How To Save More (Part 1)

Welcome to the New Year – things are definitely going to be different this time, right? You’re going to get back into the gym, start spending less and saving more and overall be the person 2.0 you know you can be. Great! Here’s a few ideas for how to help yourself be successful.

First, if you haven’t established a baseline for how you spend (for whatever reason – it doesn’t matter); start passively tracking using a tool like Mint. In apps like this you will link your bank accounts and they will work in the background, keeping track of your spending. Your bank may have something very similar; it’s less about which you use and more about just using one. Here’s the first tough part – you need to be patient and allow these programs to gather at least (3) months of history. Why? Because we want to understand where you are spending, and you may find some easy “wins” – things like the random convenience store purchase or just how often Amazon is charging your account.

It’s become super simple to link credit cards to online stores, which leads to almost unconscious spending. Unconscious, because we don’t have any time to process what we are purchasing. Instead of a “cool down” period while you get up and get the card, you just click through and it’s done. Removing the card data and not allowing the sites to remember could be a great first start.

But wait until you have at least (3) months of historical data. This is important for all the tips I will be sharing, because the baseline is going to be what shows you your success. Without a history, it’s easy to become discouraged and feel like you’re not accomplishing anything – which can lead to a regression to old habits. The history showing how much you’re not spending on a monthly basis, in comparison to previous months, reflects the work you’re putting in to better yourself.

Note I said “not spending”, I didn’t say “saving”. That’s the second part of the equation. Once you’ve identified where you can get a few “easy” wins, you want to earmark that money for a specific goal. Set up an account just for this goal, and move the money into it – immediately (when you are reviewing your account). If you wait until the end of the month, or some other arbitrary date, you run the risk of spending it on something else. Stay tuned for additional ways to not spend so much.


Give Yourself A Head Start

We have one week left in 2017, and some of us may already be thinking of how to get ahead in 2018; heck a few may even be taking the necessary steps. I think it’s a shame, how commercialized holidays have become – and I feel for those not of the Catholic/Christian faith because Christmas seems to monopolize the airways this time of year.

Stores are packed with shoppers looking for the “perfect” gifts – leading to “Black Friday”, “Cyber Monday” and lately, “Giving Tuesday”. What has happened to us? How did we let ourselves become so driven by words like “Clearance” and “One Day Sales” that we seem to have become mindless wallets and credit cards?

Most of us don’t exhibit these behaviors at any other time of the year, it’s almost like there is a switch in our brain that’s turned off after Halloween and doesn’t come back on until the week after New Year’s.

What if, instead of trying to “out-gift” each other, we took some time to ensure our lives were in order? Doing “boring” things like verifying our beneficiary forms, ensuring our estate plans are up to date and even, maybe, increasing the contribution to our retirement plans by 1 – 2%.

No – it probably won’t release the same endorphins gift giving does; but I’m willing to bet another thing it WON’T do is make you feel bad after the holiday has come and gone. Take the time you have with your friends and family to have real conversations – they don’t have to be dark and gloomy. Celebrate them, by being with them and giving them the gift of your time and attention (real attention, i.e. without a device present).

Ensuring your estate plans are in order are, in my opinion, one of the BEST gifts you can leave someone. I cannot imagine anything more tragic than not knowing what to do to honor you when you’re gone; or worse, family and friends fighting over who gets what (which I’ve seen all too much of).

So please, as this year draws to a close, take a look at what you have in place for when your time is up. Give yourself a head start going into the New Year, before vacations end and the mad dash towards new goals/resolutions kick in. Take the next few days and reflect on where you are and where you’re going. You’ll be glad you did, and so will those you treasure most.

Glass Balls/Rubber Balls

Our lives can be chaotic, especially as parents of children with differing needs. As we go through our day it’s easy to become overwhelmed or feel like you’re being pulled into a million different directions. So some of us avoid doing things, not wanting to add anything else.

I’ve adopted a philosophy of glass ball & rubber balls. Glass balls are fragile, if you drop them they can break. These are items I can’t lose sight of; things like my son’s doctor appointment(s), work deadlines, etc.

Rubber balls are less critical, if I lose track of something it may not be comfortable but it’s not going to be a critical failure. If I forget something on the grocery list or I have work items with further due dates and have to make a decision about what to complete because something else comes up during the day.

What are your glass and rubber balls? Once you’ve identified them, focus on the glass ones. Make sure you do whatever needs to be done so you don’t drop them. Accept the fact you may drop something from time to time, we’re only human. Do your best to just drop the rubber balls.

Like anything else this takes time. Start with listing your glass balls, everything else will be a rubber ball by default. The first few times you perform this exercise you may find you have a LOT of glass balls; it doesn’t hurt to revisit the list – weeding out items until you have a small core list of things you absolutely cannot let drop. Not sure what should be important at work, ask your supervisor/manager. They’ll let you know what they want, although be ready because their priorities may be changed by those above them.


Nothing Wrong with Simplicity

I think we make our lives more difficult than we need to – in all aspects. Almost like we think we’re doing something wrong if we can explain ourselves in one sentence. But in my opinion, this is what we should be striving for. Life is complicated enough, I don’t feel like it needs any help from me.

More often than not I’ve found the mantra “keep it simple” has steered me in the right direction – even (or especially) when I’m working with clients. To be clear, you must absolutely do your due diligence when considering alternatives, but I’ve found those that you can easily understand and require the least amount of effort will often work.

This shouldn’t necessarily be applied when pursuing a degree or picking a home to live in for the rest of your life – because there is usually a lot of other things to take into consideration. But how you pay for school, or the home, shouldn’t be that complicated or fancy.

Call me boring, but I like to set things in place and then forget about them – secure in the knowledge that it’s doing what it’s supposed to do. Saving for college in a 529 plan – why not pick a target date fund with the year closest to when you’ll need the money? The same goes for your current employer sponsored retirement plan. Both of these will likely have a bunch of other options available, and not necessarily anyone available to help select what works best for you.

Alternatively you could hire someone to take care of it for you; my only input being make sure you understand what they are doing. This can apply to having a housekeeper, landscaper or financial advisor – in each case you’ll want to be very clear of your expectations, and understand what they will be delivering. Once the ground rules are laid, you can shift your focus to other things – circling back periodically to check on things.

Don’t Let the Tail Wag the Dog

I enjoy coaching business owners, helping them determine where they can increase efficiency and dial in their focus running the business – as opposed to the business running them. Over the years I’ve found some very common themes – “not enough time” and “too much to do”; both of which can be addressed by stepping outside the business and looking at it as a perspective buyer, rather than the owner. Buyers look for opportunities and weaknesses (so they can bid the price down), they’re not emotionally invested in the company and won’t make excuses about why something is happening.

Unfortunately, many of us get so wrapped up in the day-to-day operations we lose sight of the bigger picture – where we want our company to be in 5, 10 or 20 years; and what is the core service or product our business provides. If you don’t have a vision for your company, or if you can’t put your finger on the core service/product, then ask yourself why you’re a business owner. Sure, there’s a lot of hype right now encouraging people to be entrepreneurs and chase their passion; but that passion may be met through hobbies or volunteering at much less cost than starting a business.

Same goes for “side hustles”. Unless you’re working part-time for someone else, you should be treating your hustle like a business. If you’re an Uber or Lyft driver, or you rent room(s) on Airbnb, then understand what your expenses are – please don’t delude yourself into thinking what you earn is “all profit”. I would also like to encourage those of you with side hustles to ask yourself “why”. Why do you have the hustle, what is the money going to help you do? Take this answer and make sure you’re taking the steps necessary to follow through.

Perhaps you’re saying “sure, this all sounds like a great idea; but you just don’t understand how busy I am”. Again, I challenge you to think as a buyer. Do you care how busy someone is, do you let them off the hook for a poorly delivered service or product? No, of course you don’t – so why are you treating yourself any different?

Make the time. Set at least one day each month aside for your business. Instead of arguing how much business  you’re going to lose (cost); think of it as an investment which will increase your profits by improving efficiency and honing your focus. Create an agenda for your day, and follow it. It’s going to feel weird at first, and maybe you’re not super productive right away – it’s a new skill and it’s going to take time to get good at it. Don’t give up, push through. If you’re not sure how to start find a mentor or hire a coach.

I need to stay busy, but I don’t like to waste my time. Think back to why you started your business or side-hustle; I’m willing to bet it wasn’t so you filled your every waking moment with work. Be honest with yourself, do you really want to run a business? Be okay with the answer, whatever it is, and take the necessary steps to be successful. Just do something.

How to Transition to a Monthly Paycheck

For most of our working years I think it’s safe to say just about all of us receive our checks weekly or every other week; and plan to pay our bills accordingly. Speaking for myself, while on Active Duty my wife and I designated the 1st’s paycheck to the mortgage and the 15th’s to our living expenses. Simple and easy to repeat; and I’d wager many others do something very similar.

I never considered what would happen if I was only paid once per month – and although I “knew” it’s what would happen when I retired from the Navy I wasn’t ready for it. It’s a different dynamic, even if you’re being paid the same or making more; because if it’s something you’re not used to it’s easy to spend like you have another check coming at the halfway point – and if you’re used to weekly paychecks it can be even worse.

To add insult to injury, it’s likely there is going to be a gap of at least (1) month between your last regular paycheck and your monthly check when transitioning to a military pension or social security. It could be even longer if you’ve filed a VA claim, I believe the current wait for fully developed claims is (6) months – a fully developed claim is one in which all supporting documentation has been provided and the VA forms have been completed correctly.

So what can you do to help yourself?

At least six months, a year would be ideal, start gradually transitioning to paying your bills within the first week of the month.

First, figure out your living expenses. Start with tracking all your spending, is a useful tool; but many banks will include a similar tool. This will tell you how much you need to earn, and if you’re not interested in transitioning to another job/career; it will help you determine if, and where, you need to cut back. For those who are Active Duty and are being paid BAH cut your expected earnings by almost 2/3 – because you will receive ~50% of your base pay only (whatever percentage you’re entitled to, it’s calculated off your base pay). If your expenses are more than your new income you have two choices – find another income source (not credit cards or other debt instruments) or dial back your expenses.

After you’ve calculated your living expenses and your monthly income, train yourself to live off one pay period.  For most of us this is going to take some coordination, because we don’t have sufficient savings to serve as a buffer. Start small, with a bill or two that are fairly consistent – like phone and/or cable. You know how much you need to set aside, and can plan for it by dialing back accordingly.

When you’re ready to start, set aside 1.5x’s the amount of the bill(s) you’re adding to the first of the month; and I recommend putting this somewhere other than your everyday savings/checking. You’re saving more than you “need” to build the habit and get you used to having less money available from your other checks. This also gives you the extra money you’re going to need to have available on the first of the month. If you cannot afford to save the full amount, then start by setting aside at least an extra $25. The less you can afford to set aside the more time you will need to give yourself for the transition, because we want the habit firmly anchored before the transition occurs.

The goal is a complete transition to paying all your bills on the first of the month before you leave the work force. This isn’t the only way to do this, and if it doesn’t appeal to you my hope is it has at least got you thinking about when you’re only going to have a monthly check. Don’t hesitate to get help if you need it, in this particular case I would recommend a fee only (hourly) planner – Garrett Planning Network, NAPFA, and the CFP Board all have “Find an Advisor” tool; to name a few organizations.



Simplify – Keep, Delete or Delegate?

How many of you have ever felt overwhelmed – like there was just not enough hours in the day to accomplish everything that needs to be done? I know I have in the past, and at times still do – usually because I put something off until the last minute and then other stuff pops up. But this is within my control, I have no one to blame but myself – and it’s not the focus of this article.

Instead, I want you to think about what you can get rid of. What eats at your time and either doesn’t add value, or even though it adds value it stresses you out. When do you feel overwhelmed – is it Sunday night because you “know” Monday is going to bring a host of new problems, or is it Friday because “there is just no way you can get everything done before the weekend”? Or is it something else entirely? Whatever it is, write it down – I’m going to share how I was able to reduce my stress/anxiety, and hopefully some of these tools will work at least equally well for you.

Make a list of what you, and only you can do – this is going to be the baseline of what you keep. Some examples are paying the bills, projects at work, taking care of the kids, etc; but be realistic – this should not mean only you can do it because no one else will do it the way you like. If the only reason you’re not delegating is because it’s not getting done the way you like, ask yourself is it really that important to have things done your way, or is it something you can let go and accept it may not be “perfect”, but it’ll work. Often I’ve found we get in our own way by telling ourselves things “must” be done a certain way; when the reality is there are other options if we keep an open mind.

Next, make a list of what you absolutely hate doing – and be honest. Looking at this list what can you get rid of? If you have children, is there anything you can assign to them as chores; or perhaps hire help. If you can’t get rid of it, can you set aside specific times to get it done, and be done with it? For example I hate maintaining my yard, cooking, and reading e-mails. So I have a “yard guy”; I cook on Sunday, making a week’s worth of meals (usually in the crockpot, eating the same thing every night for dinner); and I’ve built reading e-mails into my work calendar (I check it 3x’s/day, that’s it).

I use work lists, it helps me organize my thoughts around what needs to be done; but I don’t expect to accomplish everything in one day. I note which 3 or 4 things are the most crucial to accomplish, and the rest is there for when there are lulls – appointments cancel, dead time waiting for a meeting to start, etc. I also like to combine tasks – for example walking the dogs while waiting for laundry.

We all have time-wasters, those things we know don’t add any value yet can’t seem to get enough of. Facebook, games on the phone, etc are just a few examples; and they can eat up a lot of time if you let them. Rather than try to eliminate them completely, set a timer – allow yourself 5 – 10 minutes of mindless activity to reset, and stick to it. I got rid of cable because I used to love reading, yet I would feel obligated to catch up on shows because I wanted to get something for all the money I was paying – leaving me little time for what had once been a passion. It’s been over a year since shifting to Netflix (significantly cheaper) and I’ve found myself back in the groove reading, while still enjoying the occasional, guilt-free, show.

At the end of the day the only one who knows what you absolutely have to do is you. It’s up to you to decide how you want to spend your time; and if you decide to delegate or sub-contract (hire a housekeeper, landscaper, etc) take the time to understand how it will affect your budget. You may have to give something else up, so only do so if getting your time back is truly worth it. I reduced my phone’s data plan to free up cash flow, and to prevent myself from getting on the internet every time I had a free second. What can you do to regain an hour a day?