This reader went on to mention several activities that they enjoy, some of which overlap with the ones I mention below.

While I see where this reader is coming from, I don’t fully agree. I think there are a lot of activities that people engage in besides shopping that are regular money drains, such as playing golf, going out to eat, going to coffee shops, going to the movies, and so on.

Whenever an experience requires you to spend money, requires you to spend additional money beyond what you would normally spend, or heavily involves spending money, you should rethink whether or not you want to engage in that activity. Instead, it’s really worth your time to find things you enjoy doing that don’t involve spending money.

It would be easy for me to just start listing outdoor activities. I love spending time outdoors. I love taking walks in parks, playing soccer with my children, coaching youth sports, going swimming at one of the many lakes here in Iowa, going camping… the list goes on and on.

However, if you live in a winter climate like I do, you’re finding yourself stuck with indoor activities right now, so I’m going to name ten things I enjoy doing for little or no cost in the winter. These are all things that I fill my time with indoors, and each of them has little or no cost.

I don’t expect you’ll enjoy all of these. Instead, I suggest reading all of these and trying one or two of them (or more, if you like). Everyone is different and everyone has different passions.

Play a board or card game
First of all, if you associate board games and card games with endless, boring games of Monopoly from your youth, you’re missing out. Monopoly was first published in an early version in 1910. Comparing Monopoly to a modern board game is like comparing a Model T to a Lexus.

Try playing a more modern board game, like Settlers of Catan or Ticket to Ride. Look for a local hobby shop in your area and ask for a demonstration of the game if you don’t have access to a copy, just to see if you enjoy it. Board games can make for a great holiday gift.

If nothing else, a standard $1 deck of playing cards can provide lots and lots of gaming. You can play poker, euchre, pitch, bridge, rummy… the list goes on and on. There are also many, many solitaire games to play.

Read (or re-read) a book
My shelves have quite a few great unread books sitting on them, right next to a big pile of some of the greatest books I’ve ever read. There are few better ways to burn a few hours than to read a great book.

If you don’t have any books available to you, visit your local library. There are thousands upon thousands of books available there for free borrowing.

I could list hundreds of books that I’ve enjoyed over the years. The key, though, is to find something you enjoy, whether it’s something challenging or a complete page-turner.

Thoroughly clean a room in your house
Whenever I thoroughly clean a room in my home, I feel really good. Not just because of the exercise I got from cleaning the room with a good tempo, but from the enjoyment of having an uncluttered and very clean area in my home.

By cleaning, I don’t just mean dusting and vacuuming. I also mean getting rid of items that you don’t want or don’t use any more. A cleaned room generally has far less stuff in it compared to when you started.

This is just a great way to spend an afternoon. It makes your living quarters that much better and it can give you a good workout, too.

Make a great meal using what’s in your pantry
It’s easy to go out to eat… but that’s going to eat up money. It’s also easy to just go to the store and pick up a premade meal… but, again, that’s going to eat up money. Not only that, both of these options don’t help you learn how to prepare food or use up the multitude of things you have in your cupboard.

Making a meal from the items you have on hand can be a bit of a challenge, but it can be very rewarding, too. It gets some of the unused items out of your pantry and results in a delicious meal for you and your family.

Quite often, this ends up being close to a “free” meal because the items you use are things that would have otherwise never been used.

Make some homemade gifts
Homemade gifts are a great way to cut back on your budget while also producing something that the recipient will actually want and value. Instead of throwing your money at a person, you’re throwing some of your time, which often means a lot more.

There are a lot of great homemade gifts you can make, from jars filled with soup mix to original examples of any art that you’re skilled at.

The key is to invest the time to make it well, and to make something that the recipient will value. Do both of those and you’ll create something memorable out of your spare time.

Learn about a topic you’ve always been curious about
Most of us have some degree of curiosity and find ourselves wondering about some topic or another. There are few better ways to spend an idle hour or two than learning more about that topic.

The easiest way to do this is to start at Wikipedia, type in your topic, and start reading. Remember that this is a starting point – if you begin to dig deep into a topic, it’s often a good idea to move on to books on the topic.

I actually do this quite often. Recently, I’ve been learning about specific philosophers, using the entry on Wikipedia as a starting point and moving on to their writings.

Host a potluck dinner
A potluck dinner simply means that you invite friends over and have them each bring a dish. Together, you have a varied and delicious meal.

This is actually a great way to spend an evening socially without spending much money at all. Generally, you’re only in charge of one or two items which you can prepare or buy in bulk. In exchange for that, you get a great meal and an evening with friends.

We host potluck dinners about once a month. They’re always quite fun, and they often end up with a bunch of us sitting around a table playing a game, laughing and joking with each other.

Do volunteer work for a political campaign
If there’s a candidate or cause you believe in, donate your time from home to work for this campaign. There are always tasks that political campaigns would love to have volunteers for.

In the past, volunteers have written letters on behalf of candidates or issues, made phone calls, stuffed envelopes, maintained social media tools, and countless other little tasks that campaigns need fulfilled.

Most of these tasks can be done from home. I know one person who used to stuff envelopes for her preferred candidates. They would drop off reams of papers and envelopes and she’d prepare the documents and mail them for the campaign. She loved doing it.

Make a yearly calendar
This is a project that I do each year. We still rely on a wall calendar, so one afternoon, I’ll sit down and transfer all of the birthdays and other events from the previous year’s calendar to the new one. I’ll also incorporate things from my own personal Google calendar.

It can be quite a task when you fill in birthdays, anniversaries, and other such events. I like to write in reminders of those events a week in advance so that I remember to pick up a card or a gift if needed. I also like to note other important things, like key dates on our children’s academic calendars and the like.

This can take several hours, but a calendar with all of your important dates on it can be a godsend. You’ll find yourself relying on it so much that the time you invested up front will repay itself in a smoother life and better relationships throughout the year.

Get rid of your unwanted stuff
Virtually all of us have unwanted stuff in our home – old stuff filling up the closet, items that we might use “someday” but really won’t, items from abandoned hobbies that might have value.

If you haven’t used an item or really thought about it in a year, it’s probably safe to get rid of it. Once you make that decision, you have several options. You can sell it, you can donate it to Goodwill, or you can simply toss it in the trash.viagra online

Even with the options that don’t involve receiving money for the item, you’re still improving your life because you’re decreasing clutter. If you’re making money from it, too, all the better.

There are countless things to do with your time without spending money. The key is to just find things that you enjoy and do them.

Foundation
Start with a base of foundation that matches your natural skin color. The foundation needs to be blended well. If it isn’t blended well, you will have an unsightly line where the make-up ends on your jaw line. For a polished professional look that says you pay attention to small details, blend this line, so it isn’t visible. Also, remember that a lot of people sweat during the interview process because they are nervous.levitra Applying minimal foundation may be the best way to ensure your make-up doesn’t run in case you sweat too.

Loose Powder
To set the look of the foundation, apply a loose powder over it. Again, match colors carefully so that there is no visible difference in the color of your face and the color of your neck. Here are some tips to remember when applying loose powder.

I don’t do frugal living perfectly. There are times (usually around 8:00 a.m. on a Monday) when I cannot be stopped from my single-minded march toward Starbucks. At other times, I willfully disregard everything I know about paying retail and (albeit begrudgingly) fork over $75 for a pair of jeans. Still, I consider myself a pretty frugal guy. The broad brushstrokes of my life are characterized by financial decisions that are well-considered and based on clear financial goals.

If you’re new to frugal living, fear not. Most of us are still learning, and we can all be tempted to veer off track at times. For the newbies out there, here are seven principles to keep in mind as you enter the ranks of the frugal — it’s a sort of beginner’s guide that we’ve all had to learn (and often, relearn). (See also: The Two Biggest Mistakes People Make When Starting to Live Frugally)

1. Pace Yourself

Adopting a simpler and more frugal lifestyle can take a bit of practice. Embrace it by degrees. Diving in and cutting your monthly budget by 50% all at once will only be a shock to your system and leave the entire family feeling pinched and resentful. It takes time to phase out unnecessary expenses and gradually redirect your resources to align with your goals.

2. Understand Your Goals

Saving money in and of itself may be a worthy enough goal. After all, we all know we’ll need it — we just may not yet know when or why. But a smarter, more motivating approach is to understand specifically why you’re saving. Is it for an earlier and more comfortable retirement? To start your own business? To finally pay off the mortgage? To just sleep better at night? Having a “vision” for your financial life will help drive your frugal choices.

3. Get on the Same Page

For couples or families, no financial decision is made in a vacuum. Make sure your significant other is as committed to reinventing your financial life as you are. Reach a common goal or set of goals and understand what changes and sacrifices are needed from each person. Encourage each other and redirect each other when necessary.

4. Sacrifice — Selectively

Living a frugal lifestyle doesn’t mean saying “no” to everything. Rather, successful frugality means understanding your priorities so that the “yeses” are aligned with your priorities. It’s still okay to indulge from time-to-time,

Original article by Kentin Waits (c) Wise Bread - Read full story here.

I have had many jobs throughout high school and my college career. However, the most lucrative one that I have landed has not been with a brick and mortar company. After working in retail for years, then going to Starbucks as a Barista and finally working in accounting at an air charter company I decided to work for myself. Let me tell you, it was the best decision I have ever made.

I have not only made the most money from my decision, but I have been able to structure my own schedule according to my needs. I am sure by now you are wondering what this job is and where you can get one. It is simple! I am a nanny. If you love kids, want something more than minimum wage, want to create your own hours, and are a responsible person then I suggest you go for it.

I grew up with a large family and was an Aunt by the time I reached five. I have had tremendous experience with kids and love being around them. This job enables me to hone in on my parenting skills without being a parent. Jon and I want a big family in the future and being a nanny has been a great patience builder!

Another aspect of nannying that I love, which is perhaps my favorite part, is that I get to spend quality time with the kids. They become like my second family. It is truly a ministry. I often bring Christian children books and read to them. I adore being able to instill in them Bible verses. I also love being able to kneel beside them in bed and pray for them. I hope and pray that the Lord uses these times and shows them His love.

I find most of my nannying/babysitting positions by either word of mouth or through an amazing website I found a few years back called www.sittercity.com. It has been an incredible asset to me. I have a few tips regarding the use of this website, however:

1. While using this website, or one similar, invest in a background check. It makes you more credible to the families seeking to hire you. I have been fortunate enough to have had people pay for my background checks in the past. However, they are only around $10.00 per year and in order to get more jobs, I suggest investing in one!

2. ALWAYS make sure you are comfortable with the family. I set up a face-to-face interview prior to accepting any position. I also request to meet the father as well. I do not want to be faced with any surprises. I once babysat for a couple who seemed nice enough at first until the dad started flirting with me. Needless to say, you don’t want to place in such an uncomfortable and possibly dangerous position.

3. Don’t be afraid to negotiate your price! Be competitive, but don’t cheat yourself or the family. Also, be sure and charge according to how many youngsters you are watching.

4. Tell someone close to you where you will be and the address and phone number where they can reach you. My parents always know the house I will be at and in case of emergency they are always available. Remember: these people are strangers, and until you get to know them, you need to keep them at arm’s length.

Last but not least:

5. Have references handy for the family. This, along with your background check, adds to your credibility and helps secure a job quicker. Also, it is okay to ask them for references! Don’t be afraid. It is always better to be safe than sorry.

Maybe nannying isn’t the job for you. However, there are other jobs available that may fit you perfectly! Sittercity.com isn’t just for babysitting and nannying positions. You can find people who need housekeepers, house-sitting, pet sitting, elderly care and a myriad of other positions!

Don’t be afraid to branch out and find a job that isn’t with a corporation. Pave your own path; I know I am glad I did. After all, this is the home of the free….

Chelsea writes in: I’ve always wondered if it’s cheaper to print photos from home, rather than having them developed at a drugstore. Nowadays, most printers have photo capabilities and the quality is pretty stellar for the average consumer, but the convenience of uploading files and just picking them up when they’re done is tempting.

As always with questions like this, there are a lot of variables to consider. I decided to calculate our home cost of 4″ by 6″ prints just to see how expensive they really were.

The printer itself Our current printer is a Canon Pixma MP480, which is currently discontinued. We were able to pick one up new for $69.99 when it was being discontinued. We have used the printer to print well over 1,000 documents at this point without any difficulties and with an anticipation that we’ll be using it for a long time to come, so the cost per page for the printer is quite low. I think it would be reasonable to estimate that the cost of the printer itself per document printed is $0.02.

This is perhaps the hardest factor to truly quantify. It has a lot to do with the reliability of your printer as well as the price you paid for that printer. A low-end printer with good reviews from a reputable brand, preferably bought during a sale, will get you the best price per document printed.

The ink We can get a new color cartridge for our printer for $19.96. We use Canon 211XL color cartridges. I kept track of our last cartridge use to find out how long they lasted. We were able to print 344 documents that were either full color or largely color before the ink began to fade out with that cartridge. This adds up to a cost of $0.06 per picture printed.

My experience has been that, if you have the option to buy the cartridge with more ink, that’s the one you should choose. They generally give you more printing for the penny.

What about refilling your cartridges? I’ve mostly had good experiences with this, but not always. I have had a few experiences where cartridges have completely clogged and another experience where the ink filling process broke the cartridge in a subtle way, resulting in ink all over the insides of my printer. This can save you money, but you’re also looking at a bit of risk.

The paper I can get 200 sheets of blank 4″ by 6″ photo paper for $20.68. That gives us a cost of $0.10 per picture printed.

I’ve found that if you go really low-end when it comes to photo paper, you end up with very dull-looking snapshots. You don’t have to buy the premium paper, but the cheapest paper usually doesn’t hold ink and doesn’t look good. Research your paper brands before you buy. We usually use Kodak glossy paper.

Adding these all up, I can print a 4″ by 6″ at home for $0.18 per print.

The prices for prints from digital sources at various stores varies quite a lot. The least expensive regular price I could easily find for 4″ by 6″ prints was $0.20 a print from Target. Other stores charged substantially more – WalMart, for example, charged $0.28 per 4″ by 6″ print. There are some online services, like CVS Photo, that offer rates as low as $0.19 per print, but you have to wait to get the prints. There’s also the cost of actually going to these places, which is at least somewhat alleviated if you’re making the stop for multiple purchases.

I actually find it far more convenient to print at home. I usually use Picasa to manage all of the documents.

Is it a big savings to print at home? No. It’s clearly in the “pennies, not dollars” camp. However, I find it to be more convenient and pennies do add up over time.

Original article by Trent (c) The Simple Dollar - Read full story here.

My mother came to visit recently, so I put aside the time to just spend a day with her. It was really enjoyable to just spend several hours together. We wrapped some Christmas gifts, played a couple of games, went out for a light lunch, and visited a bookstore (neither one of us bought anything, but we browsed for a while).

When I take time out to do things like this, it somehow makes my life seem better even if it makes other aspects of my life that much busier.

Q1: SmartyPig update
My question relates to the interest rate on SmartyPig. I have opened multiple goals with them since seeing your post on them awhile back. But I can’t help but take notice of the several interest rate decreases that have occurred recently. I understand (or I guess) that the economy is driving the interest rates down; I’m just wondering if they’re still the competitive savings resource they once were. Do you still recommend SmartyPig to your readers?
- Jill

Right now, SmartyPig’s interest rate is comparable to a lot of other online savings accounts. Early on, SmartyPig offered a rate that was significantly better than online banks, and that interest rate was a big reason to use SmartyPig.

However, SmartyPig’s appeal isn’t just interest rates. They offer a lot of nice tools for saving for specific goals, like saving for a vacation or for an appliance replacement. Often, they work with the retailer from which you’re buying that item to get you a reduced rate on that item. For example, if you’re saving for a goal that is an item that you can buy on Amazon (say, a MacBook Pro), you can choose to cash out when you reach your goal in the form of an Amazon gift certificate instead of cash, and they’ll add 3% to the face value of that certificate.

I think SmartyPig is a worthwhile tool for saving for specific short-term goals. In fact, I’ve used it myself when saving for a replacement computer.

Q2: Figuring out debt repayment order
I’m a proponent of paying highest interest rate debt first, so as to minimize total amount paid over time. However, lately I’ve been concerned about my three loans. I have one private student loan for ~$47K at a variable 4% (mo. payment: $354) and two fixed federal loans for $2,308 at 5.75% and $2,491 at 6.55% (mo. payment $32.50 each). My snowball is $1,856. With all the negative economy talk, I started getting nervous about a surge in inflation that would cause my variable interest rate to skyrocket, and therefore, really hurt me since the variable but lowest rate has the largest balance. So I was going to ask you if it would make sense to pay off my variable-low-interest-rate-but-high-balance debt first, and then start paying by highest interest rate.I am extremely risk-averse. But after I ran the numbers, this scenario really didn’t pan out. It became quite obvious that only in the event that interest rates soared past my highest rate loan now, would it make sense (of course!) to pay off my biggest balance (which would then be the highest rate) loan first. Does this check out/have I done this right?
- Lauren

The best mathematical way to pay off debts is always to pay debts in the order of interest rate. If the rate of a debt changes so that a new debt is now the highest interest rate debt, then you should switch to the high interest rate debt.

The only alteration I would make to that statement is that if you’re informed in advance of an interest rate change, it makes sense to immediately switch your extra debt payments to whichever debt will have the highest interest rate.

I would not make extra debt payments based on a feeling of what interest rates will look like in the future.

Q3: Buying elderly mom a home
My 75 year old mother is in mediocre health. She’s losing the place she’s living in and needs to move in the new year. She hasn’t one penny of savings, has a beater car and routinely drives to our part of the state twice a month to visit some vulnerable relatives. This is a 2 hour ride each way, but I agree that these relative actually need her.

I will be earning a big chunk of money in the first part of the new year and would like to buy a home for her to live in and as an investment. I’d like to take advantage of the crazy low prices in the suburbs near our home. Here are several questions for you.

1. Would you pay all cash for a house? Pros and Cons (My spouse makes more than enough money to support us, so our life would not be affected by this)
2. Would you make her pay a small portion of her social security toward rent? She currently has to pay half her social security for rent and is barely making it. I’ve always heard it’s a good idea to make people pay a small amount toward what they need. I was thinking 1/4 of her SS.
3. I want to spend about $200K and these homes might not be well insulated, etc. What things would you do to a house to make it as frugal as possible for her. She currently lives in a very old drafty house and her heating bill is killing her.
4. She is know for her very poor decisions. Is it practical to set a list of rules for her? She has completely disregarded the rules her current landlord imposed (a relative) and this is part of why she has to find a new place. I’d like to make her promise she won’t let deadbeat relatives move in. That she can’t have too many animals, etc. Is this too parental?
5. We use a property management company for one other rental we have. Should we do this with her? It costs us 10%, but then she would have them to call for maintenance. It would cost me money, but it may be a great buffer. I’m wary of putting a handyman at her disposal since she might possibly have them put on a new deck or build a turret rather than just have them unclog a drain or fix a sticky door. She has very qualms about doing what she thinks is “necessary” with other people’s money. “But I needed a greenhouse, my plants were dying”. If I do use a management company I might not tell her I bought the house since she might try to do less “quirky” things if she doesn’t think a relative will let her get away with it.
- Sheila

I would be really hesitant to enter into this type of “landlord” situation with a parent for much of the same reasons that I encourage people not to lend money to family and friends. It just adds an element to a valuable relationship that you really don’t want.

When there is something wrong with the house, you will be the person called. Because you’re family as well as the owner of the house, you’ll be expected to fix the problem very quickly and efficiently. Unless you have an exceptional person for a mother, this will hold true whether you have a management company or not.

There’s also the concern that the house that might make for a good investment might not be the same house you’d wnat your mother to live in given her current health situation.

If I were you, I would rent an apartment for her. If her health is slipping, it’s likely that the period of time you would rent would be limited. It would also put the burden of the “landlord” role onto someone else, and it would also allow you to purchase a house solely as an investment.

Q4: NCUSIF insurance
I have a couple questions: I am interested in a local credit union, with a checking account that has 2.51% interest if you have an automatic depost/withdrawal and minimum 12 debit transactions which I already do. What do you think about going with a credit union who is NCUSIF insured, which they claim is equivalent to being FDIC insured.
- Ron

NCUSIF insurance is extremely similar to FDIC insurance. Both are insurance programs on savings and checking/draft accounts backed by the full faith and credit of the United States government. In terms of the end user, they’re pretty much identical, as they both offer $250,000 in insurance against the failure of the financial institution that manages your account.

So, why the difference? Credit unions, in terms of the law, are different entities than banks, with different restrictions and requirements. One could go into a long list of these differences – for example, credit unions are not-for-profit while banks are inherently for-profit, to name just one. Because they work differently, it makes sense that the same insurance policy wouldn’t work for both entities.

From my perspective, your money is going to be just as safe in an NCUSIF-insured credit union as it would be in an FDIC-insured bank.

Q5: Ending naptime
I’m a stay-at-home mom who also runs a small online business. I usually do work needed for this while my daughter (3) is napping. However, lately, she’s been really restless at naptime and requiring lots of attention. My business is suffering. Any suggestions?
- Tessa

If you want to prolong the magic of naptime, the best way to do that is to utterly wear out your child in the morning. Engage in activities that require a lot of energy prior to lunch so that your child feels a strong energy lull after lunch.

Eventually, though, your child is simply going to grow out of naptime – and it sounds like this is happening right now. This is simply going to mean that your daily schedule is going to change. You can no longer bank on naptime as a time to get things done.

For us, our approach was “quiet time.” We continued the same routine as nap time, except that we simply mandated that they lay down and be quiet for a certain period of time. If they were still awake at the end of that period, they were free to get up and usually engage in a solo activity that would allow me to finish whatever task I was working on.

Q6: Credit card challenges
My husband and I live very frugally due to having student loan debt along with other debts (auto, home repair, mortgage) and my husband is getting his undergrad degree while I work full-time. Since we do not have much money left over to save for vacations and the like we tend to put a lot of purchases (including bills) on our Discover Miles credit card and then timely pay the statement balance each month and cash in our Miles for travel expenses. This has worked very well for us and we are hoping to have enough miles for a family trip to Florida next summer (or enough to pay for our gas if we choose to drive). My question is this: would we benefit from a different kind of card, maybe one that gives us a better percentage back on our purchases? Right now we get about 1 mile for $1 spent on most purchases but I always sign up for their special bonus miles when they’re available. We get 3 miles on every $1 spent on travel expenses but we don’t really travel except for maybe 1 or 2 small trips a year. I did notice that now Discover offers us the option to use our Miles toward just about anything, including cash back or paying the balance on the card but if we could benefit from a card where we get a better percentage on every day things like groceries, I would rather have that. I don’t really care about the APR on the card since I always pay the balance but I don’t want to pay a monthly or yearly fee. Any suggestions? Also, it doesn’t need to be Discover, that’s just what we have now; we also have a Visa Amazon card but hardly ever use it since we don’t buy many things on Amazon anymore. Thank you!
- Shannon

There probably is a better card out there for your specific situation. I’m just not sure what that is.

My suggestion to you would be to sit down and really look at where you spend money, then use that as the basis for finding a new card. What retailer sees the largest amount of your transactions? That would be one sure place to start.

The key thing to remember is that rewards are rewards. If you receive “cash back” rewards or discounts, bank those rewards for your travel goals. Don’t just limit yourself to airline miles.

Q7: NACA question
Got a question for you. Have you heard of NACA? https://www.nacalynx.com/nacaWeb/index_main.aspx

My father in law mentioned it to me the other day. He said a friend of his used it, but he didn’t know much about it. Since my wife and I are looking into buying a house in a few years I checked it out. It seems a little fishy to me though. From what I can gather, if you get a mortgage through them, there is a $50 a month membership fee, plus you have to volunteer your time 5 times a year. I don’t have a problem volunteering, its the fee I am worried about. If you do get a mortgage through them, there are no closing costs and things like that.

What do you think? Have you heard anything about this at all? Seems risky to me.
- Deval

Your description of the program from the perspective of a potential borrower sounds pretty accurate based on my experiences.

NACA is a non-profit homeowner advocacy group. They work to get strong mortgage deals for members from large banks and often engage in political activism and protests to get the job done.

They seem to do a solid job of working with homeowners to get them a better interest rate, but through the rules of membership that you suggest above, they tend to at least try to draw people into their political activism. If that’s of interest to you, I’d follow up.

Q8: Splitting regular and Roth 401(k)
The company I work for has just recently added a ROTH 401k option to the existing 401k plan. I can’t contributed to ROTH IRA as I have real income plus “income” that exceeds the ceiling set by the IRS (the fake income is received via a family real estate owning LLC, we’re divesting of excess land and that carries forward to my 1040).

The only debt we have is our house, I put down way more than 20% and its value has held steady. We have a well stocked rainy day fund, plus other non-company investments (mostly mutual funds). We make solid contributions to charity, etc.

Is there a good rule of thumb, or do you have a suggestion, on what allocation I should make between the 401k and ROTH 401k? When I do planning and make financial decisions (like to potentially refi to a 15 year mortgage) I always assume my income won’t grow. But for this scenario I can see it increasing. My assumption is that taxes will rise in the US later, which makes the ROTH 401k a smart place to put a lot of money. However I’m also not totally convinced that ROTH plans won’t have a new tax levied on them in the future. But I also have to assume that if I ever get to retire that I’ll be in a much lower tax bracket than I’m in now.

To keep it simple I was going to split it 50/50, but I am wondering if you see it differently?
- Lenny

There is no “perfect” solution when it comes to splitting money between a regular 401(k) and a Roth 401(k). If your tax rate in retirement is lower than it is now, then a regular 401(k) is better. If the opposite is true, then a Roth 401(k) is better.

No one has any idea what their earnings will be over the years between now and their retirement, nor can they be certain what income tax rates will be in twenty years.

Because of that uncertainty, I think hedging your bets is a great approach. While you’ll probably not stumble upon the “perfect” balance, a 50/50 split will give you a pretty good balance.

Q9: Paying off student loans quickly
I have a question on what you think about living in a cheaper/less ideal situation if it means you can pay off student loans faster, but be less psychologically at ease. Right now the place I’m living is in a great location with reasonable rent, but my housemate isn’t so into cleanliness and it’s not that comfortable, and long story short, I’d like to move somewhere else. But I know the next place I move into will likely be more expensive – I live in a city with a high cost of living, where you’d be hard-pressed to find a studio apartment in good location for less than $1800/month, or a 2 bedroom, 1 housemate situation for less than $800-$1000 (both numbers excluding utilities). I’ve lived in places really far from public transportation, a hostel with with tons of housemates (8 people in a room), places with cheap rent but roaches everywhere…and to me, a good combination of location, considerate housemates, comfort/cleanliness, and piece of mind are important. I think home should be a place to relax and feel at ease, not be on edge or stressed. (The reason location is really important to me is because I ride buses or the subway everywhere.) How much do you think one’s monthly salary should go to rent, is it worth spending an extra $100-$200 per month for a nicer living situation (at the opportunity cost of less money going to student loans)?
- Linda

It’s all about balance, and no one has the same exact balance. If you spend more on having a nicer home now, reducing stress, you’re taking away money from extra debt payments, which means that you’ll have the debt hanging over your head for longer, adding stress.

The mistake that a lot of people make is that they regularly skew that balance toward the present, sacrificing the future. They’d rather have a little more now in exchange for something less later on, believing that something will come up to take care of that future shortfall.

Doing that for something deeply important to you is okay. Doing that regularly is a mistake. The key? Self-analysis. The more time you think about all of your decisions, the more likely you are to make good ones.

I can’t tell you which way to go because I don’t know your values. All I can tell you is to spend some time carefully thinking about this and whether you’re willing to add a lot of time back onto your debt due to the extra payments you won’t be able to make.

Q10: Spousal Christmas presents
My wife and I are working through the issue of whether to get each other Christmas gifts. How do you and your spouse do it?
- Carl

Generally, what we do is set a spending cap for each other. We talk it over beforehand, look at our budget, and set something reasonable.

Then, when we’re figuring out what exactly to get each other, we get the children involved. We allow them to help us select these gifts, which enables the children to feel as though they have a part in this process even though they don’t have a source of income.

This does enable us all to be able to open at least a few gifts on Christmas morning, allowing us to take turns and enjoy not only receiving gifts, but enjoying watching each other open gifts.

This process works well for us. I’d suggest just setting a reasonably low spending limit with your spouse and then sticking to it.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

Original article by Trent (c) The Simple Dollar - Read full story here.

The vast majority of retirement books I’ve read focus on maximizing every dollar to actually arrive at retirement. They don’t look at the period of retirement itself.

The relative freedom from time constraints that retirement offers opens the door to a lot of things that would otherwise be impossible, and this is where How to Retire Happy, Wild, and Free by Ernie Zelinski comes in. Rather than looking strictly at retirement savings as part of one’s plan for retirement, Zelinski looks deeply at the personal choices made in retirement as part of that plan.

It’s an interesting and fresh perspective on retirement, and Zelinski’s breezy and friendly tone certainly helps push it along.

Thank Heaven for Retirement!
If you do not plan for an active retirement, you’re setting yourself up for a difficult and expensive retirement. If you work until late in life under the pretense that you’re setting yourself up on easy street due to your big pile of savings, you’re going to find that you don’t have a lot of years to enjoy it. Instead, a much better path is to live relatively lean, work toward an early retirement, and plan for a retirement life that’s active and full of adventure.

Retirement: A Time to Become Much More Than You Have Ever Been
A good retirement doesn’t involve sitting around and doing nothing all day. It means applying yourself to something that you’ve always wanted to apply yourself towards but never felt that you could due to the need to have an income-producing job. If this new activity produces income, great! If it doesn’t, it’s still filling your hours with lots of contentment and enjoyment of life, and not filling those hours with idleness or expensive activities.

So Many Worlds, So Much to Do!
Zelinski makes a challenging suggestion for anyone who’s retired. On the first day of retirement, unplug your television set and unsubscribe from cable. This will force you to be more active, which will improve your health. It will also push you to actually take on the big dreams you have rather than putting them off until tomorrow because there’s something good on television.

Take Special Care of Yourself – Because No One Else Will
Some degree of physical activity is an essential part of a healthy retirement. Zelinski recommends a daily walk at a minimum – and preferably more than that. Long walks, bicycle rides, and other activity should be part of your life every single day. This will not only improve your quality of life, but the length of your life as well. If you allow yourself to be sedentary, you’ll gain weight and lose the energy you need to live an active and vibrant life. A walk through your neighborhood or through nature is also a free form of entertainment, something that can’t be said for many other forms of entertainment.

Learning Is for Life
Much like physical activity keeps your body healthy, mental activity keeps your mind healthy. Zelinski recommends a commitment to lifelong learning in which you strive to learn something significant each day. One way to do this is to take a college course in a topic that’s interested you at your local community or public college. As an aside, I had a friend whose grandfather was in college at the same time as him. The grandfather actually wound up being in an assigned project group that I was in and my interactions with him were some of the best experiences of my college years. Going back to college does not mean you’ll be out of place.

Your Wealth Is Where Your Friends Are
A good, reliable friend is something invaluable to have, but you can’t build friendships by sitting at home alone. Seek out community activities related to things you’re interested in, or just get involved with a volunteer activity. Doing these things will essentially force you to meet like-minded people, and there are few better situations from which to build a friendship. A friend is a person who will be there for you when you need them and bring joy into your life when you don’t need them as much, and that’s an invaluable thing to have.

Travel for Fun, Adventure, and More
Retirement travel can actually be really inexpensive since you’re not tied to the traditional idea of the “tourist season.” You can travel to locations on your own schedule, not those of school calendars or professional guidelines. You can also travel like a migrant, meaning you can move slowly, scoop up deals as you go, and do things at your own schedule. This makes it easy to travel almost anywhere surprisingly cheap.

Relocate to Where Retirement Living Is Best
In my opinion, Zelinski’s best single piece of advice comes in this chapter: move to a college town. A large college offers tons of cultural opportunities, speeches, performances, groups, and countless other things to get involved in, most of them for free. The college town that I once lived in was a vibrant place with a lot of older people involved in the college community. You couldn’t go to an event without a lot of older people there, which made it interesting both for me and for them.

Happiness Doesn’t Care How You Get There
Don’t leave this world with songs unsung that you wished you had time to sing. The last thing you want to have in your final years are regrets of things that you could have easily done. Your retirement years are often the time to do those things. Most of the things that people wished they could have done are things that require time, and time is what you have in spades in retirement. Use it.

Is How to Retire Happy, Wild, and Free Worth Reading?
Rather than approaching retirement as merely a savings goal, How to Retire Happy, Wild, and Free looks at retirement as a period to capitalize not so much on the money you’ve saved, but the asset of time.

In other words, saving for retirement isn’t about saving money. It’s really about saving time. The more you put away for retirement, the more time you give yourself to accomplish all of the things you dream about accomplishing, whether it’s writing a novel or learning a musical instrument or camping in every national park.

It’s a great perspective and a useful one, and Zelinski writes about it with an irreverent and breezy tone that makes this a fun book to read, too. This one’s highly recommended to anyone within ten years or so of their retirement, on either side.

Check out additional reviews and notes of How to Retire Happy, Wild, and Free on Amazon.com.

Original article by Trent (c) The Simple Dollar - Read full story here.

My husband’s father just gave him a huge speech about how he doesn’t dress appropriately for work and how he will never get promoted or “become a manager” dressing the way he does. My husband is a computer programmer who works with a bunch of engineers. He wears dress slacks and polos or button-up shirts everyday to work, while most of his co-workers wear jeans and t-shirts. This confused me, but my husband exaplined to me that what his father is saying that since he doesn’t wear designer clothes and because he doesn’t wear a tie everyday that he will never be promoted. We buy his clothes at JC Penney, but the cheaper brands. I can’t tell the difference between them and the nicer dept. store brands, other than the price. Do you agree with my father-in-laws assessment? What about if my husband wants to advance his career, but has no interest in managing people? I realize he would make more money if he eventually became a manager, but he enjoys his computer programming work, and probably wouldn’t enjoy managing people, and I would never want him to work a job he didn’t enjoy if he didn’t have to.

I think what’s happening here is that your father-in-law is substituting his own goals for his son’s goals and he’s trying to guide his son towards those goals.

Your husband seems to have his own set of career goals. He’d like to advance his career as a programmer, but he has no interest in being in management. Your husband also has familiarity with the culture of the career path that he’s chosen.

I think it’s absolutely vital that people have a set of career goals. They need to have a sense of where they want to go and what they need to do to get there. For those reading this, ask yourself those questions. Where do you want to be with your career in five years? In ten years? In twenty? What do you need to be doing to get there?

Yes, attire can be a part of those goals. The usual advice is to dress in the attire of the position you want to eventually attain. If you want to be in management, dress like management. If you want to be just part of the senior staff, dress like part of the senior staff. I consider that to be pretty good advice.

It sounds like your husband is dressing for the position he wants to attain eventually, which is a senior programmer. He should note what people in his desired position wear and emulate it.

Your father-in-law has his own goals and he probably envisions certain outcomes for his son, for various reasons. For those goals and outcomes, the advice your father-in-law is giving his son is probably good advice. He likely envisions his son eventually moving into management and wants to prepare him to do so.

The challenge here, as it often is, is communication. For this type of disagreement to occur, both people aren’t articulating what their goals are and the paths they see toward those goals.

Your husband can fulfill his part by simply making it clear that his goals do not involve moving into management. He needs to make it clear that he’s dressing for the role he aspires to, and that something he values deeply is a job that he enjoys doing and he’s willing to accept non-executive pay for that position.

If your husband can’t clearly articulate his career goals and his plans for achieving them, he should spend some time thinking about his plan for the future. Can he clearly state where he wants to be in five or ten years? What exactly is he going to do to make sure that happens? The more thought he’s given to this and the more detail he can give, the better.

Your father-in-law should be able to accept that. If he’s not, then your next move is to simply disregard his advice with regards to a career path. If he’s still giving advice that seems to be guiding your husband toward a management role, your husband needs to just nod his head and then follow his own path.

I actually sympathize with your husband. I have little interest or desire to be involved with personnel management, and knowing that about myself has driven many of my choices, both in the past and even today. I don’t want to manage people and it sounds like your husband doesn’t either.

However, it’s important to remember that (likely) your father-in-law cares deeply and desires a successful life without want for his son. Keep that in mind as you address this situation and handle everything with care and without anger or aggression.

Original article by Trent (c) The Simple Dollar - Read full story here.

Vincent van Gogh spent most of his life destitute. The one woman he loved rejected him. Almost everyone who saw his paintings found very little value in them. He would often trade those very paintings to sympathetic familes in Holland and in France in exchange for a night or two sleeping in their barn and a meal or two (yes, paintings worth tens of millions of dollars today).

In fact, the only reason he had the materials with which to paint at all was due to his brother Theo, who wasn’t exactly well off himself but who always found a way to send his brother a bit of money for more paint supplies.

The letters that Vincent van Gogh shared with his brother make for some stunning reading. They depict a person struggling deeply with self doubt. They depict a man struggling with physical and mental ailments. They also depict a person with passion and drive and a sense that he was doing the right thing, even if the people around him didn’t believe in him.

Why am I mentioning his life story here? I think there are several vital lessons that anyone can take away from it.

Don’t make choices just to please other people. Don’t buy stuff just because other people want you to buy stuff. Don’t spend money just because other people want you to spend money. Let them spend their own money if they want.

Make your own decisions and don’t feel bad about making a different choice than the crowd around you. If you find that your values are deviating from that crowd, don’t be afraid to start seeking new people to spend your time with, or accept that you’re not going to be in sync with your existing crowd on everything and just maximize what you do have in common.

Life is a long haul. The people that succeed are the people that keep going and going and going towards their goal or towards whatever drives them. If you want to find financial success, you need to be willing to accept that it won’t happen tomorrow or the day after that.

For most people’s financial situations, it will take years to find real success. The same is true for career situations, entrepreneurial situations, and even relationship situations. A Band-Aid quick fix solution is rarely the one that will build long term success.

Doubting yourself is normal. Everyone doubts themselves. Even people who seem extremely confident are often just wearing a public face. There will be times where you feel as though you’re not doing the right thing.

When you feel that way, return to the things that caused you to choose this path in the first place. For me, it’s a small handful of personal finance books. For you, it could be anything. Go back to the basics and you’ll begin to feel the confidence and motivation again.

You don’t need lots of material stuff to have a successful life. Yes, van Gogh’s example is an extreme one, but there’s still something to be learned there. He didn’t live a life filled with possessions, yet he lived a life that changed the world. Why do you need a lot of possessions?

Challenge yourself to live with fewer possessions rather than more possessions. Owning things not only drains your money, but it drains your time and spreads out your focus.

Original article by Trent (c) The Simple Dollar - Read full story here.

Whether the date on the calendar says so or not, winter has started where I live. Snow, freezing rain, the whole nine yards. Winter’s on my mind and that’s reflected in these inspirational pieces.

1. Winter Wonderland
I always look forward to the first snowfall of the winter. It’s usually a wet snowfall that clings to everything, creating a beautiful world to explore.

Many thanks to stashabella for this wonderful picture.

2. Snow-Flakes. (Birds Of Passage. Flight The Second) by Henry Wadsworth Longfellow
This beautifully captures the sentiment I often feel when I see snow falling.

Out of the bosom of the Air
Out of the cloud-folds of her garments shaken,
Over the woodlands brown and bare,
Over the harvest-fields forsaken,
Silent, and soft, and slow
Descends the snow.

Even as our cloudy fancies take
Suddenly shape in some divine expression,
Even as the troubled heart doth make
In the white countenance confession
The troubled sky reveals
The grief it feels.

This is the poem of the air,
Slowly in silent syllables recorded;
This is the secret of despair,
Long in its cloudy bosom hoarded,
Now whispered and revealed
To wood and field.

3. Making your own Boxee
I have an old computer. I’d like to be able to stream video from the internet really easily on our main television. If only there were a simple way to do this…

This does exactly that, for free. It takes about half an hour or so to set up. I picked up a wireless “remote” for about $20 that works perfectly with this.

This is just a great solution.

4. Don’t regret regret
We all regret things in our lives and we’re often told to forget them. The truth, though, is that regrets are often valuable things to have, as they can help guide us to greater things in our lives.

This is a great story by Kathryn Schulz, well worth listening to.

5. Winston Churchill on making a living versus making a life
What you do to earn money does not define you unless you choose to let it define you.

“We make a living by what we get, but we make a life by what we give.” – Winston Churchill

You’re defined instead by the person you are and the things you share with others.

6. Napoleon Hill on the right time to do something
Right now is the best time to do whatever it is you’re thinking about doing.

“Don’t wait. The time will never be just right.” – Napoleon Hill

There’s always a reason to put something off. Always. The people who succeed are the ones who do it anyway.

7. Paper snowflakes
One thing that our family does, usually on the first weekend of December, is make a bunch of paper snowflakes that we then use to decorate virtually every window in the house. We each make several in different sizes and, because of their nature, they’re all as unique as real snowflakes.

It’s just a fun way to decorate our house in the spirit of the season.

8. How to make paper snowflakes
I really like this set of instructions for creating your own paper snowflakes. It’s visual, pretty clearly written, and has a lot of images of paper snowflakes to inspire you.

If only all written instructions were put together well…

9. Emerson on today
Today is the only day that really matters.

“One of the illusions of life is that the present hour is not the critical, decisive hour. Write it on your heart that every day is the best day in the year. No man has learned anything rightly, until he knows that every day is Doomsday.” – Ralph Waldo Emerson

If there’s something important you need to do that you keep putting off, today is the day to do it. There is no better day.

10. A Long December by Counting Crows
When I was a teenager, Counting Crows were my favorite band. I still often play them when I’m working and I can sing along to most of their songs.

I can’t even guess how many times I’ve listened to this song.

Original article by Trent (c) The Simple Dollar - Read full story here.