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The King Has Arrived!

Introducing my new baby boy!

(Because apparently I don’t know how to make girls ;))

Baby Dime gives our growing family a nice sum of 16 whole cents now, and I’m pleased to announce he’s just as healthy as he is cute :)

*Say hi to everyone, little guy!!!!*

And compared to his older two brothers so far, he has been a dream! Super relaxed and goes with the flow, and we’ve only had one super hard night in the past 7 days or so since he’s been alive… Hopefully it continues!

And I gotta say, there is a huge perk of having another kid of the same sex:

THEY’RE SO GOOD ON THE WALLET!!

I swear we’ve maybe only bought two or three things in the past 9 months like a new car seat (did you know they expire??), but everything else we had more than covered…. Clothes, toys, play pens – dozens of each! And for once I’ll give my wife credit for battling me during my fits of minimalism* as we surely wouldn’t have had any of them had I gotten my way over the years ;)

So go mom!

Also came across this 9 month baby plan I announced here some months ago, which is funny to look at now since half of the stuff never saw the light of day, haha…

#1. Get my wife a minivan. Nope! Neither of us had the energy/motivation to go car shopping during the pregnancy, so we decided to table this until my wife’s car gets run into the ground, at which point we’ll pick one up for her. So thank goodness my SUV fit all 3 car seats okay!

#2. Be a stay-at-home dad who blogs on the side vs a stay-at-home blogger who dads on the side :) Still on track for this one, although much too early to tell all the way considering my wife is very much at home with me right now doing a bulk of the work – hah. The REAL test will be when her maternity leave is over and she goes back to work :) I *think* I can do it on my own while still maintaining this blog, but I may need to cheat a little and get help for a few hours here and there – we’ll see.

#3. Move back to my home state of Virginia to be closer to family. FAIL #2. I wanted this one real bad, but alas the cards weren’t on the table yet so we’re giving this state another year and going to try making it back next summer vs this summer. Not optimal, but hey – such if life, eh?

#4. Working less but living more. YES!!! Definitely doing more of this!! Still haven’t worked a single weekend in over 9 months, nor a night in probably 5 or 6… That walk with my son last year combined with the news of this pregnancy did a whopper on my life/work balance, and I have yet to regress back to Hustle Land. Which I do miss at times, but not as much as HAVING A LIFE!!! Hah! And I’m still taking mad naps!! :)

So yeah – all good in the Money household over here, and if I’m slow at responding to anyone over the next handful of weeks/decades, you’ll now know why (although we’ll continue our regularly scheduled postings here as I always have a few hours in between sleepings and poopings).

Speaking of which, time to log off as it’s just about that time to change the wee one’s diaper!

Thanks for all your kind words and prayers over the past handful of months, guys! They worked!!! And I’ll see you again in between some good ol’ quality baby loving sessions….

Here’s another pic of our lass before I go – looks just like his father before his morning coffee!

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*Isn’t minimalism so hard to figure out sometimes?? I literally wanted to give away allll our kids’ old stuff but my wife’s “we might need this some day” rational thinking won out… But how do you know when it’s rational or just hoarding?? Everything else we’ve ever gotten rid of hasn’t been missed an ounce, haha..

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[For more $$$ nuggets, head over to Budgets Are Sexy!]

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The “Debt vs. Savings” Trump Card

Y’all know by now my answer to most financial debates is that the emotions beat out the math, but there’s one thing that always trumps that which I haven’t been the greatest about voicing. Partly because I thought it was obvious, but also because I forget just how nasty the debt industry can be!

This Q&A I just had with a reader covers it pretty well, so I’m just going to share it here for everyone to see, and so that I also have a place to point people to in future discussions as well.

There IS a caveat to the savings vs debt hierarchy, so hopefully this clears it up a little!

From Johnny*:

Hey J,

One personal finance question that I keeping struggling with is the debt vs savings hierarchy. Your recent posts that cover the concept of emotions vs numbers are making me evaluate this even further.

My general theory with the hierarchy of savings:

  1. Emergency fund (3-6 months or whatever your school of thought is there)
  2. Meet your 401k match, if applicable
  3. Pay down high interest debt

I know the hierarchy continues on, but step 3 will hold me up for a while. This is also where my numbers vs emotions issue arises. The combination of establishing an emergency fund and contributing 6% to my 401k (my firm matches 50% per dollar up to 6% of salary) leaves little excess for paying down my credit cards. At this rate, my emergency fund will be at a solid point within the next 6 months or so.

However… My 13k in credit card debt will continue to bitch slap me until I can tack on emergency savings to my monthly payments. I’m currently putting about $1,000 a month towards savings and 401k, with around $500 to credit cards. $1,500 towards my credit cards would feel so much nicer than only $500.

Emotionally, I want to increase our emergency savings so that my wife and I have stability. Mathematically – and – emotionally, I want to contribute 6% to my 401k. Mathematically, I want to get out of credit card debt as quickly as possible (duh).

A little back story:

  • I bought a house with my wife last summer ($1,800 per month)
  • I’m a 4th year accountant (yes… I see the irony here)
  • Emergency savings goal is around $18k and we are about $10k away from that. We add $1,100 per month ($600 from me and $500 from her)
  • I currently lease a Mercedes with a hefty payment, but fortunately this ends in a few months ($718 per month)
  • 401k contribution is 6% to a traditional account ($80k salary) and my wife makes about $50k with no retirement account. I had 6% to my Roth but changed it to traditional today, that way I increase my take home a bit
  • $13k in my own credit cards (mostly racked up prior to getting married)

Two more critical points:

  1. My wife is unaware of this debt. We have joint accounts but also some separate accounts – I use my separate accounts to pay towards the cards. When she asked about my credit cards, I panicked and said $3k instead of the actual amount (I think it was 15-18 at the time). Now I can’t bring myself to tell her how I lied in the first place.
  2. We will likely start trying to have kids this summer (her timeline based on age, not my ideal timeline for obvious financial reasons)

Last critical point – I do not use credit cards any more. They are all in my night stand and have no current use. I have resolved at least 90% of my bad spending habits (bars, restaurants, strip clubs, clothes and shoes) and now consider myself to be quite frugal. My largest expenses are essentially my mortgage and paying off previous mistakes (credit cards and large lease payment).

With all that said, what are your thoughts? How do I battle 20%+ interest against emergency funds for my family and retirement accounts for my family? I understand that this is an extreme situation and I’m not handling it correctly by lying, but I also like the similarities and differences with this vs the couple contemplating paying down their mortgage.

The argument with this case is still math vs emotions, but flipped into a completely different situation. Should I continue to build my emergency fund, contribute to maximize my firm matching, and whittle away at my debt?

Best,
Johnny

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And here was my response to him :)

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Woahh nelly!

I desperately want you to fess up to your wife about the debt (it’ll make for quite the come back story too!!!) but I know that’s not what you’re asking about with this email, so I’ll jump right into the question at hand ;) And fortunately, I have an easy answer for you:

20% interest trumps everything!!!
Math/emotions/everything!!!

Most times when people are going back and forth it’s because the upside (or downsides) are too similar, thus making it harder to decide and why the *emotional* route then becomes the clear answer (if you’re anything like me, anyways).

But when it comes to one side being drastically different like in the case of 20% debt interest (outrageous!!!), then the tables turn and you do everything in your power to kill that junk once and for all. And even better that you’ve already nixed the habits that got you there in the first place, so you’ll be done with it FOR REAL! (Most people only focus on the *numbers* and not what got them in the hot mess to begin with)

So my personal opinion is to keep putting in the 6% towards 401k since it’s free money and you already love it both emotionally and mathematically, but then direct *all the rest* of your money right to that debt until it’s finally gone once and for all.

Which can be turbocharged even more once that Benz payment goes away as well!! (Or maybe you can use that $$$ for continuing to fill up the E. Fund and win in both areas??)

It’ll suck not doing things “in order” of your hierarchy there – which is also typically how I list them out too – but again – some things trump everything, and 20% interest is ridiculous. Odds are you’ll prob be fine with $8k banked for emergencies anyways, and if not, you can always redirect it from that month forward since nothing is ever permanent!

Anyways, those are my thoughts :)

*HOW* you’d redirect all that money without your wife asking questions I’m not sure, but if there was ever a time to fess up, now would be the perfect time! Especially if you just come out with it as open and honestly as you have with me/us here and just admit you were too ashamed to share the real numbers…

Plus, you’ve CHANGED! And you’re already halfway through the plan of nixing that nonsense once and for all! She’ll still be upset for the lying of course, but at least you’re already taking action and proving you’re serious about it unlike others who continue to kid themselves…

At any rate, I hope this gives you more to think about, and as I like to say – **as long as your money is trending UP in general**, you’re already on the right path and the rest is just amplification.

It’s great to optimize, but try not to get too hard on yourself as you’ve already had quite the nice turnaround… And thanks for making me almost spit out my coffee this morning too with your “strip club” line, haha… Too early for that stuff!

*******

What says the peanut penny gallery? Where would you prioritize the debt in this hierarchy?

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PS: This high % card also plays in the other direction too. If you were getting 20%+ guaranteed returns in saving or investing (and key being *guaranteed*), then you’d want to shift your game plan there as well. Which is pretty much why you always see “invest in your 401k” up high on these lists since the matches are not only FREE money, but an incredibly high % of it at that! (Typically around 50 to 100%).

*Name has been changed to not get our “Johnny” in trouble here… Which is an alias I always use for people who were trouble makers back in the day, since I *too* used to use it whenever I knew ahead of time I would be causing some ;) (I went as “Johnny Love” to be exact – hah)

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[For more $$$ nuggets, head over to Budgets Are Sexy!]

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A Handful of Great $$$ Tips From Readers!

Time to dump out the ol’ “reader tips” bucket again!

I swear I learn more from you guys than anyone else in my life, haha… Y’all are too clever! And it’s also nice to have someone else to blame for once if any of the ideas backfire ;) Daddy needs a break every now and then!

Enjoy these great ideas around saving, investing, couponing, gifting, budgeting, and cheering up our spouses like the true financial nerds that we are…

Hope you find something good!

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How to hide your cash:

“Just write “casserole” on some freezer tape, stick it on the container, put it in your fridge, and it should be completely safe. Since you know this is code for “cash, a roll” you too will remember where your $ is stashed! ” – Mitchell Walker @ The PouchPlan

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How to score free coupons:

“I email and call companies for coupons. I just scored free kcups (44) pack and a 3 dollar coupon for planters nuts. I used to call ten companies a day, now I only do it when I want something out of my budget. Like the ten dollar nuts, because only deluxe nuts are my favorite. You can also request coupons on company’s Facebook pages. I do all 3, been rejected only by one company in the last 7 years. I love the freebies, but even a .50 cent coupon/discount saves.” – Mariann

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How to think about market losses:

“I actually use moments like this to savor the loss. Not that I like losing money any more than the next person. But I use market losses like these to desensitize me in a way. The thought process being that the more I see larger losses in my investment portfolio, the more used to it I get and the more likely I’ll shrug off bigger losses during recessions. Stock goes down, comes back up, goes down, comes back up, rinse and repeat.” – CP

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How to cheer up your spouse like a nerd:

“I text my wife our numbers when she is having a bad day at work. Little reminders like the mortgage balance just dropped below a milestone, the house will be paid off in x number of days (currently 1,432 or less), or our mutual fund is up by some percent since January. It makes her smile.” — Richard

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How to stop chasing ‘the next thing’:

“My theme this year is “Take 1 step back and 2 steps forward” … the purpose is to go back and look at the stuff I do have (the programs, the books, the hobbies, the clothes, etc. etc. etc.) and utilize them or discard them versus constantly moving on to the next thing. And by doing that I expect that my life will jump two steps forward with no ‘chasing the next thing’.” – Mary Ann

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How to stay organized:

“I have a single sheet of paper where I list all of my accounts (savings, checking, credit card, CDs, money market, whatever) and the interest rate for each one, and any other fees. It’s a handy one page reference that I can see at a glance if it is time to move my funds. And, I value having things be easy so I don’t chase every 0.01% increase in interest.” – Jane

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Great gifts for kids:

“When my son was young, I used to give him a share of stock for Xmas with a matching Xmas ornament: Hershey stock and I had found a Hershey bar ornament, Disney with a Disney ornament, etc. Now when we decorate the tree, he says “oh this is my Hershey stock! Where is it by the way?” And then we have a conversation about the value of holding stock with DRP and not selling it for a depreciating asset like a car :)” – Libby

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Great gift for adults!

“So here’s the deal. Last year I brought up that I hate gifts and think it’s silly that we exchange them with my brother and sister in law. We are both well off enough that if we want something we’ll just buy it rather than wait for someone else to get it for us. We agreed that we’ll stop giving gifts. Instead, this year we’re doing a Book and Recipe exchange – bring a book you think others might like, and a recipe, and we’ll get together, swap them around, take what you want, etc. 100% free, 100% fun!” – Dave @ Married with Money

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Great gifts for the spouse/coin collector in your life! ;)

“We buy each other precious metals – pure silver or gold coins (.9999) as gifts these days. One: they appreciate over time. Two: they are tangible and actually feel like you own something together, but most importantly, three: we look at these coins as our retirement pocket money.” – Mrs. Dragonfly

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How to get your kids to graduate:

“The only thing that I will be assisting my kids is paying for a post secondary education. I will let them know that if they graduate, then they will not need to pay back any money. If they don’t graduate, they will need to pay back every penny, with interest. It pays to be responsible.” – Leo T. Ly

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How to stay motivated with $$$:

“I printed out one of those thermometer things that people use to track a fundraiser goal, and fill it in a little each time our net worth goes up. I keep it on my refrigerator (and hide it when people come over!), and we jut recently hit the big 7 figures last year!” – Roxi, “the weird one that lives next to the cemetery”

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What to do when you move out of a rental:

“Make sure you take pics when the place is empty the day you’re moving out. This will prove you did no damages. Some landlords will make up damages to avoid returning your deposit. Do this even if the landlord agrees to do a final walk thru, pictures speak 1,000 words or better yet, take a video of every room if possible. Gotta cover your butts.” – Debbie (She also recommends taking pictures/videos right when you move in too!)”

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What to do when one budget isn’t enough:

“I run 2 budgets; 1 for normal (employed) spending, and 1 for bare bones (no job, or retire early, or other income source) spending. The bare bones budget is always my backup plan budget and gives me a little security knowing I can survive on way less. It also lays out a path to cutting some current unnecessary spending to help increase my savings rate.” – Brian @ SingleDadMoney

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Good good stuff, haha… Y’all will have to let me know if you try any of these and report back :)

I think I’m going to steal the “you don’t graduate, you pay me back all the college tuition” route. Not sure what’s more motivating than that, but hopefully they actually ENJOY learning and being around their peers so it’s never even an issue!

Totally unrelated, I remember my father telling each of us kids growing up that he’d buy us any sports car we wanted if we joined the military like him and his father did. But apparently he needed to up the ante as all three of us ended up going to college to become artists of some sort, haha… Oops. Though something tells me it was more of a $$$ savings technique than a generational legacy one ;)

At any rate, hope these help!

– J$

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For more roundups like these, see below (listed in order of publish date, in case it’s easier to find the ones you haven’t read yet):

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[For more $$$ nuggets, head over to Budgets Are Sexy!]

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The 4 Types of *Expenses* (And The Only Major One to Watch Out For)

On Monday we covered the four pillars of freedom, and then lo and behold I get a press release this morning on the four types of expenses!

So of course naturally we have to talk about those today ;)

And according to Nik Halik, the person behind this press release and the co-author of “5 Day Weekend: Freedom To Make Your Life And Work Rich With Purpose” (which I haven’t read, FYI), all of these four types of expenses are GOOD except for one:

“We’re taught to believe that expenses are bad and to cut them as much as possible, but that perspective is simplistic and misguided. In reality, there are four types of expenses, and only one of them needs to be cut.”

Here are the four types he lists:

#1. Lifestyle (Consumptive) Expenses

These expenses include eating out, vacations, concerts, entertainment, road trips – pretty much any “experiences” that help you build memories and which usually involve other people. All completely fine according to Halik, so long as you do it in moderation, of course.

#2. Protective Expenses

These are the costs associated with protecting the important things in your life like your health, house, cars, businesses, etc. Which includes all the insurances you take on (auto, life, health, disability), as well as even Emergency Fund savings to protect you from having to go into debt. Also an OK bucket of expenses, and which Halik says the wealthy are actually much better about prioritizing than the middle class – probably because they have more to protect? (Or can afford to easier?)

#3. Productive Expenses

These are the things that improve your life, especially for the long term. Such as investing in your education or career, scooping up investments (real estate, stocks, bonds, etc), starting up or marketing your own business, and essentially anything else that fall under the whole “you gotta spend money to make money” adage. Another area that’s fine for spending.

So what’s this naughty expense, then???

#4. Destructive Expenses! (Dun Dun Duuuuuun…)

These are the bad boys of the group, and include all your nasty habits/vices and nonsense fees you pay, credit card debts, memberships you never use, and anything else that takes away your hard earned money without giving anything back in return. The toxic expenses, if you will. And they’re everywhere!!

I haven’t fully thought through all these expenses yet (literally just got the email an hour ago, haha…), but so far I’m digging it… You normally think of ALL expenses of being bad, so it’s a refreshing take (and reminder!) that sometimes it IS perfectly fine to spend money instead of banking it 24/7…

And in fact, I can come up with a handful of examples for each section, can you?

Lifestyle expenses — boys weekends in New Orleans, bachelor parties in South Carolina, weddings in Poland, cross-country road trips/love drops, Starbucks meetups with friends, date nights while kids are at grandma’s ;), and pretty much every single Friday and Saturday night in my 20’s! Haha….

Protection expenses — our life insurance, health insurance, renter’s insurance, car insurance, overloaded cash reserves, umbrella insurance, soon to come revised (and legit) will and testament/trust to finally get knocked out once and for all! (my trouble spot), and then all the maintenance we do for our cars or homes over the years… Pretty much making this category the LEAST fun of the group ;) At least with the destructive expenses you get an initial thrill!!

Productive expenses — books!!!, index funds, coin club memberships, yearly blog conferences, networking events, everything I pay to keep this blog up and running, soccer/basketball/tee-ball fees for kids, school supplies, camp costs, etc etc… I don’t think I’ve ever bought – or read – so many books in my life as I have these past 9 months since my epiphany… I can’t stop consuming physical books!!

Destructive expenses — traffic tickets, overpriced cable bills/cell phone bills, ridiculous investment fees, $40 bottles of water!, all the cigars I used to smoke (5 years free this 4th of July – woot woot), stupid credit card debts, lottery tickets? (I personally consider these “entertainment”, but for most they’re definitely “vices”), and then probably 800 other things I can’t recall at the moment…

Fun exercise to go through – highly recommend it! (Especially if you’re bored at work right now)

I’m not sure where stuff like food and clothing go, or even roofs over our heads (maybe “protective” since you kinda need them to survive?) but an interesting way of looking at it all for sure…

(Now watch – every time you go to buy something you’ll be trying to figure out which category it falls into! HAH!)

If you’re interested in learning more, check out Nik’s new book –> 5 Day Weekend. Again, haven’t read it yet, but the least I can do is pimp it out a little for giving us a fun topic to dive into ;)

Now go out and spend some good protective/productive money!

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PS: $5.00 if you can name all 5 people in that picture up top, and *where* it was taken ;)
PPS: Links above to book are Amazon links…

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[For more $$$ nuggets, head over to Budgets Are Sexy!]

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The Four Pillars of Freedom

I can’t remember if I’ve shared this before, but one of my favorite new’ish money blogs on the scene is a site called FourPillarFreedom.com.

This guy’s always getting me to stop and think with his short and concise posts, and the infusion of data visualizations he sneaks in with every other article just sucks me in even further.

Here’s one of my favorites to give you an idea: The Early Retirement Grid

(Print it out and put it on your fridge! :))

At any rate, I was poking around his Twitter page earlier (@4pillarfreedom) and was reminded of his “four pillars of freedom” which his site – and name – is based on:

  1. Philosophy – identifying your “why”
  2. Psychology – reducing your spending
  3. Work Ethic – increasing income
  4. Finance – growing wealth

Pretty clear and true!

But I thought we’d break it down a bit further today or else this would be a pretty short post :)

Pillar #1: Philosophy – Identifying Your “Why”

By far my favorite of them all because it is very VERY hard to stay motivated with this stuff (or any stuff, really) when you don’t know THE POINT of why you’re doing it to begin with! Is it to feel more secure? Provide for your family? Travel more? Quit your stupid annoying job? Be the richest person on the block??? Doesn’t matter *what* your reasoning is, just so long as you know it to keep you forging ahead (although spoiler alert: you’ll never be the richest person around as it’s a never-ending pursuit!)

My personal “why” is to be able to wake up and do whatever I want without having to think about money once… Which is ironic, since you need to deal with it every single day until reaching that point :)

Pillar #2: Psychology – Reducing Your Spending

Another great pillar! And 1/2 of the overall strategy as there really is only two ways to grow your money: spend less or earn more. You’ll see opponents of both sides battling for which is the most important, but true rock stars (or should I say, Wonder Women?) nail down both sides of the equation simultaneously. I’ve only been able to do that in short spurts (I tend to veer one way more than the other at any given point in time), however like everything this is a work in progress…

Pointing back up to that chart up above though – you’ll see how drastic the time gets cut down the less and less you spend. Especially as you keep earning more over that same period of time.

Pillar #3: Work Ethic – Increasing  Your Income

The 2nd half of the financial equation! And one with unlimited potential unlike that of cutting back since there’s only so much you can do if you still want to enjoy your life. The caps are completely removed with how much you can make, though, and if you’re REALLY good at the game you’ll manage to earn more while still working the same amount of time as everyone else!

I’m not such an expert that area as yet so I can’t share any examples, haha, but I *was* good at working 20 hours a day once to help make up for it ;) My desire for freedom overrode everything else for a handful of years back then, and really jump started my finances as I started sprinkling in elements of pillar #4 below.

Pillar #4: Finance – Growing Your Wealth

The *turbocharging* part of the equation! And the most fun one as it requires a fraction of the effort involved compared to cutting back or earning more ;) This is the area where you *invest* all of that cash you’ve been saving so it can keep compounding over and over and over again – thereby speeding up the process so you can do less cutting back/earning more later!

This part’s usually the most tricky as it can be a learning curve to get into it all (do you invest it into the market? CDs? Real estate? BITCOIN???), but once you land on what makes sense and fits your personality, you can just pour it all in from there without needing to give it much additional thought.

For me, personally, you know it’s all index funds, all the time!, but many people (smart people) will diversify it up and have their money tucked away in all kinds of different areas and risk levels. (Another post I liked from Four Pillars is this one that talks about investing in general – “A Dollar That Experiences an Investment Loss is Still Worth More Than a Dollar Spent.” How true that is!!)

So there you have it – the four pillars to freedom :)

What do ya think? Missing any here? What would YOUR four (or five/six/seven) pillars look like?

Might make for a good exercise this week, particularly nailing down that first one – the “why.” Having money is nice, but the LIFE it brings you is the more important piece to the puzzle! Use that mission as your guiding light, and it’ll make all other pillars easier to accomplish as you go…

Happy Monday!

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[For more $$$ nuggets, head over to Budgets Are Sexy!]

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A Page Full of #Money Memes

I’m just gonna paste up a bunch of my favorite money memes today, because why not?

If I missed any good ones, let me know :)

– J to the Dollar Sign

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[For more $$$ nuggets, head over to Budgets Are Sexy!]

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A Bunch of Ways to Stash Money Aside!

What up, what up!

Last Friday we ran a giveaway here of my old iPhone to someone who shared how they’ve tip’d themselves lately (winner announced below!), and there were SO MANY great savings ideas being passed over that I had to just share some of them with y’all…

You never know what’ll end up clicking, so read through them all and then see if there’s any worth testing! And if you do, make sure to come back and tell us how many millions you went on to bank ;)

Hope this helps!

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The $1.00/Day Trick

“Good morning J$! I’m a big fitness guy and I’ve been obsessing over these new smart watches that track just about everything I could wish for (they won’t track any of my budgets though ;).)

I’ve been really into one in particular: the Garmin Fenix 3 HR. Unfortunately it runs at about $350 currently and I can’t justify spending that much on a little screen that wraps around my wrist (even when I find sales going on for nearly $75 off that price.)

So to find out if I truly wanted this watch, I made a deal to Tip myself $1 every day for a year starting back in January. If I still want that watch come Christmas time, then I’ve proved to myself that it was not a passing want for a slick overpriced watch as well as spaved up enough to buy the watch outright!

What’s $1 a day going to hurt, right?!” – Chris L.

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The $20+/Week Trick!

“I upped my weekly contribution to my FFF Account – Financial Freedom Fund. At the beginning of the year, you challenged readers to put aside $20 per month. Well, I went one better, and made it weekly. Then upped it to $21, now it’s up to $25. My theory is, save until it hurts. Not hurting too bad yet… Thanks for making my FI journey a little shorter and a little more interesting!” – Karin

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The Secret Stash

“I put $20 folded neatly and stashed in my “secret” wallet compartment.   Why?  because I promised myself I would “start paying me first.”  I’m a single grandma raising my 7-year-old granddaughter (born to my daughter while she was still in high school) as my own and soooo I had been paying for everything else and thought I would start paying myself $20 with each check (I’m self-employed so never really know how much those checks will be, so this is a start).” – Lisa D.

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The Money Jar

“Just sold an old canoe for $200 and put the money in my “money jar”.  This money jar is just for me, when I want to do something out of our budget.  Like when the kids come home from college and we want to take them out to eat and a movie, etc.  Basically, it is money that I have no guilt in spending, because it doesn’t count towards our budget.” – Becky

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The Smoker Fund

“I’ve recently found this process to be very effective in reaching my goals of quitting smoking. I put away $4 each day into a glass jar while I was quitting as that was how much I was spending each day (on average) on my smoking habit.

It was so rewarding hearing the ‘clink’ of my two $2 dollar coins splashing into the bottom of the jar at the end of every day. At the end of my first month, I put it toward a bottle of scotch I’d been drooling, I mean, dreaming about (Glen Fiddich 15yr old). I’ve kept up the practice for the past 3 months but moved to a digital savings each day and have a new pair of golf clubs I’m now saving for.

Highly effective practice, feeling like I’m putting wasted money toward goals and things I really truly value.” – James W.

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The $5.00 Bill Trick

“Whenever I get a $5 bill I put it aside and it becomes part of my vacation fund. It’s amazing how fast a $5 bill here and a $5 bill there can add up. I’ve saved hundreds of dollars each year doing this trick. Great way to stash away some vacation money without feeling like you are taking a hit out of savings. Of course it’s rough when you pay for something under $5 with a $20 and get three $5 bills back in change – nice for the vacation fund but makes the weekly spending budget a bit tighter! It’s funny how now I have such a hard time parting with a $5 bill” –  LeeAnne

[EDITOR’S NOTE: We actually ran an article on someone who saved $36,000 doing this! Check it out at Rockstar Finance]

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The Intentional Thinker

“I have started “ tipping” myself by stashing away money that I would have spent on “ old money spending habits”… fast food drive  through purchases was my biggest one as well as check out line candy purchases and even my occasional need of having “to be in it to win it” lottery ticket purchases.

It started as a way to be intentional with my thinking about spending my hard earned money when I had the urge to spend money on impulsive and less than quality items and has  happily turned into away to add additional saving for a special 25 th Birthday vacation for my son!

This new and better money habit is also a way to treat my body better and in the long run is a wonderful win-win situation!” – Kim W.

********

The Busy Retiree!

I retired on April 6! Yes, retirement is just as busy as paid work, but with a more flexible schedule.  I spent the past year tipping myself.

Refinanced my mortgage to 4.25% on a 10 year note and set up bi-weekly payments starting June 2017 that included an extra $100/month to principal.  Just received escrow reduction (yea age, local tax reduction) and increased the additional principal by that $104/month.  Initial payoff June 2027; projected pay off December 2023.

While still working was finally able to join a van pool; saving $189/month for parking plus wear and tear on car; cost to ride 90 minutes each way with 14 strangers $100/month.  Ended with retirement.

Cancelled Direct TV and switched to Hulu (bit of a learning curve), saving $60/month.  Got rid of cable wires and rearranged den for first time in 17 years!

Cancelled gym membership ($21/month) as my retirement covers Silver Sneakers membership at no cost.

Called to cancel on-line NY Times subscription at $26/month and was given a monthly rate of $10.50.

Called to cancel Massage Envy membership of $59/month  (retirement=no stress?) and was told to call back when I was ready to rejoin and as a long-time member would be offered a significant discount. Kept that email.

Cancelled Am Express gold card with annual fee and kept Am Express Optima with no fee, but still earn rewards.

Cancelled several online genealogy subscriptions as I now have time to access at the library.  Same for Barnes and Noble when current year is up.

Spent the weekend moving ~1000 pictures from previously free Verizon Cloud (not free as of May 1)  to thumb drive and ultimately Amazon Prime Cloud (I cannot give up Prime).

Received a nice check for 49 days of saved and unused personal time off and used a chunk to build up my savings from 3 months to almost 5 months, much to the delight of my financial gurus.

Opened a Chase Slate account with no interest for 15 months to pay off several smaller but interest charging accounts.  Have watched it religiously and will have it paid in full at 13 months.  Will then cancel.

Signed up for Drive Safe which literally drove me nuts for a bit (consistently dinged for something on my left turns), but has reduced my car insurance premiums, as will not frequently diving in rush hour and reduction in mileage.

Using my debit card as opposed to cash; easier to see what I really did not need to spend.

Reviewed my donations and reduced to the three most important to me.

Asking for my senior discount when available.

Still adding to my savings each month, including funds to cover annual payments.

A good tipping start, don’t you think?” – Helen W.

********

And then my favorite of all comments….

The Perseverer!

“You make me so proud of myself. I have had a $0 balance for over 2 years. I had to put the breaks on all saving to get my bills paid off. This was the first month I could put anything aside. I have to say I am ashamed to say how much. It’s all singles. But as the sky is clear and nice, it’s here and I am hoping to be able to add more.”
– Sharon J.

She then attached a pic:

********

Never give up, y’all :) Every dollar adds an ounce of empowerment! And we all have to start somewhere!!

Let me know if you end up trying any of these out, or if you have any other tricks you’ve experimented with over the years… We can never have too many ideas!!

As to the winner of our iPhone giveaway?

It’ll now be the property of one “Anthony M.” who emailed in, and who coincidentally had been saving up for a new iPhone himself as his has “more cracks in it than a sidewalk” haha… He’s also about to go on a honeymoon later this year, so hopefully the saved money can go towards something much more sexy. Literally and figuratively! ;)

Thanks for participating everyone, we’ll see ya back here shortly…

I have a box of about 30-40 $$$ books I still wanna give away at some point over the Summer too – so stay tuned for those to drop!

XOXO

********
[For more $$$ nuggets, head over to Budgets Are Sexy!]

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“If you can afford the product, you can afford the stock”

Just saw this quote from Mabel @ GirlsOnTheMoney.com and cannot get enough of it!!

(Captured by @AllSheSaves from this past Lola Retreat)

How true is this??? If you can afford the product, you can afford the stock! You literally have the cash in your hands!

But how many of us spend gobs of money buying up clothes or coffees, iPhones, laptops, and basically a million dollars on Amazon every month, only to then turn around and say we “can’t afford” anything?

Check it!

  • Clothes @ $30/piece // Express (EXPR) @ $7.41
  • Coffees @ $60/mo // Starbucks stock (SBUX) @ $57.42
  • iPhones @ $500 // Apple stock (AAPL) @ $176.04
  • Laptops @ $700 // Hewlett Packard (HPQ) @ $21.79
  • Amazon @ $1,000,000 // Amazon (AMZN) @ $1,585.55

(*stock prices as of the writing of this post)

(**also, do people still shop at Express?? it’s been so many years since I shopped at the mall and literally have no idea anymore, haha…)

So yes you COULD afford it, but you CHOOSE not to. Which is totally fine – we all live in a world where we can make our own choices, thankfully! – but you technically CAN afford it and just don’t want to. Which are two completely separate things :)

In fact, I really wish the whole “I can’t afford it” line would just go away in itself as it’s only ever used in a negative light vs an empowering one… There’s really no shame in not being able to afford things if that’s truly the case (millions of people are struggling out there!), but this whole fake “woe is me, I can’t afford blah blah blah” should be wiped away for good. If you’ve got internet connection right now, you have control of where your money goes. Even if it’s not a lot.

Perhaps we can change it to “I can’t afford XYZ, because I *CHOOSE* to spend money on ABC instead?” Much more accurate, while at the same time taking ownership! Regardless of whether your money’s going somewhere productive or not.

But I digress…

If you can afford the product, you can afford the stock. Yes – nailed it, Mabel.

And really, this applies to “investing” in general and not only individual stocks, although there’s nothing wrong going that route either. I love seeing people put their money where their values are, and one strategy you commonly see are those scooping up investments of companies they love and use in any given day. Might not necessarily give you a financial edge, but it does feel good.

I actually tried this myself 6 years ago and wrote about it here – What If We Only Invested in Companies We Loved? Then 9 months later gave an update (though not nearly enough time to truly test it – hah):

Earlier in the year I decided to try out a new investing strategy and throw a pile of money only into companies that I LOVE and use all the time. Places like Amazon, Target, TJ Maxx, etc. I figured if I spent my money there all the time and am always getting addicted, others are probably doing the same! And then it would feel good supporting these places too – kinda like an all around happy energy flow or something ;)

And it indeed felt good – both financially and emotionally! Here were the results from back then:

  • TJ Maxx (TJX) — Put in $2,000. Now worth $2,182.37.
  • Target (TGT) — Put in $2,000. Now worth $2,161.83.
  • Starbucks (SBUX) — Put in $2,000. Now worth $1,987.10.
  • Panera Bread (PNRA) — Put in $2,000. Now worth $2,040.89.
  • Amazon.com (AMZN) — Put in $2,000. Now worth $2,524.92.

Again, not enough time and way too many variables to accurately portray this strategy, but it still served its purpose of getting me *to act*, and more importantly – to learn. Even if I eventually chose a different long term strategy in the end (which you now know became index investing).

All this to say that yes, most of us truly CAN save and invest more, but you have to really commit to it and want it enough to make it happen. Investing isn’t always as fun as having a new phone or computer or new line of beanie babies on the market (they’re making a comeback – watch out!!), but it’s easier than ever to start *small* these days and then ramp it up from there.

Make *one* less transaction a month, and then redirect the money into investments instead. Use an app, pick them out manually, or automate it every month – whatever it takes! Not only won’t you miss the money, but you’ll feel more confident with each passing month.

Make it happen!

******
PS: For further reading, see Mabel’s presentation she did at the conference: “Investing 101: Pathway To Wealth” (Powerpoint doc) It’s geared towards women and beginners, but there’s tons of nuggets for everyone in it. Huge thanks for letting us pass it around, Mabel!

********
[For more $$$ nuggets, head over to Budgets Are Sexy!]

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When was the last time you Tip’d yourself?

What’s up, what’s up!

So I have that phone up there (iPhone 6?), and I REALLY want to give it away to someone today…

I got it a while back while doing some testing work for a friend’s app (Tip Yourself – an awesome one – check it out!), and it’s been sitting on my shelf ever since doing nothing but collecting dust.

Figured it was finally time to pass it to someone who could put it to use – someone like you :)

So if you’ve been in need of a new’ish phone lately – or know someone who is? – today’s your chance to get a FREE one by answering a simple question today!! And that question, in honor of this app, is:

When was the last time you tip’d yourself?

I.e. when was the last time you stashed some money aside for YOU for once? Whether in savings, investing, etc? How much was it, and *why* did you do it?

For me personally it was the $1.89 I just “spaved” from getting a free coffee at Panera this morning (baller!), and I saved it because I’m on a mission to see how much I can bank just by stashing away the money that normally would have been spent anyways.

It’s not much, but we all know that it adds up, and really it’s these *small* wins in life that keep us going and motivated in general! Which is exactly why this app was built to begin with – to make it easy (and free!) for people to save, as soon as inspiration strikes!

And they’ve got a killer community built around it too, with hundreds of others banking money whenever they want to reward themselves after doing something good (getting a promotion, hitting the gym, cancelling their membership to the gym (hah!), etc). Very cool idea, and very cool team behind it. You can learn more here if interested (yes, I am pimping them hard – I love them!): TipYourself.com.

So that’s it!

If you want a chance to win this free used iPhone (no service or anything – though it works great for apps that only requires wifi!), answer that question below in the comments, or hit “reply” if you’re reading this in our newsletter, and I’ll pick a winner after the weekend is over and update this post shortly there after.

Unless my baby comes, in which case it’ll be delayed as I Tip Myself to all the sleep I can sneak in ;)

Here’s the question again: When was the last time you tip’d yourself?

Good luck!! And may the Fourth be with you!! (Sorry, had to do it…)

PS: This giveaway is only open to those in the U.S., or at least those with U.S. addresses so it doesn’t cost me all my spavings to ship it to you :)

********
[For more $$$ nuggets, head over to Budgets Are Sexy!]

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Net Worth Voyeur Time ($818,204.91 // +$16,000) and Our New Brokerage Account!

Time for ye ol’ net worth updating again!

And just like last month, it was a pretty juicy one for us this time around too – only much more fun than making IRA mistakes and playing the bitcoin game ;)

For the first time in 15 years, we finally have a traditional brokerage account again! WOO!! And what a difference all those years have made with our mindset:

(Of course I had to tweet it in real-time as blogging is too slow these days ;) So be sure you’re following me to get up-to-the-minute news and nonsense! –> @BudgetsAreSexy)

So yeah – dropped $50k right into it last week, and you can probably guess where it all went ;) I’ll give you a clue – it rhymes with Wanguard, and it got invested into Mindex funds, haha…

So why now? Three reasons:

  1. We finally had enough of staring at all our extra cash reserves, and it was beginning to feel unproductive
  2. We couldn’t use it to max out our Roth IRAs this year because of our higher incomes
  3. It was finally time to DIVERSIFY our tax accounts more, because it’s probably not a good idea to have 100% of your investments locked away in them… at least if you truly want to “retire early” one day :) (Though of course, you still have Conversion Ladders and other strategies you can utilize – which I refer to Mad Fientist on who’s a master at this: How to Access Retirement Funds Early)

And of course because I’m obsessed with index funds, we poured it all into VTSAX which required zero ounces of thought – as designed.

I’ll probably use this account to tweak holdings over time and maybe diversify our index funds as well (you know, with bonds, international, etc), but for now we got it going, so I’m calling it a win in the “more well-rounded” department. Which only took us 15 years to get comfortable with again ;)

(And to be honest, I’m still a bit nervous about it, which is strange since we have over 10x this amount in our retirement accounts which are invested in the EXACT SAME FUND??, but I’m chalking it up to just being new and different for us, so hopefully it all subsides… We can always cash it back out whenever we want/need it, right? With much less hubbub?)

At any rate, that’s the major news over here this month! No baby yet, but should be any day/hour/minute now! It’s gotta come out some time, right??

Here’s How April’s Money Broke Down:

[These reports are shared every month to keep things transparent, and to start great conversations around money in our lives. Sometimes we’re up, and sometimes we’re down, but whatever the case, we disclose it all and hopes it helps with your journey too. Welcome to net worth update #124!]

CASH SAVINGS (-$42,514.66): A big drop as we move out a chunk of cash into the new brokerage account just mentioned, as well as another clump into my SEP IRA to max it out for the year. Which thankfully we *were* able to do unlike our Roth IRAs because we earned “too much” last year – womp womp… We also got a decent amount back during tax filing too, which is why we only went down $40,000 here instead of $60,000.

SPAVINGS FUND! (+$629.92): Another great increase this month! This time due to cash back rewards with our USAA credit card, cancellation of our HBO subscription which now nets us $15.00/month (though very tempted to go back with the premiere of West World again!!), some reimbursements checks, and a bunch of other smaller cash findings we quickly stashed before it all went out the door again… Because as the saying goes, “if it’s not saved, it’s spent!” And if that’s not a saying yet, well, we’re making it one today! Spread it far and wide, people!!

(More info on the “Spavings” idea here)

THRIFT SAVINGS PLAN (TSP) (+$586.78): Up and up it goes, the more my wife works! And the beauty of 9-5s is that it should continue to do so even while NOT working and on maternity leave, due to using up vacation and sick days and what not. Benefits us self-employed schmucks lose out on ;) So yay for employers! They’re not always so horrible!

*NEW* BROKERAGE! (+$50,105.83): Best fake increase right there, haha…. Though we have already earned $105 since dumping our money in – much more than the $0.05 we would have leaving it in the savings account :) Of course, we still have a healthy chunk there for emergencies and other future opportunities, but it’s always a balancing act with this stuff, and you do your best to align everything with your goals and comfort levels… Not every last dollar needs to be optimized, but you do want it to be a *conscious* choice that best fits your lifestyle!

ROTH IRAs (+$504.35): Another nice uptick here as well! With obviously no deposits on our end as we were so rudely denied from investing in these for the tax year ;)

SEP IRA (+$7,843.39): A bit better here as we maxed out our account for the year, but we’ll see what the market has in store for us with all these ups and downs going on… Here’s a snapshot of how our Vanguard accounts have progressed since switching over to them close to four years ago:

(Just like with our new brokerage account, all money here is invested in VTSAX as well – Vanguard’s “Total Stock Market Index Fund” – Admiral Shares version (fewer fees, but you need at least $10,000 invested to move into, vs their “Investor Shares” account (VTSMX) which only requires $3,000))

CAR VALUES (-$658.00): Nothing too crazy going on here, other than we lowered our “condition” a bit for each car just to stay more conservative… OH! And we decided to wait on our minivan too until my wife’s car dies out! Turns out we can (barely) squeeze three car seats into my SUV, so for now we’re going that route until absolutely necessary :) The thought of car shopping with a newborn is just not exciting at ALL right now, haha… Or apparently the 9 months leading up to now either!

Here’s the value of our two cars per KBB.com:

  • Lexus RX350: $9,111.00
  • Toyota Corolla: $2,818.00
Total change in net worth this month: +$16,497.61!

And here’s how the past 12 months have gone to put things in even more perspective:

Some stalls over the past few months, but as to be expected when a bulk of your money is tied in the markets… At least we’re able to scoop up funds cheaper these days! And fortunately when we opened up that new account I believe the market had crashed by 500 pts that day… Which I’m sure subliminally got me to finally act ;)

Oh, and here’s how our kids’ net worths are going as well… Which they have no idea about yet, and which we’re keeping a secret until they’re old enough to log on and read these reports (which will be super weird, haha…)

And that’s April! How did you guys do?? Anyone cross the million dollar mark? Or multi-million?

In “life” news which we now like to add here, it’s been pretty low key…

  1. Waiting for baby to arrive
  2. Waiting for baby to arrive
  3. Playing with my coin collection as I wait for the baby to arrive
  4. Playing with my other babies while I wait for the baby to arrive
  5. Sleeping as much as I can while waiting for the baby to arrive :)

It really is unnerving not knowing when – or *where* – it’ll finally make its appearance, haha… I swear every day I wake up it’s going to be The Day!

But I guess he/she’s not done cooking yet… And yes – I’m purposely keeping the sex a secret from you because it’s the only one I’ve got left!! You get everything else from me!!

Hope everything in your life and finances is going well :) MAY your blessings be as bountiful as your incomes this month!

Your (im)patiently waiting friend,

********
PS: If you’re looking for help getting started with your own tracking of net worth, here are a couple of good spreadsheets that might help you:

And if you’re not a spreadsheet person and prefer something more automated, try your hand at Mint.com or it’s turbo-charged cousin Personal Capital (both of which are free). Tons of financial bloggers love and use Personal Capital, and you can find our full review of them here from one of my early-retired friends: Why I Use Personal Capital Almost Every Single Day. Hope this helps!!

********
[For more $$$ nuggets, head over to Budgets Are Sexy!]

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