The following guest post was submitted by Neal Frankle, CFP.  Check out the footer of this post for more information on Neal, and his website.

Lots of people have been laid-off recently.  As a result, they’re looking for any kind of work they can find. I respect people who are willing to do whatever they can to support themselves and their family. But sometimes the “cure” compounds the problem.  Let me explain by way of example.

Mike was a writer and like many in his field, he was laid off several months ago.  Jenny, his wife became the sole support for the family.  Mike looked for work every day but after 4 months still came up empty handed.  The pressure was mounting – financially and emotionally. The couple was facing the real possibility of losing their home.

Finally, Jenny confronted Mike and made it very clear that she expected him to do whatever it took to make money – regardless of what work it was or where he found it.

Mike understood Jenny.  Later that day, he saw a “help wanted” sign at the local book store and applied for a full-time job.  He wanted to do whatever he could to bring home as much money as possible. Mike didn’t get the full-time gig but was offered some hours on the weekend.  That was the best thing that could have happened for Mike and Jenny.

Some questions you might be asking yourself about now might include:

“Does Neal have something against Mike?”  or “Is Neal out of his mind?” or “Does Neal have something against bookstores?”  The answer is “no” to all three questions.

It would have been …..eh……”silly”….. for Mike to take the full-time job and I’ll explain why.

The bookstore was offering him less than $12 per hour. So even if he worked full-time, he would not have earned enough to hold on to the house.  The $12 hour job was a financial placebo for Jenny.  And to make matters worse, he would have been stuck in that job forever because he wouldn’t have the time to look for better opportunities.

Here’s the approach I suggest if you are out of work and facing similar difficulties:

1. Don’t panic.

If you do, you’ll end up making decisions out of fear and ones you’ll likely soon regret. This is the time when you need all your genius brain power.  Cool down.

1. Be rational & get the facts.

How much money does it cost your family to live each month?  Do you have any savings?  What else can you cut to reduce your cost of living? (Hint: if its not food, shelter or medical expenses, it can be cut.)  How much longer can you hold out?  How likely is it that you’ll find work in your own profession?

When Mike and Jenny did this, they concluded that they had enough money to hold on to the house for another 5 months.  They figured that even if Mike took the low-paying job, they would only be able to hold on to the house for 3 additional months.  So they had to decide between:

a)      Taking a chance that Mike would find work in his area of expertise and therefore creating the possibility that they might hold on to their home.  If not, they’d be out in 5 months.

b)      Working at the bookstore and almost surely lose their home in 8 months.

1. Make a decision and execute it. The couple decided that Mike would work on the weekends at the bookstore.  This allowed him to earn some money while at the same time, have the opportunity to look for better paying jobs during the week.  They understood that they had nothing to lose by going this route – and they were right. If Mike doesn’t find a higher paying job in 5 months, he’ll go back to the bookstore or pizza parlor or whatever and take any and all work he can.

When you are facing extreme financial pressure, don’t grasp at the first apparent solution.  Take the time to examine all the facts and try to think outside the box.  You may find that the best solution is not always the most apparent.

Have you ever been in a similar situation?  Do you think that Mike should have taken any job possible?

About the author: Neal Frankle found himself in a financially fragile situation at the age of 17. Both his parents passed away while he was still in high school, leaving behind a small insurance settlement. Neal sought out a financial advisor to help him invest his nest egg so that it would help put him through college. Instead, the advisor charted a self-serving course and was on the verge of burning through the money when Neal realized what was happened and fired him just in time to avoid losing everything.

The experience had a deep impact on Neal and formed in him a lifelong desire to help people learn to make smart financial decisions. Today, with more than twenty-five years of experience in the financial services industry, Neal is an author and avid blogger. Subscribe to his blog at www.wealthpilgrim.com.

I’ll keep it short today as I’m feeling a little…blah.  You know, the stage before you feel sick, but you just feel a little off.  I hope you’ll forgive me as I call it a day with the following favorites from the web.  I’m off to catch up on some rest!

The Fab Five

Do You Plan to Leave Anything Behind?  An interesting discussion here.  Some popular personal finance gurus have made it known that they plan to leave nothing to their kids.  Most of their rationale is based on the fact they were self-made millionaires (or billionaires), and they expect the same drive from their children.  I tend to take a softer approach, and would like to leave something to my kids as a legacy for them to build from. (@ Million Dollar Journey)

Do You Haggle?  How to Negotiate A Price.  I confess: I’m horrible at haggling.  I’m the guy at yard sales that pays sticker price for whatever the item is.  I just hate to bicker over price.  Of course, I recognize this weakness means I occasional overpay for items.  Maybe this article will help! (@ The Digerati Life)

Solar Energy Tax Credit:  Will You Install Solar Panels?  I recently wrote about my wishes to live off the grid, or at least less on the grid than we are now.  The boost to the solar energy tax credit makes the idea of installing solar panels even more attractive. (@ My Dollar Plan)

Should Teenagers Be Able To Have Credit Cards?  I have mixed feelings about this one. The article refers to those ages 18-20, who now have access to credit cards, but that access would be restricted if new legislation is passed.  As Trent points out, some 20 year-olds have their head on straight and are capable of handling a credit card.  Others, not so much. (@ The Simple Dollar)

40 Ways to Go Greener at Home (Besides Just Recycling).  Lots of actionable, simple ideas here for greening up our lives.  Imagine if all of us just implemented a handful of these tips. (@ Simple Mom)

The Best of the Rest

• How to Find Out if You Qualify for a Mortgage Refinance Under New Making Home Affordable Plan

• IRA vs. Roth IRA

• Save Money on Moving

• Why I Spend

• Target Funds Aren’t that Safe

Site of the Week

41 Questions.  1 Personality. Reminds me of those old Myers-Briggs personality tests from my college psychology classes, with a more high-tech spin, of course.  Want to view my results?  Interesting, it said I should be a writer.

Don’t be alarmed. I’m not quitting the blog, or my job, or going off on a wild rant. I’ve simply had enough, and I am so thankful. Today in a moment of clarity it occurred to me that so much of our lives are driven by this one single word – enough. Few of us ever experience it, despite how rich or poor our socioeconomic class defines us.

The word “enough” is powerful. Ignoring the Webster’s definition for a moment, my own interpretation of the word in the language of frugal is that
“enough” is experienced when one reaches a sufficiency. Sure, we could have more, but we do not need more. We may want more, but we do not need more. We simply have enough.

Unfortunately, most of us don’t remember what enough feels like. When we were kids we needed to learn, and often be reminded of, what enough really meant. For example, my four year-old son could eat a three-pound bag of M&Ms if left entirely up to him. As he gets older he’ll learn that the over-indulgence in sugar and chocolate will likely leave him sick. He will reach a point of balance where he limits himself to a certain number of candies to satisfy his craving, but not so many that it makes him sick.

As we grow older our tolerance increases, our stomachs expand a little, and we can once again gorge ourselves beyond the state of enough. But now our childhood, sugar-induced nausea is replaced by things like credit card debt, a mortgage we can barely afford, a car that cost more than half our annual income, and 60-hour workweeks to pay for it all.

Imagine how much simpler our lives could be if we could go back to that point at eight years-old when we rolled down that bag of M&Ms after a couple handfuls. That point when we recognized enough and allowed our innate self-control to kick in.

I’ve tried to put these ideas into practice lately by reminding myself when I’ve had enough. From food, to material items, to money, reminding myself when I’ve reached enough has served me well. Here are a few examples.

I Have Enough

I earn enough money. Who wouldn’t like to earn a higher salary? Who wouldn’t like to earn as much as their boss? I know it sounds strange to hear someone say they earn enough, but I do. I’m not volunteering to stop earning more money, but I do recognize my basic needs and a few wants are met thanks to my adequate income.

My car is good enough. I currently drive a 19 year-old van. The radio doesn’t work, the heat and air rarely works, the gas mileage is terrible, and it has zero sex appeal. I don’t care – I love it! I have no car payment, my insurance and tag costs are negligible, and save the occasional repair it reliably gets me back and forth on my short commute to work. I could go out and finance a brand new truck, but my current vehicle is good enough.

I have had enough to eat. I’m a big guy. I’ve always been a big guy, and even in my younger days I had to stay active to make up for my love of good food. Now that I’m older, and more sedentary, those trips to the stove for seconds take more of a toll. Instead of toying with every diet under the sun (which I’ve tried to no avail at some point), I’m simply using the word enough to drive my eating habits. Mid-meal I stop to ask myself, “Have you had enough?” If I have, I stop eating.  Simple as that. Hopefully, the combination of my “enough diet” and increased activity will help me get back to fighting weight.

My house is big enough. The other day I sort of lamented about the configuration of our current home and its lack of office space. I found a frugal solution, and set up shop in our laundry/utility room. I’m also in the process of adding some gym equipment to our garage so I can get in a workout at home. Would I like a bigger house with a dedicated office, a bigger backyard, a playroom for my kids, and a workshop for myself? Sure, but my current house is big enough, and provides shelter for my family.

So the next time you find yourself crawling the mall for a new jacket, ask yourself if your current one is good enough. When you feel yourself coming down with car fever, avoid the new car lot and look at your current vehicle in a new light. Does it meet your needs? Is it paid for (or close to being paid for)? Do you remember what it is like to have a car payment? Do you really want to write that car payment check for the next 60 months? I don’t know about you, but like I said, I have had enough.

Today’s “Ask the Reader” question comes from Sherry.  She writes:

How does one go about canceling unwanted credit cards?  You know, those credit cards you get so you can get a 10% discount on your 1st purchase…I think I have a 2″ stack of unwanted, unused credit cards.

We recently refinanced our house and superior credit (no reason to worry about our credit) and no debt…so how do I get rid of these cards?

Sherry, closing credit cards can be a little bit tricky in that it does affect your credit score, but probably not enough to be greatly concerned. Your FICO score is calculated by a number of factors, and two of them related to your question are credit utilization ratios, and the average age of your credit history.

Your credit utilization takes into account the amount of debt you have outstanding against your total credit limits.  For instance, if you owed $3,000 on a $10,000 credit card, your credit utilization would be 30%.  It is generally accepted that you should aim to keep your utilization ratio below 30% to improve your scores.  By closing accounts you are eliminating the $10,000 credit line from that formula, and instantly increasing your credit utilization.

In your case, it’s a moot point.  You are debt free.  Having a number of open trade lines may actually be detrimental in your case as lenders may see the cards as an opportunity to accumulate future debt.  Another risk is the more open accounts you have floating around, the higher the chances of falling victim to identify theft.

The length of time your credit accounts have been on file also affects your credit score.  Closing accounts you have had in place for several years effectively lowers the average age of your credit history, and may negative affect your score.  I wouldn’t let this deter you from closing out the unwanted credit cards, because the effects on your credit will be minimal.  I suspect you’ve accumulated the cards over a number of months or years, so closing them all will likely have little net effect on credit scores.

As for the mechanics of closing out these cards, the best way to do it is in writing.  I typically call customer service and advise that I would like to close the account.  Some places will try to negotiate, or talk to you like you’re an idiot for not wanting their card.  Stay cool – be adamant that you would like the account closed, and then follow up with the same request via letter to make sure it is in fact closed.

In order to keep your credit cards to a minimum you should only apply to the best credit card offers. Some of the bigger banks offer some pretty good rewards cards that you might want to have for your daily purchases. However, if you’re looking at savings accounts, then an internet bank is usually your best bet to find good savings account rates for your cash.

Do you have any tips to add for Sherry?

Debt Consolidation Alternative for Today’s Consumer – Reduce Credit Card Debt – Debt Free 12-36mo

Earlier this year my wife and I decided to stay put in our current home.  Now we are in the “how can we make this work” mode where you walk room to room with the realization that you will be here for a while, and the chances of building or buying a new home with all your needs will sit on the back burner for a while.  Here are a few ideas for making the existing space around our home more productive.  We’ve already implemented a couple of these items, and the remaining ones are on our to-do list.

Ways To Make Spaces Around Your Home More Productive

Convert spare bedrooms, garages or back porches to a home gym.
Our neighbors recently closed in a garage and added some gym-quality exercise equipment.  They now have a full squat rack, Smith machine, an elliptical machine, bike and treadmill.  To say I was a little jealous would be a major understatement.  I’ve always wished I could lift weights at home, mostly because I don’t care for the social setting at most gyms.  While I don’t think I’ll be able to close in the garage, I could put a weight bench with a bench press rack on the back porch.  I could also add a small set of dumbbells, a used exercise bike (for rainy days), and a heavy bag.

Create a home office with just a feet of empty wall space.
When I started writing here at Frugal Dad, I recognized quickly that I would need to carve out a quiet area to do most of my writing.  My requirements were simple:  a door, enough room for a table to hold my laptop and a few notepads, magazines, books, etc.  Finding a spot with a door proved to be the hard part.  That is, until I got creative.

Our washer and dryer are in a large utility room.  We have a rolling metal rack in there to hold canned goods, along with a spare freezer to store meats and vegetables we occasionally find on sale and stock up on.  The room may have looked full to the “unfrugal” eye, but I saw an opportunity.

I set up a four-foot folding table and small rolling task chair with no arms.  My laptop, a small lamp, a couple bookends to hold five or six of my favorite books, and a scratch pad for making notes all fit perfectly on the table.  The chair easily pushes up to the table, and is out of the way when doing laundry.

Plant vegetables in a table top, square foot garden on your balcony or porch.
Who says you have to have a ton of green space to grow a beautiful garden?  Consider building a square foot garden, or planting in containers, on your balcony or other outdoor space. I had a friend who grew beautiful tomatoes and a variety of other salad vegetables on his balcony.  Before dinner, his wife would pluck a few tomatoes to slice and eat along with their meals.  She also maintained a variety of herbs and flowers.

Turn your formal dining room into a den, study or playroom.
How often to you eat dinner in your formal dining room?  If you are like us, probably not that often.  Maybe a few times a year we gather there to host Thanksgiving dinner, or a similar occasion. But, for the most part it sits empty as a placeholder for our dining table, chairs and hutch.  Consider converting this space to a den, a playroom for the kids, or perhaps a study or home office (the latter may require adding a door or two).

One word of caution:  I once pitched the idea of replacing the dining table with a pool table.  I was half kidding (only half), but let’s just say it didn’t go over very well.

Create a reading and meditation nook.
I’ve frequently heard this advice, but it really stuck when listening to Dr. Wayne Dyer once describe how everyone should have a little “nook” where they can go to get lost in their thoughts.  It could be as simple as a quiet corner of a bedroom, or as large as an unused guest room.  The point is to create a quiet corner in your home, surrounded by things with positive energy such as pictures, drawing, motivational posters, etc.

When thinking about rearranging your home, keep in mind that any configuration changes you make may not be desirable to future homeowners.  Unless you plan to stay put forever, think long and hard about knocking down (or adding) any walls, hanging doors, etc.  For the most part, consider enchancements to your home’s space that do not require any structural modifications.  But don’t be afraid to get creative, and don’t be afraid to make the space work for you and your family.  After all, homes are meant to be lived in.