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What makes you happy?

Smiley face image
KJ: What makes you tick, what makes you happy, what gives you joy? Quite a loaded question I know! Well, let’s take a step back a little from the purely philosophical and look at it from the perspective of personal finance. Finding the things that make you happy can spell financial success for you and your family.

AJ: So often personal finances and any discussion of money can feel overwhelming, but there’s so much happiness in life that money is really just a means to an end and keeping that perspective changes the conversation completely.

So, which of the following make you happy?

What about paying your bills on time. Does that give you warm fuzzies?
Um, absolutely. Being ABLE to pay our bills on time is something I’m endlessly thankful for. Being able to leverage credit card perks to our benefit relies entirely on our ability to pay the bills on time each month in full, so this is a huge source of comfort.

Being in control of your finances.
Sure, this one is a bit of an accomplishment, and I don’t think there’s anyone who feels they are in TOTAL control of their finances. Why else would it be called an emergency fund? You never know when that emergency will come up be it medical, home, job interruption, etc. Find the specific method that helps you stay up on your expenses: good old pen and paper (AJ’s preference is the Moleskine Classic Notebook since you can store receipts in the back, plus it’s a good carrying size), Mint.com, Quicken, Yodlee!, or whatever other app suits your fancy.

Being in control also means that you’re having conversations, you have plans in place and you’re in agreement on how money is earned and spent. Control in our house looks like KJ managing investments and AJ managing variable expenses.

Having no debt.
If it gives you personal satisfaction to pay off debt, then start paying off your smallest debt first. You’ll see the quick progress you’ve been able to make, and then it can give you just that motivation you need to keep paying the same amount until the next card (or debt) is paid off. And so on and so forth. Keep the course, and don’t get frustrated along the way. It’s a process, and it’s something that your future self (and family) will surely thank you for!

Building up your savings? Retirement, emergency, or just because.
Doesn’t it feel great to watch those account balances increase month-over-month? Sure…there are market forces that can cause a temporary pause (or pullback), but watching it quarter over quarter and year over year can be a great way to see the kind of progress that you are making. And, for me, it really motivates me to try and do MORE.

Getting to work early.
Maybe getting to work on time (or early) will help you invest in yourself and earn that next promotion. At the very least it shows your employer that you’re invested in what you’re doing and in your role within the company. Creating a point of differentiation between yourself and your peers is instrumental in helping your boss see your potential.

Getting a pat on the back for a job well done.
Find out what it is that got you that pat on the back. Was it being timely (or early), securing a large client, passing a certification, your communiation skills among your team members (or cross-team)? Whatever it was, repeat to assure you’re doing what you need to at work!

Watching your kid graduate (kindergarten, high school, college).
Sometimes this is a financial commitment, and other times it’s just a matter of the time you spend with your kids to help them learn and teach them.

Giving back in a meaningful way.
For us, the earning money piece is a small piece in what brings us financial happiness. Being able to share what we’ve been blessed enough to earn is very closely tied to our overall happiness and giving back in ways that improve our community ultimately benefits us all.

So, what makes you happy?
If you can reflect on what has brought you enjoyment over the years, then plan your next month around how to make that a priority to replicate that. Help yourself and your family align around the things you all agree are important and fulfilling as a source for discussing finances which is much more fun than talking about cutting costs to stay within budget!

What makes you happy? is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

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New Year’s Resolutions

Happy 2015

AJ: We knew months ago that our resolutions for 2015 would be hugely focused on finances, and we’ve been mentally preparing ourselves for tightening our belts.

KJ: 2015 is a year of refocusing on building up some of our emergency funds and regular savings that 2014 demanded from the various unexpected turns for some of those emergency fund items spent on our home and health.

Such an important part of giving you and your family direction throughout the year is setting good goals that are Specific, Measurable, Attainable, Realistic, and Timely (S.M.A.R.T.), so we wanted to dedicate another post this year to the goals we have set for this year (we’ve spared you some of the nitty gritty of the specificity part though!). Hopefully you’ll be inspired to do just the same!

It doesn’t help to create goals that sound good but that you don’t actually put pen to paper on what you need to do to keep the goal in front of you to actually achieve it. If you say you want to read 12 books a year, then set specific targets of which book (or types of books) you want read at certain milestones, so you can better hold yourself accountable.

Most of the goals for this year aren’t as personal as they are financial. Ultimately, we ended 2014 about where we hoped to be despite some of the financially significant setbacks. The good thing (for what it’s worth) about having a lower net worth, is it’s easier to increase it from a percentage standpoint in the early years – something not likely to be true as we continue to build and grow. I.e. 35% increase on $100,000 is more palatable with setbacks than 35% on $1,000,000. Not so easy to just “trim” your way to get to such a large increase on $1,000,000!

Here are some of the goals we have set for ourselves looking into this next year:

Net worth – More lofty goals here for 2015, but again, the benefit of coming from a lower net worth is that large percentage increases are generally easier to maneuver through. Absent any big market disruptions or large unforeseen expenses to derail the plan, we might just hit it, especially with our major home renovation costs behind us. This means saving more and spending less, easy as pie, right?
Charitable efforts – We are working on creating a specific target for this year (slap on the hand for not having a SPECIFIC goal yet!), and we plan to look more closely in the next month at the time and monetary commitment to see where we can do more than we did in 2014. The important piece for us with regards to charitable efforts is to be realistic. We have demanding jobs and lives, so ensuring we commit to what we can feasibly give of our time is even more challenging than what we give financially. Thus why having a plan is so important!
Continue to maintain a healthy style – This one involves some impact to the budget each month through our boot camp we participate in and gardening costs. Although there are a number of ways to make this expense lower, the boot camp is just what we need in order to keep us motivated and on track. There’s something about not having to think about planning the workout itself, mixing it up for variety, and actually getting some motivation from those around us that makes the boot camp we’ve been doing since July a perfect fit. Other items impacting our healthy lifestyle are eating more vegetables thanks in part to our gardening efforts as we head into our second year of having a garden with fresh arugula, potatoes, green beans, squash, and tomatoes to name just a few. Yumm!
AJ: As the planter of said garden I’m committing to better mapping out what we can realistically plant and grow vs the two acre garden I apparently purchased for this year. I’m not sure how all home gardeners feel, but I spent way more money creating, filling and re-filling my garden than I ever would have had I purchased the same amount of produce from the store, so this year I’ll more accurately plot out my beds and not over buy seeds and plants.

Continue to develop professionally – This is the first year in the last seven that I’m going into without a really solid set of professional goals. Generally, I want to be a better employee and boss, provide value in as many ways as is possible, and I want to let go of some of the daily frustrations that detract from my overall happiness.
Stay the financial course – Shamefully it was I who wanted the house painted top to bottom, I who purchased new bedding, boat loads of plants and seeds and patio furniture to boot! It was my car that needed servicing, my wardrobe that needed mending and my trigger finger that did online shopping. Therefore, it will also be my cross to bear to ensure that we’re on the straight and narrow this year. Some months there were so many transactions I genuinely stopped writing them down – my hand was getting tired! We make an awesome team, but at the end of the day I know that my iron fist-management of our variable expenses is the only way we stay on track, and stay on track we shall.

Read four financial books – I didn’t read all of the books that I planned for 2014, but I met 75% of the goal, so some of those are making an appearance on my list of books to read in 2015. Good thing I had a random inkling to read a book a couple days ago. Great kick off for 2015 – one down!
Complete household projects – This year’s list of things to-do around the house are fortunately not improvement projects that will require some moolah, but I feel that I need some kind of list to actually check off as I go for those little things I’ve been meaning to take care of around the house. Most of the projects will just take an hour or two to complete, so hopefully I can check off all that’s on this list in the first quarter of 2015.
Continue to develop professionally – Through ongoing Continuing Education (CE) requirements, it’s not only required for many of my certifications and groups I am a member of, but it’s something that’s very important to focus on all throughout the year. I finished all of my certification requirements early this year, and I hope to do the same for this next year too. Human capital development, here we come!

We couldn’t wait for a clean start with the new year! 2014 was a doozy to say the least, and we’re looking forward to a more future-focused year.

    So, what are your New Year’s resolutions?
    Let us know what goals you have set for yourself!

Image courtesy of franky242 / Freedigitalphotos.net.

New Year's Resolutions 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.

Year-end financial evaluation

Year-End Financial Evaluation
AJ & KJ: Tis the season where we start to talk about the changes a new year will bring and reflect on everything from the past year. Before moving forward though it’s important to take stock of all the life changes that have occurred that will impact the next phase of our lives.

1. Changes in incomes.
Whether it went up or down, you consolidated into being a single-income household or you won the lottery changes in income top the list for considerations that require an overall financial reevaluation. Perhaps you’re considering a significant career change or a return to education. All of these things are major factors in your financial future. Compare year over year income and spending levels to identify commonalities from which you can begin forecasting the next year’s budget (and savings!).

2. Health changes.
Until you have reason to give pause with regards to your health it’s an out of sight, out of mind variable. This year we both underwent new-to-us medical diagnoses that have impacted our lifestyle and our budget significantly. We’ve added a monthly boot camp and hefty expenses of supplements and vitamins which will change the way we allocate our available funds in 2015.

3. Family status changes.
We’re at that point in our lives where most of our friends are now married or in a committed relationship and have babies on the brain. We’re the very proud aunt and uncle to three munchkins and holiday shopping always reminds me how expensive those little boogers can be. Whether you’re expanding your family, taking care of elderly family members or just planning for the future these can be expensive variables.

4. Change in housing status.
Bought a home? Sold a home? Bought a home and have yet to sell the other home? Thankfully we’re at the end of a year that has seen a lot of home improvements and renovations, so it’s all blue skies and rainbows from here – until a tree falls, a pipe bursts or I find some new Pinterest-inspired monstrosity of a project. It’s hard to plan for the unknown, but build your budget based on what you think you’ll see with regards to housing changes and don’t forget to maintain a healthy emergency fund for all those unknowns.

5. Marriage status.
Congratulations! For better or worse a change to your marriage status impacts more than a few significant pieces of your life and budget. 2 vs 1 is a very different conversation and requires planning! It involves a complete review of your finances from savings to beneficiaries of your accounts and life insurance (just to name a few).

We can’t wait to start our 2015 planning and have several of these considerations to address. The prospect of a new year is always exciting and we’re looking forward to a more successful, healthier, calmer 2015!

Year-end financial evaluation 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.

Look at your past budgets. You may be amazed

Illustration of Information Search Metaphor
KJ: We just went through this exercise, and it was quite interesting. I have used Quicken since the beginning of (my) time with an income, so I have quite a few years of history to be able to reference. I can slice and dice the data lots of different ways if I want to hone in on certain categories or just look at the high level information. What we did was look back to year-by-year spending since 2010 (the year we got married). With a good four-year history of LOTS of changes with moving homes, buying two cars, taking several (great!) trips, and adding in some home renovation costs in recent years, there was a lot to look at! Talk about a lot of one-off items that have come up over this (relatively) short time period! Amazing to look at the total figures that include the items that aren’t really part of a standard budget (well at least not what I would consider a standard budget). I like to call many of these items rotating, non-recurring budget categories. You never really know what will fit into this bucket – sometimes it may be a fun expense like a trip, but other times it may be a not-so-fun expense like a roof repair. Either way, you need to be sure you’re building some extra fluff into your savings to allow for these items that invariably come up.

AJ: Ideally, this is a once-a-month exercise unless you’re experiencing months of rapid change. I love to see the trends in our spending by category and trying to identify what it was that caused significant variances. This year, we’ve exceeded our budget pretty significantly in order to put down roots in a new-to-us home that we plan to enjoy for many, many years. Some years we’ve taken more frequent vacations. Regardless, it’s powerful to be able to look back and track where we’ve been and where we’ve seen the greatest shifts in our spending.

As we look forward towards a more lean, less project-driven year of budgeting, we’ll look to reset specific budget areas to help compensate for our heavy year of spending. Reassessing the budget based on our historical trends helps give us a place to start from and get back to knowing that we’ve been able to work within those budgets previously.

Understand why you save
At times, you’re saving for a very specific purpose, like retirement, children’s education, a planned trip, a car, etc. Other times, you’re simply saving for those unknowns. It’s good to build up some extra buffer as you don’t always know the timing of some expenses. You (generally) have control over some of those larger purchases like a home renovation, but a broken faucet or malfunctioning product may push forward the timeline from what you had imagined.

Our primary budgeting plan for when we have those rotating, non-recurring expenses is to try as best we can to shuffle our month’s budget around to absorb as much of the cost. Then, for whatever we can’t make work in the existing month, we add it as a “recoup” for what our goal is for subsequent months. While it seems like there isn’t an end in sight sometimes, our goal is to really hunker down and chip away at some of this in 2015 now that we’re past a lot of our home renovation projects.

AJ: The hunkering down and chipping away piece is where my monthly tracking notebook becomes especially crucial. Meals are planned more meticulously, excess spending is trimmed and wants are considered more thoughtfully. We know that we all have our tipping points though, so using our past years’ histories helps our expectations stay more realistic which is completely necessary. When I’m on a mission to cut spending things have a tendency to get a bit extreme! :)

    When was the last time you examined your past spending?
    Did you learn anything eye-opening about your habits?
    Share with us what changes you had to make.

Image courtesy of cooldesign / FreeDigitalPhotos.net.

Look at your past budgets. You may be amazed 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.

A billionaire’s perspective on working: a three day work week?…

Calendar Image
AJ: Irrefutable fact: Carlos Slim knows things about making money. His estimated net worth at $83 billion pretty much speaks for itself, and it makes him one of the wealthiest individuals in the world. Carlos Slim has an interesting take on the future of the working people – 3 day work weeks that span 11 hours each up until age 75. In our house we call an 11 hour day a Monday, or a Tuesday, or a Wednesday, take your pick, but 11 hour days aren’t something that gains attention in our household. I couldn’t physically do my job in 3 11-hour workdays currently, but maybe if I had until I was 75 it’d be a whole different story.

Live life at every stage
So what of it? Carlos thinks that life should be lived at every age and at every stage as though you’d earned the beauty of retirement day in and day out. I LOVE the idea of shorter work weeks, but my shorter work week would be 4 12-hour days, not 3 11-hour days, and I’m betting I’d still wind up working some evenings and weekends. I don’t think I’m special or unique, I think that’s just become more the standard of what we’re all accustomed to working in order to get our jobs done. Our generation is waiting longer to start families, is climbing the professional ladder faster than the previous generation and is working in a fully connected universe, so it’s impossible to imagine a world in which we work less than we do today, but maybe Slim’s onto something.

KJ: This is one of the daily conundrums of saving money. How much do you want to sacrifice or withhold consumption today only for some uncertain point in time in the future? Why push yourself so hard today and miss out on all the together time, family time, travel, whatever suits your fancy in the meantime? If there’s one thing we can glean from Carlos’ perspective now it’s that life is about balance – across all ages and stages and to not just continuously push for a brighter future. Relax, and learn to enjoy the scenery along the way!

75 isn’t so old
KJ:Standards of living have continued to rise over the last 30+ years, making the new 75 much more cozy than the previous generation’s life at age 75. And if that’s the case, maybe we won’t have all that much reservation to working to age 75, 80, 85. It all just depends on WHAT we are doing at that point and finding something along the way that we really enjoy that we could see ourselves doing for decades.

AJ: Slim votes for machines and services working 24 hours a day and people enjoying life more and spending more time in training. It’s truly revolutionary thinking and other richy rich people don’t love Carlos for his perspective which is why I find it so interesting.

Fascinatingly, the 5 day, 40 hour work week has only been in existence since 1938. I literally have jewelry that’s older than that. So is it really all that strange to think that we could be in a remarkably different working environment 20 years from now? I would love to see what a difference that kind of thinking would have on the quality of life for future generations.

What would three days of work change for you?
How would that change your overall quality of life?
What would you do with the extra time each week?

Read more about Carlos Slim’s perspectives from CNN Money on his work week thoughts from July 2014, and Carlos’ thoughts on a three day work week from October 2014.

Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net.

A billionaire's perspective on working a three day work week 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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