My shower is broken. The water comes out just fine, and it doesn't leak. But the temperature control is busted, so it only comes out at one temperature: as hot as it gets.

Here's the embarrassing part: It's been like this for a year.

Frugal or Lazy?

When the temperature thingy broke (and here you see that household plumbing is not my strong suit — a year after this thingy broke, I still don't know what it's called), I made some small adjustments. I went downstairs right away and lowered the temperature on the water heater so that the water coming out would be hot but not scalding. That means no super-hot water anywhere in the house, but since we have small children I was keeping it on the low side anyway. Continue reading...

Goals are critical to financial success. We've written about them a lot here at GRS; in fact, one of J.D.'s core tenets for getting rich slowly is "The road to wealth is paved with goals." Not all goals are created equal, however. A bad goal can sap your energy and distract you from making progress. A good goal, on the other hand, can provide the clarity and motivation you need to attain your dreams.

What's a Smart Financial Goal?

Getting rich isn't a goal; it's a wish. A goal needs certain characteristics to have power. I like the SMART goal-setting system, which I was first introduced to as a new hire at my one and only Big Corporate Job back in the day. I've encountered it in a few different venues since then, and always found it useful. The SMART system teaches that goals must be:

• Specific. Remember how I said "getting rich" isn't a goal? For a goal to work, it needs to be specific. Don't just aim to "save for retirement". Do your homework and figure out how much you need to save to have the income you'll want when you retire. Now you have a number, and that number can be the basis of your goal.
• Measurable. Once you have a specific goal, you need to know how well you're doing at achieving that goal. I can look at my retirement accounts and see exactly how much progress I've made towards my specific savings target. The same is true with other goals, like saving for a vacation or buying a house. The more specific you can be in your goal, the easier it will be to measure your progress.
• Attainable. I'd love to write and publish a book. Doing so is on my "bucket list". I can easily fantasize what it will be like to hold my own finished book in my hands, and display it proudly on my bookshelf. Even better if it hits the bestseller list! I'll go on Oprah! I'll get a six-book deal! I'll be the next J.K Rowling! That's not a goal; it's a daydream. My writing goals are more concrete and attainable. They build on what I'm doing now. Each time I attain a goal, like selling a story to a particular magazine or being able to quit my day job and write full time, I get closer to being able to write that book. When the time comes, I'll get real specific about what book I want to write and what steps I'm taking to do it. Then it will be a goal.
• Realistic. Notice that I've talked here about my savings goals and my professional goals. Goals need to be realistic and related to your real life. I'd love to walk on the moon someday, but doing so isn't a goal of mine. It's totally unrealistic. If you want to make radical changes to your life, that's fine. Goals can help you do that. But they need to start with small, specific, attainable steps.
• Timely. A goal needs a timeframe. Without it, you can't really measure your progress. When you make a goal, give yourself a concrete timeframe you want to accomplish it in. Saying, "I want to save $5,000 for a trip to Argentina over the next 18 months" is a much more attainable goal than saying, "I want to save for a family vacation." I know exactly how much I need to save, and how much time I need to do it in. Figuring out how much to save each week becomes a simple math problem, and I can easily check my progress as I go along.

Why Do I Need Goals?

Goals are incredibly powerful tools. J.D. wrote the other day about all the creative and flexible ways he uses the data he collects from tracking his spending. I kind of feel the same away about goals. They're useful for a diverse array of things, from getting clarity on what you want to staying motivated for the long haul.

Money is one of the biggest issues couples fight about. It's also one of the most important areas for clear communication. After all, money touches every aspect of our lives.

I've written before about the importance of having good financial communication with your spouse. It's doubly important to communicate well with your partner if you're not married. Many of the financial advantages married couples enjoy are available to unmarried partners — but they're not automatic. For unmarried partners, it takes careful planning and legal documentation to create the kind of benefits married couples get the moment they say, "I do."

Money Without Matrimony

To get a sense of the challenges and opportunities facing unmarried couples, I turned to financial expert Debra Neiman. Neiman is a Certified Financial Planner and co-author of the book Money Without Matrimony, a primer for unmarried couples setting up house together. I also spoke with two other, more personal experts on unmarried partnership: my friends John and Sarah. John and Sarah are living together and raising their daughter living together as unmarried partners. Continue reading...

Charitable deductions can be a complex and confusing area of your tax return. Understanding what you can deduct and what you can't deduct can be confusing. Documenting it properly adds yet another layer of difficulty. To help sort it all out, I talked to Kelly Erb, (a.k.a. Taxgirl), and Kay Bell (of Don't Mess With Taxes).

• • Erb is a tax attorney who runs her own tax law firm with her husband. She's also been blogging about taxes for the past six years. Before striking out on her own, she clerked for the IRS, specializing in estate and gift taxes. She also worked for a boutique law firm that primarily handled estates and gifts.

• Bell is the author of The Truth About Paying Fewer Taxes, and the founding editor of Bankrate's tax section. She has worked on Capital Hill with the House Ways and Means committee.

Both women offered great tips for getting the most from your charitable deductions while taking care to avoid pitfalls that could get your return flagged.

Should You Be Taking Charitable Deductions?

Most people give at least some money to charity, but few of us take our charitable deductions. In fact, only about a third of households itemize their deductions. The rest simply take the standard deduction, which for the 2010 tax year is:

I have a pretty idyllic Friday evening planned: I'm going to yoga class, and then taking my husband out for dinner. These are both fairly spendy activities for me, but I got a great deal. I've already paid for both my yoga class and my date night with Groupons.

Groupon is the mother of all daily deal sites, with a rapidly growing number of competitors. The concept is simple: A product or service is offered at a discounted rate, but the deal only goes through if enough people buy it. The businesses make out — in theory — on volume, while the buyers score some great deals.

Sounds almost too good to be true, right? And it's just that — almost too good to be true.

This morning, I did something unusual. After I brushed my teeth, I looked in the mirror and recited:

• "People love to give me money!"
• "I am rich and wonderful."
• "I am now earning a great big income doing what satisfies me."

I admit, I felt silly. I love a lot of New Age spiritual practices. (I've written before about using a money spell.) But talking to myself in the mirror was a little weird — even to me — never mind how silly I felt repeating these affirmations about my finances.

But can doing something as simple (and silly) as repeating daily affirmations make you richer? Chellie Campbell thinks so. Campbell is the author of The Wealthy Spirit, a book of daily affirmations on money. I spoke with her this week about the link between money and spirituality.

Over the past few years, I've done a reasonable job getting on top of my personal finances. I've paid off credit cards. I've put systems in place to track and analyze my spending each month. My files are in order. I've learned how to communicate about money with my spouse. On any given day, my financial life is running pretty smoothly.

Looking ahead, though, is like looking off the edge of a medieval map: "Here Be Dragons!" I have an underfunded retirement account, no will, no one named as a guardian for my kids, and no clear plan for what happens to my stuff when I'm gone.

I'm not unusual in this. Few people in their 30s have made appropriate arrangements for their estates after they're gone. End-of-life issues seem infinitely in the future, something even my parents aren't really paying attention to yet.

Travel has always been a priority for me. I love seeing new places, experiencing new cultures, and just getting away from the routines of my daily life. Even more important, my family and close friends are a pretty far-flung crowd. I have loved ones spread from Boston to Buenos Aires. We buy a lot of plane tickets in my family. We buy so many tickets that I should have become savvy about how we buy them much earlier than I did.

For years, I've mainly just flown with JetBlue. I use Farecast to see if there's a better deal available elsewhere. If there's not a significantly cheaper ticket on that site, I buy my ticket through JetBlue. They generally have low fares and a good frequent-flyer program. This is a pretty simplistic approach. Since I'd never researched it carefully, I didn't know if I was really getting the best deals on my travel.

Now, my best friend is moving to San Francisco. (Yes, between losing my cat and my health problems and my friend's move, it's been a doozy of a month). I'm suddenly looking at traveling a lot more than I already do! Figuring out how to squeeze a few trips a year to the West Coast into my budget is a challenge. Before I overhaul my other spending areas, I wanted to find out if I could get more travel for the same amount I'm already spending. Maybe I can make my existing travel budget take me further — literally. Continue reading...

When a friend of mine changed jobs recently, she discovered she had half a dozen old 401(k)s trailing her from her past jobs. She wanted to get on top of her financial planning, but wasn't sure what to do with all those old investments. she asked me for advice.

Truth is, I wasn't sure either. I cashed out my one 401(k) to buy a house several years ago. I know that was a dumb move in the larger financial story of my life. Saving early for retirement is one of the best ways to build wealth. I can't undo it now, though, and I've been so focused on paying off debts I haven't thought much about retirement planning for years.

As my debt burden shrinks, it's time to start thinking about my own investment strategy. So I looked into my friend's question: What should she do with those old 401Ks?

Lately, I've heard a lot of buzz about how peer-to-peer (P2P) lending is a great alternative for investors who feel burned by the stock market. Proponents of peer-to-peer lending say it's a smart way to get a good return on your money without the risk of a failing economy. But before you pull up stakes in your index funds and hightail it for the nearest P2P lending site, let's take a closer look at the pros and cons.

A Brief Intro to Peer-to-Peer Lending

In its oldest, simplest form, peer-to-peer lending is what happens when you loan your mom money to start her new hairdressing business, or borrow funds from a friend for a down payment on your new truck. You're making or taking the loan based on your relationship with the person, which counts for more than their credit rating or collateral.

Sometimes loans to friends and family work out well, but often they don't. They've funded many dreams, but they're also famous for breaking apart families and friendships that have stood the test of decades. An old saying goes, "Never loan money to friends. You'll lose your money and your friends."