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The Simple Dollar

A clerk poses for a photo showing cash in the register at Vidler's 5 & 10 store in East Aurora, N.Y. Looking to save money? Resisting the temptation to go into a store is easier than resisting the temptation to buy something, Hamm explains. (David Duprey/AP Photo/File )

The easiest way to save money? Don't go in!

By Guest blogger / 10.28.13

The other day, I stopped at a gas station with my children in tow.

Ordinarily, this would be a simple visit – I’d gas up, pay at the pump, jump back in, and we’d be on the road again.

That day, though, my youngest one announced very loudly that he had to go to the potty now( Continue… )

FC Dynamo Kiev's Dieumerci Mbokani, third left, scores a second goal for his team against FC Thun in Kiev, Ukraine. Hamm argues that setting too many goals and not following through on them can waste as much time as not setting goals at all. (Efrem Lukatsky/AP/File)

Goals: Can you have too many at once?

By Guest blogger / 10.26.13

Setting and pushing toward goals has been an incredibly positive and powerful part of my life over the last several years. Goal-setting and progress toward goals helped me build The Simple Dollar, helped me get out of debt, and helped me build a successful marriage and a strong connection to my children. It helped me write two books, take on leadership positions in the community, and build a wonderful group of friends that I value and rely on.

That type of perspective makes goal-setting sound like an unbeatable approach to life, but, just like anything else, it’s really easy to mis-use goals.

The easiest way to misuse them? You have so many goals that you’re not really able to move forward on any of them.

If I were to sit down and list out every goal I dream of achieving at some point in my life, I could fill up bookswith those goals.

If I were to designate all of those goals as active goals, I would never achieve any of them because of the sheer effort needed to make all of them happen at once. I would be spending so much time figuring out the next step on so many projects that I’d never move forward on any of them.

My solution is simple. If I have a goal I would like to achieve in the future, I simply write it down as a “someday” project. I have a really long list of those goals and projects.

Most of the time, I have ten or so different ongoing projects and goals. This is just about the perfect number for me. ( Continue… )

A retiree swims his daily mile training for the Masters national championship in Sun City, Ariz. (Lucy Nicholson/Reuters/File)

4 questions to ask about your 401(k)

By Guest blogger / 10.25.13

Beth wrote in with a great question:

I have thought for months about going into the HR office and signing up for the 401(k) plan but I don’t even know what I should say when I go there. What should I ask about so that I don’t feel like an idiot?

Based on lots of reader emails, I think this fear of seeming “like an idiot” keeps a lot of people from making the simple but vital move to simply sign up for a 401(k) plan. They read about it, but they’re overwhelmed by the details, and they don’t want to seem “dumb” when they go in and sign up for a plan.

Here’s how you can do it without seeming foolish. Just go to your human resource office and tell them that you’d like to sign up for their 401(k) plan, then fill out the forms that they give you.

Here are four key questions you might want to consider asking.  ( Continue… )

A woman takes a deposit box out of a compartment in the safe room of an Austrian bank in Vienna. Quite often, people are walking out of high schools and colleges without the first clue about how to handle the money they’ll be earning, Hamm writes. They learn via trial by fire. (Heinz-Peter Bader/Reuters/File)

Personal finance seems easy. It's not.

By Guest blogger / 10.25.13

One of the biggest criticisms levied at The Simple Dollar – and pretty much every other personal finance site out there – is that the advice shared on it is really obvious.

Spend less than you earn. At its core, that’s really what it all boils down to, after all.

There’s a problem with that, though. If personal finance advice is so obvious, why are 76% of Americans living paycheck to paycheck? Why does the average American household owe more than $7,000 on their credit cards?

The reason is simple: personal finance advice might be simple, but it’s rather hard to implement.

Why? There are a lot of reasons. Here are some of the key ones.  ( Continue… )

A worker counts U.S. dollar bills at a money changer in Manila. Hamm explains that a slight change to your daily routine could save you more than a slight amount of money. (Romeo Ranoco/Reuters/File)

A slight routine change can save you money

By Guest blogger / 10.23.13

Every single one of us makes mistakes.

We sleep in too late. We forget to call someone. We spend more money than we should. We eat a ridiculously unhealthy meal. We don’t put in full effort at work. We forget an appointment. 

Whenever I make a significant mistake, two things happen. First, I have to deal with the consequences of the mistake. I have to make things right, in other words. Second, I look for ways so that I don’t have to repeat that mistake.  ( Continue… )

A woman shakes hands with a financial adviser following a counseling event for homeowners applying for mortgage modifications in Oakland, Calif. (Robert Galbraith/Reuters/File)

Financial planners: How to find the right one for you

By Guest blogger / 10.22.13

Welcome to the latest installment in my “ultimate guide” series, where I attempt to lay out all of the things you need to know and consider when making a purchasing decision or a personal finance move. You can check out the “Ultimate Guide” archives for a full selection of these guides.

Today, we’re taking a look at selecting a financial planner. Hiring the right financial planner can be a very daunting task, with a sea of titles and acronyms out there and many advisors clouding the water with clever marketing. Not only that, financial advice is some of the most crucial advice that we receive, as it is often crucial to the planning of our future.

How do we know if we’re hiring a good one? One can never be sure, but here’s how you can navigate the waters and figure out if you need an advisor and, if so, how to find one that’s right for you.

Advisor? Or planner? Let’s settle this issue right off the bat. First, anyone can call themselves a “financial planner” or a “financial advisor.” Those terms are generic and can be used by anyone who wants to.  ( Continue… )

Paralympic swimmer Jessica Long holds up a gold medal as she poses for a portrait. Hamm reminds us that just because people don't advertise their failures doesn't mean they haven't failed. (Lucas Jackson/Reuters/File)

Other people make everything look so easy. It's not.

By Guest blogger / 10.21.13

For the most part, whenever I sit down to write a post for The Simple Dollar, I try to sketch it out like a story.

Like any good story, it has a beginning, a middle, and an end. Usually, the story tries to show someone – usually me – overcoming something or growing in some fashion. (I also try to keep it at a reasonable length and try to use straightforward language.) These are elements of basic storytelling. Few people enjoyhearing about failure on a consistent basis – they want to hear about progress and success.

The challenge with this is that most posts end up showing a positive outcome of some kind, creating a cumulative impression that I’m someone who is overcoming every challenge thrown at me. That’s not true, of course – I mess up all the time – but to write something both compelling and useful, that basic story is the one that works.  ( Continue… )

A dessert plate of Grilled Fruit en Papillote at Le Bernardin restaurant in New York. Hamm argues that throwing a great dinner party is more about hard work than throwing money around. (Bebeto Matthews/AP/File)

The truth behind the 'perfect' dinner party

By Guest blogger / 10.19.13

Not too long ago, I read an article in an issue of Bon Appetit about Mimi Thorisson, who publishes a blog called Manger. The magazine article included quite a few wonderful photographs of Mimi and her family preparing for and hosting a dinner party. (Here’s part of that article.)

It looked fabulous. In fact, it made most of my dinner parties look pretty awful.

Frankly, I wished I could host a dinner party like the one Mimi was hosting in the magazine, and I honestly doubted whether I could really pull it off.

Along with the article was, of course, a guide to making at least some of the elements work. The article suggested buying candles (with nice candlesticks) to aid with the lighting, “overdo” the flowers, serve the best possible wine and bread, and so on.

In other words, most of the suggestions involved spending money or spending absurd amounts of time.

Those are the easy answers. They’re not really the key to having this kind of beautiful dinner party.

There’s also another element going on here – and it’s something that I’m even guilty of myself sometimes on The Simple Dollar. The photos and the specific stories from the article are carefully selected to create an amazing picture, and there’s a ton of work going on (and a ton of failures) that you don’t see. ( Continue… )

24-karat gold bars are seen at the United States West Point Mint facility in West Point, N.Y. (Shannon Stapleton/Reuters/File)

Three financial traps to avoid

By Guest blogger / 10.18.13

I get a lot of email from readers. Most of them are from people either writing to comment on an article privately or to ask a question for the reader mailbag.

Some, though, write in to encourage me to post an article on a certain topic. Sometimes, it’s because they want to promote a product. Other times, it’s because they truly believe in an idea and want me to share it.

Quite often, I can file the “true believer” requests into several different groups. Today, I’m going to address three of the most frequent ones.

You Don’t Have to Pay Income Taxes!
Quite often, tax protesters will write in, encouraging me to announce on The Simple Dollar that people don’t actually have to pay their income taxes.  ( Continue… )

Salsas and other items in the International food aisle of a grocery store Wednesday, Oct. 16, 2013 in Washington. Hamm's tips for making smart, small purchases include buying gneneric and focusing on specific qualities you want out of the product. (Alex Brandon/AP/File)

Making the right 'spur of the moment' purchase

By Guest blogger / 10.18.13

Many times in the past, I’ve talked about my process for figuring out a major purchase. I’ll consult Consumer Reports, I’ll talk to my social circle, and I’ll usually end up buying with reliability as a primary factor.

This process really helps for anything that’s expensive, because the time you invest in figuring out the right purchase, but what about a spur of the moment purchase?

For example, what do you do when you stroll into a grocery store with a grocery list that your wife assembled? One of the items is “tortilla chips,” but when you go down the chip aisle, you find that there are thirty types of chips. Ideally, you want to pick the one that offers the best “bang for the buck” for you, but how do you figure it out?

This is a problem that I’ve thought about quite a lot because, frankly, it comes up fairly often. I’ll go to the store with an item in mind that I want to purchase, but when I finally reach that item, I’ll find two or six or twenty different versions of the item. Knowing how to make the best choice in that situation saves you a little money and probably a little time, too, but if you can make the best “bang for your buck” choice over and over again, you’ll end up saving a lot of time and a lot of money.

You might think that buying things like laundry detergent and tortilla chips and body wash might have completely different processes for figuring this out, but I’ve found that they really do not. I end up using the same two steps in this situation each and every time I face it, regardless of the product.

Here’s how I approach it. ( Continue… )

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