A while back, my wife was leafing through a copy of David Bach’s Smart Women Finish Rich when she asked a very astute question: is it really necessary for men and women to receive different personal finance advice?

I’ve puzzled over how to answer this for months, knowing what I want to say but realizing that this issue is bound to get me in some hot water from some segment of my readership. However, it’s a really worthwhile issue to discuss, so here goes.

It’s not necessary, but it is useful for men and women to receive different personal finance advice. Why? Men and women simply think differently, and a big portion of personal finance success is psychology. Even if there is a clearly optimal way to manage your finances, it still takes psychological effort to achieve it, and if men and women think differently, the advice that will help them achieve it will be different.

So let’s look at this a bit more closely. From that article:

Men tend to do better with tasks requiring more localized processing, such as mathematics.

For example, John Doe would likely be better at tasks such as number-crunching a budget and developing an investment plan.

women are better at integrating and assimilating information from distributed gray-matter regions of the brain, which aids language skills.

Jane Doe would likely be better at making good shopping choice (evaluating a lot of disparate types of data) and keeping the family in line with the family budget (communication and language skills).

Is this an absolute? Of course not. Many women are good at investing and many men are good at shopping and managing a budget. However, the default cognitive bias points the genders in specific directions.

The truth is that there is no “perfect” personal finance advice for everyone. Each person will find advice that works for them. It’s much like dieting. Better yet, it’s like playing The Sims – I play it much differently than my sister-in-law does, but my wife tends to play more like me than her sister. We’re all unique, though, and we all respond to different situations and events differently.

So if everyone has different personal finance needs, how can one possibly find something that will help them? Just keep looking until you find a voice or a set of answers that makes sense to you. It might be a book (like Your Money or Your Life), it might be a blog, it might even be someone on television or radio. Also, you don’t have to blindly follow everything someone says – just use the pieces that fit with you and make an effort to try to understand as much as you can.

A reader who I will call Kathy wrote to me with a rather long but quite compelling story that really struck a chord with me. When I read the story, I saw so much of myself and my wife in it in the position we were in about five years ago, and because of that I felt compelled to write a very long response to their story.

Hopefully, Kathy’s story will strike a chord with some of you as well, and you can offer some advice to them. Here’s Kathy’s tale, along with my thoughts.

My boyfriend and I have been fans of The Simple Dollar for some time now, and really respect and aspire to the lifestyle you write about. The reason I am writing you now, for the first time, is because over the past few weeks we have come to realize that we are on the whole very unhappy with our current situation.

We’re both under 25, have been together for over 5 years and live in the Greater D.C. Metro area. We’ve both got computer science degrees from prestigious New England schools and I have a masters in information security assurance. My boyfriend is a software developer and I’m a consultant and our combined income is well over 100k. We’re making all the right moves in terms of saving (well over 30% of what we’re making) and maintaining a debt free life (aside one very manageable student loan and a car which will be paid for in a few months).

Before we even get to the problem, it’s pretty clear that Kathy and her boyfriend are in a very good financial state. If they’re living in D.C., are debt free, and have marketable degrees and already have workplace experience, the world is truly their oyster.

And we’re miserable. We don’t feel as though we are in the right place at the right jobs to be living the kind of life we want. Everyone around us seems to be very content sitting in traffic for 2 hours a day to get to their jobs where they work 60 hour weeks, so that they can afford another sports car, a $500,000 one bedroom condo and a few more inches on their TV.

They’ve also made a conscious decision to reject a consumerist lifestyle. This sounds just fine to me, living in Iowa driving my eleven year old truck.

After many long conversations we’ve identified the things that make us happy in life and have made the decision that we will do everything in our power to be well on our way down the path toward those things in a year. We want to be closer to nature, and we’d love to be able to afford a modest home. I’d also love to be someplace with a sense of community where I could volunteer my time. As far as jobs go, we’re far less picky, we’re just hoping to find something to support ourselves and eventually a family, but ideally use our skills and have some sort of impact on the world.

So, let’s look individual at the things they want.

They want to be closer to nature. That likely means living in a much smaller town than the D.C. Metro area. If you want nature to be easily accessible, you’re probably looking at living in a town that has at most 100,000 residents – and likely much smaller.

They want to be able to afford a modest home. This also points toward a move to a more rural area. I can’t speak for other regions of the country, but much of the Midwest is very affordable.

They want to live in a place with a sense of community. This, again, speaks towards a smaller town, probably one that’s near an affluent area. A great place to look for this is to look for a small town that’s outside an affluent or educated area, such as a small town within 20 minutes of a college town or a technically adept city. These tend to foster communities of intelligent people who want to live in a small-town environment and often include thriving volunteer work and community activities, both in that small town and in the larger city nearby.

Adding up these points, I would encourage them to look at small towns within a 20 or 30 mile radius of smaller Midwestern cities, particularly those that house a university. In many places, these usually have an abundance of jobs for technically inclined people, but make small town living quite easy. For example, I live within an hour of several decent-sized cities in Iowa, including Des Moines, and yet my backyard has a cornfield bordering it, and there are a lot of technical jobs in this area.

We want to be living a simpler life and because doing what we were “supposed to” up until this point has lead us to very stressful, complicated lives, we’re not really sure where to even start. We’d love to pack up the car, drive across the country (something we’ve always wanted to do, always had the money to do, but never had the time to do) and eventually wind up in our new town.

That’s an awesome plan, especially since you have the freedom of youth on your side.

But how do we find this new town and should we lock down work first? What about health insurance? Should we go down to the courthouse and get married just to increase the odds that we’ll both be insured? Is there any way for people in our situation to purchase affordable insurance to make sure we’re covered for the few months of instability a move like this would cause?

If you buy into the idea I presented above, here’s what I would do:

Make a list of potential matching cities in the Midwest. Look up the state schools for the Midwest, then identify ones that potentially have a thriving research program in areas you might be interested in. This generally means that there are lots of spin-off companies in the area. You should also look for job listings at monster.com for smaller cities in the Midwest – not necessarily to find a job, but just to know who employers are in those areas that might match with your skills.

Narrow down that list. Try to narrow this list down to two or three, then investigate those cities in detail. Are there small towns nearby with palatable housing markets? Are there community features that interest you, both in the larger town where you may find work and in the smaller town where you would live? Most likely, the right place will start to become clear for you.

As for the health care, I would look into COBRA – it’s likely that you can extend your current health care package for a while after you leave your current jobs. Then, when you’re re-employed, get a health care plan that matches what you need.

And more fundamentally, in the long run, will this be a good decision? By staying where we are, we’ll probably both have six figure salaries in a few years, but during those years, we’ll be stressed, won’t have the time to do the things we enjoy and won’t be able to afford a place of our own. Alternatively, if we make this move, we’ll both likely take huge pay cuts (both to our yearly salaries and likely to our lifetime earning potential) and won’t be able to save nearly as much, but we’ll be happy now, rather than in 40 years when we can retire.

It won’t be the big cut that you think it is. Let’s say you can get a 2,000 square foot family home in the D.C. Metro area for $600K. In the Midwest, you can easily find them for under $200K. Consider the difference in those house payments, and you’ll see where most of the difference in salary actually goes.

Any, and all advice you could give us would be greatly appreciated. Right now we’re looking at about 10 months to make a major life change, and while this thought is daunting, we’re willing to do everything necessary to make it happen.

Living in a Midwestern small town isn’t the right thing for everyone, but from my perspective, it sounds like the right thing for you two.

Do any of you have thoughts for Kathy?

My niece is a wonderful young woman – a good head on her shoulders, decision making as strong as you could hope for in a high school sophomore, and an entrepreneurial spirit. My only concern about her is a sense that she hasn’t quite figured out the value of a dollar and that she’s prone to credit misuse.

Last night, I spent some time thinking about the things I wish she knew right now at this point in her life so that she wouldn’t go on to make horrendous mistakes with her finances later on like her uncle did. Here’s what I came up with, and they’re probably applicable to any high school student with a level head.

Do not carry a credit card balance. It’s okay to get a credit card, but pay off the entire balance each month. If you’re tempted to use it to buy something that you can’t otherwise pay for, don’t. Period. Let’s say you buy a Nintendo Wii and a few accessories and put $400 on your credit card, then only make minimum payments for a year. On a typical “first” credit card with a 19.9% APR, you’ll have just watched $80 vanish into thin air. Now, multiply that by twenty and you’re looking at the situation that the “average” American is in, watching literally thousands a year just vanish because they carry a credit card balance.

Put a small amount in the bank each week and forget about it until you’re about to make a big purchase or a true emergency comes up. Let’s say you can put $5 in the bank every week starting on your 16th birthday. That adds up to $260 a year, so if you cash out at your 26th birthday, you’ll have deposited $2,600. But it gets better – you can easily get a savings account that earns 5% interest. You’ll actually get out $3,352. The bank will give you $752 over that time.

Learn how to learn. Most high school classes are pretty easy for a bright person and don’t require much effort to get through. It’s really tempting to take easier options and not worry about it; instead, always take the hardest one you can take. It will force you to learn how to learn, a skill that will serve you well the rest of your life.

Start a side business. My niece already has a small babysitting empire, but most teenagers can find a way to earn some money. Many parents in my area encourage their kids to get jobs – instead, I encourage kids to start a side business. Mow lawns. Trim hedges. Scoop snow. Start a topic-oriented blog (meaning a topic that isn’t you that others might find interesting).

Take a leadership position. Join an organization and make an effort to be involved with it. Eventually, take a leadership position in it. Why? Learning how to manage people and make choices that affect others is another skill that will serve you throughout your life – and if you learn how to do it well, it will make you a lot of money.

There is no such thing as a free lunch. If someone is offering you something for free, there’s usually something they’re getting out of it in return. A free t-shirt is probably an advertisement. A free web service is likely littered with ads in some fashion. The better you are at spotting why things are being given away for free (or for really cheap), the smarter you’ll be about buying things and the less you’ll spend in the process.

If you’ve discovered something you enjoy and you’re actually good at, do it a lot. Almost always, there’s a way to make money from a highly developed skill. Anything from playing a guitar (music can be marketable, teaches hand-ear and hand-eye coordination and dexterity) to playing a sport (leadership skills, health) can work. It’s especially nice if there’s an obvious career path from it, but don’t let that limit you. Even better, if you can find a way to turn that thing you do into a side business, you might be setting yourself up for the long haul.

Another financial story that really intrigued me recently was this one, from a person who wishes to remain anonymous (so we’ll call him/her Anonymous):

My parents are immigrants/refugees from Vietnam. When they arrived here in Australia, they both took jobs and lived an extremely frugal lifestyle, sending all savings to my mother’s side of the family, who still remained in Vietnam. Before butchers realised that some people actually eat stuff other people may discard, they sold these “scraps” for an extremely low cost. So, they lived on broths and stews made from stuff like chicken feet. (I would say instant ramen was more expensive at the time.)

This was in the 1980′s. My sister was born in the early 80′s, my brother, late 80′s.

In 1990, I was born, and my mother’s side of the family immigrated to here shortly before my birth. Upon my brother’s birth and mine, my mother left work to take care of us.

Throughout my younger life, this is pretty much all the detail I knew about my family’s time before my birth, chicken feet and all.

Before my enlightenment on finance, I didn’t think about it much, but for most of my life you could say that I was spoilt. It was done for my benefit, so I could get a good education. Both of my parents didn’t get very far in school.

We still only have one source of income, and that’s my father. My sister moved out, and my brother and I do not have jobs, as well as my mother.

We always had and we still get a fair amount of stuff. Several computers, game consoles, many games and DVDs, 5 or 6 TVs, 3 surround sound systems and several DVD players, double beds.. it just goes on. and it’s been going for probably over 12 years. All on credit cards. We took out another home loan to paint the house. (I objected to this, due to money, and this house containing a few unique properties..).

My dad repairs extra cars on the weekend for some extra cash, which is spent on food. After living a poor childhood and super-frugal life in a new country full of opportunity, who can blame him?

My mother’s side of the family are basically idiots. After they immigrated here, they never helped us, and they still occasionally ask for money. (we always refuse.) They’re not exactly good at finance either. They took out a home loan and threw the money around. We clearly sponsored the wrong side of the family to move over.

I’m about to finish/fail Year 12, and hit with depression. I’m currently not trying to find a job, nor am I interested. I have tons of dreams I wish to fufill, but it all conflicts with the financial situation, so I sit here confused and lost, going nowhere. I’m quite sensitive to discouragement, so I have discarded a fair number of pursuits.

Next year, this should all ease up a little, when my mother takes up a job and if my sister moves back in. But where does that leave me? How do I save everyone?

You could say most of my family is stubborn, and I am as well, in some areas. I don’t want to live an empty life, and have an empty job. But there is a great amount of weight, pushing me down. I feel helpless.

I need encouragement, and people to support this weight. But being hit with depression, I don’t try very much.

So, here’s the summary. Anonymous is a high school student in a family of immigrants with very poor personal finance choices. Anonymous is trying to figure out what he/she can do to make everything better, but is still in school (and apparently having some difficulty there).

Here’s my advice to Anonymous.

First of all, if your family is not dedicated to finding a better financial track, nothing you can do will really help. They’re deep in credit card debt, buying things like surround sound systems and video games. They’ve been doing this for twelve years, which sounds like it’s become a normal part of life. Until the leaders of the household themselves make a conscious decision that something needs to change, nothing is going to change. Additional money will likely be spent on frivolous things, or spent on credit card debt to free up space for more frivolous spending.

That brings on the next point: do what you can to put yourself in a position to really help later on. This means buckling down, finishing school with the best grades you possibly can, and going to college, even if it means incurring debt. Right now is the time in your life where you are putting foundation stones in place for what you’ll accomplish in life – every minute you spend doing that is a worthwhile minute.

What about the need for encouragement and motivation? Seek to surround yourself with positive things – and eliminate the negative influences from your life. Look at your life and find the pieces that weigh you down and make you feel worse, then minimize those. Also look for things that make you feel stronger and better and maximize those. Don’t look at the immediate, either – focus on the things that, when you reflect on them later, make you feel stronger as a person.

One more tip of advice (something you’ll learn naturally as time goes on): people make mistakes and bad choices. It’s part of life. You will always do better if you look at the positives in people and let the negatives slide a bit. One of the brightest people I know has a big self-confidence problem and a pretty big spending problem – but you know what I see? A genius. I know she makes some bad moves, but I try every time I see her to help her see how brilliant she is.

Those things will lay a foundation for success. After you’ve got them down, then start worrying about the dollars. The first thing is to simply spend less than you make. Do that every time and you will succeed in the long run. Everything else financially really follows from that.

Good luck! You’re young and have the world laid out in front of you – don’t be afraid to take it.

Over the last day or two, I’ve been going through the piles of email that have built up since the birth of my daughter and found a few stories worth sharing, which I’ll be sharing today and (maybe) tomorrow. Here’s the first one, from Amy:

I am thirty years old, college educated, and a certified teacher. For the past several years I have taught school and used that money to buy a house with an ARM. This past January I sold the house. The 18k I made on the sale I rolled over to pay debts.

Last year I took out credit cards and my intention was to sell the house and pay the cards. However, several small things like car accidents, a move to an apartment, and buying a truck took the air out of the plan.

When all was said and done, I still have $4,000 in student loans, and $35,000 in unsecured debt.

Now here is the sad part of my story. I was advised by a friend to “just walk away” from the unsecured debt. “Pay the student loan and forget the rest.” This came from a banker. “In a few years you will not have the unsecured debt. It will be a write off. Disappear for a while.”

Since I am a teacher, I decided to take a job overseas. I was being paid to teach under the table. It was not the best idea. I decided after two months to face the music, come home and start again.

Which leads me to today. I have no money in the bank. I have $35,000 in unsecured debt. My student loans are paid through January–but then I have the payment coming back at me. I have no assets except my truck, paid for, and my laptop. Luckily, my brother is letting me stay at his house while I look for a job.

Any advice you can give would be appreciated.

Before I say anything else, please note that if you have a significant amount of credit card debt, re-read the story above. It could happen to anyone who puts themselves in a shaky financial position.

First of all, I fully understand the logic behind the advice from the banker, but it’s not good advice for the next several years unless you intend to live elsewhere. Why? Doing that will destroy your credit and leave you with harassment from creditors for many years. If you live in a situation where it’s difficult for them to contact you and your credit doesn’t matter, then this might be a good move, though I personally consider it dishonorable to walk away from your debts.

So what can you do in your current situation? Here are the steps I would take to get back on track.

First, I would focus very hard on getting a job, even if it happens to not be a teaching job. Work evenings somewhere so that you at least have some income coming in, then beat the streets for other work during the day.

Next, I would utilize a reputable credit counseling service. This is a significant enough debt situation that most normal debt repayment plans will probably not work. As a general rule of thumb, for-profit agencies are generally less helpful than non-profits. I would start with Consumer Credit Counseling Service, though that’s not a recommendation.

Also, live as cheaply as you possibly can. Don’t spend a single dime unless you have to. Live like you were in college again, eating ramen noodles and living in a tiny room. Focus on getting your finances healthy before raising your standard of living.

Another tip: don’t be afraid to look for charity right now. Talk to local pastors and see if you can at least get some free meals. Don’t be proud – pride right now will cost you.

Perhaps some readers will have additional advice for Amy.

I’m a big advocate of entrepreneurship and I truly admire people who take the plunge. Here’s a question from a brave reader who went forward with his dream. I’ll call him Walt, for fun, after a character in one of my favorite books:

I’m starting a personal training business, and I’ve been marketing for about two weeks now. I’m waiting for the clients to roll in, but in the meantime, I’m spending all my savings.

At what point do I staunch the flow and get a part-time job to pay the bills? Keep in mind that I would make $10-15 an hour in a part-time job and $75 an hour training. I break even with 5 training sessions a week.

I have about a month before I can’t rely on my savings and HAVE to have some kind of money coming in.

If I were in Walt’s situation, here are the tactics I would use:

I would spend every single day for the next month, from sun up to sun down, marketing my business. I would have a huge pile of pamphlets describing my business and hit every single gym and health food store in the area looking for clients (depending on solicitation rules, of course).

I’d offer a big introductory discount. The one thing you need right now is customers that might become regular paying customers, so offer some ridiculously huge discounts right off the bat. “75% off your first session” or “Buy one session now, get one free later” might be good initiatives. Even better, if you know people who are trendsetters, give them a completely free session in exchange for spreading the word a bit for you.

I’d call every person I know that might be connected to the area of the business. If you’re doing personal training, likely you know people who are physically inclined. Hit up that list of people and let them know that you’re now doing personal training and ask if they know anyone who might be interested.

I’d invest the money in professional-looking promotional materials. Seriously, materials that look professionally designed and printed may be very pricey, but they create an image that your business is serious and that it is of quality reputation, whether it’s true or not.

What about the personal financial situation? Here are some tactics I’d use:

Get a night job. If you’re a personal trainer, you’re probably in good shape. Look especially hard for a job as a night watchman. That way, you can do that job at night, promote your business in the morning to people who might be potential customers, sleep during the day when you don’t have clients, promote a bit more in the evening, then work again. It sounds like a lot of work, but it’ll really pay off if you’re committed to the business. Then, when the business takes off, quit the night job and you’ll have renewed focus on your business.

Get a job where you can cross-promote. How about a job at a GNC or a health food store or a sporting goods place? These jobs might not pay well, but they’ll give you golden opportunities to promote your own business. Most of the time at businesses like these where the business itself is in alignment with what your side business is but they’re not in competition with each other, it’s completely acceptable to promote a side business in this way. If you can just convince one person a month, it won’t be long before you can go back to focusing on the business full time.

These tactics are all things I would use in your position, trying to get a small business off the ground.

What do you do when you can’t afford to reciprocate the generosity of others? Jane writes:

I’m 26 now, and it seems that everyone I know is getting married (including myself). The problem is that my friends and family are scattered throughout the country. If we were to attend each of their weddings, my fiancee and I would be paying for two round-trip flights, plus a hotel room, plus a wedding gift every few months. We simply can’t afford that, but I really wish that we could be at each of those weddings, because some of these people are very close family members and friends. Additionally, I worry about looking rude, because they’ve all found some way to get to our upcoming wedding. Do you have any suggestions for ways to explain politely that we can’t afford it? Is there anything we can do to communicate our love and support without actually going to the wedding? If we have to choose between friends’ weddings (attending some but not others), how can we keep some friends from feeling offended that we didn’t choose to attend theirs? If we do attend some of the weddings, do you have any suggestions for saving money while attending a wedding? Ordinarily we only visit cities where we know we can stay with friends, and we choose our travel times to minimize the cost of travel, but with a wedding those things are out of our control. Any ideas you might have would be greatly appreciated.

My personal advice would be to not attend any weddings that would require enough financial outpouring that it causes you to have difficulty paying your bills. Here are some important things to remember:

An invitation is not a requirement to attend. It’s merely a statement from the sender that they wish you to attend their event. One should never feel like they have to come to an event.

Honesty is the best policy. If you make a decision that you can’t afford to come, be honest about it. Call the person and explain exactly why you can’t come. If you think that you can’t do this for some reason, then what’s the basis of the “close” relationship that would compel you to go to their wedding in the first place?

Thoughtful gifts mean more than expensive ones. We got many expensive gifts for our wedding, but the two that really stood out were simply very thoughtful ones – and neither of those were expensive at all. Spend some time thinking about the people involved and your relationship to them. Often, a very good idea will eventually occur to you – and often it is one that isn’t particularly expensive, either.

Make every possible arrangement to reduce costs for out-of-towners to come to your wedding. Find places for everyone to stay if they can’t afford a hotel. Host meals for the out-of-town guests. In short, do whatever it takes to reduce the costs for people willing to make the trip to your wedding. This will be greatly appreciated by the people who do attend, and they may be more likely to help you in the same way if you choose to attend their wedding.

Another tip: if you do wish to attend some of the weddings, you should make a clear demarcation between the ones you will attend and the ones you won’t. For example, you may choose to only attend the weddings of people you are related to or just the weddings of people in your bridal party. This way, you avoid any hard decisions that may hurt feelings.

Bea wrote in with the following story:

I work at a small office and we have lost two employees this year….one left for more salary and benefits and another because they were moving out of state. While I was training one of the new replacements she mentioned her salary, which was $2 an hour more than my own. Now this person’s responsibilities will be equal or less than my own and I have eight years invested in my current position. I decided to discuss this with my boss and this did not go particularly well. I asked for a raise that would at least equal the new employee’s. I was told that I recently had a 50cent/hour raise and that business is slow and that my request could not be granted. When I pointed out the salary discrepancy between my salary and the new employee I was told that it had been difficult to fill the position and my boss had to meet this person’s requirements in order to fill the position. In that case I said I would be giving notice. My boss asked me to reconsider and she would think about raising my salary in 6 months. She asked me to think about it and let her know Monday.

So my question is, how have others in similar circumstances dealt with a situation like this? Any advice for me? Hubby supports my decision to leave if no increase in salary is given, we’ll tighten our budget and deal with it .We currently live on my husband’s salary and use mine for additional savings and the little things that come up.

Let’s isolate the facts here: an employee with eight years’ experience is training a new worker to do a very similar job. This new worker is getting $2 an hour more than the experienced one. When the experienced worker requested a raise, the boss essentially said no and justified the high pay for the new worker by saying the position was hard to fill.

If the boss is telling the full truth about the reason for hiring the new worker, then if the experienced one quits as well, it will cost the company significantly. Not only would they have to hire someone at the higher rate of the new worker, there would also be costs associated with training, plus the loss of productivity associated with moving from an old hand to a new one.

In this case, it pays to play hardball. It makes business sense for that person to pay Bea at least the same as the new worker if she requests it. It also makes business sense for the business owner to not pay Bea the higher rate, but given the alternative of losing an experienced worker, the business owner would decide in favor of the raise.

This, of course, assumes that the business owner is playing fair and also that Bea has a good work record to this point. If either of those assumptions fail, it’s quite possible that Bea could walk out of the job. My feeling is if the situation in the workplace is such that this raise request isn’t met, then it’s probably not a long-term healthy situation. The business owner was able to pay the new worker more – and it would presumably cost that much to fill Bea’s slot – so if Bea is let go, that means the business owner isn’t playing fair (not good) or the business really is in trouble (not good).

Since Bea would be able to quit and survive, my advice to Bea is to keep playing hardball if you believe you are valuable to the business. If you have a good work record and have a plan if you were to lose the job, I would stick to my guns. The other option is to cave, but by doing that, you’re (arguably) making yourself appear like a doormat and likely minimizing potential future pay increases (because the boss will see that you won’t fight for a raise – and thus why should you get any?).

Are there any other suggestions for Bea?