By Daniel Rodriguez | Dr. Budgets
With Thanksgiving Day behind us and the holiday season upon us, I thought this would be a good time to write about how to spend with intention. Thanksgiving Day is a wonderful day for me to think about what I’m grateful for in my life… when I spend time thinking about what I’m grateful for, I feel really good. And for me, that is the first step on how to spend with intention. If I am grateful for what I have, then I want less, and if I want less, I can focus on spending my money on what is truly important to me.
Since this is a great time to reflect on the past year, I encourage you to think about your spending this year. Have you spent money with intention? Did you get value from what you purchased? Did your purchases make you feel good? We live in a consumer-driven economy, which, unfortunately, means that family is being pushed aside in favor of consumerism (as evidenced by stores being open on Thanksgiving Day). It’s easy to get caught up in spending money, but when you spend with intention then you’re getting the most out of your money.
So how do I spend with intention? By looking at my spending in three different ways…
Focus on Value. To spend with intention, my focus is on value… where do we get the most value when we spend money? That is a very personal question with a multitude of answers for every one of us. First, we need to determine where our money is being spent, and then assess if it is being spent wisely. During this past year my wife and I spent more at Amazon than we should have (free two-day shipping makes it too easy!), so we asked ourselves if we were getting real value out of our Amazon purchases and realized the answer to that question was no. So, we decided to scale back in the new year because we don’t want to have a bunch of unnecessary stuff. On the other hand, we spent some money this year to buy brand new carpet because our previous carpet was old and dirty, and that purchase has made a positive impact on our lives every single day… we now feel comfortable rolling around on our carpet with our daughter. We got a lot of value from that purchase. Another area where we receive tremendous value is our monthly massages… we love spending money on that experience! Actually, it has been found that people who spent money on experiences rather than material items were happier and felt the money was better spent (Forbes: The Secret to Happiness? Spend Money on Experiences, Not Things).
Here’s a trick: when you determine something is valuable to you, use that as a measurement against other purchases. For example, one client had a housekeeping service that cost $100/month, and they received tremendous value from that service. Their house was clean and they felt it gave them more time to spend with their kids on the weekends. Then we looked at their storage facility rental which also cost about $100/month. Did they get the same joy from storing their stuff at an offsite facility? For them, the answer was no. They rarely accessed their stuff at the storage facility, and they hadn’t considered that $100/month should be bringing them joy because it was a recurring expense, which brings me to…
Automatic Spending. An area where it is easy to spend without intention is on our recurring expenses, so my wife and I take a look at those every year. There are so many items that could be on this list, but examples include:
- Cable television
- Cell phone
- Gym memberships
- Storage facilities
- Cloud services
- Music services
- Amazon Prime
Take a hard look at all your recurring expenses to determine if you can either cut them out completely if you aren’t receiving much or any value from them or find a way to reduce the recurring charge. It is so easy to sign up for all of these different services that we often forget about them and then we end up doing the opposite of The Automatic Millionaire… we become The Automatic Spender! Recurring charges aren’t the only area of our spending where we sometimes spend without intention, we can also do this in everyday life were habits are well ingrained, such as a daily Starbucks visit, eating out for lunch every day, buying a soda with every meal, and grocery shopping choices. Spending with intention is the sum of many small decisions that can add up to big money savings over time!
Time Value. Another way to look at how to spend with intention is to look at it through the lens of time. What I mean by that is how much time is your spending costing you? Benjamin Franklin said Time is Money, but I believe that our time is more valuable than money. Time is a commodity that we all have the same of (we all have 24 hours in a day) whether we are rich or poor, which is why I think it is more valuable than money. When I look at spending through the lens of time, then I start to look at things differently. If I have to wait in line for 10 hours to save $50 on a Black Friday deal, was that really worth it for me? The answer to that will help me be more intentional about how I spend my money. If I spend time shopping, but then spend an equal amount returning half the items (thus doubling the amount of shopping time), then was that a valuable use of my limited time? If I have to work 15 hours every month to earn enough to make that monthly payment on that shiny new car I want, is that time commitment worth it? Looking at my spending as a function of time helps brings things into focus for me. Along the same lines, buying time can be another area where money can be spent with intention… whether it is having someone clean the house, having a babysitter watch the kids to give you some much needed R&R or even hiring someone on Fiverr to complete a difficult task for you. Sometimes, it’s worth it to spend the money to have the time.
Ultimately, what we spend our money on should be a reflection of what is most important to us. When we spend with intention, we show others, but more importantly ourselves, what really matters to us. And when we are able to focus on what really matters to us, then I believe our lives become much freer and fuller… and that is something to be grateful for.
How do you spend with intention? Please let us know in the comments section below! Or if you know somebody who wants guidance on how to spend with intention, have them contact us so we can show them how. Happy Holidays!
- Published in Spend Wisely
By Daniel Rodriguez | Dr. Budgets
I love it when we feature client success stories on the blog! Although we work with these clients for many months and see the progress they make through the coaching program, I love hearing their perspective on how much Dr. Budgets has helped them. It’s incredibly rewarding and I’m always proud of what they’ve accomplished.
This month, I wanted to do something different. Since Rachel had so many great quotes in her success story, I wanted to highlight some of my favorites with you:
“I think my total debt balance wasn’t because of one big splurge, but an accumulation of many years of small, poor decisions. Mostly, it was just me living outside of my means.”
Daniel: I see this a lot. When I work with clients who have a lot of credit card debt, it usually isn’t just one thing (a medical emergency, a big splurge) that caused them to go into debt. It is things like eating out too often, frequent trips to the coffee shop, buying lots of clothes… and, when you think about it, that’s unfortunate because they’re 1) usually still paying for purchases they made years ago, and 2) generally, they don’t have much to “show” for their debt… they ate the meals, drank the coffee and wore out (or threw out) their old clothes. They’re paying for the past (with interest!).
“I felt like I never had a plan… money just came and went.”
Daniel: I see this a lot too! When you have a spending plan, you’re telling your money where to go instead of wondering where it went (that’s my favorite quote by John C. Maxwell).
“I’m in the financial services industry and I have access to thousands of financial advisers who can help me… if I had money. But, I didn’t have money, I had debt. Financial advisers don’t typically do budgeting.”
Daniel: It is a common misconception that financial advisers can spend a lot of time with their clients on their budget. This is simply not their area of expertise (which is why they are one of my biggest referral sources!). Financial advisers deal with investments, insurance, and their client’s overall financial picture… I know this because I used to be a financial adviser. If you’re looking for help with your day-to-day spending, then you need a money coach.
“(Looking at my spending) helped me to identify the things that are important to me (that I want to keep spending money on) and the things that aren’t – it helped me to spend with intention.”
Daniel: I love this. I’m probably going to write a whole blog post on the idea of spending with intention. When I work with clients, this is exactly what we want to achieve… it’s not about cutting spending, it’s about spending money on what’s important.
“I think that working with Dr. Budgets is really positive, supportive, and realistic. We started every session by looking at the progress toward on my goal (my goal tracker) and ended every conversation with accomplishments and recognition…”
Daniel: Even my own wife thought that our monthly money conversations were going to be uncomfortable! At Dr. Budgets we try to make the money conversations as painless as possible. We also talk to our clients about what they might need to improve in order to achieve their goals… people don’t necessarily like to hear “you can do better,” but after our clients achieve their financial goals, we hear time and time again “it was the accountability that got me here.”
“Also, I have money in my budget to contribute to charities and nonprofit organizations I support. With everything that’s happened lately, hurricanes and the fires in California, I feel good being able to say ‘yes! I have money to give to that’ without guilt.”
Daniel: I love this too! Charitable and nonprofit organization donations should be a part of your spending plan. My wife and I set money aside each month to contribute regularly to organizations we support, as well as extra money so that we can give when the opportunity arises, including school fundraisers, GoFundMe campaigns, and organizations that help in extreme times of need (like when hurricanes hit the southern states and Puerto Rico, or the terrible fires in Northern California). You should feel good (not guilty) about giving to these organizations!
“If you’re thinking about it, just have the conversation with a money coach and don’t be intimidated or embarrassed by the process… it’s simple. Doing the work is not always easy, but it’s achievable.”
Daniel: Yes! Please don’t be intimidated or embarrassed… there’s nothing to be ashamed of! And, yes, it will not always be easy… but the process is simple, and we want you to succeed.
“Just talking about money allowed me to put it out in the open and feel less shameful about my situation. I can talk to my parents now about money and debt. I’ve talked to others and learned they’re in similar situations. Many people go through difficult financial times, but don’t talk to anyone about it. It’s such a cause of anxiety for people. Even if you don’t talk to a money coach, talk to somebody. Money doesn’t need to be a source of stress for you.”
Daniel: I wrote about this quote in my recent newsletter. This quote, along with this A Cup of Jo blog post that my wife shared with me got me thinking about how we talk (or rather, don’t talk) about money. I talk about money all the time – it definitely isn’t taboo to me! But, I realize that many people don’t talk about money with friends or family… and I think that hurts them.
So, I’m encouraging you (as Rachel did) to talk to somebody about money if you aren’t already. Bring it up the next time you see your closest friend or tell your parents you want to have a conversation with them about it. It doesn’t have to be serious or even in-depth… simply saying “I’m trying to pay down a little debt… can we do happy hour instead of dinner?” (or coffee instead of drinks!) might be enough to lay the groundwork for an open dialogue.
I think that a lot of good can come from talking about money… so, why not start the conversation?
- Published in Success Stories
By Daniel Rodriguez | Dr. Budgets
Do you spend your money with intention? Creating a budget is about prioritizing where you want to spend your money and how you are going to fund your goals… whether that be to travel, buy a new car, save for a house, or save for retirement. Rachel shared with us how she was able to pay off $14,000 in debt in 11 months and how life is different now that she is conscious of her spending…
I work for a financial services firm and have been with them for seven years doing employee leadership development. Before I started in this industry, I worked in retail at a high-end department store. I wasn’t making a lot of money, but felt that I needed to be dressed well. Plus, I liked fashion and shopping.
I would put clothes and other small expenses on my credit card, and, after years of this, my debt started to snowball. I wasn’t making much money, so I was only making minimum payments on my credit cards while continuing to add to them. I think my total debt balance wasn’t because of one big splurge, but an accumulation of many years of small, poor decisions. Mostly, it was just me living outside of my means.
Money wasn’t overwhelmingly stressful, but it was a constant cause of stress. I had a lot of debt, but felt it was manageable. I was able to pay the minimum or sometimes a little more than the minimum. There wasn’t a point where I couldn’t make monthly payments, but I also couldn’t envision a point where I could pay it all off. And, I was adding to it here and there, so it wasn’t going down.
I felt like I never had a plan… money just came and went. At the end of a pay period or end of the month I would get an alert that my balance was low, and sometimes I would overdraw my bank account. I would often think “I’m an adult with a good job. I shouldn’t be in this position.”
I had three credit cards with balances and a personal loan, and the combined total was about $14,000.
Deciding to Work with Dr. Budgets
I knew I needed to do something, but there aren’t a lot of options out there. I’m in the financial services industry and I have access to thousands of financial advisers who can help me… if I had money. But, I didn’t have money, I had debt. Financial advisers don’t typically do budgeting. So, I tried setting up my own budget with online tools, but learned that those tools are useless unless you learn how to use them and are consistently utilizing them to look at your spending.
I found out about Dr. Budgets through a friend… I said, “hey, what’s this?” She told me about her and her husband’s experience with their money coach and I thought it might be the accountability I needed.
Working with Dr. Budgets
After the first consultation, I had pretty much decided I was going to work with my money coach. In our first session, we looked at my last three months of spending and it was in my face where I spend the most money. That helped me to identify the things that are important to me (that I want to keep spending money on) and the things that aren’t – it helped me to spend with intention.
For me, that was a really good experience. People might think it is tedious, emotional, or embarrassing… but it wasn’t. I realized this process wasn’t about cutting my spending, it was more about redirecting my spending. Yes, I had to cut in some places, but that savings would then go to something that was more important to me. I knew that I would have to make sacrifices to achieve my goals, but I felt good about that.
I think that working with Dr. Budgets is really positive, supportive, and realistic. We started every session by looking at the progress toward on my goal (my goal tracker) and ended every conversation with accomplishments and recognition – which was a good jump off into the month.
Another thing I really liked was having somebody to talk to about financial decisions. There were situations where a “spend” was coming up or I would need to talk through a financial decision I had to make, and I knew I could talk to my money coach. I had a partner I could talk to – somebody who wasn’t telling me what to do, but giving me a perspective and allowing me to make the decision. That was helpful.
There were a few times when I received some extra money – a couple of bonuses and a big tax refund – and I talked to my money coach about what to do with it. For the tax refund, I decided to allocate all of it toward debt reduction because it didn’t really feel like money I had earned. But, for the bonuses, I decided I would put a huge chunk toward the credit cards, and also go on a little shopping spree (without using credit cards). Before, I would have paid down debt but then also treated myself on my credit card – and then I’d be worse off than before!
I paid off my debt, credit cards and the personal loan in 11 months, and I was able to buy a car! I was also able to go to Belize for a week with a friend (without using my credit card!). If I wasn’t working with Dr. Budgets and still had credit card debt, I probably still would have gone on the trip – but I would have put it on the credit card.
My money coach helped me to create a plan and held me accountable. He made me feel like it was achievable, and I never felt like there was any judgment. He mapped out different timing options to achieve my goals (shorter timeframe and longer timeframe) and what I would need to do to get there – and I did it even faster than the shorter timeframe option!
Now, I have built up some savings and I’m still continuing to save. Every month, I have money in my checking account. I don’t ever have to think about money… it’s such a nice feeling. I’m thinking about the things I’m buying and not whether or not I can afford them. Being out of debt has relieved some anxiety. It was never overwhelming, but just a little bit all the time.
My next goal is to invest with a financial advisor because I have money now! And since I’m in the financial services industry, I want to take advantage of that.
Also, I have money in my budget to contribute to charities and nonprofit organizations I support. With everything that’s happened lately, hurricanes and the fires in California, I feel good being able to say “yes! I have money to give to that” without guilt.
What would you tell someone in a similar situation to yours about Dr. Budgets?
I would highly recommend working with Dr. Budgets… and I already have told people.
If you’re thinking about it, just have the conversation with a money coach and don’t be intimidated or embarrassed by the process… it’s simple. Doing the work is not always easy, but it’s achievable. And it’s WELL WORTH IT.
Anything else you want to mention?
Just talking about money allowed me to put it out in the open and feel less shameful about my situation. I can talk to my parents now about money and debt. I’ve talked to others and learned they’re in similar situations. Many people go through difficult financial times, but don’t talk to anyone about it. It’s such a cause of anxiety for people. Even if you don’t talk to a money coach, talk to somebody. Money doesn’t need to be a source of stress for you.
It is amazing to see what someone can accomplish when they truly set their mind to something. Rachel was able to pay off her debt much faster than anticipated because she focused on her spending habits every month and allocated a big chunk of extra money toward her debt consistently. Now she is driving around in her new car and building up her savings. How awesome is that?! If Rachel has inspired you to get out of debt and you need some guidance, please contact us or schedule your complimentary consultation.
* For client confidentiality, we changed the name of the person to “Rachel.” Everything else is factual.
- Published in Success Stories
Dr. Budgets was featured on the popular Young House Love Has a Podcast on September 11, 2017 (Episode #63)! Here’s a link to the episode: #63: LET’S TALK ABOUT MONEY & HOW TO SPEND IT SMARTER.
Here’s their introduction to the episode:
“Who wouldn’t want more money in the ol’ bank account? So we picked a money expert’s brain for the most common places he finds his clients overspending, and for his best tips on making (and sticking to!) an easy household budget – which is definitely the key to saving more each month.”
- Published in Spend Wisely
- Published in Financial Goals
By Daniel Rodriguez | Dr. Budgets
Becoming a dad is the most challenging, yet rewarding thing I have ever done. Although nothing could have prepared me for this experience (not even this blog post!), there are some things I wish I knew before becoming a dad. Below are the 7 things I wish I know before becoming a dad…
1) It’s Expensive. Yes, I did read the articles that state that raising a child until age 18 costs roughly one-quarter million dollars. Take a moment to let that soak in… having a child increases your expenses for the next 18 years by $1,200/month… per child! Get ready for some major adjustments! My wife and I didn’t have to move because we already owned a two-bedroom condo (so no extra housing costs… at least not until baby number two comes along), but child care, doctor’s visits, diapers, food, clothes, and general baby stuff has taken a chunk out of our budget. Oh, and this doesn’t include saving for college. So yes, having a baby is expensive! But would I do things differently if I knew this before becoming a dad? Absolutely not! Having a baby simply forced us to redesign our budget… we made it work. My business continued to grow, so I was able to give myself a “raise,” we cut down a bit on discretionary spending (this wasn’t too difficult because we had much less time to do the things we used to!), and we were also able to refinance our mortgage to a lower interest rate. We have made some adjustments, but being a dad has been worth every penny!
2) Your Schedule Shifts. Before becoming a dad, I was in the habit of starting my workday around 7:00am, and I would often work past 5:30pm. This changed very quickly! My workdays now start around 8:30am because I drop off my daughter at daycare every morning. My day now ends at 4:30pm because I also pick her up from daycare after work. Does this mean I am getting less done? Nope! I have been forced to accomplish more in a shorter timeframe. I have been able to shift my schedule to have more time off from my business, but paradoxically, less time for yourself because of all the added duties of being a dad. It’s all good though! Too bad I didn’t know this before becoming a dad… I could have worked less and spent more time playing!
3) Your Weekends Change. This one is very similar to my schedule shifting, but I thought it was important to mention it. Before becoming a dad, I would put in several hours of work on the weekends. Now I put in little (1-2 hours) to no time into working on the weekend. Does that mean I have more time on the weekends? I wish! My weekends are now spent caring for my lovely daughter with my wife. It is a different kind of work! Can it be exhausting? Yes! Is it amazing to watch her grow up in front of my eyes? Yes! Life is very different now on the weekends. Also, our social calendar now revolves around her nap schedule.
4) It’s Challenging, Yet Rewarding. As I mentioned at the beginning of this post, becoming a dad has been the most challenging, yet rewarding experience of my life. I have had more sleepless nights (and sleep interrupted nights) in the first year of being a dad than in my entire life up to this point. “Grumpy Daniel” has made several appearances. I have found it hard to function without much sleep (especially since I don’t drink coffee!). And as much as I love my daughter, caring for her takes up so much of my energy that I am often exhausted at the end of the day (although it has become easier as she has gotten older). There are also a million decisions that need to be made as a parent, which can be very taxing. But even with these challenges, I can’t imagine my life not being a dad. I love this little being with all my heart. I smile and laugh more than I ever have. And I get to experience the world anew through her curious eyes. My favorite part of the day is when I walk her to and from daycare. My little girl has literally changed my life for the better.
5) It’s Not Easy, But You’ll Figure It Out. I was so nervous before my daughter was born. I was about to step into the unknown world of fatherhood. I had absolutely no idea what to expect. I was wondering what I was getting myself into. I didn’t know anything about being a dad! Becoming a dad is not easy, but you figure it out… quickly. I was thrust into fatherhood on the very first day, so I learned fast… and I haven’t looked back! Every day seems to challenge me as a parent, but every day I figure it out… and I’m sure this will continue the rest of my life because I don’t think I will ever “figure out” parenting completely.
6) It Will Challenge Your Relationships. I don’t understand why anyone would have a child to save a marriage because of how much it challenges your relationships… especially the relationship with your spouse. Becoming a parent will test the best of marriages, but lucky for me, my wife and I built a strong foundation of trust and communication before having a child, so all the challenges we have faced together as parents have only strengthened our marriage. The relationship with my friends and family have also been challenged because I don’t have as much time to spend with them. I have made as much of an effort as possible to make time for them, but sometimes I fall short. Lastly, my dog has probably felt very neglected since my daughter was born since he is no longer the center of attention. Lucky for him, he gets to walk with my daughter and me to daycare every morning, and my daughter is slowly becoming his new best friend (especially when she throws food on the floor!).
7) It Makes You Want to Become a Better Person. The last thing I wish I knew before becoming a dad is that my daughter makes me want to be the best version of myself. When I met my wife, she was an inspiration to me to become the best version of myself. Now, my daughter has amplified that desire. She has inspired me to think about work/life balance so I can spend quality time with her. She has inspired me to focus on my health more so I can be in her life for a very long time. And she has inspired me to be the best possible version of myself so I can set a great example for her as she grows up. It has also brought a renewed focus to search within myself to discover what is truly important to me so I can live a life she can be proud of.
So, there you have it… the 7 things I wish I knew before becoming a dad. What are some things you wish you knew before becoming a parent? If you know someone who just had a baby or is pregnant and needs someone to guide them in adjusting their spending to accommodate, please have them contact us to schedule a consultation. Happy parenting!
- Published in Family
By Jeannie Rodriguez | Dr. Budgets
Daniel and I met in 2011. We knew right away that our relationship was special, so it might not surprise you to learn that we started talking about some pretty serious stuff early on: kids, marriage, and, especially, money (he is Dr. Budgets, after all!). Before too long, Daniel had looked at where I was spending my money and made some suggestions to pay down the debt I had been struggling to eliminate. Dr. Budgets was founded about 1½ years after we met*, and so that makes me Dr. Budgets’ first client! As the “OG” client of “Dr. B,” I have some insights to share 🙂
Dr. Budgets has had many success stories… Clients have done amazing things! But, after you accomplish your financial goal, what comes next? Can anything top the feeling of paying off the debt that has been weighing on your shoulders? The answer is YES! What comes after paying off your debt is EVEN BETTER. If you stick with your spending plan, the accomplishments that follow continue to add to your overall sense of well-being. Maybe what I’m trying to describe is best said in a previous blog post:
“I soon realized I wasn’t worried about money at all. I never need to worry because we have automatic payments and buffers, and anything I need or want to buy is accounted for in the budget.”
Can you imagine that? Not having to worry about money? Let me tell you, it’s a beautiful thing. It took some work to get here though. First, I had to learn to live without my credit cards to pay off debt. Then, I had to learn to spend within my (and, eventually, our) spending plan. I also made some lifestyle changes to pay off my debt even faster, including renting out a room and getting a side gig to earn money on the weekends (but I was able to let go of both of those after I paid off my debt).
Now that I’m on the other side of debt and well into my “coaching” with Dr. Budgets, I can say my feelings about money have never been better. For example:
- I love my job, and I continue to love to work after having our daughter. But it’s nice to know that I don’t have to work at my job if I didn’t want to work anymore. I’m not a slave to my job, and I think that makes me love my job even more! Life is too short to hate what you do.
- I love our home, but it’s not our forever home. We’re working toward buying our dream house – not just a “it’s bigger than what we currently have and we need the space so we’ll take it” house. We’ve talked about amenities and location, and it’s within reach. I can actually see our daughter happily playing in the backyard of our future home. Paying off debt felt good, but debt is the past… Now, we’re working toward our future.
- We live in uncertain times and sometimes I’m nervous about the future. When I was in debt, I was VERY nervous about the future because I was one emergency away (car breaking down, a trip to the ER, losing my job) from being in a financial crisis. When I paid off my debt, I was able to create a financial safety net. Having savings gives me a sense of security.
Those are just a couple of examples of how life is better after paying off debt. But, besides these incredible side effects, what comes next after paying off debt? Here are some ideas, from Daniel:
Evaluate your spending plan. You’ve likely had a line item for debt repayment that can be re-directed. Determine how much of that you want to go into savings and other items in your budget. Maybe you want to give yourself a little breathing room in discretionary spending, or maybe you’ve become very comfortable with your spending plan and can put that money entirely toward your next financial goal.
Celebrate! You’ve accomplished something remarkable! Take a moment to acknowledge your sacrifices and reflect on your achievement. Set a budget and treat yourself to something to celebrate… you deserve it!
Create or Increase Emergency Savings. If you were able to put money toward emergency savings while paying down debt, that’s great! Maybe beef it up a bit to cover a longer stretch of time (6 months instead of 3 months, for example). If not, creating an “emergency savings” or “short-term savings” account should be your first priority.
Set your next financial goal. Get excited about your next financial milestone! Do you want to take a debt-free vacation? Save for a house or buy a new car?
If you’re working toward a financial goal, such as paying off debt, good for you! Keep it up! If you aren’t (but know you should), you may not have realized all the wonderful things that come along with achieving your financial goals… hopefully, this will help motivate you to get started! As always, if you want help please contact Daniel for a complimentary consultation – you have nothing to lose!
*Fun fact: I came up with the name Dr. Budgets… It’s a play on Daniel’s initials “DR”
- Published in Debt
By Daniel Rodriguez | Dr. Budgets
Being in the honeymoon stage after getting married is an exciting time! You’ve just committed to your partner and are starting your lives together. This new life together might mean moving in together, figuring out how to pay for your wedding debt, taking on new joint expenses, or preparing for some big expenses in the near future (buying a house, having a baby, etc.). This may lead to some stress around money. I enjoy working with lots of couples, so I thought I would share these 5 things you must do after getting married to help ease the stress of mixing marriage with money:
1) Combine to Save. Marriage has several financial advantages, especially when combining certain expenses. One big one that I have seen with clients (and in my own life!) is health insurance. If the person you are marrying works for a company with a great health insurance plan, then you could save hundreds, if not thousands, of dollars per year. After you get married, make sure your spouse adds you to their health insurance plan so you can reap those benefits. Often, there is a short window (30 days) to do this, so make it a priority after getting back from your honeymoon. Another area where you can save is auto and home/renter’s insurance. There is often significant monthly savings when you are both on the same auto insurance policy. And while you are at it, you can bundle your auto and home/renter’s insurance policy to save even more! Talk to your insurance professional after you get married (or even before if you live together before marriage) to determine if you can save some money on your insurance. There are many other areas where you could combine to save, for example, combining your cell phone plans, Netflix accounts, Costco memberships, or Amazon Prime memberships, so take a look at your particular situation to eliminate any overlap you have in your expenses.
2) Plan to Pay Off Debt. A survey of 1,010 randomly sampled newlywed couples found that entering marriage with consumer debt has a negative impact on newlywed levels of marital quality. The study also found that the large majority (70%) of newlyweds in this study brought debt into their marriage relationship. So, does this mean you should wait until you have no consumer debt to get married? Of course not! But you should come up with a plan to pay off that debt together as soon as you get married. And once you have that plan, stick to it! I have seen the huge impact that debt has on couples and their relationship, and I’ll tell you this: the couples who pay off their consumer debt seem happier. So, come up with a debt repayment plan together after you get married, and then say goodbye to consumer debt for good!
3) Merge Your Finances. There is no right or wrong answer on whether to merge your finances after marriage or not – every couple is different (for more on this topic, read Merging Your Finances After Marriage). The key is to have an open and honest conversation about money and your financial goals so that you can then work together to achieve those goals. When it comes to merging finances, I usually suggest using a joint account as the central account for a couple, which means all the income flows into that account and then common expenses are paid out of that account (mortgage/rent, utilities, auto expenses, groceries, insurance, etc.). But also…
4) Separate Your Finances. So, once you have a joint account as the central account for income and expenses, then I like to create separate accounts for each person which gets funded every week, two weeks, month (whatever works best for the couple) with their allocated “allowance” that they can spend on whatever they want. This allows each person to have some “fun” money without having to consult with the other person. In my marriage, we do this, and it is nice to be able to buy a gift for my wife from my personal account… it feels more like a gift from me when I’m using my “own money” for that. Here, again, you should have open and honest communication about what is a fair amount for each person to receive as their “allowance.” In my household, my wife gets more every week than I do, but we both agreed on that amount. Side note: if you own a business, be sure to keep a separate “business” account for all your business income and expenses, and then transfer your “salary” to your joint account (more on that here: 4 Money Tips for Small Business Owners).
5) Start a Joint FUNd. Once you have done the first four things you must do after getting married, hopefully, you have some money left over for fun! I like the idea of a FUN Fund (or FUNd for short) as a short-term savings account for joint experiences. Research has found that people who spent money on experiences rather than material items were happier and felt the money was better spent. Use this account to save for joint experiences, special occasions, stay-cations, travel, etc. When you spend this money on yourselves, you can spend it “guilt-free” because you know this money is for FUN!
Getting married is such a joyful occasion, and hopefully following the 5 things you must do after getting married in this post will help continue that happiness deep into your marriage. If you know a couple who is about to get married or just got married and wants a personalized plan on how to do any of this, please have them contact us to schedule a consultation. These are my five financial tips for newlyweds. Do you have some other ones? If so, please let us know in the comments section below.
- Published in Love and Marriage
By Daniel Rodriguez | Dr. Budgets
Life is short. Recently, I have been in a reflective mood because that has become very apparent to me. I started thinking about my life and whether I was living it the way I truly intended. The Dr. Budgets tagline is Spend Wisely. Live Wealthy.™, so I started thinking about it in terms of spending my time wisely to live wealthy because time is finite, and you can run out of it at any moment. Dr. Budgets takes a lot of my time, and I asked myself “Is it time well spent? Why am I doing this?” After much reflection, it turns out that I have a true passion for what I do, so I dug a little deeper to figure out why. Why am I so passionate about what we do at Dr. Budgets? I could help people in a variety of ways, so why money coaching?
The story of why I am so passionate about what I do for others through Dr. Budgets starts with why I do it for myself. My parents were divorced when I was very young, so I never knew anything different than having divorced parents. From the time I started school, I would be with one parent during the week and the other during the weekends, and every so often it would switch, which meant I would then switch schools (1st grade with my dad, 2nd-4th grade with my mom, etc.). When I was 12 and heading into 7th grade, my dad ran into hard financial times… his business failed, so money became very tight. My mom wasn’t making very much either, but she made it work while she was attending school at UCSD. To make ends meet, my dad decided to move to Rosarito, Mexico, which meant that for 7th grade I was going to switch schools again, but now to a different country. We also moved to a very poor part of town, so the house we lived in had no hot water (bathing in the winter was torture), broken windows, and was bug infested. Luckily, we always had food, but sometimes it was rice, beans, and tortillas several days in a row. This transition was very hard for me as a 12-year-old boy, and I would look forward to going to my mom’s house on the weekends… a house with first world amenities, like hot showers! After I finished 7th grade, my dad moved to Tijuana, Mexico where I attended 8th and 9th grades. The place in Tijuana was in an even poorer neighborhood (we now lived in an RV on somebody else’s property and used an outhouse). Those were the hardest three years of my life, and I believe those years shaped the view I have of money and the world to this day.
I realized that the reason I choose to spend my money wisely is so that I never end up in the same financial predicament as my dad. Being free of debt and having money in the bank gives me comfort and the freedom to live how I choose to live, and it means that I (or my kids) never have to live the way I did for those three years. I carry that same passion for finances to my clients because I want them to have the freedom to choose how they want to live, and to never have to face the type of decision my dad had to make. I see so many people who are slaves to their jobs because they are living paycheck-to-paycheck. I want to change this so that they feel like they have a choice to be whom they want to be and do what they want to do.
Life is too short to live otherwise, so that is why I started Dr. Budgets.
That is why every person who transforms their habits because of the money coaching they receive equals a better life for them, and maybe also for their children. Which means their children will never go through what I went through.
So that is why I do what I do. Why do you do what you do? I would love to hear your story. Please share it with me in the comments section below! If you know someone who is ready to improve their spending habits, please have them contact us today. Thanks for reading!
- Published in Health and Wealth
By Daniel Rodriguez (Dr. Budgets) & Scott Elliott (Kool Body Personal Training)
This month we are doing a joint blog post with Scott Elliott with Kool Body Personal Training. We are each sharing our perspective on 5 Ways Healthy Habits Save You Money from a health and wealth standpoint. Here are the five habits:
Eat Your Breakfast
Scott: Most of us are in such a rush to get out the door and to the office, that we often neglect breakfast. Instead of eating breakfast, we opt for coffee and perhaps add a carb to that. Eating breakfast will bring you a sustained boost of mental and physical energy. Skipping breakfast leads to adrenal crash; which we then artificially support with caffeine. The saying “Breakfast is the most important meal of the day” has a lot of truth to it. As you sleep, the cortisol hormone increases, which put us into REM (deep) sleep. When we wake up, the cortisol levels continue to rise and will eventually begin to put stress onto our adrenals. The only way to level out this increase in cortisol levels is to eat a balanced breakfast. This simple act will increase our mental and physical energy throughout the morning, with no mental crash.
Daniel: Breakfast in the morning can be something as simple and inexpensive as eggs and whole grain toast, yogurt with granola, or a smoothie (my wife makes amazing smoothies in the morning!). This daily “breakfast ritual” can save you thousands of dollars over time compared to stopping at Starbucks for “coffee and a carb.” If you still need the caffeine fix, you could brew your own coffee at home (which is often better than Starbucks anyway) and enjoy it on your way to work.
Schedule Your Workouts
Scott: Studies show that regular exercise will help reduce the number of sick days you take by stimulating and strengthening your immune system. Regular exercise also reduces the risk of illnesses such as type 2 diabetes, obesity, and heart disease. The quote “Failing to plan is planning to fail” by Alan Lakein, highlights the importance of scheduling your workouts. Once scheduled, make sure they are a priority, like meetings for work. Make your workout time a non-negotiable appointment on your calendar.
Daniel: Consistent exercise will actually make you money because of the fewer sick days you will need to take. Depending on where you work, you could then use those unused sick days for something fun like a vacation or cash them out at some point. If you are self-employed, then that means less time away from your business, which means more money. Looking at it from a long-term perspective, if regular exercise prevents diseases such as type 2 diabetes, obesity, and heart disease for you, then that will save you thousands (if not hundreds of thousands) of dollars in medical bills. Additionally, a monthly gym membership is only a waste of money if you don’t use it! If you schedule your workouts, whether at the gym or with a personal trainer, you’re making the most of the money you’re spending for those services.
Scott: Daily meditation will calm our brain, bring inner peace, and therefore, more focus and productivity to your job. Due dates, unexpected problems, or even mental fog all strip away the clarity and focus that we need to succeed in our daily tasks. Set aside 5 minutes each day to sit upright, close your eyes, and focus on your breath. Each time your thoughts drift, bring yourself back to your breath, training your mind in the art of self-control, focus, and peace.
Daniel: Consistent meditation can lead to reduced stress, which can save you money in countless ways. If stress leads you to overeat, then meditation can save you money on food expenses. If stress leads you to shop to make yourself feel better, then meditation can save you money by preventing you from buying unnecessary things. If stress causes you to drive fast which leads to a speeding ticket… you get the point 🙂
Scott: According to a 2014 Stanford Study, you can boost your creativity up to 60% by adding short bursts of activity throughout the day. Step away from the computer for a minimum of 3 minutes at a time and walk up a flight of stairs or take a walk outside. In addition, you will curb your levels of anxiety and depression allowing you to handle stress much better; stimulating your mood so you can get along with your co-workers and boss much easier.
Daniel: An increase in creativity can definitely make you money in the long-run. If you work for somebody, that could mean a faster promotion or a pay raise sooner. If you work for yourself, then an increase in creativity can lead to increased income ever more rapidly if you apply it in a way that makes you better or more efficient at what you do.
Surround Yourself with Like-Minded Motivated Fitness People
Scott: Working out with someone (or a group of people) will not only increase your level of accountability, but there is also a strong possibility of making new business connections, as you sweat it out with like-minded fitness people. You are all there putting in a strong effort to stay healthy, which will lead to a mutual level of respect for one another. Those are definitely people worth getting to know.
Daniel: Anytime you connect with like-minded people there is a good chance you will each benefit from that relationship. If you own a business, maybe one of those people becomes a client, which would lead to more revenue for your business. If you are an employee, maybe one of those people connects you to a job opportunity when you need it. Connecting with people who share similar goals and interests with you can lead to many rewards beyond money as well.
We hope you enjoyed our post on 5 Ways Healthy Habits Save You Money! If you want to learn more about Kool Body Personal Training, you can contact Scott at email@example.com. If you want to learn more about Dr. Budgets, visit our home page or contact us.
- Published in Health and Wealth