Saturday, February 3, 2018

Inspiration from Brad Stevens, Dolores O’Riordan, Steno Pads, and More

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

1. Jim Rohn on discipline and regret

“We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is the pain of discipline weighs ounces while the pain of regret weighs tons.” – Jim Rohn

Lately, my exercise routine has been far more regular than it has been since … I was in college, maybe? What changed?

For me, the shift was in asking myself a single question each day. I’d see exercise on my to-do list, and I’d ask myself: “This might not be fun, but what will my life be like if I don’t do this and don’t keep up my exercise routine? Do I want that life? How does the misery of that life compare to the misery of a little workout?”

Thinking about exercise in that way is doing wonders for pushing me toward doing it. I joined a local taekwondo class with my family and I think about those questions before every class. I think about it when I practice and train for it at home, too, as I’ve adopted some home bodyweight exercises and kicking drills that supplement the class.

Is the loss in quality of my life really worth the small cost of working out today?

You can put this in almost any context you like in which you’re trying to make a hard change in your life. Is the difficulty of this little choice right now worth the life I’d have if I don’t commit to this choice?

You can apply it to smoking. You can apply it to drinking. You can apply it to uncontrolled spending. You can apply it to studying.

It’s discipline, and it’s really powerful.

2. Lisa Feldman Barrett on how you aren’t at the mercy of your emotions because your brain creates them

From the description:

Can you look at someone’s face and know what they’re feeling? Does everyone experience happiness, sadness and anxiety the same way? What are emotions anyway? For the past 25 years, psychology professor Lisa Feldman Barrett has mapped facial expressions, scanned brains and analyzed hundreds of physiology studies to understand what emotions really are. She shares the results of her exhaustive research — and explains how we may have more control over our emotions than we think.

One big pattern I’ve noticed lately is that science is catching up to a lot of precepts that one finds in ancient philosophies like stoicism and Buddhism. Those philosophies, and the practices around them like self-reflection and meditation, are being shown to be helpful in improving a person’s mental and physical health.

When I watched this video, I couldn’t help but think about stoicism. Stoicism has been around for thousands of years. It’s the idea that it’s okay to feel emotions, but that you should observe them and reflect on them and not necessarily act on them, because acting on them is often a mistake in the moment (think about an angry person raging, or a person splurging on impulse).

For some people, that seems really hard, but it turns out that science is uncovering that our brains really are equipped to do those things if we just cultivate it a little. Being able to keep our mouths shut and our faces and bodies calm in an emotionally charged situation can be incredibly valuable and our bodies and minds already know how to do this.

3. Brad Stevens on little things

“When considering the consequences of not doing the little things, you realize there are no little things.” – Brad Stevens

The important factor isn’t whether something is a “big” thing or a “small” thing, but whether or not something actually matters or doesn’t matter to the thing you’re trying to achieve.

For example, tying your shoes before playing basketball is unquestionably a quick and seemingly minor task, but it actually matters to your ability to play, so it’s not a little thing at all.

Often, we keep practicing life routines that are filled with all kinds of pieces that don’t matter, both big and small, along with some that do matter, also big and small.

Our goal in living a successful life isn’t to “not sweat the small stuff,” but to toss out all of the big stuff and small stuff that actually doesn’t matter in terms of what we want from life, and then give respect and focus to the true things that remain, even if it’s something as simple as tying our shoes.

4. Brain.fm

Brain.fm is a service that provides procedurally generated ambient music that’s intended to amplify a person’s ability to focus, meditate, relax, or sleep by producing music at a rhythm and beat that’s in line with the brain waves that naturally occur in your brain when you focus, meditate, relax, or sleep.

I have been using Brain.fm quite a lot for focusing (while working or reading) and when meditating and I’ve found it makes a tremendous difference. I just turn it on for an hour or two when I sit down to write or to outline posts, or I turn it on for fifteen minutes while just concentrating on the breath, and I find it makes a tremendous difference in the quality of both experiences. I haven’t used it for relaxation (I like to listen to podcasts when relaxing) or sleep (I like silence) yet.

For me, I find that I have to play it fairly loudly for it to really start having a positive effect. Quiet playback seems to have very little positive effect, but if I feel like the room is nearly awash in the sound, it seems to flip some switch in my head.

I recommend giving it a serious shot. Brain.fm provides a nice trial package that you can use for free to see if it works for you. I’ve found that it works tremendously well for me.

5. Seneca on daily review

“I will keep constant watch over myself and – most usefully – will put each day up for review. For this is what makes us evil – that none of us looks back upon our own lives. We reflect upon only that which we are about to do. And yet our plans for the future descend from the past.” – Seneca, Moral Letters, 83.2

I am a strong, strong believer in self-reflection and daily review. I spend as much as ten hours a week in focused self-reflection and review of what I’ve been doing lately – no joke. I do a lot of journaling and consideration of where I am and what I’m doing in my life and it often provides a nice arrow toward where I want to go.

Such practices help you filter through all of the things you’re thinking about doing, all of the things you have done, where they overlap, and what that means for where you should be going. It really helps you to start filling in meaning in all of your future directions.

It’s a bit like wandering through a maze. Stopping and looking around, both forward and backward, will get you to the exit far faster than just running around and quickly making decisions at each turn.

6. Joan Blades and John Gable on your filter bubbles and how to free yourself from them

From the description:

Joan Blades and John Gable want you to make friends with people who vote differently than you do. A pair of political opposites, the two longtime pals know the value of engaging in honest conversations with people you don’t immediately agree with. Join them as they explain how to bridge the gaps in understanding between people on opposite sides of the political spectrum — and create opportunities for mutual listening and consideration (and, maybe, lasting friendships.)

While this video is talking specifically about political bubbles, I find that people use filter bubbles in almost every aspect of their life. We all choose what publications we read about anything and what channels we choose to watch.

Some of us filter out the news. Some of us filter out everything but the news.

Some of us filter out the political talk. Some of us filter out everything but the political talk.

Some of us filter out the sports. Some of us filter out everything but the sports.

It’s not an intentional thing, either; different people see different things and find that different details are worth focusing on and sharing, which may not create a complete picture of anything.

Every time we make a choice like that, we’re choosing to eliminate something that may inform and enrich us. There’s a real cost to that, one that’s paid in the form of making it more difficult to relate to some people.

The best solution I’ve found – and this video seems to concur with – is to have a large repertoire of things we read and watch and turn to different ones regularly. Get your news and commentary from several different places and know that the truth is somewhere in the middle.

Another approach I find useful is to simply have a strong general background on lots of things and don’t worry too much about the latest events. Having that approach means you can carry on meaningful conversations about almost anything and you can simply rely on questions to fill in the latest details, giving the other person in the conversation some opportunity for expertise (which everyone enjoys).

Another absolutely key principle – never attribute to maliciousness that which can be explained by simple human error. People aren’t perfect, and simple human mistakes are often blown up into some kind of malicious conspiracy. Don’t fall into that trap.

7. The humble steno pad

For the last month or so, I have a very simple routine that I follow when I first wake up in the morning. I get up, use the bathroom, drink a little water, do some stretching, pour myself a cup of black coffee, and then sit down with a steno pad for one simple purpose: I write down the three big things I want to achieve today.

Today, for example, my “big three” consist of achieving five “writing checkoffs” (a metric I use to keep my writing going forward at a regular pace), an hour worth of focused organization of my office, and some devoted time spent studying a book I’m struggling with. If I achieve those three things, then it’s a pretty good day.

One of the reasons I like this steno pad is that it’s big enough that I can sketch out ideas if I need to but it’s small enough to fit nicely alongside a book. It’s not perfectly portable, but it’s a very nice size for a lot of things.

I find it’s the best of all worlds for me for planning out my day and what I want to get done. It’s become a valuable part of my routine.

8. Herbert Simon on attention in the information age

“In an information rich world, the wealth of information means a dearth of something else; a scarcity of whatever it is that information consumes. What information consumes is rather obvious; it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention.” – Herbert Simon

Attention and focus are our most valuable commodities today. It is only through attention and focus that we actually achieve things and aren’t just swept aside in a flood of information and distraction and smartphone notifications.

The question really is what do we turn our attention and focus to? What are we doing with what attention and focus we have? Even more than that, are we so distracted by the flood of information that it becomes a struggle to even direct our attention and focus?

The people that keep succeeding and breaking new ground are the ones who have figured out how to focus through this flood of information. To me, this is one of the biggest challenges of modern life, and Herbert Simon figured it out many, many decades ago.

9. The Cranberries – Zombie (acoustic)

Dolores O’Riordan, the lead singer of The Cranberries, passed away at an untimely early age in January. The music of The Cranberries was a big part of my life for several years and their music still sometimes echoes through the rooms of our home.

I listened to their albums No Need to Argue and Everyone Else Is Doing It, So Why Can’t We? over and over during a particularly difficult period in my life, when I was really trying to figure out where the road of my life was headed.

There was something about her voice that grabbed me. She managed to mix toughness and vulnerability with a wonderful Irish accent.

I will miss her voice. It is a light that will never go out because it’s captured in recordings and in videos like the one above.

10. Warren Buffett on habit

“Chains of habit are too light to be felt, until they are too heavy to be broken.” – Warren Buffett

The path to a better life is in building chains of habit that reflect good behaviors and our best ideals, as well as in finding and breaking chains of habit that reflect us at our worst.

Of course, breaking the chains of bad habits is really, really hard. When you’ve adopted something as a routine and it’s ground into your life, even if that habit is really self-destructive, it can be so incredibly hard to break.

One of the most powerful things you can do in life is to never, ever start down the path of establishing a self-destructive routine. Never even open the door to it.

11. Heather Lanier on how “good” and “bad” are incomplete stories we tell

From the description:

Heather Lanier’s daughter Fiona has Wolf-Hirschhorn syndrome, a genetic condition that results in developmental delays — but that doesn’t make her tragic, angelic or any of the other stereotypes about kids like her. In this talk about the beautiful, complicated, joyful and hard journey of raising a rare girl, Lanier questions our assumptions about what makes a life “good” or “bad,” challenging us to stop fixating on solutions for whatever we deem not normal, and instead to take life as it comes.

When I was in school, children with developmental delays were usually entirely separated from the main population of the school. I understand the reasoning behind why that was done, but on the whole, I feel that the separation did a disservice to everyone involved.

Today, that type of boundary is much lower. In my children’s schools, there is much more interaction between all children of the same age, regardless of the developmental delays of some of the children. This is a net benefit for all of them, as it gives all students a broader understanding of the differences between us.

Part of the benefit, of course, is that teacher training in that regard is much better today than it was back then. Many teachers today know how to handle issues that will come up in such situations, whereas in the past, such ideas were never really covered at all in teacher training outside of very specific curriculums.

This video made me think deeply about those changes in education and helped me navigate some difficult conversations recently with my own children. Any video that has come to the forefront of my thinking that much in recent days deserves to be shared here.

12. John C. Maxwell on daily routine

“You’ll never change your life until you change something you do daily. The secret of your success is found in your daily routine.” – John C. Maxwell

One of my big focuses of the year so far has been really hammering down a set of good daily habits and a better daily routine. I want a typical day to be one that ends up, at least in part, forging me into a better person than before.

That’s not easy. Changing habits is hard, especially when the change involves switching to something that, at first, seems more mentally or physically strenuous, even if that difference goes away over time.

Overall, I’m trying to develop an ordinary day to the point where I can easily repeat it but that over time it creates a better me, like flowing water smoothing out a pebble.

My goal for 2018 is to trust the process, something I’m going to write more about soon.

The post Inspiration from Brad Stevens, Dolores O’Riordan, Steno Pads, and More appeared first on The Simple Dollar.

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Friday, February 2, 2018

Knowing When to Splurge – and When You’ll Regret It

The other day, I stopped by a used bookstore and I splurged a little. I walked out with several big thick books under my arm, books on topics that I’m excited to read about but, honestly, I’m kind of intimidated by those books at the same time. When I look at them – they’re stacked up in my office right now – I get a mix of excitement and a bit of trepidation, like, “Wow, that is going to be a deep dive.”

I spent some money I hadn’t planned on spending, and that’s really okay. A good, sound financial life isn’t about denying yourself all splurges and all pleasures. It’s about finding balance.

It’s about knowing when to splurge and knowing when you’ll regret it.

Don’t get me wrong at all. Splurging can be a wonderful thing. It allows you to enjoy something extra that’s beyond the normal routine of your life, and it is often that little change in routine that makes life exciting and vibrant and interesting and well worth living.

At the same time, splurging can also be a very regretful thing. If you splurge on something forgettable, it essentially becomes lost money. If you splurge on something that was unfulfilling or leaves you without much joy, it was something you spent far too much on. That money could have gone for something really worthwhile in your life instead. Even worse, if you splurge using money that was really needed for something else, you create havoc in your life in exchange for what’s typically a really small short term positive feeling.

In order to combat that regret, many people mentally erase bad splurges. They forget about that “dud” purchase. They forget about that beverage that was purchased and consumed and the cup tossed in the recycling bin. That $3 they spent on a forgotten drink or that $10 on that forgotten item in the heat of the moment is just swept aside, only to be seen again if you happen to glance at that single line in a bank statement or a credit card bill.

The best way to ensure that your splurges are good splurges and not wasteful splurges that you’ll either completely forget or truly regret is to have a few key principles that guide your splurges. Having a few simple principles to completely trust and follow in those splurging moments makes it much easier to make a choice that you won’t regret, one that enables you to enjoy great splurges but also have a strong financial life. Here are ones that I follow.

A good splurge is one that you’ve thought about for a while and still strongly desire. The thing to remember here is that there’s a difference between a splurge and spontaneity. You can decide, for example, that you’re about due to splurge on a book or splurge on a new blouse or splurge on a couple new craft beer bombers, but that doesn’t mean you rush out to the store and buy it. Instead, you can just let the anticipation grow and then do it spontaneously when the time is right.

Part of this consideration, of course, is that I make sure that it does fit into my budget. That stop at the used bookstore was accounted for within my spending plans for the month.

I often decide that I’m ready for a splurge in some aspect of my life, but I actually don’t give into that desire right away. Instead, I wait until the opportunity presents itself spontaneously (or, sometimes, if I nudge it a little, because a considered splurge is sometimes a really great way to suggest something to do in a social moment).

For example, I had decided a while ago that I was going to visit a used bookstore and look for a few particular books there. I decided that it was cool to spend a certain amount there ($25, to be exact). However, I didn’t rush right out to do it. I let the opportunity come along serendipitously. That way, when it did occur, I could splurge on those books with zero guilt.

It’s worth noting that sometimes the desire for a splurge will fade away. That’s okay – in fact, that’s a pretty good thing, because it means that the target of that splurge was something that wasn’t really important to you after all. Deciding on a splurge in your own time and waiting until the right time to let it happen spontaneously is a great way to filter out momentary urges.

An impulsive splurge in the heat of the moment is often a bad splurge, as it’s often quickly forgotten. If an opportunity to splurge jumps up at me out of nowhere, it’s usually a bad idea and I’m better off saying “no” to it. That’s because impulsive splurges are almost always bad splurges.

I’ll use the example of visiting a coffee shop. If I walk into a store with a coffee shop kiosk and decide, in that moment, to buy a coffee, it’s probably a bad splurge. I hadn’t thought about it at all up to that moment, so it’s not really a lasting desire, just a whim. Instead, if I’d thought about getting a good cup of coffee somewhere for the last few days and then I spy a coffee kiosk, then it’s a different story and I can splurge without concern.

In general, it’s best to figure out your desires outside of the heat of the moment. If you find yourself suddenly faced with a new temptation, you’re better off backing out. Reflect on it later and if the desire persists, then jump on board the next time it comes up.

Splurging on experiences is generally preferable to splurging on possessions. The reason is simple: if you buy something and take it home with you, you end up having to deal with that physical item. It has to go somewhere. If you don’t end up using it very much, it probably winds up in a closet or in a pantry and you have to deal with it again later.

Experiences, on the other hand, don’t go home with you except in your heart and mind (and maybe in the form of a few pictures on your phone). They don’t create clutter. They don’t require living space.

Thus, I generally find it’s better to splurge on experiences rather than things. I have a higher threshold in terms of how much consideration I need to give to a physical purchase than to how much consideration I should give to an experience. I’m more likely to splurge on a dinner date, for example, than a new book.

(Given this principle, it’s kind of funny considering that I opened this article with a description of splurging on huge books. I do plan on taking them back to that used bookstore when I’m done with them, but it’s still illustrative that this is a principle, not a hard and fast rule.)

Splurging on consumables is generally a bad idea unless it’s an exceptional situation or it’s a planned special occasion; otherwise, it almost always ends up in the “forgotten” category. What I’m talking about here are small consumables – a soda from a vending machine or a coffee at the coffee kiosk or a candy bar. Those types of consumables, usually considered and bought in just a moment’s notice and consumed almost as quickly, are easily forgotten, but their expense remains as a negative stamp on your financial state. They’re almost always best avoided unless you’ve given them some advance consideration, as noted above. Try really, really hard to avoid making such consumables into a routine that you don’t actively think about, because those expenses really add up.

For bigger consumables, like a dinner date, they’re usually fine because they’ve been considered and they’re usually going to be memorable for other reasons, such as the company or the exceptional quality of the food or some other aspect of the experience.

A great example: when I go to a restaurant, I almost always order just water as my beverage unless I’ve decided in advance that I’m going to enjoy a craft beer with the meal. If I’ve not been hankering for a special beverage, I don’t order it as a splurge.

Try to think of ways to translate this splurge temptation into something free or incredibly low cost. If you’ve thought about and somewhat decided on a particular splurge in the near future, don’t be afraid to reconsider that splurge through the lens of whether or not there’s a free or very low cost alternative option.

For example, I’ll often get all keyed up about reading a particular book. I’ll want to buy it and read it and reflect on it and maybe even read it again. It’s on my mind and I’m on the verge of talking myself into it. Before I do that, though, does it hurt to see if that book is available from the library? I’ve found that by simply checking to see if the book is available at the library, I keep myself from spending the money.

Consider other options for fulfilling your splurge and you might just find that you get the joy you’re looking for without the cost.

Whatever you do, remember this: Splurges are a good thing; it’s just that poorly considered splurges can end up being a big regret. Avoid the regret by putting a few principles to work and you’ll be in a happier place.

Related Articles:

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Thursday, February 1, 2018

A Guide to Learning How to Program in Your Spare Time – for Free!

In this modern information-based economy, where most workers use some type of computer or communication device as a major part of their job and so much of the economy is based on using and sharing information, there’s no doubt that knowing how to write computer programs is an incredibly valuable skill.

The average computer programmer makes around $80,000 a year, and that includes only people who work as employees. It doesn’t include the many, many freelance programmers who work as consultants or who start their own small software businesses. Not only that, the supply of good computer programmers far outstrips demand – if you can write code reasonably well, you’ll probably find work.

Of course, there is often a perception that computer programming is extremely difficult and something that requires a special kind of mindset and a lot of specialized instruction to be able to do. It’s often viewed as this special kind of arcana that mere ordinary mortals can never figure out.

I don’t agree with that premise at all. I was writing computer programs on my own when I was an elementary-aged child, and my own seven-year-old figured out on his own how to write a simple joke-telling program.

It’s not hard. It just takes time and practice and patience and a willingness to learn and try new things and (often) feel pretty dumb as you’re learning.

The nice thing is that the internet was largely built by people who are really passionate about this stuff and because of that there’s an incredible abundance of free resources out there for people interested in learning how to program. In fact, most of those resources were created by people who realized that one of the best ways to teach yourself something is to actually practice teaching it or writing tutorials about it.

You absolutely can learn almost everything one would learn in a full bachelors degree program in programming or computer science at a university online and for free. It won’t come with the actual paper degree, of course, but there are many opportunities in the computer programming field to get jobs by demonstrating skill without necessarily having the papers.

Plus, I find it a really interesting thing to explore purely as a hobby. Computer programming practically forces you to think in an orderly fashion, breaking things down into simpler and smaller steps until each step is trivial. That’s a great skill to have no matter what field you’re in.

Let’s get started with a key question that people almost always have when they start down that path.

The Difference Between Computer Science and Programming

This section’s important if you’re interested in learning how to program, so that you don’t find yourself skipping over stuff that seems irrelevant or simple now but becomes really really important later on.

Computer science and computer programming are two distinctly different fields with some overlapping skills and a lot of, shall we say, deep relationships between them. At many universities, courses on computer programming are lumped into a general “computer science” department along with courses in which a computer isn’t needed and is never touched, which is often a confusing thing. What’s the connection? What’s the difference? Why would a computer programmer care about computer science at all?

The key between understanding the difference between the two is knowing what an algorithm is. Computer science is the study of algorithms and how to create them. Computer programming is the practice of implementing algorithms so that a computer can use them to solve a problem.

So, what’s an algorithm? An algorithm is an unambiguous explanation of how to solve a certain kind of problem. If you follow the steps of an algorithm, you will be able to solve the problem the algorithm is designed to solve.

For example, let’s say you had a stack of 20 cards, each with a number on them. One algorithm for sorting those cards might be to grab the first card in the stack, then go through the rest of the stack one at a time, comparing each card to that first card. If the number of the new card is lower, swap the places of the two cards. Once you’re through the stack, the one card you have in hand is the lowest number. Then, repeat this algorithm for the remaining 19 to get the second lowest, and so on.

One thing you might do when you hear that solution is think to yourself, “Huh… there’s a better way to do that.” There are many faster ways to sort cards than this. Maybe you go through them one way, moving the biggest to the back, and then go back the other way, moving the smallest to the front, and go back and forth until it’s sorted, for example. That kind of thinking is computer science. On the other hand, maybe you’ll think, “Okay, how do I tell a computer how to do this?” That’s computer programming.

Computer science is all about the study of algorithms. How do you make an algorithm to solve a problem? How do you know which of several algorithms is the best? How can you describe an algorithm in a clear way? How can you organize information in a way so that new, fast algorithms are possible? Computer science uses a fair amount of math and often ends up sketching out a lot of things and drawing diagrams to help solve problems.

Computer programming is about taking an algorithm that’s already in place and turning it into code that a computer can understand. How do you do this efficiently? What languages can you use? How do you explain an algorithm to different types of computers?

The two elements go together hand in hand. Generally, programmers usually have a little bit of rudimentary computer science knowledge, and computer science practitioners can program a little. People who excel in either field often have a healthy dose of both.

If you’re teaching yourself, I recommend having some of both, because in the real world, if you’re writing a computer program, you’re probably trying to solve a problem for which there isn’t an algorithm spelled out for you.

Why is this important? The big reason is that sometimes computer science material can feel really irrelevant to programming and you don’t directly see the connection. Be patient. There’s almost always a connection, one that will help you be a better programmer (at least in the sense of figuring out how to solve smaller challenges on your own).

Decide Why You Want to Program

So, why do you want to learn how to program?

Perhaps it’s simply a matter of personal curiosity and personal interest. You are a naturally curious person. This is something you don’t know about. You’d like to know more and, who knows, maybe this is a skill you can pick up if you fall in love with it. If that’s you, I’d suggest dipping your toes in with an introductory option that keeps it fun and shows you a nice survey of things. From there, you can dive in as deep as you want in whatever direction excites you.

On the other hand, what if you’re considering this as a career or maybe you have a great idea and want to create it? I’d suggest starting with a real curriculum that will build you into a solid programmer with some computer science to help you create simple algorithms as you code. It’s worth noting that many programmers often find work without having a degree. Often, programming job applicants are given a “first pass” via a programming test that demonstrates their skills, and a degree is just a signpost that indicates that they went a certain way with their education. Quite often, a multidisciplined person – someone who knows how to program but also has a background in something else – is extra valuable!

Dip Your Toes In the Water

Dipping your toes in the water is a great way to start if you’re doing this for personal interest or you have some thoughts about a career but no background whatsoever and you’re not sure if it’s right for you.

My absolute favorite place for the first steps toward programming is Free Code Camp. It’s a nonprofit set up to teach people the basics of programming, with some advanced tasks actually being used to aid nonprofits that have specific programming needs. For you, it’s a very nice free online introduction to programming.

Move through the tutorials available on that site. Learn what a few of the most common languages are – HTML/CSS, JS, Python, and others – and what they’re used for. Write a few simple programs right in your web browser. It’s about as easy as can be.

If you find that interesting and want more freedom to explore and learn more, I suggest going through some introductory materials on setting up and using the Python programming language on your own computer.

Why Python? It’s very easy to set up. There’s tons of material available for it. You can write and then run programs immediately to see if they work. It’s in common use in many, many businesses.

My favorite introductory material is Learn Python the Hard Way, which is available for free online or in book form. Having said that, there are a lot of great books on Python that will teach you the language – just check out the computer science or programming section at your local library and grab one.

Whenever you get stuck, slow down. Go to Google and start searching for answers. Don’t hesitate to look for a beginner’s programming forum or a beginner’s Python forum, join the forum, and ask your question. As long as you’re polite and respectful of the fact that people are volunteering their time to help you and don’t act easily frustrated, people will be glad to help you out with your questions.

Diving In Deeper

Once you have those basics down, if you find that you still want to keep going, there are really two roads you can follow that have a lot of overlap.

One is the “I have an idea and I want to learn how to make it” path. With this path, I recommend letting the project be the leader. I would start with a well-rounded introduction to computer science online course just so you have the basics, and possibly an online course about data structures, and then simply start chasing information related to your project. Take classes and read tutorials as they’re relevant to what you’re making and learn as you go.

If you don’t have a specific idea in mind and just want to become a well-rounded programmer, I suggest taking free online classes that add up to at least the core curriculum of a computer science and/or programming degree, and ideally follow that with a full online computer science and programming curriculum.

I can personally vouch for these six (well, sort of seven, because one is split into two parts) online classes, which make up a good introductory sequence that matches up pretty well with the core curriculum in most computer science and programming departments. I highly recommend doing the above Python material first so that you have Python on your own computer and know how to use it, then use Python to solve the problems in these classes.

All of the below classes are free. You can just hop on board and start. I do recommend, however, that if you’re going to bother with this sequence, take them seriously, but remember you’re doing this for your own enrichment and not for a grade. Take notes, go through each one at your own speed, don’t hesitate to pause lectures to think about something or look something up.

A quick note about online classes: you’ll get far more value out of them if you take them slowly, take notes, pause and do more investigation when something isn’t clear, and do the exercises along the way. It’ll take far more time, but you’ll walk away with far more understanding of what’s going on. If you blitz through the early stuff, the later stuff will simply be inscrutable.

Let’s dig in.

Introduction to Computer Science and Programming (from MIT’s free OpenCourseWare) is probably the best all around one-shot introduction to computer science and programming I’ve found. This is where I would encourage almost everyone to start once they’ve done a few basic computer programming tutorials. It meshes together computer science and programming into one course, everything in there works really well with Python on your own computer, and it introduces you to enough topics with enough depth that you’ll know where you want to go next from here depending on your personal interests and goals.

Mathematics for Computer Science (from MIT’s free OpenCourseWare) might seem like a strange second course to point out – after all, this is basically a math course and has little to do with writing computer code. However, this is a key course to have if you’re going to be designing your own solutions to problems rather than just translating other people’s solutions into code. This really centers around how to evaluate algorithms and figure out which one is the best for your needs – all of the math knowledge you need to do that is in this course.

Learning How to Program Part One and Part Two (from the University of Toronto via Coursera), on the other hand, is focused directly on programming – the art of translating algorithms into code. This pair of courses teaches a lot of valuable principles such as how to write clean and easy to read code, how to break down ideas into such small bits that translating it into computer code becomes easy, and how to handle it when things go awry. This is a very practical toolkit for the skill of translating a discrete idea into code form so that it works and others can read it.

Introduction to Algorithms (from MIT’s free OpenCourseWare) is a good next step regardless of whether you’re more focused on programming or computer science. This free course focuses on algorithms used to solve a lot of commonly known problems, such as sorting a long list of items or finding the best route on a map. It deals both with how to compare them and a little on how to design them (very “computer science”-y) as well as how to implement them (very “computer programming”-y).

Theory of Computation (from Stonehill College via Youtube) is something of a bridge between the math taught in that earlier mathematics for computer science course and the real world, as this applies a lot of that math to actually evaluating algorithms. Again, this is really valuable stuff if you want to deeply understand how to take a real world problem and translate it into an algorithm that a computer can solve efficiently, but it won’t directly lead to better programming skills. It leads to better problem solving skills, or at least better skills in evaluating which solution is best.

Advanced Data Structures (from MIT’s free OpenCourseWare) is an additional course that I strongly recommend anyone who is into computer programming investigate deeply. This course is all about designing data structures, which in simple terms means knowing how to translate everything you would need to know about something in the real world in order to solve a problem related to that thing into a structure that a computer can understand and an algorithm can be applied to. For most large programming projects, getting the data structures right from the very beginning is one of the biggest challenges you’ll face, and this course is about getting them right.

If you want to keep going on beyond this curriculum, I highly recommend checking out this suggested intensive online learning program that matches a bachelor’s degree in computer science and programming. All of the classes listed there are free and most of them are still publicly available.

Final Thoughts

Computer programming (along with enough pieces of computer science to really be a strong programmer) is something that most people can pick up if they have a genuine interest and take it slowly. It can appear overwhelmingly complicated if you look at the deep end of the pool without knowing how to swim, but if you dip in your toes and then get into the shallow end slowly and then learn how to swim step by step, it won’t look so complicated.

The best part is that everything you need to go from someone standing outside the pool to being a great programmer is available online for free. It just takes time, interest, and a willingness to learn.

Good luck!

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How Bucket Budgeting Can Turbocharge Your Motivation to Save

In what has become a depressingly consistent tradition, a recent Bankrate survey revealed that 61% of Americans would not be able to cover a $1,000 unplanned expense.

Unemployment is currently quite low by historical standards, so the problem is not that people can’t earn money. It’s more likely that, for a variety of reasons, most people are not saving enough of each paycheck to establish an adequate emergency fund. That being the case, using a budget to kickstart good savings habits is more important than ever.

There are any number of good budgeting strategies out there. Zero sum budgeting and proportional budgeting are two great choices, but there are less intimidating alternatives as well.

I want to cover a particularly interesting strategy that doesn’t get much attention. It’s called “Bucket Budgeting,” and it can be a powerful tool for those of us who just can’t seem to help ourselves from raiding our savings for non-essential purchases or borrowing from one category to spend in another.

How to Implement Bucket Budgeting

Bucket budgeting is all about using multiple sub-accounts to set aside money for specific savings goals. So if you haven’t already, you first have to set up an online banking account. This can be done with your traditional brick-and-mortar bank, or with a separate online bank.

I recommend using an online bank that has a reputation for making it easy to set up multiple savings accounts. While you can set up multiple accounts with a brick and mortar bank, in my experience it’s generally inconvenient and there will be more fees involved.

I like Ally Bank for this purpose, but there are plenty of good options. As a bonus, many online banks offer much higher interest rates than traditional banks.

Whichever route you go, you’ll be dividing up all your savings into separate, clearly defined categories. The goal is to make sure that each dollar has a purpose.

For instance, after depositing a $1,200 check, you might leave $200 in your checking account and then allocate the rest of the money into the following sub-accounts:

  • Emergency fund: $200
  • Upcoming gas and electric bills: $150
  • Wedding fund: $200
  • New roof: $250
  • Vacation: $150
  • Play money: $50

If you get your paychecks via direct deposit, you can make it so that your money is automatically divided up into different sub-accounts with each deposit. If you deposit your checks manually at an ATM, it’s a little trickier to automate, but not much. All you have to do is log in to your account and set up a recurring transfer. For instance, if you get paid on the first of every month, you could set up a transfer for the third of every month that allocates specific amounts of money to your different sub-accounts.

(Note: When depositing a physical check into an ATM, you have to wait for the check to clear and then move the money around manually via your online account.)

With banks like Ally, there’s no limit to the number of sub-accounts you can make. If you want to get hyper-specific, go for it. There’s no shame in having an account called “Fund to Get My Tires Rotated in Six Months Because I Know It Needs to Get Done But I Always Forget.”

How Bucket Budgeting Can Help

As American Bankers Association communications director Carol Kaplan told Ally, “Research has shown that when people create accounts with a purpose, they are more likely to reach their goals.” Psychologically, it just makes sense. Which account are you more likely to raid if you feel the spontaneous urge to buy a new video game?

a) generic savings account with $3,000 in it
b) a sub-account with $200 in it all about rotating your tires

I’m betting on option A. By separating your funds, you should be less likely to spend frivolously and more likely to say on track with your goals.

As a highly visual person, this strategy appeals to me. I’d be very hesitant to touch my car repairs fund for anything other than its intended purpose. Just before pulling the money out, I think I would be able to imagine myself stranded on the side of the road, furious that I bought “Madden 2019” instead of getting my tires rotated.

I also like the idea of bucket budgeting for its ability to motivate. Saving without a goal in mind can be a slog. It reminds me of how many people see routine, day-to-day exercise as drudgery. But, once these same people get specific about their goals, the results can be dramatic. Look no further than how much effort people put into getting in shape for their wedding if you want to see how motivating a concrete goal can be.

The same principles apply to saving money. For instance, if you’ve always dreamed of taking a trip to New Zealand, it would be very motivating to watch your “New Zealand Vacation Fund” grow every month. I’d wager that would be far more motivating and effective than seeing a generic savings fund grow.

All in all, bucket budgeting gives you a sense of control over many different aspects of your life, and it can give you peace of mind in knowing that all the essentials are taken care of.

Saving as a Team

Another neat way to do bucket budgeting is as part of a group. There are online banks, such as SmartyPig, that allow multiple people to contribute to the same savings accounts. All the sub-accounts are viewable by everyone in the group, and you can even set goals.

So, if you and your roommates want to do a cross country road trip next year, you could create a fund called “Road Trip” and set the goal at $1,000, to be completed the following year. If you really wanted to be methodical about it, you could each set up automatic withdrawals from your paycheck so that a portion of it goes towards the fund.

This feature could also be very useful for couples who choose to keep separate finances. If a couple is saving up for a wedding, vacation, or a down payment on a house, they can both separately log in to SmartyPig to deposit money into that particular fund at any time.

The idea is that by automating and subdividing, you’re taking temptation and willpower off the table, two things that generally get people into trouble when it comes to money management.

Summing Up

I like to think of bucket budgeting as the money management version of the popular organization book “The Life Changing Magic of Tidying Up.” In that book, the goal is to make sure that every item you own has a place and a purpose. When you know where everything is and why it’s there, life is more efficient and easier to manage.

Bucket budgeting allows you to do the same thing with your money, making it a great way for you to get your financial life in order.

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Wednesday, January 31, 2018

The “Cash on Hand” Dilemma: How Much Is Too Much?

The idea of having “cash under the mattress” has a lot of appeal to many people. After all, cash is king and having some cash around in a quick pinch can solve a lot of problems.

An older friend of mine used to have a coffee can full of cash that he kept hidden away somewhere in his house. I’m not sure where he kept it, but I saw it produced a time or two and I couldn’t help but notice that it contained a large quantity of cash. He used it to take advantage of opportunities and to take care of things in emergencies.

A professor at the college I attended kept a false bookend in his office. It had a removable bottom and he kept about $1,500 in cash in there in $100 bills – I kid you not. He trusted me enough once to dig into it right in front of me and give me some cash to help me out in a desperate moment, an act that I still appreciate to this day because of the unquestioning generosity behind it. (I was almost completely broke and couldn’t afford the book for his class; I showed up to his first two office hours and he produce a $100 bill for me to buy the class textbook with. That’s just extraordinary generosity.)

Simply having a pool of cash around to tap into at a moment’s notice when a great opportunity appears or when disaster strikes is very worthwhile. Cash is king, after all – it solves problems.

Still, it’s hard to ignore the downside of a practice like this. Cash is untraceable, and once it’s gone, it’s gone. If you lose that cash, it’s gone. If someone steals it from you, it’s gone. If your home or apartment or car is broken into and the cash is taken, it’s gone. If your home or apartment or car burns to the ground, the money is gone.

So, there’s some risk and reward when it comes to holding onto cash. The risk is that risk of losing the money and, theoretically, the small amount of financial gain that might come from investing it elsewhere. The reward is the flexibility and opportunity that comes from having cash on hand at a moment’s notice.

Where’s the tipping point between those factors?

For me, the tipping point is enough cash to make sure my family is fine for three days during a complete natural disaster. I want enough cash to ensure that I can get my family at least 100 miles from home, feed them for three days, and house them for three days and nights. I might tap that cash for other purposes in the heat of the moment, but I replenish back up to that point.

I decided that I wanted to have enough cash available to simply handle this kind of major emergency with no questions asked. I simply produce the cash and we’re on our way.

So, how much money does that represent? I tried to imagine what would happen if there was a giant earthquake along a fault line that knocked out phone and internet and cellular traffic – no cell phones, no credit cards, and lots of destruction and fires. What do I do? I drive away from there and use cash for lodging until services start coming back up.

The exact number, then, depends on personal calculations – where you live, what things cost near your home, and so on.

In my area, and using my own calculations, that amount is $500. I keep that exact amount in cash – 5 $100 bills – hidden away at a point on my property that I can easily access in a pinch if need be.

What about you? What should your amount be? Spend some time assessing the type of emergencies you would want to be able to address with that money and what that emergency would cost you. Everyone has a different scenario that presents worry, so consider what that scenario is for you. What scenario presents you with enough concern that you would want to have cash in your house to cover it, even given the relatively small risk of possibly losing the cash to disaster?

The reality is that the tipping point comes down to your own perception of risk. Cash stored in your home for an emergency is, more than anything else, a tool that will bring peace of mind and help you sleep at night. It presents a solution to a scenario that pops up in your head and presents concern and worry into your life, and by having that solution in hand, that source of concern and worry – and perhaps other concerns and worries – melt away.

Cash stowed away in your home should be a net reliever of stress. If you find that stowed away cash is creating more stress in your life than it alleviates, then you should consider not having that much cash in your home and evaluate different plans for solving those emergencies or taking advantage of those opportunities.

Where exactly does one store that money, though? I would suggest avoiding many of the common places listed online for storing money. Burglars know about those places and will often check the obvious ones. Don’t keep it in a portable safe. Don’t keep it under your mattress or in a sock drawer. Don’t stick the bills between pages of the family bible.

Instead, think of a place in your home that you’ll remember but isn’t immediately visible and wouldn’t likely be targeted in a burglary and put it there. Mundane is usually better than super-creative. A home invader simply does not have the time to investigate every mundane and non-obvious place in your home.

If you’re still not sure, think of a few mundane places in your home, then search Google for places to stash cash in your home and use none of those places. Cross any overlapping places off of your list and use only other ideas that you may have.

Should you bury it? I consider literally burying money in a box or a glass jar to be overkill. While it is extremely unlikely to ever be burgled by someone who doesn’t already know the exact location and it’s unlikely to be damaged in a fire, it does run the risk of being completely forgotten and it takes some time and a digging tool to be able to access that money. This may be a scenario that appeals to you, but I want to have that money in a place that I can access with just a moment or two’s notice without needing any tools to access it.

What about gold or other precious items? The problem with such items is that they’re generally not items that you can directly trade for the goods and services that you want. If you’re in a situation where you’re running down the street with a gold coin hoping to swap it for a loaf of bread or a ride out of town, you’re likely already facing hardships far beyond that which you haven’t anticipated yet. Outside of those extremely rare at best and impossible at worst apocalyptic scenarios, gold and precious metals and rare coins and other such things are strictly worse to have around than cash because you have to find someone who will give you cash in exchange for them and usually at a very bad exchange rate if you’re doing it on the spur of the moment.

Remember, the purpose of having a supply of cash on hand in your home is to have easy access to it as a medium of exchange in an emergency. Items that can’t easily be exchanged in most situations are items that you shouldn’t have on hand.

Small bills or large bills? It’s likely that you already have some change and some small bills – $1s and $5s – in your possession most of the time anyway, so there’s no real need to have an emergency store of them. Plus, the more bills you have stowed away, the more space they take up and thus the easier they are to discover. Stick with larger bills – $20s at a minimum, and preferably larger ones. Yes, you may have some difficulty with change in some narrow situations if you ever have to use it, but having a smaller number of larger bills minimizes the risk of discovery.

What about keeping everything in cash? Some people have deep concerns about the banking system and want to keep all of their money in cash. My response to that is that if the banking system is ever in such complete collapse in the United States that you can no longer access any funds in your accounts and FDIC insurance has failed, there’s an extremely high likelihood that dollars are now worthless. That scenario is extremely unlikely in any case. Thus, having your money in cash is a pretty unnecessary safety risk; unless there are additional factors, you should be using banks or financial institutions to keep your money more secure than you can keep it at home.

So, let’s summarize. I think it’s a good idea to have a relatively small amount of cash on hand to handle emergencies that genuinely worry you, but not enough so that your concern about the cash is greater than the emergency you’re trying to cover. Your goal should be to minimize worry and stress by finding the right balancing point for you. If you do have money at home, store it in a mundane but uncommon place, a spot where burglars won’t immediately check; if you’re unsure, search Google for lists of common hiding places for money and avoid those entirely. Don’t keep all of your money in cash unless you have an exceptionally good reason to do so!

Good luck.

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Understanding This Marketing Trick Can Help You Avoid Impulse Buys

A few times per year, Adidas releases a new version of rapper Kanye West’s signature shoe, the Yeezy. Whenever this happens, sneaker fans everywhere lose their collective minds. Social media blows up, people wait in line for hours to secure a pair, and soon after the release, the shoes might command thousands of dollars on the secondary market (yes, there is a secondary market for brightly colored athletic slip-ons).

To the layperson, the Yeezys look like any old shoe. They don’t give you the ability to run faster or jump higher, nor do they unlock the secret of happiness.

So, what exactly is going on here? The answer is that Adidas does a brilliant job of leveraging an age-old sales tactic: scarcity marketing.

What Is Scarcity Marketing?

Scarcity marketing is a broad term that covers any instance in which a seller highlights the fact that an item is either rare, expiring, or in high demand. It’s a way to encourage a customer to make a purchase in a hurry, and usually at a premium price.

Scarcity marketing can involve capping how much of an item is produced, marking items down for a limited time, putting an expiry date on an offer, adding a timer to a checkout page on a website, and many other variations along those lines.

All of these tactics are based on manipulating the supply of – and, to some extent, even the demand for – a given item. All marketers know Economics 101: When supply is low and demand is high, prices go up.

Also, when something feels exclusive, hype builds, further driving up the perceived value. That’s part of the reason the latest iPhone or the hottest video game system always seems to have a production shortage just when people want them most.

To be clear, I’m not implying that these tactics are devious or underhanded. There are quality goods out there that can’t be mass-produced, and they should be priced accordingly. My aim is simply to make you aware of this specific and highly effective way that companies try to get you to part with your hard-earned money.

The Psychology of Scarcity Marketing

Scarcity marketing is effective in part because it plays on our innate sense of loss aversion. Most of us hate to lose something more than we like to win, a point famously proven by Nobel winning psychologists Amos Tversky and Daniel Kahneman.

I recently found out just how powerful loss aversion can be when my wife and I were searching for a home to rent on Airbnb.

After perusing the site for a while, we located a house we liked and started the process of checking out. Once we reached the final page of the checkout process, we paused, considering whether to put down a hefty deposit or keep searching for a better rental.

That’s when we noticed a pop-up message: “22 other people are currently viewing this property for these same dates.”

Before that pop-up, I could take the house or leave it. After I saw that message? I had to have it. I mean, this was a busy tourist season we were talking about. What if we didn’t get the place, and we ended up at a dingy motel on the outskirts of town?

If 22 other people were on the same page as me, one of them could book at any second! Then, I’d lose! The fact that so many others were interested in the property made me think it had to be a truly excellent house.

I entered my credit card information as fast as possible, happy to be “beating” those other folks.

I hope you can see the lunacy at play. One second, I didn’t even know there was competition. The next, I felt like I was in a race with 22 strangers to secure the vacation spot of my dreams.

While not everyone is hyper-competitive, I think the example elucidates just how effective a simple marketing tactic can be.

This same principle comes into play when buying just about anything online. Amazon will tell me that an old novel I’m interested in “only has two copies available!” When I book flights, Delta is constantly reminding me that the plane “only has three seats left!”

These little nudges create a subtle anxiety, pushing me to act just a bit more hastily then I might otherwise. As Harvard economist Sendhil Mullainathan says, “That’s [the] heart of the scarcity trap. You are so focused on the urgent that the important gets waylaid.”

Finally, perceived or real scarcity is a contributing factor in getting people to make ill-advised bets on financial bubbles.

Anyone with an interest in investing has witnessed the white-knuckle ride that bitcoin has been on lately. The once-obscure cryptocurrency rose in price by 1,800% last year.

A big factor in the rise was scarcity. Because only a finite amount of bitcoin can ever be made, some people treat it like digital gold. New money poured into bitcoin because people wanted to stake their claim on the scarce resource. The folks selling cryptocurrency-related services were more than happy to play up the scarcity aspect in order to whip people into a buying frenzy.

By all means, invest in bitCoin if you feel it has inherent value as the currency of the future. But investing just because you want a piece of something scarce makes little sense. My old Teenage Mutant Ninja Turtles sitting in my mom’s attic are scarce, but that does not make them valuable.

How to Stay Strong

In order to get better at making poised, rational, spending decisions, I highly recommend reading Trent’s post, “10 Questions to Ask Yourself Before Any Purchase.” In it, he lays out a strategy that is pretty much tailor-made to combat scarcity marketing.

The key is to carefully consider each and every purchase, as opposed to acting on impulse. Asking yourself questions such as “Have I looked for lower-cost alternatives?” and “Can I delay this purchase?” forces you to calm down and look at the situation in a more measured way.

If you run through a checklist of questions before making a purchase, you’ll be less likely to make a poor decision. Waiting 30 days can also be an effective way to sort fleeting urges from stuff you truly want.

Budgeting can also be very helpful. Just pick a budgeting style that works best for you and stick to it. If you’re diligent about buying only what you need or have saved up to afford, it’ll be easier to resist the siren call of the next great thing.

Summing Up

Scarcity marketing is real, and it’s powerful. But if we recognize its existence and do our best to make deliberate decisions when we encounter it, we can save some serious money.

The next time I feel pressured to buy an airline ticket because of seat availability, I will take the time to remind myself that there are 87,000 flights taking off in the U.S. every day. If I can’t find one that meets my specifications, I’m probably not trying hard enough.

Related Articles:

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Tuesday, January 30, 2018

The Power of the 30 Day Challenge: Ten Challenges That Can Improve Your Finances This Month

One of my favorite practices to undertake in my life is a thirty day challenge. It’s something I do almost every month in an effort to regularly find better ways of living, whether it’s a more efficient way to work or a healthier habit in my daily routine or something else entirely. The goal of a thirty day challenge is to give a trial run to a new idea to see whether or not it makes my life better.

So, how exactly does it work? A thirty day challenge is a commitment to a new personal habit or routine for thirty days. The purpose of that challenge is to simply find out if this interesting new habit or routine is something that really works well in your life.

For me personally, I usually start a new thirty day habit or two each month. For the month of January, my thirty day habit was to practice Three Morning Pages, which basically means that as a part of my morning routine, I simply sit down with a pen and brain dump onto paper until three pages are full. I found this to be a really amazing practice and plan to keep it up.

Usually, if I find that a thirty day challenge really clicks, I only try one new challenge in the coming month and try to keep the previous one going. So, for February, I’m only going to start one new thirty day challenge and keep the morning pages going.

Why? Thirty days is not quite long enough to burn a new routine in as a new personal habit or routine that you do naturally. The science varies on this and it does vary from person to person, but a new habit takes somewhere around 80 to 120 days to feel completely natural. However, thirty days is long enough to figure out whether this is a habit that you want to continue and it’s long enough to start seeing at least some benefits (or drawbacks) from that new habit or routine.

That’s why, after a really successful thirty day challenge, I generally try to spend the next two or three months trying to nail it into a completely natural routine that I’ll just continue as a normal part of my life, and that means generally starting only one new challenge for the next month. If I’m not trying to continue anything, I might start two new thirty day challenges.

As you may nave noticed, thirty days also matches up really well with a calendar month (except for February – I usually “cheat” one day on each end of February). You can start one at the start of a calendar month and it’s over before the calendar turns to the next page. If you’re a Christian who practices a discipline during Lent or practice another faith-based discipline, a thirty day challenge can also work during that period of reflection.

Over the years, I’ve used thirty day challenges as experiments in my life. They’re trial runs to see if a particular idea actually works (for me) and to see whether or not it’s a new pattern I have time for or want to keep up with. I tried being vegetarian for a thirty day challenge and it stuck; I later tried being vegan for thirty days and it didn’t stick. I jogged/ran a 5K each day for thirty days and eventually decided that daily running is not something that my knees wanted to sustain. I’ve read a book for two hours a day for thirty days, a practice that I largely kept (I block off an hour and a half for daily book reading, seriously; I find that time by basically not watching any television.) I tried drinking a morning cup of black coffee each day for thirty days, and that one stuck.

I could fill up page after page with different thirty day challenges I’ve tried. Most faded away, but a few stuck in my life and, in my opinion, changed things for the better.

Of course, personal finance is absolutely loaded with great ideas for thirty day challenges. There are many, many lifestyle changes and routine alterations which save money that you can try on for thirty days to see if they fit for you. When I first started making big financial changes in my own life, I used thirty day challenges to make them click into place and several of them became the norm.

Here are ten great 30 day challenges for personal finance, including all the ones that locked into place in my own life.

Challenge #1 – For 30 days, make all of your meals at home.

The idea here is to take advantage of the fact that cooking at home is far less expensive than eating at a restaurant or consuming delivery food or takeout. It’s just cheaper to make food yourself.

The thing that keeps people from jumping on board with this is that cooking is often perceived as difficult and a big time gobbler. Often, people eat prepared food because they’re either intimidated by cooking or intimidated by the cleanup.

Committing to a thirty day challenge related to preparing your own food lets you experience the savings while, at the same time, honing your cooking and cleanup skills so that the threshold seems far smaller. It’s about saving money, sure, but it’s also about building skills in the kitchen and learning that it’s not really that hard to prepare several dishes that you quite like.

My own passion for cooking at home was really launched with a thirty day challenge very similar to this one. The simple act of going into the kitchen and doing basic food preparation tasks over and over again over the course of a long string of days not only showed me how much money it could save me (literally hundreds of dollars a month), but also showed me it wasn’t as hard as I expected it to be. We now rarely eat anything that wasn’t prepared in our own kitchen.

Challenge #2 – For 30 days, buy no name brand items.

The goal here is to introduce yourself to the store brand version of a lot of the products you buy so that you can evaluate for yourself how well they work for your needs. By committing to avoiding name brand items, you’re going to be filling your cart with a lot of store brands instead.

I virtually guarantee you that if you take on this challenge, you’ll realize that a lot of name brands are basically identical to the store brand version and that you’re paying a pretty healthy premium for nothing more than a name written on a box, which is just silly.

I would suggest two minor alterations to this challenge. First, obviously, if you need an item and the only version available is a name brand, you can still buy the name brand. Second, if you are making a major planned purchase, do the appropriate research and make the right long-term purchase. Remember that this challenge pertains to ordinary purchases like groceries and household supplies, not buying a generic television or HVAC system.

We buy store brand versions of most things – the only big notable exception that comes to mind is garbage bags, because that’s something we’re particularly picky about. You’ll probably find one or two things yourself (which may or may not include garbage bags) where the store brand just didn’t live up to expectations, but for everything else, you’ve now witnessed that the store brand fulfills your needs for less money, so there’s no reason not to stick with it!

Challenge #3 – For 30 days, don’t use a credit card for any purchases.

Credit cards are something of a double-edged sword. They make purchasing way more convenient which saves time and money management hassle, but at the same time, they make purchasing way more convenient, which means it is far easier to make spending mistakes and buy things you can’t afford or have forgotten about.

By taking on a thirty day challenge to financially survive without a credit card (and, ideally, without debit cards, too), you’re forcing yourself to be more conscious of every financial transaction that you make. Your transactions will be done entirely by check or by cash, which means you have to actually reflect on the money leaving your account with each purchase rather than simply swiping a card and forgetting about it.

This is an inconvenience, to be sure, but it forces you to start thinking about your unconscious spending habits. You’ll see again and again throughout this month how you take a credit card for granted and how easy it is for you to use it to just buy things that you almost immediately forget about, which is a very bad financial habit to get into. Breaking that connection for a while forces you to look your bad habits in the eye.

During the month, it’s almost a guarantee that you’ll spend less money, but you’ll still be able to buy the things you really care about. What will really matter is how often you notice that you’re not able to just buy things out of reflex, and that will help you to start really rethinking your overall spending choices. This is, surprisingly, a very reflective thirty day challenge.

Challenge #4 – For 30 days, don’t turn on the television.

This might seem like a surprising thirty day challenge for financial reasons, but bear with me. Doing this challenge has a number of financial benefits.

For one, it can show you that you can live a happy and healthy life without television as a part of it. The default state of just watching some television in the evening is eliminated, so you have to find other things to do. At first, that might seem tricky, but after a surprisingly small number of evenings, you start finding lots of things to do. My thirty day television challenge led me to reading a lot more, giving a few hobbies some more undivided attention, and going to sleep earlier and getting better rest, all of which improved my quality of life.

For another, not watching television virtually guarantees a lower exposure to advertising. Most television programming is buoyed by advertisements. Almost all television programming features product placement within the shows, whether it’s a sponsorship of a segment, a character using a product in an obvious fashion, or a breathless “news” story selling a product to you. The less exposure you have to those things, the less desire you have for a constant stream of more stuff and more experiences in your life.

For yet another, many Americans have expensive cable or satellite packages. If you demonstrate to yourself that you’re fine without such a package, then what’s the purpose in keeping that package? You can always reduce your television use at home to an over-the-air antenna that picks up local stations for free and to going to social events for big sporting events or other big moments.

Eliminating television from your life can be a really big benefit in a lot of ways, and a thirty day challenge is a perfect way to give it a trial run.

Challenge #5 – For 30 days, sell or get rid of one item from your closet each day.

Many of us have closets in our home that are filled to the brim with stuff – half forgotten or completely forgotten purchases and gifts that were placed in there with the best of intentions of getting around to it someday, but the fact is that someday isn’t coming. They’re just not things that are a part of your daily life.

The end result for many people is that they have shelves and racks in their closet full of things that they’ve barely used and are likely never going to use, put back there with good intention but a lack of time and opportunity.

All of that stuff gobbles up storage space in your home. All of the items stored in there are things that someone else might actually put to some kind of productive use. Perhaps even more important, all of the items stored in there have some amount of secondhand value, which means you can turn them into money in your pocket or charitable gifts for a deduction on your taxes or simply give them to someone because it will lift up their life.

For thirty days, dig into your closet and pull out one item each day to sell or to give away. If you’re going to sell it, head over to Craigslist or a local Facebook group or eBay or Amazon Marketplace and put up a listing. If you’re going to give it away, figure out a friend or a charity that could really use it and unload it there.

The goal is to remove thirty things from your life, whether it’s articles of clothing or books or games or something else entirely. Not only will it clear out some space in your home, it’ll also clear out a bit of space in your psyche while also producing a bit of money or a bit of goodwill.

Challenge #6 – For 30 days, keep your thermostat 5 degrees cooler than normal.

This is a great challenge during the winter months; for the summer months, shoot for keeping your thermostat five degrees above normal.

In either case, the goal here is to keep your air conditioning or your furnace from running nearly as much for a month, which will save a lot on seasonal heating and cooling costs. It’s going to put money straight in your pocket.

However, beyond that direct change, it’s also going to be an opportunity to push yourself to find little strategies for making those new heating and cooling settings work for you.

In the winter, you might want to try things like wearing a sweatshirt and thick socks around the house or running the ceiling fans in a direction so that they pull air upwards rather than blowing it downwards. In the summer, you might try opening the windows and wearing minimal clothing inside and making sure the ceiling fans are all blowing downwards. There are lots of strategies for both seasons to make the temperature more tolerable.

Even if you end up deciding, at the end of the challenge, that a particular temperature is too extreme, you’ll probably find that your original setting is probably unnecessary, too, and you’ll end up at a happy point somewhere in the middle – something that you now feel completely comfortable with that also results in lower heating and cooling bills.

Challenge #7 – For 30 days, make your morning coffee at home and take it with you in a travel mug.

This is surprisingly easy to do, even if you don’t have a coffee maker at home. (If you do, obviously, just brew a couple of cups or a pot before you leave the house and fill up a travel mug to go.)

If you don’t have a coffee pot, don’t sweat it – just get a simple cold brew coffee maker like this one and start making it in your fridge with ease. All you do is put some coffee grinds in the filtered portion, fill it up with water, and let it sit overnight. The coffee’s ready to go in the morning and you just heat it up in the microwave as you wish.

You can try a bunch of different additives and sweeteners to get it just how you like it each morning. Trust me, the cost of buying a few bottles of sweetener and a bag of ground coffee is far less over the course of a month than the cost of buying coffee every day at the coffee shop.

If you can find a mix that you like, then let it become a permanent replacement. The ongoing cost of making your own coffee at home versus buying a big cup at a coffee shop every morning isn’t even comparable – you will save money doing it yourself assuming you’re aiming for something comparable. Plus, you may just find a mix that you like even better than what’s sold at the coffee shop.

Challenge #8 – For 30 days, don’t purchase any unnecessary possessions.

Over the course of thirty days, don’t buy anything that’s not something you need for basic living. Buy the basic food you need, buy store brand household items as needed, and cover your bills. Beyond that, make no extra expenditures for hobbies or interests or anything else. Lock it down.

Obviously, this will save a lot of money, but won’t it be miserable? Surprisingly, it really isn’t that miserable at all. Knowing that it will end makes it far more palatable.

Even better, along the way, you’ll almost always discover some interest or passion that you’ve overlooked lately, something that you really love that you’ve whittled out of your life because of the convenience of spending money.

When I first did this challenge, I really rediscovered hiking and bicycling. I spent a lot of time going on some really great nature walks in my area, hiking into some beautiful backcountry, and going on a few amazing bicycle rides along Iowa’s many great bicycle trails. It really reminded me how much I loved those things, especially nature walks and hikes, and I’ve made them a much larger part of my life ever since.

What will you discover? You won’t know until you try this challenge and see what unfolds in your life when you commit to not spending any unnecessary money for thirty days. At the very least, you’ll save some significant money during the challenge, and there’s a good chance you’ll discover or rediscover something wonderful that fills a place in your life after the challenge is long over with.

Challenge #9 – For 30 days, brainstorm each day ten gift ideas you could make for a person in your life.

This is an unusual challenge. How could you possibly interpret this as a financially wise move?

It’s simple. By the end of the challenge, you should ideally have a list of ten good ideas for everyone in your life that you ever have to buy gifts for – relatives, friends, coworkers, everyone.

Now that you have those lists, you now have ideas for all upcoming gift occasions with a ton of lead time between now and then. This means you can start searching for those very items to find huge bargains on them.

Let’s say you have ten ideas for someone you always exchange gifts with each Christmas. She loves sweaters, so at an end-of-winter sale you find an amazing sweater that’s her size at a huge discount. Boom! You buy it and stow it away somewhere for Christmas.

You think your nephew would love a good pair of binoculars, so instead of buying one at high prices near his birthday or at Christmas, you start subtly shopping around now for them. Thanks to tools like CamelCamelCamel, you can just sit around and wait for a great price on a few models, maybe choosing one with a normal price just a bit above your price range but one that will save you a lot when it’s on sale. Your $50 gift turns into a $75 pair of binoculars that you bought for $25 because you had so much lead time – an amazing gift and money in your pocket.

That’s the advantage of preparing gift lists like this, and forcing yourself to brainstorm now outside of the auspices of the season gives you tons and tons of lead time.

Challenge #10 – For 30 days, track every single dime you spend.

Keep a little pocket notebook with you and every time you spend even a penny, you write it down in that notebook for thirty full days. Everything. If you spend a dollar in a vending machine, write it down. If you swipe your credit card to buy a sandwich, write it down. Write everything down. Stick receipts in there for every swipe you make – grocery receipts, gas receipts, everything.

What does this do? First of all, it will give you just a moment’s pause with every purchase and will nudge you just a little against silly and unnecessary ones. That’s a valuable nudge to have in your life.

The second benefit is a bigger one, though. At the end of the month, you can take all of that info – along with credit card and bank statements to back it up and fill in blanks – and group all of those purchases together however you like.

You can – and should – parse grocery receipts and separate things into sensible categories, like necessary food and frivolous food, necessary household items and frivolous household items. Do this for everything. Make as many categories as you can, but try to make ones that separate needs from wants and impulses.

Then, when you’ve separated everything, total each grouping and see where your money went.

The thing to remember here is that it’s not a problem that you have some frivolous expenses, but the sheer amount that’s the problem. If you’re shocked by the number, you should be, and you should use that experience as a driver for shaping your future spending habits.

Final Thoughts

Thirty day challenges can mold your financial habits – and your other life habits – in countless different ways. A simple month devoted to a new way of doing things can create profound and lasting change in your life.

With most challenges, the worst possible outcome is that you realize that something didn’t fit for you but you have an interesting story to tell about it, and you probably made a minor positive change in some area of your life. It only gets better from there.

Start trying a thirty day challenge in the coming month. You might be surprised at what you find.

Good luck!

The post The Power of the 30 Day Challenge: Ten Challenges That Can Improve Your Finances This Month appeared first on The Simple Dollar.

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What Can Debt Collectors Do If You Don’t Pay Them? (A Lot)

This is an attempt to collect a debt and any information obtained with be used for that purpose.” If you’ve ever read or heard this phrase, you’ve likely been contacted by a third-party debt collector.

Debt collectors are strictly regulated at both the federal and state level. They’re not allowed to just do anything they want to pressure you into paying your debts. The Fair Debt Collection Practices Act (FDCPA) contains a list of rules that debt collectors must follow whenever they attempt to collect a defaulted debt.

In fact, the statement at the beginning of this article is a disclosure that the FDCPA requires debt collectors to make the first time they contact you. It’s informally referred to as the “mini Miranda.”

While the FDCPA and several other state and federal laws do exist to protect you from unfair collection practices, there is still a long and scary list of actions that a debt collector can legally take against you if you default on a debt. If you fail to pay, a debt collector is completely within its rights to do any of the following.

A Debt Collector Can Report to the Credit Bureaus

One of the most common actions that a debt collector may take when you fail to pay is to report your collection account to the three major credit bureaus. When a collection account is added to your credit reports, the consequences can be serious. Collection accounts can remain on your credit reports for up to seven years from the date of default of the original account.

And, it’s possible a collection can lower your credit scores. When your credit is damaged by collection accounts, this can also cause quite a few troublesome side effects, such as:

  • Denial of loan and credit card applications
  • Higher interest rates if you are approved for financing
  • Difficulty getting hired if an employer performs a credit check
  • Higher insurance premiums

A Debt Collector Can Call and Write You

Collection agents are hired and trained to collect debts. Calling and writing to you are two of the primary methods they will use to try to persuade you to pay.

Believe it or not, debt collectors can even call your friends and family (to locate you only), and may call you at work unless you inform them that you’re not allowed to receive calls at your place of employment.

If you’re on the receiving end of these collection calls and letters, the experience can be downright stressful. Unfortunately, until you pay your debt, you can count on the string of collection calls and letters to continue.

The FDCPA does prohibit debt collectors from contacting you before 8 a.m. or after 9 p.m., and it even gives you the right to request (in writing) that the debt collector stop contacting you altogether. However, be aware that if you take away a debt collector’s right to contact you, then the only recourse you may be leaving them is a lawsuit.

A Debt Collector Can Sue You… and Maybe More

Some of the scariest things that a debt collector can do occur when the courts get involved. When you ignore a debt collector, they may resort to a lawsuit in an attempt to collect on your defaulted debt.

If the debt collector sues you and wins the lawsuit, or you fail to respond thus losing by default, the court will enter a judgment against you. Depending upon the state where you reside, a judgment might also open up the following possibilities:

  • Wage garnishment
  • Tax refund garnishment
  • Bank account levies

The moral of the story is this: If you default on a debt and a debt collector attempts to collect it, then it’s in your best interest to work with them rather than ignore them. Offer a smaller amount as a settlement, and then pay it and move on with your life.

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.

The post What Can Debt Collectors Do If You Don’t Pay Them? (A Lot) appeared first on The Simple Dollar.

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Monday, January 29, 2018

Questions About Rice Cookers, Government Shutdown, Toys R Us, Lasagna and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Handling increase in income
2. Comparing pre-tax and post-tax contributions
3. Putting a windfall into stocks
4. Filing jointly or separately?
5. Retirement savings in up market
6. Low end rice cooker recommendation
7. Tired of fear, uncertainty & doubt
8. Cheap version good enough?
9. Going out of business sale?
10. Training my replacement at work
11. Oven ready lasagna noodles
12. Government shutdown panic

One of the most important things that I’ve found for my own work is the use of ambient noise and ambient music to help me focus on what I’m doing. It’s really amazing how much of a difference that it makes in terms of keeping me focused.

I’ve become so used to using ambient noise and music over the last few years that I began to actually doubt how much of an impact that it had, so as an experiment, I went for a week without using it. What I found was that I felt like I was working at half speed on every intellectual or creative task I was doing, from reading and learning to writing and brainstorming and outlining. I got about 40% less work done over the course of an entire week from working in silence or listening to pop music or podcasts versus listening to ambient noise or ambient music. Seriously. I measured it by finished word count, potential ideas produced, articles read, and a few other ways that I track things. I just worked at a much slower pace without it.

I use two different tools for ambient noise and music, and I alternate between the two to mix it up. For ambient noise, I just turn on this Youtube video, which consists of ten hours of the audio of an icebreaker ship. When I want ambient music, I use Brain.fm, which I also sometimes use while meditating, too.

I hope these resources help you out when you’re trying to study or do creative work! They certainly help me out!

On with this week’s questions!

Q1: Handling increase in income

With the implementation of the new tax law, between my husband and I we are bringing home an extra $200/month. Woo hoo! We both have WI pension plans. I have a pension from the state of MN as well, a 403b which I currently contribute 3%. I plan on taking my state raise this year (4% increase) and applying it all towards my 403b so I will be contributing 7% total. My husband is planning on opening a deferred comp plan within the next month as well. We have no credit card debt. We have a mortgage, 2 car loans ( one is almost paid off), and about $13,000 in student loans. We are 35 and have one kid and no plans for more children. Should we take this extra money and contribute more for retirement or use it pay down debt?
– Dana

If you have any high interest debt, I’d pay that off first and foremost.

Once that’s out of the way, I would sit down and think about what your plans are and how stable your life is right now. Are your jobs strong and stable? Are you spending less than you earn even as you pay down those remaining debts? If so, I’d put it into retirement.

If you’re struggling to make ends meet as it is, then I’d lean more toward using that money to get rid of a few of the debts for now. Treat them as extra debt payments and aim for the one with the highest interest rate.

Q2: Comparing pre-tax and post-tax contributions

Hey Trent, was hoping to get your opinion on my way of looking at retirement savings percentages. I believe that the most common montra out there now is to save at least 10-15% of your income towards retirement. If you are using a Traditional 401K or IRA that is a fairly simple calculation because it’s based on pre-tax dollars. So essentially if you make $50K per years, then 10% towards a Traditional account would be $5K. But my question is what if you are contributing to a Roth IRA or 401K where you are using after-tax dollars to fund the account. Do you look at your contributions as a percent of your gross salary like you do with a Traditional account or do you look at your contributions based on actual taxable/take home dollars? Same $50K salary with 20% taxes removed means take home pay is $40K. I’m maxing out a Roth with $5500 a year. Am I contributing 11% based on gross or am I contributing 14% based on after-tax?
– Jim

In general, the safe way to calculate this is to use gross income and gross contributions. You’ve already paid the taxes on Roth contributions and won’t have to pay them later, so that is, in effect, retirement savings as well.

However, that means you’re looking at ALL contributions through the filter of gross income. This means that you calculate it as gross income, but you also count the taxes you paid on any after-tax contributions you paid. So, you’d add the $5,500 to the 401(k) contributions plus the income tax you paid on that $5,500.

Again, all of this is just for guidance. If you’re at 14% one way or 11% another way, you’re fine. I think the goal should be that you’re saving at least 10% no matter how you calculate it and you’re doing that.

Q3: Putting a windfall into stocks

Normally, we put money into our Vanguard account (all stock index) on paydays when we have extra to deposit, regardless of what the market is doing. However, we happen to have a pretty large lump sum to put in right now (money set aside for something it no longer needs to be set aside for), and I’m thinking about waiting until the inevitable recession after all of these constant record highs the last few years.
I’m normally a pretty anti-“play the market” guy, for many of the same reasons you reiterate frequently, but in this case it makes sense to me because this isn’t money I’m going to be taking out and putting in constantly, it’s going to be staying in for the long term; I won’t be worried about hitting right on a true minimum, I just feel a bit odd dumping this much in at once when I can be about 99.9% sure the market will fall noticeably past this point in the future. I don’t necessarily need to wait until it hits a true minimum anyway, Normal bi-weekly/monthly paycheck deposits will continue to dollar-cost-average by going in immediately as normal. Thoughts?

– Donald

I think the absolute first thing you should do is sit down and decide what your goal is with this money. What are you intending to do with it?

If this is purely a “when something comes along” type of fund, it should be in something very low risk, because that “something” could come along tomorrow.

If you have another kind of goal that you’re thinking of, whether it’s retirement or something else, you should invest according to how far out it is. If it’s more than ten years out, you should put it in stocks no matter how the stock market is doing.

If your goal is less than ten years out but not in the super near future, then I’d probably still keep it in something pretty secure, but there’s an argument to be made here about splitting it up a little between safe investments and aggressive ones.

To summarize, figure out what you’re going to be doing with it first. If you’re certain that it’s for something that’s more than ten years out, put it in the market regardless of what it’s doing. If you’re very unsure or using for something that’s less than ten years out, keep it in something safe.

Q4: Filing jointly or separately?

My husband and I were married in September 2017. How do we figure out if we should file our taxes this year as married filing separately or married? Also how do we both go about updating our W-4 withholding, considering each other as dependents?
– Janelle

Without a full picture of your finances, I can’t give you a good answer. What I can tell you to do is either get a good software package for calculating your taxes – my personal preference is TurboTax, but most well-known packages are fine – and let it figure it out for you.

The reason for a software package is that it will automatically do the math on both methods of filing and tell you the right way to do it that’s both legal and saves you the most money, which is the way you want to file.

If you don’t fully trust a tax software package, then you should take your taxes to a tax preparer. Doing them by hand is very time consuming, especially when you’re probably going to want to prepare it both ways to see which has the best results.

Q5: Retirement savings in up market

I retired in 2010 with a nice healthy severance package and about $400K in my 401(k) plan. I was 63 then and 70 now. I have lived off the severance package and proceeds from home sale since then without touching the 401(k) and left it almost entirely in stocks. I was hoping to live out my life off of the savings account and still have 5 years more or so.

Right now I don’t know what to do. My 401(k) is approaching $1 million. I spend about $30K per year and I have about $145K in savings. My 401(k) is very aggressively invested almost all stocks. I am 70 years old. Should I make my 401(k) less aggressive or leave it there?

I am a widow with one child who is just wonderful and I want to leave all assets to him, his wife, and their kids.
– Maryanne

My thinking is that any portion of your 401(k) that you think you may need in the next ten years should be in something conservative, and everything beyond that should be in something aggressive. Assume you’re living forever.

So, what should you do? If I were you, I would move about $150K of the 401(k) into something much safer (that’s five years of living expenses, plus the five years you have in savings, adding up to ten total years of living expenses in something safe), like bonds or cash, and let the rest sit. Each year, move about a year’s worth of living expenses from aggressive investments into something safer. Social Security will definitely help here, but I’m not 100% sure what kinds of benefits you receive from it, so I’m ignoring it. You’re probably safe moving a little less into conservative investments, but this plan will keep you quite safe.

Ignore what the market is doing. The market will go up sometimes and it will go down sometimes. It is very difficult to tell where it is going in the future, especially in a timeframe longer than ten years.

I’m assuming, of course, that any and all dividends from your aggressive investments are being rolled right into more of those investments. I’d leave that in place, too.

You will have to live to an absurdly old age for this plan to ever run dry unless the US economy completely falls apart in an unprecedented way. My belief is that the best thing you can do for your son is to make sure you are never a financial burden to him and his family, and this plan should essentially insure that.

Q6: Low end rice cooker recommendation

I have been following your recent suggestions and watching the local Goodwill and SA for a rice cooker but I haven’t found one yet. I love eating rice but rarely make it because it’s not convenient in my life but a rice cooker would really help with that. I have a $50 Amazon gift card I received for Christmas and have decided to just buy a new one. What do you recommend in that price range?
– Kathleen

So, confession here: we are lucky enough to have an amazing Zojirushi rice cooker, one that does an incredible job on rice of all kinds and oatmeal and we highly recommend, but it is significantly outside of your budget. It’s a few years old and I can’t find an exact match for it on Amazon (it appears to be an older model). Before that, we literally used a Salvation Army rice cooker – I think it was a Panasonic.

Since I don’t have specific experience with rice cookers in your range, I went and looked at a few of the resources that I trust regarding such things – Consumer Reports and Cooks Illustrated. I checked out some of their recommended models, particularly ones they both liked, and sought one that comes in below $50.

My recommendation, then, is the Aroma Housewares ARC-914SBD 8-cup rice cooker. It seems to get good reviews all around and is a nice size for a single person or even a small family. Plus, you’ll still have $20 on that Amazon gift card!

Q7: Tired of fear, uncertainty & doubt

I am getting really tired of reading articles about people panicking because the stock market is “too high.” It’s always the same thing! It’s been going up for X years and that’s just too long! And the advice is either just stay the course or ridiculous panic! I think it’s all politically motivated anyway. Please don’t include questions like this in your mailbag.
– Jerry

Jerry, the reality is that a lot of the mailbag questions I get right now have to do with how high the stock market is. I actually filter out quite a lot of these types of questions because they are kind of repetitious, but if I don’t have one in my last mailbag or two, I’ll get a good half-dozen questions about it in the ensuing week. I try to answer what people ask.

Besides, I think the current stock market is a great illustration of the concern that many people have about investing in the stock market. It’s a scary place. It’s a place where you can ride a run of several years of 15% gains only to see the bottom suddenly fall out like what happened in 2008. That’s scary to a lot of people.

I don’t advocate for market timing, but I do advocate that people not put their money into the stock market if they can’t emotionally handle that kind of a drop and if their investment isn’t a long term investment. A person in their thirties should absolutely have a lot of their retirement in the stock market because it’s a long term investment, for example, but a person in their sixties, particularly a person who is skittish, might not want to do the same depending on their specific situation.

In other words, the decision about whether to invest in stocks shouldn’t have anything to do with the current market, but with the timeframe of your investment and your personal risk tolerance (because poor risk tolerance can lead right to locking in a bunch of losses). This is a moment in time where that point can really be hammered home, and a lot of people are thinking about it.

Q8: Cheap version good enough?

When do you know if the cheap version of something is “good enough”? A friend had a horror story recently about how their cheap baking dish exploded in the oven ruining dinner and making for a big cleanup. That wouldn’t have happened with a good baking dish. But if you buy everything high-end you go bankrupt. How do you know what to do?
– Olivia

For me, if it’s something inexpensive with a relatively low risk involved if it breaks, then I try the cheap version first. I use store brand versions of a lot of household supplies, for example.

If it’s something expensive or something that could cause a real problem if it breaks, I usually invest the time to do some real homework on it. I look at Consumer Reports as my first line of defense and often dig deeper into reputable publications within that specific niche as well. This usually means a trip to the library for me – I almost always have a thing or two to look up in their magazines each time I visit the library!

As a general rule, I tend to trust Consumer Reports‘ “best buys” for a particular product. I’ve found that those items almost always do the job above and beyond what I need with little risk involved, and they tend to save quite a bit off of the highest end items.

Q9: Going out of business sale?

There is a Toys R Us about 1/4 mile from my apartment that’s going out of business. How can I take advantage of this and either save some money or maybe make a little?
– David

Making money off of a Toys R Us going out of business is tricky unless you know the value of toys in your head or are willing to invest a lot of time in there wandering around checking eBay values. Buying random toys at a 30% off rate isn’t going to be a big money maker.

Having said that, a toy store going out of business can save you money in a few easy ways. It might be a great time to do a little bit of super early holiday or birthday shopping for a child in your life. If you have children or nieces or nephews or grandchildren, especially young ones, this can be a great opportunity to snag some gifts for them. (Just be sure to let their parents know what you’ve snagged so you don’t end up with a duplicate non-returnable item.)

Another approach is to talk to any parents/grandparents/aunts/uncles/guardians in your life who may actually have a use for this sale and offer to be their “mule” as a nice favor or for a few bucks. They can give you a list of things to look for and you can go in there and buy them at a nice discount to save them some money. If nothing else, this would be a great appreciated help for some of the busy parents you know.

Q10: Training my replacement at work

My company is downsizing and my position is disappearing. I’m supposed to spend my last three weeks training this guy who is supposed to now do my job and frankly I don’t [care]. What can they do to me if I just show up and sit there and do job searches instead of helping him?
– Charlie

They’ll probably still pay you, but any recommendation you get from them will probably be a bad one, which will make it harder to find your next job. If you’re planning to stay in this field, the reputation hit you’ll take from doing this will probably cost you far more than you’ll gain.

A better approach here is to do your best to train this guy. It’s not his fault he’s in this boat with you. In fact, he’s probably disgruntled that he’s being handed these extra tasks and isn’t thrilled with this either. Rather than hanging this guy out to dry, commiserate with him. Do what you can to get him into a good spot when you’re gone.

Not only will this make you look really good in this person’s eyes, it will also reflect positively in any recommendations you get from the company and might even open doors for you. You may just find that if you’re doing this well, they may end up finding another position for you or else help you find a new one. If nothing else, you won’t have burned bridges here and you’ll definitely have at least one career ally moving forward.

Q11: Oven ready lasagna noodles

I love making lasagna but it is such a time consumer that I don’t make it very often. I thought the no boil noodles would help so I tried them and it made everything gummy. Is there some trick to making them work? Thought you might know as a kitchen efficiency whiz!
– Ella

I wouldn’t remotely call myself a kitchen efficiency whiz, but I do enjoy cooking at home.

I have tried no-boil noodles myself in lasagna and I generally find them to be gummy, too. The rest of my family seems to like them just fine, but I vastly prefer the texture of regular noodles.

Now, I have found that they get a lot better if you just partially boil the no-bake noodles. I did this on accident once and boiled them for just a couple of minutes before realizing what I had done and then decided to use them anyway, and they were just fine. At that point, though, why not just use regular noodles?

I’ve also tried just cooking the lasagna using ordinary noodles that are completely uncooked and just smothering them in sauce on both sides. This seems to work reasonably well – I like the texture better than “no-boil” noodles, anyway. You might want to try this. Just make your normal lasagna, put the dry noodles on top of a layer of sauce, then do another sauce layer right on top of any dry noodle layer. Bake as normal, because the boiling sauce will cook the noodles right inside the pan.

Q12: Government shutdown panic

I currently work for the DoE as a technical assistant. I make a very nice salary that should be more than enough, but when the government shutdown happened I took a look at my money and realized I was going to hit a major problem if things didn’t get back up and running in like two or three days. That’s obviously bad and it set me into kind of a panic. I started reading about money and searching around and came to your site. I don’t know what to do next or where to start.
– David

So, I received three different variations on this question. It appears as though the government shutdown and the specter of more of them in the near future shocked a few people into thinking about their finances.

So, where can you start? The absolute first thing you should do is start building an emergency fund. An emergency fund is simply money stowed aside in a savings account somewhere that you don’t touch until there’s an outright emergency – like, say, a prolonged government shutdown. The easiest way to build this is to get an online savings account from a reputable online bank like Ally and set it up so it does an automatic transfer each week from your main checking account into this emergency fund. $20 is a good number to start with; a little more is nice. Then, just forget about that account entirely until an emergency happens.

That’s a great first step, but it’s just that – a first step. The most important thing that people should be doing with their finances is a much bigger and, often, much harder step. You need to spend less than you earn. Every month, every year. The only time that you shouldn’t be spending less than you earn is when an emergency occurs, at which point your emergency fund is there to help.

If you’re doing this, your credit card balances will no longer be going up – they’ll be going down. As will your other debts. Eventually, they’ll go away, at which point it becomes trivially easy to start saving for big long term goals like retirement.

How do you mechanically do that, though? The most important step in that process is to sit down and really look at your spending. Where is that money going? Get out your most recent credit card bills and bank statements and start looking through them. How many of those transactions do you just not remember at all? Or, you see it and you sort of remember it, but not in any clear memorable way? Most of that spending is a giant waste. You’ve essentially tossed money away on completely forgettable things and because of that found yourself utterly panicking right now. That’s a very, very bad trade.

So, if you’re seeing a lot of transactions where you don’t even remember where the money went or it seems completely dumb in retrospect, start intentionally cutting out most of that stuff. Do you really need to stop at the convenience store? Will you really care about this purchase two days from now? Start asking yourself that about everything you buy.

There are lots and lots and lots of steps you can take to start mopping things up. That’s why the personal finance section of the library and of your local bookstore is loaded with books on getting your money straight. Go to the library and pick out one that speaks to you and check it out. The core advice in most of them is pretty good. If one isn’t clicking, go back and try another one. The one that clicked for me was Your Money or Your Life by Joe Dominguez and Vicki Robin. Avoid any book that talks about unrealistic-sounding results, like “You Too Can Be a Millionaire By Age 30!”

That should be enough to get you started.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

The post Questions About Rice Cookers, Government Shutdown, Toys R Us, Lasagna and More! appeared first on The Simple Dollar.

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