Several readers suggested converting the popular 31 Days To Fix Your Finances series to a single file for easy reading. I’ve been hesitant to do this for several reasons, but due to the repeated requests, I have assembled an eBook that contains every entry in the series in Adobe Acrobat format, one handy document that you can print off and use as you wish.

I spent a significant amount of time preparing this PDF, essentially compiling the information available at that URL into a single, well-formatted document, designed for easy reading. It ended up being nearly a small book in length – 60 pages, in fact. If you print it out like a book, it would take up 15 sheets of paper and form a 60 page booklet – a nice sturdy pair of staples in the middle would do the trick! In other words, it’s basically a personal finance book in electronic form.

Great! How can I get it? If you would like this file, click this link. It will take you to a special PayPal page, where you can pay $2 securely and safely and download the file.

Why are you doing it this way? First, I spent a significant amount of time preparing the document so that it is easy to read and also so that it will print well in a booklet format – not exactly a task I enjoy. Second, I don’t want to place it up on the server for anyone to download because I’m concerned that it may become very popular and devour all of my bandwidth very quickly. Third, I’m interested in seeing whether or not there is any merit to the concept of micropayments and micropatronage as a method of ensuring content that people enjoy on the internet. On the other hand, I also want information to be free. This is the best concept I had for balancing all of these facts and ideas.

What’s the catch? There is no catch. Once you have the PDF in your hands, you have my full permission to give it away in whatever way you’d like. Mail it to everyone in your family who may be having financial problems. Send it to all of your friends. You can even post it as a free download on your own site as long as you also include a link back to The Simple Dollar. The only thing you may not do with it is sell it on your own, as this information is meant to be free.

Be sure, though, that the HTML version of 31 Days will always be free to anyone who wants to read it. This method of distributing a PDF copy of it is merely an experiment. I will never, ever distribute any content via a paid PDF that isn’t already available for free on the site.

Again, if you want a PDF copy of “31 Days To Fix Your Finances,” just click this link and pay $2 via PayPal.

Would you like to download this entire series all at once in a handy PDF format?

During the month of January, The Simple Dollar has been running a series entitled “31 Days To Fix Your Finances,” a series of activities that can enable anyone to improve their financial status by centering your financial life around your own core values. Instead of supplying a bunch of budgeting sheets and asking you to commit yourself to a program, this series is about figuring out what you want out of life and reorganizing your finances so that you can have it.

What follows is a summary of the entire month’s activities, with links to each individual day. If you’re at all concerned about your personal finances or find yourself often feeling strangely guilty about the money you spend, you’ll find some value in the activities of the month.

Let’s get started.

Stage 1: Figuring Out Your Goals And Values

Day 1: Your Five Main Values
Day 2: Defining Your Goals From Your Values
Day 3: Create A Plan For Each Goal

The underlying challenge that most people have with their finances is that they see money as distinctly separate from the rest of their life. Money is an antagonist, an enemy that keeps you from doing what you want to be doing. The truth is that money is merely a tool, and when you find yourself feeling as though money is an antagonist, it is no different than a person attempting to learn how to use a heavy sword; it’s unwieldy and dangerous.

The first step for learning how to integrate money into your life and use it successfully as a tool is to figure out what exactly you wish to build with that tool. Without underlying values, goals, and plans, money is no different than swinging a hammer around without building something. Thus, this first stage is crucial: what exactly is most important to you, and what will it take to adequately support those values?

Stage 2: Evaluating Your Situation

Day 4: How Much Did You Earn Last Year?
Day 5: How Much Did You Work Last Year?
Day 6: Your True Hourly Wage

Once you’ve figured out what is central in your life, it’s time to take a serious look at what you have to work with. How much do you make, and how much time do you spend making it? This seems like an easy question, but it’s not. How much of your income do you spend maintaining your job, via transportation, career development, clothing, and so forth? And how much time do you spend doing things devoted to your job, such as going to work, coming home from work, attending work-related functions, and so on?

When you calculate these new numbers, you might be shocked both at how much time you actually spend working in an average week, as well as how little you actually earn. You can drive this point home especially clearly by calculating a number that we’ll use throughout the month, your true hourly wage. How much do you really make for each hour that you spend devoted to your job? It’s not nearly what you might think, and that alone might shock you into considering some different avenues.

Stage 3: Building Your Own Life Budget, Not Following Someone Else’s Prescription

Day 7: Work For Your Dreams, Not Your Money
Day 8: Breaking Down Your Expenses
Day 9: Cleaning Up Your Expenses
Day 10: Fitting Your Expenses Into The Bigger Picture
Day 11: Dividing Up The Rest and Finishing Our Time Budget
Day 12: A Flexible “Budget” That Reflects Your Reality

Once you’ve taken a hard look at what you actually earn, you can begin to set up the basic framework of how to spend that money that is in line with your personal goals. This isn’t about printing out worksheets and trying to jam your life into the pigeonholes that someone else has created for you; instead, this is about defining how you spend money and working from there.

It’s almost unfair to refer to this as “budgeting,” because budgeting carries with it some very bad connotations, much like putting on an uncomfortable suit. This process is much more like going to a tailor, who uses you as the basis to construct a custom suit that fits you. This process will create a custom budget that fits your life with your values and goals as a basis. We’re not talking about restricting you to spending $20 a month on “dining expenses,” but instead creating a structure where you can decide what’s appropriate because you can see how it relates directly to your dreams.

Stage 4: Looking At Your Life, Piece By Piece

Day 13: Pay For Your Dreams First
Day 14: Get Rid Of Debts (Slowly But Surely)
Day 15: Coming In Under Budget and An Emergency Fund
Day 16: Evaluating Your Expenses – Home and Auto Insurance
Day 17: Evaluating Your Expenses – Life Insurance
Day 18: Evaluating Your Expenses – Energy
Day 19: Evaluating Your Expenses – Automobiles
Day 20: Evaluating Your Expenses – Food
Day 21: Evaluating Your Expenses – Housing
Day 22: Evaluating Your Expenses – Monthly Services
Day 23: Evaluating Your Expenses – Bank Fees
Day 24: Evaluating Your Expenses – Entertainment and Hobbies
Day 25: Evaluating Your Expenses – Credit Cards

Once you’ve got a basic budget in place, it’s well worth spending some time carefully evaluating those numbers that represent you and see if there are any places where there is excess fat – and simply trimming it away. Is your electricity bill pretty high? Maybe there are a few simple ways to reduce it. Getting tired of paying that life insurance bill? Maybe you don’t need it at all – or can utilize something less expensive. Getting dinged over and over again with bank charges? Look at what they’re charging and do something about it. Credit card finance charges eating you alive? There are some easy ways to reduce them.

We’re looking for ways to trim away fat (things that make you uncomfortable when you look at them) so that the meat (your goals, dreams, and values) have room to thrive. You don’t have to eliminate that daily latte if it brings you joy – just look for the many things you can do without or that you can reduce without significant pain and you’ll have the money to chase your dreams.

Stage 5: Setting The Stage For Lifelong Success

Day 26: Refining Your Budget
Day 27: Keeping Good Records
Day 28: Preparing For The Inevitable
Day 29: Paying Cash
Day 30: Live What You Love
Day 31: Keeping It Up

Now that the complete package is coming together, there are some basic methods for keeping the momentum going. What do you do with the fat you’ve trimmed away? How do you keep track of all of your financial information so that it’s not chaotic and incomprehensible? How do you ensure that you’re not ensnared in loan debt over and over again? How do you keep this good thing going?

If you follow this plan and keep these principles in mind, you can easily live your dream. It’s all up to you, and it takes just an hour a day for a month to get things going.

The Simple Dollar offers a month-long plan for fixing your finances. All you need is an open mind and an hour each day.

Now that the end of the month has come, one final challenge remains: how does one keep up the momentum once you start with it? The day to day challenges of life are difficult and uncertain, so how can this plan ever deal with an ever-changing life?

Unlike most financial plans, this one has something intimately familiar at its core: you. Because you’re at the core of this plan and not some form that you fill in and try to constrain your life to match, this plan can easily grow and change with you with just a few simple steps.

Once a week, make sure you’re making some sort of progress towards your short term goals. You don’t have to accomplish something every week, but keep them in mind – and regularly take the time to make forward progress towards your dreams.

Once a month, diligently update your life budget. You can do it with just money, but it’s often useful to re-calculate the hours of your life spent working for each item each month, as it is a healthy reminder of where your time goes.

Once every few months, evaluate your progress towards your long term goals. I like to do this on the first day of each season – not only does this keep me on an “every three months” pace, it keeps me in mind that time is passing and the seasons are changing, so I’d better keep up with it. This usually results in a flurry of new activities for a short period with a gradual slowing down – but it does keep me always moving towards my goals while many others stay stuck in place.

Once a year, reevaluate each of your life’s values and ask yourself whether they match your life now. When I first looked into my child’s eyes, the values of my life changed quite a bit, and thus my goals changed substantially as well. From that, unsurprisingly, my budget changed, too: I suddenly found great value in buying diapers, but also great value in buying books and educational toys for infants and toddlers. My values used to be such that buying software was in line with my life goals; now, buying wooden alphabet blocks for stacking is much more in line with what I want to be doing.

Even if you fall off, there is never a day where it’s too late to get back on. Even if you find yourself starting to fall back into your old ways, that doesn’t mean it’s time to abandon the plan. Old habits are hard to break. Try going through this entire process again to remind yourself where your values lie and what your goals are.

Good luck.

The Simple Dollar offers a month-long plan for fixing your finances. All you need is an open mind and an hour each day.

If you’ve followed this plan all the way to this point, congratulations. Even if you’ve chosen to not follow every point, you have at least spent some serious time evaluating your finances and your spending and put them in the context of your overall life, which puts you already far ahead of many of your peers.

However, the reality of the world leads many of us to forget what our overall goals are in a desire to be accepted and to feel good. Our society tries to convince all of us to spend endlessly. We’re constantly bombarded with enticements and reminders of how “great” it is to spend.

Here are seven useful tips that can help you keep your mindset in the right place, enabling you to live what you love every single day. Some of these might not work for you; just use the ones that seem as though they would be a powerful motivator.

Wrap your credit cards in a slip of paper that lists your life goals that you defined at the start of the month. It shouldn’t take more than a little slip of paper. This way, every time you go to pull out your credit card, you see your goals right there – and it becomes a reminder that by using this card, you are likely pushing away those goals.

Reevaluate your social situations. Is an evening with friends always expensive? Is a day with the girls involve a big pile of shopping bags? If these things are true, your social situations may be causing you big problems. You have several options: suggesting other activities and seeing what happens, going along and capping your own spending, or simply “dropping out” of the social club and instead investing yourself in new activities – and perhaps new friends that better match your life goals.

Engage in inexpensive activities that match your life goals. If you dream of becoming a writer, don’t spend your time at the mall buying stuff. Engage in online writing communities and look for ways to spend your time practising your writing. For almost any life goal or dream you have, there are inexpensive activities you can become involved in that synergize with that activity. For me, I’ve started this blog as a way to channel my writing and also educate myself about financial issues instead of spending my time doing the same old thing; it’s a great way to spend my time that’s much more in line with my life values, plus it’s very inexpensive.

Use the ten second rule. Whenever you find yourself about to buy anything, count to ten and ask yourself whether or not this purchase really meshes with your life goals. Quite often, you’ll find that it doesn’t, and this will be enough to cause you to put that item back on the shelf or to close the browser window.

Keep a laminated “life goals” card in your pocket. This way, every time you reach into your pocket, you’ll feel that laminated card. It will serve as a constant reminder of your goals and help keep your mind on a strong path.

Keep yourself clean. This seems bizarre, but a healthy personal appearance is well worth the money. By this, I don’t mean investing money in clothing. I mean that investing adequate time in keeping yourself clean. You’ll feel more confident and in control, and this will enable you to more easily resist the siren’s call of spending.

Live what you love. Every single day, do something that is directly in line with your lifetime goals, and as you go to sleep that night, think back on it. Very few things make me feel better as I’m going to sleep than reflecting on my day and realizing that I spent today not just doing things, but actually living my life.

Ready? Let’s continue on to the next day.

The Simple Dollar offers a month-long plan for fixing your finances. All you need is an open mind and an hour each day.

There is one final point that merits discussion before we close out this month, and that is the logic behind paying cash for any purchases smaller than a home purchase. This includes automobiles, appliances, furniture, electronics, and so forth. To most Americans, this concept is almost alien, but if you take nothing else away from this month, this is the concept to remember.

Why pay cash? To put it simply, instead of paying some company an interest rate, you can invest that money yourself and earn some interest. This might seem like a minor issue, but in actuality it is thousands of dollars that you’re throwing away, more than enough to keep companies like GMAC in solid financial shape year after year after year.

How much can I actually save? In this example of a late model used car costing $10,000, you can pocket about $3,000 simply by paying in cash rather than financing the car. That’s how much you will pay in interest, plus the amount that you can earn in interest in a savings account. Do that three times and you’ve literally netted a free car.

How am I supposed to pay cash for a car? The next question that many people ask is how they can possibly pay cash for a car. If you’ve followed this plan from the beginning, the answer should be pretty clear: your emergency fund. If you see that an auto purchase is coming, start rolling money into your emergency fund instead of into other investments or uses, building it up to the point of having several months of salary in it. I recommend making car payments into the emergency fund at this point, preferably for a couple of years. Then simply walk into the dealership, negotiate a price without saying that you’ll use their financing, then write a check. After that, you’ll probably need to build up your emergency fund again, but you won’t be making payments on your car.

I can’t do that right now! That’s true, you probably can’t do that immediately. But you can set it as a goal. One big step towards achieving that goal is to stop leasing, because auto leases as they allow you to effectively rent a more expensive car than you can afford, but leave you with nothing in the end. If you already don’t lease, then buy a late model used and drive it for years past the end of the financing. While that’s happening, continue to make your car payments into your emergency fund. Then, when the time comes, you can simply buy a car, no questions asked.

So what can I take away? Spend some time and plan out when your next auto purchase will be and what type of car you’re aiming to buy. Then, calculate the numbers and see if you can put yourself in place to pay in cash. Can’t swing it? Could you swing it if you drove that car for another year? Remember, this does fit into your budget if you just transform your car payment into payments into your emergency fund, and in a few years the dividends of seeing interest build up on your car “payments” will really start to show.

Now that the month is almost complete, we’ll spend the next two days tying up some loose ends.

Ready? Let’s continue on to the next day.

The Simple Dollar offers a month-long plan for fixing your finances. All you need is an open mind and an hour each day.

Today, we’re going to talk about planning for your passing in the form of a will or a trust, something that many people haven’t done. The truth is that it’s not something that’s necessary for everyone – but if it is necessary, you need to set aside a bit of time to get it done.

First of all, determine whether or not you need such a thing at all. I usually ask two questions: do you have any dependents besides yourself? and do you have any relatives or friends that you wish to have your things or money when you pass on? If you answer yes to either question, then it’s time to get legally binding plans set in place. If you answer no to both (many young people will, in fact), then don’t get one, as intestate (the state’s default method for handling your leftover assets) will take care of things for you.

If you do need to make a plan, though, don’t go cheap and get a kit – contact a lawyer and do it right. Ask around for references to one who can handle your will or trust preparation easily and clearly and can make sure that it is in fact legally binding in your locality. The fee for this is usually not too high, but knowing that the document is properly prepared makes it worth all of the effort.

There are a few basic things you should know before you go, though:

First, a will is the actual document that lists what you wish to happen to your estate upon your passing. There is one big drawback to a will: in most jurisdictions, for a will to be legally executed, it must go through a legal process known as probate to ensure that the statements in the will are actually carried out, which can be expensive.

Thus, some people choose to set up a trust (often called a revocable living trust), a legal entity to which a person can assign all of their assets while they are alive. This trust is legally bound to follow the rules of the trust, which usually kick in when the person who set up the trust passes on. Since these assets are owned by the trust and not by the person, they’re often not subject to probate. The only drawback is that it can be expensive.

Again, to make sure that everything goes right, ask for appropriate legal advice to ensure that you know what you’re doing and the document is in fact legally binding. For me, it was the best money I ever spent.

Spend an hour piecing together what your wishes are for your estate, then contact a lawyer. Knowing that things are taken care of when you enter the afterlife is a huge relief to many people.

Ready? Let’s continue on to the next day.

The Simple Dollar offers a month-long plan for fixing your finances. All you need is an open mind and an hour each day.

Now that you’ve built a value-oriented budget and evaluated your life in terms of your rediscovered central values, it’s time to take care of a little bit of housekeeping. The first part of this is keeping good records, something that seemed overwhelming and unnecessary to me at first. Once I finally broke down and did it, though, I found it to be a fantastic way of feeling more in control of my finances and my life as a whole.

Why keep good records? First of all, good records can protect you against errors. If you have adequate financial records, you’re prepared for an audit, prepared to apply for a home loan, and prepared to verify anything that anyone might claim. Second (and actually more interesting most of the time), good records enable you to analyze your financial life. With everything organized, you’re prepared for any sort of spending analyses you may wish to do.

How do I organize them? There are several strong organizing systems out there; spend some time looking at several of them and choosing one that works for you. Popular ones include David Bach’s FinishRich filing system and the LifeFolio filing system. I also describe my own system. You might also want to use this handy checklist of items that you should file.

What materials do I need? If you’re just getting started, a pile of folders and a box will do the trick; later on, if the system is working for you, you might want to invest in a filing cabinet. I wouldn’t invest in one, though, until you’re sure that you’re actually using the system with regularity.

I don’t know where to start! Help! When I started, I was completely overwhelmed with all of the papers stuffed into dresser drawers, desk drawers, and boxes. Whenever I thought about getting it done, I would quickly come up with something else to do. But when I finally sat down and did it, the process wasn’t too bad. Here’s what you do:

Set aside a block of time to do it. This is a great afternoon activity, so just pick an afternoon to get your items in order. Make sure you have a large box and plenty of folders before you begin.

Find a place with plenty of space to spread out. I used the living room floor.

Make a pile for each different type of record, and use the opportunity to discard everything inessential. You’ll probably wind up with a lot of piles. Don’t worry about any sorting within a pile, just get through all of the things you have built up. You should also be throwing away all inserts, envelopes, and other unimportant things.

Sort each pile by date. I like to have the newest on top, so I sort them in reverse chronological order.

When you’ve sorted a pile, put it straight in a folder, label it, and put it in the box. As you see the box filling up with organized records, you’ll feel a lot better about things. For me, it was rather exhilirating to watch things slowly becoming ordered where there was only chaos before.

Tomorrow, we’ll look at a topic that no one likes to think about.

Ready? Let’s continue on to the next day.

The Simple Dollar offers a month-long plan for fixing your finances. All you need is an open mind and an hour each day.

For the last several days, we’ve been focused primarily on digging through our monthly expenses and looking for places to trim away some fat. It will take some time for this to become clear, so today we’re going to look at how you can refine your life budget each month as the expenses begin to move downwards – and the available cash goes upwards.

First of all, at the start of each month, you should refine your “life budget” a bit. What this means is that you should take out the budget you prepared the previous month and use that as a starting point to develop the next month’s budget. Since we’re nearing the end of the first month, I’ll walk you through this process once so you can get a feel for what should be done.

At the start of the month, take out your budget from last month and all of the statements you got in the intervening month. You’ll also need a clean piece of paper for the budget for the upcoming month.

The first thing to deal with for the coming month is your overall income. If your income this month is the same as last month, just carry the amount over to the new budget. If you got a raise that will start taking effect in the coming month, enter that amount on the new budget instead.

Next, deal with the expenses. Copy each expense (but not each expense amount) over to the new budget. Then, copy over each expense that you didn’t get a statement for in the past month. These expenses will remain unchanged.

Now let’s deal with the expenses with new statements. Rather than confusing you too much, I’ll give you an example of what to do to start with. Let’s say your past budget had an electricity bill for $100, but in the intervening month, you installed CFLs and did a few other things, and the new bill is only $80. Rather than celebrating and immediately writing the lower amount into the new budget, hedge your bets a little. Take the amount from the old budget and multiply that by 4, then to that add the amount of the new bill. Divide that number by 5. That’s the number you should write in for your energy budget for the coming month.

This trick is called weighted averaging, and it protects you from making significant changes based on one data point that may or may not be unusual. Over time, your energy budget will go down. For example, let’s say that for the next six months, your energy bill stays at $80, and then summer kicks in and your bill goes back to $100. If you use weighted averaging, the bounce back won’t hurt you at all, because you’ll have a bit of a surplus from months of slightly overbudgeting and it’ll be no problem at all to pay the bill. However, if it bounces back suddenly, your budget will be damaged by this sudden change.

If you’ve been diligent about doing trimming, you’ll probably notice that after a few months, your numbers for expenses are either staying the same or trending downwards. Even better, you’ll probably be seeing some surpluses at the end of the month beyond your budget. That’s great; just move those surpluses into a savings account so they can earn some interest, and then move them back out if you need them. Even better: your budgeted total for expenses for the month is also lower than it was before. What does that mean? More money to eliminate debts and dreams!

Now that you’ve seen a little drop in budgeted expenses over the previous month, you can allot that money towards the debts and the future plans on your budget. My advice is to channel them into more extra debt payments, but you might also want to bolster a long-term plan as well. At the very least, take half of that extra money and add it into paying off debts, because the freedom of being debt free is incredible.

So just copy over the debts and plans from the previous month, except add in the reduction in other expenses to the debt you’re focused on or perhaps also put part of it into one of the dreams. And you’re done for another month.

I like to keep my current budget posted in a place where I see it regularly, along with another big reminder: I use Excel to create a chart showing my expenses and debts going down each month. Seeing both of those lines heading south is a big reminder that I’m living a financially healthy lifestyle.

Tomorrow, we’ll look at some ways of managing your financial records.

Ready? Let’s continue on to the next day.