What to Do When You Just Can’t Wait

Waiting is never fun. Especially for something you really, really want. Right now, I’m waiting to save up enough money to quit my job. I have this whole vision of exactly what I want to do when I quit- I’m going to work on this blog and my coaching business, I’ll have time to sleep and work out, and I’ll get to spend more time with my friends and family. It’s going to be so amazing- once it happens, that is.

And I’ve got a ways to go before it does. We’ve all had to wait for long term dreams to come true- getting married, graduating college, reaching financial freedom, leaving a boring job. The more we think about it, the more we want it to happen RIGHT NOW.

But there’s a better way to wait. One that actually will make time pass faster. And that’s to enjoy where you are right now.

It may seem counterproductive, but I promise you it works. Here’s how you can start enjoying your current situation.

What are you looking forward to feeling once you reach your goal?

Let’s use reaching financial freedom as an example. What kinds of things are you looking forward to doing? How will it make you feel?

You may be looking forward to traveling, sleeping in, or getting to spend more time with your kids. You are sure that as soon as you reach your goal, you will feel free, successful, and energetic.

What if you could feel that way now?

Why wait to feel free, successful, and energetic? Why wait to get all those benefits? Sure, you may not be able to take a six month trek through Asia, but you can take a day trip to a nearby state park. Start choosing those benefits as your priorities right now. Choose spending an extra hour with your kids over staying late to finish that report at work.

hike wait

hike by prodigy130, on Flickr

Ask yourself how you can feel more free (or whatever you want to feel). Freedom is a big one for me- I would love the ability to structure my day however I want. But there are ways that I can add more freedom into my life without waiting six months. I can take advantage of the flexibility I do have at my current job, including flexible hours and work from home. I can take regular vacations (staycations are great when saving money is your priority) and stop checking email at night so I can avoid burnout.

Freedom and other feelings are also a state of mind. You can choose to complain about your current situation and focus on all the ways you don’t have freedom in your job. Or, you can embrace the small freedoms you do have and take advantage of them. Take 5 minutes and brainstorm all the freedom you do have, as well as some ways you can introduce more into your life. For example, after looking at the freedoms I have above, my situation seems pretty good, doesn’t it?

Enjoy the Journey

Of course, you will still look forward to the final goal. It’s important to you, and it will still be exciting to reach the end! Using this approach, though, you don’t have to suffer during the wait. The entire process will be enjoyable. You also don’t have that let down once you reach your goal and realize that you don’t know how to enjoy your freedom or your energy- you will get a chance to work through this while working towards your goal. And once you’re enjoying the journey, you will be surprised by how quickly it goes.

What have you had to wait on? How can you enjoy the journey?

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Build a Better Budget

As mentioned in My Happiness Project update on money, I recently read the book Your Money or Your Life. I’ve picked up a few habits from the book that I want to share with you to spend and earn more wisely. I have used some of these habits, like the net worth tracker, for years, but others were new finds. All have helped me build a better budget and move closer towards my financial goals. Financial Freedom is the main goal of Your Money or Your Life, but these habits can be applied towards any money goal.

The Wall Chart

Wall Chart Better Budget

Although many of us believe we have a steady income, that doesn’t tell the whole story. I receive a biweekly paycheck for a consistent amount, but look at those spikes in my income! Those are from bonuses, birthday money, or occasionally selling furniture or clothes. Even though I have a budget that I follow strictly (I love spreadsheets), you can see that my expenses aren’t consistent either. Biannual car insurance, trips that I have already saved for, and Christmas presents can change my monthly budget significantly. I have two sections of my budget: Section A, which stays the same every month (rent, most utilities, health insurance, charity), and Section B, which I change monthly. Section B includes money for trips, clothes, presents, and other expenses I expect to come up that money. On the first day of every month, I look at my calendar and at my budget for the same month of the previous year. I calculate how much to allocate to those categories. I rarely deviate from my budget once it is set, as the monthly planning gives me the flexibility I need.

Income versus Expenses

The value of the Wall Chart is watching your Income, Expenses, and Investments over time. The goal is for income to rise, expenses to fall, and investments (a.k.a. investment income) to rise and eventually pass the expenses trend. Although I made this chart a few weeks ago, you can see a big drop in my expenses in September, when I re-evaluated my spending and decided to dedicate more focus to saving money. Seeing my expenses drop so low compared to my income is a huge motivator for me to continue saving.

The Investment data is how much you are making monthly from your investment accounts. To make it easier, Robin and Dominguez recommend using an average return rate, not calculating the actual monthly return rate. If you have mutual or index funds, you can google the annualized return rate and divide it by 12. Take off 3% that number to account for inflation. I approximate my annual rate of return at 4%, which is what I would feel safe withdrawing from my account based on the Trinity study calculations. Once your Investment income passes your expenses, you have reached the point of Financial Freedom. You could live on only your Investment income, and no additional income is needed.

The Net Worth Tracker

So, how do you increase your Investment income? By increasing the amount of money in your investment accounts, which leads us to the net worth tracker.

Net Worth better budget

I track my net worth monthly, a habit that I started when I graduated from college. My net worth has increased by 863% since then! My net worth is comprised of the money in all my accounts: brokerage, 401(k), and my emergency fund. (Note: for the investment calculations for the wall chart, I don’t include my checking account or emergency fund because of the significantly lower rate of return.)

Real Hourly Rate

For many salaried employees, we don’t actually know our hourly rate. And if we do, we calculate total salary ÷ 48 weeks ÷ 40 hours. But do you really only spend 40 hours a week on work related activities? Your real hourly rate includes the time you spend commuting, going to networking events, working overtime, or stressing/decompressing because of work. For me, I would increase that 40 hours/week to 55 hours/week.

Next, there are many expenses I have solely because of my job- gas for a long commute, work clothes, work lunches.

The equation now becomes (total salary – work expenses) ÷ 48 weeks ÷ 55 hours

*48 weeks is based on vacation time

For me, this decreases my hourly rate from $21/hour to $12/hour. That’s a huge change! You can see that a traditional job, while beneficial, comes with cons as well. If you love your job, these cons are probably worth it. But if you’re about to take a “high-paying” job just for the money, make sure to take into account the expenses and time you will have to put into that job.

The Questions

  • Did I receive fulfillment in proportion to the hours of life energy spent?
  • Is this expenditure in alignment with my goals and life purpose?
  • How might this expenditure change if I didn’t have to work for a living? (more, less, same)

Finally, Robin and Dominguez urge you to ask these three questions for each expense you have. You can change the questions to fit your situation (I combined the first two), but checking in with how you feel about your expenses will make a huge difference in how you spend. I have adjusted my budget to decrease money spent on restaurants, but I have also increased what I spend on self-care because it makes me feel great. It’s all about knowing your values, and spending based on what’s important to you.

Building a Better Budget

Getting to financial freedom, or whatever your financial goals may be, is a result of evaluating and improving these current patterns. Looking into your finances takes courage, but it can give you so much in exchange. Try out one or all of these habits, and get ready to see some major changes!

January Favorite Five

It’s been awhile since I’ve done a Favorite Five post! Here’s what I’m enjoying right now.

Favorite Fiction Books

The Guardian series by Nora Roberts– Fun, easy romance trilogy. Perfect for relaxing on a weekend.

Favorite Recipe

Hello Fresh Sesame Chicken Noodles– This recipe was delicious! My boyfriend and I tried Hello Fresh for the first time this past week. The recipes were easier than other meal prep services I have used, and the food was great. These Sesame Chicken Noodles were my favorite, and we are definitely going to recreate the recipe on our own. We also tried the Poblano Beef Chili and the Butternut Squash Agnolotti.

Favorite Workout

I’ve started swimming due to a knee injury that has kept me from running for the foreseeable future. Last time I swam regularly was in middle school, but I’m really enjoying the workout. I’ve missed that post-workout soreness and the endorphins.

Favorite HobbyGarden picture favorite five

I’m trying to grow peppers and cilantro right now. I have a Grow Bag with seeds planted inside our apartment, and I had a few shoots of an unidentified plant spring up from the compost pile. We’ll see how it goes, but I’m hoping to have my own vegetables in the spring and summer!

 

Favorite Podcast

Side Hustle School– Hosted by Chris Guillebeau, this is a short 5-15 minute podcast that gives new side hustle story every day. Perfect for anyone looking to make some money on the side!

 

What have you tried recently?

 

Net Worth Update: January 2017

First net worth update of 2017! Numbers are moving on up.

Asset Total Monthly Change Percent Change
Wells Fargo (401)k $17,593.13 $985.48 5.93%
Betterment- Brokerage $11,680.52 $602.41 5.44%
Synchrony- High Yield Savings $0.46 $0.46 N/A
TD Ameritrade- Brokerage $50 $0 0.00%
Total $30,258.12 $2,522.36 9.09%

This month was mainly market changes, although I did discover some bonds my grandparents bought me when I was a kid. I transferred them to my Betterment account, which was part of that increase. Betterment recently changed their fee structure, and I really enjoyed Mr. Money Mustache’s article explaining the changes and his reaction. I still plan on using Betterment. I get a lot of value out of their services, and the fees for my current price range aren’t changing. My main concern is whether they will increase their fees again, in which case I may re-evaluate.

Again, I do not include my car (or house, as I am renting) for two reasons: first, I intend to drive my car as long as I can safely hold on to it. Secondly, my main goal for tracking my net worth is to save up enough for early retirement (current goal- $1mil, hoping to bring that down as I lower expenses). For early retirement purposes, I only want to include assets that will continue to produce passive income.

A breakdown of the accounts I have and their progress this month:

Wells Fargo 401(k): +$985.48

This is my retirement account through my company. I contribute 6% of my income and take advantage of my company match, which is up to 6% as well. I prioritize my Betterment brokerage account over this one because I don’t want to pay tax penalties for withdrawing money during early retirement. I use Smart401(k) to determine my allocations within the account and maximize returns. This increase is due to my normal contributions  plus market increases.

Betterment (Brokerage): +$602.41

Betterment is my main account for my early retirement goal. I did not contribute anything to this account this month, so this increase solely reflects the market performance.

Synchrony (High Yield Savings): $0.46

I use this as my Emergency Fund and as a place for short term savings. I just used this money to pay for my coaching certification. My next steps for this account are to replenish my emergency savings. No, I didn’t make a deposit of less than two quarters, that money is from interest earned.

TD Ameritrade (Brokerage): +$0

This is my short term investment account- playing around with stocks and practicing what I learned in my “Rich Dad, Poor Dad” investment class. Once I finish paying off my class fees, I will put a few thousand dollars in here to play around with. I do not recommend this strategy to the casual investor, and I only put money into this account that I can afford to lose. So far, I have been using paper money to practice my strategy to build up my skills.

Do you track your net worth every month? How did last month go for you?

The Most Important Way to Make a Difference

If you want to make a difference in today’s politics… there’s something more important you can do than calling your Senator. There’s something more important you can do than joining a protest, or posting on Facebook, or certainly than arguing with your coworker about who’s right.

Love.

Yes, it sounds cliched and anti-climactic. Remember what Harry Potter thought when Dumbledore told him he had “power the Dark Lord knows not”- so what? But love is the one thing that can truly make a difference in a hate- and anger-filled situation.

“‘So, when the prophecy says that I’ll have ‘power the Dark Lord knows not,’ it just means — love?’ asked Harry, feeling a little let down.” -J.K. Rowling, Harry Potter and the Half Blood Prince

To be clear, I don’t think you should stop calling your representatives or protesting for your beliefs. I certainly don’t plan on stopping. But I can add more love into my life as well. When I meet someone whose beliefs are different than mine, I can love them anyway. Instead of holding a grudge and making comments behind their back, I can try to understand their viewpoint. And maybe it still doesn’t make sense to me- but I can still treat them as a human being no matter what.

This can be really difficult- I have so much empathy for anyone trying this. Sometimes it means accepting that you aren’t always right, and sometimes it means re-evaluating your beliefs. Even if you still hold the same beliefs after an encounter, you might feel attacked, which is scary. This connection can have such an important effect, though, and it is how to people from different backgrounds to open their minds. In this case, the more difficult the conversation, the more worthwhile.

If I know someone who has been personally impacted by the Muslim Ban, or any of the other policies I don’t agree with, I can reach out to them and ask how their day has been. Make sure they know they’re not alone in this, and that there are people who care about them.

In a world where so many feel isolated and attacked by Donald Trump or by society, making connections and reaching out is of the utmost importance. This is the only way we can overcome the hatred that causes ideas like banning Muslims or other immigrants. And it’s something that all of us can do every day with our coworkers, our friends, and our families.

Now is the time to make a choice between dividing our country over hatred of minorities or uniting our country against this hatred. I choose to unite with those I know and love as well as those who I don’t know or don’t agree with. Most of all, I choose love.