Every Sunday, The Simple Dollar reviews a personal finance or other book of interest. Also available is a complete list of the hundreds of book reviews that have appeared on The Simple Dollar over the years.

One of the biggest reasons that people fail in their entrepreneurial ambitions is that they simply didn’t lay the groundwork for their business venture. They didn’t ask themselves hard questions about what they were ready for, what their best skills were, what skills needed boosting from others, and what they needed to actually accomplish to make things happen. Often, entrepreneurs believe that they’re Superman. They’re not.

The premise of The Entrepreneur Equation by Carol Roth, then, is to guide you through that very process. Instead of asking “Are you really ready for entrepreneurship?” as almost an affront to someone’s skill, Roth is asking it in the sense of saying “Have you laid the groundwork to maximize your skills, cover the things you’re not strong at, and maximize your chances to actually make this work?”

It’s a powerful question and one that potentially separates Roth’s book from many other entrepreneurial books out there.

The Issue – The Assumptions, Myths, and Realities of Entrepreneurship
Many people associate entrepreneurship with some sort of fulfillment of the American dream. Everyone’s supposed to be a big success in business, right? The truth is that most businesses fail and the only people that see entrepreneurial success are either extremely lucky or have been hardened by repeated failure. The most important thing for a first-time entrepreneur to know is that you have a huge chance of failure and the most valuable thing you’ll get out of it is what you learn from the failure.

(Now that’s a rah-rah way to open a book!)

Simply put, not everyone is meant to enter into that grindhouse. Some people function best in an environment where they’re given straightforward tasks. Other people simply can’t handle the stress involved. Still others have a skill set that’s best designed for technical and specialty work.

Assessing Your Fit with Entrepreneurship
Is entrepreneurship the right situation for you? The book is divided into two major sections (with two smaller ones bookending it), the first of which addresses whether or not you have the mindset that works for entrepreneurial endeavors – and if so, whether it works best in a partnership and so on.

Much of the writing here comes in the form of imploring you to evaluate yourself and offering up a lot of ideas on how to really figure out whether entrepreneurship is right for you. Mostly, Roth seems to be trying to persuade you that it’s not right for you, which, again, is an interesting tack to take. The big difference seems to be that a true entrepreneur is willing to take on these problems and flaws and seek ways to correct them, either through partnership or self-improvement.

Assessing the Business’s Fit with You
The flip side of that coin is the question of whether or not the business idea you have really fits with you. Much of this section really comes down to a complete re-write of your business plan, because that is what it amounts to. Roth pushes you to look for every possible flaw in your plan (particularly ones that match up with flaws in your entrepreneurial style), then seeks out ways to correct those flaws.

My feeling, after reading this section, is that it should lead to a serious re-write of almost any entrepreneur’s business plan, particularly that of a first-timer. If a business doesn’t fit with your skill set or your style, it’s not going to work and it has an extreme likelihood of failure, so the key is to take what you know of yourself and make sure that the business you want to start matches it.

Assembling Your Entrepreneur Equation
Roth’s term “entrepreneur equation” mostly refers to your entrepreneurial elements and the things you’re going to need (mentors, partners, etc.) to make this business idea succeed. Assembling those elements and getting them in place as early as possible will pave your road to the level of success that you want to achieve.

Is The Entrepreneur Equation Worth Reading?
If you’ve ever considered starting your own business in even a halfway serious manner, Roth’s book will be a worthwhile read for you. For most of it, it will make you feel as though you’re completely not ready for this leap, but at the same time, it’ll also point you in the direction of what you need to do to be ready for the leap.

If you read it and actually follow through with the ideas within, you’ll find yourself in a much better place to succeed with your entrepreneurial plans.

Because of that, I would almost always encourage people to read this as one of their very first reads on entrepreneurship. Rather than jumping into a “rah rah everyone can do this” book on entrepreneurship, this one gets you ready so that when you read the cheerleading-type books, you’ll know there’s actually something behind the cheerleading.

I loved this book because it felt genuinely challenging, as if Roth wasn’t there to just cheerlead you and tell you everything was going to be okay. We all need that dose of reality sometimes.

Check out additional reviews and notes of The Entrepreneur Equation on Amazon.com.

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

Jennifer on Twitter wondered about moving to find work. “How about life changes? Got fired. Do I move or stay where there are no jobs?”

This is never an easy decision to make. There are a lot of factors involved, and many of them push in opposing directions. Here are three key factors I would consider.

Could you actually earn more money in another area? In other words, if you take your resume to another part of the country, could you actually find employment with income that exceeds what you could currently earn?

It’s easy to think this is true, particularly if you were recently fired from a job, know of others employed in that field, and simply can’t find any openings in your local area. However, it may be that there are very limited hiring opportunities in your field anywhere. This is certainly true in some fields and less true in other ones.

Your best approach is to look for job openings in other parts of the country. Are there are a lot of job openings in other areas? Are they promising job openings?

You might also want to start applying for jobs that look interesting before you move. Try applying for a bunch of jobs in large cities that you can easily travel to, go there for interviews (if needed), then move only if you actually find a job that earns well and seems stable.

Would that difference in pay more than exceed a different cost of living? Quite often, you’ll find jobs in other areas that pay the same as what you were making, except that the new area has a much higher cost of living. I know of computer programmers who can live well in the Midwest, take the exact same job on a coast without much additional pay, and be practically homeless.

Before you apply for any job, know how the cost of living in that area compares to your current cost of living. If it’s significantly higher, you’re going to need a significantly higher salary to account for it and maintain your current standard of living.

A good way to calculate this is to get the cost of living index for the current area where you live, as well as the cost of living index for where you’d be headed. Take your current salary, multiply it by the cost of living index of the area you want to move to, then divide it by the cost of living index of the area you’re currently living in.

An example: let’s say I lived in Des Moines, IA and I had a job offer on Long Island. The cost of living index for Des Moines is 90, while Long Island’s index is 400. If I was making $20,000 in Des Moines, I would multiply that by 400, then divide the result by 90. That means I’d have to make about $89,000 to have an equivalent standard of living on Long Island. Obviously, I’d probably be seriously downgrading my living quarters in this case (or else this is one major career upgrade). Of course, the reverse is true – if you’re making $89,000 on Long Island, you can have a roughly equivalent standard of living on $20,000 in Des Moines.

Unless you’re significantly improving your standard of living (by getting a salary that exceeds your calculated number) or you’re getting a spectacular career growth opportunity, it doesn’t make sense to move.

Do you have a support network in the area where you’re moving to? This is another factor that ties heavily into the cost-of-living question as well as quality of life factors. If you’re moving away from family and friends, you’re moving away from a lot of time and money-saving conveniences.

I know that when I first moved far away from my family and friends, I was stunned at how many little things they helped me with. Free meals were gone. Useful advice was gone. Many of my social circles were gone. These things added up to a lot of value, financial and otherwise. I would go out solely to meet new people and cement friendships. All of my meals were on me. I had to seek out new sources of entertainment. This added up to substantial costs.

This factor varies heavily for different people, but it can be a huge factor and one that shouldn’t be overlooked when considering a move.

It may seem as though I’m attempting to talk people out of moving to get a better job. I’m not. Rather, I’m simply illustrating the point that moving for a better job often puts you in a worse financial position, let alone the impact on other aspects of your life.

Before you make that leap, know what you’re doing, why you’re doing it, and whether or not you’re getting positive value out of the move.

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

By email, Kevin asked “Could you post an article outlining how to get started with slow cooker/crock pot usage and how it saves money?”

Our slow cooker is an essential piece of kitchen equipment in our house. We use ours multiple times per week for a wide variety of meals and ingredient preparation.

How a Slow Cooker Saves Time
In truth, a slow cooker doesn’t so much save time but move it. It allows you to do the prep work for an evening meal earlier in the day.

Here’s an example. Let’s say that we know that a given evening is going to be very busy. One child has soccer practice, another child has dance practice, and my wife has to stay late for an after-work meeting. Our solutions for dinner are now limited. We’re either going to eat out, get take-out, or prepare something very quick and dirty at home.

A slow cooker solves this problem. Whenever we arrive home, a good home-cooked meal made from basic ingredients is sitting there fully cooked, hot, and waiting for us. We just set the table and eat – it’s far faster than even eating out.

Simply put, a slow cooker moves your food preparation from a point where there are a lot of demands on your time to a point when there are many fewer demands on your time.

How a Slow Cooker Saves Money
Since you’re able to make the time transition described above, you’ve suddenly made it possible to cook at home when it previously didn’t really work all that well.

You’ve either turned a meal eaten out to one eaten at home, or you’ve turned a prepackaged meal into a fresh, healthier, and probably tastier meal.

In either case, that’s a net gain. The gain is clearer when compared to a meal eaten out, but it’s still prevalent when compared to a prepackaged meal, as the costs on those are often quite high compared to what you get. Even if your costs are equivalent, the meal you’ve prepared is of better quality than the prepackaged one.

We also save money by using a slow cooker to prepare other ingredients, such as making shredded chicken, chicken stock, and vegetable stock.

Selecting a Slow Cooker
For your first slow cooker, I’d suggest picking up a very low-end cooker, just to see if you’ll use it or not. A low-end slow cooker (or crock pot, as they’re often labeled) usually just has a dial on the front that enables you to choose warm, low, or high for settings and is “on” whenever it’s plugged in. Straightforward, indeed.

If you find you’re using that one a lot, it’s worthwhile to invest in one with some more sophisticated features. A timer is a very useful feature, as is a programmable slow cooker that allows you to have the slow cooker adjust from low to high at a designated time. This enables you to put in the ingredients, have the dish start a few hours after you leave, and kick up to high just before you’re planning on returning, resulting in a perfect meal. This really adds to your flexibility with using this for family meals when you’re out for the day. A good example of this type is the Hamilton-Beach 6 quart programmable model.

Using a Slow Cooker
There’s an absolute abundance of slow cooker recipes online. If you’re just starting out, I suggest sticking to simpler recipes. One approach I often use is the “five ingredient slow cooker meal.” All you really do is combine five ingredients that you like and know will go well together, put the slow cooker on low for several hours, and then enjoy. The post linked there has several examples of this, but you almost can’t mess this up as long as you stick to what seems good together to you.

Once you’ve tried some of these, start digging into the abundance of more detailed slow cooker recipes online. I’ve posted two different sets of slow cooker recipes over the years (this one and that one) and many of my Friday afternoon food posts are slow cooker recipes. Not only that, there are entire blogs and websites devoted to slow cookers, such as A Year of Slow Cooking.

The only real limit is your creativity (or perhaps ingredient availability in your area).

Each week, I highlight ten things each week that inspired me to greater financial, personal, and professional success. Hopefully, they will inspire you as well.

1. Bertie Forbes on failure and triumph
If you try something you really want to achieve and you fail at it, what do you do next?

“History has demonstrated that the most notable winners usually encountered heartbreaking obstacles before they triumphed. They won because they refused to become discouraged by their defeats.” – Bertie C. Forbes

If you quit, you’ll never win. If you stop giving it your all, you’ll never win. The only thing you can do is to pick yourself up, figure out what went wrong, and charge forward again.

2. GetHuman
One of my biggest frustrations comes about when I have a problem with a product. I try to navigate the menu of a customer support line, but the problem I have isn’t on the menu. I hit buttons and try to reach someone, but I fail and give up.

The entire purpose of the GetHuman website is to tell you exactly how to reach a live person for whatever company you need. This has come in handy multiple times in the past week.

3. Team Work by Buddy Venturanza
A few days ago, my children and I saw two ants trying to carry a leaf. They were struggling with the challenge of cooperation, but eventually they managed to get the leaf going where they wanted to go. I tried to photograph it, but nothing quite captured the sense of teamwork that went into their effort.

This wonderful photo gave me almost exactly the same feeling. Teamwork allows them to accomplish far more than they could alone.

4. Solsbury Hill by Peter Gabriel
Thanks to last week’s Pieces of Inspiration, I spent an awful lot of the past week listening to Peter Gabriel and Kate Bush. This is perhaps my favorite song by Peter Gabriel.

5. Thoreau on desperation
I can still remember the first time I read this on a printed page. I was in that summer between high school and college and the quote made me shiver.

“The mass of men lead lives of quiet desperation.” – Henry David Thoreau, Walden

There are so many people out there dealing with difficulties in life and doing it quietly. Yes, maybe some of it is self-inflicted. That doesn’t change the pain and the desperation.

6. Ronald Reagan on the Challenger disaster, January 28, 1986
I was seven years old at the time of this disaster. I was watching this in the auditorium at my grade school as the ship went up and then exploded in the air. We had spent weeks in our classroom learning about the Challenger mission and space exploration and the people on board the ship and it went up in a ball of flames.

Just over a month earlier, my grandfather had passed away. He had lived with us over the final several months of his life and I got to watch him slowly slip away from us.

That month is when I first realized my own mortality and how fragile life is. To this day, I still can’t watch any video of the Challenger without nearly breaking into tears. One big part of it that I remember, though, is President Reagan’s speech that evening, and particularly the close of it.

“The crew of the space shuttle Challenger honored us by the manner in which they lived their lives. We will never forget them, nor the last time we saw them, this morning, as they prepared for their journey and waved goodbye and slipped the surly bonds of earth to touch the face of God.”

Those words stick in my mind like few others. The last line, “slipped the surly bonds of earth” to “touch the face of God,” quote an amazing poem by John Magee, High Flight.

These words inspire me, not because of the specific memories they hold, but simply because of how much emotion certain words can contain for a person when they tie into something they hold dear.

7. Please!
This is a short film that’s spoiled by saying much of anything about it. Be warned, there is some non-family friendly language.

8. Across the Street (1875) by Giovanni Boldini
For some reason, I absolutely cannot take my eyes off of the sidewalk in this painting.

The thing about great skill is that it looks effortless. It conveys something into your mind that seems so simple that you often disregard what it takes to achieve it. For some reason, I see that in the street stones of this painting.

9. Howard Nordberg on life as a trampoline
So often in life, we’re leaping through the air and it feels like we’ll keep on going forever. But, sometimes, we land.

“Life is a cement trampoline.” – Howard Nordberg

There are so many things that happen to us that are almost impossible to recover from. We get sick. We lose that perfect job – or that perfect relationship. Everything we loved ends.

10. This Woman’s Work by Kate Bush
Since I’m sharing a Peter Gabriel song above, I ought to share one by his duet partner, as well.

The R&B singer Maxwell sang a wonderful, but very different cover of this song that you might enjoy as well.

Each week, I’ll present a low-cost meal (or a meal that demonstrates a lot of options for cutting costs) that my family eats for dinner and enjoys. Many of the recipes will be vegan or vegetarian, with options to add other ingredients for non-vegetarians.

I love pita bread. Pita bread makes it easily possible to really experiment with almost anything as a sandwich filling. Hence a sandwich made from crumbled feta cheese and chickpeas that turned out to be surprisingly delicious.

This recipe is based on one found in the Bon Appetit Fast Easy Fresh cookbook that has long been a part of our kitchen cookbook shelf, requisite wear and stains and all. We often use cookbooks for inspiration, but rarely follow recipes verbatim.

What You Need
You’ll need:

1 lb. eggplant, cut into 1/2 inch cubes
1 1/2 cups chopped onion
2 cups cooked garbanzo beans or 1 15 or 16 oz. can cooked chickpeas
1/2 cup reserved liquid from cooking the beans (or from the can of beans)
1 tbsp. ground cumin
1 tbsp. lemon juice
4 tbsp. fresh mint (we got ours straight out of the garden)
5 tbsp. crumbled feta cheese (optional – we made some with and without)
3 pita breads, sliced in half
2 tbsp. vegetable oil for cooking

The Night Before (or Early That Day)
As always, prep the vegetables early. Cook the beans if you’re using dried beans (and don’t forget to reserve 1/2 cup of the liquid at the end). Chop the onion. Store all of this stuff in the refrigerator.

Preparing the Meal
Put the oil in a skillet, spread it around, then heat it over medium-high heat. Add the eggplant and the onion, then saute for nine minutes or until the oinion is starting to turn brown (it’ll smell great).

Mix in the beans, lemon juice, and cumin and saute for a minute, then add a few spoonfuls of the reserved liquid. Saute for another three minutes and keep adding the liquid by the spoonfuls if the mix looks dry. You want it to be very moist but not runny.

Mix in the feta and the mint, then remove from heat. Cut the pita breads in half lengthwise, then stuff the halves with this mix and serve.

We ate the sandwiches with a sliced fresh peach obtained from a friend.

Optional Ingredients
This recipe works very well as-is because of how the flavors mesh, but you can use almost anything within a pita and it will turn out well. Experiment with what you have in hand and find things that work well. We’ve made lots of things in pita shells, ranging from Greek-styled food (like this) to things that are practically tacos.

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

On Twitter, Pinco shared this thought: “I love your articles about parenting. People enjoying parenting are hard to find, nowadays.”

I genuinely enjoy the process of parenting. I love teaching them new things. I love molding their behavior from the charming anarchists of toddlerhood into socially stable children. I love reveling in their crazy ideas for play. I love introducing them to new foods and new places and new experiences. I love encouraging them to refine their skills and watching as they try very hard to do just that. I love watching them assert their independence and handle tasks on their own. I even relish the harder tasks, like correction of behavioral problems.

I love all of these things.

At the same time, I don’t think everyone does love all of these things. I don’t think everyone is meant to. I think many people are swept away by a romantic idea of parenthood only to find that such a romantic view doesn’t match the reality of being a parent.

For some, the nonstop nature of parenting becomes a burden. They’re very good parents in bursts, but when it comes to the long slog, they beg for a break from it. Other parents are distracted by other interests. I can’t tell you how many times I’ve seen a child begging for the attention of a parent but that parent is distracted by work or by checking sports scores or by texting. Others have been molded into a state of seriousness by their careers and their earlier life so that it’s hard for them to relate to children. I have witnessed all of these things (possibly within the last week).

If you’re considering becoming a parent, I encourage you not to become a parent unless the following ideas really excite you.

Parenting of a child that will turn out well requires regular focus. That means turning off the cell phone and paying attention, even if what they’re saying or doing doesn’t match your personal interests. That means caring about the castles they’re trying to build out of blocks. That means understanding what the current challenges in their life are, who their friends are, and what they’re struggling with – all the time. If the intricacies of a castle that your five year old built out of blocks sounds much more dull than a night at the club, then stick with a night at the club. I’d rather hear about my daughter’s epic princess castle that she spent an hour building out of magnetic tiles.

It also requires being willing to talk to a young child. By talking, I don’t mean the cutesy “child talk” voice that people constantly get when they’re talking down to a child. I also don’t mean treating your five year old like your drinking buddy. I mean genuine conversation with children, where you listen to what they’re saying and respond to them seriously. My kids eat this up. They feel valued, they feel as though they can tell me what’s going on, and they know that I’m listening and that I care about what’s important to them. Children aren’t incompetents that you need to talk down to, nor are they your drinking buddies. They’re people with feelings and thoughts, and you’re one of the most important people in the world. Put yourself in a five year old’s shoes for a minute and imagine if your parents did nothing but talk child talk to you or else did nothing but treat you like a drinking buddy.

There’s also a requirement that you’re willing to abandon many of the habits of your previous life. I’ve dropped most of my hobbies and shrunk my social circle significantly (though it’s grown a bit as well as we’ve made friends with other parents) since becoming a parent. Guess what? You don’t have time for a lot of the things you used to have time for. At first, parents tend to just sleep less and try to maintain as much of their old life as possible. Eventually, that doesn’t work.

It’s easy for these things to seem like burdens. Here’s the thing, though: they’re only burdens if you don’t like what you’d be replacing these things with.

On an average day before kids came along, I might go golfing with some buddies and out for drinks afterward. I might go out to the movies with my wife. I’d do some extra work in the evening. I might spend four hours laying in bed reading.

On an average day today, I build a giant castle out of blocks. I cut a chicken breast into tiny pieces for easy eating. I listen to a young child wonder why their old friend won’t play with them any more. I bandage a wound. I roll down a hill covered in grass. I change a dirty diaper and listen to a baby make noises and watch him smile as I replace the diaper. At best, I might get an hour to read for personal enjoyment just before bed, but I don’t go golfing and I very very rarely go to movies at this point.

Is that change a positive? For me, it certainly is. For others, it might not be. That’s fine.

The fantasy of parenting sounds appealing to a lot of people. The reality of parenting is fun to a smaller group than that. Make sure you’re in love with the reality and not just the fantasy before you bring a child into the world.

Trust me, the reality can be a lot of fun and very rewarding, too. Even if it involves changing some disturbingly full diapers.

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

Lois on Facebook wants to know about starting from scratch. “After two years of living just on basic needs in order to get rid of 60k in credit card debt – yea! we did it! But what is the best strategy for starting over (we have do have 1k emerg. fund).”

Congratulations on your positive financial changes! It feels really good to be free from the burden of debt.

You’re facing a problem that many people face when they reach debt freedom. They’ve been in debt for so long and burdened by constant debt payments for so long that they’re unsure what to do when they’ve been freed from those shackles.

For people in your situation, I would recommend a three phase plan for continuing forward in your financial journey.

Phase 1: Retirement planning
This is absolutely the next thing you need to focus on. By retirement planning, I mean having money available to you when you reach the point in your life where you want to step away from work and enjoy the years you have remaining in your life.

My usual advice to anyone is that they should shoot to have 25 times their annual living expenses in retirement savings on the day they retire. That seems like a huge number, but it’s an achievable one.

The key is to start now. A good rule of thumb to use is, if you haven’t started contributing to your retirement, start contributing a percentage of your income to retirement that’s your age minus fifteen. If you’re 30, contribute 15% per year. If you’re 40, contribute 25% per year. If you’re 50, contribute 35%. This isn’t a perfect solution, but it’s one that’s going to get you as close as possible to a path to be able to retire at a reasonable age. In truth, if you’re approaching fifty and haven’t started saving anything for retirement, you’re either going to need a pension or you’re going to be working until at least seventy to maintain your standard of living.

Phase 2: Protecting yourself from falling back into debt
Once you’ve got retirement savings lined out, you need to use your remaining extra money to prevent yourself from falling back into debt. This comes in a few big pieces.

First, build up a bigger emergency fund. Try to save two months of living expenses for each dependent in the household. This will help you deal with almost any crisis that crosses your path.

Second, start saving for any known large expense that’s coming. For example, you’re going to have to eventually replace your car. Start making car payments now, except put those payments into a savings account. This way, instead of having to pay interest to the bank on a car loan, you’ll collect interest that you earn yourself on the savings account.

Finally, make sure you and your partner have adequate life insurance. I usually suggest getting a term life insurance policy so that you’re not left destitute if your partner dies. Shop around and look for the best deal you can find. Try to get one with a benefit equal to at least five times that person’s salary – and preferably more.

Phase 3: Establishing long term goals
If the above things are well in hand, you’re building a strong financial backbone for yourself. You should start thinking about your long-term goals at this point.

Is your goal to retire as early as possible? If so, ramp up your retirement savings as high as you possibly can.

Is your goal to go back to school? If so, open up a college savings plan (also known as a 529) and start socking money into that.

There are lots of goals that people have – and many of them require some significant savings in advance. Now is the time to start doing that.

Good luck.

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 or sell first home?
2. Keep investments or pay debt?
3. Prayer and money
4. Couple facing financial crossroads
5. Falling into money
6. Audio personal finance advice
7. Preparing for possible medical emergency
8. How to find simple joys
9. Large purchase in bad economy
10. Reading long books

Recently, I’ve found out that two college-aged people I know have taken up writing handwritten letters to others in order to impart more personal value than sending a text or an email or a Facebook message.

I can’t tell you how much I applaud that. There’s no better way to really let someone know they matter than a handwritten and heartfelt note.

Q1: Rent or sell first home?
My fiancé and I are both in our 20s, I was going to say early 20s, but I’d be lying because I’m now 26 :) We will be married in September. We have owned our home for 2 1/2 yrs, 3 yrs in sept. I owe $96,000 and have a 6% interest rate. We were talking about adding on an addition in a few years, but thought for the heck of it we would just get an estimate, and turns out they want $45000 for just a family room. We were going to finish the basement with our wedding money and thought we would show the guy what we were going to do. Turns out we have to replace the basement wall, easily $9-$15000. The guy left, and here we are, our dreams crushed. We can’t afford it.

We want to stay in our school system for our son, its a great system, and we have family we are very close to. The bad part? What the heck do we do with our house? Rent or sell? Either way, I will be fixing the wall. Disclosing it is one thing, but with the way the market is, no ones going to even walk in here.

We want to rent for the obvious reasons and don’t want to rent for the obvious reasons.

As for our money situations, my fiance has a little debt to his mother, which will be paid off after the wedding (we’re paying $1000 a month to our wedding fund right now), I’m an RN and he works at the bank, and goes to school in the evening. He won’t be done with school for at least 5 years.

I do have about $16000 saved, a well funded Roth and IRA. I gross about $58,000 and right now I want to just go by my gross. Should we rent or sell our first home?
- Janine

I’ll agree with you that you don’t have much of a chance to sell the home in the current marketplace with a severely damaged basement wall. Your best approach is to get multiple estimates on it, then start saving up for the cost of repairing it, perhaps supplemented with some of your savings (don’t clean it out for this).

The real question comes after paying for that wall repair. For starters, you need to start thinking of your income and his income as household income, and your expenses and his expenses as household expenses. What does his income look like? What are his expenses like? Clearly, he has a job at a bank and he’s also going to school. Do these two cancel each other out? What’s the true take-home that you’re working with here? What portion of that is eaten up by the current mortgage? Beyond that, where do you want to be in a few years? Do you want debt freedom? Do you want this house with a family room? Do you want a larger house?

The questions you’re really bringing up here are more goal-oriented than anything. You have to sit down with your partner and start talking these things through together.

Q2: Keep investments or pay debt?
I have an investment account valued around $50,000 and student loans of $65,000 at 6.8%. I have a job lined up after graduation, paying roughly $50,000 per year. Should I preserve the investment account and pay down the debt from income, or is it better to apply the investment funds to the debt?
- David

You should pay down the debt using most of your investment and reserve the rest (around two months of living expenses) in a savings account for yourself. Then, use income to knock off the rest of that student loan as quickly as possible.

The biggest reason for this is cash flow. The more cash flow you have, the better you’re able to deal with opportunities that life hands you, like taking a chance on a startup or suddenly meeting the perfect person for you, or dealing with the blows life hands you, like an unexpected job loss.

The return on investment issue is a wash. Warren Buffett estimates that long term returns on the stock market are roughly 7% going forward, which roughly matches your interest rate on your student loans.

Q3: Prayer and money
Do you think it is useful to pray for financial success? Do you think it’s right?
- Margie

Do I think it’s useful to pray? It’s always useful to pray for whatever’s weighing down your mind. The act of praying in itself is a great way to release a burden on your shoulders.

Does that mean God will respond? No. Just because you ask for something doesn’t mean you’ll immediately receive it.

It’s often the act of prayer that provides the value because it enables you to deal with the issue from a different angle. Any response from God is on His timetable which your intervention may or may not have anything at all to do with.

Q4: Couple facing financial crossroads
My husband and I are kind of at a financial crossroads in our life. We are both around 30 with no credit card debt, no home mortgage and no car payments. We have an emergency fund of $11k, $1,200 in an old stock that’s pretty stagnant, $12k in Roth IRAs in my husband’s name (the only retirement funds he has) and $46k in a 401k with my company. I’m putting in 6% of my income into my 401k and the company matches that with 4% for a total of 10% going into that fund every year (about $8k). The only debt we have left is my husband’s student loans, which are around $20k at 7.25%, but in deferment currently. He never finished his undergrad and was working a full time job for the last several years until he was laid off due to the economy about 1.5 years ago. We used his income to pay off tons of debt we had racked up in college. Since the lay off, he’s been going to school full time at the community college to get all his pre-reqs out of the way cheaply before transferring over to the big university to finally finish his Bachelor’s. We will be paying that huge tuition payment out of our pocket (~$4,500 a semester for the next 4 semesters), which we already have a plan on how to pay that without dipping into any savings or other monies listed here.

My question is this: I make about $4k monthly and after all of the monthly bills and budgeted money, I have about $750 dollars left. I was wondering if I should (1) increase my 401k contribution to make up for the fact that my husband isn’t actively putting money into any funds, (2) invest part of it into one of my husband’s Roth IRA’s monthly and save the rest, (3) put all of it towards my husband’s student loans, (4) build up my emergency fund even more ($11k in savings + $12k in Roths if we need to liquidate them) or (5) start saving for a down payment on a house.

We had a foreclosure on our first home because of an ugly situation with the bank and know we will need 20% down for our next home. When my husband graduates and finds a job, we shouldn’t have a hard time saving this up in a few years. I also have a pension with my job that is projected to, combined with my 401k and Social Security, be able to cover all of our retirement expenses so my husband doesn’t necessarily need to put money into anything. If we pay a lot towards my husbands student loans now, the principle will go down faster since they are in deferment and don’t require a monthly payment, but I have a sinking feeling in the back of my mind that I should be putting more money towards savings. We just don’t know what to do. Thanks.
- Stephanie

Given your situation, I would focus on eliminating his loans as fast as possible. That 7.25% interest is painful, as is the fact that it’s a sizeable bill eating into your monthly cash flow. Your emergency fund savings are more than adequate given your situation.

This also gives you more flexibility if the marketplace changes and your husband ends up finding it harder than he expects to find a job. Banking financial choices on him finding a job is not a good move, as it puts a requirement on something that’s not truly certain.

I don’t think you’ll ever regret not having that debt around your neck.

Q5: Falling into money
My wife’s father has been slowing giving his children some of their inheritance over the past decade, up to the IRS tax free limit (around 13K I believe). In order to limit any inheritance tax upon his death, he decided to give a much larger sum of money this year (about 90K after taxes). My question is, what should we do with this? It will ultimately be used in our own retirement (we are in our early 30′s), but we also have plans for a vacation home when the time is right. The vacation home is not in our 5 year plan (likely not even in our 10 year plan) however. I guess I’m looking for a place to stash the money in a semi-liquid financial product, for at minimum 5 years. After that, I’m not too sure. I have IRAs and 401K, so I’m not really looking to put money in those products. I would say my risk aversion in somewhere in the middle. Any product that has an early retirement penalty is probably not an option, based on our vacation home plans.
- Roger

So, in summary, you have a long term goal for this money that’s not hinged on retirement. You’re wondering what you should do with it.

The best option for a long-term goal without retirement tied to it is in a brokerage account. There, you can invest the money in a variety of things, including stocks. If you’re looking at a long-term goal (beyond ten years) that’s not tied to retirement, stocks in a normal brokerage account are a great way to go. I use Vanguard for these types of goals.

However, I would probably diversify it across several investments. Split it up – put some in a domestic stock index fund, put some more in an international stock index fund, and put even more in a bond fund. As time goes on and you feel like your big goal is getting nearer, close out one of the stock funds and put that money in the bond fund. Eventually, just move it all into your savings account – that will keep the balance safe for you as you hit the final stretch of savings.

Q6: Audio personal finance advice
I’ve been reading your blog for a while now and enjoy it. I’m lucky to be in a great position financially, but my boyfriend is not. He is open to advice, and we discuss finance and economics often. I would love to share your blogs, stories, and reader questions with him, but there’s one problem: he’s not a big reader. He is a slow reader, doesn’t have much free time, and generally prefers glancing through magazines if he reads anything at all. He does however enjoy listening to podcasts and always has one on (or NPR) when he is driving. He and I live about an hour apart so he drives quite a bit!

So my question to you: do you have existing or plans to create audio material from your blog? If not, do you have any recommendations for other places online that I can look?
- Christina

I’m not particularly skilled when it comes to podcasting. I think my content is all right, but in order for it to shine, I need a skilled producer. Given that this isn’t a high priority, it’s not going to happen (again) any time soon.

Instead, I’d suggest he listen to some personal finance podcasts. The best one, in his case, is probably Dave Ramsey’s podcast, which you can easily find on iTunes or on daveramsey.com. It’s essentially an excerpt from his radio show, which I think is the best one out there on the subject of personal finance.

Beyond that, I also recommend NPR’s Planet Money podcast. It’s a bit deeper, but if you really want to understand the issues underlying personal finance, it’s a great one.

Q7: Preparing for possible medical emergency
I am in what may be a very specific situation. I’m 27 and recently married a man, 31, whom I have dated and lived with for five years prior. My husband has a medical condition that poses a potentially huge problem down the line for many reasons.

When he was a teen, he contracted a virus that spread to his heart. After lying in a coma for several weeks, he received a heart transplant. It has been sixteen years since his transplant, and aside from some “minor” complications (most recently being a stent to clear a blockage), he lives a happy, healthy life.

We’ve addressed the emotional complications in therapy and continue to work on them today. We want to have a family and are making plans for the future. My question for you is how we can best plan for the possible financial complications that his condition may create. Currently, he has several visits to the hospital for testing and check ups (about 1 per month) and one cardiac catheterization. The stent was the only unplanned procedure that he has had in several years. We are both employed full-time, though I earn nearly double his income (60K to 35K), and have good health benefits individually with our employers. His parents, who are quite well off, have stepped in on several occasions to help with the medical bills. We currently do not have a separate account for medical savings. Would you recommend us saving for the known procedures, plus some percentage for unforeseen costs up to a certain number of years? Are there any accounts that you would recommend we do this in? Do you think it is reasonable to involve his parents in the discussion? Is there anything I should do separately? As you can imagine, it is a fraught discussion, but one I think is worth having for our collective piece of mind.
- Jenna

Since I don’t know the specifics of his condition and what the future expectations are, I can’t comment. However, here’s what I’d do moving forward from your situation.

The first person I’d talk to is the doctors. I’d try to get a good understanding of the future prognosis and what procedures and medications he’ll likely need in the coming years. What will likely happen? What can happen?

Beyond that, I’d start saving as much as I could for such procedures. I’d essentially recommend an infintely large emergency fund – as much as you can muster. I’d certainly involve his parents in the discussion, but with the understanding that you’re primarily looking for their advice as they’re financially successful. I would not rely on any help from them, but appreciate it if it drops out of the sky when you need it.

Q8: How to find simple joys
Whenever I read about frugality or about cutting spending, I can’t help but think it sounds really un-fun. You often mention finding joy in simple things. How do you do that?
- Kelly

I mostly do simple things. My average day involves writing, making a meal or two for my family, reading a book, playing in the yard with my children, maybe going to the grocery store or to the park – not exciting stuff.

Within that, I look for the parts that make me feel good. The taste of a well-prepared meal. The laugh of one of my children. The smile of my wife. The sense of feeling good after playing hard with my kids. The flowers I found and picked in the unfinished part of the park.

These things make me smile – and what else is there, really, than a good smile and a good feeling inside of you? I could chase that feeling all day long, or I could just do the simple things and find that those feelings come to me.

Q9: Large purchase in bad economy
I am a divorced woman, over 50. I am blessed and grateful to have a terrific job in the healthcare field. For a single person, I believe I make a good wage and contribute automatically to two retirement plans through my job: one a pension; the other a supplementary 403B. My only child is grown and lives/works in another state. My financial outlook was very low after my divorce some years ago, but through education and opportunity, I have been able to improve that outlook dramatically. I have never purchased new furniture for myself, always being the (grateful) recipient of hand-me-downs from others. I saved my entire IRS refund from last year to finally purchase some large furniture items such as a sofa and some lamps. But I find myself afraid to let go of that money. I seem to be hearing nothing but negatives regarding the state of our economy and I’m afraid that everything will go south and I’ll find myself without that extra money when I most need it. Logically, I know this isn’t true, as I have a checking account and an additional small savings account that I could tap in an emergency. Yet, I’m still afraid to move forward, even though I love the idea of owning something that I selected and bought for myself (after shopping for the best bargain of course). I greatly respect your opinion and would value any advice you could give me.
- Ginny

This is a common feeling for people who have reached a very scary financial bottom and have pulled themselves up a bit. They’re afraid to spend anything lest they find themselves drowning again.

To them, I usually say that they should trust their heart. There’s a tipping point to be found in here, where you’ll find enough financial security to be able to afford both a healthy savings account and that item you want.

Be patient and do what leaves you feeling best about the present and the future. One of these two conflicting feelings is more powerful and you should stick with that one while re-evaluating every once in a while. If the regret of having not owned whatever item it is you’re wanting begins to outgrow your desire to continually increase your savings, that’s fine, as long as you don’t wipe out your emergency fund or put yourself into debt in the process.

Q10: Reading long books
How do you read such long books like A Game of Thrones or Shogun? Whenever I see such books, I just get intimidated. I’ve started a few very long books but I’ve never been able to finish them.
- Andy

I usually just leave such books on my bedside table with a bookmark in them. At bedtime, I read a few pages, then stick the bookmark back in.

Sure, it might take a long time to get through the book, but that doesn’t really matter as long as you enjoy the journey you’re taking with the plot and the characters.

The only time I give up on a book is if I genuinely don’t care about the characters or the situation involved, which is pretty rare, indeed. Otherwise, I keep plugging away, because each page tells me a little more of their story.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.