Archives for August 2018

You’ve Done The Math, Now What?

August 30, 2018 By Deanna 14 Comments

Catching the Fever

So you learned about the about FIRE (Financial Independence, Retire Early) and dove in headfirst. Maybe you started listening to copious amounts of podcasts and got all FIREd up. Perhaps you discovered your favorite bloggers and followed their journey only to find yourself even more inspired. And maybe you took the big step and attended a CampFI event and met some of these FI (Financial Independence) minded people in person.

You calculated you FI number and set a goal. Next, you starting driving down your monthly expenses by cutting the cord and/or switching to a cheaper cell phone plan. Wanting to gain some of your time back, you began meal prepping each week. Overall you embraced a mind shift with your consumption habits and became a mindful spender. Maybe you even switched up your transportation mode and began to bike or walk to work. And for the big one, perhaps you got extreme and started a form of house hacking to reduce what once was your largest monthly expense.

With your expenses low, you started working on the income side of the equation and implemented career hacking. You started excelling in your career and driving up the company’s revenues and in turn yours. Maybe just maybe, you found more purpose in your career and even dropped the RE part of FIRE. Regardless, you are still going to achieve FI because you want that choice.

Your savings rate crossed the 50% line and you started maxing out your retirement and tax-advantaged accounts with low-cost index funds.

Yeah, you’re killing it. So now what?

It’s a Lifestyle

Welcome to the most awesome community in the world!! You’ll never meet a more friendly. community than the FI/FIRE community. Everyone is willing to share what they’ve done to get to where they’re at and then help you on your way.

Now that you are cruising on autopilot towards the brazen goal of achieving FI, I don’t want you (or I) to get distracted or lose sight of why we are doing this. So I came up with 7 tips to keep our head in the game while living our most purpose-filled life…today.

Tip #1 Annual Review

A lot can change in the 10+ years you are on this journey towards FI. For example, I just read this stellar article by Fred from Money with a Purpose and decided I’m most comfortable adding some bonds back in the mix. Moreover, this made me realize that I need to set aside time once a year where I review my situation, see what has changed, and analyze how these things affect my FI goal. In turn, I may need to adjust my Investment Policy Statement.

Here are some good questions to ask yourself at your annual review meeting:

If you were single, are you now not?
Has your family grown?
Has your salary increased?
What is your COLA (Cost of Living Adjustments)?
Do you need to re-balance your asset allocation?
Have your career goals changed?
Have your life goals changed?
What has changed with your extended family?
1. Do you need to move closer?
How does all this affect your FI number?

There are probably many different questions which apply to different situations, but you get the basic idea. Schedule a repeating annual review in your calendar and/or task manager and forget it until the reminder comes, which BTW, leads me to tip #2.

Tip #2 Use A Task Manager

I’m writing this tip as much for me as I am for you. I was just talking with a friend about his choice of task managers, todoist, and he related it to Discipline Equaling Freedom. I was instantly convinced that I need to embrace a task manager personally.

While we utilize a phenomenal task manager at the office, smartsheet, I’ve realized it’s too robust for my personal and blogging tasks. I’ve been paralyzed by the plethora of task managers out there, but the epiphany I had today was to just start.

The point is to get the stuff out of our heads so we can free up more head-space for the creative things.

Automation works with our investments why not make it work for our mundane tasks, especially the ones that are repetitive.

Tip #3 Keep on Career Hacking

I think while we are in the wealth accumulation phase the biggest factor we can focus on, which has unlimited room for growth, is our income. Think about it, you can only drive your expenses down so far before you hit a limit.

The only thing that may be putting the cap on your income is your limiting beliefs. Take some time to think on that one.

Seriously this is your biggest FIRE power so invest in it. Chief Mom Officer just put out a great article on how she went from 22k a year to 6 figures. ESI talks about career hacking on this rad ChooseFI podcast episode.

I’ve had a lot of amazing mentors in my life. By following some of their sage advice, I’ve increased my income in 7 years by 68%. And I’m not even close to being done!!

Here are some career hacking things you can do right now:

Embrace change and perhaps even drive change into your company. There is so much I can say here, but I’ll simply say this – in a world where technology is rapidly changing, we all need to embrace a growth mindset. Be open to learning and trying new things. Maybe even suggest them. Don’t be the person who is terrified of change. You’ll get left behind.
Find ways to work smarter not harder. Can you do more with less? Re-evaluate your processes constantly.
Keep learning. Sure this may mean getting an advanced degree (especially if your company reimburses for it). However, you can always learn something just by being curious. Check out Khan Academy for free online education.
Find out what’s expected of you, beat it, track it and report it.
If your boss suggests a book, read it! My boss asked us to read the book, Traction. Furthermore, implement what you’ve read into your daily work life.

Tip #4 Smell the Roses

Don’t forget to stop and enjoy the world around us. Enjoy your family. Have fun. Exercise.

Um, my nephew is not so sure about this one!

You get the idea, just don’t put off all the things you love today to kill yourself for more time with them tomorrow.

“People say nothing is impossible, but I do nothing every day.” – Winnie the Pooh

Take some time to do nothing. I struggle with this one but I’m learning to block off some time for it. 😉

Tip #5 Find Your Purpose!!!

In my humble opinion, this is the most important thing to figure out. Do some soul searching and discover your purpose. I’ve written about purpose before and that’s because it’s so darn important. I believe with everything in me that we were all created with a distinct and unique purpose. Our job here on earth is to figure out what that is, and then go live it.

Even if it takes you half of your life to figure it out consider yourself blessed because unfortunately some people never discover theirs.

Have you ever seen a dog doing what he/she was bred to do? They are elated, exuberant, focused and yes, living on purpose. We can learn a lot from dogs, like unconditional love. Dogs don’t go to university to figure this out. They just do! Just sayin’.

This dog’s purpose was to pull sleds. Sometimes he needed sleep too. 🙂

If you’ve been around these parts before you know I overcame addiction. I take no credit. I only surrendered and let God into my life. God then put some extraordinary people on my path who walked the journey with me.

Now part of my purpose is walking with others who are overcoming.

Ask yourself the following question…

Who is not being helped because you’re not living your purpose?

I guarantee when you live on purpose, you’ll help others. It’s the way this thing works. You give and in turn, you get. Oh, and you’ll get more than you could ever imagine.

Tip #6 Treat Yo Self

You’ll probably never hear this expression in the rooms of FI.

Yeah, no, don’t go to that extreme. Haha! But yes you do need to occasionally ‘treat yo self.’

Do you have a 50%+ savings rate? Are you maxing out your retirement accounts? Yep, then go enjoy some of your hard earned money, mindfully. Get some ice cream, take a vacation, go skiing, or buy those shoes you’ve been dreaming about. I don’t know what it is you long for but every now and again you need to, say it with me, ‘treat yo self.’

Just don’t sacrifice your future financial goals or go into debt doing it. You know who you are. If you’re killing it, you have permission for a little splurge now and again.

And if you are currently working hard to get out of debt, I got you. Keep going with that, but you too can treat yo frugal self too.

Here are some frugal ‘treat yo self’ suggestions suitable for everyone:

Make dinner with friends (much cheaper than going out).
Take a staycation and explore your local area. This is a good way to enjoy a vacation without deviating from your debt freedom goals.
Join a meetup. Depending on the activity, these typically don’t cost money.
Check out garage sales, thrift stores or buy nothing groups. I haven’t explored the last one yet but I understand it to be a community of trading goods and services. Start at the link I listed, narrow in on your location and voila! You’ll eventually find yourself at a Facebook Buy Nothing group specific to your area.

Tip #7 Pass it On

You gotta give it away to keep it. This is a common expression in the rooms of recovery. I find it to be true in all facets of life.

I wouldn’t be the woman I am today without all the help I’ve received along the way from others. People have abundantly poured into my life and my cup overflows. What am I going to do with these blessings? I could try to hoard them and where would that get me? I’ll take a guess – completely and ironically empty.

So take that knowledge and experience you’ve racked up and…

Help the newbie
Raise amazing children
Mentor someone
Donate your time
Donate your money
Love someone who seems unlovable

Whatever and however you do it, just pass it on…

The Debt Gender Gap And How To Reduce It Being a Woman

August 27, 2018 By Deanna 1 Comment

Hello All! This is my first guest post and I think you’ll enjoy it. The author of today’s guest post is Good Nelly and she is here to give us some actionable tips on how women can reduce the debt gender gap.

Good Nelly analyzes financial happenings and writes articles to bring awareness and help her readers plan for their financial future. She has been associated with Debt Consolidation Care for a long time. However, she has contributed her articles to other websites as well.

Alright, the floor is yours, Good Nelly…

Meal Prepping As A Life Hack

August 23, 2018 By Deanna 14 Comments

We all eat and therefore we all should cook. I will go a step further and say we all eat out at times and, at some point in our lives, should work at a restaurant. I was a server off and on for 16 years and it helped me to have an appreciation for the service industry.

What I (and probably many others) propose is that spending several concerted hours per week prepping meals is more efficient than spending time each day. I’ve been doing meal prepping for years but recently, I’ve heard a lot about in the Financial Independent (FI) community as a way to conserve time. In particular, Brad’s wife, Laura, seems to have a good system down. There is even a private ChooseFI FB group for recipes and meal plans.

I rarely use recipes in my cooking. The downside to this is if I make something others really like, well, um they are out of luck in getting an exact recipe. The upside is that I can get really creative with the ingredients I have on hand. I know what I like and have a fairly good idea of how to utilize spices in order to create a delicious meal.

Consumer Supported Agriculture (CSA)

CSAs are a great way to obtain vegetables and fruit grown locally if you don’t garden. I currently live in an apartment so there is no gardening going on here. 🙂

I love to support local organic farmers and I have found a great way to obtain my crops in a way which I call a trilogy win:

I get my crops from a farm called Refugee Response. They grow organic produce and support local refugees. I definitely want to be a supporter of that! Win #1!
I bought 20 weeks of crops for $280 which works out to be $14 per week. I bought it back in March when I was working on my minimum spend for my Chase Sapphire Preferred card. This purchase helped me earn 50k in reward miles. Huzzah! Win #2
Each week during the summer and into the fall, I pick up a weekly harvest of organic crops. I never know what I’m going to get and so it forces me to try new things. I waste none of it and make a ton of different soups. Win #3

Weekly Meal Prepping

I am a single woman so I only need to prep for myself but I make enough to invite friends for dinner. No doubt, what I can do can be multiplied to feed a family. I typically do my meal prepping on Sundays and prepare three different things to cover my meals for the week.

Smoothies

In love with this appliance. Don’t worry there’s still room for human companionship. 😉

I own a Vitamix (#love) and highly recommend them if you consume a lot of smoothies or like to make your own nut butter, hummus, baba ganoush or pureed soups.

My smoothies typically include the following ingredients:

Greens
Bananas
Berries
Dried peanut butter powder, peanut butter or protein powder
Water

I make enough for 4-5 smoothies, put them in mason jars, and freeze them. Then each night, I take one out of the freezer to thaw overnight. In the morning I shake it up and head off to work. Breakfast…covered!

Salad

I make a big salad which is enough to dole out each day for my lunches. I often cook some chicken or other protein in the crock pot to serve on my salad. Honestly, the longest part of this process is cutting up the veggies to go on the salad. I figure I’d rather do this all at once rather than every day. It essentially takes just as long to cut up part of green pepper as it does the whole green pepper. Lunches…covered!

Soup

I make some other kind of meal in bulk which will last me an entire week. Sometimes it’s something like stuffed green peppers but usually, it’s soup. Since I get crops for 20 weeks out of the year, I always have herbs and enough veggies to make some kind of delicious soup. The rest of the year, I use frozen veggies in my soups. I make sure I keep the following things on hand for making scrumptious soups:

Cans of diced tomatoes
Coconut milk and/or cream
Chicken or beef base
Pasta or grains
Spices

I get a ton of fresh herbs in my summer CSA so I freeze a bunch and use them throughout the year.

I always make a big vat of soup and then pour some of it into individual containers to freeze. I keep some in the fridge for my dinners. However, since I am freezing a new soup each week, I can pull out a couple of different containers to thaw during the week for a little variety. After all variety is the spice of life!

So my friend who goes by the name, State of O-FI-O, has become quite the soup nazi. She has been making some stellar soups by using up items in her freezer, garden and pantry. One lovely side effect is that she’s also slashing her grocery budget. Stay tuned as she will be writing a future guest post here on her souper FI powers.

Closing Thoughts

So there you have Ms. Fiology’s eating/prepping habits. I personally don’t like to spend a lot of time each day figuring out what I’m going to eat. Meal prepping allows me the freedom to spend my time during the week doing what I love. It also ensures I eat healthy since I’m not grabbing something quick (like a frozen pizza). Additionally, it helps me keep my food costs low. I spend about 8% of my monthly take-home pay on groceries.

So how do you eat? What efficiencies have you discovered?

Lay The Groundwork First, Then Wield Your Superpowers

August 20, 2018 By Deanna 9 Comments

Would you like to have superpowers? Yeah, me too. Having your finances in order will allow you to harness such powers. It feels great to be the master over your money rather than the other way around. I believe we all can and should be saving something.

If you have obstacles in the way, like debt, take the time to lay the groundwork…and then get ready to show off your superpowers!!!

It’s Never Too Late To Start

I don’t care who you are or where you’re at in life, it’s never too late to start saving. On the flip-side, it’s never too early either. There are basically three things you can do with your money:

Give
Save/Invest
Spend

Even if you have to focus on some of the other groundwork laid out in this article, you should be saving something. It’s a good habit to build.

The key to saving is to not touch that money. Put it away and forget it.

Of course, there are different ways to save money and those are either in investment or savings accounts. The former being where the magic of compound interest comes in. You’ll want to take advantage of that as soon as you can.

Investment accounts are for long-term financial goals. If you have an employer-sponsored 401k or something of the like, start contributing, at least up to the employer match. At some point, you can hopefully ratchet that up to higher percent.

Savings accounts are great for short-term financial goals. You won’t get a lot of interest-bearing growth here but you won’t get risk either and the money is easily accessible. I’m of the belief that everyone should have an emergency fund of somewhere between 3 – 6 months of expenses saved. Also, a savings account is where you can save for a future car or down payment on a house.

Lay The Groundwork

If you owe other people money, that diminishes the amount which can go towards a high savings rate. It also means someone else owns you.

“The rich rule over the poor and the borrower is slave to the lender.” – Proverbs 22:7

I found debt to be a shackle and so I focused hard on paying mine off. That simple fact allows me to now put 60%+ of my monthly income towards investing and saving.

The only debt I’d consider now is a mortgage. I currently rent but am saving a down payment for a house. Mortgage debt is fine if you are living within your means and can still afford a high savings rate. However, I’ve also heard of a great many people hunkering down and paying off their mortgage. I imagine living in a paid for house feels boss.

Anyway, if you have any other debt (car note, credit cards, student loans), I think it wise to pay them off quickly. Refinancing for a lower interest rate is certainly a lever to be pulled. However, the real attack will come by paying off big chunks as quick as possible.

And if you owe money to the IRS, focus on this first!!! The U.S. Government is kinda powerful.

The intensity is worth it! I still saved while I was paying off my debt but my main focus was plowing as much of my income towards my debt as possible. Three and a half years later, I own my entire paycheck.

Get To Possessing Your Superpowers

The groundwork is necessary but once you’ve got it laid, you get to be superhuman…

Superpower #1 – Give Like a Rockstar

Whatever your personal philosophy is on giving, I believe we all need to do it. I’ve found it’s better to give than to receive. So I say give like a rockstar!

Giving comes in many forms. How about donating some time to a worthy cause or a person who needs help? It doesn’t have to be a lot of time either to have compound effects. I guarantee if you spend one hour per week pouring into someone’s life, the fruit will come. Of course, if/once you FIRE (financial independence, retire early), you can get extravagantly generous with your time.

I’m a Christian and so I believe in tithing. I try not to be religious about it, but I’ve found that giving 10% off the top of my income helps keep me focused and disciplined. Additionally, I budget money for a random giving fund each month. If I come across a cause or a person that I believe I’m called to help, I utilize this fund. It makes me feel good.

How about stealthy giving?

How about giving compliments and positive feedback to people you meet?

Get creative!

Superpower #2 – Make Your Money Work For You

Now that you own your entire paycheck, you can put your money to work for you. I suggest investing in low-cost index funds, single stocks (if you have the time to research them), a business venture, and/or real estate. Investing is all about maximizing your rate of return and taking advantage of the glory of compound interest. Currently, I’m investing in low-cost index funds. But here are the areas I’m considering/working towards:

Entrepreneurship
The real estate market
Single stocks. I haven’t done this yet but I am really intrigued so perhaps I’ll block off a small amount of time each week to dig deeper.

The higher the percentage you can put towards investments, the more your money begins to work for you. These investments are what will allow you to retire.

With a big chunk of your money going towards savings/investing, you get to tell the rest of it where to go. I personally find joy & satisfaction in budgeting. It becomes a game to drive my expenses down each month and see how much more I can save. Yep, good times for a redeemed money nerd. 😉

However, I know many people who set their savings goals and live off the rest without budgeting per se. That is fine too and I say pick what works for your personality but remember the ultimate goal is to drive that savings rate up!

Superpower #3 – Embrace a Growth Mindset

Now that I’m not in a constant state of stress over my finances, I have more capacity for growth mindednesses. Being growth-minded means seeing a problem as something to be solved. Additionally, it means if I discover something I’m not good at, I can become a student of that thing. It also means giving myself grace. If you want to learn more about growth mindsets, I highly recommend reading, Growth Mindset by Carol Dweck.

BTW, I am a member of the Amazon Affiliate program. If you click on a product I link to and purchase it, I get paid a commission.

Prior to getting sober, I lived below the line in so many ways. I was in constant survival mode with my emotional, physical, spiritual, and financial state. Aah, I am glad to be on the other side of that!! Even after getting sober, it was still another 4 years before I was able to focus on cleaning up my finances. My mental freedom has come in layers:

Fog lifting after putting down the drink and drug
Self-awareness as I dug into why/how
Replacing lies I told myself for years with some solid truth
Becoming the owner of my entire paycheck

I see things differently now that my mental capacity is not spent on stress and worry. In turn, this allows me to possess a growth mindset.

Superpower #4 – Practice Mindful Spending

Typically our biggest expenses are housing and transportation. Find a way to drive these down and you’ll be golden.

I’ve chosen to live in a small apartment within a 1-mile radius of my job. My rent is less than 24% of my take-home pay. Keep in mind my take-home pay is after my pre-tax deductions are taken out for my retirement accounts.

Additionally, this choice is helping me keep my transportation costs low. I drive minimally during the work week so I don’t spend a lot on gas and I’m able to squeeze more life out of my 2008 Saturn.

What do you value in life? Relationships? Yep, me too. How do you foster those relationships? If it’s the time with your loved ones that you value, you don’t really have to spend a lot of money. There are a ton of free or low-cost things to do with your family and friends. For example, I just went on a free guided walking tour of downtown Cleveland with a friend.

I’ve found that I enjoy cooking for and/or with friends more than going out to eat. It’s healthier, it’s more economical, it’s more comfortable, and it’s conducive to playing board games after dinner.

When I was paying off debt intensely, I made some sacrifices. What I discovered in this so-called period of “deprivation” was that I was no less happy. As a matter of fact, I was FIRE’d up while working towards my goals. I loved seeing the balance on my student loans drop each month.

However, it is a little more fun to watch the balance on my savings increase.

I had the realization that my happiness did not stem from stuff or spending money. In turn, this allowed me to see clearly that my happiness is directly correlated to my relationships, experiences, spirituality and living on purpose.

With my new take on what I truly value in life and being above the line, I set out to make very intentional decisions with my life and finances. I developed the habit of mindful spending.

This is something Cait Flanders discovered in her year-long shopping ban. I am about halfway through her book, The Year of Less. I can relate to so much of what she writes about and I just love this line:

“During what was supposed to be a simpler year where I pursued less, everything I loved and relied on was taken from me, and I was forced to start from scratch and make a new life for myself.”

– Cait Flanders

It’s very easy to pacify ourselves with stuff. Take away the stuff and then you get to the insecurity. Get to the insecurity and replace it with truth, and then you can learn to find true happiness.

Closing Thoughts

For years I could not imagine thinking about my finances with a growth mindset. Fortunately, a few people poured into my life and showed me a way out. I took action and became the boss of my money. That perspective shift has changed everything.

While I’m not yet financially independent or retired early, I’m finding ways to give and my most favorite is pouring into other’s lives. Watching the light bulbs turn on and seeing people gain victories is a superpower that I’d like to duplicate many times over.

So what’s holding you back? What superpowers do you practice?