Money… can symbolize work, power, love won, or love denied. It can take the form of expensive homes, expensive clothes, expensive presents. Luxuries become necessities. Debt compensates for all shortcomings. “For people to admit they can’t afford things they want means placing themselves in a position of weakness,” says Dr. Edward J. Khantzian, associate professor of psychiatry at Harvard Medical School. “They have to say no to themselves, and nobody likes that.”

-Time Magazine, October 1982

Prior to January 1st, 2009… On any given weeknight, you would’ve been just as likely to find my wife and me out at a restaurant, taking in a movie, or simply shopping as you would have been to find us at home. We were what some advertisers might call “The Perfect Consumers.”

When we got bored, which happened often, we would get in the car and drive toward town. Sometimes we didn’t even have a specific destination in mind, other than to go somewhere to spend money on food, clothing, or any other form of entertainment.

While we didn’t frequently blow money on large ticket items or live “lavishly,” we did spend our money liberally and without purpose. We weren’t content, we weren’t saving, and we had no financial security.

And then it happened… Approximately six months ago, we experienced a financial rebirth. So what has changed in the time since then? Most everything!

If you’ve been following my articles here on FCN, then you know that we have:

• Changed our money mindset from a “trade time for money” approach to a “let your money work for you” approach.
• Voluntarily spent time off the grid in an effort to save money and work toward our goal of becoming increasingly self-reliant.
• Started a garden in hopes of reaping the benefits of homegrown foods, including both financial and health-related benefits.
• Installed rain barrels to harvest water for free irrigation.
• Started making our own household cleaners to save money and reduce our reliance on chemicals.

Add these articles to what I’ve been writing about over at Debt Free Adventure, and you can see that we’ve experienced a tremendous amount of change in the past six months. We’re working against the grain to return to a simpler, less expensive, more resourceful and more satisfying way of life.

How does this relate to culture and temptation?

“‘Tis one thing to be tempted, another thing to fall.”

-William Shakespeare

My wife and I have worked hard to shake the mindset of “spend to be happy.” We’ve even gone so far as to cancel our satellite TV service, and yet… We’re still influenced by the long-lasting and far-reaching effects of advertising.

When I talk about the changes my wife and I have made in our pursuit of financial independence, most people think we’ve gone overboard. You don’t have to go back too far, however, to reach a time when our view was the majority view. In my opinion this change is the result of cultural changes that have been driven by the media and advertising.

Over the past six months we’ve worked hard to:

• study personal finance
• practice frugality
• reduce our spending
• increase our giving
• increase our savings
• decrease our debt

Although we’re now tempted by fewer things, we still have to work to consciously pass our decisions through a filter of frugality. And even after doing so, I still sometimes want to buy things that I don’t need. Here are a few recent examples…

Temptations that I’ve recently fought off

“A Red Ryder BB gun with a compass in the stock, and this thing which tells time”

-Ralphie Parker

1. A new bicycle for commuting to work ($600)

In an effort to save money and get more exercise, I’ve recently begun biking to work ten miles each way. My bike is not a commuting road bike, but it’s a high-quality bike nonetheless. It was designed for hardcore trail riding and racing, but with a few recent alterations I’ve successfully turned into more of a road bike.

In my efforts to transform the bike, I stopped by a local bike shop just to check things out and get a few supplies. Predictably, it was only a matter of minutes before I was salivating over the Trek FX 7.2 hybrid - a bike designed for commuting.

This may sound silly, but at that moment, this bike was my Red Ryder BB Gun! The price was actually reasonable at just under $500, and I promptly began coveting it. My existing bike was good, but there were a few things I didn’t like about it. The biggest issues that I as having were:

• A lack of a rear rack, which is essential if you want to carry any cargo
• A seating position that’s a bit aggressive for comfortably riding miles

While I didn’t need a new bike, I seriously entertained the purchase. In the end, however, I fell back a great technique for avoiding impulse purchases. More specifically, I decided to wait one day for every $100 that I was tempted to spend. After tax and additional parts (rear rack, fenders, and so on), I was looking at around $600 out the door, so I had to wait six days to make my purchase.

Over the next six days, I discovered that my old bike does indeed have rear rack mounts built into the frame — all I needed was the rack itself. I also came to the renewed realization that what I truly want is to use that $600 for debt repayment and/or emergency fund savings.

In the end, I came to the conclusion that I simply did not need the bike, regardless of how bad I wanted it. My bike is more than sufficient and, now that I’ve made a few simple upgrades/adjustments, it will work great for what I require of it.

2. A store-bought vermicomposting bin ($130)

Instead of buying one, I decided to make my own. I spent just a fraction of what I would’ve paid in the store ($22), and it works great. I hope to put together an article about this soon.

3. A store-bought kitchen composting bucket ($20)

Here again, I made my own… And only spent $1.50! This will likewise be the subject of a forthcoming post.

Both of these compost-related purchases were very tempting, and I really had to fight the urge to buy and instead choose the frugal road. Beyond saving money, I have more pride in these possessions — partly because I made/improved them, and partly because I know that I sacrificed my short-term wants for my greater goal.

So what’s the answer?

“Contentment is natural wealth, luxury is artificial poverty”

-Socrates

Do I believe that advertising is inherently evil, and that marketers should be drawn and quartered? No, absolutely not. I do, however, believe that the entire system has been spinning out of control for years, and I think that many people are finally ready for a change. I know I was!

This post is an attempt to raise awareness that we’ve wallowed in financial ignorance long enough! We’re bombarded with hundreds upon hundreds of advertisements each day. Do we run right out and purchase the item we are being shown? Sometimes, but not usually. However…

This constant bombardment has a long-term (detrimental) impact on our mindset. It predisposes us to spend rather than save. There once was a time when our nation’s mindset was something along the lines of work, earn, give, save, and reuse.

Nowadays, our mindset has been transformed to one of work, earn, buy, and dispose. As far as I’m concerned, it’s high time that we reclaim (or adopt) a healthy mindset that encourages us to “spend less than we earn” and invest in the ideas of compounding interest.
in my opinion, your mindset is the most powerful tool that you have.

To help get us back on track, I offer the following simple concepts:

• Be content with what you have. Don’t run out and buy things just because you have a fleeting desire for them. Your financial freedom is at stake!
• Turn off your TV and limit your media exposure. The most eloquent of contrarians could not argue against the fact that mass media promotes a spendthrift mentality. Your financial freedom is at stake!
• Use what you already have. My bike may not have been my first choice, but it was my best choice. If tempted, go through your existing belongings and use what you have for a few weeks to curb your temptation. Your financial freedom is at stake!
• And remember the adage… Spend less than you earn. If you don’t, you’ll soon be broke! Your financial freedom is at stake!

What about you?

Have you successfully battled against a strong temptation to spend and won? If so, how did you do it? If not, what would you do differently next time?

This is just a quick note to let everyone know that I made it through the month of June with all of my Lending Club loans intact. This isn’t particularly surprising, as most notes are paid on time when they’re new, regardless of quality.

Taken together, my high and low risk portfolios are providing a net annualized return of 12.68%. While I don’t expect things to remain this rosy forever, I’m certainly pleased with how things are going thus far.

As I noted in my last update, I’ll likely focus on higher quality notes going forward, which will reduce my average interest rate. This should, however, also decrease the likelihood of defaults, thereby bolstering my longer term prospects.

This is a guest post from Jim Wang of Bargaineering. If you like what you see here, please consider subscribing to his RSS feed.

Credit scores are becoming increasingly important each and every day. While some people check them compulsively, almost as frequently as they check their investment portfolio, others check them infrequently, like the oil in their car. Regardless of where you stand, that three digit credit score plays a big role in your life, so it’s important to make sure that you have a good one.

So what’s a good credit score?

Good is relative. If you’re not planning on getting a loan, you probably shouldn’t be too worried about your score. As long as you have an average credit score or above, you’re in good shape. In such cases, good enough is good enough.

But let’s say that you want to buy a house, and you’re looking for a 30 year, fixed rate mortgage. What do the rates look like relative to credit scores?

Here’s what MyFICO says:

 
In that case, anything above 760 is “good,” though anything about 700 r†ange are pretty darn good. The point that I’m trying to make is that the definition of good depends on your needs. If you don’t need to borrow, then a 620 is as good as a 850. After all, you can’t walk into the grocery store with your 850 and expect to get anything with that alone, right?

So, the next time you’re fretting about how good your score is, think about what you’re trying to achieve first. Once you have context, it’s worth spending time finding out if your score is good, or at least good enough.

There are several ways you can see your FICO credit score for free, but all of them require that you sign up for a trial membership for some sort of paid service (e.g., FreeCreditReport.com requires a seven day free trial of their credit monitoring service). If you don’t want the hassle, you can always try a site like Credit Karma.

Credit Karma is absolutely free, but it’s not a true FICO score. Rather, it’s an approximation based on your TransUnion credit report. If you’re planning on getting a loan, you’ll want your real FICO score. If you’re just curious or want to see how it changes, the TransUnion-based score is good enough.

In case you haven’t heard, I just wanted to point out that President Obama recently signed the so-called “Cash for Clunkers” program into law. Starting July 1st, would-be car buyers can get a $3500-$4500 credit for trading in their “clunker” and purchasing a more fuel efficient vehicle.

Officially known as the Car Allowance Rebate System (CARS) Act, the “Cash for Clunkers” program is intended to: (1) get gas guzzlers off the road, and (2) stimulate new car sales. We’ll just have to wait and see how well it works on both accounts.

Details of the Cash for Clunkers program

According to the official CARS website:

• Your vehicle must be less than 25 years old on the trade-in date
• Your vehicle must be in drivable condition at the time of trade-in
• Only purchase or lease of new vehicles qualify
• Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
• Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in
• You don’t need a voucher, dealers will apply a credit at purchase
• Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first
• You can combine the CARS rebate with other State and Federal incentives, such as the hybrid vehicle credit
• Not all dealers will be participating in the program, so check before buying
• The vehicle that you are trading in is required to be destroyed

Note that, because your trade-in will be destroyed, the dealer is unlikely to offer you more than its scrap value. Still, for a crappy old car, the scrap value plus the $3500-$4500 credit might be worth taking advantage of.

Another point to keep in mind is that, while transactions taking place on or after July 1st will qualify, full details of the program won’t emerge until later in the month. Thus, you might want to wait a bit before jumping on this.

More info is available from the official site. If you’re curious about what sort of (official) mileage your old car gets, you can check it out at FuelEconomy.gov.

Being frugal doesn’t mean that you can’t enjoy yourself. Believe it or not, you can still go out and have a good time. In fact, there are plenty of ways to cut costs while still being able to join friends for an occasional restaurant meal.

The first step is to know exactly how much money you have to spend, and to take that amount with you in cash. If you instead rely on a debit or credit card, you might be tempted to spend more than you’ve allotted.

Another important point: Don’t skimp on the tip! Be sure to include both the tax and tip when you’re setting your budget. Beyond that…

How to save money when eating out

• Ask around to find local spots. We asked some friends for suggestions when we first moved to the area and discovered a fantastic Cuban place in the area. Their lunch specials (entree and two sides) start at $5.95, and their dinners start at $7.95. The portions are great, and I usually end up with a to-go box. Plus, they even have a live band on the weekends.
• Make sure you have leftovers. Be sure to take advantage of whatever freebies the restaurant offers. For example, you can take the edge off your appetite with chips or bread. Also, if your dinner includes a salad, then you should eat that before starting on your entree. I usually end up having plenty of leftovers to take home. Two meals for the price of one!
• Go out for lunch instead of dinner. Most restaurants offer better prices at lunch vs. dinner. Yes, the portions are typically smaller, but you can save a good bit of money by doing this.
• Skip the appetizers. Instead of ordering an appetizer, just go straight to the main course. Appetizers are often overpriced, and most restaurants provide large enough portions that they’re really not necessary.
• Mix appetizers. If you don’t want to skip the appetizers entirely, you can often save money by ordering two appetizers instead of an appetizer and an entree.
• Skip dessert. Another great way to slice a decent amount off the bill is to skip dessert. Like appetizers, desserts are often overpriced. Not only will your wallet thank you, but so will your waistline.
• Get a discount. Take advantage of weekday dinner specials, use coupons (e.g., the Entertainment book , and/or use a site like Restaurant.com to get gift certificates on the cheap.

Now it’s your turn…

Do you have any tips for saving money when you eat out?

This is a guest post by John of Mighty Bargain Hunter. If you like what you see here, please consider subscribing to his RSS feed.

Americans collectively have well over a billion credit card accounts. Some of those accounts make the credit card companies very, very rich. I’m talking, of course, about those that belong to people that carry large balances every month.

Since we’re all familiar with the evils of credit card debt, I thought I’d balance the discussion with twelve reasons why you shouldn’t get out of debt:

• Those wonderful interest charges. Why on Earth should you earn interest when you could be paying it? It’s a piece of cake: just buy a whole bunch of stuff you really can’t afford and make the minimum payment each month.
• You get to buy everything twice. Remember that espresso maker that you bought for $120? Wouldn’t paying $240 be twice as nice? It makes your espresso taste… Well… Exactly the same.
• Fees are fun. Fees for going over your limit. Fees for cash advances. Fees for paying late. Fees for paying on time. The fun doesn’t stop with the interest charges — not by a long shot!
• Financial independence is totally overrated. Being a slave to your debt has a charm all its own. You never have to worry about being in control of your finances ever again. The credit card companies will take care of that for you!
• A good night’s sleep is for sissies. Who needs a soft pillow when you could b tossing, turning, and waking up in a cold sweat from nightmares of giant point-of-sale terminals crushing that living room set you’re paying for every month?
• New friends at the collection agency. Never feel lonely again: collectors will harass and shame you… And your relatives, and your neighbors. Incessantly.
• There’s no time like the present. You needed that new home theater system right now. Right? Now those bills will be front and center in your finances — and will remain that way for a long time to come.
• Bargain hunters love desperate sellers. Nothing sound better to a bottom-feeder’s than: “Make me an offer.” Except, perhaps: “I need to sell this now.” You get to watch them salivate and then walk away with your stuff — for nine cents on the dollar, just because you need to make that credit card payment.
• You’re just a few small steps from bankruptcy and foreclosure. As much fun as credit card debt might be, bankruptcy and foreclosure are way better. Both are two-ton black marks that remain on your credit report for seven years. It just doesn’t get any better than this, folks.
• Default interest rates rock. The new credit card legislation makes it tougher for issuers to stick you with their default rate, but… When they do, it’s really high. Fall behind on your bills, and you’re the proud new owner of a 30% credit card interest rate. WOW!
• Every day is a tightrope walk. You get to be extra stressed about your job, about getting having a car accident, about getting sick, and about anything else that could be the final nail in your financial coffin.
• Someone has to pay for the responsible card users. Who’s going to cover the cost of that free float and all those credit card rewards? It might as well be you. We salute you, Mr. Up-To-Your-Ears-In-Debt Man!

As compelling as these twelve reasons might sound, some people aren’t willing to remain in hock for the rest of their lives. If you’re among them, then you might want to check out the Carnival of Debt Reduction, which is a weekly collection of debt reduction articles from across the blogosphere.

This is a guest post by Neal Frankle, a CFP and author of Wealth Pilgrim. If you like what you see here, please consider subscribing to his RSS feed.

Imagine that you just heard Jim Cramer talking on CNBC about a “guaranteed” way to make a fortune with your investments. Upon hearing this, you have three choices:

• Refinance your house so you can invest everything possible
• Call your financial adviser and ask her what she thinks about it
• Change the station to Spongebob Squarepants

What would you do?

If you said you’d change the station, you made the right decision. Nobody can guarantee how an investment is going to work out — not even Jim.

If somebody tries to sell you a far-fetched story, you might as well get some animation along with it… You’re better off with Spongebob.

While I can’t give you a guaranteed way to make a fortune, but I can guarantee that you’ll ruin your investment portfolio if you make any one of the following four financial mistakes.

Shifting your timeframe

Anytime you want, you can “prove” that an investment is either great or terrible. All you have to do is shift the period over which you do your analysis.

For example, if I ask you if stocks are a good investment, you might say, “Are you nuts? Do you live under a rock? No, they are a terrible investment. I lost 40% of my money last year!” You might even tell me that you lost a compounded 2% over the last ten years - further evidence of how bad the stock market is.

On the other hand, you might point to the fact that the last ten-year period was one of the worst ever. Instead of looking at the last ten years, you might consider the average ten-year return, which is close to 10%. Or you might point to a twenty-year average and “prove” that the stock market is pretty darn good.

So which is it? Good or bad?

All of the facts are right. The issue is which set of facts you decide are relevant to your timeframe, and whether or not you stick to that timeframe.

My point here is that, if you make an investment based on a twenty-year timeframe and then decide that you made a mistake because last year was very bad, you’re almost guaranteed to fail.

Why? Because market investments are extremely volatile, and good results can take time. If you jump out as a result of a terrible period, you won’t be in during the recovery. Congratulations — you’ve just locked in your losses.

Have you ever bailed on an investment because the pain was just too great? Investors often say they understand that investing is a long-term proposition — until they find themselves being tortured by horrific losses day after day. At some point, human nature takes over, and they bail because they’ve changed their time horizon.

Trying to predict the future

You may have run across people who think they can do this. Perhaps you’ll see some genius on TV make a prediction that later comes true. Just remember that this fortune teller won’t tell you about all the times he/she got it wrong in the past. After all, even a broken clock is right twice a day.

You might think that you never try to predict the future, but let’s take a closer look…

Have you ever jumped on a hot stock because you knew it was poised to break out? Or scooped up a “bargain” because you just knew it would never fall back to this level? If so, you’re guilt of trying to predict the future. Think of the times that you’ve done this. What were the results?

Wanting to have your cake and eat it, too

Have you ever complained about about the low interest rate on your savings account or CDs? The reason for the relatively low rate on these instruments is the inherent trade-off between interest rates and security.

If you want short-term security, you have to accept low (but guaranteed) interest rates. That’s just the way it is.

If you’ve ever complained about lousy stock market performance, you’re guilty of the same thing… The higher the expected returns, the greater the risks. This translates into the potential for wild price swings and extended down periods.

If your only problem is that you like complain about such things, you might ruin some relationships, but your investments should be safe. The problem is that many people expect great returns and security. These are the same people that fall for some slick sales pitch and get their heads handed to them. Remember Bernie Madoff?

Being unclear about your goals

By far the best way to run your investments into the ground is to be fuzzy about your goals.

“Hold on Neal,” you might be saying to yourself. “My only goal is to make money — that’s why I’m reading this post. You’ve been watching too much Sponge Bob!”

I’ll admit that I do have a weakness for that cute little yella’ fella’, but I’m dead serious about the importance of being clear about your goals. Let me give you an example…

You might say that your goals are to retire and never have to worry about money. Fine. Let’s say you could invest conservatively and have a high-probability of achieving your goals. That being the case, how would you invest?
Conservatively of course.

But there will be times when you might be tempted to take advantage of a “special” investment opportunity — a “sure thing” that turns out to be a high-risk proposition that threatens your goals.

You’d be far better off letting your goals be the lens through which every investment is examined. People often forget about this and as a result get involved with investments that expose them to undue risk and (often) investment failure.

Have you ever committed any of these mistakes? What were the results? Have I missed some other major source of investment catastrophe?

By the time you read this, we’ll be deep into a roughly 3k mile roadtrip. The good news is that the bulk of the driving is packed into the first and last couple of days. As such, we’ll be able to recover (and fish, swim, etc.) in between. The better news is that I’ve lined up a number of great guest posts to fill the gaps in my absence.

While I’m hoping to pop in from time to time, don’t be surprised if I’m slow to respond to comments, and please don’t be offended if I don’t answer your e-mails promptly. A guy’s just gotta kick back and relax sometimes. Oh, and thanks to everyone that contributed a guest post — it’s very much appreciated!

Today I thought I’d step outside of the purely financial realm and talk a bit about self-improvement. While many of the following thoughts can improve your finances, they have the potential to have a much broader impact on your life.

Focus on your passions

“Anyone can dabble, but once you’ve made that commitment, your blood has that particular thing in it, and it’s very hard for people to stop you.”

-Bill Cosby

I’ve found my greatest success by simply focusing on just 1, 2, or 3 things about which I’m passionate. Take stock of your commitments and obligations to see if you’re involved in things that you no longer truly interest you. Also, while you may not like telling people “no,” sometimes it needs to be done, and everyone involved is usually better off in the long run.

Don’t know what you’re passionate about? Take some time to figure it out. Here are some ways you stand to benefit from follow your passions:

• Accomplish more. If you’re doing what you love, or at least working toward it, you’ll be amazed at how much you can and will get done.
• Increased joy. You’ll be more of a blessing to all those around you if you enjoy what you do day in and day out.
• Increased self-confidence. If you’re following your passions, you will undoubtedly end up exercising your natural gifts. This will increase your success which will, in turn, increase your confidence.
• Increased self-worth. Few things make you feel more useful than when people benefit from the work you do. If you’re working in your ideal field, the chances of your work being beneficial increase dramatically.

Stop (or at least set limits on) watching TV

“Television won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.”

-Darryl F. Zanuck, President, 20th Century Fox, 1946

Like guns, wine, and many other things in life, television can be a blessing or a curse. It all depends on how you use it. Whether you’re an adult or a child, your TV time should undoubtedly be limited. Simplifying your life by limiting your television time can help you:

• Save money. Cancel your satellite/cable TV service and use a cheap digital antenna to pick up a good number of local broadcast stations.
• Complete lingering projects. How is your “honey do” list looking? Turning off your TV will force you to focus your time elsewhere and can be an excellent way to take a huge bite out of that oft neglected to-do list.
• Free up more time to exercise. Whether you’re doing projects around the house, or simply walking around your community, turning off the “boob tube” will certainly increase your physical activity… Trust me.
• Spend more time with your family. Instead of watching TV, get to know each other better. This will boost creativity and improve family relations.
• Free yourself from excessive commercial advertisements. Watching less advertising almost always leads to increased creative thought since your mind will not be as saturated with “less than perfect” ad rhetoric. You might also save some money!

Make the switch to homemade/homegrown

“Tell me what you eat and I will tell you what you are.”

-Anthelme Brillat-Savarin

What did humans do before the advent of the train, the automobile, and our massive modern shipping and logistics networks? Well, we purchased the majority of our foods, goods, and services from locally, of course!

Here is a list of changes you can make to simplify your life and even a few benefits you stand to realize:

• Use homemade products. Making your own homemade products can save you money and provide many other health and environmental benefits.
• Make homemade gifts. This is another great way to save money, boost creativity, and provide an artsy learning opportunity for kids. Your gifts will also most likely be appreciated on a deeper level.
• Eat homegrown foods. Eating locally-grown foods is a great way to save money, improve your health, and reduce your environmental impact. If you can grow your own garden, great! If not, visit local farms and/or frequent the local farmers market to pick up healthy local foods.
• Lose weight. Tying in with the idea of eating homegrown food, my wife and I have both lost over 15% of our body weight after cutting fast food and heavily processed commercial foods from our diets. We focus 90% of our eating on whole foods such as dry beans, whole wheat, raw fruits and veggies, etc.
• Reduce healthcare costs. Despite “the miracles of modern medicine,” obesity and related diseases are growing increasingly more common with each passing day. Our families and communities deserve better, so why not set a healthy?
• Support local farmers and craftsmen. Tired of spending all your hard earned dollars on products made in China? Stop that craziness and start supporting your community by purchasing local goods and services. Doing so is good for both you and your community.

Adopt a reuse philosophy

“Use it up, wear it out, make it do, or do without.”

-Unknown Proverb

The adoption of sustainable habits and a resourceful mindset gets easier and pays higher dividends with each real-world application. The concept is simple — instead of being so quick to throw things away, consider reusing them for some other task.

• Recycle your waste. This practice motivated me to reduce my trash bill. I had been paying $46 every three months for trash removal, now I pay less than $5!
• Reuse your zip lock baggies. This may be something you saw your parents (or perhaps grandparents) doing, but have never practiced yourself. There’s a lot of wisdom to be found in the practices of depression-era people!
• Reuse commercial containers. My wife and I eat a lot of yogurt, and we use the 32 ounce containers, along with many other reusable grocery containers, to store everything from homemade ice cream to homemade laundry detergent.
• Repurpose scrap materials. Do you have some spare wood, metal, or string lying around the house? Instead of buying products for your next home improvement project, try to make use of your leftovers and make something yourself! This exercises your creativity, creates a learning atmosphere, and can also save you a boatload of money. In fact, hust the other day I used left over downspout piping to hook my rain barrels up to my rain gutters instead of paying nearly $50 for new connectors.

Purge and enjoy the tax breaks

“Have nothing in your houses that you do not know to be useful or believe to be beautiful.”

-William Morris

Every year, my wife and I donate several huge bags of clothes to Goodwill. Each time we do it, we get a receipt detailing what we gave so come tax time we can claim the generous income tax deductions. You might not think this would be very lucrative, but it can be more beneficial than selling your stuff on eBay or Craigslist.

Simplifying your life by purging your excess can help you:

• Declutter your home. Getting rid of clutter can reduce stress by decreasing the number of things that you have to clean, maintain, worry about, etc.
• Receive tax breaks. As I mentioned, every year my wife and I claim tax breaks associated with our donations. Each year, this yields hundreds of dollars worth of deductions, which is nothing to sneeze at!
• Reduce your materialistic tendencies. Like it or not, the hours upon hours of commercials that we’ve been bombarded with are bound to affect our thinking and buying patterns. The more you purge, the more you realize how little how much more we have than we need.

Love your neighbor

“Man is now able to soar into outer space and reach up to the moon; but he is not moral enough to live at peace with his neighbor!”

-Sri Sathya Sai Baba

This may sound like something you’d hear at a religious service, but the concept makes an incredible amount of sense when you think about it. I challenge you to go through one day this week where you try hard to consider the needs of other people before your own. Before you react in any given situation, try to consider where that person is coming from. Instead of reacting with anger or abruptness, give that person something no one else will… A compassionate and patient response! You won’t believe the results.

This oft-neglected behavior can yield the following benefits:

• Reduced your stress. Instead of practicing behavior that elevates your blood pressure, do the opposite. You’ll improve your health and maybe even make some new friends.
• Increased joy. Investing in mutual funds is good, but… So is investing in karma and the general welfare of others.
• Reduce the stress and increase the joy of others. What a blessing you’ll be if you sacrifice your agenda for the benefit of others! You’ll refresh their outlook on life, and will also help spread a positive attitude.

Closing thoughts

For the past six months, I’ve re-dedicated myself to living passionately and powerfully. I’ve narrowed my focus, charted my course, and achieved a much higher level of satisfaction in all areas of my life. Success hasn’t come overnight, and I’ve had to work hard to make it happen, but… I’ve seen a huge improvement in the quality of my life. What about you?

Back in December, I put together a list of ways to earn extra money. Embedded within that list was the suggestion to sign up with a site like CashCrate, which pays you to fill out forms, take surveys, and/or sign up for free trials. While I’ve only messed around with it a bit, I received a check for over $30 in May.

While $30 isn’t a life-changing sum, I spent very little time earning it, and it seems like it would be easy to earn considerably more. Beyond that, who wouldn’t want a bit of extra money every month to help them get out of debt, pay down their mortgage, or save for retirement?

How does Cash Crate work?

For starters, CashCrate is free to join. Once you give them your name and contact info, you’re ready to roll. Upon logging in, you’ll be presented with a list of opportunities. You can switch between cash offers, points offer, and research surveys. I’ve typically focused on the cash offers and research surveys.

Payouts vary widely, and are generally proportional to what’s expected of you. Most of the offers don’t pay a whole lot (generally $0.25 to a few dollars) but they also require very little. In some cases, it’s as simple as signing up to receive an e-mail newsletter — just be sure to use a secondary e-mail address.

Here’s a screenshot of an offer that I just completed this morning. It paid $2.25 and required nothing more than signing up to receive a newsletter.

While most of the offers are free, there are some that require an upfront payment. For example, you can get $9.00 in return for signing up for a one day trial with Driving4Dollars, which costs $5.95. Obviously, they’re hoping that you’ll stick around and become a paying customer, but you’re free to cancel and pocket the difference.

CashCrate can make these offers because companies need consumers to try/review their products or services, and are willing to pay for that sort of feedback. They pay CashCrate to find participants, and CashCrate passes along a piece of the action.

Shop online

Another way to earn money is to click through to shopping sites from Cash Crate before making a purchase. While their list of participating retailers isn’t huge, there are some big names there. For example, you can get 3% cash from Disney, and 5% from iTunes and WalMart. Note that these bonuses are in addition to any credit card rewards that you might receive.

Refer a friend

Finally, you can make a bit of additional money by referring others to CashCrate. For example, I get a $3 bonus for every person that signs up and earns $10, and I also earn 20-25% of what my referrals earn, and 10% of what their referrals earn. Note that this comes at no cost to the individual being referred — they keep everything they earn. Once you’ve signed up, you are likewise free to refer others.