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Seven money mistakes you shouldn’t make in your 30s

Scissors Cutting Dollar BillAJ: KJ and I eat, sleep and breathe money talk. KJ works in finance, I manage a really large budget as part of my job, and we’re budgeting and planning obsessed. So when I come across an article that gives me pause (an article from Yahoo! Finance about 7 money mistakes you shouldn’t make in your 30s), I’m always surprised. We’ve ticked some of these boxes but the older we get the more it seems like we can use reminding.

1. Getting married before you talk about the “F” word — finances.
Again, KJ and I have never been in a place where we didn’t talk about finances but we have happily married friends that STILL don’t talk about finances. This is happiness suicide, don’t do this to yourselves. Even if one of you is an extreme spender and one is an extreme saver, don’t hide that from one another. Eventually the truth always reveals itself and it’s selfish not to be open about what’s coming in and going out.

2. Letting your student debt take care of itself.
Letting anything “take care of itself” is a little bit of a joke. There are all kinds of resources to help you manage through paying off student debt. Many companies now even offer services to help burn through that student debt. Don’t hold onto this while socking away money in a retirement fund. That’s counterproductive to the big picture!

3. Not saving for retirement.
When I was first employed out of college retirement was pretty much all I thought about. Working full-time is ROUGH in comparison to college and working forever seemed like a dreadful existence. Somehow though, the longer I work, the less I seem to focus on retirement. Something about time healing all wounds and growing up and yada yada yada. Regardless, saving for a time in which all you do is live as you choose should be the driving force behind a lot of the decisions you make – through the earning and the spending of your future opportunities.

4. Using graduate school as an excuse to avoid the job markets.
I can’t even sort of relate to this. Going back to school seems like the most stressful thought of all time and going back to school in lieu of having a job and MAKING money just seems like crazy talk. HOWEVER, there are so many professions that require a graduate-level degree in order to move forward through the food chain so you have to manage through both having a job and going to school.

5. Buying a house you can’t afford.
To me, this is the most relate-able of all of these pieces based on our current situation. We’ve talked at length about the house we bought last year and all that we’ve done to it but there are days where it certainly feels like money is flying out the windows that still need window treatments and into things like the sprinkler system and landscaping. Part of being able to afford a house includes being able to afford the bills, the repairs, the taxes, the HOA, essentially, WAY MORE than just the mortgage. If you can afford the car but not the gas, what good is it? Look at all considerations associated with owning a home before diving into this 30-year-mortgage-carrying project.

6. Neglecting your children’s education.
This is always a point of contention when we talk about money with other families. How do you plan to address education for your children? Not just college, but private vs. public schools, short-term vs. long-term. There are so many options and choices for parents today regarding the education of their children that you need to know all of your options so you can budget for them now. People are spending college-level amounts on high school-level private school, so don’t think you have all the time in the world to pick a stance on this and be able to afford it.

7. Ignoring your will.
We just finally stopped ignoring our will, three cheers! Now my mother can rest easy at night and we have a solid plan in place for the unexpected. If you own absolutely anything, you need a will. If anyone at all is dependent upon you, you need a will. If you make money at all, you need a will. Generally speaking, you need a will. It’s not all that costly or time consuming in comparison to the amount of effort it will take your loved ones to try to figure out your wishes if you don’t have one so do them a favor and get a will written up ASAP.

Image courtesy of vectorolie / FreeDigitalPhotos.net.

Seven money mistakes you shouldn't make in your 30s is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Are you working like the job you want to get paid for?

3D Business Man Going UpstairsKJ: This post is dedicated to those of you who are career climbers in your organization – do you get paid for the job that you do now or do you work like the job you want to get paid for? It’s quite the philosophical question when it comes to your job for the people you hire (if you manage people) and for your outlook on your own career. They’re vastly different points of view. One implies that you get paid for anything and everything you do. The other implies that you prove yourself of sorts to be able to get paid for the job you ultimately want and for a job well done.

Why wouldn’t you get paid for the job that you do?
Sure, that sounds reasonable, right? I mean, come on! Under what scenario would someone not get paid for the job that they are doing? I bet if you asked your friends, though, each one could come up with a list of 5-10 things that they do each week that’s not a core part of their job description or “what they get paid for.”

AJ: I loathe people who say “that isn’t my job.” Keeping your job is your job, right, so how can anything you’re asked to do NOT be your job? Be known as a do-er and what you’re doing now probably won’t be all you’re doing for very long because do-ers get noticed!

KJ: So, how do you transition to a philosophy wherein you work for the job that you want to get paid for? Here are a few ways to re-frame your perspective and expectations.

Understand you’re not where you want to end up
The current job you have is likely to be a lower point (pay or responsibility – they don’t always go hand-in-hand!) than where you will be in 10-15 years. If you’re a driven person, then the career and role you hold today is likely to be but a low man on the totem pole for what you want out of your career.

Prove your worth to the people around you
Volunteer for tasks, projects, or assignments. Don’t just sit idly by and assume that someone is going to hand a better position or increased pay to you on a silver platter when the time is right and you’re perfectly ready. Sometimes you have to take a little risk and step out of your comfort zone when the right opportunity comes along. There’s a lot to be said for someone who takes action and steps up when no one is asking.

Prove your worth to the people outside of your office
Whether it’s directly related to your line of work or through your favorite volunteer organization, try to go the extra mile in showing your value and commitment to the overall team – wherever that may be. Most things these days have little to do with the individual themselves, but more so on the progress of the overall team.

Prove your worth to the people inside your office
If your team members are floundering, then find a way to help motivate them to step up their game. Sometimes just a little notice of encouragement goes a long way to really building the morale of your team, so you can feed off one another’s drive and successes to make your organization better. Keep in mind that the whole of the organization can be greater than the sum of the individual parts.

Be professional
You never know when an opportunity will arise and knock on your door, so being professional in all your encounters will work wonders for the doors of opportunity that will open along the way.

    Do you get paid for what you do?
    Do you work like it’s the job that you want?
    What motivates you to push yourself just a little further to take initiative?

Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net.

Are you working like the job you want to get paid for? is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Is your time worth as much as you think?

Time is MoneyKJ: Have you ever sat down to actually figure out what your time is worth? Time is one of the scarcest resources, and it’s one that you can never get back. Knowing the trade-offs of what you are missing out on (often called an “opportunity cost”) can go a long way in understanding how you bring balance to your life and evaluate a purchase (whether significant or not). Let’s start with a simple calculation:

What is your yearly take-home (or family’s take-home)?
This should be relatively easy. For those of you that are salaried, the number is pretty easy to calculate – just add up your income from this last year.

For people with irregular incomes and uncertain bonuses, don’t put a whole lot of weight to those lumpy income payments. Instead, try to take a 6-18 month average (depending on just how variable your income can be) leaving out some of the larger bonuses/commissions/irregular income payments as applicable.

The 2,000 hour rule of thumb
Under both of these methods, simply divide the income number by 2,000 (the approximate number of hours worked by someone who is full-time at 40 hours per week). So, if you made $20,000 last year, your hourly rate is about $10 per hour. If you made $50,000 last year, your hourly equivalent is closer to $25.

Back out taxes
Now it’s time for the not-so-fun part. Take your number from above (sounds nice, doesn’t it?), and subtract out your taxes – boo! If you’re in the 15% tax bracket, then simply take the number from above and multiply by 85%. So, if you made $25/hr then your after-tax would be $21.25. If you’re in the 25% tax bracket, multiply by 75% ($18.75 if we continue our example). Don’t forget the impact of Social Security, Medicare, and state taxes (if that applies!) which could all take another 10%+ off your take-home pay! What you thought was your real take-home pay per hour could be significantly lower.

DIY or hire-it-out
Now that you have a quick rule-of-thumb of what your typical hourly-equivalent rate is, it might help you think about purchases in a different light – or hiring out that project instead of DIY. While I’m all for doing as much as you can yourself, there are definitely times when your time may be better spent hiring out a professional who will (1) have a better idea what to actually do, (2) has experience in doing it error-free (or as near error-free as you can get), and (3) who can do it far more quickly than you could accomplish it.

Even if the project is quite basic, maybe you would spend $400 worth of your time when you could have hired it out for $300. If instead the numbers were flipped, and it would have taken $200 worth of your time, yet you would have had to hire it out for $300 then maybe the hire-it-out option doesn’t make as much sense.

Money you have is different than money you could have
Clearly not all decisions are based on the fact that you could be working and generating income while the person you hired is completing the task. You may need to factor in some non-monetary considerations as well like needing a break – there are only 24 hours in a day!

Particularly if you live in the salaried world where extra work doesn’t quite relate directly to your take-home, the decision might not be quite as easy. It could boil down to whether you could be building your marketable skills for future (unknown) income opportunities – i.e. investing in your human capital – to be able to increase your hourly-equivalent rate in the future. Surely that’s worth something!

Use this to calculate any purchase
If the purchase of [insert product name here] is going to set you back $200, and you’re hourly equivalent after taxes is $20, then it would cost you 10 hours of work to pay for said item. It’s a good way to ask “was my hard-earned time for 10 hours really worth this purchase?” That’s about 25% of your entire week’s work…framed that way, your answer might differ.

This can be an exceptional way to really balance your wants and your needs for that good old budget of yours.

    Have you thought about how many hours it would take you to pay off something?
    Did it sway you into making the purchase or did you realize the purchase wasn’t worth it?

Image courtesy of hin255 / FreeDigitalPhotos.net.

Is your time worth as much as you think? is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

New Year’s Resolutions: eight month check up

Success On Dartboard Showing Accomplished ProgressKJ: We’ve written about our goals a lot this year, and part of what we wanted to do was build accountability around the goals we set. With a focus on one of the main things that rich people do differently – which is not only setting goals but keeping them at the forefront of their daily lives – we wanted to do a six month gut-check (which actually turned into an eight month gut-check) to see how we’re doing with our 2014 goals (read more about our intro post on our 2014 goals here).

    What goals did you set?
    Have you forgotten what they were, or have you accomplished what you set out for?

Here’s how we have fared for the first half of the year:

AJ’s 2014 goals:
Full disclosure, I forgot it was August, so remembering I started this year with goals seems impossible.
- Read 5 specific books. I have read two of the five books I intended to read along with 31 pages of a book I thought would be good for us to read as a couple (Kirby read it in one weekend about 2 months ago, and now I’m a slacker). And I’ve read probably 65 mindless books given my Nook app downloads. I bought the two other books I’m supposed to read in February, so I should probably just get on that.
- Learn to knit. I am resolved to stop making this a resolution. This is never going to happen for me.
-Learn how to bake. I’ve pretty much mastered baking, and I’ve semi-mastered gluten free baking. So long as we pretend those gluten free buttermilk biscuits never happened, this is an overall win.
-Make money money, shake money money. I’m not yet to THE goal, but I’ve made good headway. This might not happen in this calendar year but forest for the trees and all that.
- Just say no to alcohol one week per month. I THINK I’ve done pretty well about this but I’m not going to lie to you, I forgot this was a goal.
- Bring in $100 more per month. Yeah, I’m a money making machine. Check out our other post on how we made money the weird way this last month. Some months have been quite successful for this!
-Maintain my ideal weight. Kirby had a major health scare 8 days into our cleanse, so we never finished that round BUT we’re in our second month of an awesome boot camp so weight has become less of a focus in exchange for strength and overall health, so this one is for sure an A+.
-Create and maintain a garden. I think this is one of my biggest accomplishments this year. I’ve grown an incredible variety of produce that we have loved and shared. I’ve learned a lot – if your brother-in-law accidentally steps on your squash, they never come back from the dead, you can’t physically plant enough green beans to make Kirby happy, potatoes are like rabbits, sometimes you think you’re growing broccoli only to find out it’s been carrots all along, grub worms are sick and snails are suckers for snail poison.

I’m in love with gardening even though I had some failures – my strawberry plants are BEAUTIFUL, but they never produced fruit. I’m still not entirely sure where my jalapeños, sweet peppers, broccoli or tomatoes went, but whatever!

All-in, I think I’m 4 3/4 for 8, which is a-okay by this full-time-job-having, volunteer-focused girl.

KJ’s 2014 goals:
- Read 5 books. I completed reading two books so far: American Gridlock: Why the Right and Left Are Both Wrong – Commonsense 101 Solutions to the Economic Crises and The Five Love Languages. This second book is pretty fascinating. The best takeaway from this is simply a much better understanding of how different people perceive and receive love. We all have different languages, and so long as we understand that, it will go leaps and bounds to keeping open communication lines within your household.
- Professional development. This goal relates to continuing to invest in my own “human capital” (i.e. unique earning potential from the ability and skills used to generate an income). I have completed all of my required Continuing Education this year. I have three more months to go, so not too shabby. Also, I’ve continued to emphasize business development and prospecting within the community as well as finding ways to be the “guinea pig” and learn new technologies at work.
- Maintain my ideal weight. Surprise, surprise, this one has fallen by the wayside other than this last month. With the boot camp we signed up for (going on our second month now), I hope to have this in the bag by the end of the year!
- Double blog readership. Although the year started off strong with a shout-out from a fellow blogger, we had a few months of very slow posting (only two in June!) with too many things on our plate, but we’ve since refocused and we’re back to more regular posts. Just so much to always focus on, am I right!?

OUR combined 2014 goals:
- Work out twice per week. Kirby says: No comment. This one hasn’t quite worked out like we hoped with how busy we’ve been this year, but we have picked this back up in recent weeks, and we’re off to finish 2014 strong! Angela says: I’ve done way better than Kirby. I’ve made it to some Pilates classes, I’ve done the 7 minute workout and I’ve run. But yeah, two times a week is generous on the whole.
- Increase our net worth by 35%. We’re a little over halfway through the year, so that should mean we’re about halfway to this goal – theoretically. Well, we’re still generally on track, but not quite at the halfway mark that we would like to be. Hopefully the last half of the year we’ll be able to hunker down and focus now that we have some significant expenses behind us (read new fence, medical costs, and home finish-out costs to get as close as we can to finishing out our home renovation projects).

    What’s the most challenging resolution you’ve taken on?
    How do you motivate yourself to stick to it?
    Share with us your success (or failure) to stay on track of your goals.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net.

New Year's resolutions: eight month check up is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Ten financial commandments to live by in your 20′s

Old Antique Book
KJ: If you were to create Ten Commandments that would apply to your financial life in your 20′s, what would be on the list? Fortunately, MSN money recently wrote an article on 10 financial commandments for your 20′s that outlined their list of ten items that all Gen Y’ers should abide by. Do any of these resonate with you? Whether you’re in your twenties now (or were at some point), what words of wisdom would you impart on the younger generation of the shoulda-woulda-coulda?

No. 1: Develop a marketable skill
Check! – I would like to say that we have developed some pretty marketable skills. I’m a whiz-kid when it comes to spreadsheets, and Angela is at the forefront when it comes to interpersonal relationships and knowing how to sell [insert product or initiative] just about anything.

No. 2: Establish a budget
Check! – I would say we’re pretty on-board with this one. While the last few months have been a bit of a stretch with some extra items that have come up with our house, we always come back to “how can we pay for this without keeping anything on the credit card”? Sometimes expenses – and income – ebbs and flows, and this past quarter we decided to take the plunge and finally get around to some of the things around the house we had been holding off on for a while (read, finally painted our deck and got some patio furniture!).

Check out our tips on budget basics and building your first budget.

No. 3: Get insured
Check! – I would say we have this one down stat. I’m covered through my work, and Angela has coverage through her work for health insurance. Plus, we’ve got our ducks in a row for homeowner’s, car, life insurance, etc.

No. 4: Make a debt-repayment plan
Check! – None needed on this one. ‘Nuff said. Other than the house, we’re debt free!

No. 5: Build an emergency fund
Check! – Reached our goal for the emergency fund, but we continue to pad it for the next car purchase or big purchase down the line.

No. 6: Start saving for retirement
Check! – Between 401(k)s, Roth IRAs, and HSAs (that we intend to use as supplemental retirement by letting it grow over time instead of spending it today), we’re working toward that goal!

No. 7: Build up your credit history
Check! – With our process of putting all our expenses on a credit card to rack up some nice rewards and then paying it in full each month, coupled with our home loan, we’re on the track we need to be to establish some good long-term credit.

No. 8: Quit the Bank of Mom and Dad
Check! – Fortunately, once we got out of college, we were immediately on our own dime and learned to take care of ourself. We still thoroughly enjoy the “chef de Mom y Dad” when we get to spend time with family for meals, but no loans that we owe to our parents! This was a very high priority and goal for Angela and I as we started our adult lives together. We don’t want to owe anyone anything!

No. 9: Clean up your online presence
Check! – What happens on the internet, stays on the internet. Learn to keep a classy profile and think twice before you post something seemingly benign!

No. 10: Get your key financial documents in order
Check(ish)! We have most of our financial affairs and documents in order. One of our goals for this next quarter is to [finally] get our estate plan and wills in order. Being that I work in the industry, you’d think I would have this down, but we haven’t gotten around to it yet. Otherwise, between downloading our monthly statements from all accounts, reviewing Mint.com regularly, and discussing our quarterly presentation together, I would say the rest of our financial documents are in about as good order as they could be.

    What financial commandments do you live by?
    What would you tell your 20-something self?
    Share with us the rules that guide your life!

Image courtesy of adamr / FreeDigitalPhotos.net.

Ten financial commandments to live by in your 20s is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

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