• The Retirement Perspective: Today’s Dollars Are Far More Valuable Than Tomorrow’s

    Lola had an interesting question about retirement: I asked if, by calculating our monthly expenses, we could multiply that by 200, and if that would be enough to retire. So, if one’s expenses were about $24,000 a year, if having $480,000 would be enough. And you said – rightly so – that this figure doesn’t …

  • How I Deal With My Financial Fears

    Even though I write a lot about personal finance on here and elsewhere, I still have a lot of my own hang-ups about personal finance. One of the big reasons I started The Simple Dollar was to learn how to deal with those fears, and once I dealt with that new batch, a fresh batch …

  • The Status Quo Bias and Switching Jobs or Careers

    After my article a few weeks ago on how the status quo bias costs you money, a reader I’ll call Jeff made a very astute observation: the status quo bias often keeps people from making the best career decisions. Let’s back up a second, though. What is the status quo bias? From the earlier article: …

  • Overcoming a Habit of Lying to Yourself About Money

    After my recent article about how to deal with a partner that hides and lies about money problems, several readers made the astute point that many of these situations are often the result of people lying to themselves about money, whether directly (by actually telling yourself false conclusions about the facts you already know) or …

  • Nine Ways the Status Quo Bias Is Costing You Money – And How to Turn That Ship Around

    Most people are familiar with the status quo bias. In simpler terms, it simply means that people prefer things to stay relatively the same. We talk to the same people, follow the same path to work, go through the same daily routine, and so forth. We enjoy little changes – like reading a different book, …

  • Is An Emergency Fund a Psychological Negative?

    I was recently reading How to Get Out of Debt, Stay Out of Debt and Live Prosperously by Jerrod Mundis, an interesting book that sorely needs an updated edition (it was originally published in 1988 – I’d happily review an updated edition), but has at least a good handful of interesting concepts inside. One comment …

  • The Total Experience of a Purchase

    My brother recently got a new job with much higher pay than he was previously making. After getting the job, he bought himself a motorcycle, something he’s wanted for a while, and he’s incredibly happy with it and proud of it, even driving it to work to save on fuel costs and saving on motorcycle …

  • The Methods You Use to Deal with Ordinary Life Will Fail You As an Investor

    The more I dabble in investing, the more I realize that it’s something of an “opposite world” compared to the principles I use in day to day life. Things that make intuitive sense in the real world are actually failures when it comes to investing. Here are ten great examples of that phenomenon. Be the …

  • The Battle Between the Stuff I Want and the Guilt I’m Left With

    Last month, I was sorely tempted to pick up Mario Kart Wii. Mario Kart has been my favorite video game series of all – I played it for hours and hours with my friends in high school on the Super Nintendo, then burnt countless hours in the college dorms playing it on an N64. Even …

  • Left Brain and Right Brain Financial Needs

    Not long ago, I was talking about retirement planning with a friend of mine who was trying to decide what exactly to do to prepare for retirement – he’s 25, but has gotten the memo that he needs to plan now. I ran through a few options, but almost immediately his eyes glazed over – …

  • Reflections on Money: 20 Valuable Questions to Ask Yourself

    I recently read a very, very good personal finance book called Money Drunk, Money Sober (which I’ll review this Friday… oooh… the anticipation) where the authors made a brief suggestion of doing a personal inventory of your relationship with your money. At first, I was expecting it to be a rather boring listing of accounts …

  • Loss Aversion and Motivation: Using Your Natural Instincts To Get Ahead

    Yesterday on my way to work, I was tuned into NPR’s Morning Edition and I overheard a story about two researchers using our natural instinct to avoid losses as a motivation to lose weight. The concept is called loss aversion and is summarized by Wikipedia as such: [L]oss aversion refers to the tendency for people …

  • Nine Techniques for Developing Patience

    The single greatest challenge I’ve faced since learning how to turn my financial life around is patience. I want to be debt free now. I don’t want to face the long journey from near-bankruptcy to financial independence. I practice frugality every day and I’m working hard to create more income, but the path from where …

  • Defeating Superman Syndrome: How to Progress Beyond the “Need” to Be the Financial Hero

    When I was freshly out of college with my first high-paying job, I would constantly insist on paying for everything. Meals out with friends, lattes at the coffee shop, even sometimes shopping purchases – I felt this deep need to step in, bust out my plastic, and say, “I’ll take care of it!” This burning …

  • Misery is not Miserly: Breaking the Connection Between Spending and Sadness

    One of my readers recently alerted me to an interesting article at CNN.com entitled Why Sadness Can Blow Your Budget. The article discusses the “misery is not miserly” phenomenon, where people who are experiencing sadness tend to be much less in control of their personal spending, prone to splurges and poor consumer choices. Even more …

  • Emotional Fulfillment and Financial Success

    Recently, I read an excellent discussion on why we don’t save money. I originally intended to include it in my weekly roundup this week, but as I began to write my thoughts on the topic, I realized that I had a lot to say on the issue. Erica argues that we spend primarily for emotional …

  • Personal Finance and the Fundamental Choice

    A few days ago, I reviewed in detail the excellent book The Path of Least Resistance by Robert Fritz. In that book, Fritz posits that most of the time, our lives take the path of least resistance around and through the obstacles of life, both those dealt to us by others and those within our …

  • Spending Far Less Than You Earn

    Quite often, I talk about the value of frugality and spending less than you earn. For many of us, that’s a valuable mantra to repeat, because our tendency is to spend more than we should. Our challenge is to avoid spending, and we have to carefully talk ourselves out of it. Yet there are those …

  • The Long Journey

    Out of all of the challenging times since I began to turn my financial life around, I may be facing the most challenging of all right now. It’s not anything immediate or urgent. I have a nice healthy emergency fund to take care of that. It’s also not a temptation to buy anything, nor a …