“If they cleaned this place up, it could be pretty nice.” –My mom’s take on NYC.

This week my mom was kind enough to take some time off work and accompany me to New York, where I was a guest on one of her favorite shows, “Fox & Friends.”

“Did you know Gretchen Carlson won Miss America?” my mom asked me when I first told her about the interview. She would then tell me this every day for the next three days.

See Kristin’s interview here.

At any rate, Fox invited me to discuss a piece I’d written for GRS: My student loan story: How I paid it off in a year.

To be honest—maybe too honest—I’m surprised at how helpful people have found this article to be. Of course I thought it would be somewhat helpful, otherwise I wouldn’t have written it. But I mostly thought it would serve as anecdotal evidence that the rules of personal finance really do work: Live below your means. Avoid lifestyle inflation. Make your debt a priority. I figured we all already knew this and my story would just serve as a cute little reminder.

But not everyone lives in the world of frugality. Not everyone’s a Get Rich Slowly reader. Not everyone finds time to put much thought into their finances when they’re so overwhelmed by them.

In fact, when I was determined to pay off my loan, it was less about financial responsibility and more about OCD. I can’t enjoy things without other things being sorted out first. When I was a kid, I couldn’t watch a movie at home unless the living room was spotless. I was a weird kid. And that weirdness carried over into adulthood with my student loan debt. Taking a vacation with negative $12,000 was like watching a good movie in the middle of a bad mess.

But back to the interview. There are a lot of issues about student loan debt that you can’t cover in a 60-second TV spot. Fidelity recently sent me a study outlining some of these issues:

• The average college debt for recent graduates is now $35,200. That’s quite a bit more than my $12,000.
• On average, recent grads think it will take 10 years to pay off their debt, and 7 percent of them think they’ll never be able to pay it back.
• A recent MSN Money article discussed how college students aren’t able to pay off their student loans. Grads can’t find jobs because would-be retirees are staying in jobs longer, as they can’t afford retirement.

Obviously, there are a lot of variables that I didn’t have to deal with in 2006. I sat awake last night thinking about whether I was oversimplifying advice for these poor grads, who are probably drowning in debt and may be desperate for a job—any job.

Then I thought about the importance of financial education. We get into tens of thousands of dollars worth of debt to learn about journalism or literature or biology, and oftentimes, we go through our 20s (or beyond) without knowing anything about personal finance.

I first stumbled upon GRS after reading a career-related post. I can’t quite remember which article it was, but I’ve been reading the site ever since. In a short amount of time, I’ve learned so much about personal finance by reading the articles, considering the comments, and now writing my own stories. I’ve always been frugal, but I probably would’ve made a lot more money mistakes had I not taken the time to educate myself about personal finance.

If we’re going to get into debt for the sake of education, then we should educate ourselves on how to get out of it. And that’s where I think the basics of personal finance begin: live below your means; prioritize your debt, etc. Yes, it’s simple, but it’s a good start.

Last week, I got back from an amazing 10-day trip. Brian and I saw Stonehenge, sailed the Irish Sea, and I threw up three times. It isn’t a true vacation unless I’ve thrown up.

During our journey, we had a few money-related experiences, and I took the time to journal them. We were frugal. We learned about tipping. We talked to bartenders about taxes. I enjoyed these money highlights and financial reminders along our journey, so I thought I’d share.

More than money

A chatty cabdriver drove us from Dublin airport to our hotel. Once we arrived, he had a deal for us:

“Now, listen. I’m going home after this. If you want, you can drop off your bags, I’ll wait here, and then I’ll give you a ride to wherever you want to go. No charge.”

Immediately skeptical, we said, “Eh, we’re really tired. We’re probably just gonna take a nap.”

“Oh, come on,” he insisted. “It’s a free ride. Drop off your bags and let’s go!”

We were a little nervous about getting taken, but we went with it. He drove us to Temple Bar, talking the whole way about how he was looking forward to going home and sharing a bottle of wine with his wife.

“Yeah,” I thought. “That you pay for with the extra money you’re about to charge us.”

Once he pulled over and dropped us off, I noticed the meter read 30.00. At the hotel, it was 23. Here we go.

“Eh, let’s just make it 22,” he said. I was taken aback. That was a pretty good deal for the airport ride alone.

“You sure?” Brian asked. Our driver insisted. Brian then handed him a 20-euro note and a five-euro note. “All I’ve got is the five,” Brian said. The driver then insisted we just make it 20, refusing to take any tip. What then ensued was a shouting match, with Brian insisting on the tip, and our driver, Bob, yelling that we were giving him too much.

Bob finally relented, allowing us to take down his address to ship him a bottle of California wine once we get back home.

The experience made me realize I’m very distrusting of people when it comes to money. This guy was so kind, and I immediately branded him a scammer. Sure, it’s only natural (and necessary) to be wary in a strange city, but this was a good reminder that life is about more than money, as J.D. would say.

Frugality is satisfying

That Saturday, Brian and I rented a car in Wales. We learned how roundabouts work (I think) and took way too many pictures of sheep. We stopped in Cardiff, the country’s capital. Walking around Cardiff Bay, we came across a flea market, and one of the booths sold handmade bracelets for one euro.

“Oooh, pretty,” I said, and Brian took out some change and bought me a nice one with blue stones. We didn’t buy any other souvenirs in Wales, and I thought $1.29 was a pretty good price for a piece of jewelry that reminded me of a beautiful place. Because I also thoroughly enjoy frugality, the bonus is whenever I wear this, I’ll also always think: And it was only one euro!

But sometimes it’s OK to splurge

The next day, we got to Stonehenge. The whole experience was pretty amazing, despite a lady asking me to take her photo because “this needs to go on Facebook!” Really? We’re standing here, amid of one of the seven wonders of the medieval world, and you’re talking about Facebook? (Real talk: It only made me angry because I was thinking the same thing.)

In addition to the overall majesty, we were also impressed with our Stone Circle Access. You can see Stonehenge for free from behind a fence, and you can pay £8 admission price to see it behind a smaller barrier. For that price, you can’t walk up to the stones, but you can get fairly close. Maybe, like, 30 feet away?

But then there’s Stone Circle Access. With this, you’re able to get up close to the stones for an hour, before Stonehenge even “opens.” You can walk around them. You can walk under them. You can sit by them. The only thing you can’t do is touch them.

The cost for this access? £16 a person. Together, Brian and I paid $48. Sure, it’s double the price of general admission, but it was worth it.

(Note: Click here for more info on Stone Circle Access.)

The money customs of other cultures

Part of the fun of traveling is learning about other cultures. Throughout our trip, we noticed that tipping was inconsistent. Sometimes it seemed customary; other times it didn’t. We tried to tip at Temple Bar, for example, and our money just sat on the counter the whole time.

“I don’t think you tip bartenders here,” I told Brian.

“I just saw another guy do it. You’re supposed to leave one!”

“That’s not what Rick Steves said!”

When we returned to Dublin after our jaunt to the U.K., we decided to learn about tipping norms from a real Dubliner (as opposed to Google).

“If you’re at restaurant, you tip,” our bartender informed us. “Maybe 10 percent, or, if the service is exceptional, 15. But barkeepers don’t usually expect tips. Maybe if they go out of their way or something like that.”

He also gave us a brief lesson in Ireland’s tax system, which was interesting. For example, their value added tax (VAT) has different ranges, depending on what you buy. Books, children’s clothes and educational stuff have a zero percent VAT range. Most everything else is taxed at 13.5 percent. But retailers factor this into their pricing, rather than adding the “plus tax” like we do in the States.

“That’s partly why everything is more expensive here than it is in the States,” our bartender told us. “The tax is included.”

He then made us a free sandwich (the kitchen was closed) and chatted with us for the next couple of hours. We tipped him.

The importance of being prepared

The following night we logged into our account to see how much we’d spent. We budgeted for the trip, but we also used a credit card to avoid foreign transaction fees. The card we chose not only waives these fees, they also have a good rewards program.

Our spending was about what we expected: sobering enough to make us put down our pints and say, “OK, let’s try to cool it for the rest of the trip.” But one thing that gave us a little jolt: We racked up $130 in rewards. Our card offered a free $100 if you spend $500 within the first few weeks. I had forgotten about this perk, so that was a nice little surprise.

It was awesome being able to use this card and not worry about fees. We rarely had to take money out of an ATM. Before our trip, we had painstakingly planned and budgeted. Brian even groaned because I organized our planning into “Phase I, Phase II and Phase III.” It took some effort, but we figured out the most frugal way to splurge. This isn’t a budget vacation post, and I’ve already gotten long-winded, so I’ll sum up the details in a few brief bullet points:

• The “Hotel Tonight” app has an awesome $25 referral deal. We both used it and got one room for $40 and another really fancy one for $60.
• Before booking flights, I read that Tuesdays and Wednesdays are the cheapest days to buy airline tickets. This was true for me.
• We nicknamed Ryanair “Lyin’ air” (hilarious) because of their notorious fees. But it was still a pretty low price to fly from London back to Dublin. We shared one checked bag and split the fee.
• AAA discounts work on overseas car rental.

Overall, I thought the trip was a good example of how I’ve learned to manage my finances. I enjoy frugality, but I also enjoy a well-budgeted splurge. And now, I’m back to work and focused on earning more, fueled by the gusto of a thoroughly enjoyed break.

I lose count of my “jobs” these days: my literary writing (that theoretically pays, or had better one day or else), a nonprofit board on which I serve as president, and the magazine I started last summer. While I certainly put the same intensity into everything, I can definitely say that I work more hours for free than I do for pay.

So when I got the advice from a well-meaning friend, “You shouldn’t let them work you like that for free!” I had to shake my head a little to see his perspective. I’m so committed to these projects (and I know the money simply isn’t there unless I raise it myself) that I don’t mind the work:pay ratio. My general agreement with myself is that, as long as I’m making enough money to pay bills, buy good coffee and local meats and veggies, and save a little, I can do whatever I want with my (ahem) “spare” time as long as it’s for a genuinely good cause.

I heard the same phrase again a few days later, directed at someone else. “You shouldn’t do that for free.”

Well, maybe you should do it for free?

I honor and pay fealty to your right to maintain your own sets of career principles and your own agreements with yourselves. But I’d like to point out that doing a thing for free might often be in your best interests and, if you have your basic financial bases covered like bills, food and savings, doing things for free could be good for your financial and your emotional bottom lines. Actually, there are many times doing a thing for free could be… well, profitable.

Disclaimer: Many commission-based sales positions have enormous appetite for people working for free, and I cannot quite envision the time when such commission-based sales would qualify for any of my below categories. I’d love to hear your experiences if you believe differently!

Consider doing the thing for free if it meets with one or more of these possibilities:

1. You can have access to the very best in your industry.

A lot of academic and nonprofit work ends up this way. At many local writing and creative non-profits, volunteers hobnob with established writers and artists whose reputations are truly luminous by taking them out for drinks, designing newsletters or staffing events where you may not be paid for the drink you just handed to Tom Brokaw. But come on — Tom Brokaw!

It’s the “layer” of superstars just under the Tom Brokaw level who can potentially be the most helpful to your career and to whom you wouldn’t have access if you were doing similar work for pay (say, as a cocktail waitress or caterer or managing the customer newsletter for a small business). These are the people who will be the “who” in the old famous phrase, “it’s not what you know, it’s who you know.”

As the representative of the nonprofit on whose board I serve (and which has me up late many nights working for free), I took it upon myself at a small writers conference I attended to show a good time to the agent who had been brought in to give us talks on the publishing process. We’re now great friends, and though I have my own agent, I will look to her for advice and connections to her favorite editors. It was free, and it could be the relationship that makes all the difference in my career.

2. You can learn skills you could not learn (or not so quickly) in a for-pay job.

A lot of grant writers and public relations professionals begin their careers like this: the PTA or the neighborhood board or the church outreach group sees an opportunity to apply for a grant. Or a small startup need to get some PR and can’t pay. “I’ve always wanted to learn that,” the parent or neighborhood board member or friend-of-a-startup says. “I’ll try!”

A couple of turgid books and dozens or hundreds of hours of free work later, and the grant is submitted or the public is related-to. Once you’ve accomplished that and had quantifiable successes, those can be easily translated into for-pay work (and the good kind, that pays handsomely by the hour), and those you’ve helped will be eager to write you references.

3. You can have a title you could not qualify for otherwise

I run a magazine, and we always need more help. “I would love to have an editorial position on my resume,” said one volunteer. While the volunteer’s skills are bountiful, her experience is in other fields; we’re not going to split hairs and we happily offered up a title that gave both the gravitas she required and also filled the functional hole we needed filled.

While it’s even more work for free, starting your own thing is another way to get a title for which you may not be able to be hired. A small nonprofit organization you started could use an executive director! How about you? Next time you want to apply for a position whose screeners won’t accept anyone without [fill in blank] years of experience in [fill in blank] management, you’ll fill in all the blanks.

4. Your free work will give you leverage for a for-pay position

A board member came to the board with an offer: “I work as executive director free for six months, while I work to raise money for a salary for myself.” Once six months had arrived and the volunteer had raised the requisite money in grants and donations we might never have attempted without him, it was an easy sell.

If you’re going this route, it’s good to get the agreements in writing, and even worth hiring a labor attorney to draft a contract with specific benchmarks. “If Jane Jones raises $x thousand in grants and $x thousand in individual donations by December 31, the salary will be $y effective January 1.”

5. You just really, really love what your work is doing

If you can afford to work for free, and you’re slaving away for some tiny nonprofit staffed by homeless youth, and there is no future in this work, and you’re far too old to get any sort of “community service” credit for this, and all you’re doing is washing dishes but you are having amazing conversations with the people you serve and you feel you’re making a difference in the world? GO FOR IT. Be prepared to look your well-meaning advisers in the eyes when you complain about your wrinkled hands or the stinky neighborhood where you work, when they say, “You shouldn’t work for free.” You can say, “Thanks for caring about me,” and show up again tomorrow because you are awesome and the world needs more people like you.

The newsletter offers tools, advice, and our proprietary research on interest rates for savings accounts at a hundred banks (including online banks), among other educational articles. Expert commentary is provided by Richard Barrington, CFA, the senior financial analyst at MoneyRates.com, Luke Landes (Flexo) of Consumerism Commentary and our other experts. As a member of the MoneyRates.com Network, you’ll also have access to exclusive content, including Richard Barrington’s Financial Literacy Calendar.

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In other news, Experian (@Experian_US) has invited us to participate in their #CreditChat on Twitter on Wednesday, May 29, at 3 p.m. Eastern time, noon Pacific. So mark your calendar and join J.D. Roth and the Get Rich Slowly (@GetRichSlowly) team for a lively discussion on savings strategies.

Here’s an idea: Leave juvenile delinquents in a prison for three hours to be harangued by hardened criminals in an attempt to convince the kids to change their ways.

That was the premise of the 1978 documentary “Scared Straight!” which won an Oscar and an Emmy. When it aired on TV, it was the first time some networks had allowed some very dirty words that you’d never hear from Mork or Mindy.

Many correctional systems across the country tried their own versions. Unfortunately, studies indicated that all the cursing and yelling and in-your-facing didn’t have a positive effect (in fact, it may have backfired).

But that didn’t stop “The Daily Show” from trying its own version — except instead of trying to save teenagers from a life of crime, this was an attempt to save them from student loans.

The episode began with a nice fellow by the name of T.J. lecturing to seven high school kids in a classroom. T.J. has an illustration degree and $170,000 of debt. “I screwed my life up going to college,” he tells the kids. “I’ll be dead before these loans are paid off. Don’t make the same mistakes I did.” Unfortunately, T.J.’s reasoned approach didn’t get through to the kids, so correspondent Aasif Mandvi brought in two fellows who looked more like the people in the original “Scared Straight!” They took a more aggressive tone and used different language, such as “Student loans are like herpes with compound interest!”

Longtime readers may recall that I think college is a big, fat, hairy rip-off, and that universities are at least somewhat immoral. But the truth is that I suspect my kids will go to college, and that my wife and I are saving for that expensive day. While a degree might enhance a graduate’s financial situation, the chances are increased by getting a debt-free diploma. However, there are only three ways to manage that: (1) build up plenty of savings before college; (2) get the most free financial aid (i.e., scholarships) possible; or (3) pay for college out of current cash flow.

In this article, we’ll cover Option 1. For Option 2, read 15 Things You Need to Know About Financial Aid. As for Option 3, we’ll point you to a tool that will help you calculate how much college will cost you, so you know whether you can pay for it out of pocket.

That tool is the savings calculator at Savingforcollege.com. It estimates the total cost of college based on your child’s age and tells you how much you need to save each month to reach that goal. The calculator has plenty of flexibility that allows users to fiddle with the assumptions, and it can even help look up the costs of specific colleges.

Now that you know how much college may cost you — and you’ve recovered from your fainting spell — let’s discuss how to save for that big chunk of higher-education change.

Where to stash your college cash

You can save for college in a variety of accounts, but there are three main candidates: the Coverdell Education Savings Account, the 529 prepaid plan, and the 529 savings plan.

Each option has the benefit of tax-free growth as long as the money is used for qualified higher-education expenses (otherwise, the earnings will be taxed and penalized 10%). Also, the assets can be transferred to other family members if the beneficiary doesn’t need the money (whether because of scholarships or mishaps). As for their differences: Pull up a desk, sit up straight, and keep your eyes on the chalkboard.

Coverdell ESA

What it is: An investment account that is opened with a brokerage or mutual fund company, owned by either the parents or the student.

Limits: Up to $2,000 can be contributed annually. Contributions are phased out at incomes between $95,000 and $110,000 for single tax filers, $190,000 to $220,000 for married filers (though there are some ways around these limits). Contributions can be made until the student turns 18 and must be withdrawn by age 30.

Investment choices: Whatever is offered by the company with which you’ve opened the account.

Impact on financial aid: Depends on the account owner. Assets owned by a student have a greater negative impact on aid eligibility than assets owned by the parents, though this impact is lessened if the student is still a dependent of the parents.

Why choose the Coverdell: If you want maximum control over your investments in terms of what you can buy and how often you transact, this is the education savings account for you. Also, unlike with 529 plans, Coverdell assets can be used for elementary- and high-school expenses. However, given the low contribution limits, saving only in a Coverdell will likely not be enough.

529 prepaid plan

What it is: An account offered by some states that locks in tomorrow’s tuition at approximately today’s prices (or at a small premium). The lock on tuition applies only at in-state schools; the funds in the account can be used at a private or out-of-state school, but with no guarantees that they’ll cover the entire cost of tuition.

A consortium of private schools also offer their own prepaid plan, which provides guarantees for students who attend any one of the 270 participating universities. Only 16 states offer prepaid plans, and some have closed their plans to new investors. Low investment returns and budget reductions are causing some experts to question whether all states can fulfill their promises to participants in prepaid plans.

Limits: The contribution amounts are set the by states, based on factors including expected tuition growth and investment returns. Participants can only contribute at certain times of the year. Many plans prohibit students already in high school from opening a new account.

Investment choices: None — all the money is managed by the states. The “rate of return” is essentially the future growth of tuition.

Impact on financial aid: The plan is considered an asset of the parent as long as the student is a dependent.

Why choose a prepaid plan: If you live in a state that offers a plan (or choose to participate in the private colleges’ consortium), you want to lock in today’s costs, and you’re reasonably sure your student(s) will attend a participating school, a prepaid plan may be for you.

Prepaid plans are also attractive to those who would prefer their funds to be managed by the state, rather than self-managed and subject to the whims of the markets. As mentioned, though, some states may not be financially capable of fulfilling their obligations to participants in prepaid plans. Finally, most of these plans just cover tuition; you’ll have to choose another account to save for other expenses, such as room and board.

529 college savings plan

What it is: An account sponsored by states but administered by financial-services firms. Families are not required to choose their own state’s plan — which is good, given that not every state has one — but some states do offer tax breaks to citizens who choose the in-state plan.

Limits: Very high contribution limits (more than $200,000, on average), and no income restrictions.

Investment choices: A selection of mutual funds, including age-based portfolios, which are allocated among various asset classes and gradually get more conservative as the student nears college age. Generally, investment selections can be changed just once a year.

Impact on financial aid: The account is considered an asset of the parent (or grandparent), which has a lower impact on financial aid.

Why choose a 529 savings plan: You can contribute more than $2,000, you want to save for college costs beyond tuition, you value the tax deduction offered by your state (if applicable), and you don’t mind the limited investment choices.

Now what?

The good news is you don’t have to choose just one of these accounts. You can contribute to each, if you have the resources and it makes sense for your situation. For example, you might participate in a prepaid plan to manage the future costs of tuition, then max out the Coverdell (because you enjoy picking individual stocks, an investment choice not available in 529 plans) to help cover room and board, and contribute to a 529 savings plan for additional savings. Of course, such a strategy would require a lot of cash; for those seeking a place to contribute a few hundred dollars a month, the 529 savings plan is the most popular choice.

If you go that route, start by investigating the plan your state sells directly to residents (as opposed to those sold through financial advisors). If there are tax benefits from going with the home team, you may need look no further. That said, it’s not worth choosing a horrible plan just for the potential tax benefits. Savingforcollege.com is an excellent place to begin your research — it provides a review of the tax benefits each plan offers, as well as rating each state’s offerings.

The plans that tend to shine in other financial publications’ reviews include the Utah Educational Savings Plan, Ohio’s CollegeAdvantage, the Maryland College Investment Plan, and Nevada’s Vanguard 529 College Saving Plan.

Finally, attempt to persuade your kids to choose a degree that has greater chances of paying off (unlike these degrees). Yes, choosing a career you enjoy is important, nearly crucial. But college is an investment, and like every investment, there should be a cost-benefit analysis. Going into a huge amount of debt for a low-paying career makes paying for a car, paying for a home, raising a family, and taking vacations — also important factors in life satisfaction — much more difficult.

Maybe it’s the years of conditioning we receive as children to think of summer as an endless stretch of time to be filled with fun and relaxation. Maybe it’s the fact that my day job is at a university, and during the summer dramatically fewer students are on campus.

Whatever the case, each spring when the semester is drawing to a close, I find myself making plans. At the moment I don’t have plans to travel, but there are plenty of other fun and frugal things that I’d like to accomplish during “summer vacation.”

Use my vacation time creatively

I could conceivably take a week or two off of work entirely. However, summer is generally a low-stress time of year for me and one of the best times to get ahead on projects and the next year’s events. As a result, I don’t tend to see the point of taking that much time off simply for a stay-cation.

Two years ago, however, I hit upon a vacation-hours strategy that I simply adored, and which I think I’ll be implementing again. Rather than taking a week off, I arranged to leave work two hours early for a month. The same 40 hours, just a different configuration.

The difference? Structuring my vacation this way gives me the freedom to do several things that aren’t possible during a “normal” workweek.

1. Take care of weekday errands

Eye appointments. The dentist. Annual veterinary appointments for the pets. An oil change and new tires for my car. There are so many things that can only really be accomplished between 8 a.m. and 5 p.m. on a weekday, and we’re not all fortunate enough to be able to literally run our errands.

It’s certainly possible to take care of these things as a one-off. However, these are also the type of errands that can pile up before you know it. Additionally, mentally it’s easier for me to keep track of my time if it’s consistent. I’m much likelier to remember to make it to my dentist appointment if it’s the same time that my eye appointment was the day before.

Some errands, like grocery shopping, have to be done more or less on a weekly basis for me. After a full day at work I’m often too exhausted or frustrated to want to spend an hour or more in the store, especially since that’s when all the other exhausted, frustrated people are in the store too! That means this task is generally relegated to a weekend. While it’s the best solution for me, I do dream of not having to spend the weekend playing catch-up.

But if I’m leaving work at 3, it feels like a party! Like I’m playing hooky, even if I did work harder throughout the day so I could leave early. I can make it to the store, beat the crowds, and free up my weekend all in one.

2. Experiment in the kitchen

Speaking of the grocery store, when you combine taking care of that errand with getting home early, you have a situation that is the perfect storm for cooking! Cooking is probably my favorite hobby, and summer is my favorite time to engage in it.

Since Arizona doesn’t observe daylight savings time, it’s usually dark by the time I get home during the winter months, even if I don’t stop to run any errands. In the summer, not only am I able to get home sooner, but it will be sunny out until well after 7 p.m.! As a result, I’ll have both the time and the motivation to try some more complex recipes.

Summer is also one of my favorite times to cook because fresh ingredients are much more varied, high-quality, and less expensive than during other times of year. I just made my first batch of fresh salsa yesterday, and I can’t wait to put it on everything. So easy, and so much better than store-bought salsa.

Honey’s Easy Salsa (Hot!!!)

• 4 Anaheim chilies, roasted and peeled, then de-seeded

• 4 jalapenos, de-seeded and chopped into quarters

• 5 Roma tomatoes, chopped into quarters

• 2 habanero chilies, de-seeded (omit if the heat scares you!)

• ½ cup apple cider vinegar

• salt and pepper to taste

• Directions: add all ingredients to food processor and blend. Refrigerate 1 hour before serving

Seriously, do yourself a favor and never eat store-bought salsa again. But salsa is just the beginning. Huge salads full of fresh vegetables, roasted veggies on the grill, gazpacho galore, berry and rhubarb crisps and cobblers. It’s the best time of year to learn to cook!

3. Start an exercise routine

For you lucky ducks who don’t live in a place where the weather is extreme, you may have plans to engage in outdoor sports. Here, that’s not really possible unless you leave town or hike at 5 a.m., which I don’t enjoy. However, it has come to my attention lately via the waist of my pants that I should really start exercising more.

Exercise is one of those things that is easier once it becomes a routine. It’s challenging, however, to get an action to become a habit. I figure by giving myself extra time in the evenings (I’m not going to cook every night!) I will have removed all the excuses and start something I’ll stick to. For the last few months, I’ve been using Groupon to try and find a gym that offers something I’ll enjoy enough to do every day. After trying four or five different places, the one I love the most is Bikram yoga.

Unfortunately, yoga is expensive. Fortunately, my SEO side gig has experienced a recent uptick. And I have other ways to exercise while I save. First, because I still have some Groupons to use up from places that I didn’t like as much. Additionally, it looks like I’m eligible for a settlement class with LA Fitness that will net me a 45-day free pass.

In other words, even though yoga is a luxury, I won’t buy a membership until 1) I can pay in cash without derailing my debt payment schedule and 2) I’ve gotten my money’s worth out of the other methods of exercise I’ve tried.

What about you?

I find that by taking off only two hours per day I give myself the Goldilocks of free time — an amount that’s just right for increasing my productivity, without increasing the temptation to while away entire days at the mall or movie theater.

What are your plans to have some fun without spending too much cash this summer?

I said goodbye to a promising career with a six-figure salary last month. I have dreamed about this moment for over two years. Still, when it was time, I spent several days wrestling with acute anxiety and insomnia. This has, by far, been one of the hardest things I’ve done in my life.

Get Rich Slowly reader stories about quitting (here, here, here and here) provided me with immense insight into making a life-changing decision like this. The hundreds of comments on those articles gave me different perspectives to ponder. Together, they helped me work things out for myself. I want to give back, in some sense, by sharing my story.

Background

My husband and I came to the U.S. for higher education, and when we graduated, we joined tech companies as software engineers. Our jobs paid well, and as financially sensible DINKs, we paid off our loans quickly, started saving diligently and bought a home with 20 percent down payment.

Life was good — for a while, anyway. Then the 2008 financial crisis hit. I was expecting a baby at the time, and the worry that I would lose my job while I was pregnant drove me to work long hours all the way to my due date. I left on my maternity leave praying I would still have a job when I got back.

I did, but the stress of working in an uncertain environment on a high-profile project while raising a baby started to take its toll. Things hit rock bottom around my daughter’s second birthday. For the first time, I remember thinking I really want to quit. I didn’t know what I would do after I quit — I just didn’t want to go on like this for the next 20 to 30 years.

Then, I pulled myself back together and carried on.

The breaking point

A few months after that, however, my husband had a major health issue. It was the kind where you sit nervously outside an emergency room and question everything — from the quality of your life, to the kind of work you do, to the kind of person you’ve become, all the way to the existence of God.

It was the last straw on the camel’s back. When the storm passed, I realized I had a choice – pull myself back together (again!) and continue like before, or treat this as a defining moment and build a new life.

I chose the latter.

Financial planning

Part of the change was to move out of the high-stress tech job. It took me around two years from then to finally be ready — financially and emotionally. Here’s what I did:

First step: mortgage

From the time the layoff rumors had started we had been saving money like squirrels on steroids. Also, right from the beginning, we had been paying off the mortgage at an accelerated pace. So the first big change was to finish off that mortgage.

Second step: savings

My first “plan” was to keep working and save diligently until we had enough. But, both my husband and I are financial paranoids, and one fine day, it dawned on me : We’d never have enough. So I set a rule for myself: when I had enough savings to pay myself a salary that covers my average monthly expenses plus a small buffer, for the period of a year, preferably two, I would quit. These savings were after the 401(k), emergency fund, HSA, and vacations. I knew it would take me at least a couple of years to get there.

What’s next?

After my husband’s emergency room episode, I went through a period of intense introspection. I didn’t like what I saw. Somewhere along the way, I had let the stress of my life turn me into an impatient and snappy cynic. And the person who got the brunt of it was my little 2-year-old daughter.

I wanted to do something about it, but change was proving hard. One day in a desperate attempt, I indulged myself by buying over half dozen self-help and parenting books.

Those books changed my life.

I’d heard a million times that being a parent is the most fulfilling thing in the world, but for the first time, I started experiencing it. It felt like magic.

That’s when the light bulb went on.

There must be a million parents out there just like me, struggling with who they have become and the impact it has on the way they raise their kids. These folks want to become better people and better parents but don’t know how or where to start. There are people like me who make a resolution to change but give up as the demands of everyday life interrupt.

What if I could be the catalyst for change? What if I could build a blog that challenges people to improve the people we are, and in turn, improve the kind of parents we can become, and thereby the kind of people our kids will grow up to be? What if I brought together the best advice from different fields and helped them apply it to everyday parenting challenges?

I don’t remember the last time I was as excited. I went out and bought afineparent.com, and spent every free minute dreaming, planning and fantasizing.

Planning for success

Anybody can start a blog, but turning it into an honest livelihood – that takes a bit of planning and work. I could potentially figure it out by myself, but considering there are so many proven experts out there, why reinvent the wheel?

I joined an intensive coaching program by Jon Morrow, someone who is as well known for his keen marketing savvy as his exceptional writing style. With this choice, I spent most of my “learning” budget, but gained a mentor who’s been in the trenches and knows the terrain well. I’m hoping that will improve my odds of success just like having a mentor did back in the corporate world.

Besides, plunking down a chunk of change does wonders to your commitment.

Will I succeed? Financially — I don’t know. I sure hope so.

Otherwise, to some extent, I think I already have. I’ve broken the status quo and started on the course of a positive change for myself, for my family, and hopefully for a bunch of people around the world that I am yet to meet.

In a recent post, staff writer Lisa Aberle provided an excellent outline of the kind of financial information and preparation you should provide for your loved ones in the event of your incapacitation or death. It’s no fun to prepare this information, which may be why so many people avoid it. But as we’ve discussed, it’s necessary to have a plan to help people navigate your finances during what is sure to be a highly emotional time. But what about highly emotional times that aren’t actually bad?

It’s not very likely that you’ll get hit by a bus or fall into a coma tomorrow, but you know that you need measures in place, just in case. Well, it’s also not very likely that your office pool will win Powerball or that you’ll receive a large, unexpected inheritance, so why would the fact that it’s not likely stop you from being prepared to handle a windfall should one come your way? Do you have a plan in place in the event of a windfall?

Many people are not prepared for the various ways that money could come into their life, whether through the wildly improbable lottery or gambling winnings or slightly-more-practical payouts such as an insurance settlement or profits from selling a home or business. The news is rife with unfortunate stories of lottery winners whose winnings didn’t last very long. In fact, according to the National Endowment for Financial Education, about 70 percent of people who suddenly receive large amounts of money will lose it within a few years.

There is a lot of information out there on what to do with your windfall once you have it, but not too much on how to prepare for a sudden financial gain. Make an outline of information that you can reference in the event of a windfall; a touchstone to reality in the midst of all the emotion and excitement could be a financial lifesaver. Granted, the amount of money that comes to you will probably dictate how far down this list you can go. So, think about making a couple different versions of this list, perhaps “10-50K,” “50-250K,” and “Greater than 250K.”

Window shop for a lawyer and a financial adviser. This step may or may not be necessary if the amount is on the smaller side. If you don’t already have/need one, narrow your choices down to a top three and record their information on a spreadsheet. You may want to go so far as to have a free consultation.

Bank accounts and taxes. Your financial adviser will be able to help you decide where to park your funds and how to plan for your tax obligations.

Debts and obligations. Create a list of all outstanding debts. Remember to update this list every few years as your obligations change.

Splurge. Giving yourself permission to splurge – just a little bit – will feel like a treat without going nuts. What percentage would you splurge? Two to 10 percent seems to be a common suggestion. Set a limit for your future self to have some fun.

Financial goals. Write down your financial goals. Pay off credit cards? Pay off student loans? Pay off mortgage? Fund retirement account? Fund Junior’s college account?

Charity. This includes gifts to friends and family. Who would you help if you could? Making these choices before you come into any extra money could help you identify your priorities. Pay for niece’s college? Pay off parents’ car? Become a donor for a local charity?

Personal goals. Your financial obligations have been met; now, it’s time to use money as a tool to help reach some of your personal goals. What personal goals would this money help you achieve? Would you start that business? Go back to school?

We’ll all pass away one day, but none of us are guaranteed to hit a jackpot with a seven-figure payout. Do you think planning for an unlikely event is worth your time and effort? What additional information would you have ready in order to be prepared for a financial windfall?

This year, our office welcomed a 24-year-old professional into our tight-knit group. Aside from making everyone else in the office feel really, really old, it’s been fun and exciting learning what the younger generation is into these days. Let’s face it — her life is much more exciting than mine. On weekend evenings when I can be found bathing my kids, making meal plans, and doing laundry, she is usually out on the town. While I spend my free time writing and slaving away at our housework, she is planning fun outings or visiting friends from college. She can stay out until 5:00 a.m. and sleep in until noon if she wants to, and she often does. Hearing her recount all of the fun things she’s been doing makes me miss the days when I didn’t have so much responsibility.

My new co-worker is also extremely frugal. She makes practical choices and typically buys all of her business clothes second-hand. A thrifty shopper, she frequently uses coupons and doesn’t try to impress others with material possessions. In fact, she carries a purse that she bought at the Dollar Store for something like $8. I had no idea that the Dollar Store sold purses and that is exactly what I find impressive; she always finds new and interesting ways to save without sacrificing style or function. To top it off, she is allocating all of her extra money toward repayment of her student loans. I love hearing updates and cheering her on as she aggressively kills off her debt. If only I could’ve been more like her at her age, I would’ve been much better off.

Projecting my insecurities

Despite her obvious competency, I still have to stop myself from giving her unsolicited advice. It’s not that I think she needs it. On the contrary, I know that she’s making great decisions compared to many of her peers. But despite her ability to manage her finances quite well, I want to prevent her from making all of the tragic mistakes that I once made. I can’t help but project onto her wishes for my former self when I was 24 years old. If only I had someone around to smack some sense into me, maybe it would’t have taken me nearly as long to get my financial act together. There are so many things I should’ve done differently.

Can you imagine what it would be like to start adulthood over with a clean slate? Since my friend is so financially aware for her age, she has the opportunity to avoid many of the pitfalls and traps that young people entering the job market often fall into. Unfortunately, my twenty-something former self is a perfect example of “what not do do.” There is a plethora of advice I desperately needed in my 20′s, and watching her make all of the right decisions has forced me to come to term with my own mistakes. This got me thinking, “What would I tell your former self, if I had the chance?”

Start saving for retirement immediately. Due to the magic of compound interest, it’s beneficial for young people to start saving for retirement as soon as possible. I wish I would’ve started saving immediately so that I wouldn’t have to work so hard now to catch up.

Avoid debt like the plague. It’s tempting to buy designer clothes or a fancy car when you first start out. When I was her age, I definitely tried to impress others with material possessions I couldn’t afford. In my early twenties, I ran up my credit cards too many times to count. Unfortunately, I punished myself this way many times before I matured enough to stop. I wish I would’ve lived within my means and spared myself the enormous burden of debt in the first place.

You don’t need a new car. When I was 23, I financed a $25,000 car that I definitely couldn’t afford. While getting a new car proved to be fun and exciting, the payment that came with it became a huge burden. I wish I would’ve forgone the new car and kept the one I already had.

Live cheaply while you can. Saving as much money as possible before getting married or having children is an ideal way to start off adulthood. Creating your own safety net provides stability and creates peace of mind. I wish I would’ve lived cheaply while I had the chance. Now that I have a family, I have to work that much harder to save.

Your friends are probably broke. I remember seeing what my friends owned in my early twenties and being really confused. Did they really have that much more money than I did? The reality is that easily available credit makes it nearly effortless to enjoy a lifestyle you can’t afford. Now that I’m older and wiser, I realize that the majority of people I know are making payments on most of their stuff. Knowing that fact in my twenties would’ve explained a lot!

It’s stressful knowing that I wasted so many years before getting serious about saving and investing. On the other hand, always looking backward can be counterproductive. Each day presents a new opportunity to make better choices, and I’m proud to be on the path to financial freedom. It’s certainly better late than never. And, who knows? If I would’ve made better choices, my life might be completely different. The thought of a different life is terrifying, and I’m thankful that I had the opportunity to learn so many things firsthand. I’m glad for each lesson, even if I had to learn them the hard way.

The fact is, my co-worker is a smart and sophisticated young lady. She gets to start her adult life with a clean slate, but not everyone has that opportunity. Still, all is not lost. One thing I’ve learned is that it’s never too late to get your financial life in order. After all, mistakes are only insurmountable if you insist on repeating them. I’ve made my share, and I’ve moved on. And I know that at this moment, I am exactly where I am supposed to be.

What would you tell your former self, if you had the chance?

A couple of weeks ago, I wrote about the “Tyranny of the 401(k) Industry Complex.” The post was a commentary on an episode of PBS’s “Frontline,” which argued that the current defined-contribution retirement system is failing the country; financial-services companies make money while working Americans don’t, partially because these workers are getting ripped off, but also because the average American doesn’t have the time, skills, or inclination to manage their own retirement planning.

There was a good amount of debate in the comments section about whether retirement planning is all that difficult. I can see both sides, but in this post, I want to make it as simple as possible. If you follow this advice, you’ll be taking some big steps in the right direction. It’s not a perfect plan for each individual — feel free to add your own tips below — but it’s a solid strategy for those who have been frozen by “analysis paralysis” and have put off saving for retirement out of fear of making big mistakes.

Step 1: Save at least 10 percent to 15 percent of income, more if you’re starting late

The typical American is saving around 7 percent or 8 percent; that won’t be enough, especially for those who didn’t begin saving in their 20s. To help workers determine a good savings rate, the super-smart folks at Morningstar’s Ibbotson Associates came up with some good guidelines. Their assumptions:

• Retire at 65
• No cuts in Social Security benefits (Yes, it’s very possible that benefits will be cut, but most people should also retire later than age 65.)
• Inflation at 2.5 percent
• Income needed in retirement is 80 percent of pre-retirement income after retirement savings (e.g., if your household income is $100,000 a year, and you save $10,000 a year, your required retirement income is 80 percent of $90,000, or $72,000)

It’s an 11-page document full of fun (or not) charts, but since we’re trying to keep this simple, here’s a sample:

Here’s an example of how to use this: A 35-year-old who has already accumulated $50,000 would subtract 2.85 percent (5 x 0.57 percent) from 17.6 percent, resulting in a savings rate of 14.75 percent.

Keep in mind that your savings rate includes an employer match to your 401(k) contributions, if you’re lucky enough to have one. So if your employer matches 50 cents on the dollar up to a contribution rate of 6 percent, and you contribute 10 percent of your salary to your retirement plan, your actual savings rate is 13 percent.

All that said, if even looking at that chart makes you want to run away to Facebook, just do this for now: Save 10 percent to 15 percent of your salary if you’re in your 20s or early 30s, and bump it up five percentage points for every five years you delay saving. Yes, that might be more saving than you’re capable of. I’ll address that in my next post.

Step 2: Choose the traditional 401(k), then the Roth IRA

Another speed bump along the road to retirement savings is the decision between a traditional and Roth account. The easy solution: Choose both. Use the 401(k) up until you take full advantage of the match, then use a Roth IRA for the rest. Two benefits: You’re getting “tax diversification” by having both types of accounts, and you’re not putting all your eggs in the 401(k) basket. The latter benefit is partially what that “Frontline” episode discussed. The sad truth is, many employer-sponsored retirement accounts stink. But opening an IRA with a mutual fund company or discount broker gives you more choices at better prices.

Of course, choosing an IRA provider and opening the account is itself a speed bump. So start immediately contributing to your 401(k), then resolve to do the Roth IRA thing later. But if you know you won’t do it (self-awareness is a virtue!) then just get it all in the 401(k) — especially if you earn too much to contribute to a Roth IRA. (For 2013, the eligibility to make contributions phases out for single taxpayers with a modified adjusted gross income of $112,000 to $127,000, and 178,000 to $188,000 for married couples.)

Step 3: Choose a target retirement fund

Once you get your money into the account, you have to decide how to invest it. The easy answer: a target retirement mutual fund, which invests your money with a general retirement date in mind. The name of the fund always includes a year, and you choose the fund with the year closest to when you think you’ll retire. Based on that time horizon, the fund manager chooses an appropriate asset allocation — some U.S. stocks, some international stocks, some bonds, some cash — and then rebalances the portfolio for you, making the fund more conservative as the target date approaches. It’s essentially a one-stop-shop for hands-off investors.

While investing in just one fund may sound too risky, a target date fund is actually a “fund of funds” – i.e., a mutual fund that owns many other funds. Let’s look at an example. Consider the T. Rowe Price 2040 fund, a fine choice for people who aim to retire in 25 to 30 years. It owns the following funds (according to Morningstar):

Given that the year 2040 is a few decades away, this target retirement fund is mostly invested in stocks. As 2040 gets closer, the fund will gradually move from stocks to bonds all on its own. You don’t have to do anything.

Now, two caveats about target retirement funds:

1. Like all investments, they’ll drop in value. The T. Rowe Price 2040 fund dropped 38.9 percent in 2008, when the S&P 500 dropped 37.0 percent.
2. Investing in a target retirement fund doesn’t guarantee you’ll be able to retire on the target date. You still have to make sure you’re saving enough.

Step 4: As you get closer to retirement, monitor progress

Once you reach your 40s — and certainly your 50s, and definitely right before you retire — you need to do some number-crunching to make sure you’re on track.

You can use an online retirement calculator, and fiddle with the variables to see what has the biggest impact on your chances of success. You can also hire a financial planner who charges by the hour (such as some of the folks at the Garrett Planning Network and NAPFA) to give you an objective, professional analysis.

A fine start, but…

Voltaire is credited with the quote “perfect is the enemy of good.” Don’t put off saving for retirement until you know everything and feel that your plan will be perfect. After all, “perfect” retirement plan doesn’t exist, partially because there are too many variables that you don’t have control over (e.g., investment returns, inflation, the future of Social Security). But you can increase your chances of success. The advice in this post will get you going in the right direction. Put these wheels in motion, then take time to learn more and customize the plan for your situation. Maybe you need to save more or less. Maybe you can do better than a target retirement fund. Maybe you should have all your money in a Roth. The good news is, none of this is set in stone. Just start doing something now, and change later as you learn more.

I recently got sick for the first time in almost a decade, and was bed/couch-ridden for a good four days.

Since I had some time on my hands, I was able to watch a few documentaries on my Netflix queue. One of those was The Queen of Versailles, a film that will make your jaw drop like an episode of Hoarders. It’s hard to believe people really live like that.

El Nerdo also did a review of this documentary, and he does a great job of explaining the film. If you aren’t familiar with the film, The Queen of Versailles depicts Jackie and David Siegel, owners of Westgate Resorts, as they build the largest and most expensive single-family house in the U.S. The Florida mansion was modeled after France’s 17th century Palace of Versailles and is a staggering 90,000 square feet. What does one do with 90,000 square feet? The plans include 30 bedrooms, 23 bathrooms, a 30-car garage and amenities like a roller rink, baseball field, children’s theater, and bowling alley.

When the film starts, construction on the mega-mansion is well underway, but then the economy tanks. The business is in trouble, and David Siegel admits that they have no real personal savings to speak of.

There are a lot of great money lessons in the film, even for those of us who live in houses the size of Jackie’s closet. But what struck me the most was Jackie’s position in all of this: she had no idea where they stood financially.

One spouse is in the dark

“We don’t talk about financial problems,” Jackie says in the film. “I guess I’ll have to watch the movie to find out what’s going on in my life.”

Okay, sure. Jackie is a trophy wife who is 30 years David’s junior, and she’s depicted as a mostly-clueless shopaholic. But before she was a pageant queen and a model, she earned an engineering degree and worked at IBM.

Yet she has no idea where she stands financially.

That makes her position even more precarious than David’s. His decisions affect the entire family, yet she’s unaware of what those decisions are. For instance, in one scene, David yells at the whole family because someone left a light on, angry that their carelessness would run up the electricity bill. Yet he then takes out a loan to hang onto the unfinished mansion they could no longer afford. Meanwhile Jackie has no idea if they’re actually selling the home or not.

Also, what happens to Jackie if something happens to him? He’s 30 years older than her, if he were to become incapacitated or worse, she wouldn’t have a clue how to take over the family finances.

So why would someone who is obviously capable of understanding their finances remain in the dark?

There are probably a lot of reasons why it happens. David was a wealthy businessman when he met Jackie, who was a model. In their relationship, he took care of everything, and they aren’t exactly equals or partners in their marriage.

But more commonly, since the Siegels are anything but common, I suspect that it happens unintentionally. One person is better at dealing with numbers or likes handling the money, so they wind up paying the bills and checking the credit statements and the other person falls out of touch with how much is saved where.

Get on the same page

If you’re reading Get Rich Slowly, I think it’s safe to assume that you have an interest in your finances. But what if your partner doesn’t? Or what if life has gotten in the way, and they just aren’t up-to-speed anymore?

Even if you’re the one balancing the checkbook, your partner needs to know the basics about what accounts you each have and what’s in them. It allows you to work as a team and ensures that, if it’s ever necessary, your partner can take over the family finances.

But don’t bust out the spreadsheets just yet. There’s a right way and a wrong way to get them involved.

How to get your partner up-to-speed

To learn more about how to involve your partner in the money decisions, I spoke with Jacquette Timmons, the author of Financial Intimacy.

Here’s her 5-step plan to get your partner on the same page.

1. Ease them into it. If your partner is totally in the dark, let them spend three months just looking at account statements, says Timmons. “They could see a pattern of expenses they weren’t aware of, like automatic deductions for services they don’t use or incorrect charges on the credit card,” she says. “At first, just let them look and start to ask questions.”

2. Be open to questions. Encourage them to ask questions, and ”don’t take it as questioning your knowledge or skills,” says Timmons.

3. Get some context. Take the time to understand each of your money backgrounds, advises Timmons. “We all come to the table with our own little money stories,” she says. “Try to understand your differences and how to integrate different financial philosophies.” For instance, one of her clients assumed he and his wife would have separate finances because that’s how his parents handled their money. This was a foreign idea to his wife, whose parents shared everything. “To compromise, they created yours, mine, and ours accounts,” says Timmons.

4. Share info the way they learn best. There’s more than one learning style, so make sure you present information the way your partner learns best, says Timmons. For instance, one man asked Timmons how he could get his wife involved in their finances. “I asked, ‘how does she take in information?’” says Timmons. “He was going to her with Excel spreadsheets, but it turned out that she’s more visual. So I told him to turn those spreadsheets into a Powerpoint presentation, or something more visually appealing.”

5. Schedule a money date. Make a weekly appointment for a 30-minute money date. “The purpose is to handle some aspect of your finances together,” says Timmons, “but don’t go more than that 30 minutes.”

And try to make it fun! A money date doesn’t exactly sound like a great time, but “it doesn’t have to be a dreaded experience,” says Timmons. “Schedule money dates when you aren’t stressed, like Sunday night or some other downtime,” she says. “And build reward system for when you keep the date. Give yourselves a treat.”

That’s some practical advice. But getting back to la-la land, where at the Siegels at today?

David Siegel filed a lawsuit over the film for defamation, claiming that it damaged the reputation of his company. Jackie, who is considering a reality show, still promotes the film, saying that she and her husband “simply don’t discuss the lawsuit.”

Construction has resumed on their mansion.

Judging a film by its DVD cover, I assumed The Queen of Versailles would be a vapid Real Housewives-style production. But it actually delves into the serious issues of their rags-to-riches, “American Dream”-on-steroids lifestyle.

It also made me incredibly thankful for my marriage and our 1,500-square-foot home.

About the interviewee: Jacquette Timmons is the founder of Sterling Investment Management, Inc., a financial coaching firm. You can follow her on Twitter at @jacqmtimmons.

J.D. has already covered ways to save money on food. But this time, I wanted to focus on animal protein.

According to a survey by the Bureau of Labor Statistics, meat makes up over 22 percent of our at-home food (not out-to-eat or alcohol) budget. Obviously, you can cut your food budget by decreasing your meat consumption. But if you want to eat meat, how can you do it most cheaply? And waste the least amount of food?

Eat the crazy stuff

By the time my husband and I bought our first freezer full of beef, I knew my way around most steaks, roasts and ground beef, of course, but we didn’t know what to do with round steaks or even the brisket. Meat is expensive, so I didn’t want to waste anything. I hate food waste.

And I wasted even more of the animal than I realized. A couple of times a year, I help a friend sell her meat products at a popular, big-city farmer’s market. One of the most popular items is chicken feet (makes great broth that gels, I’m told!). Knuckle bones, chicken livers and gizzards, and organic liver are also popular (and cheaper), along with the normal steaks and ground beef.

My grandfather, raised during the Great Depression, said butchering was a community affair. Very little of the animal was wasted. They even scrambled the brains, which are highly perishable and had to be eaten within hours of the animal being butchered. Tongue sandwiches were also favorites.

Although things weren’t wasted during the Great Depression for obvious reasons, I wonder if my grandfather’s immigrant parents were just used to eating the entire animal. A former student (her parents weren’t born in the US), says a cow’s head wrapped in foil and roasted is incredible. She doesn’t like the eyeballs, though they are a delicacy to the rest of the family. And her favorite food ever is a soup with tripe in it.

“Nourishing Traditions,” by Sally Fallon gives several suggestions for eating organ meats like sweetbreads, kidneys, liver, heart, brains, and chicken livers. Consume with care: Liver, for instance, can accumulate toxic substances, and some believe that eating brains can transmit bovine diseases to humans.

Grinding up organ meats and mixing it with ground beef can disguise the taste if you’re unsure. But I’d rather save money using less adventurous techniques.

Make the meat stretch and use it all up

When I first started cooking for my husband, meat was the focus of our meals. Pork chops, steaks, chicken breasts, you name it. Our grocery bill was high for two people.

“You eat like what?” my sister said when I complained about our expensive grocery bills. “We eat a lot of one-dish dinners and casseroles, so the meat is diluted with vegetables or pasta. I can feed my family for less.”

I switched, then, and it made a big difference in our food budget. If we do have pork tenderloin one night, then I will make a stir fry or something with vegetables to use up the leftovers.

One of the easiest “stretcher” meals starts with a roasted chicken. Dice up the remaining chicken for a casserole or chicken enchiladas. The carcass, along with vegetable scraps or cut-up onions, can be used to make a scrumptious stock. Actually any bones can be used to make stock. The “Joy of Cooking” cookbook has pages of different stock recipes.

At our house, we rarely buy stock of any kind. In fact, I just made some chicken stock today that went into the freezer.

Cheap cuts

Some cuts of meat are less expensive than others. When our butcher asked how we wanted our steer processed, I didn’t have a clue. Understanding the different types of cuts can definitely save you money. My farmer’s market friend has drawings of the animals and where various cuts can be found. She gives her customers suggestions on cooking methods and recipe ideas. In general, when prepared well (or medium well – haha!), the expense of the cut doesn’t mean the meat is more or less flavorful. Instead, tougher (more inexpensive) meats may benefit from long cooking times while tender cuts require less time.

And sometimes you may actually prefer the cheaper cut. For instance, boneless skinless chicken breasts are $1.49 per pound on the biggest sale at our supermarker while boneless skinless chicken thighs are sometimes $.99 per pound. Because the thighs are juicier, we actually prefer the cheaper of the two options.

Paying less for meat

Buying a quarter or half of beef or any other animal may not save you money from the cheapest source of meat. However, the meat will probably be better quality. Or, at the very least, you can find a farmer/rancher who raises the meat in a way that’s important to you.

But sometimes it is cheaper. We don’t often raise beef, but we had two steers about four years ago. We sold them for $1.50 a pound. This was live weight, so our customers (aka family) paid for the whole animal and had to pay processing costs, but it was less expensive on average for them.

We’ve also raised and butchered (just once) our own chickens. In the past, for friends and family who want chicken (but don’t have the space or don’t want to do the chicken chores), we have split the cost of chicks, feed, and processing costs. Then, my husband and I do the work, and we split the chickens at the end. We end up making $2/hour or something, but we know exactly how the chickens were raised. And so do our friends.

Lastly, when meat goes on sale, you can stock up if you have a freezer. My “buy now” price is $.99 per pound or less.

Any way you slice it, animal protein takes up a signifiant amount of our food budgets, so if we can beef up our tactics, we can save some money at the grocery store.

Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want submit your own reader story? Here’s how.

Six years ago, I was broke. I was deeply in debt (to the tune of $30,000) and creditors called me nonstop. I felt powerless, hopeless and totally alone.  It was one of the darkest times in my life. The worst part: I was making good money; I was just clueless about how to manage it.

Eventually, I decided to take my power back and get into action. (Looking back now, I know that taking action is the best way to cure anxiety. When you’re taking action towards your goal, you feel powerful! When you’re hiding under the covers, anxiety will crawl into bed with you.)

Eventually, every debt was repaid, and I went from being an impulsive spender to a devoted saver in about eighteen months – without bankruptcy, credit consolidation or counseling.

And I’ve never looked back.

I shared my story with a friend who was struggling with similar issues.  Curious, she asked me how I did it. The truth is, I never really thought about HOW I did it. Without really looking closely, I just figured I got sick of being broke one day and got into action. But when I retraced my steps, I found that my success ultimately boiled down to a handful of daily habits that turned my finances around — and anyone can repeat them. The hardest part is remembering to do them consistently.

So here are the five habits I adopted that got me on the road of financial recovery, for good!

1. I commit to using all cash every day for a year. Me and plastic? We had to break up for awhile. When I discovered that debt equaled slavery, my first order of business was to cut the cards and use all cash instead. I closed many of my store accounts and held on to my oldest card. I kept that account open but did not charge any new purchases on the card. (Note:  I used my debit card as a substitute for cash when a card was needed.) At first, I was scared to go all-cash and it felt like my very survival was at stake. Soon I learned how to live within my paychecks.  It got easier over time especially since I also adopted the next habit…
2. I checked my balances online every single day. For a long time, I never shared this with anyone because I thought it seemed obsessive. But this habit works! Checking my statements every morning kept me honest about where my money was going and made it less likely to spend impulsively throughout the day. I had a real dollar amount rolling around in my head, and not some fuzzy estimate that made it difficult to make good decisions.
3. I kept a crispy $100 bill in my wallet as a symbol of my financial future. Okay, this one probably sounds a little nuts, but it worked like gangbusters. When I was paying down debt, oftentimes I felt poor. To feel better, I kept this bill as a reminder that in my financial future, my wallet would always be full. Anytime I made a purchase I was reminded of my goal. It helped to keep my motivation high when funds were low. (And, nope! I didn’t spend it! I held on to that same bill for almost three years.)
4. I put 1 percent (yes, just 1 percent) of each paycheck away into a savings account automatically. In the beginning, my savings account was teeny tiny, but it wasn’t about the dollar amount at first. It was about getting into the habit of saving regularly. As I began paying down debt and closing accounts, I would take money that was being used to pay down debt and instead put it towards my savings. Eventually the power of momentum took over, and I started to save more aggressively over time. Once I completely paid down my debt, I started putting all the money that was going towards credit card payments into savings.
5. I rewarded myself on pay day. Any time I stuck to my budget for an entire pay period, I treated myself on pay day with an “affordable luxury.” It would be something I really wanted and that was pretty low-cost. I would treat myself to a nice lunch, a manicure, a brand new book, a 10-minute massage or a bar of expensive chocolate to show myself a little love and appreciation. Over time, I really came to look forward to those little treats, especially in those last few days before pay day when my bank account got low.  I knew there was a reward at the end so I was able to stick to my plan without dipping into my savings.

These are the five habits that I used on a consistent basis to help turn my finances around for good. The best part is, after six months of sticking to these habits, they became automatic. I no longer had to “will” myself to do these things – they came naturally. Now it feels weird when I’m not in harmony with my finances. It’s become second nature, and I have these powerful habits to thank for my success.

Your turn

What about you? What are some powerful money habits you could adopt that would make dramatic changes over time in your financial life?

The beauty is that once they become routine, you’ve got a strong foundation to make lasting change with your money — for good!

I think my own sense of financial security came once I had paid off all of my debts (excluding my mortgage) and had enough money to save a chunk each month.

Certainly, having a full-time job added to the secure feeling. But in the magazine world, where I spent much of my career, jobs are hardly secure. Of the 11 magazines I have worked for, only four are still publishing today! Luckily, I was able to find another job after a magazine failed, so I could stay on my saving track.

When I got a raise or a higher salary in a new job, I still lived on way less than I was earning. I figured, my life was good when I was earning X dollars, I can live the same way and all of the additional money will get banked.

The most important thing, though, was being out of debt. There is no worse feeling than scrambling to make ends meet, as so many of you know. Debt is slavery. It also limits your options, your freedom to make choices based on what you want, not on being a slave to debt service.

Maybe you have a dollar figure in mind that will make you feel secure. If you are out of debt and earning a good living, you might fall victim to lifestyle inflation. “I’m making $50K a year; I can buy a better car, a better house…” Always spending more because you’re making more is not going to get you rich slowly.

What else might make you feel secure? Having a house paid off, knowing that in retirement you have no monthly debt obligation? Or having no strings attached so you have the freedom to go where you wanna go, do what you wanna do? (For those under 40, that’s a song by the Mamas & the Papas from the ‘60s. Enjoy!)

So what will make you feel financially secure? Is it making a certain salary? Having a specific number saved for retirement? Being debt-free? Tell us!

So, assuming I’m able to get things squared away with the company that owns the site, I’ll probably be contributing now and then. I’m likely to focus on shorter pieces, especially those that comment on current events. And I’ll even bring back the old “spare change” column where I share a list of interesting links — like this one.

First up, Abby at The Force of Happiness recently wrote about her fun money system. She and her husband use my favorite budget (Elizabeth Warren’s Balanced Money Formula), which allows them to spend 30% of their income on wants. But this method didn’t quite work for them until they made some tweaks. I think Abby’s solution could be useful for many GRS readers.

Next, CNBC has a smart article that states quite clearly: “Advice from the gurus of Wall Street may be rather less valuable than their fans would like to believe.” Collectively, professional investors generally under-perform the market. (Stanford professor William Sharpe has famously demonstrated that mathematically, this must be the case.) Sure, some pros can beat the market for a year or two (or even twenty), but picking stocks is ultimately a loser’s game.

Having said that, there are investors who do beat the market. You may remember that Warren Buffett is one of my financial heroes. I like his investing philosophy and his straight talk. USA Today recently featured a summary of Buffett’s current advice for average investors: Keep a big emergency fund. Avoid bonds. Buy stocks. (And remember: When Buffett says “buy stocks”, he means that 99% of us should buy index funds.)

Finally, do you folks know how much I’ve been dying to post Macklemore’s “Thrift Shop“ here? Yes, I know the song contains obscenities. If that bugs you, don’t watch the video.

I love the lyrics:

They be like, “Oh, that Gucci, that’s hella tight.”
I’m like, “Yo, that’s fifty dollars for a t-shirt.”
Limited edition, let’s do some simple addition
Fifty dollars for a t-shirt — that’s just some ignorant bitch
I call that getting swindled and pimped
I call that getting tricked by a business

And, of course, this part is hilarious: “I’ma take your grandpa’s style. I’ma take your grandpa’s style. No for real. Ask your grandpa can I have his hand-me-downs?”

Frugality hits number one on the radio! Maybe there’s hope for the world after all…

I’ve been saving up for a big purchase, so I’ve seriously tightened my budget. Staying within my own strict boundaries has been frustrating.

When I get frustrated, I call my mom. Recently, I vented about my finances to her.

She reminded me of her story of rising from poverty. Here we go again. She grew up poor in China; saved ten grand working part time at the grocery store. I’ve heard this story my whole life, though admittedly, I’ve never really listened.

“How’d you do it?” I asked. Something clicked, making me realize it’s pretty damn impressive to save that much while earning minimum wage and raising a kid alone.

My mom is no expert. She has no advice to give that we don’t already know. But her story inspired me to stick to my financial goal, and I think that counts for a lot.

“I wore the same clothes every day,” she told me, “because those were the only clothes I had.” My brother and I often spoof this story, teasing my mom for laying it on thick. But this time, I let her continue, instead of offering my usual, Yeah, yeah, I get it.

“When you were little,” she said, “most people would consider us dirt poor. But I didn’t. I know what dirt poor is. I remember those times.”

I could hear her voice drifting to a difficult place. “I remember picking up a piece of candy from the ground, that’s already been half-eaten, and putting it in my mouth, because I didn’t have any food,” my mom told me.

I still thought she was exaggerating, but then her voice cracked. I realized what was a tall tale to me was a very real place for her. This wasn’t a “back in my day” story. This was my mother’s painful memory.

She recalled an exciting childhood dream she had, which starred a loaf of raisin bread. “A whole loaf!” she exclaimed. “You never got a whole loaf! They didn’t even sell them by the loaf.” In her dream, the sight of that bread made her salivate. She could taste it. She opened her mouth to take a giant bite. Right as she was about to chomp down, she woke up.

“I tried to go back to sleep so I could take that bite,” my mom laughed. “I couldn’t. So I was awake, but I bit into it anyway, even though there was nothing there.”

Sacrifice

Her family moved to the States. Years passed. I was born. A single mom, she found part time work at Kroger. “How much did you make?” I asked. “I don’t remember what minimum wage was. I remember my paychecks being four hundred dollars. Yeah, that number sticks out to me.”

“Every two weeks?” I assumed.

“Every month,” she said, casually.

It wasn’t as bad as it sounds. We shared a one-bedroom apartment with my aunt, and rent was a mere $225. “Food was so cheap back then,” she added. “And interest rates were high.”

She didn’t have many expenses, and she got a better return on her savings than nowadays, but still. How does one go about saving five digits on a three-digit living?

Plain and simple sacrifice, my mom says. She cites hand-washing laundry, not turning on the TV, walking to work and winging it with childcare among some of those sacrifices. (My aunt and grandma would watch me when they could. When they couldn’t, it was bring-your-daughter-to-work day.)

But it wasn’t just about saving. It was about earning more, too. She took on as much overtime as possible and got a second job working at a nearby convenience store.

“What about fun money?” I asked.

“No fun!” my mom balked. “You find other ways of having fun. Go to the park and get on the swing.”

Playing devil’s advocate, I asked her what kind of life this was to live — constantly sacrificing, never enjoying anything. She sighed.

Perspective

“I had a bad experience to draw from, so it wasn’t a sacrifice,” she responded. “These things didn’t seem like sacrifices to me. I just did what I thought I needed to do.”

My mom has her past to draw from in order to stay motivated. I, on the other hand, have been frustrated because I can’t eat out as much if I want to afford some fancy video equipment. But listening to my mom choke up about her past, I was able to catch a glimpse of it and briefly put things into perspective. My definition of sacrifice is what most of the world would call lavish.

We all know this, and there’s no point in dwelling on it — except that seeing our situation through someone else’s eyes might help us stay motivated to reach our goals. Experiencing what she did, my mom had an advantage — she knew she could keep going. In a way, by telling me this story, she was passing the advantage on to me.

“I stuck to it”

My mom recalls a conversation she had with my aunt, “the person you should really be talking to,” she says.

My aunt stressed the importance of saving; my mom bemoaned her earnings. “Even if I could save, the most would be, what, five bucks a week?” That was before she was serious. “Why bother?”

“Even a quarter adds up,” my aunt told her. Finally, just to see how much it would add up, my mom decided to commit to saving. It was worth a shot, she thought. She wanted to see if my aunt was right. Her saving started as an experiment more than anything else.

“But once I started, I didn’t stop,” she told me. “I stuck to it. That’s why you had crappy clothes when you were little.”

Patience

One trait my mom has that’s always eluded me is patience. I guess when you’re poor, time is one of the few assets you have. My mom always took advantage of it.

“Time heals all,” she would say when I was young and crying over a breakup. She acknowledged how trite it sounded and always added, “But it’s true.” As someone who’s always on the go and trying to beat the clock, I’ve never understood my mother’s bond with time.

But when it comes to saving, this patience has worked in her favor.

After putting her mind to it, my mom soon had a hundred dollars. I remember seeing it in a shoebox in our closet once. Woah, a hundred bucks! I yelled, and my mom quickly hushed me, warning that you don’t announce things like that.

She put that money in a savings account, where it garnered something like “five percent or eight percent interest. Nothing like today.”

Six months and as much overtime as possible later, her $100 had grown into $1,000. She put it in a CD.

“Getting to ten thousand probably took me like, three or four years,” she recalls.

Seizing opportunities to save

“What about things like health insurance?” I asked. “It’s expensive to raise a kid.”

“Fully covered,” my mom said, remembering clearly. “I made sure to work enough overtime to be eligible. Anytime they offered overtime, I volunteered.”

Later, my mom would go back to school and focus on earning a real salary, but at this point on her financial journey, she was stuck.

Only, she didn’t see it as stuck. The more she got to work, the more she saw it as an opportunity to save. She says the overtime, high interest rates and low rent were “lucky breaks.”

“Not everyone sees overtime as lucky. Everybody gets lucky breaks, but it depends on you seeing it as a lucky break.”

“But what if you’re worth more?” I asked. “What if your time is more valuable than the overtime they’re offering?”

“Oh, I don’t know. When you’re poor, it’s not about how much you’re worth; it’s about how much you need.”

It sounded sensible, but part of me couldn’t help but find it sad. She reminded me of a guy she worked with. He was an engineer, making good money, she said. When the economy turned sour, he turned to the meat department at Kroger. “Of course he was worth more. But he was broke. What are you supposed to do?”

From overtime to interest rates to a job opening at Stop-N-Go, what others saw as normal, my mom saw as opportunity. She took full advantage.

“It’s like your Dad — ” she said, turning her voice into a whisper. ” — how your Dad used to be with money. When he changed his mind-set, he got this refund check. He said, ‘Gee, when you’re saving, money comes from nowhere.’ I told him, ‘No, these things happen all your life. But before, they were gone before you could think about it.”

To be fair, my dad is more money savvy than my mom in many ways. He’s taught me to negotiate, earn more and value my time, for example. But she convinced him to look for opportunities to save.

My mom’s story isn’t for everyone. Some would balk at it and argue that, sure, a quarter adds up, but it’s a realllllly slow way to get rich slowly. But considering where she is now, compared with that little girl eating trash from the street, I’m pretty damn impressed. It makes me think I can do even better, as she’s afforded me a better situation.

“I’m so happy where I am, and I feel like, financially, I’m blessed,” my mom now says. “But I do have regrets. I could have done better for you. You could have had better day care. You could have worn better clothes.”

And again, my mom starts to pause, and I can hear her tears, thinking about our past.

“Maybe you would have had better days, Kristin. I didn’t have to sacrifice for you. Your childhood could have been better.”

Ironically, those years include some of my very favorite memories. I had no idea we were giving anything up. If that’s sacrifice, I was happy to take one for the team.

There are many personal finance books out there, useful to people in all stages of personal finance. I have a lot to learn before reaching financial independence, and the editorial elves thought it would be useful if I shared some of what I learn with you. So for the foreseeable future, I will be reviewing one PF-related book per month. My first review was of “All Your Worth.”

This month, I’m reviewing “Debt is Slavery: and 9 Other Things I Wish My Dad Had Taught Me About Money” by Michael Mihalik (no relation to Joe Mihalic, author of “No More Harvard Debt“). Like “All Your Worth,” J.D. originally reviewed “Debt is Slavery” on GRS here. (Persnickety copyediting note from Ellen: We are lowercasing “is” in the title because that’s how it is styled on the book. But the rule is that verbs in titles are capitalized — even if it’s a two-letter verb.)

Next time, I’ll review something that’s never been covered on GRS. But I think I bought this book after I read J.D.’s original review and never actually read it myself. I wanted to rectify that situation. Additionally, like “All Your Worth,” I wanted to see whether the book was as useful today as when J.D. originally reviewed it.

Philosophy behind the book

Like many with an interest in personal finance (including J.D.), Mihalik made financial mistakes when he was younger. By the time he woke up and smelled the coffee finances at age 24, he owed over $27,000 but was only making $28,500 per year.

He wrote this book mainly because he wasn’t satisfied with the other resources that were available when he began his debt-payoff journey. Many books were really long, and he wanted to get started right away — not slog through an encyclopedia.

Additionally, he felt that many of the books on personal finance were just advertising. One of the 10 things he wished his dad had taught him was “Don’t let advertising brainwash you.” As a result, he wondered if he could trust authors who were trying to promote their other products.

As a result, “Debt is Slavery” is short. At 120 pages or so, it can be read in an afternoon. Additionally, Mihalik didn’t try to create a name/brand within the PF industry. He wrote this book and then faded from the limelight. While I do think there’s a place for established names, Mihalik successfully establishes his credibility as someone who’s not out to part you from your money.

What I didn’t like

There were a few things I didn’t like about the book. First, while I empathize with the fact that his father died while he was young, I wondered where his mother factored in all this. He suggests that if he had only had a mentor/teacher during his early adult years, then he might not have ended up in financial trouble. Was his mom a negative example and he just doesn’t want to throw her under the bus? Did it never occur to him to seek her help? This hole in the narrative frustrated me.

Second, he was a bit obsessed with Stuff. The most notable example of this is that he kept bringing up boats as items that are expensive to own and that could/should be sold if you are starting a debt-payoff journey. While I can’t deny the truth of that, I also wonder how many people have boats lying around. Maybe I have a hard time relating because my debt was for education, not stuff.

Third, his description of his accomplishment was a bit misleading. He says he paid off all his debt except his car loan in just over a year. Since his car loan accounted for $13,000 of his total debt, he only really paid off half his debt in a year. Obviously that’s still impressive. But why did he keep that car loan? When did he finally pay it off?

There is a section on his car-buying philosophy. However, it’s about 70 pages after he mentions not paying his car loan back right away. The very first question he suggests asking of someone who is trying to give you advice is “has he done what he is teaching?” Since he doesn’t connect his car-buying section back to his own debt-payoff story, it’s hard to tell what the answer to that question is here.

Things I loved

Although Mihalik lists 10 things he wishes his dad would have taught him, the ideas that debt is slavery and that money is time are the big takeaways. The first thing that I really loved about this book was the idea that you should think of the price of something not in terms of dollars, but in terms of how long it took you to earn those dollars.

For example, you wouldn’t say to yourself, “That book costs $25.” Instead, you’d say, “That book costs two hours at work.” That gives you an additional criterion to determine whether something is worth the price to you. If the book costs two hours of my life but will take me 50 hours to read, that’s a pretty good value. A DVD, on the other hand, might cost the same two hours of my life to buy, but only take two hours to watch. Now I know where my money’s going!

I really liked his chapter on controlling your money and planning your finances, largely because the method he uses is very similar to mine. His debt-payoff method is also solid advice, though it’s essentially the debt snowball method.

However, he doesn’t simply have you add up your income and expenses for the month. While that’s the first step, he also asks you to plan with a calendar and note when your paychecks arrive and when your payments are due. That way you can adjust due dates if necessary and make sure there aren’t times in the month where you’re in the red. Especially if you’re at the beginning of your personal finance journey and every dollar counts, this can be vital.

Who should read “Debt Is Slavery”

If you’ve been reading GRS for awhile now, you’ve probably already been exposed to most of the ideas in Mihalik’s book. However, if you’re a new reader and want to get a complete overview of sound PF philosophy, “Debt is Slavery” is a solid choice. Better still, if you know someone who is just getting interested in paying off their debts, this is a great recommendation.

Similarly, if you’ve got children who are grown up and leaving the nest, tuck this into their suitcase. Since the author was so young when he accumulated his debt, his stories about why he wanted to be “cool” would resonate with the college-aged. If your kids are recent graduates with some debt, the fact that Mihalik paid his debt off on such a low entry-level salary would be really motivational and show just how much is possible if you’re determined.

Have you read “Debt is Slavery”? What did you think? What other books would you like to see reviewed on GRS?

I mentioned in my last post that I read Barbara Stanny’s “Secrets of Six-Figure Women.” Stanny interviewed 150 women who earn more than $100,000 annually and sought to find what traits, experiences and motivators they shared in common.

Unlike most books, this one didn’t take me three months to finish. It’s a fast read, and I think that has a lot to do with how relatable it is. I’m not saying I fit the bill for every six-figure trait Stanny has outlined; but you can’t help but compare yourself to the high-earning women she’s interviewed.

Although the book is meant to empower women, I think much of Stanny’s research is every bit as helpful to men. Here are the strategies and milestones of high earners Stanny outlines in the book. Some of them hit home; others I questioned. Tell me what you think.

Declaring your intention

Stanny says all the high-earners she interviewed got their start by declaring an intention to profit.

“Each women would describe that point in her life when she says to herself, ‘It’s time to make some money.’… When you recognize the power of the profit motive, you take your first major step toward financial success.”

Six-figures or not, I think most of us can relate to this one. At an early age, I decided I would grow up to earn a healthy living. There was so much we couldn’t afford when I was kid; I wanted to be comfortable enough to afford those things as an adult. Whether it’s getting rich, earning more or simply getting out of debt, I think most of us have experienced this milestone. For high earners, this is just the beginning.

Letting go

Stanny uses the metaphor of hanging on the edge of a cliff. If you could just let go, you’ll experience all kinds of high-earning opportunities, but most of us are too terrified to stop clinging. It’s simple: “You must let go of where you are to get to where you want to go.”

Sometimes the cliff is a low-paying but stable job. Sometimes it’s an unhealthy relationship — the cliff is whatever keeps you from taking the plunge into success.

“How do you know when you’ve been holding on too long to a ledge? There’s one irrefutable clue. Whenever you feel stuck, it’s time to let go.”

In my decision to pursue a different career, “letting go” was the most difficult part. I had good friends, a decent-paying job, and I lived near my family. It was a great life, but I felt stuck. Letting go was tough, but it was worthwhile.

“Every successful woman I interviewed, when she finally let go (hard as it was), cited that single act as the springboard to higher earnings and happier times.”

As much as I can relate to this strategy, I also find it to be the scariest. Is it always a good idea to let go? Should anyone let go? What if you have children to think about? One part of Stanny’s advice made me feel a bit less apprehensive:

“Take your time. Who says you have to rush into anything? Sometimes it’s better to gradually let go of a ledge than to take a flying leap. That’s often what most of the women I talked to did. Instead of going cold turkey, they released their grip little bits at a time.”

‘Get in the game’

Get in the game, just do it, power through — however you want to say it, I think this is the most important strategy on the path to earning more: the work. Stanny rounds up a few rules for trucking through the heart of the journey:

Decide which game to play

She echoes the words of motivational speaker Larry Wilson, who told her there are two games in life. “The one most of us are playing, called Not to Lose, is an avoidance game. We’re so afraid of taking risks, looking bad, that we never really win.” The other game, Wilson says, is “To Win.” People who play To Win are willing to take risks and, yes, even expect some losses along the way. But people who play Not to Lose are more concerned with comfort and convenience.

“The desire to avoid fear … is what keeps most of us in the Not to Lose game — and in low-paying jobs.” Stanny writes.

Jump in

Even if you don’t know where to start, it’s important to just get started, she says.

“You don’t need all the pieces in place or your route all mapped out … jumping in cold can be very scary … it’s especially disconcerting at the very beginning, when you’re not quite sure what you’re doing … Unfortunately, a lot of people bail out before they realize how close they are to taking the prize.”

Keep on truckin’, Stanny says, once you jump in.

I can’t help but think of a personal example in which this advice is a little cringe-worthy. As a kid, my friend’s parents opened their own business. It was killing them financially. After some time, the father wanted to back out, but the mother insisted they keep on trucking. Long story short, it set them back for quite a few years, until, eventually, they surrendered. Should they have kept going?

I hate to seem cynical and counter this empowering advice. But what do you think? When does “keep on truckin” become “feeling stuck”?

Grab opportunities

If you start the game To Win by jumping in and play it by persevering, you succeed at it by grabbing opportunity, says Stanny.

“I can’t tell you how many of these women’s success stories started out with a lucky break. The truth is, everyone’s life is full of happenstance. The ‘lucky’ ones realize that in every synchronicity lies potential opportunity and are quick to capitalize chance occurrences.”

Recently, I was talking to my mom about this. She noted that, when you make a financial decision — to start saving, for example — these “chance occurrences” are usually things that are always there. You just see them more clearly because you’re focused.

A couple of other rules Stanny mentions: avoid excuses and ignore naysayers.

• “Some of the women I interviewed had valid explanations for why they couldn’t succeed … the true test of a six-figure woman is her refusal to buy into these pretexts.”
• “[Naysayers] actually perform a valuable service. They come to test our level of commitment … if you’re determined to succeed in spite of these killjoys, then you most certainly will.”

Thick skin is another rule. The author points out that high earners never personalize criticism. Anyone who writes for the Internet can certainly relate to that one.

Negotiate and speak up

Admittedly, this is the strategy I find most difficult. I’ve often bragged that I’ve never had to ask for a raise, but looking back, this isn’t much to brag about.

“I heard this same rueful observation from virtually all the women who were slow to hit the six-figure mark. Call it the Lament of the Latecomers. Their greatest regret was their reluctance to speak up.”

I can recall one instance that should’ve taught me the importance of speaking up. I once worked in retail. My coworker bragged that she got a raise. I didn’t, even though we’d started at the same time and both worked hard. This was the only time in my life that I’ve ever asked for a raise (sorry, I lied), and here’s how my boss responded:

“Ridiculous. This is why I tell you not to discuss your pay. I’ve already given you a raise. I just didn’t tell you about it.”

I kicked my sixteen-year-old self for speaking up.

However, I later discovered that she hadn’t already given me the raise; paperwork proved otherwise. Maybe she planned on it, maybe, but she certainly hadn’t done anything to initiate it. My coworker was earning more for a full month before my raise was processed. “If you wouldn’t have asked, she would not have given it to you,” my Dad insisted. He’s always encouraged me to speak up, and this should have taught me that lesson. Unfortunately, it’s still something I’m working on.

All of the advice Stanny has in her book is powerful and inspiring. I can even vouch for the strategies I’ve had experience with.

But I can also understand how some of this advice might seem too risky. In describing some of it to my boyfriend and mother, they instinctively pulled back their teeth.

I can imagine some instances in which people “jumped in” and “let go,” and it didn’t work out so well for them. I can’t help but wonder, if she had interviewed people who “lost it all,” how many traits they would share with the high earners?

Again, I’m definitely not discouraging — merely questioning. While I’m not quite a six-figure earner, I think I’ve done pretty well for myself by utilizing some of these strategies. But I can see someone looking at them with a more skeptical eye.

So what do you think? Is “let go” and “jump in” necessary for women (or men) who want to earn more? Or can this backfire? Do you have experience with any of these strategies — if so, was it a negative or positive experience?

This post is from staff writer Sarah Gilbert.

I am writing this after the third weekend in a row of attending professional conferences. While I wouldn’t suggest such a schedule (it was a fluke of the calendar I hope won’t ever happen again!), I came away from the experience renewed with the belief that, no matter what your field, attending conferences — given the usual caveat that moderation in all things is important — is an extremely smart financial move.

Refresh your enthusiasm

One of the conferences I attended was career-agnostic, and one of the many “TedX” events held throughout the country. This one was a day-long series of short, highly-designed talks with a similar theme (“What If?”) that was meant more as a jumping-point than a strict theme. The talks were on such a variety of things that I was certain some of them would have no applicability to my own career goals or life plans.

And certainly, some of them were as far from my own life as can be — one, for instance, detailed the way a professional athlete had overcome attitude problems and the disadvantage of growing up in a small town, became proficient and famous and by either luck or the grace of God and then developed Parkinson’s disease. However, even this one was a window into a story for me, and some of them were very inspiring.

“People are weary of being asked to do the least they can possibly do,” said one speaker, inspiring me to ask more of my community for the two non-profit organizations I help run. Naomi Pomeroy, a local chef famous for failing big and then succeeding far bigger, talked about living a life that was “not positive thinking, but positive action.” She asked, “What is it you need to stop dreaming and start being?”

I’ve been a bit weary and run down with my many obligations lately, and I left that day so refreshed and with a feeling of contentment about my choices — and a serious spark of energy to renew my efforts in my creative projects to transition them into financially successful endeavors.

Develop your ideas into opportunities

The conference I attended just this past weekend, the Mom 2.0 Summit, was one where I had pitched a speaking idea based on the post I wrote about crowd funding last summer. I found out I would be giving the talk only about a month ago, and by that time my thoughts on it had evolved. Having this deadline and imminent public unveiling of the idea forced me to develop my swirling thoughts into what turned out to be a very defined and cohesive philosophy of creative project finance. Whether or not I end up capitalizing upon that as a line of work (independent creative funding consulting, anyone?), the conference and the conversations I had as a result of the talk were worth my travel costs.

I saw similar ideas translated into opportunities by getting a bunch of smart, ambitious heads together; a group who organizes a digital family conference seemed a match made in heaven with an online service to collect and archive the stories and the wisdom of kids. A dad creating a database of children’s activities in major cities around the country found ideas about partnering with hyperlocal parenting blogs. Lines tossed around in a workshop on “Unstoppable Girls” were fielded as new campaigns for Dove and possible advertising work for one of the teen girls there.

Make friends and influence people (into giving you work)

Within the space of about 15 minutes Saturday night, I heard two separate conversations that went something like, “I met her at the conference in 2007. And then when the job opened up, she got in touch with me.” In a few sessions, someone asked the question, “but who does social media consulting? How do you find one of those?” and half the room would raise their hands. Writers and editors sat down at lunch tables and discovered each needed the other. Charity representatives and brand representatives looking to work with charities would answer one another’s questions from the audience in a session.

As we all know, the world of industry runs on connections, and we can’t all go to Harvard Business School or somewhere else where simply being a graduate/member/whatever means the phone is always answered when you call. Forging real friendships at conferences of like-minded people is the next best thing (and definitely easier to access).

Make friends and influence people (who will expand your industry knowledge)

The first conference in my string of three was a small, intimate writing conference, and one of the speakers was a literary agent. I had just signed an agreement with a literary agent and had no need of her services, but I liked her. So after I got to know her I asked her a lot of questions about how the industry works from her perspective, which editors she enjoyed working with, how she had scored her big wins, and how long she was willing to work on a project that had a hard time selling. All this was invaluable for my own perspective and strategy for working with my agent to sell my book; and I also have the benefit of having made a great new friend.

Have fun (but don’t overdo it)

There is something, also, about taking the opportunity to have a great time in the context of people who work in your industry. I often heard the women at the conference I attended this weekend saying, “when I went to academic conferences…” or “at the baby and child products expo I’m attending next week…” or “at the homebuilding conference, they…” and stories of mild revelry and lovely connection would follow. Having fun with the people who people your professional world is something to be cherished; it helps you remember why you enjoy your chosen career, and gives you more energy to go back to the grind (or the awesome everday of your fulfilling work life, if you’re lucky).

But don’t overdo it. And by “overdoing” I mean, of course, don’t get smashed every night and spend your airplane ride/drive home sweaty and nauseous. But I also mean don’t spend too much. Don’t order room service every morning just because it’s super fancy and when else do you get the chance? Don’t go out every night to a $100 meal. Sure, it’s ok to indulge in small ways, but going overboard is easy if you’ve decided all this expense is justified and deductible. Set a budget ahead of time — preferably without incurring debt — if you’re planning to go to a conference, you should have time to save up and stick to it! Share cabs to and from the airport, room with friends and use other frugal tools that will keep costs down and increase the opportunity to make those awesome connections that will pay off in the future.

Do you agree that professional conferences are helpful? I’d love to hear about your industry’s conferences; have you been? What has paid off for you, and what have you regretted?

I had left my job to raise my two children and was now expecting my third; we had no idea that my husband would be laid off work shortly after that. But with an entrepreneurial spirit, he charged ahead and started the landscaping company he had always talked about. It just wasn’t enough.

“We’ll charge it this time and then pay it off when I get paid for the next job” became a familiar, but foolish, solution. We charged our groceries, our power bill and our gas. Each time we got paid, we needed the money to live and the credit cards stacked up — to almost $40,000. But we couldn’t keep up with the payments; day after day I dreaded the phone calls threatening us if we didn’t “pay the balance in full” by a ridiculous date.

Enough is enough

My husband came home one day to find me in a puddle of tears refusing to answer another phone call. Something changed that day. Several different events played a part, but our resolve to break the bond of financial slavery began, and we finally moved from self-pity to anger— a good kind of anger that empowers people to change things.

My husband got two more part-time jobs, a difficult and demanding decision, but a necessary one, and then I got busy at home. Going back to work wasn’t a feasible option, so I began to do my part from home to help dig us out of debt.

Saving money

I began looking for every possible way to save a dollar; it’s amazing how much can be saved with the right motivation. I scoured our utility bills to make sure we weren’t over-paying — we were, so I got some of those lowered. We already didn’t have cable or satellite television, and we scaled our one cell phone plan back as much as we could, but didn’t cut it out as it was a necessary part of my husband’s self-employment. I stopped buying anything that wasn’t a necessity: paper plates, paper towels, fabric softener, even ready-made cleaners were all considered a luxury. We made our own cleaners and used cloth napkins. I began to study ways to cut the grocery bill and we incorporated far more homemade mixes, soups and staple foods into our diet.

One Christmas, we made all our gifts and I vowed to not buy any wrapping paper. I started requesting brown paper bags at the grocery store. I cut them up, wrapped our gifts, and then let the kids decorate the packages. We used leaves, stamps, paint, ribbon and fabric. We used old maps, old wallpaper and anything else that seemed creative. That was one of our most memorable Christmases.

This one might brand me as a fanatic, but we still laugh about the time I woke up to find our yard had been toilet papered. As I went out to clean up, I noticed how bright and clean the toilet paper was while it draped across our shrubs. “I’m not throwing this away!” I collected it in a basket, put it in the bathroom, and we made good use of someone else’s wastefulness.

It was just a new way of thinking — using resourcefulness and creativity that once was a much more common habit, but has escaped most Americans now amid our comfortable lifestyles.

Earning money

I also got busy seeing how much money I could make from home. My first project was eBay. I didn’t even have a camera, and I remember my first listing: a 50-cent book of Shakespeare I bought at a yard sale. I listed it without a picture and it sold for $25. You would have thought I made a thousand! After that, it was “nail it or sell it” in our house. The most interesting thing that I sold was probably the free formula coupons new mothers get through the mail. I was nursing my baby, so I listed the coupons just to see what would happen. They sold for almost their face value!

One year a relative gave us a heap of sweet potatoes. It was near Thanksgiving, so my older kids and I decided to bake sweet potato pies and sell them door to door to the neighbors. We sold every one and even received phone orders for more.

I looked at everything for its money-making potential. And then things got exciting. The skimpy Christmas when we used no wrapping paper, we were set on making homemade gifts, and I made some homemade skin products. Already prone to an entrepreneurial mind-set, I decided to package a few and try to sell them. People seemed interested, but I didn’t really have a great market. I am a writer, though I hadn’t done much professionally, so my brother suggested I had a great combination for starting a blog: things to say, a great way of saying them, and products to market.

So in 2007, I started a blog, something I hadn’t known existed a month before. It grew — and continues to grow — and now it is a considerable part of our income. I sold the skin products until this year (we decided to close that part down recently), but I’ve also added a book, several ebooks, a CD, as well as advertising, affiliate products and a membership website to help other mothers who want to learn to make money blogging. It has been a joy in so many ways. Necessity truly is the mother of invention. Now, as a mother of 10, I do what I love, from home, on my own schedule — a business/ministry born out of adversity and a desperation to make ends meet. We are, by the way, now debt-free, including our house.

Looking back, I’m thankful for our financial crisis in so many ways. Our struggle taught us the importance of contentment, it greatly improved our faith, and it sparked a creativity and resourcefulness in our family that has become a part of our life-blood.

When I can, I try to support small, family-operated businesses instead of “big box” stores like Walmart. However, I live in a coastal area of New England that is overrun with tourists in the summer, which means I end up paying slightly higher “tourist” prices for some things in the summer months. Some hotels and businesses shut down completely from November to April, so my range of choices also varies throughout the year.

But, like many people, I’m on a budget, and there are lean times when I don’t have a choice – I have to go with the lowest price. I was always taught that supporting local businesses helps your community stay vibrant and attract commerce, and you help other people support their families.

But when aspiring to be frugal, the general advice is usually to do that project yourself, or stay at home instead of going out. Where does this leave the carpenters, hairdressers, and ice-cream scoopers? Do you try to support local businesses even if the prices are higher? How much more would you spend before you can’t justify the cost? Ten percent? Twenty? Are you more likely to pay extra for goods or for services?

Like most things in personal finance, the decision is not limited to the strict cost comparison between two sellers. Every individual will assign a different value to small, local businesses — making it impossible to draw the same line in the sand for everyone.

Given that the economy is still in recovery mode, everyone is begging for your business, and the decision of who gets your hard-earned dollars can be a difficult one. Yes, Walmart may have an item $2 cheaper than your local mom-and-pop mart, but that’s not the only thing to consider. Do you have to drive across town to score the cheapest price? If so, then factor in gas and your time as well.

On the other hand, many local stores simply don’t have the variety of products to accommodate an efficient shopping trip. Many people find themselves having to run to various locations for the same inventory one could find at a box store.

But while there is a dollars-and-cents comparison to be made, that’s not the only reason you might willingly pay a higher price for an item or service. I’m willing to pay the higher price for better service, better knowledge and/or a better experience.

I could get some cheaper groceries at the megamart, but I hate fighting the crowds, disorganized aisles and the lengthy checkout lines. Here in Florida, we are lucky to be able to shop at Publix, an employee-owned grocery store that consistently lands on “Best Places to Work” lists. Even though it is the fourth-largest grocery chain in the U.S., the employers are friendly and helpful and they still have baggers who walk your bags out to your card. Their prices may be slightly higher than Walmart’s, but the experience is worth it.

But this is not always the case. A colleague related that she recently needed to buy a baby shower gift and went to the trendy boutique where the parents had registered. The store was adorable, and the woman behind the counter was pleasant and offered her help if she needed it. But when she started checking prices, she suffered some sticker shock. She just couldn’t justify spending over 20 percent more for the same items she’d seen at box stores and online. She went home, ordered the same item online (cheaper and with free shipping) and called the store to have the item marked off the registry.

As she told me, “I made the decision to support my budget instead of the boutique. And if others follow suit, that boutique may not be there next time I drive by.”

It does go beyond finance, though. Consider how would you feel if you drove by that independent book store, that home-grown boutique, or the artisan coffee shop and saw that it was closed? Are you sad — angry that nothing in the neighborhood makes it? Apathetic because you never went there? Or are you glad to see it go and replaced by a Papa John’s?

So tell us if and where you draw the line between being a local supporter and a budget minder.

Before my husband and I got our financial act together, we didn’t have a budget. Since we didn’t have and sort of plan, we spent all of our discretionary income on “wants” and financed anything that cost more money than we had. And the scariest part is that we never really thought much of it. Our income always lasted until the next payday, so we never worried about making ends meet.

But, after years of frivolous spending, we finally snapped out of it. Becoming pregnant with our second child made us start thinking seriously about our financial future, and the impending impact of another mouth to feed actually made us afraid. All of a sudden, we realized that we weren’t kids anymore. Our twenties were spent chasing adventures and spending cash like it was going out of style. And here we were, in our thirties now and on the verge of having two children to take care of. And although we were completely clueless how things had gotten so out of control, we decided that we had to take control of our financial destiny.

An unfortunate truth

We started by combing over several months of bank statements, and what we uncovered was almost unbelievable. We quickly realized that we were spending over $1000 per month on groceries for two adults and a baby. We were also going out to dinner a lot. The truth is, we were actually eating most of our expendable income. We aren’t fancy folks, but we do happen to enjoy some expensive meals and ingredients. And we weren’t enjoying them in moderation; we were eating like a king and queen on a daily basis, and our pocketbooks showed it.

We took action

After seeing our pathetic results in black and white, we sat down and created a budget. Since our food budget was the main culprit of our spending, we decided to make drastic changes. After some number crunching, we agreed that we should be able to feed our family for about $500 per month. We also decided that all restaurant spending would have to come out of our grocery category. So if we decided to go out to dinner, that meant that we would have to spend less at the grocery store. I wasn’t particularly happy about it, but our new plan made us much more thoughtful about our food spending. And since we still wanted to eat out occasionally, we made room in our budget by eating cheap meals and using up all of the items we already had in our pantry. It worked.

We also cut out all other non-essentials. I’m pretty sure I cried when my husband called and cancelled our satellite television package. I was a hopeless reality television junkie, and I was convinced I would be miserable without all of my favorite shows. But life went on. And more importantly, we started saving a ton of money. Using the debt snowball method, we allocated all of our new-found cash toward the various debts that we had saddled ourselves with. And after 18 months of rapid debt repayment, only our mortgage was left standing.

Budgets can and do work

I didn’t know it at the time, but creating and sticking to a budget was probably the best thing we have ever done for ourselves. It wasn’t always easy. And quite truthfully, the process made us take a hard look at ourselves and our shortcomings. On the other hand, we’re now more confident in our choices and building wealth like never before. We’re also on the same pen and paper budget that we started with, and there’s a reason why we haven’t changed anything. It works.

Sticking to a budget can feel cumbersome and restrictive. It might make you feel vulnerable or deprived. On the other hand, creating a budget can completely change your financial destiny. Have you ever tracked your spending and created a budget? Did it work? If you’ve tried and failed, there are a variety of reasons why your budget might not be working. Here are some possible explanations:

• You’re underestimating your expenses. It can be difficult to estimate irregular expenses like utility bills. However, it’s important to be realistic about your estimated monthly costs. Overestimate your expenses if you have to. That way, you won’t always come up short.
• You aren’t budgeting for everything. Are you forgetting to budget for gifts? Expenses for your children’s school? Did you forget your bi-annual car insurance bill? Make sure to think of everything that needs to be included in your monthly budget. Other expenses that are often overlooked can include home and auto maintenance and bills that are paid on an irregular basis. It’s more challenging to budget for these items, but it can be done. For example, if your car insurance needs to be paid every six months, you may want to budget 1/6 of your premium on a monthly basis.
• You don’t have an emergency fund. Whenever unplanned expenses come up, an emergency fund can fill in the gaps without knocking your budget off track. It’s also important to only use your emergency fund for emergencies, and to not see it as an extension of your monthly budget.
• Your expenses are too high. If your income is barely meeting your expenses, it is probably time to cut some things out. Do you really need the NFL Sunday Ticket? How about your smart phone? Is it necessary to get your nails professionally done? These are just an example of some of the expenses that can be cut out of your budget if needed. It may hurt at first, but you will survive.
• You aren’t keeping track of your spending. Certain budget categories can be trickier than others. Grocery spending, for instance, has a tendency to sneak up on me if I don’t track it closely. You can avoid going over budget by keeping an ongoing list of your spending in whatever category you find budget-busting. That way, you can check in at any time to see where you’re at.
• You’re not saying “no” to yourself. If you are constantly spending more than you have budgeted, it might be time to take a serious look at your choices. If you want your budget to work, it’s crucial to learn to tell yourself “no.” Always telling yourself “yes” can guarantee budget failure.

Of course, not everyone needs a budget. For some reason, certain people can successfully execute their financial plans without writing them down. My parents, for instance, have always been the epitome of frugality and financial prudence despite the fact that they never really had a written budget. There’s definitely nothing wrong with forgoing a written budget if you really don’t need one.

However, many of us do need a written plan for the money we earn, and there’s no shame in admitting it. I’ve definitely learned that I’m hopeless without one. And if you’ve tried to budget and failed, I have great news: it’s never too late to try again. Don’t be afraid to start from scratch. If you give your new budget a chance to work, you could quickly become a financial force to be reckoned with.

Do you have a budget? What system works best for you?

If you never watch PBS’ “Frontline,” you’re missing out on some of the best journalism on TV. I don’t agree with every viewpoint they advocate, but each episode is thought-provoking and well done.

Recently, “Frontline” focused on “The Retirement Gamble,” as they titled the piece. It can be summed up by this quote by Zvi Bodie, a professor of management at Boston University: “401(k) plans really place the burden on the individual participant to have an adequate retirement. And the vast majority of ordinary people don’t know how to do that.”

It’s true. As if you don’t have enough going on in your life, you have to become a part-time financial planner and investment manager. You need to figure out how much to save, how to invest your savings, and how to withdraw it in a way that makes it last forever or until you die, whichever comes first.

Of course, you can always get help from the financial-services industry — in particular, the mutual fund providers, since those are the type of investments in most workers’ retirement plans. However, many of these folks are padding their own retirement accounts at the expense of yours. Here’s how economist Teresa Ghilarducci explained it to “Frontline”: “The 401(k) is one of the only products that Americans buy that they don’t know the price of it. It’s also one of the products that Americans buy that they don’t even know its quality. It’s one of the products that Americans buy that they don’t know its danger. And it’s because the industry — the mutual fund industry — has been able to protect themselves against regulation that would expose the danger and price of their products.”

I’ll add another shortfall of the 401(k) industrial complex: You don’t have a choice. The 401(k) is chosen by your employer, who might be keeping costs low by passing the costs along to you. I’m on the 401(k) committee at The Motley Fool, and I can tell you that it does indeed cost an employer money and time to provide a retirement plan; it’s not as easy as opening an IRA with a discount broker. The plan has to meet all kinds of government-mandated tests to make sure that the plan doesn’t disproportionately benefit higher-income employers and owners. So companies that offer a retirement plan deserve some level of gratitude, especially if they match employee contributions. But that doesn’t mean these companies spend the time and money necessary to make it the best plan possible.

Then there are the funds themselves. The “Frontline” episode included an interview with one of my heroes, Vanguard founder John Bogle. His best quote: “Do you really want to invest in a system where you put up 100 percent of the capital … you take 100 percent of the risk, and you get 30 percent of the return?”

Where did the other 70 percent of return go? To the fund companies, due to high fees and low performance — in Bogle’s words, “The magic of compound returns is overwhelmed by the tyranny of compounding costs. It’s a mathematical fact. There’s no getting around it.”

My picking of bones

While I generally agree with “Frontline’s” call to arms regarding the malfeasance of the mutual fund industry, there are a couple of counter-points I would have liked to see them address. First off, the episode recommends index funds over actively managed funds, featuring more footage of John Bogle, one of the main figures in the birth of index funds. However, it would be interesting to ask him why Vanguard itself has had actively managed funds for decades. Perhaps even the most famous advocate for index investing sees some value in paying a fund manager to pick the investments. And, to Vanguard’s credit, the expenses on their actively managed funds are very low. I know because I own a few of them, including a few of their index funds.

The “Frontline” episode also had its nostalgia for the good, old days of defined-benefit pensions, when an employer would reward an employee after decades of service with a monthly check in retirement for life. Like many shows that bemoan the state of retirement in America, they clearly argue that those are better than 401(k)s. However, the truth is that these pensions have their own issues. First off, even at their peak, most Americans didn’t have a pension. At least with a 401(k), workers can save for retirement in a tax-advantaged account, something they didn’t have before these accounts became prevalent in the ’80s. Also, a traditional pension mainly benefited employees who worked for the same company for decades. If you left within, say, five years (as was the case when I was a teacher), you got nothing. The money in a 401(k), however, can be taken with you.

Plus, many pensions don’t have enough money to pay future benefits and are assuming (nay, praying) that unrealistically high investment returns will bail them out. Private pensions are backstopped by the Pension Benefit Guaranty Corporation, but that “safety net” itself is underfunded by more than $20 billion. Government pensions are backed by taxes, and they’re going to hit hard as more and more Boomers retire. So defined-benefit pensions are not the panacea as they’re often portrayed, often using film footage from the ’50s (as “Frontline” did).

Finally, the episode featured interviews with everyday Americans who have little in the way of retirement savings, portraying them as victims of the mutual fund companies. In many ways, they most definitely were. Yet, as these people sit in their kitchens and living rooms, explaining their predicaments to the camera, I can’t help but notice that they have nice furniture, large-screen TVs and cable. I admit that this is a bit callous of me, but I do have a little less sympathy for people with little in savings but plenty of luxuries. (Yes, cable TV is a luxury.)

Carpe 401(k)-em

The good news for you is that you’re taking control; you’re reading this blog and probably other sources of financial education. Hopefully you’re learning how to save for, and spend in, retirement, and how to evaluate mutual funds along the way. Planning your retirement is up to you; no one is doing it for you. Financial advisers have their place, as long as they’re fee-only and fiduciaries (i.e., legally obligated to put your interests first — a standard that doesn’t apply to the large majority of financial advisers). But however you manage your finances, ensure that it’s doing more for your retirement than someone else’s.

For many, owning a home is still “the American dream.”

According to Gallup’s annual Economy and Personal Finance survey, 56 percent of Americans own a home and 25 percent plan to purchase one in the next 10 years.

But sometimes buyers fall in love with a home, only to find out that they don’t qualify. Or worse, they barely manage to qualify, but at a sky-high interest rate.

That’s because lots of buyers chase the dream of home-ownership without first making sure their financial situation can support it. Instead, they submit a loan application and cross their fingers that they’ll get approved.

And even if that’s not your story and you’re in pretty good financial shape, there’s still a lot to do before you apply for a mortgage. For instance, if you don’t diligently monitor your credit report, there might be errors you need to dispute. Or if you’re a new homeowner, you might spend most of your cash on the down payment and closing costs, not realizing how expensive houses really are. For instance, when the roof starts leaking, there’s not a landlord footing paying for repairs. Now it’s your problem.

Get finances in order before you house shop

So what should future borrowers do to prepare to buy a home?

Get in good fiscal shape. That means making sure you look good on paper, which makes the home-buying process far less stressful. For instance, you won’t have any big surprises when your loan officer runs your credit. Also, there’s a chance you’ll get a better mortgage rate, which can save you lots of cash over the life of the loan.

Getting in good fiscal shape also means having a healthy savings account. You’ll sleep better at night knowing that you can cover closing costs and unexpected roof repairs.

How to get fiscally prepared to buy a home

To find out what steps a future buyer should take to prepare, I spoke with Mark Hanley, a loan officer in Austin, Tex.

“My first piece of advice to any borrower is to go ahead and get a pre-approval from a mortgage person,” says Hanley. “Get some coaching. If you do that a year before you’re ready to buy, you can really be ready.”

Hanley says that by going through the pre-approval process a year in advance, you’ll learn where you stand. The loan officer can counsel you about what you can do in the next year so that you’ll be ready when you actually apply for a loan.

When you meet with your lender, here are a few things you want to talk about.

1. Credit. Get a copy of your credit report from your lender. “Your lender can help you see what’s holding you back and look for things that you didn’t know were there,” says Hanley. “These are things you want to work on in advance of applying for a loan.” You also can get free copies of your credit report at www.annualcreditreport.com, says Hanley, but “if you need help deciphering it, talk to a mortgage person.” It’s also helpful to talk to a pro because sometimes people try to fix their credit, but actually damage it instead. “People look at credit and think, ‘I need to pay off my car,’ but if their car loan is their only form of credit, it actually does more damage to their creditworthiness,” says Hanley.

2. Loan programs. Discuss which loan program might be best for you, along with what requirements that loan program has. For instance, FHA loans require less money down than conventional loans, so that’s something to keep in mind while you’re saving up for a down payment.

3. Cash at closing. Talk about where your down payment and closing costs will come from. “If you’re moving money around, a loan officer will tell you how soon the money needs to be in your account so you don’t raise flags with underwriter,” says Hanley.

After you meet with a mortgage person, you should have a better idea of what you need to work on. In addition to that list, there are a few more ways you can make sure you’re prepared.

1. Pay every bill on time. “If you are moving from one place to another, make certain that no bills slip through the cracks,” says Hanley. “I’ve had borrowers who didn’t pay the final cable bill when they moved out of an old apartment and didn’t leave a forwarding address. It ended up harming their credit.”

2. Stay in the black. It’s an obvious no-no, even if you aren’t applying for a loan. But overdraft charges are red flags to underwriters, so make sure you walk the line from here on out. (In truth, the lender will probably only want your two most recent bank statements when you actually apply for the loan, but if you can’t stay in the black, you probably aren’t ready to buy a home.)

3. Plan your job hunt. Banks don’t like for you to switch jobs when you’re applying for a loan. “I had one client who was offered a job that actually paid more than her current job, but the lender wouldn’t let her switch jobs before the loan closed,” says Hanley. So if you’re thinking of jumping ship, do so well in advance of applying for a loan. Otherwise you’ll probably have to wait until after you close on the house.

Finally, start saving, and save more than you think you’ll need. After talking to your lender, you should have an idea of how much house you plan to buy, as well as down payment requirements for your loan program.

Also, make sure you have a separate house fund for home repairs and maintenance, as well as new homeowner expenses that pop up when you move in. For instance, when my husband and I had just gotten the keys to our new house, my dad mentioned that we needed brand new ones.

“Have you called a locksmith?” he asked.

“Um, no,” I said. “Do I need a locksmith?”

“You need to have all your locks rekeyed,” he said. “You never know if the last owners or renters kept copies.”

Ugh, of course. Silly new homeowners, we hadn’t thought of that. So, $80 later, we had new locks and keys.

And that was just the beginning — those little expenses really add up! Make sure you can cover them so your new home doesn’t instantly turn into a huge source of stress.

And that’s really the point here, reducing stress. It’s a lot of work to get this prepared, and it requires a lot of foresight. But the American dream can quickly turn into a nightmare if you aren’t financially prepared to for it.

Readers, what else can you add to this list? And if you’re a homeowner, how far in advance did you get ready to apply for a loan — or did you just wing it?

A few weeks ago, I celebrated another birthday. For whatever reason, birthdays always make me think about how many more birthdays I have to celebrate. And eventually, I think about how my husband would handle the finances in the event of my death.

Happy birthday, huh?

Although I am unlikely to die anytime soon, you never know. When thinking about my earthly exit, I am bothered most by the practical things that would affect my family. In the middle of grief and loss, I don’t want my husband to be struggling to know which bills are on autopay, how much we contribute to our IRAs each month, or what the passwords are to important accounts. So, in my opinion, the most loving thing I could do is make sure he can keep our family’s financial life together. It’s time to create a Financial Plan.

A financial plan

I drew inspiration for this plan from, of all places, my job. My program is required to have something called a “Master Plan,” a manual that covers all the policies, tasks, and projects associated with the program. If I became incapacitated on Friday, someone could figure out how to keep the program running on Monday.

Something like that is necessary (and required) for good reason: At work, I’m the only one who knows how to do some things. I’m also the one in our marriage who does everything with our finances.

But it’s more than just my husband now. By the time you read this article, if all goes as planned, we will have custody of our (almost) adopted children in their country.

Adding children to our family changes everything. Last year, a family in our community lost both parents in a car accident. I talked to the oldest daughter, and she told me how her parents had been very open with her about their finances. I don’t know if their plan was as extensive as this, but they communicated their income and debts.

As I have watched this family grieve the loss of both parents, I want to do everything I can to make it easier for someone else to step in and take care of our children’s medical and financial needs if the worst would happen.

Creating the plan

I first learned about Erik Dewey’s free Big Book of Everything from an old GRS post. His planner is full of information, more than I needed. But I pulled what I wanted from his plan and from doing other research as well.

1. Personal information. The first section in our plan has a list of our names, Social Security numbers, contact information, and dates of birth.
2. Address and previous addresses. Along with your address, include your most recent address or two and how long you’ve lived at each place.
3. Employment history. List current and previous jobs, as well as employment dates. Include contact information for the HR department at your current job.
4. Medical information. For each member of your family, include medical histories, surgeries, hospitalizations, prescriptions, and allergies. Extended family medical history is also important. Contact information for physicians, specialists, eye doctors, and dentists is also crucial.
5. Usernames and passwords. Include a list of log-in information to all the necessary online accounts. Facebook, Linked In, online photo albums, bank accounts, credit cards, frequent flier information, and email are all examples of accounts that would be useful.
6. Bank accounts. Keep a list of all bank accounts (checking, savings, etc.) along with contact information for each bank.
7. Automatic payments. List all automatic payments, from which account, how much, when, and to whom.
8. Retirement/investments accounts. Don’t forget pension plans, 401(k)s, IRAs, and any other investment accounts. Include the balances and beneficiaries.
9. Insurance policies. For health, disability, life, car, and home/renters insurance information, list the company/agent contact information, premium costs, beneficiary information, deductibles, policy holder names, and amount of benefit, if applicable.
10. Real estate. Document all real estate values, mortgage holders, real estate tax information, and mortgage company contact information. This is also a good place to list major home improvements and who you’ve used for home and appliance repairs.
11. Credit cards. Don’t forget credit cards. The balance, interest rate, issuing bank, log-in information, as well as rewards, if applicable.
12. Tax records. Explain how prior years’ tax records can be accessed as well as your tax preparer’s contact information.
13. Lawyer. Who is your lawyer? Where is your will?
14. Debt obligations. List all debts, including amount owed, interest rates, and payoff dates.
15. Who owes you. If anyone owes you money, include amount owed, interest rates, payment schedule, and payoff date.
16. Important contacts in case of death.These companies are probably found elsewhere in this plan, but the Social Security Administration, credit card companies, insurance companies, and the employer benefit department all need to be notified.
17. Inventory of valuables. Do you store any valuables in a storage unit? Safe? Safety deposit box? Don’t forget to list cars, boats, RVs, and motorcycles (include make, model, VIN, etc.). My sister will be the executor of our estate if both my husband and I die. This section will also include a list of who we want to get our stuff.
18. Data backup plans. Where is your data backed up? In a paper file? Dropbox?
19. Funeral costs. If you have requests for your final burial, you can list them here. Include the company in charge of arrangements.
20. Personal letters. My father, as I’ve mentioned before, died at a young age. He wrote each of his kids a letter that was given to us the day after he died. It continues to be one of my most treasured possessions, something I want to give to my husband and children as well.

Creating a plan like this requires a lot of work upfront. Maybe you can take a financial health day to complete this. Once the initial work is done, it will be easy to update it. I update my Master Plan at work about once per year, and it takes just an hour or so. I will do the same with our Financial Plan, adding information or updating bank account balances.

The end result of a Financial Plan

One of the best reader stories I’ve read was a story of a woman whose father prepared her amazingly well for his death. Throughout the post, she explained how he introduced her to various key financial people while he was still living.

My husband and I don’t communicate as well on financial matters as I’d like. Our system works: I organize the financial stuff and give him a financial report every now and then. Having a Financial Plan in place could help facilitate conversation while I’m living — and give my family peace of mind when I’m no longer here.