Posts tagged ‘Personal Finance’

February 16, 2012

Finding Enoughness

75/365 A Measure of Self Worth

75/365 A Measure of Self Worth by ~*Leah*~ on Flickr

Last week, I reviewed Jen Hatmaker’s book 7: An Experimental Mutiny Against Excess. It got some good feedback (even from the author!). One of the comments left was this one:

I don’t get it?! what’s wrong with having things and living a happy life?! why do we always have to cut back on things…

And I thought, “Those are good questions and deserve a post reflecting on them.” So here we are.

There is nothing wrong with a) having things and b) living a happy life. However, they are not inclusive of each other. We all know of the people who have lots of things and don’t live happy lives. Need examples? Look at the celebrities who unexpectedly lost their lives to substance abuse– legal or otherwise. And of course not having things doesn’t mean you can’t have a happy life either. If you actually know people who live below the poverty line, you now they are not all living unhappy lives.

The bottom line is, having things is not an indicator of happiness. Personally, I believe everyone has a baseline of happiness that is tied to having things.

Ok, let’s think about food for a minute. Everyone needs a certain bare minimum of food to survive. After you meet that bare minimum, you should take in food and manage it in a way to maintain your body in a healthy way. We all have our own personal cutoffs when it comes to food– that level where you know you’ve exceeded the amount you need to be healthy. The beauty is, we have actual evidence of this right? We have indicators of whether we’re managing our food intake properly. You can be underweight, healthy, overweight, obese, or morbidly obese. When you hit the range of excess– overweight, obese, or morbidly obese, there’s only one way to get back to healthy– eat less.

The important thing to remember is this– although there are standard indicators of whether or not you are eating correctly, there is no standard on the exact amount of food a person should take in to be healthy. A quick search on the web reveals the “recommended” number of calories a young woman takes in a day is different than a young pregnant woman. Children at different ages have different recommendations as well. Bodybuilders require a different amount of calories than an average man. And anyone who’s ever even bothered counting calories knows that’s not the whole story.

We know that I have a different metabolism rate than you do so even though we might be the same age, weight, and height I need less calories a day than you do because I metabolize differently than you do. We also know there are different types of calories right? There are healthy calories and empty calories for instance. So you see, what works for me as far as how much food I should eat will simply not work for you.

Money? Is the exact same thing.

The hardest part is determining your financial number of calories. But, it’s just something you have got to do. What do I mean?

Figuring out your own personal “enoughness”.

What is enough house for you? What is enough car for you? Enough clothes? Enough entertainment? Enough education? Enough charity? Enough beauty? What is enough time spent earning money?

We are told throughout our lives, “The sky’s the limit!” and it is, but it’s most likely not the right limit for you or for me or for anyone really.

Determining what is your very own enough is one of the most liberating experiences you can imagine. Just getting started on figuring it all out generates a really calm feeling in your soul.

Why?

We don’t like endlessness. We don’t like not knowing where we’re headed. We don’t like not knowing the plan. We don’t like being at the mercy of others.

When you don’t take personal responsibility for determining your very own Enough, you are putting yourself in the hands of others. And you are putting yourself in the hands of two types of others– the type who are as clueless, blind, and lost as you are and the type who have their own levels of Enough set and they want you to get them there.

Now that I think I squared away the first half of the comment, let’s do the second half–

why do we always have to cut back on things…

Try this little mental exercise for me, ok? I’d say close your eyes but you wouldn’t be able to read the rest of it. So, empty your mind as much as possible.

In your mind’s eye, picture yourself. Go ahead and do a really good job fleshing yourself out there. Don’t do an imaginary you or a fantasy you. Add the pounds. Put some clothes on even if it’s a bit wrinkly. Figure your hair out. Give yourself a facial expression you like. Don’t forget the details– a wedding ring, shoes, glasses or contact lenses, a laptop case or a purse, etc.

Ok now that you’ve got you, add anyone you help support in a significant way. Children, parents, siblings, significant others, etc. And now put yourself in your home. Map out all of your rooms. Drop all of your furniture into them. Fill your fridge up the way you’ve got it right now. Go ahead and turn the TV on. Check the closets. Open the drawers. Have a pet? Don’t forget to set out their food and water.

And just keep going. Think about any car you might have. Think about everything you and/or your loved ones did in the past week. Think of the doctor visits, the breakfasts, the lunches, the dinners, Valentine’s Day, the movie rentals/streaming, the craft projects, the groceries, the clothes you laundered, the floors you washed, the toilets you scrubbed, the ride to and from work, and so on and so forth.

Do you see “enough”? Do you even see abundance? If you are honestly looking at just YOU, you most probably do. When we start bringing in other comparison points, things diminish and lose their luster don’t they?

And that’s the point. Just like your food diet is not going to work for me, your neighbor’s things are not going to work for you. Once you’re at Enough, everything else isn’t going to do anything for you. Just like with food, you can even reach a level of Too Much. And that’s when you start cutting back and doing so joyously.

When you’re losing weight, do you bemoan the pounds as they roll back? Do you suffer anxiety as your clothes becomes looser and looser on you? Of course not! Because you know you are on the way to health.

This ties back to what I mentioned in my review of 7. The unique thing about her approach was she turned her diet into an opportunity to benefit others. And maybe this is something you can try if the idea or act of cutting back in your life disturbs you. Imagine if there was a way doctors could take the weight you lost and give it to someone chronically underweight. Wouldn’t that motivate you to lose even more? The same thing applies with charity.

I’d like to believe that most of us care for people outside of ourselves. That’s the beauty of Enough. When you have Enough, you’re free to give and care for others. You can send your niece to college. You can volunteer at a hospital. You can donate to a food bank or a homeless shelter. You can hire a cleaning lady for your friend with cancer.

We tend to focus on people who have more than us when we seek comparison. And when we do, it’s pretty yucky feeling. We don’t stack up. But if we compare to those who have less, I believe we will more often than not  find ourselves wanting to help and we will always feel grateful, which is a pretty nice feeling.

So there you are. That’s my very long answer to your very short comment. What about you, readers? Do you see enough? Do you see abundance? Do you compare a lot to others around you even in external ways like TV shows, movies, ads, etc.? Are you still working on figuring out your Enough?

January 27, 2012

Emergency Funds: “Oh Sh!t” vs. “D@mmit”

Image is from a 3M security glass ad campaign but it makes you wonder: If you had to do something dramatic to access your emergency fund- would you do it so often?

You know those pet peeves that are so trivial, you really have a hard time justifying devoting a lot of thought, much less an entire post to, but you just can’t stop thinking about it and you rant anyways?

This is one of those. And if you just go on and run away from this blog today, I totally get it just come back in the future because I’ve never really done this and I don’t think it’ll be much of a habit for me but today, it’s on.

I am going to make this post even more ridiculous by talking about a trivial pet peeve that is related to something I hardly even talk about anymore– personal finance. Why I don’t talk about it much anymore is another post entirely and we’ll get there one day, just not today.

Today I’m going to focus on the supposedly sacred and magnificent “emergency fund.”

Everyone who knows anything about personal finance knows about the emergency fund even if they don’t call it that but I’m not talking about those people today so don’t think about them right now. For the uninitiated (and it’s a good thing, I’m starting to think), an emergency fund is a bunch of money stashed away strictly for the use of EMERGENCIES.

From Merriam-Webster,

Definition of EMERGENCY

1: an unforeseen combination of circumstances or the resulting state that calls for immediate action
2: an urgent need for assistance or relief

When it comes to personal finance and the “emergency fund”, it’s referring to definition #2. In other words, your life just got a kick in the ass of varying size because something went wrong and it is having a direct impact on your needs being.

Did I lose you?

Ok, emergencies in the personal finance world should be things like:

a) Loss of income due to job loss, severe reduction in hours, medical leave, abandonment by partner, etc.
b) Loss of something/many things critical to daily life such as a main source of transportation, a refrigerator (stores food which is kind of a need), heating or cooling (in extreme weather conditions), a home, etc.

It is these epic “Oh Sh!t” moments that are supposed to be when an emergency comes into play. But if you read some personal finance blogs, you would not know this. And that annoys me.

Why people tap into “emergency funds” for things outside of true emergencies is beyond my scope of understanding. You can have an emergency fund AND savings you know. As a matter of fact, you should definitely have both and they should be built up at the same time in my honest opinion because otherwise you know what’s going to keep happening– tap, tap, tap into the emergency fund. And if, god forbid, a true emergency strikes?

Having a real “emergency fund” is a pretty scary thing because it is a solid acknowledgment of the fact that the world we live in is, at its core, entirely unpredictable and out of our control. And this spans every single aspect of our lives– even the things we cherish most most dearly. It’s terrifying. And having the emergency fund as a real emergency fund is a conscious acceptance of that fact.

You know, we really can’t budget for every single curve ball life throws our way. Some are real gentle and easy to nail but others can be some sharper ones that are much harder to nail. But just because the sharper curve balls cause some sort of unpleasantness in our lives doesn’t qualify it as a real emergency.

A lot of people have a lot of different savings methods. Some people have targeted savings accounts. Some people have a myriad of savings tools in place for a myriad of different methods (like CD ladders plus mattresses plus whatever else it is that lets them sleep at night). And they’re all really cool and I think you should definitely think about something that works for you. Just leave the emergency fund alone.

Here’s an idea– leave the emergency fund for the true “Oh sh!t” moments in your life but have another fund in place for the “D@mmit” moments too, because hopefully those happen way more often in your life than the other ones do. In a perfect world neither would happen, I could eat a plate of slutty brownies without ill effect, and all three of my children would be perfect little angels who make no messes at all, ever. But that’s not the reality of the world and we just need to move on.

If you can’t decide whether or not something is worthy of an “Oh sh!t” or a “D@mmit” ask yourself this– how far are you willing to go to access the money needed to cover the expense of said “Oh sh!t”/”D@mmit” item? The ones that you would do even the thing that would make you cry? That’s an “Oh sh!t” thing and a perfectly good reason to access your emergency fund.

Do you use and abuse the term “emergency fund”? Do you think I’m being sort of insane about this? I know it’s probably a semantics thing at play but god bless my English-loving heart, I can’t let it go! Am I sort of justified? Do you do the thing where you have an emergency fund and you absolutely refuse to let it go below such and such a threshold because that’s too risky? WHY DO YOU DO THAT? Why not just take some of it out and save it elsewhere and then bulk all your savings up together? Is it because saying you have an emergency fund of such and such amount makes you feel better even though you and everyone else know it’s not just for emergencies? Is it a peace of mind thing? But wouldn’t it be better to have another fund and a TRUE emergency fund or would that be too much money in savings for you to be comfortable with? Do I need a brownie?

Mmmm slutty brownies... What was I mad about again?

December 2, 2011

Christmas Shopping: The Update

I’m trudging. But it’s not a bad thing. I feel like I should clarify because for some reason, trudging has a negative connotation in my mind. Can’t trudging be a good thing some times?

Sorry, back to the point.

My budget? It. Is. Working?

Remember how I wrote about the gift guilt complex? Well, so far I’m handling it pretty well!

I went ahead and wrote out my list with the budgeted amount next to each name. And then I put it in my purse. It is always with me. So if I see something and it reminds me of a certain someone, I can do a quick check on my list and see if it’s in my budget. There are 41 items on my budget, by the way. That’s why the need for a portable list exists in my case.

I’ve completed 28 of the 41. And actually, I’ve gone over budget on several of them.

But I’ve also come under budget on many others. And this is the important part for me. Because I am rewiring the system this year and I’m not even stressing it.

Yes, I love the people on my Christmas list. I really would love to do good things for them and give them lots of great stuff I know they’d enjoy or they need or whatever. I really would because that’s the kind of thing that I enjoy doing.

But I’m getting better to accepting there are limits to generosity because at the end of the day, bills have to get paid. Like the $542 auto repair bill I got this morning. And the rent. And the groceries. And the prescriptions.

I used to think really specific budgets were crappy for me. Now I’m back to wondering if maybe I should re-think this. I’ve been putting time into my 2012 annual budget. Usually I end up tinkering with different months, raising this and lowering that. But this year, I’d like to make it as uniform and seamless as I possibly can. I want to set it up and just let it do its thing.

And believe it or not, part of that is making me consider envelopes. Again. I don’t know. The Christmas thing has worked out well for me but it’s not like I had the funds for each person set aside in envelopes. I just had them written on a sheet of paper. I updated it constantly to show how much I had left for a particular person or how much I blew it by.

I do track my spending on Excel but maybe this is something I need to think about– the visibility factor. The quick check-in. Maybe I need something old skool for my purse? Thoughts?

Oh regarding Tinsel, he’ll meet his demise on December 31st. I made this decision for a few reasons. One, my next influx of money isn’t until December 17 and I fear if I open him up earlier I’ll be too tempted to use him to make ends meet or to buy other people’s presents and then, poof, bye bye Tinsel. Two, I am going on my first actual big road trip with the kids December 26. Again, I’m afraid I’ll be too tempted to use him frivolously on the trip or to supplement trip expenditures.  That’s not the purpose of Tinsel so I’m going to get all Cuban with it. I’ll empty him out on the 31st and treat myself with a gift for Three Kings Day. Plus that means I can start saving up all year again for my very own Treat Yo Self Day (thank you Niki a million times for that one)!

Are you done with your shopping yet? Have you started? Did you start and hit a snag? Did you think about starting and then thought some more? Did you start and are just trudging right through?

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