Ok you guys. I’ve been pretty open about the fact that I’ve made so many negotiating mistakes. I was pretty much as bad as they get. Yes, even after taking classes on negotiation. I just didn’t understand exactly what I was supposed to say and when.

One of the things that used to confuse me the most was when to actually negotiate. All of the jobs that I had before going out on my own, had a very structured annual review process. It confused me

In December I’d do an assessment of how my year had gone and a few months later I’d have a meeting with my boss to hear what my raise and bonus was. If I wasn’t happy with my raise, I didn’t feel like I could actually ask then. It felt like it was too late. But there never seemed to be an opportunity during the meeting in December. We’d have formal mid-year check ins, but those also didn’t feel like the right time to ask for a raise.

I felt stuck. When should I ask?

Now that I hold workshops on negotiation, I realize that I’m not the only person confused by this. People reach out to me after a disappointing performance review, where they didn’t get the raise they wanted, and ask what to do. Unfortunately, starting this late in the game doesn’t lead to the best results.

If I can leave you with one piece of advice, this is it: start the negotiation process well before you think you should.

Whether you work in a very structured environment with annual reviews, you work at a company that has really loose policies (if any at all), or you work for yourself as a freelancer and need to negotiate with clients, the advice remains:

Start before you think you need to.

To illustrate what starting early looks like, I’ll break down how this would work in a traditional environment where you have annual reviews. This is also the same timeline and process that I use now that I have to negotiate rates and contracts with clients.

4-6 months out:

This is where you want to establish expectations for the upcoming review, even though it’s months away. Collaboratively set goals and expectations with your manager so that you both know what you’re working toward.

Don’t know how to start the conversation? Here’s an example:

“I’d really love to talk about my development plan for the remainder of the year. My goal is to take on more, be one of your strongest performers, and be promoted [given more responsibility, etc] next year. I’ve really enjoyed working on the new communications plan over the last few months and I see a big opportunity for the company to take that further. I’ve come up with some ideas to really knock this out of the park over the remainder of the year, and I’d like to get your feedback. I think this is something that can make a real difference to our group and I’ve outlined my ideas here. [hand over proposal of ideas] Do you think I’m on the right path with this and if I’m successful with this would you be able to support me with my goal?”

Another example:

“My goal this year is to create massive value for our team as well as get a ranking and raise that really reflects what I’ve done. I see a huge opportunity to create a social media training program, as this becomes a bigger and much more lucrative part of our business. I’ve come up with some ideas as to what this training program would look like and what I can create over the next 6 months. I’d like your advice on whether you think this is beneficial and how it can be as strong as possible. Do you think I’m on the right path with this and if I’m successful with this would you be able to support my goals?”

The key here is to actually write something up, share it, and get feedback on it. You want your goals to be aligned with your manager’s goals so that when you do the work and deliver on this, you know that they value it.

If you have a mid-year review, this is the perfect opportunity to bring this up.

2 months out:

Now’s the time to check in, remind them of what you’ve done, the progress, and get their input so you can course correct if needed. Come prepared to this meeting with the summary of the expectations you set with them at the 4-6 month mark. It should now be updated to include the progress you’ve made there, and any other exceptional work that you’ve done.

2 weeks out:

Practice, practice, practice. Oh, and practice. You’ve put in the work, you want that raise or promotion. Now, it’s almost time to ask for it. Get together a summary of what you’ve done and go over what you’re asking for and why. Don’t try to wing the conversation – that never works.

Year end review:

This is the meeting where you discuss what you’ve done, usually a self-assessment that you do for your manager. This is before they submit this info for raise and promotion consideration. This is before the company decides how they’re going to award raises and bonuses for the year. Here you’ll again bring a document that outlines the goals you had agreed to in the first meeting and how you’ve performed since then. You can also add on where you see this going over the next year. Having this document, and the lead up over the past few month opens up the door for you to easily negotiate that raise you want.

And then, cue the celebration!

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Here’s a secret that would probably shock most of my friends: I loathe budgeting. Even though I’m a CPA and have an odd obsession with spreadsheets, I can’t track where things go. I’m not detail oriented. And even with apps and programs (which I’ll use occasionally to check in on things), I hate feeling restricted.

But, I obviously like the results of budgeting. So what’s a financially responsible, budget allergic person to do?

My solution: The Non-Budget, Budget

An easy way for me to manage my money, without having to think about it. To set it up takes a bit of time and organization, but after that you can cruise on auto-pilot.

Cliff notes version:

Once I abandoned budgets forever (after a particularly soul-crushing freak out that I was “over” my food allowance for the month), I decided to set up a completely automated system. Luckily Jordan is just as much of a non-budgeter as I am and he was all about an automated system.

All of our money flows into one checking account and then flows out to different savings accounts. A lot of different savings accounts. I have automatic bill payments set up to also be taken out of our account during the first week, so I never think about the fixed expenses. The remainder can be spent as we please.

Eat out too much, buy an expensive something, or take too many ubers for the month? No problem. We’ll be eating ramen for the remainder of the month if we run out of cash on the 23rd.

If we don’t spend everything (and that actually happens, occasionally), we can roll that over to the next month or toss it into a savings account. It usually goes to a vacation savings account or our “freedom” account. Which feels ah-mazing.

Detailed version:

Step 1: All money is deposited into one checking account. My paycheck, Jordan’s paycheck, anything we earn on the side. It all goes in here.

Step 2: Automated withdrawals at the beginning of the month to designated savings accounts. And we do have many. Here’s a quick overview of where that cash goes:

• Investment/retirement account: while Jordan does have a 401K that comes out pre-tax, we also fund a separate retirement account as well.
• Vacation savings: because travel is something we do on the regular.
• Emergency savings: We keep 6 months of expenses on hand just to be sure we can cover the random bills that pop up.
• Home savings: we own a home and someday we’d like to own another one. So we put a little bit in savings each month for that future big purchase.
• Tax savings: I work for myself and we also have a semi-annual property tax bill to pay. We save monthly to make sure the IRS doesn’t hate us.
• Freedom account: We’ve got goals. Big ones. That includes being able to take some risks in our lives without having to worry about our financial well-being. This is where we fund those dreams. This is my favorite account.

Step 3: Automated withdrawals to personal checking. This is basically the same thing as step 2, but it’s going to personal checking accounts. Jordan (my husband) and I each have our own checking account for personal spending and each month a set amount is deposited in there. Some months I spend almost nothing from there and other months I spend it all. But it’s guilt-free because it’s coming out of this account. These were the most important accounts we set up for the sanity of our marriage.

Step 4: Bills, bills, bills. At the beginning of each month, we pay our bills, with the aim of having them all paid in the first 7 days. We automate what we can, and manually pay what we can’t. These bills include:

• Mortgage
• Rent
• Credit card bill
• Phone bills, utilities, etc
• Student loan payments (nope, not anymore. Paid those bad boys off.)
• Gym membership

Step 5: Spend the rest. Seriously, having this on auto-pilot makes life so much easier. We then spend what we need to the rest of the month, knowing that the important things have been paid for. If I want to go to a yoga class, go out for a fancy dinner, or buy all of the flowers at the farmer’s market, I can. Guilt-free.

There have been moments that we’ve run out of money early, which can be a bummer. But running out of money for eating out is no big deal compared with wondering if you can pay your credit card bill, your mortgage, or save enough at the end of the month. It just meant that for a weekend we stuck to a $20 budget (yes, $20 for the entire weekend), and ended up reaching into the back of our pantry for canned things we could try to make meals out of.

I know that all of our needs, including our freedom account (my absolute favorite), have been taken care of. And that peace of mind means that I can spend less time worrying about money and more time worrying about all other things (there’s no rest for the anxiety-prone).

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Though I’m great with money, there has been one thing that has been my achilles heel for years: saying no in social situations.

I don’t really budget (see: the non-budget, budget) and I rely on spending mindfully. But that mindful spending goes out the window when I want to see my friends.

Whether it’s going out to the best (and most expensive) new restaurant, going on a shopping date with a girlfriend, or booking a vacation with your nearest and dearest friends, saying no can be painful. So painful, that I’ve said ‘yes’ and regretted it too many times to count.

Peer pressure is real, people!

I used to either make up excuses (“Oh I’m busy when you’re going out to [insert name of that crazy expensive restaurant here], but I can meet for a drink after”), or just say yes and be angry at myself for a full week after. And telling someone that something “wasn’t in my budget”, is totally reasonable but for some reason, I couldn’t get myself to say it.

Luckily for me, I found a phrase that works for me. It’s easy to say and mentally makes me feel better than thinking I can’t afford something. It’s so simple that I’m sad it took me so long to find it.

“That’s not a priority for me right now.”

Easy.

A friend calls me to go shopping? “Shopping isn’t really a priority / on my list of things to do right now, but hanging out with you is! How about meeting up for a latte and a walk instead?”

Hitting the most sought-after restaurant in town? “Heading out to a fancy dinner isn’t a priority / isn’t high on my list right now, but I’d love to see you. Want to come over for a wine night on Friday?”

You guys. I feel better already just by typing this out.

Even just thinking this is a great mental shift. How crappy does it feel to constantly think, “I can’t afford that.” Just changing the script in your head to, “It’s not a priority” makes me feel much more empowered

And what’s even better is that this not only helps you rein in your spending but also helps you take control of your time.

How to use this phrase in your career.

Another big change I’ve seen is using this phrase, mentally or verbally, in my career. It’s a phrase I wish I had much, much earlier rather than always saying or thinking, “I have no time.”

At one of my jobs where we were understaffed and over-worked, I remember lamenting to my boss that I had no time to do all the work I’d been given. His response (which for the record, I hated at the time), was to “work smarter.”

What (I think) he was not-so-eloquently saying was “what are the priorities right now?” What were the priorities for me in my career development and for the business? Everything else that wasn’t a priority could wait.

It took me far too long to figure this out, but I’m glad I have it now.

I wrestled with taking on a new client a few weeks ago. It would have been great for my bank account, but not great for my long-term goals or my short-term sanity. I felt wrecked by the idea of turning it down (who turns down money?). But when I put it in terms of my priorities, things shifted.

Now, I know that work can’t only be about your personal priorities. It can be one of the priorities, but it can’t be the only one. Luckily, this phrase still works even when talking about a job that you must do.

I was sitting in a quarterly review meeting last week with a business partner. Staring at a laundry list of to-do items and things that needed to happen yesterday, panic was setting in. There was too much. But instead of looking at this and thinking, “no one has time for any of this” while committing to working 12 hour days for the next 3 weeks, I pulled back.

“We have all of these great things in front of us. But what is the actual priority at this very moment?”

The conversation shifted and instead of doing all the things, we highlighted a few and focused on them hard.

This simple phrase has helped me become so much more in control of my time, my career, and my money.

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I was at dinner a couple of months ago with a group of ladies I’d just met. As we were getting to know each other, the conversation turned to what we all did for work.

When I shared that I help women make the best money and career decisions they can make, the conversation took a nerdy turn.

One person asked me what I thought financial stability was, I answered that to me it’s having enough to be able to make the right choices in my career and my life. To be able to leave a job I don’t like, pursue something that may be less lucrative, or move to a new location if I want or need to. To not feel beholden to things because of lack of funds.

Apparently, that wasn’t quite the right answer for her. She scoffed (rude) and told me that was a fantasy. Awkwardly, the conversation moved on quickly.

A few weeks later a different person who was at the dinner reached out to me. While my answer clearly hadn’t inspired much confidence in the person who asked it, it had caught the ear of someone else at the table. And not only did she want to learn more, she wanted me to come in and teach a workshop for her women’s group.

So next weekend I’m off to teach the workshop, and as I’m preparing for it, I wanted to share my system with you.

Now this isn’t a get rich quick scheme (obviously) or something that will happen overnight (my loans took just over 3 years to pay off).

But here’s why it works for me: I hate feeling stuck.

I want to know that I’m doing something every day that is helping me to have more options down the road, whether that be 6 months or 5 years. Yes, saving for retirement is great, but I don’t want to wait until I’m in my 60’s to have real adventures. I want to know that I also have something stashed away (or that my debt is gone) so that I can make the best decisions for me, rather than out of fear of my bank account.

Money impacts both your big and small life decisions, including career decisions. It can give you the power to make the choices that are best for your career or it can leave you feeling stuck. I prefer to use it to help me make the best choices.

Step 1: Own where you are

This is the worst part, but I swear it’s like ripping a band-aid off. Once you do it and do it quickly, you’ll feel so much better. I vividly remember the fear of having to get totally honest with myself about where I was financially. My debt, my savings (or lack thereof), and my real income. But you really can’t move on until you’ve done this, so buckle up.

For this first step, you want to get a handle on where you are right now. Today. Take a look at what you have in your bank and investment accounts. You could also add in any assets that you have, to make this a comprehensive net worth calculation.

Then we move to the part that makes people (myself included) squirm. Take stock of any debt you have. Credit card, student loan

Want help making this list? Grab the spreadsheet to help guide you through it all.

Step 2: Set your goals

If step 1 is the worst, step 2 is the best. This is where you get to actually put all of those wants down in writing! Dream big with what your (financial) goals are. Do you want to save up money so you can switch to a lower paying job? Do you want to strike out on your own and need a little cushion to get you through the rough first months of business? Or do you want to travel, take a sabbatical, move to a new city, or buy a house?

Pick what your goal is and give it a dollar amount.

When I wanted to leave a job, I knew I needed to get rid of my student loan. The dollar amount I set was equal to my student loan debt.

A friend of mine made a move to a job that was lower paying, initially. To help her bridge the gap for the first two years until she began making more, she set her goal to save up half of the difference between her current salary and her new salary.

A woman that I helped with this plan decided to she wanted to move to a new city for a job. New city = more expenses. We set the goal to help her save up for a deposit on a new apartment, a new car, and some fun money to get to know her new spot.

Setting the goals is fun, I promise.

Step 3: Make a plan

Once you’ve decided what you need in the bank, it’s time to figure out how to get there. You’ll want to bridge the gap between where you are and where you’re going.

Don’t overthink this – it doesn’t need to be difficult. Simply figure out in how many months you want to get to that goal and then how much you need to set aside each month in order to hit that date.

Make it easy and get my spreadsheet, which will do the calc for you.

Step 4: Build your dream

So now that you know what you need in your bank (or paying off your debt) each month, it’s time to either make more or spend less.

While I’m pretty vocal about my disdain for budgeting, I hate waste. Especially when it comes to money. So while I won’t “budget” per se, I will look for these things to make sure that less money is flowing out of my bank account:

• Are there any recurring subscriptions that I don’t need?
• Can I call and negotiate any bills (like my cell phone or internet)?
• Am I spending in line with my priorities? 
• Am I mindlessly spending?

And while those are all great steps, one that’s just as important, though is often overlooked is making more. Scrimping and saving only gets you so far and if you really want to make progress in getting toward your goals, you have to look at how you can also make more.

Here are some ideas to get you started:

• Are you underpaid? Use these tactics to figure out if you are making less than market rate and then negotiate!
• Have a skill others need? Pick up a side hustle. I started writing as a side hustle – with no writing experience – and that money went straight to funding my dreams.
• Rent a room out for the weekend, walk some dogs (it’s amazing how much some people pay!), or babysit some kids (not just for 16-year-olds, this helped put me through business school).

Step 5: Make like Nike and Just do it (consistently)

I make lots of plans, but if I have to depend on my own discipline to stick to them, they’re likely not going to happen consistently. That’s why if I’m really serious about doing something – saving money for a specific purpose or paying off debt, it must be automated.

If you’re the same way, try my anti-budget, budget. It’s the system I use on auto-pilot to make sure I stick to what I say I’ll do.

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A few weeks ago we were served with a letter from an agent letting us know that our lease is up and rent is increasing. We had just a couple of days to decide if we were staying at the higher price or if we’d pack our bags and try something new.

Honestly, I was annoyed. I get that rent usually increases every year. But I really doubted that it went up as much as they were asking us to pay. And we have been (in my opinion) delightful tenants. We didn’t complain when our dishwasher was broken for 2 months. We keep the place really clean. So this rent increase? Not something I was thrilled with.

For most of my adult life, I’ve lived in rent-controlled cities where you know what to expect with a rent increase. This is my first time living in a foreign country, where I didn’t really know the rules. We were communicating through what felt like a layer of 15 different rental agents, trying to make the case that this rent hike was not ok. And we kept hearing, “but you don’t really get to have an opinion on this.”

We were even told this by our agent, who is supposed to be on our side. Rude, people.

Our market research

One of the things I hate more than anything is being taken advantage of. So I text Jordan shortly after hearing our rent increase was final and told him that I was going to start looking for a new place to live. I lined up 10 viewings.

Yes, I can sometimes act a bit hasty, out of spite.

We went to all the showings, found things that were fine, but once we started to think about the time and cost of moving, our eagerness to move began to diverge. Was this increase a big enough hit to our bank account (and our egos) to make us move? For me, 100% yes. For Jordan, meh. He was wavering just a little.

After a full day of house hunting, Jordan suggested we cut out all of the agents and just invite the landlord over directly to talk to him. I was still a little miffed at the landlord for raising our rent, so I didn’t really feel like sitting down and talking to him.

But Jordan always knows how to bait me, so he then dropped, “You can put your negotiation skills to use and see if they work outside the workplace.”

Oh was that a challenge? Accepted.

The conversation

The next day Jordan text him asking if he could stop by because we’d love to have a chat. He was in the neighborhood so 5 minutes later he was knocking on our door.

We invited him in, sat down, and I put my B.A.M.M framework to use. Here’s how I framed the conversation, with annotations for why I said what I did.

“Thank you so much for coming over today to chat with us. You know we’ve loved living here the past year. We asked you over today because we received the rent increase that you’ve asked for, and I’m having trouble understanding how this makes sense from a market perspective. [Not an emotional appeal, but a rational one.] I appreciate that you have a business to run and you have to make the best decisions for that business, and we also need to make the best decisions for our family. [This isn’t going to be a win/lose situation. How can we both make the best decisions for ourselves and still walk away feeling like we’ve “won”?]  We decided to do some research and viewed some other apartments yesterday.  $X is the going rate we’re seeing in the market [is he sweating knowing that we moved quickly and already booked showings with agents? That was my goal.] We looked at this first property and it is renting for $X and another comparable property is also renting for $X. [Specifics always help] While we would hate to leave, we aren’t prepared to pay over market for our housing. [my ask is that I’ve laid out what market it and we’re not budging past that.]”

Then, silence. If you’ve taken my negotiation course, you know how important silence is in a negotiation and if I’m honest, I think this silence just saved us thousands each year.

He took a few seconds and replied back, “Thank you for your honesty. Yes, it is a business and I need to make sure I’m doing what’s right for it. But I would hate to see you leave. How about we meet in the middle on the increase?”

This is the part I’m most proud of. Jordan and I both sat in silence and just stared at him. Yes, it was a little uncomfortable for a second, but that was OK. He proposed something that we weren’t ready to consider, but instead of shutting him down, we sat in silence and waited for him to continue.

And continue, he did.

“Well thinking about it as a business owner, it would cost a lot to replace you. And I don’t think the extra cost of replacing you is worth raising the rent. So we won’t raise the rent this year. Would you be OK with that? Keeping the same rent going forward?”

Oh yes, that would be just fine.

The review

While I could end the story there, and you probably would like me to, there’s one area that I had for improvement. Yes, of course, I asked Jordan for an evaluation.

After we shook on the no rent increase he stayed for another 5-10 minutes. And rather than changing the topic to something neutral like the weather (English people love to talk about the weather), I started talking about rent again. WTF, Erica.

Luckily, this changed nothing. But my lesson learned is this: ask for what you want, make the deal, and move on. If all else fails, the weather is a decent segue.

Negotiating your salary is the same as negotiating anything else in life. Taking the lessons I’ve learned and mastered from workplace negotiation, I was able to bring it into my personal life and save a bundle.

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I’ve always had a hard time reading personal finance sites because I feel like 90% of the content doesn’t relate to me. Yes, I like money, but I hate budgeting and I don’t like focusing on cheap finds (though I’ll certainly take a deal when I find one).

For a while, I was ashamed of this. How could someone who likes personal finance also justify booking a last minute plane ticket for too much money or spending on indulgences like a housekeeper? I was a fraud.

But the more I started to own that fact that I’m pretty savvy with my money, despite what conventional gurus say I should do, I started to realize that maybe my lens on money was what made it work for me. And if it works for me, this view might work for someone else as well.

What is this lens? I don’t like to look at money as something that must only be saved and conserved. I like to use my money. I like to spend it. But I like to spend it in line with my priorities and my values.

I spend guilt free on the things I love and cut out all the other things that I don’t.

Maybe it’s my take on financial minimalism. Or I’m bringing Marie Kondo’s book The Life Changing Magic of tidying up into my financial life.

Either way, money should be used. To write your own rules, create your own freedom, and live life on your own terms.

Here are some things I spend shamelessly on that bring me joy:

Dog Sitter

We live away from family. Like around the world away from family. And we rescued a dog that has separation anxiety issues. (Side note – does anyone have any advice for that?) So if we want to go out to dinner and I want to actually enjoy myself, we take her to the sitters.

Is that expensive? Yes.

Is it ridiculous? Probably.

But guess what? Leaving at the intermission of a play we were watching because our dog was at home barking her head off and having a panic attack was also expensive and ridiculous. I choose the ridiculousness that I can live with.

Education, formal & informal

I was one of those kids that never really wanted school to be over. When I was transferred from a year-round elementary school to a school with a traditional schedule I cried at the realization that summer break was for the whole summer.

I haven’t shaken that nasty habit yet. I love learning. That’s probably why I studied for the CPA exam, then studied for the GMAT, then did 2 years in business school, and then started an online course addiction that is intense.

As I was paying my CPA renewal fee this week, for a license I will likely never use again, I realized that I spend a good chunk of change on both formal and informal education. I’m a nerd and I don’t even care.

Conveniences

Like every single person I know, both Jordan and I have busy schedules. Between work, commute (his), side-hustles, friends, we like to make the most of our time.

For us, that does not include cleaning or going to the grocery store. We pay for weekly grocery delivery, a meal prep service, and a housekeeper. And guess what? It’s some of the best money we spend. Some people love cleaning or walking the aisles of a store. To those people, hats off to you. My anxiety is at an all-time high as I wander the aisles frantically searching for butter. I’m not at my best.

Travel

Travel has always been high on my list, but as we are currently living the expat life in the UK, it’s taking up more and more of our monthly disposable income. We won’t live in Europe forever so it’s worth it to us to soak in the sights. Of course, we look for deals where we can, but if we really want to go to Spain for a summer trip, we’re going to Spain for a summer trip.

On the other side of that travel coin, we also miss our friends and family dearly. And flights to the US aren’t exactly cheap. Travel home to make the unmissable events (wedding, milestone birthdays) are memories that I wouldn’t trade for money. When that horrible credit card bill with our flights home comes at the end of the month, I might cringe, but I know I’ve spent money where I really wanted to spend it.

I could give you 85 places where I don’t spend money because they don’t bring me joy. I know I have a balance – I only spend on the things I truly love. My bank accounts are growing as much as I need them to each month (thanks to my non-budget, budget).

My reckless spending won’t be what you choose. I have a friend that would never pay for the conveniences I have, but she loves purses.

As long as it makes you feel happy and balanced, you do you.

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A few years ago I was at a friend’s going away party and she pulled me over to meet her mom. When she introduced me, her mom instantly replied, “Oh you’re the one who helped Lauren set up all of her savings accounts!”

Errr….I guess so? Is that really how I want to be known? Whatever, I’ll take it.

Yes, somehow it had come up in a conversation with Lauren that I like to have a lot of savings accounts. And I showed her exactly what I did to set them up and how I was going to use them in the future. The day that I realized I could have as many savings accounts as my little OCD heart desired, was the best day of my life.

Not because I love saving (though part of me does like to make a little game out of it). But because I love saving for very specific goals.

Money is meaningless unless you have goals that excite you.

For a while my goals revolved around getting out of $120k in student loan debt, and what my life could look like if I was free. Today, they look a bit different.

What hasn’t changed is the fact that I create a bank account for each very specific goal that excites me. And in the last year we’ve added a new savings account to the list, which I’m completely obsessed with (because it’s for a goal I’m obsessed with). I’ll go into that one at the end, because I’ve recently realized just how important it is.

How many savings accounts do you need?

Here are the savings accounts we currently have:

Vacation savings: living in Europe we’ve become really good at going “on holiday” (it’s not a “vacation” here). As such, we needed to have a vacation account that we could put money into monthly and pull from consistently when those large credit card bills came in. Full disclosure, it’s a sad little account right now because we’ve been traveling too much. The photo on this post was from a trip 2 years ago where we completely drained this account and had to put ourselves on a travel time out for quite a while.

House savings: this is the savings account for the house that we own. There’s not much in it, but we save monthly for our bi-annual property tax payments. Someday, when it’s a priority or we’re suddenly making more, I’d like to start putting away cash for renovations. I want to pretend that I’m on an HGTV show and totally makeover my home. But as of now? There’s not much going on in here.

Down payment savings: because we want another house. So badly. I have a photo of it. I think about it almost daily. It won’t happen for a long (long, long, long) time, but having this account helps me feel like we’re inching closer.

Emergency fund: we keep roughly 5 months of expenses in this account. I like to have 6 months in here (or more), Jordan likes to have 3.

Business savings: mainly just to pay the tax man or anything big that I know is coming up.

And the most important account to me right now:

F-Fund: the best, most amazing account we have.

So what is this F-Fund, you ask? That’s a great question. The “F” stands for “freedom” or “fun” or a 4 letter F word.

This is the fund that you can use if you need to get out of a situation. If you need to leave a job, a living situation, or just need a break. It can be savings for a future business that you want to start, so you can finally live your dreams. It can be anything.

The point is, it’s that one account that you know you can spend on anything.

We started this account when I realized one day that we had a little extra in our checking account at the end of the month. I figured I would transfer it to one of the savings accounts that we already had – or possibly spend it on shoes.

When I wasn’t excited about either possibility, I started to think about what was missing from our savings safety net.

Two years ago I walked out of a job that wasn’t right for me. It was terrifying and I was so thankful we had emergency savings to fall back on. But honestly, I stayed longer than I should have. I didn’t want to dip into our emergency savings. That was for a real emergency. Not just an “I hate my job and I need to leave now,” situation. To me, that wasn’t an emergency.

But when I found myself in a taxi on the way to the hospital mid-panic attack, I had to lean on our emergency fund to make up for the fact that I was suddenly without a paycheck. And that, in itself, was stressful.

I realized that if I had a little extra cash stashed away for me to walk out the door and say “fork it, my health comes first,” I probably could have avoided some really dark months (no profanity here. My mom reads this, people. But you can imagine what I really wanted to say.)

Once I pieced that together I opened the Fork It account. This account doesn’t get the regular attention that the other accounts do, because I don’t have a specific timeline or goal for it. But right now it’s getting my extra cash cushions and any windfalls that come our way.

Surprisingly, it’s trucking along quite nicely and I know it will be there the next time Jordan or I really, really need it.

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Once Halloween has gone, it’s a free pass for the internet to start advertising holiday gift guides and black Friday sales. Honestly, sometimes I get a little gift fatigue before the Thanksgiving turkey is slid into the oven.

A few years ago I realized that there wasn’t really much that I wanted for Christmas. I was renting an apartment, had a planned move on the horizon, and felt like I had more stuff than I needed. Not only did I not want presents, but the idea of shopping and wrapping just didn’t feel like how I wanted to spend my limited time off from my job. I decided to embrace a different type of holiday: a minimalist-ish Christmas.

I didn’t set out to shun gifts that year, but at that moment the hours I spent shopping and wrapping were taking away from the hours spent enjoying time with friends and family.

I decided to take an alternative approach to gift giving that year and haven’t looked back since. My minimalist-ish Christmas Not only did I spend more time doing things with people I love, I saved some money (which was an unintended, yet welcome, result).

My minimalist(ish) Christmas evolves each year – some years we travel and enjoy big experiences. Other years we keep things mellow and relax with family nearby. But the one thing that hasn’t changed each year? The focus on mindfulness and intention with my money and my time has made me enjoy the holidays even more.

If you love buying and giving gifts, don’t feel like you need to stop cold-turkey. But by adding in a little more mindfulness and a dash of creativity, you may find that some pieces of a minimalist Christmas (or holiday) make the festive season feel that much more bright.

Here are some ideas to add a little more mindfulness, and minimalist(ish)ness into your holidays:

Have the conversation beforehand:

Before embarking on a mindful and minimal Christmas, I wanted to get everyone else on board. Who wants to be considered the cheap person that shows up empty handed (when that’s not the intention at all).

I suggested the idea to my husband Jordan, and he was immediately on board. When I broached the topic with my mom and sister, I came armed with activities and ideas that we could do together that would still make the holidays feel festive. Again, little to no arm twisting had to happen to make them open to trying this new approach.

But the conversation with my Dad? It didn’t fly. He’s a little nostalgic and views Christmas as a time for opening presents under the tree. Rather than force my new experiment on him we compromised. We agreed to just exchange a couple of small wrappable things and then have one of our “presents” be an activity we did together.

Having the conversation beforehand lets you set expectations for your friends and family and also gives them the chance to add their ideas to the mix.

Schedule meaningful activities before the holiday:

Since my shopping and wrapping was reduced to practically zero, I decided to use that extra time and money to plan those fun activities that I always want to do but never seem to have time for. Some things that I scheduled in for the week leading up to Christmas included:

• An ice-skating date with my sister
• Jordan and I getting hot chocolate and looking at Christmas lights
• A festive tea with my Mom
• A cookie baking bonanza where everyone brought their favorite recipe and we baked dozens of treats
• Wreath Making, which proved my creative skills are practically nil

Make the day-of meaningful:

My holidays don’t include church, which can be a great place to make the day meaningful and special. Since the present swapping wouldn’t really be happening, I didn’t want the day to feel empty. Some extra planning in advance (which I had time for!) made the day even more special than it usually is.

Here are some of the things we added in to make up for the lack of gifts being opened:

• A festive brunch that everyone cooks
• A marathon of movies with a warm fire
• A long walk, hike, or activity outside (weather permitting)
• Yahtzee and other board games with hot chocolate
• Baking (can you ever have enough cookies & cakes?)

Focus on the little things:

Sometimes going completely present-free isn’t really an option. But I honestly feel it’s the little things that make the day big – including presents. If you’re focused on fewer, better gifts, try stuffing a cute stocking with exciting little gifts. I always love more beauty goodies like nail polish and face masks or an amazing 2018 planner.

Or do like the royals do and give a cheap and cheesy bobble or a homemade gift. Kate Middleton reportedly gave homemade jam to the royal family. If it’s good enough for a princess…

And if you’re a guest at a holiday dinner or party, the best hostess gifts aren’t necessarily the ones with the biggest price tag. If I’m going for dinner I usually bring a breakfast basket for the hosts to enjoy the next morning, complete with some pastries, fruit, and juice. A friend once brought homemade biscotti that was wrapped in butcher paper with a bow. And I’ve seen baguettes and jam wrapped in a linen dishcloth given at another party.

Do you do a minimalist(ish) holiday? What’s your strategy for making sure it’s still special?

Photo by freestocks.org on Unsplash

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My first real introduction to investing was back at the end of 2008. It was a big year. The real estate market was crashing. The world was in a financial meltdown. And I was a cheeky 20-something who decided it seemed like the perfect time to make a quick buck in the stock market. I started slowly by investing $2,000 and within a few months, I had dumped most of my savings (around $10,000 at the time) into a handful of investments.

After picking a few stocks and watching them improve over the next year, I naturally figured I was the rain man. I couldn’t lose. This was easy money. And soon I’d retire on an island in the Pacific on all my stock market winnings.  

Jordan was also in on the game. We’d read business articles, comb financial statements, and ponder analyst reports. Yeah…we had no idea what we were doing. But we thought we sounded smart.

When I saw Jordan making a killing on the stock from solar panel company Sunpower, I wanted in. I jumped in on the new hot business and waited for my payday (remember this was 2009 and solar panels were just going mainstream).

How could I lose?

Spoiler: I lost. It was cruel. The stock dropped to nearly nothing. And I was crushed. 

At this dark moment, I was pretty much put off by investing. I didn’t take my money out of the market but I stopped tracking it, stopped buying stocks, and stopped dreaming about my retirement on an island in the middle of the Pacific.

Who had time to play the market anyway?

A few months later I heard about the index fund. These were not new, but they were new to me. I was caught up in the sexiness of stock picking and while I’m sure somewhere in my financial research I had come across index funds, they seemed boring to 24-year-old Erica so I skipped right over them.

But when I heard Warren Buffett championing the index fund I decided they were worth a second look.

What is an index fund?

An index fund is a portfolio of investments that are constructed to match different market indexes. For example, the S&P 500 is an index of stocks from the 500 largest companies in the US. Rather than investing in just a few stocks that are part of the S&P 500, you can invest in an S&P 500 index fund, which gives you a sliver of the entire S&P.

If you invest in a total market index fund, again instead of picking a few stocks in the market, you’ll be invested in a broad number of companies that will reflect the performance of the total stock market.

Why invest in an index fund?

Spreading out the risk is the name of the game when it comes to long-term investing. An index fund is an easy way to spread out the risk because instead of investing in a few companies, you’re invested in a lot of companies. They also have extremely low fees, which means you get to keep more of your earnings.

What’s the downside?

Just like any other investment, you’re exposed to risk. If the market declines, and it always does at some point, your investment will dip as well.  

What if I had invested in an index fund in 2009?

I’m all for admitting my mistakes because I want to make sure that we all can learn from them. So I decided to do a little math.

I looked at the stocks that I bought in 2009 and compared their performance to the Vanguard Total Stock Market ETF. This is their basic fund that matches the performance of the entire US stock market.

While most of the stocks I bought in 2009 were winners, I did have one loser. Thanks, Jordan. But overall my portfolio went up. Since I was a winner overall, is there really any difference between what I earned investing on my own and what I would have earned if I invested in an index fund that was set to track the market?

*Note: before moving into the actual returns seen over this eight-year time period, it’s important to remember the timing here. The returns shown are so large because I’m tracking from the deepest point in the recession when prices were extremely low to present day, in an arguably inflated market. These returns are not even close to typical long-term returns. This just happened to be the time period I was starting to dabble in investing and it was arguably the opportunity of a lifetime to get such massive returns. Which I did not. This is really for illustration only, to make fun of my 24-year-old wannabe day trading self.

The $10,000 I invested in 2009 into 6 stocks would be worth a whopping $13,135 today. Notice I say would be worth because I did eventually sell these stocks and abandon the individual stock picking strategy.

Had I taken that $10,000 and put it in the Vanguard Total Stock Market Fund, it would be worth $29,547 today.

Let that sink in. Would you rather have $13,135 or $29,547?

Taking a look at this today totally knocked the wind from my sails. For years now I’ve been giving Jordan a hard time about suggesting the one stock where I lost money. I blamed my lackluster portfolio on that loss.

It turns out, we were both wrong. I should not have been playing an amateur game of Boiler Room because even without that loss, my portfolio performance was nowhere near what the return would have been from an index fund. Because this index fund tracks the market, my returns would have more closely matched the entire market returns. Instead, I concentrated my money in 6 stocks, 5 of which increased in value but didn’t increase as much as the entire market did during the incredible boom time. 

Now for all of my nerdy readers out there who are asking, “but what about the fees?”, I know. I’m not including the 0.04% expense ratio of the ETF. We’ll get there, but we’ll talk all about fees in another article. My brain is tired from realizing how much money I didn’t make all those years ago.

Should you run out and invest your money in index funds after this? No. Jordan and I (along with our BFF Warren Buffett) invest in various index funds. We like them. They work for us.

But we still do our research, make sure we pay appropriate fees, take a balanced approach to investing, and understand that this is a long-term plan we have going on so we feel comfortable weathering the ups and the downs.

While we want the big life today, we also want to make sure we can have the big life when we’re in our golden years.

All pricing was obtained from the NASDAQ site which lists historical prices by date. Photo by Pineapple Supply Co. on Unsplash

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It’s no secret that I don’t adhere to tracking a strict budget. I know. I’m the black sheep of the personal finance world.

I understand that tracking daily, weekly, or monthly is what really works for some people and I have nothing against it. But I swear, I’ve tried and failed with it more times than I can count.

I was that 22-year-old college grad who tracked things down to the penny in a spreadsheet. (This was before Mint and YNAB). But when I would open the spreadsheet and see that I was out of grocery funds for the month, I’d have a mini panic attack.

When Jordan and I moved in together, it only got worse. We were both attempting to track both our separate and combined budgets. There were moments money made us hate each other just a little bit. Our disagreements mainly centered around who ate more of the groceries that week (he did) and who bought too many new things for the apartment (I did).

In one slightly embarrassing memory, I remember that I watched him pour a massive bowl of cereal. I then asked, “do you really need to eat all of that?”

I was so passive aggressive.

Though tracking wasn’t the long-term solution for me, I knew I couldn’t float through life with zero regards to my spending. Saving was a priority because having money in the bank was going to give me the runway to do really cool things in life.

So I went in search for an alternative to the track every penny plan.

Solution 1: The automatic savings plan.

After a quick search, I came across the automatic savings plan. The gist of it is that at the beginning of each month, you automatically move money into your savings account and then live off what’s left in your checking, guilt-free. It’s the pay yourself first approach.

Guilt-free? I figured I could get on board with that.

And it worked, for a while. But there were still two problems:

1.  Though my spending was supposed to be “guilt free”, it did kind of feel like I was wasting my money, and
2.  I still got money anxiety at the end of each month because I’d usually run out.

In fact, I remember an embarrassing moment one evening in San Francisco. I was in near tears in front of an ATM because I didn’t have enough cash to buy a burrito. If you’ve ever had a craving for a burrito in the Mission only to find out you can’t have it, you’d probably cry too.

Automating my saving and spending wasn’t the cure-all I was hoping for.

Problem: Mindless spending.

Post-burrito tantrum things got back on track for a few months. Sure, I’d run out of money at the end of most months, but I knew to expect it.

After Jordan and I got married and combined most of our money, we stuck with the automatic savings plan because it was easy. But it definitely wasn’t perfect.

One night when he was looking through our credit card bill, he commented that most of the charges we made were those mindless $20 and under purchases that happen too frequently. You know, the swipe that doesn’t feel bad because it’s only $17.45.

Those swipes were fine though because we paid off the balance every month and we were still saving the suggested 20%. That was the textbook definition of fine. But was it really fine?

Don’t get me wrong: saving 20% is a big accomplishment. It took us deliberately adjusting our life so we could hit that target. We’ve always lived in VERY expensive places: San Francisco, Los Angeles, Honolulu, and London. Hitting that 20% meant we were on track to someday buy a home and safely retire at 65.

To be honest, though, we had other ideas of what we wanted to do aside from retiring at 65.  

I wanted to pay off my student loans and change careers. Jordan wanted to build a house.

But we realized that all those under $20 purchases meant we had the problem of mindless spending. For a brief, fleeting moment we thought about trying to meticulously track our budget again.

Nope. Not going to happen.

We worked really hard for our money and we didn’t want to feel guilty spending it.

We also worked really hard for our money and didn’t want to give it up so easily.

What we really needed was to strike that balance but were both a little stuck on where to go next.

Solution 2: The happiness plan.

One day, it occurred to me: what if instead of trying to restrict ourselves from only eating out occasionally or only buying things once in awhile, we focused on only spending money on the things that would truly add to our happiness?

Spend on things we get the most happiness and value from, don’t spend on things that don’t.

This felt like a simple, almost too obvious shift. Weren’t we supposed to do something more dramatic?

But despite the simplicity, we decided to give it a go.

We didn’t carry a list around, make strict rules or anything crazy like that. We’d just take a little pause before purchasing something and ask, “Will this make me happier? How much happier? And why?”

This soon became the perfect balance.There were a lot of things we spent on or wanted to spend on, that made us much happier. Like a cleaning lady and weekend trips exploring the rest of Europe.  

And there are a lot of things that didn’t really make us happier.  Like picking up disappointing takeout all the time. An Amazon Prime membership that had us watching too much TV. Walking out of the drugstore with two new beauty products to try and another bottle of nail polish in an ever so slightly different shade of pink. Or grabbing a latte and pastries nearly every time we went on a walk to Hyde Park, just because it had become a habit.

We were surprised at how many moments we would reach for our wallet to buy something, only to realize that we really didn’t want it. Or how many nights we went out to dinner because we were bored and not creative enough to come up with a different activity.

The simple shift of stopping to ask, “will this make me happy?” started getting us bigger results. We didn’t run out of money at the end of the month. We didn’t get a tinge of guilt when we spent money. And we were surprisingly calmer about money mistakes (like when I accidentally called the US from my UK phone and racked up a horrible bill. Whoops).

But most importantly, we felt more in control. We started to see how we could make a plan for the things we wanted to do in life.

The combined solution

As the amount we spend each month naturally decreased, we wanted to make sure we kept sending our money where it needed to go, without having to think about that too much.

We stuck with the automation piece of our plan, to make sure we were always paying ourselves first, but with the extra cash accumulating at the end of each month from our happiness approach, we could make plans for some bigger goals in life.

We started to create new savings accounts for each of these new goals. And seeing those grow and knowing we’re getting that much closer to all of the things we can’t wait to do gave us even more of a motivation to continue.

Making automatic withdrawals to our savings at the beginning of each month and then spending mindfully with a focus on happiness for the remainder of the month was the winning solution that finally felt good, was easy, and actually works.

Where we are now.

Over the past few years, this simple approach has radically changed how we talk about and use our money. It’s helped us become better partners in managing our money. My debt is gone, I’ve changed careers, and we bought a piece of land that we will hopefully someday build on. We’ve taken a dream trip on a safari to South Africa and we’ve enjoyed hopping around Europe these past few years.

The little changes have added up to some really big things.

We now save 40-50% of our income each month without feeling like we’re deprived of anything (because we know that we don’t actually want to do or buy those things anyway).

This process has made us both feel a whole lot clearer about how we want to use our money. We’re not spending unconsciously and we’re not saving just to save. Most of the time things feel pretty easy. And when it comes to money, it’s good to feel easy.

But just like with anything else, we didn’t magically solve our problems and now things will forever perfect. The simple solutions of sticking with an automated plan and focusing on happiness works, for the most part. But there are two things that we continually have to watch for:

Balancing a social life

Moving around a lot over the past decade has meant that we’ve had to put an extra emphasis on creating new friendships in each new city. And we don’t always meet and hang out with people who want to spend in the same ways we want to spend.

While this used to be uncomfortable and we felt like we had to choose between our money and having a social life, we realized that’s not the case. After one particular night where we had loved the company but hated the fact that we just spent so much money at a restaurant we didn’t care to go to for a meal we didn’t particularly like, we realized it was time to get better at saying, “No, but…”

As in: “Thanks so much for thinking of us for dinner Sat night! We’re not that into heading to that restaurant but we’d still love to see you. Want to meet up for a drink beforehand? Or to head to the new exhibit at the V&A museum on Sunday?”

Honing this skill has helped us take control of both our money and our time, while still you know, having a life.

Not slipping into bad habits

Just like everyone else, we can still fall prey to bad habits that seem to creep up out of nowhere. Like when I tore my ACL and had to uber to and from work each day. Totally necessary since I couldn’t walk. But 2 months later when I’m walking around like a champ and still ubering to and from work? Bad habit.

Or our newly created habit of never being able to walk past a certain grocery store here in London without popping in for a little “treat.” This store is literally my Achilles heel and neither of us can walk out without buying so much snack food that we really don’t need. Really – at least once every two weeks I’d walk out with a bag of “healthy” chips, a container of guac, and a bag of cookies (plus about 85 other items that looked interesting) and call it a balanced dinner.

To make sure we don’t go too deep on a mindless spending binge, every few months as we take a look through our bank account and credit card statements, we do try to ask ourselves if we’re still spending in line with our happiness.

95% of the time the answer is “yes”. But when it’s no, we realize it’s time to break that bad habit. Bye chips & guac for dinner.

Will we stick with this strategy forever? Maybe. But we may also get to a point in life where we need to start tracking our dollars more closely. Or we may figure out a new system altogether.

The point is we now have a solid foundation to build from and a real understanding of how to handle our money to live our best life.

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When Jordan and I were saving to buy a house, we couldn’t agree on where to keep the money we were slowly stashing away.

Do we keep it in savings? Do we invest it? We couldn’t come to an agreement because though we are both equally knowledgeable, we view risk very differently.

Jordan is riskier than I am, in investments and in life. He found it fun to jump out of a plane and off a bridge, while I get queasy when I’m in too tall of a building.

Exhibit A: Jordan likes risk

When he looks at investment risk he sees the upside. While he acknowledges that things could go badly – and he hates when they do – he embraces the idea that he could win big. He’s an eternal optimist.

I like to pretend that I embrace riskier investing decisions, but deep down I don’t. I’m the person who loses one hand of $5 blackjack and I’m out. For life.

So naturally, as we were saving up, I wanted to keep our money in savings. Jordan was excited about the returns in the market and wanted to put the cash in a low fee Index Fund.

My rationale was: what if we lose it?

His was: what if we lose out?

We didn’t know how long saving for a home would take. We were purchasing in the San Francisco Bay Area, which is notoriously competitive. It could take years to buy (which it did).

So do we lose out on the potential for great returns over a few years? Or do we risk losing some of the money we need for a down payment in pursuit of that great return?

The financial rules for the extreme ends of the spectrum were pretty clear. Emergency fund goes into savings because you always want to have cash on hand. Retirement investing goes into well-diversified investments because it has a longer timeline. If the market crashes, you have more time to recover.

But the middle? We couldn’t find a hard and fast rule for that.

Luckily, a friend’s mom was nice enough to chat with us about our different options. She’s a wealth manager for the uber-wealthy – you know, the people who need to know whether it’s better to buy or lease their private plane. So it really was incredibly nice of her to talk through this question with us.

After speaking with her we decided to leave most of our money in a high yield savings account. But better than that, we also nailed down a 2 question framework that helps us work through where money should be put in the future.

Question 1: How soon do I need this?

With a short timeline, investing isn’t a great option. While things can go up, they can also go down. If you need that money pretty quickly, there’s a chance you’d have to sell at a low point in the market.  The longer the timeline, the more you are able to recover from ups and downs in the market.

Question 2: What happens if I lose this?

No one wants to lose money. But what is your tolerance for temporarily losing that money? Are you going to have to put off buying a house for a few more years? Will you have to put up with a job that you hate for a few more years?

We’ve used these two questions to navigate how to think about what to do with our money. It’s helped me to step outside of my comfort zone ever so slightly and keep Jordan from gambling away the money that we need sooner, rather than later.

And because they’re really simple questions that aren’t full of financial jargon, it’s easy to talk through them. Which means we stay on the same page with our goals.

For example, with the home that we purchased, we felt like our timeline was pretty short: we wanted to buy the house within 1-3 years, whenever the right place came on the market. Since we needed the money quickly and we wouldn’t be able to buy a home without it, we kept what we needed to for the down payment in a savings account.

Now that we want to buy another house, we’re looking at the same scenario through a different lens. Yes, we’d like to buy another house in the next 2-5 years. Our timeline is still short. But since we already have purchased a home for us to live in and this second home is more of an investment, we both feel more comfortable weathering the market ups and downs.

(Which really means I feel more comfortable weather the ups and downs because Jordan rarely needs convincing.)

If we lose the money for a while, we don’t have to sell during a downturn. We can wait on purchasing an investment property for as long as we need to.

And what about college funds for our future children? It’s invested in a 529 plan because college is a long way away (being that we don’t currently have kids). We have plenty of time to take advantage of market increases and to recover from declines.

Other goals, like our emergency savings, our f-fund, and our vacation savings are sitting in separate high yield savings accounts. We may need them on short notice and we can’t afford to lose them.

There are plenty of investment options out there other than Index Funds and 529’s, and understanding your answer to these questions can help guide where you feel most comfortable putting your money.

Whether you have the risk tolerance of a sky-diver or you prefer to keep both feet planted solidly on the ground, ask yourself these two questions and see if and how your answer to investing changes.

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I have a confession to make: I’m an annoying morning person. And I swear, it gets worse with every year that passes.

I’m that overnight guest you never want to have because I’m up at 6:30 am trying to sneak through your kitchen to find coffee. I made a rule for myself that on weekends I’m not allowed to start pestering Jordan until after 7 am. And yes, that means I often wake him up at 7:01.

But despite loving the morning, for most of my life, those early hours have been wasted. I’d poke around in the kitchen, debating for 20 minutes about what I should eat. Slowly put on an outfit, only to try on 3 tops and decide that none of them are right. Or scroll through my phone for 30 minutes doing absolutely nothing.

A few years ago I heard about the benefits of a morning routine. Most of us have heard that claim that if you establish a good morning routine you’ll magically become more motivated, have more time to yourself, and GDS like never before.

I figured a morning routine would be easy for me since I was already a morning person. How difficult could it really be?

Yeah…no. For the past 2 years I’ve tried to make a morning routine work for me. I tried the normal things people recommended: writing in a journal, meditating, exercising, reading. Those tactics never stuck. They weren’t exciting enough for me to jump out of bed and want to do.

After waking up one too many times in a terrible mood and not being very productive, I decided to change it up. I didn’t even realize I was creating a routine, but I finally fell into my groove.

This new morning routine has left me feeling a bit more productive, peppy, and positive about the day ahead.

But it’s also had a surprising effect: my spending has somehow naturally decreased.

I didn’t notice this immediately, but while on my walk yesterday morning Jordan suggested I pop into a coffee shop to grab a latte or a breakfast snack. I stopped and realized that I didn’t have my wallet with me.

It had been over a month since I’d stopped to pick something up and I hadn’t even noticed.

What used to be a regular treat on a morning walk had disappeared from my routine completely. As I thought about it more I realized that other spending habits changed as well. I didn’t go to a cafe or the corner store for a mid-afternoon pick me up. I didn’t try to avoid my to-do list by scrolling through a bunch of online stores.

Things have changed. And my morning routine seems to be a catalyst for that change.

When I’m happier and focused on my priorities, my spending reflects that. If I’m stressed, or having a rough day my spending also reflects that (I only have so much willpower).

I do subscribe to the money management idea that you should spend mindfully on the things that make you happy and cut out all the rest. This concept is made infinitely easier when you make other lifestyle adjustments that also make you happy.

If I start my mornings out happy and productive, it’s easier to avoid being tempted to pull out my wallet to buy something that isn’t really what I want.

Here’s what my new morning routine looks like:

4:30 AM

I roll out of bed and throw on yoga pants that I usually have sitting at the end of the bed. After quickly feeding my dog and starting the coffee maker, I head back to my room. I make my bed, hospital corners and all (I’m crazy), and put on a fun Spotify mix. I then do 15-20 minutes of something that resembles yoga, which is basically my version of stretching, breathing, and getting myself mentally ready for the day. While I may drag my feet to start stretching in the morning, one I put on the music and start relaxing into easy stretches, I feel a boost of positivity.

5:15 AM

After that, I head back to the kitchen to grab a cup of coffee, a cup of hot water with lemon, and a quick little snack and walk directly into my office. The night before I usually write down one thing to focus on and spend this time doing that thing (more often than not it’s writing). Sometimes it’s the most important task I need to do that day but other times it’s the thing I’m most looking forward to doing.

6:15 AM

I head out the door with Jordan as he heads to work and take our dog Hattie for an hour walk.

Half of the time I listen to a podcast and the other times I start brainstorming other things I want to do or to write about when I get home.

7:15 AM

I usually spend 15-20 minutes getting showered and dressed. I then make myself a quick breakfast and eat it while scrolling through the news or reading my email. After that, I fill up my water bottle, grab another cup of coffee, and head into my home office to get started on work by 8 am.

8:00 AM

If I’ve stuck to this morning routine I’m usually peppy and ready (dare I say, excited) to start my workday.

Waking up that early sounds aggressive – and it is – but I’m a morning person and would much rather prefer to wake up early than stay up late. When I try to stay up past 10 pm on a school night I turn into a monster the next day.

While this morning routine works to make me a happier person, it took me until recently to see the connection to my money. Here’s how it’s made an impact on my bank account:

Bye-bye bagels and coffee:

I work from home and I always felt the need to leave my house before starting my day. It was the motivation that I needed to actually put on pants in the morning and look like a decent human being before sitting down at my computer. Leaving the house used to revolve around grabbing a latte and/or a bagel. Now that I’m up so early and I take 5 minutes to eat something good, I’ve naturally stopped wanting to grab something while I’m out.

Except when the bakery has cinnamon rolls. I’m not a robot.

My browsing has stopped:

I think because I get into my work so early with a morning “win” – by doing something that either gets me excited or makes me feel accomplished – it sets the tone for the rest of the day. Rather than browsing online while avoiding my to-do list, I focus on getting more wins during the day.

My energy is up:

I used to look forward to lunch because I’d be exhausted and need a break or a change of scenery. While I would only go out to lunch once a week, I’d find myself doing other things that might mindlessly cost me money. I’d buy a new book to read or do a little online shopping. Or I’d pop down to the corner market to get a few snacks (read: candy).

I’d look for something, really anything, to give me more energy to get through the midday slump.

I spend better:

Before you think this is a “stop drinking your lattes and online shopping article”, I wanted to point out that how I spend has shifted. I spend less money, but I still do spend intentionally on things in my morning routine that make me really happy.

Every Friday morning our town has a farmer’s market. They’ve usually just set up by the time I’m finishing my walk and I stop by to browse the stalls. I seriously love this. I usually grab some goods for dinner that night or brunch on the weekend. Or a cinnamon roll that I devour on the walk home.

I might also grab a new coffee bean roast or some flowers to brighten up my office (England is so dark and grey right now).

I actually enjoy spending on these things and as a win-win, that amazing brunch at home or the artisan roasted coffee beans add a touch to my day that leaves me feeling anything but deprived.

How do you find the same money-saving morning routine flow?

Identify where your day is going off the rails and find a morning activity that will help prevent that.

If you find yourself always in a rush out the door only to spend hours of your life in line at the Starbucks, try a routine that incorporates getting up a little earlier and enjoying a cup of coffee while you do something that makes you feel great. It doesn’t need to be yoga related. Pick up a good book, journal, meditate, or make your bed with perfect hospital corners. Trust me. Those corners are therapeutic.

If you find yourself toiling away in the evening over a to-do list that you’ve avoided all day, try incorporating that one most important thing to do each day into your morning routine. You’ll get a boost of happiness from getting that thing done early. That could help save you from too many nights spent hunched over your computer eating mediocre takeout.

If a midday slump has you reaching looking for a quick fix, does moving early morning help boost your energy for the day? A walk and my attempt at a yoga session in the morning does more for my all-day energy than anything else. So does taking some time to fully drink a cup of coffee before it gets cold.

If you find that you’re generally unpleasant in the morning and always dreading what’s in front of you for the day, try adding a little mindfulness into your morning. A gratitude journal, some breathing exercises, or taking some quiet moments in the morning silence can help prepare you to approach your day more positively.

Figure out where your day might be consistently getting off track and devise a morning activity to add to the routine.

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I wrote a piece last year for The Everygirl that went through 5 different ways couples can combine their money. And I received some strong feedback:

“5 ways! There’s only one way! Combine everything!” or “Combine your money? Why make this so difficult! Just keep it separate.”

I get it. Money is touchy. Money and marriage combined? Tread even lighter with your opinions.

Jordan and I use a system that works for us. And we love it. But I also know that everyone is different and what works for us likely won’t work for you.

The most important thing to know is it works for the two people who are actually in the relationship. And that means sharing your feelings and opinions about money. Openly.

The good news is that once you decide on an approach and you make it easy with the non-budget, budget, you don’t have to keep having this same conversation over and over again.

To help you get started deciding what is right for you, there are 5 options below. We’ll use Jane and John as our fictional couple to help illustrate each one. Their household income is $100k per year: Jane makes $60k and John makes $40k. Go Jane.

Option 1: One Together

The idea here is that all accounts are kept separate except for one joint checking account. That joint checking account is used for shared expenses: rent/mortgage, bills, groceries, eating out. Each person can contribute equal amounts to this account or can contribute based on how much they earn.

Jane and John added up their monthly joint expenses and they total $4,000 per month. Jane and John can either contribute equally or based on how much they each earn. If they contribute equally, they’ll both transfer $2,000 into the joint account at the beginning of the month. If they decide to do it based on how much they earn, Jane would contribute $2,400 (60% of the total) and John would contribute $1,600.

Jordan and I used this approach when we were living together but not married. It worked pretty well for us – aside from when I would get mad at him for eating too much cereal. (And no, I don’t understand how he puts up with me either.)

Option 2: One Apart

This is the opposite of option 1. Rather than having one joint account and keeping everything separate, you combine all checking and savings accounts and keep one individual checking. Each month an automatic transfer is made from the joint account to the individual checking for that person to spend or save as they please. It’s like an adult version of an allowance.

Jane and John each put their entire paycheck into their joint checking account. From there they pay their bills and transfer money into savings. Once a month they also make an automatic transfer into their individual checking accounts of $200. Jane lets that money build up until after a few months she treats herself to a spa weekend with a friend. John spends his money every single month on video games. But neither of them gets mad or judges how they spend their separate money.

This is the option Jordan and I use right now, and we love it.

Option 3: All In

There’s no hiding anything here. The two completely combine their money meaning that their paychecks are deposited into one account and only flows to joint savings accounts and to pay bills. When they want to spend money on anything, they do it from a joint account.

Jane’s spa weekend and John’s video games will come out of the joint checking account. They have a few options as to how they can talk about their spending. They can set a dollar amount, say $200, and anything that costs less than $200 they can purchase without checking with their spouse. They can choose to discuss any purchase, large or small, as my friend did. Or they can choose to not discuss everything and trust that the other person is making the best decisions with the family finances in mind.

Option 4: All Out

This is the opposite of option 3. Rather than combining any money, the couple can choose to pay for different expenses separately, from their own bank account. There’s no combined account and each person keeps their own checking and savings accounts.

Jane and John decided that it made sense for Jane to pay the mortgage on their home since she makes more, and John would pay for groceries and utilities. They trade off paying for eating out and other joint activities. They’re each in charge of managing their own individual spending and individual saving, but check in with each other frequently to make sure they’re on track with their goals.

Option 5: Live Off One

For those serious savers, or people that eventually hope to only have one person earning an income, living off one income is a good option. With this option, one person’s paycheck goes into a joint account and pays all of the living expenses and discretionary spending. The other person’s paycheck goes right into their saving and investment accounts.

Jane and John decided that they wanted to save as much as possible, as easily as possible. Since Jane earns more, they’ll use her paycheck for all of their living expenses: their mortgage, utilities, groceries, and fun spending. John’s paycheck will be deposited directly into their savings account. Since Jane makes 60% of the household income and John makes 40%, they have a savings rate of 40%.

These 5 options are just the basics of how to combine (or not combine) money with your significant other. Once you find an option that sounds about right, fit it to what you both want.

And don’t listen to the naysayers who claim there’s only one way to do it. You’ve got to do you.

Photo by Caleb Ekeroth on Unsplash

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Years ago I was out with a friend. We were having lunch and popping into some cute boutiques in San Francisco. She found a dress that she absolutely loved and wanted to get it for a wedding that summer. Rather than making the decision herself, she called and asked her husband for permission to get it.

That moment is seared into my memory.

She called. To ask. Permission.

Naturally, I was curious and wanted to know more about how they managed their funds. She said they combine all their money and before they spend money on items individually, they usually check in with each other to make sure the other person approves.

At that point I was currently unmarried and living with two girlfriends in a small apartment, so managing money with a spouse wasn’t on my mind. But I made a mental note that the approach she was taking was not one that I wanted to replicate for myself when I got married.

I completely understand the need to make joint decisions on purchases that will affect the family finances. And this approach worked for her. But if Jordan called me to ask if he could buy a pair of pants, I would seriously question his ability to make independent, rational decisions.

On the other hand, I’ve met couples that silently seethe over the fact that one person has a shopping habit that far exceeds the other persons. I could see myself falling into the same trap of resentment and realized that was also an approach I didn’t want to take.

We all have likely heard that money is one of the leading stresses in relationships. So when Jordan and I started dating, moved in together, and eventually got married, we were very intentional with how we approached our money together.

It has evolved over the years. How we manage it now that we’re married is different from how we managed it when we were dating and living together. And it may change again as we change.

*By the way, the photo above is from our wedding 5 years ago. I’m loving Jordan’s shaggy hair and the fact that I used to be tan. And young. So, so young. 

The underlying premise of our joint money management is this:

Big financial (and life) decisions are made together. Everything else is simplified.

The Tactics:

We are fans of the no budget, budget (or the automatic budget). Day to day, here’s what this looks like:

• Both of our paychecks are deposited into a joint checking account
• Bills are automatically paid
• Transfers are made to different joint savings and investment accounts and each of our individual retirement accounts
• An automatic transfer is done to individual checking accounts for each of us. We each get an equal amount transferred to our checking each month and we can choose to spend it (or not spend it) as we please.
• We are free to spend what’s left in our joint checking on what we need and want for the remainder of the month (rent, groceries, eating out, entertainment, etc)

The transfer done to our individual checking accounts is key of us. To be honest, it might be more key for me than it is for Jordan. I need to have my freedom.

How we decided on this approach:

When we got married we made roughly the same salary, but we both knew it might not always be that way. Career changes, moves abroad, and kids would eventually come into the equation.

As there are so many ways to combine – or not combine money, we went through the different options and picked one that felt fair to both of us.

We could have kept our money separate and only kicked in a percentage of our salary to cover shared expenses. But I know how competitive I am and if there came a time when I was earning less, I wouldn’t want to be constantly reminded that the percentage I contributed was less.

We could have totally combined our money and not had separate spending accounts, but there are some things that I want to do or buy and I don’t necessarily want to weigh how that would affect our household finances. I need some freedom.

Giving ourselves equal spending amounts each month that went to individual accounts helps us both to feel like we have freedom without always breaking down who contributes what to the household finances.

Why this is important for us:

When Jordan was offered the opportunity to move abroad in 2014, salary was a big consideration. At the time we were equal earners. The move abroad was going to result in him making substantially more while I would take a significant pay cut, due to the job market in London. (I quickly learned that my MBA from Duke didn’t matter at all in a different country.)

If we had contributed to household expenses based on the percentage that we earned and his percentage shot up to 75% and mine went down to 25%, that would have been a huge hit to my ego. And I probably would have been resentful.

Though that scenario did happen, because we didn’t look at it based on percentages and who can contribute what, it made it easier for me to stomach the pay cut and focus on the great international experience we were going to have.

In the future as Jordan explores new career paths and I continue to make more, not having to compare who earns what will again be helpful as we navigate those choices.

How we use it:

As I’ve mentioned, I focus solely on making sure my spending reflects what I love. And Jordan does the same. Having individual spending accounts enables us to focus on what we really want to spend on as individuals and not hold back.

Who am I to judge his decision to buy a new pair of skis or fly to the US for a bachelor party? It’s his happiness, not mine.

When we were in Italy last month we went to the Prada outlet. As he debated a leather jacket that was really, really expensive, it was his decision to make, not ours. He knows whether he has money in his account and can make the decision that makes him the happiest, without considering me, our credit card, or our savings accounts.

We’ve both used this money for wildly different reasons. Here are a few:

• Taking my Mom and my Dad on respective 60th and 70th birthday trips
• Helping my sister when she had a huge emergency medical bill and needed a quick loan
• A weekend away with friends
• Birthday or Christmas presents for each other
• New clothes, shoes, etc.

And my favorite: when I quit my job to try my hand at working freelance and writing, he bought me my computer. That I’m currently still using. Knowing that he spent his personal money on that because he believed in me gave me the confidence to go out and believe in myself.

When it changes:

Based on our different life goals, we regularly look at our savings rate and determine if we can adjust it. When we decided that we wanted to start saving up for a second home (this one a tiny home), we adjusted our automatic savings transfer by a little each month.

We also realized at one point that the money in each of our individual checking accounts was accumulating a little too quickly. So we cut that monthly transfer by 25% to see if we could still feel comfortable living with that. (We do.)

Of course, this is just one of many ways to combine finances. It works for us because we both get to keep our independence with separate extra spending accounts while combining everything else.

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Let’s be honest: saving for an emergency fund or for retirement can be a bit, well, boring. Maybe you don’t think so but I’m totally unenthused by those two (very important) things.

But the short-term and mid-term goals? That’s where I think the fun is. Maybe it’s because I like to daydream about all of the things that I can do someday soon. But these short-term goals and dreams are the things that make life exciting. These are the goals that create a big life.

We don’t want to save just to have choices when we’re 65. We want choices today as well. 

While we’ve put our retirement saving on autopilot, with the no-budget, budget, it’s freed up our mental space to dream about things that aren’t so distant. Things that could happen in the next 2-6+ years.

And I dream about these things a lot.

As we’ve been reflecting on 2017 and planning for 2018, there are two short-term goals that get both Jordan and I really jazzed. Sometimes we have separate goals, and for us that’s fine. But this year both Jordan and I are fully on board with 2 goals that we are really excited to see if we can get to.

Once we got clear on our goals, another question popped up:

Where do we put this money?

The rules are pretty clear for emergency funds and retirement. Your emergency fund or money that you truly need in the short term should go into a savings account or money market account where it will stay safe and you have easy access to it.

Retirement funds or money that you need in 10+ years should be invested in a well-diversified fund (or funds), based on how much risk you want to take.

But these goals in the middle? There’s no one right answer. But there are a lot of great options which I’ll lay out for you here. And I’ll also fill you in on exactly where we’re going to put our money and how we made those decisions.

The options

Easy options for your money are listed in order of risk below. The lowest risk options are presented first, the higher risk options are last. You’ll notice that the higher you move up the risk ladder, the higher the potential returns. Of course, there are more options, but these are the basic big buckets, to get you started:

High Yield Savings or Money Market Account:

Your money will be safe and sound put away in a savings account or money market account. (psst: a money market account is basically the same as a savings account, but will usually come with a slightly higher interest rate). While these can get a bad rap for being boring, there’s nothing boring about having money there for you when you really want to use it. At the time of this article, you should be able to easily find an account with an APY (annual percentage yield, or interest rate) of over 1%.

CD:

a certificate of deposit, or CD, will usually provide a slightly higher rate, but requires you to put away your money for a set amount of time. The term length can vary from 6 months to over 5 years. Right now the rate on a two year CD is 2%.

Bond Index Fund:

a bond is a step into investing, but with a much lower risk than stocks. A bond index fund is a good way to spread out your risk over the entire bond market. (Need a refresher on Index Funds and wtf they are? See it here.) You’ll see historical returns for bond funds from approximately 1% to 5%.

Stock Index Fund:

this works the same way as a bond index fund, but has a higher risk. There are a lot of variations of stock index funds, but the basic idea is that you can buy into a fund that tracks the entire stock market or a piece of the market (like mid-sized companies, real estate, or technology). Returns are higher, but over the course of history, the stock market has produced 7% annual returns. Want to see the data on returns from 1950 – 2009? It’s over here.

A little of this, a little of that:

just like toppings at the frozen yogurt bar, you don’t have to choose just one. You could choose to put your money in all 4 options to spread out the risk – that’s called asset allocation.

The 2 Questions

Before making any investment decisions, there are two questions that you should ask yourself:

1. How soon do you need this?

What kind of timeline are we looking at? Short, medium, or long.

2. What happens if you can’t have it then?

Can you weather the ups and downs of the market or is this money that you will need right away (when you really need it – like emergency savings or a house down payment)?

Brush up on the two questions by reading this article.

Our 2018 Big Life Goals

Jordan has been kicking ass in his career for 12 years now. And he might continue to do so. But he wants the option to pivot, pursue a different passion, and have control over his life, without feeling overwhelmed by the strain of money.

I had a great corporate career and I’ve made a transition to self-employment. But as much as I love what I do and I hope it continues to grow, there are ups and downs in income. It’s an adjustment to not have a steady bi-weekly paycheck.

So to make sure he has control over his career, goal #1 that we have this year is to really put an emphasis on the freedom fund.

Goal #2 is so exciting but very uncertain. Last year we bought a piece of land. In 2 (or so-ish) years we’d like to put a tiny house on it. Not just any tiny house. We want to bring one back with us from Europe when we move home. I love it (check out the site here).

We own a house so this is tiny home is more of an investment. And a fun adventure.

Other examples of mid-term goals:

Tiny house not your jam? Freedom fund not at the top of your list? Here are some other examples of mid-term goals, those 2-10 year goals, that can be difficult to know what to do with.

• A down payment on a home
• A big vacation that you want to take in 2 years
• A 3 month sabbatical from your job
• Starting a new business

Our answers to the 2 questions and where we’re putting our money:

1. How soon do I need this?

We’d like to have goal  #1 saved in 1 year and goal #2 saved in 2 years. It’s a stretch, but we’re up for a good challenge.

2. What happens if the value drops and I can’t have it then?

With goal #1 (the freedom fund), I think we’d both be pretty heartbroken to not have this money ready in 12 months. Options and control mean a lot to us and this account is going to give us both.

With goal #2, honestly, nothing changes. We’ve already bought our home. This is an investment (or something fun for us to live in). We’re not 100% sure that we can get it through the permitting process. There are a lot of unknowns here and if we have to wait, we have to wait.

How we’ll save this money

Goals like these are the reason I preach buying happiness, rather than adhering to a strict budget. We’re not going to go line by line and set up a budget. We’re not going to stop buying things we love. (Like travel: we’re still going to Paris this weekend.)

Rather than adhere to a strict budget, we’re going to do other things to help us increase the gap between what we make and what we spend. We will do a couple of things like negotiating some of our expenses. (I negotiated our rent, which you can read about here. And the internet, phone, and insurance companies – I’ll be calling you soon.)

And we’re spending intentionally as well, buying the things that make us the happiest and cutting out the things that don’t. Yes, we’re going to Paris. But when planning out our trip, I decided that going to a baking school to learn how to make croissants wasn’t going to make me happier than our two goals. As a trade-off, I’ll skip the class and eat my bodyweight in croissants that come from a bakery.

Where we’ll put it

This is by no means advice for you and your specific situation. But I like to be really transparent and not just give you the textbook information, but how we’re using this in our life. With good information, you can make the best decision for your situation. We’ve done that with ours. So here it goes.

Goal #1: Freedom Fund

Since we want this in a short time frame and are not willing to weather the market ups and downs, we’re going with a very safe option. We looked at both CD’s and Savings/Money Market accounts. (again, a money market account is pretty much the same thing as a savings account, it just normally carries a slightly higher interest rate). 

Our criteria for picking an option was: we want to be able to add to the balance monthly as we save, we want access to the money at any time, and we want it to be safe. With a CD you’re not able to add to the balance monthly – what you deposit initially is all that is allowed for that CD. And with most CD’s you don’t have access to the funds whenever you need them. You generally have to keep them locked up for the entire length of the CD (so a 2 year CD means you don’t have access to that money for 2 years).

Our pick: because we want access to our money and we also want to add to the balance monthly as we save, we chose to put our cash in a money market account. We set up a separate money market account with our bank that we created specifically for this goal. 

Goal #2: Tiny House

As I mentioned, there is so much uncertainty with this goal. Will we be able to get permits? Will we still want to do it in 2 years? And we’re also not married to the 2-year goal timeline. If the market dips, we’re OK staying the course until it recovers (ie: not pulling our money out if it goes down).

Who knows – we may never actually build this thing and have the money sitting around for 8-10 years. We also already have a primary home, so we look at this as more of an investment/fun project. Because of that, we decided to be a bit cheeky with our risk.

Our pick: A little of this and a little of that. We decided to invest our money and monthly contributions into an Index Fund that divides our money between stocks and bonds. If you want more of an overview of these types of funds, Vanguard has a good description of their funds called “LifeStrategy Funds.”

Figuring this out actually didn’t take that long. Once we got clear on our goals, the money we needed, and our timeline, we had a really easy discussion about where we felt most comfortable keeping the money. And we’ve landed on a decision that feels really easy to now put into place and then set on cruise control.

I’m excited to see where we land in January 2019.

Photo by Alesia Kazantceva on Unsplash

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Every year I make resolutions or set goals in January. But to be honest, I have a 50/50 success rate. There have been a few years that I’ve absolutely stuck to what I’ve said I want to do (like that year I gave up bottled water).

And then there are others where I’ve given up on my goals by the time we hit the third week in January.

This year, I wanted to try something a little different. I pulled Jordan into it with me (though he’s never one to make New Year’s resolutions) and I’m going to use a monthly check in to help us stay honest with our progress. I’ll be sharing that monthly check in right here for everyone to see. I need accountability, people.

I struggled with setting goals this year because Jordan and I are expecting a little human to join us at the end of March. And as much as I pretend life will commence as normal, I realize I’m in a full-on state of denial.

Each month I’ll sit down and share the progress we’ve (hopefully) made and any mistakes or lessons.

Some of these goals include Jordan, which I’ve noted below. He’s a good sport to allow himself to get roped into this.

Big financial goals (both Erica & Jordan)

Our two big goals:

Money goals can sometimes be boring. But this year we have two really specific goals for our money that I think will make it more fun: we want to fund our freedom account and we want to save to buy this tiny house (read more about these goals and where to invest your money in the short term here).

They’re really stretch goals for us so I’m a little nervous to track these publicly each month. But I’m ready for that accountability.

Our goal for the new baby:

It’s also our goal to kick start a 529 plan with a windfall we have coming our way later this month, rather than make monthly contributions. I’ve done a decent amount of research and know what plan we’re going with (and why), which I’ll share once the account is funded at the end of the month.

This is an easy goal that I can check off early (winning!).

Make more goals (Erica only)

I work for myself. And while it’s great and I absolutely wouldn’t trade it, income can be inconsistent. I have two steady jobs that bring in roughly the same each month, but just cruising along with those is a recipe for disaster because if I lose one, I’ll be straight back to my corporate life.

My goal this year is to make more by picking up one new job each month (minus March & April because I’m trying to give myself a little bit of time to adjust to a baby. All tips welcome and appreciated).

These jobs can be writing or consulting, but I need to get out and pitch (groan).

As additional motivation, there’s no way we’ll reach our financial goals without me doing this, so it’s time to check my ego at the door and go look for more work.

Spend smarter & the happiness habit (both Erica & Jordan)

Sometimes I sound like a broken record, but we don’t really budget. But what we do instead is to adhere to buying only the things that make us the happiest, and cutting out the rest (need a refresher on that? Find it here.)

There are weeks where we’re great at this and there are other weeks where we’ll not even realize how much we’ve spent on stupid things until I look at our bank account and see that we have $10 left for the month.

This year, I think it would be fun for us to sit down and be honest about one purchase each month we’re thrilled we made, and one that was a downright bad decision. I can already feel myself cringing thinking back to my bad purchases of 2017.

The idea for this monthly reflection isn’t to feel bad about spending money but it’s to make sure we’re being mindful and seriously enjoying everything that we spend on.  Expect total honesty each month about the good, the bad, and the ugly of our day to day spending.

Live bigger (both Erica + Jordan)

While money goals are great, they’re not everything. Not even close. I’ve made health or lifestyle resolutions in the past, but this year, with a baby on the way, the healthy goals have morphed into the need for more mental health than physical health.

Travel:

We’ve traveled pretty extensively in the 4 years we’ve been living in London, but there are still more places on our list (aren’t there always?). We’re prioritizing this year and the two places that we absolutely must make it to are Sweden (either Stockholm or a beach town where my family is from) and Amsterdam. And also a summer trip to somewhere sunny. Because it’s going to be a long winter. 

Erica’s goal:

At the end of 2017, I really put a morning routine into place (which I love). But I still struggle to do the yoga piece of it every single day. I can be so lazy even though once I do it I feel so good.

I want to make yoga a bigger part of my life this year as a way to help manage my stress and anxiety (and you know, be a happier, nicer person). So my goal is to do yoga 5 days per week – either on my own, with YouTube videos, or an app.

Jordan’s goal:

Last summer Jordan started going to Crossfit and has absolutely loved it. While it’s great for fitness, yes, I swear it’s also had a major impact on his happiness and patience. His goal is to continue going 3 times per week (minus a few weeks post-baby where we need to give ourselves a little slack).

The Worth Project

The more that I write here, the more excited I get about sharing great information. So it has to be said, that continuing to grow The Worth Project is a big 2018 goal for me.  Like really big. Here’s what I hope to get done in this first quarter.

Double the number of people I reach each month: I get so enthused each time a new reader sends me a note asking a question or telling me that they’re happy to have found the site. It literally gives me fuel to keep writing. So a big goal for me is to figure out how to reach more people. I think this is going to have to involve social media, which tbh makes me cringe. But it’s for a worthy pursuit, right?

Create a (free) investing guide for the toolbox: I hate that investing can be confusing. I hate more that there are a lot of people taking advantage of that fear or confusion. Investing doesn’t need to be difficult. I want to break it all down. From the fees to the types of investments, to what investment services are both user-friendly and a smart financial move, I want to break it all down. I meant to have this done by end of 2017, but I’m now aiming for this to be a February goal.

Run a free workshop or challenge: it’s so easy to consume information without actually implementing anything. It’s also so easy for me to continue just writing articles and hope that someone takes action from them. To make sure we’re all in this together, I want to put together a free workshop or challenge that helps you make actionable steps toward feeling good about spending smarter, making more, and living bigger.

Take a writing class: I can write, but I’m not a great writer. It’s a challenge for me. But I know the better I write, the easier it will be for you to read and follow along. So it’s time to take a writing class.

If you set goals for the new year, share them with me! Let’s keep each other accountable this year.

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You guys. I am beyond excited to share my reading list for 2018 (and hopefully have you join in). Every year I make the vague resolve to read more. Then halfway through the year, I realize I’ve only picked up a handful of books, most of which constitute beach reads. I’m not knocking beach reads, we need them. But there is also something important about reading non-fiction books in pursuit of your big life.

Here’s the list of each book, broken down by theme: Earn More, Spend Smarter, or Live Bigger. Some of them I’ve already read. Some of them I’ve purchased but never read (whoops). All of them I’m super excited about.

Next to each book, I’ve noted in which month I’ll be reading and I’ll send out a reminder in The Weekend Buzz (hint: get on that list here).

At the end of each month, I’ll write up a review of the book. If you’ve read it with me, you can join in with your thoughts. If you didn’t get to that book this month, you can read my review to see if it’s even worth it.

Also, I’m probably the last person to know this, but local libraries let you borrow ebooks. All online. Via overdrive. Even though I’m living in London right now, I’m planning to use my library card from home to borrow as many of these as possible.

To make my list, books had to relate to one or more of the 3 categories we talk about at The Worth Project:

Earning More, Spending Smarter, or Living Bigger

After that, I scoured reviews and tried to come up with a well-rounded list that will have one or two books that will speak to anyone who reads this site.

If a book for the month looks interesting, join along and read it with me. If you’re on the fence about it, you can wait for my review. If you’re not interested at all, good thing this isn’t a school assignment.

January:

What if it does work out

I am so excited to read this newly released book. I have a side hustle. Well, honestly it’s more like 5 side hustles that make up one full time hustle. But I’m not where I want to be…yet. This book is focused on practical advice to help you earn extra income by doing what you love. Author Susie Moore is a side hustle veteran who wrote a full guide on how to find, start, and grow your side hustle.

February:

The Subtle Art of Not Giving A F*CK

If you are that rare person who doesn’t let what other people think slow you down, you can skip right over this month. I, however, am not. While I’ve gotten so much better about this over the past couple of years, I catch myself worrying about how different decisions will be judged by others. For example, survey my close friends and you’ll find that nearly zero of them know about this website. This book is here to help us learn how to confront the bad things that happen in life and learn what we should really care about.

March:

Your Money or Your Life

This is basically going to be like no other personal finance book you’ve read. And, what a good way to start 2018. Before we get into some personal finance books, this feels like a great one to start with. I fully subscribe to the idea of being intentional with your money and to make being “good” with it easy. This book takes that idea to a whole new level as it makes you reflect on the difference between making a living and making a life. It’s a perfect intro before we get into more tactical aspects of personal finance.

April:

The Index Card

And speaking of tactical books, this is a book that I’m so excited to read. The authors became famous for their concept that all you need to know about personal finance can fit on one index card. Then they took that index card and wrote a book about it, which feels a little counterintuitive. But these 10 simple rules which are detailed in the book are supposed to give the reader an easy to follow action plan.

May:

Big Magic

Saying this will make me unpopular, I know. But I didn’t love Eat Pray Love. So for the past few years, I’ve been hesitant to pick up Big Magic, though so many people have been raving about it. It’s time to give it a read. The primary message is to embrace your curiosity and creativity. While I don’t consider myself a creative person, I’m hoping this book will help me to change that.

June:

The Confidence Code

I’ve always felt like I have reasonably decent confidence in my abilities. That is until I began navigating a career change. The uncertainty rocked me more than I expected and, to be honest, is still something that I struggle with as I look for new opportunities. When I read this book two years ago, it helped me to realize that I wasn’t the only one who struggled with the issue of confidence. And, as the authors point out, it’s a muscle that can be strengthened with practice. I’m excited to give it a read again this summer.

July:

A Random Walk Down Wall Street

I was introduced to this book during an undergrad finance class and after reading it I proceeded to ignore all of the sage advice and dive into a $16k investing mistake. But this book has hung around my shelf ever since and it’s an investing classic. With over one million copies sold and a solid take on behavioral finance that actually makes learning about investing interesting, it’s probably the one investing book you should read. I’m excited to read it again 13 years after I read it (and ignored its advice). This time I’ll listen.

August:

The Gratitude Diaries

I really enjoyed Gretchen Rubin’s The Happiness Project, and this book feels like it’s going to be very similar. The author spent an entire year looking on the bright side and chronicled how it changed her life. I’m a big believer that gratitude can change everything and I’m excited to see just how someone brings it into their life for an entire year.

September:

Decisive: How to Make Better Choices In Life and Work

The title really just says it all. One of the things I’m consistently focused on is making sure I’m decisive. I’m fairly decisive in all areas of my life, except for one: career. Naturally, I’m thrilled to read this book by Chip and Dan Heath. I loved their book Make to Stick and I hope this one will be just as entertaining and informative.

October:

Ask For It

A classic, easy, and approachable book about negotiation for women. This book will walk you through not only why we need to negotiate but also how we can start that process. It’s a light read with solid material and is the perfect thing to read in advance of your annual review.

November:

The Linchpin

I’ve never read any of Seth Godin’s books, but so many of them have come highly recommended. In the description for this book, Godin writes that “Every day I meet people who have so much to give but have been bullied enough or frightened enough to hold it back. It’s time to stop complying with the system and draw your own map. You have brilliance in you, your contribution is essential, and the art you create is precious. Only you can do it, and you must.” This sounds like a book I can get behind and I’m excited to dive into it.

December:

Better Than Before

Just in time for New Year’s resolutions…in 2019. I’ve taken the personality type quiz (I’m a questioner). But I’m excited to finally figure out what that means, and how to use that personality to build a sustainable habit. You know, for the goals next year.

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I was listening to a podcast a few years ago and the host asked listeners to “reflect on your financial goals. What are they?”

Maybe I was in a particularly grumpy mood that day but the snarky response in my head was, “to have enough money. Ugh, I hate that question.”

I was a little annoyed. I was climbing my way out of six-figure student loan debt and really negative about my cash flow. “Money goals” felt like an overused term and I was tired of listening to personal finance experts tell me that I needed to have them.

While I’m a goal setter by nature – and so is Jordan – I couldn’t get enthused over the idea of sterile money goals.

I mean really, how exciting do these sound?

“My goal is to pay off my student loans.”

“My goal is to save up for a down payment on a house.”

“I’d like to contribute more to my retirement this year.”

Those were all technically things I wanted to do, but I wouldn’t put them on the same level as my real life goals. I wanted to get in better shape, start a business, get better at photography, learn to cook, and travel extensively.

Those were goals I could get excited about.

But I couldn’t get excited about paying off my debt or saving for a house.

I soon realized that the way of thinking about money goals felt wrong, at least for me.

(by the way the photography and get in better shape goals? Still waiting on those over here).

Your money = your life

One of the things I struggle most with personal finance is that most everything I read or listen to makes it feel like your money stops at your bank account. Asking what are your “money goals” are makes it feel like your money and your life are two separate entities.

So I would half-heartedly set money goals, focus on them for a week, get discouraged, forget about them, and live my life as usual.

I continued that cycle until one day, a couple of years ago, I was struggling. I’d just left a “big” job (read: a very nice paycheck) after a panic attack from stress.

Money goals weren’t really top of mind. Figuring out my life while I scraped together enough for my student loan payment was.

As I was heading to the gym feeling sorry for myself, I heard a story about someone my age who died tragically in an accident. We’ve all read stories like that, but for some reason, this one struck a deep chord.

It put the world in perspective, if even for a moment, and I found myself asking:

“How do you want to live your life?”

This didn’t immediately relate to money for me. At first, it was more that I didn’t want to go back to the soul-crushing job that I had just left. Then it was that I wanted to be healthier. More organized. A better friend. To enjoy my day more (and to truly mean it when I said that each day was a gift).

I wasn’t making grand long-term plans, which would’ve been too overwhelming to me at that point. I was simply looking at my ideal day and figuring out what that looked like at this point in time.

I began incorporating a morning routine.

I cleaned out my closet.

I started working for myself.

Eventually, I began to imagine a little further into the future and plan out how I wanted to live my life a few years down the road.

I wanted to continue working for myself.

I wanted to have the opportunity to move back home, closer to family.

I wanted to live in a house that was large enough to host family and friends for dinners.

I wanted said house to have a pizza oven (clearly important).

I wanted to hike year-round, go camping, and travel.

I wanted to have flexibility and spend time with the people who mattered most.

By asking myself “how do I want to live my life?” over and over again, I started to dream about what was possible.

24 Hour Money Makeover

5 Simple Steps to Live a Life You Love

Connecting to the dollars

Slowly, money wasn’t a disjointed element that I would make boring goals for and hope they would stick. It was a tool that was going to help me live the life that I wanted to.

They say that the easiest way to know what someone values is to look at their bank account. By thinking about what I wanted – how I really wanted to live – I began to see that reflected in my bank account. No longer was I scraping money together to pay my student loan. I began to pay more than what I needed to.

I became obsessed with spending smarter and only buying the things that made me the happiest. Not because I was sticking to a budget, but because I was really mindful of how I wanted to live my life. Buying the things that made me happiest didn’t mean cutting out the cute shoes or vacations, but it made me more aware of all the dollars that were leaving my bank account.

Some of the money I was happy to see go because I was getting something great in return and it was adding to the life I wanted to live. Other money, I realized, was leaving my bank account and wasn’t bringing me a lot of happiness (I’m looking at you Whole Foods salad bar). 

I became hyper-focused on paying off the remainder of my student loans because I knew being debt free would help me navigate the inconsistent income that comes when you start working for yourself.

I started making more because it would enable me to do the things I was excited to do, like travel, pursue work I actually enjoyed, and take that really great yoga class down the street.

Making communication easier

Conversations between Jordan and I shifted drastically. Instead of the usual, “should we buy a house?” conversation, we got back to the basics and started talking about how we wanted to live. While on the surface level I assumed we were always on the same page (save for retirement, save for a house), there was so much we inadvertently left out of the conversation.

We began talking about our ideal day. We would then talk about what we hoped our life would look like a few years down the road.

Our bank account started to grow more and we began putting pen to paper (or numbers to spreadsheet) for these big goals in life. Goals we were excited about. Goals that involved money and our lifestyle. Everything from what car he wanted to get to the next trip we wanted to take, to the house we will someday build.

We purchased a piece of land that may have seemed impulsive or like a poor decision to other people, but that goal came directly from so many conversations of us asking, “how do we want to live?” and then taking the daily action to get there.

This question and these goals still get us out of bed every morning and make us excited to know that we’re choosing to live our life in alignment with these goals.

Do we do this perfectly? Heck no.

We each have those days and make our mistakes with money. That’s one of the reasons I decided to start chronicling goals this year – it’s another form of accountability and it’s a great way to be transparent. Because sometimes we do mess up. But those mistakes don’t detract us from the bigger life goals we have.

Celebrating the piece of land we bought (on a windy, grey day)

The tactics in action

Just because I adopted asking this question rather than sitting down and writing out specific money goals, didn’t mean that I abandoned my spreadsheet loving self. I do love a good spreadsheet.

I’d take my question: “How do I want to live?” then move to, “how much will it take to fund that?”, and then finally, “what am I going to do to get there?”

Big questions + numbers in a spreadsheet helped me to actually enjoy watching myself get to the goals.

You can get the entire process broken down with a spreadsheet to help you put it all together here.

Skeptical?

I’ve just written an entire article about how we’ve shifted our focus from strictly money goals to focusing on how we want to live. If you’re living paycheck to paycheck or struggling under a mountain of debt, you’re likely eye-rolling and thinking that there is no way this article relates to you and your situation.

And it might not.

It worked for me to be less bitter about paying off my loans and to pay them off faster. It’s worked to improve communication between Jordan and I. And it’s helped us to (mostly) avoid FOMO because we really do focus on exactly how we want to live.

If setting money goals in the past hasn’t worked for you, asking this question might make a difference. At the very least, it might help change your perspective. It might help you visualize and get excited about what your life could look like. It might change how you make small decisions every day.

And the small, mindless decisions that we make day to day and month to month impact our bank account more than most of us ever realize.

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I’ve received a lot of questions recently about how we organize our money and all the different bank, investment, credit card accounts we have. I’m kind of flattered that people assume I’m organized.

But to be totally truthful, I am the most disorganized organized person you’ll ever meet. I always wanted to be that woman with the perfectly neat desk, beautifully arranged drawers, and expertly styled bookshelf. But I am not her.

I remember in my first job out of college, a client walked in and saw my desk and nearly doubled over with disdain as she told me,”a cluttered desk is a sign of a cluttered mind.” Thanks for that.

The majority of my house is clean and organized (including my exceptionally well-organized closet!), but my office is a sight. At any one time, I have 15 post-its scattered around my desk reminding me of various to-do list items. I have piles of paper everywhere. Right now I have 8 flash drives sitting on my desk and I have no idea what’s on them.

But don’t worry. I’ve written on one of those post-it note to-dos that I need to look through them.

Jordan, a meticulous organizer who has folders for receipt type and year, is often dismayed by my hanging file folder system. I have one folder. It’s labeled: important. And most things in that bulging file are probably important. Or were important. Or maybe important in the future.

The only thing that keeps me from being a total mess is having a simple system.

Every Friday I throw away pieces of paper I don’t need. I have stacks of items in my office within reach of my chair, each organized by order of importance.

And money?

It has to be simple, otherwise, I’d be a complete and total mess. Like most people, we have a lot of accounts at a lot of different places and I really don’t want to spend much time keeping it all in order. I took some time to get it set up well, so I could then forget it.

If you’re a less than perfectly organized person who is embarrassed by the state of your accounts, it’s ok. There is a solution. And the answer is not on one of the 8 flash drives sitting in the corner of my desk.

Dreaming big, with numbers

How we set up our money is partly based on ease (see below) and partly based on life goals. We decide what accounts to use and where to put our money based on asking ourselves the simple question of: “how do I want to live my life?”

You can read more on that goal setting question and how it has transformed the way we approach money here.

We sit down and come up with some ballpark dollar values for goals and include them on sheet 1 of the spreadsheet that you can download here.

Creating the automatic flow

We then keep track of all of the monthly transfers that we have going on by using this spreadsheet.

While the transfers are automatic, and we don’t really have to check in on them at all, it’s nice to have them listed in one place so when we make changes, we can easily see what transfers need to be updated and by when.

We probably update these transfers once a year – maybe twice a year if we’re feeling really ambitious. Because we’ve automated our spending we really don’t have to spend any time thinking about where our money is going. You’ll find the automatic flow tracker listed on sheet 2 of the spreadsheet.

And a full description of the automatic budget in this workbook. If you hate budgeting, you’ll like this workbook.

Money have you feeling like a mess?

A simple spreadsheet solution that’ll take you from “wtf?” to “ah. money is simple.”

Getting the full picture

Soon after we got married, we knew we needed to have the full picture of our money in one place. With dreams to buy a house, travel, and you know, retire someday, knowing what we had – and what we owed – was really important.

Knowing your full financial picture is something that everyone should do, regardless of their relationship status. But honestly, I didn’t prioritize it. I pretty much knew where everything was and I had a rough idea of the balance.

Up until getting married, I had been keeping track of everything that wasn’t a checking or savings account in my head. I had a few retirement accounts with my old employer (whoops), I had 2 other retirement accounts with 2 different brokerages. I had a taxable investment account. I had my student loan. And 2 credit cards.

I had financial breadcrumbs spread all over the place. I knew where they were, but they weren’t organized (let alone optimized).

Jordan, being the extremely meticulous, organized person that he is, had a spreadsheet where he would track our net worth quarterly. When we got married he asked me to add my accounts to the list.

Each time Jordan would sit down to update his spreadsheet, I’d somehow remember to tell him about one more account that I’d previously forgotten to mention.

I sound like a mess, but I knew where everything was. I just didn’t have it written down and I didn’t have the attention span to sit with him and catalog everything into his spreadsheet.

(As I write this I can’t help but think, poor Jordan. He’s so patient with me.)

But if you are great with meticulously tracking things and you love a good spreadsheet, his style is probably right up your alley. You can find his tracker on page 3 of the spreadsheet.

I, clearly, was not down with the spreadsheet, so I had to find a different way to help make sure we stayed organized.

Our new automated process

I could sense his frustration with me a few months ago when I remembered to tell him about another account I’d failed to mention in our last 5 years of marriage (it was really small, to be fair).

When looking around for an option to make life easier, I stumbled upon Personal Capital. They have a free tool that was designed to make you more knowledgeable about the overall picture of your money. (note: that is an affiliate link, but it’s a free tool I use and love and really wanted to share. For more information on affiliate links, see this disclaimer.)

I signed up for an account, connected all of our bank, investment, retirement, and mortgage accounts, as well as our credit cards. It was simple, other than the fact I had to track down all of the passwords I’d forgotten. It’s amazing how quickly you can amass so many accounts.

Once that was connected, either one of us can log in and get an instant snapshot of our accounts and balances, all in one place.

I honestly really like being able to log in and see how much is left on our mortgage and remind myself of what’s in our retirement accounts. It’s kind of like a Mint, but for your overall financial health, not just your monthly budget.

While this is an extremely powerful website with tools to help you analyze your investments (which I totally love and I will share more about), it does something much more basic than that: it helps me stay organized.

Jordan was able to ditch his spreadsheet and we connected all of our accounts to this: all bank accounts, retirement and investment accounts, credit cards, and our mortgage accounts. (ok fine, I still have one more to connect, but I promise I’ll do it soon).

It’s cleared away so much mental clutter for me (desk clutter, not so much).

And since the tool itself is free, it was an easy decision for me to create an account and set it up.

*Note: while the tool is free, they do offer additional investing and advisory services which are not free. I’ve only used the free tools like the net-worth calculator, fee analyzer, and retirement calculator. I haven’t used other services, so I can’t speak to whether I’d recommend those.

To be honest, I think Jordan will still probably update his spreadsheet quarterly because old habits die hard. But now he’ll be able to log right into Personal Capital to get a list of all of our accounts and the balances as of that day, without having to try to get me to participate.

Have you found a simple way to organize things? I’d love to hear!

Photo by STIL on Unsplash

Money have you feeling like a mess?

A simple spreadsheet solution that’ll take you from “wtf?” to “ah. money is simple.”

THE LATEST & GREATEST