Five Thoughts about Making College Great
Tomorrow, several people that matter a lot to me are starting their college experience. Here are fifteen things I’d like to suggest to them that they’re probably not hearing from anyone else who has been giving them advice on college over the past three months.
You don’t have to know what you want to do right now. You’ve probably heard countless people asking what you’re majoring in and so on and you’ve likely built the decision up into something monumental in your head. It isn’t. For starters, most of the time when a person asks a college student what their major is, they’re mostly just looking for some sort of information about who you are. They’re not trying to judge you, they’re trying to understand you.
As for the vitality of that major, I majored in life sciences and computer science in college and today I’m a writer on personal finance topics.
In short, you end up finding your own path in life and it’s not a path dictated by your college major. If you’re lucky, you’ll have a major that actually lines up with what you’re passionate about. If you’re not lucky, your college degree will mostly wind up being proof that you went to college for some number of years and were able to complete a degree.
Instead, the biggest value you’ll earn in college is the relationships with other people. The friendships I built over the course of my college career form many of my friendships now. I have friends sprinkled throughout tons of businesses and organizations and walks of life now. A relationship I built with my academic advisor got me my first real college job. A relationship I built with an awesome staff member got me a research job related to my area of study. A relationship built with a professor helped me to get my first post-college job – and, indirectly, my second one. I fell in love with my wife-to-be in college. At my wedding, my best man and one of my groomspeople were my two closest college friends.
The people made the impact. Focus on building friendships with good people – students, staff members, professors, deans, everyone. Look for people who are focused at what they’re doing, have some interest overlap with you, and are also seeming like they’re having fun doing it, because those are the people that are going to be great to spend time with and are also going to be doing something great with their life. They’re the kind of people that will make your path better.
The biggest value you can get from your classes is transferable skills. Knowing the ins and outs of organic chemistry might help you if you happen to wind up in one of those rare jobs that utilizes it. The skills you’ve built in the process of actually getting through organic chemistry – those are ones you’ll utilize time and time again.
The value isn’t so much in the actual subject you learn in your classes. The value comes from the ability to absorb lots of information, to process that information, and to think about that information. The value of college is in the ability to manage your time effectively enough so you can do all of that, get strong grades, hold down a job, build relationships, and grow as a person. The value of college is learning how to communicate with people from vastly different backgrounds than you – in other words, try making a friend that lived on another continent.
Time management skills. Information management skills. Communication skills (speaking, writing, presenting). Critical thinking. Those are the things that college gives you a great opportunity to really, really learn, and those are the things that will help you no matter what your path is.
Almost everyone will get as much or more value out of learning how to learn a particular challenging topic or class than they will get out of that specific topic.
Try things you would have never tried before. The social constructs of a typical high school make it very hard for people to dive into and discover what they’re passionate about. Those constructs are largely gone in college. This is the time in your life to try stuff you would have never tried before.
As Robert Heinlein put it, “A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”
College is the best opportunity in your life for trying all of these things, learning how to do them, and stumbling upon that thing or two that really, really lights up your passion.
The only way to fail at college is to sit around your dorm room a lot of evenings watching reruns of Bones or taunting someone on Xbox Live. Do something new, preferably something you would have never done before (and preferably not anything that has a likelihood of killing or seriously harming you).
Keep your eyes wide open for free stuff. The average college campus is teeming with free things to do and food to eat. Look at your school’s event calendar and start hitting as much of that stuff as possible – anything and everything that looks vaguely interesting. It usually is interesting (or at least exposure to something new), it’s almost always free, and there’s almost always free food there.
If the people around you won’t engage in the tons of things going on every evening, it’s a great time to expand your horizons a bit more. Look for the faces you see repeating at these events. It’s a great way to meet interesting people who are actively involved in the world around them.
Plus, most of this stuff is free, which enables you to keep your cash right in your pocket, take out fewer student loans, and get out of college with a smaller debt burden than you otherwise would have.
These are the elements of a life-changing college experience. It’s not about chasing a perfect 4.0 or partying hard all the time. It’s about finding who you are, building the actual skills you’ll need over and over again in life, and finding the people and things that actually matter to you. Good luck.
Continue reading Five Thoughts about Making College Great …
From The Simple Dollar.
Overcoming Severe Social Anxiety
Chris emailed me with the following question. I originally planned to include it in a reader mailbag, but I felt such strong sympathy for his situation and others in that type of situation that my answer to him kept growing and growing until I realized that it was a full post all its own.
I am 34/ male. I feel very awkward in public. I don’t read books, I think what others might think why I am reading this book. I don’t browse stuff on my iTouch as I think others might look at what I’m browsing/ reading. The only thing I can do is: quickly browse my iTouch playlist, put my headphones on and listen. I even turn the brightness down in my iTouch so others can’t see anything (just in case!). I have always been like this as far as I can remember. This causes me to waste a lot of time and I want to change this. What do you recommend? Any courses I should take or books I should read or sites I should visit?
Chris, you’re clearly suffering from a severe case of social anxiety. I’ve suffered from it in the past as well and I have multiple friends who have the same thing in various degrees of severity.
Social anxiety is incredibly painful – and it’s also incredibly costly. By being so reclusive in social situations, you miss out on countless chances to interact with people, build friendships and relationships, and grow as a person.
I overcame my own social anxiety mostly through a ton of practice and a lot of failure. Among the first things I did was work on creating a false appearance of confidence in public places. I didn’t feel confident at all – I felt like I wanted to do much like you do, hide somewhere and reveal as little as possible about myself.
The first thing you need to think about is what is the worst case scenario and is that worst case really so bad. I found that most of the time, I was being reclusive and afraid for no good reason. The worst thing that can happen if someone sees what you’re listening to on your iTouch is that they just think “I don’t like that music” and they move on with their life. In the end, that’s almost indistinguishable from what’s going on now – and arguably better than looking like the guy who’s being ultra-secretive with his iTouch. On the other hand, the best result is someone peeks, likes what they see, and says so, giving you the opportunity to meet and relate to someone else.
For most little things like that – what book you’re reading or what music you’re listening to – there’s almost no social drawback from letting others see what you’re reading or listening to as compared to intentionally trying to hide it. Just simply imagine watching someone else who is just sitting there reading a book or listening to music or someone trying to hide what they’re reading or listening to.
In fact, that points towards the first tactic of getting over social anxiety (at least for me): change your attitude. Look around you. Watch what they’re doing. Are people being condemned for what they read on the bus or what music they’re listening to or what clothes they’re wearing or what they’re saying (within reason – I mean, there’s probably condemnation for the lunatic yelling on the bus)? No, there’s not. It’s seen as normal – likely more normal than the person trying to hide everything about them.
You’re not perfect, but no one else is, either. Every single person in the world makes social gaffes. Guess what? Your life won’t end if you do, too. In fact, most of the time, social gaffes end up being a positive – they’re endearing to others who recognize that the other person is human and makes mistakes just like they do.
Start small. For you, not hiding your iPod Touch might be a first success, or openly reading a book that interests you. Next, make it your mission to say hello to at least one person you don’t know each day. Or two. Or three.
Move on from there to watercooler-type discussions. Focus on actually going to such informal social gatherings and listening. Encourage yourself to make one comment a day – focus on that. You don’t have to be the talkative one, but just focus on that one small step.
For me, the thing that helped a lot was participating in a social group. In your case, the best option for that would probably be volunteer work, like working on a Habitat for Humanity house. These types of situations foster the types of simple and easy social interactions that you’re striving to practice. A day building a Habitat house not only helps the world, but it helps you break through your social anxiety.
Have something to say. Read the news each day and be aware of what’s going on politically and culturally around you. You don’t have to have mountains of arcane knowledge, just know what the top headline or two of the day is and something about it, or the top sporting event of the day. Do you want to know a big reason why sports are popular? It gives people something to talk about in uncharted social situations.
Ask questions. If you don’t know what to say to someone – and I certainly don’t sometimes – a question usually works very well. Something simple always works, like “do you know what the weather is going to be like today?” or “did the Cubs manage to win yesterday?” or “That’s a beautiful coat. I’d love to buy one like it for my sister. Where did you get it?” You give the other person something easy to talk about, they’re likely to eventually respond with a question, and you’ve started a conversation.
Seek out someone else who is shy. For the longest time, this really, really helped me in social situations and I’ve built a few lifelong friendships out of it. When you’re at an event with a lot of people, look for the other person or two who look like they don’t want to be there. Go up to them and flatly say, “Man, I don’t do well in these kinds of social situations.” Then, follow that with a question and you’ve probably found someone to talk to, someone relieved to not have to come up with something to talk about.
I do not recommend turning to psychological assistance for this. Your question comes off as someone who has some social awkwardness, not as someone who has deep underlying issues. You already have the desire to overcome that awkwardness, and there are a lot of personal steps you can take to start overcoming it on your own without psychopharmacology and expensive bills. Only seek professional help if you’ve tried in earnest many times to overcome this and failed to make any progress at all.
Little steps make all the difference here. It takes a long time to overcome social anxiety, but the rewards of overcoming it are great in almost every aspect of your life: socially, professionally, personally, financially, and otherwise.
Continue reading Overcoming Severe Social Anxiety …
From The Simple Dollar.
The Obligations of Wealth
Connie writes in (I edited her question a bit to protect privacy):
I recently married a business owner who had a net worth of around $10 million before we got married. He has lived in the same medium-sized town all of his life and has kept many of the same friends since his school years. Lately, though, he has noticed that a lot of them seem resentful of him. I asked a few of my friends about this and they said that the feeling in the community was that he was being wasteful and ungiving with his money. I don’t feel that’s the case at all. He gives substantially to our church and to several charities. It is hurting him to watch some of his friendships fall apart because of this greed. Do you have any thoughts about this?
I certainly do.
First of all, I think there is some inherent distrust of the rich in the mainstream of American society. People assume that if you have accumulated money, then you are either using it in some unworthy way or you’re a miser, both of which are negative stereotypes. Many wealthy people solve this by either being extremely public with their giving (Andrew Carnegie, Bill Gates, people who donate to universities to get their name on the door), being extremely quiet about their wealth (John Madden, for example), or just not caring what other people think (every ostentatious display of wealth you can imagine).
A big part of that is that for many people, having $10 million is an enviable position to be in. There is, flat out, going to be a lot of envy of your position. People imagine all of the things they could do with that kind of wealth – both selfish and charitable – and they feel some sort of resentment towards others who don’t do the same (even if, often, it’s not what they would actually do with their wealth). “This person doesn’t share my values,” they think, or they feel simple jealousy.
Obviously, at some point, your husband has done something to not conceal his wealth. Maybe you live in a very high-end house. Maybe you drive expensive cars. Whatever it was, it made clear to your friends that you had significant money. Because of that, what you’re now seeing is a mixture of envy and jealousy and opinions on what your husband is doing.
Yes, it’s not nice. But at the same time, it’s human nature. No one is immune to jealousy or envy. Your husband’s success has made him a target for this.
Another thing to consider: has money changed your husband from the kind of person that he used to be? It could very well be that the wealth in his life has altered his values, his political beliefs, his ways of interacting with people, and so on. I’m not saying that they have, I’m merely saying that it’s something to think about. A good source to look at here is old friends that have been there for the long haul – ask them what they think.
So what can he do from here? He has several options.
He can just ignore it and go on with his life. This falls into the “just not caring what other people think” category. He can continue to do exactly what he’s doing now and decide that the friends who are falling into the jealousy trap aren’t contributing positively to his life (because, honestly, if they’re making him feel guilty about the things he’s worked hard for in his life, they’re not being good friends at the moment).
He can make a very public display of charitable giving. He could give a chunk of his wealth to some sort of civic charity, like sponsoring a building for the Boys and Girls Club or something like that, and do it in a public way. Alternately, he could just make an effort to just donate as he’s donating now, but make it more public. This will smoothe some matters, but this still won’t make everyone happy – there will be people jealous of the reception he gets for his giving, too.
He can temper his public displays of wealth a bit. Whatever he’s done to make people think that he’s rich, he can just pull back on a bit. If it’s the car, get a less flashy car next time. If it’s the house… well, there’s probably not much he can do there. He can dress a bit more in time with how everyone else dresses if clothing is the problem. If you’re wearing a large ring, you can save it for special occasions. (I don’t know what triggered the response, so I’m guessing in the dark here.)
He can focus on actually shoring up the individual friendships that matter to him. Instead of fretting about this privately, he can instead focus on the friends that are actually closest to them. Have him sit down with them and talk through this stuff. It can sometimes be hard for males to do this kind of thing, but if it’s deeply bothering him, he should do it.
He can re-evaluate what he values and how he treats others. This works best if you come to the conclusion that, yes, wealth has changed you in some not-so-positive ways. Introspection and a serious focus on improving yourself can go a long way.
If I were you, I’d probably use some combination of these tactics. I don’t think he should bend over his life for these folks, but I think there’s something to be said for not making ostentatious presentations of your wealth. Similarly, I think there’s real value in always shoring up the relationships that deeply matter to you – and sometimes accepting that other relationships have moved on.
For those of you who don’t have a lot of money, put yourself in this man’s shoes for a moment. Yes, it would be wonderful to be financially secure for life, but what would you do if that security meant that many of the people you’ve had relationships with most of your life no longer were close to you? What price does wealth have? What’s the best way forward? I don’t think the answer is exactly the same for everyone, but spending a moment in someone else’s shoes can make for some surprising insight.
Continue reading The Obligations of Wealth …
From The Simple Dollar.
Reader Mailbag: Vacation Monday
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. Help an unlucky friend?
2. Are rent-to-own homes worthwhile?
3. Maximizing value of college
4. Post-graduation options for teachers
5. Secured loan or credit card?
6. Used swimsuits
7. Student loan debt priority
8. Best use of windfall?
9. Keeping old utility statements
10. Goals for 2010
For many Americans, today is a holiday, the third day of a long weekend, where people can relax after staying up late into the night watching fireworks.
For us, the fireworks were actually watched on the third and the fourth was relaxing. Today? I’m working about a 3/4 day with some time off in the afternoon to have friends over.
Of course, working today (when no one is around) makes it easier to take several days off later this month to go to Chicago, see a Cubs game, take my children to the Field Museum, and so on.
I was wondering if you have any advice for the friends of a person who went bankrupt to save the house (medical bills, foreclosure, ongoing health concerns, and $9/hr job) who want to help but are not sure HOW to help?
- Victoria
Don’t loan money unless you expect it not to be repaid (in which case, it’s a gift). That’s something that constantly damages relationships and friendships and just simply isn’t worth it.
The best thing you can do is help this person with day to day life. Invite this person over for meals at your home. Go to his/her home and prepare some meals that they can keep in the freezer. Help them with any tasks they seem to have a hard time keeping up with.
Just as important, let that person vent at you some. It can be very cathartic to vent. Listen to his/her problems and offer any suggestions you can provide – but focus on the listening part of it.
In other words, be the best friend you can possibly be.
My wife and are moving back home and looking for a new house. We are probably going to rent first until we can get a decent down payment saved to purchase a home. My question is about rent to own or land contract type homes – are these a good option? They sound alright on paper, but I have this nagging feeling these types of things don’t work out as planned. What are the major downsides to these deals?
- Matthew
Things don’t work out as planned usually when the owner of the home passes away. The house is given to someone else as part of the estate resolution and they often have no reason at all to fulfill the terms of the arrangement, meaning you’re out the money you paid (you essentially just paid rent for the last few years, in other words).
Your best bet to protect yourself is to have every possible contingency taken care of in the contract. You should specify a date and a price when you can buy the home, how much of your monthly payment goes towards the down payment, and ideally the home itself should be in some sort of trust that will survive the life of the owner of the home without destroying your arrangement.
If the owner balks at these types of things, I would be extremely wary of signing on the dotted line.
I don’t know where you were at in your life in college or what you would do in hindsight, but that’s exactly what I would like to know: what tips, suggestions, or ideas would you have for college students in handling their finances (or lack there of), loans, ways to make money on the side, or any other things you wish you would have known back when? If I missed an article where you have already discussed this, my apologies, I haven’t gone through everything on your site, it can be quite daunting sometimes.
- Kevin
The best thing a college student can do to put themselves in a good place after college is to live as cheaply as they possibly can. Live cheap without shame. The biggest mistake many college students make – myself included – is to live high on the hog on the back of student loans that offer an excessively large living stipend. You should focus to minimize that stipend.
Live in an overcrowded apartment so the rent is dirt cheap – after all, you’ll mostly just be sleeping there. Hit every free meal you possibly can on campus. Hit every piece of free entertainment the campus provides for you (and at a large school, there’s a lot of it if you look around for it).
The next most important thing you can do is to focus your energy as best you can on setting up your post-college life. That doesn’t strictly mean grades. It means building relationships with people in your career path. It means finding experiences that will glow on a resume. It means figuring out who you are and what your true talents and passions are. In other words, don’t waste a dime of that money you’re spending.
Kevin also had a follow-up question worth addressing…
On a more personal note, I am going to be a high school teacher. I realize that it is a profession that generally doesn’t make a lot of money, but that is my passion and I believe I can follow basic finance principles such as the ones you have outlined in various articles on your site to achieve my own goals. Even so, with the limited salary I will have starting out, how would I go about managing saving money, being thrifty, and investing early at the same time? I know I am looking quite a bit into the future, but I have a girlfriend(becoming a math teacher) who I will soon be engaged to that has the same desire to start a family not long after we graduate. Understanding that I will be swamped with school loans, buying or renting a house, kids, and other firsts as a new couple, what would our financial priorities be at that point, and how would they gradually change?
- Kevin
The first thing I’d do is see whether or not there are opportunities for getting your loans repaid by working in disadvantaged schools. Many states offer loan repayments to teachers willing to teach in disadvantaged districts. See if you can get into such a program and use it hard for the first five years or so.
Your first focus should be on building a cash emergency fund so that the inevitable disasters don’t completely drown you. Get in a pattern right off the bat of having some of your income siphoned out of your checking account and into other things – your emergency fund at the start and your house savings a bit later. That way, you’re learning how to make ends meet on less than you’re bringing in, which is the best financially healthy habit a person can build.
As for investing, just focus on retirement investing for now. You’re going to have so many needs over the next five years that any additional “investing” would be pretty short sighted. Just focus on contributing plenty to retirement, spending less than you bring home, and socking away some for the bevy of expenses you’ll have a few years after graduating.
Which would be better for helping build my husband and I’s credit? My parents gave us some money ($3000) to help my husband and I get a credit history, though we also need to money for some house repairs. Which would be the better option in this case, to use it to get a secured loan or a secured credit card? Thanks!
- Sarah
A secured loan means you’re putting down some sort of collateral on the loan. I’m going to assume from this that you’re referring to your house and you’re wondering whether a home equity loan would work better for improving your credit than a secured credit card. Another option would be to buy bonds (or stock) with this money, then use that as collateral for the loan.
Both options (secured loan or secured credit card) would raise your credit. It really, really depends on your specific situation as to which will improve your credit the most. You should sit down with someone who can look at your credit report and help you figure out which avenue will help.
The first place I would start is with my local credit union. Pay them a visit and see what sort of secured loan options they have available. If they have good options (meaning you can get such a loan at a reasonable rate, like under 8%), I’d go that route.
What are your thoughts on buying used swimsuits? Swimsuits are usually pricey, and the other day in a thrift store I saw that they had a whole rack of nice looking swimsuits for about $5 to $7 each. I love the thought of saving all that money, but it just feels gross. Do you know if it’s safe to wear a used swimsuit in terms of disease/medical issues? I did a quick Google search, but only saw hits of people ranting about how gross it is. What are your thoughts?
- Hayley
I wouldn’t do it, mostly because undergarments and swimming suits are the items that wear the quickest from reuse and if you’re buying it used, it’s likely experienced some wear already and just won’t last all that long.
I understand why many people would consider such use unhygenic, but I don’t think that’s really that much of a concern if you clean the item properly. I would likely wash such an item a few times with bleach or other strong cleaners to ensure that it’s completely clean before use.
That being said, it just wouldn’t be worth it to me. I have two pairs of swim trunks I bought new at early fall sales for about $2 each. I have no reason to own anything else.
I just graduated this Spring with a Bachelors degree in Business Administration. I got a job making $42,000/year and currently have $11,500 built up in an ING savings account. I’m currently living at home, single, and have no real need for much of an emergency fund and have just about no monthly expenses. I currently have $4,500 in an unsubsidized federal loan at a fixed rate of 6.8% and $802 in interest and $6,700 in a Wells Fargo student loan at a variable 3.25% and $700 in interest . My question is what should I do now? Use almost all of the money I have now to payoff as much as I can? Build an emergency fund first? Just pay off the loan at 6.8% and invest and pay the minimum on the other? Thoughts?
- Corey
I think your ING savings is plenty adequate for an emergency fund given your situation.
There are advantages and disadvantages to the options available to you. I think it’s pretty much the best option to pay off the 6.8% loan as soon as you can. I would probably strip the ING account of all but two months’ of living expenses and get rid of that higher interest loan.
The advantage of paying off the lower interest loan is cash flow. It would leave you with fewer required bills each month, which makes other lifestyle choices – a job switch, a move across the country, etc. – that much easier. On the other hand, if you’re not planning on doing anything different for a long while, you can probably do better than 3.25% with that money over a longer time scale.
The real answer depends on what you’ve got going on in your life. Are things about to change? If so, get rid of that second loan.
Last year I was in a serious car accident which left me with a permanent injury. I am about to settle with the other driver’s insurance company for a sum in the neighborhood of $100k. I currently owe $70k on a home valued at $100k. And I have a child who will be going to college in 2 years. I plan to use a portion of the money to supplement her college savings rather than taking out student loans. But I am also wondering if it would be wise to put a good portion of it towards paying off my mortgage. Owning my house free and clear at the age of 38 sure would be nice. But I’m not sure it’s the best move, given the current housing market. What if I pay off my mortgage and then my home continues to decline in value? Would I be better off investing the money in a diversified stock/mutual fund portfolio? I could really use some advice.
- Jen
Are you planning to move anytime soon? If not, don’t waste a second thought on the housing market.
Another question: are you planning on helping pay for your child’s college education? If you are, don’t put the money you’d use for that into stocks, as they’re very unstable over the short term (less than 10-15 years).
If I were you, I would pay off the mortgage. As I mentioned above, it’ll definitely help with your monthly cash flow, as you will no longer have that mortgage bill each month. That might be very important depending on how you want to help your child with college.
You recently wrote about eliminating clutter…I hate clutter and have a follow up question.
How long do you need to keep paid utility receipts? I have boxes of receipts. For that matter what paid bill receipts should one keep on file if any in this age of digital records? Thanks for your thoughts…I would like to reduce paper clutter in my home!
- Mary
I usually keep paper utility statements for a year.
However, I’ve been moving to electronic statements for a lot of this stuff, and that stuff can essentially be stored forever. If your financial institution allows you to download statements from them, get into a routine of doing that and saving them. Then, if you still have paper statements, don’t worry about keeping them around.
I look forward to the near future when this is all done electronically, actually.
Now that we’re halfway through the year, I was wondering if you could give us a progress report on your goals for 2010.
- Maria
Resolution #1 was lose 40 pounds. I’m currently down about 14 pounds from the start of the year. I was down about 30 at one point, but I gained some back due to a stressful period at the end of my wife’s pregnancy and during the final edits of my book, taking me close to where I started. My focus is mostly on improving my diet.
Resolution #2 was to pay cash for a replacement for my truck, which I did in March by buying a 2004 Honda Pilot in cash off of Craigslist. We’re extremely happy with it.
Resolution #3 was to learn to play the piano. I started taking weekly lessons from a local teacher in January and the lessons have gone really well. I feel like I’m moving along at a steady pace and, more importantly, I think my ability to read the music and hear it in my head has come along greatly. I’m not as adept at the actual playing as I might want to be, but that will come with practice. I can play some simple two and three-chord songs – nothing too spectacular yet. My biggest challenge is finding the time to practice. We don’t own a piano, so I have to leave the house to practice (I sometimes practice on a keyboard, but I don’t like it very well), which doesn’t happen as often as I’d like. I’m thinking of buying an electronic piano at some point in the future, because this really feels like something I want to do for the rest of my life.
Resolution #4 was reducing my entertainment and hobby spending by 50%, which has been really, really successful. I’ve succeeded at this thanks mostly to lots of trading of books, games, and other things. I’m at about 40% of my pace from 2009.
So, the only resolution that needs a little extra focus is the weight one, which I think is headed in a good direction. I’d also like to find an electronic piano to really make my piano resolution go into high gear.
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: Vacation Monday …
From The Simple Dollar.
The Simple Dollar Time Machine: June 26, 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 (June 20 – June 26, 2009)
How Low Can You Go? Moorish-Style Chickpea And Spinach Stew I thoroughly enjoyed this meal – it was one of the best vegetarian dishes I’ve ever tried.
Some Thoughts on the “Lake Wobegon” Effect People often overestimate their luck, their fortunes, and their skills. You’re better off vastly underestimating it instead.
Friendships and Financial Responsibility If you find that your friends aren’t matching up well with your growing values, it’s okay to move on. Friendships that were meant to last will last – and those that weren’t meant to last won’t.
Fifteen Things to Do to Make Jumping into Freelancing/Self-Employment Financially Successful Self-employment can be a wonderful thing, but if you don’t have self-discipline, it’s never going to work.
When Is a Child Ready for an Allowance? It depends on whether you’re tying it to chores or not (we’re not – we’re giving a small allowance independent of chores). If you’re doing it independently, do it early so that the lessons can be built over a long period of time.
Two Years Ago (June 20 – June 26, 2008)
You Can’t Buy Love Don’t even try. What’s going to eventually make love blossom is you. Not your money. Not your stuff.
Starting a Natural Collection Whenever I re-read this article, I think of my aunt’s amazing collection of geodes, built up carefully over many decades.
Ceiling Fan Hacks: Save Big on Energy Use Proper ceiling fan use can save you a truckload on your energy bills.
The Economics of Children’s Birthday Parties I really don’t see the point in spending much on a child’s birthday party. They seem to have as much fun with companionship as they do with tons of expensive entertainments.
Addiction and Personal Finance An addiction to anything makes personal finance very difficult because that addiction eats up all of your spare time and money.
Three Years Ago (June 20 – June 26, 2007)
You Don’t Need Six Figures: The Financial Realities of Living in Iowa I’m a huge fan of living in Iowa. Open skies, open air, low cost of living – it’s wonderful.
Money, Spirituality, and Charity What can you do with the gifts you have to make the world a better place? It’s a tougher question than you think.
Predicting the Future: Where Will Tax Brackets Go In Thirty Years? Taxes will be higher in thirty years. I’m extremely confident of that prediction. They really have nowhere to go but up.
Cook Once, Eat Twice With A Crockpot Clever use of a crockpot can greatly stretch the food you buy into multiple meals, turning a good bargain into a great one.
Trimming The Fat: Forty Ways To Reduce Your Monthly Required Spending This is one of those nice “checklist” posts, designed to help you curb all of those monthly bills that drain on your savings.
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.
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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!
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Continue reading The Simple Dollar Time Machine: June 26, 2010 …
From The Simple Dollar.
MMOs and Financial and Personal Balance
Charlotte writes in:
I just wanted to suggest that you write about MMOs. My husband and I have been playing World of Warcraft since we were in college for about five years. We play about two hours each evening and maybe three or four hours on raid nights (two nights a week). We don’t have a television or cable or anything and we mostly read or go on walks when we’re not working or playing or sleeping and stuff. For us, it’s pretty cheap entertainment. It costs about $70 for the initial software and then $13 a month for the subscription. Considering the time spent and the deep enjoyment we get out of it, it’s a pretty nice bargain.
I’ve played World of Warcraft off and on myself since its release (for those who play, I have a level 80 hunter on Galakrond and a few other characters here and there). Much like Charlotte and her husband, when I’m actively playing, I’ll play a bit each day (to do daily quests) and then maybe one longer spell once a week (to participate in a large group raid).
It’s cost-effective. I agree that, in terms of bang for the buck, World of Warcraft is a pretty dollar-effective hobby. Let’s say a person plays for an average of one hour a day. That means the cost per hour for software and for subscription fees over the course of, say, two years is about forty cents an hour. That’s a pretty cheap hobby, any way you slice it.
It’s also an inherently social activity. In the past, World of Warcraft has enabled me to maintain friendships with people from college (one of my old friends has even called it “Facebook for fantasy geeks”) and helped me to build a few new friendships, too. A MMO like World of Warcraft is built on the idea of being social – there are lots of people playing at the same time and the players communicate with each other, often building amazingly complex social constructs.
It’s also addictive. When the most recent expansion came out, I spent several hours a day playing it for a few weeks, often staying up until late into the night playing. That’s an extremely mild case of it.
I have had friends who literally do nothing else besides work, eat, sleep, and play World of Warcraft. They’ve played ten hours a day for month after month earning achievements, building up characters, and so forth. I know one person who has lost a job and a girlfriend because of his addiction to the game. (Here’s a long thread filled with World of Warcraft addiction stories).
Why is it addictive? I think the biggest thing is that it does a great job of doling out microgoals and microrewards for those goals. If you can complete some objective that takes an hour or two, you’re given some reward – a stronger character, a better horse to ride on in the game, and so on. Since the game is inherently social, there’s also a big “keeping up with the Joneses” element to it – you want to have a character with weapons and armor and a mount and achievements that top your friends. Not only that, such games offer up engaging storylines that keep you interested in the story.
In moderation… The solution, thus, is in moderation. When played in reasonable amounts, MMOs like World of Warcraft can be a great way to relax and be social at a very inexpensive price. The problem comes in when this relaxing social activity begins to interfere with other aspects of your life – your personal relationships, your other activities and interests, your work, and so forth.
For me, I pretty strictly cap my World of Warcraft play time. I’ll go for months without playing at all (usually during the summer months when I’d rather be outside) and play more in the winter, but during those winter months I balance my gameplay with other activities. For me, the surest sign that things are out of balance is if I find myself making little progress in other areas of my life.
If you can’t keep things in balance, you have an addiction. If you find yourself spending the majority of your free time playing, you have an addiction. You are far better off just deleting the game from your computer and walking away from it than letting your life’s energy be sucked away into a computer game. Don’t let it happen. Check out WoW Detox, uninstall the game, and find something else to do with your life’s energy.
Right now, I’m looking outside at the nice weather and at the books on my bedside table. I think I’ll uninstall World of Warcraft for the summer while I finish up this post and re-install it again in the late fall, maybe when the next game expansion comes out. It’s an inexpensive, fun hobby, but it’s just that – one little element in a well-balanced life.
Continue reading MMOs and Financial and Personal Balance …
From The Simple Dollar.
15 Examples of Finding Ways to Enjoy Your Hobbies with Minimal Spending
One big problem that many people have when they adopt a frugal lifestyle is the perceived reduction in enjoyment they’re going to have in their hobbies. Entertainment spending is one of the obvious places to cut in a budget because it’s not a base need, but it is a very painful cut. If done recklessly, it can certainly reduce one’s enjoyment of day to day life.
This is certainly something that has challenged me over the past few years. I’ve got several hobbies that could seemingly be very expensive on their own but, with some footwork and forethought, I’ve found ways to trim their costs down to almost nothing while still retaining what I enjoy about each one.
Over the last week, I’ve also talked to several people I know who simultaneously have seemingly expensive hobbies yet enjoy them with minimal cost. I made a list of many of these hobbies and the methods used to reduce their costs. If you don’t see your hobby listed below but have a great idea for how to reduce the cost of it, mention the hobby and the cost-cutting method in the comments.
Antiquing Focus on really mastering how to value particular types of items – vintage toys, etc. Save your buying impulses until you’re absolutely sure you spy an underpriced item that you can turn over.
Board games Hit thrift stores regularly as you’ll often find great, complete games for almost nothing. Before you buy new games, attend sessions at your local game store where you can demo such games and try them out. Build friendships with other people who enjoy board games and play their games as often as they play yours.
Camping Buy equipment that will last and will work in lots of environments (so you don’t have to buy multiples). Don’t get too much equipment, as you can make a lot of things with what you find on hand – a tent, a sleeping bag, and a utility tool will work for many people. Don’t buy stuff because you think you might use it or need it.
Coin collecting Know your hobby. Know what rare coins have value, particularly ones that look similar to coins made today. Sift through change you get and find ways to accumulate more change without spending (like getting rolls of pennies or dimes at the bank). Understand what you really enjoy about coin collecting and focus on that.
Comics Check your local library if you enjoy reading comics – they often stock annuals and other collections. Start a “comic circle” where you each buy certain comics then swap them around the circle. For collectors, know the market cold and look in unusual places for bargains, like yard sales.
Cooking Minimize your equipment – you don’t need dozens pots and pans. Cook for yourself, not just to impress others (this improves your skill and saves money on meals). Master the use of ingredients you can easily grow (like our chive patch and our asparagus patch, which require no maintenance at all and just produce free food for us).
Gardening Compost as much as you can as it will reduce your fertilizing costs. Build friendships with other gardeners and share equipment. Harvest seeds and save them for spring.
Golfing Try golfing at the community courses near you instead of at the country club, as municipal courses are often far less expensive and yet still a lot of fun. Once you have a set of clubs, stick with it and only “upgrade” when there are liquidation sales or something else that’s completely exceptional. Don’t be afraid to use “lost” balls – balls hit out in the middle of nowhere and considered “lost” by other golfers – pick them up and toss them in your bag. Get a golf bag with wheels or a pull cart and get some exercise instead of renting a golf cart.
Hunting Handle the meat packing and processing yourself. Don’t buy “special clothes” for hunting beyond what’s required to keep you safe – just add layers in the winter. Focus on specific types of hunting instead of buying a weapon for everything.
Magic: the Gathering Instead of playing in the expensive competitive Standard environment, play Limited instead. Build a “draft cube” (basically, a big, diverse pile of cards) and play using that, particularly when you attend events. Ask to borrow full decks from players that have lots of cards.
Movies Eat a snack and drink a big glass of water before hitting the theater. Don’t buy a DVD unless you’ve already watched a movie multiple times in a theater or as a rental. Swap DVDs (temporarily) with friends. Go to discount theaters instead of “first-run” theaters and you’ll save most of the cost of a ticket.
Pets Volunteer your time at a pet shelter, as it will allow you to bond with lots of pets, help to make sure those most in need are cared for, and also help you to find the perfect match. Learn what an animal’s true dietary needs are and focus on meeting that instead of just buying a big bag of Ol’ Roy – not only is it better for them, it’s often cheaper.
Reading Join your local library – or even volunteer there. Swap books with your friends. Join a service like PaperBackSwap and swap online.
Scrapbooking Keep in mind why you’re scrapbooking – it’s to preserve memories. Don’t spend your money on expensive decorating elements that don’t really mean anything at all. Use highly inexpensive or throwaway items for your decorative elements instead – let that be another channel for your creativity.
Video games Trade games with friends. Play through games all the way before picking up a new one. Buy used games – and trade in any games you have that you won’t likely play again. Never buy new releases – wait until the price starts to drop and you save money while still enjoying the same game.
There are a few themes that run through many of these tips that bear repeating, because they help save money with any hobby.
Build friendships with people who have the same hobby. You can share ideas and equipment with them.
Minimize your equipment. Don’t buy stuff just because you think it might have a use. Go minimal, then expand if you have a true need.
Avoid the “cult of the new.” Never buy a new release. If you wait a little while, you can usually get the same item for less.
Understand what aspects of the hobby you truly enjoy. Maybe it’s just the collecting nature. Maybe it’s just the act of what you’re doing. Whatever it is, spend some time figuring it out, as it will often lead you to savings.
Continue reading 15 Examples of Finding Ways to Enjoy Your Hobbies with Minimal Spending …
From The Simple Dollar.
Other People’s Priorities Don’t Have to Be Your Priorities
Kelly writes in:
In the past three months, I’ve paid off all but $2,000 of my credit card debt. I feel happier about my money than I have in a long time. The only problem is that my social life seems to be falling apart. I don’t have as much interest in the things my friends are spending their money and time on and I find myself doing other things a lot. What do you suggest?
Bear with me for a second as I go down a bit of a strange road.
I’ll admit it. I’m not a good housekeeper, and neither is my wife.
Yes, we keep our house reasonably clean and we make an extra effort to clean when guests come over, but on a day to day basis, housework is lower on our priority list than it seems to be for many other people that we know. Quite often, we do minimal cleanup during the week and wait until Saturday for a real housecleaning – and, even then, we don’t scrub the walls or things like that on a regular basis.
Our priorities are simply different. There’s no wrong or right about it. Some people value housecleaning more than we do. A few of our closest friends spend literally hours each day on housecleaning because keeping their house sparkling is a very high priority for them.
So what’s a high priority for us? Time with our kids and with each other. Learning new things. Finding ways to have fun without spending a mint.
If we were to simply follow the lead of some of the people in our social circle, we would probably spend more than we do. One of my closest friends is becoming a small-scale land baron. Another one buys lots of Leroy Nieman serigraphs and, on occasion, original art. Yet another close friend really, really values his three automobiles.
Our money goes towards financial stability, because that’s what we value.
Placing that value highly, even if it’s not in line with what our friends seem to value, hasn’t damaged our deepest, most important friendships. You don’t have to value exactly what others value – you just have to respect it.
Instead, our friendships are usually based on the things we do have in common. Almost all of our friends really enjoy hosting and attending evenings full of board games, usually with a potluck meal. Even though there’s a variety of political perspectives, we all value political discussions that don’t turn into insults, so we often discuss politics together in a setting that would often result in arguments and fights. We all value reading and learning new things. None of us, at this point, is in a bad financial state, as we all have our debts under control.
For all of the things we do differently, we have those key things in common. You don’t have to do what your friends do, and you don’t have to value all of the same things that your friends value.
If you value living frugally, that’s fine. You don’t have to spend like your friends do. Instead, find ways to accentuate the things you do have in common. What do you both value? That’s the basis of a strong friendship.
Kelly, it seems to me that you’ve adopted stronger financial practices as a significant value in your life, and that’s great. It’ll help you to stay afloat no matter what the river of life sends your way.
The question is what else there is in your life. What other things do you value? How do you spend your spare time? What do you think about? There’s a good chance that these things still overlap with your friends – and if they do, seek ways to spend time with them that match up with those values.
You might find that your values actually are pretty far away from some of them and that your friendship was really only based on one value, one that you’ve moved away from as you’ve grown as a person. That’s fine – I discovered that myself when I started re-evaluating my life. If that happens, it simply means that it’s time to start socializing in ways that will help you meet people that match up well with your current values.
I firmly believe that if you surround yourself with people who mostly value different things than you do, you will be unhappy. I also firmly believe that if you seek out groups of people with which you share at least some values, you’re likely to build great relationships and friendships. Even better, if you can seek out multiple groups in this way – a group that matches one value you hold dear and another group that matches another value you hold dear – you’ll not only build friendships and relationships, but you’ll be able to make some powerful connections, too.
Good luck!
Continue reading Other People’s Priorities Don’t Have to Be Your Priorities …
From The Simple Dollar.
A Pre-emptive Strike Against Selling to Friends
A while back, I wrote about the dangers of selling to friends and family. Recently, a reader wrote to me stating that they wanted to make a “pre-emptive strike” against these kinds of sales pitches, but didn’t know how to go about it.
Please feel free to copy and paste the following email, edit it as you please, and send it to your friends. Trust me, almost all of them will thank you.
Hey friend,
A while back, one of my other friends invited me to a [Tupperware/Princess House/Pampered Chef/etc.] party at their home. I accepted, because I felt like I was supposed to – after all, I didn’t want to let my friend down.
When I got to the party, all of the items at the party were way overpriced and, frankly, I didn’t want any of them. But my friend was trying so hard to sell the items that I bought one out of guilt. There went $30 down the tubes. The item’s now gathering dust until I find some excuse to re-gift it to someone else.
The more I thought about this, the more irritated I got. Why should I have to buy stuff I don’t want just to maintain a friendship? I don’t think friendships and sales pitches mix.
So let’s make a deal right now. I’ll never host this kind of party and “bank” on our friendship by inviting you to it, so you’ll never have to feel obligated to buy some junk just because we’re friends. You’ll do the same for me. Deal?
Your friend,
In other words, be straightforward about it. Make it clear that you don’t want to participate in such parties – and also make it clear that you won’t ever utilize your friendship in such a way.
Yes, yes, I’m sure I’m going to hear from lots of people who are happy with the items that they bought at such a party. I’m not writing to you. If you’re interested in the goods these businesses have to offer, then seek out a party in your area and attend one!
I’m also not decrying the products sold. Some of the items at these parties are perfectly fine, though I make no claims about them being any sort of bargain.
I’m also going to hear from people whose friends were glad to have such an opportunity. Perhaps some of your friends did feel this way. However, I’m willing to bet some of them did not – they went to your party and made a purchase merely to be polite and that item found its way to a yard sale somewhere. I know many, many people who fall into this latter category.
If you enjoy hosting such parties, that’s great! Sell to strangers instead of selling to your friends. If your friends are interested when they find out you’re hosting such events, they’ll ask to attend, but make it clear to them that you don’t mix your business and your friendships so that they don’t feel obligated to come. If not, don’t cash in on the friendship.
My concern is simple: selling to your friends usually diminishes your friendship. They feel obligated to come, and when people start feeling as though a relationship is based on obligations that they don’t want to fulfill instead of things they’re happy and excited about, they begin to grow apart and drift away. That’s never worth the small commission you might get from selling to them.
Continue reading A Pre-emptive Strike Against Selling to Friends …
From The Simple Dollar.
A Pre-emptive Strike Against Selling to Friends
A while back, I wrote about the dangers of selling to friends and family. Recently, a reader wrote to me stating that they wanted to make a “pre-emptive strike” against these kinds of sales pitches, but didn’t know how to go about it.
Please feel free to copy and paste the following email, edit it as you please, and send it to your friends. Trust me, almost all of them will thank you.
Hey friend,
A while back, one of my other friends invited me to a [Tupperware/Princess House/Pampered Chef/etc.] party at their home. I accepted, because I felt like I was supposed to – after all, I didn’t want to let my friend down.
When I got to the party, all of the items at the party were way overpriced and, frankly, I didn’t want any of them. But my friend was trying so hard to sell the items that I bought one out of guilt. There went $30 down the tubes. The item’s now gathering dust until I find some excuse to re-gift it to someone else.
The more I thought about this, the more irritated I got. Why should I have to buy stuff I don’t want just to maintain a friendship? I don’t think friendships and sales pitches mix.
So let’s make a deal right now. I’ll never host this kind of party and “bank” on our friendship by inviting you to it, so you’ll never have to feel obligated to buy some junk just because we’re friends. You’ll do the same for me. Deal?
Your friend,
In other words, be straightforward about it. Make it clear that you don’t want to participate in such parties – and also make it clear that you won’t ever utilize your friendship in such a way.
Yes, yes, I’m sure I’m going to hear from lots of people who are happy with the items that they bought at such a party. I’m not writing to you. If you’re interested in the goods these businesses have to offer, then seek out a party in your area and attend one!
I’m also not decrying the products sold. Some of the items at these parties are perfectly fine, though I make no claims about them being any sort of bargain.
I’m also going to hear from people whose friends were glad to have such an opportunity. Perhaps some of your friends did feel this way. However, I’m willing to bet some of them did not – they went to your party and made a purchase merely to be polite and that item found its way to a yard sale somewhere. I know many, many people who fall into this latter category.
If you enjoy hosting such parties, that’s great! Sell to strangers instead of selling to your friends. If your friends are interested when they find out you’re hosting such events, they’ll ask to attend, but make it clear to them that you don’t mix your business and your friendships so that they don’t feel obligated to come. If not, don’t cash in on the friendship.
My concern is simple: selling to your friends usually diminishes your friendship. They feel obligated to come, and when people start feeling as though a relationship is based on obligations that they don’t want to fulfill instead of things they’re happy and excited about, they begin to grow apart and drift away. That’s never worth the small commission you might get from selling to them.
Continue reading A Pre-emptive Strike Against Selling to Friends …
From The Simple Dollar.