• Establishing a Difficult but Rewarding Habit

    The process of moving from spending all that you earn (or more) to spending significantly less than you earn is an absolutely essential part of gaining control over your finances – and it’s not easy. It involves upsetting a lot of the habits that you’ve established in your life. At the same time, you also …

  • Letting Up

    When people find themselves first recovering from financial disaster, they often bear down very hard on every dime. They scrutinize every expense and every receipt, looking for a way to squeeze a few more dollars out of their life so that they can push down those debts a little bit. At that point, fear is …

  • Handling Social Reactions to Changes in Your Spending

    When I first started cutting back on my spending, a significant portion of my social group took notice. They saw that I was less interested in expensive excursions like golfing and that I was sometimes skipping after-work meetups (and drinking only water at most of the ones I attended). Quite a few of the people …

  • The Art and Psychology of Self-Control

    One of the most difficult aspects of personal finance – for me, at least – is the art of self-control. I have always found it difficult to just say “no” to my spending temptations. For many years, I’ve found success in putting up barriers. This works, to a large extent. By making it more difficult …

  • Chasing Money

    “Don’t think money does everything, or you are going to end up doing everything for money.” – Voltaire It’s not too uncommon for a frugal person to hear the criticism that they are “cheap.” At the same time, it’s also not too uncommon for a wealthy person to hear the criticism that they are somehow …

  • The Challenge of the “Best” Choice

    As I write this article, my three year old son is perched on my lap with my arms around him. He’s playing with one of his favorite toys, a Transformer that’s easy to transition from a fire truck to a robot, and he’s telling me stories about them. He’s happy and safe and secure sitting …

  • “If Only I Had This Thing, I Would Be Happy”

    Something has captured your imagination or your heart. Maybe it’s an expensive physical item, like a tablet computer or a shiny car. Maybe it’s something like a relationship with another person, either real or visualized. You get wrapped up in this thing that you want. You keep visualizing yourself with this thing in your life …

  • Approaching Fears

    All of us have a fear or two that keeps us up through the night. Maybe it’s debt or being unable to take care of your family. Maybe it’s a lack of money for retirement. Maybe it’s a health issue or early death. My biggest fear, without a doubt, is passing away before my children …

  • Failing at Personal Finance

    Recently, I’ve been reading the wonderful book The Up Side of Down by Megan McArdle, someone whose writings I’ve enjoyed for a very long time. The premise of the book is that, at some point in our lives, we’re going to fail. We’ll fail at a relationship or at launching a business or at a …

  • Does the Investing Advice of a Billionaire Help Ordinary People?

    A reader passed along this interesting interview from the Wall Street Journal with Mark Cuban. For those unfamiliar, Cuban is a billionaire who made a significant amount of his wealth in the early days of the internet era. His argument in this interview? Diversification is “for idiots.” First of all, let’s talk about what diversification …

  • Don’t Cut Where It Hurts (At Least, Not at First)

    The one part about turning around your personal finance situation that everyone dreads is the cutbacks. It’s easy to see why. Your normal, everyday life is what has led you to this financial corner. In order to turn the ship around, you’re going to have to make some changes to your normal, everyday life. People …

  • The False Belief of Invincibility

    When things are going well, it can be really easy to buy into your own invincibility. You can’t possibly lose your job. You’re dominating in the workplace and taking care of everything that can be asked of you. Your performance numbers are incredible. You can’t possibly get sick. You feel great and your health has …

  • R.E.S.P.E.C.T.

    A long time ago, I wrote an extremely well-received post in which I outlined the basics of personal finance on the back of five business cards. After that, I converted the cards into a presentation that I’ve used many times when I’ve been invited to speak on personal finance topics in my area. A few …

  • Forgotten Purchases

    Forgetting purchases is my number one personal finance challenge. How does one “forget” a purchase, you might ask? It’s pretty easy. I’ll buy something, but then I’ll forget to take note of it later on where I keep track of my personal spending. Then, later on in the month, it will appear as though I …

  • Advice for College Graduates Without Debt

    Mary writes in: “I have a son graduating in May and he has a good job lined up making about $60,000 a year. He has no debt and will have about $1000 in credit card debt. He drives a car that we are hoping will last the next 5 months, not in the best of …

  • Some Thoughts on Selling to Friends

    A while back, I wrote an impassioned column about the dangers of selling to your friends and family. My feeling was that selling stuff directly to friends and family was a very poor idea. Recently, I had an interaction with an old friend that made me re-think this stance a little bit. This friend of …

  • Is an Emergency Fund Necessary?

    I’m a pretty big advocate for emergency funds – cash stowed away in a savings account for a rainy day. Establishing an emergency fund is one of the first things Sarah and I did during our financial turnaround and that emergency fund took care of several difficulties we faced during the first year or so …

  • Net Worth and Pleasure

    In a post a few days ago, I made an offhand comment about how I didn’t really receive personal pleasure from seeing my net worth increase, though I once did. A few people emailed me on that subject, so I thought I’d clarify what I meant. When I first began to overcome my personal finance …

  • Financial Problems and the Three Ps

    Recently, I found myself browsing through a book called Learned Optimism by Martin Seligman. The idea behind the book is that an optimistic approach is the best way to handle the problems that life throws at us. I was particularly struck by Seligman’s comparison of how optimists and pessimists handle problems. In Seligman’s view, pessimists …