Fridays are typically “Ask the Readers” days at Get Rich Slowly, but today I’m doing something a little different. I’ve made a couple of big revelations lately, and those have generated a lot of questions. Today, I’ll answer a handful of these questions in order to give an outline of how I’m managing my money.

There’s a lot to be said about the discipline it took to be conscious spender (and saver) even after a windfall. How did you do this?

In a way, conscious spending became easier after the sale of Get Rich Slowly. But it also became more difficult. Let me explain.

When I sold GRS, Kris and I paid off our mortgage. This freed $1000 per month that I could use for whatever I wanted. (That $1000 was my half of the mortgage payment.) My spending on the Needs part of the Balanced Money Formula essentially dropped to zero, leaving me lots of room for Wants and Saving.

Plus, because I followed my own advice about spending a small portion of a windfall on things you really want, I didn’t feel deprived.

That said, it’s easy to become complacent when you have a large nest egg. It’s easy to start spending a little more here and a little more there because you know you have plenty of savings to bail yourself out. Though I never came close to spending more than I was earning, I did begin spending more than I ought to have. That’s why I started preaching the virtues of conscious spending; I needed to remind myself of the concept.

Lately, I’ve become more of a conscious spender. That’s because I don’t allow myself to touch the money from the windfall. Instead, my goal is to live on my current income, which is a little lower than it had been when I was working at the box factory.

I haven’t totaled the numbers for 2011, but leaving aside money related to the sale of the blog, I probably earned about…calculating…$48,000 from all sources, including speaking, magazine articles, book royalties, interest income, and writing for this blog. That’s roughly the median income for an American worker household (albeit I have an enormous nest egg).

Now that I’ve moved out of the house and am renting an apartment, my expenses have increased substantially. Remember that $1000 I freed by paying off the mortgage? Well, I’m now paying that again in rent and utilities. Meanwhile, I still have the other expenses I was carrying before, including gym fees, soccer tickets, and Spanish classes. Unless I find some way to boost my income — and I aim to do so — I’ll have to cut back hard on some things. Most likely travel.

If you had such a major windfall, why did you still feel compelled to give up comic books?

I felt like I was collecting comics out of compulsion. I don?t read everything I buy. I want to, but I don?t. So why buy more? Besides, I haven?t given them up completely; I?ve just reduced my comic spending radically. (As in $0 so far in 2012, though that?ll change soon.)

Also, as I’ve mentioned, I don’t want to touch the nest egg. If I’m going to buy comics, I have to do so within the constraints of my current income. Again, this is the notion of conscious spending that I write about all the time. I would much, much rather spend that comic money on Spanish lessons right now. I love learning Spanish much more than I enjoy reading comics. That may change in the future (and probably will), but for now, the Spanish is a priority, and that?s my focus.

What’s your asset allocation?

I covered this in detail last April when I wrote about rebalancing my investment portfolio. You can see my target asset allocation there. But my current asset allocation looks nothing like that. Because of market movement, and because Kris is receiving some of these funds as part of the divorce settlement, my asset allocation is a mess. It’s very heavily weighted toward broad market index funds (which is a good thing, I suppose) with very little in bonds. If the market were to crash today, I’d be hurting.

One of the challenges I now face is balancing things without incurring tax liability. If I sell stocks to buy bonds, for instance, I’ll owe long-term capital gains tax (15%) on any profits. This is why I have an investment advisor I meet with regularly. He can hold my hand as I try to navigate this. And it’s definitely something I’ll be looking at once tax season is over.

You’ve often talked how you’d like to move into your ?dream? apartment and start over, so I?m wondering if you’re now following that wish at your new place? How are you doing with your war on Stuff?

I was wondering how long it’d be until somebody asked this. This is one of those chances for me to practice what I preach. How am I doing? I’d give myself a B-.

In some ways, I’ve done an amazing job of shedding layers and layers of unnecessary Stuff. It’s all sitting in the workshop at the house, waiting to be sold. (Yay! Extra income I can use to save for travel!) That said, I still moved a lot of things.

My closet is full of clothes. Not as many clothes as I used to own (all of these actually get worn), but still too many. I feel like I could benefit by intentionally pruning one quarter of my wardrobe. It’d hurt, but wouldn’t make me feel deprived.

I also own a hell of a lot of computers and gadgets. No man needs this much electronic eqipment! Plus, I keep tonds of paper. I need to get over that obsession.

My biggest battle, though, is against the books. (Surprised?) In the house, I had many many bookshelves devoted to books and comics. Here in the apartment, I have less space, so I have fewer books. But I still have a lot. Plus, there are still more to bring over. Every time I go see Kris (as I will tonight), I bring back at least one box of books (and sometimes several). Again, it might profit me to intentionally purge one quarter of my books.

After your trip to Africa, you talked about how you felt like it was your responsibility to do something to help, to contribute. Afterwards, you and Kris got a ton of school supplies but then decided not to mail them because it was too expensive. Have you changed your mind on that? Are you at least donating some of your money to some groups or charities that could benefit now that you?ve sold your site?

Over the years, the one financial choice that I’ve made that’s brought the most heat from readers is my decision not to contribute to charity. I’ve just never found a cause I want to support. That’s no longer true. Recently, I have discovered a couple of causes I’m passionate about supporting. But I’m going to start by contributing my time, not my money.

Since the start of the year, I’ve been contributing five hours a week to volunteer work. (This morning, for instance, I’ll spend two hours in a second-grade classroom helping kids learn to read and write Spanish.) Plus, I?ve been meeting with representatives from non-profits and charities. Part of this is related to actual work, but part of it is because I?m trying to find causes I believe in.

The causes I’m drawn to are all related to education (both adult and childhood), financial literacy, and immigration. And it looks like I may have found a way to combine all three! At the end of March, I plan to teach a personal finance class (in Spanish) to a group of 35 latina women. If that’s successful, I’ll try to build upon it.

So, I haven’t made any charitable donations…yet. But I’ve begun to contribute my time.

When you started GRS, did you imagine that it might end up making you a lot of money, and ultimately making you financially independent? Do you just think you got lucky, or could someone set up a blog today and emulate your success?

When I started Get Rich Slowly, I had no idea what it would become, financially or otherwise. I?ve always said that my goals were (in this order): to help me get out of debt, to help others get out of debt, and to make a little money in the process. That I?ve been able to exceed all of these goals amazes me.

Did I get lucky? Yes, of course. But luck isn?t the only element involved. I worked very hard to produce quality content. And I stuck with it day after day for years. Some folks don?t appreciate just how difficult this is. At the peak, I was working 80 hours a week on the blog. But as I?ve said in the past, hard work isn?t enough. In order to do what I?ve done, you also need some luck. In my case, I was lucky enough to catch the attention of some influential readers early on. They shared the blog with their friends, and it spread from there.

Could someone achieve the same success with a new blog today? Of course! And there are those who do. But I?m not sure what the right recipe for replicating this success is. There?s so much involved with it, and some of it seems difficult to define. I’ve started many other blogs, but none has caught on like GRS.

The Bottom Line
I make an average income. Because of some big life changes, at the moment I spend less than I earn — but not by much. Until I can find ways to make more money, my travel budget is going to suffer.

That said, I have a great job that gives me lots of flexibility to spend my time and money on the things I love. I also have a fat emergency fund. And, of course, I have a huge retirement nest egg. My aims for the coming months are both to increase my income and to continue exploring charity and volunteer work. In the meantime, I’ll share my progress with the readers of Get Rich Slowly.

This post is from staff writer Sarah Gilbert.

For the past two years doing taxes has not been bearable: it’s been terrific! I’ve used an online e-filing service for several years now after many years of taking great pleasure ? really! ? in filling out the paper forms, just because it gets the money to me far more quickly.

Last January I began to fill out the online forms and, at some point, started glancing at the little status bar on the upper right corner. I’d filled in all my dependents and household income, and the number corresponding to my refund was more than double what I thought I might be able to expect. It ended up more than triple my expectations ? about $7,500. It is, I’ve now learned, one of the significant benefits of having a spouse whose income is coming from a war zone, where it’s not taxable. As my own freelance income had decreased, thanks to the extra work of holding down the house and three young children on my own, we were getting an earned income tax credit on top of the child tax credits for our boys.

This year, I’ll get a tad bit less. I made a lot in 2011, but I’m not complaining a bit. I am, instead, working hard not to spend it unwisely by trying to follow the following rules:

1. Don’t spend a single penny before the money arrives in your bank account.
Don’t charge something on credit cards; don’t promise to spend the money; don’t put a deposit down with the rest due the day you expect the refund. Naturally, this one is very difficult in practice. This year, I had a fantastic deal on wool comforters made by a nice family on the outskirts of the city; lots off retail, with a third down in December and the rest due at the end of January. Surely my tax refund would arrive by then! And I really did need new comforters ? the feathers coming out of my old one were so thick it looks like some geese are about to lay eggs under the bed. Everything worked out, but I had to juggle, and I felt a little awful using the comforter a few days before I expected the refund to arrive. I’d paid for it, but I’d have to make it up later.

You won’t know what unexpected expense or nasty delay might cause you to be staring down a final payment or contract fulfillment without anything left in your bank account but hope. And then, you could end up using costly credit or financial shenanigans to make good on your promise.

2. Pick a debt that can reasonably be paid off with the tax refund. And do it!
Also, try negotiating the balance due. I’m still, faithfully but slowly, paying off long-ago-closed credit card accounts. Number two was 76% paid as of January 30. I called the day the money hit my account to negotiate a big payment that will satisfy the whole account ? and I’m saving $1,000 off the original balance. (I could probably have worked it down further; my negotiation skills are great, until I wear out and let them “win.” You could try harder!) Now I’m planning to spend March working out a payment plan for credit card number three ? the last.

3. Put at least a third in a savings account, right away.
Consider it “someone else’s money.” (Your future needy self, of course!) If I leave the money in my regular checking account, I’ll consider it fair game. And it’s the perfect seed for the emergency fund you’ve been wanting to start. It’s important that I separate the concepts of “savings” from “checking account buffer”; I’m far less likely to preserve the buffer, so I have to get it into a separate account. Preferably one that’s harder to withdraw from. So I’m planning to get half of that savings into a Roth IRA. It’s not a ton of money, but it’s better than letting it sit where I can access it for emergencies that… aren’t really.

4. Commit to yourself to buy things that will pay you back in savings.
Note I am not including “wardrobe investments” in this (unless perhaps we’re talking about a wardrobe completely devoid of work boots, or something). I consider things such as upgraded windows (to save you energy costs), a couple of bus passes or other bulk purchase of something you use very frequently (to save you stress, having to make change, and get a bulk discount). Maybe a bike could replace a short commute, or a second car. (My stimulus check in 2008 went to a fancy mama bike that’s saved me so many thousands of dollars I’ve stopped tracking.) Maybe you can buy a half of a cow from a local farmer, saving you tons all year on quality meat ? or maybe a chest freezer to make that possible. This concept is served by my wool comforters; they’re so freakishly warm that I’ll be able to turn the furnace down several degrees at night.

5. Spend 5% or so on something nice.
I know, the “windfall” rules say to only spend 1% on splurges. But let’s go crazy! It’s just a tax refund, after all. Go out to eat with your family (once). Buy yourself a pretty raincoat or some new wool underwear (my favorite splurge). Just make sure you feel good about yourself and you stick to the 5%. Which leads me to the most important thing of all…

6. Make your budget before you do anything.
Well, it’s okay to stick that 1/3 in the savings account first. But don’t rush off and spend your splurge and your “investments” before you’ve sat down with a piece of paper or a spreadsheet and all your bills for the month. Go on: put in one column all your regular income and the tax return. Put in the other column all the regular bills (put those first!) and what you’ve hoped to spend your tax refund on. Let’s not put off paying your home equity loan or your power bill because you have so much money, right? Make sure you’ve paid your bills first. I went so far as to forcing myself to record all the money I’d spent, down to the last bus ticket and coffee shop tip, over the month of January before I’d let myself spend any money on treats.

It’s really effective (if you can hold yourself back) to let the debt payments and bill payments clear your bank account before you buy anything fun (even if that “fun” thing is a wool comforter or organic underwear for your kids: one thing on my list!).

7. Don’t let yourself go shopping.
I rarely go shopping, because I rarely have much spare cash. Except for when I have spare cash! Then I love to shop. I shouldn’t. Even when I’m not going crazy with the designer clothes and $300 boots, I’m going crazy with designer insulated coffee bottles. I can’t help myself.

So I’ve found the best thing to do is to make a list of all that stuff I’ve been wanting ? “needing” ?for the past year, and prioritize. I’ve been waiting for those organic underwear the longest, and my nine-year-old has been complaining his old ones don’t fit. So I need to buy that and not (for now) that cute pair of rain boots I’ve been longing for (but totally not needing). The wireless modem is about to fail, so we’ll get that ? but not the new iPod touch to replace the one with the marred screen. It still works and, after I made my list, I learned that it would cut into my savings funds. That’s non-negotiable.

Make your list, do the math, then go shopping.

8. Think about investments in a new way.
Last year I spent part of my tax refund on tickets to two conferences, thinking that they’d be good for my “professional development.” The first, a culinary professional conference (I write about food), turned out to be a bust ? it was really fun, but I didn’t meet anyone I couldn’t have met online, and it was terrifically expensive. It’s more of a moneymaker for the conference organizers than for the attendees. The second, a blogging conference, turned out to be amazing; I met a couple of people just by chance with whom I went on to do consulting projects and other writing gigs. I made twice as much in income from people I never would have met otherwise as I spent on the conference. And I made some friends I love dearly.

So I’m being more strategic about conferences this year, and focusing on the ones where I am comfortable my “career” is already established and will give me the opportunity to strengthen relationships with people I really care about. I’m heading to a writing conference a lot of my favorite literary editors will attend; I’ve discovered that connections (when they’re authentic friendships) in literary journals and book publishing are far more important than in food writing. And the ideas I get from literary events turn into even more “output.” I’ll also repeat my visit to the blogging conference, ever more alert to the opportunities to share ideas and meet people with whom I can collaborate ? and hopefully turn into more income, in addition to friendships. A happy person is both a better money maker and a person who needs less money, right?

The best part is that I can count all these expenses against my income on next year’s taxes! No time like the present to start planning for next year.

This post is from staff writer Tim Sullivan.

My brother, my best friend, and my girlfriend?s sister are all getting married in the upcoming year, so I?ve heard a lot about wedding registries lately, and there seem to be many pros and cons. Personally, one of my least favorite things in life is going to Crate and Barrel, walking around with my scanner gun, and seeing that the only things that fit into my price range are wooden spatulas and the saucers to espresso cups (the cups already purchased). ?Congrats on your everlasting love. Here?s a steamer basket.? I?ve always thought there has to be an alternative.

Here are two numbers I found interesting:

Okay, so 70% of engaged couples are living together, and 88% of engaged couples are registering. According to the survey, more than 90% of registered items are bakeware and kitchen appliances. Here?s my question: Those couples that are living together, do they not have spatulas, steamer baskets, and toaster ovens yet? Is their apartment filled with mismatched plates and saucers and an uneven fork-to-spoon ratio? Do they not already blend their own smoothies?

The point I?m trying to make is that the majority of couples are living together, and I assume they have a functional household complete with everything they need. As for the couples who aren’t living together, it’s rare to have someone move out of their parents’ house and into the house of their betrothed. According to the U.S. Census Bureau, the median marriage age in 2010 was 28.2 years old for men and 26.1 for women. In the 1960s, it was 22.8 years old for men and 20.3 for women. Compared with our parents? generation, the 30% of currently engaged couples not living together have an extra six years to accumulate not one, but two sets of IKEA kitchen starter sets and warped cookie sheets.

Apparently, I?m somewhat alone in this thinking.

Things you wouldn’t buy yourself
My brother brought up that he would never buy a $500 blender, but it?d be nice to receive it as a gift. Perhaps then a registry is a collection of things you?d never buy yourself. I know that GRS readers are impossible to generalize, but I can?t help but think that if we’re itching for a Vitamix, most of us would forgo the $599 one from Crate and Barrel and substitute in the $499 one off Amazon listed ?like new? (or better yet, chose a different Vitamix then the currently hip 500 professional series and get whatever Vitamix was hip last year, for half the price). We?re conscious about where our money goes, and I?d like to take into account my friends? money, as well. (I don?t mean that literally…at least, I think I don?t.)

I?m not saying to throw caution to the wind and leave yourself open to getting a bunch of gifts that don?t fit your tastes, but if you’re looking for something that doesn’t come from Macy’s, there are other options for registries. In my continuing conversations about registries with those closest to me, I?ve come up with a list of a few fun suggestions:

Weddings truly are big business and even creative couples who try to circumvent some of the higher costs of the big day itself often fall short in their creativity for registries. Couples can create registries that are personalized without relying on the mainstream box stores.

And to my brother, I love you bro, but when you move four times in the next five years, I know it?s going to be me carrying that Vitamix up four flights of stairs.

What are your ideas for creative wedding registries? If you’re married, what did you like about your registry process, and what would you do differently?

When I started Get Rich Slowly — on 15 April 2006 — it made very little money. It earned a few pennies per day. Slowly, the income grew. A few pennies per day turned into a few dollars per day, and that turned into tens of dollars per day. Eventually I was making enough money from this site that I could quit my day job to blog full time. The last time I mentioned my income on GRS, I wrote that I was making $5,000 a month. That was in November of 2007, I think. Then my wife, my lawyer, and my accountant all asked me to stop writing about my income. When that holy trinity speaks in unison, you listen, right?

The more I worked on this site, the more the income increased. I won’t say how much I was making, but if you read Crystal’s guest post from earlier this month, you can make some educated guesses.

As Get Rich Slowly grew, one of the curious side effects was that people began to make offers to buy the site. I always ignored those offers.

Eventually I realized I was being foolish. I wasn’t following my own advice. What would I tell my readers? Well, I’d tell them to try to make more money, so why wasn’t I trying to do the same? At the beginning of 2009, I made a private New Year’s resolution: I decided to field every offer for the site that I received.

The Razor’s Edge
It didn’t take long to get the first offer. At the beginning of January 2009, someone wrote saying he wanted to buy Get Rich Slowly.

“How much will you pay?” I wrote back.

“I’ll give you $5,000,” the guy said.

“No thanks,” I said. That was less than one month of revenue. I’d be foolish to sell.

A week later, I received another offer to buy the site. But I didn’t notice. I was distracted. I’d just received news that my best friend had killed himself. This single event rocked my world. If you want to find a catalyst for all the things that have happened with me over the past few years — the travel, the soul-searching, the sale of this site — look no further than Sparky’s death.

Suddenly, blogging didn’t matter. I had been burned out before this, but now I wanted to leave, to quit cold turkey, to do something else. My wife and I talked things over, and she agreed that it might make sense to sell the site.

When the dust had settled at the end of January, I found the second offer to buy GRS waiting in my inbox. I replied.

“How much will you pay?” I asked.

“We don’t know,” the guy said. “First, you have to sign a non-disclosure agreement. Second, you have to send us all the financial information related to your business. Third, you have to wait.” This was baffling. I contacted my accountant and attorney to ask questions. They said this was standard practice, and to go ahead. I sent the info over and waited. And waited. And waited.

The First Offer
While I waited, Kris and I talked more about the possibility of selling Get Rich Slowly. Could I actually do it? Would I? In general, I loved the work, and I loved the community that was coalescing around the site. Plus, I felt a huge responsibility to the people who had been reading for three years already. I didn’t want to leave them in the lurch. But I was feeling increasingly frustrated, as if I’d said everything I could say about money. I wanted to quit anyhow, so what was the difference? And there was the fact that I wanted to write a book and begin giving community presentations about personal finance. Thinking things through made my head hurt. There was so much to consider.

Eventually, the company (which I’ll call Computer Resources so that I don’t violate the NDA) came back with an offer. How much was the offer? Because of the NDA, I can’t give a number, not even a fake one. But let’s just say Computer Resources offered me a lot of money for the site.

In fact, the offer was so big I couldn’t refuse. At the same time — again, following my own advice on this blog — I figured I had to negotiate. I submitted a counter-offer. Computer Resources went back to the drawing board.

About this time, I started to feel as if this was all way over my head. I did some research on the web and found other sites that had been purchased by Computer Resources. I contacted the site owners and talked by phone or by e-mail. They all had good things to say about Computer Resources except that apparently the company simply purchased sites, slapped ads all over them, and then left them to die. They never updated content. I didn’t really want that to happen to Get Rich Slowly.

One of the fellows I talked to suggested I contact an investment banking firm to help guide me. “They’ll take a commission, but it’ll be worth it,” he told me. “It’s just like using a real estate agent to sell a house.”

The Second Offer
As February 2009 wore on, Computer Resources still hadn’t responded to my counter-offer, so I contacted the investment bankers. They were excited to work with me. “You’ve already done a lot of the work on your own,” they said. “But we think you can get more for your site. We think you should spend a few months sprucing things up and then put it out at auction.”

“That’s a good idea,” I said, “except for two things. First, I’m burned out and I want to sell now. Second, the economy is tanking, and I’m afraid the revenue for personal finance sites will dry up before long. I feel like I’m on the top of a bubble and should sell now.”

I agreed to let the investment bankers contact one other company, a company called QuinStreet.

As the investment bankers were talking with QuinStreet, Computer Resources came back with their counteroffer. It wasn’t much more than before, but they added a bunch of stock options. I had a week to respond. I told them I’d think about it, and meanwhile started talking with QuinStreet.

At first, QuinStreet made me nervous. I was afraid they’d buy Get Rich Slowly and convert it into one big credit card ad. But during our conversations, they explained they had a grander vision, that they were committed to building a collection of sites with solid financial content, sites like Get Rich Slowly. Unlike Computer Resources, they wouldn’t let GRS wither on the vine; they needed to make money, yes, but they wanted to provide content while doing so.

As the deadline approached for a decision on the Computer Resources offer, QuinStreet gave me an offer of their own. If I would remain with the site for three years, QuinStreet would pay me almost twice what Computer Resources was offering. I was floored. Still, I wasn’t willing to commit to three more years at Get Rich Slowly. I was burned out. My best friend had just killed himself. I wanted to do other things. So, I did something strange: I asked for less money.

The Final Offer
Tuesday, 03 March 2009 was a big day for me. While the surface of this blog was calm and normal, there was a flurry of activity behind the scenes. Computer Resources was demanding a decision on their offer. QuinStreet was scrambling to give me a second, lower offer. I was hunkered at my accountant’s office, waiting. My lawyer was at his office, in constant communication with me. At the end of the afternoon, QuinStreet sent over their revised proposal.

They were offering about 33% more than Computer Resources. Plus, I wouldn’t be tied into the site for three years; I could walk away from GRS at any time.

My advisors and I agreed that this was an offer we could accept, and we finally responded to Computer Resources, which was growing impatient. I asked if they could beat the offer from QuinStreet. They thought about it for an hour, and then declined. They were cranky.

During the month of March 2009, I spent much of my time working on the “Asset Purchase Agreement” to sell this site. QuinStreet wanted some things in the contract, and I wanted others. Mostly, though, our visions matched. They wanted a personal finance site with solid content, and the contract we created reflects that.

For instance, QuinStreet offered me editorial independence. What does that mean? It means that QuinStreet won’t (and legally cannot) tell me what to write. It meant that I could continue to share the same sorts of things I’d been sharing at Get Rich Slowly since day one. I couldn’t be forced to write about credit cards or payday loans or other things that went against my better judgment. (Not that QuinStreet would have asked me to write about those things — it just gave me some insurance.)

But I couldn’t write about everything I wanted. As you know, I’m a pretty open guy. I share much of my life on the internet. And I would have shared the sale of the site, too, except that QuinStreet requested a non-disclosure agreement, just as Computer Resources had. I balked at this. “It’s standard operating procedure,” QuinStreet told me. “We don’t want our competitors to know what we’re doing.”

The investment bankers, my accountant, and my lawyer all said the same thing: “It’s standard operating procedure. They don’t want their competitors to know what they’re doing.” I went along with it, even though it meant I wouldn’t be able to share this very important event with GRS readers.

A New Era
On 01 April 2009 — yes, April Fool’s Day — we signed the paperwork. QuinStreet acquired Get Rich Slowly.

At first, I thought I’d stick around for only a few more weeks…or a few more months. I flew to San Francisco to meet with the new owners, and we discussed the direction of the site. They showed me the re-design they’d already begun to implement. (By the way: If this is the only design you’ve ever known for Get Rich Slowly, then you’ve never read it when I owned the site.)

Because I wanted to leave the site, we had to find new contributors. We held auditions for staff writers. Remember that? That was because I wanted to leave, and we needed replacements. Robert Brokamp and Donna Freedman write here because I was going to walk away. The reader story every Sunday started because I was going to walk away.

But you know what? I didn’t walk away. GRS was my baby. Plus, working with QuinStreet took a lot of the pressure off me. Besides, I felt an obligation to you, the readers. I stuck around. In fact, I’ve stuck around for almost three years now, working with QuinStreet to guide the site’s direction. No, it’s not exactly the direction it would have been taken if I’d been completely in control myself. But that was never going to be an option. I was going to leave the site after Sparky’s death. I was going to quit cold turkey. The GRS of the past three years is the best it could possibly have been under the circumstances.

Plus, QuinStreet has been more responsive than I had hoped. When I sold the site, I feared the worst. The worst never came to pass. In fact, the people I work with always listen to my concerns (and to your concerns) and try to balance those with the needs of the business. I think the partnership has been very successful over the past three years, and believe it will continue to be so.

Managing My Money
What did I do with the money I earned for selling the site? I practiced what I preached.

Over the past three years, I’ve strived to not touch any of the money I earned from selling Get Rich Slowly. And that’s my goal for the future too. Instead, I live off my income from writing. QuinStreet pays me a modest salary to manage Get Rich Slowly, and I continue to write for Entrepreneur magazine and other outlets. Though I’m in no danger of falling into debt, I tell myself that touching my savings would be the same thing. My goal is to keep from deficit spending. So far, so good.

The Bottom Line
So, what does all of this mean for the future of Get Rich Slowly? I’m not sure, actually. QuinStreet owns the site, and they can do what they want with it. If they decided that this site would make them more money as a porn site, they could turn it into a porn site. But they’re not going to do that. After working with the company for the past three years, I’m convinced they want to provide quality content so that people can improve their financial lives. Yes, they hope this will lead folks to respond to the advertising — they want to make money — but they understand that content is king.

I know that many folks will be pleased that I’ve followed my own advice and managed to achieve financial prosperity. I also know that some folks will resent this success. And, especially, that I haven’t mentioned it before. Well, I couldn’t mention it for a long time because QuinStreet was trying to keep the news from its competitors. But I can talk about it now.

The bottom line is that for roughly half its life, Get Rich Slowly has been owned by QuinStreet. (March 15th is the actual mid-point date for ownership.) If this site has helped you move toward your own financial goals over the past three years, it’s been under their reign. When I talk about “social media elves” or “marketing elves” or “technical elves” or any other sorts of elves, I’m actually talking about QuinStreet employees. There’s now a whole team of folks who help with this site. It’s not a one-man show, and hasn’t been for a long time.

There have been a number of changes to GRS over the past few years. We’ve brought on staff writers, and my voice has diminished. It’s flattering that some folks find this frustrating, but it was also unavoidable. Lately, though, I feel re-invigorated. Now that I’ve been able to share some background — both in my personal life and my professional life — there’s tons for me to write about. Plus, I’ve been wanting to do more smaller articles like I used to.

I won’t become more prolific this week or next — I’m about to leave for Argentina! — but in March, I intend to increase my output at Get Rich Slowly. It won’t ever reach the “12 article per week” level that I used to produce, but it’ll be more than the “one article per week” level I’m at now. It’ll be fun for me, and I hope that it’ll be fun for you.

This post is from GRS staff writer Donna Freedman. Donna writes a personal finance column for MSN Money, and writes about frugality and intentional living at Surviving And Thriving.

A basic burial averages close to $6,600 in the United States. Many people worry about the financial burden this places on their families. There is a way around this besides opting to be cremated and carrying enough life insurance: whole-body donation.

It?s estimated that at least 20,000 bodies are donated each year. I?m considering it myself. The idea of contributing to medical education and research intrigues me ? and I also like the idea that it potentially means a no-cost funeral.

That sounds like the lowest form of cheapskatery, but hear me out. I?d planned on cremation, since my personal desire is not to take up any real estate after death. I?d rather leave this mortal coil to the folks who are still alive to enjoy it. But even a bargain-rate cremation runs about $750, and if surviving family wanted a chance to say goodbye first it would cost more. Maybe a lot more.

My estate is fairly small, and I?d like to leave as much of it as possible to my only child, who experiences some disability. And again: I?d like to help future doctors, nurses, and other medical professionals improve their skill sets.

Your religious faith may have strict rules about how a corpse should be treated. Or maybe you just can?t get past the idea that you will be dissected over a period of months in anatomy class, or cut up and divided among different programs (brain to an Alzheimer’s study, joints to an orthopedic surgery training).

If that bothers you, then of course you shouldn?t do it. Keep in mind there won’t be much bodily integrity in that 6-by-3 slot in the soil, either. Your body will decompose. Ashes to ashes and all that.

A caring and gracious act
If I were a wagering woman, I?d bet that 90% of the readers who saw the headline either shuddered or said ?eeewww.? Maybe both.

Riddle me this: Why is organ donation lauded while donating a body gives us the heebie-jeebies? They?re both caring, gracious acts. But you probably won?t see a Lifetime movie about the impact of whole-body donation because people generally find the idea deeply creepy. It puts the ?gross? in ?gross anatomy.?

Here?s another way of thinking about it: Whole-body donation benefits all of us, every day. Any physician trained in the United States worked with cadavers. New medical instruments and new surgical methods are perfected on human tissues, joints, and bones.

Altruism is the usual motive for donation, according to industry spokespeople. (Yep, it?s an industry. More on that in a minute.) People designate their bodies for study to contribute to the greater good.

Not every medical school has a ?willed body? program, however. The ones that don?t need to get cadavers from somewhere else. Sometimes that means another medical school, but it usually involves one of the handful of nonprofit and for-profit companies that procure human tissue in this country.

How do those companies obtain bodies? By paying for transport and final disposition, that?s how. Hence the idea of a free funeral.

How much is that body in the window?
Not every medical school pays for preliminary embalming and transportation of cadavers. Posthumous enrollment in gross anatomy class means getting your own ride to school. By contrast, the human-tissue procurement companies pay for all of it, from pickup to cremation.

Here?s how to find out more about both options:

Maybe the idea of the body as commodity strikes you as just wrong. You?re not alone. Medical ethicists are still trying to figure out the ramifications of the Uniform Anatomical Gift Act, which forbids the sale of human tissue for transplant or therapy. It does permit ?reasonable payment? for services such as surgical removal, storage, transportation, etc.  But it doesn?t address whole bodies or the sale of body parts for anything other than transplant or therapy.

So are you breaking the law by arranging for the postmortem sale of your body? No one is quite sure. I look at it this way: If I make this choice I won?t be profiting by it. I?ll be saving my daughter and any other heirs the cost of dealing with my remains.

If you opt for a nonprofit or for-profit group, be aware that each does things differently. For example, some allow for organ donation because they deal in body parts as well as whole cadavers.

You may have the chance to have your ashes mailed back to your heirs. At least one company sends a letter about the kind of research that was furthered by your body (or parts of it).

Certain conditions preclude donation, e.g., contagious diseases such as hepatitis and AIDS. Some programs will not accept extremely obese cadavers.

Timing might make a difference, too, since some organizations specify ?no embalming? ? in other words, the cadaver must be refrigerated and shipped as soon as one hour after death. If seeing you one last time is important to family members, choose a company that allows enough time for viewings.

It?s important to note that you may not be able to dictate how your body will be used, such as in the following circumstances:

If these examples trouble you, then you might want to donate only to a medical school. This will likely cost money, although probably still less than a funeral.

Plan your approach
Should you decide to donate, research the options and make the arrangements yourself. A nebulous ?please donate my body to science? request isn?t fair to your loved ones. When you die they?ll be shocked and grieving; don?t make them look up the different programs and try to figure out what you would have wanted.

Talk to your family about it now, and don?t be surprised if you encounter objections. Listen to them. It will be easier to answer such concerns if you?ve read the FAQ sections of med school or donation company websites. Remember: Their feelings are valid, even though ultimately it is your decision.

Unless, of course, your next of kin ignores your request and arranges a funeral. If you think this could happen, put your final wishes in writing and get them witnessed and notarized. Store the document with other ?in the event of my death? paperwork, and maybe leave copies with a family member you trust to carry out your decision.

Incidentally, this can go the other way: Your next of kin can donate your body to science without your consent. If that skeeves you out, make your wishes known quite emphatically. Myself, I?d put it in writing. I?d also threaten to come back and haunt whoever did the donating.

This guest post from Christine is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. This reader story is a little unusual. It’s the product of Daily Worth’s “The Money Fix”. But I’ll let Christine explain…

My name is Christine, and I’m a school teacher. Last year, I set a goal for myself. I’d been renting homes and apartments to live in for eight years, and the last two rentals were particularly bad. The houses themselves were nice, but after one rental foreclosed underneath me and the next was leased by an awful realtor who couldn?t even get me a key to the pool that was 100 feet outside of my door, I knew I needed a change. That?s when I decided to buy a house.

When I made the decision, I started getting all my ducks in a row. About six months before my lease was up, I met with a good friend who was a realtor, and he hooked me up with a lender he trusted. We sat down and both spent half the day getting me pre-approved for my loan and answering every question I had. After crunching some numbers, I knew the price range I could afford for the monthly payment, principal, interest, insurance, and taxes. (This range was well under the maximum I was approved for.) I took notes, and with this new knowledge under my belt, it was time to save.

Actually, therein lay the problem: saving money.

Financial Obstacles
Months before meeting with the realtor and lender, I had begun to stash away money here and there to meet my goal. However, after talking with the both of them I began to feel wholly unprepared to buy the house of my dreams. My meager savings was far from what I needed to make my first home purchase.

Not only that, but I wanted to be sure I was financially sound after buying my first house. I wasn?t going to wipe out my savings to buy a home; I wanted to make sure I still had a cushion of money in the bank in case there was an emergency or some sort of surprise repairs.

At the time, I had almost $5,000 saved to go towards my down payment and closing costs; I needed about $3-4,000 more in order to be able to be able to afford to buy. This meant I needed to save between $500-$1000 a month to be able to purchase and close before my lease was up. I needed help — and fast if I was going to be buying before the end of the year.

That?s when I got lucky.

The Money Fix
Daily Worth — a financial website for women — ran a contest asking readers about their financial problems. If you wrote to describe your situation, you could receive advice from a financial expert and $200 for writing two posts reflecting on your experience.

I wrote in, and one morning I received a phone call telling me I had won, and financial expert J.D. Roth would be getting a hold of me soon to discuss my problem. (FYI, Daily Worth is currently taking applicants for their third season of this contest, so if you have a money problem its probably worth checking out!)

This next part may sound cheesy or cliché, but from the moment I won and began getting advice from J.D., my life changed.

J.D. called me one morning and I laid out my problem: I wanted to buy a house but didn?t know how to save enough money in a short amount of time. I admitted I wasn’t financially perfect, and I probably spent too much on silly things, like going out to eat, when I should be more frugal. I had experienced some financial troubles in the last few months, like paying off medical bills, dental work, and car maintenance, which were putting a dent in the amount I was able to save.

J.D. asked me a lot of questions in order to figure where I could make changes in order to save. When I put down the phone I was not only relieved that I was getting some help, but I also felt like just talking to someone helped me realize what flaws I was making financially. I was ready for a change and awaited J.D.?s advice eagerly.

A few days later, I received J.D.?s financial plan. There were no curveballs or any strange tips; actually all the suggestions he mentioned were things I read before (mainly at Daily Worth or GRS). The difference is that when J.D. laid out his advice for me, I had no more excuses. I couldn?t read the same advice in a blog or website and think, ?Oh that?s great advice for someone, but not me,? because the suggestions were tailor-made for me. I had no more excuses for dismissing good financial advice.

What did J.D. recommend?

Save First
In the past, my plan was to save all my leftover money; however that wasn?t working. There was always an extra expense (car repairs, dental work, a pretty pair of shoes, etc.) to take that extra money away. J.D. suggested I automatically transfer about 10% of my paycheck to my savings every pay period, and that I should aim to gradually increase this amount to 20% or more of my take home pay.

This would force me to learn to live on a smaller chunk of my income and stretch my money, because the money that went in my savings wouldn?t be readily accessible to me in my checking account, and I could no longer fall back on the ?extra money? that I knew would be there at the end of the month when I wanted to go buy something I could live without

Keep Multiple Savings Accounts
J.D. suggested multiple savings accounts, so I will always have a back up stash of cash to cope with new tires, dental work and other such emergencies. This will also allow me to have a separate account solely for saving for the down payment and closing costs of my future home. He also suggested a third account for other things, like Christmas or birthday gifts or future vacations.

He suggested using an online savings account, as having an account separate from my existing bank would make my money more difficult to access. Multiple accounts for specific purposes would give my money a specific purpose and give me an idea of what I can and cannot afford.

Track Spending
I had been tracking my spending prior to J.D.?s suggestion by keeping a spreadsheet in Excel. I would make two pages for each month: One with all my regular monthly bills and expenses (rent, electricity, my car payment, insurance, etc.) and one page keeping track of the charges I put on my credit card.

I know it seems silly to write down all the charges I put on my credit card, because anyone can just look online and see how much they have spent, but that never worked for me. Writing my charges in Excel gave me an idea where I stood (even if I didn?t always follow the budget I laid out). However, J.D. suggested using Mint or Quicken to get a clearer picture of where my money was going. I could use the software to set targets on how much money I wanted to spend each month on expenses like gas and groceries.

J.D. also suggested I use the Balanced Money Formula to set my spending targets. Using this formula, you aim to spend 50% or less on needs, save more than 20% (including debt repayment), and use the rest, around 30%, to spend on wants.

I liked the idea of using a software to track my spending because keeping the spreadsheet can be a lot of work, and it doesn?t tell me too much about what percent of my spending is on things I need, like food, versus how much of it is on my wants, like going out to eat, makeup, and clothes. The 50-20-30 formula gave me a guideline to use in regards to my spending.

Take a Second Job
This was another thing I was already doing. During the school year, aside from teaching, I also worked as a habilitation provider. The problem with my second job was that I always looked at the extra income as extra spending money, when what I needed to do was think of it as extra saving money. I need to change my viewpoint and think of that income as my primary source of savings, and pick up extra work until I have saved enough for my down payment and closing costs.

Plan into Action
From there I put J.D.?s advice into action. I used Get Rich Slowly: Best Savings Accounts for 2011 to guide my search for an online savings and narrowed my search down to ING Direct, Ally Bank, and Sallie Mae. In the end, I chose Sallie Mae, because not only did it have one of the higher compound interest rates, but it also offered up to a 10% match of your rewards through Upromise, a service that allows you to earn a small percentage of money from your everyday spending.

About a month later, I also opened a Perk Street checking account. I now had four separate accounts for specific purposes: my checking and savings accounts at my brick and mortar bank for regular bills and unforeseen repairs and expenses, my Sallie Mae account to save for my home (which would later turn into my emergency fund after buying my home), and my Perk Street checking for all wants, gifts, and vacations.

I picked up some extra work tutoring and created an Etsy store to bring in some extra income. All surplus income I would not normally have to pay bills was put towards saving for my future home. I also redistributed my regular income, arranging for 10% of my income to automatically deposit into my savings each month.

I switched to Mint to track my finances, and abandoned my former budgeting spreadsheet. Since I am a visual person, I like that Mint shows my spending using graphs, which allows me to see how close I am to the individual budgets I have set up. Mint.com showed me that I was over spending on groceries, and when my Money Fix story ran readers gave me great suggestions to help me slim down this area of my budget, like making a monthly menu to help me plan out what I need to buy at the grocery store. This also means that I am not only going to the store with a list and a plan, but I’m also only going to the grocery store about once a month and filling in with small trips when I need to.

However, Mint didn?t just help me trim my grocery bill; it helped me trim my overall budget. I cut back my restaurant spending and started going out to eat only once a week, instead of 2-3 times. I’ve been going out less on the weekend, and therefore have been spending less on gas. When it was time to get new clothes when I had to go back to work this school year, I resisted the temptation to go to the mall and hosted a clothing swap.

Mission Accomplished
The bottom line is that the plan worked. I was able to cut my overall spending by 30%. I made saving a priority. After putting the plan into action, on November 15th, I closed on my first home.

The journey to saving for my first home has taught me that I need to make saving for my future a priority. Savings shouldn’t be whatever money is leftover, but the money that is taken out first, because there will always be a need to have money in the bank (especially now that I have a home to maintain). My savings now comes first and completely shapes the way that I budget my money.

This post is from staff writer April Dykman.

One of the tenets of personal finance is to pay yourself first. And one of the most sure-fire ways to make sure you do that is to automate your savings: setup your checking account to make an automatic deposit to your saving accounts.

Automation has been incredibly effective for me. I have targeted sub-accounts for property taxes, auto repairs, house savings, and more ? a tactic I learned about here. The first year my husband and I had to pay property taxes, however, the billing statement felt like it came out of nowhere ? was it really due already? Luckily we had the cash, thanks in part to a very generous wedding gift sent the month before, but that was pure luck. If not for that, we would have had to suspend our debt repayment and possibly dip into our tiny (but growing) emergency fund. When we paid property taxes the next year (and every year since), all I had to do was transfer the money from savings into our checking account, then pay the bill. Much less stressful!

Automation on uncertain income
One of the downsides of being self-employed, however, is that my income is irregular. Irregular income is a reality for most freelancers, as well as people who are paid on commission or on tips, to name a few.

We still have the important expenses ? like home insurance, taxes, and retirement contributions ? on automation, but a large chunk of our income is being directed toward saving to build our house. Since I’m never sure exactly how much I’ll make each month, I’ve been hesitant to designate a set amount to be automatically withdrawn for that particular savings account. What if a client was late sending payment? And what if that automatic transfer slipped my mind and I forgot to cancel it for the month?

Instead, I’ve waited until bills were paid and automated withdraws cleared, then transferred the remainder (minus some padding that I leave in checking) to our house savings account.

This has worked out okay, but sometimes I forget to make the transfer, and then I’m stuck trying to sort through how much was left at the end of last month, along with whatever expenses we’ve had since then. Also, I like having a system ? with automated payments, I can predict how much will be in our account in six months or a year. This is particularly helpful for our house savings account, since we’re paying cash to build our home. Finally, there’s no temptation to spend the money. We’re pretty good about that, but with automation, it’s becomes a certainty.

Found savings
This month our income and expenses had some big changes. In order from smallest to largest, here’s what has changed:

With these savings and the new expense, we now have $594 of “found” money. This money used to be tied up in other expenses, and even after I quit my day job a year-and-a-half ago, we never had a problem paying them.

I realized this is a perfect time to automate our house savings. Instead of making the transfer of the extra $600 each month (may as well round up, right?), I set up an automatic transfer of $600 from our checking account to our savings. Of course I’ll still have to transfer anything above that amount, but for now, the $600 inches me closer to automation.

Additional income, snowballed
A little excited about the idea of automating our house savings (I’m kinda nerdy like that), I started to think about other ways to automate more of our savings.

Right now I’m talking with a client about working together on a more regular basis. This client has always paid on time, and I’d be writing for them biweekly. This new income source could be funneled into our automated house savings, since it will be predictable (well, as predictable as an income source or job can be). I can do the same thing with any future, regular work.

I held off on automating our house savings because of my irregular income, but even people with a fluctuating salary can automate a good portion of their savings. Start with found money from paying off debt or cancelling a subscription you haven’t used in months, then increase the amount even more if you have extra, regular income (above what you need to pay the bills). This might be income from a second job, a side business, or overtime you work regularly, as examples.

Finally, remember that even small amounts will start to add up. That’s something I dismiss sometimes because a few dollars doesn’t seem like enough to make a difference. But if we downgrade our Netflix membership, something I’ve been considering based on our rental history, I plan to add the $8 savings to the automatic savings deposit ? I guess I’m feeling extra motivated!

If you have an irregular income, what is your savings system? Do you automate your savings, or do you have a hybrid system like mine?

One common request from new GRS readers is some sort of central location where they can find a list of introductory articles to guide their progress. This is a great idea, and I’m working on it. Some of the GRS elves are working on a “Guide to Money” that will provide some of this info, but I envision a single page that collects all of the relevant articles for folks starting out.

In the meantime, folks like Ashley are hoping they can get some help now. Ashley writes:

I’m a new reader to the blog and just wanted to say thanks for presenting often overwhelming information in a digestible manner. As someone whose former financial philosophy was “ignorance is bliss”, GRS has played an integral part in my transformation from 30 year old faux-dult to real, live adult, at least in the personal finance category.

My question is this: What does a generally healthy personal financial portfolio look like? What are some must-haves for everyone and in what order should I work on getting them? It seems like a simple question, I know, but I’m picking myself up from living paycheck to paycheck and struggling with debt and I want to set some goals: savings, debt, retirement, investments (gulp). I realize it’s hard to generalize, but what do a good adult’s finances look like?

Ashley’s right: It is hard to generalize. Everyone is different, with different strengths, different weaknesses, and different goals. Still, it’s possible to make a few recommendations. There’s a core group of financial structures that I believe are important to everyone. And there are many ways to customize a “personal financial portfolio” (as Ashley calls it) in order address you own personal aims.

Building a Base
When I talk with people about how they should set up their finances, I generally recommend the following:

These are some of the basics, though not all of them. These core skills and habits can help almost anyone get started on the path to prosperity.

Customizing Your Course
Once you’ve become accustomed to the basics, it’s important to customize your financial habits and structures to reflect your personal skills, goals, and psychology.

For instance, some folks are opposed to debt in all forms. These people avoid credit cards, certainly, and often try to avoid mortgage debt as well. Other GRS readers love credit cards. They never abuse them, never carry a balance, never pay any sorts of fees. And some are eager to carry a low-rate, long-term mortgage because they figure they can put that money to work elsewhere to earn a better return.

Another example is automation. For most people, automation is liberating. By creating a system whereby you make automatic contributions to saving, to your retirement plan, and to your bills, you take the weakest link — you — out of the chain. But for a few people, automation actually creates problems. For these folks, it’s important to do things manually.

So, you see, once you have a solid financial base, you begin to build a customized financial framework based on your personal needs. And these needs are determined by your goals.

Until you have personal financial goals, you can’t really know what’s “healthy” for you. Emergency funds are a great example. Some folks — such as Trent at The Simple Dollar — don’t feel comfortable unless they have sizable emergency fund, such as a year (or more) of monthly income. I, on the other hand, am okay with six months worth of expenses in savings. Based on my psychological make-up and my personal goals, this is plenty.

Reader Response
My own financial profile? Let’s see if I can summarize it quickly:

There’s more to it than this, of course. That’s where you come in. Until I’ve had a chance to compile a beginner’s guide to personal financial mastery, Ashley’s best bet is to listen to the advice of GRS readers.

What do you think? What advice do you have for Ashley? Is there such thing as a one-size-fits-all starter financial portfolio? If so, what does it look like? How does it change with time? If not, then what do you think different people should do (and have) at different stages in life?

Like a hibernating bear, I feel like I’m waking from a long winter’s nap. For the past few months, I’ve been dormant, not just at Get Rich Slowly but at my other sites as well. I’ve had so much happening in my personal life that it’s been tough to find the mental energy to write about money (or anything else). Now I’m ready to get back to work.

As part of that, it’s time to call for another round of reader submissions. I’ve always said that it’s your contributions that make this site great. Get Rich Slowly isn’t about me — it’s about the community, about helping to solve each other’s problems. I’m just the guide.

If you have a reader story or an “ask the readers” topic, please send it in. April and I have been working together (along with the GRS technical elves) to streamline the process. As part of that, there are now dedicated submission pages and email boxes for collecting your contributions.

If you’d like to submit something to Get Rich Slowly, visit one of these pages:

});

$('input[name=interviewee-email]').click(function(){ var val = $('input[name=interviewee-email]').val();

if(val == 'Your email address') { $('input[name=interviewee-email]').val(''); } });

$('textarea[name=interviewee-message]').click(function(){ var val = $('textarea[name=interviewee-message]').val();

if(val == 'In a sentence or two, please briefly describe your experience') { $('textarea[name=interviewee-message]').val(''); } }); } else { $('input[name=interview-question]').val(type); } })

});

function validateInterviewForm() { var email = $('input[name=interviewee-email]').val(); var email_verfication_regex = /^[a-zA-Z0-9._-]+@[a-zA-Z0-9.-]+\.[a-zA-Z]{2,4}$/; $('#int-form-error').html(' '); $('#int-form-message').hide(); if(email == '' || email == 'Your email address') { $('#int-form-message').show(); $('#int-form-message').html('

Please provide your email.

'); return false; } else if(!email_verfication_regex.test(email)) { $('#int-form-message').show(); $('#int-form-message').html('

Invalid Email address.

'); return false; }

return true; }

function emailInterviewRequest() { var url = '/submit/submit-interview-request'; var data = $('form[name=interview-que-form]').serialize(); $.ajax({ url: url, type: "POST", data: data, success: function(data){ if(data.indexOf("Error")== -1) { $('#int-form-message').show(); $('#int-form-message').html('

Thanks for submitting email. We will contact you soon!

') } else { $('#int-form-message').show(); $('#int-form-message').html('

'+data+'

') } }

}); }

function show_form(type) { var form = ' '+ ' '+ ' '+ 'In a sentence or two, please briefly describe your'+ ' experience'+ '

'+ ' '+ ' '+ '

'+ ' '+ ' '+ ' '+ '

'+ '

'+ '  

'+ '

'+ '

';

return form; }

Add Your Voice

Ask the readersShare a personal storyWrite a guest post

We want to talk to you if:

.interview-div input{ border:none !important; } #int-form-message{ padding: 5px; margin:2px 0; display:none; }

.int-form-options a{ cursor: pointer; text-decoration: none; line-height: 20px; }

.int-form-options a:hover{ font-weight: bold; text-decoration: none; }

#int-form-message p{ font-size: 12px; font-weight: normal } .interview-div{ border:1px solid #82AC6D; } .story-hero{ background: url("/images/story-hero.jpg") no-repeat scroll 0 0 transparent; height: 102px; width: 298px; } .story-links{ padding: 5px 10px; border-bottom: 1px solid #82AC6D; }

.story-links h3, .interview-form h3{ color: #82AC6D; font-size: 21px; font-weight: bold; margin: 0; padding: 0; font-family: helvetica; letter-spacing: 0 !important; }

.story-links a{ display: block; font-size: 12px; margin: 3px 0; text-decoration: none; color:#000000; font-weight: normal; }

.story-links a:hover{ text-decoration: none; font-weight: bold; }

.interview-form{ padding: 10px 10px 5px; }

.interview-form p{ color:#82AC6D; font-size: 12px; padding: 0; margin: 0; font-weight: bold; }

.int-form-options label{ font-size: 12px; }

.int-email { float: left; margin: 5px 10px 0 0; }

.int-email input{ border: 1px solid #999999 !important; font-size: 12px; color:#999999; padding: 2px 0 2px 3px; }

.int-submit{ float:left; margin-top:5px; }

.int-submit input{ background: none repeat scroll 0 0 #78AB1A; color: #FFFFFF; font-size: 15px; font-weight: bold; padding: 0px 8px; }

.int-message textarea{ color:#999999; } Submit a reader question Submit a reader story Submit a guest post

I look forward to reading the latest round of articles!

Also as part of my escape from hibernation, I’ve begun to read other personal finance blogs again. It’s about time! Here, then, are some recent articles I’ve liked from around the web:

First up, here’s a belated goal-setting tool for the new year. Many folks I chat with tell me they have trouble setting goals. They don’t know what they want to do with their lives. Well, Scott at Living Your Legend has created a free goal-setting guide that you can download and print. If you’re having trouble finding direction, this tool may help.

Via Jim at Bargaineering, here’s an article at Wired that seeks to answer the question, “Are name-brand batteries worth the cost?” The short answer? Yes, they are.

In a similar vein, Ed at Five Cent Nickel wonders is travel insurance worth the cost? He, too, concludes that the price is worth it. I’ve always been wary of travel insurance, but was forced to buy it for my trip to Peru. I searched and searched until I discovered a company called World Nomads, which seems to have great rates for reasonable coverage. Kris and I are paying a combined $280 for our upcoming trip to South America, for instance.

Let’s go for the trifecta. Rebecca at Money Crashers has yet another “is it worth it” article. She wonders are discount grocery stores worth the savings? She says that for careful shoppers, they are.

Finally, over at Saving Advice Amy Roseveare, an “image consultant”, shared a great list of how to save money on clothing. As she notes — and as I’ve learned first-hand — losing weight can be costly. (But that doesn’t mean you shouldn’t do it.) My favorite piece of advice? Spend more on the things you wear the most. It took me a long time to learn this, but I’m glad I did. I buy most of my clothing at thrift stores, but I’m happy to pay a premium for nice boots and a nice rain jacket. (I do live in Oregon, after all.)

This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool?s Rule Your Retirement service. Robert contributes one new article to Get Rich Slowly every two weeks, and photocopies his face and other body parts.

I don?t know you personally (yet), but my guess is that you own an IRA or employer-sponsored retirement account such as a 401(k) or 403(b). Such accounts are where the majority of Americans hold their longterm savings. However, like anything governed by the Congress and the IRS, there are plenty of rules, exceptions, and quirks. Here are some lesser-known facts about retirement accounts.

1. The deadline for 2011 IRA contributions is April 17, 2012.
It?s too late to make a 2011 contribution to your 401(k), but you have until the tax-filing deadline to contribute to an IRA. That?s usually April 15, but it?s been extended to April 17 this year since April 15 falls on a Sunday, and April 16 is Emancipation Day in the District of Columbia (as well as the birthday of Peter Billingsley, who played Ralphie in A Christmas Story, but I don?t think the IRS cares about that as much).

2. Contribution limits are up for 401(k)s, not for IRAs.
The most you can contribute to an IRA in 2012 is the same as the limits for 2011: $5,000, with an additional $1,000 for those age 50 or older. However, the amount you can contribute to a 401(k) has been increased to $17,000, with an extra $5,500 for the 50-and-older crowd. So if you maxed out your 401(k) in 2011 and want to contribute the max this year, you?ll need to increase your paycheck withholding.

3. If you have a job, or are married to someone who does, you can contribute to an IRA.
There are lots of rules about who can contribute to which kind of IRA, how much can be contributed, and the tax treatment of those contributions. Spelling that out would take a whole other post. But here?s the crucial starting point: You must have earned income ? i.e., get paid to do a job ? to be able to contribute to an IRA. The only exception is a spouse who is married to someone with a job, who would then be eligible for the so-called ?spousal IRA.? This also means that a kid who is earning money can contribute to an IRA (though it?s a bit more complicated, since it might take more work to document something like babysitting income).

However, some people think that if they?re not eligible for a Roth IRA of deductible traditional IRA, then they can?t contribute to an IRA at all. Not true. You can still contribute to a non-deductible traditional IRA, which will grow tax-deferred ? i.e., you don?t pay taxes on any investment earnings until you make withdrawals. Just make sure to document how much you contributed because that money will come out tax-free.

(For those who want more information about income and eligibility numbers for IRAs, here are some of the IRA guidelines for 2011, and here are some of the guidelines for 2012.)

4. Improve your investment choices.
The typical employer-sponsored retirement account offers so-so investment choices and charges too much for the privilege. Fortunately, you may not be stuck with those lousy and overpriced investments. Here are some options:

Also, your company may have a benefits committee, or at least a group of folks who occasionally think about the retirement plan (typically, the human resources folks and perhaps the CFO). You can agitate for better investment options, a brokerage option, or even a completely different plan. We went through this process a few years ago at The Motley Fool, and believe me, it?s worth it.

5. You can pay annual IRA fees with non-IRA money.
Many IRA providers charge an annual account fee, which is automatically taken from your account assets. But you can instead send a check to the custodian and leave more money in the IRA to grow through the years. (Contact your provider for details.) Unfortunately, you can’t use non-IRA money to pay other costs, such as commissions and mutual fund expenses.

6. Get the money before age 59 1/2.
Because Uncle Sam wants us to save for retirement, IRAs and employer-sponsored accounts come with several tax advantages. To encourage us to actually use this money for retirement, Uncle Sam will make you pay a 10% penalty if you tap the account before age 59 ½. While leaving the money alone until you retire is definitely the smartest strategy, the truth is that sometimes people need the money before they reach their 60s. Here are several exceptions to the 10% penalty (though, in many cases, the withdrawals will still be taxed).

You also might be able to escape the 10% penalty if withdrawals are used for un-reimbursed medical expenses; health insurance if you?re unemployed; or living expenses if you?re disabled. The rules around these exemptions are more complex, though, so do plenty of research first.

7. You can invest in “alternative investments,” but tread carefully.
Retirement accounts are not limited to stocks, bonds, and mutual funds. You may be able to use your retirement savings to invest in options, real estate, small businesses, and collectibles; I?ve even met someone who works for a 401(k) provider who claims they have a client who has invested in Babe Ruth memorabilia. The trick is to find a custodian that will allow such investments. You’ll have to go beyond the usual brokerages and mutual fund companies and find a company (often a bank) that specializes in such arrangements, which are often referred to as ?self-directed IRAs.? That said, many promoters of these arrangements turn out to be frauds. Using your retirement-account money for such arrangements is much more complicated, and risky. Caveat emptor and all that.

8. Use the Roth as an estate-planning tool.
Let’s say you’re still working, but you’ve already saved enough for retirement and would like to help your kids, grandkids, or favorite Get Rich Slowly contributor. One option is to contribute to a Roth IRA and name your relative(s) as beneficiaries. When you retire from this world to the next, your heirs will receive that money income tax-free (although it may be subject to estate taxes).

There are a few reasons a Roth IRA is better than a traditional IRA for this purpose. You can’t contribute to a traditional IRA past age 70, even if you’re still working. In fact, at that point, you must begin taking money out, which is known as a required minimum distribution (RMD). The scenario is a bit different with a Roth; there’s no age limit and no RMDs. Plus, heirs must pay income taxes on inherited traditional IRAs.

9. Protect assets with retirement accounts.
The money in your employer-sponsored retirement account most likely can’t be lost to bankruptcies or lawsuits. In most cases, the same goes for IRAs, up to $1 million.

10. Inherited retirement accounts can get very complicated.
This is another one of those topics that would take several hundred words to explain, and you?d never make it to the end because you?d pass out from boredom and ennui (if you haven?t already). But there are lots of quirks about inherited retirement accounts. Just one example: If you inherit an IRA ? even a Roth IRA ? you may be required to take annual minimum distributions, even if you?re seven years old (and good for you for reading this post at such a young age).

If you inherit a retirement account, it might be smart to see a qualified professional to get guidance ? perhaps from an accountant or financial planner who works by the hour (such as the folks at the Garrett Planning Network). You can also find good information at IRAHelp.com and Fairmark.com.

11. Have Uncle Sam fund your IRA.
Getting a tax refund? You can instruct the IRS to send it directly to your IRA.

This post is by staff writer Tim Sullivan.

It?s Friday night. A few friends and I are debating whether or not to go to the college bars down the street to get a drink when my friend Steve chimes in that his apartment is just up the way, and says, with his chest slightly puffed, ?I have a fully stocked liquor cabinet ? something for everyone.?

Steve obviously likes to keep his apartment ready for impromptu entertaining. There?s ample seating, surround sound, and yes, a bar separate from the kitchen that?s almost equal in size. Behind the bar he keeps bottles upon bottles of spirits, all lit from underneath. He puts on some Miles Davis and takes his spot behind the bar.

?What are you having?? he asks me.

?What kinds of whiskey do you have??

?Makers Mark.?

?What else?? I ask, expecting somewhere in the umpteen bottles to be a second choice.

?Nope. That’s the one. That?s my whiskey.?

Steve takes the strategy of stocking his home bar with one of absolutely everything in hopes to appeal to every taste. Just looking over the bottles on the shelf, I don?t doubt that his liquor cabinet (which is less of a cabinet and more of a display rack) must have neared the $1,000 range. I wondered if there wasn’t a more cost-effective way to stock a home liquor cabinet.

Economize and personalize
Jeremy Coffey, sommelier at Sofia Wine Bar in New York City and home mixologist (his fiancée gave him that second title, even though he rarely goes much more intricate than a gin martini, an olive if you’re lucky) says the key is to economize and personalize. “No one likes to be a home mixologist, not even mixologists,” he says. “It?s just too much work.? Jeremy says that your liquor cabinet should be a reflection of your taste ? quite simply, what you drink. When company comes over for a cocktail, let them try one of your favorite drinks.

To give you an idea of what I?m talking about, we?ll use Jeremy?s liquor cabinet. He lives with his fiancée and neither of them like vodka drinks, so why have vodka in the house? He divides his purchasing needs into whiskeys and clear spirits. He?ll have a whiskey on hand, a gin, and his fiancée?s favorite tequila. He usually keeps a rye, especially during the winter months and substitutes that out for a more summery liquor when the temperature shifts. He makes his own bitters and likes to sink a drop of port into mixed drinks instead of vermouth. Let?s look at the cost:

Jeremy gets a cheap bottle of port for around $10 and makes his own bitters. Going from an empty cabinet to fully stocked costs Jeremy about $180. He doesn?t consider the what-ifs or impromptu hellos essential considerations for his liquor purchases.

What about planned events? Instead of putting out a couple of bottles of wine and hoping that people bring more, what can you make for a small gathering without your guests drinking away your last paycheck?

Have them sip on one of the following:

French 79

With that, 10?15 people would be happily in drink for under $50. Have it be your cocktail of the night; let them supply the wine.

Rye Manhattan. Try it with a tawny port. This one is a winter favorite of Jeremy’s and has quickly found its way into my calmer Friday nights.

Garnish it with an orange twist, and warm yourself from the inside. After one of these, I can save money by turning the heat off.

Jeremy also recommends any good old-fashioned party drink. He says that not many people complain with a splash of rum in their punch or a decent, well-made sweet and sour mix for margaritas. You can get the store-bought stuff for cheap, but if you have any inclination, a little bit of time and just slightly more cash can yield a better drink. Here?s the punch I had a recent party (and consumed enough vitamin C to keep me scurvy-free for decades):

Homemade fruit punch

As Jeremy advises, remember to stock your liquor cabinet not for breadth of options but for individuality. Try not to fall victim to the thought that you need to please all tastes and get over the marketing that tries to make us think we need to buy the top shelf liquor to shake up a decent cocktail.

What are some of your favorite party drinks either from hosting or attending? How do you economize when it comes to entertaining?

For several years now, I’ve lived in a sort of financial sweet spot. After paying off my debt, I realized that Kris and I had everything we really wanted or needed, so we never had to buy much for the house (except when something broke). But now that I’m on my own, I’m finding all sorts of little things I need to buy again. And those little things add up.

Last Friday, for instance, I invited the neighbors across the hall to join me for a glass of wine. Great! Except that I apparently no longer own a corkscrew. Oops. Something else to add to my ever-growing list of things to acquire. (Other items on the list: slotted spoon, measuring cups, kitchen tongs, pill box, hangers, picture hooks, toilet brush, and so on.)

Some of these things can be obtained frugally. I’m happy to buy kitchen utensils — including a corkscrew — at local thrift stores. I don’t need fancy stuff. But sometimes I end up spending more due to necessity, or because I make a spur-of-the-moment decision.

A Quick Bite to Eat
I’m a creature of habit. Because of this I tend to eat one of two meals for breakfast: chicken sausage or Bob’s Red Mill organic high fiber hot cereal with flaxseed. I cook the chicken sausage on the stove, but I’ve always made the oatmeal in the microwave. I have a little two-minute routine that produces perfect oatmeal and makes me happy.

Well, the new apartment didn’t include a microwave. And I was fine with that. Besides my oatmeal routine, I’m generally anti-microwave. I’m perfectly happy preparing food on the stove or in the oven. (It’s my inner Luddite, I guess.) I resolved that I was going to live without a microwave, which seemed like a frugal choice.

That resolution lasted one week. During that week, I made oatmeal several times, and each time sucked. First of all, it took more than ten minutes to prepare each batch. (The electric range takes much longer to warm up than the gas range in the house.) Second, the quality of the oatmeal produced on the stovetop was awful: gummy, lumpy, and gross. ¡Que triste!

So, when I found myself in a local department store last weekend, I made an impulse purchase. I bought a microwave.

The Calculus of Convenience
The microwave I chose cost me $80. If I’d been in frugal mode, I would have done more research to find the best model at the best price. I probably would have used Consumer Reports as a tool. But I wasn’t in frugal mode. I was in “I have a new apartment and need to buy things” mode. (This is a dangerous thing in and of itself, and a subject for another time.)

On a long walk yesterday, I ran the numbers through my head. Was buying a microwave a poor financial decision? Of course not. Let’s make some rough assumptions:

One way to look at the cost-effectiveness of the microwave is to look at the “price per use”. In this case, if the $80 microwave makes 100 bowls of oatmeal in a year, that’s about 80 cents per bowl. (And the cost per bowl would continue to drop over time.)

Another way to look at this, however — and the way I prefer to look at it — is to see how much time I’m saving, and how that applies to the cost of the microwave. So, if I think I’ll save 1000 minutes during the first year of owning the microwave, that’s nearly 17 hours that I’ve recovered. And $80 divided by 17 gives us $4.71 per hour. If my time is worth more than $4.71 per hour — and it is! — then the microwave is a good deal. (Plus, the hourly cost will decrease the more the machine is used in the future.)

If I could quantify the quality of the oatmeal, I’d have a final way to compare costs. But I can’t. All I know is I much prefer the perfect microwaved oatmeal to the gummy gunk I had been eating. That’s worth a lot right there!

Conclusion
Obviously, I’m not fretting over this purchase. I can afford it, for one. For another, we all know how handy a microwave really is. I’m not about to lapse into “how much is my hot chocolate?” thinking. (I hope.)

There’s a balance to be had. Sure, it’s silly to spend on unnecessary (or unaffordable) appliances and gadgets. I wouldn’t use a KitchenAid upright mixer, so it would be foolish to buy one. Kris, on the other hand, uses hers all the time. It’s a valuable tool in her kitchen. And as much as I covet a $650 blender, that’s outside my budget. (It might be in your budget, but it’s not in mine.)

For me, it’s fun — and motivating — to run the numbers on purchases like this from time to time, just to be sure they make sense. Now that oatmeal will taste even better because I know each batch saves me a little more money…or something like that.

This is a guest post from Crystal Paine, the Money Saving Mom. Paine is a wife, homeschool mom to three, self-proclaimed minimalist, and wannabe runner. For practical help and inspiration to get your life and finances in order, visit her blog, Money Saving Mom, or purchase a copy of her brand-new book, The Money Saving Mom’s Budget.

When my husband and I got married nine years ago, we had an audacious dream of paying cash for our first home. At that time, it was very much a far-off dream — we were just trying to survive the rigors and expenses of law school without going in debt. That alone was a seemingly gigantic feat.

But after three years of law school, my husband did graduate without debt, passed the bar, and we started planning for the future. Since we’d been renting for almost four years, my husband had a good job, and our second baby was on the way, pretty much everyone expected that buying a house would be in our immediate future.

I mean, after all, isn?t buying a house the responsible thing for a young couple to do? Well, maybe — or maybe not. We didn?t have much money in savings, and we weren?t sure how long we would be living in the town we were in, so we chose to go against conventional wisdom and continued renting.

Setting a goal
Within the next six months, my husband lost his job, we relocated to another city so he could find work, I had some significant health problems in my pregnancy which resulted in numerous hospital and doctor?s bills, and we had our second baby. Needless to say, we were incredibly thankful that we hadn?t taken out a mortgage and then had to deal with the headache of trying to sell a house at the last minute — especially since the housing market was poor in our area.

It was around this time that we were first introduced to Dave Ramsey. While we didn?t have any debt and had always lived on a strict budget, going through his Financial Peace University Class fired us up to set big financial goals and work hard to accomplish them.

One of the big goals we decided to aim for was paying cash for our first home. We crunched a bunch of numbers and realized that, if we continued to live simply and frugally and worked hard to bring in extra money through side jobs, we could save enough over the course of five years to pay cash for a starter home.

It felt like a mammoth goal and we weren?t sure if we could do it, but we decided to go for it anyway. We figured that, even if we didn?t make our goal in five years, we?d at least be a lot closer to it than if we didn?t try at all! Plus, from our calculations, we?d be in a lot better position to wait to buy — even if it took seven years to save up enough for a house — than if we were to go ahead and get 15-year mortgage and pay it off early.

We knew that we could buy a decent starter home in the area where we were planningto move for around $100,000 to $110,000, so we divided $100,000 by 60 (since there are sixty months in five years) and set a goal to save $1700 every month. Because we didn?t have any debt or school loans, and because we lived simply and frugally, we were able to live on significantly less than we were making, thus freeing up a good chunk of money to put towards our house savings each month.

Gazelle-like intensity
Once we set this goal and I blogged about it publicly, we were incredibly motivated to work as hard as we could and delay every purchase we could in order to put as much as possible into our house savings fund. We used coupons, ate a lot of meatless meals, shopped at thrift stores, cooked from scratch, brown bagged it, continued to use our old and worn-down furniture, didn?t replace anything that wasn?t an absolute necessity, limited our going out to eat, only had one car, stayed home a lot, used gift cards from Swagbucks to buy any non-necessities, bought eye glasses from Zenni optical, learned to be content with what we had, and continued to live on a strict written budget.

Meanwhile, we also looked for ways to increase our income. I blogged, wrote ebooks, and took on freelance writing jobs. My husband did contract work, started his own law firm, and helped me running the blogging business.

That first year, we didn?t always make our monthly savings goals. We had some unexpected medical bills and car problems that ate up a portion of our savings. But we kept plugging away, throwing whatever extra we could squeeze out of our income toward savings.

The few years of long hours and hard work we?d put into blogging started to really pay big dividends and by the second year, we were meeting and exceeding our monthly savings goals every single month. As our house savings fund increased, we began to get so excited that we kind of went overboard and worked long, long hours in order to meet our savings goal even faster. I wouldn?t recommend putting in such long hours, missing so many social events, or sleeping so little, but the effort paid off because, at the end of two and a half years, we paid 100% down on our first home!

Even though I wish we had given ourselves a little more breathing room and margin while saving, it was thrilling, fulfilling, and exciting to achieve this goal — in half the time we had initially planned. And we are thankful we chose to take a counter-cultural route and pay cash for our house. Not having a mortgage payment has freed us to continue to save aggressively toward other goals, increase our spending in areas that really matter to us, and give generously to needs in our community and around the world.

This guest post from Clara is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. This story seems especially appropriate after the news I shared this week.

Two and a half years ago, my marriage ended. I left a comfortable financial situation and found myself one step above being eligible for food stamps. Money from our joint accounts paid for the down payment on my rental, but I also needed furniture, household equipment, and beds for me and my two children. The little things add up.

I found the tiniest little house to rent, priced well under market value (perhaps because it’s only about 450 square feet). This little cottage has its charms, but it’s very rough around the edges. Winter winds seem to shoot straight up from the crawl space. Still, it’s cheap. And I have access to a yard and a garden, and the landlords and neighbors are nice.

I took a few things from the house I’d shared with my husband. Virtually everything else was purchased used from yard sales during the months before I left: kitchen knives, pots, lamps, towels, a TV. Even artwork and the shower curtain came from yard sales. The only things I bought new were the beds and the refrigerator. I started life on my own with no money in the bank at all.

Starting with nothing
The divorce was in mediation, which didn’t seem to be going so well for me because I had no idea about my rights to marital assets. My car died, so I took out a car loan, my first debt in many years. My part-time job ended just after I signed my lease, and I couldn’t stay in the house with my husband, so I just kept moving forward.

I found another better-paying, part-time job and made a hasty decision to go to graduate school. I wanted to get a master?s degree since decent jobs were as scarce as hen?s teeth then. I took on student loans to pay my in-state tuition costs and to buy a laptop computer that was absolutely necessary to be a student again (our only computer).

Meanwhile, my kids and I played board games and borrowed books from the library. I bought bikes, scooters, and other toys at yard sales. I was lucky in that my ex-husband was good about paying the spousal and child support, but there sure wasn?t anything to spare.

We lived quite frugally, to say the least. I cut expenses to the bone.

Three years later
Eventually ,I got a raise at my part-time job, found a summer job when I didn?t have classes, starting doing some tutoring, and sold things on-line as well. it was a tough schedule with two kids, graduate school, and everything else. But here I am, almost three years later. And there’s money in the bank (a four-month emergency fund, plus I allocated the car loan money to a car fund account so I have something the next time I need to buy a car).

At first, I lived on $25,000 a year in a high-cost area (and, frankly, it’s not much more than that now), but I still saved money.

I had an opportunity to become a graduate assistant; because I had so little debt and such low expenses, I was able to do it. Now my salary is minimal, but I’m getting free tuition and lots of mentoring from many wonderful professors. I will graduate in May and start to look for a full-time career in a couple of months. I’m aware that I may need to take a couple of part-time jobs instead.

Looking to the future
The divorce still isn’t finalized. When it is, I’ll be able to pay off my $16,000 in student-loan debt. Once gain, I’ll be utterly debt free. I was able to leave my share of retirement funds untouched during the divorce, so retirement calculators tell me that I have enough to fund a very frugal retirement at age 67.

My kids and I are healthy and happy and sane. When the divorce is finally settled and I have a full-time job, I am planning to buy a house: a nice, small, affordable house.

It’s been hard. There are nights when I sit with just one light on studying because I need to keep down the electric bill. But we always had enough for our needs, plus enough of our wants to keep from going crazy. I even got a scholarship to the local Y for me and my kids. Because I’ve lived a frugal life for several years, there’s no prior debt at all, which of course makes everything much easier.

I never figured I could live so happily in such a tiny house with so little money. But I’ve learned that this freedom is the gift that frugality gives me.

This post is from staff writer April Dykman.

One of my goals for GRS in 2012 is to write more about earning money.

I quit my job a year-and-a-half ago to become self-employed, but I know that most people are employees, and I’m the last person who would suggest that everyone should quit their jobs and become full-time freelancers. For one thing, it’s not right for everyone. It can be lonely, and it doesn’t come with medical benefits, which some people need, especially those who can’t get individual insurance at a reasonable cost. Depending on your career, it might not even be possible (never heard of a self-employed police officer, for example). And some people want to put in their time and leave work at work at 5 p.m., or just plain enjoy their job.

There are a lot of reasons why it makes more sense to be an employee, which is why I don’t plan to only write about starting a side business or freelancing (although I do plan to cover those topics), but also how employees can earn more at their current job and make savvy career moves.

A history of unsuccessful negotiation
I worked for one company or another from the time I was 17 until 2010. And one thing I never mastered, despite my sad attempts, was the art of negotiating salary. There was the job I took because I desperately wanted to work for this company with great benefits and “just be an editor” (not an editor and secretary and event planner and marketing coordinator and graphic designer…). They called, offered the job, and I said “yes” to all of it without even blinking. There was the job where I tried negotiating ? I even researched how to negotiate and prepared facts and figures ? but felt strong-armed into taking the amount offered.

In both cases I was scared they’d pass me over. I didn’t know what to say if they said “no”. I wondered if it was even possible to negotiate at either of these companies, or was it more that the common denominator here was me? So when I decided I wanted to write more about career strategy this year, I also knew I would need to bring in some experts. Obviously I’m not the best person to tell anyone how to negotiate their salary!

How the pros negotiate
Recently I spoke with Ramit Sethi of I Will Teach You To Be Rich (the blog and the book). When Ramit was studying at Stanford, he got a group of friends together who, like him, were interviewing at some of the world?s toughest companies ? such as McKinsey, Google, and Goldman Sachs ? and learned the intricacies of interviewing, negotiation, and writing effective résumés.

I interviewed him about some of the top mistakes people make when it comes to negotiating salary, and how to overcome your fears.

April: What is the biggest mistake people make when it comes to salary negotiations?
Ramit: They don’t negotiate at all. We concoct all kinds of reasons why ? “The economy is terrible!” and “I’m just lucky to have a job,” and “They don’t have a budget this year,” but really, we don’t know if it will work because we rarely try. In our research of 20,000+ people, we found that most of us are afraid of negotiating for two reasons: We were never taught how, so we don’t know what to say, and we worry what will happen if they say “no.”

April: There was one job offer where I didn’t negotiate at all! I accepted their offer right away because, like you said, I was scared they’d rescind the offer or think I was being difficult. What’s one thing can we do to assuage our fear of negotiating?
Ramit: Practice relentlessly. I went from closing zero interviews to closing a double-digit percentage of interviews once I practiced ? and practiced in the right way. First, practice in front of a mirror. Then, record yourself. Next, have a friend run a practice negotiation and videotape yourself. Most of us find this weird, but I find it weirder to leave literally millions of dollars on the table over your career because we don’t want to take a few hours to negotiate.

April: What are the gender and age differences when it comes to negotiating?
Ramit: The data is clear that women negotiate far less frequently than men, costing them tens of thousands of dollars in the short term and millions over the course of their careers. They also use subtle phrases that cost them thousands, like “I think” or “I’m not sure, but…” There are very subtle gender pressures in a negotiation, so it’s extremely important to practice and deconstruct any self-sabotaging verbal or body language tics that compromise your position. This can work well ? my female students negotiate, on average, $10,000 in salary increases.

April: Wow. I use those phrases all of the time! But some negotiating tactics sound like they could be pretty uncomfortable if someone isn’t good at selling themselves. Does successful negotiation involve sales techniques or some kind of Jedi mind tricks?
Ramit: When I was younger, I had to get scholarships to pay my way through college. I ended up applying to 60-70 scholarships, and when I landed my first interviews, I kept losing again and again. I finally decided to videotape myself and I discovered a subtle tic ? I wasn’t smiling! In my head, I was a friendly guy. On camera, I wasn’t coming across how I wanted to. Once I started smiling, I started getting scholarship after scholarship. Is that a Jedi mind trick? Or is it simply studying the process systematically? None of this is magic, but it does require some unconventional approaches.

April: At one of my companies, my boss was notorious for putting people off when it came to an answer about raises ? is it worth “bugging” my boss? Do a few thousand dollars more make that much of a difference?
Ramit: Even one $5,000 raise ? just one ? can be worth $1 million over an entire career. And people who tend to negotiate a raise once tend to do so repeatedly.

Well, there you have it. It was me, not them. I was a young female using phrases like “I think” who was too fearful to ask for raises because I was always hearing about budget concerns and how we were lucky to have jobs. I was pretty textbook, and a lot of that could have been remedied if I had videotaped myself. It’s a powerful way to avoid common mistakes ? such as not smiling or using weak phrases that undermine your efforts ? and to gain confidence before you sit down with your boss.

If you’re interested in more on negotiation, Ramit is offering a free mini-course that includes tips on overcoming fears about negotiating; the three biggest interviewing mistakes; the exact words to use to get a raise; and more. Here’s a preview of what you can expect:



Do you negotiate your salary? If not, what has held you back?

This post is by guest writer Carl Richards. Carl is a financial planner, contributor for The New York Times and Morning Star, and author of Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money.

With 2012 still fresh and new, it?s a great time to make a plan to have a better year financially than we did in 2011. But figuring out how to make smart decisions about money can be a frustrating experience. In large part it comes from the sense that it should be easy. After all, it should be a simple math equation, something that fits in a spreadsheet, right?

I think a significant part of our frustration with money comes from the fact that making smart decisions is not as simple as finding the right spreadsheet. Emotion and how we feel about money plays at least as large a role as the calculator.

Given the role that emotion plays in our financial decisions, I?ve found it far more interesting, and frankly more helpful, to focus on asking the right questions, instead of obsessing over one-size-fits-all answers. By learning to ask better, or at least different, questions we can have some hope of having a better experience.

This approach reminds me of the old Stephen Covey lesson about spending our entire lives climbing a ladder only to find out it was leaning against the wrong wall. As we start to ask ourselves different questions about money we can make sure that we?re climbing a ladder leaning against the right wall.

To get started, I suggest asking yourself and/or your partner some of my favorite money questions.

1. What’s important about money to you?
I’ve asked this question in hundreds of interviews over the years, so I?m no longer surprised when the initial answer is silence. We?re not used to thinking about the importance that we place on money and why. This question is not about goals, like saving for education or retirement; it’s about values, like security, freedom, flexibility, and peace.

The goal of this question is to define your financial values and help you get to the ?why? of money. Don’t stop with the first answer or even the second. Most often I hear people say things like security. But keep pushing. What’s important about security to you? Think of the answers as a progression of values and your goal is to keep digging until you can say, ?There is nothing about money more important to me than XXX.?

One time I had this discussion with a very successful professional couple. The wife was in the prime of her career as a successful emergency room physician. Like many people before her, the first answer to this question related to security. But as we continued to push, the answer became, ?I?d like to have more time.? When I asked why time mattered, she got very quiet, and then said, ?I finally want to have time to have a child.?

The most important thing about money to this emergency room doctor was getting to the point where she would have the security and the flexibility to have a child. Of course your answer will vary from this doctor, your friends, and your neighbors, but that’s why this is so important. Once you become really clear about what’s important about money to you, then you have the emotional context to talk about goals. To return to the ladder example, it?s about defining the wall you want to lean your ladder against.

2. Where do you want to be financially in three years?
The context for answering this question should be based on what you learned in the first question. Whenever possible, the answers should be specific and measurable. Think in terms of defining and setting goals.

For instance, if one of the most important things about money to me is providing opportunities for my children, I might set a goal to start saving for education. But of course that’s not specific enough. The next step requires that you define exactly how much you want or can afford to save. I found it to be most helpful to make these goals specific in terms of time frame and dollar amount.

They need be no more complicated than, ?I will save $100 a month on the 15th of each month into my child’s 529 account.? Picking the specific numbers and even the timing may take some work to figure out for your particular situation, but plenty of online savings calculators exist to help you figure out the best number for you.

It’s important to notice that so far we haven’t talked all about rates of returns or specific investment products. So far this is just about the plan, not the product; it?s about a process of planning. The other thing that’s important during this step is to let go of the need for precision.

While we want the goals to be specific and measurable, you also have to realize that often these are guesses. You don’t really know how much you’ll need to save to meet an educational goal, for instance, because too many assumptions go into it. So what we need to do is avoid getting hung up on the need for precision at the expense of getting started. Realize these are guesses, make the best guess you can, and get to work.

3. What good habits will help me reach my goal?
When it comes to money, behavior plays a massive role in our success. The big problem is most of us behave poorly if left to our own devices. The solution is pretty well documented at this point: we have to find ways to automate good behavior.

If you determine that you should be saving $100 a month towards education, don’t make that decision every month, make it automatic. It’s as simple as signing up for an automatic withdrawal out of your checking account and into your child’s 529. If we make this into a decision that requires action on our part every single month, we will fail. If it’s going to require you take out your checkbook, write a check, address an envelope, put a stamp on it, and put it the mailbox you can tell it’s not going to happen. There will always be other things that we would rather spend $100 on. So take advantage of automation.

Another example of good behavior that we can automate is rebalancing our investment portfolios. This is a pretty simple concept. I believe it?s one of the most important things we can do to avoid the big behavioral mistake of buying high and selling low that we?re also prone to commit.

Here’s the deal: let’s say you determine that the 529 education account should be put 60%into stocks and 40% into bonds. So you setup the account and invest in broad-based index funds to ensure diversification. Now comes the avoiding temptation part.

Perhaps you set up the account in mid-2007 right before the massive declines of 2008 and early 2009. After watching the market go down 20, 30, or 40%, you?d probably feel like selling what you had invested in stocks. But clearly that decision doesn?t match with our goal of rebalancing. The key to investing success is pretty simple: buy low, hold on to it, and sell it for a higher price later. But instead we?re tempted to buy high (when we feel good about things) and sell low (when we feel bad). It?s why the behavior gap exists.

Going back to the earlier example, emotionally we wouldn?t want buy more stocks to get our portfolio back up to a 60/40 value split. Instead, we?d be tempted to liquidate our stock holdings. By adopting rebalancing as part of our investing strategy, we avoid this temptation because it automates behavior.

So if we started in 2007 with 60% of our money in stocks, and the market declined, we would now have something less than 60%, let’s say 50%. However, if you?ve automated the rebalancing process, you?d be taking money (10%) from the bond side of the portfolio that did relatively well (high) and move it into the stock side of the portfolio (low) to restore the 60/40 split.

Avoiding the greed trap
There are a lot of benefits that can come from rebalancing, but none is more important than effectively automating the good behavior ? avoiding the big behavioral mistake of getting scared out of our portfolio after a market decline. It also works to prevent us from getting greedy after a market is having huge run.

Warren Buffett said the key to investing success is being greedy when others are fearful and fearful when others are greedy. But unless you see Buffett in your mirror, it’s almost impossible to do unless you automate that type of behavior through disciplined rebalancing. There are plenty of services out there that will actually rebalance for you.

Each of these questions demonstrates my primary goal in writing The Behavior Gap. It wasn?t to provide another step-by-step personal finance book, but to help people think through the questions we need to ask ourselves. By providing a framework, there?s the opportunity to have more meaningful discussions about money.

Plenty of great resources cover the specifics of how to implement financial decisions, including J.D.?s book, and the ongoing discussion on this site. My hope is that we also can take a little time to have some more meaningful, honest conversations about money with the people we love to make sure that the ladders we are climbing are leaning against the right walls.

This post is from GRS staff writer Donna Freedman. Donna writes a personal finance column for MSN Money, and writes about frugality and intentional living at Surviving And Thriving.

Have trouble saving money? Time for some mind games.

Hide cash via direct withdrawals. Get free money from banks. Name an account for a goal. Make your savings ?one-way,? i.e., really hard to tap.

The unemployed and underemployed may feel ? with good reason! ? that they can?t afford to save. Even those with decent salaries might feel squeezed by the rising cost of basic needs like food and utilities, especially if they?re repaying student loans.

Here?s a cold, hard fact: You need to save anyway ? and not just for an emergency fund, but also to augment your eventual retirement. (And when you?re my age, ?eventual? is closer than it may appear in the rear-view mirror.)

Maybe you really do need need every dime to keep creditors at bay. Or maybe a little budget-tweaking could free up some extra bucks for your Someday Fund. Even if it?s just a tiny amount at a time, it?s something.

Easy does it
The simplest way to save is to automate it. Have a small amount siphoned off each payday by your financial institution (I use an online bank for this) and learn to live on what’s left. Increase the amount slowly ? an hour?s pay at a time, perhaps? ? to give yourself time to adjust your spending.

See if you can get to the 20% mark suggested in the 50-30-20 budget. Since that 20% refers both to savings and debt repayment, get those cards paid off so you can salt away more at a time.

Incidentally, that does not mean exile to the Island of No Fun At All. The ?30? in that plan allows for 30% of earnings to go to ?wants.?

Some ways to inch closer to the 20% savings mark:

Every dollar ? and every dream ? has a name
One financial planner I interviewed sends his clients monthly ?invoices? for their long-term goals, e.g., ?pay cash for next car? or ?comfortable retirement.? Think of your savings account as a line item on your budget, and pay it along with the rest of your bills.

Another planner told me her mom always said, ?Every dollar has a name.? Those bucks had some pretty prosaic names: Rent, Utilities, Groceries. But the lesson stuck, and the little girl grew up to include a name in her own monthly budget: ?Savings.?

My own experience with naming was not a line item but a targeted account called ?Home.? (As in, ?a home of my own some day.?) I started it with one of those ?free money from banks? deals and beefed up the account with any extra cash I got: manufacturer rebates, a little holiday bonus, wrapped coins, babysitting jobs, pet-sitting gigs, mystery shopping.

Whether you do long-term savings as a budget line item or as a targeted account, you?re giving your dollars a name. You?re sending them to a specific area to do a specific job. You?re being proactive about your financial future rather than just heaving greenbacks toward that amorphous entity called The Bills.

A glimpse of the future
Maybe you need a more tangible reminder of your goal. Some people slip photos of their kids between the cellophane and the cigarette pack to bolster their efforts to stop smoking. I?ve also heard of folks who rubber-band pictures of their dreams (new house, Mini Cooper, whatever) to their credit cards to discourage in-the-moment spending.

I once interviewed a woman who created a computer-drawn design of her dream kitchen. Then she pinned up the picture by her desk as a reminder of why she needed to save. It worked: She paid cash for the remodel.

Another woman I spoke with changed an online shopping account password to the year her kid would start college and the preferred university?s acronym. Retail therapy wasn?t nearly as important when the sign-on became something like ?2014UCLA.? It was a sobering reminder that baby needed textbooks much more than mama needed a new pair of shoes.

These same tactics could work when the goal is beefing up savings vs. getting yourself some gorgeous granite countertops. Personally, I recommend solid-surface counters. Some of that counterfeit stone is so good you could take it for granite. (Sorry. I couldn?t resist.)

Hands off!
Make it tough to touch your funds and they?ll remain safe from moments of temporary insanity. (Back away from the comic book store! Hands where we can see ?em!) I?ve got a few suggestions for isolating your dough:

But don?t save every dime. You need categories like ?discretionary spending? or ?riotous living? in your budget, too. (Or just cut to the chase and create a line item called ?bail bondsman.?) Spend it any way you like ? but once it?s gone, that?s it until the next pay period.

If you don?t spend it all, you have the choice of depositing it into savings. While it can be really satisfying to watch that balance increase, I?d caution against banking the surplus every month. Live too close to the bone for too long and you might eventually knock yourself off the wagon. Allow for some wants along with the needs and you?ll find it easier to stay within the budget the rest of the time.

We all need goals
In a perfect world you wouldn?t need a bag of pecuniary tricks. You?d just pay yourself first as a matter of course. Life isn?t perfect, though. Some days it?s not even above-average.

Don?t feel you have to do it all. You won?t get kicked out of the movement if you don?t embrace every frugal hack extant. Sometimes it?s still hard for me to spend money, but I recognize that I need to loosen up lest I reflect the worst attributes of Hetty Green (miserliness) without any of the advantages (shrewd business sense, huge net worth).

Thus I don?t lose any sleep if I neglect to bank my coupon savings or to save every dollar bill that comes my way. In fact, my ?Home? account is no more ? at least as a private entity. When I got mugged a few months ago I had to redo my bank accounts since my personal information had been compromised. I realized it didn?t really make sense to have a separate account, so I merged it with my regular savings.

Yet it still exists in my mind as the seed money for a smallish house with a decent southern exposure for gardening (mostly things I can eat) and a front porch swing. We all need goals. The possibility of homegrown tomatoes keeps me tucking away the savings. But I make sure to shake loose a few bucks for the bail bondsman fund, too.

This post is by staff writer Sarah Gilbert.

Suze Orman is famous for her personal, easy-to-digest, and friendly personal finance advice. Many of us less famous (far less famous, in the case of this writer) finance writers admire her general approach, which boils down to “spend less than you earn.” Who can argue with that? So imagine my amazement at the news this week that Suze will be offering a branded prepaid debit card.

Prepaid debit cards have a star-crossed reputation
You know about branded prepaid debit cards, but they’re usually not connected with individuals known for their sensible finance advice. Think Russell Simmons. Think the Kardashians. See? Sample words and phrases from our collective wisdom on those topics include “skeptical” and “reprehensible” and “urge to scream” and “hit cash-strapped consumers over the head with nickel-and-dime charges.”

The biggest problems with prepaid debit cards are, really, threefold:

Suze Orman wants to make a difference (but, is it a fool’s errand?)
Orman has a different idea. She, too, wants to convince the unbanked to use her prepaid debit card, but she wants to charge less. Her “Approved Card” is far cheaper than Rush or the K thingy ? only $3 to purchase the card and a $3 monthly fee. ATM transactions from the Allpoint network (found in 7-Eleven, Costco, Kroger, CVS, and Walgreens) are $2 per withdrawal, and point of sale transactions, such as purchases at the grocery store or coffee shop or online, are free. Balance inquiries and some declined transactions are $1 , but it’s free to be declined at the register for a regular PIN/signature transaction. Many of these transactions, especially ATM withdrawals, are free for 30 days with a direct deposit or bank transfer into the Approved Card account, making them a great product for customers with some sort of automatically-deposited income (even, for instance, unemployment).

Notably, electronic debit bill paying is free. Many competing products charge for this service, from $1 to $3 per transaction, and it’s the service that customers without a regular bank account need. Often, discounts and special deals are available to customers who allow vendors to debit their account each month.

The great credit score kerfuffle
The concept that sells many prepaid debit cards ? the quasi-justification for how expensive they are ? is that they might help in the quest to raise a credit score. If a credit score is low enough so that a mainstream bank isn’t part of your personal finance portfolio, can a prepaid debit card even help? Probably not.

The problem that Suze Orman has mentioned in public statements about the Approved Card is that credit bureaus, beyond even knowing about the transactions made by the millions of unbanked consumers, don’t care about sensible use of money. They just care about sensible use of credit. A New York Times piece quotes Orman as saying, “There is something radically wrong here. We are rewarding people for having credit and punishing people who pay in cash. I want to change that paradigm.”

Wanting to change credit score calculation is easy. Changing is hard.
Orman has done the near-impossible and convinced TransUnion, one of the big three credit bureaus, to collect the data about spending habits from her customers. But what that will do to credit scores is another thing entirely. The answer, probably, is nothing.

The problem is that TransUnion has only been persuaded to evaluate the data Orman will collect with her Approved Card; it has not promised to include that in credit reports nor in the calculation of scores. If, after two years, it finds the data meaningful, it’s still unlikely to have much of an effect on the resultant calculations. Responsible use of a prepaid debit card, after all, hasn’t had much impact on the financial institutions that sponsor the card ? in this case, Orman’s own company ? so the patterns of data don’t have much meaning.

What kind of debit card use could demonstrate the sort of behavior creditors want to see, such as:

These all can be shown far more reliably through existing reporting. A consumer who pays rent on time each month in cash won’t differ, to the eyes of TransUnion, from a consumer who pays rent on time each month by automatic debit from her Approved Card. Similarly, failing to overdraw an Approved Card account (that is impossible to overdraw from, except perhaps for a few $1/$2 ATM transaction declined fees) is very different from failing to overdraw a bank account.

Why would you use a prepaid debit card?
There are two groups of people I can see benefiting from using a prepaid debit card, as well as one group I would caution to avoid it. All of them could achieve higher credit scores, but not in the way you think. Let me explain.

About those credit scores…
One last word of admonishment about focusing one’s financial life to better one’s credit score: I think this is largely baloney. You’re far better off arranging your financial life around living more frugally, paying off debt that you do have, and finding ways to avoid incurring new debt ? say, buying a beater car until you can afford to save up for a nicer one, or renting a low-cost apartment until you can save up a very large down payment for a house. Ideally, you would be living in a way that makes credit scores worthless.

Naturally, we’re not all living in this paradise. There are very valid reasons to hope for a great credit score, not least of which is that many jobs include a credit check sometime between interview and first paycheck. I get that sometimes you need a good credit score (especially if you want to buy a home). But if you’re like me, and already have both a mortgage and reliable transportation (a fancy bike, in my case) and don’t see applying for a job in your immediate future, just work to improve your financial situation. If this means signing up for Suze’s debit card, you have my blessing.

Two months ago today, I asked my wife for a divorce.

I won’t be writing about the personal aspects of the divorce at Get Rich Slowly. In fact, other than some brief background at my personal site, I don’t intend to write it about it on the web at all. Kris and I are both emotional wrecks right now; the wounds are fresh and raw for both of us.

That said, I can no longer avoid sharing the truth with GRS readers. Too many of my financial decisions — present and future — are tied to the divorce. I’m hunting for health insurance, for instance, and I’ll have to re-evaluate my asset allocation. And ten days ago, I moved to a new apartment.

Living Small
For the past eight years, Kris and I have lived in an 1800-square-foot house on three-fifths of an acre. The place also includes a large garage, a workshop, and a couple of out-buildings. Plus, I’ve been leasing an office up the street. Despite working to reduce clutter in my life, I have a lot of Stuff. I’ve written a lot about wanting to simplify, about wanting to live in a smaller space, but I’ve been reluctant to take the necessary action.

Now, though, I’m moving. And because I’m moving, I feel obligated to practice what I preach. While part of me wants to find another house (Kris is keeping ours), I know it’s better to find a smaller space and to adjust my life to fit it. Thus, I’ve been looking to see how some of my friends manage to live not-so-big lives.

For instance, last fall Tammy — who writes about simplicity at Rowdy Kittens (and who shared a GRS reader story about the benefits of biking) — moved into a tiny house. The entire home is only 130 square feet! She and her husband had me over for dinner recently, and I shot some video of the space:

I loved Tammy and Logan’s tiny house. The floor plan is well-designed and functional. Still, I’m not ready to live that small just yet.

Instead, I opted to rent an apartment.

The Apartment
While most folks were spending Thanksgiving week, well, giving thanks, I was hunting for apartments. Some might consider going from house to apartment a step backward. I don’t mind. In fact, as I’ve mentioned before, I actually believe renting can be a great choice for the right person. In this case, I think I’m the right person.

While searching for a place to live, I tried to take a lot of things into account. Price was important, obviously, but so was the age of the place, the layout, and, especially, the location. Over the past five years, I’ve come to place a premium on walkable neighborhoods, and I know I wanted an apartment with a high walk score.

I found a place I liked in a good location near downtown Portland — the biggest drawback is that it’s right next to a donut shop (danger! danger!) — and signed a lease. But then I started to worry that I was paying too much. By comparing notes with other people, I’ve since decided that while I’m not getting a bargain, my rent is reasonable.

Best of all, the apartment has a walk score of 88 (very walkable) and a transit score of 73 (excellent transit). And because I’m an avid walker, I can reach neighborhoods that the Walk Score app doesn’t consider. (As a comparison, our house has a walk score of 49, meaning car-dependent, and a transit score of 32, which means it has some transit.)

I’ve been in my new place for ten days now, and I like it — but it doesn’t feel like home. Still, I’m trying to make the most of these 705 square feet. Instead of just talking about how much I want to cut back on clutter, I’ve been faced with tough decisions every day. Which books do I keep? Which comics? How many pairs of shoes? How many jackets? Do I really need (or want) my records and record player?

By making judicious choices (and with the help of some new furniture from Ikea), I think I’ve reached a good balance. My new place contains the things I need — but it’s not filled with a lot of clutter and junk. It’s my hope that this will continue for the foreseeable future.

Fear of the Future
Now that I have a place to live — and now that I’m mostly unpacked — there are other problems to tackle as a result of the divorce.

For one, how do I handle health insurance? For eighteen years, I’ve been on Kris’ policy. Not anymore. After the divorce is final, I have only a few weeks (or maybe even just a few days) before my coverage with her carrier lapses. I’m the sort of guy who might risk going without health insurance for a few months or years, but Kris won’t have it. “We are not getting a divorce until you can prove to me that you have health insurance,” she told me the other day.

Meanwhile, what do I do about my office? Does it make sense to continue to rent that space? Should I find someplace closer? More importantly, what about day-to-day stuff like laundry and groceries. Obviously, I’m capable of handling these chores on my own, but due to the division of labor within our marriage, I’ve always relied on Kris to handle most of these chores. Now I’m going to have to budget for food, plan meals, and buy supplies on my own.

Kris has lots of questions about the future too. She’s still in the house, after all. How will she handle the yard work? Who’s going to take care of her car? And so on. But she too is capable of handling these things on her own. Besides, we both agree that figuring out the chores is inconsequential to figuring out the big stuff, the emotional stuff.

For now, Kris and I are still in constant contact. We had dinner Friday night, I drove by the house yesterday, and we’ll have dinner together tomorrow night. Plus, we still plan to share a vacation to Argentina in a few weeks. If one of us gets into trouble, the other will be there to help. Our marriage may be ending, but our friendship isn’t.

This guest post from Crystal is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. Crystal writes about finding the balance between paying the bills, saving for the future, and budgeting for the fun stuff at the aptly-titled Budgeting in the Fun Stuff.

Last time I guest posted here at GRS, it was March 2011 and I still had a day job. And it was a crappy day job. I worked in a customer service cubicle position for a company that seemed to go out of its way to tick its customers off. My 45 hours a week plus commutes earned me $26,500 annually before taxes and benefits when I started in June 2005 and $35,500 by the time I left in July 2011.

You read that correctly — I left. I quit and it felt so good! Here is how I turned my side hustle of blogging into my full time job.

Growing My Blog
I started Budgeting in the Fun Stuff in February 2010. I really just wanted to create an online community of personal finance geeks like me that knew how to have fun too. I’ve been posting daily at BFS ever since and have grown it into a site that gets more than 15,000 visitors a month. I know that isn’t the biggest blog ever, but I am proud of it and am so thankful for all of my supporters.

If you are interested in growing your blog, I highly suggest commenting on other sites in your niche. Most of my readers seem to have found me through comments I have left elsewhere. Also, join a blogging forum that fits your site. I have learned so much from the people I’ve gotten to know through the Yakezie Network. I also think that guest posting truly helps. Not only do you build up links and your reputation online, but readers will start following you if your guest posts are interesting and fun to read.

Creating a Goal
As my blogging hobby grew, I started receiving emails from advertisers. I sold my first sidebar ad within 2 months. I then earned a Google Page Rank and started receiving even more offers. Within a year, I was bringing in about $850 a month from direct ads. I was very excited but knew I’d need at least 3 times that to quit my full time job.

My husband and I sat down and created a goal in March 2011. Specifically, we decided on my blogging target number — $2500 a month from online income on average for 4 months in a row with no less than $2000 in any given month. In short, I needed to make $10,000 in a 4 month period before I could comfortably quit. At the time, I thought I was about a year away from hitting that number. I had no idea what was about to happen.

Starting My Business
In April 2011, Kay Lynn from Bucksome Boomer made a suggestion that has literally changed my life. She knew I enjoyed negotiating with advertisers based on comments I had left in the Yakezie forums. She also knew that she hated it, so she asked if I’d run her advertising for her. We worked out the details and I started nearly immediately. Within a few weeks, I decided to offer my services to others. By the end of May 2011, I had 12 ad clients. I added another 17 in June and it just kept growing by leaps and bounds from there.

Since I make a commission from the deals I close, running the advertising for others meant that my own online income started growing way faster than I ever could have imagined. I also started staff writing like crazy to supplement. I hit $3750 in March thanks to three big ad deals on my own sites. April brought in about $2100 thanks to my new business. Then May brought in about $2050. So I was at $7900 and June came in at more than $5100!!! I was astounded!

Quitting
In July 2011, I hit a wall. I couldn’t grow my online business and work my day job anymore. I was putting in about 45 hours a week at my day job (and sneaking in a ton of blogging time). Then I’d come home and put in another 5 hours each week day and full 8-10 hour days on the weekends in order to keep up with my online work — like writing for my own blogs, running my ad business, and writing and editing the posts for my 11 staff writing positions. I was literally working 85 hours a week on a slow week. So I quit.

I gave my notice in early July and walked out a free woman on July 15th, 2011. I was happy. I was excited. And I was scared.

Self Employment has been Kind
I now run the joint advertising emails for more than 80 bloggers with a total of more than 100 sites. I get to help a ton of bloggers like Kay Lynn. Some of my clients just don’t enjoy dealing with advertising, some don’t have the time, and some want access to more advertising contacts.

I also still staff write for two other sites, continue to post daily at Budgeting in the Fun Stuff, and post weekly on How I Make Money Blogging. I pay myself $1650 every two weeks with $500 of that being diverted into an account for taxes when they are due. My best self employment months so far have been October 2011 and December 2011 when I made more than $18,500 and $25,000 respectively! These two months have proven to be outliers, but $8000-$10,000 a month seems to be the norm. We are saving a third of the extra cash for taxes and using the rest to pay off our mortgage early and to invest more for our future.

Moral of the Story
I am living proof that anyone can achieve whatever they want with the right mixture of ability, persistence, time, and luck. And that mixture is different for everyone. For example, I am finally using my college degree in Marketing to help others and fund myself. I am persistent enough to follow through on all of my obligations. I had the time to put in during those 80-100 hour work weeks earlier this year and continue to put in about 50-60 hour weeks now. I was lucky enough to have a key strength pointed out to me by Kay Lynn in April 2011 and followed through.

Maybe someone will need to substitute some time for ability or add in some persistence in place of luck, but I know there is a right mixture for anyone willing to go for it. Good luck!

Many of the reader questions I get here at Get Rich Slowly follow a familiar formula. The person sends me a breakdown of her income and expenses, also sharing how she’s allocating her savings. From these figures, my correspondent wants to know if I’d make changes to her budget.

Unfortunately, I’m not qualified to answer questions as specific as these. (And I don’t have time to answer them all!) That said, there are often certain themes, such as: “Am I saving enough?”

For instance, Kailey wrote recently with the following question. To me, it’s clear she’s saving plenty — but how should she allocate what she saves? That’s the question. Here’s her e-mail:

I’m 25 and about three years into my professional career. I’m pretty diligent about savings and contributing to my 401(k). Of course, I never feel like I’m saving enough, even though I’m fairly confident that I save much more than many of my peers.

One-third of my income goes directly into my ING account for my emergency fund (which is fully funded for approximately one year of living expenses) and now is being used to accumulate money for a down payment on a house/condo. Unfortunately, I live in Southern California, and in an area where that 20% down payment doesn’t seem to be within reach in the next couple of years. In addition to the 33% of my income being directly saved, I also contribute 8% to my 401(k). This 8% allows me to take full advantage of my employer’s generous matching contribution each year. I also have an automatic annual 1% increase to my 401(k) contribution.

The problem lies in that I never feel like I’m contributing enough to either my savings or my 401(k). How many GRS readers actually max out the federal contribution limit of $16,500? I don’t feel that this even seems realistic or attainable on a decent life style. And is it really a good idea to increase that amount by significantly decreasing the amount going into my savings each month?

Taking advice from GRS, I opened a Roth IRA a few month back with $3000 of the $5000 limit. This definitely increases my percentage of income saved. However, it would still be interesting to hear other readers percentages and/or thoughts on my progress given my age.

First of all: Wow! Kailey is saving almost half of her income. That’s awesome. Although she’s fretting over how to maximize her money, I think she should congratulate herself for what she’s been able to do at such a young age. If she continues down this path, she’ll be in great shape twenty years from now.

So, Kailey’s problem is a good problem to have. But if you were in her position, it’d still be a problem. How much should she save for the near future? How much should she save for retirement? These sorts of decisions can be perplexing, and unfortunately, there are no easy answers. Because we can’t know the future, we can’t know what the best choice is for our individual circumstances. Instead, we have to make best guesses based on who we are and what our goals are.

That last part is important. I always preach the praises of conscious spending — the notion that we should spend lavishly on the things we love while cutting back ruthlessly on everything else — but I think there’s something to be said for conscious saving also. (In a way, this is why I’m a fan of targeted savings accounts.)

When you have specific goals, goals that mean something to you, you’re much more motivated to save. If I have a trip planned, I’m more diligent about saving than if I’m saving for some undefined future, for instance.

In Kailey’s case, it sounds as if buying a house is important to her. That’s a good goal, and it will help keep her motivated to save. If I were her, I’d stay focused on that. She’s already putting 8% of her income into her 401(k), plus $3000 a year into her Roth IRA. That’s a good start, and if she can maintain those contributions as she saves for a home, I think she’ll be fine. Then, once she’s accumulated enough for a down payment, she can attack her retirement saving even more aggressively.

Really, though, I don’t think there’s any one right answer in this case.

What do you think? If you were in Kailey’s position, would you save more for retirement? Would you save more for the down payment on a house? How do you find a balance? And, at the same time, how do you make sure you’re not depriving yourself in the present?

This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool?s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks.

As far as investing goes, 2011 won?t be a particularly memorable year. The Standard & Poor?s 500 began the year at 1,257 and ended the year at the exact same spot. So if you began the year with $10,000 in your 401(k) and invested it in an index fund that seeks to mimic the performance of the S&P 500, you?d just have $10,000 a year later, right?

Probably not. The value of your portfolio depends on a few factors:

Investors who survived the ?Great Recession?
So even though the S&P 500 went nowhere in 2011, someone who kept investing in the Vanguard 500 or any other similar index fund ? both through additional contributions to retirement accounts and dividend reinvestment ? saw her net investment grow in value. This presumes, of course, that she stuck with the investment as it dropped almost 20% from April to October.

To take a slightly longer-term look at sticking with an investment, a recent report from Fidelity Investments illustrates the value of summoning courage in the face of a downturn. The company analyzed the returns of investors with Fidelity retirement accounts from the market decline of 2008 to 2009 through June 2011 and found the following:

The analysis also compared investors who stopped contributing to their 401(k)s with those who kept on savin?. The account balances of the former grew 26%, while those of the latter ballooned 64%.

These are important lessons, since the world seems pretty scary these days. Of course, investing when everyone else is scared is what we?re supposed to do. But today?s risks ? debt problems in Europe, falling home prices, swelling government deficits, increasingly unfunded entitlements, computers accounting for most of the trading volume ? are real and unprecedented. Plus, the market isn?t priced to provide extraordinary returns. I don?t know exactly when, but there will be more years like 2011, even those as bad as 2008. During those times, it will be important to remember the conclusions of that Fidelity study: Stick to your allocation (except for occasional rebalancing), and keep on savin?.

This is a post from staff writer Tim Sullivan.

Right after we graduated from college, my best friend wanted to buy a real bed. He?d slept on gifted beds, Craigslist-ed beds, found beds, futons, couches, and I even think there was tatami mat in there, but he decided graduating college made him an adult and needed a real, adult bed.

He saved a good amount of money and did research at multiple mattress stores testing for firmness, pocketed coils versus continuous coils, pillow top or memory foam ? he tried them all. He finally settled on one that was as adult as a mattress can get. It was a Bonnell coil system king-size mattress with a memory foam pillow top. It had a temperature regulating system to assure neither overheating nor shivering, and he was convinced that this mattress would be the end to his minor-yet-chronic backaches. He waited for a somewhat decent sale, purchased it (with free delivery), and his mattress arrived.

After buying a bed frame that took up most of his Brooklyn apartment, he was ready to live the good life.

The first night, he couldn?t sleep. Second night, same story. He couldn?t tell if it was too firm or not firm enough, if it contoured to the curves of his back perfectly or not all. The seemingly simple act of falling asleep was just confusing. He had a rather sleepless week and then called to exchange it. But since he bought it on sale, they wouldn?t do their normal bed exchange. He kept trying to sleep on it while trying to sell it for a decent price, and when that didn?t happen, he ended up settling for a nearly $2,000 loss. He bought a used IKEA mattress off Craigslist and has slept perfectly since.

Guilt settles in
My friend talked a lot about the financial guilt he felt after saving for so long and then losing so much money. He made the bed a priority and his priority backfired on him. We could break down his researching of the bed, that he should have read the return policy fine print more carefully, or how he could have been more assured of his purchase, but for now, the deed was done and he had nothing but the consequences. I remember hearing him on the phone with his mother who pretty much said get over it. Move on.

Normally, I consider this sound advice. And maybe so does Shakespeare:

?Things without all remedy should be without regard; what?s done is done.?

Taken out of context, Shakespeare is siding with all the live for today, forget regret rhetoric that we often encounter. That said, this quote is by Lady Macbeth, chastising her husband for being such a wimp for feeling bad about murdering people. The inability to experience regret is a diagnostic characteristic of sociopaths. Guilt is a utterly human emotion and should be allowed to be experienced. Quit feeling guilty about the guilt, that?s the first step.

Mistakes happen. Instead of trying to live without any regrets, what if we learned to live with it in a way that serves us?

Overcoming the guilt
I think it?s interesting to see what we regret and feel guilty about. According to a study from the Kellogg School of Management, only 2.5% of the guilt we feel is because of financial reasons.

Decisions (or non-decisions) about education, career, romance, parenting, and self all beat out our decisions about finance in terms of our longterm levels of regret (finance even loses to how we spend our leisure time). And though a 23-year-old may regret the $20,000 she owes after graduating college, it’s more likely that the 35-year-old will regret never having gone. Granted, this isn’t even close to a sure-fire statement, but it demonstrates that we regret decisions about education more than decisions about money, to the tune of almost 30%.

We all know what it’s like to make a large purchase and having that pit-of-the-stomach, sick feeling. Whether it be a necessity or a decadence, that feeling is unavoidable, and it’s not likely that you’ll ever eliminate it completely. I think my stomach will always drop when I make a big withdrawal from my checking account, even if it’s something exciting and purchased responsibly. Tickets to Paris? My bags are packed! Seeing the cascading numbers on my online savings account screen? I could do without that.

What we can change now
American journalist Sydney J. Harris said, “Regret for the things we did can be tempered by time; it is the regret for the things we did not do that is inconsolable.”

Learn from what you regret. Write down your financial regrets, past and present, not only the times that you did spend, but also those that you didn’t. Many of our more profound regrets come not from the things we did, but from the things we were to busy or bullheaded to get around to doing. You still have time to make that next step, whether it be a future investment, that long sought after degree, or just a new skill ? regretting what we haven’t done is often easily remedied.

Listen to that pit-in-the-stomach feeling. If you spent months saving for those airline tickets and you’re meeting your other financial goals, the anxiety is probably nothing to worry about. But if you feel guilt every time you buy the pricey olive oil or the new must-have app, that’s worth thinking about. Don’t “move on” or “forget” until you’ve asked yourself why you feel badly. Are you buying out of boredom? Are you charging it to your credit card? Are you spending more than you earn?

We can’t live life without guilt and regret. Every day, we do things. Most of those things will be in the positive column, and as for the rest, chalk them up to experience. What’s done is done, and we should let residual emotions run their course, but we also can learn from the negative experiences, and hopefully not repeat the same mistakes.

What have been some of your larger financial hiccups? How quickly did you recover, and what did you learn from it?

This is a guest post from Jaime Tardy of Eventual Millionaire. After paying off $70,000 and quitting a six-figure job, Jaime became a business coach. She also interviews millionaires every week for tips and advice. Jamie has appeared on CNN, MSNMoney.com, Fortune.com, Success Magazine, the Yahoo homepage, and more.

Ever since I was little I’ve been curious about the idea of having one million dollars. My mom told me to marry a rich man (!), but as an eight-year-old who didn’t like boys I said, “I want to do it myself!”

I’m not a millionaire. In fact, I wrote a post for Get Rich Slowly about paying off $70,000 dollars of debt a few years ago, and I’m slowly climbing my way up. During the journey, I also read numerous books about millionaires, but I decided I wanted to learn directly from the millionaires themselves.

Last year I started a podcast series of interviews with millionaires to find out what their pivotal moments were, how they did it, and what advice they had to offer. I concentrate on business building, but I also ask about how they handle their personal finances.

To date, I’ve interviewed more than 50 millionaires. Most of them started with very little money (like $50 in their pocket, or they were living with their mom at age 25) and were able to establish and keep up frugal habits once they learned how to make more money. I’d like to share with you some of their direct stories and advice.

Avoid debt
Millionaire Derek Sivers sold his company, CD Baby for $22 million in 2008. But even when he paid the bills as a professional musician and circus clown, he avoided debt. He says:

“I’ve always been very debt-averse. I don’t like being in debt at all, even on the small level. I never bought anything with a credit card unless I had that much money in the bank. The credit card was just a convenience. I never went into negative debt on a credit card, even as a teenager because I just hated that feeling. They say that there are two ways to be rich: one is getting more money, and the other one is lowering your expectations, lowering your needs.”

Derek says that when he was in his 20s he lived off of $12,000 in savings for a few years. Then he got a job with the circus making about $12,000 a year, and he felt rich.

Derek also gave the proceeds from selling CD Baby to a charitable trust for music education, and he continues to live a frugal lifestyle.

Be value conscious
Todd Tresidder, financial coach and founder of Financial Mentor, made most of his money through smart investments. He got the seed money to make those investments by saving almost 70% of his income. I asked Todd how he saved so much money. Todd said:

“I think…it comes back to values. You just have to not have an interest in buying lots of stuff…I was a single, young man, not too far out of college and my mom would get on me. She’d say, ‘Todd, you’re making all this money, why don’t you go buy yourself a Corvette? Go get yourself a flashy car.’ But I lived in Lake Tahoe. I’m an outdoor recreation buff…I’d play volleyball down on the beach; mountain bike in the hills. I run.”

By holding on to what he valued (time spent outdoors), Todd avoided expenses like a big monthly payment on a car he didn’t need (or want).

Buy used and share (and help the environment, too!)
I asked comedian Dan Nainan for one action tip that you can implement this week to move toward your goal, and Dan said the following:

“…figure out how you can save money. Don’t spend as much. Don’t go to Best Buy ? get it off of eBay because sometimes it’s a tenth of the cost of retail. Go to Craigslist. I use Craigslist and eBay a lot. You can save a tremendous amount of money because people buy stuff and they don’t need it anymore, and it’s cheaper than buying retail. You’re not only saving money, but you’re buying something from someone so they’re not throwing it out. That’s helping the environment a lot. I mean there are countless ways you can save a lot of money and not consume a lot…it’s a win-win for everyone.”

Dan also says that folks in neighborhoods or townhouses could a lot of things with neighbors to save money, such as a barbeque grill or even a video camera. He also loves the library, of course!

Do what works for you
Matthew Tuttle, owner of Tuttle Wealth Management, a financial management company, had a lot of great information gleaned from working with clients (and their money). Matthew offered the following advice:

“I’m not a big fan of budgets. I’m not a big fan of trying to impose that discipline on someone who just can’t do it. I also find a lot of times spouses vehemently disagree when it comes to budgeting. What I am much more a fan of is, save as much as you can and if you’re saving as much as you can, as long as you’re not going into debt, then I don’t necessarily care where you’re spending your money.

So if I go to someone who is not saving anything and say, ‘I need you to start putting away 20% of your income every year,’ it’s not going to happen. It’s like the idea of boiling a frog. You dump a frog in boiling water it’s going to jump out. So I like to start slow. ‘This month let’s put away 1%.’ Then next month we’re going to bump it up to 2%. Then we’re going to bump it up to 3%, and we’re going to slowly get you used to living on less and less and less and get to a point where you’re saving as much as you possibly can.”

We’ve heard it over and over a thousand times: spend less than you earn. The millionaires I interview look for ways to increase the earnings and decrease the valueless spending.

For instance, Todd values outdoor recreation. He’s not looking to cut his ski trips, but he is willing to cut in other areas he doesn’t value as highly.

Millionaires invest
Many millionaires became millionaires because they don’t spend, they invest:

They look at each purchase, even personal things, as an investment. Of course most personal expenses don’t yield a profitable return in terms of more money in the bank account, but they can offer good value. The self-made millionaires I interview make conscious decisions about what they want and what a purchase will give them in return.

Even though I am fairly frugal I’ve learned a lot from the suggestions of millionaires. I’ve learned a lot from their attitudes about money. One of the reasons I started doing the podcast series was because I used to put millionaires on a pedestal. Now I realize, they are just people like you and me. They have made good and bad decisions in their lives. They learn from their mistakes and try to make better decisions. They even make spelling mistakes, just like me! And these people I have interviewed are also some of the most generous people I’ve ever met. The books I’ve read on millionaires didn’t tell me that.

For more advice from self-made millionaires, download my Top 10 Tips from Millionaires, and check out past GRS articles Five Secrets of Self-Made Millionaires; Nine Lessons in Wealth-Building from The Millionaire Next Door; and The Secrets of Financial Freedom: An Interview with the Millionaire Next Door.

Note: It’s a rare thing, but it happens once or twice a year: Life has reared its ugly head, and there’s no fresh story for you this morning. Instead, enjoy this classic from the Get Rich Slowly archives.

Money is more about mind than it is about math — that’s one of the fundamental precepts of this site. If you improve your self-esteem, if you improve your mental attitude, if you improve your knowledge, you will improve your finances. To this end, it’s important to avoid negative messages about money. It’s difficult to improve your mental attitude when you’re besieged by financial trolls.

What are financial trolls? In a recent article, Steve Pavlina shared five wealth lessons, the last of which was: financial trolls must be shown no mercy. Pavlina writes:

A financial troll is a close cousin to the forum troll, except that financial trolls strive to sabotage your financial pursuits. These trolls can be internal or external. They?re the people who make comments like, ?Wealthy people are so greedy. They only care about themselves and will take advantage of anyone to make money.? Financial trolls are also the internal voices that say, ?If you make too much money, people will judge you harshly for it. They?ll assume that?s all you care about.?

Coping with external trolls
When I started Get Rich Slowly, I wanted people to like and agree with everything I wrote. Any time I received a negative comment, I took time to exchange e-mail with the person who left it. Here’s an example of an actual criticism I once received: “I would love [this site] if only the privileged would acknowledged how lucky and privileged they are and how their ‘advice’ applies to only other privileged kids.” I tried to carry on a conversation with the commenter, but nothing I could say would satisfy him — in his mind I was a rich jerk and nothing could change that.

I realized that 95% of these people aren’t interested in a rational exchange of ideas. They’re external financial trolls. They have chips on their shoulders, they’re clinging to preconceived notions, or they just want to argue. They’re not worth my time. Other examples of behavior you might see in external trolls include:

Defeating most external trolls is straightforward. Because they’re not internal, you can usually just remove yourself from the situation. Ignore the troll. Change the conversation. Leave the room. Hang up the phone. Do not argue — as Pavlina notes, any time you argue with a troll, the troll wins. Do not engage the troll.

Coping with internal trolls
Internal trolls are more insidious than their external brethren. Because they are a part of you, eradicating them takes self-discipline. Examples of internal trolls include:

Conquering internal trolls can be non-intuitive. Most are a product of self-doubt, which is best combated through exercise, discipline, positive social interaction, and a healthy diet. Seriously. The following can also help:

I have much more trouble with internal trolls than I do with external trolls. They’re a constant threat.

Know when to seek help
Some trolls are difficult to defeat. What do you do about a spouse who insists on sabotaging your financial security? How do you deal with your own compulsive shopping? Problems like these may require the assistance of a trained professional: an accountant, a lawyer, or a psychologist. The important thing is to deal with them. Until you defeat them, they’ll only hold you back, preventing you from achieving success.

This guest post from Felix is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes.

I suspect I?m representative of a large group of Get Rich Slowly readers. Early on, my financial competency was average — I don?t have a history of overspending, and I haven?t overcome a huge battle with consumer debt — I just haven?t always been great about saving and planning for the future.

I?ve spent the last six years improving my financial literacy and focusing on saving and planning for retirement. I do more than the minimum and less than the maximum, and I think I?ve achieved a good balance between enjoying money now and saving for the future. My primary non-retirement saving goal has been directed at getting positioned to buy a house. In October, I took the plunge.

The house was a responsible purchase (it?s well within my price range and is a good fit for my lifestyle) that I’ve been planning and dreaming of for years. Yet, I?m finding my enjoyment of the purchase is significantly marred by the money mindset I?ve had for the last six years (save as much as possible! never let the savings balance decrease!). With every expense, anticipated or otherwise, I?m so focused on the financial factors that I?m missing out on the fun associated with this goal I?ve worked so hard to achieve.

A Home in the Woods
When I was in my early twenties, my parents gifted me with some money to match what they spent on my sister?s wedding (the logic being they would not be funding my wedding). To me, at the time, it was a life-changing amount of money, and I quickly used it as a downpayment for a small, affordable, rustic cabin in the mountains of Western North Carolina. And like most of my historical financial decisions, it wasn?t totally irresponsible, but it wasn?t made with consideration for future costs associated with home upkeep, not to mention road and vehicle maintenance associated with the rustic nature of the location.

I spent the next five years struggling to tread water financially. My monthly expenses included a small mortgage ($650 including escrow and PMI), a car payment ($100), utilities ($100), and a student loan payment ($130). Beyond that, there were fuel charges associated with driving a four-wheel drive vehicle in and out of the city, as well as any food, clothing, and entertainment costs, which were relatively low for a single guy working full-time, attending graduate school part-time, and doing little else.

When I graduated with my master?s in Library and Information Studies in 2005, it became apparent that my degree was worth much more in the North East. On top of that, I was worn out from the stress of working all the time but being unable to make ends meet, let alone grow my savings account. So I began applying for jobs everywhere between New York and Maine, and I put the cabin up for sale.

Luckily, both actions produced results, and I sold the cabin for twenty percent more than I had paid for it and headed to Massachusetts where I?d found a research position that fit my interests and goals. I rented a small apartment in Providence, Rhode Island (the closest city), and I spent a year or two exploring a different part of the country, working like a dog, and building a solid savings account. After a couple of years my girlfriend joined me, and together we?ve spent the last four years recovering from home ownership and loving the leisure time and financial relief renting affords.

Saving for the Future
That savings account I?ve been building has always been ear-marked primarily for my next home purchase, with the idea that the next time I buy a house, I?ll be prepared to handle all that comes with it. And as my relationship with my girlfriend has become increasingly serious, we mapped out our future plans together as something that looks like this: we would move back to the South close to our families and buy a modest house that accommodates her love of company and my extreme introversion without being overly large or opulent.

Up until last spring, that had been an abstract conversation. We were happily enjoying easy living; we both work hard, but little else hampers us, and a majority of our leisure time looks like a vacation to our friends and family who are raising children and tending homesteads. Everything changed when we got a call from our then-landlords who told us, apologetically, that they would not be renewing our lease because they needed to sell the property unexpectedly.

That house was the first place we had really made a home together. It was a nice size for us, it was in a great location, and it was where our relationship had really gelled. It was also where I had built my first garden in years — a modest raised bed that fed us from March to October and brought me an enormous amount of pleasure and pride.

So when we got word that we were losing our home, we signed a lease for an affordable single family in a less desirable location and set our plan of moving south into motion. I worked out a plan to keep my job and work remotely, and we booked a plane ticket in early fall to explore some towns and neighborhoods in Western North Carolina with a realtor in order to determine what kinds of properties we could expect to afford. The trip was merely a fact-finding mission, to determine whether it made sense to buy now or continue renting and saving.

Going into that trip, our ground rules were the following:

Quite unexpectedly, at the end of a long day of seeing disappointing properties, we stepped out of the realtor?s car onto thirteen acres containing a small cabin and a barn that was exactly what we wanted. The cabin was modest, the barn had the potential to be built into an office/guest house, and the property was unbelievably beautiful. And, we learned quickly, it had been on the market for two weeks, shown many times, had already received one (low) cash offer, and the realtor was anticipating another one that weekend.

A Bold Decision
Very quickly we were thrust into discussions about making drastic changes to our lives that we had only casually considered previously. After two sleepless nights, a second day spent looking at houses that did not fit our needs, a second showing of the property in question, hours spent reviewing account statements and budgets, some helpful talks with our realtor, and some talks between us about what we?d really be getting ourselves into (and what we?d be giving up), we woke up early on the last Sunday of our visit and put together an offer.

The offer was accepted, and our monthly mortgage payment (including escrow) would be $400 less per month than our rent had been for the last two years. The down payment, for which my savings account had been created and intended, was smaller than I had ever expected it would be (the house was well under budget), and I was pleasantly surprised by the remaining balance in my savings account after I had written the check.

I had anticipated much of the stress moving, and moving to the country after enjoying city living, would bring into our lives, but I had not prepared for how challenging spending my savings for the first time in six years would be.

Section Four
Unfortunately, after living six years with the mentality that the balance of my savings account should never decrease, I find little consolation in knowing I planned responsibly for this home purchase and am now carrying out the goal of buying a house without being totally strapped. We?ve owned the house for a couple of months now (though we?re still in Rhode Island finishing up our obligations here), and spending money on it hasn’t grown any easier.

I’ve opted to go ahead and turn the barn into a home office now; that project is an inevitability, and having the work down while we?re away saves us construction headaches later, and saves me costs associated with renting office space in the short-term. It?s also a dream come true; I?ll have a custom office/workshop that has the potential to become a nice guest house when we decide to spend the money to add plumbing. The project has been fun to plan, and I?m working with an affordable, talented contractor who has made every step of this project nearly seamless. And yet, every step is darkened by my reluctance to spend money, even when that spending is planned responsibly and doesn?t result in negative financial consequences (beyond the negative entry in my bank book).

I’m optimistic that this dark caste will lighten some once we?re at the house enjoying our purchase, but ultimately I think I?ll need to alter my approach to finances to really enjoy my house. In a tenuous economic climate where there is no shortage of stories of individuals who have lost everything, it’s tempting to plan for the worst and scrimp and save every possible penny. And honestly, I get genuine pleasure out of the security associated with a high balance in my savings account.

However, I know that pleasure is not as rich as the satisfaction I get from working the land and living some place that feels like home. That said, I struggle every day with actually enjoying what my planning and saving has made possible in my life, and that paradox is by far the biggest challenge associated with my increased financial literacy. It?s also an indicator that it?s time to rebalance my priorities and focus on my holistic happiness literacy, so that next year when I?m preparing the land for the garden I?ve saved so long to obtain, my enjoyment won?t be tarnished by account balances.

Yesterday I wrote about three 30-day challenges that can help you start forming new habits, and I recently learned about one more.

MyMoneyCircles is offering a four-week personal finance boot camp, starting on January 9. The site aims to combine expert money-management advice with social circles to make success quick and easy.

Leading the boot camp is The Money Coach, nationally known personal finance expert and New York Times best-selling author Lynnette Khalfani-Cox, who teaches people nationwide how to achieve their financial dreams.

Is this right for you?
According to the website, the goal is for participants in MyMoneyCircles to kick their financial security up a notch, whether your goal is to save more money, reduce debt, or improve some other specific area of your finances.

The MyMoneyCircles community includes the following:

MyMoneyCircles is for “anyone who is serious about making positive financial changes.”

What are the benefits?
The boot camp offers participants the following:

The goal is to give you “more of what you want (more money, greater savings, and increased financial well-being) and less of what you don?t want (less debt, financial stress, anxiety, and worry).”

How does it work?
Each weeklong, online boot camp focuses on a specific financial topic addressing common economic challenges. The first four boot camp guides cover the following topics:

In addition, all boot camps involve the following core activities:

Registration is free, but the boot camp kicks off on January 9, so head over to MyMoneyCircles if you’re looking for a financial challenge!

It is a truth universally acknowledged, that a person in want of a good fortune must be in possession of an emergency fund. Hilarious literary allusions aside, the emergency fund — or rainy-day savings, or whatever you want to call it — is one of the bedrocks of basic personal finance. A solid savings account is like self-insurance; it can offer some protection when life seems intent on drowning you with one financial crisis after another.

But what is an emergency? That’s what Natasha wants to know. She writes:

As far as my emergency fund is concerned, what is actually considered an emergency? I just got an unexpected dental bill in the mail and I was wondering if I should just dip into my emergency fund to pay it instead of doing a monthly payment plan. I really don’t want that bill lingering around for months. I’d rather just pay it and get it over with since I have the money. What do you think?

This is an interesting question, and one I’ve thought about a lot lately. Since I started managing my mother’s money in July, I’ve had to make several similar decisions: For instance, should I maintain her savings account or pay off her car loan? (I chose to pay off the car loan, but that’s because I know we three sons are there to offer financial help if a big emergency arises.)

How do you decide what is and what is not an emergency?

Sometimes the answers are easy, of course. A vacation to Florida is not an emergency and should not be funded from your emergency fund. New boots are not an emergency, and neither is a new videogame console. On the other hand, if your only car is totaled, buying new transportation is an emergency. Or if your son breaks his leg, his medical expenses are an emergency.

But what about all the stuff in between? What if your computer dies? Is that an emergency? Or should you just go to the internet cafe? What if the garage roof starts to leak? Or, as in Natasha’s case, what if you have an unexpected dental bill?

Ultimately, I think the key is to decide for yourself what you emergency fund can be used for and what it can’t. But once you make that decision, stick to it. If I were in Natasha’s place, I’d absolutely use my emergency fund to pay off the dental bill. Why? Because:

So, if this were my decision, I’d pay the bill.

What would you do? Do you think it’s okay for Natasha to tap her emergency fund to make this payment? If not, why not? More to the point, what does constitute an emergency? What things do you use your emergency fund for? Is a credit card an emergency fund? What things do you refuse to pay out of your rainy-day savings? How do you keep yourself disciplined enough to know when something is actually an emergency?

This post is from staff writer April Dykman.

I never make New Year’s resolutions. I’ve got nothing against them, but I’m usually already working on resolutions made throughout the previous year. I’m too impatient to wait for an arbitrary day to start changing something in my life.

One example? Less-than-healthful holiday eating habits. I’m a health nut by nature ? I crave kale, and soft drinks have zero appeal. But on December 25, you can bet I’m going to eat my mother-in-law’s homemade tamales and buñuelos. Not to mention that my father-in-law, who runs a bakery, brings a box of campechanas, my favorite kind of Mexican sweet bread. It’d be rude to turn that down, and seriously, who would want to? It’s delicious and made with love. But on December 26, I’m back to my normal eating habits. Why wait for January 1?

Still, a new year signifies a new beginning, and it’s a time when many people reflect on the past year. If you’ve made a resolution, one way to kick your year off right is with a 30-day challenge. I don’t mean an insanely restrictive budget or cutting back on the cocoa in your hot chocolate to save money. A challenge should be interesting and fun ? not something you dread. And who cares that it’s already January 5? Dates are just dates. Try one challenge, and maybe when it’s over you’ll try another.

Challenge 1: Save $1,000 in 30 days.
“Americans suck at frugality,” writes Ramit Sethi of I Will Teach You To Be Rich. “We spend more than we make. We?re terrible at deferring our immediate wants and investing for the long term. We go into debt. And we blame everyone but ourselves.”

Yet despite our bad habits (and because of them) the vast majority of us worry about money. So Ramit developed a 30-day plan of actionable items ? tasks you can easily complete in under one hour that will save you serious amounts of money. According to Ramit, the problem with most “save money” tips is that they are too abstract, too labor-intensive, and/or too myopic. For example, “start a garden” is a tip that might save you money, but it’s going to take money to get started, a great deal of time to reap the rewards, and that all assumes that you have both an interest in gardening and that you know enough about it to not kill off your entire crop.

Instead, his plan show you how to pick up the phone and negotiate your car insurance, rethink and lower your cell phone bill, and lower your commuting expenses. “…I will ask you to cut back on some things ? sometimes radically,” writes Ramit. “For example, if you get your nails done or eat out every day, that?s gone this month. If you were planning to buy a big-screen TV, you can forget about it in November. You can pick it up next month, but I bet you?ll think twice once you save $1,000.”

Challenge 2: Remix the clothing already in your closet for one month.
In a clothing remix challenge, you think of new and creative ways to remix your existing wardrobe. Fashion blogger Kendi from Kendi Everyday started her blog to document her daily style, but after just a few months she was out of shopping money. “I introduced myself to the idea of remixing by coming up with the 30 for 30 Remix Challenge,” she writes. Basically she picked 30 items from her closet and remixed those items, and only those items, into 30 outfits.

“The whole point of the remix is to show myself and readers that with a little bit of creativity, you can make what you have work for you,” she says. “This is a challenge to help you learn to shop your closet and to shop smartly.”

When you’re familiar with what’s in your closet, you become a more discriminating shopper. You’ll also realize you have more options than you might think, preventing a desperate search for appropriate attire when you “have nothing to wear.” Kendi also likes to refrain from shopping during the challenge, though it’s up to you whether you want to do that or not.

Challenge 3: Get rid of one item every day.
Australian blogger and mom Colleen started off 2010 with zero intention of making the usual New Year’s resolutions. But a few days later she decided to turn a project she had already begun into a yearlong resolution. Her 365-day resolution was to get rid of clutter in “…every wardrobe, bench, shelf, under bed, pantry and garage space in [her] home by giving away, throwing away or selling one item everyday…”

Colleen suggests a no-shopping rule for at least the first three weeks (you don’t want to reclutter after you’ve decluttered), and for those who are tempted to spend, there’s a set of questions to ask yourself before you whip out the plastic. A few of my favorite questions include:

You can commit for 30 days or go for the full 365. The longer you do it, the more of a lasting change you’re likely to see in your shopping habits. “Taking my time and really feeling the journey embedded new principles into the way I approach Stuff…I have decluttered my home the fast way so many times, but never before have I learned what I needed to learn to stay decluttered,” says Colleen. (What should you do with that clutter? Sell it, swap it, or give it away.)

I’m tempted to try all three challenges at once! But I’m going to start with the third challenge, getting rid of one item every day, and I’ll commit to 30 days ? at least initially. I already spot a stack of DVDs just begging to go to Goodwill.

Have you ever tried a 30-day challenge? What was the goal, and what were your results?

This is a guest post from Natalie Peace of PeaceAndProfit.com. She is the author of 30 Keys to Building a Multi-Million Dollar Business: What They Didn?t Teach Me in Business School. Natalie is an entrepreneur, business coach, and she’s currently writing a book on how to start a wildly successful business.

Looking at the businesses I?ve built, managed, and sold (worth $2 million) by the age of 30, I?ve been reflecting lately on what set the foundation for my achievements so that I can help others experience financial security and abundance. I believe my success is the result of an unusual childhood, and a few unique things my parents did to set me up for success.

1. Give incentive to learn from the masters
My father actually paid me $2 to listen to each chapter of an audiobook and then summarize the main points in my own words, so I wound up listening to dozens of audiobooks throughout my childhood. (I didn?t get paid for chores as they were simply expected of me.) The trick was that he would choose books on management, wealth building, and personal growth.

I was four years old when he started this, and as a result I became fascinated with human potential and manifesting wealth long before I was even old enough to have a paper route or babysitting job. All this knowledge seeped into my young, fertile brain and shaped my subconscious, priming me to be a confident entrepreneur and manager. People often tell me about great, classic books they read by people like Napoleon Hill, Og Mandino, Denis Waitley, and Zig Ziglar and I smile, fondly recalling my experience listening to those masters.

2. Encourage questions
Both of my parents went out of their way to make sure I felt heard, understood and valued. They would explain to me what was interesting and important about anything I was saying and would then expand on the topic with their own knowledge. And they were always willing to answer the million ?why? questions I asked, with real answers. They never responded ?because I said so.

3. Provide unconditional love
Researcher Brené Brown talks about the concept of teaching children that they are worthy of love and belonging, rather than telling them they?re perfect. This is a big distinction, and I believe I?m a good example of why this works. There will be days when the world is going to chew you up and spit you out. People are going to laugh at you and call you names, and they will reject you and your ideas. Knowing all of this will happen to your child and insisting that they are perfect no matter what will not help them.

No one is perfect. We don?t need to be! Instead, we can learn to hear feedback from others through a filter that says we’re completely lovable as we are. If we know for certain we are lovable regardless of what people do or say to us, we can then hear criticism and search it objectively for meaningful clues on how we can improve. My mom has always shown me a great deal of love and affection, and it?s certainly one of the biggest secrets of my success.

4. Show the importance of a strong work ethic
When I was a teenager, Dad had me mowing his yard, which was a sprawling acreage back then. Of course I had more fun things to do than household chores, so I got it done as quickly as possible. One day when I had finished, he thanked me and told me he wanted to tell the neighbors about my mowing skills, so they would hire me to do their yards as well.

The prospect of making cash appealed to me, so I was all ears. My dad then said, ?Let?s take a look at the yard now. Are you happy with how it looks? Would you sign your name to this job, proudly telling people you did it?? As I surveyed my hasty mowing efforts, it was plain to see that I had left behind several tufts and swatches of grass. I realized that no one who?d seen this would hire me to take care of their yard. My dad could have yelled at me for being lazy, but he chose instead to demonstrate the benefit of a solid work ethic.

5. Teach kids to be powerful
I was not allowed to indulge myself in negative self-talk. I was shown how to cancel negative beliefs (like ?I can?t do this?), and replace them with positive ones, focusing on the desired outcome. I started doing visualization exercises and focusing on goal-setting at the age of five, beginning with small goals like teaching my dog how to sit and saving up to buy a bike. When I had success achieving these goals, it gave me the confidence to reach for bigger things, with the belief that I would attain them.

I was encouraged to set goals in all areas of my life ? when I was six, I wanted the training wheels off my bike and knew it would take practice to get there. When I was 12, I set a goal to take a babysitting course so I could earn money. When I was 13, I set a goal of being a really good friend.

You can help your kids set goals in areas they?re genuinely interested in, as well as set goals they would probably achieve anyway (like passing second grade). Get them to write down these goals somewhere they?ll see them every day, and check them off when they?re complete. When I did this as a kid, it gave me enormous satisfaction. (It still does today!)

As a result of a somewhat unique upbringing ? thank you, Mom and Dad! ? I don?t have a fear of success, and I know that creating abundant wealth is possible. What other unusual and effective parenting methods have you used or observed to set kids up for success? Share them in the comments!

Continue reading Goldman Earnings Sink After Buffett Dividend

Goldman Earnings Sink After Buffett Dividend originally appeared on BloggingStocks on Tue, 19 Apr 2011 09:03:00 EST. Please see our terms for use of feeds.

Johnson & Johnson's Income Falls 23% originally appeared on BloggingStocks on Tue, 19 Apr 2011 08:22:00 EST. Please see our terms for use of feeds.

Continue reading Burberry Shares Leap on Sales Update

Burberry Shares Leap on Sales Update originally appeared on BloggingStocks on Tue, 19 Apr 2011 08:04:00 EST. Please see our terms for use of feeds.

Filed under: Citigroup Inc. (C)

Continue reading Citi's Income Falls 32% as Underwriting Slips

Citi's Income Falls 32% as Underwriting Slips originally appeared on BloggingStocks on Mon, 18 Apr 2011 10:00:00 EST. Please see our terms for use of feeds.

Filed under: Mattel, Inc (MAT)

Continue reading Mattel Net Income Falls on Higher Spending

Mattel Net Income Falls on Higher Spending originally appeared on BloggingStocks on Fri, 15 Apr 2011 09:21:00 EST. Please see our terms for use of feeds.

Filed under: Bank of America (BAC)

Continue reading Bank of America Earnings Fall 39%

Bank of America Earnings Fall 39% originally appeared on BloggingStocks on Fri, 15 Apr 2011 08:05:00 EST. Please see our terms for use of feeds.

Filed under: BP p.l.c. ADS (BP)

Continue reading Scuffles, Protests Mar BP Shareholder Meeting

Scuffles, Protests Mar BP Shareholder Meeting originally appeared on BloggingStocks on Thu, 14 Apr 2011 18:03:00 EST. Please see our terms for use of feeds.

Filed under: Google (GOOG)

Google's Hiring Spree Weighs on Earnings; Shares Slide originally appeared on BloggingStocks on Thu, 14 Apr 2011 16:26:00 EST. Please see our terms for use of feeds.

Continue reading Ford Expands Recall of F-150 Pickups to Nearly 1.2 Million

Ford Expands Recall of F-150 Pickups to Nearly 1.2 Million originally appeared on BloggingStocks on Thu, 14 Apr 2011 12:10:00 EST. Please see our terms for use of feeds.

Filed under: Hasbro Inc (HAS)

Continue reading Hasbro First-Quarter Profit Drops 71%

Hasbro First-Quarter Profit Drops 71% originally appeared on BloggingStocks on Thu, 14 Apr 2011 12:05:00 EST. Please see our terms for use of feeds.

The companies say the deal will create a stronger force in creating packaging for beverage, food and consumer products ranging from sports drinks and beer to personal care products and motor oil.

Silgan said it will have 17,000 employees and 180 manufacturing facilities in 19 countries once the deal is completed. It expects the combined company will achieve $50 million in cost savings by the third year after the sale closes.

The companies expect the sale to close in the third quarter if regulators and shareholders approve.

Silgan is offering 0.402 shares and $4.75 in cash for each Graham share, valuing the company at $19.56 per share. That's a premium of 17.1 percent to Tuesday's closing price.

Continue reading Silgan Buying Graham Packaging in $1.28 Billion Deal

Silgan Buying Graham Packaging in $1.28 Billion Deal originally appeared on BloggingStocks on Wed, 13 Apr 2011 09:44:00 EST. Please see our terms for use of feeds.

Continue reading JPMorgan's First-Quarter Profit Swells 67%

JPMorgan's First-Quarter Profit Swells 67% originally appeared on BloggingStocks on Wed, 13 Apr 2011 08:06:00 EST. Please see our terms for use of feeds.

Continue reading Zipcar Revs Up for Its IPO

Zipcar Revs Up for Its IPO originally appeared on BloggingStocks on Tue, 12 Apr 2011 16:45:00 EST. Please see our terms for use of feeds.

Filed under: Nokia Corp. (NOK)

Continue reading Nokia Launches New Symbian Smartphones

Nokia Launches New Symbian Smartphones originally appeared on BloggingStocks on Tue, 12 Apr 2011 13:14:00 EST. Please see our terms for use of feeds.

Filed under: Cisco Systems (CSCO)

Continue reading Cisco to Exit Flip Video-Cam Business

Cisco to Exit Flip Video-Cam Business originally appeared on BloggingStocks on Tue, 12 Apr 2011 09:21:00 EST. Please see our terms for use of feeds.

Filed under: Earnings Reports, Alcoa Inc (AA)

Continue reading Alcoa Kicks Off Earnings Season With Improved Sales

Alcoa Kicks Off Earnings Season With Improved Sales originally appeared on BloggingStocks on Mon, 11 Apr 2011 16:45:00 EST. Please see our terms for use of feeds.

Filed under: Level 3 Communications (LVLT)

Continue reading Level 3 to Acquire Global Crossing for $2 Billion

Level 3 to Acquire Global Crossing for $2 Billion originally appeared on BloggingStocks on Mon, 11 Apr 2011 16:36:00 EST. Please see our terms for use of feeds.

Filed under: NASDAQ

Continue reading NYSE Rejects Nasdaq-ICE Takeover Bid

NYSE Rejects Nasdaq-ICE Takeover Bid originally appeared on BloggingStocks on Mon, 11 Apr 2011 09:06:00 EST. Please see our terms for use of feeds.

Filed under: Apple Inc (AAPL), Viacom (VIA)

Viacom was one of the content owners that pulled its channels from Time Warner Cable's iPad app recently. This combined with its changing stance regarding Hulu points to the growing friction between content owners and those companies involved in distribution through new streaming platforms like Netflix, Hulu and now tablets. As the landscape changes for delivering content, we expect to see Viacom along with competitors like News Corp, Time Warner CBS and Disney position for a greater share of the revenues and benefit from providing content to through these new channels.

Continue reading Viacom Pulls Channels from iPad App Raising Stakes in the Streaming Standoff

Viacom Pulls Channels from iPad App Raising Stakes in the Streaming Standoff originally appeared on BloggingStocks on Mon, 11 Apr 2011 08:00:00 EST. Please see our terms for use of feeds.

Continue reading Endo Pharma Buying American Medical for $2.6 Billion

Endo Pharma Buying American Medical for $2.6 Billion originally appeared on BloggingStocks on Mon, 11 Apr 2011 07:24:00 EST. Please see our terms for use of feeds.

January 31st was the deadline for companies to mail out W-2 forms and 1099 forms involving other income and interest. Coming up is February 15th, the deadline for brokerages to send out 1099-B forms listing stock sale proceeds.

That means you early-birds out there (not me) are probably chomping at the bit to file your taxes! So here’s a question to you readers about last year:

A better question would be why you chose that software – price, convenience, trust, quality of product, or what? Would you have switched if a competitor was $25 cheaper?

Related posts: eBay, Half.com, PayPal, Amazon.com Sellers: 2011 IRS 1099-K Regulations How To Generate and Issue Your Own 1099-MISC Forms Free IRS Tax Filing Extension Instructions 2011 (Online/E-File)

Poll: Which Tax Software Did You Use In 2011? from My Money Blog.

© MyMoneyBlog.com, 2012.

When a mutual fund or hedge fund lists their historical returns, the industry standard is to use time-weighted returns that assume you buy at the beginning of the time period and hold until the end. However, what often happens is that a fund will start out small and have great returns for a while, gradually start attracting lots of investor money, and then the subsequent returns are not so hot. Whatever special inefficiency or investment idea the fund managers had initially is either wiped out by market forces over time or simply hindered by asset bloat. In such a case, the actual returns experienced by investors is less than what is listed under fund return data, even though things like 5-year trailing returns still look quite good.

Via Abnormal Returns, Ben Lorica of The Verisi Data Studio took an academic paper by Dichev and Yu [pdf] in the Journal of Financial Economics and made a nice visualization of the hunk of data presented about hedge funds:

From the paper’s conclusions:

Using a comprehensive sample, the main finding is that dollar-weighted investor returns are about 3% to 7% lower than fund returns, depending on specification and time period examined. This difference is economically large, and it is enough to reverse the conclusions of existing studies which show outperformance in hedge fund returns. In addition, the estimated dollar-weighted returns are rather modest in absolute magnitude; for example, they are reliably lower than the returns of broad-based indexes like the S&P 500 and only marginally higher than risk-free rates of return.

Most of us can’t invest in hedge funds even if we wanted to, so this is best taken as a larger lesson to be careful when chasing hot returns by any money manager. You don’t want to be the last money in. Morningstar also tracks “investor returns” (dollar-weighted) separately from “total returns” (traditional, time-weighted) in their mutual fund listings.

Related posts: Morningstar Investor Returns: Another Reason Why Chasing Past Performance Is Bad Hedge Funds: Too Sexy For My Money Index Fund vs. Top Hedge Funds: Buffett Makes A Bet

Hedge Funds: Actual Investor Returns Less Than Advertised from My Money Blog.

© MyMoneyBlog.com, 2012.

I love Dropbox. I like that it’s a real folder on my computer that is also invisibly synchronized and backed up in the cloud. The best part is that usually I forget it’s even there. Other online storage apps like Box.net or SkyDrive don’t work nearly as seamlessly for me.

The Dropbox free version offers up 2 GB of storage free to start, which you can increase to nearly 20 GB with various tasks. It may not be big enough for a full backup, but plenty for my important files. Check out this Lifehacker guide that details all the possibilities. You get 250 MB free by signing up under a referral link, and I get 250 GB extra too. I’ve only gotten 3 referrals up until now, but with other stuff was already at 4.5 GB free.

Today Lifehacker adds that right now if you install their new Beta version which lets you automatically back up photos and videos from your cameras/phones when connected to your computer, Dropbox will give you even more space – for every 500 MB of photos and videos automatically uploaded, you’ll receive another 500 MB of space permanently, up to 4.5 GB total. I synced up the photos from my iPhone and already have another free gig and counting. Sweet.

Related posts: Make Money Bidding on Self Storage Auctions? 4 More Ways To Get A Free Credit Report Increase in Housing Quality vs. Increase in Housing Prices

More Ways To Increase Your Free Dropbox Storage from My Money Blog.

© MyMoneyBlog.com, 2012.

While perusing this early retirement reading list for more books to read, I ran across an interesting fellow named Harry S. Dent, Jr. His primary theory is that age demographics are strongly correlated with the economy and thus stock market prices.

In particular, the number of households headed by 46-50 year-olds are the best indicator because they are shown to have the highest spending. This makes sense, as around age 50 is also when peak income occurs while you also have spending pressure from grown-up kids and college tuition. After that, the kids move out, things slow down, and average income drops. Here are some charts from the HS Dent Foundation website:

By looking at birth rates and adjusting for immigration, you can basically predict how many 46-50 year-olds there will be well into the future. Here’s how the shifted birthrate data corresponds to the Dow Jones stock index adjusted for inflation:

According to the birthrate data, we are looking at depressed prices for another 10-15 years or so, but things will pick back up after that. While I think there may be something to this concept on a long timescale, I would be careful with trying to profit with it in the short-term.

I’m actually look at Mr. Dent himself here – a quick look around shows that he is trying everything under the sun to make money from this simple theory – writing a new book every few years with mostly the same content (2011, 2009, 2006), selling $1,500 seminars to “Demographics School”, and even starting his own Dent Tactical ETF (ticker symbol: DENT) with poor performance since inception and a bloated 1.65% expense ratio. Potential investors should know that he already started a mutual fund previously that failed:

In 1999, the AIM Dent Demographics Trends Fund was launched, based on the demographic economic and lifestyle trends identified by Dent. Unfortunately, the fund’s results were miserable. From 2000 through 2004, the fund lost more than 11 percent per year and underperformed the S&P 500 Index by almost 9 percent per year. In 2005, its sponsor put investors out of their misery by merging it into the AIM Weingarten Fund.

Over the years, he has made many predictions. Some of them came true, more or less. For example, he predicted that the slowdown in Japan economy would coincide with the end of the end of their peak number of 46-50 year-olds in 1990-1994. Some of them did not, like in 2006 when he predicted the Dow Jones would reach 32,000-40,000 in the year 2010 (the highest ever close was 14,164 in 2007).

The last prediction I could find was Dow 4,000 to 6,800 somewhere around 2012. That’s over a 50% drop from today’s prices. I think I’ll add this demographics theory to my investing consciousness, but I’ll leave the bold predictions behind.

Related posts: Stock Market Timing Using Historical Moving Averages Magnifying Fear and Joy In The Stock Market A Better Way To View Stock Market Risk

Correlation Between Age Demographics and Stock Market Prices? from My Money Blog.

© MyMoneyBlog.com, 2012.

I enjoy reading older books about early retirement; I seek to learn from their experiences, but I also look for ways in that their perspective is colored by their own time period. For instance, a book written in the 80s1 – an era of high inflation – would likely assumed that interest rates would be moderately high forever, at least in the 5% range. The tendency to extend recent trends into the future is unavoidable, and something you should consider when reading or making forecasts today.

This is a review of How To Retire Early and Live Well With Less Than A Million Dollars by Gillette Edmunds, a book published in 2000 that was recommended to me by a reader. Edmunds was a former tax attorney and financial journalist who retired in 1981 at age 29.

Unreasonably High Expected Returns
Remember that for both the 1980s and the 1990s, the average annualized total return of the S&P 500 for both decades was around 18% a year. Imagine two decades of such returns, all before the dot-com bust and the housing bust. Edmunds retiring in 1981 turned out to be some of the luckiest timing possible. As a result, a major criticism of this book is the continued expectation of high stock returns going forward. The quoted excerpts below are taken verbatim from the book:

I bet these assumptions sounded reasonable, perhaps even conservative, in 2000 but they are just bad jokes today.

Owning Non-Correlated Asset Classes
Edmunds tells us not to time the markets, ride out temporary market drops, and to maintain low investment costs. He advises you to hold a variety of “non-correlated” asset classes such as:

Edmunds believes that these asset classes are on different business cycles. When one is going up, the other is going down. However, I don’t like the term “non-correlated”, as very few asset classes have negative correlations these days. Low or minimally correlated is a better term. As we saw in the recent financial crisis, when the poo hits the fan correlations can go back to 1 (everything goes down together). However, I agree with the general asset allocation advice of holding different asset classes with minimal correlations. He counts as an early proponent of not holding too much in US stocks (no more than 1/3rd of total portfolio), and an equal amount in foreign stocks (also use for 1/3rd of your portfolio).

I did have an issue with the lack of supporting evidence as to why these assets and not others, as we only get weak arguments like “after owning bonds for about five years, I realized that a portfolio of five different high-return asset classes that excluded bonds had both high predictability and high returns”. I’m sorry, but making a conclusion to stop holding bonds after 5 years of data is just plain bad advice and makes him come off as egotistical.

He ends the book with a philosophical epilogue with the usual “money isn’t everything, enjoy life with family and friends” material. I don’t mean to belittle the importance of this factor, just that I didn’t really learn anything new from it. He does come off as well-intentioned and talks about the effect of his divorce. Despite its flaws, I found this book worth the read as it encompasses the overall philosophy of one person who had been successfully retired for 20 years. Just remember he had a very strong tailwind of high returns, and adjust your own expectations accordingly.

Other “early retirement” books that I’ve reviewed:

Related posts: Book Review: Yes, You Can Still Retire Comfortably! Book Review: All About Asset Allocation Book Review: Early Retirement Extreme

How To Retire Early and Live Well With Less Than A Million Dollars [Book Review] from My Money Blog.

© MyMoneyBlog.com, 2012.

Recently, I came across an investment tip called the Overnight Rule from Carl Richards via the NYT Bucks Blog:

Imagine that all your investment holdings were sold overnight by accident.

You can’t undo the trades, and now all you have is cash.

Would you buy back everything you owned previously again at their current prices? If not, why are you holding them now?

I think this provides a fresh look at your portfolio, as many times we hold investments for irrational reasons. For example, there is the well-documented trait of loss aversion (even though readers of this blog may be immune), where investors really hate selling at a loss, even more than they love selling with a gain.

Perhaps you bought the stock at $20 a share, and it is now at $15 a share. You want to get rid of it “just as soon as it gets back to $20 a share”, so that so you can say you didn’t lose money on it. It’s better to admit the mistake and put your money in something better.

Then there is regret aversion. Perhaps you bought it at $50 a share and now it’s at $400 a share. You get to tell your friends how you bought Apple at $50 a share. You’re afraid it’s overpriced, but you don’t want to miss out if it rises some more. You sit on your gains and choose inaction instead of having to make a hard decision even though your money could be better deployed elsewhere.

Maybe it is company stock from your job, or shares that you inherited from a beloved family member. Whether is it some form of sentimental attachment, inertia, or plain laziness – you may want to consider your reasons for holding them.

There is a small exception to this rule if you are sitting on large capital gains in a taxable account and don’t want to realize them and get hit with the tax bill, especially if the alternative investment is also very similar (ex. mutual funds with similar holdings). However, even in this scenario you want to make sure that you’re not holding a poor investment just to put off a tax bill.

I did not come up with this myself, but read about this rule somewhere online within the last month. I’ve searched for the source but can’t find it, so please let me know if you do. Found it, thanks!

Related posts: Frugal Living Ideas and the Rule of 72 Portfolio Manager Rick Ferri Shares Personal Portfolio and Asset Allocation Building My Portfolio: Efficient Frontier and Modern Portfolio Theory

The Overnight Rule For Managing Your Portfolio from My Money Blog.

© MyMoneyBlog.com, 2012.

Interest rates looks to remain tiny for a long time, so if you want to boost your interest earned while keeping your money safe in banks, taking advantage of sign-up bonuses is one way to do it. Earning 1% APY on $10,000 is just $100 a year, and it’s even hard to get 1% APY now! Why not double or triple that with some new accounts.

Citibank $50 bonus if you open a Citibank account with $1,000 and complete 1 direct deposit and 1 electronic bill payment for 2 consecutive months. New checking account customers only. There’s no monthly service fee if you maintain a $15,000 combined average monthly balance requirement in eligible products; otherwise $20.00 monthly service fee is applied. Eligible products are linked deposits, loans, mortgages, and investment accounts. $100 bonus available with Citigold account.

Chase Bank $150 bonus when you open a Chase Total Checking account and set up direct deposit (new Chase checking customers only). This account is free if you make a $500+ direct deposit each month, or have $1,500 minimum daily balance.

M&T Bank $100 bonus when you open a MyChoice checking account and set up direct deposit within 90 days. This account is free if you maintain a direct deposit each month or have $500 minimum daily balance. $125 and $150 bonuses also available with upgraded accounts (and higher requirements).

Capital One $100 bonus when you open a Interest Online Checking account by 1/31/2012 using offer code CHEC168DF and make a direct deposit of $250 or more within 90 days. No monthly service fee, and pays 0.75% APY on balances less than $100k.

Related posts: Chase Bank $125 New Checking Bonus In-Branch or Online Checking Account Bonuses: $125 From Chase, $100 From Bank of America Chase Checking Account $100 Bonus Coupon Code

New Checking Account Promotions: Citibank, Chase, M&T Bank from My Money Blog.

© MyMoneyBlog.com, 2012.

If you’ve been thinking about a 0% balance transfer, here is some news that may help you make your decisions. This is the best info that I have, you can judge me on the accuracy in the future.

As of right now both the Citi Platinum Select Mastercard and the Citi Diamond Preferred Mastercard have a 0% APR on balance transfers for 18 months and on purchases for 18 months. Balance transfer fee is 3% with a $5 minimum. No annual fee.

In addition, the Discover More Card – No Balance Transfer Fee has 0% APR for 12 months but with no balance transfer fee. No annual fee. My unofficial sources tell me that this will be extended for the rest of February, but after that it will likely end. This matches historical patterns that this is a limited-time post-holiday promotion. More details on the promo here.

As always, these cards should be used as a tool to lower the interest rate on your existing debt to accelerate payoff. If you can pay it off in the proper timeframe, some people have paid off their student loans. Consumer debt is kryptonite to financial freedom.

Related posts: Navy Federal Credit Union No Balance Transfer Fee Promotion Are 0% APR Balance Transfer Offers Coming To An End? Free Money! …aka Best of 0% Balance Transfer Offers

0% APR Balance Transfer Promotion Updates from My Money Blog.

© MyMoneyBlog.com, 2012.

(In this post, I’m not going to provide all the background information on savings bonds that I normally do. For that, please read the older posts in my Savings Bonds category.)

When the Treasury announced the $10,000 purchase limit for 2012, a few readers asked if you should buy savings bonds in January, or wait until later in the year. Since then, a few things have happened. For one, the Federal Reserve has basically said that they will keep their target fed funds rates at zero until late 2014, while setting a target inflation rate at 2% annually. Translation: Interest rates on savings accounts and similar products will be remain crap while the things we buy get more expensive.

Also, we have another month’s worth of Consumer Price Index (CPI) data which is how the inflation rate is defined for savings bonds. The next 6-month variable rate update will be based on the CPI-U change between September 2011 and March 2012. We are halfway there:

CPI-U
Sep 2011 226.889
Oct 2011 226.421
Nov 2011 226.230
Dec 2011 225.672
Jan 2012 ?
Feb 2012 ?
Mar 2012 ?

You can see that inflation is actually negative over these three months. However, user MoneyOCD of Bogleheads posted this informational chart showing that in recent years there have been many periods of negative inflation from September to December, only to be followed by periods of higher inflation from December to March.

Basically, making predictions now is premature. If you buy in January through April, you will get a fixed rate of 0%, and a variable rate of 3.06% for six months. Given the interest rate environment, this is pretty much one of the best options for “safe” money. If you wait all the way until May, you’ll get something new based on whatever happens to inflation the next few months along with a fixed rate that will most likely be zero again. The inflation rate resets every 6 months based on your purchase month.

In general, if you have the money and are looking to put it in shorter-term, low risk investments that are guaranteed not to lose money (in terms of face value), I would be maxing out my limit on savings bonds for 2012. Keep in mind that savings bonds can’t be cashed in for an entire year after purchase. My personal opinion on the short-term? I don’t see any benefit in waiting until May. If you have money to put aside now, buy Series I savings bonds now. If you don’t, just wait until you do. The rate is already higher than savings accounts or 1-year CDs, and by waiting around in a 0.75% savings account or 1-year CD you’ll be missing out in interest.

If you’re looking to buy in January, I’d put in your order today at TreasuryDirect. It’s better to buy near the end of the month, as you get credit for the entire month no matter if you buy at the beginning or the end.

Related posts: US Treasury Ends Paper Savings Bonds in 2012 Savings I-Bonds November 2010 Fixed Rate: 0.0% Savings I Bonds September 2011 Update: 3.06% For Next 6 Months

Savings Bonds vs. Bank Savings Accounts from My Money Blog.

© MyMoneyBlog.com, 2012.

You’re probably aware of the wonders of the Roth IRA and how it allows your money to grow completely free from taxes, even upon withdrawal. An added wrinkle is the lack of age restriction, so that even kids with earned income (wages, salaries, tips) can contribute to a Roth IRA up the lesser of their taxable income or $5,000.

Along those lines, I received a PR e-mail from a site called 1417power.com. The idea is that you pay them “tuition”, and in return they pay your kids official job income that makes them eligible to contribute to a Roth IRA. They claim to follow all applicable child labor laws for those aged 14 to 17 (thus the name). Your kids do thing like fill out marketing surveys, but you’re essentially buying them a job. Digging through their fee structure, roughly 50% of what you pay them is skimmed off to go to the site owners.

Naturally, my question was – why can’t I just do this myself? The idea of paying your kids to do things like babysitting, lawn care or landscaping work, or manual labor seems simple enough. However, this Fairmark article argues that paying your own kids for chores is usually not considered taxable income, so you can’t “switch it” to taxable income for Roth IRA purposes when it benefits you. I’m not completely convinced, but for the sake of argument let’s explore other options:

There would still be some loss, as their gross income would be subject to payroll taxes like Social Security and Medicare, as well as a small amount of federal income taxes (less than 10%). But if your child has the discipline to not touch the money for decades, the tax-free growth could be enormous. You’d have to be comfortable with the fact that they could do whatever they wanted with the money at age 18 as they can withdraw the money after taxes and penalties.

The Parental IRA Match
Another move taken from this Forbes article for those that are already parents of teenagers with part-time jobs is to match their earned income. If little Jane earns $3,000 being a lifeguard, then let her spend her all or part of her take-home pay, but help her fund a Roth IRA to the full $3,000.

Effect on College Financial Aid
From my quick research, it appears that retirement accounts like Roth IRA are not considered an asset by the generic FAFSA form, but individual universities may deem them as a student asset. This could make for example 25% of the IRA to counts toward the student’s expected contribution, which doesn’t seem too bad.

Here’s a question for the parents out there – have you done anything along these lines? What did you do and why (or why not)?

Related posts: Roth IRA Contribution vs. Emergency Fund Savings 2010 Roth IRA Income Limits Effectively Removed Does Your Income Vary? Get Around Roth IRA Income Limits

Pay Your Kids To Fund Their Own Roth IRA? from My Money Blog.

© MyMoneyBlog.com, 2012.

Clover is a new person-to-person payment system for use between phone numbers. Simple fees (none for personal use), simple interface. If you sign-up via invite from a registered user, you’ll get a $5 bonus (I actually got a $5 Amazon GC + $1 credit, but the link just says $5). The referrer gets $5 too. You don’t even need a credit card or bank account to start, just a phone number (landline numbers work, but it’s optimized for Android and iPhone/iPod Touch users).

I am out of invites, so please randomly choose from one of the links in the comments which are provided by fellow readers.

After you join, go ahead and leave your own referral link in the comments. I have to approve the comments though, so please be patient as it may take a while to show up.

Related posts: Zecco Refer A Friend Promotion: $100 Referral Bonus (2012) 2011 TradeKing New Account Referral: $100 Bonus 2010 TradeKing New Account Referral: $50 Bonus

Clover Pay $5 Bonus via Referral from My Money Blog.

© MyMoneyBlog.com, 2012.

LivingSocial is offering $20 to spend at The Body Shop for $10. Valid in-store only. Valid toward sale and promotional items. Over 65,000 purchased already. Psst guys… Valentine’s Day is less than 3 weeks away

p.s. Groupon has $6 movie tickets to romantic comedy flick “One For The Money”

Related posts: LivingSocial: $20 Amazon Gift Card For $10 American Apparel: $50 Gift Card For Just $25 $2 for Five Movie Rentals from Blockbuster Express – Groupon

LivingSocial: $20 at The Body Shop for $10 from My Money Blog.

© MyMoneyBlog.com, 2012.

Some of you may not like the idea of trying out a new credit card with an annual fee and possibly having to cancel the card later (even if comes with a big sign-up bonus!), though the effect on your credit score is a lot less than many media articles would lead you to believe. Here are a couple of cards with $200 sign-up bonuses and minimal requirements (indeed, they would have been rock stars in 2008 and 2009) – but are also everyday “keeper” cards with no annual fee. I’ve had both of them for years.

Chase Freedom Visa – $200 Bonus

Citi Dividend Platinum Select Visa – $200 Bonus

Which one is better?
Both offer a $200 bonus after spending $500 on the card for anything (40% back). Both offer 5% back on select categories, and the good thing is you can benefit from having both cards since their categories often don’t overlap. Both require you to “activate” the 5% online each quarter, which is a bit annoying but only takes a minute. Both cap their rewards at similar levels (5% of $1,500 is $75 per quarter = $300 per year). Both have no tiers on their 1% back on everything else. The Chase Freedom has no expiration of rewards as long as the account is open, whereas the Citi Dividend rewards do not expire as long as you have activity once every 12 months. Last I checked, the minimum redemption amount was $20 for Chase, $50 for Citi. Overall, they are both very similar in my opinion.

However… in my credit card survey a few weeks ago with over 3,000 reader responses, there was an open-ended question asking which card was the “best credit card on the market today”. The #1 most popular answer was the Chase Freedom card, beating out everyone including travel cards. Where was the Citi Dividend card? Not even in the top 20. The people have spoken, but I’m really not sure why! Better commercials?

Related posts: Citi Dividend Platinum Select Visa Card – 5% Cash Back on Rotating Categories Chase Freedom Promo: $100 Sign-Up Bonus + 5% Cash Back Chase Freedom Promo: $100 Sign-Up Bonus + 5% Rotating Rewards

Citi Dividend Platinum vs. Chase Freedom Visa: Which Is Better? from My Money Blog.

© MyMoneyBlog.com, 2012.

I’m a little late on this one, but check it out you live in the New York City metro area or will be there in February. American Express has another promotion where if you spend $200+ at 2 or more participating merchants on a registered AmEx from February 1?29, 2012 then you will get a $50 statement credit. Register at amexnetwork.com/getmore. In-store purchases only. Registration is limited!

For the best value, note that Costco is a participating merchant. Keep in mind, you’ll have to visit two of them, but given all they sell there (stamps, gift cards, toilet paper) you shouldn’t have a hard time saving $50 off on $200 of stuff you would have spent any