Land your dream job: How to find work that brings both joy and money

Do What You Love, the Money Will FollowIn 1987, Marsha Sinetar published Do What You Love, the Money Will Follow, a popular book about finding your dream job based on your passions. She urged readers to “follow their own hearts to the work of their dreams”.

Sinetar is a proponent of what she calls Right Livelihood: Doing your best at what you do best.

“Each of us, no matter how ordinary we consider our talents, wants and needs to use them. Right Livelihood is the natural expression of this need,” she wrote. “When we consciously choose to do work we enjoy, not only can we get things done, we can get them done well and be intrinsically rewarded for the effort. Money and security cease to be our only payments.”

“Do what you love” sounds like a great idea — who wouldn’t want a dream job that was both fun and paid the bills? — but as many people have pointed out over the past thirty years, it’s generally poor career advice. When folks cling to the belief that they’ll have no trouble if they do what they love, they run the risk of not being able to make ends meet.

One obvious problem is that not everything you enjoy doing can generate a reliable source of income. I like videogames, for instance, but I’ll never make big bucks playing Hearthstone. It’d be foolish to try.

A few years ago, career columnist Penelope Trunk put it this way: “I am a writer, but I love sex more than I love writing…I don’t sit up at night thinking, should I do writing or sex? Because career decisions are not decisions about ‘what do I love most?'”

There’s another problem that’s seldom mentioned. When people do manage to find what they think is their dream job, to make a career out of what they love, they frequently lose enthusiasm for the very thing they once valued. I’ve experienced this first-hand.

When I started Get Rich Slowly in 2006, I was working as a salesman for the family box factory. I didn’t like my day job, so blogging was a fun escape. Eventually, I made enough from blogging that I could quit my job selling boxes to write full time. I was going to do what I loved! Awesome, right? In many ways, it was awesome — but it also quickly became a curse. Writing went from a fun escape to a tedious chore, a slog instead of a joy. (That’s one reason I sold this site in 2009.) When I repurchased the site last fall, I thought long and hard about how to avoid falling into that trap once again. (So far, so good!)

Having said all that, I don’t think it’s bad to seek your dream job. In fact, I believe it’s a worthwhile goal — as long as you have realistic expectations (and can be patient). The challenge is to juggle what you’re good at, what you enjoy, and what people will pay you to do.

The Intersection of Joy, Money, and Flow

In 2016, my friend and colleague Chris Guillebeau published a book called Born for This: How to Find the Work You Were Meant to Do.

“There’s more than one possible path to career success,” Guillebeau writes, “but you want to find the best one — the thing you were born to do.” He says that this “best path” is located at the intersection of joy, money, and flow.


  • Your work should make you happy. Similar to Sinetar, Guillebeau believes you should enjoy what you do for work. In a way, it’s like the Konmari Method of organization, which argues you should own only things that “spark joy”. Guillebeau seems to be saying that ideally your work will “spark joy” too.
  • Your work should make you money. It’s no good pursuing your passion if nobody will pay you to do so. You need to be compensated for your efforts. Fundamentally, your work must support and sustain you.
  • Your work should tap your talents. Your career should involve something you’re really good at; it should allow you to put your skills to good use.

A perfect job — and there may be more than one “perfect job” for you — can be found where joy, money, and flow come together. An illustration from the book might help you visualize this concept:

The Joy-Money-Flow Model

The key, of course, is actually finding work at the intersection of joy, money, and flow. It’s one thing to talk about wanting this sort of perfect career, but it’s another thing entirely to discover a job that sits in the sweet spot. That’s what Born for This is all about.

Clarification: I don’t like Guillebeau’s use of the term “flow” in this context. It doesn’t match the psychological definition, so it creates confusion rather than clarity. Instead of “flow”, I think it makes more sense to talk in terms of talent or skill: Your ideal job(s) can be found at the intersection of joy, money, and skill.

How to Find Your Dream Job

Born for This by Chris GuillebeauThe bulk of Born for This — roughly 250 pages — teaches readers how to identify possible dream jobs, and how make those dreams come true. Guillebeau covers a lot of ideas. Let’s look at a few of my favorites.

Expand your options — then limit them

To help find work you were meant to do, Guillebeau advocates drawing up a large list of career possibilities, then pruning that list to a handful of dream jobs. Based on concepts in Born for This, I’ve created a simple exercise that I think can help provide direction for those who feel lost in their careers.

  1. First, get clear on your purpose. Before you complete the rest of this exercise, be sure you’ve created a personal mission statement to guide your decisions. (Need help? Here’s a free PDF describing my method for finding a mission statement.)
  2. Next, spend fifteen minutes brainstorming a list of possible careers. At this point, it’s important that you don’t self-censor. Go crazy! List anything and everything that you could do for work. If you’ve always wanted to be an astronaut, put “astronaut” on the list. I’m serious. Write down whatever comes to mind, no matter how impractical.
  3. Now, limit your options. This is the time to be rational and practical. Go through your list and remove anything that doesn’t spark joy. Remove anything that doesn’t seem like a source of income. Finally, remove those options for which you don’t have the talent (or for which developing the skill would be impractical).
  4. Lastly, choose your five favorite options from those that remain. (If you have fewer than five, that’s fine.) Rank these dream jobs from top to bottom based on any criteria you choose. These are the career options you should pursue long-term.

Once you’ve made your list of dream jobs, learn more about these fields of work. Develop the skills you need to pursue these professions. Schedule informational interviews with people who do the kind of work you’re interested in doing. Over the months and years ahead, use this list to plot your career path.

Master the right skills

If you want to improve your marketability overall — not just within your field — Guillebeau says it’s vital to “improve the right skills”. If you boost technical skills specific to your field, that’ll help you climb the career ladder for your current profession. But if you strengthen universal “soft skills”, you’ll not only become a better employee but a better person overall.

Useful universal skills include things like:

  • Writing ability. If you can express yourself with pen and paper (or with keyboard and pixels), you’ll always have opportunities. Companies of all sizes need employees who can help them communicate.
  • Public speaking. If you’re able and willing to talk to people — especially groups of people — the world is your oyster. I know a handful of folks who are masters of public speaking, and they’re essentially able to pick who they work for and name their salary. Not kidding.
  • Negotiation. When you learn to negotiate, you can use this skill not only to help yourself but also to help your employer. On a personal level, you can use negotiation skills to increase your salary and obtain additional benefits. On a business level, you can put this into practice by getting better prices from suppliers — or convincing customers to pay more.
  • Follow-up and follow-through. Do what you say you’ll do, and do it well. No matter what job you choose, the ability to keep your commitments (and even to exceed expectations) will make you a valuable employee.
  • Tech savvy. Get up to date (and stay up to date) with modern technology, whether that means learning to use a smartphone or teaching yourself how to work with social media. People who know how to use the latest tech are always in demand.

These soft skills will help with anything you choose to do, whether in your current field or an entirely different career. Plus, most of them will come in handy for life outside the workplace.

Become indispensable

There’s no doubt that Guillebeau favors self-employment. Much of his own career has been built on helping others start small businesses. All the same, he understands that not everyone wants to work for themselves.

However, if you’re an employee you can still act as if you’re a small-business owner. “You are self-employed one way or another,” writes Guillebeau. “Even if you’re earning a steady paycheck, you are essentially self-employed in terms of being responsible for your career.


Whether you work for yourself or work for somebody else, you are 100% responsible for your income. Most people approach their careers passively. If they have a job, that’s good enough. They do little (if anything) to improve their skills. They do the bare minimum that’s asked of them. They don’t bother to bargain when they’re hired or given a performance review.

Because you’re reading Get Rich Slowly, you are not not “most people”. To use the terminology of my previous site, you are a money boss. You take responsibility for your personal life, for your financial life, and for your career. You understand the importance of managing your career as if you were managing a business. Part of that means becoming indispensable to your biggest client…your employer.

Note: For more on this subject, see yesterday’s article about how to grow your career.

There are two key facets to becoming indispensable:

  • Improve education. Education has a greater impact on your work-life earnings than any other factor. You should always be learning, whether it’s for yourself or your employer. Go to conferences. Take classes at the community college. Read books related to your field. Take time to learn what other people in your office do. Master the “soft skills” we talked about earlier, but pick up technical knowledge too. Remember: The more you learn, the more you earn.
  • Exceed expectations. The vast majority of workers do only what’s needed to get by. (Some don’t manage that!) They don’t take the initiative to learn and do more. An indispensable employee does more than she’s asked. She doesn’t wait to be told what to do; she knows what needs to happen next and she does it. She sees problems and solves them.

Take your career seriously. Your job isn’t a place to kill time or tread water. It’s important. Even seemingly trivial jobs are a chance for you to get ahead, and can eventually lead to work you were meant to do.

During my sophomore year of college, I had a work-study job with the campus Summer Activities department. Every afternoon from four to five, it was my job to answer the phone after my boss had gone home. And that’s all I ever did. I never showed much enthusiasm for the job. I only answered the phone. (And worked on my homework.)

Another student had the same job covering the phone before my boss got to work in the morning. Unlike me, however, he did more than he was asked. Much more.

Neither of us knew it at the time, but our boss held a lot of clout on campus. When the other student applied for a plum job with the admissions office, she pulled strings to help him get the position. When I applied for a job I really wanted with the residence life department, I didn’t get it. I found out later that my lack of initiative in what seemed like a meaningless work-study job had played a huge role in their decision not to hire me.

The other student had made himself indispensable, and it paid. My lackadaisical attitude held me back.

The bottom line? Whether you’re looking for your dream job or not, be your own boss — even if somebody else can lay claim to that actual title. Be so good they can’t ignore you. Do this and doors will open up for you.

The post Land your dream job: How to find work that brings both joy and money appeared first on Get Rich Slowly.

Five steps to make more money while growing your career

This is a guest post from ESI of ESI Money, a blog about achieving financial independence through earning, saving, and investing (“E”, “S”, and “I” — get it?). It’s written by an early-50s retiree who achieved financial independence, shares what’s worked for him, and details how others can implement those ideas in their own lives. (Note: ESI is also the owner of Rockstar Finance, the leading curation site for top personal finance articles.)

You’ve heard it a million times before: To build wealth, you have to spend less than you earn. It’s a great piece of advice — one of my favorites, actually. Too often, however, people take this to mean simply “control your spending”.

While your spending is certainly part of the equation, there’s an equally-important component: your earning.

Here’s what I think a lot of people miss: It’s easier to spend less than you earn when you earn more. It’s also easier to reach your financial goals. From my experience, the best way for most people to earn more is to grow their careers. Today I want to show you five ways to grow your career so that you make more money and enjoy greater job satisfaction.

The Case for Career Growth

Unemployment punI know, I can hear the collective groan.

For myriad reasons, many people dislike advice about growing their careers. It’s probably because so many hate their jobs.

I get it. I’ve been there myself.

But I also understand that there’s a paradox between hating a career and achieving your money goals. If you hate your job so much that you don’t want to focus one extra second on it, you will actually prolong the time you need to work — the very thing you hate so much!

Instead, if you put a bit of time and effort into growing your career, you’ll end up making millions more (literally), hitting your financial goals earlier, and (very likely) enjoying your career more.

If I were able to give you a few, simple, easy-to-implement tips to help you achieve this, would you be interested?

How Can I Be So Sure?

Before we get to the tips, let’s address the elephant in the room: How can you be sure that the Bozo writing this piece can actually deliver?

In all honesty, you can’t. But I do have a few accomplishments that might give you some confidence:

  • Personal experience. I was able to grow my income by 8.16% per year throughout my career. Obviously people have done much better than this, but 8%+ isn’t too shabby over almost 30 years. If you don’t believe what a huge impact this can make, pick a starting salary and increase it by 8% each year for 28 years.
  • Corporate experience. In addition to managing my own career, I saw countless colleagues and subordinates managing (or, mostly, not managing) theirs. I eventually became the president of a $100 million company, supervising the careers of hundreds of people. So along the way I learned a bit about growing your career, how to get ahead, and how companies view employees.
  • Education. There are thousands of books (and millions of web pages) about career management. I’ve read many of them and tried a variety of techniques. I will say that most of them are virtually worthless, but there are some nuggets of wisdom that I’ve applied and learned from.
  • Millionaires do it. I’ve interviewed over 30 millionaires (and more on the way.) Almost every one of them has developed a high income by applying the skills below which have accounted for a large part of their success.

The good news is that you can do even better than I did. It took me decades to come up with the tips I’m about to share. Most of them were discovered in the school of hard knocks by trial and error. You can cut out the pain of failure and get right to doing what counts.

You can also skip the thousands of tips you might gather from here and there. Simply apply the five steps below and you’ll get most of the impact for a fraction of the work.

With that said, here are the five tips you can use in 2018 to grow your career…

Step One: Be Proactive

You may think this is not a tip, but it’s actually a very important start. Proactivity is required for career success. (If you read last week’s article from J.D., you probably undertand that becoming proactive is the key to success in nearly every aspect of your life.)

Based on my observations, there are three types of workers in the world:

  • The “go-with-the-flow-ers”. These people do their jobs and mind their own business. They take whatever comes their way job-wise — the good and the bad. These can be great people, of course, but their careers are going nowhere with a que será será attitude. Go-with-the-flow employees get go-with-the-flow raises and promotions. And let me tell you, those are not high. Even if these people are high performers, many companies will take advantage of them with low raises until they say something — which they won’t because they are going with the flow!
  • The “work hard-ers”. These folks simply “work hard and let their efforts speak for themselves.” This strategy has the potential to provide a good outcome as sometimes companies will recognize good performance. But it’s hit and miss for two reasons:
    • Often these people work hard on things the company won’t reward them for. Sure, they are putting in the effort, but it’s misdirected and the company couldn’t care less.
    • Companies generally want to pay people as little as possible. So even people that work hard and perform often get basic raises. Why pay them more if they’ll keep working hard no matter what?

    This plan of action simply leaves too much to chance. My experience is that maybe one in ten workers who try to “work hard” achieve even a decent level of success and just one in one hundred make a significant impact on their careers.

  • Those who are proactive. These people get noticed. They get direction. They make things happen that the company wants to have happen, manage the process, and as a result they get paid more and promoted. This is why being proactive is a vital first step for anyone who wants to earn more.

What does it mean to be proactive?

First, it’s a mindset. You need to realize that no one cares more about your career (and its financial impact) than you do. So you have to do something if you want something good to happen. No one else is going to do it for you.

Second, once you have the mindset, you need to take action. What action you should take brings us to the next steps on our list…

Step Two: Discuss (and Document) Expectations

Let’s say you hire a guy to mow your lawn. He charges $30 for the service. In exchange for his work, he expects you to pay what you promised. In exchange for payment, you have certain expectations of him.

You certainly expect him to cut the grass. You might also expect him to either bag or clean up the clippings. You might also expect him to edge the lawn.

Lonesome lawnmower by J.D. RothIf he does these things, you feel fine giving him $30. You expected him to do certain things, and he did them. You expected to pay him $30 and you did. All expectations are met and the payment is given. Everyone is satisfied.

Now let’s say instead of just cutting the grass, cleaning up the clippings, and edging the lawn he does even more. He goes above and beyond. Let’s say he also trims your bushes, fertilizes the lawn, and pulls weeds.

In this case, you love what he’s done because he’s done more than you expected. You are happy to pay him $30. In fact, if he wanted more (i.e., raised his rates at a later date), you’d probably pay it because he did way more than expected.

On the other hand, let’s say the lawn guy didn’t do what you expected. He mowed the grass but left a mess with the clippings and didn’t even try to edge. Maybe he did some other tasks he thought you would appreciate but didn’t — like rearranging your gnome family yard decorations.

In this case, you feel like your $30 has been wasted — at least in part. He did not meet your expectations (or even come close). Will you hire him again? Maybe, if you have to. But you certainly won’t pay him more. In fact, you may ask for a discount next time.

The same performance expectations that you have for the lawn guy (and the way you evaluated him) is the same sort of relationship your company has with you.

They hired you at a given pay rate and expect you to do certain things for that pay. If you do more, they are open to paying you more. If you do less — or you do the wrong things — they certainly don’t want to pay any extra. They may even fire you.

This then begs the question: What does your company expect from you? That’s the problem: Most people don’t know. They have a vague idea, at best. Sure, the company might have a job description that some HR person crafted five years ago, but those are often so weak that you can’t ascertain anything tangible from them.

So how do people usually react to this situation? They guess. They make assumptions about what the company wants, how it measures success, and so forth.

And often they guess incorrectly. They might get some things right, but the chances of getting the full scope of what the company expects from you (as well as the level of expectation) by simply guessing is virtually impossible.

So what should employees do? It’s simple: They should ask their boss what she expects.

I won’t go through the step-by-step process of how to do this because I’ve already provided details elsewhere, but here are the highlights:

  • Set up an appointment to talk with your boss. During an annual review is a great time.
  • Tell her that you’d like to get specifics on what she expects you to accomplish.
  • Tell her the reason that you want to know these is that 1) you want to be working on what she feels is most important and 2) you want to be sure you’re delivering the results she wants.
  • Next, have a conversation about her expectations. Get her to be as specific as possible and quantify whenever possible. “Grow sales” is worthless since you don’t know what you’re shooting for. “Grow sales 5% over last year” is specific and something you can use.
  • Write down the details as you discuss them, and agree on expectations. This is a back-and-forth discussion, and your input should be part of the process. For example, if your boss says she expects you to “grow sales by 50%” and that’s not reasonable, you need to manage the conversation and agree on an attainable (even if challenging) goal.
  • Tell her you’ll record these in an email and send for her review just to be sure you got them all right.
  • Write them down later and send to your boss for approval. Adjust as needed until you get the ok.

Before I go further, let me say that your boss will love you for doing this. She’ll probably be blown away by your willingness to ask and listen to her. She’ll also be impressed that you want to know what the company wants so you can deliver it. I know that the handful of times someone did this with me, I was thrilled to work with them and to follow up later.

After the conversation, you know exactly what is expected of you. You also have it in writing. There’s no room for error or misunderstanding at this point.

Next, it’s time to make things happen.

Step Three: Over-Perform

Now that you know what’s expected, is this what you strive for? Nope. You strive for more! Why? Because the company is already paying you to do those expected tasks! If you want to be paid more, then you have to do more.

Go back to the lawn guy. Would you be willing to pay him $50 if he just did what you expected? Of course not! You were willing to pay more only if he did more.

Those who do just what’s expected get basic raises — and they’re lucky to get those. They’re already being paid to do their jobs, so why pay more for just that?

But for you, the proactive career-manager, it’s time to get to work. You need to over-deliver compared to your expectations.

How do you over-deliver? Here are some examples:

  • If your goal is to “grow sales 5% over last year”, aim to grow them 8%.
  • If your goal is to “cut costs by $100k this year”, cut them by $125k.
  • If your goal is to “sign up 50 new customers”, sign up 75.

You get the idea. Simply do more than what you and your boss agreed was expected.

As you accomplish these goals, don’t assume your boss is aware of how you’re over-performing. She’s a busy person too and has her own goals to accomplish, so she might not be following your progress that closely. That’s why you need to regularly remind her.

Be likeable!There are several ways to do this: as part of regular reports, in one-on-one meetings, at team meetings, and so forth. I used to do a weekly update via email that listed my expectations (the ones we agreed on) and what I was doing to hit them. I included numbers/data so it was clear that I was doing more than expected. I knew it and my boss knew it.

This way you will both be on the same page — you’ll regularly remind her of what’s expected as well as how you’re accomplishing more than that.

Once you over-deliver (which usually takes several months or years), it’s time to schedule a meeting, show that you’ve accomplished more than expected (this shouldn’t be new news to her), let her know you can do even more, and ask for a raise.

Whether you deserve a raise or not should be a no-brainer by now. You deserve one! The only questions left should be how much of a raise you’ll get and when you’ll receive it. Asking for more during an opportune time like the annual budget planning process works best as it can be cooked into the numbers from the get-go. Mid-year raises aren’t unheard of, but can often be more difficult to secure since budgets often aren’t flexible.

Once you have the raise it’s time to start the process over again with new, higher expectations.

Step Four: Be Likable

Here’s a news flash: Nobody gets ahead alone. You need people to help you — those above you, below you, and at your level. And the fact is that people help others that they like. (By the way, people give raises to those they like, as well.)

Some studies suggest that being liked at work has more impact on being successful (and making more) than actual job performance.

Brazen Careerist author Penelope Trunk explains this issue thusly:

People would actually rather work with someone who is incompetent and likable than competent and unlikable. Most people nod in agreement when they read this. It’s the unlikable people who form arguments in their head.

But there’s more. At work, if you are unlikable, people start thinking you are less competent. So stop thinking you can skate by on your genius IQ because you can’t. You need emotional intelligence as well. This situation is so pronounced that there are special-education classrooms rife with kids who could read when they were three. Social skills matter as much as intelligence when it comes to long-term success, even for the geniuses.

The truth is that both performance (over-delivering) and being likable are important. You don’t want to choose between the two — you want to be both a high-achiever and a person people like.

How can you be more likable?

There’s no clear science on how to make people like you, but here’s a simple guide that I’ve seen work for most people in most cases: Treat people like they want to be treated.

If you do this and put others before yourself — if you’re nice, helpful, considerate, and simply a pleasant person to be around — people will like you and your career will benefit as a result.

I also suggest reading a couple books:

For those introverts out there, don’t worry. You don’t have to be the life of the party or a social butterfly to make this work. You don’t have to be Mary Poppins or a back-slapping good ol’ boy. Simply be friendly and thoughtful. It will go a long way in making you likable.

Step Five: Develop Your Talents

It’s a fact of life that having certain skills can significantly increase your earning ability. It’s also a fact that you likely won’t be world-class in any of them. By definition, only a small minority can be world-class at any one thing.

But you can develop a high level of competence with a unique combination of valuable skills. This collection of abilities makes you very unique — and valuable.

For instance, you probably won’t be the best salesperson in the world. Or the best negotiator. Or the best public speaker. Or the best analyst.

But you could become an executive with solid skills in sales, negotiation, public speaking, and analysis. Most people don’t have anywhere near this skill set and thus having it makes you very valuable.

Dilbert creator Scott Adams calls combining skills like this “building a talent stack“. Here’s how Adams explains what he means by a “talent stack”:

It’s the idea that you can combine normal skills until you have the right kind to be extraordinary.

Understanding how a talent stack works is important. Normally, people think that success comes from developing talent in one skill. This works well in some fields. In medicine, the natural progression is to pick a specialty. In sports, you train to become best in your field, like Tiger Woods (golf) and Michael Jordan (basketball). In acting, you develop the best acting chops, like Robert De Niro and Morgan Freeman.

But besides becoming world-class in one skill, talent can come from having a unique stack of skills that no one else has. You can utilize different skills to create value in a way no one else can, thus becoming one-of-a-kind in your own league.

This concept is absolutely true. I’ve seen it play out again and again in my career and the careers of countless others.

So, you need to work on developing your talent stack. But how do you do this? How do you become proficient in specific skills?

You need to educate yourself and work on the needed skills. Here are some ideas:

  • Take classes. You can either pay for useful college courses yourself or many companies will cover these costs.
  • Seminars/workshops. Again on your own or company-paid. My companies sent me to time management, sales, and public speaking classes — on their own dime and during work hours. These skills benefited me throughout my career and in my private as well.
  • Read. Books are great (and free at the library). My preference is finding trusted sources online and learning from them.
  • Listen. Audiobooks can be checked out at the library and podcasts are free. Both can be listened to during down times like driving to and from work.
  • Volunteer. Charitable organizations will often allow you to take on projects that your company might think you’re not ready for. These can serve as great learning experiences.
  • Cross-functional teams. Volunteer at work to be on a team that includes several different disciplines. You can learn all about marketing, sales, finance, operations, and more.
  • Take on a special project. Ask your boss for a unique assignment. I did this a few times in my life and learned a ton every time.

Be proactive on developing your talent stack. Concentrate on those skills that most relate to higher pay. When you do you’ll become more valuable because you’ll be able to do and accomplish more. And as we’ve seen, those who do more than expected, get paid more.

That Sounds Like a Lot of Work

By this point, you may be thinking that these five “simple” steps seem like a lot of work — maybe more than you’re willing to put in.

If so, I’d like you to consider the following before you dismiss them:

  • To accomplish anything meaningful, you have to put in effort. If you’re unwilling to do so, you’re likely going to be limited in several areas of your life.
  • Much of the work above can be done while at work, requiring no additional time commitment on your part.
  • Some of the work (like educating yourself with podcasts and audio books) can be done while doing something else — driving, exercising, mowing the lawn, etc. Again, there’s no additional time commitment on your part.
  • The financial rewards can be staggering. As noted above, the math clearly shows that you can make millions more over your working lifetime by proactively managing your career.
  • The time results can be staggering too. Earning more means you can save more, which leads to faster financial independence. Combine a strong income with even a modest side hustle and you can retire in ten years — at least a decade or two before you might otherwise.
  • As for any costs, investing in your career offers one of the best returns available anywhere. Who wouldn’t invest a few thousand for returns of hundreds of thousands?

Even with this compelling evidence, some will find excuses why they can’t (or shouldn’t) take action. There’s not much I can do about them; they’re not likely to take action no matter how great an opportunity exists.

But for the rest of you, don’t let a few, minor challenges dissuade you. The time and effort is minimal, especially when compared to the reward.

The Brick Wall

It’s worth mentioning that it’s possible to take all of the steps above, do them well, and still get nowhere. Even when you do everything right, you can hit a brick wall — a company that doesn’t recognize accomplishments or a boss who isn’t supportive. There’s no doubt that a situation like this is frustrating. (Thankfully, most bosses and companies aren’t like this.)

If you hit a brick wall, don’t despair. Your hard work is not lost. But you need to go back to step one and be proactive about managing your career.

If you’ve done all the above and still get nowhere, you have two choices:

  • Stay put and simply grind it out at your current job/company
  • Look for other opportunities either in another part of the company or with another company

This is a personal decision, so the brest course of action will be up to you.

I had to face just such a decision on several occasions.

Four different times during my career, I had to decide either to take it or move on. In each case, I ultimately decided to move on. In two of those instances, I had to stick it out for two more years before finding a better opportunity. It paid off in the end, though, because I found much better jobs each time. But I had to be patient. You might have to be patient, as well.

The career-focused work I completed while waiting prepared me to perform at an even higher level in my next job. This, in turn, allowed me to start the new company at a much higher salary and deliver results above expectations for years to come.

That said, in nine out of ten cases you won’t have any problems. If you apply the steps in this article, your compensation will increase and you’ll enjoy your job more.

And your net worth will certainly thank you for the results.

The post Five steps to make more money while growing your career appeared first on Get Rich Slowly.

On the importance of putting first things first

Holy cats! That was an interesting 72 hours.

For the past three days, I’ve been fighting a terrible cold. Or maybe the flu. I’m not sure which. It hasn’t been fun.

On Sunday, while I was in Florida attending an early-retirement retreat, I woke with crap in my lungs. All day, I was coughing and sneezing and hacking. I still felt relatively strong, though, so I made sure to get in my four-mile training run. (I made two goals involving running this year: I want to run at least one mile every day and I want to run a half marathon at the end of March.)

On Monday morning, I felt worse. Still, I rolled out of bed and tromped the one mile I had scheduled for myself. It was a l-o-n-g mile, let me tell you. I was wheezing and gasping the entire ten minutes.

The six-hour flight home to Portland on Monday afternoon was miserable. I hate flying when I’m sick, and I know how much that sucks for other passengers. I huddled next to the window and tried not to breathe too deeply. Breathing too deeply rattled the crap in my lungs and sent me into fits of coughing, so I mainly zoned out and made an effort to take shallow breaths.

“You sound terrible,” Kim said when she picked me up from the airport. That night, she made me sleep in the guest room.

I spent all yesterday fighting a high fever. I tried to write an article, but it was a futile endeavor. I couldn’t focus. I couldn’t write or read or even watch TV. (I starting watching the new Blade Runner movie, but I couldn’t focus for more than a few minutes at a time.) I could barely focus on videogames.

In the afternoon, I felt a little better, so I decided to take the dog for a walk. “I have a three-mile training run scheduled today,” I thought to myself. “I probably shouldn’t do that. But surely I can do just a mile.” I put on my running clothes, grabbed the leash and the dog, and headed outside.

After two minutes of running — and less than a quarter mile — I pulled up short. I couldn’t catch my breath. I felt like I was going to faint. I walked the dog back home and crawled into bed.

And that’s how my goal of running at least one mile each day in 2018 came to an end.

Blind Pursuit of the Less Important

My example of blindly pursuing a small goal at the expense of the Big Picture is relatively minor. It’s not a big deal. But it’s not hard to find examples of people doing this on a grander scale, which can lead to all sorts of complications.

I’ve noticed, for instance, that many people who discover the ideas behind early retirement become laser-focused on their “number” — the amount they need to save in order to reach financial independence (a.k.a. FI). They rearrange their lives so that they can save 50% or 70% or 85% of their income, but never take time to figure out what they’re saving for. Why are they saving for financial independence? What’s the purpose?

Then a crisis occurs and they realize the goal they’ve been pursuing was a red herring. Financial independence and early retirement aren’t the actual objective — and they never were. A happy life filled with meaning and purpose is what they really want; financial independence is merely a tool to help them achieve it.

I see this all of the time in the financial independence community. Everyone who reads FI forums can tell me what their number is — but only a handful can tell me why they’re pursuing FI.

Here’s a classic example. Yesterday, in the financial independence forum on Reddit, an anonymous user posted a heart-breaking story about losing the love of his life because he was too focused on money — too obsessed with how and what and not enough on why. Here’s his story:

I should be clear, it’s because I obsessed over FI and ignored my life goals.

Together for 7 years, living together for most of it. She was perfect for me and was also very frugal. I had it all.

I read the stickied post. “Find the live you want to live and save for it”, or whatever it’s called. But I didn’t take it to heart. I thought I was doing this. I didn’t understand. I was so wrong. I was blind. I was living the life I wanted to but I was ignoring the life that my partner wanted.

I didn’t spend money with her to do the things she really valued. I didn’t buy plane tickets to go visit her family with her when she desperately wanted me to come. My whole life I said I wanted kids and then discovered FI and changed my mind because they were too expensive. I refused to buy nicer furniture for our apartment and made her embarrassed about our place and not comfortable in her own home. Over and over I made this mistake and we drifted apart. She wasn’t asking for much, just for things she really valued. She is frugal. I was selfish. And I lost sight of the fact I always wanted kids.

I realize this all now but it’s too late. I told her all of this but it’s too late. Don’t be me. Examine every facet of your life and think about it. I regret it all.

FI ruined my life, but it’s my fault, not FIs fault. It was my obsession. So here’s my advice. Focus on the life you want to live, but compromise with your partner too because I’d trade all the money in my bank for that relationship back. And once you are in the boring middle…focus on what makes you and your family happy today.

Don’t be me. Don’t get obsessed. Live in the present.

Goals are good. Goals keep us motivated. They give us meaning and purpose. They spur us to become better versions of ourselves. They help us learn and grow and develop into more interesting human beings.

But some goals are less important than others. Some goals are meant to support higher-level goals.

Putting First Things First

I believe strongly that financial goals ought not be top-level goals in your life. Your financial objectives are there to help you pursue more important things. Because of this, there are times you ought to set money considerations aside to attend to more important matters.

This isn’t just true with financial goals, of course. It’s true with all goals that support larger purposes.

In my case, running one mile every day this year wasn’t my real aim. When I take a step back to look at the Big Picture, I realize that specific goal on its own was meaningless. That goal was actually representative of a larger goal — to get fit, to exercise more often. Running every day was merely a manifestation of a deeper desire.

In that context, it’s no big deal that I’m going to miss two or three days of running while recovering from being sick. In fact, the time off is a good thing.

As you work toward your goals — financial and otherwise — please remember to place them in proper context. Prioritize the important stuff. Don’t sacrifice a greater good for some lesser aim. Don’t give up your long-term health to keep a running streak alive. Don’t sacrifice a relationship to obtain some arbitrary savings goal.

Put first things first.

“Putting first things first means organizing and executing around your most important priorities. It is living and being driven by the principles you value most, not by the agendas and forces surrounding you.” — Stephen R. Covey, The Seven Habits of Highly-Effective People

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How to get out of debt (without gimmicks or games)

As part of back to basics month, let’s use today to explore how you can get out of debt without gimmicks or games.

How to get out of debt without gimmicks or games

After twelve years of reading and writing about money, I’ve come to believe that debt reduction ought to be a side effect and not a goal. Getting out of debt is a target, not a habit. And, as we’ve been discussing recently, good goals are built around actions instead of numbers. If you restructure your life so that you’re spending less than you earn, you will get out of debt. It’s a natural side effect.

Having said that, I realize that a lot of GRS readers are struggling to get to square one. Getting out of debt is their goal and primary obsession. That’s okay.

Before you can begin repaying your debt, you must be earning a profit. Unless your income exceeds your expenses, your debt is actually increasing. If you’re continuing to add debt, or if you’re only able to make minimum payments, you must first find ways to spend less and earn more until you have a positive “saving rate”. (Both businesses and people earn profits. But when individuals earn a personal profit, we call it “savings”.)

After you’re earning a personal profit, you can (and should) make debt elimination a priority.

Why You Should Pay Off Your Debt

Debt repayment can improve your credit score, meaning you’ll pay less on everything from rent to car insurance to future borrowing needs. Plus, debt reduction is one of the best returns you can earn on your money.

Investing in the stock market provides an average annual return of about 10% — but that return isn’t guaranteed. Some years the market is up 30%, but other years it drops by 40%. When you pay down a credit card, you earn a guaranteed return of 20% (or whatever your interest rate is). That’s tough to beat.

There are also non-financial benefits to paying off debt, including:

  • Simplicity. The more debt you have, the more bills you have. It’s easier to manage your money when you have a simple, efficient financial infrastructure. Each time you pay off a debt, you move one step closer to this ideal.
  • Cash flow. Whenever you eliminate a debt, the money formerly used for that monthly payment becomes available to pursue other goals – including fun stuff like ski trips and knitting supplies.
  • Freedom. When you have monthly payments to meet, you’re chained to your job. You’re unable to take risks. Once your debt is gone, a wider range of options becomes available to you.
  • Peace of mind. Best of all, once you’re debt-free, you can sleep easier at night. You’ll put less pressure on yourself, and you’ll have fewer fights about money with your partner.

When I first tried to get out of debt, I lacked a system. Without a plan, I sent extra money to one credit card and then another. As a result, I never seemed to make any progress.

After deciding to become boss of my own life, however, I researched how to get out of debt. Many books recommended a strategy called the “debt snowball”. Although I was skeptical, I gave it a try. The method worked. Using it, I managed to eliminate my debt and begin saving for the future.

The Debt Snowball

With the debt snowball, you set aside a specific amount of cash each month to pay off the money you owe. At first, progress is slow. In time, however, you begin to make rapid progress, picking up speed like a snowball rolling downhill.

Step One

The first step is to make a list of your debts. For each obligation, include the balance you owe, the interest rate, and the minimum payment. Arrange the list so that the debt with the highest interest rate is on top. Next comes the debt with the second-highest interest rate, and so on, until you reach the final debt on the list, which will be the one with the lowest interest rate.

For instance, here’s the actual list of my debts from October 2004, ordered by interest rate:

  • Computer Loan: $1116 @ 15% ($48 min)
  • Business Loan $2800 @ 11% ($30 min)
  • Home Equity Loan $21000 @ 6% ($100 min)
  • Car Loan $2250 @ 5% ($170 min)
  • Personal Loan $1600 @ 3% ($100 min)
  • Personal Loan $6430 @ 0% ($60 min)

I had $35,196 in debt and my minimum payments totaled $508 per month.

Step Two

Once you’ve listed your debts, decide how much you can afford to pay toward them each month in total. This should be at least the total of your minimum payments ($508 in the example above), and preferably more. In my case, I started by allocating $700 every month toward debt reduction.

Step Three

Now, for all of your debts except the debt with the highest interest rate, make minimum payments every month. Use the rest of the money you’ve allocated for debt reduction to pay down the debt with the highest interest rate.

The computer loan topped my list of debts with an interest rate of 15%. The minimum payments for the other debts combined to $460 per month. Under this plan, I’d then take the remainder of the $700 I’d allocated toward monthly debt reduction and apply it to the computer loan. Instead of making the $48 minimum payment, I’d pay $240.

Step Four

Repeat this process every month until the debt at the top of the list has been eliminated.

Step Five

Here’s where this method gets powerful. With your first debt defeated, you don’t use your improved cash flow to buy new things. Instead, you use the extra cash to attack the next debt on your list.

If I start by applying $700 toward debt each month, for example, I continue to apply $700 toward debt each month until all of the debt is gone. After the computer loan is retired, I focus on the business loan. Because the minimum payment on my other debts would be $430, I could funnel $270 to pay off the business debt every month.

When the business debt is gone, I’d then throw $370 per month at the home equity loan, and so on. Ultimately, I’d be left with a single loan: the $6430 personal loan at 0% interest. Every month, I’d apply all $700 to get rid of this debt.

Pros and Cons

The debt snowball is powerful and effective. Mathematically, it’s the best way to get rid of your debt. There’s just one problem.

When you attack your debts from highest interest rate to lowest, you’ll pay less money in the long run. Unfortunately, many folks – including me – find the going difficult. In my case, I hit a wall when I reached the third debt on the list, my home equity loan. That $21,000 balance was going to take years to repay. I didn’t have that kind of patience.

Fortunately, I learned there were other ways to order your debts. You don’t have to tackle the high interest rates first.


Building a Better Snowball

Humans are complex psychological creatures. They’re not adding machines. Many of us know what we ought to do but find it difficult to actually make the best choices. (If we were adding machines, we wouldn’t accumulate consumer debt in the first place!) It’s misguided to tell somebody so deep in debt that they must follow the repayment plan that minimizes interest payments. The important thing to do is to set up a system of positive reinforcement.

Because of this, many people prefer slight variations on the debt snowball method. These methods ignore math in favor of psychology.

Dave Ramsey’s Debt Snowball

Financial guru Dave Ramsey has popularized one variation of the debt snowball. Instead of ordering your debts by interest rate, he suggests you attack those with the lowest balances first.

Using Ramsey’s method, my debts from 2004 would be ordered like this:

  • Computer Loan: $1116 @ 15% ($48 min)
  • Personal Loan $1600 @ 3% ($100 min)
  • Car Loan $2250 @ 5% ($170 min)
  • Business Loan $2800 @ 11% ($30 min)
  • Personal Loan $6430 @ 0% ($60 min)
  • Home Equity Loan $21000 @ 6% ($100 min)

As with the standard debt snowball method, I’d make minimum payments on each debt except the top one on the list. At it, I’d throw everything else I’ve allocated for debt reduction each month. When the top debt was eliminated, I’d move on to the one with the next smallest balance.

Ramsey’s variation isn’t as quick as paying high-interest debt first, and in the long-run, you’ll lose slightly more to interest payments. (In my own case, the projections showed it’d take an extra month to repay my debt and I’d pay and extra $841.15 in interest.) However, there’s a psychological advantage to doing things this way.

By attacking your smallest debts first, you get some quick wins, which provide a mental boost. This psychological lift provides extra motivation to keep attacking that debt. Every few months, you get the satisfaction of crossing another debt off the list! Ramsey says this is “behavior modification over math”, and he’s right. In fact, I opted to use this variation of the debt snowball when I repaid my own $35,000 of debt in 39 months.

Adam Baker’s Debt Tsunami

Other experts, including my buddy Adam Baker from Man vs. Debt, suggest yet a third alternative they call the debt tsunami. They argue it’s best to pay off your debts in order of their emotional impact. Attack your debts from smallest balance to highest, they say, but for added psychological boost, prioritize any debt that particularly bugs you.

“I used to be addicted to gambling,” Baker says, “and I had debt that was specifically associated with gambling. To pay that off first changed me as a person. To pay off the $600 I owed on a credit card was great, but it didn’t change me. It didn’t signify that my life was going to be different and that I was going to live in a different way.”

But paying off his gambling debt did mean something to him, so Baker attacked that first.

Here’s another example: Many people borrow money from their parents. These loans may carry interest rates of only two or three percent (or maybe they’re interest free), but they come with a lot of psychological baggage. This is another instance where it might make sense to pay down low-interest debt first because the non-financial rewards are so great.

The most important thing when paying off your debts is to pay off your debts; the order in which you do so is ultimately irrelevant. Find a system that works for you and develop the discipline to stick with it.

Note: It’s less imperative to repay low-interest debt. Businesses use “leverage” to borrow money cheaply so that they can earn higher returns elsewhere. You do the same when taking out a mortgage at low rate (like three percent) or using school loans to improve your education (which will, in theory, provide high future returns). It’s good to repay all of your debt, of course, but it’s okay to make repaying the mortgage a long-term goal instead of lumping it in with your debt snowball.

The Bottom Line

As I mentioned at the start, I’ve come to believe that debt repayment is a side effect and not a goal. You shouldn’t make it your primary purpose.

If you do the other things I recommend, such as creating a personal mission statement and boosting your profit margin, you’ll naturally pay off debt as a matter of course. But you’ll enjoy a benefit many people don’t have once their debts are gone.

You see, a lot of people feel lost once they’ve dug out of debt. Search online and you’ll find tons of questions and conversations about what to do next. Debt repayment had given them purpose, and now that purpose is gone. As a result, they lose financial direction. And like a dieter who had aimed for a weight instead of a lifestyle change, an unfortunate few of the newly debt-free find themselves resuming bad habits.

If you’re pursuing other goals and intentionally building good habits, you’ll get out of debt. And once you get out of debt, the good times will continue: That debt snowball you’ve been building will transform itself into a wealth snowball.

Congratulations! You’re on your way to financial freedom!

Have you ever had to dig out of debt? What methods did you use? Were some more successful than others? If you had to do it over again, would you have done anything differently? What advice would you give to others who have just taken on the role of money boss in their lives?

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Money story: I was a frugal jerk

This guest post from the Frugal Jerk is part of the “money stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all stages of financial maturity. Today, the Frugal Jerk — who has asked to remain anonymous for now — shares the first half of his story about going from internet entrepreneur to busted and broke.

I was a frugal jerk!

You might know me. I’m a blogger and entrepreneur. I’ve had tens of thousands of customers during the last decade, so it’s very possible that you’ve purchased something from me in the past.

I’ve been read by millions of readers on my own sites and I’ve appeared as a guest writer on popular websites you’ve surely heard of. I’ve also been featured in New York Times bestselling books that may sit on your shelf. At my peak, my income was $300,000 per year. By many accounts I would be considered successful. But I’ve made many dumb mistakes with money.

We’re not going to bury the lede: At a certain point, because of a perfect storm of mistakes and problems, the smartest move was to foreclose my home. This move may have even saved my life. This is that story.

What’s interesting about all of this is that I grew up fairly poor and conservative with money. If I couldn’t pay for something in cash then I didn’t buy it. I didn’t make stupid financial decisions. Those decisions were for idiots. I was no idiot! (Reality check: Everyone is an idiot sometimes.)

Buying the Hype

When I bought my home, everything was going great. In the run-up to the U.S. recession, houses wouldn’t stay on the market for long. If you remember those days, you know that you could go to a first open house and the house would often be sold before you got there. It got to the point where houses were regularly selling for more than asking price. Bidding battles were not uncommon.

This should have been a warning. But I was young and dumb and flush with cash. I had a business generating almost $1,000 in profit per day. Mostly automated. All online. What to do with all that money? Home values always go up, right? It’s always smart to “Buy! Buy! Buy!” isn’t it? We all heard it daily. (You might still hear it regularly since the economy has improved lately.) Plus, it’s the alleged American Dream. Quite literally everybody around me told me to buy, particularly those who knew my income. Parents, friends, the echo chamber in the media. I didn’t hear a single dissenting opinion. (Besides my own, which I steadfastly ignored.)

So I bought a home.

Considering my income, I thought I was making a smart choice. I settled — and I do mean settled because I didn’t even like the home — on a $300,000 four-bedroom three-bath two-car-garage home. I was a young single guy with a huge family home. I know what you’re probably thinking. But it was “only” one year’s income and I put 20% down. What could possibly go wrong?


If you’ve been a working adult over the past decade, you know the answer.

Nearly everything went wrong.

The stock market tanked. The housing market tanked. And, most relevant to my eventual foreclosure decision, my income tanked. The year I bought my home, I made about $300,000. The year after, I made less than $50,000. The year after that? Less than $20,000.

It was a massive blow to not only my finances but also my ego.

The Shiller Index of Home Prices

In the Beginning

My beginnings probably aren’t atypical of folks who read sites like Get Rich Slowly.

I started working and saving at around age 13. I had a checking account and kept it balanced all through high school. I graduated from a four-year university with a science degree and not a single dollar in debt. Actually, because of the business I started while in school I graduated college with over $50,000 in savings, including $10,000 in a Roth IRA. Who starts a Roth IRA in college? The Frugal Jerk, that’s who.

Even though I had all this savings, I still felt poor. What’s $50,000 when others folks are millionaires and billionaires? Some call this a scarcity mindset, and maybe it’s a result of growing up “not rich”. We always had electricity and food and went on the occasional vacation (often camping). But I was an LA Gear child with Nike Air tastes. Maybe you can relate?

Like many folks in similar situations, I was raised with a faulty money blueprint. I wasn’t taught the value of money or the thought process behind saving and spending. But I was taught that rich people were to be venerated and poor people disparaged. There was nothing worse than to be poor or in debt or to ask for help. (The ultimate sin was getting any help from the government.)

I was told things like, “No, too expensive. You’ll end up like one of those poor people.”

I was taught to buy the cheapest, even if the more expensive is in the budget, better quality, and more useful. (Now I know a simple cost-benefit analysis can go a long way to helping decide whether to buy something that’s cheap versus something more costly.) The point is that as I became an adult, even though I was debt free and had a significant savings account, I felt poor, was terrified of actually being poor, and I wanted a lot more. And I got it. For a while anyhow.

The positive side of growing up the way I did is that I was taught debt was generally bad (except for a mortgage or car note, for whatever reason). I wasn’t taught why debt was bad, but the lesson mostly stuck. I never — not once in my life — carried a credit card balance. I never paid my bills late. I bought everything in cash, including a luxury automobile.

Wait, what? Frugal with a luxury automobile?

Well, I quickly fell into the classic spending trap once I started earning big. What’s $60,000 for a car when you’re earning that much in just two months? I wrote a check and paid extra to have the specific vehicle I wanted driven cross country and delivered to my door. (In case you’re wondering, that costs over a thousand bucks.) I couldn’t wait to show it off. To whom? To all the poor unsuccessful suckers around me. “Ha! I’m so smart. I bought this expensive car for cash! All these other idiots are using financing. So dumb.”

See? I was already a jerk — but no longer frugal. Obviously.

Things Fall Apart

So, the recession was in full swing although many of us were in denial. Me? Well, as I said, my income tanked and my home’s value tanked. My Roth IRA was worth about what I put into it. My mortgage and home-related expenses were eating close to $25,000 per year, so I was spending more than I was making. (My income fell to below $20,000, remember?) Things were not going well for me.

I decided to try to sell my home.

I listed it below my purchase price. It wouldn’t sell. I set an arbitrary limit to the hit I was willing to take on the home; I was hoping I wouldn’t lose more than $30,000 (or ten percent). In retrospect, I should have done whatever it took to sell. But that’s the thing about hindsight: It’s too easy to look back and judge. I didn’t think things would keep getting worse and I was using emotion instead of logic to make my decisions.

Did I say Frugal Jerk? Frugal Idiot is more like it, right?

But we’re still not to the point of foreclosure. I hustled hard, got some of my income back, and was once again earning nearly $10,000 per month. Not anywhere near what I made before, but a great income nonetheless. I could replenish some of my savings and maybe not worry so much about expenses anymore.

Unfortunately, we still hadn’t seen the worst of the recession. At this point houses like mine were still sometimes — rarely — selling for over $200,000. It wasn’t the $300,000 I bought mine for but it also wasn’t the $120,000 or less they’d eventually sell for. I was uneasy. I didn’t want to take a $100,000 hit on my home (which would take out the majority of my savings), and I didn’t feel like I had many options besides sticking it out and hoping for the best.

Then my income tanked again. Hope wouldn’t — couldn’t — save it. Because, in case you’re unaware, hope is a terrible strategy in business and in life. (Particularly in finance.)

Darkness Visible

Maybe I’ve left out something important: During this time I was also dealing with suicidal depression and debilitating anxiety. Not the result of financial troubles, but certainly exacerbated by them.

The Opposite of This

Getting out of bed or going grocery shopping was unbearable (and, frankly, a rare occurrence). I often went weeks without speaking to another human being. If I had to, I’d do my grocery shopping at 3 a.m. so I could avoid other people. If you’ve read Darkness Visible by William Styron or even Allie Brosh’s more accessible book Hyperbole and a Half, then you might have some understanding of what this kind of depression feels like. It’s something I’ve dealt with since a young age. And by “dealt with” I mean I shut myself off from the world and kept it all in.

It’s no wonder my chosen career path was to sit in front of a computer and not speak to people on a day-to-day basis. Some might say that career path was more curse than blessing. While it’s provided an interesting life, it hasn’t been without consequences.

Living with the proverbial dark cloud of depression is difficult enough. Doing it while also dealing with income uncertainty and a crashing economy? Yikes! Clearly I’m still here, but it was almost too much to handle. Thankfully, humans are resilient creatures. Even jerks like me.

My foreclosure process was long and grueling. From the time I missed my first payment until the day the house was actually foreclosed upon took three years. But, believe it or not, the experience was one of the most positive things to happen to me as an adult. It forced me to re-evaluate my relationship with money and with life itself. I also learned how to start over with nothing, from the bottom of the heap with a broken credit score.

For more on that, stay tuned for part two of my story next week. And if you have more questions than answers leave them in the comments. I won’t answer them here because I’m a jerk — but I’ll cover them in the future.

Reminder: This is a story from one of your fellow readers. Please be nice. After twenty years of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are. Unduly nasty comments on reader stories will be removed or edited.

The post Money story: I was a frugal jerk appeared first on Get Rich Slowly.

GRS Theater: Developing Self-Reliance — Personal empowerment lessons from 1951

Earlier this week, I encouraged readers to become proactive by developing an internal locus of control. In that article, I wrote:

You are the boss of you. You don’t need anybody’s permission to get out of debt or to buy a house or to ask for a raise. And nobody’s going to come to you out of the blue to explain investing or health insurance or your credit card contract. Take charge yourself.

“I get it,” you might be thinking. “Self-reliance is great. But how do I change? How do I get from where I am to becoming a more self-reliant person?”

In today’s installment of GRS Theater, we’re going to look at another fun educational film nearly seventy years ago. This short video (targeted at teenagers) aims to help viewers become more proactive.

“If you’re not self-reliant, you’ll never do any more than just ‘get by’,” says the narrator.

I love how in his desk, Mr. Carson, the French teacher, just happens to have a typewritten card with the four steps to self-reliance. “Learning to be self-reliant takes time…and hard work,” he says, handing young Allen the list.

Here are Mr. Carson’s steps, with a bit of elaboration.

  1. Assume responsibility. Take the blame for things that are your fault; look after your own work; plan your own time; depend on yourself to get things done.
  2. Be informed. If you don’t know some vital piece of information, find it out. Ask. Get the facts you need to make smart decisions. Knowledge gives you power. Ignorance puts you at the mercy of others.
  3. Know where you’re going. Set smart goals. Have a long-range plan so that you understand the general course you’re trying to make through life. Don’t simply react passively to the world around you.
  4. Make your own decisions. Develop the ability to think for yourself. Don’t rely on others to make choices for you — that’s a sure route to unhappiness. Be decisive.

These steps are very similar to habits espoused by modern self-help gurus. Taking control of your own destiny is a great way to improve your satisfaction with life, to increase your happiness. The film picks up bonus points from this lit geek by name-dropping Ralph Waldo Emerson and his essay, “Self-Reliance”:

There is a time in every man’s education when he arrives at the conviction that envy is ignorance; that imitation is suicide; that he must take himself for better, for worse, as his portion; that though the wide universe is full of good, no kernel of nourishing corn can come to him but through his toil bestowed on that plot of ground which is given to him to till. The power which resides in him is new in nature, and none but he knows what that is which he can do, nor does he know until he has tried.

In the film, we get to watch as young Allen gains self-reliance, which transforms him from a dependent child to a confident young adult. Eventually, he becomes a leader among his classmates.

“Yessir,” says Mr. Carson. “That was self-reliance — the kind we can all use. It’s hard work to become self-reliant…[but] Allen learned to do it, and he’s a certainly a happier and a better person for it. Will you develop the habit of self-reliance?”

The post GRS Theater: Developing Self-Reliance — Personal empowerment lessons from 1951 appeared first on Get Rich Slowly.

How to shop for high-quality clothes

I’m in Florida for ten days to attend a couple of weekend early retirement retreats. At Camp FI, about 50 or 60 people gather for three days of what Mr. Money Mustache calls “crazy rich people talk” — real estate investing, travel hacking, gift card arbitrage, 70% saving rates, and the rewards of frugality and thrift.

One afternoon, the conversation turned to clothing. Given that so many people in the room had a net worth of more than a million dollars, a surprising number of us still bought our clothes at thrift stores.

Cheapskate Millionaires

“I can’t bring myself to pay more than ten dollars for a t-shirt,” one guy said. We all nodded in agreement.

“I don’t pay anything for t-shirts,” said another fellow. “I travel a lot for work. When I go to conferences, I often come home with three or five or ten t-shirts. There’s no point in ever paying for them.” Throughout the weekend, I noticed that a lot of us wore t-shirts we’d picked up for free. (Because we’re money nerds, Choose FI t-shirts were prominent.)

“But what about quality clothes?” asked one woman. “I get why we’re all so cheap on the everyday stuff. But sometimes, I want clothing that looks good, that I can go out in.”

“I’m a long-time thrift store shopper,” I said, “and it’s taken some effort to allow myself to shop in regular stores. For quality stuff, I think it’s important to find a store with styles you like where the clothes also fit well.”

“I’ll give you an example. In the fall of 2016, I made a trip to New York City. The forecast was for warm weather, so I took warm weather clothes. Turns out, temperatures were much lower than expected. And it rained. I was unprepared. My hotel was next to a J. Crew store, so I stopped in. I had never shopped there before in my life, but I discovered I liked the stuff they had and their clothes fit me well. I didn’t like the prices, but I managed to find a few things on sale, so I bought them.”

I paused and looked down at the clothes that I had on. “Ha,” I said. “Right now, I’m wearing the dress shirt and sweater I bought that day in New York.”

Beyond Cheap

“I don’t shop at thrift stores,” said the man standing next to me. “I don’t like to have a lot of cheap clothes. I like simplicity and minimalism. So, I’m willing to pay more for my clothes because I buy only a handful of items and expect them to last a long time.”

“Can you give some examples?” somebody asked.

“Take this shirt I’m wearing now,” he said. “It’s a wool t-shirt from Icebreaker. And this jacket is from the same company. It’s more expensive — probably a lot more expensive — but it lasts a long time, looks good, and is very versatile. Merino wool is warm when it’s cold and cool when it’s warm. Plus, I can wear it for days on end without it stinking. I think that J.D. likes Icebreaker stuff too, right?”

“I do,” I said. “I brought two of their wool t-shirts with me on this trip. And because it’s freezing here in Florida right now, I brought an Icebreaker jacket.”

“I try to keep a small wardrobe too,” said another friend. “For me, that means always wearing the same thing. I have like four or five of the same t-shirt. I have two pears of pants, and they’re both the same. And all of my socks are the same. I don’t even fold them. I just throw them all in the drawer loose since it doesn’t matter which ones I pull out.”

Sidenote: I didn’t mention it during the conversation, but you can find quality clothes at thrift stores. They’re more expensive, sure, but not nearly as expensive as buying them new. The key is patience. Sort through the racks. You might only find one or two items per trip, but that’s okay. To increase your odds, find a thrift store in a nice neighborhood. Kim and I, for instance, recently discovered a consignment store near us called Simply Posh. It has lots of nice clothes at great prices.

The Quest for Quality

“You know, I read a great article recently,” I said. “I just shared it with the Get Rich Slowly mailing list. It’s all about how to shop for high-quality clothes. One of the points it made is that quality doesn’t have to be expensive — and that expensive doesn’t always mean quality.”

I gave an example. I’m a h-u-g-e bag nerd. I have far too many backpacks and travel bags. “One of my favorite places to buy bags is a company called Filson,” I said. “Their luggage is outstanding. Because of this, I thought their clothes would be high quality too. They’re not. Filson clothes suck. They’re still very expensive, but they’re all poorly made with awful fit. I’ve spent a ton of money on Filson clothes, but I’ll never spend another penny on a shirt or jacket from them. Not even a belt.”

“How can you tell quality clothes?” somebody asked.

The article I read says that the most important factors are fabric, fit, and construction,” I said. “Clothes that are made well with quality materials will last longer. They’ll be more durable. They’ll also look better. But like we’ve already talked about, nothing matters if the clothes don’t fit well. It doesn’t matter how much something costs if it doesn’t look good on you.”

“Yeah,” said one gal, who is a doctor. “That’s an important point. And I’ve found that clothes fit me much better when I am fit. If I’ve been exercising and I’m in shape, clothes fit like we’re supposed to. Plus, being fit gives me confidence, and that can make any outfit look sharp.”

How to Discern Quality

Later, when I got back to my room, I re-read the article about how to shop for high-quality clothes. According to the author, there are three things to look for when shopping for high-end clothes:

  • Natural fabrics. “From my experience, natural fabrics feel better against the skin, wash better, and last longer…If you have crappy, flimsy fabrics, the best designs and construction won’t save it.” The article offers tons of tips on how to shop for cashmere, wool, cotton, and leather clothing.
  • Construction. “The quality of construction depends on how well fabric pieces are stitched together. An initial test could be holding the garment up to the light and stretching one of the seams to see how much light comes through. If the thread is really tight and even, this is a good sign.” In the article, the author shows photos to demonstrate good construction versus poor construction.
  • Where it’s made. “Good manufacturing can happen in any country, but I’ll use the country to determine how much I’m willing to pay. For example, I know labor costs in the US is expensive, so I’m willing to pay more for an item made here.”

Although I’ve already read this article four times in the past month, I’ve bookmarked it to refer to in the future. In the past, I was always a poor dresser. I wouldn’t say my fashion sense is sharp yet, but it’s improving. (It helps that Kim has been gently prodding me for the past six years!)

Footnote: While writing this article, I stumbled upon the concept of the capsule wardrobe, which is a small (30-40 item) wardrobe deliberately built with high-quality, timeless pieces that all co-ordinate with each other. This contrasts with how most of us build wardrobes: randomly and in piecemeal fashion. More here.

We’ve talked about shopping for clothes several times in the past here at Get Rich Slowly. Here are two of the most popular posts: How do you build a wardrobe on a budget? and How much do you spend on clothes?

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Your credit score — and why it matters

For today’s edition of “back to basics” month at Get Rich Slowly, we’re going to talk about credit scores. What is a credit score? Why should you care?

As you go about your life, you leave a trail of transactions. You take out a mortgage, you buy a new car, you use your credit card to buy new clothes and your debit car to purchase groceries.

Every month, your creditors — the companies to which you owe money — send info about your recent activity to a variety of credit reporting agencies (commonly referred to as credit bureaus). Each agency collects this info into a file called a credit report.

Your credit report is a history of how well you’ve managed your credit. It contains info about where you’ve lived, how much you’ve borrowed, and whether you tend to pay your bills on time. It also notes if you’ve ever filed for bankruptcy.

The credit bureaus — Equifax, Experian, and TransUnion — sell your credit report to other businesses so they can decide whether to lend you money, sell you insurance, rent you a home, or give you a job.

Credit reports may be boring, but they’re vitally important because they provide the basis for your credit score.

How to Get Your Free Credit Report
The U.S. government has mandated that consumers be allowed to view their credit reports from each of the three major reporting agencies once every year. This is easy to do via the free website. (Beware of scammy lookalikes. This one is the official government-sanctioned site.)

To get your report, you need to provide some basic info like your Social Security number. You might also need to answer some questions about current and/or past accounts. Sometimes these questions get tricky if you don’t have quick access to your files. (When Kim had to check her credit report recently, she couldn’t remember the amount of her mortgage payment from 2005. Her request was denied.)

If you’d like, you can obtain reports from all three credit reporting agencies at once. Or, you can stagger your requests, possibly requesting one report every four months from a different agency.

Your Credit Score

While your credit report collects info about your debt history, your credit score is a single number that summarizes all of that data.

Credit scoring has been around for decades in one form or another. It only became widely used during the 1980s after a fim called Fair Isaac (now known as FICO) developed a new type of credit score called a FICO score. The mortgage industry recognized the usefulness of credit scores, widely adopting them in the mid-1990s. Other industries followed suit.

To generate your credit score, FICO takes bits of data from your personal credit report and compares this info to similar data from millions of other people. FICO then uses secret formulas to squeeze all of this information into a single number, which can range from 300 to 850. This number is a measure of risk. It gives lenders a good idea of how likely you are to pay them back. They use it to decide how much to lend you, what interest rates to charge, and what terms to set.

Although the FICO score is the most widely used credit score — used in over 90% of U.S. lending decisions — it’s not the only credit score. Other companies offer competing credit scores, and FICO (the company) offers a variety of specialized scores to measure things like how likely you are to declare bankruptcy, close an account, and so on.

Take a company like Credit Sesame, for instance. Credit Sesame offers a variety of credit-monitoring tools including a free credit score. But Credit Sesame does not use a FICO score. The company uses the VantageScore, which was developed by the three major credit bureaus as an alternative to the FICO score.

Confused? Don’t sweat it. The important thing to remember is that we often talk about “your credit score” like it’s just one thing when it’s actually many credit scores.

“A bad or even mediocre credit score can easily cost you tens of thousands and even hundreds of thousands of dollars in your lifetime,” Liz Weston writes in Your Credit Score. “You don’t even have to have tons of credit problems to pay a price. Sometimes all it takes is a single missed payment to knock more than 100 points off your credit score and put you in a lender’s high-risk category.”

A high credit score will get you the best interest rates on credit cards and loans, including mortgages. With a low score, you’ll pay higher fees and interest rates.

Here’s an example from FICO:

FICO Score Effect on Mortgage Terms

Bad credit can cause a downward spiral. One money mistake leads to bad credit, which costs you more money and leads to more debt, which drops your credit score…and so on. But your credit history doesn’t just affect your ability to borrow money. Nowadays, it’s used by insurance companies, landlords, and even employers.

  • Some insurance companies use a specific credit score (known simply as your insurance score) — combined with other info — to gauge how likely you are to file a claim. A lower score can lead to higher insurance premiums.
  • When you try to rent a home, your prospective landlord may run a credit check. If your credit score is low, she may see you as a high-risk tenant and ask for a larger security deposit — or simply turn down your application.
  • Current and potential employers can pull your credit report if you grant them written permission. This is especially true for which security is important. To some employers, a good credit record shows that you’re less likely to steal from the company, to take bribes, or to reveal sensitive information.

As you can tell, your credit score can have a very real impact on your life. But how is your credit score actually calculated? Let’s take a look.

FICO Score Components

The Anatomy of a Credit Score

According to FICO, your credit score is determined by a variety of factors that predict how likely you are to repay the money you borrow. Your credit score tracks 22 pieces of information from five broad categories:

  • Payment history (35% of your FICO score): Do you pay your bills on time? If you pay late, how late? How long has it been since you missed a payment? How many times have you had problems? The more responsible you’ve been, the higher your score.
  • Amounts owed (30%): How much credit do you currently have? Of that credit, how much are you using? How many of your accounts have balances? The less of your available credit you use, the better your score.
  • Credit age (15%): How long have your accounts been open? How long has it been since you used them? The longer you’ve had accounts, the better your score.
  • Credit mix (10%): How many different types of credit accounts do you have? (The two main kinds are installment debt like a car loan or a mortgage and revolving debt like credit cards.) How many do you have of each type? Your FICO score will be higher if you use a mix of different kinds of credit. (This is the only weakness to my own score. I don’t have any installment loans at the moment.)
  • New credit (10%): Have you opened new credit accounts recently? How many? Opening new accounts may ding your score, especially if you open many at once.

For some folks — like young adults who don’t have a lengthy credit history — the weight of each individual category may be a little different.

While FICO shares this broad overview of how they determine scores, the actual formulas are confidential. If you want more info, download the free “Understanding FICO Scores” booklet from FICO.

How to Get Your Free Credit Report
Even a decade ago, it was tough for a consumer to get her credit score. They were considered top secret info. It was a Big Deal to find some sort of hack that let you see your number.

Nowadays, there are a variety of ways to see your credit score for free. Both my Capital One credit card and my Chase credit card, for instance, give me access to my credit score. On those rare occasions I need to make a large financial transaction, I’m almost always offered my credit score.

And, of course, there are now companies like Credit Sesame, which are set up to offer consumers a variety of credit-monitoring tools, including a free credit score. (I’ve been watching my credit score with Credit Sesame for a while now. It was 804 a year ago. It was 810 in November. It’s 814 now. But I still get a “D” for my account mix. If I had other types of credit, my score would be higher.)

My Current Credit Score

What Is a Good Credit Score?

According to FICO, the national average FICO score is 695. While the company doesn’t share detailed stats about credit scores, they have published the following guidance:

  • A FICO Score of 800+ is considered exceptional.
  • A FICO Score between 740 and 799 is considered above average.
  • A FICO Score between 670 and 739 is considered average.
  • A FICO Score between 580 and 669 is considered below average. (Many lenders will still approve loans with scores in this range.)
  • A FICO Score below 580 is well below the U.S. average and shows that you’re a risky borrower.

Each of these ranges (or quintiles) contains roughly 20% of the American population. (About 17% of the U.S. has a score below 580, for example, while 19.9% have scores above 800.)

Last February, I signed up for a new credit card. My banker was chatty and we had an amusing conversation about credit and credit scores.

“Your credit score is 804,” he noted. “That’s unusual. The average credit score is below 700. You also pay off your balance every month. That’s unusual too.”

“It is?” I asked.

“You bet,” he said. “Something like 90% of our credit card clients carry a balance. I can tell we’re probably not going to make any money off of you, but that’s okay. You can’t win them all!”

Although income is not a direct factor in computing credit scores, there is a strong correlation between household income and credit scores. The more a person earns, the higher her credit score is likely to be. Age is also a factor (which isn’t surprising since you have to build a credit history to have a good score).

FICO Score Distribution by Age

How to Improve Your Credit Score

Simply knowing your credit score doesn’t do you a lot of good. If you’re not happy with your score, you can take steps to improve it. My pals at Stacking Benjamins just published a podcast interview with Farnoosh Torabi about the keys to raising your credit score. From my reading, these five factors are important in giving it a boost:

  • Pay off your debt. According to credit expert Liz Weston, “The most powerful thing you can do to improve your credit score is to reduce your credit utilization.” In other words, reduce your credit card balances. FICO reports that about one in seven people who carry credit cards are at over 80% of their credit limit. “Below 30% is good,” Weston says. “Below 10% is better.”
  • Pay on time. According to Weston, if your FICO is 780, a single late payment can drop it 100 points. If your score is 680, a late payment can cut it 70 points. If you miss a payment, don’t panic. Do what you can to get current and stay current.
  • Only open new accounts you need. Don’t open a store charge account just for kicks or because the salesman pressures you into it. New accounts are only a small part of your total score, but they do have an effect. Keep new accounts to a minimum, especially if you’re planning a big purchase (such as taking out a mortgage).
  • Don’t close old accounts. It’s okay to cut up old cards or to free them in a block of ice, but to maximize your score, keep the accounts open. If you have to close an account or two, close newer accounts before older ones.
  • Keep tabs on your credit report. Even if you do everything right, your credit score can take a hit from identity theft and other forms of fraud. Even simple errors can hurt your score. Check your report regularly, and correct any problems you find.

Here’s a final word of advice: Don’t obsess over your credit score. Sure, it’s important, but ultimately it’s a number for lenders, not for you. A less-than-perfect score isn’t the end of the world.

I just spent the weekend in a group of 58 early retirees. Many of these folks have more than a million bucks in the bank but have lousy credit scores because they do things like travel hacking. They’re not worried because they know their credit score is just one piece of the puzzle.

If you struggle with compulsive spending, it’s far better to cancel your credit card accounts and take the hit to your credit score than it is to risk getting buried deeper in debt. The bottom line? Be smart with your money and your credit score will be fine.

Next Steps
If credit scores are important to you or interest you, I recommend Liz Weston’s Your Credit Score. Whether she likes it or not, Weston has been pigeon-holed as one of the top credit score experts in the nation. Her book is packed with great info on how credit scores work and how to improve yours.

I also recommend checking your credit score regularly. I pull mine whenever I check my credit report. But I try to to look at it every month or two, even if I’m not checking my credit. I use one of my credit card accounts, if I think of it while I’m doing my finances. Otherwise, I just pop into Credit Sesame.

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J.D. on the NewRetirement podcast: Financial independence, purpose, and happiness

From time to time, I make podcast appearances. Last week, for instance, I recorded three episodes for various shows — including a l-o-n-g discussion with Joe Saul-Sehy from Stacking Benjamins about the pros and cons of the new Star Wars movie. (Our discussion starts at 56:13 and lasts for half an hour!)

New RetirementThe afternoon before I flew out to Florida, I sat down to chat with Steve Chen from NewRetirement.

For those of you unfamiliar, NewRetirement is a retirement planning tool. It’s not just a calculator, but a sophisticated forecaster to help you plan your future. I have no financial stake in the company — not yet, anyhow — I just like it. I think most retirement calculators suck. The NewRetirement tool is one of a handful I like.

Anyhow, over the past year, I’ve had a chance to get to know NewRetirement founder Steve Chen. I like and respect him. He’s doing good work and his heart is in the right place. When he asked me to be the first guest on his first podcast, I was eager to do so. We talked about purpose and happiness (Surprise!)

Steve and I had planned to talk about the pros and cons of early retirement, but, as sometimes happens, our talk strayed to other (equally interesting) topics.

I don’t have space to quote the entire transcript. (You can find that here.) Instead, I’ll highlight one of my favorite (edited) sections.

I want to ask you another question. One thing that I found really interesting about you is that you’re writing about personal finance and helping people make better choices, but I also know that a big thing for you is purpose — helping people figure out what should they be doing with their time and their lives. I’m wondering if you could elaborate on that a little bit.

I have a money blog. I write about money. I mentioned at the start of the show that I have a degree in psychology. I’ve always been interested in the pursuit of happiness. What does it mean to be happy? What does it take to be happy?

Even though I’m writing about money, I’m actually writing about the pursuit of happiness. From my reading and my experience, the best way to achieve well-being is to have a sense of purpose and to pursue that purpose, to build your life around that purpose. I know that sounds New-Agey, maybe a little hokey. I don’t mean it in a hokey, New Age way. I mean it a very real way.

As long ago as Aristotle — thousands of years ago — up to modern day, psychologists have found that when you have a purpose, when you have a direction in your life and you build your life around it, you tend to be much more fulfilled. It’s easier to make decisions with your money, with your time, with your friends — with everything — if you know what it is you want to accomplish out of life.

I don’t think there’s any one right purpose that’s right for everybody. For some people, your purpose might be your family. For other people, it might be travel. For others, that might be serving a higher calling, whether that’s a God or some other purpose like serving others. It doesn’t really matter. I urge my readers to get clear on what their purpose is so they can make better financial decisions.

One interesting thing is that the rates of depression actually go up when people retire because they lose a lot of the benefits that they have from work that they might not have been aware of: the social connections, the sense of purpose, the daily activity, just being out and about. Suddenly, that goes away and your life is suddenly different. Thinking about that ahead of time is super important.

As I say, I think the whole conversation was interesting. If you’d like to read (or hear) more, check out the NewRetirement website.

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Fighting lifestyle inflation: Hopping off the hedonic treadmill

This is a guest post by former Get Rich Slowly staff writer Donna Freedman, a veteran personal finance journalist — and one of my favorite writers. Since leaving GRS, Donna has published two books: Your Playbook for Tough Times and Your Playbook for Tough Times, volume two. These are both excellent handbooks for folks trying to make ends meet under difficult circumstances.

Your Playbook for Tough Times by Donna FreedmanFrugalists aren’t averse to spending. They’re just canny about how they buy, or whether they buy at all.

That’s a tough sell, so to speak, in a country where we’re persistently pressured to keep up with the Joneses (or the Kardashians). Flash sales, one-click shopping apps, deal websites, and near-weekly sales at brick and mortar stores make it soooo easy to buy.

Haul photos on social media, hot deals shared by friends, clothing or cosmetics worn by favorite celebrities, that bling your sister-in-law sported at Christmas – spending triggers, every one of them.

It’s tempting to believe that next purchase will be the one that makes you finally, truly happy. Except that it probably won’t, thanks to what sociologists call the “hedonic treadmill” or “hedonic adaptation” – our tendency to adjust back to previous levels of happiness after a spike in glee.

J.D.’s note: You might have seen this concept referred to as “lifestyle inflation” at GRS and other money blogs.

Maybe that initial joy is caused by a pay raise or the purchase of a big-ticket item like a luxury car, or even a smaller-ticket item like a leather jacket or the cookware you were convinced would change your life. All too quickly the Lexus becomes just another vehicle, and the raise seems to melt away thanks to lifestyle inflation (like, say, a higher auto insurance rate).

A steady practice of purchasing sets the bar higher every day. Shopping, meals out, luxury vehicles, fabulous entertainment all become needs rather than wants. Little extras and perks are no longer treats – they’re the bare minimum of acceptable.

Saying “Yes” to What Matters

As a midlife university student paying off divorce-related debt, my default setting was “no.”

  • No, I couldn’t shop anywhere but the secondhand store.
  • No, I couldn’t go out every weekend.
  • No, I couldn’t stop brown-bagging.

My dollars had better places to go than malls or movie theaters. Specifically, they were slated for slaying my divorce-related debt, and for building my emergency fund and retirement account.

Once I was debt-free and reasonably well-funded, the “no” setting turned into “well, sure – if you really think it through”. I was able to say “yes” to things that really mattered: health insurance, charitable donations, therapeutic massage, travel.

Mostly, though, I kept soaking beans instead of ordering in, taking the bus instead of buying another car (I’d given the old one to my daughter and son-in-law when they moved), and sticking with my thrift-shop apartment furnishings.

It’s not that I minded spending. I just didn’t want it to be too easy. You shouldn’t want it to be easy, either.

Saying “no” or “not today” doesn’t just improve the bottom line; it also enhances the occasions when you do say yes. A really nice meal out or tickets to the opera or the monster truck rally feel super-special precisely because you don’t get them all the time.

I love steak, probably because I rarely eat it – but when I do, oh boy is it ever great. Would I enjoy it as much if I ate it twice a week? Probably not.

Deferred Gratification Doesn’t Have to Hurt

Understand: I’m not saying you should never buy anything. Frugality does not translate to a life of joyless self-denial. What it does mean is making conscious decisions about what’s right for you and your money.

Obviously you should enjoy the fruits of your labors. Never underestimate the effect of a Saturday matinee or a craft beer with friends; even small treats can feel supremely luxurious.

But treat yourself mindfully rather than automatically. How easy it is to think, “It’s just a hobby magazine” or “I deserve to hit the clubs every weekend while I’m young and carefree”. Pile up enough of those publications and pay enough of those cover charges and it starts to look like real money.

Deferred gratification doesn’t have to hurt. In fact, new electronics might be exponentially cooler because you researched them, anticipated their purchase for weeks, and then paid cash. Which brings me to a word you don’t hear all that often: sacrifice.

Putting off immediate desires used to be a defining characteristic of adulthood. First apartments and first homes were small and modestly decorated (and “decorate” was often code for “things from your grandparents’ attics”). Making it in the real world meant years of hard work and of using it up, wearing it out, making it do or doing without.

That notion may seem downright quaint to those who grew up in a culture of buy now and pay eventually. Why shouldn’t you have the latest smartphone upgrade? Why shouldn’t your first apartment have throw pillows and wallpaper borders and pillow shams that match the dust ruffle? Why shouldn’t your kids have the best that money can buy?

Because you pay for many months or even for years, that’s why, and because it’s not just the interest charges that hurt. Being in debt means opportunity cost – think of where that money could have gone! – and more to the point, it limits your options. How many people do you know who hate their jobs but can’t afford to quit because they need to make minimum payments on the credit cards that paid for all the things they bought to take their minds off the fact that they hate their jobs?

Frugal people do attend shows and sporting events, buy cars, take vacations. What they don’t do is get these things by going into debt without a clear plan to pay it off. That’s like sticking your head in a lion’s mouth on the theory that it might not be hungry today. But it probably is – and you won’t know for sure until you feel the jaws clamp down.

Face it: You probably won’t win the lottery or have a rich uncle leave you a bundle. Your needs and your wants will be met by the dollars and cents that you earn and build.

It can be hard to imagine how the things you give up today will make a big difference decades down the road. But you are responsible for that future, which means being responsible in the present.

Donna’s books are available on Amazon and Kindle for $9.49 and $7.99, respectively. She’s also created a Get Rich Slowly discount for the e-versions (PDFs). You’ll pay $5 per book if you visit her online payment platform and using the code GRS1 for the original “Playbook” and GRS2 for “Playbook Vol. 2.”

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