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“Persons of high self-esteem are not driven to make themselves superior to others; they do not seek to prove their value by measuring themselves against a competitive standard. Their joy is being who they are, not in being better than someone else”

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Now that we’ve reviewed a few different options for managing those debts you can barely keep up on, let’s talk about your options for the ones where you’ve actually fallen behind.I haven’t exactly...

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On "Bad Career Advice: Do What You Love" - Part 1

Penelope Trunk’s article "Bad career advice: do what you love" argues that trying to do what you love for a living is a terrible way to build a career:

"… career decisions are not decisions about “what do I love most?” Career decisions are about what kind of life do I want to set up for myself?"

She’s certainly fighting against the tide:

"The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle." - Steve Jobs

"Do what you love, and the money will follow" by Marsha Sinetar

Ten Ways to Do What You Love for a Living

"First, I learned the importance of following your passion" - Arne Duncan

Compensation for work exists on a spectrum across multiple factors - often with factors like prestige, moral mission, or inherent appeal substituting for wages. Further, the structure of compensation - current vs. deferred, cash vs. medical or other benefits - can greatly differentiate the stated salaries for any work. 

The most important question is which blend of factors is right for you? Which will give you the life that you want - and not at the expense of your sanity?

The joke about forest rangers is that they are paid in "sunrises and sunsets". Corporate lawyers and investment bankers can expect to make a lot of money, but must often give up enormous amounts of flexibility and time with their families. Social workers and doctors can have very high burnout rates. Every position will have its advantages and disadvantages. 

I already moved once within my industry to a position with lower pay but more freedom. What's right for you?

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If you'd like to see a video, nat geo has one (and the narration is great)

"Evolution, what are those flatworms doing?"

"Oh, they’re getting ready to penis-fence."

"Penis… fence?"

"Yeah. They’re hermaphrodites, so either of them can inseminate the other one to reproduce, but neither one actually wants to be inseminated."

"They… don’t?"

"Well, no. It’s much easier to be the inseminator. I kind of set it up so that actually bearing the offspring totally sucks. Haha, whoops!”

"So… they’re going to…"

"Try to stab each other with their two-pronged penises while simultaneously avoiding getting stabbed themselves, yes."

"Jesus."

"The good news is that there’s no real reproductive opening, so they can just pierce the skin wherever and get the sperm in."

"That’s the good news?"

"Well, I thought so. Ooh, they’re starting! Fatherhood to the victor!"

"It is way too early in the morning for this.”

Source: Wikimedia Commons / Photo courtesy of Nico Michiels / licensed under CC BY 2.5

BAY AREA! I’m reading tonight at Books Inc. Berkeley. Come say hello!

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One thing to think about is that if you lose your job or even move to a new company you might need to repay the entire balance of the loan on a very short timeframe or face steep penalties. I hope this does not become a problem - and if you have an emergency fund it may not - but it is something to consider before you take the plunge.

I plan to buy a house in the next year or two. I want to do 20% down to avoid PMI and lower the mortgage payment. I have a company sponsored 401k (used to be blackrock, now voya). There’s an option to take a loan out of this 401k for real estate.Basically you are loaning yourself the money (from voya) and there’s an automatic repayment dedution every paycheck. This is all done pretax, I guess the money is never technically realized? And there’s no interest, (only lost potiental market gains). The maximum loan amount is half of the current 401k value.Would it be smart to divert more pretax income into this 401k with the intention to take a loan out of it for a house? I could save faster because its pretax and the loan would have no interest as opposed to the mortgage. The repayment would offset with the lower mortgage payments. Seems like a double win. Just not sure if this is totally kosher? Read replies here: http://www.reddit.com/r/personalfinance/comments/2vl9p8/company_sponsored_401k_loan_to_buy_a_house/

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What to do with a windfall

Everyone will make occasional financial mistakes - even Get Rich Slowly's founder, J.D. Roth:

In 1995, my father died after a long battle with cancer and he left a little bit of life insurance. I think I got $5,000 or something like that, and at that time I had over $20,000 in credit card debt. If I had been smart, I would have paid off some of that credit card debt, but I wasn’t. Instead, I went out and bought a new computer and video game stuff. So, here I am with a chance to knock off a quarter of my debt, and instead I end up spending even more money. And to me this is an example of the kind of failures that I used to have all the time…

In the past year, we had windfalls from tax refunds (if you can characterize a return of an interest-free loan from the government as a windfall), a bonus I earned at work, and some generous christmas gifts received from family members. 

So if the best way to use a windfall is not to buy more video games, what is it?

1. Build your emergency fund. This one might sound surprising - after all, if you happen to be in debt, shouldn't that be paid down first? Nope - an emergency fund equivalent to at least 3-6 months of your take-home income should be your first priority. Even though an immediate debt paydown may seem appealing, if you face a household emergency in the future and don't have the funds to cover it, you may be forced to borrow money less advantageously from high-cost sources like credit cards, payday loans or pawn shops - which come with even more interest than the debt you would have paid down. Remember that your emergency fund can be liquid and earning slightly more than nothing.

2. Pay down debt. Yep, this makes number two on the list. If you are in debt - especially higher-interest loans like credit cards, and some auto loans and student loans, using a windfall to make extra payments can lower the interest you pay over the life of the loan and bring you one step closer to being debt-free. Even with "good" debt like a mortgage or subsidized student loans, early repayment can be a great plan, but it can have tax implications, so do your homework first.While it might be tempting to increase your savings rate before fully paying down high-interest debt, remember that paying down debt with an 8% interest rate is like earning a guaranteed 8% return on your money. 

3. Increase your savings. If your high interest debt is gone - or you're not contributing enough to your 401(k) to receive a full employer match - throw more of that windfall into a 401(k), IRA or Roth IRA, or other longer-term savings vehicle. This money should not be in a high-interest savings account unless you think you may need it within the net 1-3 years for a down payment on a house, car purchase, or other use. 

4. Have some fun. Yes - have some fun! Because our emergency fund is already solid, the bonus this year went first to paying down additional debt, then to increasing retirement savings - but we also went out to a nice dinner to celebrate a year of hard work. 

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Good luck!

My family has paid off $45 thousand in student loans (thanks, grad school!) over the past two years, mainly by making minimum payments and throwing extra cash from any 'windfalls' at the loans.

We determined our budget by figuring out how much we would need 1) to pay off debt, 2) to live off of and 3) used our income less 1) and 2) to figure out how much we can afford in rent.

It's a long road but you can do it! We still have a long way to go but I'm glad for how far we've come so far.

I’ve decided to put my tumblr to use as a personal finance accountability check. I have a goal of major debt reduction and this is my way of being accountable to myself. I will do this checkin every wednesday afternoon, and detail how I am going about reducing my credit card debt.

I have two...

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The Economy Didn’t Make You Poor – You Made You Poor

http://www.moneymanifesto.com/the-economy-didnt-make-you-poor-you-made-you-poor-7732/ (via centssense)

Phrased differently - for those with middle-to-high incomes: "You don't have  a medical bankruptcy. You have a 4500 square foot house plus Escalade three years ago bankruptcy"

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Please don't send me another email

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What does an emergency fund have to do with anything?

Over 26% of Americans are dealing with 'significant stress' at any time - with 50% reporting experiencing this stress every year. 

While money can't prevent stressful situations or bring happiness, it can keep a temporary illness from becoming a medical bankruptcy

So how could an emergency fund - three to six months of post-tax income - help you through a stressful situation?

Illness and disease: An emergency fund could help cover living expenses and medical costs if you lose your job - and your insurance - due to an illness, or give you the flexibility to care for an unwell loved one even without your own income. 

Death of a loved one: Even if your loved one is insured or has funds set aside for a memorial, estate and insurance claims may keep you from accessing those funds in a timely manner - having some of your own to leverage as a stopgap will allow you to focus on your family, and not on your finances. 

Problems with work: Whether your hours are cut involuntarily or you are ready for a career change, an emergency fund can help tide you through period of inconsistent income.

Family events or issues: could your roof need replacing? Water heater break? Emergency car repair? If you can't repair the car and rent another easily, it will be difficult to keep your income; an emergency fund will keep the going smooth. 

Don't be one of the 60% of americans lacking the cash on hand to cover an unexpected bill of $500. Start your emergency fund today. 

A caveat: for low-income families, many barriers can prevent saving, from the obvious - it's hard to save on a small, inconsistent income - to the outrageous - low income families may be penalized, and effectively lose benefits, by saving. This is one more example of high marginal taxes on the poor - and it's something we as a society need to reform. 

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You can earn more than .0005% on your savings

Nationally, savings accounts are earning just .06% - and I personally have one that is under .0005%. 

But it is possible to earn more - last year, we opened an account with american express personal savings and are earning 0.9% on a portion of our emergency fund. A few other options to consider:

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Whether changing careers by choice or circumstance or pursuing a side gig, being flexible in your approach to jobs can help you adjust confidently.

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Just 38 percent of Americans said they could cover an unexpected emergency room visit or even a $500 car repair with cash on hand in a checking or savings account, according to Bankrate, which commissioned the study. About 26 percent would reduce spending on other things, and 28 percent said they would either borrow from family or friends or use credit cards.

http://www.cnbc.com/id/102317918#.

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puritanicalpersonalfinance Normal advice? Don't spend more than 25-30% of your gross income on housing. Best advice? If you have debt, like we do - or just need to start saving more - aim for less. A year in a shared 2 bedroom apartment now could save enough to pay off all of your debt and put you on a great path. 

My company will pay %100 of health/dental. Ill be paying $30 a month for vision insurance. I have 3k in credit debt. No car payments. $110 phone plan. Any advice? In my opinion I believe I can afford 800-1000 but I would like others to share their experience as I am a bit nervous to sign a lease. Read replies here: http://www.reddit.com/r/personalfinance/comments/2vmki5/realistically_how_much_rent_can_i_afford_on_45k_a/

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How much should I pay in rent?

When I got married, my husband and I sat down together to plan out our budget. We knew that student loan payments would be a big driver, and had a good idea of what our incomes would be. Here's the process we went through:

1. Calculate monthly income

2. Calculate monthly student loan payments

3. Calculate anticipated expenditures - cell phone plans, internet, grocery money, car and renter's insurance, 401k contributions, car payments, gas, utilities, and others. 

4. Look at what's left: that's how much we can afford in rent. 

As a result, our current rent is about 30% below our monthly student loan payments - but we have enough of a cushion that we are paying them off ahead of schedule. 

Don't let where you want to live or some standard 25%-30% of income formula determine your choice; as long as you can live somewhere safe, decently maintained, and within reasonable distance to work, you should seek to pay as little in rent as possible. After all, rent and cars are the two biggest components of most budgets; cutting back on those will save more money than cutting your entire latte habit. So pay your debt and savings first - and choose a place that lets you live with money left over.