It’s payday.  You’re happy.  But your joy doesn’t seem to last for long.

You start to pay your bills one by one, and quickly the money leaves your checking account just as soon as it got there.  In the blink of an eye, you’re pretty much right back to where you started …

You’re living paycheck to paycheck, and you can’t stop worrying about money.  And unfortunately, your story is not unique.

According to a report from CareerBuilder, seventy-eight percent of full-time workers said they live paycheck to paycheck, up from 75 percent from the previous year.

If you think that simply earning more money is going to solve your problems, think again!  In the same article, they state that nearly 10% of people who earn $100,000 or more can’t seem to find a way to make ends meet.

So what’s the solution?  Why is it that some people seem to be less stressed about money while others can never seem to get ahead?

In this post, I’d like to give you five strategies for building better money habits that you can use to pull yourself up out of the hole and put your financial worries at ease.

But first: What is it that each of these tips will have in common?  What’s the common goal that each one will have you working towards?

The Ultimate Solution to Your Money Worries = Financial Freedom!

Think about what it is that sets you apart from the Rich and Wealthy.

You might be able to list a few (and I could tell you a few of my own ideas in this article here).

But all-in-all, there is one main underlying thing that the truly Rich and Wealthy have achieved when it comes to money that helps them to be worry-free: They’ve got financial freedom.

What is financial freedom?

Financial freedom is the point where you’ve got enough savings or other income streams that you don’t have to work for money anymore.  Essentially, you could afford to live your current lifestyle for the next few decades without any concerns about money.

The classic example of financial freedom is a retiree who has saved up $1 million dollars.   If this was you, using the 4 Percent Rule for retirement, you would be able to withdraw 4% of your savings ($40,000 per year) for at least the next 30 years without any worries of running out of cash.

Now that’s confidence!

This is why building up your nest egg and savings is so important.  For most people, your nest egg will be the ultimate key to leading a life of financial independence.

This is exactly the place I want you to get with your money.  It won’t be easy, and it will take a lot of effort.  But the closer we get, the more at ease you’ll feel about your finances.  Your confidence will grow, and your time will be freed up to focus more on improving other (more important) areas of your life.

Sound good?  So how do we get started?

1- Get Control of “Money In” vs “Money Out”

Step one any time you want to improve your finances is always very clear:

You need to get a VERY clear picture of how much money is coming in and how much is actually going out.

It sounds so basic … I know.  But it’s a step that is often so trivialized that we tend to overlook it and allow our expenses to pile up.

For example, we one time went back-to-school shopping for our kids.  On the drive home, my wife and I guessed that we had spent probably $500 on items for our kids.  But later when we actually added up all the receipts, the damage was more like $1,000.

Somehow all those extra purchases just snuck up on us!

Why is tracking your finances always so important?

There’s a very popular quote by management expert Peter Drucker:

“You can’t manage what you can’t measure.”

It doesn’t matter whether you earn $10,000 per year or $100 million dollars per year.  If your outgoing exceeds your income, there are going to be money problems!  (If you don’t think so, just look at the financial trouble actor Johnny Depp got himself in back in 2017.)

So how do you track your finances?

Step 1 – Make a list of how much money is coming in.

This part should be relatively easy.  For most people, their main source of money comes from their job.

But if you’ve got other streams of income coming in, be sure to note that too.

Step 2 – Understand what you’re spending your money on.

The best way to do this is to start a monthly list or fire up a spreadsheet in Excel or Google Spreadsheets.

Start by looking back through your checking account over the last 3-6 months and seeing what bills you’ve paid, checks you’ve written, etc.

If you’ve got credit cards, break those down into separate categories too such as Food, Auto, Clothes, etc.

What do we do with all of this information once we have it?

You create a budget!

Step 3 – Creating your budget.

I know … everyone likes to hate on budgets.  But like we pointed out with the Drucker quote, if you’re not tracking what you’re doing, then you really have no hope of ever improving it.

Here’s the truth about budgets: They only work when you actually follow them.  And its up to you how you design them.

Make them too strict, and you’ll choke.  But make them with realistic goals and with enough room to fit your lifestyle, and you’ll be okay.

The goal, of course, is to always be tracking!  Always be understanding clear as day how much money is going in and how much is going out.  Without that information, you won’t know how to react and where improvements need to be made.

Bonus tip: To have complete peace of mind when it comes to budgets, I prefer to work with annual budgets over monthly ones.

Why? 

Annual budgets let me see how my finances will look and if I’ll be on track over the course of an entire year!  Honestly, it’s pretty hard to be financially surprised when you can look 12 months ahead and have a pretty solid estimate of how money is going to be in our checking account.

2- Dramatically Reduce How Money is Going Out

There’s nothing like having a few thousand dollars in the bank ready to help you stop worrying about money.  No matter what the situation or the emergency, you’ll know that you’re covered.

But how do you save up “a few extra thousand dollars”?

Let’s be real … there are fundamentally only two ways to save more money:

1. Earn more
2. Spend less

Between the two, I want to focus on #2 for a minute: Spending less.

Spending less is something we all have the power to do. 

Seriously!  No matter how tight you think your spending is now, there is ALWAYS room for improvement.

What’s the best way to get started?

1- Challenge all of your purchases. 

Why are you buying the things you buy?  Are these things you actually need, or just simply things you want?

2- Ask yourself: How will this purchase improve your life? 

Again, I love to buy things just as much as you.  But sometimes it helps to stop yourself and ask if this thing you’re about to spend your money on is actually going to improve your quality of life in any way, shape, or form?

3- Multiply the purchase by 7 and then ask yourself it’s still worth it. 

I’ve previously written an article that showed how a dollar saved today is actually worth $7 in the future.  So if that thing you want is only $100, you should really think of it as costing you $700 in future savings.  Will the purchase still be worth it?

4- Last question: Can I do better? 

Can you get a cheaper quote or buy this item online for less?  I’ve found that 99% of the time the answer is almost always YES.  I’ve had experiences where I’ve put in the effort and ended up saving hundreds or even thousands of dollars on single purchases.  It’s amazing what kind of deals you can get if you’re just willing to work towards them!

3- Save More By Paying Less Taxes

As I mentioned in the previous one section:

Spending less is one of the best ways to build up your savings.

BUT, what if instead of spending less on the things you actually like, we spent less on the things you DON’T like … such as your taxes!

How can you do that?

By calling your employer’s HR department in the morning and bumping up your 401(k) contributions!

Remember that with a 401(k), you’re saving your money BEFORE the taxes are taken out.  This means that effectively you’re saving approximately 28% more than you normally would if you tried to save your money post-paycheck (like everyone else tries to do).

Whether you’re saving an extra $100 or $10,000 per year, this 28% addition can be a very significant advantage to all savers.  Year after year, it’s really going to start to compound and add up!

(Curious why 28%?  Here’s a post that explains the math.)

Don’t forget: In addition to the tax-deferred savings, your 401(k) also gives you the opportunity to:

1. Invest your money for long-term growth as well as …
2. Rack up additional employer contributions along the way.

Over time, all of this just means good news for you.  And nothing makes you feel worry-free about money quite like knowing you’ve got a growing nest egg heading towards six or seven figures!

The bottom line: I can’t recommend this enough … work towards that goal of maxing your 401(k) every year!

4- Invest For the Future

Of the elements in the machine that takes our savings and turns it into passive income for life is investing for growth.

Suppose you were able to save $10,000 per year over the next 30 years.  You are given two choices: Either save the money in a regular bank account earning no interest or invest it in a stock market index fund.

Which one would likely produce the better results?

The stock market index fund of course!  And by a long-shot: $944,608 vs $300,000.

In terms of potential monthly passive income, that’s $3,149 vs $1,000.  Over three times as much!

This is thanks to the magic power of compounding returns!

What this means for you: In order to generate future long-term, worry-free income, you need to think big and invest for growth.

There’s a very smart way to do this: Simply put a portion of your savings that you feel comfortable with in a stock market index fund.  As an example, the S&P 500 index has returned between 9-10% over the past 25 years.

The rest of your money can go in a more conservative bond index fund.

Two very popular choices, low-cost choices are:

• Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
• Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)

What’s the right proportion to invest in stocks?

Again, what / how much you decide to invest (called asset allocation) is a personal comfort question.

But if you’re looking for some sage investing advice, the Rule of 120 seems to be a good place to start.

This works when you take your age and subtract it from 120.  The result is the percentage of your nest egg that you should have invested in stocks.  Everything else should be invested in bonds.

Example: If you’re age 30,

120 – 30 = 90% invested in stocks.

100% – 90% = 10% invested in bonds.

Just an FYI: There are other variations of this Rule where you start with 110 instead of 120.  Again, it’s just a guideline.  It’s up to you how aggressive or conservative you’d like to be with your investments.

5- Work on Your Financial Habits Daily

These tips for handling your money aren’t just a one-and-done solutions.

Just like your education, health, and weight, practicing the right habits are what’s going to keep you on track for the long-haul and give you the peace of mind you’re looking for.

Your goal: Practice the advice you’re reading and actually work it into the things you do daily.

When it comes to your finances, everyone always thinks the time to apply what you know is when you’re about to make a big purchase like a new car or house.  But that’s not true.  You can use these techniques all of the time to be constantly saving and improving your money.

For example, the next time you go to buy something online, take an extra 5 minutes and see if you can find a coupon or promo code that will give you a few bucks off.

I did this when we were in line at a store waiting to buy some new patio further.  Lo and behold, I found a coupon that knocked off $60 – just like that!

This is an example of the kind of habits I’m talking about.  As long as you’re always:

• Tracking your money
• Spending less (and hopefully way less) than what you earn
• Challenging your purchases and getting the best deal possible
• Investing for long-term growth,

Then you’re going to be able to stop working about money, achieve financial freedom, and live the life you’ve always dreamed!

Readers – What are some of the strategies you use to worry less about money? 

Photo credits: Pexels

The post How to Stop Worrying About Money – 5 Effective Strategies for Better Money Habits appeared first on My Money Design.

Whenever someone asks “What should I be investing in?”, they’re usually looking for some kind of magic stock or once in a lifetime opportunity that will make them rich.  But in reality, there is something far greater that everyone could invest in that will pay them back over and over again for the rest of their lives.  It’s called their “financial education”.

A financial education is one of the single greatest assets a person can have.  Yet, for too many, it often gets ignored or even neglected altogether. 

Take, for example, the topic of saving for retirement.  This is something we all know we must do.  But according to this article from Money, less than 40% people surveyed can answer basic questions about their retirement plans. 

Overall, understanding the basics of money is not just something that impacts you financially, but it can also dramatically change your life in ways you probably haven’t even considered.

I’ve known this to be true in my own life.  Since finding success with money, I’ve had less stress, better health, been a better husband / father, and overall happier.  But none of that would have ever been possible if I hadn’t first made a conscious and deliberate effort to understand how money works.

And there are lots of other people out there who feel the same way.  Folks from all walks of life have figured out how to manage their money to the point where they can say they’ve reached financial freedom.  They’re living the lives that many people think are impossible to achieve, and it’s all thanks to having developed healthy financial habits.

Don’t think you can?  Or maybe you think you’ve got better things to do with your time and nothing to gain?

Think again!  You might be giving up a LOT more than you could ever imagine …

The Impact a Financial Education Can Have on Your Life

What is a 23-year-old giving up by not starting their 401(k) right away at their first job?

The answer: For starters, a retirement nest egg of almost $1,794,377 after 30 years (inflation adjusted)!

Yes, that’s what someone contributing the maximum 401(k) amount every year and earning the compounding rate of the market would have made in real dollars.

Imagine that for a moment … To most people, having a million dollars or more means having everything they could ever want.  You might never have to go to work again.  You could quit your job and it would have no consequences to mortgage, vehicle, health, or daily lifestyle.

What would you do with all of your time?  You could finally spend it with your loved ones like you’ve always wanted.  You could finally pursue your interests and hobbies.  You could go travel and finally see the world.

What does that feel like?

It feels “secure”.  And that’s what a financial education can do for you.  This is the life it can offer you.

When it comes to money, it’s not always about having “more” or the material things we can buy with it.  The real impact comes when you build financial security that will allow you to live your life the way you want to; according to your terms.

Financial security allows you to buy back your time.  Your hours no longer belong to the office or some job.  You’re no longer exchanging it for the opportunity to pay off your mortgage for another month.  Thanks to understanding how money works, you’ve developed a system that will create all the income you’ll ever need for the rest of your life.

This is real power! 

How I Became Financially Literate

Everything I have today can be traced back to my financial education.

It’s been said that the best way to become rich is to ask someone who’s already found success with money what to do.  As a young man just starting out my career, I didn’t know anyone who was “rich”.  But I knew there was a place where you could easily find their stories: The bookstore.

There are books upon books available written by successful people of all types of backgrounds.  And these people have a TON of advice to offer.  All you have to do is be ready and willing to go look for it. 

That’s exactly what I did.  The first personal finance book I ever read was called Rich Dad, Poor Dad.  As someone new to the concepts of passive income and building wealth, it was mind blowing!

I became addicted to learning and wanted to know more.  Not long after, I started reading about all kinds of personal finance topics: Investing, retirement, better saving habits, earning more money, etc.  I was going in 20 different directions and loving every minute of it. 

My hunger for information didn’t just stop with books.  Back when the Internet was still relatively new and magazines were still a thing, I got several subscriptions to the popular ones: Smart Money, Money, Kiplinger, etc.  Then as personal finance blogs started to become a thing, I started reading those.  (And as you can tell, I even started one myself!)

I got to the point where I could read an article about something and then recognize when another article was taking contradicting it or taking a different perspective altogether.  But I didn’t care.  In fact, I embraced it because sometimes I found that the first thing I read wasn’t necessarily the “best” thing.  I was learning just as much about what to do as what not to do, and why one might be better than the other.

What I’ve Learned From Reading About Money

After years of reading a ton of books, magazines, and blogs containing all the secrets of success when it comes to money, what were the top lessons I learned from it all?

Reading about money only provides you value if you plan to do something with it. 

Learning is one thing.  But reading alone will never make you rich.  It’s when we “do something” or apply this information when it really becomes beneficial.

Take, for example, someone who wants to do a better job budgeting their money.  You can read about all the different and creative ways to create a budget (such as annually instead of monthly).  But if you never sit down and actually create your own budget, then you’ll never accomplish your goal.

The same can be said for those trying to reach financial freedom and early retirement.  You can read all across the Internet scores of stories of people who were able to stop working by their 30’s, 40’s and 50’s, and this might sound like something you’d like to do as well.  But knowing the background stories of these early retirees isn’t enough.  To get there yourself will take years of very deliberate planning and sacrifice.  Make no mistake – there’s work to be done!

Not everything you read about money is true or will work for you.

Like I said earlier, sometimes when it came to learning about money, I would intentionally read advice that was different or even contradictory to other things I had read.

Why?  Because when it comes to money, different perspectives are invaluable!

One of the first areas of personal finance where I ever recognized this to be true was when it came to life insurance (told in this story here).  In my early 20’s, I listened to a friendly life insurance salesman and he sold me on the idea that pricey permanent life insurance was “an investment”.  To make things worse, I had also seen a number of personal finance books where they also made such claims (no doubt also written by life insurance professionals).  But as I broadened out my financial education and read several different perspectives, I learned technically why this was actually not really a very good investment for me at all, and how I might be better off putting my money elsewhere.  This information enabled me to cancel my permanent life insurance contract, get a much cheaper term policy, and then divert the difference in money to better options.

This kind of thing happens all the time in personal finance.  Like most literature or things you read on the Internet, sometimes its designed to sell you something as opposed to help you with unbiased advice.  And personal finance isn’t the only guilty party.  Virtually every industry out there (nutrition, exercise, healthcare, etc.) is littered with advertisements posing as articles. 

Your only defense against this sort of silent marketing is your own brain.  You have to be able to recognize when someone is telling you something just to make a buck as opposed to simply sharing a helpful story.  The only way to do this and to stay sharp is to read from multiple sources and try to see subjects from as many different perspectives as possible.  Only then can you “prove it” to yourself and have the confidence to know that the direction you’ve chosen to take is the best one for you.

How to Get Started With Your Own Financial Education

For most people, learning about personal finance will never be a class they take in high school or at university.  It may not even be something you learn from the people you trust such as your parents or other family members.

Your financial education should begin with one thing: Your goals.  Let your goals, whatever they may be, decide how much and how deep you pursue your own financial education.  Whether its building a better budget, becoming a stock picking wizard, or even achieving financial freedom, let your goals be the prize at the end of this marathon of learning.

Where should you start looking?

The Internet

To get started, you don’t have to do much more than what you’re doing right now: Reading a computer screen.  Search out as many questions as you can think of and read all top 10 articles you find.  Again, get as many different perspectives from as many different sources as possible to prove to yourself what the best answers should be.

The Library 

It may be old school, but the library is still an excellent way to get a TON of free information in the form of books.  There are hundreds of book titles out there that are still as useful and relevant as they were the day they were published. 

Did I say old school?  If you’ve got a tablet or don’t mind reading from your phone, let’s not forget that most libraries will allow you to check out ebooks for free.  This can be very useful if your library doesn’t have physical copy of the book or you’d simply like to save a trip.

Amazon

If we’re going to talk about books, then we can’t forget to mention Amazon. For less than what you probably spend on coffee, Amazon has literally hundreds of thousands of ebooks written by professional and amateur authors on nearly every niche of personal finance you can imagine.  If fact, you can check out some of the books I’ve published on Amazon here.

Remember too that if you don’t like reading, Amazon has lots of books you can listen to through their Audible service. Although it will cost you a few bucks per month, this can be a great way to turn that time you take to commute to work, exercise at the gym, or clean your house and listen to some interesting books.

Podcasts

If you’d rather listen to someone give you tips on money than read about it, then podcasts might be what you’re looking for. Podcasts are great because they’re free and you can listen to them any time you want. And just like with blogs, a lot of them are made by “real” people who are just trying to share their thoughts and tips for financial success.

To find them, all you have to do is go to your phone and hit the “Podcasts” app (or whatever app you have that is similar). You can then type in “money” or whatever niche search term you like, and then you’ll find hundreds of options to choose from.

Be Curious

If there’s one thing I could say that has been really helpful in my financial education, its to simply remain curious.  Never stop asking questions about money.   Never take no for an answer.  Never stop wondering how you can do better or improve your situation. 

One of the big questions that motivated me to read nearly thousands of blogs was “If I want to retire early, how to get your money out of 401(k) before you turn age 59-1/2?”  This was how I found hundreds and hundreds of success stories from people who found creative IRS loop holes and structured their finances creatively.  In fact, I collected so much useful information I even wrote a whole book about it.

Let your curiosity motivate you.  Let it be the source of energy that keeps your pursuit going.  There are people out there who have the answers, and its very likely they’ve either put it on the Internet for free or written a book about it.  You just have to keep asking the questions.

Photo credits: Unsplash, Pexels

The post How a Financial Education Can Bring You Success With Money appeared first on My Money Design.

As humans, we tend to value a lot of different qualities and abilities in ourselves. But when it comes to appreciating the value of knowledge, this is one asset we tend to underestimate.

Consider this: Would you say you’re an “expert” at something?

Don’t be too humble. According to the author Malcolm Gladwell, author of the incredible book “Outliers”, it takes at least 10,000 hours to become a master at something. While that might sound like a crazy amount of time to invest into something, chances are that you may have already put that much time into your favorite hobby or interest.

Perhaps you have knowledge or skills that are the by-product of your day job. And even if its not the most interesting topic, if someone were to ask you a question about your particular specialty, you’d probably be able to impress them with the volume of information you have readily available at the tip of your tongue.

Whether you realize it or not, the value of knowledge is something which can be leveraged. When applied in a way that helps others, the things we “know” could be exchanged for a handsome fee, used to advance our careers, and ultimately lead to actions that will bring us closer to achieving financial freedom.

To take this asset for granted would be just as silly as applying for a job and forgetting to mention that you have a 4-year college degree. The knowledge you have isn’t something you’re born with. It’s acquired over time. It’s earned. You’ve put effort towards gaining it. And all of that should mean something.

So now the only question is: How can you turn that effort into something positive financially? Something tangible that can change your life?

Don’t believe me that such a thing is real? One of my favorite lessons in the value of knowledge is “The Story of the Repairman”. Here’s how it goes:

The Story of the Repairman

A large factory is producing hundreds of thousands of dollars of goods.

One day, a critical machine in the line goes down. The boss is frantic! “We can’t stop production! We’ve got orders to fill! Call a repairman at once!”

So the factory calls a local repairman to fix the machine. The repairman says takes a look at the situation and tells them it will cost $5,000 to fix the machine. In haste, the factory boss agrees.

The repairman then opens up his tool-bag and starts going over the machine. He spends a few minutes looking underneath it and checking the gauges. Then he takes out his wrench and begins to tap on the machine. After about 15 minutes of tapping in various spots, the machine starts to work again. The repairman, acknowledging a job well done, packs up his wrench and is off.

A week later the invoice for $5,000 shows up at the factory. It goes to the boss’s desk for approval, and he hesitates. “The man was only here for 15 minutes! How can he possibly think he can charge us this much money?”

So the factory boss calls the repairman and asks him if he could be so kind as to itemize the invoice. About an hour, the repairman emails over an itemized copy of the invoice. It reads as follows:

• Line Item 1 – $100 – One hour of labor
• Line Item 2 – $4,900 – Knowing where to tap on the machine with the wrench.

Although he is reluctant, the factory boss remembers that he was given the price up-front. And when he thinks about how much money they would lost if the factory had been shut down all day, it would have been substantially more by comparison. So in realizing the value that the repairman provided, he approves the invoice for payment.

Leveraging the Value of Knowledge

So what do we learn from this? What is the the moral of the story?

(… No, it’s not that you should try to rip-off your customers and get as much money out them as possible …)

This light-hearted story is meant to teach us one thing: Value is in the eye of the beholder. What you know or find to be common-knowledge might be complex to others. Knowledge is relative; it’s a matter of perception, and the more you seem to have of what people want (or need), the better your opportunities for financial gain will be.

The story of the repairman happens all the time. Sometimes it happens “literally” with real repairmen. Think about the last time your refrigerator or washing machine wasn’t working quite right, and you needed some help. Like the factory boss, your options are to buy a whole new appliance (a thousand dollars or more) or to pay the repairman whatever rate he quotes you (usually a few hundred dollars). Which would you rather pay?

A “repairman” could also be someone with the knowledge to fix … just about anything! Think about how many people there are in the world who are able to call themselves (or be known by others as) experts or gurus. (Also think about how they are able to command compensation beyond our normal realm of comprehension!)

Maybe you know someone who has hired personal trainer, financial coach, career coach, or even life coach. In all of these areas, the expert needs to have intricate knowledge of the field and be able to apply it in a practical way that will best help their client.

Maybe you know of a company or employer who paid outside consultants several tens (maybe hundreds) of thousands of dollars to give them advice about a particular subject.

How can these experts often demand fees and rates that seem substantially higher than what you or I would earn per hour from our regular job? Because the value they are perceived to provide transcends the traditional dollar-per-hour work model. Often times, they aren’t even being billed for the number of hours they’re working. Instead, they’re being paid a handsome flat fee or commission.

Why are they able to do this? Because fundamentally they have something you need. They have knowledge that could help you and your company to succeed and turn results that are several multiples higher than the fee they are asking to charge. They create value with their knowledge, and financially they know that they can leverage it just the same as any other tangible asset.

What Do You Know That Would Be Worth Something to Someone Else?

Do you have any skills or abilities where you could do the same thing? Do you know anything that you believe someone would be willing to pay you to find out more about? For example, could you:

• Write freelance articles, blog posts, or even author an ebook about a particular topic?
• Coach someone to be more successful with their job, fitness goals, personal finance, musical instrument, etc.?
• Act as a consultant for modern advertising through social media?

You might doubt yourself. But I’m sure that if you really dove into one of your special interests or hobbies, you might find out that you have a lot more to offer to someone than you think!

Invest In Your Knowledge

Do you lack confidence in your mastery of a subject? Don’t feel like you have the right credibility? Want to sharpen your knowledge all around?

If any of these doubts sound familiar to you to, then perhaps you need to invest more in your own knowledge. For example, you might it would be beneficial to:

• Go back to college to get your bachelor’s or even masters degree.
• Get certified in a particular field (such as becoming Certified Financial Planner).
• Go to a seminar to learn more about a possible business venture (i.e. real estate, house flipping).
• Take an online class to learn how to better market your digital skills. Bloggers do this all the time to find out more about they can attract more readers and promote their content better.
• Purchase one-on-one fitness training to reach your health goals.

There are so many more we could list!

Value Doesn’t Always Have to Mean “Money”

Remember: Sometimes “getting paid” for what you know ISN’T always the ultimate goal. Often the knowledge we gain could be leveraged to make significant improvements in our lives – beyond the value of money.

Think about a person who invests their time and energy into eating healthier, losing weight, and exercising. Given the scenarios I gave above, maybe this person could consider becoming a personal trainer or even a life coach.

But think about the changes this person could make in their own life (or the lives of their family and friends). Learning what healthy habits to take on and what exercises to engage in will undoubtedly add years and years of quality to this person (not to mention minimize your medical issues).

When I think about myself and all the knowledge I’ve acquired throughout the years about personal finance, its the same thing. Yes, I make money with my writing. Yes, I could likely even be paid for helping others with their money issues. But what’s the most incredible to me is how much this knowledge has improved the financial situation in my own household. Thanks to these efforts, we’re able to buy pretty much whatever we want when we want. We’ve traveled to exotic locations most people only see in magazines. And most importantly, we’ll likely retire early about 20 years before most of my peers. That’s power. That’s truly the value of knowledge, and I’m happy to be living it.

Readers – How do you leverage the value of knowledge to your benefit? What kind of an impact or improvement has it made on your finances, career, or personal life?

Photo credits: Pexels, Unsplash

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As a small child, I would spend every night leading up to Christmas morning wondering what was going to be underneath the tree waiting for me.  As a young parent, Christmas became a whole lot less about “what I wanted” and more about how much  my wife and I could surprise our kids.

Now, Christmas means just a little something different to me.

It was Christmas 2014 when I was a seemingly perfectly healthy 34 year old husband and Dad.  Then, not 15 days later into January, I went to the hospital only to find out that I had Stage II cancer.

When you’re in the hospital waiting to find out what’s going on exactly and how bad your situation really is, certain things tend to disappear from your mind entirely.

You don’t think about work.  You don’t think about all the “things” you do and don’t have.  You don’t even think about all the petty stuff that people did that annoy you …

Instead, you think about only one thing: You think about time.  You think about whether or not you’ll be around to see your family, if they’ll be okay, and if you did everything you were meant to do with them …

There’s only one thing you want, and that’s for everything to go back the way it was before.

The Greatest Gift of All

When you receive chemotherapy and feel sick for days, the best possible gift you can get is when you start to feel like your old self again a few days later.  It’s indescribable to be full of energy again.  To have food taste good again.  How great it is to simply breathe and not have any part of your body hurt.

When you start to get better, it feels great to be alive.  And things look a lot differently than they did before.  Your career doesn’t define you any more.  Material processions don’t really make you feel anything.  And some of the things other people get really passionate about or take so seriously seem down-right ridiculous.

People who are negative or miserable all the time make no sense to you.  “Hey buddy, want to have REAL problems?  Try discovering a giant tumor in your chest and then come talk to me about how inconvenienced you are”.

When you’ve been robbed of so much time, time has a completely different value than is used to.  You finally understand that it is in fact “finite” – you will eventually run out  of it.  Time is a premium.  You realize all you can do with time is make the best of it.

All you can do is give it your best shot while you’ve got the opportunity.  Don’t waste your time pursuing the things that will ultimately leave you unfulfilled and unhappy.  Give your love and attention to those who really need it the most.  Make plans and goals to go enjoy the experiences you really want to get out of life.

Financial Freedom is Bigger Than Just Yourself

For years, financial freedom has been very important to me.  And it still is.  But now financial freedom represents so much more.  It signifies not just the time to do as I please, but also the opportunity to make differences to those where I might have never otherwise been able to.

By turning our savings into a machine of labor-replacing income, I will ironically take money right out of my daily equation.  Working won’t revolve around financial gain, because my savings will provide all that I could ever possibly need.

Instead, I will be able to focus on helping people and sharing my knowledge the way I want to.  Not because it is tied to any sort of job or financial gain, but because I care.  I can help other people to realize and achieve their own dreams and goals, and I will be able to do so without the artificial boundaries so many of us commit ourselves to.

And, depending on how our assets shift and grow, the sky could be the limit to what I am able to do with them.  It could mean financial gain for future generations, or even funding other causes we believe in.  I could create the gift that keeps on giving.  This could be my legacy, and I’d have financial freedom to thank for it.

Financial freedom has never been about the money.  Having “the most money” was never the end-goal.  Money was just a tool.  Money was just the coal that I shoveled into the hot furnace of a giant machine; a machine that I’m designing and perfecting little by little each day.   A machine that will one day not just do great things for me and my family, but for others for years and years to come.

That’s the whole point.  That’s what we’re saving for.  Every dollar saved is creating something larger than life, larger than myself, and having a purpose that I can share with all of those who matter to me.

This Christmas, I’m thankful for getting the one thing I wanted more than anything this year: To be able to finish what I started!

Merry Christmas everyone!

Featured image courtesy of Broo_am (Andy B) | Flickr

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I love to talk to people about money!  Yet I can’t help but notice how many times a conversation ends in “I could never do” or “why that will never work for me”.

These excuses are the lies we tell ourselves to make it seem better when we’re not where we want to be with our money.

It’s no secret why we do it.  Excuses are easy!  They’re a convenient place to run and hide when there’s real work to be done.

But as the expression goes, “time is money”.  And the more time we waste, the further away we get from becoming financially independent.

That’s why I’d like to address a few of the most common money excuses for why we don’t save, and show you how we can overcome them!

You know them; maybe even used a few of them to squeak by.  (I know I used to …)

But at some point, if we truly want to take control of our own financial situations, then we’ll need to see these excuses for what they are – nothing more than just excuses!  Let’s get started.

1- But I’m already saving 10% of my income …

One of the most misguided pieces of advice you can find in popular financial media is this notion that saving 10% of your income is going to make everything okay.

Don’t get me wrong … It’s great to be saving!  (Sadly, you’re technically doing better than half of the Americans who save nothing at all.)

But all comparisons aside, the real question you should be asking yourself: Is 10% going to accomplish my goals, or do I need to bump that number up?

To put this into context: Suppose you earn $60,000 per year and save 10% of your income.  How long do you think it is going to take you to save up a large enough nest egg to generate $60,000 in passive income each year?

The answer: Over 43 years!

What if you were hoping to retire in 30 years?  Or maybe even 20?  10?

Here are some other questions to consider:

• Would you be okay with working a little bit, or do you never want to have to work another day in your life?
• Do you hope to live in the Hamptons and travel the world in luxury? Or is your goal to simply enjoy the same comforts you do now?
• Are you okay with some financial risk, or do you want absolute certainty that you will never, ever run out of money in the future?

It’s these questions (and more) that will ultimately determine how much you need to save into your nest egg. 

By all means: 10% might do the trick!  But it’s also VERY possible that you could be completely under-shooting the number you need to hit if you want your dreams to become a reality.

My advice: Forget about the math for moment.  The hard part is deciding what it is that you really want to do!

For that, I invite you to grab a cup of coffee, take a seat, and give these questions some serious thought.  If you’ve got a spouse, talk about where the two of you would like to be financially.

I can assure you: Once you know where it is where you want to go, getting there will become a whole easier.

Once you start to get an idea, play with the numbers using a simple retirement calculator like this one here.  Or if you’d like to explore this topic even deeper, you can check out my book: How Much Money Do I Really Need to Retire & Achieve Financial Independence?  There you’ll find all kinds of neat tricks you can use to truly determine how much you need and the best ways to get there.

2- But I can’t afford to save another penny …

Nonsense!  Anyone can save more money if they really wanted. It’s just a question of priorities.

Allow me to put this into perspective: Pretend an important bill arrived in your mailbox.  Would you pay it?  Absolutely!  Why?  Because that’s what any responsible person does when they owe money.  They pay it!

But no one ever thinks about their own financial independence in this way.  We always treat it as “optional”; something we can put on the back-burner and take care of later (but rarely ever do).  We forget that in reality saving for retirement is like paying a bill to our future selves. 

This becomes even more important when you realize that (thanks to the power of compounding returns) that every dollar you save now has the power to be worth $7.61 in 30 years!  And that has the power to generate $0.30 of passive income every year for potentially the rest of your life!

Kind of makes that dollar seem a lot more important, doesn’t it?

My advice: Take the savings amount you figured out in Tip #1 and subtract it from your budget just as if it was any other important bill.  From here, we’ll want to explore what things are not “as important” as your own financial future.

A good place to start is to pull up the last 3-6 months worth of credit card statements.  Ask yourself what those purchases accomplished and how important they were to you.

Remember that this doesn’t mean we need to cut out all things and have no fun at all.  We’re just asking you to re-access your priorities against how badly you’d like to become financially independent.

3- But I don’t want to retire early …

Guess what?  You don’t have to.

Financial independence isn’t always about retiring early.  In fact, most people who pursue it do so to achieve something even greater: Financial security!

Imagine having complete confidence in knowing that no matter what happens, your lifestyle will be fine!  No fear of losing your home or not being able to pay your bills.

How many people do you know who can say that if they lost their job tomorrow, they would still be able make their mortgage payments or provide the same level of comfort to their families?  I’m going to guess that the answer is probably “not very many”.

Or how many people do you know who are well pass the age of when they should have stopped working, but absolutely have to out of necessity?

When people live paycheck to paycheck, they hand over that financial control to their employers and handcuff themselves to their jobs.  The problem with this is that no one can ever predict what’s going to happen next … Your employer could make some bad financial decisions and go bankrupt.  They could get bought out by another company and eliminate your position.  Or maybe one day your boss just decides they don’t like you anymore, and they start giving you a hard time.

Whatever the reason, one thing is for sure: You call the shots when you have financial control!  You become your own insurance policy against the worst that could happen.  It may be a parachute that you hope to never use, but leaves you feeling much better in knowing that you have it.

My advice: Imagine for a moment that you did lose your job.  What would life be like for you?  How long would your savings last before the money all ran out?  It’s a scary thought, but its also been a stark reality that many people like yourself have had to unexpectedly deal with.

Just like in Tip #2, where does this sense of “security” fall in line with your priorities?  Again, decide for yourself how important it is to purchase “confidence” over whatever else you spend your money on today.

4- But I don’t know how to invest in stocks …

No problem.  You don’t really need to.

The average person doesn’t have to (and probably shouldn’t) buy stocks directly.   In order to master investing to become financially independent, all they have to understand are a few basic principles:

• Keep it simple. Only invest in what you can understand.
• Don’t chase after high returns. Go for average returns.
• Don’t pay any more fees or taxes than what’s necessary.

For any normal person, this task can be simply accomplished by investing in a simple stock market index fund from within their tax-advantaged 401(k) or IRA.  Buying into one of these funds is like buying shares of the top performing 500 companies in the U.S all at once.  That’s a group that has produced roughly 10% average annualized returns for over 50 years.

Compare that against roughly 90% of the other financial products on the market, and you’ll see that the index fund dominates in the long run.  This is thanks to both performance and their super low cost.  It’s no wonder they’ve receive so  much praise from the likes of Jack Bogle and Warren Buffett.

My advice: Tell yourself you CAN invest in stocks and get to know index funds.  There’s a whole website devoted to the topic called the Bogleheads where you can learn a lot about passive investing.  Here’s a good page to get you started.

I can tell you from experience: Sticking to these funds keeps everything very simple.  There’s no guess-work or fancy analysis to be made.  I simply pick the amount of stocks and bonds I feel comfortable at, and adjust my savings to it.  It’s as easy as that!

5- But I don’t have a high paying job …

That’s fine.  You don’t necessarily need one.

Earning more money isn’t really the full picture when it comes to financial independence.  The real goal is in creating the biggest difference between what you earn and what you spend.

Not a lot of people realize this, but spending less accomplishes two main objectives:

1. It widens that gap between earning and spending leaving you with more left-over every month to put into your nest egg savings.
2. It trains you to live more modestly. This creates a lifestyle pattern where you adjust to needing less, thereby reducing how much money you ultimately need to save up in the first place!

You might even call this a double-ended approach to guaranteeing your own financial security.

I’ve heard stories of high-paid executives making six figures who can’t figure out how they will ever afford to retire someday.  Why?  Because their lifestyle and expenses are completely unsustainable.

On the flip-side, there are countless blogs and threads of everyday people who earned humble salaries and were completely able to achieve financial freedom.  It was all due to them creating this gap between earning and spending that helped them put away the maximum savings possible.

My advice: Rather than agonizing over why you can’t make more money, why not think about some ways you could introduce some simplicity in your life?  Instead of spending money, could you take up a new hobby or learn a new skill to occupy your time?  Find a new passion that you care about?

6- But I like my house and nice stuff …

Here’s a shocker … I do too!  And no one says you’ve got to give any of it up!

There’s a horrible precedent in personal finance that the word “frugality” means “cheap”.  I should know: I used to cringe at the word.

This is probably because a lot of the extreme early retirement stories you often hear involve people down-sizing their houses or spending $100 per month on groceries.  But you’ve got to remember: Those stories only make the headlines because they are sensational, not because they are actually practical.

Instead, I offer a different approach.  Why not just live within our means by striving to get the absolute best price you possibly can for the things you want?  For example:

• You want a nice house?   What’s the best possible deal you can get?  When my wife and I bought our current house, we got it for nearly $70,000 less than the original asking price!
• You want a nice car? What’s the lowest you can talk a dealership salesman down to?  I walked out on 5 different dealers before I found one that would reduce the price of our current SUV to what I wanted.  All it took was a little persistence and finding the right guy!
• You want a luxury vacation? What combination of savings and credit card rewards could get you there for almost free?  We took two vacations in 2017 for literally next to nothing saving almost $5,000 in the process!

Notice the difference?

You CAN have nice stuff!  You CAN keep your house.  As long as you stay within your given budget, and save what you need to, why not have some fun with whatever is leftover?  Why not try to get the maximum return for the least amount of expense?

7- But I want to pay for my children’s college …

No problem.  The path to financial independence isn’t just about planning for retirement.  It can involve a great deal of financial aspects, including the future of your children.

My wife and I have saved for years for our children’s college right alongside with our retirement savings.  Just like learning about the tax advantages of different retirement funds, we discovered long ago that there are also special savings programs for things like college, dependent care, and medical expenses.   It goes hand in hand accomplishing the same net result: Saving you more money to do what you want with it.

My advice: Remember my first tip?  Go back to your list of priorities and decide where paying for your children’s college lies.  Depending on your timeline, you might be able to work on a parallel solution that accomplishes both things at once.  But just like your own financial independence, it’s up to you to plan and decide how it will all fit together.

Readers – What are some of the biggest financial excuses that you’ve heard?  What advice did you offer to overcome them?

Featured images courtesy of Flickr, Pexels

The post The Top 7 Money Excuses That Hold You Back From Financial Independence appeared first on My Money Design.

And why not.  The U.S. is one of the most over-worked developed countries in the world.  Our mantra for generations has been to simply put more hours in when we want a bigger paycheck.

Yet … we all know there are outliers.  I’m sure you can think of one.  Everyone has that one guy or girl in the office that seems to never be there or be very busy.  But then they (appear to) make way more money than the rest of us.

Maybe you know of a friend or family member that works fewer hours than you do, but they seem to be doing very well financially.

Are we jealous? Of course!  Who wouldn’t want to have to do less and earn more?

With more money and more time to do what you really wanted to, you could spend more time with your loved ones and friends, do your hobbies, play golf, travel, etc.  Some days just about anything sounds better than having to go to a cubicle, fill out useless reports, respond to emails, go to meetings, or whatever other things you dread when you’re at the office.

So how do we get there? How come some people enjoy this privilege while others don’t?

In this post, we’re going to explore two examples where working less and earning more was achievable.  And it was all thanks to just ONE very important thing…

Working More to Work Less

I’ve been reading a really great book lately called How to Retire Early by Robert and Robin Charlton.

The book is the story of how this man and wife couple (with no kids) was able to retire by their early 40’s after just 15 years of saving!

So how did they do it?

The foundation of their story begins with one profound decision: They wanted to escape working.

Neither of them were necessarily “in love” with what they were doing for careers, and they dreamed of a day when they could travel and live abroad without financial burden.

Their goal wasn’t to work less, but to not have to work at all!

And so like most people on the quest for financial freedom and early retirement, they knew the answer to their problem was simple: They needed to make more money.

Earning more money but keeping the same standard of living expenses meant they would be able to save away more and more money every year for early retirement.  That money would compound into a fortune so big that that one day be able to stop working and live off of 4 percent (give or take) of that money each year for the rest of their lives.

And so, ironically, they actually began their journey by “working more”.

Robert plunged himself into his career and began to take on more assignments at work.  Eventually he ended up changing jobs, and that led to him earning a higher paid position.

His wife, Robin, also made some pretty significant career changes as well.  She was earning a very small amount as a travel agent.  Sensing this was an industry that was quickly dying out (and it was by the end of the 1990’s), she went back to school, got a nursing degree, and then started earning 3x more than she was before.

All this time, the two continued to save more and more for retirement each year.  They went from saving just a few thousand dollars to over $40,000 annually for the last few years.  Those savings quickly snowballed into all the money they would ever need to stop working completely and enjoy their standard of living.

The lesson here: By actually working harder for a few short years, this couple was able to shave almost 20 years off the standard retirement norm!

How’s that for working less and earning more?

Applying the 80/20 Rule

This couple isn’t the only one to have a positive experience with working less and making more money.  I had some experience with this myself.

A few years back, I came to really understand something called the 80/20 rule from the book “The 4 Hour Workweek”.

In case you’ve never heard of it, the 80-20 principle is simple: 80% of your results will come from 20% of your efforts.  The idea then is to eliminate the 80% of things that are not helping you reach your goals, and redirect your efforts to the 20% that are.   By doing so, you’ll stop wasting your time and increase your results.

The more I thought about this, the more I realized just how guilty I was of this.  How many things in a day was I doing that didn’t really contribute at all to me being a better professional or earning more?

I began asking myself:

• Do I really need to respond to every single email right away?
• Do I really need to be involved in every decision or project?
• Do I really need to follow up on every single quote?
• Do I really have to solve every single problem?
• Do I really have to know everything about everything?

Of course not!

Instead, I began to lean out from the mundane and focus on my efforts on the things that actually mattered; the things that actually produced results!

Before every action, I would ask myself:

How is this going to bring me closer to MY goal? 

How will this make me a better at what I want to do?  … better as a professional and enhance my career?  How will this be better for my company in the long run?  How will I ultimately end up benefiting?

In doing so, I found myself moving away from being a jack of all trades and more specialized in niches within my industry that were interesting to me.  I was developing a deeper understanding of some pretty complicated subjects, and I was really enjoying the challenge.

By not signing myself up for everything under the sun, I found myself taking home less and less work.  I was also starting to really work less than I was before.

Did that hurt me financially?

NO!  That year, I got a HUGE bonus check.  Then, as if that wasn’t good enough, the following year I got an even bigger profit sharing bonus – the biggest I had ever received in my life!

The lesson learned: Doing more isn’t what gets rewarded.  It’s what you know and what you do with it that employers reward.

Plus: Money wasn’t the only reward.  By working less, I was instead spending my time where I needed it: with my family, laughing at our favorite shows and simply enjoying their company.

I was finding a better work-life balance.  I was taking back what was mine: Time.

And it was paying off: Both mentally as well as financially.

The Key is “Focus”

In both examples, there was one common thing that led to making more money and less work:

Focus.

In the first example, when the Charlton’s decided that an early retirement was something they desperately wanted to achieve within 15 years, it became clear to them what they had to do.  They had to focus on earning more money to save more money, even if that meant some pretty dramatic changes to their careers in the short run.

But eventually it paid off!  Through disciplined saving and investing, they were able to retire 20 years ahead of when most people typically do.  Now they enjoy traveling abroad living in different countries and doing the kinds of things that most people only dream about.

In the second example, once I began to focus on the more actionable aspects of my job and really devote my attention to learning the kinds of things that would enhance me as a professional, my compensation really started to pick up steam fast.  This is because employers like it when people produce results; and they value those that can produce the kinds of things that no one else can.

I’m sure there are many more examples that demonstrate that it is possible to work less and make more money.  In your own lives, I’d encourage you to find the thing you should be focusing on.  Experiment and test to see which things work for your situation.  As you keep on chipping away, the answers will slowly reveal themselves, and you’ll discover a pattern that works for your particular situation.  It’s there if you’re willing to go find it.  Yes, it may even require a bit more work in the short run.  But over the long haul, the benefit will pay dividends for life.

Readers – How do you get away with working less and making more money?  What’s your secret?

Featured image courtesy of Scott Moore | Flickr

The post The One Thing You Need to Do to Work Less and Make More Money appeared first on My Money Design.

No one in their right mind ever wishes ill-will upon another, right?

So why do we sometimes feel such a contradiction of emotions when someone we know has a good fortune?  Why is it that we suddenly feel consumed by feelings of envy and disdain?

According to a paper from the University of California, San Diego, feelings of envy are much, much more common than you might guess. More than three fourths of all study participants reported experiencing envy over the past year (more so with women 79.4 percent versus men 74.1 percent).

So why is this?  Is it natural to hate other people’s success?

Could it be because we suddenly feel inadequate with our own accomplishments?

Or does it have more to do with evolutionary instincts?

In this post, I’d like to dive into what it is that makes us feel this way.  But more importantly, I’d like to see what skill we can use in overcoming envy.  Perhaps the true battle has more to do with battling our own insecurities about who we are and what we’re capable of doing.

The Evolution of Envy

So first of all, is there anything inherently wrong with wanting what other’s have?

If you think about it in the context of our history as a species, absolutely not!

According to Maslow’s Hierarchy of Needs, physiological needs (the needs for food, water, shelter, etc) rank as the most basic but most important layer of needs for human survival.

Since the days of cavemen, humans have banned together in small groups as a means for surviving.  The strongest of the group could provide for the others who were not as lucky at hunting.

But this didn’t come without a price.  The stronger and more “successful” of the group would get the best meals, find the best mates, and more likely live a longer life.

In our modern society, we can draw a lot of parallels.  Though we’re no longer hunting for buffalo so that the tribe can eat that night, we do the same through our jobs.

Those who can work and provide for their families (through money from their paycheck) will provide the much needed food and shelter for their families.

But then it doesn’t stop there.  Even after those basic needs are met, we still compete (sometimes aggressively) for other ranks within our social norms through the attainment of:

• Powerful job titles
• Higher salaries
• Better looking spouses
• Bigger houses
• Etc.

So then can we really blame ourselves if our DNA has been programmed by our ancestors of the past?

Feelings of Envy and Social Media

Ask yourself: How many times have you walked over to your colleague’s desk and fed into your own feelings of envy.

Your colleague holds a better job title than you and likely makes more money. But they might be younger or perhaps even more inexperienced. You see a picture on their desk of a happy, beautiful family on some exotic vacation. You can’t help but start to experience feelings of resentment. Or worse, you start to feel unsatisfied with what you have in your own life.

These feelings are not at all uncommon. And it doesn’t stop at the office. In fact, you don’t have to look much further than your own phone or computer screen.

According to mental health experts, Social media is a HUGE contributor to feelings of anxiety and envy. Every post and picture is carefully crafted, filtered, and cropped-down to feature the best of the best events in our lives.  They serve as our proverbial trophies.

Post the most trophies, and socially, you’re the winner.

The rest of us … we can’t help but feel like the losers …

Overcoming Envy and Recognizing an Opportunity

Okay.  Just because you’re programmed to be jealous of your neighbor’s house, your co-worker’s success, or even your friend’s good fortune doesn’t mean you have to give into your primal urges.

One of the great things about our species is that it has the potential to evolve.  And it is through the realization of what these things actually mean that we can find a way how to overcome envy and deal with the situation for what it is.

Here are a few of my tips and strategies.

1- Realize it’s all B.S.

Those outrageous social media posts.  Happy times.  10,000 followers.  Fancy vacations.  Outward displays of wealth …

It’s all complete B.S.  It’s all just nonsense.

If you were really a fly on the wall in the homes of your friends and co-workers, you’d see the same things that everyone else experiences: Bad days, fights, failures, … times you wouldn’t want anyone to know about it.

They’re just as normal and messed up as you.  Don’t forget it.

2- Advertising is preying on you and making it worse. 

As if people throwing their money around and social media wasn’t bad enough

Feelings of anxiety and envy are something that marketers are well aware of.  And they won’t hesitate for one second to use it against you – even if that means preying upon your feelings in a desperate attempt for you to buy their garbage.

How many times have you opened your news feed or been walking through a mall, and everywhere you look, you see glamorous pictures of people living the high-life and having a great time (or better life than you).

Again, it’s all FAKE.  It’s all carefully staged and designed to get you to believe in a lifestyle that you think you can “buy” your way into.

The problem is that, for most of us, that life can and never will exist.  Recognize this for the complete B.S. it is.

3- Define success on your own terms.

Just because some people think having a powerful job position, more money, or a big house makes them out to be more than they really are doesn’t mean you have to.

You can define success any way you wish.  If that means throwing yourself into your passion, pursing a hobby, helping out others, or doing something else to enrich other lives, than so be it!  Live your life by your own terms, and don’t worry about what others think.

4- Hatred only consumes you.

Like we’ve said, it’s perfectly natural to feel envy and anxiety.  But if you feel it building up into hatred, stop yourself and talk to someone.

Hatred can be dangerous and counterproductive to your own success.  The resentment you might feel towards a co-worker, friend, or neighbor will only sabotage the relationships you could be building.  In the end, the only person it will hurt is yourself.  Don’t let it.

5- Nobody’s fault but my own.

To borrow a line from a really great Beck song, you need to realize that your life is “nobody’s fault but my own”.

You are the sum of your actions and decisions.  Though you might want to blame others for your misfortune, what you choose to do each and every day with your time is up to you.

Take some responsibility and carve out the life you want instead of one you’re simply settling for.

6- Don’t get mad, get even.

Let your competitive side shine!

So maybe you really want that big promotion at work.  Or maybe you want to achieve some big accomplishment.

Stop “wishing” for it and go do it already!

If you never try, then you can never expect to ever succeed.

7- Learn from their good fortune.

If there’s one good thing that can happen for you because of someone else’s good fortune, its this: You might learn what steps to take to get there.

This is absolutely why I love reading about the financial freedom success stories of those who have achieved early retirement.  Every time I do, I pick up one or two new details or strategies that I can then blend into my own way for trying to accomplish the same thing.

8- Keep things in perspective.

Its okay to want more.  We all do.

But sometimes we get so caught up in our desires that we forget about the things we DO have.

Don’t take for granted the things you HAVE accomplished and what it took to get there.

To someone else, you may be THEIR idea of success.

Readers – Confess! Do you feel just a little a little frustrated or angry over other people’s success? Be honest. More importantly, what do you do about overcoming envy?

Photo Credit: Pexels / Wikipedia / Flickr

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Really.. it’s fine.

Contrary to some of the other personal finance advice you might read out there, you’re not committing some kind of financial suicide.  The frugal police aren’t going to come bust you.

In countless articles I’ve read, one of the first areas they always suggest you cut out of your life is that “high-priced” gym membership.

And I get it.  According to USA Today, the average price of a typical gym membership these days costs just under $60 per month.

And to make matters worse, 67% of them go unused.  For those people , that’s just plain silly.  I’ll send you my PayPal address if you want to give away $60 every month.

But what about all the people who actually DO use their memberships?  Are they being ridiculous for paying to go to the gym?  Couldn’t they just work out at home and accomplish the same thing?

I don’t necessarily think so … I’ve been there, and I’ll tell you why.

The Failure of Our Home Gym

When my wife and I met in college, we were both really good about going to the gym.  Then after we got married and we bought our first house, I made a small investment into some free weights and a treadmill.  “I’ve done it!” I triumphantly thought … Now we won’t need to pay a whole bunch of money every month for gym memberships!

For a while it worked.  Sorta …  My wife and I would go through streaks where we’d work out.  But it would only be for 20-30 minutes tops.  And between work and all the other stress in life, it was WAY too easy to just let our downstairs gym collect dust most days.

Then last Fall, my wife and I decided to give the local Planet Fitness a try.  What a difference that’s made!  Now we both go regularly 3 or more times per month as a way of staying accountable for putting the membership to good use.

It started out as $20 per month and has now increased to $40 per month since we started bringing our two teenage kids.

Though I realize that’s roughly an expense of $480 per year, I’m not at all fazed by this.  Not one bit.

First, there’s the fact that our overall health has improved significantly!  Since joining I’ve already dropped 25 lbs and am starting to regain some of the stronger physique I had all the way back in college.

On top of that, going to the gym has become a wonderful bonding activity that my wife and I can do together several times per week; each motivating the other to become more fit.

So how does that break down into dollar and cents?

Having Fun Together for $1.33?

I could argue that financially going to the gym is one of the cheapest activities around that you could spend your money on.

For example, take the average family of 4 going to dinner.  This can be a very fun night out together.  But with our two teenage children, it costs us generally $50-$80 by the time we get our bill.  That’s quite an expensive activity!

Going to the gym, on the other hand, costs our whole family $40 for the month.  Repeat: For the month!

This means if you calculate out the dollar amount spent per visit, we could literally go there every day as a family for approximately $40 / 30 = $1.33 per day.  I can’t even take myself and my wife out to get coffee for $1.33.  The only activity that even comes close is when we used to take our kids (when they were small) to the local park to play (free).

Now, of course, unless you’re some kind of gym rat, no one is going there 7 days per week.  So let’s use more realistic numbers.  As I mentioned, on average we’ve been going 3 days per week.  We’ll call this 12 times per month. Now we’re up to a whopping $40 / 12 = $3.33 per visit.  This is still almost nothing when you put it in the perspective of the cost of all the other activities you could be doing.

We already covered “eating out”.  What about going to:

• The movies = Easily $50+
• The mall = I don’t even want to guess how many hundreds …
• Miniature golf / Bowling / classic family outing activity = $50+ again
• Go to a local carnival = $50+ (wristbands cost $25 apiece now?)
• A water park = Probably more like $50
• Just about anywhere…. = Likely $50+ per visit

Therefore, financially I conclude that among the majority of the other activities you could pick to occupy your time, going to the gym will likely be one of the cheapest when you actually calculate out the amount of money spent per visit.  The condition, of course, is that you actually USE your membership regularly.

But that’s not even the biggest reason why I argue that it’s okay to go to the gym …

You Should Spend Your Money How YOU Want To

The biggest point I’m trying to make here is this: YOU are in charge of what you spend your money on.

In the wide-world of personal finance, you often hear a lot of opinions about what you should and should not spend money on.  Sometimes you hear so many different ones that your brain begins to wonder if there’s anything acceptable to purchase.

The answer is: Of course there is!  But its up to you to figure out what that something is.  And it doesn’t matter if it’s a gym membership or trying out the latest craft beers, going to rock concerts, ukulele lessons, traveling to exotic locations, … whatever!  The choice is yours.

Again, this is all assuming your financial household is in order.  As long as you’re hitting your money goals and thinking long-term, you should be able to enjoy the excess.  Enjoying the fruits of your labor here and there is what keeps you fresh and motivated to work even smarter.

Don’t be derailed by the noise of others.  Let them spend their money they want, and remember that you are allowed to do exactly the same.

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