Over the past five or six years since my financial turnaround started, the single most significant change that has happened to how I view the world is a switch to what I call “long term thinking.” Simply put, I evaluate most of my life choices primarily through a long-term lens.

In other words, when I look at things like how I spend my money, how I spend my time, who I choose to interact with, and so on, I’m often not thinking as much about immediate pleasure but how my choices will impact my life in, say, five years.

Let me give you a few examples of what I’m talking about.

Most mornings, my children wake me up and I’m pretty groggy at first. After a minute or two of swimming up out of a sleep state and into a basic comprehension of the world around me, I’m faced with a choice. I could either shamble along in a half-awake state, mumbling incoherently at my children, or I can will myself to be energetic and help them get ready in the morning. The former is far more pleasing in the short term, but I often find myself jumping up and down several times and splashing my face with cold water so I can get going immediately and get right on the task of making sure the kids are dressed, talking to them about their day, and making sure they have a great breakfast on the table. That little bit of discomfort each morning will lead to more well-balanced children in several years.

I stop by a local boardgaming night and try out a new game that I really enjoy. The store has it on sale for $40. I’m faced with a choice. If I buy it, I’ll probably play it a few times with my friends. If I don’t buy it, it won’t prevent me from spending an evening playing games with my friends. So, the upside of buying this isn’t a new social event. It’s just more stuff on my shelf. On the other hand, another $40 in my bank account means an easier road to financial freedom.

Buying a cup of coffee from Starbucks in the morning might give me a quick jolt of energy. Of course, if I do that, then I become just a bit more used to having that jolt in the morning, making me more reliant on coffee instead of a glass of water in the morning. A consistent diet of Starbucks isn’t really a good thing for my long term health, either. Not drinking that cup of Starbucks leads to a trend of less spending on morning coffee and better health. I’ll leave it as a rare treat.

This is a hard switch to make. Our immediate wants and desires scream with urgency next to longer-term concerns, and it is incredibly easy to just let the short-term thinking rule the day. I used several tactics to start making the transition (and I’ll be the first to admit that I’m not 100% at thinknig this way).

I spent time thinking about my common decisions away from the moment where I made those decisions. Thinking about things in the heat of the moment often leads a person to make the short-term beneficial decision rather than the long-term beneficial decision.

Thus, I started spending some time each day thinking about the decisions I made that day, particularly ones I would often see myself repeating. Outside of the moment, I’d look at the short term benefits of my options as well as the long term benefits and I’d decide independently what the best long-term choice was.

I spent time figuring out exactly what I wanted from my future. I often mention drawing a five year sketch of your life and a ten year sketch and maybe even a twenty year sketch. What I mean by that is simply laying out what things you’d like to have in your life at that point. Obviously, those things won’t perfectly come to pass, as life often hands us unexpected things.

The reason for doing this is to figure out what things you can control to make those dreams come true. I can control the money I spend. I can control the food I eat. I can control the time I spend. I can control what I read and what I learn. What choices can I make in those contexts that lead to the five year sketch of the life I want?

I spent less time with people who would tempt me to make short-term decisions. People who constantly encourage you to buy things you don’t need are ones that will cause you to constantly sacrifice your future for your present. I spent a lot of years hanging out with people who did just that and it led me almost into the poorhouse.

My current circle of friends are almost all rather frugal. We have potluck dinners for our social engagements and usually wind up playing board games. We trade a lot of tips on saving money and sometimes clip coupons for each other and send each other deals. We take pride in our good financial moves – buying land is far valued over buying a new car, for example. These are friends that will encourage you to think for the long term.

I set up situations where the beneficial short term choice and the beneficial long term choice were the same choice. An easy example of this is throwing out all of the unhealthy snacks in your house so that you can only choose among healthy ones, but you can do the same thing with lots of different aspects of your life.

For example, you can choose a commute that doesn’t take you by temptations to spend money or eat unhealthily. You can delete distracting computer games from your computer. You can unplug the internet router for a while, making it much more difficult to get online (and instead easier to get other things done). If you make the path of least resistance one that helps your long term future, you’re setting up a great life.

I accepted some short-term choices as splurges. Splurges turned from just spending money into making choices for the short term. So, for example, playing a computer game is often a splurge for me. It’s fun in the short term, but has virtually no positive impact in the long term.

The key is that I recognize that it’s a splurge. It’s something that I know isn’t the best choice, but it’s okay to do every once in a while. It’s part of the spice of life, and I savor those splurges.

Good luck!

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. Me and Grandma
Over the holidays, I was going through some old photographs and I came across this one of me and my great grandmother, taken a few days before Christmas 1998.

She was very old and frail at that point, but still stubbornly independent, quick-witted, and insistent on living on her own. For Christmas that year, we brought her several boxes of prepared and easy-to-prepare food items and other things that would make her continued independent living easier.

There are a handful of people in my life that I have missed greatly since they’ve passed away. She’s very high on that list.

2. Bon Iver’s Beth/Rest
This is my favorite new song of 2011.

There’s just something about it that hits me right here in the chest.

3. Mark Twain on reading
I believe one of the best gifts I can give to my children is the gift of the joy of reading.

“A person who won’t read has no advantage over one who can’t read.” – Mark Twain

Reading is about the acquisition of knowledge, the growth of one’s morals and values, and the enjoyment of a vast literary heritage. There are few things more valuable to do with one’s time.

4. Priceonomics
Ever wondered how much you should be paying for an item? This site simply aggregates data from all over the internet so that all you have to do is type in the name of an item and it gives you a rough estimate of what you should pay for it.

This is one of those things where there’s the kernel of something great and you can just see the potential for this to turn into an essential tool.

5. A happy toddler
I love browsing old public domain photographs. Every once in a while, one pops up that makes me feel more human.

The above picture was taken in approximately 1900. The look of impishness on the boy’s face reminded me greatly of the looks that my one year old son often gives me when he’s toddling around the house and has come up with some idea that will surely cause a mess. Some things never really change.

6. Thoreau on finishing things
The difference between people who succeed and those who fail is the ability to consistently finish, particularly at the important things.

“All endeavor calls for the ability to tramp the last mile, shape the last plan, endure the last hours toil. The fight to the finish spirit is the one… characteristic we must posses if we are to face the future as finishers.” – Henry David Thoreau

Do we want to get things done or leave things half-undone?

7. Billie Holiday singing It Had to Be You
Billie Holiday is one of my favorite singers ever. She just grabs those notes and turns them into something magical.

I hope there’s an afterlife so that I can someday sit down and listen to and watch this amazing woman sing.

8. Wozniak on goals and success
Over and over again, I find the people who succeed at things aren’t the people looking for the financial success. They’re just looking to do something well because they love it, and when they achieve that good thing, the world beats a path to their door.

“My goal wasn’t to make a ton of money. It was to build good computers.” – Steve Wozniak

There are variations on this quote in every field. I find it is even true for me.

9. Charlie Chaplin’s speech in The Great Dictator (1936)
A friend of mine passed this along to me recently, asking me to watch it and think about it.

Regardless of how you feel about the idea behind it, it’s powerfully delivered and thought-provoking.

10. Condolence by Dorothy Parker
Funerals bother me a great deal. I’m troubled by how people often show up and act incredibly distraught about someone that they didn’t have time for when they were alive. I often wonder what the people who passed on would think about all of it.

They hurried here, as soon as you had died,
Their faces damp with haste and sympathy,
And pressed my hand in theirs, and smoothed my knee,
And clicked their tongues, and watched me, mournful-eyed.
Gently they told me of that Other Side-
How, even then, you waited there for me,
And what ecstatic meeting ours would be.
Moved by the lovely tale, they broke, and cried.

And when I smiled, they told me I was brave,
And they rejoiced that I was comforted,
And left to tell of all the help they gave.
But I had smiled to think how you, the dead,
So curiously preoccupied and grave,
Would laugh, could you have heard the things they said.

I hope that when my time comes, people tell a lot of good jokes and funny, happy stories about things I did.

For the rest of this week, I’m going to discuss the goals I’m setting for 2012 and the plans I have for achieving them.

When I think back to some of the people in my life that have passed away that I greatly miss, one of the things that really bothers me is that I don’t have some memento of their life that lets me have at least a sense of the person that they were. All I have are memories, a few old home movies, and lots of photographs.

The one exception to this is my great grandmother, who spent a significant amount of time during the last few years of her life writing something of an autobiography. I had the opportunity to read most of it once and, in the near future, I’m hoping to be able to have a copy of it of my own and read it again. It’s just a way to touch the thoughts of a person that I loved very much that I’ll not be able to see again in this life.

This, of course, brings me to thoughts of the people I love the most: my wife and my children. What will they have to know me by if something were to happen to me?

I’m not foolish enough to think that I’m infallible. I’ve protected their financial future with a sensible life insurance policy and an estate plan.

What I’d like to do is, in some way, protect their emotional future as well. What would I want to leave for them as people if something were to happen to me?

For my children, there’s simply a lot of life advice that I want to impart on them as they grow older, become adults, and face their careers and lives. I’d like them to know about their ancestry and I’d also like for them to be able to know something of the person that I was, what I held dear, and what I felt about them.

For my wife, the mission is a bit different. She already knows most of the things that I would leave for my children. What I would want to leave for her is a different gift: the knowledge that I loved her very much and that I want her to move on and have new experiences and a new life after I leave, whatever those may be. I think a lot about the scrapbook that Ellie created for Walt in the movie Up that recollects their lives shared together and ends with an admonition that Walt creates his own adventures.

This is challenging work, but it’s also valuable work. It’s something I can give to my children when they become adults even if I’m completely fine. It’s something I can continue to update throughout our marital life and leave for Sarah.

My goal in 2012 is simple: I want to create a journal/scrapbook for each of my children and for my wife that collects together the things mentioned above. I want them to have these items if something were to happen to me in the near future, and I want to give them to my children as they reach adulthood. As for my wife’s book, I’ll leave it for her to find it when the time is right.

For the most part, these will take the form of handwritten journals. I communicate so much through the written word that this seems natural to me. Although the material covered in the journals for my children will be similar, I’m going to write them each individually and I hope that they do vary some.

As for my wife’s memento, I hope to just recollect everything that’s happened in our lives together to this point and add to it regularly, with a note on the last page reminding her that I love her and that I want her to have a beautiful life, whatever that may be.

If a time comes in their life where they yearn to reach out and touch me in some way after I’m gone, perhaps I will have left behind something that can fulfill them at that moment when they need it.

A couple days ago, I watched a program on TLC called Extreme Cheapskates, which featured people doing things like using reusable toilet paper and cooking goat’s heads in order to save money.

It was pretty obvious after just a few minutes of watching that the point of the show was to make frugality look ridiculous by choosing to profile tactics that violate other social customs and norms. In some cases, the people were aware of it, but in others, they seemed completely oblivious that they were doing things that others would see as … well, “extreme.”

While watching it, I received a couple emails from readers who were also watching it. One in particular stood out at me:

Is this really the kind of thing you do at home? Some of this stuff is just sick. Some things are worth a dollar or two more.

Simply put, the outcome of this show was to paint a socially uncomfortable face on the idea of frugality. By highlighting people who take frugality to an extreme, they manage to cast a negative glow over anyone who proudly practices frugality.

Here’s the thing, though. This type of negative highlighting happens all the time with all kinds of things.

Focusing on the practices of the Hutaree and the Christian patriot movement casts a false negative light onto Christians, most of whom are wonderful people who try to live their day-to-day life in a positive fashion.

Focusing on the practices of a few large banks that received TARP money and also have consumer unfriendly practices casts a false negative light on all banks and credit unions, most of which do really great work for people.

Focusing on groups like al Qaeda casts a false negative light on Muslims, most of whom are wonderful people who also try to live their day-to-day life in a positive fashion.

The list goes on and on. When you define a large group by the actions of a small, extreme element of that group, you’re almost always making a mistake.

This brings us back to frugality and Extreme Cheapskates. Frugality is not the extreme actions represented on this show.

What you’re actually seeing when you watch Extreme Cheapskates are people who have a overall value set that’s significantly different than yours. It’s the same thing you see in the extreme cases mentioned above.

It does not mean that the larger group these people claim to represent shares their values.

I consider myself frugal. I even consider myself a cheapskate in terms of things that just affect me. I make my own laundry detergent. We make a lot of the Christmas gifts we give away. I drive a used car I bought off of Craigslist. We save leftover vegetable scraps to make vegetable stock, then compost the leftover scraps from that.

At the same time, I don’t do things that are rude to others or unhygenic or dangerous to my health.

Frugality isn’t about squeezing every penny out of everything. It’s about maximizing the value of the things you’re doing, and “value” doesn’t always strictly mean money. Money often plays a significant part in it, but so does time and so does health and so does the relationships you have with the people you care about.

Frugality simply means that you take the time to figure out those relative values for yourself. Have you actually thought about the relative value proposition of buying generic laundry detergent versus making your own versus buying Tide? If you have and you’ve come to a conclusion on the issue, you’re probably frugal. You’ve thought about what you value – money, time, hygiene, relationships. You’ve obtained information on the issue. You’ve come up with a conclusion based on the information that balances what you specifically value.

That’s actually what these “extreme cheapskates” are also doing, but their values likely differ significantly from yours. That doesn’t mean that being frugal or being a cheapskate is weird. It just means that the “extreme cheapskate” puts an extremely high value on the “money” part of the value equation (or an uncomfortably low value on the “hygiene” part or some other part of the equation).

It also means that when you see a list of frugal tactics, you’re seeing tips that represent different levels of value on things like hygiene and time and food quality (and so on), and that you need to filter those lists based on how you value things like hygiene and time and food quality.

Be frugal and smart and live by the things that hold value in your life. Do that and you’ll always win.

For the rest of this week, I’m going to discuss the goals I’m setting for 2012 and the plans I have for achieving them.

Every single time I engage in some form of community service, I feel extremely happy about what I’ve done. I feel like I’ve caused some sort of positive change in my community and made someone else’s life better.

The problem is that it’s incredibly easy for me to put aside some of the things I could do related to community service and instead do other things. I could head over to the food pantry… or I could make chop all of the vegetables for a great ratatouille. I could pack up the children and help remove snow for elderly people… or I could go inside, make some hot chocolate, and watch The Incredibles with my kids.

Although the “right” choice here is very fulfilling, it’s often hard to do in the face of temptation.

This year, I’m simply striving to make the “right” choice more of a routine.

What areas am I focusing on?

I hope to spend some time helping a couple local food pantries with odds and ends that need done, such as restocking shelves and preparing bags.

In the winter, I’m going to pack up a shovel and do some volunteer snow removal where it’s needed.

In the spring and summer and fall, I’m going to do some volunteer work for the local parks and recreation department.

There are also a couple local charity groups that have some computer needs that I can help fulfill, so that their normal workflow can go much more smoothly.

What I’m essentially committing to is about four hours per week – on average – of such volunteer work, with a couple weeks for travel and the like.

I’ll be keeping track of this time in a spreadsheet, just so that I know I’m keeping pace with this goal. If our winter turns snowy, it’s likely that I’ll get significantly ahead earlier in the year. This does provide some breathing room for periods in the summer when there are reduced opportunities and different time constraints.

Why do this? Volunteer work makes a better community, and a better community makes a better life for those who live in it. It also leaves me feeling better about myself every time I do it. That’s reason enough for me.

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. Conflicting messages on spending money
2. Career options in conflict
3. Extreme cutbacks
4. Sports salaries
5. Confusing tax code
6. Saving on a fixed income
7. Best book of 2011
8. Getting started with blogging
9. Getting off the treadmill
10. New Years party hosting

Because our close group of friends mostly has this week off of work, we planned a day where we would get together and just play board games all day long, sharing lunch and dinner.

That day is today. I have some friends to laugh, think, and play with.

Q1: Conflicting messages on spending money
We are encouraged to spend money because spending helps our economy. Then again, we are also told to spend wisely. How can these two viewpoints/ideas be reconciled? Is it possible to believe and act on both of these concepts?
- Megan

Those two viewpoints are coming from two different groups with different goals.

It is obviously good for retail businesses and commercial product manufacturers if you go out there and buy as much as possible. The more you spend in this way, the more jobs are created in the retail and manufacturing industries. On a national scale, the best thing you can do is spend.

On the other hand, on a personal scale, the best thing you can do is save. Spending with reckless abandon does not help your personal finance situation. People who recommend saving are generally more concerned with this end of the economic scale.

Which is right? They both make good points. The solution, I think, is balance. Spend with some sense, but don’t be completely tight-fisted in every aspect of life. Be discretionary and spend less than you earn, but don’t avoid all splurges. Support businesses that make good products and have good business practices. That way, everyone wins.

Q2: Career options in conflict
I am an educator currently at a university 45 minutes away, instructing first year physics students in a laboratory setting two days a week. With the other 3 days I try to substitute teach at local school as much as possible. One of those schools is literally a 1 minute drive from my apartment and will have an opening in February covering for a teacher whose course load is grade 11 and 12 physics along with an upper level math course. Those courses would be my dream to teach if I were to get the position.

Timing is the real issue. The 2nd semester for the university starts in January and they need to know if I will be continuing on very soon and I can not do both the university work and the high school one.

My conflict is this: do I NOT take the university course and HOPE that I get the position at the high school?

I really enjoy the university work and subbing since it allows for a lot of freedom in the evenings but is less pay and more commuting (and more temptation to eat out on the way in). The high school classroom would be wonderful too and would allow for a meatier paycheck, but would involve much more time in the evenings planning and marking.

Do you have any advice or questions that I should be asking myself?
- Ron

A bird in the hand is worth two in the bush. Take the job that’s available to you now, then cross the bridge of other options when you get there.

The worst case scenario if you take the university job is that in February the other job becomes available. In that case, what are your options? Is there any reason you couldn’t walk away from the university job for a better opportunity?

Unless there’s some sort of clause preventing this, I would suggest taking the university job and seeing what happens next.

Q3: Extreme cutbacks
Currently I am working on my 2012 budget. I am very fortunate to be the mother of five children (ages ranging from 3 to 12), I hold a pretty good job for which I am sometimes frustrated but always grateful, but unfortunately, my husband’s business has not made any money over the past three years and has cost a little. Yet, I have made ends meet, saved some and several years before we had paid off all mortgage debt.

This year we need to save for a major improvement to the land where our home is located. We need to put in major revetment to protect the property from further erosion. The project will cost $150,000. Currently, I make pre-tax $75,000. Total expenses have been about $55,000. I track EVERY penny. Expenses include about $5,000 in business costs and $5,000 in work to the house that my husband does each year (our house was a serious fixer-upper, and we’ve worked on it for 15 years).

This year to accelerate savings I have created a budget, but it means we must really cut back on all expenses…including gas and food. The projected budget brings spending down to $40,500 — allowing me to save more for the revetment and also still put money into my ROTH.

I have strange feelings about this budget. It will require real sacrifice, and we already live frugally. We do not eat out, go to movies, take a vacation…we do have indulgences like a sailboat that was given to us that costs $1500 a year for a mooring, but that is our summer fun for the family. I admit that I have spent too much on clothing for work in the past, but not outside the realm of moderate – just not frugal.

Entering this new phase of finance feels like starting a really strict diet…I wonder if it’s realistic, or if I’m setting myself up for failure. The budget would require me bringing food from $688 a month to $625 — which might not sound like much, but I already make most food from scratch — and it’s not like I’ve been buying any expensive items. Also, it will require monitoring fuel for the van carefully…an item that sometimes I cannot control.

Anyway, how realistic is cutting back so extremely, and do you have any recommendations for keeping these goals and remaining positive even when it seems insurmountable.
- Shannon

Without seeing your budget, it’s hard to know whether it’s realistic or not.

However, if your gut is telling you it’s too tight and you already carefully watch the numbers, your budget is probably too tight. A person’s gut feeling is often right in matters like this.

So, what do you do from here? I’d suggest looking seriously at solutions you might not have considered before, like selling the property or selling another asset that you have with significant value.

Q4: Sports salaries
Do you think professional athletes and entertainers are over paid?
- Lucien

They’re paid exactly what the market will bear for them.

Think about it this way. If you knew that your boss would pay you $10 million for your job, would you not accept that $10 million? Very few people would turn down that level of income.

So, should the owners be paying that much? Well, they make more money if they put a competitive and entertaining team on the field. They do this by hiring skilled players that people want to watch. People want to see Chris Paul throw an alley oop pass to Blake Griffin. They don’t want to see Joe from the YMCA. If the owner hires entertaining players, more people attend the games of his team and more people buy their products (like shirts and posters and jerseys and trading cards…).

In the end, it comes back to the fans. As long as they buy tickets, shirts, jerseys, and other materials at the prices charged for them, the athletes will be highly paid.

Q5: Confusing tax code
Why on earth is simply paying your income tax so confusing? Every time I try to read an IRS document, I just get confused. I pay someone else to do my taxes for me and it’s ridiculous that I should have to do that.
- Shawn

I agree with you wholeheartedly.

What we have now is a tax system that’s a compromise between a lot of different interests. You have some who want to make the tax burden lower on huge numbers of lower income people. You also have some who want to minimize the taxes on the rich people who will (in theory) invest their money.

Give these people lots of years to compromise and negotiate and insert clauses to help their groups and you get the tax code as it is right now.

Does it need a reboot? Yes. Do enough people in Congress and in the executive branch have enough courage to make that reboot happen?

You make the call.

Q6: Saving on a fixed income
At the age 30 I became severely disabled with a mental illness and had to go on Social Security disability. Since then I have tried to work several times part time unsuccessfully. Now I am trying to save money just to get a car because, since then, I have developed back problems which make it impossible due to the pain to ride a bus which would have been a good way to save money.

So, saving $400 a month is half of what I live on which is $800 per month. In addition, I am trying to save for an emergency fund. I have been able to save the money for the car and the emergency fund due to ending my eating out, cutting out my cable, finding the best price possible for my car insurance, but retirement savings seems impossible. Is there any alternative for people like me who find themselves on a limited budget at such an early age?
- Ron

Set goals. Recognize that it’s going to take a long time to get there. Celebrate the little victories as you approach your goals.

There’s really not much else you can do. You have to figure out what’s really the most important thing for your life situation and work diligently toward whatever that goal is.

Each person’s life is going to be different, with different needs and different values. The best thing you can do is figure out what you most want and focus on that like a laser beam.

Q7: Best books of 2011
What was your favorite book of 2011? No cheating – just name one!
- Linda

That’s a tough one and it depends on what you’re asking.

My favorite book published in 2011 is Moonwalking with Einstein by Joshua Foer. It’s a great book about the realities of memory and how to improve your own memory, backed by great anecdotes and science.

My favorite book I read in 2011 was A Way of Kings by Brandon Sanderson. It’s the most enjoyment I’ve had from reading a fantasy novel in a very long time.

Q8: Getting started with blogging
My question is how you built such a robust following on The Simple Dollar. Was it largely through the guest posting model advocated by sites like “Blog Tyrant?” Or did it happen more organically through the quality of your writing and posting frequency? The “romantic” part of me would prefer for the second option to occur, but I fully realize that some more active promotion is probably necessary to get my blog to the level I want it to be. I promote it among my friends on facebook, but beyond that, I’m a little unclear on how to approach fellow bloggers regarding guest posting and whatnot, especially in a field (“self-improvement” or “lifestyle design”) that is dominated by a few big names like Tim Ferriss and Chris Guillebeau. Is it better to start as a commenter and work up a repoire that way? Or is cold e-mailing people okay, too? It’s a lot of the little personal interactions on the internet that I could really use some help with.
- D. J.

I did very little guest posting in the early days of The Simple Dollar.

My early success, I think, was due to writing some articles that were heavily linked on some very popular blogs. I did that with some degree of intent, of course. I looked at the popular blogs I read and asked myself what kinds of things they linked to and what kinds of links I clicked through on, then thought of post ideas accordingly, wrote them, posted them, and submitted them.

At this point, you might want to shoot for Twitter mentions from those guys to get the ball started, but you’re going to find that popular bloggers are BURIED in material like this. You reach a point where you absolutely have to filter what you look at and do because if you didn’t do that, you would never, ever get anything done. Keep that in mind and make it very easy for them to see what you’ve done.

I think the sustained success has come from having a large backlog of posts. There are a LOT of terms you can type into Google and find pages from The Simple Dollar as a result. I’ve made a conscious effort all the way along to try to write in an approachable fashion.

So, get the attention (and a link from) big names and write lots of good posts.

Q9: Getting off the treadmill
I am 27 years old living with his mom, lots of experience in different fields but nothing to back it up (jack of all trades, no specialty). I did a mistake 3 years ago (realizing this now) getting a 15 000$ loan for a nice Cadillac & to cover my credit card. I now have 8 000$ left on this debt paying 330$/month, but with interests i am really giving about 230-250$ towards the actual amount.

Seems my monthly bankroll is tied up in car paiments (330$) + insurance (75$), high speed internet (60$), cellphone (70$), a bad smoking habit (160$ more or less), newly acquired Gun hobby.

Any suggestions to help me get out of this never ending loophole? I want to move out and move on with my life without always paying bills and feeling stuck!
- Alan

Get rid of the smoking habit and the gun hobby?

Right there, you have two expensive things that are gobbling down significant chunks of your money. If you want to escape from your never-ending loophole, you have to look for things that aren’t necessary that are gobbling up your resources.

Quit smoking. Enjoy the guns you have. You’ll find yourself with a couple hundred more a month. Apply them to extra payments on your car loan and you’ll get rid of that payment in half the time. At that point, you’ll have almost six hundred more a month than you have now.

Q10: New Years party hosting
I’m hosting a New Years party this year and I’m kind of unsure what to serve to people. What’s appropriate to serve at a New Years party without spending a ton of money?
- Jean

It depends on the type of party you’re having. Finger foods are usually appropriate – at our New Years parties, we tend to serve plenty of finger foods. One way to get started is just to ask some of the people what kinds of finger foods they like and choose frugally from those options.

As for drinks, you really don’t need to splurge. A bottle of bubbly or two is appropriate for the turning of the year. Guests often bring bottles to such parties, though.

There’s nothing wrong with asking some of the guests to bring something simple, either. A simple request to bring a bottle of wine or a simple snack food is completely appropriate and trims costs for you.

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.

For the rest of this week, I’m going to discuss the goals I’m setting for 2012 and the plans I have for achieving them.

A few weeks ago, I mentioned that I had made some changes to how The Simple Dollar is managed in an effort to free up time for other writing projects that I’ve wanted to take on. For me, first and foremost among these projects is the fantasy novel I’ve long talked about writing here on The Simple Dollar.

Why haven’t I written it yet? Time, mostly. The ideas behind the novel float around in my head all the time, but turning those ideas into actual written prose is a time-consuming process.

Right now, the novel exists as a fairly detailed plot outline that I keep tinkering with, several character sketches, and one chapter that I’m not even sure will be in the final novel. It might actually be a prelude. Although the novel is self-contained, it could easily develop into a series.

I also have several ideas for a second novel that I’d love to write, one with a more modern setting.

2012 is the year that I’m going to write them both.

Obviously, the first step is to simply get first drafts finished of both of the novels. That in itself will take some time, particularly for the second one.

I intend to first draft the first one, then move on to making character sketches and a plot outline for the second, then moving back to the first for later drafts. This way, I give them both some time to breathe.

I have several test readers and a freelance editor lined up. This will help me polish these things up a bit beyond what I could do myself.

After that, I’m going to publish them. I’ve decided already to go the self-publishing route regarding these novels, and I’m going to be discussing them and promoting them at TrentHamm.com and on my personal Twitter, though neither is really up and going quite yet.

The exact plans for publishing are still up in the air at this point, but I will likely publish a Kindle version first and eventually do a print version. I am considering a Kickstarter campaign for it as well.

Such issues are secondary, however, to the primary goal. I intend to write two novels this year. That’s pretty clear cut. I’ll worry about selling them when that bridge comes.

Over the last few weeks, I spent a lot of time thinking about resolutions. During that process, I did a lot of digging for articles on resolutions and goals from people whose thoughts I greatly value. Here are some of the useful articles I found in that search.

Solving problems Leaning away from problems rarely pays off. (@ seth godin)

Getting Out of Debt: Make That New Year’s Resolution Work These tactics are geared towards financial resolutions, but they really work for almost any goal you throw at them. (@ consumerism commentary)

Keeping new year’s resolutions from NPR’s Science Friday This post summarizes a great episode of NPR’s Science Friday that discusses the psychology behind resolutions. (@ unclutterer)

Should You Have GOALS or RESOLUTIONS? The words often mean similar things, but can have very different connotations that put you in different mindsets. (@ happiness project)

Resolve This! “Resolutions are about want, but they are useless without will and action.” Indeed. (@ jonathan fields)