A couple years ago, Farnoosh Torabi wrote You’re So Money, I book I succinctly described by saying “this book pitches personal finance advice for consumerism addicts.” Nevertheless, I concluded that the book did offer some very solid advice to the crowd that would not allow their Gucci handbags to be pried from their cold, dead hands.

Torabi’s follow-up book takes a decidedly different tack on the arena of personal finance, moving on to the idea that your personal mindset has a good deal to do with whether or not you find money success.

For me, this is the area where personal growth ties deeply into personal finance. Personal growth is all about becoming aware of your actions and choices and considering how you can improve those actions and choices. When you put that spotlight on your money, you can often reveal quite a lot about improving your personal finances, and that’s the sweet spot this book swings for.

Personalize Rich
What does “rich” mean to you? Once you sit down and start answering that question for yourself, you begin to realize that “rich” doesn’t mean the same thing to everyone. You need to figure out what you define as “rich,” which is, in essence, simply setting, in a very vague way, your long term goals. For me, rich is often defined in security – is my family safe from whatever may come? Others may define it very differently.

Establish Goals
From there, Torabi takes the ideas of what makes a person “rich” and transforms them into specific, tangible goals that a person can use. What does it mean for my family to be “safe from whatever may come”? When I’m able to transform that into a specific goal, like a big emergency fund, then I have something to work towards that’s real, as opposed to the vague notion of something that I might just be dreaming about.

Craft Your Money Philosophy
What you’ll find as you move through the process of figuring out what “rich” means to you and establishing goals based on it is that some particular values are going to be important to you. For me, family is a really, really key value, for example, and thus for me, my money philosophy centers deeply around providing for that family. I value having an emergency cash reserve and I’m less interested in chasing big financial growth.

Embrace Your Relationship with Money
The idea here is that many people are detached from their money in many ways. They don’t connect their ...

One idea that was repeated over and over was how incredibly important and valuable having a budget was. I tried several different budgeting approaches and stuck with them for short periods, but the idea of a budget just never really stuck with me. The constant recording of expenses and estimates of spending in the future and so on always seemed like a bunch of busy work that never really went anywhere at all for me.

What did I do instead, then? I focused mostly on just watching what I spent. I did find a lot of value in simply jotting down every dime that I spent in a pocket notebook and, soon, I began to resist spending because I didn’t want to write it in that notebook any more. I began to really focus on how I spent my money in a few key categories – books being the big one. I set up some automatic transfers to take care of specific bills and to start saving for specific goals. Perhaps most importantly, though, I began to really change my behaviors and how I spent my time.

There are two big things to recognize from this story.

First of all, the actual personal finance choices I made were budgeting. Writing down my expenses, setting up automatic payments and savings, focusing on problem categories – those are exactly the type of things that make up budgeting.

More importantly, however, they led me to the same theoretical goal that budgeting has – a more responsible relationship with my money. That’s the destination of budgeting – a relationship with your money that enables you to have the freedom to effectively not worry about the money too much and just get on with your life.

If that’s the case, then why do so many people fail at budgeting – and why is it still recommended so often in personal finance books and on personal finance sites? I think the answer to that question explains why budgets are so often described in personal finance books – and also explains how people can get real value from “budgeting” their own way.

Budgets, Budgets, Budgets: Why?
Take a look at the people who are typically authoring personal finance books. They’re CPAs, CFAs, and other folks who deal with finances for a living. They’ve likely always been strong with math and never been afraid of dealing with large chunks of numbers – it always came natural to them.

I’ve always enjoyed math – in fact, I was just a few credits shy of a minor in mathematics in college – but I’ve never been much of a fan of business or accounting math. Large rows of financial figures have always caused my eyes to glass over. I enjoy chasing down a problem, but ...

Hey, look, homemade crepes!

OK, before we get going, it should be noted that this meal is pretty much as easy to prepare as you want it to be – and at almost every turn, we chose the more difficult route.

Actually, to be more specific, Sarah chose the more difficult route. She did most of the preparation of this recipe and was the one that made most of the difficult choices. I’ll be using the adjective “we” to describe the effort because there was some trade-off here and there, but she did most of the effort for this recipe.

What difficult choices did we make? Rather than buying a package of crepes at the store, Sarah chose to make the crepes from scratch. Rather than buying a package of pre-shredded Swiss cheese, Sarah chose to buy a chunk of Swiss and shred it herself. In both cases, the result was a tastier and healthier and less expensive meal, but it certainly added to the prep time. Those two things alone more than doubled our prep time, turning a meal that could probably be in the oven in fifteen or twenty minutes into something that involved more than an hour of work.

So, let’s dig in and see how we got there.

The inspiration and model for this meal came from this cookbook, Low Cost Cooking, that we came across in a yard sale for $0.25 (the cover has a $0.50 sticker on it, but we came late to the sale). Can you guess when it was published by the cover design and heavy use of earth tones? If you guessed “late seventies or early eighties,” you’re a winner! It was published in 1980 and is apparently long out of print.

Yes, we shop at yard sales and consignment shops for cookbooks. They’re actually great sources for cookbooks. I’d estimate half of our cookbook collection is from such sales.

Anyway, on to the recipe…

Here are the ingredients for everything including the crepes. One of the advantages of making things like crepes on your own is that you can choose what goes into them – organic milk and farm eggs, in this case.

I’m going to mark off the making of the crepes in their own section. If you wish, you can simply buy a package of crepes at the grocery store instead of making your own.

Making Crepes
Here’s what you need just for the crepes.

1 cup all-purpose flour ($0.15 or so)
1 1/2 cups milk ($0.30 or so)
2 eggs ($0.15 or so)
1/4 teaspoon salt ($0.02 or so)
1 tablespoon cooking oil ($0.05 or so)

In other words, you’ll be making about 16 crepes for about $0.65 – or about $0.04 per crepe. If you buy them, they’ll be substantially more than that.

Making crepes is really easy. Just mix all of the ingredients in a bowl until they form a batter, then heat a small skillet over medium heat with just a drop of oil spread all over the surface of it. Put about two tablespoons of ...

The idea here, though, is that each of them has a few quarters to spend each week on whatever they would like. Most of the time, they spend it on reasonable kid things – they both have a strong affection for M&Ms, for example, and often buy M&Ms with their quarters.

This week, however, was different. We were dining at a restaurant that had one of those carnival-esque “claw” machines near the exit, where you use a stick to maneuver a claw around, then hit a button to have the claw drop into a pit of stuffed animals or other toys. Almost always, the claw is unable to pick any of the items up, so you simply lose the money you put in there.

We’ve warned our kids about these machines in the past. “If you put your money in there, you’ll just lose it and not get anything for it.” “Those machines are rip-offs.”

However, we are also committed to letting our children make their own choices about their free-spending money. Thus, as we were leaving with our children, they asked if they could use their spending money in the claw machine. After a quick warning about the nature of the machine, we allowed them to, assuming it would teach them a quick, simple lesson about disappointment and how things like this actually work.

Of course, my two year old daughter won a stuffed animal on her first try.

Of course, my four year old son won a stuffed animal on his second try.

Obviously, the lesson learned from this situation is the opposite of what we hoped they would take from it. My son, in fact, ...

Yesterday my husband found out he has lost his job. We don’t know what to do.

He was making $38,000 a year as an IT specialist. I make about $36,000 a year as a school teacher. We have about $10,000 in credit card debt spread across three cards and a $1,300 a month mortgage payment. We don’t have anything saved either other than some retirement account money.

I am so scared we are going to lose our house and lose everything! What do we do? Help!

First and foremost: don’t panic. No problem is solved well in panic mode. Bad choices – choices that you’ll regret down the road – are made when you panic.

Take a deep breath. Here are seven things that you should attempt to do in the coming days.

Be proactive. Some people “turtle up” in bad situations like this and spend their time avoiding the problem, doing things like playing video games and watching television. Now is the time not to do these things to excess.

Instead of withdrawing, fill as much of your time as you can with one simple question: what can I do right now to fix our financial situation? Don’t turn away from the problem – grab it by the horns.

Get that second paycheck back as soon as possible. Your husband needs to find work quickly and get back in a situation where there is a second stream of income coming into your home. He should not be picky at this point. Look for a job in retail where there is often work available for people.

Once he has that in hand, he can then spend his spare time searching for a job that matches his resume and skill set. However, it is vital that you not “hold out” for a better job right now. If you do that, you are going to dig yourself into an even worse hole than you’re in right now.

Cut all unnecessary services. Yes, ...

I have no debt and despite the preaching of many to never by a new car, I felt it was the right move for me because I plan on keeping it until it eventually dies.  Since this was my first time buying a car, I was nervous — but I read up and talked to some friends before starting my car buying journey. Here are a few steps I took:

1. Know your budget

Before you can even begin to figure out what kind of car you want to buy, you have to know your budget.  Whatever amount you are comfortable with, set that range you’re able and willing to spend before hand.

When you know your budget, it will help you determine where to begin.

2. Research

Once you know your price range, start your research.  The best way to research nowadays is online. Sites like Edmunds.com give you comprehensive information and ratings about the vehicle along with safety, fuel efficiency, and numerous consumer reviews. Researching online will give you the information necessary before you even step into a dealership. This will help you narrow down your choices, as well as help you think of a few questions to ask the salesman.

From these sites, you can also find the MSRP and the invoice price of the car you want.  These numbers are important information to help you negotiate for the best deal. Obviously, you are trying to pay closer to the invoice price than the MSRP.

Once you narrowed down your selection and have a good idea of prices, head to the dealership.

3. Test Drive

In no way shape or form should you be thinking about buying when you go to the dealership for the first time.  You are there to test drive and you should make that known right away.  Try to test drive all the cars you want to check out on the same day.  This will help you better compare the cars and make it easier to narrow down your options.

Tell the salesman you are looking to buy a car within a certain time period, that you’re visiting a few dealerships to test drive, and you would like to test drive one ...

Over the last few years, I’ve come to believe that the biggest key to personal finance success is controlling your own psychology and impulses.

Our entire lives are filled with quick decisions we must constantly make – and, for the most part, we’re good at it. We commute to work without getting in an accident. We make constant little decisions at work – and at home, too. We’re able to effectively take several pieces of information, combine them together, and make a pretty good choice based on the result – and we do it over and over again.

Unfortunately, that same ability often doesn’t serve us well at all when it comes to personal finance. The ultra-quick decision making process that leads us to making great little choices in everyday life often leads us to making disastrous financial decisions. Very rarely do snap decisions work out well in the financial world.

This concept is the central focus of Snap Judgment by David Adler. He makes a two-fold argument. First, such snap decisions fail us financially and, if we’re able to get control over them, we’re much more likely to find financial success. Second, understanding how people make such snap decisions can help us to predict and prepare for the choices that other people will make, pushing us to further success.

Sound interesting? Let’s dig in.

I: The Psychology of Financial Decisions
The basic rule of thumb for success in any financial arena is “buy low and sell high.” It rings true in everything from stock investing to grocery shopping. The problem is that most of our normal financial cues tell us to do virtually anything but that. For example, we often believe there must be value to be found if everyone else is buying something, but quite often that means that it’s the opposite of a bargain – the price is overinflated.

Similarly, we are often wired to overlook what we view to be small amounts of risk – if we didn’t, we’d never leave our house in the morning. However, when we apply the same philosophy to investing, we overlook those seemingly small risks and chase what looks like the biggest returns – and then we get bitten by those risks. That’s why so many people got caught losing big chunks of their retirement in 2008?

II: The Track, the Stock Market, and Other Types of Gambling
Our brains are wired to see patterns in our lives, from traffic to grocery shopping to financial ...

The title of this book pretty much sums it up.

One Year to an Organized Financial Life by Regina Leeds basically lays out a week-by-week plan for getting your financial house in order. The book is divided into twelve chapters (months), each containing four subsections (weeks in a month), and each of those sections details how to take control of a specific aspect of financial life.

The end result is something that feels very much like a detailed plan to follow. Personally, such a plan gives me mixed feelings – while it’s great for a person who just wants to be told what to do, I’m a big believer in understanding your finances and your motivations and, at times, this book feels more like a “just follow these steps” kind of guide than a “understand what you’re doing” book.

The big question, though, is whether the information is worthwhile. Let’s dig in.

January: Take Control
More than anything, this opening chapter focuses on information management. Quite often, people’s personal information is in a very unorganized state, with cards and receipts jammed in purses and papers tossed into boxes and filing cabinets. The solution? Start from scratch. Clean out your purse and figure out a good place to put that stuff. Start a real financial filing system. Even more important, go through your mind and start asking yourself why you make the choices that you do.

February: Assess Your Finances
This month is all about creating a budget. The process is standard by now: record all of your expenses, then parse them into groups that make sense to you, then from there figure out what you should be spending in each category and shoot for that new target. My concern here, though, is that to set up a really accurate budget, you need more than just a month. You have to record your expenses over a longer period of time than a mere month to get an accurate grasp on your money. Although the procedure here makes sense, stuffing it into such a short timeline does not.

March: Get Ready for Taxes
This chapter summarizes the process of doing your taxes. Collect your documents and your relevant receipts. Decide whether or not to use a professional or do it yourself. Then, take the plunge – fill out the paperwork and file. It’s a process that most of us (painfully) have to go through each spring. A big key suggested here is to start a filing system now to store all tax-related documents throughout the year so that when you do your taxes the following year, all of the receipts and other materials you need are ready to go.

April: Spend Less, Save More
Frugality is the buzzword here. This chapter focuses strongly on cutting your expenses – much of the advice is right in line with the ongoing “Trimming the Average Budget” series on The Simple Dollar. Hand in hand with that kind of trimming, though, is the need to actually save what you’ve been cutting, because the tendency often is to take that money and spend it on things that you seemingly couldn’t afford before, thus raising your standard ...

Housing – household operations – $984

Household operations? Think housecleaning services, nannies, babysitters, child care, and the like – services people pay for to keep their household running efficiently.

Quite often, these expenses are purchased in order to buy time for other things, like leisure or spending time with family – and that’s understandable. However, there are still many ways to peel back a bit more on the average household operations budget.

Make sure you’re actually utilizing the time you’re saving. If you’re paying for a housecleaning service just so you can sit around each evening and do nothing at all, you might want to reconsider your choices, particularly if you’re swimming in debt. Household services are fine if you actually need the time for something positive and productive in your life, but if you’re not utilizing that time, it’s probably time to reconsider the whole thing.

Cut back on housecleaning services and see if it makes a difference. If you pay for a housecleaner, reduce the frequency of the visits and see if it makes any sort of impact on your life. You might find that with just a bit of casual picking up, you don’t really need that much time from the housekeeper, thus saving you money.

Buy services in cooperation with your neighbors. A few houses on our block negotiated with a lawn treatment service in order to get a reduced rate for all of them. If you utilize services that people you know also use, look into negotiating for a better group rate for all of you. This particularly works well if you’re a new customer ...

One Year Ago (January 3 – January 9, 2009)
Seven Huge Financial Mistakes I Made During My College Career This was basically a letter to several members of my family who were about to enter college.

Frugality and Binge Buying The real key is honesty with yourself. Admitting that you made a mistake and striving to figure out why you made it – and how to fix it – is how to turn a failure into a success.

A Mother’s Gifts Here are some reflections on the lessons that my mother taught me as I was growing up (and as an adult, too).

Debt Reduction and Debt Elimination Programs: What’s the Catch? Often, they’re just selling you information that you can already get for free on sites like The Simple Dollar.

When Your Financial State Improves, Do Your Frugal Standards Change? All of life’s choices aren’t based on maximizing the bottom dollar. There are a lot of factors in our lives that help us to make the choices we do.

Two Years Ago (January 3 – January 9, 2008)
When Is Frugality Stealing? This was one of my favorite discussions ever on The Simple Dollar.

How Much Frugality Is Too Much Frugality? When does being frugal cross the line into being cheap? For me, it’s in interactions with other people. I don’t mind drinking tap water as my primary beverage, but I would consider it rude (and cheapskate-ish) to offer nothing but tap water to guests in my home.

The Value of Cultural Literacy Being culturally literate has a lot of cash value. It makes conversation substantially easier, and conversation leads to the building of relationships which can in turn help you out substantially when it comes to doing home repairs, finding a job, and countless other things.

Practicing What You Preach: Should A Personal Financial Writer Be Expected To Follow Their Own Message? I think that’s a tricky question, and it was echoed for me later on when I discussed my purchase of a Prius for many of the reasons mentioned in this article.

What Color Is Your Parachute? The Flower Diagram I consider this to be an invaluable job evaluation tool. In fact, I wound up using it myself as part of my decision-making process to leave my former career and jump into writing.

Three Years Ago (January 3 – January 9, 2007)
Should ...