read piles of personal finance stuff. Writing a book gives me the opportunity to reach people who don’t surf the internet very much – or at least have never searched for personal finance stuff – and have a similar positive impact.

So what about those one star reviewers who say “just go read his website”? From a book sale perspective, that’s not the best thing in the world. However, from a personal perspective, I’m really completely fine with that. A reader on the website is just as worthwhile and important to me as a reader of any book I would write would be.

Those one star reviewers are, in some ways, providing a promotional assistance for me, if not for my book. If someone reads that “just go read the website” review and goes to the website, perhaps I’ve picked up a new reader. Sometimes those readers read the website and also choose to go pick up the book after seeing The Simple Dollar website as a “preview” of it. That’s also just fine by me.

Expanding on topics
Many of the chapters in my book (and in the books of others who write personal finance blogs) are far longer and more well-researched than could ever be reproduced in a blog posting. Quite often, the chapters in our books take a bunch of individual ideas that we’ve fleshed out and discussed on our blogs, ties them together with research, and offers something of a different angle on them.

Here’s the catch: that type of writing is very difficult to do online. The longer a blog post is, the less likely it is that a reader will read it all the way through. They’ll scan for the bolded parts, but many readers simply don’t bother to read a lot of the details. A big part of the reason for that is the nature of the internet – there’s something else interesting just a click away. Here’s an excellent article from Slate about how people read online.

Reading a book is a much different experience. We usually find ourselves in a place with much fewer distractions. We can curl up with a book, read much longer segments at a time, and absorb more complex ideas. It’s simply a different experience than reading online.

Because of that difference, someone who writes a book can approach things differently than a blog post. You don’t have to bold your key points all the time. You can incorporate more research and other details. You don’t have to worry as much about the “get your attention shock value” of every other paragraph in order to keep someone’s attention. In short, you can really dig into a topic and write at length in a way that websites really don’t afford.

For me (and for most writers), that’s a very powerful way to explore ideas and come up with new ones. So many times during the writing of my books, I’ll flesh out a chapter, come up with some great conclusions, and then riff on them in short postings on The Simple Dollar website because they’re on my mind and I want to share them with you. The drawback is that when someone reads the full piece from the book, they get a sense that they’ve already read at least some of it – and that’s true, to some extent. But it’s not the full extent of it.

I don’t write for direct income
Unless you’re Stephen King or Nora Roberts or you’re a celebrity writing a nonfiction book or you luck out with a big celebrity endorsement (Hey, Oprah, how about using my book in your book club?), writing books is not a great way to become wealthy.

In terms of my income per hour invested in writing my most recent book, I will have to sell an awful lot of copies to earn minimum wage on the direct income from the time spent on the book. I’ll bet that I’ll never get there, either, when I start including the promotional work I’ve done for that book.

I knew this going in. I did the math and I knew I’d have to sell fifteen truckloads of copies to do well. Direct income was absolutely not my motivator in writing this book.

Then why write it? I wrote it so I could expand on topics that interested me. I wrote it so the conversation would continue with new readers who might never get online. I wrote it to challenge myself in a new way.

And you know what? I’m really happy with that.

I’ll say something else, too. I’ve talked to a lot of other online writers who have written books and their experience has been similar. The time invested in the book, compared to the direct income earned, was not the best investment in terms of earning potential for their time. They all wrote the book for the secondary reasons: reaching new people, being able to introduce themselves as an author, stretching themselves to actually complete a book, digging into new topics or old topics at a new depth, having a book out there that helps people find their website, and so on.

That’s why I wrote my book (and, in part, why other bloggers have written books). It’s why I’ll probably (eventually) write another one. I do have two ideas floating around that go pretty far astray from the usual main focus of The Simple Dollar, which means I may have to work to find a publisher for these. This book – and those potential future ones – are new challenges for me – and for the people who read them.

If all else fails, someone will pick up a copy of the book in thirty years, long after the website has gone offline, read it, and find something in it that changes their life. Nothing I write on this website will ever, ever do that.

Jennifer writes in:

My husband had been complaining about sharp pains in his side for several weeks. A few days ago I had to take him to the emergency room. He stayed overnight for observation and was released the next day with a ton of medications to take. It turns out he has a liver inflammation caused by a bacteria. He’s going to be fine.

Here’s the whole problem with this. We have health insurance with a $20 copay. My husband didn’t go to the doctor to avoid this copay because our budget is so tight. Now we’re stuck with a big pile of medical bills.

This is a problem that I often have as well. I’m a huge believer in self-care, which means that, for example, if my back hurts, I’ll just take it easy and do some careful stretches over the next few weeks instead of rushing to a doctor or a chiropractor. My instinct, in cases of minor pain, is to wait it out and see what develops.

I do that for several reasons. One, I’ve had bad experiences with prescription drugs and (especially) drug interactions in the past. An example: the last time I went to the doctor for a cold, I believed I was having allergies. The doctor diagnosed a sinus infection and prescribed Bactrim. I found out the hard way that I’m actually very allergic to Bactrim. Two, I usually feel better if I find non-pharmaceutical ways to treat a minor condition. And, yes, it’s less expensive, too.

This type of attitude – something that many frugal people follow – brings up a challenging point. When do we decide that it’s the appropriate time to go to the doctor? Ideally, there would be some magical indicator somewhere between “a few minor symptoms” and “emergency room situation” that tells us that it’s time to go to the doctor, but unfortunately, most of the time, there is no such indicator. When does an otherwise healthy person with good money sense visit the doctor?

Here’s what I’ve found.

First of all, my primary help in figuring out when to go is my wife – and I’m her guide as well. We’ve reached a balance in our relationship where we’re easily able to tell each other when there’s a problem. If I hurt my back, for example, I don’t try to use a stiff upper lip to hide it – I tell her what’s going on.

Second, I don’t use the internet to diagnose my medical problems. Almost every ache or pain a person has, when researched online, turns out to be cancer or ALS or multiple sclerosis or something else dreadful. Diagnosis should be left in the hands of a professional using professional tools, not someone reading a website, rubbing a bump, and guessing.

Third, I’m mostly concerned with chronic or worsening conditions. Over the short term, I don’t worry about most things unless they’re showing clear signs of getting worse. A cold is not a sign I should run to the doctor, but a cold that lasts for months is a sign that a repeat visit might be in order. An ache or a pain is just a sign that I’ve been overly active and I need to take it easy for a bit, but an ache or a pain that gets far worse over time or swells substantially means I might need to focus on it a bit.

Finally, I use free nursing services. Many communities offer a hotline where you can call medically trained professionals for quick advice and direction as to whether you should seek additional help or steps you can take to deal with a medical situation on your own. In my community, for example, First Nurse is available. Such services can go a long way towards helping you figure out whether a condition you have actually merits additional medical costs and efforts or whether it’s just a temporary thing that should just be monitored from home.

Your health isn’t something to mess around with. At the same time, being overcautious with your medical treatments can result in additional problems, from challenging costs to side effects of medications. If you’re struggling to find your own balance, I highly recommend seeking help from the people around you. Don’t ever be afraid to ask the people you care about most for their help and advice when you need it. It’s given with love and it’s given for free, whenever you need it. Never turn away from that resource.

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. Starting a garden from seed
2. Losing my job next summer
3. Splitting rent and utilities
4. Dealing with a challenging year
5. Time to have a child?
6. Double disabilities: what now?
7. Budgeting and taxes
8. Prioritizing student loans
9. Child now, with payoff?
10. How much for retirement?

The best birthday parties I’ve ever seen are simply ones where a person gets to spend time with people they truly care about and value. If you want to make someone’s birthday special for them, give them time.

I’ve been trying to start a garden from seed for the last two years and I just cannot seem to get strong plants. This last year, I started the seeds in peat pods in late January, which I moved to medium size pots once the seedlings were about 2 inches high (these pots were kept inside until mid-May). However, most of those plants didn’t grow at all or died in the medium pots. The ones that survived did not transplant in ground very well. Is my timeline too compact, do I need to start the seeds earlier? When transferring the peat pods to should I remove the webbing to allow the roots to expand?
- Nikunj

First thing: were you using any sort of grow light with the indoor peat pods? Grow lights are absolutely essential, because there is insufficient sunlight during the winter months (in the northern hemisphere) for most outdoor garden plants to survive indoors.

I don’t think your timeline is too compact. It just takes practice, adequate water, adequate light, and perhaps a bit of fertilizer as well.

Your best bet is to visit gardening message boards and simply ask for advice on creating the best possible early growth environment for the types of plants you’re trying to raise. While you won’t be able to fully imitate that, you should be able to approximate it well enough to have success with your seedlings.

I am going to lose my job. In one way, I am lucky, because I am finding out about 10 months in advance, but I’m still worried about my future. My entire department has learned that we will not be funded next year. Because we work for one department of a large university, there is always the possibility that I will be able to find a new job before I become redundant, however it is not likely that I will find one at my current pay rate. I have been debating starting my own business for a while, and could move forward with that plan if I cannot find another job at the university, or I have considered renting my house out and going to work overseas for a year or two. I wouldn’t build any wealth doing that, but it would be a great experience.

With the time remaining until my job ends, should I continue to invest in the Roth IRA? Continue to put extra money toward the mortgage? Or should I instead put as much money as possible into my savings accounts?
- Mary

Your first step is to figure out what your next step will be once your current job goes away. Are you going to actively job-hunt? Are you going to attempt to launch this side business?

Whatever you decide, start focusing on it now. If you’re seeking a new job, now is the time to get your resume straight, because the job market is rather soft (to say the least). If you’re thinking of launching a business, start the launch process now, not later, so that things are in place and running by the time you walk away from your current job.

If you’re switching jobs, I would halt the Roth payments and direct them towards an emergency fund until I had a job locked up. Once a job is in place, I’d move all of the saved money into the Roth. If you’re starting a business, keep contributing to the Roth.

My question is this, my boyfriend and I have been living together for a little over two years and now we are both beginning our careers. However, his income is substantially less than mine, I make about $700 more a month. We live in Los Angeles, not a cheap town by any means and I’m beggining to reconsider our financial situation. I have heard from other people that we should split our rent and utilities based on our difference in salary, however, I have some serious school loans, about $32,000 to pay-back and I was hoping to use a good amount of my ‘extra’ money (I live well below my means) to do so. What would you do?
- Lauren

Are you in this relationship for the long term?

If the answer is yes, then your financial futures are tied together and it benefits you to look at your combined state and make whatever choices will put you together in the best financial place. There is no “who pays more rent” to the question at that point. You keep the rent paid and focus on getting rid of the highest interest debt that either of you have.

If the answer is no, then you should absolutely go for equal rent. Living together is a financial arrangement in this case and your personal wealth has no bearing on the rent arrangement.

I have been a very fortunate person in many regards. Through the generous assistance of my parents and grandparents, I was able to graduate from university with no debt and was also able to major in a subject that I loved. While this major (theatre) did not lead directly into a high-paying career, I was able to leverage many of the skills I learned at university into valuable on-the-job skills. (Theatre is a subject chock full of transferrable skills and many of the people I went to school have found satisfying and lucrative work outside the entertainment industry.)

The question I have for you is more personal than financial. This is going to be a tough, challenging year and I have a lot of daunting tasks ahead of me on the path towards getting funding for my dream school. I will be a couple thousand miles away from my boyfriend, and there is no guarantee that anything is going to work out as I have planned. What advice do you have for staying positive, focused, and productive in a difficult situation? I am certainly going to take advantage of counselling services, and I already exercise regularly, eat well and am careful about my alcohol intake. I do, however, get the blues. I know that what is happening to me is part of life, but I also feel very scared about the future. I am afraid that returning home will put me in a rut.
- Slaney

The absolute best thing you can do is establish a very positive routine right off the bat and stick to it. The old saying “the devil finds work for idle hands to do” is true in that time spent just wandering or bored is time that often develops into dangerous and negative habits and routines.

Fill your spare time with personal goals. The exercise routine is a start, but keep your mind exercised as well. Set some sort of reading goal for yourself, an ambitious but reachable one. Fill your time achieving those goals.

If you “escaped” a negative situation with your personal life when you lived with your parents, avoid falling back into it. Do not re-establish contact with anyone that was part of that negative situation.

My wife and I are both gainfully employed. I work as a teacher and my wife works for a non-profit here in Florida. My question is that we are strongly considering children but want to do things different then both of our parents and some friends are doing. We want to give our children a better childhood then we had. Don’t get me wrong we had fun as kids but we both come from households where statements like “we cant afford that” was the norm for items that were paltry in cost. We make about 80k combined and live pretty frugally albeit going out to eat a few times a month and traveling frequently.

We have about $2,000 in emergency savings that we are continually adding to, about 50k worth of student loans currently in forbearance until next year, and debt from earlier in college that have just about reached the 7-year statue of limitations mark so it should be falling off of our credit. Would it be ok in your opinion given the circumstances to go ahead and start having our first child?
- Faith

What do you mean by “giving your children a better childhood”? What will be better about it than what you had?

Spend some very serious time thinking about that question. The best childhood you can give to your children is one where they’re not having to compete with distractions – careers, substance abuse, personal interests, etc. – for your attention. It’s not about buying them an armload of stuff – for children, stuff is merely a distraction from parents who aren’t paying attention to them.

You can give your children the best childhood in the world on a shoestring budget earning much less than $80K. It’s not about stuff. It’s about time.

My wife and I are both disabled and are on disability pensions I am on Canadian one and she is on Social Security. She is not allowed to work at all as a requirement of here pension while I am allowed to work a modest amount on top of the pension. All of our income came to 42000. We have availed ourselves of the Canadian Registered Disability Savings Plan and have together 37000$ which can’t be touched until we are 65. My doctor says that he believes that neither of us should return to full time work, If I was to go off of my pension I would have to pay 13000 in prescription costs for an experimental medication for my disability. We have been thinking of purchasing a low end rental property or two for our retirement. We own our home outright except for a line of credit that we used to purchase our adaptive car. We only have 14000$ left to pay on it. This month we are scheduled to receive a 5400$ settlement and a9000$ in january. Our income this year will likely go down by 7000$ this year. We intend to pay off the line of credit as soon as possible. Should we borrow the down payment for the purchase of the property and then purchase the property or should we wait? Property prices seem to be going up here. We do not have an emergency fund but over the last five years have always paid off our credit card bill at the end of the month. We live simply. For four years after our marriage we did not have a car because we wanted to pay off our mortgage a quickly as possible. We buy everything at a discount and thrift stores. On top of everything else we just had a major flood but are not in trouble because we received the first check from the insurance company and we had the money that we were formerly paying on our mortgage. I would like to start with the property investment before prices go up. We are looking to rent them out over the long term. We would hope that the investment property is paid off by the time that we reach 65 when our income will drop. Is this a good plan?
- Austin

With all of these numbers, the one that would concern me the most isn’t here: your monthly cash flow. You have $42,000 a year coming in. How much is going out?

From what I can gather, you’re breaking even right now and are about to experience a $7,000 reduction in your income. If that’s the case, you should not be borrowing additional money. You should take the settlement money and use it to pay off the line of credit to free up your cash flow so that you can survive the downturn in your income.

If owning a rental property is your dream, you’re going to have to make some other cuts in your spending to be able to afford it (since earning more isn’t an option). If you can’t, then it’s not a realistic dream.

Every financial blog/book/article I have read on budgeting talks about figuring out your gross pay and then breaking it into percentages e.g. 60% of gross for living expenses, 10% for debt reduction, 10% for short term savings, 10% long term savings, 10% for fun.

So WHERE do taxes fit into all of this??? I have never seen a good answer–or even anyone addressing this. If you want to use this on the blog–feel free–but I would love a response back personally if you are able. And maybe you already have answered this but I have overlooked it.
- Leigh

The obvious answer here is that they’re talking about post-tax dollars, not pre-tax dollars.

The best way to make this type of “60% solution” actually work in a person’s life is to apply it to each paycheck after the taxes are already taken out. You utilize 60% of your take-home for living expenses, 10% for debt reduction, 10% for long-term savings, 10% for short-term savings, ant 10% for fun.

In fact, I’d go even further and look at it as post-tax and post-401(k) money. This really should be used in the context of your paycheck that you bring home, nothing else.

I’m in graduate school this year-last of 2 years. My tuition has been covered by a scholarship, and I live about an hour away from the school. I’m a working adult with 3 kids, so I can’t really take on much more work. The fees and books come in around $1500-2000 per year. Last year I used our credit card for this and it’s really bitten us in the butt! So two questions:
1. Would you recommend taking out the Stafford Subsidized Loan? The rate is much lower than the credit card-6% to 28%, but that’d be another payment.
2. Do I take out all the Stafford money I’m eligible for to help with last year’s credit debt? It wouldn’t get rid of the credit card, but would be similar to a transfer.
- Samuel

Yes, you should use the subsidized loan here to pay for your credit card debt. In effect, you’re using this year’s loan to pay for last year’s textbooks.

That’s the purpose of having student loans that cover more than your tuition – they also ensure that you have the textbooks and supplies that you need if you don’t have the cash to pay for them.

If I were you, I’d take all of the Stafford money, buy your books, and pay off as much of the credit card as I possibly could. That student loan debt is better than that big pile of credit card debt.

I am 27, living in Brooklyn and married. I have a very high-paying job that I absolutely hate, and my husband has a lower paying job that he’s frustrated with but is dealing. I have about $70,000 in law school debt and we have another $20,000 in debt from a business that my husband started right before the crash (we have, incidentally, whittled that debt down from $60,000). My question is when I should leave my job. Put simply, I can’t stand it. I work at a large law firm and the work is both mind-numblingly boring and incredibly stressful. I want to start my own small business as either a lawyer back in Austin (where I went to law school and have friends and connections) or earn money online through e-books and affiliate marketing. I believe that I can be reasonably successful at either of these options (eg run with a very low overhead, come out in the black, and make enough to at least make my loan payment each month). My husband can do his job from anywhere and would be able to support us on his salary alone in an inexpensive city like Austin (but with essentially no savings). Right now our emergency fund is pretty much nil.

I am frankly scared to have a child (but then I think I always will be), but I am also ready and so is my husband. It also seems really unwise to pass up a really generous maternity policy at my firm when we know that we want kids soon anyway. I know that there is never a “good” time to have children, but I am worried about the stress of moving across the country with a brand new baby and trying to get a business off the ground. On the other hand, I do really want children, we are both ready and $90,000 is very hard to pass up.
- Cara

There is a good time to have children. It’s when you and your partner want one and have the financial ability to make it work.

Right now, it sounds like you’ve got a strong “yes” on both counts, so I would absolutely go for it. Right now is probably your best opportunity in your life to have a child.

Yes, you’re a bit scared. Guess what? Anyone who thinks about the monumental job of parenting with any level of seriousness is a bit scared.

If you want it, go for it. There will probably be no better opportunity.

First, some background: I’m married, and my husband is in his second year of medical school. He is on a Navy scholarship, so they are paying for his very expensive education, and providing us with a monthly living stipend. I have had a difficult time finding work in my field since we moved, but finally got a steady job for this coming year. Together we only make about $3100 a month, but we have learned to live on about $2000 monthly. We have no debt, about $15,000 in savings, and $3700 in a 401(K) from a previous employer.

Here is my question: Knowing that my husband will have a much higher income about three years from now, what should we be focusing on right now? We’re putting as much as we can in savings, but would it make sense to put more money away for retirement? What percentage should go into retirement each month?
- Madeline

Put as much into retirement as you can possibly afford to right now, preferably in a Roth IRA or (if you can) into a plan that offers some matching funds from an employer. The matching funds should come first.

Why save now? If you have matching funds, you should always be taking them. Also, if you have a chance to get money into a Roth IRA, particularly if you expect your income to skyrocket in the future, you should take it.

If you have no debt and a big emergency fund (which you do), you’ll never ever regret socking away money for retirement right now.

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.

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

MashupMom.com is one of the better coupon and sale aggregating blogs out there (meaning that most of the content posted is either sales at various stores or coupons for various products). I have mixed feelings about such sites. On the one hand, I do appreciate that they’re showing readers ways to save money. On the other hand, I know from personal experience that without a good financial backbone, coupons and sales become just a way to acquire even more stuff and put yourself in an equally bad (or arguably worse) position than you were before.

Those same caveats came to mind when I read Mashup Mom’s (actually Rachel Singer Gordon) book Point, Click, and Save. The book is absolutely loaded with fantastic ideas for saving money online… but the vast majority of those tips merely reduce the price of things people don’t necessarily need. In other words, this book can save you a lot of money if you use it in a reasonable way (seeking out ways to save money on things that you’ve already decided that you want), but it can also just cause you to accumulate more stuff and not save any money at all (if you’re the type of person who will buy four more sweaters because they’re 50% off today).

Let’s dig in and peek at some of the advice on offer.

1 | Let’s Get Started
This opening chapter largely outlines the points I make above. In short, the advice in this book works best when used in the context of a larger strategy of spending less than you earn and building towards bigger goals in life. In other words, these tactics won’t help you get ahead if you merely use them as a tool in a never-ending race to acquire more and more stuff. While this chapter is far from a personal finance guide, it does make clear that these tips alone won’t make you rich or even save you money if they’re not used with sense and restraint.

2 | Change the Way You Shop
Here, Gordon talks about some of the basic tactics for more financially effective shopping: stocking up on non-perishables when they’re on sale, making meal plans and shopping lists, using coupons, signing up for customer rewards programs, and so forth. The real secret, though, is just one word: planning. The more forethought you put into your shopping, the less you’ll spend for what you need.

3 | Get Connected Online
Gordon mostly just lists a ton of websites where you can seek out deals, coupons, freebies, work-at-home opportunities and such – in other words, sites that mostly just list such opportunities. These are great resources to start with, particularly if you’re looking for something specific. (I usually find it’s a bad idea to go rummaging through such deal sites if you don’t have something specific in mind that you’re looking for, because the bargains can tempt you into buying something unnecessary).

4 | Get in the Game
This chapter explains how exactly to go about hunting down deep discounts on the staples you already buy – and then, of course, stocking up on those items once you find the discounts. The trick usually involves “stacking” – holding onto coupons, then waiting until a local store offers a great discount on the item. This requires some time – you not only have to keep track of coupons, you also have to keep track of store flyers and cross-match them. However, the rewards can be tremendous, such as getting 20 bars of soap for free (I did this once, stacking a Lever 2000 coupon with a huge sale at a CVS a couple years ago). Just stick items like that in your closet and use them up over time.

5 | Get It Online
Here, Gordon summarizes the many, many ways you can save money using the internet, from simply shopping for bargains to using it to replace your CD collection (using free internet radio) or your cable box (using sites like Hulu). There are many, many wonderful free services out there, from photo organizers (I love Flickr) to word processing programs (I love Google Docs).

6 | Fantastic Freebies
I generally don’t use freebie sites because, frankly, most of the freebies are things that I have no interest in having at all – and it’s not worth the time for me to hunt down the one or two freebies out of hundreds that I might be interested in. However, Gordon does mention my favorite site for free things of all – Freecycle. I often browse the listings here because every once in a while, someone gives something amazing away on here simply because they can’t use it.

7 | Make Money at Home
Just as there are countless ways to save money online, there are countless ways to earn a little, too. Gordon outlines a lot of these, but they all have the same thing in common: if you just dabble with them, you won’t earn much, and you’ll never earn a good rate with some of them no matter how much time you put into them. I know of people who have done quite well, though, capitalizing on skills they already have and selling them online, like a few people who sell lots of handmade goods via Etsy.

8 | Make Bonus Income with Your Online Activities
This is more or less an extension of the previous chapter, except here Gordon focuses on things where companies are paying you to gather data, like taking surveys or using a search engine that monitors what you’re doing for marketing data. Some of these things require little effort, but they earn very, very little and for me, the privacy concerns of many of these things outweigh what you might earn. Still, for some, this is another avenue of putting a bit more change in your pocket.

9 | Organization, Balance, and Planning
Here, Gordon moves back towards general personal finance advice, discussing some of the online options for saving and managing your money, like online banks (ING Direct and SmartyPig, both of which I use, are mentioned) and other money management tools. She also encourages people to get involved reading personal finance blogs (The Simple Dollar is mentioned) and get a grip on their overall money picture, which is really key.

Is Point, Click, and Save Worth Reading?
This book does exactly what it promises: it outlines ways to save money on purchases online and make a bit of income online as well. It’s written in an upbeat (and a bit cheeky) tone that made for enjoyable, light reading.

Is it worth reading? It mostly comes down to a question of whether you’re already adept online or not. If you’ve already got a good familiarity with online shopping sites and can comparison shop easily online, this book won’t offer a lot for you.

But it’s perfect as a book. The obvious audience for this book are the people who aren’t as adept on the web, who don’t use it as a tool for comparison shopping. Those are the people who are well-served by reading this book, and I highly recommend it to them.

Just be sure you don’t use the tips to buy mountains of stuff you don’t really need.

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.

Even though the book opened with a chapter on debt (which, as I explained last week, was put there simply because debt is the most urgent personal finance problem that most people face), this second chapter begins what I consider to be the heart of the book. It addresses the fundamental question that I think drives people to pick up personal finance books (and other self-help books): a sense that there’s something missing in their lives. They want more out of their life than they currently have. They feel somehow trapped by their situation.

Based on the many, many emails I’ve received from readers, these are the kinds of feelings with which people begin to approach personal finance issues if they’ve not worried about money before. They come around because they’re finding that their lives aren’t going the way that they want them to. Dreams are being abandoned. Choices are being limited. Their paycheck is constantly being drained.

One solution that people often come to is that if only they had more money (with which to buy more things), they would be happy. I don’t believe that to be the case, and I back that up a bit with some research on pages 17 and 18:

Quite often, people assume that if you’re rich, you must be happy. In truth, the idea that riches bring happiness is an optical illusion, an artifact of our competitive nature.

Daniel Gilbert, professor of psychology at Harvard University and author of Stumbling on Happiness, puts it succinctly in a talk in 2004: “[A]fter basic needs are met, there isn’t much ‘marginal utility’ to increased wealth. In other words, the difference between a guy who makes $15,000 and a guy who makes $40,000 is much bigger than the difference between the guy who makes $100,000 and the guy who makes $1,000,000 [...] [O]nce basic needs are met, further wealth doesn’t seem to predict future happiness. So the relationship between money and happiness is complicated, and definitely not linear. If it were linear, then billionaires would be a thousand times happier than millionaires, who would be a hundred times happier than professors. That clearly isn’t the case. On the other hand, social relationships are a powerful predictor of happiness – much more so than money is.”

To put it simply, once you meet a minimum level of financial success – and the cap is pretty low – additional income itself doesn’t make you happier.

What does? I summarize some additional research on page 18:

In short, happiness doesn’t revolve around financial success. Instead, it revolves around simple elements that we can all foster in our lives: building positive relationships with other people, cultivating low-pressure situations and minimizing high-pressure ones, and improsing our personal energy level all contribute heavily to a personal sense of happiness. These things together also produce financial and career health as well.

So why am I writing about personal finance?

Personal finance is an incredibly effective tool for achieving all of those things. Why? Because, quite simply, good personal finance management buys you the one thing in the world you can never have enough of: time.

When you have your money in order, you’re not losing time to “unwinding” from a stressful job. You have the freedom to leave it.

When you have your money in order, you’re not losing personal time to never-ending overtime. You have much more control over the hours that you work.

When you have your money in order, you can make career and personal choices based on how you want to spend your time, not how someone else tells you to spend it in exchange for a few extra dollars.

What keeps people from reaching that point? There are a lot of reasons, and I’ve talked about many of my own on The Simple Dollar. One big one that was true for me (and true for many others based on emails and conversations I’ve had with readers) was the sense that life is a competition and the person who “wins” that competition is the person with the best stuff. I riffed on that a bit in an earlier draft of this chapter, which I’ll share here:

During most of my adult life, I was driven by competition. I needed to win, and my sense of how to keep score was how much money you made. Since people typically don’t go around wearing their account balances on their shirt, I competed in the only way I knew how. I spent money on things that made it appear as though I were winning.

Eventually, I realized that the game provided only empty victories. I was “winning,” sure, but all of that stuff I was buying was only valuable to others, not to me. I looked like the “big winner” to others, but as I sat at home at night, I would often get a sense that I was in fact losing – and losing badly.

Competition is a great motivator, but no matter how hard you compete, you’ll still lose the game if you’re keeping the wrong score.

If you measure the success of your life by what other people think of you, you will never get ahead. There will always be someone else to impress or some other tool to win their fleeting awe. It all passes, though, and you’re left with, well, just you.

When you realize that the fleeting awe that others give you really doesn’t matter much at all and that what really matters is you and becoming the best possible person you can be, personal finance often snaps right in place in this kind of complete life.

Take control of your life. Figure out what you want, set your own goals, and use your money as a tool to put you where you want to be. Stop wasting time (and a lot of money) on what other people think.