25x Rule: The simple math for deciding whether or not you can quit working for good.

quit working 25x rule

If you’re sick of your day job and dream of an early retirement, then what I outline below will be helpful for you to figure out if it’s feasibly possible yet. What might surprise you is that you could be closer to telling your boss to shove it than you think, depending on what you’re expectations are.

25x rule for retirement

The Road to Financial Independence (or, “FI” as the money nerds like to say)

The traditional route to FI (yes, I’m a nerd) based on the pioneers of the movement is to keep your expenses so low that not only can you save for retirement faster, you also commit to keeping expenses low for the rest of your life, so you can live on a smaller nest egg.

Here’s some easy math (the only math I’m capable of) to figure that out for yourself:

Financial indépendance (FI) is defined as having enough money saved so that your investments can cover your daily expenses to the point where you no longer have to work for an income.  The equation to calculate what that magic number is for you, is to multiply 25 times your annual expenses. So, if you’re someone who only spends 25K per year, then once you’ve reached $625,000 (25 x $25K) in investments, you can live off the proceeds of that figure and thereby kiss your cubicle life goodbye and sleep in till noon every day for the rest of your life.

Sounds good, right?

Well, that depends whether you’re cool living on 25K per year (adjusted for inflation) for the rest of your days which is a pretty meager income, even in the cheapest areas of the US. It would be impossible to live here in the SF Bay Area on that income, but even in Birmingham, Alabama or Youngstown, Ohio where you can still buy a single family home for $40,000, it would still be a stretch.

No vacations, no dining out, no shopping trips to the outlet malls and not a lot of wiggle room for the things that generally come up in life, like medical expenses or car repairs.

Basically, at this level, you’re committing to being poor, but well rested for the rest of your days.

The Good News

This equation doesn’t factor in any other possible income streams you may have, like pensions, social security or inheritances. It also doesn’t account for income you might make from any random jobs you could pick up in your post-retirement life. It’s just a standard baseline of what you could count on to cover your expenses, based on your current savings.

The Bad News

If you’re in your 40’s and your current nest egg wouldn’t afford you a roomy cardboard box at the rate of 25x, then you’ve got some work to do, but all is not lost. You can start right now by reducing your expenses and increasing your income to build that retirement account up. You can also think about a post-cube career that will afford you the ability to feel a little “retired-ish” without losing your income entirely.

The Important Takeaway

Clearly, the best time to start saving for retirement is when you’re still in the womb. The next best time is today, so don’t be discouraged if you’re not even close yet. With a little creativity, focus and determination, you’d be surprised how fast you can accumulate wealth.

 

The Unexpected Benefits of a Self-Imposed 30-Day Spending Ban

Ikea pop-up livingroom

Inspired by Cait Flanders, I took on a self-imposed spending ban last month that will finish in just a few days.  What I’ve learned from this experience, the way I’m influenced to shop and the impulse I have to hit the “buy” button, has been truly enlightening.

shopping ban benefits

Overall, this wasn’t too much of a challenge for me. Maybe that’s because I’m already stocked to the hilt with makeup, clothes and toilet paper. Or maybe it’s because I’ve come far enough in my minimalist journey that I really don’t crave that much anymore. Either way, it was a bit of a non-event for me.

That said, the first couple of days were really hard.

As I started my shopping ban, I pledged to take screenshots of all the things I would have normally purchased on impulse and then revisit them after the ban to see if they were still something I wanted to buy. Surprisingly, most of these impulses came from Instagram. It appears that I’m a sucker for the Instastory swipe-up-to-buy feature and I follow a lot of fashion bloggers who use this tool often.  Because the enticement to buy was coming from my favorite bloggers, it didn’t occur to me at first, but I started to realize I was being subjected to a whole new set of make-shift TV commercials that I’ve tried hard to avoid by only watching shows on Netflix or Amazon.

Here are just a few of the things I had the urge to buy, but didn’t. I am pretty confident I won’t go back and pick them up once the ban is over.

shopping ban

After the first week, an interesting thing happened…

After the first 7 to 10 days passed, I stopped screen-shotting things. I didn’t feel the same interest in stuff. I started thinking about all the jeans, electronics and hair product I already had and realized the idea of more was off-putting. I was starting to build a new mental muscle around appreciating things, but not needing to acquire them.

But I did break my ban

I still have 6 days left of my shopping ban, but I broke it today. I bought two large bottles of my favorite shampoo (because the price is better in bulk) and a suitcase for a trip I’m taking next week. I feel okay with these purchases because without buying them in advance of my trip, I’d be kinda hosed.

So, I may not have been 100% successful with my ban, but the key behavior I developed from this experiment was the habit of pausing before clicking the buy button. I’ve realized how numb I’ve become to the process of buying online so much so that I end up purchasing unneeded things on impulse. I’ve also become more aware of how many of my purchases not only fail to improve my life but often hinder it, and so I’m less likely to accumulate mindlessly.

I never deprive myself

The more I step away from impulse consumption, the more I see the vapid impact it has had on my life. I’m able to see a better version of my life that still includes things in it, but only things that have meaning or add a ton of value. I’m ashamed to admit that most of the things I’ve acquired in the last 10 years haven’t brought enormous value.  That said, if there’s something I really, truly want, of course, I’m going to get it. If something brings me joy (like hair extensions or yoga pants) then I’m 110% happy to buy it. I’ll never deny myself impactful pleasures because that’s the kind of thing that my money should fund.

Slow Acquisition

The opposite of mindless Amazon-1-click shopping is the idea of slow acquisition. I first heard the term on The Minimalist podcast and it immediately struck a cord. How many of us practice slow acquisition these days? Between Ikea and Overstock.com, It’s so easy to furnish an entire house in 48 hours, but with what? Particle board furniture and pictures of nature scenes we’ve never see in person? What if it took years to furnish a home, with just the right pieces that were beautifully designed and also had a ton of functional value? What would that home feel like compared to the 48-hour Ikea pop up house? Imagine how different each space would feel to live in.

Ikea pop-up livingroom

The template Ikea living room.  Not terrible, but certainly not personal.

More and More I Want Less and Less

The funny thing is that 10 years ago when I first started blogging, I talked about minimalism and the idea of consuming less. At the time, it was spiritually motivated by a deep concern for the environment, and while that’s still important to me, I am wise enough to know that these concerns aren’t personal enough to others to drive massive change. But fortunately, happiness, quality of life and financial freedom are very motivating aspirations for many people, and even though the commitment to consuming less is driven by a different aspiration, the end result is still beneficial to the planet.  It’s a win-win with no downside.

I’m Finding More Peace in Simplicity

It’s the cyclical moments in life that really show me how far I’ve come on this journey more than the day-to-day personal growth. Once a year I go home to visit family and friends and while I used to be consumed with optimizing my trips to Canada to buy more for less, I now focus on bringing less, shopping less and focusing my energy on time well spent. It’s the year-over-year mindset shifts that stand out more than the day-to-day baby steps and I’m always grateful when I’m reminded of how far I’ve come.

There’s Always Room for Improvement

The one thing I’ve learned, not just through this spending ban, but also through this entire refocus on consuming and owning less is that there’s always more ideas, habits, and inclinations that I’m challenged to grow from. My closet isn’t a perfect display of 33 garments. It’s still a jam-packed jumble of clothes I rarely wear (albeit it’s getting better). I still have too much stuff and the inclination to acquire more is always there. But over time, I gain awareness, understanding, and appreciation for less. As that grows, my better choices and habits continue to improve.

How to Conduct Your Own 30-Spending Ban

It’s so simple.  Just commit to not buying anything but necessities for 30 days.  Your definition of what that means might be different than mine, but I encourage you to make it challenging enough that you’re forced to think creatively and do without some creature comforts, but not so challenging that you’ll give up before the ban is over.

For me, this ban included buying anything except:

  • Food for family (including dogs)
  • Medications
  • Basic toiletries
  • Emergency/must-have items (like the suitcase I needed to replace for a pending trip)

Things I wanted to buy in the moment, but did not:

  • Clothes – more specifically, a pair of skinny jeans, a graphic tee, a pair of flyknits and a super cute fleece jacket.  All of these items were on sale which made them extra hard to say no to, but in retrospect, I’m so glad I did.
  • Electronics – I really want a pair of Beats Wireless Headphones, but not enough to spend $300 on them.
  • Cosmetics – I’m forever buying more make up in hopes to feel prettier.  While makeup is great, and I’ll never stop wearing it, no amount of under-eye brightener is going to make me look 10 years younger (trust me, I’ve tried).
  • Books – there are two books I almost bought, but didn’t and one I was able to rent from the library.

Looking back at this list, I’m amazed at how much I could have purchased that I didn’t really need.  There’s at least $500 worth of product on this list and none of the items appeal to me just weeks later.

So are you ready to start your shopping ban?  The best advice I can give you is to commit to doing it right now and not to put it off as you may feel pressure to pre-buy items you’ve been contemplating and that’s a trap you don’t want to get caught up in!  Good luck and let me know how it goes!

 

How much of what you spend money on has value in 10 years?

invest don't shop

This afternoon, while I was listening to a personal finance audiobook (dork, I know) I was challenged to consider how much of what I spend money on has value in 10 years. When I thought about it, there’s very little that I have owned for more than 10 years. Even the houses and cars I’ve bought haven’t lasted that long.

In fact, I had to think really hard to come up with anything I’ve spent money on that has actually stayed in my life for that long, and sadly, it’s not much. Here’s what I came up with…

  • A paint suit from Zara (I’m just ecstatic it still fits me)
  • One pair of Lulu tights that desperately need to be retired
  • About 10 pieces of art
  • A wine carafe – wait, that was actually a gift
  • My investments

That’s all I can think of. I asked my husband to list what he’s owned for 10 years and he couldn’t come up with much more than that.

The reality is that most of the things we own don’t last that long (except for our investments). I think this has financial implications for sure. I mean, think of all the things you’ve purchased over the course of your life, and what percentage of it still belongs to you and adds value to your life. It certainly does make you think differently about the money you spend from day to day.

what you value in 10 years

But there’s another implication here that’s much more terrifying. It’s the environmental footprint of all our discarded belongings. Think about it – 100 years or more ago, people kept kitchen utensils, clothing, furniture, and tools for a lifetime and then passed down what remained to their offspring. Things were cherished and maintained. Now they’re just discarded and replaced. Where do you think all that stuff goes?

How much of what you spend money on has value in 10 years? Click To Tweet

I was watching an H&M commercial yesterday and I saw a pretty polka dot blouse for $9.99. That’s good news for us, because the cheaper clothes become, the less we pay for wardrobe updates. But the cheaper clothes get, the more inclined we’ll be to buy more and discard more. Consider also, the person on the manufacturing end of that garment, getting paid fewer and fewer cents on the dollar of a cheaper and cheaper garment.

While I’m not trying to make anyone feel bad about the purchases they make, (and I do love me some H&M), I do think it’s worth pointing out that we’re buying a lot of shit we barely use, rarely care about and can very easily do without.

Just something to consider as you go through your next 10 years. And the next time you click purchase on an item that will end up at your door in a few days, consider how long it will actually add value to your life.

Not that long I bet.

This musing is timely as I’m in the first week of my 30-day shopping ban. So far I have “admired, but not purchased” about $450 worth merchandise that probably wouldn’t have lasted a year. I am so glad I passed them up. Consider challenging yourself to 30-days of no shopping and see what comes up for you. I think you’ll find it very enlightening!

An unfiltered experience of a Beachbody Coach

beachbody coaching review

Before I begin this, let me say that I’m no longer a Beachbody coach, so there’s no agenda (or affiliate links) here. This also isn’t a story of bitter resentment. I don’t mind Beachbody and I quite enjoyed my experience with the brand. If it were not for the fact that it is an MLM, I’d probably still be connected to the company. But it is, so I am not. Here’s my story…

How I got started as a Beachbody Coach

I became a Beachbody coach in January of 2015. I had a fitness blog at the time, some fitness credentials and a hope to expand that into an online business some how, so when I came across the Beachbody opportunity, it felt like a good fit. What made me pull the trigger was that my coach wasn’t pushy. She felt authentic, genuine and honest.

It took me 5 months before I actually had the nerve to start a “Challenge group”, the model Beachbody recommends for selling products. Essentially, you bring 10 or so people together online in a private Facebook group, and you all go through a workout program together and drink their meal replacement shakes.

Now, part of this model is really smart. Home workouts are great for people who don’t have the time, resources or inclination to go to a gym. The programming of the workouts are good, really good in some cases, and if people follow the programs, they get results, generally. The issue I have is that in order to be successful as a coach, you have to push the meal replacement shake, which after giving it a very good college try, I just can’t get behind.

beachbody coaching review

Shakeolgy – the meal replacement shake and really the bread and butter of the beach body business.

Coaches will tell you that this is the end all be all, and I think some of them actually believe it. Anecdotally, I have taken the shake daily for a long period of time and saw no results from it. If you dive deep into the ingredients you won’t find anything bad, but you also won’t find anything that even remotely justifies the $100+ price tag. It’s an overpriced product that’s “free’ if you’re selling it to enough people. But from a value standpoint, it’s a poor player in the supplement market overall. It’s not organic, it has a high sugar content and a low protein value for the money. Coaches will argue that you’re getting 5 servings of fruits and vegetables, but it’s hard to believe that a powdered supplement can ever replace the real thing.  If you want a scientific opinion of Shakeology, I recommend checking out the independent study that’s been done on the product’s viability on Labdoor.

I want to underscore that I don’t see anything inherently damaging about the product, it’s just not worth the price and the sugar content is sub-optimal. You could do much better for less I you’re really into drinking your calories.

The Beachbody Workouts

I’m a fan! The workouts are great. I don’t love them all, but the more advanced workouts are actually really good. I like the periodized programming (it gets progressively harder as you develop strength and skill), the positivity of the instructors and the ease of the online platform. I give them 5 stars for delivering a solid workout product almost every time.

The Beachbody Meal Plans

I’ve tried my best to work with these plans and the small portion containers, but I fundamentally disagree with how they’ve arrived at the volume of carbs, fats and proteins for each user, based on some pretty basic math. My allotted calorie range allowed me 4 cups of green veggies a day. That’s generally what I have for lunch and couldn’t bring myself to suggest others to abide by silly restrictions like that. They also leave no room for treats. That’s not sustainable for most people looking to lose weight and create a healthy lifestyle. A macro-based/flexible dieting approach would make much more sense.

Beachbody Coaching Experience – The Pros

Perhaps what I miss the most about being a coach is the positive energy of the culture. These days everyone has something to complain about on social media, from the POTUS to the weather, but Beachbody coaches always keep it positive. The restraint to keep the vibe high is admirable until there’s a natural disaster or something tragic happens and then their posts about loving drinking their strawberry shakes before a workout seems out of place and almost offensive.

The social media training you receive as a coach is also really insightful. Regardless if you plan to be a coach, there’s value in the training that many of the teams within Beachbody deliver. That said, one could spend hours soaking up training but do nothing to implement it (a lesson learned from experience).

One big advantage of being a coach is that you’ve got to walk the talk to be successful in the business, so it does keep you focused on your own fitness and nutrition. I kept myself honest by talking about my workouts and meals, and that’s a powerful way to maintain strong habits.

Beachbody Coaching – The Cons

The biggest problem with the Beachbody opportunity is that there’s a lot of people trying to make a living from it, but very few that are actually successful at it. For the majority of the coaches in the network, (over 400,000 people) the cost of being a coach exceeds their income from it, and I’m not even talking about their hours invested. The real cost of coaching is $15 per month for “the website” and then $40 per quarter for Club Membership. Now, keep in mind, that will only keep you active. If you want to take advantage of the team cycle bonus (the true revenue generator which only happens when you have a substantial organization below you) you have to buy a certain amount of product each month ($90 or more) and you have to sell a certain amount as well (about $500 per month). This requires a lot of hustle which quite frankly, I didn’t have the appetite for.

The only way to make a substantial amount of money in this business is to build a big organization, but that’s a moving target. People come and go as it’s really hard to see progress and most people don’t have the patience for it, so your rank and income, which is based on the number of people you recruit, is constantly moving. I can’t speak from experience because I never reached a high rank, but my coach said it was quite normal to fluctuate in rank and you just had to go with it and not let it get you down. Personally, the lack of control over my own income would most certainly get me down.

The biggest issue I had with being a Beachbody coach was the selling. Coaches are expected to message anyone and everyone with the means to pay for a workout and a shake, from your 4th-grade teacher to the girl you most hated in college. It feels very disingenuous to connect with people you otherwise wouldn’t want to talk to with an agenda to sell them something.

Overall, I spent a ton of time and money with little to show for it other than some increased muscle mass and a few new friends, which is nothing to sneeze at!! While I often enjoyed my experience and I was always honest about the good and the bad, I knew early on it wasn’t going to replace my “day job” salary.

What I don’t like about Beachbody

Many of the coaches in the network are stay at home moms looking to make a little extra money. I totally get that and I think it’s a good way to make some extra cash if you are willing to hustle and make those sales. But one of the “selling points” of being successful is this idea of bringing your husband home and enabling them to retire. I can sort of understand this if your husband is in the military and you don’t want him to get shipped off to a war zone, but the idea of making enough money in a highly unstable business so that your husband can quit his otherwise stable job with health benefits and a regular paycheck is a total head-scratcher to me.

Why would you want to make your family be entirely financially dependent on a business that is not truly your own? Beachbody as an organization could close up shop tomorrow. They probably won’t, but they could. They could also change their revenue model, product portfolio or reward structure at any time and that could completely change the compensation of the top earners with zero recourse because it’s not their business. With that being said, why oh why is it a good idea to encourage your husband to quit his job because you’re making “just enough” to have him retire? This is a big selling point of the top earners and it makes me cringe every time I hear it.

What I like about Beachbody

They do stand behind their products.  You can get a 30-day money back guarantee on most of not alll of their products, which is great.  You have to be careful however, as they will put you on an automatic delivery if you sign up for Shakeology and without realizing it, the product will show up at your door once a month.  You do have to pay for the return shipping fee, so it’s an oversight you won’t want to make.

Should You Become a Beachbody Coach?

If you’re a SAHM who’s looking to get in shape and find something mentally engaging to get involved in, then sure – go for it. It can be a fun passtime, you will learn a few things about selling and social media and you may even improve your fitness as a side benefit! But if you’re looking for a legitimate way to make money, especially if you want to replace a full-time income in less than 3 years, then I’d say this isn’t where you want to invest your time and energy because for 95% of the people who try coaching with that intention, fail.

Thoughts?  Questions?  Have you ever tried coaching with Beachbody?  How was your experience

Lifestyle Creep & How to Avoid it

Regrets, I have a few, but then again, too few to mention (record screeches to a halt).  Oh yes, I’ve got more than a few regrets I can mention.  Even as someone who keeps a close eye on her funds, my lifestyle has become more high-maintenance as my income has grown.  So much so, that now I couldn’t ever imagine going back to the way things used to be, only a few years ago.  The diva in me has expanded.
The idea of lifestyle creep is that as your income grows, so does your penchant for nicer cars, holidays, homes and wardrobes. The concept is extremely common in practice (although not often considered). Your tastes have probably refined dramatically since your broke college days, and you’d probably much rather eat at a fancy restaurant than Taco Bell, but the amount of creep you let into your life, can be detrimental. Not only does it influence your appetite for finer things and creature comforts, it also drives up your burn rate (the rate at which you burn cash) while deteriorating your capacity to save. Both of these variables have a huge impact on your perceived and actual quality of life.

lifestyle creep

I find that most people start experiencing the creep when they hit their 40’s, which is generally their highest earning years.  You’ve probably also got a couple of kids at this point, so the need for a bigger house, car and vacation allowance is typical.  But how much do you let these expenses increase?  For example, now that you’re a family of 4, do you just 4x your budget for an annual trip to Hawaii, or do you opt for less expensive vacations like camping? Do you need a BMW X6 to drive your kids around in or would a Toyota Minivan work just as well?

I’m not trying to shame anyone here and the reality is that you’ve earned the privilege of having more choices in your 40’s than you did when you were 21, but the key is to know where creep is harmless or even good, and where it’s just derailing your efforts to live the life you want to.  And let’s be honest… that typically happens when we compare ourselves with our peers (if my neighbor Joe can afford a BMW, I can too).

If I haven’t quite convinced you of how prevalent lifestyle creep is, then consider these stats about people in the US:

  • 78% of people live paycheck to paycheck (and many make at or above $100K per year)
  • 24% have no emergency savings (over 57 million Americans in total).
  • The average household has $8,158 in credit card debt.
  • The average monthly new car payment is around $479.

If this sounds like you, clearly you’re in good company, but how do people get here?  By inching up their lifestyle expenditures as their salary increases.  The process starts as soon as we begin bringing in an income.  When you go from making $20 a week delivering papers at the age of 12 to making $9 an hour in retail at the age of 16, you can start to afford your own clothes and go to the movies, so that’s exactly what you do.  When you’re out of college and in your first job, you can afford a car or an apartment without roommates, so you do that, too.  By the time you’re 40, you’re earning enough to get a new car every 3 years, take at least 1 fancy vacation a year, and maybe even own a 2nd home at the lake.  Creep, creep, creep….

Beware of the 40-something lifestyle creeps

There’s no scientific evidence to the following, but between my own behaviors, those of my peers, and the crazy stats I shared above, I see these things as typical creepers to be aware of:

Lifestyle Creep

  • Business class airline tickets – there was a time in my life where I was just so happy to get away that I’d travel in the cargo hold if they’d let me.  These days, if I can’t travel business class, I try not to do it at all.  I know that may seem excessive to some, but having a wealth of bad travel experiences behind me, I’m at a point where if can’t go in comfort, I’d really just rather not go.  This also probably has to do with the fact that I no longer live in Canada where the winters are long and hellacious, so I’m no longer desperate for warmth.
  • Fancier Cars – personally, I am NOT a car snob, and if you saw the junkers I drove in college, you’d get how not snobby I am about my wheels. When I first moved to Silicon Valley, I had my car shipped from Toronto, a slightly banged up, salt-crusted (I moved here in January) Chevy Cavalier.  To say that I stuck out with that car was an understatement.  Before too long, I had upgraded to a 3 series BMW, just to “blend in” a little better.  Now I’ve graduated to the SUV class, but I’m hell bent that my next car will go back to economy class, if only because it’s less of an insult to the environment.   This is one area where I can literally stop the lifestyle creep dead in its tracks and not feel too deprived because of it.  PS. In case you’re not already aware, nobody gives a shit what you drive, so hopefully, you’re not paying a premium to make an impression.
  • Donations – this may not seem like a lifestyle enhancement, but it is something I’ve increased as my salary has grown.  I love sending money to my favorite charities, like The Bill Foundation, Muttville and Animal Sanctuary.  I do a monthly contrition and then I typically top it up at the end of the year.  The feeling of contributing to something near and dear to my heart brings me a lot of joy.  Zero regrets on this one.
  • Housing –  This is where I think a lot of adults suffer some serious creep. Sure, it’s hard to live in a 1 bdrm apartment if you’re a family of 4, but do you have to live in a McMansion with a master bedroom that’s as big as an apartment?  I live in a modest 2-bedroom townhouse that costs well over a million dollars.  While that may sound extravagant, it’s pretty normal for this area and it was cheaper than the rent I was paying at our last place.  The Bay Area is incredibly expensive (and worth every penny).  I used to balk at the prices here, but salaries are also a lot higher than anywhere else in the US, and frankly, anything under 2 million now seems like a good deal for a 50-year old standard 3 bedroom house. One thing I’ll never do while I’m living in this area making the mistake of buying too much house.  There’s just too much margin for error in this area (in the millions).

Lifestyle Creeps  that are mine all mine

  • Yoga pants – I love me some Lululemon.  I have a ton of the cheap stuff, too, but nothing beats the quality of their leggings and they make my lower extremities so happy.  When you average out the cost per wear, they’re probably the least expensive item I own.  So while the upfront cost of $100 a pair, is steep, it’s clearly not steep enough that I won’t pay for it.
  • Fancy wine – I blame this one on my husband.  Truthfully, I don’t have a good appreciation for good wine, but I no longer wince at the cost of paying for the good stuff, either.  When you live a stone’s throw from Napa/Sonoma, it’s easy to acclimate to winery prices (which are generally more expensive than the brands you buy in the grocery store).  The upside is that along with the higher wine cost, you also get to appreciate being in the best wine region on earth, IMHO.
  • My Hair – my head is a complicated story that I won’t get into.  Suffice to say, between the accouterments I need to keep it looking as full and healthy as it is, and the regular trips to the stylist for maintenance, I’m spending well over $2,000 a year on my locks.
To distract you from the judgy thoughts you’re probably entertaining right now, let me share with you, a “vase?” someone recently spent $6,500 for at a local museum auction.
lifestyle creep
I digress.

 

3 Ways to Avoid Lifestyle Creep

  • Avoid trying fancier products and services when less expensive options can suffice.  To that end, I strongly urge you NOT to try business class as you will forever hate the idea of flying in coach again.  This is also the difference between buying Mac lipstick for $26 when you can get some really great drugstore brands for under $10.  It’s the choice of buying your clothes from H&M or even a second-hand retailer rather than heading straight to Nordstrom or J Crew (is it just me, or is J Crew not insanely expensive).
  • Take stock of the luxuries you’ve already acclimated to.  This is trickier as it’s harder to deprive yourself of an experience you’ve already come to enjoy (like flying business class).  But it’s important to look at everything from the car you drive to the shoes on your feet to the last place you ate dinner at.  Are they excessive?  More importantly, do they add to your intrinsic happiness (for me, yoga pants is a hard yes).  Try to make a game out of finding less extravagant replacements to the creep you’ve already inherited.
  • Every time you get a bump in salary, immediately give those extra dollars a job.  From the moment you get your raise, have more money taken off your paycheck put directly into an investment account, ESPP option or even an HSA if you’re eligible.  Do this before it ever shows up on your paycheck. This way, you never feel the freedom of those extra funds to pad your latest lifestyle improvement.
Overall, by staying aware of this concept you’re halfway there in terms of managing it.
Now let’s talk about your creepers.  Common now, I shared mine!  🙂

A 30-Day Shopping Ban (Whole 30 Style)

30 Day Shopping Ban

So, this illustrator decided to do a 30-day shopping ban where she painted (but didn’t purchase) all the things she would normally buy over the course of a month. It inspired my own creative experiment in understanding how my spending habits could be improved. It’s kinda like doing a Whole 30 for your wallet where I’ll buy only food (real food) for 30 days and nothing else. No clothes, no Quest Bars, no trips, no supplements, no small little impulse purchases and no hair product (gasp) for 30 whole days. Instead, if I see something I want, I’ll take a picture or screenshot of it, and drop it in my Amazon cart, but I will not make another transaction until Oct 17.

While this seems like nonsense at first glance, if you were to look at my Amazon account history over the last few years you’d understand how trigger-happy I can be with purchasing pretty much anything. From obscure imported coffee to Living Proof Dry Shampoo (that stuff is damn good), I’m one click away from spending half my paycheck all from the comfort of my couch on a random Tuesday night.

While my habit has improved dramatically since I started focusing on minimalism, I still have some pretty rich spending habits that could be reigned in.  Of course, the goal is not to deprive myself with this ban.  It’s always about building that self-awareness muscle around what it is that makes me happy vs what is just taking up unnecessary space in my life.

shopping ban

By adopting the Whole 30 framework (a commitment to only eat real food for 30 days), I’m hoping it will help me become more aware of my shopping triggers that come up when I’m feeling stressed/sad/overwhelmed/inspired.

I will share the process over the next 30 days, but to be clear, these are the parameters I’m placing on this experience:

What I will buy:

  • Real food that isn’t packaged as a snack (like my beloved Quest Bars) and food for my dogs (obviously).
  • 2 social dinners out per week (this is something that brings me legit happiness and I’m not interested in giving it up)

What I won’t buy:

  • Snacks and treats
  • Household consumables like soap, cleaners or paper towel
  • Clothes, accessories, shoes of any kind
  • Supplements
  • Beauty products
  • Trips
  • Online workouts (it’s an obsession, don’t judge)
  • Show series
  • Audiobooks/real books
  • Courses of any kind (unless it’s a free trial)
  • Anything for the house
  • Pretty much anything else period.

I plan to share this journey with you on Instagram as I work through my urges to purchase, so be sure follow along if you’re interested. Better yet, commit to your own 30-Day Shopping Ban and borrowing from the Whole 30 theme, let’s use the hashtag #wallet30.

Ready?

Let’s do this!

To Get What You Want, Ask Yourself This…

I heard this question tonight on a podcast and I had to turn the thing off for a moment because my brain was exploding. Ready for it?

What kind of person do you need to be to get the kind of results you want?

I have to say, this question made me look at my life from a completely different perspective. It forced me to consider what I want out of life and then work backward to consider who I need to be to make that a reality. Because most often we’re so focused on being the type of person we think we “should” be, for some undetermined, potentially unwanted result.

Personally, I want to be fit and healthy, deeply engaged in my work (whatever that is) and feeling loved and connected to the people around me. I’d also love to be financially independent which would give me a strong sense of security (I suffer from bag lady syndrome).

So what type of person achieves those results? Well, it’s probably someone who:

  • Workouts often & progressively while eating well.
  • Makes a point of being intentional about work and ensuring that it’s interesting and engaging (news flash, that’s not your bosses responsibility, it’s yours).
  • Goes out of their way to stay connected to their friends and family and making a point of prioritizing time spent with loved ones.
  • Has an investment portfolio that literally says – “I’ve got your back”.

Suddenly I have no reason to wallow in “what am I doing with my life” drama (something I’m a pro at, even in my 40’s). By reverse engineering the person I want to be, I can focus on developing behaviors that will make results happen.

Life can be so profoundly simple, and yet we (I) make it so darn complicated! Click To Tweet Ask yourself what kind of person do you need to be to get what you want out of life. Click To Tweet

Survival is for suckers – it’s time to thrive

how to thrive

Have you ever asked someone how they’re doing and they say, “oh, I’m surviving”?  They may not be battling cancer or a financial meltdown, but just the very existence of their day-to-day is so boring and draining that they can’t come up with a better term than “barely functioning”.

It’s also something I hear from people who are in survival mode. Between work, family, lack of sleep and lack of life, they literally are just hanging on.

thrive in life

Here’s the problem with that M.O. It’s never typically a rough period that goes on for a few weeks because of a brutal project at work or a sick kid. It’s the kind of malaise that can linger for YEARS and end up becoming a life theme.

That’s a problem.

If this sounds like you, I don’t mean to add to your mounting problems by calling you out on your apathetic coping strategy. I’m also not suggesting that your life has to be puppies and rainbows 24/7. However, I am pointing out that if this sounds like you and you didn’t even notice it until this very moment, then there’s something you can do to change the trajectory to something a little more well, life affirming.

  • Address what’s sucking your soul. That could be your job, your negative Nelly friend or even your kids who are driving you nuts. I’m not suggesting you have to ditch your job or the people closest to you, but by knowing what’s draining your battery, you can make conscious choices to fix it.
  • Make an effort to change something. That could mean a babysitter, a new job or heck, maybe even a divorce. I don’t suggest that big sweeping decisions should be made without a lot of reflection, but what I am saying is that the longer you ignore what drains you, the longer your life will be as gratifying as a C-span binge. Who wants to live like that?
  • Add little boosts of personal joy that make you feel good. Watch a comedy show, listen to your favorite tunes, put a saying or quote up on your wall that inspires you. Moments of joy are rarely something that’s overly orchestrated and it doesn’t have to cost anything. Sometimes we’re just so in the weeds of our own lives that we forget that this journey is supposed to feel good. Personally, as someone who’s generally overthinks everything, I often have to remind myself to lighten up.

how to have a happy life

I can share from experience that I’ve made some pretty difficult decisions to change things that were fundamentally dragging me down and keeping me in a perpetual state of survival mode. Relationships (including a marriage), behaviors, jobs and a poor health condition were all taking the life right out of me. I had to find strength to say no to them (over the course of many years) and looking back, even though it was often hard or devastating in the moment, I’m now thriving in areas of my life because of those decisions. My life isn’t perfect but I’m doing way more than just surviving it.

I recall an old boss making a comment that I seemed to have a charmed life. That comment stuck with me because it implied that I was lucky to have a good life. He was partially right. I do have a good life, but it’s not by luck. It’s by choice. Some of those decisions were really hard, but I knew I’d be better off if I made the change and in every situation, that was right.

Change might be the right thing for you, too. If you’re just surviving and it’s been that way for a while, it’s time to push yourself out of your comfort zone. Start small to build confidence. For most people, feeling better physically can go a long way, so if you’re currently not working out or feeding yourself well, start there. If it’s a financial suck, it’s time to start making some hard decisions that will help you get out of the hole that your’e in.

If you’re struggling with your decision to change, remember this…

It’s okay to be stuck. Just don’ t pretend that it’s not your choice to stay there.

It’s okay to be stuck. Just don’ t pretend that it’s not your choice to stay there. Click To Tweet

 

Why You Don’t Want to Buy That Vacation Home.

downside of vacation home ownership

the cons of owning a second home

In the past, my husband and I owned a beautiful 3 bed, 3 bath lake house, 2 hours outside of LA. For the first couple of years we LOVED it and got a ton of use out of it. But it was at a high cost. Not only did we have to pay for the house and furnish it, there were also a lot of upfront costs for repairs and upgrades to make it truly our own. The investment was huge, but initially, the payoff was, too.

buying a vacation home

But after few years, our enjoyment of the house started to decline. Getting up on weekends was difficult, the area didn’t offer much to do outside of playing in the lake and it was a lot of work maintaining two homes. We were starting to feel the burden of owning a second home when we felt compelled to spend every vacation there to justify the cost. Then in 2013, we suffered a break in and it was never the same. We sold the house that summer at a $40K loss and never looked back.

While I don’t regret that experience, I’ll never take on the hassle of a 2nd home again. Now with AirBnb and VRBO, you can rent homes so easily and experience new places every time you go away. Also, you’re not responsible for replacing the roof, plowing the road in winter or preventing critters from making themselves at home in your walls.

The Cost of Ownership

vacation home buying

Our lake house cost about $4K per month including everything from mortgage and utilities to seasonal snow plowing. That works out to $132 a day per year.  When you consider we spent an average of 65 days a year there (including weekends and one or two full week stays), that means we were paying about $48K per year for the house, but only utilizing approximately $8,580 of that cost. Think of all the amazing vacations and getaways you could go on with a $48K annual budget!

Alternatives to Ownership

While the idea of owning a second home can sound romantic, the idea of maintaining two properties, packing, unpacking and packing again as well as cleaning two homes can take its toll. The vacation home market can also be very volatile and in a down market, it can take a long time to offload an unwanted property. If you have the hankering to have a getaway spot, run the numbers on the cost of ownership vs the cost of renting only when you need it. If you want something you can use over an extended period, consider renting a home for a season, which is the best way to concentrate your investment during prime time usability without having to carry the cost and burden of the home in the off season.

If that doesn’t suffice, I’ve also heard of several families sharing one vacation property where the cost of ownership and the burden of upkeep is shared among the owners. I love this idea, particularly for areas like Lake Tahoe where people come for different reasons. It’s a ski town in the winter (which I would never partake in), but it’s an awesome summer destination as well. How great would it be to have two families that prefer primary ownership based on the season?

don't buy a vacation home

Thinking about renting the house part-time to defray the cost?

This can be a reasonable strategy for defraying cost of ownership, but I wouldn’t buy a home on the assumption that your rental fees will cover your costs.  Here’s why:

  • You won’t have 100% occupancy consistently, so it’s hard to gauge what your returns will be month to month
  • You will inevitably run into hassles with renters.  We’ve had furniture destroyed,  garbage left in the house, noise complaints, oh and there was that time when someone left their crack pipe in our master bedroom.
  • You will not be close by when issues come up, so you’ll need to pay a property management company to deal with 2 am plumbing emergencies.
  • Your neighbors that don’t rent their properties will come to hate you for renting yours.  I promise you this.

Bottom line, before you think about buying a vacation home, consider if it would make more sense just to rent.  When you purchase a second home, you’re paying for 100% of the possible usage time, yet most people use their 2nd homes only 30% of the time or less.  That means you’re paying for something that’s not being capitalized on, at least 70% of the time.  Renting will not only reduce your out-of-pocket expenses, it will also save you tremendous complexity and hassle. If you’re hell bent on buying, try fractional ownership with another family to defray cost and maintenance while increasing overall utilization time.

Thinking of buying a vacation home? Factor utilization time into your cost of ownership. Click To Tweet

 

 

I Failed at Minimalism

becoming minimalist
Make your own sign posts and accept that the journey will take as long as it needs for you to fully arrive exactly where you want to be. Click To Tweet

I’m about to admit pure failure here.

I’ve been writing about my journey to minimalism for a while now. I have to say, the purging felt good. I enjoyed sharing pictures of all the belongings I pitched. I felt self-righteous about my new-found power to “just say no” to more stuff.

minimalsim

But then the Nordstrom Semi-annual Sale happened and I completely fell off the rails. To be fair, I was starting a new job, so I needed some new threads, but not to the extent that I went to.

That was my first indication that my minimalistic veins really didn’t run that deep.

Then there was the deep regret of ditching things that in retrospect, I wasn’t ready to part with. Books I now need to buy again. Important papers that got accidentally tossed out in the flurry of purging, like my naturalization certificate. How did I let that thing go?

I’m not suggesting that I won’t continue to lean toward less and live a simpler life, but what I’ve learned along the way is that rash, sudden decisions to purge can often be as detrimental as the impulsive nature to acquire.

I’ve come to believe that minimalism is more of a spectrum than a destination. It’s the active pursuit of less, but not for the sake purging, but for the goal of living with just enough. Nothing excessive, but comfortable and reasonable.

The Minimalists, two men who have inspired my journey to live with less, go pretty far into the spectrum. They advocate getting rid of things like university diplomas, family pictures and other things that you don’t truly love or use often. Now that I’ve gone there, I wish I had slowed down and consider what parting with those things really meant. Mostly, it’s books, pictures, and paperwork that I’m missing, but there are a few household items that I wish I still had as well.

I’ve spent a great deal of time and energy feeling conflicted about where I am on this journey. I realize that I’m very prone to driving hard to get to a destination, only to realize it’s not where I want to be. I’ve done the same with careers, weight loss, relationships, and travel. But it’s also made me realize that just because I want to have more than just a few treasured belongings that fit in a single suitcase, I can still identify with the overall goal to be mindful about spending. To be picky about what I acquire and to mindfully let things go when they’re no longer needed. I don’t need to be in such a big hurry to meet the criteria that define the modern day minimalist. Instead, I need to decide what that means for me, personally.

I suspect that’s a pretty good way for all of us to live. Make your own sign posts and accept that the journey will take as long as it needs for you to fully arrive exactly where you want to be.

Make your own sign posts and accept that the journey will take as long as it needs for you to fully arrive exactly where you want to be. Click To Tweet