The four-ounce bottle of wood glue cost $2.79. The eight-ounce bottle cost $3.49. That’s 70 cents an ounce for the smaller size and 44 cents an ounce for the bigger one.

A no-brainer, right? Clearly, the larger bottle was by far the better value.

I bought the smaller one.

No, this wasn’t a temporary lapse into reckless extravagance. This time, I decided the smaller and relatively more expensive quantity was the thriftier choice. I didn’t need a big bottle of glue. I didn’t, in fact, need more than a tiny bit of the smaller bottle for my small repair project.

True, the glue was protected by a clever reclosable cap designed to keep it from drying out. It would probably keep for quite some time. There was at least a chance that, the next time I needed some wood glue, this stuff would still be usable. Of course, that’s assuming, (a), that I would remember I had it and, (b), that I would be able to find it somewhere in the utility room or the garage.

The state of the garage was the real reason I bought the smaller bottle of glue. We had just spent a Sunday afternoon in there cleaning, organizing, and getting rid of junk. Among the two trash cans full of stuff we had consigned to the landfill were all sorts of bottles, cans, and other containers whose partial contents were dried up, unidentifiable, long past their expiration dates, or otherwise unusable. Anything that hadn’t been used back when the stuff was purchased was simply wasted.

For anyone with a frugal mindset, it’s annoying to pay a premium for a smaller amount when it would seem so much more cost-effective to buy more. It’s frustrating, for example, that a quart of paint costs about half as much as a gallon—especially if the small job you need it for will probably require about a quart and a half.

Yet whether it’s paint, glue, or craft supplies, it doesn’t make sense to buy a lot when you only need a little, even if you assume you might use more of it someday. What’s more likely is that it will sit around on a hidden shelf somewhere, slowly deteriorating. If you do ever need it again, chances are you’ll have forgotten all about it, so you’ll just go buy more anyway.

Then someday, during some future spasm of organization, you’ll discover it, realize it’s unusable, and throw it out. Sometimes the real waste comes from buying more than you need.

Trusts are effective financial planning tools based on a structure that is simpler than it may seem. The creator of the trust contributes something of value into the trust and creates instructions as to how it will be managed and eventually disbursed. The trustee is responsible for keeping the property safe and managing and distributing it according to the instructions. The beneficiary is the person or entity that eventually will get the property in the trust.

Trusts may be useful in estate planning, asset protection, and providing for elderly parents or other family members who may be unable to manage their own affairs.

Establishing a trust isn’t especially difficult, but it’s not a do-it-yourself project. It’s important to work with an attorney to be sure the trust complies with legal requirements and will actually carry out its intended purpose.

What may be the hardest part of setting up a trust is choosing the trustee. Here are a few suggestions that may help. Some of them come from information provided by the Financial Planning Association.

1. Be sure you as the creator of the trust understand the trustee’s role. Ideally, trustees will have some expertise in legal matters, taxes, and investments. The specific knowledge needed will vary, depending on the scope and purpose of the trust. It’s important to discuss that purpose in detail with any potential trustees to be sure they have the necessary skills and are comfortable taking on the responsibilities.

2. Consider the pros and cons of choosing a personal or a professional trustee. Generally your choice will come from one of three categories: A personal trustee who is a close friend or family member, a personal trustee who is a professional advisor, or a corporate trustee such as a bank’s trust department.

A family member or close friend may already have inside knowledge of your circumstances, as well as having personal relationships with the beneficiaries of the trust and a personal commitment to carrying out your wishes. The possible downside is that the trustee may have conflicts of interest or find it difficult to enforce some trust provisions.

Professional advisors such as attorneys or accountants will have specialized knowledge that may be important. Even advisors who have worked closely with you will have a level of professional detachment that may make it easier to carry out your wishes, especially any that involve saying “no.”

With a corporate trustee, the relationship is with the firm rather than an individual, which provides continuity and protects the trust even if the original trustee is unable to continue serving. The downside is the lack of detailed personal knowledge and involvement.

3. Evaluate costs. Professional or corporate trustees will, of course, charge for their services. Friends or family members may not charge fees but really should be compensated appropriately. State laws govern the maximum fees trustees can charge and the specific services provided.

4. A commitment to take on the responsibilities of the trust and to carry out your wishes with integrity may be the most important quality for a trustee. Someone without financial and legal knowledge can always get help from professional advisors.

Finally, remember that the word “trustee” isn’t used by accident or coincidence. The trustee’s role is to act in your stead when you are unable to, managing the assets of the trust with the same care you would use and making the decisions you would make in the best interests of the beneficiary of the trust. The most essential factor in choosing a trustee is finding someone you can rely on to act on your behalf. Who is, in short, trustworthy.

The idea for this column was stolen from—er, inspired by—a new musical that premiered in 2007. The show, by Carole Caplan-Lonner, is The Kids Left. The Dog Died. Now What? With entertaining music and clever dialog, it takes a humorous look at one mid-life crisis after another.

If you have a chance to see it, by all means do, especially if you’re over 40. If you’re under 40, go anyway. It will give you something to look forward to. (Black Hills Community Theatre’s excellent production, by the way, runs through May 20.)

One of the songs in the show is “Everybody’s Got a Cheap Spot.” It pokes fun at the frugal little quirks that we all have and that a few of us might even be willing to acknowledge. Like the woman who entertains grandly with fine china and flowers, but won’t waste the candles by lighting them before the guests arrive. Or the man who takes his whole family on an expensive cruise, but walks around on aching feet because he’s too cheap to buy good shoes.

These “cheap spots,” of course, are just money scripts popping up in unexpected places. I suppose judgmental persons might consider my ability to get three or even four cups of tea out of one teabag to be a cheap spot. They might think the same of using pliers to squeeze the last bit of face cream out of the tube.

Personally, of course, I consider those behaviors merely normal manifestations of common-sense frugality.

But who wants to pay attention to our own cheap spots? It’s much easier and more fun to catch those of others. Like the person who reuses paper napkins. Or the one who will spend two dollars in gas driving to a different grocery store to save 39 cents on three cans of peas. Or the person who leaves the TV on all evening whether anyone is watching it or not, but who carefully shuts the lights off when leaving the room.

Or—by now you have the idea; feel free to fill in the blanks. But while we’re poking fun at our neighbors’ cheap shots, we really shouldn’t forget about our own. We might as well follow the suggestion repeated in the chorus of the song: just “have a laugh at your own expense.”

If you’re a Baby Boomer, or your parents are, here’s a ray of sunshine to brighten your day: Boomers have so severely underfunded their retirements that Congress may turn to their children to bail them out.

This is the gist of an article in the April issue of Financial Advisor magazine by Dr. Somnath Basu, professor of finance at California Lutheran University. He notes, “The problem could be as big, if not bigger, than the 2008 financial crisis.”

A new study by the Center For Retirement Research, Boston College, detailed on CNBC.com, finds the retirement years for Boomers will be much leaner than for their parents. An estimated 51% of them will be unable to maintain their current lifestyles in retirement.

Ironically, one major contributor to this bleak picture is the Boomer generation’s own optimism and positive thinking. Raised in a society of abundance with expectations of prosperity, Boomers have over-spent and under-saved for decades. Many of them assume they will receive ample inheritances. They see increased life expectancy as a wonderful thing, forgetting to factor in the higher medical costs that will come with it. They expect to work well into their 70′s, disregarding statistics that show many of them will be forced to retire sooner due to health problems or job layoffs.

Let’s look at some decidedly pessimistic numbers from the Center For Retirement Research study. The median 401(k) and IRA balance for Boomers nearing retirement is $78,000. Only around half can expect to inherit from their parents, with the median inheritance amount $40,000. That adds up to a total nest egg of $118,000, which at a 4% withdrawal rate provides less than $400 a month for life. Combining that with the average Social Security check of $1,077 means retiring on an income just above the poverty level.

What’s the solution? Many Boomers say they plan to never quit working. Unfortunately, this is delusional. According to a new survey by the Society of Actuaries, “The 2011 Risks and Process of Retirement Survey,” over one-third of Boomers think they will never retire and only 10% say they will retire by 60. Statistics show, however, that 50% have actually retired before age 60. The main reasons are health and downsizing, which boomers discount. Well over 90% of them maintain they have a healthy lifestyle and won’t get sick. Boomers are so out of touch with reality I wonder how many, if asked, “Will you ever die?” would answer, “No,” or “Maybe.”

Sadly, only one-third of Boomers have a plan for financing their retirement, other than planning to work until the day they die. What’s the solution for the remaining two-thirds who are unprepared?

Unfortunately, for many older Boomers it is already too late. Their lack of planning for their retirement years may mean forcing their children and grandchildren to decide whether taxpayers can afford to pick up the tab.

Younger Boomers can take control of their retirement by radically downsizing their lifestyles and increasing their income. This means selling expensive homes, cars, and toys and living as frugally as possible. The resulting savings should first go to pay off high-interest debt, then to fund to the max every available retirement plan. Another possibility is to consider various employment options, including government jobs which offer pension plans unavailable in most private sector jobs.

Wise Boomers will also encourage their own children to emulate the frugality and money skills of their grandparents. The kids will need those skills for their own futures—especially if they have to help their Boomer parents pay the bills.

Old? What do you mean, old? Our furnace couldn’t have been old. After all, it wasn’t the original one installed when the house was built; it was much younger than that.

The house we live in was moved to this location after a disastrous flood in 1972 that killed 238 people. A great many homes were destroyed, and others, like ours, that were only slightly damaged were moved out of the floodway.

The furnace was installed when the house was relocated in 1973 or 1974. That’s not really so long ago–is it? It wasn’t until this year, with Rapid City marking the 40th anniversary of the flood, that it occurred to us how old our furnace was. No wonder it was backfiring and groaning and making all those other strange noises.

We also discovered it was rated at 75% efficiency. According to the furnace guy, given its age, it had probably been operating at more like 60% efficiency.

What that means in terms of cold, hard cash is that, of every $100 we spent last winter on three-dollar-a-gallon propane, around $40 was wasted. It went right up the chimney without doing a thing to keep us warm. In fact, it probably did just the opposite, if you factor in the cold chills we got when we wrote the checks to the gas company.

The new furnace is rated at 95% efficiency. Yes, it cost several thousand dollars. Doing the math, however, tells us it should pay for itself in around five years.

We were lucky. Our old furnace kept clunking along until we finally decided to replace it. We didn’t have to make that decision on an emergency basis some frigid February day.

Most of us don’t have the self-discipline, let alone the cash, to set aside a little bit every month toward repairs and refurbishments. Yet it would be a great idea if we did. Every 30 or 40 years, something major is going to break down or wear out.

Having to spend a chunk of money on home improvements is never fun. But knowing you have the cash when you need it? That’s enough to make you feel warm all over.

Since the death of singer Whitney Houston, I’ve seen several articles from attorneys and financial advisors about the errors in her estate planning. They have summarized three areas where it was badly flawed:

1. Lack of privacy. Ms. Houston had a simple will that was subject to public probate, rather than a living trust that would have kept her affairs private. Anyone with thumbs and access to the Internet can see a copy of her will.

2. Lack of protection from claims, con artists, and circumstances. The estate, estimated to be worth over 20 million dollars, was left to Ms. Houston’s daughter, Bobbi Kristina Brown. A vulnerable young woman just barely of legal age will receive three huge payouts over the next decade and become a multi-millionaire by the time she’s 30. A trust could have given her some limits and structure, as well as providing for advisors to help her learn how to manage her wealth and protect herself from predators.

3. Lack of tax planning. The federal estate tax of 35% on anything over $5,120,000 will apply to the estate, so Uncle Sam will take around a third of it off the top.

Unfortunately, this lack of skilled estate planning isn’t all that rare among wealthy people. Here are a few of the money beliefs that may be behind inadequate estate planning:

“Complicated estate planning is for rich people, and I’m not rich.” This may especially apply to owners of small businesses who don’t have a particularly high income or lifestyle but whose land or businesses may be worth several million dollars. Yet good estate planning advice is especially important for them, because their heirs aren’t necessarily aware of or prepared for a substantial inheritance.

“The financial advice that was good enough when I was just starting out is good enough now that I’m successful.” A tax preparer, accountant, or financial advisor who is highly competent with small individual or business matters may not have the knowledge necessary for more complex estate planning. Seeking out different financial advisors as your income and net worth grow is no different from consulting a specialist rather than a general practitioner if you have specific medical needs.

“When you can afford the best, you’ll get the best.” Trying to save money by hiring bargain-basement financial advisors is almost always a mistake. It can also be a mistake to assume that someone who charges top-tier fees will always have top-tier skills and integrity. Even if a financial planner or other professional has a reputation as an advisor to the wealthy, it’s still essential to verify that the person or firm is right for you. Ask for references and be willing to ask hard questions about compensation, investment philosophy, and services. Make sure you are a client, not a customer. Work only with financial advisors who, like accountants or attorneys, have a fiduciary duty to put your interests first.

“I know how to make money, so of course I know how to manage money.” Many highly educated and skilled professionals are high earners but don’t necessarily have the knowledge to manage their earnings well. In order to know whether the advisors you hire are competent, it’s important to learn the basics of investing and money management. Look for advisors who don’t set themselves up as “gurus” but are willing to teach and to work in partnership with you.

When it comes to financial advice, it isn’t enough to find someone who will “make you feel like a million dollar bill.” It’s more important to find advisors who will help you take good care of all your dollars.

The recent discussion of the “Buffett Rule” proposal to increase taxes on the wealthy has focused attention on U. S. tax rates. It’s giving Americans a chance to better understand our tax policy and the economics of the free market system.

Mitt Romney, the probable Republican Presidential candidate, has come under attack from both Democrats and other Republican primary candidates for his high income and net worth and his low overall tax rate. The arguments are that Romney made his money by the wrong type of capitalism and that he pays too little in federal taxes.

The tax returns Romney has made public show most of his money comes from investment returns on his holdings rather than from wages or a salary. His overall tax rate in 2010 was 13.9% and his estimated rate for 2011 is 15.4%. This caused a predictable outcry that his tax rate is lower than the income tax bracket of many middle class Americans.

President Obama’s 2011 tax return shows a tax rate of just over 20%. Former Republican candidate Newt Gingrich paid 31% of his 2010 income in federal taxes.

To the uninformed, these varying tax rates initially look unfair. What many people don’t understand is the big difference between “ordinary income” (from wages, a salary, short-term capital gains, and interest) and “passive income” (from stock dividends and long-term capital gains). The federal government taxes ordinary income at up to 35% and passive income at 15%.

Why the different rates?

First, let’s look at dividend income and long-term capital gains taxes on investments held over 12 months. Dividends come from corporations that must first pay income taxes on any profits. Long-term capital gains come from shares of a company purchased and held for more than 12 months.

Since the effective corporate rate is 39.2% (the top federal rate and the average state tax rate), the corporation has already paid taxes on all income, including what is paid out to investors as dividends. Prior to the Bush tax cuts in 2001, dividends were then additionally taxed at almost 40%. This meant every dollar of dividend income was taxed twice, once at the corporate level and again at the individual level. The result was that 60 cents out of every dollar of profit made by a company was paid to the federal government. The Bush tax cuts continued the practice of double taxation, but lowered the amount paid at the individual level to 15%.

The same double taxation applied to long-term capital gains, except that the tax rate was a flat 28% before the Bush tax cuts reduced it to 15%.

This double tax makes it seem that the wealthy pay less tax than they really do. An individual may pay 15% on passive income of, say, five million dollars. Yet corporations have already paid taxes of around 39.2% on that same income, for a total tax rate of 54.2%. Of the five million in profit, over two and a half million goes to Uncle Sam. That would seem to be more than a “fair share.”

According to Congressional Budget Office figures from 2011, the top 1% of taxpayers pay an average of 29.5%, those in the percentiles from 81% to 99% pay 22.8%, those from 21% through 80% pay 15.1%, and the bottom 20% pay 4.7%. Those numbers, of course, don’t include the 49.5% of Americans who pay no federal income tax at all.

Even factoring in the different tax rates on ordinary and passive income, it’s clear that the more money Americans earn, the more tax they pay. What could be more fair than that?

The old adage “Waste not, want not” sounds quaint to 21st century ears. The term “want” to describe poverty probably went out of style around the same time that counties closed their poor farms. Still, the saying still has a solid core of truth. Choosing to be frugal so you don’t end up in poverty has a lot to recommend it.

Given the incredible abundance that we’re surrounded with in today’s world—not to mention the incredible marketing that tries to persuade us we need all that abundance—it might be useful to turn this adage around. Let’s look at it this way: “Want not, waste not.”

In other words, if you don’t want something, don’t waste your money on it.

This probably sounds painfully obvious. And it is obvious, when it comes to big things. It’s very clear to me, for example, that I don’t want a gazillion-inch high-definition flat-screen TV. Or a sports car. Or a purse the size of a baby walrus with some designer’s initials on it. Or that jar of super-hot jalapeno salsa on the shelf at the grocery store, even if it is on sale.

But there are other times when choosing not to buy something we don’t really want isn’t as clear-cut. Suppose you’ve gone out to dinner with some friends. Everyone else chooses to have dessert. You’re comfortably full, you had a cookie with lunch, and you really don’t want dessert. What are the chances you’ll order some anyway, just because it’s the thing to do?

Or what about the things “everyone” buys or has that many of us tend to take for granted? Cable TV. Brand-name shoes. Subscriptions. Club memberships. Manicured lawns. The latest styles in clothes, even if you can’t walk in them or sit down in them or the color makes people ask whether you have the flu.

If you want these things and can afford the time or money to have them, then go for it, by all means. If, after some thought, you decide you really don’t care or actively don’t want them, then the answer is clear. Keep your money for something else instead. Want not, waste not.

Recently I read a news story about a small business owner whose landlord was not renewing her lease. A chain restaurant was buying the building and intended to raze it. The business owner was distraught, as she had recently spent $30,000 to remodel the property.

One common reaction to stories like this is anger at a landlord for unfairly selling a building out from under a tenant. Another is, “Why would tenants spend so much money remodeling a building they didn’t own?”

Neither response sees the whole story.

I empathized with this owner’s loss as a result of a bad business decision. The bad decision wasn’t spending $30,000 to remodel a space she didn’t own. Business owners make such “tenant improvements” all the time. Every tenant you see in a mall has poured thousands of dollars into fixing up and customizing their space. Tenant improvements can range from repainting a space to building a fast food restaurant on leased land.

The poor business decision this owner made was not being sure the lease term ran for long enough to recoup the cost of the tenant improvements. The cost of any tenant improvement is a pure expense that needs to be factored in as part of rent and amortized over the life of the lease. This is because when the lease expires, both parties have the right to not renegotiate a new lease. Any tenant improvements become the property of the owner. Landlords who choose to use property for something different when a lease expires aren’t abusing or taking advantage of tenants—they are simply exercising the contractual rights agreed to by both parties.

Most new strip centers or malls lease relatively unimproved spaces, sometimes called shells. Tenants get four walls, a cement floor, and bare girders above. It’s the tenants’ responsibility to finish the spaces in the manner they want. This makes a lot of sense, as usually each retailer is very specific about the floor plan, colors, and building materials they use in their spaces. At the end of the lease the relinquished tenant improvements, with years of wear and tear, are typically worth very little. New tenants will rip them out and finish the space according to their needs.

Let’s take an example of a 5,000-square-foot shell that rents for $8 a square foot annually. Let’s say it will cost $100 a square foot for the retailer to finish the space. If the lease extends for 20 years, the annual cost of the tenant improvements is $5 a square foot ($100 divided by 20 years). This brings the total cost for the leased space to $13 a square foot ($8 shell rent plus $5 for improvements).

With a four-year lease, however, the amortized cost would be $27 a square foot. A one-year lease would cost $108 a square foot. Either one would make the space too expensive. A business owner unable to get a longer term would either substantially reduce the cost of the tenant improvement or look elsewhere.

Sometimes a tenant needs to spend a lot to improve a space, but doesn’t want to commit to a long-term lease. In this case the tenant’s best strategy is to get the landlord to improve the space so the tenant isn’t left losing a substantial amount of money if either party doesn’t renew the lease.

Business owners need to understand their rights and responsibilities as tenants. They also need to be sure the costs of rent and tenant improvements are reasonable over the life of the lease. It’s a good idea to consult both an attorney and an accountant before signing any lease.

This week a close friend had a heart attack. She started having severe chest pain and nausea on Tuesday morning. It was Wednesday morning before she went to the clinic.

The main reason she waited that long, hoping she just had indigestion, was that she doesn’t have health insurance.

This woman is single, in her mid-fifties, and works in a retail store. My guess is that she earns around $10 or $11 an hour. She drives an old car, lives in a small rented house, and doesn’t have any debt as far as I know. She lives frugally and has always taken care of herself without asking for or expecting handouts. And she can’t afford health insurance. Even a high-deductible individual policy like the one I have, which costs $221 a month, would stretch her budget to the breaking point.

Now, after surgery and two days in cardiac intensive care, she’s doing well and should make a good recovery. She has received wonderful care. But all the machines monitoring her blood pressure and heart rate and oxygen levels don’t have any sensors to measure the stress of wondering how that care is going to be paid for.

It’s too early to tell exactly how much damage her heart has sustained. That damage is almost certainly greater than it would have been had she gone to the doctor 24 hours sooner. Not to mention that the cost of her treatment might have been substantially less.

It is outrageous that, in this century and this country, where we have some of the best hospitals and medical professionals in the world, people still postpone getting life-saving care because they can’t afford it.

The problem of the high cost of medical care isn’t one with any simple solutions. The complex, controversial, and ironically named “Affordable Care Act” isn’t the answer. I’d like to see health insurance completely separated from employment and made available through large pools or co-ops. I’m also starting to think that South Dakota’s retired Senator George McGovern has a point with his suggestion of simply extending Medicare to cover everyone.

I don’t know what the answer might be. But I do know we won’t find any solutions until we as a people become willing to have difficult conversations about our spending on health care. We can’t solve this enormous problem by shouting at each other. Instead, we need to find a way to work together.

With our whole hearts.