The most important trick to managing your finances — and maybe the hardest — is just getting started. My household finances were like an impenetrable jungle of budget formulas and investment accounts and bank policies and tax codes; not knowing where to start kept me broke and confused for years.

There are as many systems of thought for tackling spending as there are people managing their finances. Some people are avid fans of budgets while others swear they never work. Some will tell you to save up an emergency fund first while others zero in on debt reduction at all costs.

Finding a starting point can be a challenge. The trick is to begin where you are: Find something you’re already good at and apply it to your financial life.

Getting started
To find your path through the financial forest, look for something that is:

• A small step. You’re not going to completely remake your financial life in one day. Choose something bite-sized that you can do with relatively little effort or expense.
• Self-contained. “Get out of debt” isn’t a first step to managing your money. Tracking your spending can be. Calculating your net worth might be. Reading a personal finance book or taking a community education class are good choices. Choose a single step that will help you work toward a larger goal.
• Comfortable. The skill you use to make the first step should be a familiar one. Now’s not the time to learn how to create an Excel spreadsheet or read a stock ticker. Start with what you already know.
• Pleasurable. Ideally, start with something you enjoy doing. You’re more likely to persist with your new financial strategy if you’re doing something you enjoy and are good at.

For me, the first useful step after years of false starts was joining a Your Money or Your Life study group. I’m a big nerd at heart. Sitting in a class taking notes on a textbook and doing homework was something I knew how to do well. Using those skills to do a class about managing my personal finances let me get a grip on the information in a way no other format had.

By starting with what I already knew, I was able to sidestep my fear about money. Those voices in my head that told me I wasn’t able to understand my finances and I’d never be any good at it fell silent when I put my “student brain” in gear. I basically tricked myself into learning how to manage my finances by focusing on a skill set I had long mastered: being a good student.

Learning new skills
Once you’ve started down the path and are making some progress, you’ll want to stretch and learn new skills. The new skills you’re reaching for should:

• Build on what you know and are doing well. Once you get into the flow of it, it will be easier to see what new skills you’ll need to learn. Then you can build on what you’re doing, instead of starting from scratch with a brand-new skillset.
• Apply directly to the work you’re doing. Don’t distract yourself learning to make that Excel spreadsheet if it’s not going to solve a problem for you. Stay on task and pick up the knowledge you need to reach your goals.
• Be steady and repeatable. At this stage of the game, do something small, slow and steady that you can keep doing over time. Focus your energy on the daily habits that will help you reach your goals. That kind of personal change is powerful stuff.

For me, the new skills that fostered personal change came at the end of the YMoYL group, when I was out on my own doing this stuff in the boring, workaday world. There was no teacher to show off for anymore. I just had to do it.

The new skill I picked up was the relatively basic one of tracking my finances. I’d tried it many times and floundered. This time it stuck, because I was building off of what I’d learned in the class. I started a cash notebook, using the same type of small pocket notebook I’d carried for years to jot down creative ideas.

Things started going pretty well for me, financially. My money was getting organized. I was saving more, spending less, and paying down our debts. So far so good. I wondered what else I could be doing with the new tricks I’d learned. Then things got really exciting.

Cross-training your skills
Once you’ve mastered your new money skills, you can apply them to other areas of your life. I was never able to keep a daily record of activities before I began tracking every cent that passed through my household. Now I know how to do it.

Since mastering that skill, I’ve used the same tracking system to keep a log of freelance writing submissions and contracts. That’s been a huge boon to my career. I’ve also used it to keep a food journal that helped me radically change my diet. I am now starting an exercise log using the same set of skills.

No matter what you want to change about your financial life, you already have some of the tools you’ll need to do it. This is true whether you’re staring down a mountain of debt or starting to pile up some investments.

Look around at your life now: What’s working well? What are you really good at? How can you apply that to the financial problems you’re trying to solve? Success breeds success: Beginning with what you know lets you start by succeeding, and makes it easier to continue doing so.

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Related Articles at Get Rich Slowly:

• Ask the Readers: How Can I Get My Wife to Talk About Money?
• Smart People Ask Questions
• When the Going Gets Tough, Get Back to the Basics
• Welcome to 2007
• Ask the Readers: How Do You Keep from Losing Control?

What was it like without credit? Surprisingly easy, actually. Though a lot of folks will tell you that it’s impossible to rent cars or get a hotel room without a credit card, that’s just not so. A debit card lets you do all of these things, too. (Though, to be fair, companies will often put “holds” of several hundred dollars on a debit card when you rent cars or stay in hotels.)

To be honest, I didn’t miss having a credit card when I was living without one. I never encountered a situation where a credit card was required. Not once.

Writing in this morning’s USA Today, Sandra Block says that more and more consumers are saying “no” to credit cards:

In a country where the average consumer owns five credit cards, [folks without credit cards] may seem somewhat quaint, like an Amish farmer who drives a horse-drawn buggy. But proponents of a no-credit-card lifestyle say there’s nothing old-fashioned about their choices. And they’re convinced that their numbers will grow as consumers become increasingly disenchanted with credit card industry practices.

The author points out that credit card usage is slowing rapidly. National credit card debt fell by nearly 20% in November; new credit card accounts are down almost 50% from a year ago; and even folks who do use credit (73% of Americans, according to the Federal Reserve) are using credit less often.

Block’s article profiles several Americans who have decided to declare: “No credit needed!” Among them:

• Emily Maddox (24 years old), who has never had a credit card and has no plans to get one. They make her nervous.
• Dann Zinke (22), who is saving for college. He thinks credit cards are a hassle.
• Our very own GRS staff writer, Adam Baker (25), who opts to live without credit cards because it’s easier to track spending and helps him live a simpler lifestyle.
• Luis Rosas-Guyon (37), who finds that since he gave up credit cards ten yeas ago, his life is less stressful.
• Tim McFarlin (34), who ditched credit cards because he thinks the industry’s practices are unfair to consumers.

There are tons of different reasons to live without credit cards. (For my book, I interviewed three different folks who live by the “no credit needed” motto, and each had a different motivation.) The policy has some drawbacks — credit cards do offer consumer protection and other benefits, and they help you build your credit score — but I know from first-hand experience that living without them is a perfectly valid choice. It’s not only possible, but can be profitable as well.

How many of you live without credit or have done so in the past? I know from past conversations that there are some die-hard credit-card users around here (and these are folks who use them wisely, not irresponsibly), and there are also some die-hard “no credit needed” folks. I think both camps have merit, and the important thing, as always, is to do what works for you.

[USA Today: More consumers just say no to credit cards]

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Related Articles at Get Rich Slowly:

• Credit Card Index
• I Do Not Use Credit Cards
• Discussion Forum Highlights
• Video: Credit Cards in the Blender
• A Quick Trick for Tracking Credit Card Expenses in Quicken

What in the world does that mean? Well, a blog carnival is a weekly round-up of articles on a particular subject (in this case, money). The carnival moves from blog to blog, and gives readers a chance to find new writers they may enjoy.

It’s been over two years since Get Rich Slowly last hosted a carnival (it takes many, many hours to put this together), but I wanted to do one for old time’s sake. Besides, it’s a great way to support up-and-coming financial bloggers. I found several great new money blogs while looking through the submissions this week.

So how does this carnival work? I received submissions from 72 other personal-finance blogs. Yes, I read every one of these articles. Yes, it took forever. I’ve cut out the worst of the submissions, as well as any that don’t apply to personal finance.(Come on, folks: “the economic link between China and Canada” has nothing to do with the day-to-day financial life of the average person.) The 61 articles that remain are included in this carnival.

I’ve organized the articles by topic. The categories below are listed in alphabetical order — except for Relationships, which I bumped to the front in honor of Valentine’s Day! Within each topic, I’ve ranked the articles in order of how much I liked them. (So, the first article in the investing category was my favorite investing article this week.) And if I really liked an article, I marked it with a happy star: . If you’re looking for just the best, skim through and find the starred posts.

Which of these articles is your favorite?

Relationships
Mr. Cheap at Four Pillars has a mind-boggling look at two views on the economics of dating. He explains how a man he knows literally keeps score of how much he spends on the women he dates; and how a woman he knows who tries to get men to spend as much as possible on her. This is “personal” finance in the true sense of the term.

Ray from Financial Highway, whose site slows my browser to a crawl, has a look at frugal Valentine’s Day gift ideas.

Jason at One Money Design also has some inexpensive Valentine’s Day ideas. (Although, I don’t know: Pizza can be romantic? Really?)

Joe from Personal Finance by the Book has a short look at Love and Money, just in time for Valentine’s Day!

Budgeting
Dough Roller has a great article about improving your finances by using an overall financial goal. We have so many financial goals, many of which won’t be met for years or decades, that it can be easy to get discouraged by our progress. Borrowing an idea from David at MoneyNing, DR says that instead of focusing on the future, we should strive to simply do a little better every month. Doubleplusgood.

Darwin at Darwin’s Finance wonders, “How much could you reduce your budget if you were laid off?” Running the numbers on his own life, Darwin finds he could save over $1,000 per month if he had to. As you know from my own experience, I too was able to save $1,000/month when I cut my spending and paid off my debts. I wonder how many other folks could do this if they had to…

At the Canadian Finance Blog, Tom urges readers to control spending with a budget. It’s basic stuff, but it’s important.

Anastasia from Living on a Budget is a 36-year-old Russian woman living in London. This week, she has a short quiz to help you figure out which budget personality you are. (I scored a 55, by the way.)

Career
Mike, the Financial Blogger, explains how he got three salary increases in less than a year. Mike uses a poker analogy to make his point, which is an excellent one! Remember: Negotiating your salary is one of the best things you can do to improve your personal finances.

At the Early Retirement Blog, Kyle argues that you should set aside 10% of your work for retirement, not 10% of your income. “The miracle of compound interest will get you where you want to be in 40 years,” he says, “but dedicating 10% of your time to generating alternative streams of income will get you there in 5.” While I think Kyle’s guilty of some hyperbole here — it’s extremely unlikely (read: nearly impossible) that you’re going to retire in five years just by spending 10% of your work hours on side projects — I think his overall idea is good.

Paul, the FiscalGeek, argues that the secret to success is hustle. I happen to agree: Hustle is vital in almost every area of life, especially personal finance.

Jonathan from Christian PF has a look at five legitimate work-from-home jobs. I know there are legitimate work-from-home jobs out there, but even the real ones make me wary. I think it’s much better to create a job of your own doing something you’re passionate about…

At Grad Money Matters, guest-poster Caroline shares the secret to finding a part-time job in tough economic times. The advice here is good, but I wish the article were a little more in-depth.

Debt
Though I found the writing a little sloppy and hard to follow, I really liked the submission from Penny Farthing who asks, “Is debt okay if it leads to self-improvement?” This is a fantastic question, and I think most people would say that yeah, this sort of debt is acceptable. (Think college loans and so on.) But where do you draw the line? I like this question so much that I may actually write a post here at GRS about it sometime in the future.

The always-awesome SVB from The Digerati Life explains how to apply for a loan at a peer-to-peer lender. I know know much about peer-to-peer lending, but I know that many folks have found it a useful way to attack their high-interest debt. This brief guide is a great way to get started.

Lakita from Personal Finance Journey has a look at everything you ever wanted to know about the new credit card laws but were afraid to ask. We’ve covered this recently at GRS, too, but Lakita’s take is a good reminder of the coming changes in credit card terms.

Craig from Money Help for Christians answers a question about options for when you can’t make your student loan payments. Because I know nothing about this subject, I learned something from this article.

If you really can’t make your student loan payments, you may end up in bankruptcy. If that’s the case, then Single Money Guy has some tips for rebuilding your credit after bankruptcy.

JS from Smart Money Daily goes over the 9 reasons Dave Ramsey hates HELOCs.

Finances
Studenomics has a fantastic look at how you can make money as a tutor. I often think making money is the most-neglected topic in personal finance, so it’s great to see articles that offer real-life experience and advice about earning extra income. Great stuff.

David, the Personal Finance Analyst, has a long look at your secret credit scores and their implication. He doesn’t have any concrete recommendation, but these “secret” scores are important, and not enough folks know about them.

Sun at The Sun’s Financial Diary encourages readers to become master of their financial domains. Sun says that when getting and accurate picture of your financial situation is the first step to becoming a master of your finances.

Adam at Magical Penny has a thought-provoking look at why it’s okay to lose money in a savings account. He argues that even while inflation is chipping away at the value of your cash, there are great reasons to build your savings. I think his advice is right on.

RJ from Gen Y Wealth takes a look at the wealth effect, which occurs when your net worth increases due to an increase in home or stock prices. This increase makes you feel richer, and therefore causes you to increase your spending.

At his blog, Len Penzo explains inflation by showing that Avatar isn’t the biggest move of all time. Inflation can be hard for some people to grasp, and this is a good way to explain it.

Frugality
RC at Think Your Way to Wealth wonders, “Is self-reliance a lost art in this day and age?” This is a great mediation on our throw-away culture.

Ryan, the Financial Student, shares the story of how he’s getting 30 hours of college credit for 15 bucks using something called the post-secondary education option, which allows high-school students to take college classes for free. Way cool!

The Well-Heeled Blog argues that you can save money by embracing your natural hair, and says, “I used to spend $250+ and 4 hours in the stylist’ chair to straighten my hair. After I’ve come to accept (and even love) my wavy hair, however, I stopped the straightening treatments. I’ve discovered that I’m getting better hair and a fuller wallet in return.”

Investing
Note: There were a lot of of submissions in this category, and they’re all pretty good actually. They’re still ranked in order of how I liked them, but I felt these submissions were much stronger than in other categories, so even those near the end of the list are still worth reading.

My favorite post of the week is from Pop Economics, which I’d never heard of until today. Pop explores the illusion of control — our compulsion to do something with our investments. Studies show that we feel happier if we feel like we’re in control of our investing future. When we don’t have control, we feel depressed. With that in mind, how do you reconcile those instincts with passive, low-cost investing? This article explores a couple of options. I love this blog. It just started on January 1st of this year, which is why I’d never heard of it, but I’m a subscriber now!

Mike, the Personal Finance Ninja, gives three reasons the average joe is a bad investor. Mike says that you are not Warren Buffett. For most of us, active trading is not a good idea; instead, we should keep expenses low and diversify with index funds. Ninja cartoons! Warren Buffett quotes! Index funds! How could you not read this article?

Mike at Gather Little by Little shares the second part of a series on what he calls “investing baby steps”. In this installment, he examines some investing strategies for beginners. (There are more strategies to come in the future!) I think this is could be a useful series of articles for folks wanting to learn more about how to invest.

The Dividend Guy shares seven warning signs that you need to repair your investment portfolio, a good reminder that it’s important to review your investments at certain intervals. (I recommend reviewing your asset allocation once per year, though some folks think you should do it every quarter.)

Jim at Bargaineering just published another in his ongoing series of Devil’s Advocate articles, in which he tries to argue against conventional financial wisdom. (He doesn’t necessarily believe what he’s writing; he just wants to present the other side.) In this case, he tries to argue that you shouldn’t invest in the stock market.

Another Mike — Mike Piper, the Oblivious Investor — has a review of Zvi Bodie’s Worry-Free Investing, a book that argues investors should put their money almost exclusively into TIPS, advice that Piper thinks is…well, oblivious!

The Smart Wallet has a good post on a dry subject: Paying capital gains taxes when you trade stocks. This explains yet another reason it’s not a good idea to be an active stock trader.

At Free Money Finance, a guest poster explores the eight biggest mistakes investors make. Solid advice here.

Paul Williams from Provident Planning has an article with a very narrow target audience: He’s reviewed Prudential’s Retirement Red Zone, which is apparently a pitch at soon-to-be-retirees to use variable annuities.

Money Management
Jeff Rose from Good Financial Cents has a great piece on how to find the best financial advisor for you. If you’re in the market for a financial planner (or other advisor), be sure to read this.

Can you retire early without getting lucky? That’s what Tim from Canadian Dream: Free at 45 wonders. He says that nearly every story he’s heard of early retirement has included an element of luck. But can the average person retire early? Tim ran the numbers and found that if you do everything right, yes it’s possible. But you have to avoid consumer debt, buy a small house, and keep away from lifestyle inflation. Great piece!

Ron at The Wisdom Journal has a thought-provoking piece about goals. He notes that 80% of accidents on Mt. Everest happen on the way down, and wonders if this isn’t a metaphor for how we handle financial goals. We spend so much time planning how to reach our financial destinations that sometimes we forget to think about what happens after. Interesting stuff.

At Sweating the Big Stuff, Daniel takes a look at compound interest and why it’s important to pay yourself first.

K from Family Balance Sheet shows how to create your own family balance sheet, which will let you manage your household like a business. (Includes a sample Google Docs spreadsheet you can use!)

PT Money has a run-down of joint savings accounts. What are they? Why should you care?

Modern Gal (a great blog I’ve never seen before) has some short-and-sweet financial advice for thirty-somethings. These are basic but important tips.

Big Cajun Man from Canadian Personal Finance (there are cajun Canadians?) wonders, “Do you have a financial GPS?” He thinks it would be great if there were some automated way to know when you’ve made a wrong turn with your money.

Real Estate
Though it’s basic stuff, I really liked Austin’s article about Renting 101: What you should know before you sign at Foreigner’s Finances. This basic info is valuable for folks just starting out on their own. Maybe you have a brother or niece to forward this article to.

J. Money from Budgets are Sexy warns that owning a home is more expensive than you think, writing, “There are a ton of benefits that go along with this American Dream (tax write-offs, stability, equity, etc), but you’ve got to be aware of the financial drains as well.”

Thinking of buying a home buy confused by the terminology? Elle at Couple Money has a post that explains how amortization and mortgages work. It’s a pretty math-y article, but will probably prove useful to those folks looking to buy in the near future.

Rob at Free Family Finance has an 8-minute video about the differences between 15- and 30-year mortgages.

Taxes
Free From Broke has a quick run-down of qualifying for and claiming the first-time homebuyers tax credit. I’ve had some people ask me about this, and frankly I don’t know much about it. You folks should head over to check this out.

Matt from Debt-Free Adventure explains how he prepares his taxes online and offers tax help and tips for first-time online software users. (Apparently he’s a big fan of TurboTax Online.)

Miscellaneous
Mighty Bargain Hunter has a great reminder about identity theft and financial security: Sometimes your bank will call you for a legitimate reason; if they do, call them back. He explains the process using his own situation as an example.

At Eliminate the Muda, LeanLifeCoach takes a look at money and time, and how we waste them. I’ve said it before, and I’ll say it again: One of the keys to my financial turnaround was that I stopped wasting time. It’s amazing what you can accomplish when you actually do things!

The Weakonomist goes on a rant against bundling, the practice of making you pay extra for crap you don’t want by packaging a bunch of stuff together. I think he’s got a valid point, though his Microsoft example seems to go against his argument. (Or am I missing something?)

Kyle from Suburban Dollar shared a 4-minute video review of Gary Vaynerchuk’s book Crush It! I’m not a fan of video posts (see my whine about Free Family Finance above) because they force the blog “reader” to sit there passively and prevent them from skipping spots. But Kyle does a good job here of staying succinct, and his review of the book pretty much matches my own. (Including the complaint that there isn’t really any actionable advice in the book.)

The blogger from Don’t Quit Your Day Job takes a look at why parents with children seem to volunteer more than others. (Answer: It may be because they volunteer to help with their children’s activities.)

Jason from Live Real, Now has a cute piece about what Dungeons and Dragons taught him about finance. In a similar vein, B Simple from Simple Financial Lifestyle shares the keys to winning your own personal financial Super Bowl. Gimmicky, but fun.

Helen at Science and Money (another blog I’ve never seen before) has a review of Saving Money by Mary Firestone, a financial-literary book for children. Helen thinks it’s lame.

Final carnival stats: 72 submissions, 11 rejected (and another 7 nearly so), 61 accepted (10 of which were highlighted). Six hours to prepare: Five hours to compile and list links, and another hour to create theme and post the carnival. 3705 words. Photo by Sophiea.

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Related Articles at Get Rich Slowly:

• Carnival of Debt Reduction #43
• links for 2006-09-12
• Carnival of Personal Finance - Call for Submissions
• Carnival of Personal Finance
• Daily Links: Debt Reduction, Stupidity, and Mutual Funds

Click on image to open a larger version in a new window.

Ah, Dinosaur Comics — you gotta love them.

As a reminder, I’m not opposed to owning a home. I own one myself and have no plans to move. But my recent research persuaded me that renting isn’t as bad as it’s been made out to be. Both renting and owning can be good choices; it just depends on your situation. (And how many dinosaurs you have roaming the neighborhood.)

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Related Articles at Get Rich Slowly:

• The New York Times Rent vs. Buy Calculator
• The Rentometer: How Does YOUR Rent Compare?
• On Meeting and Resisting Temptation
• links for 2007-05-05
• Housing: Rent vs. Buy Calculator

Confession time: I read Get Rich Slowly on a daily basis. Phew, that was easier than I thought! Two years ago the major confession would have been the balance on my credit cards. I found this blog about the time I was just starting my own personal finance journey. Like many new college grads, I was in major credit card debt with a salary that barely covered rent and food — not that I ever really tried living within its confines.

Before I paid off my credit cards, I worried needlessly about things that were out of my control. Oddly, they were not all related to money. I worried that my dad would have a heart attack (he’s in fine health). I worried that my bus would get me to work late (never happened). But the big worry was that people would learn how much debt I was in and think I was living a lie (which I was).

The wakeup my 23-year old self needed was realizing how much I disliked my current job. I was terrified of leaving, couldn’t imagine staying and felt stuck. Looking back, it’s easy to say the rest is history after that moment, but every single day of paying off my debt was a challenge. I needed drastic action in order to change the course of my financial life, and here’s what I did:

1. I moved in with Mom and Dad. This was weird, embarrassing and uncomfortable at first. But I love my parents dearly and we learned to cohabitate in a way that didn’t make me feel 16 again. I spent 15 months saving on rent to pay off my credit cards.
2. I took a high-paying administrative job. It’s not like I dreamed of graduating college to become an assistant, but I found a corporate assistant position (that did not require I transport kids, cook diner or manage a household for someone else) and now I get all the same gold-plated benefits as my bosses.
3. I make a budget. I don’t do anything fancy. I prefer to use a post-it note and map out my spending plan for each of the next four weeks. Weekly budgeting is key for me since I’m paid every Friday.
4. I use cash as often as possible. I do my best to keep spending money in cash form, a popular technique for those trying to spend less. It “hurts more” to use paper money than plastic debit or credit cards.

Now that I’m on stable footing again, I’ve resumed my life as a normal 20-something. I moved to an apartment that I share with two roommates. Together we can afford more apartment that anyone could separately and it works. I have let credit back in, by using my Banana Republic card in a way that maximizes my reward potential and lowers the cost of my work clothes. I don’t worry about my financial future anymore because I know I’ve learned some very powerful lessons.

The best part of paying off debt is that I can dream again. This fall I applied to graduate school. Next I’ll be starting a side business based on my administrative skills. Most importantly, I’ll continue to read Get Rich Slowly because I like being part of a community of people constantly working to better themselves!

Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are.

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Related Articles at Get Rich Slowly:

• Reader Survey: How Do You Cope with a Limited Income?
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We all know that cooking meals at home can save money. For some (like me), it’s a lot of fun, too, but it’s easy to get in a rut — which is where I found myself last year.

Brown rice was my go-to side dish, but there are only so many ways to cook the stuff before your taste buds get bored. That’s when I discovered a whole new world of grains that got me excited to cook again, many of which are now kitchen staples. If you’re ready for something new, try out these under-appreciated grains, each with a distinct texture and flavor.

Barley
Before combat, Roman gladiators ate barley, which was believed to give great strength and stamina. Non-gladiators can just enjoy it for its rich, nut-like flavor and health benefits. Barley is a good source of fiber, selenium, phosphorus, copper, and manganese.

Barley is often thrown into a beef stew, but it is certainly worthy to be a dish all on its own. Try Barley Stew with Leeks, Mushrooms, and Greens or Barley Salad.

Kasha
Kasha is roasted whole-grain buckwheat or buckwheat oats and is commonly eaten in Eastern Europe (though in Slavic countries, the word kasha refers to porridge in general). Kasha is close to wheat in its nutrition content, though it’s gluten-free, and is high in protein, B vitamins, phosphorus, potassium, iron, and calcium.

Kasha is cooked the same way as rice, and it’s just as versatile. For a couple of ideas, try Wild Mushroom and Onion Kasha or Kasha with Browned Onions and Walnuts.

Millet
In the US, millet is most often recognized as the main ingredient in bird seed. But millet isn’t just for the birds; it’s a staple grain in Africa, India, and Asia.

Millet is high in protein—1/2 cup of cooked millet provides 4.2 grams. It is also rich in niacin, B6, calcium, iron, potassium, magnesium, and zinc. Like kasha, millet is a good option for those with gluten allergies.

To start cooking with millet, try out Curried Millet, Shiitake, and Corn Salad Restey or keep it simple with Hot Millet Cereal.

Quinoa
Quinoa (pronounced keen-wa) isn’t actually a grain, but I had to include it anyway, and I’ve saved my favorite for last. While it is commonly thought of as a grain, it’s more closely related to leafy greens, such as spinach and chard. Quinoa, however, is grown for its seeds, not its greens. Quinoa is a 5,000-year-old crop that was a diet staple for the Andean Incas, who referred to it as “chisaya mama,” or “mother of all grains.” It has a light, soft texture and a delicately nutty flavor when cooked.

Quinoa is full of nutitional value, containing all of the essential amino acids and more protein than grains. It is a good source of dietary fiber, magnesium, phosphorus, calcium, iron, vitamin E and several B vitamins, and omega-3 fatty acids. Quinoa also is another gluten-free option.

One of my favorite recipes for quinoa comes from La Tartine Gourmande, a gorgeous food blog by Béatrice Peltre. (And by gorgeous, I mean that if it was possible to live inside a blog, I’d live in hers.) Béatrice was kind enough to provide the beautiful photos in this article and to let me share her black quinoa salad recipe on GRS. So, to get you started on some culinary experimentation, here is Béatrice’s quinoa recipe. Feel free to experiment and make it your own!

Note: Most quinoa comes pre-rinsed to remove the saponin, which is a natural, but bitter, resin-like coating. It’s a good idea to give it an extra rinse in cold water before cooking it, as recommended in this recipe.

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Related Articles at Get Rich Slowly:

• Cheap Healthy Good
• Eating Healthy at Fast-Food Restaurants
• Healthy Food on an Unhealthy Budget
• Save Money on Food with the Sixty Minute Plan
• The Hillbilly Housewife

For some reason, seeing the book laid out makes the project more tangible than it has been before. There’s just something about holding this pile of words that’s now coalescing into something that other people will read.

It also makes me giddy to see the book listed at Amazon. I know this won’t ever be a best-seller like a Suze Orman book or a David Bach book, but it’s fun to see it climb from #540,000 on the Amazon best-seller list to #17,777. I have to say: If I even crack #5,000 I’ll be happy. (Honestly, I’m happy already!)

Ultimately, though, my goal isn’t to get rich by selling a ton of books. (Good thing, too, because that ain’t gonna happen.) My goal is to reach some folks who need help with their money: If I can give them the info they need to turn their financial lives around, then my work is done. I feel like that’s what I’ve been put here for. (Well, that and reading comic books…)

Here’s the copyright stuff and the table of contents:

I’ll spend the next week hunting for those last pesky errors. I’ll read the book aloud (at least once, if not twice), check for typos, double-check my links (the book has tons of links), and make sure my facts are correct. (I’ve been working with FICO, the credit score people, to correct a couple of charts, for example.)

Have a good weekend, everyone! The sun’s out here in Portland, so I’m going to take my first bike ride of the year…

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For consumers like me who have spent decades shopping at full retail, getting a deal on previously no-deal items is liberating and invigorating, as I found out during a recent week I spent haggling. At first, my wife and friends asked me if I was crazy, but when I reported saving $3 on steak at Giant and $50 a month on our Verizon bill, they asked only one thing: How?

Just before Christmas, I spoke with Rosenwald about haggling. Though none of my tips made the final article (which is no big deal; that’s how journalism works!), he did profile long-time GRS reader Stephen Popick (who also volunteers as the GRS discussion forum admin). Rosenwald writes:

Popick is a well-paid guy — he can afford things. But he looks at price tags merely as suggestions. (Call him cheap, and he’ll thank you for the compliment.) For years, Popick has haggled down prices on ground beef, videogames, beer, bicycles, magazines, satellite TV and even the his-and-her plastic reindeer that adorned his front lawn for Christmas.

“I’ve always wondered why more people don’t do this,” said Popick, who lives with his wife in Alexandria. “This is your money. It would be wasteful not to do this, right?”

Taking lessons from Popick and others, Rosenwald gave haggling a try. He negotiated on everything from DVDs to steaks to cell phones. Final result? Rosenwald saved $730 in seven days.

As I’ve said before when this subject comes up, haggling isn’t for everyone. But if you’re brave enough to negotiate — and willing to put up with occasional rejection — you really can save money.

Here are some past Get Rich Slowly articles on this subject:

• How one reader uses haggling to save big bucks
• How to haggle
• You can negotiate anything
• Negotiate once, save thousands every year
• How I cut my Comcast cable bill by 33% (without losing any service)

Do you haggle? How often? Only on the big stuff? What rules have you set for yourself? How successful are you?

[The Washington Post: In tough economic times, shoppers take haggling to new heights]

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• Understanding the federal budget
• The truth about taxes

I didn’t have any political agenda in mind; I just wanted to know the facts. What I discovered is that there are a hell of a lot of numbers involved with taxes, and plenty of conflicting information from a variety of sources. Based on my research, I concluded that at the federal level at least, our tax rates are low when compared to both our own past and to other countries. (You can see the 2010 federal income tax brackets at Five Cent Nickel.)

On Tuesday, USA Today shared a fun toy that basically takes all of my wordy research and converts it into a simple interactive tax-rate calculator. You put in how much you earned in any given year, and the calculator shows your effective tax rate and where your tax dollars go.

Here’s how USA Today describes the calculator:

Tax rates and federal spending priorities have fluctuated quite a bit over the years. This interactive graphic makes it easy to chart both. Simply enter a salary and see how much goes to federal taxes and how that money gets spent. Then, look back in time to see how that income compares with he past when adjusted for inflation, and what the tax rates and spending priorities used to be.

For instance, here’s a breakdown for three income levels: $25,000, $50,000 (roughly the U.S. median household income), and $100,000.

    
Click on any image to open a larger version in a new window.

It’s also fun to see how much different folks at different income levels pay. If you earn $10,000, you have an effective tax rate of 8%, though that’s been increasing with time. If you earn a $1,000,000 a year, you have an effective tax rate of 35%, though that’s been falling with time. Is this good? Bad? Just right? I don’t know, but it’s interesting to see.

This really is a great educational toy, and I highly recommend you spend five or ten minutes exploring it. It’s probably the most fun you’ll have with taxes this year!

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When he got his first credit card, Andy made a habit of paying his bills when he got them in the mail. But: “Then I got laid off. I didn’t pay my credit card bill until a day or two before it was due. I waited as long as I could because I needed that money elsewhere.”

Even after he got a job again, Andy kept paying his bills just before they were due. And he kept feeling stressed. Why? “Because I still am struggling to pay off my credit card bill each month before the due date. I have the money, I’m not carrying a balance or paying any interest…but instead of being ahead of the game I’m trying to base-slide in that home run at the end of each month.”

Andy writes:

I recommend that people do two things. Even if you’re carrying a balance on your credit cards, send your payments as soon as the bill comes due. Then you’ve got a buffer of about 30 days if for some reason you can’t make the payments immediately. If something does happen, do everything possible to get back your buffer ASAP.

Andy says there’s a real psychological difference that comes from paying his bills early: “That 30 day window makes me feel more secure.”

Long long ago, back when this blog was young, I wrote about my own personal discovery of this technique. When I was living paycheck-to-paycheck, I always waited until the last minute to pay my bills. Four years ago, I finally realized there were several advantages to paying my bills as they arrived:

• It saves time. Rather than spend half-an-hour batch-processing bills, I can take a few minutes at a time to pay just one bill.
• It saves worry. I’m no longer concerned with late payments. I know my bills are mailed on time.
• It saves mistakes. Sometimes I would forget to pay a bill. If I pay the bills as they arrive, this can’t happen.
• Most of all, it saves money. When I got paid, I used to buy my fun stuff first, and pay bills out of what was left over. Now that I pay bills first, I’m more inclined to invest any remaining money instead of spend it.

Even if you live paycheck-to-paycheck, you can profit from this advice. Try it for a month. You may not be able to pay all of your bills this way (your mortgage, for example, might have to wait), but you should be able to pay most of them. See if it doesn’t take a load off your mind!

After having used this technique for four years, I can’t imagine doing anything else. In fact, I barely remember that I used to struggle with paying my bills on time. But I did. Amazing how far I’ve come! And it’s amazing that smart personal finance is made up of regular small habits like this one.

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Over the holidays, we said good-bye to an old family member. It was definitely her time to go. She leaked, she conked out at odd times, and she stank. Of course, I’m talking about our old vehicle: a minivan with 182,000 miles on it. I didn’t let go of her easily; after all, we didn’t get rid of our previous car until it had 264,000 miles on it. I figured we could get the minivan to at least 200,000.

But while visiting relatives in Florida, we had the opportunity to buy a used minivan from my sister’s meticulous neighbor for a great price. So we took it. I have to admit, it’s been a huge upgrade. It has all kinds of luxury features that our old minivan didn’t have, such as:

• When you turn it on, it stays on until you turn it off.
• When it rains, the water stays out of the vehicle.
• There’s an electrical device in the cigarette lighter that I can use to charge my cell phone, rather than just an empty hole where an electrical device used to be.
• The speedometer is an accurate reflection of the speed I’m traveling, rather than a number to which I have to add five to 15 mph.
• The brake light comes on only when the emergency brake is actually engaged.
• It has this thing called “air conditioning.”
• It doesn’t stink. (The smell in the old car came from water coming in and getting the carpets all moldy.)
• It has a “keyless remote,” which is a device on the key ring with buttons that, when pushed, cause the side doors to slide open.

(Regarding that last feature, here’s a trick you can play on the uninitiated: I put the keyless remote in my pocket, and told my mom and my aunt that the doors were voice activated, but you had to use the secret word. In this van’s case, I told them, the secret word was “monkey _____.” Since this is a family website, I can’t print the actual word, but use your imagination and you’ll be close. So I got my 70-something mom and aunt to yell, “Monkey ____!” at the van, pressed the button in my pocket, and — voila! — the doors opened. They just couldn’t get over it. “I have to get me one of those!” my aunt exclaimed. I let them yell, “Monkey ___!” at the van for another 15 minutes, closing and opening the doors, until I told them the truth. If I had videotaped it, we’d all be YouTube heroes by now.)

Drive a lemon, save some cabbage
I take my share of barbs from family and friends for driving clunkers. But for me, there are two driving (no pun intended) factors: 1) money, and 2) safety. Let’s look at the first one.

At what point is repairing an old vehicle just throwing good money after bad? Here’s one way to look at it: According to Comerica Bank, creator of the Auto Affordability Index, the average cost of a light vehicle last year was $25,500. If you had to finance that total amount over four years at the going rate of 6.56% (according to Bankrate), it would cost you $605.44 a month. If you spend less than that on repairs of the old vehicle, then keeping it saves money…at least for the next four years. At that point, the newer car would be paid off, and the old car would be really old.

But in the meantime, if it cost you only $200 a month to maintain the old vehicle, you saved $405.44 a month, or $19,461.12 over four years. Not too shabby.

While that’s helpful as a way to begin to think about the question, it doesn’t really help with determining a bottom-line number for an actual person because it’s based on an average number, 100% financing, and the purchase of a new car. To help someone like you — who is non-average, who likely wouldn’t finance the entire purchase, and who might be buying a “pre-owned” car (which, to me, is an inappropriate term, since “pre-owned” should mean “before it was owned,” that is, new) — you’ll have to whip out a spreadsheet and factor in all the costs. That includes assuming higher maintenance costs for the older car, but also higher insurance, higher property tax (if you, like me, live in a state that charges such things), and transaction costs after replacing your jalopy. It’s not an exact science, since it involves forecasting future maintenance costs — an impossible task. But it will give you some numbers to think about. In most cases, I bet the analysis will show that keeping the old car is the way to go, financially.

But then there’s safety
Did I do just such an analysis when I decided to replace our old minivan? Not exactly. We had reached a point where we were spending more than $2,000 a year on maintenance, and I had a rough idea of how much it would cost to fix the major problems with our van. Then this opportunity came up, to buy a van from one of those people who perform regular maintenance and have the records to prove it, at a price $2,000 to $5,000 below what it would have cost me to get the same vehicle from Craigslist or Carmax.

But what really got me was that the old van just didn’t feel safe anymore. Something was always going wrong, and I didn’t want something major to happen while my wife was on the highway with our kids. And I must admit, it’s nice to have a car that stays dry, has A/C, and doesn’t stink…yet. If I ran the numbers, I suspect my spreadsheet would have said, “Keep the old car.” But as readers of this website know, financial decisions don’t always come down to dollar and cents.

So I feel comfortable with the decision we made. As for our old van, my sister and brother-in-law got the major problems fixed and arranged to have it donated to a church they work with, so we’ll get a tax deduction out of the deal (another factor that would have gone into the spreadsheet) and the van will hopefully last long enough to do some good. My relatives in Florida approved of the trade-off, especially those who make jokes about the heaps we’ve driven, and believe that any car should be replaced once it reaches 100,000 miles.

Yet the math clearly shows that driving a car well beyond that point is the right thing to do for your net worth. According to Comerica Bank, the purchase of a new car costs 21.9 weeks of a median household’s income. That’s working 42% of the year just for a car. To me, acquiring a new vehicle before it’s necessary is a bunch of financial monkey _____.

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One goal that Kris and I share is to take a trip to Europe later this year. We’ve been saving for nearly a year already to make this happen, and I’m sure to write more about it in the future. (In fact, I have one short post about our trip coming up soon.)

But I want to take a moment to get a little more personal than I have lately. In mid-January, I shared a brief summary of my 2009 discretionary spending. I pointed out two things:

1. Last year, I spent an average of $286.97 per month on dining out. We typically dined out about six times per month, and paid nearly $50 per meal.
2. Despite this, my spending on other discretionary items was down. In fact, I noted that I as experiencing what I called a “waning of want”; I didn’t feel the urge to buy Stuff.

More than in past years, I’ve been thinking about the results of my 2009 discretionary spending survey, and I’ve actually tried to act on them. During January, I did my best to keep my spending in check. How’d I do? Let’s look.

Last month I spent:

• $83.09 on Entertainment ($13.98 to purchase two multi-record sets at a thrift shop; $69.11 on iTunes downloads, including multiple seasons of The Amazing Race)
• $125.69 on Dining Out (we dined out five times, for an average of just over $25 per meal)
• $14.78 on Pets
• $5.97 on Books (again from a thrift shop)
• $12.20 on Cable TV and $45.99 on Internet

That’s it. For me, this is a huge victory. I didn’t feel deprived in any way, but spent less than $300 on discretionary items. (And that’s including cable and DSL, which I don’t usually lump with discretionary expenses.)

To some of you, $300 will seem like a lot; for others, it’ll seem like a pittance. For me, it’s pretty skimpy, especially compared to past spending levels. (Again remember: I spent nearly $300 a month on Dining Out last year alone!)

Now, I’ll admit that I don’t think this level of spending will last indefinitely. The longer I put off buying comics, the more things I want to buy (Dick Tracy and Little Lulu are calling my name at this very moment). Plus, being holed up working on my book for the first three weeks of January played a huge role in my decreased spending. So did saving for our trip to Europe.

But still, the larger point is that it is possible for me to spend less if I put my mind to it. Just yesterday I decided I wanted to play a computer game. I’ve worked hard lately, and I deserve some time to goof around. I considered buying something new (or re-activating my World of Warcraft account), but instead I downloaded the free Battle for Wesnoth. Turns out it’s a fantastic game. Instead of buying new comics, I’ve been going through the un-read stuff I already own. And for entertainment, I’ve been trying to exercise. (My one goal for 2010 is to lose 50 pounds; I’m down five.)

There’s nothing earth-shattering in this article, no profound lessons to be learned. I just wanted to take a few moments to share the personal side of my personal finances. I’m pleased with how things have gone so far this year. How about you? One month into 2010, are your finances where you want them to be?

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When we last left off, I’d just walked away from my first real estate closing with an eight-unit apartment building and $1000 cash in my hand. I was riding high. Unfortunately, the reality of the situation hadn’t sunk in. Over the next year, my low-income, eight-unit apartment building was going to take me on the most wild roller coaster ride of my life.

Instead of providing a chronological list of events (which may be entertaining, but of little use), I want to share the mistakes I made and the biggest lessons I learned throughout the process. In this second installment, I’ll share the first two mistakes (of what could be dozens). Neither of these first took long for me to realize.

Mistake #1: I bought a negative cash flow property without an emergency fund
Yes, it was purchased at a great price. Yes, it did have an amazing amount of potential. But all the potential in the world didn’t change the facts:

• 7 of the 8 units had people living there.
• Only 3 of them were paying tenants.
• I needed at least 5.5 tenants paying to break even.
• All of the units, even the vacant one, needed repairs before they could be rented.

In theory, I knew all this before I bought the property.  I had a detailed plan on how I would attack these issues quickly. I would file evictions the next day on those tenants that had gone months without paying. I would immediately hire people to get the vacant unit up to minimal renting standards.

In theory, it was all going to work perfectly. But then it came time to actually execute the plan.

Coordinating quotes for repairs took longer than expected. Eviction filing took money up front and the courts were running an extra week behind (4-5 weeks instead of 3-4 weeks). Tenants became optimistic about the management change and wanted to work out repayment plans.

In the first two weeks, a storm broke a large front window, and a back door was kicked in (probably by the tenant who lived there, although I had no proof).  While insurance would eventually cover the window, both had to be fixed immediately, as it was winter and both were security concerns.

Repairs and maintenance were both accounted for in my number crunching, but the emergency fund that could smooth out an early spike in the averages was nowhere to be found. I didn’t have a penny to my name and the $1000 check at closing went much faster than anticipated. The lack of the emergency fund compounded into several other problems in those first few months.

Mistake #2:  I got emotionally involved
Back in part one of this story, I outlined my previous success in building up a property management business. With my client’s properties, I was cool and calculated. I treated management as a business. The property owners were clients. The tenants were…just tenants.

When I signed the dotted line on my own property, the idea was to simply plug it into our property management system. It was going to be “just another set of units.” We’d coordinate repairs, screen tenants, and handle issues in the same ways as we had set-up for our clients. I was incredibly naive.

Without an emergency fund, we needed money. Sure, we had plenty of clients who had also needed money at one time or another. It was my job to set expectations and to advise them on the best course of action. I sought to remove emotions from the equation and ensure that they didn’t make a rushed decision.

I was good at this part of my job and we made nearly no exceptions. If a client had a monetary circumstance where they had to make what we thought was a bad decision, they’d usually cease to be our client. It was that simple.

It’s amazing how quickly exceptions are made when you are the one that needs money.

It happened slowly at first. One tenant, whom seemed genuine, wanted to set up a payment plan to get back on track. It was a weekly payment plan, something we would have never agreed to with our normal clients (too much time commitment). We had two choices in our situation. First, we could head through evictions (2-5 weeks), coordinate repairs (1 week minimum), and re-rent (1-4 weeks minimum). Or alternatively, we could try to squeeze money out of the existing tenants.

The former was the smart, long-term, and business-oriented option.  It was the only one we would have offered to our clients. I could have listed at least two dozen reasons why it was the best option. Of course, we chose the latter.

This ushered in a four-month period of various weekly payment plans with not just the one tenant, but with 3-4 other tenants as well. It did help bring in the immediate cash we needed, but we paid a hefty price. Juggling these weekly re-payment plans with tenants who had already proven they weren’t reliable:

• Took additional time.
• Added large amounts of stress.
• Caused problems with repairs (easier to fix up a vacant unit).
• Fostered a “but you made an exception with him” mentality among all of the tenants.
• Lowered the value of the property (a fresh, consistent tenant would have increased value).

It was a horrible pattern, one that I knew far better than to fall into. I assumed there would be no emotional difference on how I would handle the property…and I was wrong.

These first two major mistakes arose in the first few weeks and months. We haven’t even touched on the issues that came up when we replaced three furnaces and four water heaters. Nor have we revisited the most bizarre moment of the entire year, which involved a split-personality tenant, no less than three fire trucks, and fraudulent accusations of animal cruelty.

For that, you’ll have to wait until next week!

J.D.’s note: Adam doesn’t realize it (because he’s a young pup), but this post makes a New Wave geek like me think of this Culture Club song…

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In some ways, January was a strange month around here. For one thing, I think this was the month with the fewest posts since I started the site; there were only three days with more than one post. Yet I don’t feel like this was a bad thing. In fact, I felt like there were some fantastic conversations in January. (What do you think? Are you okay with the one-post-a-day thing? Or would you prefer to see more?)

Here are some of the best articles from this month:

• January 4th: 10 steps to financial success in 2010
• January 6th: Invest in your most important income-produing asset (by Robert B.)
• January 7th: The best time to buy almost everything (by April)
• January 13th: What the new credit card law means to you (by Adam J.)
• January 18th: Break out of your comfort zone to achieve success (a guest post from Flexo)
• January 25th: Great lessons from great men
• January 27th: Does renting make sense?

The blog isn’t the only part of this site. If you have burning questions about personal finance, one of the best places to get answers is the Get Rich Slowly discussion forum, which just got a fresh coat of paint.

The forum is a great place to chat with your fellow readers. Have questions about emergency funds? Ask! Want to chat about cheap vacations? This is the place to do it. The forums have over 3400 registered users and over 44,500 posts.

Subscribe!
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Finally, you can follow me on Twitter or join the Get Rich Slowly blog network and/or the Get Rich Slowly page on Facebook.

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

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Over pepperoni pizza and root beer, the conversation turned to the economy. I asked my brother Jeff how the family box factory is doing. “To be honest,” Jeff said, “we’re about to finish our best month since October 2008. And if you look at actual daily sales, this will be our best month since February 2008. It’s our best month in two years.”

“That’s great,” I said. “Maybe this means the economy has finally turned a corner.”

We’ve believed for years that sales at Custom Box Service are a fairly accurate barometer of the economy’s overall health; our sales always reflect where the country’s economy will be six months down the road. Sales at the box factory started to erode in autumn 2007, for example, before falling off a cliff in March 2008. Things bottomed out last February, with our lowest sales since the company incorporated in 1995. So, if the company’s sales are finally improving, we take that as a sign that the U.S. economy is on the road to recovery.

“How’s your business been doing?” Jeff asked our friend Ron. Ron’s family owns a wholesale nursery, and their sales have been down too.

“Rotten,” Ron said. “Last year was awful.”

“I think the economy’s been bad all over,” Kris said. “I just spent a week in eastern Oregon for work. It’s been a while since I was in Pendleton, and I was shocked at how many empty storefronts there were. A lot of places have gone out of business.”

“I keep waiting for things to turn around,” Ron said. “Just today we got a huge order, which is a relief. It’s an order we expected last fall. I’m just glad it finally came through. ”

“Yeah,” said Jeff. “I think a lot of people put off ordering because they were letting their inventories run low. But that just made things worse. Our sales were down so much last year that we couldn’t fund employee pensions and Christmas bonuses were a lot smaller than usual. At least we didn’t have to lay anyone off.”

“But January was a good month,” I said. “That’s a good sign, right?”

“Yeah,” Jeff said. “And another good sign is that some of our suppliers are raising prices. In fact, we think some of them will be going up 15%!” — Fifteen percent is a huge price increase for paper — “So maybe that means things are turning around. Or maybe it’s just a sign that there’s inflation in the future that’ll make things worse. I guess if you were optimistic, you could say these are signs of an improving economy. It’s definitely a step in the right direction, but it could just be a brief peak on the roller coaster of the Great Recession.”

I, for one, am an optimist. (Not just about the economy, but all things.) I think things have finally turned a corner. Unemployment is still lagging behind (as it always does and always will), but from my perspective, the economy seems to have hit bottom, and is finally beginning to show some signs of improvement.

When I got home from bowling Friday night, I dug out the numbers for the most recent poll from Get Rich Slowly and MoneyRates. Since mid-January, visitors to both sites have been answering the question, “Where do you think the economy sits right now?” Here are the results based on more than 1200 responses:

• 2% — Strong growth. Full Steam ahead!
• 15% — On solid ground and growing some, thank goodness.
• 43% — Stagnant. Not growing, but at least not getting worse.
• 20% — Not horrible, but looks like it’s going downhill.
• 21% — Free falling. I’m bracing for the worst.

In general, GRS and MoneyRates readers aren’t yet optimistic. Many of you think things are stagnant still, and nearly as many think conditions are getting worse. Fewer than one in five believe that the economy is actually improving.

A poll is one thing, but I’d like to hear your actual thoughts. How do you feel about the current economy? Do you think we’ve finally hit bottom? Or are things still getting worse? How has the recession affected you and your family? What do you think it’ll take for things to get better?

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In May of 2008, I graduated with my MBA from a great school. I went straight from my undergraduate career into an MBA program, so despite numerous internships, I didn’t have a great deal of work experience, nor did I have a nest egg of any kind. Luckily, what I did have was a CPA for a mother who taught me the value of saving a buck when I was very young.

I also was able to go to school on a partial scholarship and applied for numerous others while in the program. With all this said, I went to four years of college and two years of an MBA program and came out with around $37,000 in debt.  That’s a large number to swallow; however, as far as education goes, I still look at that as quite a bargain.

Back in May 2008, I was 24 years old with $37,000 owed to good old Sallie Mae. I was starting my first full-time job in June, with a salary of $65,000 plus bonus potential. It wasn’t the $90,000 others from my class were making, but I thought I was doing very well considering I wasn’t yet 35 and I wasn’t moving to a big city (like NYC or DC).

Fast forward to today, roughly a year and a half later: I have $8000 left to pay on my student loans. I also have an emergency fund of around $17,000 and have over $15,000 in my retirement accounts. I’ve gone from having about $1000 to my name (net worth of about negative $36,000) to today where my net worth (emergency fund plus retirement accounts minus remaining student loans) is approximately $24,000. I’ve paid off $29,000 and saved $32,000 in a year-and-a-half: a total of $61,000.
 
How did I do it? I didn’t live like a pauper, but I did and do live frugally. I didn’t do anything that any of you haven’t heard before. I have no secret that hasn’t been revealed on personal finance blogs, but nonetheless, here’s the laundry list of how I’ve tackled my debt and built my savings:

I set goals! Before I began working, I set up my budget and set stretch goals for each month on what I could save/pay off.

I paid myself first and automated my finances. I immediately set up my 401(k) with my company. I set my contribution rate to 10% and didn’t concern myself with company match whatsoever. I figured if I never knew what it was like to have that 10% in my paycheck, I’d never miss it.

I also took a couple hundred bucks (it adjusted over time so there isn’t an exact figure to put here) from each paycheck and immediately moved it over to an ING Savings Account that I set up to build my Emergency Fund. Finally, I set up a Roth IRA where any excess cash could go at the end of each month.

I got a roommate. I wanted to live in a nice, safe area with a pool and a gym. It didn’t have to be the Ritz but I wanted it to be a place I was happy to call home. After looking at the prices of such places, I knew to accomplish my financial goals, I was going to need to get a two-bedroom and split the rent. I found a great roommate and split everything down the middle with them. This kept my rent and utility bills far under the 33% suggested rate. (I paid approximately $650 in rent for those of you who like exact numbers.)

I negotiated on all utilities and kept them to a minimum. I didn’t get a home phone number; my cell phone was all I needed. I had regular cable (no fancy movie channels) and regular internet through a bundle package. I negotiated these rates to the absolute minimum offered and when they tried to raise them, I called the cable company and told them their services were not worth that amount and that I would like to cancel. It was easy and fast and worked like a charm.

I kept the heat and A/C on at limited levels. If it was hot, I used a ceiling fan rather than pump A/C through the whole house. I opened the windows and let the breeze cool off the house. When it was cold, I used heat but also wore socks, sweatpants and a sweatshirt so that I could be warm without making my house a sauna. I used a drying rack as much as possible to save on dryer costs. It also helps keep your clothes from wearing out — an added bonus!

I learned the art of couponing at the grocery store and taught myself how to cook. Every Sunday, I faithfully clipped coupons and used sites like Coupon Mom or Frugal in Virginia to help me match coupons to sales to get the lowest prices possible.  This seemed daunting at first but quickly became a ten to fifteen minute routine which often saved great deals of money

I didn’t buy pre-made food: I cooked from scratch. I found this was cheaper and far healthier! All Recipes was a great and free resource so that I didn’t get bored with the same old meals.

I bought produce that was in season so I could still get fresh fruits and veggies.  I also stuck with apples, bananas, and pears instead of their more expensive berry counterparts. I ate vegetarian a few meals each week.  I didn’t completely take meat out of the equation but did limit my intake of it. I also grew my own. I couldn’t have a full garden but I did grow tomatoes on the back terrace. 

I didn’t eat out often! I probably ate out once to twice a week to keep up with my social calendar.  Instead of eating out, I invited friends to my house or met them for a pot-luck. Finally, I brought my lunch to work almost every day.

I didn’t buy Stuff. Don’t get me wrong: If I wanted something, I bought it. I just evaluated whether it was something I really needed or if that want was only temporary. Usually, I’d wait a week to see if I was still thinking about the item. When I did shop, I used coupons at the stores and Retail Me Not when shopping online. I also shopped the sale section first.

I used the library and swapped books/DVDs with friends. Instead of hitting Barnes and Nobles, I went to the library or did PaperBackSwap. I’ve never been left wanting for something good to read or watch.

I worked out and spent a lot of time hiking outside. Hiking and enjoying the great outdoors is healthy, fun and free! I also did live in a beautiful area for hiking so was very lucky in that regard.

I worked hard at my job. I busted booty to get bonuses and raises at work. I made sure that I gave 110% and that my bosses were happy with my work. Any extra money (bonuses, tax returns etc) went straight into loan repayment after a small celebratory dinner of some kind.

I made side money.  This also went straight into loan repayment. I used eBay to sell items I didn’t want/need anymore. I sold books and DVDs that I no longer wanted on Amazon. I did Swagbucks. It’s amazing how easy it is to get those $5 Amazon gift cards. It’s essentially free money!

Basically, I just didn’t let myself fall victim to lifestyle inflation. I didn’t need to have the latest Coach purse or a brand new car. I took good care of what I did have and bought nice things without the ridiculous price tags. I didn’t blow money at the bar, and I built my social calendar on less expensive outings with friends (picnics, free concerts, dinner parties etc).  

I turned my debt repayment into a game where it was fun to send in that big payment and I turned any shopping into a quest for a great deal. It won’t work for everyone, but it worked for me!

Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are. Photo by fotographix.ca.

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Related Articles at Get Rich Slowly:

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To be honest, we’ve done nearly nothing in the yard since October. Literally. We haven’t found time to cut back the grapes, prune the fruit trees, or train the berry vines. I’m not sure that Kris even plans to place a seed order, although the seed catalogs have been pouring in.

Fans of our garden project have been e-mailing us to ask for updates. I’m afraid y’all will be a bit disappointed in 2010. We’ll still be growing a garden, but we’ve made a conscious decision to make it simpler and smaller, and we’re going to take a year off from tracking our “income” and expenses. We have a lot of travel planned, which would make things difficult. (Though I guess we could teach our house-sitter how to track the harvest.)

The berries and fruit trees will do their own things with little effort from us, and instead of starting most of our seeds inside this year, Kris will be buying potted starts at the Master Gardener show. Last year, she noticed growers are now carrying many of the heirloom tomato varieties she prefers. This year’s garden will focus on fresh salsa and salad ingredients (tomatoes, basil, jalapenos, basil, onions, a few cukes, zucchini, peas, green beans and beets).

But while we won’t be tracking the financial side of things in 2010, we do intend to give brief updates throughout the year. We’ll give you photos of our young and maturing garden, crow about our first berry harvest, and share recipes to go along with our late summer bounty of vegetables.

And, as always, we love to hear what you are doing in your own gardens. If any of you are tracking your profits and losses, feel free to share throughout the growing season.

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Related Articles at Get Rich Slowly:

• The Year-Long GRS Project: How Much Does a Garden Really Save?
• The GRS Garden Project: June 2009 Update
• The GRS Garden Project: September 2009 Update
• The GRS Garden Project: March Update
• The GRS Garden Project: November Update

For example, my good friend Mac from Get Fit Slowly (where I may eventually write again some day), came to me this week with a question about credit cards. In fact, it’s a question I get surprisingly often: He wants to know how to find the best credit card for his needs. To find out, I tapped a couple of the experts in my professional network.

First, let’s look at Mac’s situation:

My wife and I are long-time users of the Alaska Airlines Platinum Credit Card. We use this card to earn frequent-flier miles, and since we primarily fly up and down the West Coast to visit family with our children, Alaska seemed like the way to go. The card also has a few other perks:

• One frequent-flier mile for every dollar spent.
• Two frequent-flier miles for every dollar spent on alaska airline flights.
• One companion ticket each year (buy one full-price ticket, get a second for $99).

I have no idea what the interest rate is because we pay off the card every month without fail. Neither of us likes to carry cash, so we basically use this card for everything we can. (We even use it for small purchases like morning coffees and video rentals.)

Recently, I’ve been unhappy with some changes they’ve made to the card benefits. So, I’m looking into switching cards and was wondering if you could offer some advice. I’m looking for a rewards based card for folks who pay off their balance each month. Our rewards would be used for travel, so I’d like the best travel rewards primarily, but I’m not opposed to other rewards programs such as merchandise rewards, etc.

A few of the cards I’ve looked at but haven’t pulled the trigger on are the American Express Platinum Card and the Chase Sapphire Card. I’m not sure which of these to choose from or if there are better options out there. What are your thoughts?

My thoughts are that looking at credit card offers makes my mind numb. I’d rather go to the dentist!

As most of you know, I carry just one credit card (a Capital One No-Hassle Cash Rewards card), and sometimes I think I should get rid of even that. But I really do like getting one percent cash back on the things I buy, so I’ve kept the card. (And I use it — a lot.)

If I were to start looking for a new card, I’d start by checking two sites: Index Credit Cards and Card Ratings. There are other credit-card sites out there, but these are the two I know best. Both have huge lists of cards that you can sort through to find the one that fits your needs.

In fact, because I know so little about this subject, I contacted both sites to ask if they could give feedback on Mac’s predicament. Here’s what Curtis Arnold from Card Ratings had to say:

Many of our readers share Mac’s frustration. I personally have never been a big fan of airline reward cards, but particularly in this tough credit environment; my personal mantra is that cash is king.

I would challenge Mac to take a look at our recent press release regarding the best credit cards of 2009. There are a couple of cash rebate credit cards that give you 2% cash back on every purchase and several cards that give you 5% back on certain types of purchase. If you do the math and compare the rebate percentage of these cards with your current one, I would be shocked if your current card even comes close.

Adam from Index Credit Cards suggested two options, depending on how important the travel rewards are to Mac and his wife:

First is the Citi PremierPass Card, which pays you points on purchases as well as on actual travel miles flown. There’s a no-annual-fee version of this card as well as a card that charges $75 annually but offers a more generous rewards package. Which you choose would obviously depend on how often you use your card and also how often you would buy airline tickets with it. You can use the points from this card for travel across airlines or for other rewards from Citi’s ThankYou rewards program.

Second is American Express Blue Cash. Based on Mac’s description of his card use habits, I’m assuming he puts a lot of expenses on his card every year. This card is a cash rebate card that works best the more you spend with it. At first you earn a modest 1% cash back on gas and grocery purchases and 0.5% on other purchases, but after you’ve spent $6,500 with the card, those reward percentages go up to 5% on gas and groceries and 1.25% everywhere else, with no limit on your rewards. Think hard about your expenses, though, because if you won’t spend significantly more than $6,500 per year, you’re better off going with a straight cash back card without this tiered formula.

See why I went out to the experts? This is all gibberish to me. Maybe I’m hurting myself with my ignorance, but I’m content with my Capital One No-Hassle Cash Rewards card. It gives me one percent cash back on everything I buy. That’s it. No muss, no fuss. The whole thought of having to track travel miles makes me tense! (Seriously.)

Anyhow, what are your thoughts? Where do you go to get info on current credit card offers? What should Mac look for in a card? Can you recommend any options for a family that doesn’t carry a balance, but uses their card for most of the purchases they make?

This website may receive payment by the companies mentioned in this blog.

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Related Articles at Get Rich Slowly:

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Social psychologists have found that people tend to choose their significant other based on similarities—similar attitudes, values, and even similar names.

Those findings would seem to suggest that people with similar spending habits would be attracted to each other, too. But a working paper published last year found the opposite to be true. In “Fatal (Fiscal) Attraction,” Rick, Small, and Finkel, professors of the Wharton School of Finance and Northwestern University, found that while most singles say that their ideal mate would have similar spending habits, when it comes to feelings toward spending, opposites attract.

The spendthrift-tightwad spectrum
Rick, Small, and Finkel used a survey to establish where study participants fell on a spendthrift-tightwad spectrum. According to the paper, each of us feel a degree of “pain of paying.” Spendthrifts feel too little pain, causing them to spend more than they ideally would want. Tightwads experience too much pain, causing them to enjoy their money less than they would like. It is important to note that the survey was created so that those on the extreme ends of the spectrum were not simply savers or spenders, but also were the most unhappy with their emotions toward spending.

Opposites attract
If people choose their spouse based on similar attitudes and values, then why would a tightwad fall for a spendthrift, especially if her ideal mate is a tightwad, too?

It turns out that while we look for similar traits in most cases, it depends on whether a person likes or dislikes a trait in themselves. The study found that the more unhappy someone is about their own emotions toward spending, the more attracted that person will be to his or her financial opposite. Deep down, a tightwad might dislike how crazy it makes her to spend $10 to see a movie with her friends, even though she can easily afford it and wants to go. Because she finds it painful to spend and dislikes that about herself, she’s likely to fall for a guy who spends more liberally.

Bad news for marriages
Unfortunately, the attraction to one’s fiscal opposite doesn’t bode well for the marriage. The study found that the degree to which spouses differ in the tightwad-spendthrift spectrum is negatively related with marital bliss. Rick, Small, and Finkel wrote:

Husband/wife differences in emotional reactions toward spending are associated with greater financial conflict in the marriage, which is in turn associated with diminished marital well-being.

And while there’s no scientific proof that money is the root of most divorces, money does create conflict in 84 percent of marriages, according to the findings of a 2007 Money magazine survey.

How to adapt

They strained their chests against enormous weights, and with mad howls rolled them at one another. Then in haste they rolled them back, one party shouting out: “Why do you hoard?” and the other: “Why do you waste?”

Rick, Small, and Finkel start their paper with the above quote from Dante’s Inferno, and the results of the study make a marriage of opposites sound doomed from the start. But marriages of tightwads and spendthrifts can thrive if they can manage to find common ground.

• First, accept that your spouse isn’t likely to make drastic changes. Also, if you were attracted to their relationship with money, even on some subconscious level, you probably don’t want them to do a 180 anyway.
• Find balance. According to the study, one possible explanation for why tightwads and spendthrifts seek their opposites is a desire for balance. They want someone who can help them overcome their emotional reactions toward spending. In other words, a spendthrift may seek out a tightwad because he or she thinks the tightwad might help reign in the splurges. Before you wish your spouse saved more or could loosen the purse straps, consider whether their habits have changed your emotions toward spending for the better.
• Stay on the same side. It’s easy to see someone with opposing views as your adversary, but you’ll be more productive if you approach your situation as a team. I want to spend thousands on a luxury vacation, you want to spend a few hundred to stay at a nearby B&B. Is there a solution that would make both of us happy? Find common goals and work from there.

My own experience has been that differing traits can be a positive thing. While neither my husband nor I spend excessively or save compulsively, he is much more easy-going in general, whereas I fretted for months over buying a computer I needed for my freelance work. (I couldn’t actually complete the online order for my laptop until he was sitting next to me. I need moral support for big-ticket items.) I appreciate the way his influence has helped me lighten up, yet it was my geeky love of spreadsheets and math that helped us develop a concrete plan to pay off our debt and build up our savings. Differences can help you grow as a person.

Are any of you a spendthrift in a relationship with a tightwad, or vice versa? How do you successfully deal with your different approaches to money?

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Advantages to renting
In 2007, Tim Ellis shared a guest post with GRS readers about the realities of home ownership. “It’s a real shame when people are driven to get into the housing market because of misplaced notions of imagined financial benefits,” Ellis wrote at the time. I didn’t pay much attention (because I was in London!), but I now believe he’s right. Yes, homeownership makes sense for some people. But there’s no shame in renting; in fact, for many folks, that’s the way to go.

The housing industry is huge, and it spends a lot of time propagating certain myths about homeownership, myths like:

• If you rent, you’re throwing your money away.
• Owning your home is a forced savings plan.
• Home ownership is a path to wealth.

My own research shows that over the long term, housing prices (and gold prices) barely outpace inflation. In fact, since 1926, home prices (and gold prices) have returned about one percent above the inflation rate. That’s hardly a good investment. (Stocks have averaged about 6.8% above inflation!)

There’s no question that buying a house makes sense for some folks, but mainly for non-financial reasons. Owning a home gives you stability (you’re not at the mercy of a landlord) and freedom (you can do what you want with the place). But financially, it’s not usually the best bet. (It’s true that you build equity, but you do so at a very high cost.)

In an editorial in the June 2007 issue of Kiplinger’s Personal Finance, Knight Kiplinger wrote, “It often costs less to rent. The annual cost of owning a property, be it a house or a condo, is usually greater than the cost of renting, after taxes.” And there are other advantages to renting.

For one, you have flexibility; you can move at a moment’s notice. For another, you’re not responsible when things go wrong. If the shower starts leaking before you leave for your vacation in Duluth, you don’t have to worry about it — you call in the landlord.

Still, this is a personal finance blog, so let’s look at some ways to examine the decision to rent or buy in a financial light.

Renting by the numbers
One way to tell whether it’s better to rent or buy is by checking out the price-to-rent ratio (or P/R ratio). This number gives you a rough idea whether homes in your area are fairly priced. Figuring a P/R ratio isn’t too tough. All you need to do is:

1. Find two similar houses (or condos or apartments), one for sale and one for rent.
2. Divide the sale price of the one place by the annual rent for the other. The resulting number is the P/R ratio.

For example, say you find a $200,000 house for sale in a nice neighborhood. You find a similar house on the next block for rent for $1,000 per month (which works out to $12,000 per year). Dividing $200,000 by $12,000, you get a P/R ratio of 16.7.

But what does this number mean? Writing in The New York Times, David Leonhardt says, “A rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting.” That’s \a little opaque, but what Leonhardt means is that the higher the P/R ratio, the more it makes sense to rent — and the less it makes sense to buy.

During the housing bubble, the national P/R ratio came close to 20 (and went far above that in some cities). In other words, you could rent a $200,000 house for $10,000 a year (or just over $800 per month), which is a pretty good deal.

The normal range nationwide is between 10 and 14 (meaning it would cost between $1200 and $1600 to rent a $200,000 house). During the 1990s, just before the housing bubble, the national P/R ratio was usually between 14 and 15 (about $1100 to $1200 to rent a $200,000 house).

Another way to gauge the cost of housing is to compare it to your family’s income. From 1984 to 2000, median home prices were about 2.8 times the median yearly family income. (In other words, the typical house cost about three times what a family earned in a year.) During the early 1970s, home prices were about 2.3 times median family income. During the housing bubble, this ratio jumped to 4.2.

These numbers may not mean a whole lot on their own, but they can give you some sort of idea whether housing is overpriced in your area. Plus, it seems safe to assume based on past figures that most families can comfortably afford a home that costs about 2.5x their annual income. (So, if your family makes $80,000 a year, you can afford our theoretical $200,000 house.)

Home sweet home
Despite the results of my research, I’m not about to sell our house. The thing is, there’s more to this decision than just the numbers. As I always say, money is more about mind than it is about math. Our financial decisions have more to do with our psychology than with the numbers.

Kris and I are happy in our drafty old house. We love the vast yard that gives us space to grow a vegetable garden, blackberry canes, and fruit trees. We love the uneven floors, the outdated kitchen (everything’s from 1950!), and the zillions of windows. It may not make the most financial sense, but there’s more to happiness than just money.

We’re not about to move, but you know what? If I had it to do again, I’d never buy this house. If we had stayed where we were, we’d now have just four years left on our mortgage. But knowing what I know now, I might even be inclined to rent. For most folks, renting isn’t a bad option.

Note: This post contains bits and pieces that have been discarded (and some that haven’t!) from Your Money: The Missing Manual. My final manuscript was much, much too long, and we’re going to have to cut a lot of stuff. This makes me sad, but it’s not a complete loss. I’ll be able to share some of it here at GRS!

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• links for 2006-11-08
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Talking about money is one of the great taboos of our culture. I know more about my friends’ sex lives than I do about their bank statements. Many of us find it hard to discuss finances under the best circumstances. When we’re stressed about money, we tend to clam up even more.

If you’re married (or living with a partner), you don’t have that luxury. Financial success is not a private affair. You need to talk to your spouse or partner about your money. This is vital for both the health of your relationship and the health of your bank balance.

You don’t have to take my word for this. This week, I had the pleasure of interviewing Lou Scatigna, a.k.a. The Financial Physician. An entire chapter of his new book is devoted to “lack of spousal communication”.

How big a problem is failing to talk to your spouse about money? “If you have money conflict, your marriage is doomed,” Scatigna says.

OUCH! My husband and I have our share of differences when it comes to handling our dollars, and I’d like to stay married. In addition to genuinely liking the guy I married, divorce is expensive.

The monthly family finance meeting
Scatigna’s prescription for this ailment? Have a monthly family finance meeting. Scatigna says its vital for both partners to sit down together once a month and pay all their bills together. Even if you’ve automated many of your monthly bills with an electronic bill pay system, you need to be looking at them each month. Doing this together has a lot of advantages:

• You both know the real cost of living in your household. When only one partner handles the finances, the other can be genuinely unaware of how much credit card debt your family is carrying, or how high the winter heating bills are. This is information you both need to have.
• You can hold each other accountable to shared financial goals. It’s harder to justify an extra latte when you know you have to own up to your spending at the end of the month.
• Working together can make it fun. Instead of a tiresome chore, handling the finances can become something you do together. Finding ways to save can become something of a game, and as you get better at it you’ll both reap the rewards.
• Having both partners fully up to speed on the household management protects you both from being left in the lurch should the other suddenly not be available. People die or suffer sudden illnesses, and the business of life goes on. You don’t want to have to learn how to pay your home’s monthly bills while you’re handling a family crisis.

I’m a long-standing believer in the theory of a monthly household finance meeting, but I also know it’s a lot harder to practice than it is to theorize about. Scatigna says it’s the rare couple that actually sits down and talks about finances every month.

Making the time to talk
Managing finances together sounds simple, but there are a lot of stumbling blocks. People are busy. You’ve got a career, a family, maybe kids of your own, plus friends and hobbies. Spending an evening a month on a boring chore can seem like a lot to ask.

Plus, money pushes a lot of buttons for people. It brings up fear, anxiety, guilt, anger. A lot of negative emotions most of us like to avoid. So we avoid talking about money with our spouses until it explodes in a financial disaster or a relationship meltdown.

Even when we do sit down to talk, it can be hard to make good use of the time. Should you discuss long-term goals or just go over this month’s bills? How can you avoid spiraling into a fight?

My husband and I have been in a groove with this lately. To get started, we sat down and worked out a master list of financial goals. We also made a huge spreadsheet of our fixed and flexible expenses. We use these as guides when we’re looking at how cash flowed in and out during the month.

Here’s a list of do’s and don’ts that are working for us:

• Don’t spring a big money talk on your spouse by surprise.

While cooking dinner or getting ready for work is not the time to have this conversation.

• Don’t talk about it when you’re already angry. Just got a surprise overdue notice for that parking ticket your honey forgot to tell you about? Don’t call her up at work to complain about it.
• Don’t talk about it after midnight. My husband and I tend to leave money talks for the end of the day, and wind up trying to deal with it when we’re both exhausted and edgy.
• Do set a specific time to sit down and discuss your finances. If you expect the conversation to be difficult, try scheduling two dates at once: one to talk about money, and another one a few days later to do something fun you both enjoy.
• Do have an agenda. We’ve wasted many household money talks staring at each other over a pile of bills and not knowing what to do. Now we have a pretty clear routine: go over each spending category on our spreadsheet, look at how much we spent, figure out if we can cut back on it at all in the coming month, and check in about how that fits into our big-picture money goals.
• Do be gentle with each other. Scatigna warns that in households where one spouse pays the bills, that partner can become resentful for having to carry all the weight. That was certainly the case in our house, but once I learned to control my temper about it, my husband became much more willing to come to the table and get involved.

Talking about money really has eased tensions between us. It’s also helped with our cash flow. We’re on the same page a lot more often. We’re both paying more attention to the kinds of details that used to cost us a lot in mistakes or careless spending. We feel like a real team, and we’re actually saving money.

Previously at Get Rich Slowly, Sierra told us about sweating the big stuff, described the pitfalls of buying in bulk, and made an argument for a secular tithe. As you might guess, I like her writing.

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Recently I’ve begun to read a different kind of money book in my spare time. I’ve discovered the joy of classic biographies and success manuals, especially those written by (or about) wealthy and/or thrifty men. When I read about Benjamin Franklin or Warren Buffett or J.C. Penney, I learn a lot — not just about money, but about how to be a better man.

Here are twelve of the most important lessons that these books, written by and about great men of years gone by, have taught me.

Be Tenacious

More than any other, one lesson stands out from the books I’ve read: Never give up. If you have a goal or a dream, pursue it. If there’s a cause that you truly believe in, then fight for it. That’s not to say that you should doggedly chase greed or gluttony, but that you should do your best to achieve those things that are important to you. Great men struggle through daunting obstacles to reach their destinations. In everything that you do, do your best. And remember: The road to wealth is paved with goals.

Exercise Self-Control

Benjamin Franklin famously attempted to codify his quest for self-control. As Brett wrote at The Art of Manliness, Franklin committed himself to thirteen virtues, and he developed a system for tracking how disciplined he was in his daily pursuit of these ideals. There’s nothing wrong with an occasional indulgence. But when the indulgence becomes a habit — or worse, a vice — this can affect your life. Even destroy it. If you have habits that prevent you from fulfilling your potential, find a way to boost your self-control. (You might, for example, use Joe’s Goals to track your progress, much like Benjamin Franklin did.)

Do the Right Thing

Have a code of honor, and live by it. Your code of honor might come from your faith, or from your education, or from your family. Whatever the source, live by these values. Life is filled with temptations. The more you accomplish, the more people will tempt you with offers for quick gains or passing pleasures. Many men succumb to these, but those who do rarely achieve what they might have if they’d stuck to their principles. The books I’ve read are filled with stories of men who have resisted the urge to compromise, and who believe that this has been a key to their success. Don’t cheat. Be honest. Work hard. And embrace the golden rule.

Embrace The Golden Rule

James Cash Penney — the man behind the J.C. Penney chain of department stores — believed that success could be measured by how a man treated others. In his book, Fifty Years with the Golden Rule, Penney describes his life-long adherence to this maxim: “Do unto others as you would have them do unto you.” Other great men believed the same. They believed that their fortunes came not from pursuing money itself, but by producing something of value to others. But this principle also holds true outside of business. In your dealings with your friends, your family, and with strangers, treat others as you would like to be treated. Doing so builds social capital, strengthening the fiber of the community.

Pay Yourself First

Another common thread in most of these books — and in personal-finance classics like The Richest Man in Babylon — is the importance of saving. “Pay yourself first,” the old adage goes, and it’s great advice. If you will set aside ten or twenty per cent of all that you earn, your fortune will grow far beyond that of your peers. Some of this money should be invested in a manner that makes you comfortable. (You should learn about the concepts of asset allocation and diversification, if you haven’t already.) But some of your money should also be set aside in a high-interest savings account to act as an emergency fund. When you save — when you pay yourself first — you are using the strength of your youth to insure your uncertain tomorrow.

Avoid Debt

Debt is slavery. When you owe money to another man, you are obligated to work for his benefit, not yours. Many young men struggle with debt — I did so myself. But those who are not able to overcome their spending habits are likely to find themselves always poor. When you pay interest to someone else, you cannot earn interest for yourself. When you’re in debt, your options are limited. You cannot choose, for example, to take a month off to travel across the country with a friend. You cannot quit a job you hate. If you did, how would your bills get paid? To be sure, a certain amount of debt is useful in business, but make it a policy in your personal life to never borrow for something that will decrease in value. (And if you’re already behind, make it a priority to get out of debt as soon as possible.)

Keep Well

Your health is your greatest asset. If you lack health, you cannot work, and cannot produce an income. Health allows you to engage in productive activities, at work and at play. It allows you to enjoy the company of your friends and family. And it allows you to live with vigor. Guard your health. Do not neglect your body. Eat well. Exercise regularly. If you drink or smoke, do so in moderation. You will not live forever, but with some care and foresight, you may get a little closer!

Do Not Covet

It never pays to compare yourself to others. For one, you can find yourself longing to own the same things they do. Your best friend buys a new Ford Mustang, and suddenly you want one too. The guys from work go out for drinks on Friday evening, but you’re broke — the temptation to join in, to have what others have, can be unbearable. Focus only on yourself and how the things you own and do relate to your goals. Don’t be jealous of others. (This is one message in the famous essay, “Acres of Diamonds”: Instead of looking elsewhere for wealth, look at your own life.)

Live Modestly

This is the flip side to “Do Not Covet”. Just as you should not allow the behavior of your friends to influence your spending decisions, so too be conscious of your influence on them. If you have money, don’t flaunt it. And if you don’t have money, don’t pretend that you do. It’s fine (even good) to buy quality products, but don’t be flashy. Live simply and well.

Practice Patience

Too many men want to “get rich quick.” They’re on the lookout for fast money. They also want to lose weight now, to be a great golfer now, to be in management now. This obsession with “now” is a problem. In his new book Outliers, Malcolm Gladwell writes that the difference between those who succeed and those who don’t is 10,000 hours. That is, those who achieve mastery have patiently practiced their craft for at least 10,000 hours — the equivalent of five years of full-time work. When people ask me why Get Rich Slowly is so successful, one of my responses is that I’ve worked at it 60+ hours a week for the past four years. Practice may not “make perfect,” but it certainly breeds success.

Give Generously

I wasn’t raised in a culture of giving. It’s only something I’m beginning to learn in middle age. But as I read about the choices of men who have come before me, it’s clear that they have derived satisfaction (and done a lot of good) by giving generously — not just of money, but also of time and knowledge. Do not hoard the things you have. Share them so that others might profit, too.

Learn from the Average Joe
Over the past few months, I’ve enjoyed reading the real-life stories of how great men became great. But I’ve also found it enlightening to read about the experiences of the average everyday guy — fellows like you and me.

One book I strongly recommend (especially considering the state of the economy) is Hard Times by Studs Terkel. Hard Times is an oral history of the Great Depression. Terkel interviewed scores of men and women about their experiences during the 1930s. Their stories are amazing, and they offer great insight about how we can live better lives today.

Go forth, my friends, and do great things.

Note: This article originally appeared at The Art of Manliness in a slightly different format. April and I plan to do a follow-up that highlights great lessons from great women. But give us time to research it! (And if you have suggestions about books/pamphlets we should read for this project, let us know.)

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For years I’d heard the rental horror stories, about tenants who refused to pay and landlords who couldn’t get rid of them, or tenants who trash their units so badly that the landlord gives up on renting altogether.

I’m sure these things can and do happen. But are they the norm? My wife and I had always wanted to own rental property, but stories like these made us nervous. Maybe rentals weren’t really meant for average folks like us.

Plus, there was the question of cost. My wife and I only make $60,000 between the two of us. Could we really afford to own a rental property? We’d always thought of rental properties as something for the rich. But maybe we had it backwards: Maybe the rich were the only ones smart enough to know that rental properties were good investments. Maybe we need to think like the rich do.

Doing our homework
With our limited income, we felt like we didn’t have the money to put in stocks. Plus, we thought that maybe the income from a rental unit would help us build a nest egg that wasn’t subject to the whims of the stock market. And we really liked the idea of having somebody else (the renters) setting aside money for us every month.

First, we did some homework. While the bank pre-approved us for a loan, we talked with our insurance company, local real-estate agents, and local landlords. This research gave us enough knowledge to go out and look.

We found several houses we liked, but most of them were too expensive. We couldn’t rent them out for enough to cover expenses. It seemed the local investors (rich people) were working closely with the real-estate agents. Agents get thousands of dollars in commissions through the investors, so my one purchase wasn’t anything that interested them. The investors are their bread and butter, so they got first crack at the good deals. I got the overpriced leftovers. My wife and I almost gave up. We couldn’t get a real-estate agent to work with us; we just couldn’t compete with the investors.

Evening the score
Then one day, there was an auction in our area. I went to see how much the house would go for. It went cheap! I’d been looking for long enough to know that if the house had been listed with an agent, it would have sold for a lot more. I wondered if this were a way to even the score.

We asked around and discovered the local investors get so many houses through the real-estate agents that they don’t bother going to auctions. They consider it a waste of their time.

Auctions are scary places to buy houses. There are no contingencies, no home inspections, and everything is final when the auction is done. You have to be sure of yourself when you place that bid. These things alone make it hard for the normal person to buy a home at auction.

The next few months we went to every auction around. We learned how to bid at an auction, and how much houses were going for. We knew we needed $5,000 for a down payment on the day of the purchase, and financing for the rest within 30 days. Because the houses at auction were selling for about 10% less than on the open market, this was our chance to get a good deal.

After waiting for a while, we found a house we liked that was going to be sold at auction. It was in a nice neighborhood. It needed some work, but we knew we could do most of that ourselves. We ran the numbers through our bank and found out interest rates had dropped to record lows because of the mortgage crisis. There seemed to be a perfect storm of low interest rates and people losing faith in real-estate. We felt that this was our chance.

Taking a chance
When we got to the auction, we were scared to death. We’d been to other auctions before, but this one was different. We knew this was the house for us. We wanted it more than any other house we’d looked at.

We arrived well armed. We’d done our math. We knew just how much comparable houses were getting for rent, what the taxes were, how much insurance would cost, and how much we could bid and still come out ahead.

As you can probably guess, in the end we were the winning bidders. We’d bought our first rental property. Now the real work began. We spent two solid weeks doing nothing but working on the house. When we were done, it looked great. We found a renter through word of mouth, signed a one-year lease, and now welcome the challenge of being landlords.

The property has been rented out for about six months now, and we’re very glad we bought the house. Our tenants have been early with the rent every month, and so far things are going smoothly. We did have some furnace problems and a problem with one of the doors, but those were minor. We knew there’d be problems, and we’ve dealt with them as we would have with our own house. It’s nothing the average person couldn’t handle.

Buyer beware?
Owning investment property isn’t for everyone. As with other investments, there are risks involved. But we felt that rental property would give us another form of income to help us on our financial journey. We know it’s not going to give us a quick payback like picking the right stock might. But we’re not looking to get rich quickly. We’re looking to build a nice solid nest egg, and rental property is just a part of that.

Is rental property for the average joe? We think so. What do you think? Do you own rentals? What advice do you have for others who might want to try this to make a little extra money?

Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are.

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Here’s a tiny example.

Taking a page out of Trent’s book, Kris has been on a crock pot kick lately. This morning she tried a new swiss steak recipe. “Can you do me a favor?” she asked before leaving for work. “Can you make some mashed potatoes to go with dinner?”

“Of course!” I said. I make awesome mashed potatoes.

Well, as the day progressed, I became less enthused about the whole potato mashing process. As you might guess, it had something to do with The Book. Though I finished the manuscript last Friday, that’s not the end of the work. In fact, I’ve been buried in editing ever since.

This morning, I started editing the chapter on housing. I expected it take only four hours. Instead, it took seven. Next I rushed to start editing the chapter on taxes and insurance, but discovered it’s packed with problems that need to be fixed. I turned instead to the chapter on debt. More problems.

“I don’t have time to mash potatoes,” I thought. “I have to edit.”

And though I know this sounds strange, it was then that I had an epiphany. All these months and years, I’ve written about the notion of Money as a Tool, and I’ve sort of understood it intellectually. But it wasn’t until this moment that I actually knew what the concept meant: It meant I was stopping by the supermarket to pick up some mashed potatoes!

Money as a Tool
It’s difficult to describe the relationship I used to have with money. It seemed like the ultimate objective. It was what I wanted. Yet I didn’t do anything to earn or save the stuff. Instead, I’d spend it without thinking. When I spent more than I could afford to buy comics and videogames, I got a little thrill. It felt like I was somehow cheating the system.

I know now that the only one I was cheating was me. It took me years to pay off the debt I racked up by “cheating”. Now I really do see money as a tool. Monetary wealth isn’t the goal. Happiness is the goal. Doing the things that make life meaningful for me — reading, writing, spending time with friends — is the goal. Money is useful because it can help me do these things. Used wisely:

• Money buys time. I think we all understand this abstractly. Sometimes, as in the silly case of my mashed potatoes, money almost literally buys time, but it’s usually more subtle than this. When I think of my retirement savings, I think that every dollar buys me a certain amount of future time with which I can do as I wish.
• Money helps you meet your goals. It helps you do the things that need to get done. To use another example from my book-writing process, I’ve paid to buy books and journal articles to support my research. As I begin to focus on fitness, there’s no question that money helps me better pursue my objectives. If I don’t spend on Stuff and nonsense, I can use money to pursue my priorities.
• Money makes life easier. This one’s obvious I suppose, but you can use money to take away some of the drudgery in life. You own a car so you don’t have to walk or ride the bus. You might pay the neighbor kid to mow the lawn. Or, in my case, I rent office space so I can have a “fortress of solitude” in which to write.

For me, the transition from using money for instant gratification to using it for bigger purposes has been a slow one. It took a long time to even realize how stupid I was being. After I became financially self-aware, it took a few years more to break my old habits, though I finally seem to be gaining some degree of self-control. (As I mentioned last week, I haven’t used money to buy anything on impulse yet in 2010. That amazes me.)

And I’ve reached a place in my life where I can buy mashed potatoes from the grocery store and not feel an ounce of guilt because I know I’m practicing conscious spending.

$8 Per Hour
Normally, I think of supermarket mashed potatoes as a sort of rip-off. For $3.99, you get a pound-and-a-half of mediocre spuds. For four bucks, I could make twenty pounds of home-made mashed potatoes that taste much, much better. But was that $3.99 a rip-off today? Hell no! It was a bargain. That $3.99 bought me an extra 30 minutes to work on Your Money: The Missing Manual. To me, that’s cheap.

Of course, there’s just one problem: I didn’t actually use that 30 minutes to work on The Book. I used it to write this blog post instead. Ah well. Sometimes the things you build with your tools don’t turn out the way you’d planned…

Postscript: Kris and I have eaten dinner now. Her verdict? “These mashed potatoes are tasty,” she told me. (For the record, I was unimpressed.)

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Most people agree that a vacation is supposed to be relaxing, but planning for one can be just the opposite. Still, poor planning can cost money and time, causing headaches and frustration when you’re supposed to be getting away from it all.

Some people like to book a ticket and see where life takes them. Others prefer cruises or tours where the planning is taken care of for them. I prefer to plan my trips, researching and budgeting as much as I can while I’m at home to make the vacation as smooth as possible. If that sounds like the route for you, today I’m going to share my method, step-by-step, for budgeting and planning a vacation, including spreadsheets you download and customize.

This method is effective in planning trip logistics and budgets, laying out how to do the following:

• Estimate how much the trip will cost, allowing you to save sufficiently and not come back to a credit card debt slap in the face
• Efficiently plan your time, maximizing time spent doing fun stuff and minimizing time lost due to scheduling conflicts
• Easily keep important information at your fingertips to save money and time

This method saved me at least $375 on my last trip after a cabana in Mexico lost my reservation. Because I used this step-by-step system, I had documentation of my reservation and deposit, and the owner agreed to “make their friends leave” and accommodate me. (Things work a bit differently at Mexican beach cabanas.)

Stuff like that isn’t fun when you’re on vacation, so let’s avoid those hassles. Pick a destination, and start planning.

Choose a travel guidebook — or three
Most travelers find that there isn’t just one guide that covers all of their needs. Some books cover the logistics — where to stay and how to get around the city. Others might focus on history, culture, and the arts. Then there are some that are even more specific, like biking through the Netherlands or kayaking in New Zealand. Get one book that adequately covers the basics and at least one that covers your personal interests.

How to know if it’s guidebook love
Here’s what to consider when deciding which guidebooks to buy:

• Do the accommodations and restaurants fit your budget?
• Do you like the layout? Is it easy to find information?
• Does it have detailed maps?
• Does it cover your primary travel interests, such as history, culture, food, markets, safaris, ecotourism, farm stays, hiking, etc.?
• Does it make you feel even more excited about your trip?

If you plan to visit only one specific region or city, or if you just plan to spend the bulk of your time in one, consider a regional or city guide with more specialized information.

Guidebooks worth a look
If you aren’t sure where to start, here are a few guidebook series worth checking out:

• Rick Steves’ Europe Through the Back Door. Steves believes in making travelers “temporary Europeans.” From his book: “The more money you spend, the bigger the wall you build between yourself and the culture you traveled so far to visit. Stay in the small inns, eat in family-style restaurants, visit out-of-the-way places, rub elbows with the locals. You’ll spend less money and have a great time in the process.” The guidebooks include tons of practical information about where to sleep, eat, how to use public transit, budgeting, historical sites, maps, and more. Steves’ book got me from Rome to Pompeii, and I saved $50 over the route that others in our travel group used.

 

• Lonely Planet. Perfect for logistics, but you’ll need to supplement with another book for history and in-depth cultural information. This series is especially good for long-term travel, as is gives extensive information about where to stay, how to get around, etc.

 

• Frommer’s. Another series that advocates living like a local, but is very extensive in the destinations it covers. A book from this series helped me to rent a car and successfully drive around the Yucatan peninsula, use toll roads, and not get lost once.

 

• Fodor’s Guides. There are several series of Fodor’s travel books, each written for a different type of traveler. Fodor’s uses local writers to give readers the most accurate information and inside knowledge.

 

• Let’s Go. If you’re a student, or just on a student’s budget, this guidebook series is one to consider. Written by students, there’s information on all things cool and free.

Also check out Budget Travel for articles on your destination(s). I’ve found some great hotels written up in Budget Travel that were out-of-the-way and not as popular as some of the ones listed in the big guidebooks tend to become.

Basic planning
Once you have your travel resources, you’re ready to start planning and budgeting. Download and open my Vacation Budget and Itinerary Planner (1.2mb XLSX) and click on the Basic Plan tab. (If you have an older version of Excel, here’s a 1.0mb XLS file.)

• How many days do you have for this trip? Enter that number into the yellow box.
• Where do you want to go? List each city in the column to the left.
• How many days do you want to spend in each location? Enter those numbers into right column.

If the difference is negative, you need to earn some more vacation days or make some cuts to your itinerary. Don’t try to pack in too much. If you spend all of your time jetting from point A to point B, you won’t see as much. What is most important? Be sure to check your guide books to see how much time is recommended for each place.

Fill in the details
Now that you have a basic outline, use the Expense & Itinerary Planner page to plan your itinerary. First, fill in the dates. Next, list the following, step by step, in the Activity column:

• Transportation between points
• Accommodations
• Attractions

Use the guidebooks to estimate expenses for each item in the Activity section, and enter those into the Expense column. If I’m staying at one hotel for three nights, I typically list the expense just once on the first day I’m staying there, but you can list it on each day if you like.

You’ll need to search online for airfare and train estimates. For airfare, check out the big sites, like Kayak, but don’t forget to look at budget carriers, too. Fellow GRS staff writer Adam Baker wrote a great guide, 5 Little-Known Websites That Will Save You Time and Money When Booking Airfare Online. Adam writes, “In most cases, the cheapest fare will be found using a combination of sites depending on your specific travel plans.” Try lesser-known websites when searching for the lowest airfare.

For rail travel in Europe, Rick Steves provides a comprehensive guide to Eurail passes, including how they work, how to plan your trip, and cost comparisons. Include any mode of transportation you’ll use, whether it’s rental cars, buses, taxis, ferries, or elephants.

In the Notes column, include important details, such as hotels that only accept cash upon arrival, offer continental breakfast, or other important details.

Now use your books to estimate meal expenses (plus tips) under the Food section. I like to find budget hotels with complimentary breakfasts, which can reduce expenses a bit if the hotel comes at a good price. If the primary reason you’re going to Italy is to dine like royalty, however, by all means, add that in there. You can toast to me with your glass of Brunello.

If you like souvenirs, add a budget for that expense. Personally, my favorite souvenirs are photographs, which weigh no more than my digital camera and cost nothing. Add any other expenses in this section. For example, if you are renting a car, add in an estimate for gas.

State of the budget
You should have an estimated grand total for your trip. Is it in your budget? If you haven’t started saving for the trip, how many months until departure? Divide your trip cost by the number of months until you leave to find out how much you’ll need to save each month. If you can’t save that amount, reassess your trip plan or the departure date.

No reservations: Start booking your trip
You have a budget and an itinerary, and you’re ready to start making reservations. As you make reservations, enter whatever you’re paying now in the Pre-paid column, and the amount due on arrival (DOA) in the DOA column.

Fill in times associated with each activity where appropriate, especially for departures and appointments. You don’t need to schedule every minute of every day, only the activities with a time frame associated with them. For example, if a museum you want to visit closes at 1 p.m., that’s something to write on the itinerary. If you want to see a show that starts at 7 p.m., that’s another important detail to note.

Create your personalized travel guide
Gather the following items, in this order:

1. Budget and Itinerary Planner sheet

 

2. Torn-out, relevant pages from guide books (Tear up a book?! Yes. They are quickly outdated anyway, remember?)

 

3. A page with addresses, telephone numbers, and websites to each hotel, attraction, or transportation source, where applicable

 

4. Reservation receipts, confirmations, and e-mails

 

5. Photocopy of the passports of each person going on the trip
6. The 800 numbers for each credit card that will be used on the trip, in case you need to report one lost or stolen (Also, call your credit card companies to let them know when and where you are going, or your card might get frozen for unusual charges.)

 

7. One page with emergency numbers, such as the nearest U.S. consular office. U.S. embassies or consulates can provide assistance if you need it. Go to the U.S. Department of State to get contact information for the area(s) in which you will be traveling.

Take this stack of papers to a print shop and make a spiral-bound copy for each person traveling with you plus an extra copy to leave with a friend or family member.

It’s a bit of work upfront, but it saves you a lot of hassle on your vacation if you have an itinerary and important information at hand, and you won’t be shocked by a massive credit card bill when you come home. Plus, if you give a copy of your personalized travel guide to your mom, she might not nag you quite as much for going white-water rafting in Nepal.

J.D.’s note: Kris and I have recently become avid watchers of The Amazing Race. Between watching that show and reading April’s article, I’m dying to get out and see the world. To celebrate the completion of my book, we’ll soon be taking a trip to Belize, but I want to do even more!

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I don’t know about Get Rich Slowly readers, but I can tell you that the majority of Motley Fool readers are guys, and that’s true of most financial publications.

That men are more likely to be consumers of investment information could explain the gender gap in financial literacy — especially among older Americans — that some studies have uncovered. I don’t mean to demean the better-smelling sex; in fact, some studies have found women deliver better investment returns than men do. But the deficit in financial literacy is especially troubling given the other challenges women face in retirement planning. Some of these challenges are faced by all women, while others pose particular problems for women who are or were married, especially if they put their careers on hold to raise a family.

The Troubling Statistics
Here are some stats to put it in perspective:

• Women, on average, earn 76% of what men earn, resulting in an average lifetime earnings differential of $250,000.
• Women leave the workforce for an average of 12 years to raise children or care for relatives, resulting in a loss of $550,000 in wages over their lifetimes.
• The average woman lives five years longer than the average man. Sounds good, but it means women have to stretch their retirement savings longer.
• Some of the biggest health-care costs are incurred in the year prior to death, which reduces financial resources left to surviving family members. Those survivors are most likely to be women, since wives tend to outlive their husbands.
• Women of the baby boom generation are more likely to be divorced than women from other generations and to have fewer children to rely on in their old age.
• A couple must have been married 10 years before an ex can claim spousal Social Security benefits. But most divorces occur within the first seven years.

In addition, here are some sobering facts from the Center for Retirement Research:

• As employers drop defined-benefit plans (pensions) for defined-contribution plans (401(k)s), divorced women may suffer. According to the center’s director, Alicia Munnell, “Traditional pensions give wives an automatic claim on their spouse’s benefits, but 40l(k) plans usually do not.”
• Despite being an average of three years younger than their spouses, wives usually retire when their husbands do. This can cut short their careers, savings, and retirement benefits.
• Among single women 65 and older, 28.2% are considered poor or near poor, compared with 22.7% for non-married men and 8.1% for married people in the same age group.
• A married couple’s combined Social Security benefit is reduced by one-third to one-half when one spouse dies. Also, payments received from a defined-benefit pension might be reduced or eliminated.

What’s a Woman to Do?
The solution for all women — single, married, widowed, or divorced — is to take control of their financial futures. It stands to reason that since women live longer, they should consider retiring later. Postponing retirement can mean a larger nest egg and Social Security benefits. Note that Social Security benefits are based on your highest 35 years of earnings. If you worked fewer than 35 years, those no- and low-earning years might be used to calculate your benefit. By working a few more years, you can increase your benefit. Also, non-working spouses can contribute to a spousal IRA, allowing for more tax-advantaged savings.

For married couples, both spouses should be involved in the day-to-day management of the finances. If one person handles the finances and the other doesn’t want to take over after he or she becomes widowed, assemble a list of trusted advisors who could assume those duties.

Remember that a married person can receive a Social Security benefit based on his or her work record or their spouse’s work record, whichever is greater. Because of their lower lifetime earnings, approximately two-thirds of wives receive benefits based on their husband’s record. But if the husband applies for Social Security benefits early — and thus receives a reduced monthly payment — the survivor benefit will also be lower.

For this reason, husbands should consider postponing the application for Social Security benefits as long as possible. The same principle generally applies to defined-benefit pensions, so be sure to consider the benefit to the surviving spouse when you’re deciding when to receive your pension and in what form.

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When I was 23, I bought an eight-unit apartment building with no money down. And I walked away with $1,000 cash at closing! Sounds pretty fancy, right? Wrong.

It was one of the dumbest (and riskiest) moves I’ve made in my young life.

I escaped without a scratch, but it was due to an over-sized dose of sweat, tears, and luck. None of it was due to savvy investing skills.

The sound and the fury
I was 23 years old and had just earned my real-estate license the previous year. My first couple of months were spent buying and selling a few upper-end units for individual homeowners. The commissions were decent, but as a new Realtor my split with my company was high. To complicate the problem, I had financed my association, training, and union fees to get started. (This was before I had decided to cancel my credit cards.)

After several months, I began to work more in the booming foreclosure and short-sale markets that were plaguing central Indiana. Out-of-state lawyers, doctors, and other high-income earners (mostly from the West Coast) were swarming our local market.

They were buying up $30,000, $40,000, and $50,000 houses like they were toys — albeit over-priced, over-financed, and only half-functioning toys at best. With rents ranging from $400-$1000, they simply couldn’t resist what their spreadsheets were telling them the return would be. They bought many of the homes site unseen and used the first real-estate company that would sell to them.

We represented a lot of the banks that had no idea about the local market prices, nor the current condition of their properties (even after we told them several times). Well over half the deals fell through. Either the banks were too unrealistic to negotiate, or a closing would be interrupted by the discovery of a mystery lien, a second mortgage no one knew about, or some other problem with the title that we didn’t even know was possible!

It was harder work for lower commission, but there were hundreds upon hundreds of properties, which helped even out the paychecks from month to month.

Property management comes calling
After most of the out-of-town investors closed on their new rentals, they began searching for a company to manage/rent them. After several dozen requests for an affordable and trustworthy property management company (and no clear-cut option), we decided to start offering the service ourselves.

I joined forces with a broker who spent his time focusing on acquiring more leads for buying/selling. I set about figuring out how to actively manage and rent the vacant units (which almost always needed repairs first).

Since many of our clients were repeat customers already, they were ecstatic to have the option of having their properties managed by us in-house. Within just six months or so we had over 125 units under management.

I was working countless hours and answering the most bizarre phone calls you can imagine at all hours of the night. Overall, though, we were turning a profit and looking for ways to scale our system over the next couple of quarters.

A perfect storm
As part of our networking and lead-generation work, we regularly attended private meetings where local brokers would pitch each other their current clients wants and needs. In one particular meeting, another broker was pitching one of his own properties for sale. It was two side-by-side four-plexes (eight units total) with each unit being one bedroom. It was in a low-income part of town, but he was only asking $125,000 for both properties.

“$125,000 for eight units?”, I thought. “There has to be a catch.”

There was. Seven of the eight units had tenants, but only three had any history of paying on time. Even after kicking out any non-paying tenants, each unit would need a couple thousand dollars of work to get anything decent in rent. In addition, there were four furnaces in total all of which were probably made in the 40s or 50s.

In other words, it was a project by anyone’s terms. It would require some up-front repairs, several months of eviction filings, court visiting, and re-showing the units, but… “$125,000 for eight units!”

If only someone would loan me the money…
I dug deeper and deeper into the numbers. I was already managing property, coordinating repairs, negotiating prices on materials, and renting units for dozens of other clients. It made sense that if I could get a loan, I could plug a property right into this current system I was running.

That was a big glaring issue, though. Neither my partner nor I was credit-worthy in any sense of the word. The chance of me getting approved for a mortgage was zilch (let alone a non-owner occupied, low-income commercial loan). With regret, I pushed the property to the back of my mind and continued about the process of building the management business.

At our next networking meeting, though, we caught wind of some additional news on the properties. The broker who owned them was in serious trouble on about a dozen different pieces of real estate. He owed $76,000 on both the buildings, which were financed through a popular investor/hard-money lender.

The private lender was getting scared that the investor would soon default (giving the lender a property he wanted nothing to do with) and the owner was only looking to get out of the property, so he could focus his energy on his salvaging his other properties.

Without much thinking, we pulled the trigger.

A bold offer
We called up the private lender (an individual) who was currently financing the properties and pitched him the idea of us taking over the loan and purchasing the property from the current desperate owner. We offered to both sign onto the loan, giving the investor two names opposed to the one he currently had and showed how we would remedy the situation, evict all the tenants, and plug it into our management system.

Neither of us had a penny to our names, so we even had the guts to require that the private lender actually invest more money into the property. In order for us to take it over he’d have to loan us an additional $15,000 to replace the furnaces and repair two of the units after evictions.

It was a bold offer. We’d give nothing but a management plan and our signatures on a $91,000 private mortgage (at 12%) for eight units and a $16,000 cash loan. The lender must have known even more about the current owner’s dire circumstances then we did, because he took our offer. The current owner was happy to get out for what was owed, and within the week we sat down to close.

After the paperwork was signed on my first-ever real estate purchase I was handed a $1000 check (for prorated rents/deposits for the month). I gave nothing tangible, just my worthless signature, and walked to the bank to deposit the money.

“So this is how real estate works”, I gloated. “I could get used to this.”

I had no idea what was in store…

To be continued…

J.D.’s note: This is a glimpse into a world I’ve always wondered about. Though Kris keeps trying to dissuade me, I have a fascination with rental properties. I look forward to reading part two of this story. And although GRS is not about to be come a real-estate blog, this Sunday’s reader story is actually about how one of you folks decided to take the plunge by buying a rental property, so we’re going to have a mini-theme here for a week or so…

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I have to edit all 14 chapters of Your Money: The Missing Manual by next Monday, which is a huge task, especially when you consider my goal is to polish everything and create a tie it all together. As a result, I’ll be sparse around here. In fact, I may have to publish a couple of guest posts this week and next.

In the meantime, it’s been a while since I shared a roundup of interesting links. I’ve stumbled across a few lately that I’d like to share.

First up, here’s the story of Katharine Hibbert, a woman who lives in London without money. I’ve shared a couple of similar stories in the past, but Hibbert’s is different. Whereas other “no money” types live lifestyles that don’t appeal to me (living in a cave, drinking urine, and so on), she’s able to make a go of it without anything too radical. (Her use of a cell phone makes me scratch my head, though. How is that possible without money?)

Over at Card Ratings, Curtis Arnold has posted his list of the best credit cards of 2009. As I mentioned last week, I’ve actually considered going back to a no-credit kind of life. But I recognize that some folks love finding new cards. If you’re one of them, check out this list.

Ramit at I Will Teach You to Be Rich has been writing a lot lately about how to earn more money. I’ve said it before and I’ll say it again: The best way to turbo-charge your financial success is by earning extra income. I don’t cover this topic as much as I should around here, especially considering how important it is. One of Ramit’s recent posts describes how to turn your skills into services people will pay for. Great stuff.

Matt at Steadfast Finances wrote a great article about visualizing how your stuff owns you. This is basically another approach to the “real hourly wage” from Your Money or Your Life, but the visual aspect sets it apart. I love this.

Finally, FMF from Free Money Finance asked me to point out he’s started his “March Madness” blog tournament. This is like the NCAA basketball tournament, but pits the best blog posts from the past year against each other. I’m honored to have a few in the running. If you have the time and inclination, go vote for your favorites!

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Humans are wired to seek comfort, and as a result much of daily life is focused around familiar patterns and habits. When something threatens to break those habits, we feel uncomfortable and nervous. These negative feelings are easily avoided by continuing to live life the same way, rejecting change. If given the chance to enter uncharted territory, a situation where life’s future is unpredictable, people often prefer not to change, clinging to a comfortable situation.

I still remember the summer before I left my home and family to attend college out of state. Although I’d spent summers away from home before, I didn’t feel ready to live without the immediate support of my parents on what seemed to be a more permanent basis. I considered postponing my college education or attending a community college for a year to ease the transition.

Realizing that millions of kids my own age had the courage to attend college while living on campus hundreds or thousands of miles away from their family, I decided to follow through. I convinced myself I was at least as capable as millions of other kids.

Looking back, the experience was perfect for me and I’m glad I found the strength to move away when I did. I adapted to the new living situation rapidly and found it wasn’t difficult to expand my Comfort Zone.

Breaking out for your career

There are four things that make us feel comfortable:

• Familiarity with location
• Familiarity with people
• Familiarity in thoughts
• Familiarity in actions

But if we cling to familiarity in these aspects of our lives, there’s no opportunity for real growth — personally, professionally, or financially.

My college experience dealt with location and people, but the changes we make in our actions can have an ever greater effect, and are key to financial gain. Working in the corporate world, anyone could grow accustomed to daily, weekly, or monthly patterns of tasks and responsibilities. Being adept or even excelling in these responsibilities isn’t enough for someone who wants to make an impression and increase the possibility of being rewarded.

Here are a few ways someone could break out of the Comfort Zone at work:

• If you don’t typically speak in front of others, prepare a short presentation about one of your responsibilities and share it at a meeting with your team.
• Develop a unique process improvement that has the possibility of increasing productivity, income, or whatever is important to your workgroup.
• Eagerly attempt a challenging assignment that normally would be handled by your supervisor or a “higher level.”

Not everyone is wired for corporate life. In fact, corporations are full of people who aren’t. They may be dreaming of some activity they would rather be doing only if money weren’t a consideration.

Two former vice presidents from my company were tired of corporate life, so they gave up their six-figure salaries to open a bed and breakfast in the Hamptons. This is happening everywhere; people are making major changes to their lives to fulfill a calling, a dream, or a passion. These changes always require a rejection of some level of comfort in pursuit of a new environment offering a possibility of self improvement.

Breaking out for financial growth

Aside from a career path or entrepreneurial dream, it’s easy to fall into a Comfort Zone with our finances. It’s easy to pay someone else to do basic yard work, for example. And if outsourcing this work is embedded in your family culture, paying someone else is natural and comfortable. There may be good reasons to outsource but in many cases there aren’t, and those reasons — no time, no skill — are often excuses. Even having never picked up a rake or planted a flower, a new self-responsible gardener could save a significant amount of money over time, amplified by compound interest.

Many people avoid investing because it seems difficult or risky from the outside. How do you know which stocks to pick? How do you handle a stock market crash? Whom can you trust? With these questions, many people stick to what they’re comfortable with: investing in their company’s 401(k) because someone else has made the decision for them, and saving anything else they have left after expenses at the end of the month in a bank account.

This is the result of financial comfort. While it feels good, and this person may have a sense of security that nothing bad can happen, the opportunity cost could be significant. By not taking action, the would-be investor is likely losing out on thousands, tens of thousands, or perhaps even hundreds of thousands of dollars over a lifetime. This could be solved by stepping outside the Comfort Zone and learning how to do something new: invest.

How to break out of your Comfort Zone

Whether you want to be rewarded at your job, be successful on your own, improve your financial situation, or just feel like you accomplished something, the key is to break out of your Comfort Zone. Even if what you are doing works for you, a little effort to try something new could result in a better outcome. If you keep doing only what’s ordinary, your results will continue to be just as ordinary. The only solution is to start doing something extra-ordinary.

But just like any move against human nature, this doesn’t come naturally. Here are some hints for making the transition easier and, well, more comfortable:

• Educate yourself. Find out how other people achieve what you want to achieve with a high level of success. Research your tasks as much as possible, reading case studies, books, and blogs. Find guides that provide step-by-step instructions for the task outside your Comfort Zone that you wish to accomplish. Keep coming back to your resources throughout the entire process.
• Team up. The internet is your friend, but nothing beats spending some time in personal conversation with someone whose path you’d like to emulate. If your goal is to stop buying dinner out and start cooking every day, reading recipes will only get you so far. Have an expert help you by giving you hands-on experience under the watchful eye of a personal guide. For whatever you want to achieve, find a class that lets you participate while working with classmates, most of whom could be in the same situation as you. There is safety — and comfort — in numbers.
• Create a plan. Writing down a challenge, whether just in a notebook kept in your night stand or on a blog public to the world, makes it real. I believe the more public, the better. (At Consumerism Commentary, I make my finances public, which means I’m accountable to the world, not just myself. This brings extra pressure, but motivation as well.) While writing, break your goal into at least three measurable accomplishments, and break those accomplishments into at least three tasks. This is your roadmap. For example, running a 5K is outside the Comfort Zone of many couch potatoes. In this case, a plan has been created for you. All you have to do is follow it.
• Take small steps. Like the first step of a couch potato on the way to her first 5K, the first step is always the most difficult. Any task that seems daunting can be broken down into smaller steps. Eventually, your series of small steps becomes your path to the goal. Some people can make the change they want in one leap once they decide to tackle the obstacle, but that’s not the right choice for everyone. In general, small steps result in success because a slow process helps to reinforce and internalize the experience — building gradual comfort.
• Breed a new comfort. As make slow progress through a series of tasks or through repetition, you’re actually e-x-p-a-n-d-i-n-g your Comfort Zone. That which you never would have considered doing is now something you might do without a second thought. You may find yourself looking for more and ready to make some new plans once comfort sets in. Despite my nervousness about college, it didn’t take long to feel comfortable there. I was soon looking for more challenges, such as running student organizations.

By breaking out of your Comfort Zone, you’re opening your mind to new experiences, so it’s natural for your goals and desires to change along the way.

An investing newbie whose goal was to familiarize herself with the stock market may have such a great experience after the first Comfort Zone breach that she may be inspired to become a financial planner and to help others achieve their financial goals. The factory worker who quits his job to run his own business may achieve personal success which inspires him to meet new people including his future wife.

The rewards for escaping your Comfort Zone are limitless. The rewards for never expanding your experience are well-defined: more of the same.

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I got married last month. It was a bit of a whirlwind romance — at the beginning of 2009, we’d been talking about an engagement later in the year, with a wedding in 2010. Things being what they are, the engagement got moved up a couple of months, and we decided to plan a wedding for the end of the year.

The first question we had to ask ourselves was, “What size wedding do we want?” The next question was, “What can we afford?”

A little background
Let’s talk about our personal situation for a moment before I answer the questions in detail. My wife is finishing school and doesn’t work. I finished grad school 18 months ago, and had a bout of unemployment for the last four months of 2008.

As I’d just gotten out of school, I hadn’t yet amassed much of an emergency fund. I mostly lived off of credit cards during that period. After moving, paying rent for two months on two apartments, and a small weekend trip to Europe earlier this year (before the wedding was in the works…if I knew we were getting married this year, we wouldn’t have gone), I racked up over $10,000 in credit card debt. I set a goal in April to have my debt paid off by the end of January 2010 — a goal I’m quite pleased to say that I’ll meet.

Basically, the take-away here is that we didn’t have much money for a wedding.

For us, the most we could contribute was just a few thousand dollars. My fiancée checked with her family, and the best they could contribute was $1000. My parents paid for our honeymoon, so, we were looking at planning a wedding with a budget of $3000.

What size wedding?
I’ve moved around a bit over the last few years, so it’s been hard for me to keep up with old friends. And since I recently moved, I didn’t have friends that I was dying to invite to my wedding. My wife had a couple of people on the “it would be nice if they could come” list, but their attendance wasn’t critical. So, we decided on a family wedding.

We figured that meant under 10-20 people including us. Some of my wife’s immediate family is local; the others all live in the same town about eight hours away. My family isn’t local, and would have to fly no matter where the wedding was held.

Here’s the challenge: How do you plan a wedding for a dozen people on $3000? We explored some local options, and with facility charges and whatnot, the economics just didn’t work. We would have paid too much for a big facility that would feel empty with so few people in it, or been too stuffed in a smaller facility. Because it was a December wedding, an outdoor event where we are wouldn’t work either.

We both wanted a nice wedding that didn’t feel cheap and that worked in our budget. (My wife told me later that she wasn’t thrilled with the budget we’d set, but she also said that ten years from now, she’d be happy we weren’t still paying for it.) Then there’s the sticky issue of some friends of her local family that we socialize with from time to time… we were being “encouraged” to add them to the guest list. I wasn’t happy about it — if they all came, it would almost double the size of our wedding.

What can we afford?
As luck would have it, we stumbled on some wedding packages in Las Vegas. When I started putting together cost estimates, I realized that this would be the best fit. We stumbled upon the Stratosphere’s wedding packages, and they start at just a few hundred dollars. We chose a package that ran about $800 for a 30-minute ceremony way up in the tower, and it came with a dozen photos.

The ceremony was nice and short. We ate dinner at Fellini’s restaurant in the hotel — we were able to get a private room for no additional charge — and best of all, we had a really nice three-course dinner for $32.95 per person. Wine was available for $18 a liter. The restaurant served us a really great cake for about $80. All said and done, dinner was about $800.

After dinner, we were given passes to the hotel lounge up in the tower, which provided us an excellent venue to enjoy a few drinks, some light dancing, and each other’s company. The VIP concierge was kind enough to provide us a limo at the low rate of $42 an hour — six of us drove up and down the strip for two hours taking pictures all over the place.

Repercussions
Choosing to have our wedding in Las Vegas didn’t go over so well with her side of the family at first. My family didn’t care; as my dad put it, a plane ride is a plane ride. Her family, on the other hand, had to travel. If the wedding had been local, those that were eight hours away would have driven, and the locals could have just stayed put.

My wife and I talked about it for awhile. I asked her, “Who is this wedding for? Is it for us, or for your family?” It was for both, of course, but when push came to shove, the costs came out of our pockets. A local wedding would have cost more, although not by much. It would have been a bit cheaper for her family though.

What was the right answer?

The truly locals do quite well for themselves (and, truth be had, get caught holding the bag for others in their family on occasion) but they also know that we’re just getting started in our married lives, and that every dollar counts.

I would have compromised. If I were in her family’s shoes, I would have sat down and said, “Look, we know it’s going to cost you more to have a local wedding. It’s also going to cost us a lot in travel expenses. How about we figure out what it would cost us to travel out there, and write you a check for a fraction of that?That way neither of us is unfairly burdened with avoidable costs.”

Had they offered that, it’s likely we would have had a local wedding.

Happily ever after
In the end, we decided it was our wedding, and our budget. We also knew we weren’t putting people at a terrible disadvantage cost-wise (flights were running $250 per person from both cities, and the Strat had regular rooms for $30/night during the week and $50/night on the weekends. Our suite ran $120/night.)

It turned out to be, in everybody’s opinion, an awesome wedding. I loved it from a budget perspective — we were able to pay for exactly what we needed, no more, and no less. No minimum charges, no facility rental charges, no nothing. And after the wedding, we had the whole town of Las Vegas to provide our nightlife. I think we did the whole thing for right around $3,000 — if we went over, it was only by a few hundred.

Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are.

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