Saturday, May 6, 2017

Inspiration from Casey Brown, C. S. Lewis, Michele Sullivan, and More

Once a month (or so), I share a dozen things that have inspired me to greater personal, professional, and financial success in my life. I hope they bring similar success to your life.

1. Nelson Bunker Hunt on goals

“First, you decide what you want specifically; and second, you decide if you’re willing to pay the price to make it happen, and then pay that price.” – Nelson Bunker Hunt

Achieving goals requires sacrifice. You can’t just set a goal of becoming wealthy or becoming perfectly fit or becoming the world champion at some competitive hobby, then magically expect that to happen. It requires paying some sort of price to make it happen.

The thing is, most people aren’t willing to pay the price for major goals. They’re either not willing to do so or not able to do so. That’s why everyone isn’t a millionaire. That’s why everyone doesn’t have a perfect BMI. That’s why everyone isn’t an amazing star at their preferred sport or competition. They’re not willing to work hard and sacrifice for what they want.

A goal worth achieving is one that you invest some of yourself into – your time, your money, your energy, your contentment, your pleasure. Maybe you don’t eat everything in front of you … and you keep doing it. Maybe you don’t buy everything that you see that you happen to want … and you keep doing it. Those are real prices, and the question really is whether you’re willing to pay them to get what you want.

Most of the time, the path to a goal is pretty simple. For money, it’s spending less than you earn – not hard. The challenge is gearing yourself up to pay the cost of doing that simple thing.

2. Casey Brown on knowing your worth and then asking for it

From the description:

Your boss probably isn’t paying you what you’re worth — instead, they’re paying you what they think you’re worth. Take the time to learn how to shape their thinking. Pricing consultant Casey Brown shares helpful stories and learnings that can help you better communicate your value and get paid for your excellence.

The single most useful tool I’ve found in terms of asking for a raise is to have something in hand that clearly demonstrates your value, and that’s usually a job offer from someone else. If you don’t have that, then you don’t really have a lot of leverage. Thus, you should always keep your resume sharp, your skills fresh, your professional network strong, and your ears open for opportunities.

Why doesn’t everybody do that? Complacency, I think. It’s easier to just go to work, come home, do other non-work things, sleep, go to work…. over and over again. It’s the people that actually go the extra mile and keep themselves polished up that end up getting good pay.

Remember, you’re an asset. Think of your career as being like a house that you’re trying to sell. If you just go to work and come home and don’t do much to maintain or shine it up, it begins to look shabby. There’s not much curb appeal. You’re not going to get paid a lot if you sell it. On the other hand, if you maintain your career (and your house) a little bit and keep it nice and clean and with some nice decoration in the front, it has curbside appeal and will put some dollars in your pocket.

3. C. S. Lewis on gradual change

“Isn’t it funny how day by day nothing changes but when you look back everything is different.” – C.S Lewis

This hits home hard for me. Sometimes, when I look at my children, I am just stunned as to how much they’ve grown up.

I was recently at my oldest son’s soccer game and I noticed that he looked downright athletic running down the field. He slipped right by a defender and just booted the ball high into the net for his first goal of the season. He then high-fived his teammates and then flashed a thumbs-up over to me and his mother. In those moments, he didn’t look like a little boy any more. He looked like someone well on his way to adulthood.

When I just look at him day after day, it seems like he’s the same kid. It seems like all of my kids are just kind of the same, day in and day out. It’s only when I step back a little and see how much they’ve changed that it really jumps out at me how they’ve grown so much.

Appreciate today, because tomorrow won’t just be more of the same.

4. YouTube’s #Education meta-channel

This is basically a huge repository of educational videos, posted by schools and universities and people with channels dedicated to learning. Going here feels like drinking from a fire hose if you’re a curious person and a lifelong learner. In other words, I absolutely love it.

Things like this are why YouTube is gradually replacing a lot of other sources for watching video for me – television programming, as it has been for the last several decades, is simply going by the wayside because of this kind of thing. Between YouTube “channels” like this and the offerings on services like Netflix, it’s becoming harder and harder to justify paying $100 a month for cable.

Plus, with channels like these, you can clearly feel how the people making the videos are typically small operations, usually one person with a passion about the topic and another person with a passion for videography. I like watching things made in that way – there’s something very natural and honest about it.

5. Ralph Waldo Emerson on happiness

“The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well.” ― Ralph Waldo Emerson

I didn’t understand this quote for a long time. Why would you live life in a way that intentionally didn’t aim for happiness? It didn’t make sense to me.

Here’s the secret: if you do the second part with your whole heart, the first part comes naturally. If you spend every ounce of your effort being useful and honorable and compassionate and trying to make some difference in people’s lives, then happiness just happens. It’s automatic.

The happiest moments I have when working on The Simple Dollar are when I actually see that something I wrote has helped someone. The happiest moments I have as a parent are when I see something I’ve worked on with my children coming to fruition in their actions and behaviors. The happiest moments I have in solitude are when I feel an idea clicking together in my head.

None of those things have anything to do with seeking happiness. Happiness is just the natural outcome of a life well lived. If you intentionally try to seek happiness, you generally won’t find it, at least not for very long. Happiness is something that happens on the journey to a worthwhile destination.

6. Good and Cheap: Eat Well on $4/Day by Leanne Brown

This is an excellent little cookbook, intentionally targeting low-cost recipes. I considered giving it a full review, but what I’ve found is that it’s just a book that embodies a lot of my own philosophy on food and money. It’s honestly not too different than what I would publish if I wrote a cookbook, and it’s not too far off of many of the food articles that have popped up here on The Simple Dollar.

Yet, in reading it, I still learned a few new things. I snagged some recipe ideas. I tried some new angles on make-ahead cooking.

Why? It’s because books like this aren’t just a set of instructions to follow. They’re a smorgasbord of ideas, where you take from it what you need for your own situation. Some of them won’t be new, but some of them will be. Some of them won’t fit your life, but some of them will. It’s that set of new ideas that fit your life that make books like this useful and worth your time.

7. Zapier

I use a lot of different tools to keep track of the things I’m doing and that I need to do. I have notes stored in Evernote, to-do lists in Todoist, files stored in a Dropbox folder, and on and on and on.

It’s pretty useful for me to find ways to automate some routine tasks. For example, if I have a post idea, I want to be able to just type in the idea as a task on my task list and automatically start a note related to that post idea in Evernote and a file related to that idea in my Dropbox folder. If it’s a certain type of post, I want to have some templates already used. If I can make all of that automatic, that’s really useful.

I use IFTTT to automate some pieces of this, but it doesn’t do everything I want. I have a few scripts on my computer that do other parts, but it’s not robust, either.

On the other hand, Zapier solves almost everything I need. In fact, it’s almost like drinking from a fire hose when all I really need is a sprinkler. There’s only one problem – the basic features of Zapier only do part of it, while the full featured version that covers everything costs $20 per month.

Still, Zapier is a tool that’s so incredibly powerful for linking together various systems I use to keep track of what I’m working on that it inspires me to more and more new ideas for automation. There’s going to come a point where I reach a critical mass of ideas that I can’t quite flesh out with the basic version, and at that point, I’ll probably upgrade.

8. Henry David Thoreau on the greatest compliment

“The greatest compliment that was ever paid me was when one asked me what I thought, and attended to my answer.” ― Henry David Thoreau

There is no better compliment you can pay to your friends and coworkers than asking for their opinion on things and really listening to the answer and actually utilizing what they tell you.

Think about it for a minute. Think about situations where people have asked you what you honestly thought about something, listened to it carefully, asked follow-up questions, and then actually took action based on that? Didn’t it feel great?

There is no better compliment than respect, and there’s no clearer sign of respect than someone who asks you for help, truly listens to you, and then takes action based on that suggestion.

9. Michele Sullivan on why asking for help is a strength

From the description:

We all go through challenges — some you can see, most you can’t, says Michele L. Sullivan. In a talk about perspective, Sullivan shares stories full of wit and wisdom and reminds us that we’re all part of each other’s support systems. “The only shoes you can walk in are your own,” she says. “With compassion, courage and understanding, we can walk together, side by side.”

This, in a way, overlaps the previous quote. It is hard to ask for help. Asking for help can make us feel like we’re weak, and we don’t want to feel weak.

The reality is the opposite, though: asking for help is a sign of strength. It’s what leaders do, to gather good people around them. It’s what wise people do, to gather wisdom. It’s what effective workers do, to gather intelligence and skills.

When you shoulder more than you can handle because you’re afraid to look “weak” by asking for help, you eventually can’t carry the weight. You slip and fall and that’s when you appear weak, as though you can’t handle what’s before you.

Ask for help. Seek out the wisdom and insight of those around you. Alleviate some of the burden on your shoulders so that you don’t fall and knock others down as you slip. You’ll become stronger than ever before.

10. Robert McNamara on good and evil

“In order to do good, you may have to engage in evil.” – Robert McNamara

I’m not including this quote because I agree with it. I’m including it because it has fostered a ton of discussion in our house over the last few weeks. I’ve had many, many conversations with my children about situations where it is okay to do the “wrong” thing because it serves a greater good.

The source of all of this was a situation that occurred on the playground during a school recess. A fight occurred, and my oldest son was really torn on whether he should tell exactly what he saw or not. He witnessed one of his friends – but not one of his closest ones – get into what sounded like a pretty brutal playground fight. When the teacher asked for witnesses, he was really torn on whether to say anything and the window of opportunity to speak up passed before he could make up his mind.

This grew into a more general conversation about times when it is okay to disobey in order to do some other good. When is it appropriate to speed? When is it appropriate to interrupt a quiet period? When is it appropriate to fight back against negative behavior on the playground that isn’t being resolved by a teacher?

Those aren’t easy questions. Sometimes, we’re all put in situations where we have to either choose doing the right thing in the short term, which may have a long term bad outcome, or the wrong thing in the short term, which may have a long term benefit. How do you choose?

It’s not easy, but life isn’t easy. Neither is parenting.

11. Pilot Juice 0.38 mm pens

As many of you know, I pretty much always have a notebook and a pen in my pocket. I’m always jotting down notes and sketches and diagrams of all kinds. Part of doing that relies on having a very reliable pen in my pocket, one that won’t leak and will consistently just work on a variety of paper types.

For many years, I’ve used a Uniball 207 pen, but I recently found a really good deal on the above pens and bought a large handful of them after trying one and reading about them online, and I must say that they simply work like a charm. They write really well on all kinds of paper, haven’t leaked yet, seem to have tons of ink in them, and are available at a good price.

Yes, I could spend a lot more on pens, but I’m more interested in functionality than aesthetics. Yes, I could spend less on pens, but my experience with cheap pens has involved leaking all over my pocket and ink clogging in the tip and making the pen non-functional. I’m looking for a balance – the least expensive pens that just write when I want them to write on a variety of paper types – and these just do the job.

12. Epictetus on embodying your beliefs

“Don’t explain your philosophy. Embody it.” ― Epictetus

Actions speak louder than words. If you believe that people should behave in a certain way, you’re going to be far more effective at spreading that belief by actually acting in that way than by talking about it.

If you want people to be kind to their neighbors, be kind to your neighbors. If you want people to care about their community, then care about your community and do things to make it better. If you want people to be more forgiving, forgive people who have wronged you. If you want people to be more willing to talk to people with different political views, have lots of open conversations with people with different views than yourself.

Be the person you want the world to be filled with. Don’t just think about it and talk about it and wish for it. Be it.

That way, you’re leading by example. That way, you’re actually filling the world with the things that you claim to want. That way, when someone asks you for life advice, you have authority because you actually walk the walk in terms of the life philosophy you’re offering. If you say one thing and then do another thing, it’s pretty hard for people to respect you. If your ideas and words are in alignment with your deeds, then respect comes naturally.

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Friday, May 5, 2017

How to Get Back on a Strong Financial Path After a Big Setback

You’ve finally done it. You’ve committed to making some big financial changes in your life. You’re going to plow through your worst debts, build up an emergency fund, and start saving for retirement.

At first, everything’s going wonderfully. You sell off a bunch of stuff on Craigslist and wipe out a few really bad debts. You put some money in your savings account for emergencies. You’re taking big whacks out of your highest interest rate debt. You’re spending less than before, too. You can really see the progress.

Then, it happens.

“It” can be any number of things. It might be a job loss. It might be an unexpected pregnancy. It might be an illness of a family member. It might be a car breakdown. It might be a family emergency. It might be a broken-down washing machine. It might be a flood.

Whatever “it” happens to be, your financial plans are disrupted. Some big unexpected event has just siphoned off most of your gains. Your emergency fund is gone. You may have thrown more money back onto your credit cards.

You look at your finances and… you’re back to square one, or close to it.

It’s disheartening. It makes you feel like you’re never getting out of this hole. It can definitely make you want to quit the whole financial progress thing entirely.

Before you do that, though, let me just offer a few words of advice.

First of all, this disaster would have likely happened anyway, regardless of your financial choices. Your financial decisions did not cause this disaster. This disaster is just part of life. Sometimes, life happens to us. It’s not fair. It’s not fun. It happens. Don’t try to tie together this disaster with your financial moves. You would be surprised how often that happens, and it’s absolutely the wrong takeaway message.

Second, imagine how this disaster would have impacted your life had you been doing nothing financially over the last few weeks/months/years. Imagine you hadn’t sold some stuff on Craigslist. Imagine you hadn’t paid off some debt. Imagine you hadn’t spent a little (or a lot) less in the recent past.

What kind of smoking crater of a disaster would your life look like now if you hadn’t made those moves?

Likely, because of the moves you made, you were able to deal with this crisis with much lower stress than you otherwise would have. You were able to deal with the broken-down car. You were able to deal with the family emergency. You were able to quickly replace that broken-down dryer. You had the resources in hand to deal with those things.

Without your recent financial moves… would you have been able to handle it at all? Maybe. It probably would have involved digging a bigger debt hole. It might have involved borrowing money from family. It might have involved a really badly kludged solution to the problem.

In other words, without your good moves prior to this disaster, this disaster would have been far worse.

Want to know a secret? That’s one of the best reasons to be financially responsible. It takes those crisis moments and eliminates the financial stress from them. You don’t have to worry about an unexpected car repair – sure, it’s a bummer, but you can just handle it. You don’t have to juggle accounts. You don’t have to write a check that might bounce. You don’t have to make panicked calls. You don’t have to get emergency loans. You just handle it. Sure, you wind up with a bit less money in your pocket, but there’s no additional stress involved.

The simple truth is this: given that this disaster was likely going to happen regardless of your financial moves, your life is substantially better now because you made those moves. Your financial moves have already improved your life by making this disaster much more tolerable! Rather than being frustrated by your lack of progress, you should embrace it and compare it to where you would have been had you not been making these moves and then had to deal with this emergency.

The next step, of course, is getting back on the saddle.

The recipe here is honestly much the same as it was when you were first turning things around. You want to have an emergency fund in place – some cash in your savings account, ideally enough to cover a month or so of bare-bones living expenses. After that, you want to start cutting away at your debt, especially anything that has double-digit interest rates. If you don’t have any high interest debt, keep cutting at that debt, but also start saving for other major goals like retirement.

Here’s a refresher course.

Spend less than you earn.

This is the absolute, most fundamental piece of the puzzle. If you’re not spending less than you earn, nothing else listed below works. (Ignore costs associated with the emergency when considering this.)

In a typical pay period, you need to wind up with more money in your checking account at the end than when you started. If you’re struggling to do that, evaluate your expenses.

Food is a great place to start – just eat more at home, buy more store brands, and have more low-cost meals. Meals like scrambled eggs and toast, beans and rice, stir fry, soup and sandwiches, and many others are extremely cheap.

Consider your cable bill and whether or not you can cut some channels from it (or scrap it entirely). Put a cap on your “fun” spending each month. If you buy a lot of stuff online, delete your credit card numbers from those sites. Those are immediate steps you can take, but they just scratch the surface.

Build an emergency fund.

After an emergency, you’ve likely depleted your emergency fund, so in the short term, focus on building it back up. I usually recommend shooting for a single month of bare-bones living expenses – just enough to cover the bills and keep lentils on the table.

I also recommend automating this and never turning it off. Instruct your bank to transfer a small amount each week from your checking into your emergency fund. If you don’t have an emergency fund, one great way to do it is to sign up with an online bank like Ally Bank or CapitalOne 360, link the account with your current checking account, and set up a small automatic weekly transfer. That way, if you do deplete your emergency fund, you’ll automatically start refilling it, and it keeps filling and filling during calm periods so you can eventually handle all kinds of emergencies.

Tackle high-interest debt.

In an emergency, you may have thrown a big expense onto a credit card or taken out a high-interest, short-term loan. Get rid of anything that’s exceptionally high-interest first – anything over, say, 30% – and then stock your emergency fund as described above.

Once you have your emergency fund going, start drilling down through everything that has double-digit interest rates – your credit cards, mostly, though some dodgy car loans and student loans might be that high – and pay them off in order starting with the highest interest rate. Do everything you can to make extra payments on that highest interest rate debt.

Save for retirement and other goals.

If you’ve knocked down your high-interest debt, start saving for retirement. The only exception to that rule is if your employer offers matching funds on your retirement savings, in which case you really should be contributing enough to get every dime of matching money because that’s effectively part of your salary that you’re missing if you don’t collect it.

If you’re unsure as to how to save for retirement, the easiest method is to just sign up with your retirement plan at work and choose a “target-date retirement fund” that matches a year close to when you will retire. That will usually be a solid choice for almost everyone.

You may have other goals, such as a house down payment. For those, an automatic savings plan, much like what’s described above in the section about emergency funds, is perfect. Just open up a savings account somewhere and automate the savings.

What if emergency strikes again?

If it does, follow all of these steps again. Remind yourself that you’re in far better shape than you would have been without taking positive steps and then get right back on the saddle by working on replenishing your emergency fund first and then moving right back into debt repayment.

A setback isn’t the end of the world. In fact, your ease of handling a setback is a sign that your financial progress is working. Just pick yourself off and step right back on the path.

Good luck!

Related Articles: 

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Thursday, May 4, 2017

Personal Finance and Life Priorities

A few days ago, I was in the midst of a back-and-forth email conversation about organizing a to-do list. I was making an argument on behalf of the importance of knowing the relative priority of your tasks when getting things done. I’m just going to share the key part of the email – it’s long, but I think you’ll find it worthwhile – and then discuss the ideas within it in a money context:

Let’s say, this evening, you have four things on your to-do list:
+ Make a healthy supper for your family
+ Help your daughter with her math homework
+ Sign up for the 401(k) at work
+ Revise a proposal for a new work project

If you’re looking at things in the short term – what’s most important in terms of today and nothing else – you’d probably rank them like this:
1. Make a healthy supper for your family
2. Help your daughter with her math homework
3. Revise a proposal for a new work project
4. Sign up for the 401(k) at work

On the other hand, if having the best life a year from now is most important to you, you’re probably going to rank them like this:
1. Revise a proposal for a new work project
2. Help your daughter with her math homework
3. Make a healthy supper for your family
4. Sign up for the 401(k) at work

If you’re focused on what’s most important five to 10 years from now, it’s probably something like this:
1. Help your daughter with her math homework
2. Revise a proposal for a new work project
3. Sign up for the 401(k) at work
4. Make a healthy supper for your family

On the other hand, if your time scale is more along the lines of 30 years down the road, your list might look like this:
1. Sign up for the 401(k) at work
2. Make a healthy supper for your family
3. Help your daughter with her math homework
4. Revise a proposal for a new work project

The ordering of that list changes drastically just by changing the time scale by which you order the importance of the items. What if you organized that list if you put your family as your highest priority? It’s probably something like this:
1. Help your daughter with her math homework
2. Make a healthy supper for your family
3. Sign up for the 401(k) at work
4. Revise a proposal for a new work project

You’d probably order it differently if you prioritize your career success. You’d probably order it differently if you prioritize early retirement and financial success.

Successful time management – at least in terms of figuring out which among a series of things needs to receive your focus right now and which ones can be put off – has a ton to do with what you prioritize. If you prioritize today, your list is going to look way different than if you prioritize your long-term future. If you prioritize your hobbies, your list is going to look vastly different than if you prioritize your personal health. Figuring out which of those things you really do prioritize is going to influence your to-do list a lot.

This same exact phenomenon – your life priorities shaping how you use the resources available to you – pops up regarding every resource you have in life: your time, your money, your focus, your energy, your skills, and so on. We’re all faced with nearly unlimited options for using those resources and it’s often difficult to use them in a way that truly reflects our priorities.

A few quick observations:

Using our time, money, energy, etc. in ways that aren’t in alignment with our life priorities ends up carrying some strong negative baggage after a while. People often recognize when they’ve made a mistake – or a series of mistakes – in terms of prioritizing the things in their life. Even when we don’t consciously recognize those mistakes, they often build up into a sense that there’s something truly amiss in our lives. In fact, I’d go so far as to say that this very thing is a source of a great deal of unhappiness in modern life.

The most common mistake people seem to make is overemphasizing the short term and neglecting the long term. People do this all the time. It’s why people don’t save for retirement. It’s why people don’t sacrifice a bit of time each week to get into better physical shape. It’s why people eat a lot of unhealthy foods. In each case, the short-term priority is winning out over the long-term one, which means comfort and mild happiness today but a lot of unhappiness down the road.

The other common mistake people seem to make is to take steadier things for granted. If something seems steady and reliable in your life, you tend to take it for granted. If your marriage seems stable, you take it for granted. If your kids seem well-adjusted, you take it for granted. If your job seems stable, you take it for granted. This often subtly pushes you toward prioritizing different things and not prioritizing the maintenance that needs to be done to maintain that stability. That’s how marriages often crumble, jobs become less reliable, and parent-child relationships begin to stall.

Let’s focus on the financial implications of these ideas. You have a certain amount of money that you bring in and certain demands on that money. How do you decide which demands to prioritize and thus use your money on?

It’s not an easy question and it really drives to the personal nature of personal finance. Not everyone is going to have the same priorities in life. In fact, priorities among people are going to be quite different, and that’s completely fine.

However, I will say this: financial problems and personal unhappiness are almost always the result of simply not prioritizing your money use very well. Almost always, financial troubles and a sense of being unhappy about your money and your financial state boils down to your spending simply not matching your real priorities.

Think about it. Almost always, when you’re frustrated about not having enough money for something in your life, if you look a bit closer, you’ve probably already spent some money recently on something that’s relatively less important. You don’t have enough to pay the gas bill, but if you think back to the last few weeks, you bought a few beverages at the gas station and went out to a pretty lame movie and you paid your Netflix bill, too.

Another challenge is that people almost always overvalue their short-term wants over their long-term needs. HBO has 42 million subscribers in the United States, for example, but 76% of Americans have no emergency fund of note and no retirement savings. That means that there’s a pretty large number of Americans out there without any emergency fund of note or any significant retirement savings who spend a chunk of money each month to maintain their premium cable package with HBO included. If that’s not a shining beacon of putting short-term priorities over long-term ones, I don’t know what is.

Those two factors combine into a pretty tough picture. People constantly overvalue the short term as compared to the long term, and then they don’t even rank short term priorities very well. They’ll spend money on short-term things and sacrifice any investment in vital long term things, but then their short term choices are so misprioritized that they wind up in some pretty difficult spots.

This brings me to my central point: Most personal finance problems are resolved if people step back and spend some time thinking seriously about the real priorities in their life and then take action on them. Here are some things to think about when considering how you prioritize spending.

What kind of life do you want 10, 20, or 30 years from now? Are you doing anything right now to ensure that life?

I’m going to be blunt: if you’re not doing anything right now to ensure the life that you supposedly want in the future, then you’re accepting that you’re not going to have that life in the future. Great things in life only happen if you work for them and sometimes go through some discomfort for them, and if you’re not doing those things, you’re not going to have the great things you want.

Here, I’m looking entirely at the big life goals that people always envision for themselves. Those visions are always different, but they almost always include an optimistic future of some kind. Maybe you’re imagining a better job. Maybe you’re imagining a happy retirement. Maybe you’re imagining running your own business.

Whatever that vision is, if you’re not working for it right now, it’s very unlikely to happen.

If you’re not saving for retirement right now, a beautiful retirement is very unlikely to happen.

If you’re not paying down your debts right now, a debt-free life is very unlikely to happen.

If you’re not saving for your child’s college education right now, helping them significantly for college without going into debt is very unlikely to happen.

Your success in those things is judged by your action, not by your wishful thinking. If you want to retire with some money in the bank, you’ve got to take action. If you want to have a down payment for a house, you’ve got to take action. Thinking about that future doesn’t really mean anything at all.

What if you don’t take action? If you’re not taking action, then that future you’re dreaming of is exceedingly unlikely to happen. Instead, a much less optimistic future is likely to occur, one where you’re in the same boat you’re in right now, except you’re older and have less time to do anything about it.

You have to give your future a very high priority if you want to have a great future, because your future self probably won’t be very helpful. That means taking financial action now to have the things that you want.

What actually matters most to you in your life today? Step back and include the things you take for granted.

How much do you value having a roof over your head? How much do you value having running electricity? How much do you value having those things if you suddenly lost your job?

Compare that, honestly, to how much you value your most frivolous expenses. Is it more important to you to guarantee electricity and your ability to pay the rent for a few months if you lost your job? Or is it more important to have a year’s worth of premium cable channels or Netflix? Is it more important to you to have gas in your car or a bottle of Gatorade from the gas station cooler? Is it more important to you to own a Lexus instead of a Toyota or to not have a complete panic attack if your washing machine breaks down?

I find that a bit of negative visualization helps a lot here. Simply remove a key element from your life and see how much worse it becomes. What happens to your life if you remove, say, the transmission from your car? What happens to your life if you don’t have soda in the fridge? What happens to your life if you don’t have the income from your job?

The worse a picture is, the more important it is for you to protect and preserve that thing you removed.

This is all leading to another key point…

One powerful way to start prioritizing your money use is to appreciate what you have rather than lust for what you don’t.

A big part of how we make our spending choices comes from what we focus on. What do we think about? What draws our attention? Are we drawn to appreciating the things that we have? Or are we drawn to wanting things that we do not have?

If you intentionally focus yourself on the abundance of things that you have, then you’ll find that your spending choices will slowly move toward preserving the things that you have. Building up an emergency fund begins to make a lot more sense. Saving a lot for retirement begins to make a lot more sense. Those types of smart financial moves are oriented toward protecting what you have; spending more and more money on more and more stuff and more and more “special experiences” is all about wanting more and more.

Again, as I mentioned above, I find that negative visualization really helps with this kind of prioritization. If you start imagining what your life is like without things like your loved ones or your favorite daily experiences or without your ability to see or without access to the internet or without the ability to feel warm sun on your skin, you start to see that your life is pretty empty without those things. The purpose isn’t to dwell on a sad picture, but to remind yourself that you have this awesome thing that you enjoy very much. You already have a great life, and seeking more and more won’t really improve it.

What about drive? Yes, undoubtedly, some people are driven by external desires. They work with an intense focus on having a particular thing and they’ll work hard to get that thing. However, the truth is that it rarely brings lasting happiness. Achieving an external goal feels good, but it doesn’t take very long for your happiness level to go right back to where it was.

Artificially inflate long-term plans in importance, because your mind already inflates the short term.

Another useful strategy for better prioritization of life is to consciously overinflate long-term planning. In other words, when you’re thinking about what to do with your money, you should intentionally give more weight to things that won’t pay off for a while.

Why is that? Our minds constantly inflate the value of short-term things. It’s what we do.

I like to use the analogy of comparing the tip of my thumb to the size of the moon. If I hold out my fist at arm’s length and stick my thumb up in the air, the tip of my thumb is about the size of the moon. Obviously, it’s a perspective issue – my thumb isn’t the size of the moon – but that’s not what my eyes see at first glance. At a quick glance, those things look to be the same size.

The same exact thing happens when comparing short-term things and long-term things in our own life. Short-term things are like our thumb, while long-term things are like the moon. The short-term things seem bigger than they really are in comparison to the long-term things (or, if you want to take the other perspective, long-term things seem much smaller than they are). Often, we think of long-term things as being important only in an abstract way – we don’t really think of retirement as a “real” point in our lives, though we know that it will eventually happen. Things beyond a certain point don’t feel “real” to us because our minds are wired for the short term.

That doesn’t mean that long-term things aren’t real. Unless we are very unfortunate, we will live to an old age and, in that old age, we are exceedingly likely to not have the physical capacity that we have right now. Thus, it makes a great deal of sense to use that physical capacity we have right now to protect that older version of ourselves, and that means saving for retirement.

As noted above, however, most people don’t do this. Why? They fall into the perspective trap. Small things today seem as important or more important than gigantic things several years down the road. If people were easily able to step out of the perspective of today, they would realize the enormous nature of retirement compared to, say, the desire to buy an extra bag of cookies at the store.

The solution I’ve found that works best for me – and works really well for others that I know – is to spend time reflecting on these things until you can get a better perspective. That doesn’t happen easily, so the best shortcut is to simply inflate the importance of long-term things. It’s not a perfect solution, but it definitely works.

When you’re comparing the desire to buy a bag of cookies at the store versus starting to save for retirement, just think about your life from the perspective of yourself at retirement age. Your choice as to whether to start retirement savings probably determines whether you’re living in a nice house or living in a tiny apartment. It probably determines whether you have the freedom to visit family or have to stay at home. It probably determines whether you have good meals or have to live on a steady diet of nothing but lentils.

Then, bring that life into today. Your choice really is between that bag of cookies or a nice house. The only reason it doesn’t look that way is because of the time issue.

To me, buying a bag of cookies today only really makes sense if it’s merely taking away a completely superficial treat later on. If I’m not saving very adequately for retirement and if I don’t have a strong emergency fund, I probably shouldn’t be buying unnecessary stuff, because that bag of cookies will be paid for dearly in thirty years.

This doesn’t mean you shouldn’t ever splurge today. It just means that if you’re not preparing for the future at all, you’re splurging so much today that you’re making tomorrow miserable. The most effective way to stay mindful of that is to visualize that tough future and compare it to the most frivolous of your splurges today.

Final Thoughts

The recipe for good life perspectives is simple. Think about your future. What do you want from it? Make it as real as you can today. Recognize that your little choices today match up with much bigger impacts down the road. Then, make choices that give you a good life now and a good life later on.

Most of this happens within your mind. After all, you are the one who, in the end, has to decide between retirement savings and today’s perks.

What will you choose?

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Massages Are Crazy Expensive, Until You Learn to Do Your Own

Back when I was a Division I collegiate athlete, one of my favorite perks was getting free massages. Any time I felt tight, I could head over to the training room and an experienced physical therapist would work out all my knots, free of charge. In fact, we were encouraged to go as much as possible. Those were the days.

Now, I live in Brooklyn, N.Y., and a massage will run me about $100 an hour. I’m not willing to spend that much. But, my body still craves a solid rubdown, and with good reason. There are many health benefits that come along with getting a massage. The Mayo Clinic points out nine disorders that massages have been proven to help alleviate:

  • Anxiety
  • Digestive disorders
  • Fibromyalgia
  • Headaches
  • Insomnia related to stress
  • Myofascial pain syndrome
  • Soft tissue strains or injuries
  • Sports injuries
  • Temporomandibular joint pain

Other studies have shown massages can also help with things like range of motion, nausea, and depression.

So, what’s a frugal massage lover to do? We have to to take matters into our own hands. Literally.

We should all take a few minutes a day to grip, push, squeeze, rub, and twist various muscle groups with the amazing tools dangling at the end of our arms.

Your hands are powerful! The average male can exert 48 kilograms of force units in a grip test. I’m not really sure what that means, but I know that’s plenty of force to get a pretty darn good soft tissue massage in.

I’ve found that my neck, thighs, forearms, shoulders, and feet can be capably worked on simply by using my hands and some common sense. Do you sense a knot? Put pressure on it until you feel some discomfort, and slowly rub on the tender area for a minute or two.

But, don’t go crazy with it. This is not a “no pain, no gain” situation. In fact, a commonly cited reason people stop getting massages is that they are too intense. Just as with exercise, you want to push yourself, but within reason.

You might be surprised at the sense of well-being a solid rubdown gives you. If you throw in a lacrosse ball, tennis ball, and a foam roller, you’ve got yourself an almost professional-grade massage.

The Routine

If you want a basic massage that can take as short or long as you like, you can try the following routine. I’ve found it to be tremendously helpful. It is by no means comprehensive, but it gets the job done if you’re looking for a simple, efficient — and cost-effective — massage.


An easy place to start is with your neck. It’s part of the body that commonly holds tension, as we spend most of our days craning our necks toward computers or other screens. Like many others, I’ve found a surprising amount of relief from simply rubbing the sides and back of my neck. It sounds so easy, but we rarely take the time to actually do it.

I’ve found that this technique from youbeauty.com is also effective:

“Grasp the back of your neck with one hand placing the heel of your hand into the space just behind your ear at the base of your skull and your fingers wrapped around the opposite side of your neck. Squeeze, applying pressure with the heel of your hand only (using fingers just for leverage). Work your way down your neck to where it meets your shoulder. Repeat several times. End with some gentle neck stretches, tilting and rotating your head from side to side.”


After rubbing your neck, the shoulders are the logical next step. And as with digging into your neck, this should be fairly intuitive. I like to grip my left shoulder with my right hand and use my thumb to do the hard work of kneading out the muscle.

But, you should also pay particular attention to the outside areas of the shoulder (the places further from your chest.) which you can apply pressure to via your middle and index fingers. I tend to get sore in those spots.


Now it gets fun. If you want to give your back some love, there is no substitute for a foam roller. You can pick one up at Walmart for less than $15, and it will last you for years, even with daily use.

Lay with your back on the roller and slowly move up and down, letting good old gravity do the work a masseuse would be doing. Feel the pressure build and release as you roll around, making sure to go from your waist all the way up to your shoulder blades.


As good as the foam roller feels on your back, it’s even better equipped to loosen up tight leg muscles. You can easily roll out your hamstrings (back of your legs) and quadriceps (front of your legs), making sure to spend at least a few minutes on each. Be careful, the quadriceps are usually a lot more tender than you’d expect.

It’s also critical to roll out your iliotibial band, or IT band for short. This is one of the tendons that runs from your hip to the outside of your knee, and it is often tight in runners. In fact, there were a few people I used to play college and professional basketball with who had their knee pain greatly alleviated by rolling out their IT band with a foam roller. Just rest the outside of one leg on the roller and slowly move up and down, then do the same to your other leg.


Your gluteus maximus muscles are the biggest in your body, but they’re often neglected during stretching and self-care regimens. Let’s fix that.

Grab a tennis ball if you have one around the house. If you don’t, I suggest getting a lacrosse ball — they’re denser than tennis balls, and for bigger people like myself, they dig deeper into the muscle tissue.

I like to spend a solid couple of minutes sitting with the lacrosse ball under one of my glutes. Sometimes, that pressure alone is enough of a release for a tight muscle. If you want, you can gently roll around to find and relieve different areas of tension.


There are few things as satisfying as a good foot massage. My favorite thing to do is to assume a standing position, with one foot resting on a lacrosse ball or tennis ball. I then press my arch into the ball and slowly move my foot around. It doesn’t get much easier than that.

Another maneuver that feels great requires taking a seat. You then grab your foot and interlock all five of your fingers into all five of your toes. Slowly move your hands up, down, and side to side. The combination of pressure and stretch is heavenly.

Summing Up

Of course, it’s hard to replace a trained massage therapist. I don’t want to denigrate their skills, nor imply that I feel better after a DIY massage than I would after seeing a professional. But, with some practice and a few inexpensive purchases, you can get a pretty darn good massage for a fraction of what it would cost you at a spa.

The most important part, and also the hardest, is to make time for this self-care. During a hectic day, when perhaps it’s most necessary, that can be very difficult. But, even the busiest among us should be able to find 10 to 20 minutes for a massage. It becomes easier to budget time for a self massage once you realize how good they make you feel.

Happy rolling!

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Wednesday, May 3, 2017

A Great Day with the Kids… on the Cheap

Over the past few years, my wife has been working hard to earn her masters degree in education in order to become a better educator. She’s a passionate educator and comes home almost every day bubbling with ideas for reaching students, even after years of teaching the same subjects to a revolving door of America’s youth, and I admire that passion and focus that she brings to the table.

However, in the process of chasing that masters degree, there have been many weekend days in which I’ve been alone with the kids (she often has classes on Saturdays that fill up much of the day, as her program is designed around people who are continuing their professional lives while working toward a masters). It’s been up to me to plan many, many days with the children on my own over the past few years. Typically, she and I would balance those responsibilities, but with her coursework, the planning has fallen to me.

Some days, of course, I give the kids a great deal of open-ended free time. A child’s time doesn’t have to be – and shouldn’t be – entirely structured, and if I ever feel like their lives are becoming too structured, I make sure to give them an open-ended day to do as they please. The only thing I encourage them to do is to try to make or do something cool that they can talk about at the dinner table that evening. I leave it up to them to devise it and execute it, and it usually has good results. I mean, who doesn’t appreciate an art show or a dramatic poetry reading or a book review at the dinner table?

Sometimes, though, I’ve chosen to spend the day with them, and that often means coming up with something to do together. Typically, I want it to cost very little, so my activities of choice are almost always free ones or extremely low cost ones.

What follows is a list of some of the best low-cost things I’ve done with my kids on those Saturdays when their mother has been away at class. I used that restriction for a few reasons, the biggest one being that these are things that a single parent could actually pull off with three kids. I didn’t want to include things that would become logistically difficult for a single parent, so I’m just restricting it to things that work with one parent but can easily include both parents for a full family day if one so chooses.

I’ve been keeping a list of these ideas since my wife started her masters program, and now that it’s winding down, it feels right to share this list. I’ve grouped some of the specific activities together as we’ve done variations on the same thing many times, but there’s still a robust list of things to do and try.

Choose from among these options and mix and match them to meet your needs and the needs of your family. These options are widely varied in terms of content and time and what’s needed for everyone involved, so I’m pretty sure you can find at least one or two ideas that will click with you and your kids. All of these work easily with one parent and three elementary-aged kids and will definitely work with smaller numbers.

Make a food item that they like completely from scratch.

In the last couple of years, we’ve made bread (basically flour, yeast, sugar, and water) from scratch, pasta (eggs and flour) from scratch, pickles (cucumbers, water, and salt) from scratch, sauerkraut (cabbage, water, and salt) from scratch, and many other such food items from scratch. We start with the most basic things we can and then work together to transform them into a tasty final product. We’ve produced delicious garlic breadsticks, homemade pasta that we used in a lasagna, tons of pickles and sauerkraut, pickled eggs, jellies, zucchini bread… all kinds of things. The goal here was to get the kids as involved as humanly possible in the process (with my only labor contribution being in the form of touching up certain steps), learning about what goes into a lot of common foods, and producing something for supper that’s really inexpensive.

Go geocaching.

If you have a smartphone, just download a geocaching app, look for a location near your home that has several geocaches in a concentrated area, then head there as a family and find several geocaches. Geocaching is basically real-world treasure hunting, where the treasures are often small tubes or little boxes with a log in them and occasionally a neat tchotchke or two (which you can swap out with our own little item for someone else to find). It’s a great way to spend a few hours exploring and noticing the details of the world around you.

Play a game against their collective brainpower.

One activity that’s proven to be popular time and time again is a collective board game. We’ll get out something like a chess set. On one side of the board is me, while the three kids collectively manage the other side. You get two full minutes to make a move (though I usually make them faster than that). They collectively try to beat Dad. I encourage them to talk out their moves and I’ve found that listening to what they’re planning usually gives me some tips as to what to think about. We’ve reached a point where the games are competitive and their collective brainpower makes some good choices, and they absolutely revel in the idea that they’ve pushed me into a corner.

Make a creative work of some kind.

For example, we might spend a few hours writing a surprisingly long story. I’ll just keep feeding them questions that are meant to encourage them to add depth to characters and to events and then we keep layering them into the story. We’ve made short films using a smartphone camera and whatever props and costumes we could find around the house. We’ve made photo collages out of magazines. The goal is to make something that’s meaningful to everyone involved.

Go sightseeing near your home.

Sure, you might be intimately familiar with the highlights of your city… but your kids aren’t. Take them to everything that people flock to see about your local area. Let them see the beautiful architecture, the public art, the amazing gardens, the wonderful views. My kids have been to the Des Moines Art Center. They’ve taken the Capitol Tour. They’ve enjoyed the Pappajohn Sculpture Park. They’ve seen the World Food Prize Hall of Laureates. They’ve explored almost every inch of the State Fairgrounds. They’ve seen the bridges of Madison County. They’ve visited virtually every park and nature area in Polk County and the counties surrounding it. Those are things that people go out of their way to see when visiting central Iowa and my children have seen most of them. What free things do people see in your area? Have you taken your kids there?

Design and implement a volunteer project together.

Look for something in your community that stands out as something that needs to be fixed and then spend a day together fixing it. We’ve done this several times. We spent an afternoon picking up trash in local parks and depositing it in trash cans. We’ve pulled weeds out of the flower beds in a few parks. After a stormy Friday night, we went on several trails near our home for the purpose of a nice nature walk but also to clear all of the limbs and debris from the trails. We even spent a day going door to door asking for clothes donations for the clothing pantry – we put out notes the week before at a bunch of houses, then went door to door to collect unwanted clothes the following weekend and took them to the pantry. The fun here is letting your children identify something in the community that sticks out at them as something bad that’s fixable and then working with them to cultivate a way to fix it or at least improve it.

Do a ‘wandering walk.’

This is probably our single favorite thing to do on a nice day. We simply go to somewhere new for all of us (or at least for the kids), park the car, mark it on my phone’s map app so we can find it again, and then just simply wander. We constantly discover new things, like Little Free Libraries or hidden little parks or trails that go down to this amazing beach next to a creek or this crazy walkway that goes over the interstate. Once, we found ourselves in the midst of a protest. Another time, we came upon what appeared to be a meeting of the local homeless community in a park. Almost every time, we come home with several crazy stories from our wandering. We just wander around in whatever spontaneous direction we choose until someone suggests that they might be getting tired, stopping whenever we see something interesting.

All of us have enjoyed all of these activities, even as our children have gone from barely beyond toddler aged to our oldest being a middle school student. The exact variations of each activity have certainly changed over the years, but the core of it has been the same – they’re all fairly open ended activities that center around spending time together without spending money together.

You don’t need to open up your wallet to spend a great day with your kids. You just need to open your heart and give your time and attention.

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How to Use a Zero-Sum Budget to Pay Down Debt

While there are plenty of different budgeting strategies to try, my personal favorite is the zero-sum budget. This type of budget isn’t hard to implement, nor does it require fancy software or third-party support. With a zero-sum budget, you can transform your personal finances with nothing more than pen and paper.

Most importantly, zero-sum budgeting teaches you to use your most powerful wealth-building tool – your paycheck – to pay down debt and start saving.

If you’re unsure how zero-sum budgeting works, here’s the basic rundown:

  • With zero-sum budgeting, you base each month’s budget on last month’s income and expenses. By using last month’s income to plot out this month’s expenses, you can base your budget on your real income and not on projections.
  • Using pen and paper or a simple spreadsheet, you create a plan for each dollar you earn – every single month. By “giving each dollar a job,” you pay yourself first, eliminate waste, and maximize the money you work so hard to earn.
  • The goal of zero-sum budgeting is to end the month with zero. Since you plan your spending and based on last month’s income, you should theoretically end each month with nothing (or a slight buffer in your checking account).

Zero-Sum Budgeting in Real Life

Before we dive into how you can use a zero-sum budget to pay off debt, let’s talk about how this type of budget works in practice. Let’s look at a fictional family, the Martins, who took home $6,000 last month after taxes and pre-tax retirement contributions. When they tracked their actual spending for last month, it looked something like this:

  • Mortgage: $1,200
  • Groceries: $900
  • Car insurance: $100
  • Auto loan: $450
  • Cable TV and internet: $150
  • Cell phones: $200
  • Gas: $200
  • Utilities: $400
  • Clothes: $400
  • Entertainment: $500
  • Miscellaneous: $300
  • Restaurant meals: $600
  • Student loans: $300
  • Credit card payments: $500

Total: $6,000

As you can see, the Martins spent all they earned and then some. Worse, a lot of their spending was non-essential. The Martins weren’t making much progress on their debt, yet they were bleeding money on fun and “stuff.”

Once the Martins recognized where their money was going, they could begin a new month’s budget using last month’s income as a guide. Here’s what the next month’s zero-sum budget might look like:

  • Mortgage: $1,200
  • Groceries: $700
  • Car insurance: $100
  • Auto loan: $450
  • Cable TV and internet: $100
  • Cell phones: $150
  • Gas: $200
  • Utilities: $400
  • Clothes: $200
  • Entertainment: $300
  • Miscellaneous: $300
  • Restaurant meals: $300
  • Student loans: $300
  • Credit card payments: $1,500

Total: $6,000

Do you see what the zero-sum budget has done here? Almost overnight, the Millers have tripled the amount they’re able to put toward their credit card debt. They had to reduce some of their discretionary spending, but they’ll also pay off their debts faster this way.

How to Use Zero-Sum Budgeting to Pay Down Debt

The example above shows exactly why zero-sum budgeting is so powerful. If your finances are messy or you don’t have your priorities straight, sitting down to track your spending and create a zero-sum budget can make even the most complex issues seem crystal clear.

Unfortunately, old habits die hard… and following through with your zero-sum budget requires patience, discipline, and some work on your part. Writing down your spending goals isn’t enough; you have to follow through with those goals if you want your zero-sum budget to work.

This is especially true when it comes to paying off debt. You can plan to allocate $1,500 in monthly payments to your creditors (as the Martins did), but will you actually write that check?

If your goal is getting out of debt, following through is the key. Here are some tips that can help make your zero-sum budget more powerful than ever:

#1: Pay yourself and your debts first.

If your goal is getting out of debt and saving for the future, savings and debt repayment need to be your top priority. That’s why you should take the most painful steps in your zero-sum budget at the beginning of the month. By getting the hardest payments out of the way, you’re setting up your zero-sum budget for success.

#2: Be proactive: Don’t ‘wait and see’ how things shake out.

One big mistake people frequently make with zero-sum budgeting is waiting to see “how things work out.” Let’s say you plan to pay $1,000 on your credit card bills, but wait to see if you can afford it at the end of the month. In this case, you’ve let an extra $1,000 sit in your checking account all month – just waiting to be spent. So if you went over your food or entertainment budget, the overage comes directly out of your debt payoff amount.

Waiting to “see how things work out” is the same as saying you don’t think they will. You’re setting yourself up to fail before you even start.

To avoid a budgeting fail, make sure you make your hefty debt and savings payments at the beginning of the month. If you wait to see if you mess things up, you probably will.

#3: Track your spending to see where you’re at at least once per week.

Whittling your spending down to save more isn’t easy. If you’ve been spending hundreds more than you should on food and dining out, for example, spending just $500 per month on food can be a challenge. The best way to safeguard your finances is to track your real-time spending regularly. This step is most important for fluctuating and projected expenses like food spending and entertainment.

Whatever your spending goals are in these categories, it’s up to you to stick with them. Checking in with your bank statements or online checking account at least once per week to see “where you’re at” is the best way to stay on track.

By checking in, you can see if you’ve overspent and need to rein things in. If it’s only the 10th of the month and you’ve already spent half of your food budget, for example, you can go on a food freeze or use up staples in your pantry to stretch your budget through the end of the month. On the flip side, you may not be able to gauge how you’re doing — and get yourself back on track — if you never check.

Final Thoughts

If your goal is getting out of debt, you have nothing to lose by giving a zero-sum budget a shot. There’s nothing to buy and nothing to download. You can make a simple zero-sum budget with nothing more than your previous month’s bank and credit card statements, a pen, and some paper.

Also remember that zero-sum budgeting (and anything worth doing, really) takes time. You may experience a few hiccups during the first few months, and that’s perfectly okay.

If you keep plugging away, keep tweaking, and dedicate yourself to making your budget work, it eventually will.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

Does your family use a budget? Have you ever tried to use a zero-sum budget? Let us know in the comments section.


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Tuesday, May 2, 2017

Finances Without a Direction in Life

During the first few years of marriage, my wife and I were largely directionless. We both had jobs that paid fairly well that we enjoyed and we had a vague sense that we wanted to have children someday and wanted to have a nice house someday… and that was about it. I had really vague dreams of being a writer at some point, but I envisioned myself being a lot older when I thought about it.

We drifted. We went out a lot. We traveled a lot. We basically just lived for the moment.

I could look back on those years, when we were in our early and mid-20s and were simply drifting through life, and say that I regret them, but I don’t, not on the whole, anyway.

There are really only two things I would change, looking back. One, I wish I had chosen to spend more of our time doing things that would have helped me figure out what I wanted from life. Two, I wish I had saved a little more and spent a little less. Neither one of those changes would have radically shifted how we spent those years, but they would have done a lot to change my life as it is now.

To me, those two principles are really the answer to one key question, one that comes up quite a lot in questions I get for the reader mailbag: How do I not make my life into a train wreck as I find my direction in life? People ask that question in some indirect way at least once a week.

Today, I’m going to give my best general answer to that question, and it’s somewhat encapsulated in the two changes I’d make above. In general, there are two things you really need to do if you feel directionless but are scared of wasting your life just wandering through it. Let’s address them in turn.

Finding Direction and Meaning Without Losing Freedom

One of the big realities of personal finance success is that it’s really hard to motivate yourself to make good financial moves if you’re not doing it for any reason that benefits your life. Once you get beyond some basic steps (which I’ll talk about below), it’s pretty difficult to convince yourself to take on meaningful financial initiatives because doing so eats into other aspects of your life. It’s pretty hard to buy into the idea of saving for a very unclear goal in the future if it takes away money from enjoying life today, in other words.

Thus, one big part of the equation for finding financial success in a life without direction is taking some basic steps to figure out that direction. It all boils down to a single question, really:

Where do you want to be in the future?

It is completely okay and completely normal to have no good answer to that question. If you see that question and draw a complete blank, there’s nothing whatsoever wrong with you. You’re not a failure. You’re not a weirdo. I’ve been there, as have most people that I know.

The first question, really, is do you need a direction in life? I think the answer is yes, but that “direction” doesn’t always mean the same thing for everyone.

What do I mean by that? I think having some anchors in life – good reasons to get out of bed in the morning and feel some excitement about the day ahead – is really useful for everyone. Without that, life does feel pretty empty. You can quickly find yourself in a cycle of things that are pleasant but not meaningful.

The one single meaningful anchor I had in the first few years of my marriage – and the one thing I built that really lasts from those years – was a strong relationship with my wife, and that’s all I really have from years of living. As much as my wife means to me, a full and rich life means having more anchors than just her (and I think she’d agree and say the same thing about herself – in fact, I know she would because we’ve had these kinds of conversations).

However, those anchors don’t have to lead anywhere in particular. Sure, some of them lead to big things. You might be anchored by a career you love that you want to build to a certain level (but you don’t have to be). You might be anchored by children and you want to raise them to be successful and independent adults (again, that doesn’t have to be your anchor). Or, on the other hand, you might just be anchored by something as simple as learning new things every day.

All that an anchor really is, then, is an area of your life that you want to improve about yourself or about the world around you, or something that you want to explore with more depth. That’s it. It really can be anything, as long as it’s something that you want to be better by the end of any given day. What do you want to be better about your life?

For me at that time, my one main anchor was my wife, and I wanted to constantly improve and strengthen my relationship with her. At the time, I didn’t really see it as a direction in life, but looking back, it obviously was.

Today, I have lots of anchors. My relationship with my wife is still a big anchor, but it’s now joined by the anchors that are my three children. Each day, I want to do what I can to be a supportive parent and help build them into functional adults to the best of my ability. Writing is an anchor – each day, I want to write (or conceive of ideas for) things that will help improve people’s lives. Learning is an anchor – I devote time literally each and every day to learning. And those are just some of the anchors I have, and together they provide a real sense of direction in my life. Some of my anchors have big destinations at the end. Others don’t. All of them, however, convince me to spring out of bed in the morning.

My sole piece of advice to anyone who feels directionless is this: Find some anchors. They don’t have to be big directions in life. They just have to be things that you’re excited to grow in each and every day. What do you want to dive into today? What do you want to be stronger when you go to bed tonight? Figure those things out.

How do you find those anchors, though? Try things. Try lots of things. If you don’t know how to do that, one way to start is to go to your city’s community calendar on the city’s website and go to as many of those things as you can possibly schedule just to see what they are. Do the same thing with your local library. Do the same thing with Meetup. Make a list of everything about yourself that you’re unhappy with, then try to find a couple of ways to correct each one, then do those things enough times so that you can get some actual feedback on whether they’re working. Make a list of things you want to learn about and try learning them, whether from a book or a deep dive into Wikipedia (to start) or a class or something else. Just try stuff.

What you’ll find is that a lot of that stuff just flows right by you. It’s not particularly interesting or exciting, and that’s fine. What you’re looking for are the things that resonate. Those are the things that you find yourself deeply enjoying in the moment, or you find your mind flicking back to constantly, or you find yourself thinking about when you go to sleep or wake up. Those things are potential anchors. Start digging into them. Do more of them. See how deeply that burgeoning interest goes.

What if you don’t feel like you have time for trying things? Well, for one, I’m not sure how you can feel directionless and also feel like you have zero time, but if you do find yourself there, drop some things. You’re clogging up your life with stuff you don’t find to be meaningful, so clear it out. Divest yourself of responsibilities, starting with the ones that have minimal effect on other people.

What you’ll find is that once you have several anchors, things you’re really excited about and want to dig into every day, your sense of directionlessness starts to fade. You do have a purpose – in fact, you have a lot of purpose. Sometimes, you’ll find that several of those anchors have a lot of synergy – they build on each other. You may also find that some of them point to an end goal or two – that’s a long-term goal, right there. You might even call it… a direction in life. At this point in my life, I think that a “direction in life” simply means that you have a lot of anchors with some synergy between them that call you to fill a significant portion of your day on things that fulfill multiple anchors.

You may also find that you really wish you could find ways to open up more of your life to these anchors, and that’s when we start getting into the financial part of things.

Anchors and Finances

Early on in this journey, you may not have any life anchors, or you may not have very many. You still feel directionless. What do you do?

At that point, the best thing you can do is to simply keep your options as wide open as you possibly can. You do not want to find yourself mired into a situation where you’re stuck in a job or stuck facing a lot of debt payments (thus requiring you to only be able to take certain jobs).

In other words, if you’re directionless, live as lean as you can. If you have debt, pay it off. If you don’t have an emergency fund (meaning you don’t have at least a month or two in living expenses in your savings account), build that up. Try to avoid taking on any more debt. Keep up to date on all of your bills and if you happen to be behind on any of them, make catching up a priority.

If it’s available to you, saving a reasonable amount for retirement is also a good move. Even if you don’t have anchors in life, you’re going to get older, and eventually it’s going to be more difficult and less compelling to work. If your work offers a 401(k) – especially if they offer any matching funds – put aside some money into there. If you don’t have that, start up a Roth IRA and contribute around 10% of your take-home income. If you’re making over $100,000 a year, you may not be eligible for a Roth, so learn more about Roth IRAs if you’re in that boat.

At the same time, live reasonably cheap. You don’t need to live like a miser, but you should be spending enough less than you earn so that you can save for retirement and build up an emergency fund without building up more debt. Learn how to prepare food at home instead of eating out constantly. Ditch cable unless you watch it a lot. Either find an apartment or a house close enough to work that you don’t have to drive there (and can maybe then ditch a car) or else find a cheap apartment or house. Look at smaller ones than you expect. Don’t replace your car until it’s in bad shape, not just because your lease is up or you’re no longer making payments. Those steps alone will get you there without really interfering with the things you do for enjoyment.

That’s really all you need to be doing if you don’t have a direction in life. It’s simple.

Now, as I mentioned above, if you feel directionless in life, the best thing you can do is to start finding anchors, and the more you find, the better your life will be. Anchors are simply things that make you want to get out of bed in the morning and things you genuinely want to improve at in some capacity each day. I want to improve my relationship with my wife and kids each day. I want to be healthier each day. I want to help people each day. I want to learn some things each day. Those are anchors for me because they’re meaningful enough for me that they push me out of bed each morning out of pure zest for making them happen.

Once you have enough anchors, you’ll find that one of two things start to happen. You’ll find that either your anchors are synergistic enough that they start giving you a clear single direction in life, or you’ll find that you have so many anchors that you want more time and energy to devote to them. Let’s address them separately.

What if you find yourself with a burgeoning “direction in life”? If that describes you, then you should orient your finances – everything you spend, everything you save, and so on on – around that direction. What kind of financial support does that direction need? Where is it leading and how will I have the money I need when I get there?

For me, my general direction in life pushes me toward helping my children become independent as they enter their twenties and then being prepared to fill in that empty time at that point. Thus, I’m saving for their college educations using 529 plans and I’m also saving for what will likely amount to a major career shift at that point. A lot of the anchors in my life synergize as I approach age fifty, so my financial plans are all about making sure everything launches at that point.

What if you just have a bunch of seemingly unrelated anchors that you’d love to be able to cultivate more? If that’s your situation, your financial planning should orient toward removing responsibilities and requirements from your life that aren’t anchors.

For many people, that means finding their way out of their current job, and thus they’re talking about either a major career switch or early retirement. In either case, you suddenly have a ton of incentive to really tighten your spending so that you can either amp up your retirement savings so that you can retire as early as possible or clear out all of your debt and other regular bills and perhaps save enough money quickly so that you can easily make a career switch.

A meaningful life is one where you have plenty of anchors to fill your days with joy and adequate resources to support those anchors. It may be that those anchors do form an overall “life direction” for you, and that’s great, but they don’t have to. They just need to give you meaning when you get out of bed each morning, and the financial role in that is to ensure that those anchors are well supported and secure.

We really need to talk about frugality’s role here. The areas of your life that aren’t anchors should draw as little of your money as possible. If you’re pulled out of bed with excitement each morning by the kind of soap you use in the shower, that’s great, but if you’re not, you shouldn’t be using anything more than the best “bang for the buck” soap bought at the best sale price you can find. Store brands and discounts should be your friend.

The real trick, though, is distinguishing between anchors and “perks.” Many people find themselves in a nonstop flood of “perks” in their life, where they buy high-quality and expensive versions of things that aren’t really anchors in their lives. Take coffee, for instance. Many people love their morning coffee, but is it one of the reasons they get out of bed with excitement in the morning? For some, sure; for many, probably not. If that’s not you, there’s nothing wrong with a morning coffee to wake you up, but you should be focused on finding a decent cup of coffee at a great price.

I have one friend who is an absolute coffee connoisseur – he absolutely loves it. He roasts his own beans and can wax at length about different bean types and roasting techniques. He has thousands of dollars in coffee brewing and coffee making equipment. Coffee is his anchor and that’s awesome – I don’t begrudge him investing his money in it.

If that’s not you, then coffee is a perk at best. Sure, enjoy a great cup as a treat, but don’t make it a daily thing. Find a way to make a decent cup as cheap as possible each morning and roll through life.

Final Thoughts

The recipe here is simple. Find your anchors. Invest in them. Don’t invest in things that aren’t anchors. That’s the secret to financial success in a life that feels directionless.

Your first step is to start seeking anchors without doing anything to disrupt your finances or bury yourself in a corner while seeking them out. Sure, that might mean working at a job that doesn’t excited you for now, and that’s okay. Focus your money on keeping as many options open as possible for you and focus your time and energy on exploring more avenues of life so that you can find the things that excite you.

After that, once you’ve found some anchors, hone your financial plans around those anchors. Trim the money and energy you spend on the things that aren’t anchors so that you can adequately support your true anchors. That might mean ditching hobbies or even cutting things that other people consider essential (like cable, for instance). Follow your anchors. Trust them. Support them. Sure, they may not collectively give you a direction, but what they will do is give every day meaning.

Good luck on your journey.

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The post Finances Without a Direction in Life appeared first on The Simple Dollar.

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Time for an Upgrade? Here’s How to Sell Your Old Cell Phone

The average American upgrades their cell phone every 29 months, but I have a friend who goes through phones much more quickly than that. He likes to get the latest model every year.

During a recent hangout, he startled me by opening a desk drawer to reveal what can only be described as an electronics graveyard. It contained six iPhones, an old flip phone, chargers, cables, cases, and every dongle imaginable. There were arguably enough in there for him to open his own mall kiosk and sell phone parts on the side.

He told me how his drawer was filling up because he didn’t know what to do with the old phones. He knew he shouldn’t toss them, but he also didn’t want to go through the hassle of selling them. I offered to sell them for him and we agreed to split the profits.

Then, I had to dig into all the options for selling a used phone. What my I found was that there are always going to be tradeoffs. You won’t find a solution that is fast, easy, and lucrative. In general, the less sweat equity you want to put in, the less money you’ll earn.

Here are some of the best options for selling a cell phone:

Highest earning potential: eBay

After conducting my research, I chose to sell the phones on eBay. It’s the largest online auction site, with a robust used cell phone marketplace, so it allowed me to quickly get my listings in front of millions of potential buyers.

The downside of using eBay is that it takes a bit of effort to create an attractive listing. You need to understand how to take crisp photos, how to write a good description, the ideal days of the week to list, and at what price to start the bidding.

You also need to potentially deal with scam buyers and answer all the questions that come in from potential buyers.

Another thing to keep in mind when using the eBay auction method is that there’s a chance you sell the item for much less than it’s worth. That’s because, in order to attract bids, it’s generally recommended to start the auctions at an artificially low price. But, due to timing and listing issues, or any complex combination of factors, you might end up with very few bidders and a final sale price that will make you want to cry.

A few years ago, back when I was an eBay amateur, I convinced my girlfriend to let me sell her slightly used shoes on the site. Let’s just say she was less than pleased when I had to sheepishly mail off a pair of heels worth at least $75 for a whopping $5. My argument that we should just look at it like charity did not go over well.

For some people, learning the ins and outs of eBay and dealing with the hassle won’t be worth it. But, if you have the time and energy, you’ll usually sell your phone for a higher price on eBay than if you use the other options.

I was able to sell my friend’s phones with relatively little hassle. All the buyers paid on time and were very respectful. To me, the extra effort was worth it.

eBay also has a quick sale service, where you mail in your phone and eBay then pays you a price determined by their staff. If you take this route, you’ll sacrifice profit for convenience. For instance, if you’re selling an iPhone 6 in good condition, the current trending price on eBay for auctions is $225 and the “eBay quick sale” value is $150. For some people, the convenience may be worth sacrificing those $75.

Keep it simple: Trading in with your carrier or cell phone retailer

Any big U.S. carrier or cell phone provider will happily take your old phone off your hands via their buyback programs. Best Buy, Walmart, Target, Apple, Amazon, and all the major cell phone carriers offer this service.

The offerings of these companies are much like the eBay quick sale. You mail in your phone and get paid a fixed price in return. The difference is that they each make their payouts in the form of online gift cards or credits toward a new purchase. While credits are obviously not as fungible as cash, they can be useful to the person who’s simply upgrading and wants to keep things simple and minimize transaction costs.

If you’re particularly loyal to a certain company and you don’t want to deal with selling a phone on your own, this isn’t a bad deal. But, all things considered, you’re likely to get less money (and in a less liquid form) using these sellers than if you go elsewhere.

Keep it local: Craigslist

Craigslist, the free online classified site, is similar to eBay in that you’re in charge of creating a listing for your item. It differs from eBay in that there is no bidding system. You’ll receive direct offers from potential buyers, and sometimes people will try to lowball you.

But, if you’re patient, a Craigslist sale will usually result in more cash in your pocket as compared to doing the carrier trade-in option, or often even eBay. That’s partly because there are no shipping fees and no transaction costs (eBay takes 10% of every sale, and even a simple PayPal transaction carries a 2.9% transaction fee), and you can set your desired price without worrying about getting enough bidders. Plus, you’re almost always going to be paid in cash. As long as you know the fair market value of your phone and you’re willing to be firm, you should be fine.

Also, Craigslist is good for those who want to build social capital in their neighborhood. There is something nice about having personal interactions and potentially getting to know people in your community.

That being said, some people are wary of meeting up with strangers. The meetups also take time to coordinate, and sometimes people flake out at the last second. As with eBay, the time and effort needed to make the extra money might not be worth it.

Easy and flexible: Dedicated buyback companies

Gazelle, Flipsy, NextWorth and BuyBackWorld are all dedicated electronics buyback companies. They’re not affiliated with a particular cell phone provider or carrier. Like the giant corporations mentioned above, they’re targeting consumers who want to get money for their phones with minimal hassle.

They each operate on the same general principle: You mail your phone to the company and they take care of the rest. Some, like Gazelle, even offer to wipe your phone of all personal data so you don’t have to (I wouldn’t trust a third party to do this, but for the less tech-savvy it can be an intriguing option). Payments come in the form of a check or a PayPal deposit.

These companies also offer a 30-day price lock. If you upgrade every year like my friend, this could save you quite a bit of money. That’s because the resale price of a cell phone drops by 15% to 20% in the month leading up to a new release. If you know you’re going to upgrade every year, then you can sell your old phone the month before a new release. That way you can use your phone in the month leading up to the release without having to worry about it losing value when you want to sell it.

Flipsy is a particularly intriguing option, as they act as a sort of clearinghouse for all the authorized buyback companies. They vet and verify buyback companies who can then make competing offers to buy your phone based on the age, make, and condition of your device. These companies are likely to multiply as cell phones become more and more popular, so it could be nice to use a service that consistently assures you that you’re getting the highest offers.

A note about electronic waste

Most people selling used phones are doing it to make some extra cash from what would otherwise become a lifeless rectangle in a junk drawer. And that’s great. But, it’s also important to keep in mind that there are compelling environmental reasons to resell — or, at the very least, properly recycle — your old cell phones.

Far too many people simply discard old phones without thinking about the environmental impact of that choice. And as cell phones grow in popularity, the problem will only get worse.

In 2017, more than 50 million tons of e-waste are expected to be generated globally. While that’s just a small fraction of the total trash generated, electronic waste is particularly toxic. Phones are full of heavy metals that tend to leach into the local water supply if not recycled properly. For instance, a single lithium battery can contaminate 60,000 liters of water.

This is a particularly bad problem in China, where most of the world’s e-waste is processed. Lead levels in children are dangerously high in villages that process the most electronic waste.

By reselling rather than discarding, you’re earning money and helping to combat the global e-waste problem. If your phone is too old or damaged to be worth anything on the resale market, you can find a responsible recycling program near you on e-stewards.org.

Summing up

Every situation is unique, so the make sure to explore all of your options before selling a used phone. Keep in mind that nothing will be perfect. If you want to get rid of a phone quickly and easily, you likely won’t get as much money for it. If you want to maximize profit, you’re going to have to work a little harder.

It all comes down to how much free time you have and whether the benefits of earning extra money outweigh the opportunity costs of your time spent.

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The post Time for an Upgrade? Here’s How to Sell Your Old Cell Phone appeared first on The Simple Dollar.

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