Month: November 2019


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Let’s say you’re lucky enough to be born into a wealthy family. They take care of all of your needs and fulfill an awful lot of your wants. You were always the person with the nice clothes, the latest devices, the expensive games, the nice car, all paid for by mom and dad. You go to college, paid for by mom and dad. Then, suddenly, you’re out on your own. You’re making a decent living, but it’s hard. All of the nice stuff in your life before now is out of reach and everything is painfully expensive.

Let’s say you got a great job coming out of college and you nailed it for several years. You made a very good salary and you became accustomed to spending accordingly. Then, suddenly, things went in a new direction. Maybe you fell out of that career for some reason. Maybe you began to question whether you wanted to keep doing this or not. Maybe you had a major personal life change. Now, suddenly, your income is a lot lower. You’re making a decent living, but it’s hard. All of the nice stuff in your life before now is out of reach and everything is painfully expensive.

Let’s say you simply realized that your current financial life is unsustainable. You spent your 20s and maybe your 30s spending lavishly and enjoying a lot of travel and luxury goods and suddenly you’re realizing you don’t really have anything saved and actually have a lot of debt. You have to cut back and make some changes. You’re making a decent living, but it’s hard. All of the nice stuff in your life before now is out of reach and everything is painfully expensive.

These stories all in the same place: people are recalibrating. They’re learning how to survive on less spending money than they used to.

Recalibration can happen to anyone. It can happen to the kids of millionaires who are suddenly cut off from the bank of mom and dad. It can happen to people with a great job who suddenly find themselves jobless. It can occur when someone decides to leave a well-paying job to become a stay at home parent. It can happen much like it happened to me, with a realization that one’s financial life is unsustainable. Sometimes, recalibration happens by choice; at other times, it’s forced upon you.

No matter what, it’s not fun.

It can be easy for people to say “That’s not really a problem,” but no matter what your original spending level, a significant cut in your spending levels creates life difficulties. It is not easy for anyone to recalibrate. We’re creatures of habit. That’s why things like losing weight are so difficult for so many of us. Even among the most spontaneous of us, we’re still creatures of habit and many of those routines are very hard to change.

Here is my best advice for anyone currently recalibrating, or who might see recalibration coming in their near future.

Take a “Glass Half Full” Approach

It is very easy when you’re recalibrating to find yourself focusing on the downgrades and obsessing over what’s missing in life. After all, what’s changed in your life is the recalibration – you’re spending less than you used to and you can’t help but focus on it, right?

Rather than focusing on how the glass is half empty, focus instead on how the glass is half full.

Whenever you catch yourself feeling miserable about recalibrating, consciously recognize what you’re doing and how it doesn’t help, and then consciously start thinking about all of the things you do have and all of the things you could do.

You might find yourself dwelling on the fact that you can’t eat out like you used to, yet there’s nothing stopping you from making some of your favorite foods at home a lot cheaper than before.

You might be upset that you can’t just go shopping at the drop of a hat, but aren’t your closets and shelves full of stuff that you love that’s just gathering dust? You have infinite things already in your possession that don’t get the attention they deserve.

You might feel like your social life is suffering because you can’t go out all the time any more, but there’s no reason you can’t call someone up and invite them to do something that doesn’t involve shelling out cash. A good friend is one you don’t have to spend money in order to spend time with them.

You have a home to live in. You have tons of possessions. You have people in your life that love you. You have your health and your energy and your life. You have access to more entertainment options and more knowledge than anyone who has ever lived. You have so much.

Focus on that, not on the little inconveniences that come from recalibrating.

Dive Deep into Low Cost Passions

One of the things that really saved me during my own recalibration was that I really loved to read. It was a passion that had been somewhat derailed into more of a desire to just collect books and stuff my shelves with them.

I made a concerted effort to spend less time shopping for books – effectively reducing that to zero for a while – and more time actually reading. If I didn’t want to read any of the abundant books already on my shelf, I just went to the library to find other ones.

What things do you enjoy that doesn’t require a big additional expense?

Perhaps you love to go hiking. Rather than obsessing over the latest hiking gear, just get out there and start making a list of trails you’ve explored.

Perhaps you love clothes. Rather than spending hundreds on new clothes, start trawling secondhand shops for things that are huge bargains that look good on you, or figure out how to modify some of the stuff you already have for new looks.

Perhaps you love good food. Rather than going to tons of restaurants, start learning how to actually make things you love in your home kitchen.

There are essentially infinite free and low cost things to dive into out there. Spend some time thinking about things you actually really love doing in your life, figure out which ones don’t involve big outlays of money (or can be done in a way that doesn’t involve a lot of money), and dive into them.

The purpose is to find ways to fill your life with joy and pleasure without exchanging a ton of money for it. One of the things that forces people to recalibrate is that they found themselves in a routine where they were constantly exchanging money for enjoyment and pleasure, and that’s a key cycle to break. You don’t have to spend money to have joy and pleasure.

Cut Back Hard on Things That Are Relatively Unimportant – Learn to Love the Store Brands

Here’s a strategy to try: the next time you buy any household product, buy the store brand version instead. Do it for everything.

Then, over the next month or two, see if you notice anything actually lacking in terms of what you use them for. Does the store brand laundry detergent get your clothes clean? (Hint: it does.) Does the store brand dishwashing detergent get your dishes clean? (Hint: it does.) Does the store brand ketchup taste basically the same as other ketchups? (Hint: it does.) Do the store brand trash bags convey your trash out to the curb? (Hint: they do.)

What you’ll find is that you’ll notice and be bothered by maybe 5% to 10% of the changes, but the other 90% to 95% of the store brands just work perfectly for your needs.

You can do the same with all kinds of stuff. Cancel all of your cable and streaming services except for the one you actually use the most. If you find you’re really missing one, bring it back (or find a suitable replacement, like Sling). Trim back your cellular plan to match what your actual usage has been over the last year and see if that works for you.

The best strategy for recalibrating a lot of your spending is simply to cut back hard, then restore only the things you actually really miss – and you’ll find that you don’t miss a lot of it. This strategy works because you know it’s okay to restore things that you genuinely miss, and the things you don’t become a source of savings.


This is a great compliment to the “glass half full” strategy. Volunteer work can really remind you of the abundance you have in your life and leave you appreciating what you have much more; furthermore, it’s an activity with minimal personal cost.

Simply sign up to volunteer for some cause that you care about, ideally on a local level so you can really see who you’re impacting. Sign up for the food pantry or the clothing pantry or a soup kitchen or a Habitat for Humanity house. You don’t have to do it forever; just take it on as a 90 day personal challenge.

As you’re there, be aware of the difficulties and challenges that the people you’re helping out are facing in their lives. Those challenges are often tremendous, and the people struggling often have few resources with which to handle those challenges.

The experience of volunteering at the local level left me with an incredibly powerful sense that my life was actually really abundant, even at moments where I felt the bite of recalibration. It was a firm reminder of how much I have.

Find People Who Don’t Need to Spend Money for Fun

Look for people in your life who find enjoyable things to do without spending money and actively start spending more time with them. Hang out with the people that like to have movie nights at home or have lots of dinner parties and potlucks and game nights rather than the people who have to go out to have fun.

If you don’t have people in your life like that, seek them out. Go to lots of community events – they tend to draw people who don’t want to spend, spend, spend to maintain their social network. Check out Meetup and go to things that seem interesting. Do the same with your library’s website and your city’s website and things in your community Facebook groups. Actually go to things and participate in them, especially if they’re free, and make an effort to talk to and get to know people there.

Yeah, you won’t click with everyone. That’s fine. The goal is to meet a few interesting people and then, over time and repeated participation, build those relationships up. You’ll find that socializing and friendships don’t have to come with a price tag.

Consciously Dig Into Your Media Collections

Give yourself a simple challenge along these lines.

“I’m not subscribing to a new streaming service until I’ve watched everything on my watchlist / saved list on this service.”

“I’m not buying a new book until I’ve read everything on my shelf or traded away / sold everything I’m not going to read.”

“I’m not buying a new board game until I’ve played all of the ones in my closet at least once, or traded them away if I have no interest in playing them again.”

You get the idea. Whatever form of media that you collect, stop collecting more of it until you’ve gone through what you have now and curated and enjoyed it. By curating, I simply mean getting rid of things you have no intent of reading or watching or listening to or playing with in the future.

This is my challenge in 2020 with my collection of board games, for example. I’m not spending money on a new game until I’ve played everything on my shelves at least once or, if I’m not willing to play it, trading it off for something else that I will play.

This is a great way of recalibrating the balance in your life between collecting more and more stuff that you won’t get around to actually enjoying versus actually digging into your collection to figure out what it is you actually enjoy and refining your collection to match it.

Center on a Inexpensive Self-Improvement Goal

One surprisingly effective tool for recalibrating your spending is to dedicate yourself to a particular self-improvement goal that doesn’t require a ton of additional spending.

For example, you might focus on adopting a healthier diet centered around making food at home. You might focus on getting stronger by building up your core strength through calisthenics. You might focus on learning a new programming language using online resources. You might focus on learning a new spoken language using Duolingo or other free resources.

The point is to give yourself a clear self-improvement goal that’s centered around daily activity. “For the next 180 days, I’m going to spend 30 minutes a day doing bodyweight exercises to strengthen my core and tighten my gut.” “For the next 180 days, I’m going to prepare and eat one vegan meal at home each day.” “For the next 180 days, I’m going to spend 45 minutes learning French.” 180 days is a good target for a goal like this because it will often begin to be a habit, one you stick with even after the 180 days is over.

A low-cost self improvement goal gives you something to focus on that’s distinct from spending and gives you something to take pride in that’s not related to spending, either. You’ll take pride in the effort you’ve put forth, not in something you merely bought, and that’s a big difference. Plus, you’ll be filling up time and mind space with something that’s not related to spending money.

Think of something else you want to improve about yourself and commit to a goal of 180 days where you take daily activity toward that improvement.

Consider a Big Downgrade

Most of the above suggestions are ways to help you deal with lots of little changes in your life, but sometimes it can be bigger just to execute one or two really big changes.

Have you thought about moving to somewhere less expensive? Have you thought about selling off your car and relying on either one fewer car or on mass transit?

Those two moves, right there, can make a gigantic financial difference when you’re recalibrating, but they often don’t pop up on people’s radars. They don’t seriously think about selling the house – instead, they stick with it until it’s about to be foreclosed on. They don’t seriously think about selling the car until the repo man takes it. They don’t consider how selling those things off now can not only alleviate some headaches but also put some money in their pocket.

Consider it. Would it be a good move to move to an apartment, clean out your house, and sell it, paying off the mortgage in full and giving you enough cash to pay off a lot of other debts? Would it be a good move to move to a smaller apartment, maybe one closer to work that allows you to use mass transit? Would it be a good move to sell off your car and just use mass transit for everything (or get a Lyft in a pinch)?

A single big move like that can change everything for the better. Give it some serious thought.

Final Thoughts

Recalibration is hard. It’s hard whether you’re rich or poor or somewhere in between. It means giving up things you once enjoyed. It means facing some hard facts about your life.

In the end, however, recalibration can lead you to a more sustainable life going forward, one that you can be happy with over the long run.

The trick? Next time around, don’t let your lifestyle inflate with your income growth. Instead, keep your lifestyle the way it is and use that money to build long term stability so you don’t have to painfully recalibrate when things don’t go the way you expect.

Good luck!

The post Recalibration appeared first on The Simple Dollar.

How to manage money for financial success in the U.S. military

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Howdy! I’m Spencer, an active-duty Air Force officer investing for financial independence by age 40. Since 2016, my wife and I have saved half of my active-duty paycheck into our financial independence accounts. I started writing in 2012 about achieving FI in the military on my website Military Money Manual.

Because J.D. has no experience with the military, for Veterans Day he asked me to share the lessons I think every servicemember needs to know about getting rich slowly. These are the concepts I wish someone had explained to me as a newly-commissioned officer in 2010. (These lessons are just as applicable to the enlisted side of the house.)

I’ve split this article into two sections.

First, I’ll cover some basic lessons for beginners: taking care of yourself, emergency funds, military friendly banks, tracking your money, and TSP investing.

Next, I’ll cover some advanced topics: investing for financial independence, military deployment, travel, and military credit-card perks.

Let’s start with the basics.

Managing money in the U.S. military

Educate Yourself

One of the harshest life lessons you must learn early in your military career is this: “No one is looking out for you except you.”

You must take responsibility to educate yourself about saving, investing, spending, and achieving financial independence. If you have a really good supervisor or commander in the military, they may explain the Thrift Savings Plan (TSP) to you, but that’s probably it.

If you want to achieve financial independence in the military, you need to learn how to do it yourself. There are many resources available to learn about money, including:

I believe it’s important to always be learning, to always be asking questions. If you have questions about your military pay, benefits, or personal finance, type them into Google. Ask your supervisor. Ask your buddies (but don’t always take their advice haha).

Never be afraid to ask questions. Keep yourself educated about money.

Find a Military-Friendly Bank

While you can certainly use a regular bank to manage your money (and Get Rich Slowly maintains a list of online savings accounts), I recommend finding a military-friendly bank. Certain banks and credit unions are dedicated to helping military servicemembers. They understand the difficulties unique to our situation. For instance, USAA has never shut down my ATM card despite withdrawals in over 40 countries.

Some of the largest and most recognized military-friendly banks include USAA, Pentagon Federal Credit Union (PenFed), and Navy Federal Credit Union (NFCU).

Look for a military-friendly bank that offers ATM fee reimbursement and that doesn’t charge fees on your accounts no matter what your balances are. Many military-friendly banks will deposit your military pay one business day earlier than your actual payday. This is a nice feature to get access to your money a little earlier each payday.

Build an Emergency Fund

Unlike your civilian counterparts, you’re unlikely to be suddenly fired from the military. Because it’s a government job, you would at least get a few months notice if you were involuntarily separated.

You also don’t have to worry too much about surprise medical bills. Tricare is one of the best healthcare insurance networks in the U.S., and the military medical system is one of the most affordable. You will rarely, if ever, have a co-pay to see a doctor or pick up a prescription.

So, if you don’t have to worry about medical expenses or getting fired, why worry about saving an emergency fund in the military? Because things always go wrong.: cars break, payment of travel vouchers is delayed, the government shuts down, and so on.

Plus, you know how unpredictable military service can be. You may be called away suddenly for a contingency operation in Africa when the car breaks down at home, preventing your husband from getting to work.

Many times when you receive PCS (permanent change of station) or go TDY (temporary duty assignment), your expenses won’t be immediately reimbursed. If you have an incompetent finance office, it may be weeks or months before you finally get paid for that trip.

When you have an emergency fund, you can cover these expenses and not sweat it while finance gets their act together.

When the government shut down in early 2019, members of the Coast Guard went unpaid for an entire pay period. This was an extremely stressful time for many folks. You can insure yourself against political theatrics like this by having an emergency fund.

How big should your emergency fund be? I recommend starting with $1000 and then saving up so that you have enough to cover six months of expenses.

Personally, as an eight-year captain, I have $10,000 in my emergency fund. This isn’t six months of expenses, I admit, but it will cover two plane tickets to fly me and my wife home in case we need to be with family in an emergency. And $10,000 will cover all but the most serious car repairs. It’s the amount that lets me sleep easy at night.

Know Where Your Money Goes

Trust me, I hate budgeting. But if you want to achieve financial success — in the military or otherwise — it’s important to understand where your money is going. This helps you determine if you have optimized your spending to make you happy.

Here’s an example: Let’s say you notice you’re spending $100/week on Buffalo Wild Wings. But you don’t even like wings and beer that much. And you’re trying to lose weight. Well, it looks like you found a great expenditure to eliminate! Most of us can find spending like this to trim from our budgets.

To make tracking easier, I recommend apps like You Need a Budget (YNAB), Personal Capital, or Mint. Or, if you like computers, track your money in a simple spreadsheet.

The key is to make sure that your spending aligns with your goals, that you’re happy with what you’re spending money on.

As for me, I hate budgeting, as I said. After I trimmed the obvious fat from my spending, I adopted what I call an “anti-budget”. I save half of my income into my investment accounts (TSP, IRA, taxable brokerage, and cash accounts). I spend the rest of my money and don’t worry about it. This system is simple. For me, simple is best.

I don’t enjoy analyzing my budget, so I make sure the big three expenses — housing, transportation, and food — are correct, then I live my life. If you get these three right, you can take care of 80% of your savings for only 20% of the effort.

Get Your Full TSP Match

The military’s version of a 401(k) is called the Thrift Savings Plan, or TSP. It’s a boring name that doesn’t really sell the fact that it’s one of the best retirement plans available in the world.

The TSP offers five funds, which together make up most of the investable assets in the world. These funds are:

  • C Fund: contains the S&P 500 companies, the largest 500 companies in America
  • S Fund: contains the 3529 publicly-traded companies in America that aren’t in the S&P 500
  • I Fund: an international stock fund covering 21 nations outside the U.S.
  • F Fund: a fixed-income fund that invests in corporate bonds
  • G Fund: the government bond fund

In addition to these five funds, you can also invest in TSP Lifecycle funds. These are target-date retirement funds that automatically adjust their mix of stocks and bonds over time. In theory, they deliver higher returns with more volatility early in your career, then they become more bond heavy as you age.

The TSP expense ratios are famously low, usually around 0.04% annually. That means for every $1000 you invest in the TSP, you pay $0.40 per year in management fees. That’s it! (And that’s amazing.)

Even on a $1,000,000 portfolio you’d pay only $400 per year. These fees are some of the lowest available in any retirement plan.

You can contribute up to $19,000 into the TSP in 2019. If you deploy to a combat zone, you can contribute up to $56,000.

The TSP is an employer-sponsored retirement plan, so it’s completely separate from your IRAs, or Individual Retirement Accounts. That means you can put $19,000 into your Roth TSP and $6000 in your Roth IRA — $25,000 total for a year!

If you could contribute $25,000 to your IRA and TSP for a full 20-year military service, you’d have $1,100,000 after 20 years, assuming a 7% return. If you entered military service at age 20, retired at 40, and left the $1,100,000 to grow until age 60 at 7%, you’d have $4.2 million. That’s the power of compounding and paying yourself first!

If you joined the military after 2017, you’re automatically in the Blended Retirement System (BRS). In order to maximize your retirement savings, you must contribute at least 5% of your base pay every month.

The government automatically contributes 1% of your base pay to your Traditional TSP account on your behalf. They will contribute up to another 4% if you contribute 5%. This 5% can be worth thousands of dollars annually.

When you retire, that 5% match could have grown to tens of thousands (or hundreds of thousands) of dollars.

One of my biggest financial regrets it not contributing to my Thrift Savings Plan earlier. Especially now that you can receive a match on your contributions, you need to at least contribute 5% monthly to your TSP as soon as you commission or graduate basic training.

Okay, now that we’ve covered some basic military money topics, let’s move on to some more advanced material.

Use Credit Wisely

There are a lot of folks who believe credit cards are evil. And if you’re not careful, you can end up deep in debt. Many military members do so. But if you understand how to use credit cards wisely, they can be an excellent tool to help you achieve financial success.

Servicemembers have two laws working in their favor: the Military Lending Act (MLA) and the Servicemembers Civil Relief Act (SCRA).

These laws have been generously interpreted by most of the major credit-card companies, including American Express and Chase. Both companies are waiving annual fees for servicemembers for cards opened after entering active duty status.

The American Express SCRA policy goes beyond the legal requirements. AMEX waives all annual fees for active-duty servicemembers, Title 10 Reservists, and Title 32 National Guard. This includes their civilian spouses, usually as long as the servicemember is added as an authorized user to the account.

The AMEX SCRA policy applies to both personal and business cards. For instance, my wife and I currently have 13 AMEX cards with $4665 of annual fees waived. The annual recurring benefits of these free cards include:

  • Three free nights at Marriott with Gold Elite status
  • $600 Marriott expenses credit
  • One free night at Hilton with Diamond Status
  • $250 Hilton Resort credit
  • $1150 in airline fee credits reimbursed
  • $800 of Uber or Uber Eats credit
  • Companion pass in Delta first class

These benefits add up quickly: airport lounge access, upgrades to business class, free hotel stays, and free food really goes a long way to making travel free or very cheap.

Since 20 Sep 2017, the Chase MLA policy waives all annual fees on their personal (not business) credit cards for military servicemembers and their spouses. This includes active duty, Title 10 reservists, and Title 32 Guard.

This includes their Chase Sapphire Reserve card, which comes with an annual $300 travel credit good towards airfare, hotels, taxis, trains, Uber, rental cars, parking, and anything else travel related. Chase waives the $450 annual fee on this card for both military servicemembers and their spouses.

These are just some of the credit card benefits extended exclusively to US military personnel. I keep a page updated with the best credit cards for military troops.

But again: Credit cards are only useful and valuable if you don’t carry a balance. If they’re going to lead you into debt, you should avoid them. The bonuses and perks aren’t worth the cost of debt.

Deal with Deployment

Believe it or not, deployment is a golden opportunity to put yourself way ahead – smash debt, save a ton, spend nothing, and figure out what you want to do with your life.

The biggest financial advantages to a military deployment are:

  • Tax-free combat zone income (CZTE)
  • Tax-free contributions to your Roth TSP and Roth IRA
  • Savings Deposit Program (SDP)

Combat zone tax exclusions, or CZTE, are available when you are in a Presidential-declared and IRS-recognized designated combat zone for at least one day of any month. So even if you just fly in, land, and take off again two hours later, you’re eligible for CZTE pay that month.

Your pay during any CZTE month will not be subject to federal income tax. It is subject to FICA tax, so you’ll see Social Security and Medicare tax deducted from your paycheck.

Because your income is tax free any month you’re in a combat zone, you have a unique opportunity to get tax-free money into your Roth IRA and Roth TSP. The money goes in untaxed, grows untaxed, and can come out untaxed, subject to the rules of Roth accounts!

This triple no-tax win is an amazing investment opportunity almost no one else in America can access.

Another program available to you on deployment is the Savings Deposit Program or SDP. The SDP offers a guaranteed 10% return on your investment on up to $10,000 invested.

For example, if you’re on a one-year deployment and invest $10,000 from the beginning of the deployment, you could earn $1000 by the time you head home.
While you’re deployed, your expenses can drop to nearly zero, depending on how much family you’re supporting back home. All the essentials — like food, housing, a gym, and transportation — are covered. You just need to work, work out, eat, and sleep.

Your income will also increase due to the CZTE pay, hardship duty pay, family separation pay, hazardous duty pay, hostile fire pay, and many other special payments you can receive while deployed.

The combination of low expenses and high income means you can really set yourself up for financial success. On my first deployment, I paid off my USAA cadet loan. After my third deployment, I finished paying off my student loans.

If you don’t have any debt, use a deployment to max out your retirement accounts, max out the SDP, and save some money for whatever your future goals are. Set an outrageous goal for yourself, like saving $50,000 in six months. I’ll bet you’ll surprise yourself with how much you can save on a deployment!

Don’t forget to set aside a little money to enjoy life when you get back to the real world. Military deployments aren’t vacations and they’re not stress free. Make sure you take some of your deployment savings to visit your loved ones or take your family skiing.

Travel for Free (or Cheap)

Going TDY (temporary duty) can be a great way to travel and make extra money while you serve. When you’re sent away from your permanent duty station (PDS) on official business, you’ll receive per diem to offset your increased expenses.

Lodging expenses are reimbursed at the rate they were paid. If your authorized lodging amount was $200 and your hotel was $150 per night, you are reimbursed $150. You do not keep the difference.

On the other hand, your meals and incidental expenses (or M&IE) are paid regardless of expenses incurred. If you’re authorized $100 per day and you grab breakfast at the hotel, lunch at Chick-Fil-A for $10, and dinner at Chipotle for $15, you get to keep the remaining $75 per day.

Per diem can add up quickly, especially if you’re on a long training TDY. It can also disappear quickly — usually on drinks out with your coworkers. Be smart about it.

Leave in conjunction with official travel (LICWO) and circuitous travel during PCS are excellent ways to travel to new destinations and get reimbursed for your travel. Essentially, you can take the scenic route to get to your next duty station or temporary assignment.

The government will reimburse you up to what they would have paid for a ticket. Since the government almost always buys full fare, full flexible economy tickets, you can usually get much cheaper flights and get some free travel in during your leave. Here are more details and nuances of LICWO and circuitous travel.

Space Available (Space-A) travel is a tremendous benefit available to servicemembers. Usually if there is an empty seat on a military flight, the passenger terminal will open it up to servicemembers and dependents. Free travel around the world!

There are a lot of caveats to Space-A, and it’s not a very reliable or seamless process all of the time. I recommend that you check out and their Facebook group for the best information on travelling Space-A.

Invest for Financial Independence

Most servicemembers don’t make it to 20 years of service. The figures vary by service and officer vs. enlisted, but only about 20% of servicemembers who serve earn any kind of military pension, whether it’s active duty, guard, or reserve.

But even without a pension, military service can set you on the path to financial independence (FI). The military can teach you discipline, goal setting, and perseverance. All of these traits are useful if you want to complete a multi-year project like investing for financial independence or early retirement.

Military servicemembers have unique investment opportunities available to them that civilians do not. (We’ve already covered some of these, such as the TSP, SDP, and tax-free income.) However, the principles of FI apply to military servicemembers the same as civilians.

Achieving financial freedom in the military is simple, but not easy:

  • Save and invest enough of your money until you have 25x your annual expenses invested in low-cost, total stock and bond market index funds.
  • Now you can safely withdraw 4% of your invested assets annually to pay for your living expenses.
  • Voila, you don’t need to work anymore!

As I say, the concept is simple — but it’s not easy to achieve. How quickly you can achieve 25x of your expenses depends primarily on your saving rate.

  • Save 10% a year and you’ll achieve financial freedom in 51 years.
  • Save 25% and you cut it down to 32 years.
  • Save 50% and you are looking at only 17 years of investing to achieve financial independence.

Seventeen years is less time than it takes to earn a military retirement pension! Combine a military pension with FI and you’re looking at a fat retirement.

Or, if you don’t make it to 20 years (like 80% of your brothers and sisters in arms), you can still achieve FI by combining your military savings with whatever your post-military plans are.


I hope this was a valuable introduction to military finances. Armed with these lessons, I believe that every single servicemember can achieve financial success during and after their military career.

And remember: Most advice that applies to civilians applies just the same to military folks. It ultimately comes down to: “spend less than you earn and invest the difference”. That’s all it takes to eventually become financially independent. How long that takes is up to you!

The post How to manage money for financial success in the U.S. military appeared first on Get Rich Slowly.

Scared of money? (Why & how to overcome your fear today)

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The more I see people talk about money, the more I see how SCARED we are of it.

How we let others poison our views of money.

And how easily we use negative words to describe it.

Here’s an email I got from someone who read my book, I Will Teach You To Be Rich. What do you notice?

“Frick it, I guess I’ll write the email…

Money stresses me out. My parents didn’t teach me anything about it and I’m very dependent right now. I did a year of nonprofit and made about 10k after taxes and it was miserable, so I figured if I can pull that off for one year then I can make it work. And I did! But I don’t know if I’ll hit it this year (it’s a bit depressing and a big source of anxiety). I think time is the name of the game though, the career is moving forward, hopefully, game sales will kick in passive income.

For the “rich life” I’m a simple person. I want enough money to be able to travel. I want to own a dog. I want a kitchen with an island. I want to have a nice desktop and a nice coffee table. My partner doesn’t want to own a house but I kind of do. Since I don’t have a full-time job outside of my freelancing which is currently in a drought period, I don’t have really ANY money, averaging about $250 a week.”

My response:

“Good stuff. Great to meet you

Now I want you to look at your email and count the number of times you use negative words to describe your life/money. How many do you count?”

His response (notice the skepticism):

“Ha, I can’t tell if this was an automated message or not but you got me there!

Depending on your definition, about 6-10.”

6-10 IN A SHORT-ASS EMAIL. (Well, compared to the kinds I write…like the one you’re reading. LOL.) Finally, my response:

It’s not automated.


Now, can you rewrite that entire email to be POSITIVE instead of negative? Send it over my way.

This guy didn’t even notice his reflexive negativity with money. It’s become like a dull toothache, something he gets used to. And since negativity is his worldview — the “lens” through which he views everything — I guarantee it’s an invisible “drag” on his entire life.

I asked him to rewrite his email to be POSITIVE instead of negative because sometimes, it takes someone pointing out your pattern to shake you out of it.

When I talk to people about money, here are the most common words they use to describe it:



“Is it too late”

(What words come to mind for you?)

But it’s even more revealing when you listen to the ways they talk about money.

What they say: “What’s my Rich Life? Well, I just want to go on vacation with my kids a couple times a year, nothing fancy…”
What they really mean: Notice those last two words — “nothing fancy.” When people talk about their Rich Lives, they almost always minimize their own dreams. When you’ve spent your entire life worrying about what can go wrong with money, it’s almost impossible to dream.

What they say: “How do I KNOW your programs will work?” OR “Will this book work for me if I live in Bolivia and I have a lazy left eye and I only eat mussels on Mondays?”

What they really mean: “I have a finite amount of money. If I spend it here, I need to know it will absolutely work, otherwise, I will have wasted my money…and there’s no way for me to ever earn more”

Are you about to say what I think you’re about to say?

What they say: “Even if I made $250,000/year, I wouldn’t eat out at a nice restaurant like that. What a waste!”

What they really mean: “I have never eaten at a place like that and I don’t want to be the kind of person who “has” to go there to enjoy food. I’m simple.” (One level deeper: “I’m nervous that if I ate there, I might actually like it. I don’t trust myself to avoid going there every single week and spending all of my money”)

What they say: “I shouldn’t get a credit card.”

What they actually mean: “I don’t trust myself to control my spending, therefore I need to restrict myself”

What they say: “I went to [ANY FOREIGN COUNTRY] and they tried to rip me off because I was an American”

What they really mean: “Well, yeah, I could have afforded an extra $5 for those postcards…but I HATE BEING RIPPED OFF. If someone else is winning and I am losing, I HATE IT”

So many of us make day-to-day money decisions, never understanding the “invisible scripts” that actually guide these decisions. And in America, money is driven by FEAR.

FEAR that we’ll never have enough.

FEAR that we can’t make more of it.

And FEAR that someone will judge us for our spending — or even what we want to spend on.

I hate this. That’s why I show you how to identify your Money Dials, the things you LOVE spending on, then I show you how to spend MORE on it.

Talking to a small group about money psychology. On book tour, I hosted private events in NYC event at Thompson Square Studios (NYC) and our Hills Penthouse (West Hollywood). As a reader of IWT, you can get your first month free at either of these locations. Please reach out directly to

I also show you how to get psychologically comfortable with the idea of changing your identity. People say “Money changes people,” in disgust, as if it’s a bad thing. Money should change you! It should let you dream bigger, it should let you live an easier or more adventurous life, and it should let you bring others with you (learn about the psychology of the wealthy).

But you can’t do that if you’re stuck thinking about money as a source of anxiety and fear.

An interviewer recently asked me what I would change from my 20s. I said, “I would have more FUN. I was too rigid. But the times where I had the most fun and I was the most successful was I just loosened up and tried a bunch of new things”

With money, try these different approaches.

Know that you can trust yourself. Know that you can eat at a really nice restaurant once for the experience — and truly enjoy it — but trust that I’m not going to trip and fall and end up going there every single week. You can also use credit cards without overspending (follow the systems in my book). You can pay off your debt and stay out of debt. You can become Rich and do good. Trust yourself.

Know that you can create more money. You can negotiate your salary — or find an entirely new job. You can start a business, even if you don’t have an idea. You can build your network to sidestep people with 10 years’ more experience than you — and get perks you’ve never dreamed of. All of those things can dramatically increase your income. Above all, your money is not a fixed pie that you have to exhaustively guard and protect. You can also expand the size of your pie.

Stop being afraid of waste. In puritanical America, one of the biggest no-nos is WASTE. Oh no! Ramit, if I start spending more on the things I love, I might “waste” some of my money!

How do I “KNOW” that your book will solve my exact, highly specific problem that I worry about every fucking day of my life? If it doesn’t, I’ve wasted $10!!!! Scammer!!!

Oh no! Ramit, what if I hire someone and they don’t handle my SEO, my WordPress uploads, design all my graphics, triple my conversion rates, write my entire email funnel, and create a new webinar system? I might have WaSTed the $13/hour I tried to pay them!!

Oh no, there’s so much government waste! We should ONLY focus on cutting government waste. Especially that one thing I really hate. What? It only represents 0.03% of total spend? No, that can’t be right. Anyway, we need to handle WaSTe. Also, don’t talk about raising my historically low taxes, you socialist.

If you spend your entire life worrying about waste, you miss a simple fact of life: In any system of sufficient complexity, there will always be waste. Yes, you should take measures to control it, but you should also accept that there will be a certain amount of waste — and move on!

I know that I’m going to buy courses and attend conferences that won’t be perfect for me. I know I’m going to eat at a restaurant that’s unmemorable. I know I’m going to make bad hires.


I’d rather try new experiences and learn with each one…than to sit back and let the bogeyman of “waste” scare me from doing anything at all.

So much of personal finance advice take your latent fears and heightens them.

NO! Don’t use a credit card, you might overspend a little!

NO! Don’t eat out at that restaurant, what a waste!

NO! Don’t try to negotiate your salary, you should just be happy you have a job!

If you spent the last ten years worrying about your waste and all the bad things you might do, you’ve accepted the message that you should be SCARED. That you’re an organism that simply reacts to whatever’s around you — that you have no agency or control.

Meanwhile, the people who have gone on offense have taken control of their own finances, their own psychology, started to earn more, and happily spend on the things they love. No anxiety. Just confidence and the systems to back it up.

You listen to these fears and end up frightened and anxious, sitting around worrying about all the things that can go wrong with money.

Or you can go on offense. You can take control of your money.

You can build a plan to spend extravagantly on the things you love.

You can EMBRACE making mistakes, knowing you’ll waste a little money, but it’s fine, because over the long term, those mistakes are minor, and you can create more wealth for yourselves.

You choose.

In my book, I wrote this:

Play offense, not defense. Too many of us play defense with our finances. We wait until the end of the month, then look at our spending and shrug: “I guess I spent that much.” We accept onerous fees. We don’t question complicated advice because it’s given to us in a language we don’t understand. In this book, I’ll teach you to go on offense with your credit cards, your banks, your investments, and even your own money psychology. My goal is for you to craft your own Rich Life by the end of Chapter 9. Get aggressive! No one’s going to do it for you.

My dream is for you to remove the shackles of negativity around money. To decide what you LOVE spending on, and spend more on it, so money goes from a source of anxiety and doubts to a source of joy and possibility and purpose.

Get my book here

And comment here if this resonates with you. I want to hear from you.

Scared of money? (Why & how to overcome your fear today) is a post from: I Will Teach You To Be Rich.

Highlights from my 15-year Stanford reunion

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A few weeks ago, Cass and I flew to Stanford for my 15-year college reunion. 

Going to Stanford was transformative for me. It taught me what excellence really is. I met amazing friends. And Stanford gave me the freedom to explore topics like technology and social psychology, persuasion, cults, deception, and ethics.

I shared some of my highlights and takeaways from my trip on Instagram, and now I’d like to share them with you here.

I wanted to give Cass a tour before the reunion, starting with the spot that had the most impact on me during my 5 years at Stanford.

Los Altos Taqueria.
The best Mexican place near Stanford.

Should we move to California?

After tacos, Cass and I headed over to campus, walking through Stanford’s iconic Palm Drive entrance. This “Welcome to Stanford” banner was one of the first things I saw when I visited for the first time, and I’ll never forget it.

Welcome to Stanford

During my first visit, I was really surprised at all the trees along Palm Drive. I thought, “Why don’t they hire someone to do some landscaping?” But it turns out, this is all intentional. 

This is an 8,180-acre campus with foothills, plains, and more than 43,000 trees. There are all kinds of animals, birds, hikes, places to walk.

The Oval

Look at that grass! What does it take to maintain something like this? It’s the same love I feel toward luxury hotels. It’s not just that it’s beautiful, it’s that there’s a team of people looking after you, and they value beauty and care.

We were lucky to be there on a leisurely Wednesday afternoon and take our time exploring the campus. And if we got tired, we could always head back to our hotel and take a nap. No rush. We could rest and come back tomorrow. That’s the beauty of a flexible schedule, even in the middle of the week. 

We headed over to Memorial Church, a beautifully architected, interdenominational church that was built in the late 1800s. Many alums get married there — there’s a years-long waiting list. Cass was blown away, even though there were so many other mind-blowing buildings on campus. She said, “Wow, I’ve never been on a campus with a church.” I loved seeing Stanford through her eyes.

Memorial Church

Cass built SoulCycle’s retail business before starting her own business, Next Level Wardrobe. So I wanted to take her to the Stanford Student Enterprises store, a student-run merch store on campus. I worked at SSE as the marketing manager, one of my first business jobs, and met a lot of friends who went on to start their own businesses. It was great to see it still running 15 years later.


One of the first things I noticed when I came to Stanford was that all the classroom doors were unlocked. You could walk in and explore, use a conference room if you wanted to. There were essentially unlimited resources. 

What a beautiful symbol. It’s hard to get in, but once you do, they trust you. 

I created my business in the same way. It’s hard to be able to join — we don’t let everyone in. But once you’re in, we offer you amazing resources. We call you, we check in on you, we let you join any of our other courses.

It’s also a way for me to think about who I want to be surrounded with. I want to trust the people around me. Coming here taught me that you can treat people like they’re going to do GOOD by default. This profoundly shaped the way I think about my life, my business, and the people I want to be around.

Later, we dined at Tamarine, an upscale restaurant in Palo Alto. When I was a student, this restaurant was too expensive for me. Now as an adult, being able to come here on a whim shows me how far I’ve come.

The wine director even stopped by to say hello and say he and his wife were both IWT students. Thank you Brent and Liz!

On Day 2, we looked at all our breakfast options. American, eggs? No thanks. It was back to…

The day of the reunion was packed with activities, and I got to meet up with old friends and catch up.

We sat in on class panels, where alums talked about what they’d learned since Stanford. I’m deep in the self-development world, and I appreciated hearing moments when people realized what they were doing wasn’t working. 

These conversations can’t always happen in public, just look at high earners asking for advice on Reddit. That’s why I take pride in surrounding my students with other people who understand.

We also visited my old stomping grounds at the Program in Science, Technology and Society. 

This is a very small major at Stanford, and most people found it confusing and wanted something easier to explain, like computer science or econ. But I got to customize my curriculum and studied technology, psychology, persuasion, social influence, ethics, and more. All of this plays into my business today. And I found that if you tell your story right, people are fascinated, not confused.

After my reunion, I got to spend a day with my family in San Francisco. I took them to the Cal Academy to show them the aquarium and penguins. 

Imagine being a kid and seeing this for the first time!

We took a break in a cafe for a bit. My friend Nick Gray once told me that if he went to a museum, he would spend 90 mins tops, and the first 30 would be at a cafe planning his trip. That blew my mind, since I grew up only going to a place once, so we’d spend the entire day seeing everything. This time, I slowed it down, knowing we could always come back. A totally different experience.

When I shared all this on Instagram, some of you were asking how much student loan debt I had after leaving Stanford. I got scholarships that paid my entire undergrad and grad work there. Little known fact: Elite colleges are incredibly generous with their financial aid. (To find out more about my scholarship system, click here.) 

My parents used to say, “Be good enough to get in. The money will take care of itself.”

This is an example of the subtle ways parents who revere education show their values. They visit colleges, talk about why education matters, introduce you to professors and teach you to respect them.

My dad once brought our entire family to Berkeley. He put my sisters on his shoulder and said, “One day, you can come here.” And they did.

My scholarships also paid for ANY books I wanted. This was one of the best things in my life. I literally had an account at the bookstore. Whatever I bought, any book, would be covered. This was my first example of true abundance with books. Ever since then, I never think twice about buying a book. This is the origin story of Ramit’s Book Buying Rule!

I loved sharing my time at Stanford with you on Instagram, and loved reading your comments. Follow me there for more travel stories and send me a DM anytime. I read them all.

Highlights from my 15-year Stanford reunion is a post from: I Will Teach You To Be Rich.

Using the “Eisenhower Box” To Set Spending Priorities

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“What is important is seldom urgent and what is urgent is seldom important.” – Dwight Eisenhower

One of my favorite mental tools for organizing my to-do list is a simple strategy I learned from Stephen Covey. Basically, everything you need to do or might want to do in life can be organized by two questions: is it urgent or not, and is it important or not.

One way to look at this is by simply drawing two lines across the center of a page, one horizontal and one vertical, so that they cross in the middle and create four boxes, one upper left, one upper right, one lower left, and one lower right.

The upper left corner, which I’ll call “quadrant one,” contains things that are both urgent and important. Think of a huge work task that needs to be done by 5 PM today. They’re the top priority things.

The upper right corner, which I’ll call “quadrant two,” contains things that are urgent but not important. Think of many of the emails sitting in your inbox or notifications on your phone. They’re demanding your attention now, but aren’t really that important.

The lower left corner, which I’ll call “quadrant three,” contains things that are important but not urgent. Think of stopping by the HR office at your workplace to change your 401(k) settings. These things really need to get done eventually, but no one’s demanding that they be done right away.

The lower right corner, which I’ll call “quadrant four,” contains things that are neither important nor urgent. Think of dealing with a pile of old mail. Maybe you should do it someday, but it’s not vital and it’s not shouting at you to get done.

I often use this method for figuring out which tasks need to get done. What I’ve really figured out over the years is that the most important piece of using this for figuring out what to do today is to figure out what goes in quadrant two (urgent but not important) and quadrant three (important but not urgent) and utterly prioritizing the quadrant three stuff over the quadrant two stuff. Prioritizing important-but-not-urgent tasks over urgent-but-not-important tasks is hard because those important-but-not-urgent tasks aren’t shouting at you to get done, but the urgent-but-not-important tasks are yelling at you even though they’re really less important.

The “Eisenhower box” is merely doing this on a physical sheet of paper, drawing out the four quadrants and putting everything on your to-do list into one of those four, then doing the “urgent-and-important” stuff first, then the “important-but-not-urgent” stuff before bothering with the “urgent-but-not-important” stuff. It is really helpful when you’ve got a lot of stuff on your plate.

Here’s the interesting part: you can use almost this exact method to help prioritize your spending and figure out what “fat” you can cut from your spending going forward so you can achieve your financial goals.

Sit down with your credit card bill and a blank sheet of paper. Divide that paper into four quadrants by drawing a vertical line down the middle and a horizontal line across the middle.

In the top left one, write “Important and Urgent” and underline it. Write “Urgent but Not Important” in the top right one and underline it. Then do the same with “Important but Not Urgent” in the lower left and “Not Urgent or Important” in the lower right.

Then, go through everything in your credit card statement. For each one, ask yourself two questions.

Was this purchase urgent? Meaning, could you have easily waited to make this purchase? Was there a real need to make that purchase at the exact moment you made it, or could you have waited a day or two?

Was this purchase important? Was it something you truly needed? Was it something that is going to improve your life in any lasting real way? Is that purchase truly in line with a primary life goal?

Be honest with those questions, and the answers will tell you which quadrant that expense should go into. Just write it down in that quadrant, with just enough detail to recall what it is, then move onto the next item on your credit card bill.

For example, I might look at my credit card bill and see a few entries like this:
$30 at the local game store for a new board game that was on sale
$70 at the local discount grocery store for groceries
$6 at the convenience store for a snack
$210 at the county courthouse for annual vehicle registration

The new board game would probably go straight into the “urgent but not important” quadrant. It was a sale, making it urgent, but it was a completely unplanned purchase for a game I’m not even sure that I wanted.

The groceries would probably go into the “important and urgent” category, as we need food to eat and the stuff I buy at the discount grocer is usually very low priced. These are food staples.

The convenience store snack was clearly “neither important nor urgent.” I had the munchies and bought something I certainly didn’t need. It was just meeting a fleeting craving and there was nothing else special about that moment, the definition of neither important nor urgent.

The annual vehicle registration would definitely be “important but not urgent.” Nothing in my life would be immediately problematic if I waited until the due date to pay it, or even past the due date for a while into the grace period. Even beyond that, it’s likely things would be fine. Eventually, though, it would need to be paid or else I’d be facing a serious fine should I be pulled over – it’s an important expense but not one that needs to be paid immediately.

In the end, you’ll have a lot of stuff written on your sheet. There will probably be some things in each quadrant.

Going forward, you can completely dump everything written in the lower right quadrant, the not important or urgent stuff. All of that is a waste of your money and life energy. If you did get minimal value out of it, that value could obviously be much greater with a different purchase. For example, I really don’t need to ever stop at the convenience store for a snack. I don’t need to buy a cup at the coffee kiosk at Target. It’s all fleeting junk that’s a waste of money and life energy once you get beyond filling a short term craving.

Similarly, you can dump most things in the upper right quadrant as well, the urgent but not important stuff. Not everything there should vanish – there are things in there that were perhaps a bit of healthy spontaneity – but it should be a reminder that a lot of spontaneity ends up not doing anything for you in the long run. Those expenses should remind you that some spontaneity is good, but a lot of it is pretty useless, just a little momentary burst of fun that fades and leaves you right back where you started. I didn’t need that board game, although I did spend a lot less on it than I could have. It’s not wholly regrettable, but largely so.

The expenses that should remain in your life are the ones on the left, with maybe just an item or two from the upper right. That’s the important stuff, the stuff that matters, the stuff that sustains your life and makes it worthwhile. All of the rest is stuff you can discard going forward.

You can use this experiment as a tool to help you hone in on what’s important to you and which expenses, going forward, you can cut out or minimize to stay on focus with what’s important to you. This isn’t a tool for correcting the mistakes of the past, but to guide you to better decisions going forward.

It’s worth nothing that no one is perfect at this. We all have expenses that are in the “not important” quadrants. The goal shouldn’t be perfection, but to be better than before. The goal shouldn’t be zero expenses in those two quadrants, but fewer expenses going forward with a steady decline over time.

This all adds up to a healthy direction for your financial future, where your spending is directly in line with the things most important to you. The simple act of reflection, using the Eisenhower box method, is a really powerful tool for honing that spending instinct.

Good luck!

The post Using the “Eisenhower Box” To Set Spending Priorities appeared first on The Simple Dollar.

A Guide to Inexpensive Holiday Cooking (and Why You Should Get Started Now!)

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Last week, I shared a lengthy article on how to make meal prep more efficient. Over the weekend, however, I started to look ahead at the coming months and recognized that the late fall and winter holidays are coming up quick on the calendar, with Thanksgiving just a few weeks away and the December holidays right on their heels.

I realized, based on my past experiences with holiday cooking, that the big meals that many families prepare for holiday gatherings are prime examples of the value and practice of meal prepping. Most of the strategies that I discussed in the article last week apply perfectly to Thanksgiving, Hanukkah, Christmas, and other winter holiday meals. Wherever families gather for a big meal, these strategies are valuable to employ.

Thus, I thought it might make sense to walk through how to use those strategies specifically to plan a family meal. I’m going to use Thanksgiving as a model here, but this strategy works for any big meal for any family gathering.

The best part? You can get started right now – and, in fact, you probably should.

Figure Out the Guest List and the Meal Plan

This is something you can start doing now for Thanksgiving, if possible, and it’s always a good idea to start thinking about this at least a couple of weeks in advance if you’re preparing a big meal with lots of dishes for lots of people in your home and you’re also working full time. The more you start planning in advance, the easier it will be on the day of the meal, the more time you’ll actually have to spend with people, the less expensive it will be, and the less stress it will produce.

Simply make a list of everyone who will be coming to your big holiday meal, while noting any specific dietary concerns that any of the guests might have. What you’re aiming for is an approximate head count – it doesn’t have to be perfect, but you don’t want to plan for 8 and have 20 show up (or vice versa).

At the same time, start making a meal plan. Give yourself plenty of time for this so that you can give it some real thought, look at a variety of ideas for main dishes and sides, and make sure you’re meeting everyone’s dietary needs (what can you serve that’s vegan that everyone will enjoy, for example).

A good place to start with this would be to look at some sample Thanksgiving menus. Don’t be afraid to pull elements from one and add them to another, or to substitute in a traditional family dish that you have a recipe for into a meal plan, or to cut out a few items because it seems overwhelming.

Transform the Meal Plan into a Grocery List

The next step is to turn that meal plan into a grocery list. Again, you’ll want to do this as early as possible – even this week or this weekend.

Again, this is pretty easy. Just pull out all of the recipes for the things you want to make for the big meal, look at what items you already have and are confident you will have when it gets close to that meal, and then make a giant list out of everything that’s missing.

The reason that it’s a good idea to make it now rather than later is that you don’t have to shop for this whole list all at once. Rather, you can – and should – shop for it in parts since you have so much lead time. You can bring home ingredients well in advance of the big day and store them in your cupboard or freezer or refrigerator as appropriate.

Shopping for the list in pieces lets you utilize grocery store flyers to get the items on sale. Each week, for the two or three weeks leading up to the holiday, you can look at your grocery store flyer, figure out what items on your big list are on sale, and buy those items immediately. Then, when you’re several days out from the event (perhaps the Saturday or Sunday before), you can get everything still on the list that doesn’t need to be super-fresh, and then pick up a few final items that must be fresh two or so days before the big event.

Doing things this way will cut your meal cost tremendously. In the weeks leading up to a big holiday, lots of the usual elements of big holiday meals go on sale at grocery stores. You’ll find sales on turkeys and hams and potatoes and bread and rolls and flour and all kinds of things in those weeks leading up to the holiday, but they won’t necessarily appear all on the same week.

Make a Prep Plan

The next thing you should do, once most of the ingredients are in hand, is to make a “prep plan.”

Essentially, a “prep plan” is just a division of all of the recipes into a giant pile of steps in which you identify which steps can be done days in advance of the big day and you do all of them early.

So, let’s say you have a recipe, we’ll call it Recipe A, with a list of ingredients that includes some tasks like chopping and then includes seven steps, and you have another recipe (Recipe B) that has a list of ingredients with some more inherent tasks, like cooking some rice, and then includes six steps.

On your “prep plan,” then, you have a bunch of steps you can include. You have tasks for all of the various ingredient preparations, then tasks for each of the steps in each recipe, and so on.

Here’s the thing: most of the steps on that prep plan can be done well in advance of the big day. You can spread most of those tasks out across the week before your big meal so that you’re not overwhelmed with tasks on a single day.

So, one great approach is to simply sort these tasks by day. Which tasks can be done three or more days in advance? Which tasks should be done one or two days in advance? Organize all of those tasks by day so that you have a checklist of things to do each day, with each individual checklist small enough as to not be overwhelming.

Planning like this makes it easier to not spend extra money on convenience steps, like buying expensive pre-cut onions or pre-cooked mashed potatoes. Those convenience foods are often far more expensive and often aren’t as good as the real thing, but the real thing does take time. However, if you spread out the tasks like this, you can do the real thing and save money and have better results.

The Sunday Before Should Be a Huge Prep Day

The Sunday before a big meal (or the last day beforehand where you don’t have to work) is a great day to do a lot of prep work. You can do almost everything short of actually putting dishes in the oven on that day. Your “prep plan” should have a lot of tasks for that last fully free day before the big day.

Some of the things you can take care of:
+ Full assembly of some dishes. While you might not want to fully assemble everything this far in advance, you can definitely assemble some dishes and keep them covered in the fridge until the big day. If you don’t feel comfortable doing this, you can definitely prepare a lot of the ingredients and prepare them the night before the big event. Your goal is to have the meals ready to be put directly in the oven or put on the stove top.
+ Chopping of all vegetables. Many dishes require chopped vegetables of some kind – chopped onions, chopped pepper, chopped carrots, and so on. Chop all of your vegetables in advance and save them in small containers in the fridge so that they can be easily added to meals. When doing this, I usually label the containers with a bit of masking tape and marker so I know what they’re for so that they’re easy to grab when I’m actually assembling the dishes.
+ Making of sauces and gravies. If any meals require a sauce or a gravy, you can make all of that in advance and save it in a container in the fridge. As with the vegetables, label the containers with masking tape and marker so you know what they are and what dishes they might go in.
+ Sauteing of vegetables and meats. If you have any meats or vegetables that need sautéed, you can do this in advance, save the sautéed vegetables or meats in a container in the fridge, and deglaze the pan by dumping a bit of water or broth in there and then pouring that right in the container to maximize the flavor. Again, this can all be saved until you actually need it so you’re not having to do this on the day. Also, as with the chopped vegetables and the sauces, labeling the containers with masking tape and marker helps tremendously.
+ Cooking rice or beans or other pre-cooked sides or ingredients. If any of your sides or dishes require beans or rice, you can absolutely cook all of that in advance and store it until it’s actually needed. I often do this during regular weeks when we need beans for meals. As with the other stuff, small containers in the fridge that are labeled with masking tape and marker are perfect for storage.

Isn’t that a lot of containers? It sure is, but you can easily buy bundles of very cheap food storage containers at most grocery stores. The best part is that if you have a lot of food storage containers on hand, they’re also going to make for great leftover containers after the meal, and if they’re cheap ones, it’s not a big deal if people just keep them.

Spread Out Other Prep Tasks Throughout the Evenings Beforehand

While I definitely recommend using your last full day at home before the big meal for a lot of meal prep, some tasks need to wait until closer to the meal. In those cases, use your evenings for some of the tasks.

For example, there are many meals that you don’t want to fully assemble until closer to the big day, but you might want to chop the vegetables further in advance. So, you can chop the vegetables on Sunday and then assemble the dish itself on Tuesday to store in the fridge for final cooking on Thursday. You might want to wait to cube the potatoes for a potato dish until Wednesday, for example, and then let them soak overnight.

If you do five tasks a night for three nights, that’s 15 tasks you don’t have to deal with or stress out about on the big day.

Utilize the Slow Cooker

A vital element that many people overlook when preparing big meals is the utility of a slow cooker. Slow cookers are invaluable when preparing all kinds of things, from cooking beans to cooking potatoes to cooking meat.

If you have a slow cooker, you should absolutely include it in your meal prepping plans if you have any use for it at all. It’s great for cooking vegetables or beans or other ingredients while you’re at work so that you can come home and the ingredients you need are immediately ready for use.

Even better, slow cookers are almost perfect for cooking and mashing potatoes and sweet potatoes on the big day. You can start them early in the morning and just forget about them entirely until it’s time to drain the potatoes, season them, and mash them. You may have even more uses on the big day, so you may want to consider borrowing one from a friend or a family member to use that day.

Again, it’s all about getting simple tasks out of the way so that you’re not overwhelmed with other tasks at the last minute, which often results in a lot of stress and a lot of last minute problems and a lot of time spent away from family and guests.

Aim to Have As Many Things As Oven-Ready as Possible the Night Before

One great target to have with your “prep plan” is to have as many dishes ready to go in the oven (or to the stovetop) for final cooking as possible on the night before the big meal. This ensures that you mostly just need to put things in the oven, on the stove top, or in the slow cooker the next day.

Yes, there are some things that will just have to wait until the last minute, particularly if you’re trying to make fresh bread items, but if you’re aiming to have everything ready to go in the oven the night before, you leave yourself with absolutely minimal tasks for the big day.

Carefully Plot Out Your Final Cooking Strategy

One vital thing to do on the last day is to carefully plot out your cooking plan. What dishes need to go in the oven when? What temperature does the oven need to be set at? What goes in the slow cooker when? Plan it all out and give yourself a little breathing room at every step so that everything doesn’t fall into chaos if something’s not done in time.

For example, you might want to serve a meal at 4 PM. In that case, you might have a plan like this:

10 AM – Potatoes go in slow cooker
11 AM – Turkey goes in oven at 375 F
2 PM – Set the table
3:30 PM – Turkey comes out of oven, given to Uncle Bob for carving, casseroles go in oven at 400 F
3:30 PM – 3:45 PM – Drinks are put out on the table
3:45 PM – 3:50 PM Drain potatoes and mash them
3:50 PM – 4 PM – Put out other dishes on the table
4 PM – Casseroles come out of oven and go on table, turkey goes on table, gather everyone to eat

Yours might be more detailed than this, but you get the idea.

This kind of plan, especially coupled with the prep work already done, gives you a lot of breathing room and flexibility on the big day. The only time you really need to be in the kitchen is during the last half hour, with a few steps into the kitchen beforehand throughout the day. You can enlist other family members for tasks like setting the table (a good task for preteens and teenagers).

Again, this is all about minimizing your stress on the day of the event. If you have a clear plan in place that has some breathing room for a few missteps, your day will probably go off quite well and you’ll get to spend a lot of time with family. Even better, everything will have come together with minimal expense.

Final Thoughts

You may have noticed that a lot of these strategies revolve around planning, and that’s intentional. A big family holiday meal almost always comes off much more smoothly and with much lower stress and, perhaps most importantly, at the lowest cost if you invest some planning and forethought into the meal and take care of as many steps in advance as you possibly can.

While I’m not preparing a Thanksgiving meal this year thanks to some wonderful friends and family members, I am going to be preparing a Christmas dinner for my immediate family and (likely) a few additional relatives and friends, and this article basically outlines the strategy I’m going to use. I’ll have the meal planned likely three weeks in advance. I’ll be buying ingredients off of the grocery flyers for at least two weeks, probably hitting three different weekly flyers. I’ll be doing lots of prep in the evenings for the last few days before the holiday, and I’ll be running off of a “cooking plan” on Christmas Day in between unwrapping presents and spending time with family and I don’t want to be stressed out or in the kitchen all day on the big day.

I’m sharing this article now because I know that many people will want a similar experience with their own holiday moments, and Thanksgiving is a big holiday for many families in America. Some families even combine all winter holidays into one family gathering and celebrate it on that last weekend in November, and I hope that these strategies will help make it all inexpensive and low stress.

Good luck!

The post A Guide to Inexpensive Holiday Cooking (and Why You Should Get Started Now!) appeared first on The Simple Dollar.

14 Ways I Easily Repurpose Used Items at Home

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One of my favorite simple ways to save money is to just repurpose things that I might otherwise throw out. There are many things that seem to have lived out their primary purpose that, rather than tossing them in the trash, I’d far rather find a second use for them.

This past weekend, while puttering around the house doing a lot of little tasks, I kept noticing all of these different things I had repurposed over time and I started making a list of them. Here are 14 of those things. I hope you’ll find some of them useful.

Use old t-shirts for household cleaning and window washing. If a t-shirt starts to get too beat up to wear, I like to toss it in a rag bag that we keep in the laundry room. Then, whenever we’re doing household cleaning, like washing windows or cleaning the walls, I’ll go there first.

Old t-shirts, along with a spray of window cleaner, do a wonderful job of getting windows looking sparkling clean. Similarly, they work great with a bit of household cleaner for cleaning the kitchen floor (basically, anywhere where you find floors that aren’t carpet) or cleaning marks off the walls. If the t-shirt gets grungy after some cleaning, it’s no big deal – just toss it in the normal laundry and when it’s dry, toss it right back in the rag bag. You can get tons and tons of uses out of it.

Even better are the free t-shirts you’ll sometimes get at parades or other events. If they don’t fit anyone in our family, they’re usually directly inserted into the rag bag. (In fact, over the years, we’ve had so many that I’m now a bit choosy about them and prefer really soft ones that do a good job of cleaning.)

Use miscellaneous ingredients on the verge of getting thrown out for soup or stock, if compatible in flavor. We’ll often serve things like minimally-seasoned vegetables as side dishes for meals, and with many meals we’ll find ourselves with awkward leftovers, like a handful of mushrooms or a small amount of spinach. Rather than throwing them out, I’ll keep them in the fridge for a few days and if we have a healthy amount of a few different things and they’re even remotely compatible in flavor, I’ll make a soup or a stock out of them.

If I’m making soup, which is the option I use if I don’t have a good meal plan, I basically just cook them in vegetable stock/broth or water, adding lots of seasonings and salt and black pepper, until it’s boiling for a few minutes, then serve it. Most of the ingredients in there are either already cooked or will cook extremely fast (like chopped spinach). If there’s something that needs to cook for a while (like, say, some raw carrots), I’ll let that boil until the vegetable’s a bit soft, then I add the other stuff for just a few minutes.

If I don’t want to make soup, I’ll often throw all of the leftover vegetables in the slow cooker in the morning and let it boil and bubble all day long. As an intermediate step, I’ll put all of the leftover veggies in a large storage container in the freezer, then when that container fills up, I’ll use all of it for stock. I’ll let it simmer with some seasonings for a very long time, then strain it and freeze it in soup containers for future use as the liquid in batches of soup (or as liquid in some casseroles).

Use old condiment bottles for new condiment mixes. Quite often, I’ll hold onto old plastic condiment bottles when they run out so that I can make a new condiment mix in that bottle and store it in the fridge.

For example, I love having a container of “fry sauce” on hand, and it’s pretty easy to make. Just add two parts mayonnaise to one part ketchup in a bowl, add two teaspoons of dill pickle juice, a teaspoon of seasoned salt, and a teaspoon of ground black pepper, and whisk it thoroughly. Spoon it into the clean condiment bottle and you have yourself an amazing dipping sauce or sandwich condiment.

I’ll experiment endlessly with variations on this sauce or completely different recipes, just to provide some variety for sandwiches or for dips.

Use old spice shaker bottles for fresh spices and new spice mixes. Rather than buying a bunch of shaker bottles for spices, I just hold onto nicer ones and refill them. Furthermore, I use some of them to make my own spice mixes.

I love going to spice stores or bulk spice sections in food co-ops to stock up on fresh spices at a pretty inexpensive price for the quantity. This lets me go home and fill up a big shaker bottle with, say, dried basil or dill or oregano that’s wonderfully fragrant and fresh.

I’ll also fill up other shaker bottles with mixes of spices that I use for specific recipes. For example, I usually have a shaker bottle of pasta sauce seasoning that I add to a can of diced tomatoes and a can of tomato sauce in a saucepan. The seasoning mix consists of 4 parts basil, 4 parts onion powder, 2 parts marjoram, 2 parts garlic powder, 1 part rosemary, 1 part ground black pepper, 1 part savory, and 1/2 part cloves. I’ll just add all of that to a shaker bottle, shaking it thoroughly as I add ingredients, and then when I’m done I can just add several dashes of the mix right to diced tomatoes and tomato sauce for a great cheap pasta sauce.

Use window cleaner bottles for homemade window cleaning and general household cleaning solution. If I use up a bottle of Windex (or the store brand equivalent), I’ll save the bottle and use it for a homemade window cleaning solution. The bottle under the sink has had some kind of homemade brew in it for years.

I try lots of different recipes for it. Right now, it’s just a very watered down mix of Dr. Bronner’s liquid castile soap (24 parts water to 1 part castile soap), which also works as a general household cleaner, so I may stick with it because I can spray it on all kinds of stuff. In the past, I used a mix of 8 parts water to 1 part vinegar with a drop or two of dishwashing liquid; it also worked well as a general household cleaner.

Use soap dispensers for homemade hand soap dispensing. I do the same thing with those little soap dispensers that you can buy at the store for hand soap next to a sink. One might just toss them after use, but we save them and refill them.

If nothing else, you can buy large jugs of hand soap refill, but we’ve been using a watered down castile soap in foaming dispensers as of late (8 parts water to 1 part castile soap). It makes a different foam than normal hand soap, but it does a great job of cleaning your hands.

Use glass jars for food storage. If I have a glass jar from the store from something like pickles or salsa or even pasta sauce, I’ll usually give it a few additional uses making simple homemade pickles or sauerkraut or saving partial batches of them. I might make a gallon jar of pickles, for example, and then want to spread them out into smaller jars, and those glass jars from the store work perfectly for this.

Similarly, after I strip off the label, I’ll use larger glass jars to store things like rice and beans in the pantry. It’s a lot easier to store an extra pound of dry rice in a glass jar than in a bag or some other awkward container, plus it’s a lot easier to see it.

Use grocery bags and egg cartons as additional packing material. We usually have several canvas bags in the car to use for groceries, but if we’re buying groceries or household supplies and don’t have those bags on hand, we’ll wind up with some plastic bags. Rather than just tossing them, I’ll save them and use them as extra packing material when we ship items. (They can, of course, be easily recycled, but we don’t have curbside recycling in our area and the nearest place to take them is more than 10 miles away.)

Balled-up plastic bag work wonderfully as packing material for most items, nestling the items inside of a cardboard box surrounded by those bags will get them to their destination safely. I often ship board games via the mail, so I’ll double-layer them in plastic grocery bags then surround the double-bagged game with balled-up bags and they arrive safe and sound.

You can use egg cartons in a similar fashion if there’s plenty of space in the box. A few empty egg cartons provide a great buffer for holding items still in a box when it is shipped.

Use coffee grounds and egg shells and used tea in the garden. We used to actively compost, but we found that we would struggle to have enough kitchen scraps to make good compost in any reasonable amount of time. Instead, we’ll take used coffee grounds and used eggshells, let them completely dry out, then run them through the blender to make a powdery mix, then spread that powder on the garden as a free fertilizer.

Just rinse the eggshells thoroughly and let them dry in a container for a week or two, and let used coffee grounds and used tea dry out for several days on a plate or a paper towel, and save them when they’re dry in a bag. Toss all of it in a blender, run it on high for 20 seconds, then take that powder and spread it on your garden. It’s a marvelous simple fertilizer.

Use egg cartons, old candles, and dryer lint to make fire starters. I’ll hang onto the last bits of old candles and when I have plenty, I’ll then hang onto paper egg cartons and dryer lint for a week or two. I turn all of that into great fire starters for campfires or fireplaces.

Just take the egg carton, stuff each well with dryer lint, then take melted candle wax and pour it thoroughly on top to “bind” the dryer lint to the egg carton. Let it dry, then when you need to start a fire, tear off an “egg” and light the paper egg container part. It’ll catch fire easily and the wax and lint mixture will burn hot and long enough for you to get some smaller pieces of wood going. It’s a great way to get a final use out of a candle that’s burned down to the nub, as well as avoid just throwing away lint and egg cartons.


Use paper towel and toilet paper rolls to make “lint logs” for fire starters. Just stuff some dryer lint into the tube, then roll up each end tightly to form a little “package” with dryer lint in the middle. Again, it’s easy to light the tube and then the lint will burn wonderfully as you get a fire going.

I find that just rolling the tube tightly is enough to make it stay in place, but if you need a little more, a small bit of masking tape is perfect, plus you can just burn it with the masking tape in place when you need the fire starter.

Use old toothbrushes as cleaning tools. When you become concerned that your old toothbrush isn’t cleaning your teeth as well as you’d like and move to a fresh one, that old brush still has some life left in it. Just clean it thoroughly and start using it as a household cleaning tool.

Toothbrushes are great at cleaning really hard to reach spots or narrow places where it’s hard to get with a rag or other tools. I often use them to clean around the edges of faucets and sinks, for example – a drop of soap on the toothbrush and some scrubbing around the edges quickly leaves those spots looking nice and clean. You can keep using an old toothbrush until most of the bristles have fallen out, getting a ton of use out of it.

Use old food storage containers for other storage purposes. Food storage containers eventually outlive their usefulness, as they’ll become cracked and don’t work quite so well for storing food any more. However, a food storage container with a tiny leak remains useful for storing bigger items, so you can transition it to another part of the house for other storage needs.

A food storage container is great for storing nails and washers. It’s great for storing bits for crafting projects. It’s great for storing board game pieces (especially the smaller food containers). It’s great for storing anything that’s small and can easily make a mess.


Use two liter plastic storage bottles to store rice. Quite often, bulk rice comes in these big awkward bags that are difficult to really use effectively in the kitchen. What you ideally want is something that can easily sit in the pantry, keep the rice fresh because it’s sealed up, and then make it really easy to dispense the rice as needed.

Two liter soda bottles are perfect for this.

Just take a few two liter bottles, wash them thoroughly, dry them out, and then you can buy jumbo bags of rice and fill a few of those bottles. Just use a wide-mouth funnel and they fill easily. Pop a cap on top and pop them in the cupboard and you’re good to go.

When you want to use rice, you simply pull out a bottle and pour. It’s easy to fill up a measuring cup with it and, as you get more experienced, you can eyeball how much you need in your cooking pot quite easily. It solves the rice storage problem with ease.

You can do the same thing with very small beans (like lentils) and popcorn, but anything much larger than that won’t pour out of the mouth easily.

The lesson here is that many things you might instinctively throw away actually have other household uses, and when you move items to those other uses, not only are you extending the item’s lifespan, you’re probably replacing the need to purchase a different item. Repurposing things I might otherwise throw away means I’m not buying things like condiment mixes or spice mixes or fire starters or storage containers or fertilizer or packing peanuts or lots of other little things.

Whenever you’re about to toss something, give it a second thought. Is there something actually useful you could do with this?

Good luck!

The post 14 Ways I Easily Repurpose Used Items at Home appeared first on The Simple Dollar.

Questions About Used Cars, Small Windfalls, Vanilla Extract, Motivation, Soup, and More!

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What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Family doesn’t save or plan
2. Note about used cars
3. Getting small windfall into retirement
4. Staying motivated in retirement
5. Real vanilla extract worth it?
6. Soup freezer containers
7. Sharing cost of holiday meal
8. 401(k) aggressive investing?
9. Sports and trading cards?
10. Worried about hack
11. Recommendations for travel toiletries
12. More on “black belt” theme

I dislike everything about the switch back and forth between Daylight Savings Time and regular time. Just end it, please.

On with the questions.

Q1: Family doesn’t save or plan

I’m 36/M married to 32/F. My parents died when I was young and I essentially don’t have any family. My wife’s family more or less “adopted” me when we started seriously dating and now I’m basically a full-on part of their family. Great in most ways, but they’re all struggling financially, every single one of them. They don’t save for the future and don’t plan. When I suggest making financial plans to my wife she goes along with it as long as they’re vague but when I start talking about actually doing specific things she puts the brakes on immediately. We’re not in any financial trouble right now but we have very little saved for retirement. We use credit cards for an emergency fund. I signed up for a 401(k) on my own last year and contribute 4% to get 4% of employer matching and my wife was actually kind of annoyed by it and only begrudgingly accepted it when I pointed out my contributions were doubling. Not sure how to convince my wife to save, even for retirement.
– David

The thing is, you’re probably not going to be able to “convince” her. I’ve found, over and over again, that making smart financial moves is usually something that people have to come to on their own and when external forces are trying to push them there when they’re not ready or not interested, it’s a waste of time.

Rather, I would encourage you to approach this from a “this is important to me” angle. Make it clear that this is something you believe in strongly and that you want to do it.

There will come a point – maybe not tomorrow, but at some point – where the lightbulb goes off for her and she understands the value of what you’re doing. It’ll probably be at that point when she’s thinking ahead to the future and realizes the only way that you’re both going to be able to retire before your mid 70s is due to the money you’ve been socking away for retirement. Obviously, the younger this realization comes to her, the better, because she’ll be much more on board with the savings and you’ll have more years to rapidly build your nest egg before retirement.

For now, just ask for her trust in doing this, that it’s important to you to do it. Let it build, and then when the light bulb clicks on for her, she’ll be glad you did it.

Q2: Note about used cars

I agree with most of what you wrote about how used cars are not the great deal they used to be, but I wanted to fill in a reason why: there aren’t as many used cars as there used to be. The truth is that in 2008-2010 the car makers simply didn’t make as many cars because of the economic crisis. That means in the last few years there haven’t been many cars in the ~10 year old range that you could sell for $5-$8K. This means people are either holding onto cars for longer or buying more recent used models. People are trying to get a 10 year old car for $5K like they used to and they simply don’t exist so they decide to either buy something newer usually with a loan or keep driving what they have. So the newer cars have more buyers and that always pushes the price up when you have more demand and equal supply and because of that used isn’t a big bargain right now. I think that it’ll rebound in 3-5 years when the 2012-14 models reach that age as those are around in much more abundance. I think things will go back to something like they were and used will be a bit of a bargain again.
– Shaun

Great insight! I hadn’t thought about the used car market in that way before, but it certainly makes sense.

I went and looked at a few dealer websites and, sure enough, there were very few cars in that 2007-2010 model year range. There were a few, but not many at all. There were more cars on the old end of that range being sold for around $4,000 than ones in that range. It’s almost like a chunk of the market is missing.

So it makes sense that people are either waiting for a while longer or buying something more expensive if there simply aren’t any cars at the age that they’re looking to buy in. If you have people buying the 2012-2014 used instead, then that market is emptier, and that drives people who would buy those to even newer used models, and when you have more buyers than cars, the prices go up.

It completely makes sense. Thanks for the insight!

Q3: Getting small windfall into retirement

I received about $50K from my grandfather’s estate when he passed away. There were only two grandkids and everything was split up evenly among all descendants. I am 28 and I would like to get that money into retirement savings as I think that would be what he would want, as he told me again and again over the last several years that I should be saving for retirement. I almost feel like that’s why he gave me this money so I would be 65 and have a good life and would remember him.

How do I do this, though? How do I get that $50K into a retirement account? I looked at a Roth IRA but you can only contribute $6,000 a year. Are there other options?
– Max

A Roth IRA is probably the best option for you. I’m assuming that you’re already contributing to a 401(k) or something similar at work if it’s available to you.

If I were you, I’d open an account with an investment firm that you trust – say, Vanguard or Fidelity. Put all of the windfall in there – $6,000 of it into a Roth IRA and the rest into a normal taxable investment account. Put all of the money in the Roth into a Target Retirement fund aiming for your retirement year. Put all of the money in the normal investment account into something aggressive that you can just sit on and forget about. I’d probably put half of it into a total US stock market index fund and the other half into a total international stock market index fund, and set it to reinvest your dividends. Then, just let it sit.

On January 1 of each year, move $6,000 from the taxable investment account into the Roth IRA. Each year, you’ll have a small amount of taxable growth in your normal brokerage account – probably on the order of $1,000 the first year and progressively less each year after that as the money moves into the Roth IRA. You’ll have to pay taxes on that, which will be a couple hundred dollars at first (probably just a couple hundred dollar reduction in your tax refund) and progressively less each year.

Eventually, all of it will be in the Roth and then you just sit on it until retirement. It’ll grow and grow and grow, tax free, as long as you wait until age 59 1/2 to withdraw.

Be sure to keep an eye on the income limit for a Roth IRA. Once you start getting north of $100,000 a year in income, you start to run into limits on how much you can contribute to a Roth. In those situations, consider instead bumping up your 401(k) contributions at work and then using the taxable money for living expenses if needed.

Q4: Staying motivated in retirement

Can you offer some advice on staying motivated after retirement? I started reading The Simple Dollar in 2008 and you encouraged me to live a little leaner and save more for retirement. When I retired last year I had a lot more in retirement than I expected and the actual financial part has been easy. My retirement fund is actually bigger now than when I retired.

The problem is I don’t feel motivated to do anything. I mostly just putter around the house and read magazines and watch television. I go on a walk once a day. I call my kids sometimes. I don’t feel motivated to do much of anything any more.

What can I do to find that motivation? I don’t want to just sit here and wither but I don’t really have a reason to do anything.
– Max

For many people, motivation comes as a result of responsibility and commitment, and it sounds like there isn’t much responsibility or commitment in your life right now. People are motivated because they’re responsible for their kids or they’re responsible for a work project or because they’re committed to something they agreed to do. My list of commitments and responsibilities is comically long if I were to list it out, and I feel pretty motivated each and every day.

My suggestion would be to find something for your idle hands to do and then commit to that. I think volunteer work is a great opportunity for this. Are there volunteer programs in your community that you could sign up to help with regularly? Are there committees you could serve on and help make decisions? In most communities of any size, there are tons of opportunities out there if you dig a little bit. You could be doing anything from being a school crossing guard to helping shelve books at the library or delivering flowers at a hospital or helping build a Habitat for Humanity house or participating in a political campaign for a candidate or cause you believe in.

Agree to bite off a big commitment with whatever it is you’re doing and you’ll likely find motivation starting to grow again. The difference is that you have a lot of options before you and you can choose the option that really matters to you based on what you personally value.

Q5: Real vanilla extract worth it?

Found an old article of yours where you talk about making vanilla extract with vanilla beans and vodka and letting it sit for a very long time. Seems good in principle as you’re basically making vanilla cordial which would work great in baking and most uses. My grandma used to make peppermint cordial doing the same thing with a bunch of peppermint candies. Anyway I was thinking about making some homemade because the price of real vanilla extract versus artificial at the store was huge, but the price of vanilla beans is really high too. Trying to decide if it’s worth it or not.
– Daria

My understanding is that different people taste different things from vanilla extract, much like how different people taste cilantro differently. Many people think that artificial vanilla and real vanilla extract taste basically identical, while others report a huge difference.

I’m somewhere in the middle. I can tell the difference at room temperature and when it’s used in cold things, like ice cream. However, when it’s baked, I usually can’t tell the difference or, if I think I can, it’s pretty subtle. That being said, there have been a few specific kinds of artificial vanilla that have tasted awful to me, something I attribute to some ingredient in the mix that’s not the actual vanillin.

If you plan on using it mostly for baking and the people you’re baking for can’t tell the difference, use the artificial as it’s much cheaper. If you plan on using it for a variety of things, including things like ice cream, I’d make my own.

Q6: Soup freezer containers

What is the best way to freeze soup without making a mess? Tried Ziploc freezer bags but it was real messy!
– Brenda

I’ve tried a bunch of different containers and I think these are the best ones I’ve tried. They come in 32 ounce and 16 ounce sizes depending on what you want (16 ounce is good for a large individual serving, 32 ounce when full works well for our family), you can freeze them and microwave them and wash them in the dishwasher with no problem (though you’ll want to have them in the top rack), and they seem to last and last.

I agree with you that Ziploc freezer bags can be tricky with soup. I tried using them for a while but there were so many incidents of spillage if I was trying to fill them myself that I stopped using them pretty directly for soups.

That being said, good on you for trying to freeze soups. I eat soup that’s been reheated quite often and it’s delicious and quick.

Q7: Sharing cost of holiday meal

I have hosted our extended family Thanksgiving for 12 years. That includes putting up several people for three or four nights, feeding everyone countless meals, and putting on a huge Thanksgiving dinner with homemade sides and all of the trimmings. It often costs $200 to put on the big meal alone and hundreds more to host everyone. I asked my siblings to each chip in $50 this year to help offset the cost and now I learned that they are all calling me “cheap” behind their back. I have never even stayed at most of their houses ever. Am I wrong here or are they just a bunch of selfish jerks?
– Carrie

It’s hard to tell 100% from this story what is going on. Quite often, situations like this are borne out of a misunderstanding or out of something said in frustration that was taken the wrong way.

It’s very likely that the manner in which you requested the money was taken with an intent that you didn’t want. They perhaps felt like it was a demand, or that you were holding the family Thanksgiving holiday “hostage,” and that often doesn’t sit right with people. This is particularly true if it’s perceived that you aren’t really struggling financially at all.

If you want others to pitch in, your approach shouldn’t be tied to a dollar amount or anything like that. Rather, you should simply say that the expense is becoming difficult to manage and that if anyone can offer a little bit of help with the groceries, that would be greatly appreciated.

At this point, I would probably issue a clarification and roll back your request to something like that. Just say that your first message might not have been clear. Don’t demand a specific amount and make it clear that this is about you struggling financially, not about an ultimatum regarding ending Thanksgiving dinner.

Remember, you can only control what you do, not what other people do. These are things you can control.

Q8: 401(k) aggressive investing?

I am 26 years old and have started contributing to the 401(k) plan at work. I am putting in 8% of my pay and my employer is matching 4% so 12% is going in which is good. I have been looking at the investment options and I don’t think the Target Retirement Fund is aggressive enough for someone as young as me. Even the one matching my retirement year still has money going into bonds and cash. I think for me something that’s pure stocks or maybe stocks and real estate is better until I’m maybe 45 or so and then I just move everything back into the target retirement fund. What do you think?
– Brian

I think that if you’re aware of the risks with taking an even more aggressive stance, then that’s perfectly fine.

The big reason many Target Retirement Funds have at least a little bit of bonds and cash, even when they’re 35 or 40 years from their target date, is that they don’t want people logging onto their 401(k) accounts in the midst of a downturn, seeing a huge loss, and bailing. Rather, they want people to see a loss but not a huge one, not quite as big as they heard on the news, and they feel a bit of relief and keep on trucking. The drawback, of course, is that the gains won’t be quite as big, either.

Over long time periods, the gains should notably outweigh the losses and thus an even more aggressive investment strategy can pay off. It does throughout the historical data, though that’s absolutely not a guarantee going forward. You just have to be able to stomach some pretty big downturns when the stock market goes south.

Q9: Sports and trading cards?

What are your thoughts about investing in sports and trading cards? I have seen data that says you can easily make a 30%-40% return annually on them.
– Eric

There are a ton of caveats with those kinds of numbers.

First of all, you have to know the market you’re investing in. You need to know exactly what you’re investing in and which products are going to retain value and grow. That requires a lot of learning and domain knowledge and perhaps most of all separation of your personal emotion from the investments.

Second, there’s a ton of risk baked in, as trading cards and sports cards are entirely luxury goods bought by people who do it for pleasure. If times get tougher, people will stop buying. If tastes change, people will stop buying. A trading card does not address any sort of fundamental need – it aims entirely at entertainment and pleasure, and those things are fickle.

I don’t see any problem with having a hobby budget where you invest in these things and then try to flip them for a profit. I have a friend who does exactly this – buying and selling Magic: the Gathering cards is his hobby and it’s a profitable one. It’s fun for him in many ways, and he’d just stop doing it and sell everything if it stopped being fun.

Treat it as a hobby. Set a fixed monthly budget for yourself, an amount you don’t mind losing, and use that to buy and sell to your heart’s content. You might make money. You might lose your shirt. In either case, you’re doing it because it’s enjoyable.

Don’t put your retirement money into baseball cards or Magic: the Gathering or Pokemon cards.

Q10: Worried about hack

The other day I got an email that appeared to be from myself. It said that someone had gained access to my email and other accounts and that they gave me seven days to pay them or else they would drain my bank accounts. I don’t know what to think.
– Brian

This is a junk email, a waste of your time. Just delete it.

Someone spoofed your email address making it appear as though they were sending an email from your own account. They have a program that lets them send emails to people with a fake “From” address so that it looks like it comes from whatever address they want. To spook you, they made it look like it came from your address.

Most likely, they just bought a huge list of email addresses from someone and sent the exact same message to everyone on that list, spoofing the “From:” address on each one to make it appear as though everyone on that list was getting an email from themselves.

It’s an extremely low effort way to try to get people to send them money via Venmo or Bitcoin or whatever. Ignore it. They’re trying to scam you.

Q11: Recommendations for travel toiletries

How do you pack toiletries for travel? You can’t take anything big through airports or they’ll confiscate it. I use to put stuff in my suitcase and check it but I have had two different items explode and make a huge mess recently.
– Bonnie

Personally, I usually stop at a Target or something at my destination and pick up a few essentials or use what’s available for free at the hotel. I rarely pack much for toiletries, particularly anything that won’t make it through security screening.

When I’m traveling, my goal is to be clean and hygienic and odor free and clean shaven. What do I minimally need to accomplish those goals? Soap and shampoo are usually free at the hotel. I can usually request a small tube of toothpaste, too. I take a toothbrush and a small deodorant stick through airport security. I can pick up a razor at the hotel or, if they don’t have anything I like, I grab one at Target for a few bucks that will work for the length of the trip. That pretty much covers it – it’s one or two things in my carry-on, a few free items at the hotel, and maybe one or two items from a store at the destination. Just buy any consumables in their smallest possible form.

It can get trickier if you have more esoteric or specific needs, but that’s what I do.

Q12: More on “black belt” theme

You wrote recently that your theme for 2020 was “black belt” in that you wanted to get a black belt in taekwondo but that there were other reasons too. Would you mind sharing what that means?
– Adam

Sure. I actually wrote a little more about it in an introduction to the mailbag a couple of weeks ago, which I’ll share again here:

My theme for 2020 is “black belt.” A big part of the reason for that is that, as I’ve mentioned a few times, my family gradually joined a community taekwondo class several years ago (some of us joining before others) and I’m aiming to be able to test for my black belt in December 2020 (possibly February 2021). That will require a lot of work and practice throughout the year.

The theme goes deeper than that, though.

I’ve realized in the past few months that there are several things in my life that I do well, but I could do much better if I “leaned in” on them a little and improved with some deliberate practice and care and thoughtfulness. Personal communication with others is definitely one, as are some spiritual and meditative practices, some dietary practices (mostly eliminating some bad things from my diet), and a few other specific things. I want to lean in on those things in the coming year in a deliberate and careful way so that I can be even better at them.

Basically, I want to improve on a number of things I’m good at with deliberate practice so that I’m great at it. I think I’m good at communicating with others, but I want to work toward being great at it. I think I have a good set of spiritual and meditative practices, but I want them to be great. I think I’m good at eating healthy foods, but I want to be great at it.

This boils down to a list of four big goals for the year:

1. Black belt fitness and preparation
2. Adopt a maximally healthy and still sustainable permanent diet
3. Deep study of life philosophies and religion through reading and meditation and reflection
4. Improve personal communication and relationships – improve or rebuild every significant relationship in my life via better communication

Each one of those fairly neatly breaks down into some daily steps and daily deliberate practice and habit building, and that’s what I want to fill 2020 with.

The first one is all about taekwondo. I have a training regimen, both inside and outside of class, that should have me ready for my black belt test later in the year. It involves a lot of stretching, a lot of kicking, and a lot of building of core strength.

The second one is mostly about a careful analysis of what I eat and drink. I mostly eat really healthy stuff, but I think I mostly eat too much of it and I want to dig to the bottom of that. I’m going to try a number of different practices to see if I can figure out the best possible permanent diet for me that’s really simple to follow and doesn’t make me crave stuff. My focus is health, not hitting a particular weight.

The third one is about finding more contemplative time and better practices within it. Meditation has been a life-changer for me over the last few years and I want to explore more avenues and practices. I want to read a number of challenging books within the realm of philosophy and theology and religion as I’m pretty passionate about those areas right now. I feel like this is my own riff on a “midlife crisis” (I don’t know if I’m too young for that or not) but I have this strong sense that I’m kind of in the process of carving out who I want to be for the rest of my life.

The final one is about improving my personal communication skills, particularly face to face communication but also using digital tools, and making positive improvement to every meaningful relationship in my life. I’m going to try to consciously reconnect with a lot of people throughout the year and work on being a better listener and friend. Again, this is something I think I’m good at but not necessarily great at.

(I do have a fifth goal, but it’s highly personal and tied to some specific people in my life who probably don’t want things in their life shared on a popular website.)

So, overall, it’s really about leaning in to some things I think I do well, but that I’d like to do very well.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. 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 many, many questions per week, so I may not necessarily be able to answer yours.

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Inspiration from Rumi, Libby, Kurt Vonnegut, and More

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Once a month (or so), I share a dozen things that have inspired me to greater personal, professional, and financial success in my life. I hope they bring similar success to your life. Please enjoy the archives of earlier collections of inspirational things.

1. Harry Truman on credit

“It is amazing what you can accomplish if you do not care who gets the credit.” – Harry Truman

Part of the reasoning for my goal of financial independence is that I want to reach a point where I don’t need or even want the credit. I just want to do good stuff.

Why do I need credit? One of the big reasons people take credit for things is that they want to secure their income. Many people take a very strong-arm approach when it comes to getting credit in their professional lives and even their community lives because their finances aren’t rock solid and they’re very wary about losing their job. It’s an extremely short term approach – over the long term, it’s much more valuable to have humble people who just want to produce things – but often some level of credit for hard work is needed just to keep one’s job and one’s career on track.

(The best thing you can do for your career, in my opinion, is to stand on a stage and dole out credit. You inherently get the credit for being in the spotlight, but you appear humble because you’re doling out the credit.)

I look forward to a day for me when credit essentially doesn’t matter and all that matters is the good results. I want to spend a day weeding a community garden or restocking a food pantry shelf or putting some vegetables on the front step of someone who is food insecure or fixing a maintenance problem in the headquarters of a charity or emptying the trash there. Those things don’t win you credit and they certainly aren’t going to earn you an income, but they do make things better.

2. Libby

The last five books I’ve read have all come into my hands for free using the Libby app.

Basically, it’s a very slick app for getting e-books and audiobooks from your local library for free. Most libraries check out books in a format you can easily read or listen to on your phone, and Libby lets you download them (or get into the reserve queue for them) at your leisure. And, again, it’s all free.

I have a whole bunch of books I’m waiting on in the Libby app and when one comes available, I can snag it with ease. Because several have come available in a very short succession, I’ve found myself using Libby a ton.

3. Marcus Aurelius on needing help

“Don’t be ashamed to need help. Like a soldier storming a wall, you have a mission to accomplish. And if you’ve been wounded and you need a comrade to pull you up? So what?” – Marcus Aurelius

American culture often lauds the “go it alone” mindset, implying that “going it alone” makes you seem tough and leads you to accomplishing great things. The reality is often the opposite – many of the greatest moments in American history are almost purely team efforts, starting with the American Revolution itself and continuing with basically every significant development and moment in American history. Those moments are very rarely due to one person alone – they’re almost always a team effort, with people working together for some cumulative effort.

Even when you do hear stories about people “going it alone” and succeeding, you’re hearing the one success that stands in rare opposition to a thousand failures you never hear about.

Why does a team work better? Because, inevitably, some members of a team will struggle, and there are teammates around to lift that teammate up and get that teammate back on track. Without a team, if that person starts to struggle, they fall.

You don’t have to “go it alone” with anything in your life. It might seem like a better storyline, but it’s much less likely to lead to success. Surround yourself with people who will help pick you up when you slip, and help pick other people up when they slip.

4. George Harrison – All Things Must Pass (demo)

This song has gotten me through many rough moments in my life – not the overly loud album version, but this stripped down demo (and this even more stripped down earlier demo).

For me, it’s a gentle audio reminder that bad things will happen in life, but they will pass and joy will be fond again. Furthermore, the people in my life that brought about the pain – often people I loved passing away – would never want me to dwell on that pain. They would want me to remember them fondly with a laugh and a smile, not tears.

Things in life can hurt, but if they were worthwhile, they shaped you in a positive way. As they pass, remember not the pain of losing them, but the shape they impressed on you while they were with you.

5. Paul Gauguin on learning

“The public wants to understand and learn in a single day, a single minute, what the artist has spent years learning.” – Paul Gauguin

I take this in two ways.

On the one hand, many people want to become masters of a particular craft super quickly when, in reality, you cannot master some crafts without a lot of work. I think it’s possible to become competent in a particular area pretty quickly, but to master it? That takes a long time. I understand the feeling of having worked for many years to build a particular skill, watch someone else build a skill to a reasonable level quickly, and then feel like they’ve achieved equal mastery. It can be frustrating.

On the other hand, isn’t the purpose of art to make the viewer see the world a little differently, and doesn’t that rest on the back of many years of skill built by the artist?

I think this quote speaks to two different things, depending on how you read it. A craftsperson who has achieved a lot of skill thanks to a lot of work can be frustrated by other craftspeople. At the same time, a craftsperson who builds a high level of skill deserves appreciation from the general public.

This quote made me think, and anything that makes me think and keeps resonating in my head inspires me.

6. C.S. Lewis on someone

“There is someone that I love even though I don’t approve of what he does. There is someone I accept though some of his thoughts and actions revolt me. There is someone I forgive though he hurts the people I love the most. That person is …… me.” – C. S. Lewis

Literally no one on this earth is perfect. We all make mistakes. We all do things that hurt the people around us, often without even realizing it. We all let our emotions get the best of us sometimes.

It happens. It’s life.

All you can do is pick yourself up, do what you can to honestly admit your sorrow and make amends, and then strive to do better the next day. You have to do those things with honest intent, though. Apologize honestly, with true intent. Aim to do better, with true intent.

No one is ever going to be perfect, but we can all be better than we used to be.

7. Robert Wright – Why Buddhism Is True

This is a book that I’d be very tempted to write a full “Books with Impact” article on if it wasn’t just a bit too far outside of the purview of what makes sense on this site.

The point of this book is simple: Wright takes the secular elements and practices of Buddhism and analyzes them from philosophical, psychological, and medical perspectives and makes a pretty good argument for the life benefits of secular Buddhism, which I’ve written about before.

I tend to view Buddhism as two distinct pieces: a secular philosophy free of theological entanglements and as a religion. I’m also of the belief that the secular philosophy couples well with handling modern life, and it couches itself well with other religions. You can practice secular Buddhism hand in hand with any religion you want, including atheism.

What does it address? As I wrote in the other article, secular Buddhism tackles the problem of desire. We all desire things, and at times those desires can become all-consuming. Secular Buddhism is effectively a set of practices for helping you quell endless desire. This doesn’t mean you don’t have goals or other things, but that you’re able to quiet the constant churn in your gut of wanting more and more and more things.

This book does an amazing job of addressing desire and it’s well worth reading.

8. Mary Anne Radmacher on courage

“Courage does not always roar. Sometimes it is the quiet voice at the end of the day saying, I will try again tomorrow.” – Mary Anne Radmacher

Life knocks all of us down sometimes. There are days where you spend all day working and feel like you didn’t make an iota of difference. There are days where you just feel defeated and don’t make any real progress on anything.

Many times, courage is simply getting out of bed and tackling it all again. Courage is someone who is really struggling who managed to make it out of the house this morning. Courage is a 16 year old girl, almost completely forgotten by her parents in their alcohol and drug-fueled world, managing to make it to class most of the time.

Courage often doesn’t scream. You often don’t see it. But it’s all around us.

9. Herman Narula on the transformative power of video games

From the description:

A full third of the world’s population — 2.6 billion people — play video games, plugging into massive networks of interaction that have opened up opportunities well beyond entertainment. In a talk about the future of the medium, entrepreneur Herman Narula makes the case for a new understanding of gaming — one that includes the power to create new worlds, connect people and shape the economy.

I am an enormous believer that games – in reasonable moderate amounts – are a profoundly powerful way to connect with other people while nudging you to think in different ways, a true social art form like music can be and painting can be. The downside of games is when they become too much and you allow them become too much of your life – they work best in moderation.

Over the years, games have led me to connect with many, many people, build quite a few lifelong relationships, learn how to think in new ways (both creatively and strategically), and learn new ideas (like, for example, the history of Afghanistan).

There’s a lot of power and beauty in a good game, both for the thinking it nudges in your brain and for the connections it nudges you to make.

10. Stephen King on talent and persistence

“Talent is a wonderful thing, but it won’t carry a quitter.” – Stephen King

You can have all of the talent in the world, but if you don’t put in the work, it won’t take you to where you want to go. At the same time, it doesn’t take much talent to be wildly successful – less than you might think – if you combine it with tenacity and hard work.

Hard work is the key. Almost all of the time, when you see someone who’s wildly successful, there has been a ton of work done in the background that you don’t see, even when you might not think so. There’s often considerable planning, considerable thought, and tons of effort.

Effort is the magic, not talent.

11. Kurt Vonnegut on six seasons

“One sort of optional thing you might do is to realize that there are six seasons instead of four. The poetry of four seasons is all wrong for this part of the planet, and this may explain why we are so depressed so much of the time. I mean, spring doesn’t feel like spring a lot of the time, and November is all wrong for autumn, and so on.

Here is the truth about the seasons: Spring is May and June. What could be springier than May and June? Summer is July and August. Really hot, right? Autumn is September and October. See the pumpkins? Smell those burning leaves? Next comes the season called Locking. November and December aren’t winter. They’re Locking. Next comes winter, January and February. Boy! Are they ever cold!

What comes next? Not spring. ‘Unlocking’ comes next. What else could cruel March and only slightly less cruel April be? March and April are not spring. They’re Unlocking.”
– Kurt Vonnegut

This absolutely nails something I’ve long felt about the seasons, that there is a distinct difference between early and late fall and early and late spring.

In my part of the world, early fall is when you’re harvesting from your garden, and late fall is the season of frosts and minor snowfalls and cold weather that’s cold enough that you bundle up but you still want to go on walks. Here, the transition between the two happens sometime between October 15 and, say, November 30 most years; I’d estimate it happened around October 24 this year.

In the spring, the reverse is true. Early spring is a period where the days are consistently above freezing and the winter snow accumulation slowly melts, but it’s not warm enough to really encourage much green growth. That’s usually March to mid April or so. At some point, it kicks to a warmer level and the green growth takes off – grass becomes bright green and starts growing rapidly, trees and bushes bud and grow leaves, the asparagus grows like wild, you can find morels in the forest. This usually hits sometime around April 10 or so and lasts until maybe mid-June, when summer begins in earnest.

This passage struck me because it was one of those moments where someone expressed something I’d understood and felt before but never really expressed, and it’s those moments that the beauty of human communication really comes through.

12. Rumi on your words

“Raise your words, not your voice. It is rain that grow flowers, not thunder.” – Rumi

If you want to say something meaningful, shouting it won’t get the message across. People might hear you, but they won’t listen. People listen to words, not shouting. In fact, a loud voice often harms the message you’re trying to share. All it often gets across is intense emotion.

A much better approach: learn to craft your words to say what you mean rather than shouting to try to get a message across.

This was a lesson I had to carefully learn after becoming a parent. When a toddler does something wrong and you know it’s going to be a lot of work and a lot of frustration to fix it, there’s a desire sometimes to shout. Yet, again and again, I found that kneeling down to their level and talking to them quietly with carefully chosen words was far more effective than shouting 99% of the time, and if you save the loud voice for very rare occasions, it has far more impact.

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Don’t Make Things More Complicated Than Necessary

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There is a tendency on personal finance websites, in personal finance books and personal finance magazines, to get into great detail about the specifics of various personal finance decisions and strategies. You’ll find long articles about specific tax loopholes (like “backdoor Roths” and so on). You’ll find long calculations that seem to indicate that one move is strictly better than another one. You’ll find lots and lots of arcane writing about taxes.

For someone who just wants to achieve some level of financial security in life, it can be simply overwhelming. Even something as simple as putting money in a savings account can turn into pages and pages of details and information that can cause most people’s eyes to glaze over.

If that sounds like you, my advice is really straightforward: don’t sweat all the details and just keep things super simple. Most of that advice isn’t particularly useful anyway.

Let me get into why I say that.

For starters, what matters more than anything for long term financial success is that you’re consistently spending a lot less than you earn. What you actually do with it is pretty secondary. You have far more positive impact on your future, especially at first, by simply spending less or getting a raise at work and then doing something – anything – worthwhile with that money.

Let me be absolutely clear: compared to the simple decision to spend less and to put more money aside for the future, the difference between paying off a debt or putting the money in savings or investing it is trivial in terms of the long term impact on your life, especially when you don’t have a whole lot of money to your name.

Now, when you have achieved some wealth, there ends up being a bigger and bigger difference between those options, but when you’re first trying to turn things around or when you’re dealing with a small income or a small amount of savings, you have far more impact in simply making good daily choices than you do in sweating about investment decisions.

Furthermore, the choice of the “right” investment decision is almost always based on predictions about the future. If you predict that the US economy is going to keep growing like gangbusters for the next decade, one choice is the best, but if you predict we’re heading into a recession, another choice is best. The truth? No one knows for sure.

Instead, stick to the things you do know for sure.

Having money in the bank is good, and the more, the better. Money in the bank means that you have a cushion against unexpected events in your life. That’s a net positive. Yes, there are specialized accounts for specific purposes – a Roth IRA and a 401(k) for retirement, a 529 for college savings, and so on – but the most important thing isn’t the account type, but the money you’re able to put in there, particularly at first. If you’re not sure, stick to a more general and flexible account type, like an ordinary savings account at a bank, and then figure out the different options at your own pace. What matters is that you’re putting money aside; getting it in the right account is important, but it can wait.

Having less debt is good. There are almost no situations in which an individual paying off debt isn’t a good move. Again, one can make arguments about which debt should be paid off first in the perfectly optimal way, or whether you’re better off investing or paying off a low interest debt, but it is essentially never a bad move to pay off debt. If you have enough money in the bank to handle something like your car breaking down, then paying off debt is almost always a really good choice. If you want a really simple rule to follow to decide which one to pay off first with extra payments, just choose the one with the highest interest rate and pay it off first. Again, that’s a simple rule that will almost never guide you wrong.

Struggling to pay your bills is bad; failing to pay them is even worse. It seems obvious, but in reality, almost 80% of Americans live paycheck to paycheck, meaning they’re right on the verge of beginning to struggle to pay their bills. Failing to pay bills damages your credit, meaning it kills other opportunities down the road. Furthermore, you often have to end up paying them anyway with additional interest owed.

Don’t hamstring yourself with big bills that will be difficult to pay. Don’t take out a loan to get the expensive car. Drive cars into the ground and then replace them with a used car that you can ideally pay cash for. Live in inexpensive housing, less expensive than what you could afford if you squeezed out every dime. Don’t get a huge unlimited cellular plan, especially when you’re not really using it that much – cut it back to the minimum. None of this is complicated. Just make choices that result in small monthly bills so that you have money to put aside.

The less you spend on foolish things each month, the easier it is to pay the bills, pay down your debts, not accumulate more debts, and put some money in the bank. Stop spending so much money on vices, hobbies, and entertainment. Find free things or cheap things to do to entertain yourself and fill your time. One big way to save money is to start making inexpensive meals at home – make a sandwich at home instead of eating at a fast food restaurant. Buy everything in store brand form. Those kinds of moves won’t change everything, but they can definitely help move the needle.

The vast, vast majority of people don’t even handle these basics very well. The biggest part of the reason that people struggle to get ahead financially is that they overspend, and when you lock yourself into more bills than you can easily pay, everything gets hard. It gets even harder when you spend a lot of money on foolish stuff.

It is very easy for personal finance websites and books and magazines to walk away from these basics and get lost in the nuance of Roth IRAs and 401(k)s and so on when the reality is that for most Americans and most people in the Western world, the real issue is that they don’t have the basics down pat. Worrying about what account to use when you have a bunch of debts, very little in the bank, and are struggling to keep your bills paid is like putting the cart before the horse.

Keep it simple. Cut back on your spending, starting with your big bills like housing and your car and insurance. Keep an eye on your foolish spending, too; look through old credit card statements and see where you’re spending money that you completely forget about, as that’s forgettable and utterly wasteful. Start by putting some money in savings just to create an emergency cushion; move on from there to making sure that you’re caught up on your bills and then start eliminating your debts. Make all of that consistent – this needs to be your life going forward, and it can be quite a lot of fun and pretty low stress.

It’s only at that point, when you’re able to consistently spend less than you earn and you’ve got your bills under control and you’re wiping out debt and you’ve got some money in the bank for emergencies and now you’re wondering what’s next, that you should start worrying about the next steps of investing. Amazingly, the vast majority of Americans aren’t at that point yet.

Focus on the basics. Don’t worry about those other details, at least not until you have these basics completely under control with your actions. Don’t make things more complicated then that.

Keep it simple. Spend less than you earn. Do something smart with what’s left.

Good luck!

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