Is the First Week In December the Ideal Couples Getaway Time?
I have friends who are jetting out of Decatur and heading to the beach. The first week of December.
Jenn and I have friends who are jetting out of Decatur and heading to the beach. The first week of December. I mean the family just left a few days ago from Thanksgiving celebrations., right? The house is finally cleaned after the melee. The holiday decorations are out, the tree is in the stand, the Elf on the shelf rules the mornings.
There are receipts to collect from day care and doctors offices. There are last minute projects at the house/office that need to be completed before the end of the year. The car needs to be serviced and needs new tires. Leaves!! So much raking needs to be done.
And they are going to the beach …
Brilliant!! I am glad to be surrounded by friends smarter than I.
Let me count the ways this actually makes sense:
The grandparents are in town, they can watch the kids
Thanksgiving can be stressful, its time for a quick pressure release
Christmas is right around the corner and can be stressful
It just turned cold, and a bit of sun and warmth is a good reminder of fun times to come
It is a good forcing function to get some family chores done
It has been a long year, and we have not had as much couples time as planned
It is a great time to evaluate the year
It is a great time to plan out the coming month
Everybody else just completed their travel, so it is not crowded or super expensive
The best books of the year lists are out … now you have some time to read one
This type of trip did not get factored into our yearly vacation budget. And next year’s is going to be pretty depleted after trips to New Orleans for Mardi Gras and Kenya in the summer.
But maybe Jenn and I need to discuss this for next year … what do we need to sacrifice to make this happen?
If only we had a few days at the beach to discuss at our leisure…
Budgeting Part 3 of 3: The Squeeze
Learn the most efficient way to monitor, analyze and squeeze your spending so you can grow your wealth.
BUDGETING 101: for people who hate budgeting PART 3/3:
In Budgeting Part 1: Do you need a budget, you decided you were jumping on the bandwagon, getting your act together, and starting to budget like an adult. Then in Budgeting Part 2: How to start a budget, you learned, by limiting the amount of money in your spending account, and prioritizing your goals. But now, you can’t seem to make ends meet, and you just are not sure where all of that discretionary money goes.
Your Next Steps
Recognize why you are budgeting.
Your goals are important and you need to be intentional if you want to achieve them.
This budgeting system works If you put in the work and sacrifice.
There’s no way around it: progress requires efforts outside our comfort zones. But you can do it. The key to being successful with budgeting is being clear on your priorities and making progress towards your short-term goals to keep you motivated. Without a budget, we spend money without intention. Twenty dollars here, eating out often, buying whatever strikes our fancy… robs you of your goals.
Budgeting Tools
You need some visibility into your spending, so that you can understand where you cash is going. The best way to do this is with technology. There are lots of tools available. Don’t get too caught up on the decision, there are pros and cons to them all. Check them out quickly, and pick one. The only way to determine if you will really like it is to try it for a month or two.
What do I use? Tiller.
Tiller offers a free 30 day trial and then it is $59/year.
Setting yourself up for success
After selecting your tool, be prepared to spend some time getting things set up. This is where the work comes in. If things go well, it will take an hour, but it could take as long as 3 to get things “just so”. You will need to link up your spending accounts. And then set up categories, to assign to expenditures, that suit you. Typically there will be a set of standard categories, but if they do not all speak to you, create your own. And delete those that you will not need. After you have the accounts linked, and the categories make sense, go take a break. Great job! You are super close.
Then spend 2-4 hours, and categorize the last month or 2 worth of expenses. Get everything categorized. You will need to be thoughtful of the categories otherwise, you’ll have a Goldilocks problem: If you have too many categories, it will be hard to see major trends in the data. And if you have too few categories, it will be hard to see trends in the data.
analyze your spending trends
Once you are satisfied with the data and categories, it is time to start analyzing the data. Are there obvious areas that you are spending too much on? Typically a nice starting point is on:
Eating out
Groceries
Entertainment
Credit cards
Toys
Technology
slowly squeeze your spending
Once you see a category that seems out of whack, or takes too high a % of the your overall discretionary spending, give yourself a goal. Start by limiting that category to 90% of last months bill.
Eg: you spent $1000 last month on eating out. That constitutes 20% of your discretionary budget and is also equal to the amount you spend on groceries! Start your next month will a goal of $900 ( $225/week).
Repeat that process for each major category that “needs some attention”. Also, shoot for a total goal for how much you need to trim? Perhaps your overall goal is to trim $500. Take off $100 from 5 categories, and you are there.
monitor your progress
The last step is monitoring. Block out a dedicated time each week 15 - 30 minutes, where you spend the time categorizing everything. If you set up the time to create the best categories for your spending, then this will be automated and just require a few adjustments. Each month it would get easier and take less time.
Then acknowledge where you are for the month. If you are over: tighten your belt for the following weeks. If you are on track … Great job.
If you survived the first month, but have not yet reached your savings goal, DON’T FRET!!! You are doing great. Just trim more in categories that are out of whack.
Continue to squeeze until your goals are allocated, and your spending is “under control”. With a little work, some dedication and grit, you will get there. You should start to see good results by month 3 or 4.
Q. IS THERE A PARTICULAR TIME BEST SUITED FOR THE WEEKLY WORK?
A. I suggest some time in the morning, when you are fresh. A perfect time is over coffee on Sunday morning. You also want to allocate your weekly discretionary money on Monday, not Friday.
Q. I AM HAVING TROUBLE SITTING DOWN AND DOING THE WEEKLY WORK. SUGGESTIONS?
A. An accountability partner is always a good idea. Let a friend, mentor, family member know that you are working on this. And you need to have your partner involved in the results. It takes both partners to succeed at this.
Q. By SATURDAY, I’m LOW ON DISCRETIONARY MONEY, And … MY FRIENDS ARE GOING OUT, I DON’T FEEL LIKE MAKING DINNER and I want to go shopping!
A. Yup, budgeting is about prioritizing, which means you will have to sacrifice some. Stop trying to keep up with the Jones’!!
Q. I HAVE BUDGETED DOWN TO THE NUB, AND NOW I HATE MY LIFE BECAUSE I CAN’T HAVE ANY FUN.
A. This is not what you want to happen, because it ultimately leads to you falling off the wagon. You have several options:
1. Get rid of some of your expensive bills, like a brand new German car. Maybe cutting the cord on your cable bill, will help.
2. Cut out some of your monthly subscription services for entertainment (apple music, Netflix, Spotify, Audible, the gym you never use, etc).
3. Is your home too expensive?
4. Were you too fast or ambitious with your expense squeeze?
Need to review? or IN case you missed Them, parts 1 and 2:
Budgeting Part 2 of 3: How To Start Budgeting
The sooner you can get started, and make progress, the more likely you are to stick to it and succeed. So, let’s do this!
BUDGETING 101: for people who hate budgeting PART 2/3:
How to get started
Congratulations! You’ve realized you need a budget. That is the first step towards being in control of your finances, and half of the battle! The next step is getting started with a budget. The sooner you can get started, and make progress, the more likely you are to stick to it and succeed. So, let’s do this!
The majority of the advice out there approaches budgeting with expenses and tools. I have a different approach: First, take a breath. Innnnnn and ouuuut. Then, we begin with your income.
The easiest way to stay in control of your budget is to never have money show up in your “spending” account. Having a big chunk of money in your account is too tempting. Right after you get paid, it’s natural to think, “I work I hard, I deserve _________.”
fund your goals
with automatic payroll deductions
401k - start with 5% of income or max out a company match. For every $100k, that is $208/paycheck. You wont miss it, but over a career, your future self will be pleased.
Health Savings Account - look at last year’s out of pocket spending, set it there.
Dependent care savings plan - what is your kids’ day/after care expenses? You are already spending it!!
set it and forget it
Don’t be average:
The average American has 3.1 credit cards with an overall outstanding balance of $6,354.
Credit Card Usage and Statistics 2019
set yourself up for success with online bill pay
Ok, so you funded some of your goals, but now your paycheck is in your account, and you are feeling flush! Set yourself up for budgeting success by going to your online bill pay and setting up automatic payments immediately after every paycheck .
Schedule automatic monthly payments for:
If you are self employed
Set up a SEP IRA and have money automatically contributed to your SEP IRA account.
Your non-discretionary bills immediately and make it a set amount each month.
We pay GA Power $200 every month. During the winter we build up a nice cash reserve, during the summer we spend it down. The opposite happens with the gas bill. I also like to round up to the nearest hundred on my mortgage, with the extra going to principal.Pay off your damned credit cards! Start with the one with the smallest payoff and allocate all but the minimum amounts for the others.
Transfer money into a savings account for a rainy day fund.
Fund your short term goals: Transfer money into a vacation savings — or other short-term goal like a new car or house renovation project.
IRA or a brokerage account and the kids 529’s - if you are doing nothing, make it $100. Increment in. As you get comfortable, increase it.
“The goal here is to fund your goals, and never even think about the money “leaving” your account, because it never really “enters” your account.”
Don’t EVER give your bank account info to a company to take out auto payments.
You need to control the movement of your money.
Discretionary Spending
Take a moment to recognize the work you’ve done: You set up automatic payments for your non-discretionary bills AND your goals are being taken care of. That is a huge step. Nice work! What will remain in your account, is THE ONLY CASH you have left to spend on discretionary items. That means, you make a promise to yourself: NO CREDIT CARDS when you run out of money at the end of the month.
Advice on credit cards
Credit cards are bad. This is worth repeating: NO CREDIT CARDS. That means, you make a promise to yourself:
DEAR SELF:
NO, I MEAN NONE , NOTHING, NADA GOES ONTO A CREDIT CARD, not even to earn miles for the trip I’m not going to take in the indeterminent future. And if I do take the trip, it will likely be during a blackout dates and I won’t be able to use those elusive “rewards” anyway.
Yours Truly, (really I’m yours… am I getting too meta?)
Me.
Budgeting FAQs
q. I get paid twice a month, I can’t afford to pay all of my bills at once! How will i be able to afford to eat or live reasonably until my second pay check?
or
q. My bills are spread throughout the entire month how do I manage not getting late fees?
A. Both of these questions have the same answer: Spread your non-discretionary bills across your two paychecks. What that may mean is, the majority of your bill paying in your first pay check, goes to the mortgage (and maybe a few utility bills). Leave yourself enough left over, so that you can buy gas and groceries until the next paycheck. On your next paycheck, finish off the utilities and your savings for goals. Leave just enough for your discretionary spending, to make it to your next paycheck.
q. what if one of my big utility bills (e.g. my car loan), needs to wait until the second paycheck, but is due on the 8th of the month, and will thus be late?
A. Most of the time, if you are up to date on your bills, a company can work with you to change the due date, give them a call. If they won’t, make a minimum payment on your first paycheck, and then finish the payment on the second paycheck.
q. Why autopay the same amount each month?
You want to set up your payments on autopay, and don’t want to wait on the bill.
You don’t want to worry about any accidental underpayments.
Over the course of the year, the payments will average out.
Q. Josh, by the end of the month, I either don’t have any money left over, or worse, I am spending on my credit card to make ends meet!! This method sucks, what gives?!
A. Good question… the answer to this is in Budgeting Part 3
Not sure if a budget is for you? Take my free assessment:
Do You Need A Budget? Take Josh's 13 Question Assessment To Find Out
Check out Josh’s checklist to see if you should be using a budget
BUDGETING 101: for people who hate budgeting PART 1/ 3
When working with my clients, the first thing I have them do is forget about money and DREAM BIG! I know it sounds weird but stay with me for a moment. Next, we take those dreams and organize them into short/mid/long term goals. Then money and finances comes in. My approach to personal finance is that your money should fund your dreams and goals. And the way we do that is through… BUDGETING.
Do you really need to budget?
Yes.
Don’t believe me? If you answer yes to any/all/many of these, keep reading.
Is your income bucket dry at the end of the month?
Do you use credit cards to fund your lifestyle?
Are you lacking in long term savings for retirement?
Would you like to go on more vacations?
Do you ever fight or stress about money?
At the end of the month do you wonder where all your money went?
Will your kids need to take out loans to go to college?
If you needed a new roof on your rental place (I do!), you would need to pay for it with credit cards or loans
Does your retirement plan include working forever?
If you answer False to any of these, you need a budget.
You have 3-6 months of your typical household spending saved and earmarked for emergency funds.
You know your monthly household expenditures.
You mapped out your short, mid and long term goals and are actively working towards reaching those goals.
You know how much you need to retire and have a target date when you will likely reach that number.
Why are you NOT budgeting now?
Now that you understand, you should be budgeting, let’s address why you aren’t already doing it.
You make too much money, and have plenty at the end of the month
It sucks the life out of you
You tried it and quit
It takes too much time and its boring
The tools for budgeting stink
It causes fights at home
It’s too much work and nobody wants to take the responsibility for driving the conversation
You are slowly but surely reaching our goals without one
You’ve tried it before and failed. You just can’t stand to have to fail at it again
That’s just a few reasons (or excuses) I’ve heard over the years. I get it. Budgets aren’t exciting. But it’s a key component to reaching your goals. And goals are exciting. For example budgeting could fund a fabulous vacation all paid for upfront.
From my experience, 99.9% of people would benefit from a budget. Even those of you with plenty of cash at the end of the month!! Hello, retiring*** at 54 instead of 56! Hello buying the turbo instead of just the V6!! Hello, philanthropy.
The Importance of a Budget
watch this short 50 sec Video to see why you need a budget.
Thanks to my wife for sketching out this visual.
Income filling a bucket at the top of the process.
Out of the income bucket are a set of spigots, that are used to fill expense buckets, first and then goal buckets next.
The key is to control your expense spigots so you can fund your goals.
Non-Discretionary Expenses
The biggest monthly expense for most is housing: a mortgage or rent payment. Followed up by a standard set of non-discretionary items: gas, electric, cell phone, internet, insurance, car, student loans, etc.
Discretionary Expenses
Then you have discretionary buckets: groceries, gas, eating out, beers and clothing. This is where a budget is key in getting a handle of your discretionary expenses. Watch out little expenses add up fast…ahem, eating out.
Your goals
After you deal with your general monthly expenditures, you are left with the excess to allocate to your savings for goals like: buying a house, buying a new car, going on a vacation, saving for kids to go to school and retiring. Typically, the savings buckets are filled with little drips from spigots, if there is any excess at all. Sometimes, your top bucket is empty at the end of the month, and you end up needing a credit card to fill some of your expense buckets.
Next: How to get Started
it’s easier than you think
Josh's Car Buying Process
Next to purchasing a home, buying a car is one of the biggest personal financial decisions you will make. I am incredibly calculated when it comes to car buying and want to share the process I go through:
Choose a car that holds its value and has low maintenance and insurance costs.
My family is in the market for a new SUV. Our 2008 R300 Mercedes Benz has done an admirable job for our family: It is AWD, has a third row, is super comfy and is an absolute beast on the highway. However, it has reached my standard goal for a car of 160k miles and 10 years old. Combined with the fact that expensive things are starting to need to be repaired… its time we move on.
Next to purchasing a home, buying a car is one of the biggest personal financial decisions you will make. Given that, I am incredibly calculated when it comes to car buying and want to share the process I go through:
Josh’s Financially Sound Car Buying Process
1. Trade In or Sell Your Existing Car
I will list it on Autotrader or Craigslist, and let it continue to live on with a new family. I can’t let myself be ripped off by a dealership. And it is too old to sell to Carmax.
2. Set A Budget
You need to have a firm budget with a clear understanding of how much you can comfortably afford. A car is not worth the financial strain of sleepless nights over high payments. Decide how much you can spend on a car and how you’re going to pay for it. We determined our budget for this car purchase is $40,000.
3. Define Your Car Requirements
Here are our requirements:
AWD for family safety
Either Japanese or American badge, for value, ease of repair, supply
Not a European badge, because TCO is generally higher, with a higher starting cost. ( We already have one European car in the family.)
A car that is 1-3 years old, so that I do not pay the new car premium
A car that has 20-30k miles, enough miles to have not been ridden too hard, but new car kinks have been worked out
A model not in its first year of design and function has been iterated and cost efficiencies have been achieved
A 3rd row for carpools. Our sanity hinges on carpools.
Looks good and has a positive image. While we are not totally trying to keep up with the Jones’, we do like nice things.
4. Car Prospects
Once we decided our requirements, I put together my initial list of cars: Ford Explorer, Lincoln Navigator, GMC Yukon/Chevy Tahoe, Toyota Land Cruiser/Lexus, Toyota Highlander, Honda Pilot, Acura MDX, Nissan Armada, Infinti QX60 and Subaru Ascent. Then, as Jenn and I drove around, I would point out cars, and gauge her reaction:
The full size SUVs were too big for Jenn. That killed the Navigator, Yukon/Tahoe, and Armada.
The Explorer got nixed for emotional reasons, that are too deep seated for me to understand (husbands, I advise sometimes, just don’t ask questions).
The Land Cruiser is a family favorite, but too expensive.
This left us with a more manageable set of prospects: Highlander, Pilot, MDX and Ascent. Each of these, has a different set of positives:
In a dealership, be ready for the finance manager to pitch you additional products and services.
Highlander: looks good, comfy, AWD, hybrid for good mileage, indie shop in the hood.
Pilot: good size, good quality … it’s a Honda!!
MDX: looks great, good quality, potentially expensive … it’s a high end Honda!!
Ascent: we have had Subaru’s in the past and love them for ruggedness, quality, value and local shop access — but it is in it’s first year.
5. Buy Or Lease
For our family, given that we buy and hold, we don’t have to debate the lease/buy equation. Leasing just doesn’t make sense.
6. Research
So with all of these variables, in play, here is the remaining process:
We need to test drive the cars.
Josh to explore used car prices via autotrader/ebay SOLD prices
Talk to local indie shops to determine any “gotchas”
Check short term loan options, because we will likely need to borrow $10-15k
We normally take our time on the car buying process, so this will likely play out over the course of the next few months. But taking into account all of the variables allows us to hone in on the best option for our family. And it keeps us from making an emotional purchase at the local dealership when they start throwing incentives at us.
7. Close The Deal
Get a pre-purchase-inspection (ppi) at your local/friendly indie car shop, on any car sold by an individual. If they have the service records, comb through them. If they don’t have the records, that is a red flag!! Check the carfax to make sure it hasnt been wrecked or in a flood. Before taking ownership of the car, you should add it to your insurance policy. Then, you only need to pay for the car, if buying a used car, usually with cash or a cashier’s check. Make sure you get a title and have the seller sign it correctly. When in doubt, check the state’s registry website for more information. Most states allow about 10 days to register the car in your name.
Do you need help determining your car budget, the right type of car for your family, options for buying or selling a car, lease or buy equations, total cost of ownership? Let’s sit down and chat about it.
"Tidying Up" Your Financial House
After watching Tidying Up with Marie Kondo, I could not help but see the parallels in what Marie and I do with families. I start with a philosophy: we should be living our best lives today in the short/mid/long term, and then work through a set of milestones.
Jenn and I spent last night watching Netflix’s phenomenal, “Tidying Up with Marie Kondo”. We were fascinated, and a bit inspired by it. She takes the mundane task of creating a tidy home, and turns it into an experience where a couple grows closer together, by creating peace where there once was chaos. The process has a profound experience on the couples she works with.
Marie, has a philosophical frame work, Konmari, that she has translated into a specific set of milestones:
Clothes
Books
Papers
Komono (Misc items)
Sentimental items
After watching a couple of episodes, Jenn and I spent a few minutes, sorting through my vast “treasure trove” of books. Anything that did not “spark joy” in us, was sold or donated this morning to our local used book seller. Not only was it liberating to get rid of some junk, but Jenn and I worked together through the process, and connected with some old books that sparked a conversation … and we got 25 bucks!! for the old books. Overall it was a fun experience.
Much like Bruce Willis and the young boy in “The Sixth Sense”, that said “I see dead people,” I see finances everywhere. I could not help but see the parallels in what Marie and I do with families. I start with a philosophy: we should be living our best lives in the short/mid/long term, and then work through a set of milestones:
Create an emergency fund, get your down side covered with insurance
Maximize your earning and get your budget under control
Funnel money into accounts that fund your long term goals
Funnel money into trips/things/charity that suit your short term goals
Take care of your friends and family, with wills, 529s and care for your parents
Getting your personal finances in order seems like an overwhelming and impossible chore to many people — just like tidying your home — but when you dig in, you’ll find that it’s not as hard as it seems. You just need a financial planner to coach you along the way to “tidy up” your finances. As a result, you and your spouse will grow closer by removing the financial concerns and fears prohibiting you from reaching peace and sparking joy.
Are you ready to work with your partner on a profound experience? How can we spend some time getting your finances organized?
The Key To Keeping Your New Year's Resolution
So You Made a New Years Resolution? Did You Include This?
After 1 month
45% of resolvers have given up.
Roughly 40% of Americans made a New Year’s Resolution on January 1st. And for good reason. We thrive as a society, because we constantly work to improve ourselves. The most common resolutions are around:
Weight loss/working out
Finance: Better money management and debt reduction
Stopping Bad habits: drinking/smoking
after 6 months
65% of resolvers have given up.
Here’s a common Resolution many of us can relate to
You are busy with work and family, booked from dawn to dusk. When you get home from work, its late, and you are tired, so you go out or order take out for dinner. It becomes a habit. As result, both your budget and weight become a concern. So you make a New Years resolution to make dinner 3 days a week. Its a good goal!
What’s Missing from this goal
What’s missing from this goal, is “how” are you going to go about it. If you want to add something to your busy schedule you have to remove something else. It’s why many people don’t stick to their resolution. They resolve to do something, without resolving NOT to do something else.
There’s a reason in this scenario that you started ordering out. You were too tired to cook. So you have to free up time so you get home earlier 3 days a week and aren’t too tired to cook dinner or plan a way to prepare dinner before you walk in the door tired and hungry.
My Recommended Resolution: Budgeting
If you are open to a resolution, I highly recommend budgeting: create and stick to a budget. If you and your family want financial security, following a budget is the answer. I assure you, it is going to take some time. Whether you use an app on your phone and check in each morning over coffee, or if you do a weekly audit on Sunday mornings before church, using a sophisticated tool … you will need to add the time to your schedule. There is no way to “carve out” extra time, you must decide to STOP doing something else, so that you can spend time budgeting. So, ask yourself, if you are resolving to make and stick to a budget … what are you giving up, so that you can spend time on something more valuable?
Want to be in the successful 35% that keep their resolution?
Are you busy and need someone to help you with your finances? Contact me whether you need a realistic budget, a financial plan, help getting out of debt or a financial advisor that you can trust to manage your investment portfolio and keep you informed and in control, I can help you.