As of late, though, I’ve revised my stance on the credit card. It’s not worth it. No, I didn’t acquire massive amounts of consumer debt. And no, I haven’t had any problems with American Express. They’ve always treated me well. (They even waived a $40 late fee for me once.) But I have decided that the card is actually more trouble than it’s worth.

Card Benefits Barely Matter

Sure, the 1% cash back, or whatever your card offers, seems nice. Why not get some free money, right? Okay, but it’s really not that much money. Let’s say you get 1% cash back from your credit card. Let’s also say you put $2000 per month on the card. At the end of the year, you will have gotten $240 back. Sure, it’s 240 dollars, and that’s nice, but that means you charged $24,000 that year. Should you really be charging $24,000 to your credit card in one year? If $240 really makes a significant difference in your finances, then no, you shouldn’t. If $240 makes a big difference to you in the grand scheme of things, you need to stop charging and learn to save.

If I spent every single take-home dollar through my credit card (an impossibility), and got 1% cash back, then at the end of the year, I’d get less than 0.6% of my gross pay as cash back. Um, wow. Now I can afford that vacation to Aruba, if Aruba is a cheap hotel in a bad neighborhood.

That’s the way the math works out, though. There’s simply no way to spend enough on a card to have the cash back (or other benefits) really matter. The percentage just isn’t high enough. It doesn’t matter how much you spend, you’ll still be getting only a small fraction back. Yes, a little free money is nice, but is it really enough that you should be letting it sway your decisions?

Let’s look at it one other way. A pack of gum costs about a dollar. If you saw that pack of gum for 99 cents instead of a dollar, would you get excited? No? Maybe you find a new plasma TV you like. It costs 1700 dollars, but you find it on sale for $1683. Excited yet? No? Damn, you’re hard to please. If you don’t get excited when retailers offer you a 1% discount, why do you get excited when AmEx does?

Using a credit card for the cash back is like withdrawing cash from one credit card and transferring the balance to a new card with a low introductory rate, just so you draw a tiny bit of interest on the balance for a few months. Yes, people do that, too, but it’s still stupid. The payoff just isn’t worth the hassle.

Living Month to Next Month

Credit cards also encourage living month to month. Even if you pay off your credit card every single month, you can easily find yourself behind. It’s simple to deceive yourself about the real state of your finances when you rely on credit.

Up until recently, I was using my credit card for virtually everything. I paid my bill, in full, every single month. That makes it okay, right? Well, no. I realized a few months ago that I was basically living on my next month’s income. I wasn’t destroying my savings yet, but slight overspending was building up, and it had gotten to the point where I didn’t have enough in my monthly expenses account to cover the total current balance and still pay the rest of my bills for the month. I had let the credit card hide my debt. Because I was paying it off monthly, I was convinced I wasn’t overspending, but I was. I was living almost a month ahead of my income.

In theory, a closely monitored budget should avoid this problem. At best, though, adding an ability to hide debt will add extra burden to your budgeting effort. At worst, it will hide issues that will sneak up and bite you later.

The Alternatives

So, I’m giving up the credit card. What does that leave? Three things.

1. Cash
2. Checks
3. Debit Cards

I use checks for the same things I always used checks for. Rent, car payments, other bills. I use cash for food and discretionary spending. I use the debit card for everything else. In particular, I use the debit card for fuel. Paying for gas with cash is a pain, and paying with a check is even worse, so the debit card is the only way I plan to pay for gas.

Having the debit card handy means that I have the same emergency support that I get from the a credit card. i.e., I can always pay for a ride home if I break down. Using the debit card also means that I never have debt build up on me unexpectedly.

It’s certainly possible to use a credit card and still maintain a budget. It is not, however, possible for the credit card rewards to be “worth it”, when they are worth so little. Do what you think is best for your finances, but don’t let yourself imagine that the small rewards have much value. As for me, I’ve chosen simpler finances over a couple hundred extra dollars every year. The easier budgeting, combined with the peace of mind I get from knowing exactly how much money I have is worth far more than 1% cash back.

The Yardstick

We cannot measure our success without knowing what success will look like. Our goals should be the yardsticks for our lives. If we are meeting our goals, then we are successful. If we are not, then we need to adjust either our goals or our efforts. Do you know what your goals are?

You might want a million dollars, but that’s not good enough. That’s not a goal. It’s a dream. You can’t act on a dream. Do you want to save a million dollars for retirement? If so, then maybe your goal should be to “invest $250 in a mutual fund every month for the next 40 years.” That’s a goal you can act on. You are much more likely to invest $250 than you are to just “save a million dollars.”

Let’s look at another common example. If you want to get in shape, then “eating better” and “going to the gym regularly” should not be your goals. Even “lose ten pounds” shouldn’t be your goal. Those are all just too intangible to reliably act upon. Your goals should be to “eat no more than 1500 calories per day,” and to “go the gym from 6:00 to 7:00 on Tuesdays, Thursdays, and Saturdays.” Anything less than that isn’t a real goal. It’s just a dream.

Toward a Goal

Once you’ve made your goals into something tangible, something measurable, you can monitor your progress. Did you save $250 last month? If not, you need to adjust your budget and compensate. Did you go to the gym last Tuesday? No? Then you need to make the time.

By setting a measurable goal, you can constantly evaluate whether you’re going to reach that goal. If your dream is to spend more time with your kids, you can’t really track that. How much is enough more? If you want to spend 2 hours every weeknight helping your children with their homework and then going for a walk as a family, that’s something you can track. You can try to track your success in your head, or you can actually keep a personal log. Either way, the first step is to make the goal measurable.

I want to finish all of my degree, except for my dissertation, by the end of next spring. That’s not very tangible, though. So instead, my goals are to take my comprehensive exams and finish 12 hours of class this fall, and to take 6 hours of class and propose my dissertation in the spring. These are by no means easy goals (I have a full-time, off-campus job), but they are measurable goals. I know exactly what I need to do, and I know exactly when I need to do it. I can and do track how my school goals are progressing.

Once your goals are measurable, you can make progress. Until then, you’re just frustrating yourself with dreams that won’t come true.

Big Goals

Sometimes a goal might just be too big to really be tangible. If that’s the case, you need to break it into smaller goals. For example, starting your own company is a huge goal. It’s definitely possible, because others have done it. But “start a company” just doesn’t seam tangible, or very measurable, for that matter. You’ve got to somehow break it up into achievable pieces.

If you want to start a software company, you should probably have a goal of spending several hours a day putting together a prototype product. After that, maybe you need to find a partner or an investor. So you should have a goal of spending some amount of time finding a partner. Or a goal of hitting up everyone you know with more than $5 for investment money. At every step of the way, there should be tangible goals. Even if they aren’t all obvious from the beginning, you should be nailing them down as you go along.

Meeting goals can be hard. It can be very hard work. But the first step is to really know what the goals are. Setting goals is not an extremely difficult thing to do. It takes some time, a little personal honesty, and probably a pen and paper. Whatever time and effort you put into setting your goals will pay itself back many times over, when you actually meet your goals. Once you’ve actually set real goals, you’ll know what you want, you’ll know what you need to do to get it, and you’ll know how to track your progress.

People waste their entire lives dreaming and never doing. All the hoping in the world won’t turn a single dream into reality. But hard work can turn goals into reality. Don’t sell yourself short.

The one thing that unites all human beings, regardless of age, gender, religion, economic status or ethnic background, is that, deep down inside, we ALL believe that we are above-average drivers.

– Dave Barry

Let’s face it, we hate everyone else on the road. We’re all absolutely fed up with the terrible drivers. Unfortunately, the bad drivers show no signs of disappearing. If anything, the number of bad drivers seem to actually be increasing. Maybe that’s because we are the very same drivers we hate. Here’s my thoughts on what it takes (and what it means) to be a good driver.

A Brief Detour

Remember how yesterday the guy driving that green SUV nearly hit you when he merged into your lane without signaling? The asshole! What kind of idiot is he?

Well, you did the same thing to me last week. And I did it to someone else the week before that. Everyone makes mistakes while driving. Yes, yourself included. That doesn’t necessarily mean that everyone is a bad driver. It means everyone is human. Keep that in mind next time you see another driver do something really stupid. We all make mistakes, so take a deep breath and just let it go. Fuming in your car isn’t helping you or anyone else.

Have a Driving Goal

The most important thing you need in order to be a good driver is a goal. You should have a clear goal whenever you pull onto the road. I’m not talking about just getting from point A to point B. I’m talking about an overall guiding principle to guide your driving, a driving philosophy, if you will.

Your goal might be, e.g., to maximize safety, certainly a good goal to have. My goal is to promote overall traffic flow. I feel that every driver has a responsibility to other drivers. It’s not just you on the road. It’s a shared resource, and it’s only responsible to try to maximize the utility of that resource. It also turns out that the goal of promoting traffic flow is complementary to promoting safety.

Once you’ve got a goal, you can refer to it to fine-tune your driving. Having a goal won’t put an end to all your mistakes, but you might be surprised how a goal can redefine your behavior in certain driving situations. It’s simple to weigh two options and decide which one will help your goal the most. Constantly evaluating your driving against a strong reference can certainly help you to become a better driver.

An Example: When to Slow Down for a Turn

Lots of drivers slow down before they really need to. They slow down for turns, exits, etc. Some drivers begin slowing down as much as a mile early for highway exits. Let’s weigh this kind of behavior against a reasonable driving goal, and see how it holds up.

• Safety. By slowing down early, you are no longer following the flow of traffic. You are therefore at a higher risk of being hit by someone behind you who’s not paying attention. If you’re like most of the “early slowers,” you’re also not even braking, you’re just pressing the accelerator more gently, slowing without brake lights, further increasing the chances of an accident. Now, you can say it’s the other driver’s fault if they rear-end you, and that’s fine, but that’s got nothing to do with safety. Increasing safety means you want to minimize accidents, not just minimize the accidents in which a judge will find you at fault.
• Traffic Flow. By slowing down early, you’re forcing those behind you to slow down unnecessarily. You’re also encouraging them to swerve around you, potentially slowing other lanes down as well (and increasing the chances of an accident, see above). Slowing down early hurts traffic flow unnecessarily.
• Fuel Efficiency. An interesting argument for the “early slowdown” is fuel efficiency concern. However, in many cases, you aren’t maximizing fuel efficiency by slowing down early. If you slow down too early for some highway exits (e.g., those in which the exit ramp climbs toward an overpass), you’ll have to accelerate again later to reach the end of the exit ramp. You’d likely be better off holding a steady speed and using the exit ramp’s climb to slow you.

As an aside, I also have serious doubts about the efficiency of slowing down while still applying some gas. It seems that for maximum efficiency, you shouldn’t slow down for a turn, exit, or red light until your foot is completely off the accelerator. The wind and the natural resistance of the car’s moving parts will bring your speed down fairly quickly, without braking, if you completely remove your foot from the accelerator. And I can guarantee that your car is burning less fuel when your foot is completely off the accelerator than when you’re lightly pressing the accelerator.

It seems best to slow down only when necessary. If your foot is still on the accelerator, you shouldn’t be slowing down. If your foot is still on the accelerator, then you do not need to slow down yet, and there’s no logical reason to so so.

One More Example: Merging at low speed.

We’ve all seen people merge with highway traffic going 25mph, or try to. It can be infuriating. Rather than just be angry and dismissive, though, it’s again useful to think about why it’s so infuriating.

• Safety. Merging at low speed is unsafe for two main reasons. First, if you merge moving slower than traffic, someone in that traffic is much more likely to hit you. You’re also more likely to be hit by others behind you who are merging, and who are giving more attention to the traffic they’re merging with than they are giving to you.
• Traffic Flow. If you merge at low speed, others who are merging behind you are forced to slow down, as are those in the traffic you’re merging with. You’re forcing numerous people to slow down when you merge at low speed. This kind of poor merging can be a major cause of traffic problems on busy highways.
• Fuel Efficiency. This one’s barely even relevant here. You’re (presumably) going to get up to highway speed eventually. It makes sense to do that before merging. In many (or most) cases, the on-ramp will be sloped downward, which is the perfect place to build speed with low fuel expenditure.

Merge at speed. You should be moving at the same speed as the traffic you want to merge with. Going slower makes it harder, not easier. To be as safe and efficient as possible, always merge at the speed of traffic (but keep an eye out for the guy in front of you trying to merge at 25mph).

Put Your Goal Into Practice

I’m sure you can come up with plenty of other examples of driving problems, so I won’t bore you with any more. The point isn’t just to pick out examples of bad driving, but instead to decide why they are examples of bad driving. When you see someone do something stupid while driving, ask why it’s stupid. Determine why they shouldn’t have done that, so that you can truly know why you shouldn’t do it either.

But don’t stop there. Once you’ve picked your driving goal, use it to evaluate your own driving habits as well. Part of being good at anything is working to improve. If you want to be a good driver, think about how you drive. Ask yourself how you could improve. Find the parts of your driving that don’t fit well with your goal, and fix them.

Being a good driver means asking yourself where you can improve. Having a goal can help you answer that question.

(Update: I’ve changed the title to hopefully better match the tone of the post. The title was written before the actual post, and seemed out of place.)

1. Identify your desires.

   Take the time to sit down and decide what it is that you want. Your desire can be short term, as in a beach trip this summer, or long term, as in a millionaire retirement.

   Do you desire Money? A successful relationship? More community involvement? A big screen television? Decide what the things you desire are. If you are unable to identify the things you want desires, you will not acquire them. Identify your desires so that you can obtain them.

2. Visualize what you desire.

   No, I haven’t accepted a sponsorship deal with the producers of The Secret. Visualization isn’t a fix-all, but it is a useful tool. It is, first and foremost, a motivational tool.

   Really think about what you want. Clear any mental distractions away and develop an accurate, clear image of what you desire. Develop this image as fully as possible, because it’s going to guide you.

   Now, hold onto that image. If, and when, you run into frustrations, problems, and barriers, you can call back your visualization. You can recall your image to remind yourself what you are working for. Use your visualization as a source of motivation. Build an image that will motivate you.

3. Set goals and record them.

   You decided what you want in step one, and you established a clear mental image in step two. Now is the time to develop accurate written goals. Find a way to put your desire into words. If you cannot put your vision and your desires into written form, they are not well-formed. Revisit steps one and two.

   Writing down your goals forces you to be more exact about what it is you want, and the record of your goals can provide motivation later. Just as you can return to your mental image when the path becomes hard, you can re-read your goals when you need additional inspiration or personal clarification. Write down your goals to clarify them and provide motivation.

4. Break your goals into achievable pieces.

   This is the single hardest part of goal-setting. It’s easy enough to say you want to retire a millionaire. It’s much more difficult to really set down the steps to reach that goal. The individual pieces should be achievable goals in their own rights.

   If your goal requires saving money, then you need to build a budget, and pursue a higher-income job if necessary. If your goal is to improve your health, set yourself a realistic diet and exercise regimen. If your relationship needs mending, decide what’s wrong with your relationship and set aside the resources and time needed to mend the broken parts. If you are unsure what your goal requires, your goal may need to be specified more exactly.

   If any piece of your goal seems too large, break it down further. Treat each piece as a new goal if necessary, going through these eight steps with the smaller goal. Turn your goals into small steps.

5. Eliminate distractions.

   Eliminate the annoyances that hinder your chances of reaching your goals. If your goal is to lose weight, and you’ve got snacks around the house, throw them away. They are a distraction from your goal. You don’t need them around making your goal more difficult. Make throwing away the snacks your first action.

   If you are trying to reduce your debt, and you have a friend who always wants to eat out at the most expensive restaurants, you need to resolve this. It is a serious obstacle to achieving your goal. You don’t have to eliminate the friend, but you need to eliminate the problem. Tell him that you can’t afford to be eating out so expensively. If he’s really a friend, he’ll understand, and you’ll have a distraction eliminated, either way.

   It’s not always easy to remove distractions. It’s not even always possible. In the cases where it is possible, do it. Do what it takes to eliminate as many distractions as you can. The road to a goal is hard enough without unnecessary blockades. Remove the things which distract you from your goals.

6. Push through problems.

   There will always be problems when trying you reach your goals. Some problems will be big, while others will be bigger. You need to push your way through these problems. You built a strong visualization for a reason. There was a purpose to writing down your goals. When you run into an obstacle that’s more than just a distraction, call up your visualization, re-read your written goals. Use these as fuel to push yourself over, around, or through the obstacle. Problems will arise, but you can overcome them. Remember, your goal is on the other side of that obstacle.

   If you are looking for your dream job, and you’ve already gotten ten rejections, pull your visualization up, and ask yourself, “Is this setback big enough to stop me from reaching my goal, big enough to stop me from getting the job I want, that I deserve?” If you want it, really want it, the answer will be, “Absolutely not.”

   Hold onto the image of what you want, and keep plugging away, striving toward your goal, until you reach it. Remind yourself that even though it’s hard work, it’s going to pay off in spades when you achieve your goal. Push through the obstacles to reach your goal.

7. Work hard toward your goals.

   You don’t just need to work hard. You need to work your ass off. This is the most important step in achieving your goals, and it’s also the most difficult. You can have all the best intentions in the world, but if you don’t put in the work, you will never meet your goals. The likelihood of achieving your goal is directly related to the about of work you put in.

   Find the time and resources to achieve your goals. Push yourself to reach your goals, one step at a time. You are responsible for putting the effort in to achieve your goals. No one else will, or can, put the time in for you.

   If you want to get in shape, you have to diet. You have to keep your dates with the treadmill. No one else can get you into shape. If you want to get out of debt, you have to build a budget, and you have to stick with it. It’s you who has to give up the non-vital expenses, and it’s you who has to live within your means. You have to put in the time, and you have to put in the effort.

   Recall your goals and your visualization. Re-read your written goals. Remember what you are working for when the road seems too long. When you slack off, your goals will move further away, but when you really put the work in, you will see your goals coming closer and closer, until they are finally within your grasp. Work hard and eventually your goals will arrive.

8. Re-evaluate your goals.

   Periodically rethink your goals as you progress. It’s okay to change your goals. Sometimes we outgrow a goal. Other times our goal priorities change. If you find that your initial goals no longer meet your current desires, adjust your goals accordingly. Rethink your vision, rewrite your goals, and adjust the steps as necessary. It’s not important that your goals stay constant, only that you are constantly working toward your goals.

   Likewise, if you find that the steps you are taking are not bringing you closer to your goals, or not bringing you closer as fast as you expected, you should reconsider the steps you chose. It may be that you simply need to be patient and continue to work hard, or it may be that the steps you chose are not optimal. Just as your goals need not be set in stone, the steps to your goals can be pliable. Adjust them where necessary to choose the correct path.

   Nothing is set in stone. You chose your goals, and you may likewise choose to change them. Re-evaluate as needed, and don’t be afraid to change your goals. Remember, your goals should fulfill your desires. If they no longer do that, they need to change. If your goals no longer reflect your desires, adjust your goals.

None of these tips are earth-shattering or new. They are instead quite practical and time-tested. They may not always be easy, but they work. Apply them in your life, and with time and hard work, you can bring your goals within reach.