This article is by editor Linda Vergon.

In honor of Independence Day, I thought it would be fun to see if we could come up with 1,776 ways to get rich slowly. After all, reaching “financial independence” these days does require some of the spirit our founding fathers had when they stood up to a tyrannical king and announced to the world that they were going to create a new nation.

Freedom is worth the struggle.

It may be difficult to properly understand the oppression that existed in colonial America in 1776, but a lot of us know what it’s like to live under the tyranny of debt; and in some measure, when we commit ourselves to tackling it, it’s like making our own declaration of “financial” independence. To free ourselves of debt requires sacrifice and struggle, but freedom is worth the struggle. Coming together to offer our own ways to get rich slowly could help someone else in their struggle for freedom.

I’ll get us started and hopefully we’ll actually reach 1,776!

  1. Ride your bike to work.
  2. Join a carpool.
  3. Track your spending in a notebook.
  4. Learn to cook.
  5. Visit your local library.

Your turn. How many can you contribute?

Happy Independence Day, everybody!

This article is about Ask the Readers

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Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D. recently launched the Get Rich Slowly course, a year-long guide on how to master your money. His non-financial writing lives at More Than Money.

When I was young, my father got audited by the IRS. I can’t remember the details — I was young, and my father died long ago — but I do remember how he fumed and fussed for weeks as he tried to gather the paperwork and make his case to the auditor. The experience made an impression on me. I vowed that when I got older, I wouldn’t be as messy and disorganized as he’d been, and that I’d always do a good job of documenting my taxes.

For the most part, I’ve stuck to that. I’ve tried to save every scrap of paper related to my personal finances and, especially, my business finances. I’ve always tried to be meticulous about respecting the wall between business and personal accounts. And since I started this blog eight years ago, I’ve tried to pay attention to the red flags that lead to IRS audits (which is one reason I’ve never attempted to deduct a home office expense, even though there are times — like now — when I could).

My decades of being a pack rat paid off recently. In early April, I got a letter from the IRS. The government wanted to audit my 2011 taxes, and they were particularly interested in my Schedule C (“Profit or Loss from Business”).

“No worries,” I thought. “That’s why I saved those documents all these years!” Turns out my archiving techniques left something to be desired.

The documentation
Because 2011 was the last full year we were married, my first step was to contact Kris. “Do we have anything to worry about?” she asked.

“I don’t think so,” I said. “We never did anything wrong. At least not intentionally. We might have made some mistakes somewhere, but I doubt there’s anything major. You just pull together your paperwork, and I’ll pull together mine.”

Kris had gathered all of her info within a week, but I was completely consumed with preparing the Get Rich Slowly course. It wasn’t until the end of April that I began to gather my statements and receipts and the other information the IRS had requested.

I found most of the paperwork stuffed in a shoebox (literally!) in the back of my storage unit. Because there was zero organization, I spent an entire Saturday afternoon stacking statements and receipts in chronological order. “I guess that’s my first lesson,” I thought. “I ought to be more systematic about how I archive my financial records.”

After sorting the physical documents, I went online to retrieve digital statements. I was frustrated to find that many banks and credit card companies don’t allow users to access digital documents after a year or two. After a certain time elapses, you have to file a request to have the documents mailed to you — and that can take days or weeks. (It took over a month to receive one statement I requested!)

I was able to gather almost everything I needed. I hoped that the auditor wouldn’t worry about the few small gaps.

Note: Ultimately, I did have to fill in the gaps. I requested duplicate statements directly from the banks. But the real godsend during this process were Quicken and Quickbooks. During 2011, I kept complete business and personal records. The auditor was able to use these to track the flow of money from account to account.

The interview
On a drizzly morning in early May, I drove to my accountant’s office for the audit interview. “You don’t seem too stressed,” Sabino said.

“You know, I’m not,” I said. “I haven’t done anything wrong, at least not that I know of. So, this seems like more of an adventure than anything. Maybe I can write about it for the blog!”

Sabino looked through my paperwork. “You won’t need these,” he said, setting aside some extra financial statements I’d printed. “As a rule, you only want to provide the info that the IRS requests. You may think you’re being helpful, but every extra piece of information gives them another chance to expand the audit.”

“What do you mean?” I asked.

“Well, the IRS won’t go digging for dirt on other years. But if you accidentally give them reason to suspect there might be something to find in 2010 or 2012, then they can expand the audit beyond 2011. So, we never give them more than what they ask for.”

“Okay,” I said.

“That same thing is true during the interview. You can be friendly, and you should answer the questions fully and truthfully. But don’t be chatty. Don’t volunteer stuff. Even a casual conversation can give the auditor reason to expand the examination.”

We gathered the paperwork and headed to the meeting room. The auditor already had stacks of documents regarding our case.

“Wow!” I said. “You’re not messing around.”

The auditor laughed. “You know the government,” she said. “We love our paperwork!”

She started the interview by reading questions from a pre-prepared script. “Have you reported all of your income?” “Do you keep business and personal accounts separate?” And so on.

Eventually the questions moved off-script as the auditor tried to get a handle on my business. “You make money blogging? How does that work?” “This conference in Denver was with other bloggers? Did that lead to more business?”

After 20 or 30 minutes, we were finished. “I think I have all I need,” the auditor said. “I’ll get this wrapped up and then let you know my decision.”

The outcome
I expected a decision on my audit within just a day or two, but that didn’t happen. Instead, the auditor continued to request information and clarification. Why did my checking accounts showed more money deposited than my W2s? What was this World Domination Summit thing?

As the weeks passed, we discovered I had made a few errors. I paid for certain business expenses out of my personal account, a mistake that actually hurts me. Plus, I’d made a personal loan but hadn’t been recording the interest income on my taxes. But it seemed to me that the mistakes against me were balanced by the errors in my favor.

The auditor must have agreed because today I finally received word: The audit will come back “no change,” meaning I won’t owe anything extra (other than the $1,500 I paid my accountant to coach me through the process!). The auditor did ask my account to scold me, though: “Please remind John that he needs to document the business purpose for an expense and make sure that the expense makes sense for his blogging business.” That’s a change I’ve already made to the way I track my expenses!

Here are some of the key things I learned during this process:

  • Don’t file a tax return during an audit. If you do, the audit could expand to include the new information. In my case, I received notice of the audit in early April, just before filing my 2013 return. My accountant immediately applied for an extension.
  • Get organized. As soon as you receive the audit notice, gather the requested information. Don’t wait. Even if you’re organized, this will take time. If you’re like me, you’ll discover some pieces are missing. It can take weeks to receive duplicate statements from your bank or broker, so start right away.
  • Get help. Hire a tax professional to represent you. He’ll have a much better understanding of tax law and the audit process, and can coach you on what to say and do.
  • Be courteous. You may hate the IRS and resent the audit process, but don’t take it out on the auditor. She’s just doing her job. Be polite and professional. Imagine that you’re at a job interview and act accordingly.
  • Change your habits. It’s easier to be organized now than to create it from scratch under duress. After my audit, I adopted a new, embarrassingly simple step: I labeled a file folder “2014 Taxes” and I’ve been placing all the year’s financial documents here. I even print electronic documents too, since I learned the hard way that many financial institutions only keep statements online for a few months.

I’m glad that my audit story has a happy ending. Many don’t. What about you? Have you ever been audited? (Or do you know somebody who has?) What was the experience like? How difficult was it for you to pull together the requested documentation? Any advice you’d give others so that they can better cope with an audit in the future? (Or to avoid one altogether?)

This article is by staff writer Holly Johnson.

In late 2008, Lance Cothern reunited with his high school girlfriend Tori after several years apart. Lance was almost ready to earn a bachelor’s degree in accounting, and Tori was a sophomore studying nursing at a four-year public university at the time.

After a few years of dating, the conversations turned serious and they started planning a future together. Unfortunately, unbeknownst to either of them, Tori had a problem that was much bigger than she had ever realized – a lot of student loan debt.

Because of some scholarships and work during school, Lance managed to graduate college debt-free. That freed him up to focus solely on his future wife’s debt, which eased the burden somewhat. However, as she pushed through her final semesters at school, they could only watch in horror as interest piled on top of interest to push her total burden up over $80,000.

The piling on of student loan debt

Yes, you read that right. Tori owed $80,000 for a bachelor’s degree in nursing. Right about now, you’re probably wondering how on Earth that happened.

Unfortunately, it’s a lot more commonplace than you might think. In fact, Tori’s student loan debt story isn’t unlike any of the other tired old clichés relentlessly portrayed by the media: the struggling social worker who ends up 100K deep in student loans, the humanities Ph.D. who is forced to live with her parents well into her 30s, or even Kasey O., the woman I wrote about last year who still owes over $95,000 for a bachelor’s degree in media arts and animation.

And just like many others who find themselves in this precarious situation, Tori didn’t really know how much she had borrowed until it was far too late. Part of the problem, according to the pair, is that she went to college during the credit crunch, which temporarily made it difficult to access the most attractive student loans. So instead she took out loans with high or variable interest rates, with her largest balance teetering around 11 percent.

“To make matters worse, none of her student loans were subsidized,” says Lance. “That means that her loans were charging her interest the entire time she was attending school. The interest would then be added to the principal of the loan and would incur even more interest charges over the course of her four-year college career.”


Looking for a way out

Just like the many thousands of students stuck in this unfortunate situation, Lance and Tori wanted a way out. They wanted to begin a life together, and they didn’t want to spend the best years of their lives struggling under the weight of nearly six figures of debt. After briefly researching income-based repayment and loan forgiveness options, Lance and Tori decided that their best option was to try to get out of debt as quickly as possible so they could move on with their lives. The prospect sounded daunting for sure, but they felt it was the best option they had.

The minimum payments on her student loans were around $700 per month, says Lance. “To pay off our debt, we lived frugally and used a very large percentage of our income to pay off her student loans, sometimes as high as 50 percent or more of our monthly income.”

In an effort to earn more, Tori picked up some extra shifts at work and Lance switched to a less-demanding job with higher pay.

“We had to decide that some of life’s conveniences would be put on hold while we paid the debt off,” says Lance. “We didn’t eat out often, we didn’t have smartphones, we had a very small entertainment budget and we made sure we weren’t wasting money on things that weren’t more important to us than paying off her debt,” he says. “Student loan debt had to be our No. 1 priority.”

And it worked. In a matter of three years, the two focused almost all of their attention on completely annihilating her student loan debt. And now, in their late 20s, they’ve earned the right to start their adult lives with an entirely clean slate.

A generation of debt slaves

There’s no longer a doubt that student loan debt places an enormous burden on today’s young people. With the average student loan debt now over $29,000, it’s no wonder that the average Millennial is struggling, and why USA Today recently referred to student loan debt as an entire generation’s ball and chain.

“For many 20- and 30-somethings, paying off the cost of college takes priority. Marriage, a house and family will have to wait,” wrote Hadley Malcolm in USA Today, after sharing one of the saddest charts I’ve ever seen. A few highlights:

  • The percentage of college students who graduate with student loan debt was 65 percent in 2011, up from 46 percent in 1993
  • 1 in 8 borrowers owes more than $50,000 for their education
  • The unemployment rate for recent college graduates was 13.3 percent in 2012
  • A whopping 16.9 percent of adults ages 25 to 34 reported moving back in with their parents in 2012

Note from editors: The Brookings Institution recently published a report that examined student loan debt between 1992 and 2010, and concluded that typical borrowers were no worse off now than they were 20 years ago. Interesting alternate viewpoint based on looking at the data differently…

Refusing to be a victim

But that’s what makes Lance and Tori’s story so intriguing. Just like so many other student loan debt horror stories, it has all the makings of a segment on the nightly news, but with a twist. Lance and Tori didn’t allow themselves to become a pawn in the growing student loan debt crisis. They took control of their situation instead. Here’s how they did it (and how you can do it too):

  • They used the debt snowball method. Made popular by Dave Ramsey, the debt snowball method for debt repayment requires you to focus your energy on either your loan with the smallest balance until it is paid off. Then you move on to the loan with the next lowest balance, and so on. “We paid off the highest rate first,” says Lance. “Then we went loan by loan and decided which was most risky due to things like private vs. federal and fixed vs. variable rate.”
  • They focused on earning more. One of the most efficient ways to pay off debt is to earn as much as possible. To do this, Tori picked up extra shifts at work and Lance focused on earning extra money on the side through freelance writing and starting a website, Money Manifesto. You can do the same by finding ways to make more money, whether it’s freelancing, dog-walking, or babysitting. The end result is all that matters.
  • They kept their expenses low. Earning more only works if you’re disciplined enough not to spend it elsewhere. To put as much money toward their loans as possible, Lance and Tori quit going out to eat and slashed their entertainment budget in half. They also lived a frugal lifestyle and went without many of the modern conveniences many of their friends had, like smartphones. Want to find a way to cut your expenses? Start by tracking your spending to see where your money is going in the first place.

Even though the journey was sometimes painful, the now debt-free twosome is glad they went through it.

“We learned a lot during the process,” says Lance. “We learned that we could be happy even without a lot of money to buy things that many people consider necessities. We learned you have to take action or things will never get better,” he says.

Lance and Tori’s story proves that paying off a huge loan is possible, even over a short time frame, if you’re willing to make it a priority. And, even though the steps they took might seem simple from a distance, the truth is, they’re the only ones that work. It doesn’t matter whether you’re struggling with a giant mortgage, student loan debt, or credit card debt, the story is the same. Short of winning the lottery, you have to put in the work. You have to go without. You have to be willing to make sacrifices.

One of the basic tenets of GRS (and one of my favorite sayings) is that “no one cares more about your money than you do.” And it’s true.

I’d also add that “no one else can save you.”

The painful truth is, sometimes you have to save yourself.

Are you still paying off student loan debt? What is your plan to pay it off once and for all?

This article is by staff writer April Dykman.

“You + me + swimming date at the springs.”

That was the text message I sent to my friend Kacey last week. “Are you flirting with me?” she replied. “Let’s make this official.”

See, every summer I solemnly swear that I’m going to spend the next several months in the water, yet I never do. (I say several months because I live in Texas, where it’s summer for most of spring and fall.)

This year, however, I was serious. Since I’ve moved from the country and bought a house in the city, things-to-do are much closer to me. Driving time and gas expense are no longer an excuse.

But here’s the thing: I want to keep my spending in check. Now that we live in the city, we save money on gas but spend more money on entertainment and eating out. For instance, when we lived in the country, we had zero interest in making a one-hour round trip to the nearest restaurant for dinner. We always preferred to cook at home because of the driving time. But now, we go out to eat every now and then. Being able to do that is part of the reason we moved.

So, I want to get out of the house more this summer, but I want to be careful about how much I’m spending. Which brings me to this list of free or nearly-free things for me/you to do this summer. I’ve categorized these activities by whether you’re trying to enjoy the sunshine or escape the blazing heat, because sometimes a summer day outside can feel like this.

Want to soak up the vitamin D?

If you’re looking to get outside, here are eight activities that’ll help you accomplish that.

  1. Swimming. Community pools, lakes, springs — most of these places are free or charge a very small fee.

  2. Kayaking, canoeing, etc. Typically, you can rent equipment for about $10 to $15 per hour. Last month I rented a tandem kayak with my niece and took her to a spring where you can see turtles swimming under the boat. (We also might have been attacked by a swan — we’re still not sure. Either way, priceless memories, people.)

  3. Festivals. My problem with festivals is that I don’t ever know about them until everyone’s posting photos, hashtagging #suckstonotbehere. Anyway, the simple solution is to Google “[city] summer festivals.” I did just that and found an events calendar with stuff like a 5K run in July (you’re drunk, runners!) and an ice cream festival in August (yes, thank you!)

  4. Concerts. Before I moved to the country, I used to go to free concerts in the park presented by our local symphony. You can bring snacks, lay in the grass, and listen to the woodwinds — all for free. There are a lot of free or cheap outdoor concerts in the summer, though; so if classical isn’t your thing, search city guides and local papers to find your scene.

  5. Picnic. Pack a lunch and a blanket and head to your nearest park for a gorgeous afternoon.

  6. Hiking. Head out to your nearest trail or take a day trip to a new park — then, take a hike. I mean that in a nice way. :)

  7. Outdoor gardens. In my city, we have a botanical garden, a wildflower center, and a sculpture garden. All charge a pretty low admission fee, and they’re a great way to spend time in nature (and learn a lot, too).

  8. Farmers markets. Most markets don’t just sell produce and meat; they also bring out bands, food vendors, and activities for kids. For instance, my local market has a balloon-animal-making clown. He smiles at me and I and see this, but the kids seem to like him. Anyway, you can make a morning of a farmers market.

Need to escape the 1,000-degree weather?

A few summers ago, we had a summer of 60+ days of 100-degrees or higher. That’s not the norm, thank goodness — but still, August can be brutal. Here are some ways to get out of the house, but stay in the AC.

  1. Movies. Okay, this one is obvious, but I’m thinking beyond the regular movie theaters here. For instance, there’s a historic theater that plays classic movies all summer long, so you can see Citizen Kane or The Godfather on the big screen. There’s another theater that runs a “kids camp” with free movies for parents and kids. My hunch is that local, historic, or more off-beat theaters are more likely to offer these kinds of screenings.

  2. Improv show. My friend Kacey is an improv actor, so I’ve been to a few shows. “Tickets are usually $10,” she says, making them a fairly inexpensive way to have a ton of fun. For instance, did you know that there’s such a thing as musical improv? The actors make up entire songs and sing in unison right on the spot. Crazy!

  3. Museums. Many museums are either free or they have a specific day of the week when they’re free.

  4. Ice skating rink. Before writing this article, I’d never thought about ice skating during the summer. But really, what a great way to cope with an insanely hot day! Especially because I’m terrible at ice skating, so my rear end will be on ice most of the time.

  5. Be a bookworm. There’s the library, used bookstores, and local bookstores, which are all free or cheap. These places also host events, so look for an events calendar.

  6. Learn something new. Want to learn how to bake a peach pie or what the heck a downward dog is? “Many institutions and stores offer free classes on the weekends on all sorts of topics,” writes Trent Hamm at The Simple Dollar. “Stop by a local food store and catch a free cooking class, or a hardware store to learn about a home repair topic. Got kids? Try something like the Home Depot Kids Workshop, where they offer free how-to clinics for kids ages five to twelve — these can be a lot of fun.”

Of course, you’ll need to Google around a bit to get the specific offerings for your hometown, but most mid-sized cities seem to offer some version of these activities and events.

As for me, I’m making another date to hang out at the springs. A big pool of water is my summertime happy place.

Readers, help me out here and add to this list! What do you do when you want to get out of the house during the summer?

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