The Simple Dollar Weekly Roundup: Making It All Work Edition

After the universal positive response to my idea of doing a chapter-by-chapter discussion of David Allen’s Making It All Work, I’ve decided to go ahead with it. Expect it to begin in a few weeks (I usually like to have several posts already in the bag for series like that before I start posting them).

Meanwhile, here are some interesting articles I’ve read from around the web this week.

Professionals, Amateurs, and the Great Unwashed Which are you? And which one would you be most likely to hire? I think it depends on the job, but I agree that enthusiasm and passion make up for a lot. (@ seth godin)

How To Get Hired & Get The Job You Want By Volunteering The people that do this kind of thing are the people that stand out from the crowd and get hired. At the same time, the people who do this kind of thing are people who have enough financial stability in their life to pull it off. (@ the digerati life)

Can’t stand the heat? Get into the kitchen — but only long enough to make iced tea. My wife and I are enormous fans of tea. We almost constantly have a sun tea jar sitting out on our deck during the summer. It’s incredibly inexpensive and tasty. It’s just our beverage of choice, hands down, and it has a lot of health benefits, too. (@ surviving and thriving)

Preparing for a Baby – What Do You Really Need? I’m linking to this because it’s a great example of how two frugal people think differently. She thinks that a changing table “is the single most important piece of furniture in the nursery.” I thought it was basically useless – we just have a “portable changing table” with a towel and the stuff we needed in a bag, meaning you can change the baby pretty much anywhere. (@ cool to be frugal)

Big Difference Between Average and Median Net Worths “Average” means you add up all of the net worth in America and divide it by the number of people. “Median” means you line everybody up in order of their net worth and ask the person in the middle what their net worth is. The two numbers are vastly different. (@ free money finance)

Advice from Financial Planners for Members of Generation Y I’ve never been quite able to determine whether I’m part of Generation X or Generation Y – or why it really matters. (@ gen y wealth)

Continue reading The Simple Dollar Weekly Roundup: Making It All Work Edition …

From The Simple Dollar.

September 1, 2010 | Filed Under Frugal Living | Leave a Comment

The Simple Dollar Weekly Roundup: Making It All Work Edition

Earlier this year, I did a very popular series on David Allen’s book Getting Things Done, one that’s still generating a fair amount of email.

Given that I personally found at least as much value in Allen’s follow-up, Making It All Work (which approaches GTD a bit more philosophically), I’m wondering if there would be interest in a similar chapter-by-chapter review of this latter book as well. Here’s my review of that book.

I really like the “book club” format for deep discussions about particularly strong books.

Five Surefire Ways to Strengthen Your Willpower Willpower often makes the difference between succeeding and failing at something challenging. The stronger your willpower is, the more likely you are to get what you want. (@ dumb little man)

How to Replace Six Vital Documents These are just good things to know, because countless things can happen to our key documents. (@ get rich slowly)

Moving On Seth is no longer going to publish books in the “traditional” fashion. I’m actually going to attempt this with my next book, publishing by myself primarily in an electronic format with a print version available, too. (@ seth’s blog)

Diving Into Our Emergency Fund – Again When I read stories like this, I’m reminded how easy a well-stocked emergency fund makes our life. If a person went through this kind of stuff without an emergency fund, it would have been a very rough patch, indeed. (@ blogging away debt)

Why personal-finance “experts” continue giving worthless advice This article hits on why tiny individual personal finance bloggers have a larger monthly audience than many huge “prestigious” personal finance publications. We focus on actual problems that people have, not “financial literacy.” (@ i will teach you to be rich)

Continue reading The Simple Dollar Weekly Roundup: Making It All Work Edition …

From The Simple Dollar.

August 25, 2010 | Filed Under Frugal Living | Leave a Comment

The Simple Dollar Time Machine: August 21, 2010

Many newer readers of The Simple Dollar haven’t been exposed to the hundreds of great articles in the archives of the site, so this is a weekly series that highlights the five best posts from one year ago this week, two years ago this week, and three years ago this week. I call it … the Time Machine.

One Year Ago (August 15 – August 21, 2009)
The Danger of Selling to Your Friends and Family When you try to sell to your friends or your family, you’re taking advantage of your relationship with them. They feel obligated to buy from you because of your relationship, but there’s often a sense that the relationship has been undermined.

The Real Lessons of “How Low Can You Go?” Last summer, I did a series of posts paralleling NPR’s “How Low Can You Go” series of low-cost recipes. Here are some of the things I learned from the series as a whole.

Why My Net Worth Is Now Negative Again Did I go into debt? No. I just recalculated my net worth with the realization that some of the things I own aren’t really liquid.

Are You a Money Victim? Whenever you blame others for your money problems, you’re a money victim. Don’t look for ways to blame others. Instead, look for ways to create a situation for yourself where other people’s inevitable problems don’t affect you.

Rule #10: Plan Ahead Every Time You Spend. The more I plan ahead for my expenses, the more financial success I seem to have. Every dollar should only be spent with some forethought.

Two Years Ago (August 15 – August 21, 2008)
The Big Debate #5: Chasing the Dreams or Chasing the Money? I lean hard towards chasing the dreams because passion is the one thing people will always pay money for.

This Is the Right Personal Finance Book for You! Obviously (tongue in cheek), the best personal finance book is this one, but here are some others to look at.

Fourteen Techniques for Improving Your Work-Life Balance Finding the right balance between the work you do and the things you work for is key to a happy life. When those two things get out of balance, it’s a very hard road.

What Features Are Most Important For Your Primary Bank? My Thoughts and Recommendations For me, great online banking, strong customer service, and minimal fees are key for any good bank. I really don’t care much about 1.5% interest versus 1.25% interest.

Winning the Battle Against Low Quality Generics While Still Saving Money I’ve had many great experiences with generics. I’ve also had some disastrous experiences as well – experiences that have taught me that I need to be careful with generics.

Three Years Ago (August 15 – August 21, 2007)
Tackling Breakfast: Healthy, Inexpensive, And Easy Meals To Get Me Started In The Morning Breakfast is the most important meal of the day, but it’s often easy to do it in a costly and (healthwise) disastrous way. Here’s how I tackle it instead.

A Frugal Dilemma: Inheriting Stuff You Wouldn’t Normally Use My advice? Sell it as soon as you possibly can unless you truly can find a use for it.

Should You Vote For A Politician That Promises Lower Taxes? Politicians often can’t connect what they promise on the campaign trail with what they can actually do once in office.

Losing A Friend Over Money If your spending goals start to diverge from your friends, you’ll find yourself in a difficult spot sooner or later. You’re better off handling it with maturity and sincerity.

30 Year Versus 15 Year Mortgages Continued: What About Income Tax? Income tax deductions shouldn’t be a major concern when you’re thinking about which mortgage to choose. Given how few people can actually deduct their home mortgage interest, you’re better off focusing on getting the best interest rate.

If you’d like to browse through more of the archives, visit the chronology, where all posts are listed in chronological order.

Ten Ways to Get More out of The Simple DollarUpdated!
This is kind of a FAQ for new readers and is posted each week along with the Time Machine. Here are ten great ways for new readers to dig deeper into The Simple Dollar.

1. Subscribe by email or RSS. Visiting The Simple Dollar’s website is great, but for many people, it’s more convenient to receive the articles in another form. It’s easy to join 60,000 other subscribers and get The Simple Dollar’s content by email or in your RSS feeder (if you’re unfamiliar with RSS, check out Google Reader.

2. Comment. Each article on The Simple Dollar has lively discussion. Just click on the green square in the upper right of each article on the website and join in!

3. Become a fan of The Simple Dollar on Facebook. I put up questions and other materials about once every week or two on Facebook (so you won’t be flooded with Simple Dollar updates). Join in the conversation with other Simple Dollar fans and occasionally get some interesting freebies, too.

4. Follow me on Twitter. I post interesting articles, quotes, follow-up material, commentary, and other material on Twitter. Follow me! If you’re unfamiliar with Twitter, it’s essentially an open discussion forum for people to share ideas and thoughts with other like-minded folks – you just choose the people you want to listen to and their ideas and thoughts are all delivered to you on a single page.

5. Read my story of financial meltdown and recovery. The Simple Dollar isn’t based on what I’ve read in books or learned in school. I’ve made a lifetime of financial mistakes – The Simple Dollar is a record of what works for me during the process of getting my life on a better track.

6. Download my free 49 page e-book. Everything You Ever Really Needed to Know About Personal Finance On Just One Page is completely free. It summarizes all of the key lessons I’ve learned along the way about personal finance in one tidy package – in fact, all of the main principles can be found right on the cover.

7. Dig through “31 Days to Fix Your Finances.” 31 Days to Fix Your Finances is an article series that outlines how you can get a grip on your finances over the course of a month.

8. Send me your questions and suggestions. Send me an email and let me know what you’re thinking, what you’d like to see, and any questions you might have. I try to respond to as many emails as possible and I read them all. I may even use your question in a future article!

9. Become a “Friend of The Simple Dollar.” If you find the stuff on The Simple Dollar valuable and are willing to spend five minutes or so a month to help me out with small things, please consider signing up to be a “Friend of The Simple Dollar”.

10. Email a great article you find to a friend. Find an article that you think your friend would love? At the bottom of each article, you’ll find a link that says “Email this” – just click on that, type in your friend’s address, and send it right along to them!

Continue reading The Simple Dollar Time Machine: August 21, 2010 …

From The Simple Dollar.

August 21, 2010 | Filed Under Frugal Living | Leave a Comment

The Challenge of Couponing

I’ve long been an advocate of using coupons at the grocery store. I often clip coupons for toiletries and household products and, when there are opportunities, for some food items like organic milk (I had a great coupon for this a while back). I’ve also used coupons for bigger purchases as well in the past.

Because of this, I hear almost every day from people who have great coupons or great coupon-offering websites. “You should try this!” they’ll say, or they’ll suggest that I feature the site on The Simple Dollar. A very recent example of this is Groupon; other examples include Coupon Sherpa and Woot – and I won’t even touch on the plethora of “coupon blogs” out there.

I don’t link to these things. In fact, I usually don’t visit them beyond simply adding them as a bookmark to a “coupon” folder in my browser.

Some of you are probably surprised by that (others might already know why). After all, on a site interested in saving money, why wouldn’t I hunt down coupons?

Here’s the truth: visiting coupon sites for the sole purpose of “saving money” will cost you money.

Let’s walk through the reasons for this. Almost every coupon you see requires you to spend some money in order to bring home the “savings.” Any time you spend money on something you don’t need, you’re taking money away from something that’s actually important to you.

If you go to a site that lists nothing but a bunch of coupons (or look at a coupon flyer), you’re not looking at coupons – you’re looking at lists of stuff to buy.

For me, successful coupon use takes a very different approach. Rather than simply looking through lists of coupons and identifying ways to “save” on items I don’t really need, I start with lists of the things I do need or truly want independent of the coupons.

In other words, I do use coupon flyers and coupon sites, but I don’t bother to look through them unless I’m looking for something specific.

So, for example, I’ll look through coupon flyers once I have my grocery list together. I’ll look at coupon sites once I’ve come up with a gift idea or two for a friend or family member or when I’m considering a specific purchase.

Another example: I have a special email address that I use to sign up for coupons from retailers I regularly visit. When I’m considering a purchase, I visit that email account and search through the emails (Gmail makes this kind of searching very easy) for ones that match the item I’m thinking of or the retailer I’m thinking of visiting. Almost always, I’ve got a coupon right there.

Aside from that, the coupon flyers remain unopened and the coupon sites remain untouched. Looking at lists of stuff to buy – even with a nice discount on it – is just spending time thinking of spending my money on stuff I don’t really need and don’t really want.

Let what you actually need lead the way. That way, you’ll never find yourself spending your hard-earned money on stuff that you really don’t want – and you can conserve that money for stuff that you really do need or want.

Continue reading The Challenge of Couponing …

From The Simple Dollar.

August 19, 2010 | Filed Under Frugal Living | Leave a Comment

Start

If we don’t start, it’s certain we can’t arrive.
- Zig Ziglar

One of the biggest themes of The Simple Dollar is goals. I find goal-setting – figuring out a specific goal, writing it down, coming up with a specific plan to get there, and following that plan – to be incredibly empowering. Diving head-first into such planning has quite literally changed my life, as it made The Simple Dollar and my subsequent writing opportunities possible. It made paying off all of our credit card debts, car loans, and student loans possible, leaving us with just a mortgage. Goal-setting gave me a framework for writing two books in the past three years, and it’s giving me a framework for learning how to play the piano and countless other personal objectives.

If you roll back the clock five years, I was buried in debt. I had vague dreams of being a writer. The Simple Dollar hadn’t even popped into my mind yet.

What took me from there to here? I attribute it to goals, of course, but there’s something much more specific than that at the core here.

The start.

The Simple Dollar was born because I sat down one evening and decided to stop dreaming about it and start doing it. I threw together a rough site design on Blogspot and wrote my first article within a couple of hours.

I started paying off debts because I sat down one evening and decided I needed to get my financial life under control. I studied all of my debts, came up with a plan for tackling them, and started cleaning out my closets within the first few hours.

When I look around my life, there are so many other things I would love to accomplish. I have several big household projects that are just sitting on the back burner. I’ve got ideas for two future books and at least two blogs I’d love to start. I’d like to run a 5K next fall.

Big goals, big dreams. None of them will happen until I sit down and make the decision to get started with them. I can dream all I want, but until I get started, nothing will happen.

Which brings us back to you.

Almost all of us have a dream or two floating out there. A big home project we’d like to pull off. A career change. A lifestyle change. A diet change. A change in our social circle. A new skill we’d like to learn.

It is so easy to dream about these things. But it’s not the dreaming that changes a life – it’s the doing and the accomplishing.

Today is the day to get started on one of those big goals.

Here’s my challenge to you. Tonight, go home and spend two hours on the big thing you’re dreaming most about in your life. Sit down, figure out a plan for how to get from where you’re at to where you want to be. Write out that whole plan. Then take the first big step towards getting there, whatever that might be.

You’ll feel so good about things that you’ll barely be able to wait until your next opportunity to take a whack at it. Soon, you’ll find yourself moving towards a goal that you thought was out of reach – and growing as a person at the same time.

That’s a big win, no matter how you slice it.

Continue reading Start …

From The Simple Dollar.

August 16, 2010 | Filed Under Frugal Living | Leave a Comment

The Simple Dollar Time Machine: August 7, 2010

One Year Ago (August 1 – August 7, 2009)
Putting the Strength of Weak Ties to Work Our lives are loaded with “weak ties” – people we know, but not well. There is a ton of value in maintaining those ties, strengthening them a bit when you can, and

Thoughts on a Low Grocery Bill You know, if you spend a bit of extra time and can trim $30 off of your weekly grocery bill thanks to coupons and meal planning and flyer watching, that’s $120 a month. That’s almost $2,000 a year. That can be a game changer if you do something worthwhile with that money.

Faith as a Guiding Financial Principle If your faith holds deep meaning for you, it can be a powerful tool for helping you make better choices. When you see someone talking about their faith and relating it to personal finance or personal growth, just remember that the faith is a powerful tool for some, but if it’s not a powerful tool for you, that doesn’t discredit the advice at all. You just need to seek the things that are important to you.

The Short Term and the Long Term Choice Quite often, we are faced with choices where one side is beneficial in the short term and the other is beneficial in the long term. A balance is healthy, but the more often you’re able to make the long term choice, the better life you’ll build for yourself.

The Netflix Culture of Excellence – and How to Capture It In Your Own Life I was utterly inspired by this article about how Netflix encourages the best from their employees.

Two Years Ago (August 1 – August 7, 2008)
The Status Quo Bias and Switching Jobs or Careers So often, we are afraid of making what would be a very good career change for us because our minds are wired to be afraid of such change. Overcoming the status quo bias in our careers

Balancing Personal Principles and the Bottom Dollar: The Cost of Healthier Food Choices One of the most challenging aspects of frugality and food is that the cheapest food is often the least healthy. It’s produced in factory settings with chemically-treated ingredients that have been stripped of most of their nutrients and combined with other ingredients to make it taste good. Raw foods are almost always substantially more expensive. How can you balance these facts?

The Frugal Introvert: Fifty Ways to Have Fun By Yourself on the Cheap I’m an introvert and I find a great deal of value in activities that I can do alone. Here are fifty things that can be done alone without shelling out the cash.

Is College Really Necessary For All High School Graduates? Whenever I think about this topic, I think of the pile of friends I have that have struggled finding work with their college degree. Then I think of a family member who is making a very good living plying a trade without any sort of college degree.

Looking at Debt Repayment as an Investment In my eyes, debt repayment is an investment. You can’t change the past, after all, so if you’re facing a debt, an extra payment against that debt is an investment because it reduces your repayment amount.

Three Years Ago (August 1 – August 7, 2007)
A Guide To Setting And Reaching A Net Worth Goal Net worth is an incredibly powerful personal finance metric. Here’s how to set a realistic goal and some tactics for reaching that goal.

The Debt Entrapment: When Your Debt Forces You To Stay At An Untenable Job Debt isn’t just money you owe. It’s freedom you’ve lost.

Freshly Graduated And About To Get A New Job? Here Are Seven Things To Do To Get Started On The Right Financial Path The choices you make right out of college can set the financial tone for your whole life. Making the right first step can be absolutely invaluable.

Seven Ways To Save Money While Cooperating With Your Neighbors – And How To Get Started Our neighbors have been an invaluable resource since we moved in. Getting to know your neighbors is well worth your time.

The New Person At Work Is Getting Paid More Than I Am! How Can I Handle It? Remember, jealousy almost always kills any good thing. The grass is always greener on the other side.

If you’d like to browse through more of the archives, visit the chronology, where all posts are listed in chronological order.

2. Comment. Each article on The Simple Dollar has lively discussion. Just click on the green square in the upper right of each article on the website and join in!

7. Dig through “31 Days to Fix Your Finances.” 31 Days to Fix Your Finances is an article series that outlines how you can get a grip on your finances over the course of a month.

Continue reading The Simple Dollar Time Machine: August 7, 2010 …

From The Simple Dollar.

August 7, 2010 | Filed Under Frugal Living | Leave a Comment

WFMW: Finding the Time to Be Frugal (Reader Help Needed)

Molly reader, Kim, left the below post and I though it would make a great topic for Readers Helping Readers.

How do you all have time for this? I so want to be frugal and I’m stressed trying to keep up with it all. I do homeschool my children, like most of you, and I’m trying to do a pampered chef business, but thinking of quitting so i can focus more on my family, but we need the money i bring in. It’s so challenging, God helps me each day! Thanks for the sites, I’ll try to keep up with all you frugal moms, lol.

She has a good point. Bargain shopping and making frugal choices DOES take time. Here are a few of my thoughts on the matter.

I view my “frugality” as a job. I consider my savings to be my hourly wage. It may take me an extra two hours to plan out my grocery shopping, use coupons, etc. (It’s sometimes shocking how long it can take, isn’t it??!!) But I can easily cut my grocery bill in half when I do so. Even if I only save $50 a trip, that comes out to $25/hr. Not bad. So, if I’m “too busy” to coupon, am I busy doing something that is going to make me $25/hr. Usually not.
Alternatively, some frugal practices are NOT worth my time. The time you have to spend on frugal endeavors will be limited by the number of small children you have, whether or not you homeschool, whether you work for hire, outside commitments, etc. Before I worked from home and homeschooled, I would can fruits and vegetables every summer. Now, I just don’t have the time. When I calculate out the savings they just weren’t there to justify it. Now, if I had a garden or access to free foods, that might change. But for now, I make more at “work” than I save by canning.
I enlist the children. As my kids get older I give them more responsibilities. Currently, they are capable of keeping the house relatively presentable. I am willing to pay one of my kids a dollar or two to cut my coupons and put them in my coupon binder. It saves me a good chunk of time and I know I’ll save much more by having them clipped, organized and available. When I was a child, my siblings and I were each responsible for making a batch of bread once each week. Making your children responsible for a small garden, even a container garden could be helpful. Keeping the budget on track is a family affair, not just Mom’s responsibility.
Consider the learning curve. Sure, the first time you create a menu plan (join our newsletter for a free quide!) or try a new recipe, extend a mix, or make your own laundry soap, it may be a bit time consuming. But many of these tasks become second nature after a few tries and take considerably less time. As with most anything you’ll need to allow some time for education and practice on your road to becoming a practiced frugalite. Is it worth it? Absolutely!
Don’t forget the real issue. Why are you doing what you do? Being thrifty isn’t about saving every little penny. It’s about being conscious of your spending and making deliberate choices about how you spend your money. If you choose to spend on a luxury or forgo a frugal practice, that’s fine. Just know that you are making the choice and why. The more ways you are aware of to save money, the more choices you have in what you choose to do or not do. Don’t feel you have to do everything!
I recognize that I’m modeling stewardship and educating my family through my thriftiness. Saving money and being financially responsible isn’t about just the money itself. It is about using the resources we’ve been given in a responsible manner. Our children learn from what they see us do. I am confident that my children can get by with less income than the average young adult simply because they’ve grown up watching us make money-saving decisions. Whether they choose to use those skills or not is their decision, but the knowledge will make them that much stronger as they set out on their own. So I’m not only saving money, I’m teaching at the same time. Plus, most thrifty activities involve learning or practicing a variety of useful life skills.

Those are just a few of my thoughts regarding “finding the time” to be frugal. What about you? How do you find the time, in your busy schedules, to save money? I can’t wait to hear your comments!

Taking time to save money works for me! To see more Works for Me Wednesday tips visit We Are That Family.

Continue reading WFMW: Finding the Time to Be Frugal (Reader Help Needed) …

From Econobusters.

July 21, 2010 | Filed Under Frugal Living | Leave a Comment

The Simple Dollar Weekly Roundup: Dealing With Stress Edition

How do I deal with stress? My best way of dealing with stress is to be active, not to be passive. I’ve found that every time I respond to stress in my life by just sitting around or doing nothing, it just makes the stress worse. I’m almost always better off doing something physically or mentally active or directly attacking the source of the stress.

How to Dry Fresh Herbs We have a ton of herbs this year, as our perennial herbs went berserk and attempted to take over our entire garden. Thus, this type of advice will have us sitting pretty with oregano and a few others for a long while. (@ bargaineering)

How to Get Your Spouse On Your Financial Team For us, the real key for getting on the same financial page is to simply talk it out. In fact, my mother says that Sarah and I tend to talk things “to death.” It works for us. (@ consumerism commentary)

Best Freelance Advice Ever If you’ve ever considered self-employment or freelancing, the advice in the comments on this article could be utterly invaluable. I bobbed my head in agreement with many of them. (@ freelance switch)

Earning more money: Finding the right idea While I don’t think the ideas here are 100% perfect (I think some of the stuff he is against works very well for certain paths – it just doesn’t work for every path), I do think working through the ideas here can really help anyone who is struggling for ways to earn more. (@ i will teach you to be rich)

13 Pay-What-You-Want Restaurants This idea works only if the customer is willing to name a fair price for what they get. I know many people who would go there, order food, and pay a cent or nothing at all. I think non-profit restaurants will work, but I think it will require minimum prices. (@ coupon sherpa)

See an online job scammer at work As time goes on, I’m finding myself trusting unmoderated sources less and less and people that I trust more and more. (@ red tape chronicles)

5 Strategies for a Happy Marriage: Secrets every bride and groom should know A happy and successful marriage will be one of the best financial moves you ever make. An unsuccessful marriage can end in complete financial disaster. Better do it right, I think. (@ pick the brain)

Continue reading The Simple Dollar Weekly Roundup: Dealing With Stress Edition …

From The Simple Dollar.

July 14, 2010 | Filed Under Frugal Living | Leave a Comment

Reader Mailbag: Notes and Some Questions on the “Getting Things Done” Series

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. GTD and privacy
2. Planning for a long trip
3. GTD and prioritizing
4. Overcoming jaded partner’s money attitudes
5. GTD and daily routines
6. Hopping into an IPO
7. Reporting a tiny income
8. Stagnant savings
9. GTD and “books to read”
10. Student loans and house savings

It’s strange – there haven’t been many comments on the posts, but I’ve had more reader comments and questions directly emailed to me about the Getting Things Done series than almost anything else I’ve ever done on The Simple Dollar.

This further mystifies me, because I have a hard time figuring out what ways to tell if a post is a hit or not. I usually rely on comments, but quite often the number of comments have little to do with whether the post actually provides valuable information or entertains readers.

In the end, sometimes I just have to guess what you’d like. In truth, that starts by just thinking about what I’d like to read. I very rarely post something that I wouldn’t enjoy as a reader.

So, today, I’m including a few of the better questions I’ve received over the course of the GTD series, along with plenty of non-GTD questions, too.

I´d like to ask you about GTD and what you do to keep your privacy, since you have your life, your wants and to-dos on one inbox, someone can see when entering your office or home, or when some friend ask you to see your cool new phone with your tasks in there.

Also on this issue, how do you keep your spouse/girlfriend from seeing your task/project about her surprise party or to buy some gift for her? Because I keep this out of GTD so she doesn’t see it but since it’s out of GTD I tend to forgot and would like to know how you deal with it? And since your series is finishing I thought that’s a good thing to talk on the GTD series.
- Marcio

I generally don’t keep what I would call private information in my inbox. Virtually everything in there is pretty mundane – I guess if snoops want to know about my desire to read Reality Hunger, they can know.

If you do have a lot of personal information in your inbox and it worries you, keep your inbox offline and in a locked drawer in your desk.

As for such surprises, I usually handle all of that in my calendar. I have most important birthdays in my calendar, as well as reminders two weeks in advance of really important birthdays. I don’t think it would spoil a surprise for my wife if she knew I was thinking of her birthday two weeks out (in fact, she’d probably be happy to know it). If I’m doing something complicated that requires secret planning, I just keep those plans in a project folder put in a private space where she’d never look.

I’m transferring from a nearby state college to a private college in the fall. I will be graduating in either two or three years after that, depending on how some of my credits transfer. I paid very little in tuition at the state school, and only had to take out a loan for $1500 with 6.8% interest. I paid the loan down to $700 over the last year, even though I don’t have to pay anything until after I graduate (though the interest still accumulates). At the school I am transferring to, I’ll owe almost $3000 on a subsidized loan (the government pays the interest until I graduate) and and another loan for $1000 at 6.8% (not subsidized). I’ll also have to pay another $4000, but it looks like my uncle is going to contribute the $4000 so all I’ll have left are the loans.

I have $5000 in a savings account earning between 1-2% interest, which I accumulated entirely from working two jobs last summer. I’m planning on traveling to Europe for a year or so the fall after I graduate, and will be doing so very cheaply (by couchsurfing, WWOOFing, and the like), and want to have $15,000 saved for the trip.

My question is what I should do about paying off the loans vs. saving for the trip. I haven’t touched the $5000 since I deposited it, and like having that money there as both an emergency fund and assurance that I’ll be able to take the trip. But I can’t help but feel that it makes more sense to pay off the loans, or at least the two I’m paying interest on. However, I’m nervous that if I put that money toward my loans, I’m going to have a hard time rebuilding to $15,000 plus paying off the other loans I’ll likely acquire within the next 2-3 years. I really don’t want to put off the trip any longer, it’s one of those things that has to be done before I actually settle down or I’ll never end up going. I’m hoping you’ll have some insight and the kick in the butt I’ll need to do the financially sound thing.
- Sarah

You don’t have what I would ever call life-stifling student loans. The $1,000 at 6.8% is a little high, but even that one isn’t bad at all. Your total debt (just shy of $5,000) is an amount you can pay off in a year when you start your professional career.

If you were in a truly bad student loan debt situation, I’d encourage you to rethink your Europe trip plans. But those aren’t bad student loans.

Focus on saving for the trip. Make the minimum payments on the debt. Enjoy this opportunity in your life. Come back refreshed and ready to take on the world.

Thank you for writing your series on GTD.
I have a dilemma that perhaps you and your readers can help with.
Here’s the scenario:
It’s 6pm. I’m not yet done with the task I’ve been working on but it’s my usual time to go home. I have 3 choices. Part of me wants to stay and keep working cause I know I’ll feel better when it’s done.
Part of me wants to go home and tackle my next actions list there.
Part of me wants to go to the gym.
How to pick which of these 3 to do?
- Julia

Allen spells out how to decide between such choices on page 92 of the book:

1 | Context
2 | Time available
3 | Energy available
4 | Priority

You’re currently at your desk with your supplies out, which means that the context of the current situation suggests that you finish the task.

I’m assuming that you have a healthy workplace, of course. If you have a draconian workspace with inflexible hours and a boss that is going to essentially punish you for stepping up to get things done, context really doesn’t matter. In that case, context doesn’t really matter and you move down to the next criteria – time available. If you don’t have anything scheduled for that evening, that criteria goes out the door and you move on to energy available.

Do you have the energy to go to the gym? If you do, I’d go to the gym. If you don’t, I’d go home and do household chores.

So, here’s how I’d do it. If you have a good workplace and a job you value, stick around and finish the task. If you’re in a worse position professionally, go to the gym if you have the energy for it. If you don’t, go home and handle what chores you have energy left to do.

Several years ago, his parents filed for bankruptcy – his dad lost his job, though found another briefly, but they also had a few years of back taxes and poor spending habits. During that time, my boyfriend would sometimes even pay for groceries and Christmas gifts from money he earned. Though he was skeptical, his parents encouraged him to go to college, telling him that he will be able to get by with jobs and loans, and if anything bad happened they would be there to support him. He’s been struggling financially for years, but it has finally hit him hard now. This is the third time he’s been unable to pay rent (He has been able to make payments in the past, they were just late). He offered to pay what he has now, a little less than half, and the landlord is generously okay with that for now. This only leaves him with $66.

In addition, he recently found out he doesn’t have a job anymore, as the test prep courses he was scheduled to teach were canceled due to low demand. Both parents are unemployed: his father has been for a while but has been attending school as well as getting by on odd jobs. His mother recently lost her job and is considering going to school so she can get by on loans. She often had to borrow money from him for necessary medications and other expenses she couldn’t afford at the time. So, they are both in no way able to support him. (He also has a teenaged sister living with his mother).

He’s been living off loans and what jobs he can get teaching and tutoring but those are meager. He has thousands in debt; some is credit card debt but most are student loans. He has thought about dropping out and finding a full time job, but that would also mean he would have to start paying those student loans, and he would need to find a well paying job quickly on just a high school diploma. Every now and then he gets slapped with something unexpected, such as a parking ticket. He also needs a new tire and new brakes. As you can imagine, he has no safety net.

Understandably, he is very jaded and very depressed, which makes it even harder. It is difficult for him to focus on school (as well as even get courses that he needs to graduate). I almost forgot to mention, he hardly has any extra expenses- just rent, food, utilities, etc. I think I covered everything. It seems like there isn’t anything he can do- he’s completely trapped.
- Ellen

First of all, sitting at home being jaded and depressed will absolutely not solve these problems. That is usually the worst possible response a person can make to a difficult situation. Everyone faces challenges in their lives – those that allow themselves to be jaded because of them tend to succeed much less often than those who do the best they can to overcome whatever hand life has dealt them.

The first thing he should do is go seek steady employment, even if he views the job as “beneath” him. There are lots of jobs out there if people are willing to work them, but in a world where almost every high school graduate goes on to college and then expects a college job with a college degree, a lot of jobs are seen as being “beneath” people. I see this all the time from people who write to me complaining about their unemployment in a career path where the entry-level wage is $30,000 a year. They’ve not looked outside of this path for work.

He shouldn’t be afraid to look for minimum wage work. It will get him out of the house, interacting with people and earning some money with his time. Yes, the job might be boring or he might see it as demeaning or something like that. Here’s the thing: it’s not demeaning. It’s an opportunity to turn the ship around. When you’ve fallen to the ground, you don’t jump back on the ladder several rungs up. You grab on to the bottom rung and start climbing again, looking for every chance you have to pull yourself up.

He should take that money and stick it in a savings account and continue to live as cheaply as he can. Then, the next time when one of these emergencies hits, he can just handle it without blinking an eye. The first time a car failure or something like that happens and you can just handle it, the world seems a lot more manageable.

Just take it a step at a time.

How much detail do you put into your calendar and your to-do list? Do you list everything that you intend to do in a day, like taking a shower?
- Mark

I don’t include established habits – like bathing – on my calendar or my to-do list. These things are just part of my morning routine and come naturally without even really thinking about them.

What I do add is a reminder of any routines that I’m trying to build. For example, if I’m attempting to establish a habit of a daily three mile walk, I make sure this is constantly on my to-do list (and marked as important).

If something reaches the point where I’m just doing it anyway, then I eventually delete it from my to-do list.

Currently my only form of investing in the stock market is through a moderately aggressive 401k at work, and my wife similarly is investing in a 403b. Neither of us know much about the specific make-up of these allocations. I know very little about actually buying a specific stock through a brokerage, and I only keep up with news on the stock market as much as the mainstream news covers it. However, a company that I have been a customer of for about 8 years, and which I believe in very strongly, is about to go public. My wife and I have always thrown out the idea of buying stock in the company when it became available, and now that time is here. We could potentially feel comfortable investing $1000 to $3000 of our current savings into this company as a long-term investment and still leave us with over 3 months expenses in our emergency fund. We have alot of student loan debt, and although we arent paying it off aggressively, we do make our payments and contribute a bit extra here and there.

The question is not necessarily should we do this, although that could be up for debate. However, any advice or resources a beginner in this kind of investing could turn to? Aside from this strong inclination towards a certain company, I don’t think we’d ever feel inclined to gamble in the stock market, and I know little about the logistics of actually buying a stock. We’re not considering this in order to make a quick gain (I realize those type of expectations are foolish), but in reality would be in with this company for the long haul.
- Nick

Oh, come on, Nick! You’ve got to tell us what this IPO is! (I’m kidding. A little.)

If I were you, I wouldn’t really view this as an investment per se, because the risk involved in investing in an IPO is pretty stiff. However, if you truly believe in the company and have the discretionary income to invest, I encourage you to go for it.

In 2002, I knew a few people working at Google and was absolutely convinced that I should invest in their IPO, but I convinced myself (right or wrong) that I didn’t have the adequate funds to do it. I still regret it.

If you can swing an investment without upsetting the ship – and it certainly sounds like you can – give it a shot.

I am working in the US from last 3 years on a work visa and have a stock trading account with Scottrade with a portfolio of few stocks. I also get quarterly dividends on some of the stocks I own.

I wanted to check on how the US IRS Tax rules apply on these dividends once my work assignment completes and I return to my home country? In that scenario, I will have no income to report in the US but will have some dividend income (approx 500-600 USD per year) thru the stock portfolio i have with scottrade. Does that qualify me to report and pay the taxes in the US as my income in US would be way below the tax bracket where income taxes are applicable.
- Sandeep

You are required to report it. You almost assuredly won’t have to pay any taxes on it.

Dividends are taxed as ordinary income. If you file a return on this income (which you should), your standard deduction will be significantly larger than the $500-600 a year you’re earning in dividends. End result? No taxes.

Yes, you should report that income to the IRS. No, you won’t have to pay taxes on it.

My mother and father are retired and they are selling their home. They will be walking away with a nice chunk of money which I have referred to as their NEST EGG. My mother is 63 and my dad will be 65. They are not huge money gurus and don’t really have any plans for the potential $250K-$300K they could walk away with from the selling of the house.

What should they do about reinvesting this money? I would love to see this money work for them and live off the interest.
I would hate to see it sit stagnant in a savings account and get taken away little by little by Uncle Sam.

Do you have any advice/suggestions?
- Alex

For starters, it’s not going to be taken away little by little by Uncle Sam. Let’s say they have $250,000 in a savings account that earns 1% interest. That means they’ll be taking in $2,500 in interest each year. They will only be taxed on that interest earned. Depending on their tax bracket, Uncle Sam would take somewhere around 15% of it. In the end, they’d still earn about $2,100 a year from that money after taxes and the balance wouldn’t be touched.

If you want better returns than that, you’re going to have to take on some risk in some form or another. They could use that money to buy a very long term treasury note that would return about 3% on their money – $7,500 a year. The risk there is that the rates on treasury notes will probably go up in the next five years or so, so one option would be to wait with the money in savings for a few years and hop in later on.

Another option is to put it in a riskier investment, like a stock index fund at a brokerage. What happens there is that you’re at the mercy of the stock market. If the stock market has a good year, it will probably make about 15% a year and sometimes more. If it has a bad year, it could lose 15%. If it has a disastrous year (like 2008), it could lose 40%. Over the very, very long term, Warren Buffett has publicly estimated that a person should average out to about 7% a year going forward, but that’s a prediction (albeit one from one of the best investors on earth). The problem is, though, that some of those years are going to be +18% and others are going to be -18%.

You could also mix the investments. If you put half of it in savings earning 1% and the other half in the stock market, a good stock market year would earn you 9% overall and a bad stock market year would send you down 10%.

The problem with the risk is if your parents are relying on this money to support them. If they are and the money’s in the stock market, a swoon at the wrong time would be devastating. If they at least have a healthy Social Security check coming in, then they can feel at least a bit better about it.

You mentioned that whenever you have a book you want to read, you make a note of it and toss it in your inbox, then you keep a list of them? How does that work? I don’t get it.
- Erica

I do keep a list of books I want to read, films I want to watch, and games I want to play.

My “films I want to watch” list is actually my Netflix queue. If I see a note about a film, I just add it to our queue (we’re thinking strongly of going cable-free and are seeing if Netflix streaming and 1 disc at a time for $9 a month works for us).

For my books and games, I usually just add them to my Amazon wish list (with a comment if I wish) and/or to my library queue. In the past, I kept these in a Word document. The advantage of using a wish list is that if a family member is stymied as to a gift to get me, my wish list usually has a giant bundle of things on it.

I am 24, two years out of college, and have pretty good job security making $52.5K per year. Including rent, car payments, student loans, and everything else, my monthly fixed expenses are about $1570. I put gas, food, and weekend expenses on my credit card, and pay it off each month. That ends up being around $700 or so per month. I end up saving around $500 per month after all expenses, including my 6% 401k contribution which is the max my company matches.

Now, here is the issue: my loans. I have a little over $50K in student loans, and about $11K in car loans. Half of the student loans are at 2.8% interest, while the other half is at 6.5%. My car loan is at 5.74%. I would like to have enough money to put a down payment on a house in the next five or so years. So, should I continue making the minimum payments on my loans and putting that $500/month into a savings account for a house, or should I use it to put a little extra into my loan payments? Right now I am just putting that money into a savings account. Basically, what should I be doing different in order to better prepare myself for the future?
- Kevin

The interest rates on your loans are low enough that if you’re considering buying a home in the next five years, you’re better off just making the minimum payments on your loans and saving for a down payment.

Here’s why. As the money sits in your savings account, it’s earning about 1% return. Then, when you go to make that down payment, you’re reducing the amount of your mortgage by some significant amount, which means that the money you invest at that time will essentially earn a return for you equal to your mortgage interest rate. The absolute lowest amount you’ll likely get for a mortgage rate is 3.75% (on a 15 year) – and in five years, I’ll almost guarantee it’ll be more than that, probably significantly more. If you don’t have the 20% down, you’re likely going to be taking on an extra loan at a higher rate or paying PMI, which means an interest rate higher than your base rate because you didn’t save.

In other words, you’re better off saving for that down payment now and paying minimum on those loans. Even if your plans do change, it’s still not an enormous loss if you choose to channel that saved money into debts later on.

Obviously, the best choice in terms of maximizing every dollar would be to live in the cheapest apartment possible, pay down your debts ASAP in order of interest rate, and then start saving, but that plan may exceed your time frame depending on what else is going on in your life.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

Continue reading Reader Mailbag: Notes and Some Questions on the “Getting Things Done” Series …

From The Simple Dollar.

July 12, 2010 | Filed Under Frugal Living | Leave a Comment

The Simple Dollar Weekly Roundup: Link Choice Edition

A fellow blogger wrote to me asking me how I go about choosing the articles I include in my weekly roundup each week.

What I basically do is read a lot of blogs and news sites throughout the week (including ones that bloggers send to me) and bookmark articles that made me think. I save these in a folder marked “next week’s roundup.”

Then, when I go to assemble the roundup, I dig through that folder. There are usually 30 to 40 articles in there. What I usually do is read through that list and look for the ones that still make me react to them. If I don’t remember what the article was about by glancing at the headline, it’s not going to make it. If I remember the article but just shrug my shoulders, it’s not going to make it.

This usually trims it to ten or so. I then eliminate site duplicates – so I’m not linking to the same site twice in the same week, even if there are two great articles there – and just put up the rest, which usually ends up numbering between about five and about eight articles.

I usually save one or two articles a week for future roundups so that I can put together a set of interesting links for any weeks when I’m traveling or up to something else.

And now, here are the articles that made the cut over the past week.

How to Handle a Telephone Interview I don’t like telephone communication because I can’t see the face of the person I’m talking to, which gives a lot of cues as to what that person is thinking. Thus, these are pretty good tips (from my eyes). (@ freelance switch)

How to Simplify When You Love Your Stuff The key really is to make sure your stuff is in line with one of your core values in life and to make sure you have time to actually use or value that stuff. (@ zen habits)

Do You Know Your Daily Salary? Use it to Better Understand Your Money This is very similar in concept to a true hourly wage (your income per hour after you take out all of the expenses required to work there and receive that income, like taxes and clothing and travel and meals eaten out). For me, the true hourly wage was a real shocker and a great way to put my spending in a real context. (@ pt money)

Are CDs Obsolete? CDs should be evaluated as being roughly equal to savings bonds and savings accounts. If you can get a better interest rate elsewhere, don’t buy a CD. (@ my dollar plan)

What Should You Buy Used? What Should You Buy New? I agree more or less with this list, but I think each person should think seriously about whether or not an item they use could be purchased used at a much lower price. (@ get rich slowly)