As this year comes to a close, I thought it might be nice to highlight some of the best, most well-received articles from the past year. I went through the archives and found two articles from each month that either received a lot of positive feedback from or that I found particularly powerful or interesting. Hopefully, you'll find a few old favorites here and come across something good that you overlooked, too.
Let's dig in!
Although a lot of personal finance advice is useful and practical, it doesn't always translate perfectly into taking immediate action. You can read endlessly about setting goals and contributing to Roth IRAs, but it doesn't always translate directly into action.
That's where this article shines. It's about direct action: things you can immediately do to improve your financial state right then and there. You can toss these ideas directly on your to-do list for the day and they will help. While not every item is perfect for every financial situation, there's a good chance that at least a few of these items will immediately work for you.
Why should someone work for a long term financial future when they could be living in the moment? Given the uncertainty in life, what's the benefit of working toward financial success?
My answer to this is that simply living for today locks our lives into a very stressful pathway in which we're tied to our jobs and live in a constant stress cycle. Paying attention to your financial future gradually gives us lower stress and greater personal and professional freedom.
My belief is that if you adopt an approach with your money where you only use it for things that are either truly necessary, deeply meaningful or to secure a better future, you’re going to have a pretty good life, both in terms of enjoying today and having a wonderful tomorrow. This article lays out the case for it.
This is the first entry in an eight-part series in which I walk through eight different areas of modern life and explore the connections between those areas and one's financial life. I think they're all powerful articles. Here are the other seven:
- Your Spiritual and Mental Life and Your Financial Life
- Your Intellectual Life and Your Financial Life
- Your Marital Life and Your Financial Life
- Your Parental Life and Your Financial Life
- Your Professional Life and Your Financial Life
- Your Social Life and Your Financial Life
- Your Leisure Life and Your Financial Life
What's the big message here? It's so easy to fall into a trap of thinking that your finances are kind of isolated from the rest of your life, but it's just not true. Your finances are deeply connected to almost every area of your life, both in the sense that your financial behavior affects that area and your behavior in that area affects your finances.
Even more important, as you begin to understand the connections, you begin to see how a rising tide lifts all boats. If you work to improve one area of your life, you'll often see improvement in others; if you consistently improve in all areas, the improvement in your life will be greater than the sum of its parts.
This article was inspired by a scene in the movie The Gambler, in which John Goodman's character tells Mark Wahlberg's character about his concept of a "fortress of solitude." Here, a "fortress of solitude" simply refers to a pool of money that enables you to sustain a decent middle-class life in perpetuity, roughly two million dollars or so. With that, you buy a house and a nice car and you have enough money in the bank to keep them no matter what happens to you.
I found that scene really inspirational and actually wrote about it in an earlier article called "Freedom Money," but with this article, I wanted to talk about how you get from the normal financial situation most Americans are into having their own "fortresses of solitude." It's basically the path to financial independence, spelled out in crystal-clear terms.
In this article, I share the advice that one of my mentors gave me many years ago: "You can either have a good day or have a good trajectory." His words didn't make sense then, but they're incredibly clear now. You have a fundamental choice in how you live your life. You can either live your life in a way where you've spent everything for today, or you can live a life in which you are planting lots of seeds for tomorrow.
In the short term, living solely for today is the best route. However, it doesn't take long for a life in which you're planting a lot of seeds to become better and better as those seeds start to come to fruition. The relationships you've built, the skills you've improved, the fitness and health you've worked for — they all start to pay benefits in your daily life, lifting you higher than you thought possible.
One of the most foundational frugality strategies out there is that you should cut back hard on the things that don't matter so you can have plenty of money for the things that do matter. It makes sense at first glance, but the more you consider how to apply it, the less clear it becomes. What doesn't matter? Sure, some frivolous things are obvious, but simply tweaking a few obvious expenses won't move the needle.
This article focuses on practical strategies for revealing which expenses actually matter and which ones really don't in your life, and you might end up surprised as to which expenses fall into which category.
Almost everyone who tries to transform their financial life eventually realizes that this transformation goes through a number of phases. First, you have this "honeymoon" phase, where you take on a bunch of low hanging tasks that make a big difference in your life and you feel a great deal of financial progress, but then that wears off and... then what?
Eventually, many people reach a point where it feels like their financial progress has slowed to a crawl. The goal feels incredibly far off in the distance and like a mountain on the horizon, you keep going and going and you don't feel any closer to it. What do you do then? That's exactly what this article delves into.
Every few years, I end up writing an article like this that delves into how I juggle all of the things going on in my life. I write tens of thousands of words a month for The Simple Dollar, try to be a good husband and a father, keep up with lots of community commitments, maintain good friendships, try to keep myself physically healthy, mentally healthy and still have time for a few meaningful hobbies, all without just throwing money at the problem and paying people left and right to do things for me. How does that come together?
For me, it is held together by a few trusted systems that enable me to focus on the moment and get things that I'll deal with later out of my head. It also centers around being constantly realistic about what things are worthwhile to do with my time and which ones are not. This article dives deep into the mechanics of all of that.
30-day challenges and 90-day challenges are a deep and powerful part of how I incrementally improve my life. I simply learn about something that might make a better life for me, then challenge myself to do that thing for 30 days (or 90 days, usually after I've tried it for 30 days and been tentatively pleased with the results).
This principle applies wonderfully to making financial changes, particularly alterations in your spending habits, but it's much broader than that. You can use 30-day and 90-day challenges to bring about incremental improvement in almost any area of your life. I particularly find it valuable in taking on specific changes that might be really hard; because it's a "timed" challenge, there's always a light at the end of the tunnel.
If you really want to cut back on your food spending, one good approach is to center your diet around a handful of key staples. I traditionally define the six key frugal food staples as rice, beans, oatmeal, pasta, eggs, and on-sale fresh produce. Those items are always incredibly inexpensive, at least fairly healthy (especially with some moderation), and have a lot of culinary flexibility, but they're not quite enough on their own.
This article digs a little deeper into the idea of frugal food staples, identifying 10 more key foods that are very reasonably priced and complement the six key staples very well in a wide variety of dishes. Together, these staples and supplementary foods make for an inexpensive grocery list from which you can prepare a lot of different meals and feed a lot of people at a reasonable price.
While I generally find financial improvement to be very empowering, that's not always the case. For some, making positive financial changes can end up feeling like an abandonment of things that they love in life. The end result is a sense that financial improvement is making you unhappy. What do you do when you want financial improvement but the apparent path to get there is personally miserable?
This article delves into several reasons as to why this might be the case. Perhaps you're cutting the wrong things. Perhaps you're expecting too much out of financial changes. Maybe you're building toward the wrong things, or the destination is too far off. Perhaps it's even a combination of those factors. Whatever the cause, there are things you can do to get rid of the unhappiness without killing the financial progress.
One major factor that derails people on the path to financial success is unplanned expenses. Often, people are aware that such expenses are coming and will occur, yet they find themselves blindsided when they do come in and those expenses damage a lot of financial progress, leaving people with a sense that financial success will never happen.
The truth is that the ability to anticipate upcoming financial needs is a skill that can be built up, and the more skilled you become, the harder it is for those kinds of expenses to upset your progress. If you want to move to a situation where an irregular bill like insurance or an unpredictable expense like a car repair doesn't completely sabotage your finances, then this article is for you.
A big part of our family's summer vacation is seeking out free and low-cost things to do that we'll all enjoy, no matter where we happen to be going. Our Colorado summer vacation was no different. We spent time in three different parts of the state — Steamboat Springs, Colorado Springs and Mesa Verde — and we found low-cost and free things to do in each area.
Looking back, our family's consensus is that the Mesa Verde leg was the real highlight. Exploring Mesa Verde National Park, with lots of hiking and exploration of centuries-old ruins, was a wonderful experience and there were many low-cost things to do in the area.
When you live in a tiny apartment or room, it can be difficult to figure out ways to prepare your own food. It can feel like eating out or grabbing takeout is the only option, because you simply don't have the space to make anything yourself.
It turns out that you actually can prepare a pretty enormous variety of foods for yourself with extremely limited space. All you need are a few tiny tools and a rethinking of how to prepare food at home and you can make an enormous variety of cheap and tasty dishes.
Books with Impact: Atomic Habits
I covered quite a few books over the course of the year, but none of them were quite as impactful as Atomic Habits by James Clear. It cast a refreshing new light on how to build positive new habits and routines.
Atomic Habits presents a very powerful system for creating a daily habit consisting of a specific action or a small group of actions. If you want to get in the routine of doing a specific small thing every day and make it as automatic as, say, making coffee if you're a coffee-lover, then this book is for you.
Cheapness is not the sole standard by which frugal people judge the relative success and failure of things in their life. Rather, the approach that many frugal people take is to treat frugality as one "filter" among many when deciding what to do in a particular situation.
For example, if you have 50 recipes worth trying, a frugal person will usually look at things from a low-cost perspective to help narrow down the field. However, that does not mean that the cheapest recipe will immediately win the race, merely that frugality is one tool among many.
Many people execute positive financial behavior in their lives most of the time, only to find themselves occasionally exhibiting poor behavior that completely undermines all of the other good money choices they're making. Financial self-sabotage can completely wipe away a ton of good progress and leave the person committing the self-sabotage with a sense of failure and hopelessness.
There are a lot of approaches people can take to solving the problem of financial self-sabotage, from focusing on small permanent sustainable changes to divesting yourself of people and influences that bring on self-sabotage. Often, you need a mix of approaches to eliminate self-sabotage from your life.
As people settle into their adult lives, many find that the time that they were able to devote to furthering their careers in the early days is no longer available to them. With commitments to relationships, children, and community, finding time to nudge your career into a more lucrative place is often in short supply in your 30s and 40s.
That doesn't mean you can't make moves that will improve your career. It just means you have to be a little creative and use strategies that improve your career situation without a big investment of time.
It's easy to look at a job through the lens of exchanging time in the office for a certain salary, but the full picture is much different than that. We often devote extra time and money to our jobs when we do things like commuting, meals with coworkers, business travel, extra tasks at home and so on. Those expenses of time and money really cut into what you bring home per hour invested in your job.
There are a lot of tactics you can use to reduce both the extra time commitments and extra expenses due to work, from things like focused work sessions for intense tasks, multitasking less intense tasks, carpooling and so forth. It all serves to maximize the return you get for every hour you devote to your workplace.
One big reason why people don't prepare meals at home is because of the time investment in meal preparation. It takes time to buy the ingredients, assemble the meal and clean up afterward; when this problem is viewed through the eyes of an already very busy person, the temptation to just order food becomes obvious, even though home food preparation is far cheaper.
The solution is to rethink home meal preparation. The key is planning ahead a little, because by having a clear meal plan, you can double up on many common food prep tasks and handle most of the work in advance when time is a little more flexible, minimizing the actual work during the evening meal crunch. This article gives you lots of little strategies for pulling that off.
Cost-Effective Strategies for Handling and Preventing the Winter Blues / Seasonal Affective Disorder
The late fall and early winter months typically trigger a wave of melancholy for myself and many other people, too. Seasonal affective disorder, or the "winter blues," can be a huge problem, interfering with the flow of day to day life and leaving a person feeling very depleted during the winter months.
There are a lot of strategies that help with seasonal affective disorder, but many of them are quite expensive. Here, I list a bunch of low-cost strategies that really help me with my seasonal affective disorder.
Smartphones can be a life-changer in terms of staying productive, getting information when you need it, and staying in touch with people. Those benefits, however, can be a double-edged sword. Smartphones can become a huge distraction and seriously zap your productivity. For the price you pay, you need it to be a useful tool in your life, not a productivity gobbler in your pocket.
This article provides a long checklist of settings and tools you can use on your smartphone to minimize the distractions it provides and maximize the value it provides. Most of these are incredibly simple steps that work on any smartphone model, and they can really help your phone become less of a distraction and more of an asset.
When many people think of a frugal gift, their mind usually goes to something cheap that the recipient won't like and that you bought just to save a buck. That's a cheap gift, not a frugal gift.
A good frugal gift is one that balances what the recipient will enjoy and value with a great price. The trick is finding that good frugal gift, and this article provides a lot of tips for that search that will work for almost any gift-giving occasion.
One major challenge of getting your finances on track is really understanding what constitutes a "need" and a "want" in our lives. Most of the time, we fall into the trap of thinking that, just because something fulfills a need, the expensive version of that item is what's filling a need. The truth is that a very inexpensive version can fill that need; the rest of that expense is a "want."
While that realization is powerful, how does it turn into practical solutions that can help our finances? This article delves into that very issue, offering advice on how a better differentiation between needs and wants can lead to much greater financial success.
Let's hope that the best ideas of 2019 help us to get 2020 off on the right foot!