For the past several days, my cousin and her two sons stayed at our house. It was something I’d been looking forward to for a long time, as she’d never been able to visit us until now.

I was very close to this cousin of mine (let’s call her Laurie) when I was a child, but as we both grew into adulthood, we drifted apart for various reasons. She moved east, I moved west, and we would go for years without seeing each other.

Yet, as we’ve built a relationship again over the past few years, I’ve come to find that we have a great deal in common with each other as adults, far more than we had when we were younger. So many of our life experience all the way along overlap with each other. She’s one of the very few people on Earth that I feel genuinely understands.

Re-establishing my relationship with her has been one of the best things I’ve done in my adult life.

As I watched her leave earlier today, a few thoughts occurred to me.

The genuinely valuable things in my life have very little to do with money or accumulation of stuff. It’s people. My wife. My children. My parents. The handful of people close to me that mean a great deal to me (the aforementioned Laurie, John, Rachel, and a small handful of other people that I’ve previously promised not to mention on here). The large group of less intense social connections that I have, ranging from people like my great aunt Dori to some of my old coworkers.

When I sit and take stock of my life, the things I want most are healthy relationships. I want those people I mentioned above to know that I care about them, even though it’s often not the easiest thing to communicate such thoughts.

Buying stuff really doesn’t matter with regards to those relationships. All money really does is keep a roof over my head and keep the people I care about the most reasonably safe and happy and healthy. Beyond that, money does very little to improve those elements that matter most. For a long time, I believed that they did – at other times, I would just use money as a way to make myself not have to think about it.

Buying things doesn’t make people love you.

My short and medium term goals right now all revolve around making sure the people I care about know that I care about them. If it’s truly those relationships that matter to me, then I owe it to the people I care about to show them that I do care for them.

For me more than anything, it means repairing some relationships and it means cementing some other ones. It means some letters and some phone calls and some face to face meetings, too.

After all, there is no point in having financial success if you haven’t secured the things in life that matter to you the most.

What relationships in your life need some mending? Why not suck up a bit of pride and send that person a letter telling them that you really do care and admit that it’s your own inability to communicate that has been the problem? Call them up and do the same thing. Or wait until the holiday season and take that person aside for a chat.

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. Rent-to-own apartments and homes
2. Retire now or later?
3. Roth IRA for teenager
4. Managing money while traveling abroad
5. Life insurance misinformation
6. Moving forward in bad economy
7. Pay off line of credit?
8. Motivation to live, not exist
9. Painful breakup advice
10. Quitting alcohol addiction

Don’t look at Monday as a bad thing. Look at it as a good thing. If you go out and hit a home run today while everyone else has a big case of “the Mondays,” you’ll really stand out.

What is the deal with “rent to own” apartments/houses? My husband and I have been weighing the rent vs. own situation for several months. How does rent to own fit in and what are the pros and cons?
- Rachael

Rent-to-own apartments and homes are similar to car leases. It’s basically a contract between a renter and a seller that the renter will have an option to buy the property at the end of the rental agreement.

Most of the time, the agreement specifies a buying price for the property up front, as well as applies some portion of the rent towards reducing that price. When the agreement ends, the renter has the option to buy the home at the adjusted price or walk away, leaving the owner with what amounts to a unoccupied rental.

The exact specifics depend heavily on the actual rent-to-own contract between the renter/buyer and the seller. They can vary quite a bit, but that’s the general idea behind them.

I am an employee of the federal government. I’m 56 years old and have 32 years of service. I’m in the CSRS (Civil Service Retirement System). I am eligible for retirement based on my age (55 or higher) and years of service (30 or more). My organization recently offered an incentive program to retire ($25K). I acknowledged my interest in the incentive program. Now, they’ve made the actual offer. I have about two weeks to accept or turn it down.

The question I have is (1) do I stay and work harder/longer on becoming debt free and increasing my lifelong retirement income or (2) take the incentive, increase the amount of money to eliminate all my debt? Additionally, I’d like advice on the best way to utilize the incentive money. After Uncle Sam takes his cut, I’ll probably end up with around $15K – $17K. I could take the incentive in increments or as one lump sum. My initial thought is to put it in my savings/emergency fund and pay significant extra amounts on my debt(s) each month while earning a little interest on it. My second thought is to pay off one of the 3 credit cards that are in the $18K – $20K range and use that approx $600 per month to work down the other cards/debt.
- Rick

What this really boils down to, in my eyes, is whether or not you enjoy your work and whether you have a game plan for what to do after retirement.

If you are a person who really enjoys their work, gets great value out of work camaraderie, and has only vague ideas about what to do in their next act in life, keep on working and build up a better retirement for you. You don’t have to walk away.

On the other hand, if you’ve got big plans for the things you want to do after you retire and you view your work as complete drudgery, take the path to earlier debt freedom and earlier retirement.

This is a case where, in my eyes, personal finance is really about the “personal.”

My son has earned a few hundred dollars this summer and I have encouraged him to put this money in a Roth IRA because 1) he has savings for his “wants” and 2) because we often talk about the importance of investing for retirement. Is it possible for a 17 year old to open a Roth?
- Lisa

He sure can, as long as he is reporting income on his 1040 that is equal to or greater than the amount being deposited in the Roth IRA (and he’s paying taxes on that income, of course).

In fact, that’s probably a pretty solid move, provided that you’re confident that your son won’t take advantage of the ability to withdraw Roth IRA contributions at will.

I would do the entire process as a collaboration, in which you research what a Roth is, what investment house you want to use, what investments to choose, and so on. Talk about the pros and cons of each. Empower him to make the choice himself, though.

At the end of this month, my wife and I are taking our honeymoon in Rome! Both of us love travel, and Rome has been near the top of my list of places in the world to visit for a long time. We’ve booked a flight and hotel already through Travelocity and that’s 100% paid for. We’ve budgeted $2-$3k for incidental spending while traveling (food, tours, souvenirs, anything that catches our eye and we want to experience). This money is also already set aside too, so we’re not going into any debt for this trip.

However, I’ve never traveled in Europe and had to manage a large chunk of spending money (previous trips were with family, and they handed the cash). I’m not familiar with ATM availability (or fees), or whether Rome is a cash or credit city (and if credit, which cards). I know I’m going to be paying fees either on cash exchange, or on any credit cards I use. What is the best way to handle spending money when traveling abroad? I want to make that pool of cash go as far as it possibly can and could use some help.
- Mkie

The first step I’d take is contacting my bank to find out about overseas ATM availability. What are the fees for using an ATM in Rome? It varies a lot from bank to bank, so call to find out their policies.

I would do the same thing with your credit cards, though Visa and MasterCard are pretty widely accepted throughout Europe.

Ask about the currency conversion for each card. Find out which one does the best currency conversion (after fees) for you. So, for example, say “I’m going to spend/withdraw 100 euros in Rome tomorrow. What will be the total cost for me, including fees, in dollars?” Whichever card/cards offers the best rates should be the ones you use.

I’m very, very concerned about the many queries you seem to get about whole life insurance and, most especially, insurance on the lives of children. In my view, this sort of product is a scam and it’s sold to ignorant people who can least afford it. (I use the term “ignorant” in it’s neutral sense, meaning people who simply are uneducated about the product and don’t know anything excepting what the salesman is telling them.)
- Dorothy

This is a problem with a lot of personal finance (and other) decisions.

The reason you find so much conflicting information about things like life insurance for children is because you have people with different motivations saying different things. If a person’s primary incentive is to sell a product, they’ll give you advice that results in you buying that product, even if it’s not necessarily from them.

Your best best with any financial question, particularly when it comes to insurance, is to seek out sources of information that don’t have a vested interest in selling you on insurance. Read an assortment of personal finance books and Google the authors to find out if they’re insurance salesmen. Figure out which people have a vested interest in helping you versus a vested interest in selling product, and trust the people who want to help you.

My mom is only charging me $350 a month for rent and all totaled my fixed bills are $505 which include internet (I have online courses so it’s a need right now), cell phone (we don’t have a landline), and storage rental. I also have a payment agreement I will be paying to my old apartment but I don’t know the amount as of yet. I am very worried about what will happen after I graduate. I want to have a job lined up and ready to go, but I’m worried with the economic troubles we are facing. My friend graduated 2 years ago and has yet to land a professional job in the field. While I have a lot more going for me I still worry.It is almost assumed I will be relocating for a job as it’s just one of those things that comes with my field. As well it could take up to 2 months during the hiring process and the time you start, I could be hired in May and not actually start till August. So I’ve started saving up a good chunk of my stipend, to the tune of $800 from each check, by the end of the program if I kept that up I would have $8,000. But I don’t know if that’s too much and if I should be paying off debt and saving less. I don’t live outside my means, and usually research and save for any purchase over $50. But I do have a bad habit of lending money to family.
- Jai

The big thing you need to do is start your job search early. If you’re going to graduate next May, start searching now. If you are a good candidate, most employers will wait a month or two for you to begin work versus hiring a poor candidate.

Another concern is your propensity towards lending money to family members. Stop! You’re a college student, for goodness sakes! If anyone should be borrowing money, it should be you. Besides that, lending money to family members often ends with strained relationships and mistrust, something you don’t need in your life.

Aside from that, I think you’re doing well.

My questions is regarding how to categorize our Line of Credit loan. Our story: my husband and I both did the College/ credit card/ unwise use of money thing in our 20′s & early 30′s. Over the past few years, we’ve been improving our financial “health” – paid off those credit cards, got way more in touch with our spending, spend less than we earn, do a good job with our budget, and carry no credit card debt. We have a mortgage of $350,000, and a home equity line of credit of $44,500. The LOC was opened several years ago (before we wised up) to re-fi part of our mortgage, and to give us some house project money. We did the projects (patio, yard & kitchen improvements), paid some credit card debt, bought a fancy dog… you get the picture – it wasn’t all responsible spending.

Now that we have no other debt, I waffle about how to approach/categorize our LOC. I want to lump it in with the mortgage, and call the debt pay-off/booty-busting part of our life done. But I’m wondering if that’d be “cheating”. The LOC has higher interest and part of that spending really was in the same vein as our credit card abuse. Should we consider it a credit card, and continue to bust booty to pay down the LOC? The thought makes me want to cry.
- LeAnn

I would consider it a credit card, particularly since it has higher interest than the mortgage. Focus on paying it off sooner rather than later.

Here’s the truth: people virtually never regret paying off a debt. The freedom from that monthly payment is a tremendous boost, even if it’s not mathematically the best solution. The increase in monthly cash flow also enables people to work more quickly towards their goals and withstand major setbacks more easily.

Go for getting rid of the debt, and don’t look back.

I was paid three days ago. After we paid the mortgage and car insurance, we only have $150 to our name until the 15th. With that, we have to buy gas and groceries for two weeks and pray that no emergencies come up in the meantime. For months we have been cutting back more and more and more. My husband of five months has been unemployed since December. We had savings and emergency fund but it was depleted a month after the wedding when we suffered a very serious legal issue that required us to hire an attorney. The retainer took every penny we had. When my husband is not looking for work, he spends his time learning how to make foods from scratch, like bread, bagels, pasta. He’s gotten good at stretching the food budget (what of it there is). We don’t go anywhere. We don’t do anything outside the home because we can’t afford to waste gas. There is no “fun money.” Today, he is calling the insurance company to reduce our coverage to as little as possible and I will be calling to cancel the cable. I make enough to cover the bills, but there’s not a lot left over for gas and groceries, let alone savings. At the end of the month our property taxes are due – $1700. I had the money saved for it, but all of that went to the legal retainer. It won’t get paid. We have is a credit card with a $1k balance, racked up over the summer to make ends meet, payments are manageable. We’ve placed ads to sell valuables, but there’s not much interest. I’m feeling so low right now. We are just existing. Not living. This is no way to live. It’s not a debt issue. It’s an income issue. Moving wouldn’t make sense. Our mortgage payment is lower than rent in this area and there’s a custody arrangement in place which must be considered. We have to ride this out, but man, this is painful.
- Tara

This almost exactly describes my situation in 2006: bills without enough money to pay them. For me, it was a financial bottom and it led to a real turnaround.

My sincere suggestion to you is to not give up hope. It’s hard, I know, but this trial is an opportunity to figure out what really matters to you and your husband. Cut away everything and see what you genuinely miss – you’ll be surprised how little of it actually matters in your day-to-day life. What you’re learning right now will stick with you and help you for the rest of your life.

As for your husband, he should get a job. Any job. I know there is work out there, but it’s often work that people don’t want to do. Check your pride, get a job, and start bringing in some income before you lose what you have left.

I just broke up with someone I’d been seeing for six years and engaged to for two years. I’ve made multiple career decisions and lots of financial decisions based on the idea that we would be together for the long haul. Right now, I’m sitting in a city I don’t want to live in and a job I don’t want. I have a signed lease and a lot of debt, too. I don’t know what to do.
- Kelly

Right now, stop looking backwards with regret and anger. Looking at the past does not help you with the future.

You need to assess where you’re at right now and where you’d like to be in a year. Obviously, you’d like to be living elsewhere. That will probably require a different job. You’ll also need to be out of your lease.

Start building a to-do list to take you to that place where you want to be. Polish up your resume. Start hunting for something else. Cut back on your spending – I’m going to speculate that if you have a lot of debt, you probably have a lot of excess spending going on. This doesn’t just mean less shopping, it means doing things like trimming back on your cell phone plan, consolidating your debts, and so on. Figure out where you want to be going and direct your life towards making that happen.

Over the last few months, I’ve been following your personal finance advice to a tee and it’s really helped me to see what I’m doing right financially and what I’m doing wrong.

I’ve finally come to terms with the fact that I am an alcoholic. The amount of money I’ve been spending is a wake-up call. The question is – what’s next? I think I have the willpower to stop cold turkey and my wife is being really supportive as she’s quitting too, though she didn’t drink nearly as much as me.
- Dan

First of all, a huge congratulations on turning a major corner in your life, personally and financially. That takes a lot of guts.

I would strongly encourage you to find some additional support as you work through your alcoholism recovery. Alcoholics Anonymous is worth at least a look.

One big thing I would encourage you to do is buy a simple wall calendar and start keeping track of your successful days for a while. At the end of each day you manage to stay alcohol free, put a big red X over that date on the calendar. As you move forward, keep doing that, and you’ll begin to admire that big long row of Xs on your calendar. You won’t want to break that chain.

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.

I really enjoy reading personal finance books that target young professionals – the one group that I believe could use the personal finance help the most. So many of them are really well-written, but they each take one of two routes: they either focus so generally on the issues that it doesn’t feel like it’s in touch with the lives of young professionals, or they focus exclusively on one small subgroup of young professionals (Farnoosh Torabi’s You’re So Money falls into this category, focusing on consumerism-oriented young female professionals).

Because of this, I usually either recommending one of the “narrow” books to young professionals or, if none of the ones I’m familiar with seem to fit, I just point them towards the personal finance book that changed my own life, Your Money or Your Life.

Generation Earn by Kimberly Palmer falls straight into this category – one only needs to glance at the subtitle, The Young Professional’s Guide to Spending, Investing, and Giving Back, to get the idea.

Does this book actually rise above the crowd of “average” books for young professionals? Does it particularly address the needs of a specific group of them?

Building Your Life
One thing that I particularly liked about this book is that it starts right off the bat with the one area that I find young professionals constantly struggling with: getting some control over their spending. Often, this is the first time in a young adult’s life that they’ve had full control over their money, and unless their parents have been very effective at conveying money ideas, these newly flush young adults (and I certainly was in this category seven years ago or so) make some awful spending decisions that they suffer for the rest of their lives.

What suggestions does the book offer? First, set some goals. Spend some time thinking about where you want to be in ten years, what it will actually take to get there, and what steps you need to take now to make that happen. Second, apply some thought to your purchases. The big one: carefully research any purchase over $100 to make sure you actually need it, that it meets your requirements, and that you’re getting the best price on it.

This portion of the book covers a lot of topics: jobs, credit cards, all of that basic personal finance stuff that a lot of books offer. How does this book handle it differently? What stuck with me is that it didn’t spend time demonizing bad practices – instead, it spent space lauding positive practices. I like that perspective, as it does a great job of creating a sense that these things are doable and they will result in something positive rather than making the reader feel self-conscious about the mistakes they’ve made.

Creating A Home
The middle third of the book is focused strongly on setting up a full household for the first time. When you first leave college and have your own apartment or you’re thinking about buying a home, it’s very easy to fall into some huge traps – buying more house than you can afford, decorating and stocking the apartment with expensive stuff (bought on credit), and so on.

Palmer focuses on tactics for drastically reducing the costs of each of these aspects. The biggest part of all of this is an honest evaluation of the question “what do you need?” versus “what do you want?”

From there, the section moves onto simple frugality – steps people can take without disrupting their life to reduce bills and required expenses once they’ve set up house. In many ways, Palmer focuses on doing this through simplicity (things that save both money and time) and meaningfulness (worthwhile uses for that money and time, such as thoughtful gift-giving – and even homemade gift-giving).

Changing the World
These topics bridge the gap into the third section of the book, which focuses on how a young professional can use the resources in their life to actually promote positive change in the world, often while achieving the other ideas in this book at the same time.

Volunteerism opportunities are discussed at length, both in the sense that they give someone an opportunity to facilitate positive change and as a way to quickly make social connections in a new area. There’s also a focus on how the frugal tactics that can save you money and time also have a positive environmental impact as well.

What’s the purpose of this section, really? It does a great job of casting the day-to-day choices of what people do with their time and money in the light of how better choices with those resources can have a lot of positive impact, both on yourself and on the broader world.

Is Generation Earn Worth Reading?
This is a great book for a thoughtful college graduate. In fact, without knowing anything more than that about a graduate, this would be my first pick as a gift for graduation (perhaps coupled with Your Money or Your Life).

As with many such books, the subtitle should make it clear whether this book will have any value for you personally. Are you a young professional? If the answer is yes, this book is probably worth a look.

Recently, Barrie left a very interesting comment on The Simple Dollar Facebook page:

I’d love to see something about scarcity vs abundance. I can’t seem to escape the scarcity thought bubble.

The ideas of scarcity and abundance have bubbled under at The Simple Dollar for a very long time. Now’s a great time to talk about these ideas head on.

The terms “scarcity mentality” and “abundance mentality” were coined by Stephen Covey in his best-selling book The 7 Habits of Highly Effective People:

Most people are deeply scripted in what I call the Scarcity Mentality. They see life as having only so much, as though there were only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.

The Scarcity Mentality is the zero-sum paradigm of life. People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. The also have a a very hard time being genuinely happy for the success of other people.

The Abundance Mentality, on the other hand, flow out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.

If you’re in the workplace and find yourself getting depressed because someone else got a raise, you’ve probably got the scarcity mentality. On the other hand, if someone getting a raise gets you excited because that means there’s a possibility of you getting a raise, that’s the abundance mentality at work.

If you’re at home and find yourself envious of some gadget someone else has because you don’t have one, you’re probably falling into the scarcity mentality. If you’re happy for a friend because they have something they want and you’re also content with your own possessions, that’s probably the abundance mentality.

To me, the biggest difference between the scarcity mentality and the abundance mentality is that the scarcity mentality cares what other people have, while the abundance mentality doesn’t.

It almost goes without saying, then, that having an abundance mentality is incredibly useful when it comes to personal finance.

How can you cultivate an abundance mentality if you’re stuck in a scarcity mentality rut? Here are four suggestions for doing just that.

Active thinking
Whenever you find yourself falling into a “scarcity” trap, where you find yourself jealous of the things other people have, stop. Ask yourself how exactly that other person having something great is preventing you from having something great. Virtually always, it’s not.

Put effort into actively thinking about the situation you’re in instead of falling into the idea that someone else’s fortune or misfortune directly relates to your own fortune or misfortune.

Conversational choices
When you’re talking to someone else, don’t spend your time talking about the things other people have. Instead, focus on getting to know each other instead of getting to know each other’s scarcity mentality.

Share frugality tips. Ask the other person about what they have accomplished lately. Ask for help on areas in your own life where you’re needing some guidance. All of these areas are great sources for conversation that do not encourage the scarcity mentality.

Personal growth
When you’re alone, focus on activities that promote your own personal growth. Work on things that build your skills. Practice the personal activities in life that bring you happiness and joy, not just things that fill time and allow your mind to wander to the things that others have.

An evening spent learning something new or improving your skills at something you enjoy is an evening wonderfully spent.

New relationships
If you’re finding the above things difficult, seek out a new crowd and a new social environment. Completely change the way you spend your free time.

One great way to do this is to join a volunteer organization. Volunteer organizations are a great place to meet people with an abundance mentality. Another place to start is to look for outdoor activities sponsored by your local parks and recreation department, which provides a good way to simultaneously meet people and get in better shape.

The more you adapt your mind to an abundance mentality, the easier it will be to break free of a sense of constantly comparing yourself to others and having a constant need to “beat” those around you.

There really is enough for everyone.

“Financial independence” is a phrase often bandied about by people without any sort of consistent meaning.

Does “financial independence” mean complete freedom from debt?

Does it mean the ability to switch jobs without creating a financial panic in your household?

Does it mean having enough money to survive without further income?

Does it mean having enough money to thrive and chase whatever endeavors you like without further income?

Here’s the thing: they’re all definitions of financial independence.

Why so many different definitions for the same phrase? It’s simple: different financial writers use the phrase differently. They all tend to agree that “financial independence” is a worthwhile, lofty place to aim your financial efforts towards – they just can’t quite agree on what exactly that phrase means.

I subscribe to the idea that financial independence means that you have enough money to survive without further income. That does not preclude you from working for additional income. It merely means that if you were to quit working today, you would not lose any significant part of your way of life due to a lack of a working income.

I view many retirees as having reached this level of financial independence, for example. Retirees often do not have to work to maintain a basic lifestyle, but often choose to work out of a desire to do something interesting and productive with their time, and also a desire to live a lifestyle beyond their idea of a basic lifestyle – travel, services, a nice home, and so forth.

Others might have different viewpoints. Financial independence might occur for them once they’re outside of the burden of excessive debt. Others might feel independence when they can freely switch jobs, or when they have the ability to start their own business out of pocket.

The important question isn’t what financial independence means to me or what it means to some financial writer out there. What matters is what financial independence means to you. What does it mean to you?

On one level, this discussion really is about goal-setting. Many people look at financial independence as a state beyond what they currently have – and it’s something that has attributes that they want. Do you want the ability to easily switch jobs without panic? Do you want the ability to survive without having to work? Those are goals that all fall under the umbrella of financial independence.

The key part is to turn that idea of financial independence that you have in your head and in your heart into a long term goal, one that you’re planning on reaching in the future. What can you do today to move towards that definition of financial independence?

What’s the importance of writing about this? Whenever you read an article by a financial writer and the writer mentions “financial independence,” consider for a moment what that writer is actually talking about. Does it match what you define as financial independence? Or are they talking about something else?

This way, you’ll quickly know whether the information presented is directly relevant to you or whether you have to look for information within the article that is still useful to you even if you aren’t in line with the goals discussed in the article.

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 (October 3 – October 9, 2009)
15 Ways to Be a Leader Today – or Any Day The best way to build social connections is to step up and be a leader of a group. Here’s how to do just that.

A Weekend at Our House A typical weekend at our house is family-oriented and it rarely involves spending much money.

The “Local Store Premium” – How Much Is It Worth to You? It’s worth quite a bit, actually, when you start calculating the costs of shopping elsewhere.

Frugal Soups and Stews: Great Solutions for Busy Weekends We often make soups and stews in our slow cooker on weekends. We put the ingredients in in the morning, then eat it for dinner whenever we happen to come in from the park.

Is This All There Is? If you feel that your life is empty, it’s time to step back and re-evaluate how you’re spending your time and who you’re spending it with.

Two Years Ago (October 3 – October 9, 2008)
Some Thoughts on the Fulfillment Curve Once you reach a certain point in a particular area in your life, there’s diminishing returns from adding more to your life in that area.

The Entrepreneurial Drive (Or Lack Thereof) I think some people have an entrepreneurial fire – and some do not.

A Do-It-Yourself Guide to a Romantic and Highly Frugal Date Night My wife and I do something along these lines as often as we can, usually involving a grandparent or two who asks to babysit.

Opening the Door to Helping Your Parents The transition from your parents taking care of you to you taking care of your parents can be a tough one.

Ten Things I Wish I’d Done Differently While Buying a House The best reason to look back at the past is to find out what you can do better in the future.

Three Years Ago (October 3 – October 9, 2007)
Five Lessons My Friend’s Passing Taught Me About Money, Life, And Everything Else The person that I’m writing about here passed away three years ago. I still miss him. He was a great guy.

Frugality Campaigning: How To Support Your Favorite Candidate Or Cause With Frugal Living It’s more than putting your money where your mouth is. It’s putting your behavior where your mouth is.

How To Minimize The Cost (And Maximize The Benefit) Of Eating Out For Business Is it worth the cost of eating out? It can be, as long as you’re sensible about it.

Ten Steps To Financial Success For A Minimum Wage Earner I wrote this in response to a commenter who lamented how difficult it was to live on minimum wage.

The $21 Food Week: Is It Possible? Is It Healthy? I don’t think it’s healthy over the long term. $1 per meal for every meal in the week is really pushing it.

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.

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I often brew homemade beer. It’s an enjoyable hobby that allows me to sometimes use items from my garden and gets me deeply in touch with the natural process of making a homecrafted beer. I have complete control over the ingredients and can make whatever variation seems good to me with whatever ingredients seem flavorful to me.

Plus, it makes a really cool gift for someone who appreciates a good homecrafted beer.

What follows is my procedure for making a simple homemade beer. I chose to base this batch on a kit, because kit brewing is without a doubt the easiest way for a newcomer to try out homebrewing.

A homebrew beer kit, like the one pictured above, can be purchased at your local homebrewer’s shop. Most cities with a population of 50,000 or more have one – the larger the city, the more likely it is that there will be multiple shops. Search around for them, visit a few shops, identify a beer kit you’d like to try, and don’t be afraid to shop around.

For this year’s Christmas beer, I chose to make a lighter beer with hints of coriander and orange. The kit came with a small amount of each – I chose to add a few coriander seeds on my own.

A homebrew beer kit contains all of the liquid and solid ingredients you need for beermaking besides the water, the glass bottles, a pot to boil the beer in as you’re making it, and another container for the beer to ferment in. You’ll also need a small handheld device for putting the caps on the bottles.

How do you get those things? You can purchase the bottles or accumulate them on your own. You can use any large pot in your kitchen for the boiling. As for the rest…

… I recommend picking up a simple homebrewing equipment kit at that shop as well, especially if you’re thinking about brewing your own beer regularly. A kit usually includes a large bucket with a spigot near the bottom (with a tight-sealing lid that has a breathe hole), a small bubbler that allows gas to escape the bucket without exposing the beer to air as it is fermenting, a capping tool, and usually a piece of rubber hose to make the bottling easier.

We brew beer fairly often (a few batches a year), so we usually use a five gallon glass bottle for most of our fermenting needs. For beginners, it doesn’t make a big difference, but a glass bottle allows less gas to escape through the sides of the container.

The first thing to do is to sterilize everything you’re going to use to the best of your ability. We use an iodine-based solution for this cleaning – you can use bleach or whatever you choose.

The next thing you’ll do with your kit is fill a large pot with about two gallons of water and heat it to boiling. You’ll then make what I sarcastically call a “tea bag.”

The “tea bag” is simply a cheesecloth bag (usually included in the kit) that is wrapped around the dry grains used in beer making – wheat, oats, and various other things depending on the type of beer you’re making.

All you do is put those grains in the cheesecloth bag, tie the top, and put it in the boiling water for an hour or so (depending, again, on the specific grains – don’t worry, kits include an instruction sheet). You’ll usually end up with cloudy water.

Once the “tea bag” is finished, you start adding other ingredients – liquid malt (shown above), dried malt powder, hops, coriander, and orange peel all go into the pot. This is stirred regularly and boiled for about fifty minutes.

Looks yummy, doesn’t it?

Once the boiling is finished, you need to cool the hot beer rapidly. I do this by preparing an ice bath in my kitchen sink. I simply fill one of the basins with cold water, add a bunch of ice to it, and stick the whole boiling pot straight in there. The ice water on the outside of the container helps to cool down the beer rapidly (and rapid stirring helps, too).

Once the beer is down to about 80 F or so (35 C), just pour the contents of the pot straight into your fermenting bucket (make sure the spigot at the bottom is closed!). Add room temperature water until the bucket is full to the five gallon mark, then sprinkle some yeast on the surface and stir the yeast into the beer.

Once that’s done, put the lid on the bucket, put the bubbler on the lid, make sure there’s a bit of water in the bubbler, and wait.

After about 12 hours, you’ll start to see rapid bubbling in the bubbler. This will go on for a couple days, then slow down gradually until it appears not to be bubbling. You want the fermentation to stop before you add it to the bottles.

The way I do it is that I wait until it appears not to be bubbling any more. I then watch the bubbler for three minutes. If I see a bubble, I wait one more day and watch again. If I don’t see a bubble, I mark the calendar and bottle the beer three days later.

Bottling is also easy. Make sure the bottles are as clean as you possibly can (you’ll need roughly 50 bottles). As mentioned above, use bleach or an iodine solution and rinse the bottles thoroughly.

Next, mix the priming sugar with two cups of boiling water and boil the mix for a few minutes. This provides food for the remaining yeast to add carbonation to the beer – that wonderful bubbliness. Cool the priming sugar mix, then add it to the bucket and stir for a couple of minutes.

Then, simply fill up each bottle with the spigot. Go slowly and carefully – use the plastic tubing and pinch the tube to control the flow. You’ll want to leave an inch or so of air in the neck of the bottle. Put a cap on the top with the capper (in your kit) and you’ve got yourself a bottle of beer!

Our coriander-orange beer is currently still fermenting, so the completed bottle pictures are of our previous batch, a hefeweizen.

For our own homebrew, we just reuse six pack boxes of other kinds of beer (in this case, Shiner Bock). We label the caps with a number to identify which beer is which.

For our finished gift bottles, we’re planning on making custom labels of our own design.

What’s the cost of this? The initial equipment can cost $20 to $30, depending on availability in your area. Each kit costs about $25 and makes roughly eight six packs of bottled beer. Thus, if you’re just making one batch, it can be pricy, but if you’re going to make several, the initial equipment is prorated across all of your batches and the price becomes very reasonable, especially given the high quality of the beer you’re making.

I’m very serious about the quality of homebrewed beer. The three best beers I’ve ever had in my life were brewed in my own home. The freshness of the ingredients and the control you have over those ingredients allows you to make some incredibly good beer at a great price.

Even better, it makes a great gift.

This is the second entry in a twenty part series discussing the wonderful time and priority management book Making It All Work by David Allen. New entries in this series will appear on Tuesday mornings and Friday mornings through December 10.

Last time, we talked about procrastination and why people avoid projects that have unclear parameters – “the purpose, the boundaries, the contents, and the rules.”

As I’ve mentioned before, the real benefit of Making It All Work is that it takes the invaluable time management tactics of Getting Things Done and places them in a broader context, relating, on a deep level, the individual choices you make today to the broader directions and responsibilities of your life. To put it simply, Getting Things Done helped me to do more, while Making It All Work made me think more about what I was doing.

Allen starts all of this off by using GTD as a foundation, which makes sense. GTD focuses heavily on the “immediate” aspects of task and time management – what are you going to do right now? How will you make sure that the task you were given right now will be done in the immediate future? How do you maximize your focus right now? Allen (on page 14) identifies four key elements that explains why GTD has worked for so many (myself included):

First of all, the concepts work, in an understandable and logical way.
Second, they are easily implemented, by anyon, at any time, with common tools everyone has.
Third, the problems that GTD addresses, and the awareness of them, continue to grow steadily and globally.
Fourth, the model corresponds to something deeper and more intuitive that resonates in the human psyche at many levels.

I agree with all of these. The GTD system is simple and makes sense. The challenge of it – for me – is simply that my life is so stuffed with things that need doing that I often have a very hard time purely keeping up with all of the stuff I need to do. The system, when it’s humming, does a better job of managing all of that than anything I’ve tried.

Why does it work? For me, it comes down to one thing: focus. The entire point of the system is to eliminate distractions from your work so you can focus on the immediate thing that you’re doing. From page 33:

GTD is primarily about focus – eliminating the things that distract it and giving you tools that facilitate your ability to direct that focus toward what you need, in the way you need it, and on when you need to do it.

Why is focus so important? This is the factor I find most compelling about GTD – it advocates what I would describe as the opposite of multitasking. Instead of dealing with a bunch of things at once – answering the phone, remembering messages, writing a report – GTD is all about handling them one at a time. If you have something you need to focus on, write down the things you need to remember for later and put them in a trusted system, then eliminate as many distractions as you possibly can. This will allow you to get the task at hand done better and faster than you would have possibly thought.

Here’s the thing, though: our modern world often pushes us to lower and lower sustained periods of concentration and more and more elements of distraction and interruption. On page 36:

New technologies like email, BlackBerrys, instant messaging, cell phones, and the like have brought to the fore the question of the potential costs of sub-clinical distractability, and study after study has attempted to document the business downside to the lack of focus such phenomena foster. Their real economic sots are hard to measure, but inferences can be drawn from documented statistics about the decrease in average concentration time and increase in interruptions. Companies have consequently tried to institute such polieice as “no email Fridays” and “quiet hours” not only to curb the inefficiences that result from the psychic noise, but also to give sufficient breathing room for the reflective, creative process that some are savvy enough to recognize as strategically important for their knowledge workers.

The ability to handle such distraction is beneficial in some ways and really harmful in others.

It benefits the person by enabling them to deal with a diverse set of small tasks quite well. If you’re able to accept input from a lot of different sources and can deal with the individual pieces quickly, then effective distractibility and quick attention switching can pay dividends.

The problem appears when you start looking at jobs that reward creative thinking and sustained focus. In such jobs, being easily distractable is a big minus.

Not being easily distractible is also important when you’re doing individual planning and long-term thinking. Focus is rewarded when you’re setting goals and trying to work towards them.

This is why GTD pairs so well with the core ideas of Making It All Work – the ability to think creatively and focus on your life at a higher level than “what needs to be done today” or “what needs to be done this week” is essential for planning a very bright future.

There’s another problem at work here: how do people manage to do this long-term thinking if they’re living a life full of distractions? The simple answer is that they entrust it to their subconscious in a way. Their psyche grabs ahold of the important threads of their life and hangs on tight. From page 41:

The way most people seem to operate is by entrusting only their psyche to manage what’s incomplete. But the mind then tries to keep all the agreements simultaneously, which is impossible. The result is the pardox that by contunially attempting to relieve the stress of unfinished work, more stress is created.

To put it simply, our brains don’t really prioritize well unless we put active thought into prioritizing and get things straightened out externally (with a to-do list or a calendar, for example). Instead, when we have a bunch of unfinished stuff, our subconscious grabs on to all of it, and since it doesn’t really have a sense of what comes first, we feel overwhelmed and stressed out.

Here’s an example: I’m sitting in my office writing this article. Right now, my son is downstairs with a touch of the flu, and I have a desire to go check up on him (Sarah’s down there, too). However, I also know that if I spend my time torn between two things I feel like I should be doing (checking on my son and writing the article), neither one will get done very well and I’ll just feel stressed out. I’ll sit here at my desk, thinking about my son off and on, and I won’t be focused on getting this article done.

You can back off even further than that, in a way. I also know, on some level, all of the different responsibilities and things to do I have going on in my life right now. I have to schedule a couple of meetings. I have to get an agenda written and electronically distributed. I’m worried about my daughter’s progress with potty training. I’m concerned as to whether I’m a good husband or a good parent.

All of that stuff – and a lot more – clogs my mind up if I let it. It makes it much more difficult for me to focus on the specific task at hand. With all of that floating around, I can’t truly focus on the task of writing this article.

What’s the solution? On page 42, Allen outlines it:

In order to relieve the pressure of broken self-agreements, you must know that:

+ You have captured, clarified, and organized your commitments, at all horizons, and
+ You will consciously engage with them as often as you need to.

The GTD system does a great job of handling the commitments at nearby horizons – “what do you need to be doing right now.” Where Making It All Work succeeds is at the further horizons. How do I get the issue of being a good husband and a good parent out of my mind (which means that the task I’m working on is slower) and into some sort of thought-out context where I have time to think about what I need to do and have those tasks available in such a way that they’re just a normal part of my trusted systems?

That’s really what this book is all about, and it’s incredibly empowering.