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This is a guest article by Gerri Detweiler. Gerri is the host of Talk Credit Radio and serves as Director of Consumer Education for Credit.com. She is the author or co-author of five books, including Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights. Her next DIY project is to (finally!) roast coffee beans.

Mark Frauenfelder makes his own yogurt and sauerkraut. roasts coffee beans, and has raised chickens. He’s also tricked out an expresso machine and built his daughter a guitar out of a lunchbox. And he’s managed to complete all of these DIY projects — and many more — while contributing to the very popular blog BoingBoing, and serving as editor of Make Magazine. Oh, and he’s also written a book about his experiences: Made by Hand: Searching for Meaning in a Throw Away World.

My DIY projects, by contrast, are often utter failures. My homemade sauerkraut probably would have given me food poisoning if I had been dumb enough to taste the foul-smelling concoction, and the popcorn popper I bought on eBay to roast coffee beans has been sitting untouched on a shelf for a couple of years now. Oh, and my homemade yogurt tasted like the cheesecloth I used to strain it.

It would be easy to dislike Frauenfelder, except for the fact that he’s a really nice guy. So instead of getting annoyed every time he writes a post about one of his successful projects, I decided to interview him on my radio show, Talk Credit Radio, in the hopes of gleaning some wisdom that could help me become a more successful DIYer. Following are some his best tips (edited and excerpted) from that interview:

Don’t be afraid to make mistakes

Gerri: Tell me a little bit about what you learned from your DIY journey?

Mark: I think the most important thing I learned was that it’s okay to make mistakes, and that you can learn a lot from mistakes. In fact, a lot of research has shown that people learn fast when they do make errors because it really sticks in your mind.

As Editor-in-Chief of Make Magazine which is a technological project magazine, I hung around a lot of people that I call “alpha makers,” people who are just committed to anything and they do a great job of it. I found that it isn’t so much their skill level that’s important but the fact they have gotten over their fear of screwing up. And that is like the most important thing that I learned, otherwise you’re going to be frozen with fear.

I make tons of mistakes all the time but I hopefully learn from them so that every new box guitar I build is a little bit better than the one before. Then you can raise the bar and challenge yourself to try something a little better. It’s a fun way of looking at the world.

You do have time to for DIY projects

Gerri: Mark, let’s talk a little bit about the time factor. You’ve got two daughters, and a full-time job as a writer and editor. How do you fit in these DIY projects? Wouldn’t it be a lot easier to just go and buy a spoon (rather than carve one yourself)? Or go and buy espresso rather than try to figure out how to trick out your espresso machine?

Mark: Absolutely, it would be easier to go out and buy something and time is really precious, especially when you have small kids and you have to work for a living. And that is one of the reasons I wrote this book. I read all those books about going back to the land and making things yourself, they kind of assumed you lived in this ideal world, you have infinite time to do all this stuff.

So I took a much more realistic approach: What if I gave myself 15 minutes a day to get away from the computer and work on a project? And I think almost anybody can give himself 15 minutes a day. But it really adds up and after a month or so, that’s a considerable amount of hours that you’ve been able to devote making things.

There was a guy I was reading about in the 1700’s whose wife was 10 minutes late at the dinner table every minute so he took those 10 minutes to work on a novel and he ended up writing 3 very successful novels that way by squeezing in those 10 minutes. I think that’s the trick is giving yourself that time and scheduling it in.

Gerri: In your book, you talked about how when you were making your wooden spoons, you discovered that you could actually do that while you were on a conference call, for example, and concentrate better. So maybe there is some synergy between being able to accomplish other things whether to clear your mind, or find the relaxation that you need if you take on some of these projects.

Mark: Absolutely and you’ll see that with knitters. People who knit say that they are able to really have a much more pleasant conversation while they are knitting and I found that also that when I do work conference calls, if I just sit and carve a spoon it puts you in kind of a slow state or something and I’m much less fidgety and I can really concentrate one that conversation. It’s a pretty cool effect.

You can do this anywhere

Gerri: You aren’t living on a ranch in Montana or out of the woods somewhere. You’re living in a Los Angeles suburbs, is that right?

Mark: Yeah, I’m about a six-minute drive from Hollywood and Vine. So I’m right here in the city, basically up in the hills.

Gerri: You’re doing these kinds of projects in a very urban environment. Do your neighbors, do people think you’re crazy?

Mark: They’re amused by the chickens. When I had the chickens, they got out and were running around on the street and one of the people who lives on the block, he was one of the producers of The Waltons and he was, “hey this is just like The Waltons!” And he got hold of a cam and started snapping some pictures – he loved it.

It’s not always about saving money

Gerri: Some of these projects may involve specialized tools, or they may involve specialized materials. What have you found in terms of the financial payoff or the financial cost in your DIY projects?

Mark: That’s a really good question. It’s kind of a yes and no thing. No, it’s not going to save you money compared to something that you would buy. If you were to build your own television set it would cost a lot more money to buy the part than it would to buy the TV off the shelf. It’s usually cheaper to buy in almost every case.

But, if you look at making as a hobby that is really rewarding and a way to spend time, it’s going to be less expensive than going out at night and spending a lot of money at a nightclub or taking an expensive vacation or something like that. As leisure activities go, you can make it pretty inexpensive. If you wanted to become a wood carver, you could buy an improvised wood carver set under a $100 and it would give you a lifetime of enjoyment. In the end I think it’s an inexpensive and rewarding way to spend your time.

Gerri: And some projects like some of the food projects you’ve done, you may have an initial investment, like building the chicken coop or getting the yogurt maker if you decide to go the route. But it sounds like that in the long run, they can end up saving you money.

Mark: Yeah, definitely, one thing that I’ve started doing is roasting my own coffee. And there’s a way that you can do it using an air popcorn popper. There are tutorials online that show you how to do it and the cool thing is that green coffee beans, unroasted beans are a lot cheaper than roasted beans. They’re about $5 a pound that’s comparable to, comparable roasted beans would be about $15 a pound. And green beans will stay fresh for about a year or two so you can keep them by yourself, 10 pounds of beans and then roast a batch whenever you need fresh coffee and you will have the freshest coffee ever and you’ll save money.

Gerri: I really appreciate your book and recommend it. I also love your blog at boingboing.net. Can you give us more places that you recommend that anyone who’s interested in DIY should visit?

Mark: Sure, well I think makezine.com has a lot of really good recent resources that will show you how to make different projects, lots of tutorial videos that can help you get started, information about Maker’s Fair, which is our twice annual fair, that has a 100,000 attendees who come to see this giant-like science and creativity fair. It’s really fun.

And another really good website is instructibles.com and that’s where people upload instructions on things that they’ve made, all sorts of gadgets from beer coolers, built-in wagon to really neat kind of kites, all kinds of projects. I think those two right there will keep you busy for at least a couple of weeks.

Listen to or download the complete interview with Frauenfelder here: download

You can also listen to or download an interview with Consumerism Commentary’s Flexo here: download

Editor’s note: I’ve been a fan of Mark Frauenfelder since I discovered BoingBoing many years ago. He was a guest on the Consumerism Commentary Podcast, as well, in 2009.

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Since 1966, the Higher Education Research Institute has been conducting a study of first-year college students to determine personal goals and values. This collection of data has offered research a chance to see how priorities change over the years, and there are striking generational differences in the results. Recent research at San Diego State University combined the data from this research with additional studies, and the results were published in the Journal of Personality and Social Psychology.

The most striking generational difference is the change of relative importance of “being very well off financially.” 44.6 percent of baby boomers considered this goal essential or very important. Through the period when Generation X entered college, 1979 to 1999, 70.8 percent of college freshmen believed it was essential or very important to be well-off. For millennials, or Generation Y, with students entering college from 2000 to 2009, this rate increased to 74.4 percent. In 1978, being rich ranked 8th among all the goals listed as choices in the survey, and since 1989, this goal has consistently ranked first.

Other goals on the list that lost ground due to the surge in the desire for financial success above all else include developing a meaningful philosophy of life, declining in importance from 73 percent to 44 percent and keeping up with political affairs, declining from 50 percent to 35 percent. At the same time, some goals that may not be directly related to being rich increased. Creating artistic work (painting, sculpting, decorating, etc.) increased from 15.5 percent to 16.0 percent from baby boomers to millennials. Influencing social values increased from 32 percent to 40 percent.

Why are young people significantly more concerned with financial security, and if this concern is so much higher, why is financial literacy in young people lacking to such a degree as reported constantly in the media including financial blogs?

I see two significant influencers of attitudes in college freshmen. The first is a reaction from their parents’ attitudes. Baby boomers’ parents might have lived through the Great Depression, perhaps as kids. The experience of financial difficulty sticks with this generation as they mature and have families of their own. While one reaction to parents whose philosophies of money have been shaped by hardship would be to put an extra emphasis on financial independence within a family, it’s more likely that financial struggle helped people understand that there is more to life than having money, and this is the attitude that was passed down from one generation to the next.

As the baby boomers built their own success as adults and benefited from the clear economic expansion after World War II, financial success was within reach and became a new goal. Suburbs blossomed, and television opened people’s minds to consumer culture. This openness combined with the ability to earn enough money to cover more than just the necessities shifted the culture, and these attitudes weren’t unnoticed by baby boomers’ children, Generation X and millennials.

The second significant influencer is popular media. As mentioned above, the availability of television shaped American attitudes. National programs offered millions of families a glimpse into the best of what the consumer culture had to offer. It wasn’t just Lifestyles of the Rich and Famous, it was the popular sitcoms that projected an idea of what life should be like in the home. I noticed during the recent recession, television programming tended to reflect more financial escapism. People seem to enjoy watching programs featuring rich and upper-middle class lifestyles, and this type of programming has flourished in recent years.

A combination of these influencers likely contributed to Generation X’s and millennials’ stronger focus on their goal of “being well off financially.” There is still a broken connection between this goal and the behaviors that help individuals reach the goal. Consumer debt is still a problem. College graduates lack understanding of basic financial principles, and often make mistakes that may or may not be corrected by the time they start families of their own. Perhaps the real goal is not being well-off, but appearing well-off. When financial independence seems out of reach, young people are willing to settle for looking or feeling rich. This is an approach focused on the surface, just appearances, rather than one based on making the tough adjustments required to fix the fundamental financial issues. It’s faster, more convenient, and outwardly identical to a point.

It’s perhaps why people who play the lottery are more likely to have low incomes, and maybe it contributes to the appearance that people living on welfare might have expensive-looking phones or other accessories; in a world without hope for financial success, the only way to satisfy the need for “being well off financially” is through objects acting as external symbols of wealth.

Photo: chrisdlugosz
American Psychological Association, via MainStreet

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Not every credit card on the market today is out to provide consumers with great rewards, because not every card customer can make the most of those rewards. Credit cards are just tools, and depending on who is wielding them, they could have a positive or a negative effect on that person’s finances. Some people just use credit cards to habitually buy what they can’t afford. For them, a great rewards credit card might actually be counterproductive.

A good example would be someone who has made mistakes with credit cards in the past and is now looking for some way to get out of the debt hole. Rather than trying to rack up rewards with spending, this individual would be better off finding a low-interest card or a card with an excellent introductory APR on balance transfers that will allow him to save money while reducing his debt.

Chase (JPMorgan Chase & Co.) Issuers design some cards for people looking to save money on costly interest payments. Slate® from Chase – No Balance Transfer Fee has offers a 0% introductory APR on purchases and balance transfers for 15 months. This offer is for applicants with good or excellent credit; after the 15-month introductory period, the APR is 11.99% to 21.99% variable. Notably, Slate from Chase – No Balance Transfer Fee does what the offer says: It allows you to transfer a balance to the card with zero fees if you do the transfer within the first 30 days your account is open. (After the 30 days, balance transfers are assessed a fee of $5 or 3% of the balance transferred, whichever is higher.) Combined with the 0% APR period for purchases and balance transfers, this is a card that will likely save you money if you carry a balance and are committed to paying it down within 15 months. The Slate® from Chase – No Balance Transfer Fee card has no annual fee.

Slate from Chase includes a program that’s meant to help cardholders analyze and pay down their debt. The program is called “Blueprint,” and it allows cardholders to pick which purchases to pay off first. With Blueprint, customers have the option of designing their own plan:

  1. Full Pay. Avoid paying interest by paying off full categories of your choice. Chase will separate all of your purchases into different categories.
  2. Split. Inform Chase how much you want to pay and to what purchases you would like it applied to.
  3. Finish It. Set up a goal and a timeline and Chase will calculate your monthly payment schedule for you.
  4. Track It. Check out your spending trends and see where you stand with any goals you’ve set up.

It seems like a lot of work, and most people will probably prefer to just send a payment into a credit card and have it apply to the highest APR balance regardless of what the original purchase was. Psychologically, however, there is value in understanding exactly when a particular purchase has been paid off. That theory has been used to great effect by Dave Ramsey with the Debt Snowball, and this is sort of a similar application.

That’s about all there is to the Slate from Chase. For consumers looking for a great introductory rate with features to help you keep your debt in check, this card fits the bill. Remember to keep in mind that the best offer is given to excellent credit applicants only, so anyone with average or even above average credit should avoid applying. Here’s how to apply for the card.

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This is an article by Marc Pearlman. Marc is a money management professional who has been in the finance industry over 20 years, and he is the author of The Positive Money Mindset and host of the radio show, Your Money Matters.

I watched as these two were duking it out — at the poker table, that is. Fortunately for me, I was out of the hand with my lousy cards safely in the muck pile. I watched with no attachment to the outcome, but I had a prediction of who would come out the victor in this poker showdown. This young kid, probably mid to late twenties with a black hat pulled half way down his head had been quiet most of my time at the table, was squaring off with a middle aged guy. If appearances mean anything, this middle age guy was somebody of means given the designer clothes he was sporting.

Anyway, this kid makes a modest bet and the middle aged guy is quick to match it. Not only does he match the bet, he raised him with a smirk as though daring this kid to come at him again. So, the kid comes back at him with a bigger bet, and again this guy matches him. When all was said and done, both guys had all their chips in the middle and our middle aged poker wannabe had absolutely nothing for a hand. He tried to save face and belted out, “I didn’t have anything, but I couldn’t sit there and watch you walk away with it.”

Poker chipsEgos can be expensive that way.

All too often people make financial decisions out of emotion, which can be an expensive trap for those who have their ego firmly married to their net worth. If we look around, we can see examples of this all across the spectrum of income classes.

Years ago, I worked with a doctor who shall we say did not suffer from a fragile ego. He was interested in putting money with an institutional money manager who had a large minimum investment requirement and a lousy recent track record. I had suggested a manager who demonstrated better performance numbers and who utilized a strategy with less risk. “What is the minimum investment?” the doctor inquired. The minimum was about half of the other managers requirement, I answered. The doctor quickly rebuffed the notion.

It came out in conversation that his peers had money invested with this manager who had the higher minimum. I understood that it was important for him to be part of what he believed to be a prestigious group of investors. Making money was not his motivation, satisfying his ego is what dictated his investment choice.

Another story comes to mind. I once had the opportunity to work with a professional commodities trader. I was hired to help him with his trading deficiencies. This guy had strong opinions on whatever subject was being discussed. He could not possibly fathom that his thought process could be flawed. I introduced him to the concept that being right to him was more important than making money. He scoffed at the idea. In the end, he learned his lesson in a painful way. This trader would hold onto losing positions until he was forced to sell. He vigorously defended his position that he was right only to watch his once several hundred thousand dollar trading account dwindle to less than $20,000.

Ultimately, the ego he was trying to protect was humbled.

Here is yet another example of how our egos can hurt us financially: about a decade ago I had a wonderful client who has since passed away. Great guy, but wow, what a terrible stock picker! Honestly, someone could have made a fortune by simply doing the opposite of what this guy did. He held fifteen stocks in his portfolio, ten of which I had selected for him.Out of the five he picked, every single one was a dog. When I say dog, I mean dog with fleas. They were all down 70 to 80% within a year. I am not suggesting that every selection I made was a homerun, but we were profitable on average with my ten selections.

He would call in on a regular basis to discuss the market. He never wanted to discuss his losing stock picks. Furthermore, I knew it was taboo to mention my winning stock picks. The only subject that was not off limits was the couple of picks I made that were not working out.

When he passed, he still held those losing positions. His refusal to acknowledge his mistakes cost him well over five figures in losses, not to mention the opportunity costs associated with redeploying the money elsewhere.

Big egos often mix with money with the same cohesiveness that oil and water mix. Having an inflated ego is not necessarily the issue, but when your financial decisions are borne from ego, you are in dangerous territory.

Strong and sound financial decisions require letting go of your ego. Often, we need to admit our analysis was wrong and we need to cut losses in order to preserve our hard earned capital. Sometimes the simple truth is that keeping up with the Joneses is going to bring financial ruin.

Many times, laying down your cards is the best thing you can do for your wallet.

Photo: Ross Elliott

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Cash Back Rewards Stolen

by Flexo
Burglar alarm

Using cash back credit cards is rewarding in two specific ways. First, you’re earning money when you spend. That’s the obvious part. But when you know that you’re getting a rebate when you use your credit card, you also feel better about spending than you would otherwise. Feeling good can be dangerous, as you might ... Continue reading this article…

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How to Solve the Financial Literacy Problem

by Flexo
Kid with money

Many Americans experience financial jeopardy at some point in their lives, and experts share an opinion about a strong cause: there’s no formalized way to learn how to use money properly, so most people must learn by experience, making mistakes as they learn what is necessary for building a solid financial foundation. It would save ... Continue reading this article…

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How to Love Cooking

by Forest
Toast

This is a guest post by Forest from Frugal Zeitgeist. Forest writes about frugality, finance, minimalism and lifestyle. In this article, Forest shares his experiences in the kitchen. Cooking great meals is a great way to save money and stay healthy, but it’s a skill that I haven’t developed for myself. Passion can boost motivation, ... Continue reading this article…

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Year-End Personal Balance Sheet, December 2011

by Flexo
Net worth balance sheet, December 2011

I’ve spent the last decade of my life focused on my finances. I started because I had no money and a job that was taking more from me than it was providing in income. I knew I had to make some changes if I wanted to build any kind of future for myself. Soon into ... Continue reading this article…

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