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Saturday, April 15, 2017

Comparative Advantage and Smart Frugality

Whenever I see a long list of frugal activities, I immediately toss out most of the items on that list, not because the list is bad, but because I filter the items on that list pretty quickly.

First of all, there are items on the list that simply aren’t “worth it” for me. They don’t earn enough of a financial return for the time and effort invested to make me want to do it. One great example of this is the idea of washing Ziploc bags for reuse – I might save a dime or so in doing this, but it’s going to take me multiple minutes to turn the bag inside out, clean it thoroughly, make sure it’s very dry, make sure that it’s not leaking (because what’s the point if it’s just going to leak), turn it back to its correct dimensions for use, and store it. That’s just not worth the time or effort in order to save a dime.

Second, there are items on the list that rely on something I’m just not very skilled at. For me, a great example of this is any task that requires a lot of very fine detail work. I have enormous hands, so doing things that require me to firmly grip tiny objects tends to go very slowly. I can do them, but I just can’t do them with any speed or with any quality. I usually pass off tasks that take advantage of smaller hands and fingers to my wife (and she takes advantage of my height quite often in exchange).

Different people are going to read such a list differently. They may have a different threshold for what makes something a worthwhile frugal task for them. Even more important, they may have different skills and talents than me that make some tasks more efficient for them – hemming a pair of jeans comes to mind.

This is where the economic concept of comparative advantage pops in.

Comparative advantage, in simple terms, means that someone (or some group) has the ability to make a product or produce a result more efficiently than another person (or another group). For example, if Sarah and I are both trying to hem a pair of jeans, Sarah is simply going to do it faster than I will and will probably produce a more skillful result. On the other hand, when it comes to going through items stored on high shelves, I have a large comparative advantage over Sarah because I can simply grab boxes while standing there whereas she has to go get a step stool.

All of us have things that we happen to be good at. One of my brothers is incredibly adept at spotting things (think of a Where’s Waldo book) and he uses that skill to hunt for morel mushrooms in the forest or to find arrowheads or fossils. I can walk with him in the woods for several hours and find maybe one mushroom and he’ll come out with a sack of mushrooms, six arrowheads, three fossils, and probably some strange artifact from a pre-Columbian group. He’s done this many times – I’ve witnessed it.

Thus, if my goal is to get some morel mushrooms for dinner, I’m far better off trying to convince my brother to go out there for an hour and pick some for me than for me to wander around in the woods for several hours and not find nearly as many. He has a large comparative advantage over me in that department.

So where do I have a comparative advantage over him? Well, I could tutor his children in a variety of school subjects. I can fix most electronic devices quite efficiently. I’m good at food prep and can make a lot of food that can be stored for a long time.

Those are all skills that I have that he might not otherwise have. So, what I might do is this: I’ll go to my brother and say, “Hey, I’ll hook you up with a few jars of pickles if you go mushroom hunting with me for an hour and let me keep the proceeds so I can make a big batch of sauteed morels for my friends next weekend.”

So, what happens here? My brother gets a bunch of jarred pickles that would have taken him a lot of time to produce, especially since he doesn’t grow cucumbers, while I get a ton of morels for just an hour spent in the woods. We both get a ton of value out of an hour or so of our time.

Without each other, I would have spent several hours stumbling around in the woods without a whole lot of success (it would be fun, but not real productive), while he would have bought some mediocre pickles from the store with his hard-earned money.

That’s comparative advantage at work. I’m taking the product of something I’m skilled at or have some other kind of advantage with – growing cucumbers and transforming them into jars of pickles – while he’s taking the product of something he’s skilled at – finding morels in the woods – and we swap those advantage. Thus, my brother gets to effectively have the advantage of growing cucumbers and jarring pickles without any of the work and I get to effectively have the advantage of being absurdly efficient at finding morels in the woods. We both save a ton of money and time.

This idea has a ton of applications for frugality, so let’s walk through some of them.

There are some things in life you are simply better at or are more prepared to efficiently achieve than others. If you have a garden, for example, you’re far more prepared to have a bounty of vegetables in the summer than your friend who does not have a garden. Perhaps you have a particular natural talent or a skill you’ve built over time, like my father’s skill at chopping down trees and cutting wood – even at his age, he’s still incredibly efficient at producing a truck bed full of firewood, far, far more so than I am.

It is well worth your time to figure out some of those things for which you have a comparative advantage. What are you good at or particularly well prepared to do, things that your friends or neighbors might be able to do themselves but with much lower efficiency? You can actually make a list of those things if you’d like.

You might want to also consider things that your friends and neighbors and family members hate doing but that you don’t mind, or things that they’re indifferent towards that you actually enjoy, because you’ll be getting a comparative advantage in personal pleasure out of that activity compared to the people around you.

Make a list of these things if you’d like, but it’s usually just enough to identify some of your comparative advantages you have over others.

What if you don’t know where to start? Here are a few things to ask yourself.

Do you have any particular skills or talents that others sometimes want or are even willing to pay for?

Do you have any equipment that others sometimes want or need to use?

Have you made or grown anything that others sometimes may want or need and will pay for?

Is there anything you can do surprisingly quickly or with higher quality results than the people around you?

Is there anything you enjoy doing that many other people find to be drudgery?

When I look at myself, I can find all kinds of things for each category. Like I said above, I’m good at fixing electronic equipment and doing small repairs. I’m also good at writing marketing copy or short written pieces for various things. I’m good at tutoring children and adults one on one on subjects that they’re struggling with due to (I think) a mix of empathy, humor, and solid understanding of many topics. I have lots of different pieces of equipment that people sometimes want to use, like our snowblower and our high-powered stand mixer. We almost always have a garden that’s full of vegetables and we often preserve and store those vegetables. I can make excellent breads. I actually kind of enjoy folding laundry and find it to be really meditative, and the same is true for mowing grass. Those things just scratch the surface.

Those are my comparative advantages.

Great, you might be thinking, but what use is that?

Well, the next step is to know how to leverage those comparative advantages to save money (and make money, too, but that’s another subject). You can, quite simply, turn the things that you’re particularly good at into spectacular advantages in other areas of your life where you may not be quite as skilled.

How do you do that? Bartering.

I gave a pretty clear example of bartering above when I described swapping my comparative advantage in making pickles for my brother’s comparative advantage in finding morel mushrooms, but you can do the same thing with almost every comparative advantage you have with the comparative advantage that almost everyone in your life has.

Do you have an abundance of garden vegetables? Swap them with your neighbor for use of his snowplow this coming winter, saving you a ton of time and effort shoveling your own driveway (or the cost of your own snowplow).

Do you have a strong skill when it comes to adjusting and fixing clothes? Offer to hem up your sister’s clothes for her in exchange for a few jars of her homemade salsa, which saves you the cost of buying premium salsa at the store.

Do you have a membership at a warehouse club? Offer to buy your sister’s family a bunch of warehouse club items at a discounted price for her in exchange for her using her discount at work to get you a better price on a new cell phone.

Do you know how to change the oil on a car quickly and easily? Change your brother’s oil in exchange for him spending the time that the oil is dripping helping you repair the railing on your deck because he’s got a knack for simple carpentry.

Over and over again, the comparative advantages you have in your life can be used to get far more value out of that advantage than you would otherwise because you’re willing to barter that advantage with friends and neighbors in exchange for their comparative advantages.

What do you need to do to make this a part of your frugal routines?

First, spend time thinking about the comparative advantages that your friends bring to the table. What skills do they have that you do not, especially ones you might pay for? What equipment do they have that you do not? What do they make or produce that you might otherwise pay for? What are they able to do really efficiently that takes you a long time to achieve?

I know, for example, that I have a few friends who are avid gardeners, so I often plan ahead with them and grow different things so that we can trade our comparative advantages. I look at our big cucumber patch not as a bunch of cucumbers, but as a few cucumbers and the ability to trade for a lot of additional vegetables and other things we might need.

I have a friend that’s good at entertaining children by making balloon animals, so I’ve swapped with this friend before, giving some things of value to her in exchange for this service. My friend has shown up and blown up a ton of balloon animals for kids at a party in exchange for some of my help.

As I mentioned above, I have family members that are extremely adept at finding certain types of gourmet foods in the wild. I have friends who are very well equipped to watch a dog for several days. I have friends who are good at carpentry and woodworking and electrical wiring. Those are all things that are really useful for me.

Second, have a strong understanding of what comparative advantages you can offer that are useful to the people in your life. Know what you can offer that takes you substantially less effort and worry than what others have to invest to receive the same thing, or what equipment you have that saves you a ton of time on a task that your friends may invest a lot of time in, or what goods you can acquire at a much lower price than your friends (like garden vegetables).

This requires a healthy amount of self-analysis. What are you good at? What can you really offer of value to others? Can you offer your time? Your energy? Your strength? Your knowledge? Your possessions? What do you have that is more efficient than what your friends and family can offer?

Third, never be afraid to suggest trades to friends or family. I do this quite often, especially when they have something I want or need and I have something they could find useful. I’ll always offer to give someone a jar of pickles in exchange for using their drill or a basket of garden vegetables in exchange for some of their best peppers.

If your friend recognizes that the thing you’re wanting is relatively low effort for them and the thing you’re offering has notable value for them, they’ll almost always take you up on that offer, and when that happens, you both benefit. That’s the value of comparative advantage – you both get something that’s more valuable to you than what you give away.

Let’s spell out a clear example of what I mean. Giving a jar of pickles to a friend in exchange for using his corded drill for a few days means I don’t have to shop around for one or invest the money in buying one. On the other hand, letting a friend take something out of my garage for a few days that I won’t be using in exchange for some food that I’ll most definitely enjoy is quite a bargain, indeed.

That’s how most trades of comparative advantage work. You give up something that costs you little in exchange for something that has a greater value for you because it’s easy for you to give up the thing you’re offering but hard for you to get the thing you’re receiving. Your friend does the same thing, but in reverse. You both win.

So, whenever you see any instance where you can trade with a friend by borrowing something or lending something or giving away something that was very low cost to you but of much higher value to a friend, do so.

Fourth, don’t be afraid to offer help. Quite often, if I see a friend who needs or wants something, I’ll just give it to them, especially if it’s something that’s of relatively low value to me. I lend stuff out all the time. I give away food items I’ve made. I give away garden vegetables. I give away my knowledge and expertise.

What do I get in response? I don’t get anything directly, nor do I expect it. However, my friends know that I have just given them something that they value, and good friends don’t forget. When they see a window to reciprocate, they usually will. I have a belief – not an expectation – that my friends will help me when I need them to and they’ll sometimes surprise me with good things, and I’m usually right.

I earn two other, more subtle things as well. One, I earn a stronger friendship, especially if giving without strings attached is a pattern. Two, I earn some good feelings, because at my core I believe the world is a better place when people give of themselves when it makes sense and try to contribute positivity to the world. Those things have real value, and I get them in return whenever I offer help or give things away to people, especially people I care deeply about.

In the end, comparative advantage is an incredibly valuable tool in a frugal person’s toolbox. It allows us time and time again to get more value out of the bigger things we have – our expensive items and our personal skills – and to be able to swap some of our seemingly simple items for things of much more value, thereby amplifying the value of our possessions, time, and skills. Don’t be afraid to share your talents and useful possessions with your friends and they’ll be likely to share back, which will create a ton of value for you and produce a lot of goodwill and good feelings in the process.

Share and share alike, especially when it comes to things of value that you can easily produce.

Good luck!

The post Comparative Advantage and Smart Frugality appeared first on The Simple Dollar.

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Friday, April 14, 2017

Assessing Your Financial Progress With Honesty but Without Negativity

I’m going to let you in on a couple of dark secrets about financial improvement.

First of all, it’s a slow road. Once you get past that initial burst of changing things around, automating your savings and some of your bills, selling off a bunch of stuff to eliminate a few debts quickly, and taking a few big frugal steps that are essentially the “low hanging fruit,” it feels like your progress slows down. Way down. The reason is that your destination is almost always very far off in the distance, so far off that it feels almost unreachable.

Have you ever driven on the Kansas Turnpike, where the road seems to go in a straight line forever on what amounts to completely unchanging terrain, with only the glimmer of a destination off in the distance? That’s kind of what financial change can feel like sometimes.

The simple nature of long, slow progress means that financial change can be a real drag on your mental state. You feel like you’re putting so much into this and moving forward an almost imperceptible amount on the big journey. Hundreds vanish into retirement savings and emergency funds and debt payments and it still seems like the destination is so far off that it might as well be unreachable and all of the effort amounts to practically nothing.

To put it bluntly, the long road to financial progress can easily detour right into some intense negativity. Whenever you feel like you’re making huge sacrifices but aren’t seeing any sort of positive change as a result of it, it can feel painful.

One response to that negativity, of course, is to simply give up on your financial turnaround. Many people do this. They convince themselves that the system is rigged because they’re not seeing any direct success. They begin to believe that anyone who does find financial success is somehow “cheating” or is doing something so ridiculous that they won’t even consider it.

Another tactic that people use is to rely on outward signs of wealth as “proof” of financial success. “I must be doing all right if I can afford this Escalade,” they think, but when you’re barely able to keep food on the table, and most of your income goes to debt payments, you’re not building wealth. You’re robbing the future to pay the past.

Yet another tactic that people use is to focus entirely on one single metric that looks like it’s going well and then revert to old behaviors with everything else. They start contributing to retirement and look exclusively at that retirement number going up. Meanwhile, they’re racking up credit card debt and are behind on their mortgage payments, but their retirement balance is going up so everything must be great!

I’ve seen all of these responses. Each one of them allows people to either give into pure negativity when assessing their financial progress or else allows them to avoid any sort of honesty when looking at their money situation.

Here’s the truth: You want honesty, but not negativity. Honesty means that you’re seeing the truth and recognizing that it’s not all good but it’s not all bad, either. It means that you see that you are making progress but that you can still do better and it opens you up to finding ways to do better, which is one of the most important elements of financial success. Negativity, on the other hand, puts an enormous emphasis on the negative and convinces you that your good efforts have far less value than they actually do, which is disheartening and can often convince people to fall away from their financial progress.

How, then, can you look at your financial progress with honesty – allowing yourself to see the good and the bad – without giving into negativity?

First, stop comparing yourself to others. A lot of negativity about personal finance comes from people comparing themselves to others. If they’re doing well at saving, they’ll compare their possessions and current lifestyle to others and feel inadequate and jealous. If they respond by cutting back their savings, they’ll quickly start to convince themselves that big financial goals are impossible. The root of that negative feedback is other people, and comparing yourself to others is useless.

Remember, you have no idea what a person’s full life picture looks like – how much debt they have, how much help they’re being given from the Bank of Mom and Dad, or anything else. Comparing your situation to anyone else based on a few signs that you can see from the outside is a huge mistake.

Instead, focus your comparisons on yourself. Keep your eyes squarely on the direction of your own progress and let other people do their own thing. Compare your situation now with what it was in the past and look at the positive change that’s occurred due to your financial and professional efforts. The goal here is to see that you are making real progress and to see how little changes really do accelerate that progress.

Second, use your recent past for comparisons. I recommend using your financial state from a month ago and, if you have the information, a year ago as guideposts (we’ll get to how to specifically do that next). You can also use the moment of your financial turnaround as a guidepost, too, mostly in a “see how far you’ve come” way for inspiration, not because it’s particularly useful.

The reason to use recent comparisons is that the differences between you right now and the version of you that existed a month ago aren’t very many, and there aren’t even that many differences between the you of today and the you of a year ago. In many ways, you’re living the same life with the same interests as you were a month ago and even a year ago. Thus, when you’re comparing your financial state right now to your state from a month ago or a year ago, you’re eliminating most of the factors that excuse bad behavior or inflate good behavior. You see the truth of your behavior as clearly as possible.

Third, use your overall net worth as a central indicator of progress. A person’s net worth is simply the sum of their assets minus all of their debts. So, if you have $10,000 in retirement, $5,000 in savings, and a $5,000 car, and you have $10,000 in debt, your net worth is $10,000 ($10,000 + $5,000 + $5,000 – $10,000). That should be the one number you use as an overall comparison point between your financial state right now and your financial state a month ago or a year ago.

One great way to do this is to just get into a routine of calculating your net worth once a month. I suggest using a spreadsheet for this if you’re familiar with how to use one. Just make a row for each major asset that you want to keep track of and for each major debt that you want to keep track of. Make a sum of the debts, then a sum of the assets, and then subtract debts from assets to get your net worth. Yes, it might be negative, especially early on.

When you compare your net worth right now to where it was a month ago or a year ago, you see, right there, what your financial progress looks like. Paying off debt and saving money for the future helps your net worth. Spending foolishly hurts it. It’s as simple as that. If you have the individual debts and assets up there, you can quickly see what’s gone up and what’s gone down from month to month, so you can see where the problem is – if it’s your checking account that’s shrinking, you probably have a spending problem.

Fourth, focus on how far you have come, not how far there is to go. It’s easy to feel bad if you have a negative net worth or if your net worth is tiny compared to what your goal is. Don’t worry about that number on its own and don’t worry about your overall goal too much, either.

Instead, focus on the change you’re making. What’s the difference between your net worth right now and where it was a month ago? A year ago? When you started? If you’re putting forth effort, that number is going to be positive, and the harder you work for it, the higher that number is going to be.

Your net worth is not an indication of your effort in its own. The change in your net worth, though, that’s an indication of effort. Right there, you can see the difference you’re making. Don’t worry about how much of your overall goal that represents. Worry instead about making that difference a little bigger.

This brings us to the last principle: Use your progress, good or bad, to set reasonable and achievable short-term goals for yourself. Your net worth went up by $1,000 last month! Awesome! Can you shoot for that amount again next month and make it repeatable, or maybe even shoot to beat it? Your net worth went up by $15,000 last year? Awesome! That’s an average of $1,250 per month. Can you beat that average this coming month?

If you find that your progress isn’t what you want it to be, sit down and look at your most recent history and see what went wrong. Why did you spend so much last month? That’s your focus. You can see that you’ve made great progress overall for the past several months and it’s only the last month that’s problematic. What can you fix?

Don’t look at such situations as a sign of failure. Look at it as a misstep or two after a long journey in the right direction, a brief wrong turn when you’re well into the Appalachian Trail of your journey. You can look at comparisons to where you were at the start or where you were a year ago as proof positive that you’re heading in the right direction overall. Such reviews and improvements are meant to keep it that way and to perhaps even accelerate your journey a little.

In the end, it’s all about honesty without negativity. You need to understand that you’re not perfect and that missteps will happen with everyone, but you need to look at those missteps with honesty and ask yourself how to truly correct them. That’s the path to success in almost everything you tackle in life.

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Thursday, April 13, 2017

The Surprisingly Versatile Vegetable You May Be Ignoring (and Nine Creative Ways to Cook It)

“Eat your vegetables,” your mom told you. And she had a point. Federal researchers note that people who eat more natural foods are less likely to develop chronic diseases and more likely to enjoy good health. Eat enough vegetables, researchers say, and you’ll reduce your risk for heart disease, stroke, heart attack, and certain types of cancers. And if you go the extra mile to eat vegetables with loads of fiber, you can reduce your risk of obesity and Type 2 Diabetes by half or more.

Still, eating enough vegetables isn’t always easy – nor is it always good for your wallet. According to the United States Department of Agriculture, women ages 19 and up need to eat 2 to 2 ½ cups of vegetables each day. Meanwhile, men ages 19 and up should strive to consume 3 cups (or 2 ½ cups for ages 51 and older). In today’s hectic environment, it has become increasingly hard to find smart veggie options on the run, and particularly in fast-food restaurants. And when you do find a fast-food salad or veggie burger, they aren’t always particularly cheap.

Unless you mostly eat at home and cook vegetables with every meal or eat vegetarian most of the time, hitting your daily quota of veggies can be tough. To bulk up on vegetables – or at least get close to the daily requirements proposed by government agencies – you may need to get creative.

Trick Your Taste Buds with Cauliflower

One vegetable is so versatile that it’s easy to work into your regular food routine – often, without changing much. By getting creative with cauliflower, you can create some yummy (and convincing) dishes that emulate other less-than-healthy foods.

If you’re not eating enough vegetables, it might be time to put cauliflower on the menu at your house. Here are a few of the best ways to work this adaptable plant into your nightly meals:

#1: Cauliflower Fried Rice

I don’t mean simply preparing fried rice with cauliflower in it — I mean using minced cauliflower as your “rice.” It tastes exactly like the real thing. Here’s how I make it:

Wash and dry a full head of cauliflower, then cut it into florets. Once the vegetable is completely dry, pulse small portions in a food processor until the entire head of cauliflower is rice-sized.

In a skillet, combine two tablespoons of sesame oil and four eggs. Cook the eggs “scrambled style” and set aside.

Add another tablespoon of sesame oil to the skillet, along with a medium onion (chopped) and chopped green onions. Cook for a few minutes on medium, then add a small bag of frozen peas and carrots. Once heated, add cauliflower “rice” and several tablespoons of soy sauce. Cook thoroughly for 6-7 minutes, adding back the eggs when it’s almost done.

You can add a ton of soy sauce or very little while the mixture simmers – the choice is yours. Just remember that, if you’re heavy on the soy sauce, this dish can get very high in sodium (try a low-sodium soy sauce for more flavor and less salt).

#2: Cauliflower Breadsticks

Cauliflower breadsticks mimic the flavor of traditional breadsticks, yet don’t pack nearly as many carbs. With this recipe, you’ll start with a head of cauliflower, wash it thoroughly, and chop it up. Make sure to dry your cauliflower completely before you move on to the next step (you’ll want to get ride of excess moisture with almost any cauliflower recipe to ensure it doesn’t come out soggy).

Preheat your oven to 400 degrees. Pulse your cauliflower in a food processor until it’s fine, then pour it onto a cheesecloth or towel. Wrap the cauliflower up into the towel and squeeze out all the extra water you can.

In a bowl, add two eggs (or four egg whites), one cup of your favorite shredded cheese, two teaspoons of minced garlic, one teaspoon of Italian seasoning, and a dash of salt and pepper. Mix it up, then spread it evenly to create a square shape on a baking sheet. I like to bake cauliflower breadsticks on parchment paper, but you could use a non-stick baking pan instead.

Bake your cauliflower for 15 minutes, then take it out of the oven. Sprinkle a cup of parmesan cheese on top, then bake for another 5-8 minutes. Serve with your favorite marinara sauce.

#3: Cauliflower Crust Pizza

To make cauliflower “pizza,” you’ll follow the directions above until you take your crust out of the oven the first time. Once the crust has baked for 15 minutes, you’ll take it out and cover it with marinara sauce, your favorite pizza toppings, and one cup of mozzarella cheese. I like to top my cauliflower pizzas with a bunch of veggies (onion, chopped peppers, mushrooms, etc.), but you could also add pepperoni, sausage, or ham.

Bake for another 7-10 minutes (until toppings are cooked and cheese is melted), then cut into square-shaped pieces and serve.

#4: Cauliflower Mashed ‘Potatoes’

Cauliflower can taste a lot like mashed potatoes if you mash it and add traditional creamy, garlicky flavors. To make mashed cauliflower “potatoes,” you’ll start by boiling or steaming a full head of washed cauliflower florets for 15 minutes. Once the cauliflower is cooked, you’ll dry it completely – the dryer the better!

Put your vegetable in a bowl and add two tablespoons of milk, a half cup of sour cream, one tablespoon of butter, garlic salt, and chives. Mash the cauliflower by hand or use a hand mixer until it has the consistency of potatoes.

Serve your cauliflower mash alone, with butter on top, or with your favorite gravy.

#5: Cauliflower Buffalo ‘Wings’

Bite-size cauliflower florets make a healthy substitute for chicken wings, but soak up plenty of savory, spicy buffalo sauce. Preheat your oven to 450 degrees. Start with a head of cauliflower, taking special care to wash it and cut it up into wing-sized florets. Dry the cauliflower completely before you move to the next step.

In a bowl, whisk together one cup of flour, two tablespoons of garlic powder, a half cup of milk, and a pinch of salt. Dip each of the cauliflower florets into the mixture, shake off any excess, then lay them in a large baking pan. Cook the cauliflower for 20 minutes at 450 degrees.

Now, take the cauliflower out of the oven and turn the temperature down to 400 degrees. Grab a marinating brush and saturate the “wings” with your favorite buffalo wing sauce. This recipe also works with other sauces you’d normally try with wings – teriyaki, for example, or barbecue sauce.

Bake another 10 minutes at 400 degrees, then serve with blue cheese or ranch dipping sauce.

#6: General Tso’s Cauliflower

The General Tso’s cauliflower recipe I tried at home was similar to this one (except for the fact I used store-bought General Tso’s sauce).

Start with a head of cauliflower that’s been washed and cut into florets. In a bowl, mix together one cup of flour, ½ cup of cornstarch, two teaspoons baking powder, two teaspoons salt, four eggs, and ½ cup water.

Add cauliflower to the batter, shaking off the excess but leaving enough behind to coat it. Fry cauliflower in a large oiled skillet on medium heat for 10-15 minutes. Make sure to flip cauliflower halfway so both sides are slightly brown and crunchy.

Let the cauliflower sit on paper towels to soak up excess oil once cooked, then toss in your favorite General Tso’s sauce. Sprinkle shallots and sesame seeds on top, then serve with rice or dipping sauce.

#7: Roasted Garlic Cauliflower

Preheat your oven to 450 degrees, then wash and cut a head of cauliflower into florets. Dry the cauliflower all the way, then cover it thoroughly with a mixture made up of three tablespoons olive oil and three tablespoons of minced garlic.

Pour cauliflower into a casserole dish, then sprinkle with salt and pepper. Bake for 25 minutes, stopping to mix halfway through. Remove the cauliflower from the oven and sprinkle a cup of your favorite cheese on top. I prefer a mixture of parmesan and mozzarella, but nearly any cheese that melts will do.

Bake for another 5 minutes (or until cheese is melted), top with parsley, and serve.

#8: Turmeric Roasted Cauliflower

Turmeric is a bright, yellowish spice hailed for its health benefits. Some experts say it’s a natural pain reliever and anti-inflammatory, and that it may help prevent certain types of cancer and strengthen your immune system (though others caution that it’s not a miracle spice).

Combine turmeric with cauliflower and you’ve got a healthy dish that packs an antioxidant punch. I make turmeric roasted cauliflower with a recipe similar to this one.

Preheat your oven to 400 degrees, then toast coriander and peppercorn seeds on high heat for around a minute. Once cooled, grind the spices along with garlic, turmeric, crushed red pepper, and olive oil. Cover cauliflower florets in the mixture and bake them for 30 minutes at 400 degrees. Once roasted, sprinkle with shallots and serve with your favorite dipping sauce.

#9: Cauliflower ‘Tots’

I’ve never tried to make these before, but I am aching to experiment with this low-carb recipe for tater tots. Start with a head of cauliflower. Wash it thoroughly, cut into florets, then dry all the way. Preheat the oven to 375 degrees, then steam the cauliflower florets for 3-5 minutes before pulsing in a food processor.

In a large bowl, combine cauliflower, one egg, ½ cup minced onion, ½ cup minced bell pepper, ½ cup cheddar cheese, ¼ cup parmesan cheese, ¼ cup breadcrumbs, and ¼ cup minced cilantro and/or parsley. Mix ingredients together and season with salt and pepper.

Once your mixture is ready, use your hands to form it into small tater tots. Place tots on a cookie sheet and bake them for 20 minutes at 375 degrees. Serve with ketchup as you normally would.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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What is your favorite cauliflower recipe? Have you tried any of the recipes on this list?

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Have an Amazing Family Summer Without Breaking the Bank: 20 Low-Cost Family Summer Activities

We have three children. My wife is a teacher. I have a fairly flexible job that gives me freedom to work whatever hours I like provided that I get my tasks done.

What does that add up to during the summer? It adds up to a lot of family time. Each spring, Sarah and I spend a lot of time brainstorming things that we’re going to do as a family during the summer.

We come up with day-long activities, afternoon activities, weekend activities, and so on, and we plan ahead for those activities so that we can just pull out a plan and be ready to go with it at a moment’s notice.

Being the highly organized person – at least in terms of information – that I am, I have a notebook in Evernote that contains a note for each one of these ideas, outlining what we need to do for each of them so that when we decide to go for it, we don’t have to think about what to grab or what needs to be done. I just pull up the note.

Given that we’re pretty cost conscious folks, many of these plans are intentionally very low-cost plans. We don’t feel the need to run to a baseball game or to an amusement park just to have a great time together as a family.

Today, I thought it might be fun to share some of the activities from our folder, so here are 20 of the most “share-able” ideas, ones that aren’t too off the beaten path and should work with some variation in most areas.

Activity #1: Geocaching (and managing our own geocaches)

Whenever I mention low-cost family activities, I almost always mention geocaching because it is undoubtedly in the top tier of our family’s favorite things to do together.

For those uninitiated, geocaching is basically a global “treasure hunt” using cell phones or GPS devices. You simply go get coordinates for geocaches from a geocaching app or from geocaching.com and then go to those coordinates and look around according to the clues given to you by the site or app. Eventually, you’ll find a hidden container, which usually contains a log book and often contains little tchotchkes (which follow a take-one-leave-one policy).

We love simply “collecting” the geocaches we’ve found and swapping various trinkets for the trinkets we find in geocaches. Our whole family tends to get really into this for two or three periods each summer, during which we’ll spend full days just going to a new town or recreational area and hunting for tons of geocaches.

Activity #2: Going on a picnic and a trail walk at a local or state park

The local, state, and national park services in America do a tremendous job of making our nation’s natural beauty accessible to all. Parks all over this nation have places to picnic, informational exhibits to see, trails to walk, and views to admire, and most of them are free (and the rest are really low cost).

It’s well worth your time to head out to some of these parks and see what they have to offer. Just pack up a picnic lunch and head out to a nearby state or local park (or a national one, if you’re lucky enough to live near one). Walk on some of the easier trails, take lots of pictures, and admire the views. Find a comfortable picnic table or a soft spot in the grass to spread out a blanket and enjoy a picnic lunch together.

It’s a wonderful way to spend the day outside in the fresh air enjoying the majestic beauty of some of the best that nature has to offer.

Activity #3: Building a fort in the woods

While this isn’t something you should do at a public park, if you happen to live near wooded areas or have friends that do, spending a few hours in the woods building a fort out of fallen limbs and logs is a tremendously fun time for the family.

Just go out there and start piling up tree limbs to make walls with an opening to get in and out of the fort. You can make the thing as simple or as elaborate as you wish, and if it falls over a time or two as you’re figuring out how to do it, that’s no big deal.

We’ve spent full afternoons building these kinds of forts in the woods as a family, sometimes creating quite elaborate structures. We’ve had picnics inside of them and even came back to the same structures several times to improve them. We’ve even managed to put a roof on a few of them, including one memorable one that kept us dry during a moderate rainfall (though a few patches did have to be made).

Activity #4: Making a food item that everyone likes completely from scratch

How is pasta or macaroni actually made? What goes into it? How about ice cream? What about peanut butter? These simple things are staples that most of us just buy without a second thought at the store, but it can be a ton of fun (and very tasty) to make them ourselves from scratch, and it’s often an activity that can draw in kids like moth to a flame.

For example, just pull out a bag of flour and some eggs and announce that we’re going to make pasta for supper. Statements like that will get kids intrigued and you’ll likely find yourself going through the steps of making pasta from scratch or making bread from scratch or making a cake from scratch.

The best part with a family project like this is that everyone walks away learning something new and you usually have a food item on hand that you can turn into a very distinctive and memorable meal or snack.

Activity #5 : Going on a day trip (with a picnic basket) to an interesting nearby town

There are several interesting little towns within a couple hours of our home in Iowa. The Amana Colonies have a rich German heritage. Pella has a wonderful Dutch heritage and wonderful places to just walk around. Orange City is similar. Decorah has one of the most beautiful downtowns that I’ve ever seen. It can be fun to just go to these interesting towns and cities and simply explore them.

Pack up a picnic lunch and head out in the morning. Explore the town for a while, then head to a park for lunch, then spend the afternoon exploring. What kinds of interesting sites are available? What examples of the town’s history can you find?

We’ve wound up exploring the birthplace of John Wayne, the childhood home of Herbert Hoover, how to make sauerkraut, how to make fizzy sodas, and how to do rosemaling, all for free on these kinds of trips. They often end up providing us with a few incredibly fun and quite memorable moments and they make for a very fun day for virtually no cost.

Activity #6: Playing a full course of disc golf at the park

Many parks offer open “disc golf” courses that simply require a Frisbee to play a round, which takes an hour or two (or more if you have a family). Disc golf is much like regular golf, except that the holes are baskets above the ground and you throw a Frisbee until you can toss it in the basket, with the best player taking the fewest number of throws.

It’s such a simple and fun way to spend a few hours outside. It offers some gentle competition, but unless you’re quite skilled, there are going to be enough mistakes and foibles that everyone will eventually have a bit of egg on their face and there will be plenty of laughs and fun. At least, that’s how it goes when our family heads out to play disc golf.

Activity #7: Having a ‘summer reading challenge’

Some summer activities do need to be oriented toward the indoors because there are always rainy days and thunderstorms and sometimes you just feel like relaxing in the air conditioning.

One of our favorite summer activities is a family reading challenge. We make pages full of checkboxes and then each time someone reads a book for half an hour, they can check off one of those boxes.

We often set up some kind of family reward if everyone makes it to a reasonable goal and there’s usually some other kind of special reward for the winner. For example, the family reward is usually some kind of special activity day that we’d probably do anyway but it provides a great reward for the activity, like a day at a local amusement park, and the individual reward is something like allowing the winner to choose a place to go out for dinner.

Activity #8: Making a family movie

Almost all of us has a video camera in the form of our cell phone and many models either have simple video editing software right on the phone or makes it available for download (there are also tons of desktop video editing software options).

What this means is that most people have all they need to make a family movie of some kind. You can write a script and make a dramatic or comedic film. You can make a documentary of sorts about your current life. Just choose something together that you’re all engaged with, write a script or a detailed plan for what you want to do, then start shooting the pieces.

Afterwards, you can work together to edit everything into a movie that you can enjoy immediately, then put up to rewatch later on when everyone’s older. There are few things more fun than watching a family movie that everyone made a few years ago, which stands perfectly on top of the fun of actually making one this summer!

Activity #9: Making and flying kites

It’s actually not too hard to make a kite, and it’s pretty fun to fly a kite on any moderately breezy day. Making your own kite just requires two dowels, a plastic bag, some electrical tape, and some string, but you can go as elaborate as you want with the project.

The process of actually making the kite is a fun project on its own, but then heading out and actually flying the kite adds even more to the mix. It provides an opportunity to make something, an opportunity to learn about revising and repairing things, and also provides the simple fun of just flying a kite that you actually made yourself.

Activity #10: Making a giant blanket fort and watching movies in there

This is a great way to spend a rainy day at home. Just take all of the blankets and sheets and pillows in the house, bring them into the living room, and then assemble a giant blanket and sheet and pillow fort using the furniture and whatever you can find to prop things up.

Once you get the thing built, bring a tablet or a small video player in there and hang out in a tight space as a family and watch a movie together. It’s fun to just be piled up together in a family-built blanket fort on top of a ton of pillows, watching a fun movie together, and the only cost is the time involved.

Activity #11: Creating a huge sidewalk chalk mural

If you have a box of sidewalk chalk sitting around, go find a section of pavement with a ton of open space and start drawing a gigantic mural. Draw a picture of your family allying with a ton of dragons to destroy a huge medieval castle. Draw a picture of the family dog piloting a giant mech costume. Write out the entire text of some meaningful passage and letter and decorate it beautifully.

Get everyone involved. Plan out what you’re going to do at the start so that the whole thing has some coherent sense. Make sure to use as many different colors as possible and account for the fact that you only have so much blue chalk.

A great sidewalk chalk mural can absorb several hours and result in a really colorful and fun art piece that will last only as long as the weather allows it. It’s simply a great way to spend a warm summer afternoon.

Activity #12: Having a backyard campfire and cooking dinner over it

This is a slice of camping (see below) that you can easily bring to your own backyard if you have a fire pit – and if you don’t, you can easily find inexpensive raised fire pits.

Just gather some lawn chairs, pick up some wood (or use any extra untreated wood you happen to have around), and get a fire started. Use some thin sticks to roast marshmallows or cook hot dogs, or simply wrap some items in aluminum foil and drop them right into the campfire to cook them. Simple campfire meals – meat and vegetables and flavorings wrapped in aluminum foil with a bit of butter and an ice cube for moisture – are delicious and incredibly easy and fun for everyone to make for themselves.

Activity #13: Having an art contest within a certain timeframe

Got a spare afternoon? Bring out all of the art supplies in the house, place them on a table, and then tell everyone that they have the afternoon to create an art showing of whatever they make.

Everyone can do this – I often do this by simply drawing and coloring in some elaborate stained glass style patterns.

The winner of the “contest” can be decided by family voting and that person can win a prize that involves getting out of chores or some other small favor, but the real fun of all of this is in the creation and in the sharing of those creations.

Activity #14: Going stargazing

There are few things more fun on a late summer evening than going out in the country where the lights aren’t as bright, stretching out on a blanket, and gazing up at the stars. You can spend time simply enjoying the majestic beauty of the night sky, or you can actively look for particular stars and planets and constellations.

The real fun of it, though, is simply being close to family, stretched out on the ground, with the incredible beauty of the night sky before you and a bit of summer’s evening chill in the air.

Activity #15: Completing a many-piece jigsaw puzzle

This is another great long-term activity for hot summer afternoons and rainy days. Just find a quiet corner of your home, set up a card table, place a chair in front of it, and start a 1000 (or more) piece jigsaw puzzle on it. Leave it set up so that anyone can take a turn putting pieces into the puzzle over the following days or weeks.

What often happens is that people will sit down for a few minutes, find a piece or two, then move on to something else. Then, someone else will do the same, then someone else will, and before long, the puzzle starts coming together to create a beautiful picture and, in the end, completing the puzzle feels like a family accomplishment.

Activity #16: Exploring how something is made

If you have curious children, eventually one of them will ask how something is made. How do people make glass bottles? How do people make airplanes? How do people make roads? I know my children ask those kinds of questions all the time.

If you have an empty day before you, you can answer one of those questions in depth. Find out where such things are actually being made near you and then simply call and ask if you can visit and learn more about the process. In the past, we’ve done this to learn more abut how paper is made and how hard candies are made, and we’ve even done simple forms of those things at home.

Activity #17: Going on a weekend camping trip

If you have a spare weekend, head to a state park together and pitch a tent at a campsite. You can build campfires, cook your own meals, sleep in the outdoors, explore trails, see wildlife, get tons of fresh air, and learn about the world around you.

If you have a tent and a few sleeping bags, a weekend of camping really isn’t very expensive at all. You typically make your own meals and the park provides all of your activities. It’s a great way to spend a summer weekend or two doing something outside of the norm without blowing up your budget.

Activity #18: Going to a community festival (and packing along a lunch to take)

Many towns and cities host community festivals during the summer months in which the town shows off many of the traits that make it interesting. You can often learn about different cultures, try samples of the things made in the town, and engage in a lot of fun activities.

While town festivals can be expensive, they’re not too bad if you focus on the free activities and bring along your own picnic lunch. Just get out there in the morning, eat a lunch you brought with you around noontime, and if you decide to stay through dinner, you can either eat a second picnic meal or indulge of one meal of festival fare. Most good community festivals have enough free activities that you can fill up a day with tons of enjoyable things to see and do without breaking out your wallet.

Activity #19: Meeting the families of friends for an afternoon at the park

Several times per summer, we’ll call up the family of one of our children’s friends and ask them to meet us at a park. This gives the parents a good chance to get to know each other and allows the children to play with their friends.

Often, we’ll combine this with grilling or a picnic meal that we eat together at the park shelter, which makes for an inexpensive meal. It gives us a chance to get to know other families in the area better, particularly the parents of our children’s friends, and occasionally build new friendships.

Activity #20: Building a freeform castle out of a ton of LEGOs from old kits

This is yet another “cooling off in the afternoon” activity that can end up being a ton of fun for children who still love LEGOs or other building toys but have somewhat outgrown the kits. Simply pull out a bunch of incomplete kits and parts, combine everything together, and build one giant castle/vehicle, using everything you can find.

You might find a mashup of a train and a Star Wars spaceship combined with parts of a castle to make some sort of flying battleship. You might combine a normal city building with part of Hogwarts to make a Ministry of Magic building. You might merge a model of the Death Star with a LEGO Architecture kit to make a futuristic tech headquarters. You might combine a fairy’s home with a ton of ordinary LEGO bricks to make an enormous rainbow-colored add-on.

Just mix and match and build and create and see what you come up with when you’re not simply following instructions or looking at a pattern. This type of project turns out to be incredibly engaging and sometimes pulls in everyone in our family for an hour or two of LEGO building.

Final Thoughts

If you turn a creative eye to the things you already have on hand and the natural creativity and curiosity and energy of your family, you can find nearly infinite things to do during the summer. A summer vacation doesn’t have to be expensive nor does it have to be boring. You likely already have everything you need to fill up a summer with tons of things to do that everyone will enjoy.

Get started now and plan out a few things so that you’re ready for the summer when it comes. Where might you camp? What’s geocaching all about? What places might you be able to tour? What kinds of recreational facilities are available?

Get that information together, combine the ideas above with your own imagination, and jot down a big list of ideas for things to do this summer. It’s a far better alternative than having bored children who beg to go to an expensive amusement park, that’s for sure!

Good luck!

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Wednesday, April 12, 2017

Transforming a Hobby Into ‘Achievement Collecting’ – and How It Can Save You Money

During the latter days of my video game hobby, I used to love spending time after work playing video games on my Playstation 3 and computer games using Steam. These two platforms had one really cool feature in common, one that kept me playing many games far longer than I might have otherwise – achievement collecting.

Achievements in video games and computer games are a simple concept to understand. Essentially, they’re specific goals within the game that aren’t necessarily tied to actually defeating the game. Most of them are centered around exploring every nook and cranny that the game has to offer and often involve finding or doing an extensive set of challenging things.

I found these achievements to be really fun to collect. I distinctly remember spending a lot of time collecting achievements in some games, most memorably Red Dead Redemption and Batman: Arkham Asylum. It was fun to chase down those achievements because I was actually doing something I enjoyed, plus I got this sense of accomplishment out of it.

My interest in playing video games has waned in the ensuing years, but I haven’t forgotten the joy of chasing down achievements. In fact, they form the backbone of my fondest memories of the later years of my video game hobby.

Here’s the thing, though: Achievement collecting doesn’t have to end just because I don’t play video games much any more (aside from getting stomped by my kids at Mario Kart). In fact, achievement collecting can liven up almost any hobby and can actually save you money in terms of your hobby spending.

This is one of those things that’s easiest to comprehend through examples, so let me start off by giving you some examples from some of my own hobbies.

In 2017, I made it my goal to read 52 books. This is essentially an achievement, and that achievement encourages me strongly to spend more time reading. Notice that reading does not mean buying books – it means spending my time with a book in my hands learning something or being carried off into a story. It means actually engaging with my hobby.

I have a long-standing goal to walk at least five trails at every state park in Iowa. I actually keep a list of these parks and trails that I’ve walked, along with photos. This encourages me to plan weekends where I go to state parks with my family and go on the trails with them, which is a great way to spend a weekend doing something. It’s far less expensive than hanging out at a REI store buying stuff that I don’t actually need to fulfill some vision of an outdoor adventure.

I’ve found that I like to collect filled-up journals and notebooks as well as empty fountain pen ink bottles because I’ve used up all of that ink taking notes and journaling. I like using fountain pens for writing, but it can be tempting to get caught up in buying some of the many beautiful inks available, but I came to realize that I was far more proud of collecting things like empty ink bottles and full notebooks because those were easy indications that I’ve actually been doing things with pens and inks, not just collecting them.

I’m much more interested in my daily step count than on a new pair of hiking or walking shoes. I’m much more interested in my batches of homemade sauerkraut or home-brewed beer (both of which I carefully catalog) than I am with the amount of gear that I have for those things. I’m much more interested in my list of “nickels and dimes” (board games I’ve played five or ten times this year) than the actual physical games in my collection.

In other words, I find that I get much more joy and life value out of collecting achievements or physical representations of things I’ve actually done than collecting stuff that represents things undone. An unread book on a bookshelf is just stuff – it has no real meaning for me. A book that I’ve read, whether I actually possess the book or not, has meaning – it represents knowledge that I’ve (hopefully) absorbed into my head.

Understanding that phenomenon actually encourages me to buy less stuff, assuming that I stay focused on the achievements. The actual process of reading a book or adding a fully-read book to my list of completed books doesn’t require me to own the book – I can happily return it to the library at that point – but those processes leave me with far more lasting meaning than actually buying a book and tossing it on my shelf.

Over time, all of my hobbies are slowly transforming from object collecting into achievement collecting, and any stuff that I own is solely oriented toward achievement collecting. I collect books that I’ve read and not that I own. I collect trails that I’ve walked and not hiking gear that I own. I collect notebooks I’ve filled with thoughts and not pens and notebooks that I own that sit unused.

That change has made virtually every hobby more meaningful for me. Rather than just looking at a shelf full of stuff that I’m not using, I’m instead drawn to thinking about the stuff that I’ve actually done and completed and achieved. I don’t have to look at a shelf of mostly unread books and try to convince myself that I’m well-read; I can just look at a list of the books I’ve read recently and remember all of the great stuff I’ve actually read recently and revel in all of the ideas and stories. I don’t have to look at a bunch of unused homebrewing equipment; instead, I can look at some of the bottles I’ve actually made and my big long list of successful recipes.

The focus turns from the collecting and the owning to the doing and the enjoying, in other words.

That transition has actually saved me a ton of money. Basically, I no longer feel that I need more stuff for most of my hobbies. What I need, more than anything, is time for my hobbies, so it’s actually convinced me to be more efficient in other areas in my life so I can block off more hobby time, and when I have more hobby time, I’m more inclined to do things rather than buy things.

There are still some pitfalls along the way, however.

First of all, in realizing how important my leisure time actually is to me, I’ve found that I sometimes really struggle when it’s missing. During really busy weeks when I don’t have any time for actual leisure, I can feel it strongly and it knocks my mood down. It also drastically increases my temptation to spend money on hobby supplies, because buying stuff is a weak substitute for not having time for a hobby you love.

My solution here is to block off time for hobbies and treat it as uninterruptible as possible. I treat my periods of time for hobbies as being practically sacrosanct, with very few things being able to interrupt them. Sunday afternoons are always blocks of hobby times, as are a couple of weeknights and most Saturday afternoons are spent on hobby activities that can be done with the family most weeks. We also have a rule of thirty minutes of daily sustained silent reading which I participate in as an example for the children, but I do it to sustain my passion for reading books, too. Walling off this time ensures that I have regular hobby time, which points me toward achievement collecting and away from spending.

Second, I often use hobby spending to prop up hobbies that are waning for me. I self-identify as a follower of a hobby, but if I find myself naturally winding down my time spent on that hobby because I find other stuff more compelling, I have this deep desire to “make up” for that by buying more stuff. Why? I think it’s because I think “stuff” can be a lure to convince me to actually do things.

Here’s the truth: Passion for a hobby is judged by how much time you put into it and how much more time you want to put into it. If you’re not spending time on a hobby, then you shouldn’t be spending money on a hobby.

What’s my solution? I keep rough track of how much time I spend on my various hobbies and I use that info to calibrate how much I spend on it going forward. I have a monthly hobby spending budget and lately I’ve been intentionally cutting my spending hard on any hobbies that I don’t spend time on. This is actually surprisingly easy to do. It also keeps money in the bank where it belongs and it also makes it easier to actually buy things for the hobbies I spend time on when I actually need them.

Finally, I find hobby related media very valuable, but it also sometimes pushes me toward more purchases. While the hobby media that I read or watch is really helpful in terms of techniques or ideas, it also often pushes me toward purchases that I don’t actually need but am tempted by, things that theoretically could improve my ability to actually achieve things within my hobby but often just amount to a tiny incremental improvement on what I already have.

My solution here is to be very selective in my hobby media. I have cut back significantly on my hobby-related media and instead try to focus my spare moments on getting other things done so that I have more time for practicing my actual hobby. I cut out several hobby publications and subscriptions and now I generally only use it when trying to figure out how to solve a specific problem that crops up by using internet searches. Knowing the latest in hiking gear doesn’t really help me get to the trail on Saturday afternoon, after all.

So, here’s my challenge for you. Look at your hobbies, especially ones that seem to eat a lot of your spending, and ask yourself whether you can start collecting achievements with that hobby instead of stuff. Can you start aiming for games played or games completed rather than games owned? Can you start aiming for books read rather than books owned? Can you start shooting for woodworking projects completed instead of tools owned? Make it your goal to actually complete things within your hobby over the next several months rather than just acquiring more stuff, and then, along the way, assess how you feel about that new direction. If you have a hobby budget, let your time use lead you in terms of how to spend your hobby money, particularly in terms of cutting back on spending in areas that you spend less time.

Good luck, and may your hobby achievements lead you to less spending and more enjoyment!

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Tuesday, April 11, 2017

Seeking “The Best” Versus “Good Enough”

Recently, I had the pleasure of reading Tyler Cowen’s excellent book The Complacent Class: The Self-Defeating Quest for the American Dream. In it, Cowen makes the argument that in achieving the relative stability that America has enjoyed since the 1970s, we’ve become complacent and mostly just seek to preserve that sense of stability, but that the elements that have made America great have come from periods of instability – World War II, for instance, and the cultural upheavals of the 1960s – and thus our efforts to conserve that stability are actually making America less adept at change and innovation, which enables other nations to catch up to and surpass us. He makes a great argument for that idea, and regardless of whether you agree, it’s powerful food for thought.

I’m bringing up The Complacent Class because there was one particular quote that really stood out to me as one that was very meaningful in terms of the ongoing quest for financial stability and independence that many of us find ourselves on. Here it is, found on page 124:

“So many of us now have seen or tried or maybe just read about “the best” that we either learn to be content with the matches we can achieve or we are perpetually discontented.”

So, let’s back up for a second and talk about what he means by “matches.”

Cowen’s argument is that one of the most powerful changes in America over the last thirty years or so is an increase in the breadth of “matches” we can achieve in our lives. Matches, in this sense, refer to any option among an array of options that we might choose for our lives. You make a match when you choose to date someone, for example. You make a match when you select a type of soap to buy.

Over the last twenty to thirty years, our ability to find matches has exploded for a number of reasons. The availability of online shopping is obviously one big factor, but our knowledge and awareness that so many more options even exist is another part of the equation.

There was a time, for example, where the dating options for most people consisted of the people in their town or perhaps in neighboring towns. Most people did not attend college and eventually chose jobs in their local town, so meeting people from far away was difficult. Your overall dating pool was much smaller, so you had far fewer potential romantic “matches.”

There was a time not too long ago when your only options for buying mustard were the two or three options stocked on the shelves of your local grocery store. You might buy one and if you liked it, you’d probably stick to it. Most people weren’t even aware that there were more options out there or, if they were aware, they recognized that the difficulty of acquiring that strange mustard was prohibitively difficult and thus made it a pretty poor “match.”

You can see where this is going. The cultural changes over the last fifty or so years have enabled a rapid expansion of dating pools and also the ability to compare people in your dating pool to people outside of that potential pool (via the media). People no longer feel that they have to choose a mate out of the 100 or so people of their approximate age in their area; the pool is now much larger for almost everyone and nearly infinite for some.

The same is true for mustards. Most grocery stores stock a lot of kinds of mustard now and you can easily find many, many more mustards online. You can get almost any variety of mustard imaginable.

This same phenomenon is true for everything. We simply have far better “matches” available to us in every dimension of our lives due to better access to products and better access to information.

So what’s the problem?

Well, there are a number of them, actually, and they have a huge impact on our financial and professional decision making and outcomes.

The Paradox of Choice

The first problem is described very well in Barry Schwartz’s excellent book The Paradox of Choice; you can get a summary of Schwartz’s point in this excellent short talk by him.

Schwartz argues that when the number of choices available to us for a particular decision is too large, we tend to struggle mightily and often end up making poor choices.

The reason is that when you start increasing the number of choices available to you, it takes more and more mental effort to dig through all of those choices.

Because of all of that additional mental effort, we often begin to rely on simple signals to tell us what the best option is for many decisions, and one of those simple signals that we rely on is price. If you’re looking at a bunch of mustards at the store and you want to get a good mustard, one mental shortcut that many of us use is to eliminate the cheapest ones because they’re theoretically not very good. The expensive ones must be better.

Why do we do this? We need to have something to cut through the options and help us find the best one. The problem is that knowing how to cut through the options with all of the different kinds of decisions we face every day is essentially impossible. It would require a ton of knowledge, far beyond what is reasonable for an average person to understand. A mustard manufacturer or mustard seed farmer might have some great domain knowledge that can help them pick “the best” mustard, but us? Is it really worth the effort learning a lot about mustard to choose the “best” mustard? Probably not.

You can repeat all of this for almost anything in the world – mustard is an example. The same thing is true for ketchup or toilet paper or pickles or dating options and so on.

The most interesting thing is that we often end up feeling that we could have made a better choice and we end up feeling less happy with the option we chose, even though we have so many choices. In all of those unchosen options, there must have been a better one, right? Thus, we regret the option that we chose. We regret that bottle of mustard. Maybe we even regret our spouse.

We also often suffer an escalation of expectation, meaning that if there are two kinds of mustard, we have lower expectations out of whatever one we choose than if we had 100 kinds of mustard to choose from. If you only have two kinds of mustard, it’s unrealistic to think either one is perfect, but if you have 100? Well, then, one of them must be perfect or pretty close to it! (We’ll get back to this in a minute.) It means disappointment and regret and second-guessing are incredibly easy and pleasant surprises are harder and harder to come by. It also means that when you feel that dissatisfaction, you blame yourself because surely it must be your fault that you didn’t make the best choice!

Even worse, people often avoid making larger choices when they’re overwhelmed with options. Schwartz uses a great example of this in the video, pointing out that when more investment choices are offered in a retirement plan, people actually are less likely to participate even if the employer is offering matching funds. This may explain things like declining marriage rates as well.

Here’s the truth: some choice is better than no choice, but there quickly comes a point where more choices are actually a negative rather than a positive. They end up costing us more money and leave us feeling regret.

Does this seem bad? Well, we’re just getting warmed up!

The Perfect Is the Enemy of the Good

One of the biggest problems in all of this is that, even if you find the absolute best mustard in the market, the actual quality difference between that mustard and one of your first options is relatively small.

In other words, it’s pretty easy to find options that are “good enough” – in other words, that are of 90% or 95% quality – but it becomes prohibitively difficult to find the one that’s “perfect” – the 100% option.

It takes just a little effort to get to one of the best options. It takes a ton of additional effort to get to the best option. (Of course, best is however you define it – best bang for the buck, best product quality, etc.)

Yet, as we saw above, this idea that we didn’t quite reach “the best” lingers over our heads, creating dissatisfaction when there otherwise wouldn’t have been any. We put in more and more and more effort for smaller and smaller and smaller benefit, and yet that dissatisfaction that we don’t have quite the best never really goes away.

There’s always better mustard. Or better pens. Or better dating partners. Or better anything.

If the options are few, we can actually evaluate each option and reasonably choose among them, feeling confident that we did choose the best among our options. When the options are many, we can never be quite sure we’ve chosen the “perfect” option

The idea that a “perfect” option is available to us is always the enemy of actually having a “good enough” option. It brings us down, and it gets worse when there are lots of options available to us.

How to Solve the Conflict Between “The Best” and “Good Enough”

So, how do you resolve that conflict? In a world where we have tons of options, how do you resolve that conflict between “the best” option and simply having a “good enough” option? In other words, how do we find happiness in the 90% option?

Here are five strategies for finding happiness in “good enough” rather than despair of possibly coming just short of “the best.”

Reflect

This is the single most valuable tool that everyone has in their arsenal when it comes to being at peace with your purchasing decisions. I find that, again and again, the more I reflect on my purchasing decisions, the better I tend to do with them, even if I’m not choosing the “perfect” option.

What I reflect on is this: how much of life am I missing out on chasing some sort of “perfect” result? My wife isn’t “perfect” and she would say the thing about me, but if I had waited for “perfect,” I would not have an absolutely wonderful marriage.

My retirement investments probably aren’t “perfect,” but if I had waited around for “perfect,” I wouldn’t have much saved for retirement anyway and even the best investment in the world can’t dig you out of the hole that time puts you in.

If I spend a lot of time stewing over the perfect mustard, finally choose one, and then end up deciding that I might have bought an even better one, wouldn’t I have been better off just grabbing a good mustard quickly and enjoying my sandwich without really worrying whether the mustard was optimal? “Really good” mustard can be found quickly and isn’t far off of “perfect” mustard, after all.

If you find that you’re making a decision in life that you regret, reflect on the alternative solutions. Would you really be happy spending that much more time finding a “perfect” solution? Even if you have found a somewhat better solution, is it that much better? And wouldn’t you have missed out on things had you waited around for this “better” solution to come along?

Make a List

Another factor that often plays into that battle between “the best” and “good enough” is that I’m convinced I need to worry about factors that aren’t even really relevant to me until some marketing guru convinces me that I need to worry about it. If you’re trying to make a decision between a bunch of options, just list in your head what factors you actually care about as you’re looking and pick one that checks as many of those boxes as possible, then just walk away.

In other words, boil things down to the features that you care about, look at the options through just that filter, and make a choice accordingly. It’s a lot easier to make a decision based on just a few criteria that you’ve conceived of yourself and you’re far more likely to end up choosing something that you’re happy with.

Stop at Three (or at Absolute Most Five) Viable Options

When we’re looking at a wide variety of options, like when we’re choosing a salad dressing in the store, it’s easy to get lost in the wide array of options. You’ll decide on one, then maybe switch that decision to another one, then you find yourself torn between several options, and even when you pick one, you’re not really happy that you picked a good one.

Do this instead: grab the first three or so options that you see that look good, toss them in your cart, and walk away from the salad dressings. When you’re on the other side of the store, decide which one you actually want among the ones you’ve grabbed, then simply return the other two.

What this does is that it artificially limits your choices down to a small set so that you can make a reasonable choice among the options. You’re not trying to find the best among 100 options, most of which aren’t that good; instead, you’re just choosing among three options that are pretty good.

Seriously, try this – it works really well. When you’re facing a wall of hot sauces or laundry detergent, rather than evaluating fifty options, grab three that seem good and walk away. When you’re far away, choose one among those three and put the other two back. You’ll find that you have a pretty good option that you’re happy with almost every time. You’d be shocked how often I do this when I wind up with a last minute vague item on my grocery list (like “coffee”).

Trust Independent Sources

The reason that we often think that we don’t have the “best” option is because we’ve been informed that someone else has the opinion that we don’t have the best option. We hear some marketer who tells us that some other option is better, or we see some magazine that describes the “perfect” mate that our current partner doesn’t live up to.

The real problem here is that those sources aren’t necessarily trustworthy. They’re often written by marketers or other people whose primary purpose is not to point us toward the best option, but to convince us to buy something. Maybe they’re just not particularly informed about the options that are available.

What really matters are trusted sources. There are only a few sources of information on products that I really, deeply trust. One is Consumer Reports. Another is Cooks Illustrated. When I need a product recommendation, I virtually always find that their “best buy” picks or “bang for the buck” picks are perfect for what I want. Often, I just follow those picks without digging any deeper unless I am deeply concerned about a particular feature.

Find a handful of independent sources that you trust regarding decisions that trouble you and just trust their conclusions. In other words, offload the pressure of a buying decision to them and just follow their suggestions.

Stick with Consistent Choices That Work

If you have a product that you know fulfills your needs well, stick with that product. Rather than being overwhelmed with tons of other options, stick with the one that actually fulfills your needs. Grab that one and move on with life.

Might there someday be a better product of that type? Sure. Here’s the thing, though: leave the work of figuring out whether new products actually are better to those independent sources that you trust. Don’t waste your personal time or energy or money on new options that are at least as likely to be disappointing as they are to be worthwhile. If your trusted source ends up concluding it’s better, go with the new one; otherwise, stick with what works.

This policy serves the purpose of ensuring you always have an item that solves the problem you want it to solve while also making sure you don’t throw money after products that may have uncertain results.

I do this with many regular purchases; I stick with some store brands and some Consumer Reports “best buy” options until either that item isn’t available any more or I happen to read an updated article from CR. That way, I don’t get trapped in the decision process of having to decide if a new option is worthy of a purchase. I quickly grab the item that works and move on with life.

Trim Your Media Consumption

Many of the problems with feeling regret about purchases or desire for higher-end options that don’t really meet your needs comes from media sources. Newspapers, websites, blogs, magazines, television shows – all of them seem to devote significant time to the latest and best and greatest products, encouraging us to not be satisfied with our current choice or the current options available to us. There’s always some new product or some exclusive thing that we must try.

The easiest way to combat that sensation of not being satisfied with your current choice when it meets your current needs and desires is to simply cut back on your consumption of those kinds of media. Trim your intake of newspapers and websites and blogs and magazines and television shows that encourage you to consider new products and chase consumer goods. Instead, devote your time to media sources that aren’t all about the latest and greatest stuff, that don’t fill you with ideas that what you have now isn’t good enough and that you really don’t have the best option.

That news isn’t really informative, because it doesn’t really address the fact that some particular area of your life is already fulfilled pretty well. It just encourages you to want to spend your money on something that the media writer wants you to think is even better, which leaves you with nothing more than dissatisfaction with what you currently have and a sense that you ought to have something more, even when that “something more” might not really be much of an improvement for you after all. It’s that sense of dissatisfaction with your current choice that drives a lot of consumer unhappiness and it also drives people to spend even more on stuff.

Final Thoughts

With the enormous multitude of choices before us, it is very easy to get trapped in the desire to find the best option – and it’s equally easy to get lost in a sense that you haven’t actually found the best option and somehow you failed, especially when you invest significant time and effort into making a choice.

The way around it is to make choices completely on your own terms. Think about it in advance, assess your needs, restrict your actual choices tightly, stick with things that work well, and keep from spending your entertainment time on things that just make you feel bad about your choices.

It’s not a perfect set of solutions, but most of the time, you’ll spend less time dithering on choices and feeling like you’ve made a mistake and more time actually enjoying the “good enough” option that you chose and feeling great about it.

Good luck!

The post Seeking “The Best” Versus “Good Enough” appeared first on The Simple Dollar.

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How to Tell If a Credit Repair Company Is Breaking the Law

By John Ulzheimer and Chad Kusner

Regardless of what you may have read or heard about the process called “credit repair,” it’s legal and consumers do seek the help of credit repair organizations with the goal of correcting and/or improving their credit reports and credit scores. The industry has a checkered past and room to improve their reputation, but legally compliant credit repair companies do exist and do help consumers correct or remove information from their credit reports.

And while the Federal statute called the Credit Repair Organizations Act (CROA) sets tough compliance requirements on the industry, credit repair companies can and do operate fearlessly as long as they’re following the rules. And by doing so they, in turn, hold banks, debt collectors and the credit reporting agencies accountable to consumer protection laws.

One of the easiest ways to identify a company that is violating the CROA, and thus should be avoided, is to get an understanding of how they plan on billing you for their services. The CROA prohibits billing in advance of services being rendered. That means if you’re being asked to pre-pay for their services, the credit repair company is breaking the law.

Compliant credit repair firms charge for their services typically in one of two ways. They either charge for a monthly suite of services only after they have been provided, or in a pay-for-performance structure. With the latter, the client only pays if that company is successful deleting or correcting the disputed credit report data. Each billing format has its pros and cons, and selecting one over the other may be more difficult than imagined. The following will provide insight into the two structures, weighing the pros and cons.

Why Payment Format Is Important

The government entity that is tasked with enforcing the CROA is the Federal Trade Commission (FTC), but the Consumer Financial Protection Bureau (CFPB) can also nail a non-compliant credit repair company. Based on their prior actions, it appears the FTC’s interpretation of compliance with the CROA’s advanced fee payment is as such:

1. The completed services have been provided as outlined within the agreement signed by the consumer, thus payment demand is proper and legal.

2. There has been meaningful improvement to the consumer’s credit report and or credit score, thus payment demand is proper and legal.

3. All the work that will ever be done for the consumer by the credit repair organization has been fully completed, thus payment demand is proper and legal.

If you review the CROA, you’ll notice that the advanced fee language is written somewhat ambiguously, some believe by design, so that bad actors have nowhere to hide from enforcement actions because it could be interpreted very liberally. Therefore, credit repair companies have had to carefully structure their payment models to be uber-compliant.

The bottom line is simple: Avoid any credit repair company that requires upfront payment of any amount for any reason.

Subscription Based Credit Repair Services

Many credit repair companies use a subscription billing model and charge their customers monthly for services rendered during the previous month, or in arrears. Meaning, they bill their clients every 30 days for the previous month’s work.

Typical credit repair subscription rates range from $59 to $129 per month. To comply with the advance fee payment provision of the CROA, the credit repair company must first disclose to their customer in writing what they’re receiving for the monthly payment and, second, be able to demonstrate the services were fully provided during that previous month.

Often companies with this billing structure may charge a higher initial amount called an “initial audit” or “discovery” fee. If the agreements clearly outline this front-loaded variance in billing, it’s typically not considered to be a red flag among credit repair company owners. Typically, there is more work to do – and therefore more expense – on the front end of a credit repair engagement, including customer acquisition and enrollment.

And while this can create sticker shock for a new customer, the contrary (very low fees) should be even more concerning, argue many credit repair company owners. Lower fees and, thus, lower barriers to entry are enticing. Paying $99 instead of $299 can seem like a sound financial decision, but not if you’re getting a substandard service. In that case, even the $99 was poorly spent.

Companies that charge extremely low initial fees are incentivized to keep their clients in their subscriptions as long as possible because, you guessed it, every month there’s a new invoice to be paid. This not only prolongs the time it takes to complete the credit repair process, but it almost guarantees a higher cost to the consumer over time.

The time needed to complete as full a credit report rehabilitation as possible should take between three and seven months. Anything longer than that may require attorney intervention or the filing a complaint with the CFPB.

Pay for Performance, a.k.a. Pay for Delete or PPD

Pay for Performance, also called Pay for Delete or PPD, is a newer pricing model in the credit repair industry. The process entails charging clients only after the credit repair company is successful removing or correcting the information on a client’s credit reports.

At first glance this seems to be a more customer-friendly payment structure, and in some cases that’s true, especially if the likelihood the item will be removed from the customer’s credit report is low.

What is often overlooked, however, is the potential longer-term financial commitment PPD can be. Because the credit repair firm is only charging for their successes, they can be tempted to offset their costs when they’re not successful.

The way this is done is by charging for every item that is corrected and/or deleted from a credit report on each of the three credit bureau reports. For example, say you have a collection on your credit reports, all three of them. If the credit repair company is successful in deleting the collection, they may charge as much as $50 per credit bureau, or up to $150 total. That’s $150 for one collection item that was removed from all three credit reports.

Now consider when the company is successful getting 10 unique items removed from each credit report — not an unrealistic scenario, especially for consumers who have very poor credit. That could cost the consumer $1,500 or more.

When you compare PPD to a subscription-based pricing model, the same results may cost the consumer many times as much. The credit repair company is still rock solid in its compliance with the CROA’s restriction on advance billing, but was its pricing structure the most competitive for the customer?

Final Thoughts

Many credit repair company owners offer both pricing structures and allow their customers to choose which one they like better. But these same owners warn that consumers should not choose a credit repair company simply based on costs. If budget is a concern, you may want to consider working to clean your credit reports on your own, which is completely free except for the investment of time.

If an offer sounds too good to be true, it likely is just that. There is no silver bullet that can clean up your credit reports. It takes time, effort and persistence. Run like the wind from companies that use platitudes like “Credit Problems, No Problem,” or “We erase bad credit, guaranteed,” or “Raise your credit score 200 points in 30 days.”

If you do choose to get professional help, review the details of the services. Weigh the pros and cons of both payment models keeping your budget in mind and, equally important, just how deep your credit challenges run.

Related Articles:

John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. He has written four books on the topic and has been interviewed and quoted thousands of times over the past 10 years. With time spent at Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.

Chad Kusner is a 15-year veteran of the consumer credit industry. He is the owner and CEO of Credit Repair Resources, a CROA-compliant credit repair organization based in Cleveland. He is FICO Pro Certified and a director of the credit repair trade association, NACSO. Kusner has been approved by the Ohio Supreme Court as a Continuing Legal Educator.

The post How to Tell If a Credit Repair Company Is Breaking the Law appeared first on The Simple Dollar.

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