How should we balance frugality with social/environmental responsibility?
Whenever I read personal finance books and articles, I often see the term “financial independence” bandied about. To some, it merely means not relying on a parent or other loved one to help pay the bills. For others, it means freedom from all debt. For yet others, it means freedom from having to work for income.
These are all apt definitions of financial independence, perfectly applicable to different points in life and each useful as a goal for some people. Let’s take a look.
Over the last few weeks, I’ve had a long conversation with a reader I’ll call Jenny. Jenny has one big thing she loves to splurge on in her life - she likes to take long weekend trips about once every three months, leaving on a Thursday night and getting back late on Monday. Those are her “vacations,” and she goes all over the place on them. She’s been to just about every major European city, much of South America, almost everywhere in the United States that one could even conceive of going, and so on.
Over the last two years, I’ve reviewed in detail more than a hundred (actually approaching two hundred) personal finance and personal productivity books on The Simple Dollar - for more than a year, I reviewed two a week. Over that time, many readers have asked me what I’m doing with all of those books. Some came from the library, a few were review copies, and some were gifts, but surely I had to be building up quite a library, right?
Prior to our financial meltdown, my wife and I simply never sat down and talked about our finances. Right after our meltdown, we talked about things almost every day, but through our recovery, our discussions have slowly reduced themselves to the point where we’re effectively already having monthly family financial meetings.
And these meetings have become a big part of the financial glue of our marriage.
Over the last few weeks, several readers have written in asking me what I’m going to do with my economic stimulus check, perhaps in hopes that it would give them some idea as to what to do with it. I thought that walking through my plans for the money might give some people insight into how I make my financial decisions.
Here’s my family’s exact plan for the $1,800 we’ll soon be receiving: every single dime of it is going towards my wife’s student loan.
A number of people have asked me how I’m saving for retirement now that I’m self-employed, and several more asked yesterday when I mentioned that I was signing up for a SEP-IRA. In order to clarify everything, here’s exactly how I’m saving for retirement as a self-employed writer.
For comparison’s sake, my previous retirement savings were exclusively in 403(b) and 401(k) plans.
I often write about how a person can save a few dollars here and a few dollars there by making a few little changes in their life. For some of my readers, this seems pointless, and they’re quite happy to tell me so. “Why bother saving $3?” they’ll ask.
Over the last month or two, I’ve really begun to understand the reasons for frugality: those little choices snowball into something big over time. Let me show you exactly how it works.
At some point, as a relationship grows and becomes more serious between two people, questions begin to arise about long-term plans, particularly as it begins to become clear that at least a significant portion of two lives are going to overlap and become one.
For my wife and I, these discussions started about a year before our wedding. We just talked casually about things, such as merging checking accounts and saving a lot in our supplemental retirement plans. We mused about kids a bit, with a general consensus of waiting for a least a year after our wedding.