Ask Metafilter is one of my favorite sites on the internet; I’ve been an active member there for years. It’s a great place to get advice on many subjects, including money. And careers. Recently a user named Entropic asked a question about “finding your passion”, which received an awesome reply from my pal Grumblebee. Here, with permission (and a tiny bit of editing), is that Ask Metafilter exchange.

Entropic
How did you find your passion?

How have you figured out what your passion(s) is/are in life, and how have you translated that into a successful career involving your passion(s)? I am intentionally not including details about myself and my situation because I don’t really want specific suggestions about what might be good career directions for myself or what interesting areas I might pursue. I’m looking more for concrete examples of what steps you’ve taken to find out what drives you, and how you were able to make a career out of that.

Grumblebee
Is there a difference between “discover your passion” and “discover what you want to do”?

I ask because I hear people talk about their Passion (with a capital P), as if everyone has one whether they know it or not. As if it’s a special glowing ball inside each of us. Yet I see no evidence that this ball necessarily exists.

Defining passion
To me, it’s more likely that we have things we like and things we dislike. A like becomes a passion when it repeats with regularity. For instance, I like peaches, but I don’t constantly crave them. So I wouldn’t call peaches a passion. On the other hand, whenever I see a book, I want to read it. I like reading… I like reading… I like reading… So I’d call reading a passion.

Is there anything like this for you, even if it’s something “stupid” (e.g. watching TV or eating poptarts)? If so, that’s a passion for you. If it repeats with great rapidity (and if the urge is very strong), then it’s an obsession. (I can’t keep my hands off my iPod. I think about it all the time. If I lose it, I panic.)

You don’t get to choose your passions. Since passions are just intense likings, choosing a passion would be like choosing to like eating eggplant. You either like eating eggplant or you don’t. Perhaps, if you don’t like it, you can learn to like it. But right now, you either like it or you don’t.

Finding and feeding passion
I’ve met some people who don’t seem to have any strong passions. Some admit to this. They certainly have likes and dislikes, but nothing specific crops up over and over. In fact, some people dislike anything that repeats too often (you could say such people have a passion for novelty). Other people do have passions (defined as I’ve done so, above), but they don’t think of them as such. For many people, their passion is other people: passion for their kids, passion for their families, passion for helping others in need, etc….

Many people think they’ve discovered a passion when if fact they’ve only found a surface activity that lays atop their real passion. For instance, I love working in the theatre. At the risk of sounding holier-than-thou, I believe my passion is pretty “pure.” In other words, my passion for theatre doesn’t hide a deeper passion. I love theatre because I’m fascinated by the specific mechanics of telling stories on stage. When I’m not rehearsing a play, I will choose to read a book about theatre mechanics just for fun (for another dose of my obsession).

I’ve met others like me, but I meet far more theatre people who seem to be using theatre to feed some deeper passion. (Please note that I’m not saying that there’s anything wrong with this or that I’m better than these people. I believe neither of those things. And there are plenty of other activities — just not theatre — that I use as tools to feed deeper passions.)

Such people may be into theatre because they love attention and praise; they may love belonging to an open-minded group (many “misfits” find their way into theatre in high school and stay because they love belonging to such an accepting culture); they may even be operating on autopilot, doing theatre because for whatever reason, they got into it when they were younger and it never occurs to them to quit. (They probably enjoy having mastered something.)

Digging deeper
I think it’s useful to delve into your psychology and ask yourself why you like what you like. Sometimes (as with me and theatre), the answer might be “because I simply love the activity.”

How do you know if this is true? Try mentally removing orbiting aspects of the activity: Would I still want to direct plays if no one saw them? Would I still want to direct plays if I could only work with bad actors? Would I still want to direct plays if I hated the results? Would I still want to direct plays if I always got bad reviews? etc. For me, though I wouldn’t enjoy the activity as much in these cases, I’d still want to do it.

This is useful because if you learn what your true passion is (the underlying one, if there is one), you may be able to change your life for the better. You may be able to say, “Wow! It’s not theatre I like, it’s collaboration! Maybe I instead of continuing in theatre, I should look into all sorts of collaborative activities and get into the one that’s the most collaborative.”

Such psychological delving may also help you deal with a crisis: “Oh no! I’ve lost my voice. I can’t act anymore. Wait a minute: it’s not specifically theatre that I like, it’s storytelling! I could write a novel.”

There’s also nothing wrong (and a lot right) with realizing, “I love attention and praise, so theatre is a great activity for me.” In all of these cases, you’ll have learned something about yourself.

Turning passion into a career
Once you know your passion, you will be tempted to ask — as you did — “How can I turn this into a career?” I think that’s the wrong question. I don’t think it’s totally wrong. I just think it’s too specific. Instead, I recommend you ask yourself this: “How can I best arrange my life so that I can spend the most time engaging in my passion in its purest possible form and derive the least amount of pain doing non-passion activities?”

I am a director, but I’m not a working (as in “paid”) director. To pay my rent, I have a “day job.” I could work as a director, but I’d have to direct plays that I don’t want to direct. For some people, that would be fine. For me, it’s not a good trade off. I’ll be more happy with the day job and the ability to direct whatever I want — forgoing pay. It took me a while to come up with that “formula,” and it’s a personal one. Mine won’t necessarily work for you.

(If you realize you’re like me, find the least painful day job you can, getting yourself training if you have to. I actually like my day job. And I continually work to make it better and more interesting. The cliché of waiting tables to support your passion isn’t a necessity. If you commit to the idea of having a day job — I’ll likely have one for the rest of my life — it behooves you to make it a good one. Or at least the least painful one you can find.)

I see a lot of people working really hard to make their passion into a job, and — tragically — when they finally make it happen, they don’t enjoy the passion any more. (E.g. a lot of working actors, who got into the business to play Shakespeare or Chekhov, spend most of their time acting in commercials.) If this happens, it’s really worthwhile to do some soul searching. Would I be happier with a day job? Am I happy doing a compromised version of my passion? If I am happy doing a compromised version of my passion, does that (perhaps) mean that what I thought was my passion wasn’t really my passion? (”Hmm. I thought I wanted to act, but in order to do theatre for a living, I’ve had to become a producer. And — hey — I like it. Maybe acting isn’t my real passion. Maybe my real passion is being a key part of a big project.”)

I am not saying there’s anything wrong with figuring out a way to do your passion for pay. Often, that’s a great way to spend most of your time doing your passion. Just make sure that if you’re doing your passion as a job, it’s really your passion that you’re doing and not a perverted version of it that will fail to make you happy.

Putting it all together
So, go through this thought process:

Finally: I’ve noticed that people (myself included) have a strong urge to classify themselves. People really want to be able to say, “I’m a director!” “I’m an engineer!” “My passion is gourmet cooking!”

There’s nothing wrong with that drive, but putting yourself in a category is not the same thing as actually being in that category. In fact, categorizing yourself — since it’s so final — is a good way to thwart any attempt to discover your actual passions. Once you say, “I’m a director,” it’s hard to think, “Wait a minute: is it actually directing that I like or some other activity that directing helps me achieve?” Which is why, at the start of this long post, I suggested you de-romanticize the whole thing and, instead, think about what you like and dislike, rather than trying to pin down your Passion.

Maybe you don’t have a Passion. Maybe you have many likes:

If so, you’ll be much happier if you arrange your life to maximize your chances to do these activities than if you expend a ton of energy categorizing yourself.

I am fortunate to have been able to turn my passion — writing — into a career. But even so, some of what Grumblebee warns against is certainly present. As much as I love to write, I have a very different relationship to it now that it’s my job than I did when I simply did it for fun.

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Last spring, This American Life tackled the subprime mortgage mess in a show entitled “The Giant Pool of Money”. This is a great episode, and I recommend it to anyone who wants background on the current U.S. financial situation. When I wrote about it in May, I said:

Why did the crisis occur? Because all along the financial chain — from bankers to brokers to borrowers to investors — people deluded themselves. They thought they could throw out the old rules of money. They thought they could cut corners to make a quick buck. In short: they were trying to get rich quickly instead of to get rich slowly.

I’ll stick with the slow, boring path to wealth, thank you very much. (And hope my progress isn’t derailed by the greed of others.)

Today’s program was a follow-up, exploring the bailout bill passed into law on Friday. “Another Frightening Show About the Economy” again tries to demystify the current financial crisis, explaining why the bailout is needed, and what it intends to do. The show covers:

I know this stuff sounds boring, but it’s not — at least not in the hands of Ira Glass and the gang at This American Life. I encourage interested readers to set aside a couple hours to listen to these episodes.

For more info, check out NPR’s Planet Money blog.

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Last month I wrote about the sunk-cost fallacy, the mistaken belief that just becuase you’ve spent money on something you should continue to spend money on it.

In reality, once you’ve spent your money, it’s gone. According to economists and psychologists, it’s a mistake to consider past expenses in deciding what to do with your investments, your home, or your Stuff. What’s important are future expenses and future happiness. To the extent that we can focus on the future instead of the past, the better off we’ll be financially (and mentally).

The example I used in that article was my desire to continue playing a computer game because I’d already pre-paid $80 for six months of service. Unfortunately, the example failed because people took me to mean that it was a “waste of money”, which wasn’t really what I meant.

Today I want to offer another real-life example. Maybe it’ll do a better job of conveying the concept of the sunk-cost fallacy.

Last March, I decided to tackle my physical fitness by setting some big goals for myself. One of those was to go from couch-potato to marathon runner in about six months. To goad myself into action, I paid about $100 (non-refundable, non-transferable) to sign up for the Portland Marathon (which is being run at this very moment).

For a while, this seemed like a brilliant idea. Having paid for the marathon in advance, I was motivated to train so that my money didn’t go to waste. I began to run with a group. I lost weight. I felt great.

At the end of May, however, I hurt myself. I took some time off. I didn’t worry too much, because there were still four months left before the marathon. But when I tried to return to running, the pain persisted. I went to see a physical therapist. June turned to July turned to August. Eventually I decided that maybe I could walk the marathon. I’d paid $100 for it, dammit, and I wasn’t going to let that money go to waste!

Over the last couple months, however, I’ve come to realize that I’m engaging in the sunk-cost fallacy again. The fact that I’ve already spent $100 for the marathon is meaningless. It’s a sunk cost. It’s not recoverable. What matters is the future cost in time and money. And, as it turns out, health.

I could have continued to push myself to prepare for the marathon, but the most likely result would have been additional doctor bills and physical therapy visits. I would be spending future money attempting to make past money “good” again.

Instead, I’ve changed my focus.

I’ve begun to prepare for the 2009 Portland Marathon. I’m running short distances (three miles) a couple times a week. I’m lifting weights to build my leg strength. Meanwhile, I’ve learned a lesson. In the future, I won’t sign up for the marathon until later in the summer, when I’m sure that I’m physically ready to go.

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Taking my own advice about how to choose a credit card, I recently signed up for an American Express TrueEarnings card because:

Those all sound like great perks, but the card also comes with an added “bonus”: an eleven-page card agreement. And these aren’t ordinary pages, either.

Because I’m That Kind of Guy, I counted the number of words per line and the number of lines per column. I then compared these numbers to a couple of books at my desk. This eleven-page card agreement, if printed in book form, would be 63 pages long.

Ugh.

Yet because I believe I should never sign anything without reading it, I will not activate this card until I’ve read — and understood, and agreed to — the entire document.

Sixty-three pages of legalese. Can you imagine how painful this is going to be?

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During 2008, my wife and I are tracking how much time and money we spend growing food. This is the report for September.

September generally brings the largest harvests for our garden. That was true again this year, but not by as much as we hoped. The bad weather at the beginning of the season means that things just aren’t ripe yet. Kris has been encouraging her tomatoes for weeks. I’m dying for the grapes to be ready. (They’re almost there!)

We did harvest a lot last month, the bulk of which was tomatoes and tree fruit. We had so many tomatoes, in fact, that Kris was able to enlist the help of five-year-olds Albert and Annika to help harvest. They did an amazing job picking cherry tomatoes.

Like investing in fruit
September’s nice because there’s almost no garden maintenance. All we have to do is stroll out to pick the food we want. During the middle of the month, Kris and I had a mild misunderstanding. I thought she told me to go pick all of the apples from our trees, but she really told me to pick a few for some jam. I came back into the house with 19 pounds of apples, which was far more than she needed. We made an spontaneous batch of applesauce.

Actually, Kris did a lot of canning this month: marinara sauce, applesauce, salsa, pickled plums, and more. As usual, we supplemented our own harvest with free food from friends and neighbors (25 pound of pears here, 15 pounds of plums there), as well as things like onions and garlic from the produce stand.

Now, as the rains begin and the harvest draws to a close, our pantry and freezer are both packed full. When we make a blackberry cobbler in February, take pickled “dilly beans” to a potluck or pop open a jar of spicy salsa on a chilly afternoon, we’ll be extending the benefits of our garden year-round. Our home-canned goods will help defray food costs over the next eight months until we can expect another strawberry crop to kick off 2009’s garden bounty.

The fruits of our labor
Our total harvest in September yielded $152.75 in produce, largely from tomatoes. Here’s the complete tally for this month’s garden production.

Note: For the purposes of this project, we’re using “best match” pricing. Based on GRS reader suggestions, we’re obtaining typical pricing from our local farmers market. In some cases, we use pricing from a local organic produce stand. In all cases, we’re trying to be fair, but this is more art than science.

A little bit of whining
I’ll be honest. I’m a little disappointed. Once it became clear that this garden was going to “make money”, I wanted it to kick ass. It hasn’t done that. Don’t get me wrong — we love having fresh produce outside our front door, and we enjoy the work with the plants, but I was hoping for more.

I think there are a few ways we can improve.

This year, we initially made a large financial outlay for two types of organic pest traps for the apple trees. They proved successful; our apples were practically worm-free! As the two trees mature and bear larger crops, the number and value of the apples will increase as the cost of the traps will drop (because some parts are reusable from year-to-year).

I almost want to repeat this entire project next year to see if we can spend less and harvest more! (Maybe we’ll do it behind the scenes, providing totals at the end of the summer.)

Summary
We spent nothing on the garden this month, and very little time. It doesn’t take long to harvest 19 pounds of apples or five pounds of tomatoes. September is the closest our garden will ever come to “pure profit”.

There is still food left to harvest. Though the rains have set in, we may have more tomatoes. (There are plenty on the plants, but the cool weather is likely to prevent them from ripening.) There are potatoes left to dig, and the acorn squash is ready to pick and dry for winter storage (to be tallied in October).

Most importantly, we have grapes to pick. We only have 20 feet of young grape vines, so we won’t have many from our yard. But the neighbor has vast swaths of Concords growing wild. I wanted to pick them last weekend, but he insisted they were two weeks away. I plan to pick them next Saturday. I just hope these rains don’t ruin the flavor. (Will rain do that to grapes?) There are few things I love more than fresh Concord grapes. (Especially fresh free Concord grapes.) They make amazing grape juice and Kris wants to put up some grape jelly.

Kris has made notes on her garden plan to help her organize her seed order for next year. Only a few short months until the seed catalogs arrive! And she has begun an experiment to grow a few herbs indoors this winter. Stay tuned on whether that is worthwhile.

Final word
Just to be clear on the purpose of this project: This isn’t a formal experiment. Kris and I are long-time hobby gardeners, and we have set ways that we do things. This year, we are not trying to do anything different than we have for more than a decade. We’re not trying to be 100% organic (though we are mostly organic through our normal practices).

Nor are we trying to be 100% frugal. Instead, we’re trying to see just what our garden costs and produces based on our normal habits. We hope the results of this experiment will help us find new ways to economize and to improve our crops.

You can read about my goals for this series in The year-long GRS project: How much does a garden really save?

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The more the credit crisis spreads, the more it affects the average person. Kristen wrote last week looking for advice. She’s not in a panic, but she is wondering what she should do:

I wanted to ask your thoughts on the recent seizure and sale of Washington Mutual. All of my accounts are at WaMu, including my 3.75% APY online savings account, and my 4.5% APY 12-month CD. I think these are great rates for what I have, and in comparison with what other banks are offering.

Now that WaMu is part of JPMorgan Chase, should I look elsewhere for accounts with good interest rates? Frankly, what I’ve seen of Chase bank’s rates, I’m not very impressed. I also can’t find other banks with comparable rates, but I’ve only started looking. I’ve enjoyed having all of my accounts wrapped up conveniently in one bank — checking, savings, CDs, and we just opened our kids’ savings accounts there as well.

Are the days of doing all my banking and saving with one institution a thing of the past? How can I choose a good institution without fear that it, too, will fold in six months? Or should I just stay put?

I’ve been wondering the same thing recently. None of my money is with banks that are in trouble, but I do have it spread out in three different places: one bank has my business accounts, one bank has my long-term savings, and a credit union has my day-to-day accounts. This seems goofy, especially considering my quest for simpler, more automated finances. Still, this system works right now, and is mostly automated, so I’m happy with it.

I also talked with my cousin Nick earlier this week. He’s always had his money with Washington Mutual, but he wants to move it now — not because he’s worried about losing it, but to “vote” with his dollars, to show his disapproval. He, too, wants advice on where to put his money.

A couple of quick thoughts for Nick and Kristen:

Surely many Get Rich Slowly readers have faced similar decisions lately. What choices are you making? How do you pick a bank in the current financial environment? Is it something to even worry about if your deposits are less than the FDIC limits?

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Get Rich Slowly readers have sent me many stories about the ongoing U.S. economic crisis and the debate over a possible bailout. Because I don’t like to talk politics here, and because economics is way outside my area of expertise, I haven’t provided much commentary on this situation.

Besides, sound personal finance skills are the same no matter what the condition of the economy. When times are rough, it’s even more important to focus on the basics: spend less than you earn, do what you can to avoid (or eliminate) debt, protect your job, etc. Also remember that investing is a long-term adventure; the time to make adjustments for low risk tolerance is before the market drops, not after.

Rather than ignore all the stories you folks have submitted, however, I thought I’d link to them all at once with only a minimum of comment.

And, of course, many people are looking for (and offering) solutions. Here are a few:

Finally, though it’s only marginally related, Clusterstock has an August 22nd transcript from what it calls “that awesome Warren Buffett CNBC interview”. It’s full of classic Buffett bites — little nuggets of wisdom about the economy from the world’s richest man. “I don’t try to pick turns [in the market] in any kind of an industry in terms of buying stocks. I just like to buy them when I think they’re cheap relative to their long-term earning power.”

But what does this all mean? Who can tell? Everyone seems to be flailing wildly to blame homeowners, banks, hedge-fund managers, Democrats, Republicans, George W. Bush, Bill Clinton, Ronald Reagan. I don’t think it’s the fault of any one person or group of people. This was systemic. And now the system is correcting itself.

The next few years will likely be painful for everyone, but less so for those who continue to practice basic smart personal finance skills.

Update: As I was composing this, Trent at The Simple Dollar published a great post in which he echoed FDR: “The only thing we have to fear is fear itself.” Photo by Wonderlane.

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Most of the time, the talk about the housing bubble and the credit crisis and the faltering U.S. economy seem rather abstract to me, as if people were discussing a problem in Canada or Mexico. Or Norway. I’ve spent the past four years focused on my own financial situation, ignoring the outside world. The national economy often seems remote from my own personal economy.

But there are millions of average people who have been affected by this country’s fiscal woes. My little brother, Tony, is one of those average people. He’s in dire financial straits.

In 2004, Tony bought a house in Portland for $415,000. In 2006, he got a new job in central Oregon, so he moved his family to Bend. He put the Portland house on the market. He intended to rent a place in Bend until his existing home sold, but then he found a house he liked. He applied for a loan and was approved. He bought the house.

The house in Portland never sold.

For the past two years, Tony has been making $5200 in mortgage payments every month. Or, lately, not making the payments. He ran out of money long ago. Tony agreed to let me interview him yesterday in order to share his story with GRS readers.

Note: Tony knows he made some poor choices, and he blames himself for his current problems. He’s candid that he should have been paying more attention to his finances. But looking back to 2006, he doesn’t understand why the bank approved him for the mortgage on the Bend house before the one in Portland sold. It seems like the bank was betting on that sale, too.

J.D.: How are things going?

Tony: What do you mean? They’re not going very well. The house in Bend was foreclosed on yesterday. The one in Portland is for sale again.

J.D.: You weren’t able to sell the house over there, huh?

Tony: No. Plus we consulted with a lawyer, and he said we should just give it back because of the tax ramifications.

J.D.: I don’t understand.

Tony: Well, it would be a short sale. To give you an idea, we put the house up for sale at $299,000, and we paid $380,000 for it. So what you do is you do a short sale — the mortgage company has to agree to it — but the government considers the difference as money that was given to you. It’s taxable income.

J.D.: When did you buy the house in Bend?

Tony: It cost $380,000 in September 2006.

J.D.: And how much was the mortgage?

Tony: Roughly $2400 a month. There were two mortgages.

J.D.: When the bank forecloses on it, what happens?

Tony: We’ve been out of the house for a while. We’re living with my wife’s parents. From what my lawyer says, there’s nothing the bank can do to us. They’ll essentially just take the house and then auction it off at the courthouse steps. There’s no other ramifications to me. There are several houses that are being foreclosed on in our neighborhood. One that went to foreclosure and was auctioned off sold for $230,000.

J.D.: Was it the same kind of house that would have gone for $380,000 in 2006?

Tony: Yeah. It’s the exact same house as ours except it has a two-car garage and ours was a three-car garage.

J.D.: Holy cats. That’s like a 40% drop in two years!

Tony: I know.

Note: In 2006, Bend had one of the hottest real-estate markets in the country. Now it’s fallen on hard times. Again, most of Tony’s problems come from the fact that he gambled by not selling his first house before buying a second one. Back then, this didn’t seem like it would be a problem.

J.D.: You wouldn’t have been in such a bad situation except you haven’t been able to sell your Portland house, right?

Tony: Yes.

J.D.: And how much did you buy that house for?

Tony: We bought it for $415,000 at the end of 2004. We still owe the bank $367,000. We’re paying $2800 a month.

J.D.: And you tried to put it on the market when you moved to Bend, right?

Tony: Well, on the advice of our Realtor, we put it on the market for $585,000, because that’s what she said that it would go for.

J.D.: And that was in the summer of 2006?

Tony: Yes. Then after the house had been on the market for a month, we got an offer at $500,000.

J.D.: And you turned that down?

Tony: It was turned down but not by me. The Realtor got it as a verbal offer and said that she told them “no” because she could get more for it. She informed us that they had made a verbal offer a week after they made it. Then last September we almost had it sold at $480,000 but the deal fell through because it was based on whether or not the couple sold their house. Guess what didn’t happen?

J.D. And that’s when you started renting the house. [For the past year, Tony has been renting the house to a friend, trying to defray some of the mortgage expense.] What do you have it on the market for now?

Tony: We have it on the market for $499,000. We just put it on the market last weekend, but we already have somebody interested in it.

J.D.: If that sells, does it get you out of your bind?

Tony: It helps, but it doesn’t necessarily get us out of the bind. Some of that money would go to the Realtor. Plus we owe money to other people. [Tony borrowed money from various family members.] And then there are our normal bills, which are behind. So even if we sell, it doesn’t solve the problem, but it does help.

Note: You know how the power of compound interest can help you save? Well, it works in reverse too. People in credit card debt understand that. Tony’s learning that the damage from mistakes can compound, too. What started as a small problem — needing to sell the Portland house — has mushroomed out of control. Things just keep getting worse…

J.D.: A couple months ago, you mentioned that you’re doing some sort of consumer credit counseling or something. How does that work?

Tony: Not very well. It’s not a debt consolidation place, but it kind of is. These guys are for profit. They piss me off. They told me they settled a Bank of America account for me, but I keep getting letters from Bank of America saying the account is not settled. So this place drafts money out of my account every month to pay the people we owe — it’s kind of forced savings, in a sense — but I won’t let them draft any more until they give me written proof that they’ve settled with Bank of America.

You know, this is my own frickin’ fault for not paying attention to exactly what was going on. I want to repay everyone because it’s my debt, but at the same time, it’s so frickin’ huge, I don’t know how I’ll ever do that.

J.D.: Why do you think you got in debt? Do you think it’s because of the house? Or do you think it’s other stuff?

Tony: There are several reasons that got us into debt. The first time we put the house on the market in Portland, we used credit cards to fix it up. We put a fence on it and that sort of stuff. The move here probably cost us $8,000. The idea was when we the house sold, that’d be paid back right away. The house never sold. Then we got ourselves into a situation where we had double mortgages.

J.D.: Oh yeah. What was the mortgage on the Portland house?

Tony: $2800. You do the math there. So, we had double mortgages, and we’re doing whatever we can to pay them both, praying that the house in Portland will sell. So we borrow from people. Slowly but surely, the amount we can beg, borrow, or steal keeps dwindling. I finally said, “This is is not going to work. We’ve got to do something different.”

J.D.: Were you having problems with debt before?

Tony: Before we moved from Portland? No. We were actually okay. We were financially okay. Did we have credit card debt? Yeah. Was it manageable? Yeah. Could we make all our monthly payments? Yes. Did we have extra spending money after we made our monthly payments? Yes. We weren’t paying off our debt extremely fast, but we weren’t building debt. You know what I mean?

J.D.: To me, you guys typify all the problems that are going on with the economy at large. You guys are the ones we know most being affected by it. Do you pay attention to the economic news at all?

Tony: Hell yeah — every day!

J.D.: What do you think about it?

Tony: I was just talking about this with my wife the other day. I don’t know if it’s because of what I’ve been going through or what, but my personal opinion is that we’re not looking at a recession. We’re looking at a depression.

J.D.: And what’s going to happen for you guys if there is a depression?

Tony: To be honest with you, I have no clue. I’m scared.

My heart aches for my little brother. Obviously, Tony is not a “victim” — I don’t think he’d claim to be — but he is one very real part of the ongoing credit crisis. To me, he’s the average American. He wasn’t pro-active. He was eager to have a new house, so he bought one before the old house sold. He didn’t have anything in savings, so he took a risk by financing his move on credit. Now, along with many others, he’s paying the price. I just hope he comes through this okay. Photo by respres.

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Related Articles at Get Rich Slowly:Could Tithing Lead Some Americans to Lose Their Homes?A Short BreakPersonal Finance 101: Dumb Mistakes Lead to Financial RuinThe Best of Get Rich Slowly: July 2008Daily Links: My Favorite Stories from the Past Two Years

A little blurb in the 22 September 2008 issue of Newsweek caught my eye. Linda Stern writes that younger workers are becoming more comfortable about sharing their salary information with friends and co-workers. She points out that it’s also possible to make more generalized salary comparisons using web tools like:

I haven’t used any of these services (they’re not likely to have information for “professional blogger”), but they could be useful for many people. PayScale, in particular, seems to have a good balance of information and usability. I’ve wasted a fair amount of time paging through their 2008 college salary report, which includes topics like:

There are other career-enhancement tools available on the web, too. For example, Indeed bills itself as the “search engine for jobs”.

Indeed gives job seekers free access to millions of employment opportunities from thousands of websites. Indeed.com includes all the job listings from major job boards, newspapers, associations and company career pages — and we continue to add new sites every day.

Meanwhile, the Occupational Outlook Handbook, which is published by the U.S. Bureau of Labor Statistics. This free resource can tell you the training and education needed for various careers, typical earnings and job prospects, what workers do on the job, and more.

For more tips on how to boost your salary or find a better job, check out the Get Rich Slowly career category, which includes great posts like these:

And, of course, always feel free to share your experiences here, and to the pick the brains of your fellow readers.

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When do I want to retire? How much do I want to have saved? What sorts of things do I want to accomplish before then? I’ve begun to think seriously about these questions lately.

Jim at Blueprint for Financial Prosperity recently offered some tips on how to draft a basic financial savings plan, a tool that could help me craft a road map for my future. He says that failure to plan is one of the seven deadly sins of personal finance. I agree. I believe that the road to wealth is paved with goals, and planning is one of the most important parts of the journey.

Jim writes that the roots of his planning technique are grounded in the MBA classes he recently completed. He’s developed a system that reminds me very much of my spending plan, but focused on the long term. Here are his recommendations:

For much more detail, consult the full article. Jim notes that this sort of savings plan focuses only on the expense side of the equation. You may find that in order to meet your goals, you need to boost your income.

Kris and I have never created a long-term financial plan. When something major comes up — like buying a house — we sit down and brainstorm a plan, but most of the time we just wing it. Now that I’m approaching 40 (I turned 39-1/2 last week!), I’m beginning to think more about the future. I’ve always been a spontaneous sort of guy, but now I’ve reached a point in my life where I want a little less uncertainty. I want to have a destination in mind, and I want a map of how to get there.

To that end, when Kris and I take our brief vacation later this month, we intend to spend some time developing a long-term plan. (In between horseback riding and kayaking, of course.)

Photo by mamchenkov.

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September was a sort of unofficial “credit card education month” around here. I tried to share information about how to use credit responsibly. (Now maybe it’s time to move on to debt reduction themes!) Most of all, there were some great conversations at GRS in September. Here are a few of my favorites:

Best of the Forums
Though I didn’t have time to hang out there, the Get Rich Slowly discussion forums were active again this month, spawning several interesting conversations:

The forums are a great place to chat with your fellow readers. Have questions about emergency funds? Ask! Want to chat about cheap vacations? This is the place to do it. (Since opening last year, the forums have 2175 registered users and nearly 26,000 posts.)

Subscribe!
You may subscribe to Get Rich Slowly via any of the following methods:

This weblog is a success because of you and your support. As always, I welcome reader contributions, either as ideas for stories, or as guest entries. If you have any comments or requests to improve this site, please feel free to pass them on.

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This is a guest post from Katrina Ramser, a freelance writer who contributes to various websites, newspapers and magazines. She also writes about swimming at SquidKid.

Did you know an average of six credit card offers are sent to each American household in typical month? That’s five billion advertisements a year. If you had a company where one-third of your profits came from penalty and non-penalty late fees alone, you too would be able to jam mailboxes full of rigmarole about your product, making sure yours was one of the 8.6 credit cards the average American has stuffed in her wallet.

It?s simply not enough to pay your balance in full and on time. Credit card companies are looking for ways to penalize you for paying your balance off. They can cancel a card if you are not using it, which can hurt your credit score. Did you know they can raise your APR on one card simply because they found out you were late on a payment to another? Did you also know that the fine print on contracts states they can increase your APR at any time they want, for any reason? Has this happened to you as of late due to the credit crisis?

Fighting back doesn’t take one borrowed dollar. Here are ten aggressive tactics to turn the tables on credit card companies.

#1: Understand when and where the credit card debt cycle begins
Credit card companies start recruiting before skepticism or experience develops; college students being a prime target. With education costs and student loans at an all-time high, youth are the perfect profile of a needy, unsuspecting victim. If fact, a large number of college students have reported they didn?t even know the credit being offered to them wasn?t free of charge.

Currently, 96 percent of college seniors have at least one credit card, but many have as many as six credit cards, with an average Annual Percentage Rate (APR) of 18 percent and an average balance of $3,200 (no matter the number of cards). When students graduate, get a job, and move into the 25-to-34 age group, their credit average revolving card debt becomes $4,088. Only 29 percent of this age group can actually pay off their balance each month. When finally married, the debt figure can double as finances merge, so looking into the great American debt melting pot, the average household credit card debt becomes around $9,312.

This brings us to total American credit card debt: $800 billion. No one is left out of the credit card debt hook — from dogs to the deceased, you’ll get offers to join the chains of debt slavery, so watch where, how, and when you begin to be picked off by credit card companies.

#2: Pay off your credit cards in an effective manner
The best thing you can do for yourself and your debt is to pay it off and never tango with credit card companies again. There is just no substitute or excuse for taking up the financial reins of your own life. This will give you the greatest power, as well as let you help others later who have fallen into the trap.

#3: Send back any credit card offers or additional debt-inducing advertisements
You know all those little ads that are mailed with your bill? Stuff them in your bill’s return envelope to send them back. Let the credit card companies be responsible for their own paper waste and noise. Get calls on the phone from credit card companies? I like to put them on hold and leave them there for an indefinite amount of time.

#4: Destroy all your credit cards — emergencies call for cash, not plastic
Credit cards are not a necessary part of life. Although credit cards — when used wisely — can render a user cash-back and other reward benefits, you don’t need to have a credit card in case of an emergency. You need to have $1,000 cash in a high-interest online savings account like ING Direct that issues debit cards so you can have the money in a snap. Another idea is to take a Sharpie and write a goal on your credit card, as suggested by Jim at Blueprint for Financial Prosperity.

#5: If you choose to keep a credit card, don’t be a debt recidivist
Personal finance television spokesperson Jonathon D. Pond, author of Grow Your Money, calls a person who lapses back into revolving debt a “Debt Recidivist.” More than half of credit cards users can’t, don’t, or won’t pay the balance in full at the end of the month.

#6: Stop the credit card companies from contacting you
If you go to the National Do-Not-Call Registry, you can register so you won?t get credit card offer calls. To stop your mailbox from being filled up with offers, contact OptOutPrescreen.com.

#7: File a complaint against the credit card companies
Consumer Reports advises consumers top register a complaint with your state attorney general. (Contact information is available at The National Association of Attorneys General.) Also lodge a complaint with the Office of the Comptroller of the Currency, which you can reach by phone at 800-613-6743. If the OCC doesn?t regulate the card issuer, it will help you find the agency that does.

#8: Realize revolving balances support credit card corporations and their causes
From 1990 to 2004, almost $8 million from credit card companies was contributed to both political parties. Aside from achieving personal relief and control over your financial life, another value-based and entirely beneficial reason to pay off your credit cards is to stop giving funding to organizations who will not use your money to lobby for laws on your behalf. In a sense, when you use credit cards, think of yourself as inadvertently giving money to a cause you might (or more likely might not) support.

Remember, penalty and non-penalty fees (late fees, interest rates) make up whopping one-third of total revenue for credit card companies — that staggering total for the top ten credit card companies is around $16 billion a year.

#9: Support government regulation for credit card companies
Because credit cards are currently unregulated by federal law, these companies do not have a watchdog to keep their business practices in check. This lack of regulation is also the reason for changeable interest fees, late fees, transfer balance fees, foreign currency conversion fees, membership fees, and other ?universal default? penalty and non-penalty fees. Currently 29 states have no limits on credit card interest rates. Grace periods (the amount of time you have to pay your bill before the APR kicks in and you owe more due to the balance) are becoming non-existent.

Some legislative issues at hand are to require credit card holders to have a cosigner unless they can prove they have a regular income. Congress could also require credit card issuers to disclose important information, such as the fact it could take 30 years to pay off $2,500 in credit card debt if you only pay the minimum.

Organizations campaigning against consumer debt include Institute for American Values, the Institute for Advanced Studies in Culture, the New America Foundation, Public Agenda, Demos, the Consumer Federation of America, the National Federation of Community Development Credit Unions, and CreditCardReform.org.

#10: Vote in the next election
In 2004, the last Presidential election, 64% of Americans turned out to vote — up from 60% in the 2000 election. We saw a huge surge in all races, ages and genders showing up at the polls. But flip the pancake and you’ll find the numbers of those not still voting are staggering. For example, more women voted than men in 2004…but 40 million women still did not vote. I’ll give you the same simple speech my father used to give me when I was younger and disconnected to the process: “Voting is not a choice; it is your civic duty.”

Previously at Get Rich Slowly, Katrina Ramser asked, “What’s not to love about a new car?” You can read more of her work at SquidKid. Photos by the half-blood prince, ShutterCat7, and Just-Us-3.

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I spent a couple hours this morning performing what ought to have been a simple home-maintenance task. The light fixture on our front porch had gone faulty, and I needed to replace it. I’ve done enough wiring projects now that the electrical aspect of the job didn’t bother me. But the woodworking? That was frustrating.

As I fumbled with the jigsaw (”Drat! Another blade bent!”), I wished again that I practiced woodworking more often. I have several friends who do so, and the skills they’ve learned help them to save money around the house. My incompetence this morning gave me plenty of time to reflect on the value of productive hobbies.

Productive hobbies
When I was younger, I spent most of my spare time reading comic books and playing video games. There’s nothing wrong with a little self-indulgence, but the older I get, the more I appreciate hobbies that provide practical skills. Productive pastimes are not only fulfilling, but they can also help save money. (Sometimes they can even generate a little income!)

Here are a few hobbies and pastimes that can help to save (or make) money:

The possibilities are limitless. There are countless fun and interesting hobbies that can either save you money, or maybe help you earn a little on the side.

Quick tips
You’ll notice that none of these hobbies involve collecting. I’m an inveterate collector myself (comics, books, notebooks, movie serials, music of the 1920s, …), so I know first-hand how expensive it can be. Some would argue that it’s a form of compulsive spending, and I can’t really disagree. Since I’ve begun focusing on hobbies that involve doing rather than getting, I’ve spent much less money.

For some hobbies, equipment can be prohibitively expensive. In these cases, you may be able to find used stuff on Freecycle or Craigslist, or you may be able to begin with low-end gear. (This isn’t always a good option. If you think you’re going to be doing a lot of running, you should buy a quality running shoe from an expert, and not settle for cheap sneakers, for example.)

In many cases, it’s possible to jump-start a hobby by taking a course at a community college or community school. I spent a year taking photography classes, for example. The instruction and experience were invaluable, and helped me develop the skills necessary to actually sell a couple photos.

My friend Michael likes woodworking but can’t afford (and doesn’t have space for) all of the equipment. When he needs to build something, he signs up for a community college woodworking course so that he can use industrial woodworking tools at a reasonable cost.

Further reading
I’m a big fan of productive hobbies, and I’m not the only one! Here are some articles on the subject from around the web:

Don’t forget that hobbies are an excellent way to make gifts for less than it costs to buy them. Kris sometimes knits gifts for special occasions. Most years she gives some sort of home-made food to our friends for Christmas. I sometimes give photographs. One of the best birthday gifts I ever received was a batch of homemade chocolate chip cookies.

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Some GRS readers have noted that some of my tips are geared toward country folk, or at least those with a little bit of land. They’d like more information for urban dwellers. I’ll try to offer more such content in the future. For today, here are a couple of recent articles from around the web that touch upon these sorts of themes:

At Wise Bread, Myscha Theriault has a collection of thrifty tips for fast-moving city folks. This a strange hodge-podge of ideas about how to stretch your dollar with downtown living.

At Yahoo! Real Estate, Jack Hough makes the argument that renting makes more financial sense than homeownership. We’ve covered the rent vs. buy question at Get Rich Slowly before, and as the collapse of the U.S. housing bubble has demonstrated, concluded that buying a home makes sense not as an investment, but because you want a nice, permanent place to live where you are the boss.

Robert Powell from MarketWatch says that the current economic turmoil is worrisome. His advice? Don’t panic, but re-evaluate conventional retirement-plan strategies.

I like Ron Lieber’s advice at The New York Times: take control of your own financial risks by re-evaluating your investments, seeking alternate sources of income, consider investing a little more in your mortgage right now (which pays a known rate of return), and making sure your insurance is adequate.

Finally, Nick at Punny Money explores a question I’ve never really thought about before: Is one gasoline brand better than another? His conclusion? “When it comes to gasoline, gas is gas.”

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Last week, USA Today featured an article on Christians who continue to tithe even as they face foreclosure.

Tithing is the practice of donating 10% of your gross income to your church. It’s not a common practice (only 5% of American adults tithe), but it’s important to those who choose to do so. It’s a component not just of Christianity, but other religions as well.

But what happens when tithing interferes with your ability to pay the mortgage? The USA Today article explores this conflict.

“I’ve had home owners who face foreclosure sitting in front of me saying, ‘I’ll do anything, anything to keep my home,” said Ozell Brooklin, director of Acorn Housing in Atlanta, a nonprofit which offers foreclosure counseling.

“But after we’ve gone through their monthly expenses and the only thing left to cut is their tithe, they say ‘I guess this home is not for me’ and they walk away,” he said.

The article discusses just how important this conviction is for some people, and how they’re willing to sacrifice their homes in order to continue tithing. “To stay current on the $500 monthly mortgage, [one woman] was faced with giving up a tithe to her local evangelical church of around $200 a month. Instead, she let the property go into foreclosure.”

For many people, tithing is the most important part of their budget. Even before the age-old admonition to “pay yourself first” (which means to set money aside into savings before paying your bills), these folks donate money to church or charity. There’s nothing wrong with this, but it can lead to financial decisions that most people never face.

But is tithing really the reason some people face foreclosure? Or is the financial distress a symptom of deeper problems?

Tithing is another reminder that financial decisions aren’t all about the numbers. Our personal convictions affect our choices. I frequently say that money is more about mind than it is about math; our decisions are influenced more by our psychology and emotions than they are by the arithmetic of the situation. But sometimes our financial decisions are also subject to other forces, such as religious beliefs and personal convictions.

Note: Get Rich Slowly does not take a stand on religious or political issues. I’m presenting this topic for discussion because I think it’s fascinating, not because I want to promote or denigrate any particular point of view. Although I don’t tithe to church or charity, I respect and admire those who do. Please be considerate in the comments.

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