A Beginner’s Guide to The Simple Dollar

Chris writes in:

I’m a new reader and I was just wondering if you had an “introductory” guide to The Simple Dollar? Maybe a resource where I could find your best and most useful posts (”useful” is of course subjective). Any chance you could create one?

Good idea, Chris. Without further ado, here’s a “beginner’s guide to The Simple Dollar,” which should explain many of the questions people have when they read posts on here.

What Is The Simple Dollar?
The Simple Dollar is a site written by me, Trent Hamm. The basic idea behind The Simple Dollar is that anyone can build a better life for themselves, regardless of what they want in life, as long as they apply some thoughtfulness to their choices. The biggest trap that I see in modern American life is poor money choices – it keeps people from enjoying the freedoms that life has to offer. I post two articles a day and all articles welcome comments from you.

About Me
I’m a thirty one year old guy who lives in rural Iowa near Des Moines. I have a wife, Sarah, and two children – Joe, who is three years old, and Katie, who is two years old. Sarah teaches for a living, while I’m a writer with a pretty flexible schedule which enables me to spend lots of time with the children.

I grew up in a family without much money. Early on, I had a pretty strong entrepreneurial spirit, but it was crushed by an awful childhood experience. I worked my tail off and earned a full scholarship to a four year university straight out of high school – without it, I would likely be working in a factory right now, possibly the factory my father worked in. I started dating my wife during those college years. Although I dreamed of being a writer, I listened to the advice of others and selected a major with more earning potential.

After college, I got a very good job (even during the 2002 down market) and found myself on a career path in science research that excited me. Unfortunately, I had poor financial control and my marriage made it worse. Eventually, I found myself slowly becoming disenchanted with my career, mostly because the nature of the work changed, and combining that with the costs of having children, I felt really trapped.

This came to a head in April 2006, when we had a near financial meltdown and realized we were facing tons of debt – several student loans, credit card debt that went well into the five figures, two automobile loans, and a few more consumer loans (for furniture and the like). I spent a very long night doing some serious soul-searching and when I woke up the next day, I realized that I needed to start making some major changes now.

After some early success, I started writing The Simple Dollar, tapping into my own desire to be a writer along with my desire to share my story. Mostly, I just intended to write about my own experiences, but the site grew more popular than I ever expected – and ate up more of my time than I ever expected. In March 2008, I took a scary leap and quit my science career, devoting myself to writing full time (with enough flexibility to spend tons of time with my children). During this period, we paid off every debt listed above, although we made the decision (with our growing family) to purchase a home with a mortgage.

My Philosophy and Key Readings
The best place to start, without a doubt, would be “Everything You Ever Really Needed to Know About Personal Finance on the Back of Five Business Cards” (also available in extended form as a free 49 page PDF. This one article outlines the basics of my philosophy and ideas on personal finance, gained from the experience of turning around my financial, professional, and personal life.

Many people have the perception that cutting one’s spending can’t possibly be enjoyable. My argument is simple: if it’s not enjoyable, don’t do it. All I suggest is stepping back and asking yourself some bigger questions. What are you truly passionate about? What are you most worried about? How do the little choices you make every day help you with your passions and help eliminate your worries? The best place to cut spending is in the areas of your life that aren’t important to you – or at least aren’t central values in your life.

My central goal (as with many readers of The Simple Dollar) is not getting rich. Instead, I just seek financial independence, meaning I can go through the actions of a normal day/week/month/year without relying on anyone for financial support – employers, clients, lenders – and be able to support myself and my family in a life that makes us happy and enables us to follow our goals and dreams independent of money and independent of the demands and constraints of employers or anyone else. If you’ve figured out what really matters to you in life, such independence is a much more attainable goal than you might think.

Beyond that, everything else is just details. I usually seek maximum simplicity in my financial choices – banks that don’t hassle me or charge me fees and give me lots of online banking automation, investments that require very little maintenance or stress without charging an arm and a leg, and so on. Endlessly comparing mutual funds and digging for the “ultimate” bank offer isn’t of interest to me – it makes my life more complicated and I prefer simplicity, thank you very much.

Are there any other posts you consider “essential” to The Simple Dollar? Please leave them in the comments if you have any!

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