Wednesday, June 30, 2021

The Budget: The Ultimate Life Design Tool

I've been recently considering the relationship between myself and the mind.  For many years, the mind has been desperately clutching for control, like a new driver grips a steering wheel.  It would yell, scream, and use fear to control my actions, believing that it was keeping me safe from harm.  While I'm grateful, this control-seeking behavior wasn't at all necessary as my inner-self has always been capable of steering this ship I call my life.  I've spent years studying, meditating, practicing, and finally, it seems the mind in me has come to the understanding that it doesn't have to work so hard.  It can relax a bit and know that we're always okay.

Personal finance is generally the mind's game, and I can assure you this mind of mine has been primed.  It has trained endlessly as if preparing for the personal finance Olympics.  I've memorized rules, strategies, account types, theories, orders of operation, and admittedly derive huge pleasure from the act of doing so.  But it seems I've entered a space where the mind is beginning to enjoy sharing responsibilities with my inner-self, and I feel as though it's inviting my inner-self to play with it in the financial arena as well.   One area where I see this coming up is in the budget.  The mind has had the budget on lockdown for a long time, and I am eternally grateful.  This beautiful budget has allowed us to save a full 20% downpayment for a gorgeous piece of New York real estate.  We won't be touching our retirement accounts or emergency savings for it either, and we feel incredibly blessed.  It seems that by the end of summer, we should be in the process of moving.  With the move comes a new budget to sort.  We have ideas about what that will look like already, though I can't help but feel you can't entirely know the details until you've started to experience them.  These milestones and life transitions come with a tremendous opportunity to invite your inner-self to the table.  Certainly, the mind has its goals: pay off the mortgage early, get teacher loan forgiveness sorted, pay off the rental, and it'll certainly get its way.  Achieving financial goals is one form of joy!  But there is more joy to be had in redeveloping a new budget.  

Of course, we'll return to our 50/30/20 Budget and start by plotting our monthly bills into the categories of "fixed" and "flexible" expenses.  Then we'll move on to "goals."  This will involve a bit of a dreaming conversation.  We already contribute heavily to our retirement accounts and will be pensioners, but how quickly do we want to pay off this new mortgage?  How much extra do we need to contribute to the mortgage from day 1 in order to meet that goal?  We will have these same conversations with some of our other major goals.  This is where the mind and the inner-self meet. They're co-pilots.  The inner-self knows my heart, knows my joy.  The mind is my chief strategist and gets to plot possible courses.  They need to become in sync and for couples, both individuals need to also become in sync.  I have to be honest, I'm really excited to have that particular monthly money meeting.  I'm going to create a fabulous spread, and prepare to co-create the life we both want to be living.  After we decide on our goals and understand how much of our income needs to go toward these things each month, we're going to automate them.  This not only makes things easier in terms of items on the monthly to-do list but also energetically.  We won't have to put so much energy into these goals, but rather just address them briefly at our money meeting and move on to the part of the budget that largely goes to designing our lives.  There are a handful of actual bills that go into the flexible spending section of the budget, but its alternate name is "lifestyle spending."  This section is theoretically 30% of your income when using the 50/30/20 Budget and has the opportunity to be your inner being's playground.  What are your values?  What kind of life do you want to design for yourself?  Do you want to take a photography class?  A sip and paint? Learn the guitar?  Study ballet?  Do you want a massage this month?  Take in a play or concert? Do you want to stash a little money for an upcoming vacation?  There are no wrong answers.  Designing your life should be one of the components of a healthy budget.  Your budget isn't supposed to be a restriction. It should be a place where your mind and inner-self conspire to design for you the best life possible in a manner that is sustainable now and in the future.

Honestly, there's also a bit of identity in this.  Sometimes, when you are working toward a goal, and it gets to become a long slog, you can start to feel like your whole identity is wrapped up in a combination of work and the goal.  Sometimes, it's a matter of staying the course for a short period of time until you can check off that goal, and switch gears.  Sometimes, you may want to reevaluate prior to meeting the goal.  We for one, have stayed the course, realizing we were so close to meeting our goal.  I wouldn't change any of that.  Though, in reflection, I can see that I was beginning to feel as though working and saving were absorbing more of my sense of self that I prefer, which I fully intend to shake. Again, it's worth asking "Who am I outside of this goal? Outside of my job? What am I doing to support myself in being that person?  How is my money supporting me in developing my life in the direction of the things I value?"  I have been thinking about these questions for some time and have fairly clear answers.  If your answers are less clear, that's okay.  Give yourself some grace.  But do ask the questions.  You owe it to yourself to step into who you are truly meant to be and live a life of joy in the process.

Join the Newsletter

Subscribe to get our latest content by email.
    We respect your privacy. Unsubscribe at any time.

    Tuesday, June 22, 2021

    Things I want our kids to know (about banking)

    Of the many hats worn by both my partner and me, "teacher" is one that we both wear with pride.  By the time this is published, there will only be a couple of days remaining in our school year, and another cohort of youth will cross the stage with diploma in hand and enter into the realm of adulthood.  Parents and teachers have all done our best to prepare our youth for the world beyond high school.  Many are working summer jobs, and attending college in the fall.  

    This initial stage of adulthood is one of major discovery.  Everything is new.  After I graduated from high school, I moved several states away into an apartment for the very first time and began school part-time (which I did for one year before going full-time).  I really didn't have much concept of paying bills and am lucky that I lived with someone that could provide me with a bit of guidance.  I am also lucky that the job I landed just after that move was in a local credit union.  I really didn't know much about banking at the time.  So, while I learned how to help members, I was also able to learn how to navigate banking for myself.  Had I not started working at the credit union and had the guidance of someone that had experience managing their accounts and bills, I'm certain I would have been completely lost.

    I know that lately, I've been writing a lot about how our mindset impacts our financial lives because I believe that one of the cornerstones of building a healthy financial future lies in developing a positive relationship with money.  The other component is knowledge.  While I believe that mindset is a huge component, there are a few things that we simply need to know.  So with that, there are a few things I want our kids to know (about banking).

    Free is key!  When you go to a bank or credit union and ask to open an account be prepared to bring your ID; you will also need to give your SSN to them.  Make sure you ask for the "free checking" account.  Oftentimes, banks and credit unions have a free version of the checking account and a version that has a monthly fee involved.  You want the free one when you are just starting out.  

    Minimum Balance Requirement:  When you open a checking or savings account, find out if there is a minimum balance requirement.  Ideally, you want the one that doesn't have this.  But if there is a minimum balance requirement, how much is it?  Are you required to keep $100 in the checking or savings?  Is it more?  What happens if you drop below that?  Will you be assessed a fee?  If so, how much is that fee?  Is that fee waived if you set up direct deposit to go into the account?

    Direct Deposit:  Ask the person at the bank or credit union for the information for direct deposit.  Use this information to set up a direct deposit with your employer.  This means that on payday, your pay automatically goes into your account without you needed to collect a physical check and go to the bank or credit union.  Warning:  Be very careful with the direct deposit information.  The same information that you will use to automatically put money into your account, can be used by someone to automatically take money out of your account. If this information falls into the wrong hands, you could have issues.  By no means should you be overly paranoid about this, but you should be aware of the need to safeguard this information.

    Automatic Savings Transfer:  Consider setting your account up to automatically transfer a little money into your savings account every single payday.  Be consistent.  It is important that you build up a savings account so that you have money in case of an emergency.  Set a goal for this!  Aim first to build your savings to $500, then $1000.  Emergencies happen!  Take action to protect yourself.

    NSF Fees:  NSF stands for "nonsufficient funds."  This means that you tried to spend money using your debit card or a check but there wasn't enough money in the account for it.  If you do this, the bank or credit union will charge you hefty fees each and every time you do it.  Oftentimes these fees are near $40 EACH!  You seriously don't need to be buying yourself a $42 soda!

    Online Banking/Mobile Banking:  This should be a free service.  Get set up for it and have them show you how to use it.  Put the app on your phone, that way if you are about to make a purchase you can log in very quickly and make sure the money is there so you can avoid an NSF fee.  This can also allow you to transfer money to and from savings.  Let me repeat myself:  Get the APP!

    Overdraft Protection:  The bank or credit union can help you protect yourself from NSF fees by setting you up with overdraft protection.  What does this mean?  If there's only $10 left in your account, and you spend $20, the bank can set it up so that your account will automatically transfer the difference from your savings if it's there.  Additionally, find out what the fee is each time you use overdraft protection.  It's usually around $5 each time, which adds up!  If you use the mobile app or online banking to make the transfer yourself it should be free.  So, that's the best choice.  However, a $5 fee for overdraft protection is way cheaper than a $37 NSF fee!

    Listen, there's plenty more to know and these are just the highlights, but you can do this.  This is your future.  Take it upon yourself to become educated about your money while you're young.  I promise you, it's a choice you won't regret.

    To my regular readers: I know this was a different sort of post for me.  As graduation season is upon us, I've had the opportunity to reflect and kept feeling as though there were a few things I wanted our kids to know (about banking).  If any of you are parents or educators and would like to hear a few more things I'd like our kids to know about, let me know in the comments.

    Join the Newsletter

    Subscribe to get our latest content by email.
      We respect your privacy. Unsubscribe at any time.

      Tuesday, June 15, 2021

      The Universal Law of Compensation

      I have a journal where I keep a list of Universal Laws and notes regarding each of them, and the wisdom I've gained from them over the course of time.  I open this journal frequently and review these notes as if by sheer repetition the wisdom will permeate my being.  The funny thing about that repetition is that it works.  Those devoted to their religions read their scriptures often.  Likewise, I pour over universal wisdom almost daily to ensure my walk is colored with knowing.  When you have a practice such as this, it's interesting how your eyes will happen upon certain passages and it's as if they extend their hands off the page in order to touch you with their message.  Some passages that are tried and true receive your attention regularly, while some less flashy gems hover quietly in the background.  They're accustomed to being passed by, but occasionally they emerge with something rather important to share.

      The Universal Law of Compensation has recently been on my mind.  It suggests that in manifestation, all that is delivered back to us is the direct result of our previous thoughts and actions.  In other words, we will be compensated according to our thought and actions.  Doesn't that make you want to curate your thoughts and actions more deliberately?

      Almost fifteen years ago, when I met my partner, we were both experiencing this universal truth in full swing albeit in opposing directions where money was concerned.  I was living bi-coastally, on income that flowed to me through cobbled-together sources.  I had a stable apartment in Brooklyn, which I would sublet while gone to the West Coast, but while in Portland, I primarily hopped from place to place, staying with whichever friends had space at the time.  I remembered thinking that I didn't need the guise of stability from one particular source because I "knew everything  would fall into place." As a direct result, opportunities flowed into my experience.  I always had enough: enough work, enough income, enough lodging, enough food; my bills were always paid on time, and I woke up each day to a life designed by me where I could choose exactly what I wanted to do with it.  Now, to dig a bit further into the relationship between this universal truth and the practicality in which this played out for me, it's important to connect my thoughts with my actions.  I continually thought that "everything would fall into place," and had prepared myself mentally for opportunities to present themselves.  I was prepared to say "yes" to the unexpected.  I was producing theatre at the time but otherwise had very little in terms of time obligations.  When friends learned of my adventure, two of them presented me with some opportunities.  One friend had become the manager of a local gift shop and offered me a position.  
      Another friend, a brilliant computer programmer, was working a full-time job and an additional contract position that was demanding a ton of his schedule.  He had oodles of money coming in and loved his work.  Unfortunately, he was struggling to get things done on the home front.  He needed his dog walked, papers files, groceries purchased, healthy meals available to him. He offered me a flexible schedule and a guaranteed number of hours per week if I would just take care of these things for him.  He also offered free rehearsal space to my theatre company. These weren't the "kinds of jobs" I would necessarily look for, but I "knew everything would work out" for me, and was 100% open to what the universe had to offer.  When the universe offered the solution, I took action.  My thoughts and actions combined to deliver a positive result back to me.  This is the Universal Law of Compensation in action.

      During this same time frame, my partner was in the beginning stages of her own transformation.  She had just rented a house for the first time entirely on her own.  While she was excited, she was also fearful of the financial responsibility that accompanied this increased level of independence.  As we all know, fear is resistance.  Fear of financial responsibility equals resistance to financial responsibility.  Resistance to financial responsibility is resistance to money. You cannot have more of that which you resist!  This resistance would come out in ways that seem so small, you'd almost guess them to be inconsequential.  She had resistance to opening her bills, didn't want to check her online banking or bank statements.  She didn't want to discuss money.  She felt that budgets were restricting her spending rather than permitting it, therefore she didn't make any real effort to utilize a budget.  These seemingly mundane actions are the direct result of one powerful little thought "I don't want to deal with my money."  How many of you have either thought that way or know someone that does?  This might come out as variations such as "I don't care about money" or "Money isn't important to me," or even "I really don't like handling the finances."  We shrug our shoulders when people in our lives make these comments; their relationship with money is their business, right?  What we might not entirely be realizing is that these thoughts are hurting them.  Now, let's follow a thought experiment for a moment.  Let's replace the word "money" in those thoughts with "babies."  We now have thoughts like "I really don't want to deal with my baby" and "I don't care about babies."  There's also "The baby isn't important to me," and "I really don't like handling the baby."  Just reading those lines felt gross, didn't it?  It felt pretty bad typing them.   If you heard someone saying any of those things, wouldn't you think they needed some serious help?  I would!  I would also literally never let them babysit any child ever; nor would I be comfortable with them having children.  If someone is saying that about their money, they also need help.  Their relationship with money is damaged, and the result of that isn't good at all.  For my partner, the desire to "not deal with" her finances resulted in late fees on bills, NSF fees, low credit score, zero savings, and a life of constantly putting out financial fires for failure to plan.  It's no surprise really.  The things we manifest are the direct result of our thoughts and actions.  She thought that she didn't want to deal with her money; her actions were to largely ignore the bulk of the interactions with her money.  Let's not forget, inaction is an action.  The results that were delivered to her were problematic.  People that "don't want to deal with babies" aren't typically asked to babysit.  Likewise, if the message you're sending is that you "don't want to deal with finances," the universe is going to respond accordingly by withholding financial abundance from your experience.

      So, if you're like my partner used to be, how do you change?  Some of these thoughts come from some deeply held beliefs and aren't that easy to change.  Well, sometimes it's easier to start with some actions.  Sometimes, taking small actions in the direction of that which we want can help us to reset our mindset.  With my partner, it started small.  She opened herself up to discussions about money, even if it was foreign and uncomfortable at first.  She opened a new checking and savings account to start fresh and utilize the opportunity to build new habits.  She learned how to use online banking and put the app on her phone so that she could look at the balance before making a purchase if she was unsure about its status.  These actions were a little uncomfortable at first because she was working through resistance; those changes are never easy.  The result was that her mindset began to shift.  She no longer felt like she didn't want to deal with her money. Rather, she gained confidence in doing so.  Handling her finances began to feel lighter for her, and she began to realize that by treating her money with the respect it deserved, it could help her create the life she desired.  As she began to be able to build savings, pay for a car repair without worry, cash flow a vacation, her relationship with money leveled up again.  She moved from "I don't mind dealing with my money" to "I like being in control of my finances." This significantly more powerful place has resulted in an excellent credit score, being approved for a mortgage, cash-flowing vacations, having an emergency savings, and funding retirement.   It's also resulted in a tremendous increase in income opportunities.  

      We have ever-evolving relationships with money, as we are constantly in the process of expansion ourselves.  In the world of personal finance, we often discuss the building blocks of financial security as being: reduce expenses, live below your means, save the excess, eliminate debt.  While important, more attention should be paid to the foundational elements of personal finance which includes habits of both a mindset and emotional nature, as both need to be in place before we can even begin to fathom building those more tangible, monetary ones. In returning to those mental and emotional fundamentals, we should start with considering the Universal Law of Compensation because our results with money are directly influenced by the relationship between our thoughts and actions. 

      Join the Newsletter

      Subscribe to get our latest content by email.
        We respect your privacy. Unsubscribe at any time.