Tag: financial freedom

  • Powerful Money Lessons from Alone

    Powerful Money Lessons from Alone

    One of my favorite shows is Alone.

    I’ve been talking about it a lot lately with anyone willing, or in the case of my students, with anyone without a choice but to listen.

    If you haven’t seen it, the show is a competition between 10 survival experts who are dropped off in the middle of nowhere, completely isolated from all human contact. Each person is allowed to bring ten survival items, some clothes, and a safety kit. They all have cameras to film their journeys. Whoever survives the longest wins $500,000.

    It is astonishing what these people are capable of. They build their own shelters and catch all their own food. On a daily basis, they’re forced to solve problems. They have no one to help them, or to blame, but themselves.

    My favorite competitor is an Australian guy named Outback Mike. I was blown away by the ideas he came up with and the things he built. There was no mental or physical challenge that he backed down from.

    My wife and I first discovered Alone during the pandemic. It was the perfect show during that time of immense mental and physical hardship. There was something about the way each survivalist focused on that day’s tasks, and blocked everything else out, that resonated with us.

    Watching the latest season of Alone these past few weeks, it occurred to me that the show is full of analogies for the personal finance topics we discuss in the blog.

    I’ve found analogies to be great teaching tools, so here we go.

    1. Not all calories are created equal.

    The major challenge in Alone is getting enough calories to survive. Food is not exactly plentiful in the remote locations where the competitors are dropped off.

    To survive, competitors dedicate endless hours strategizing and looking for food. Common strategies include fishing, trapping, hunting, and foraging.

    One of the first things you learn is that not all calories are created equal. Calories from fat and protein are at a real premium. Even with an unlimited supply of berries and greens, the competitors make clear that you cannot survive for long periods without fat and protein.

    Besides the importance of the type of calories, the way the calories are procured is just as critical.

    This makes perfect sense in a survival scenario. If you expend 2,000 calories of energy to catch a fish, and that fish only provides you 1,000 calories of food, that is a losing proposition. If you continue on that trajectory long enough, you’ll starve to death.

    This is why contestants on the show always think about ways to passively procure food, such as setting traps or using gill nets. If they can obtain food passively, they can then use that time to rest (save calories) or on other necessary tasks.

    In the show, most competitors eventually tap out, on the brink of starvation, having failed to obtain enough food. It’s never for a lack of effort. It’s just really hard.

    So what do calories have to do with personal finance?

    Just as not all calories procured are created equal, not all dollars earned are created equal.

    This begs the question:

    If you think about what you do to earn money, are you the contestant trading 2,000 calories of energy for 1,000 calories of food?

    In other words, are you always working?

    landscape photo of man fishing on river near mountain alps symbolizing that not all dollars are created equal as discussed on Think and Talk Money.

    Let’s look at two hypothetical professionals.

    The first professional works 80 hours per week and earns an annual salary of $200,000.

    The second professional works 40 hours per week and earns an annual salary of $120,000.

    Which one would you rather be?

    Would your answer change if we convert the annual salary to an hourly rate?

    On an hourly rate, the first professional ends up earning $48 per hour.

    The second professional earns $58 per hour.

    If you’re still leaning towards the first professional who earns more overall but less per hour, did you think about how valuable that extra 40 hours per week could be?

    That’s time that could be spent on your true passions. It’s time that could be spent with friends and family. That’s time that could also be spent developing a skill or earning income through a side hustle.

    Looking at it another way, what if you could earn the same $200,000 without having to work 80 hours per week? This is where passive income streams come in.

    Like the gill net that catches fish without the active involvement of the fisherman, have you explored ways to make money while freeing up your time for other worthwhile pursuits? This is an unavoidable step on your way to financial freedom.

    For what it’s worth, I’m confident that the survival experts would all choose to be the person who makes more money per hour while also having more time available for other pursuits.

    2. Attitude is everything.

    Watching Alone, you see a wide range of personalities. While each contestant has the resume of a survival expert, one attribute always separates the winners from the losers: attitude.

    The contestants are forced into what would be impossible survival scenarios for the average person. It’s completely understandable to have tense, frustrating, and stressful moments.

    This isn’t me judging the contestants who have poor attitudes. I wouldn’t last an hour in the woods by myself. I’ve never even been camping. My wife caught more fish when she was six than I’ve caught in my whole life.

    This is just my observation that most of the time, contestants have similar survival skills. What separates the winners is their attitude and ability to recognize that things will go wrong.

    When things go wrong, they don’t blame anyone else or play the victim.

    Instead of getting frustrated and quitting, they think of solutions to the problem at hand. This is what so impressed me with Outback Mike.

    Yes, we all need a bit of luck in life to thrive. But, we need to put ourselves in position to benefit from luck when it comes our way. That takes intentional thought and effort.

    I’m guessing we all know very smart and talented people that have bad attitudes. When things don’t go their way, they immediately blame other people. Nothing is ever their fault. They feel entitled to success without doing the work.

    That type of person usually doesn’t lead a very happy or fulfilling life.

    For sure, that person would not last a week on Alone.

    3. Along with starvation, missing family is the hardest part.

    If it’s not starvation, odds are contestants will tap out because they miss their families. The physical challenges of being forced to survive on limited food in rugged conditions is hard enough.

    To do it alone and isolated from your family makes it nearly impossible.

    One of the most enlightening parts of the show is when the contestants reveal their mental struggles to the camera. Since they’re alone, and typically starving, we get to see raw emotion in real time. You learn a lot about the human condition in these moments.

    One unavoidable truth is that us humans are social creatures.

    We need our people. We need love and support and connection. Going through life alone goes against our DNA.

    Even the chance at winning more money than the contestants ever dreamed of is not nearly enough to keep them away from their families any longer.

    This is why I want to encourage you to not isolate yourself with your money decisions. Money touches all aspects of our lives. Don’t try to go it alone. Include your people in your money life. Talk to them. You will only be better for it.

    There’s one other lesson Alone teaches us about the importance of family. A lesson that is extremely relevant to me right now.

    When each season begins and the new contestants are introduced, my wife and I know right away who isn’t going to make it: the people with young kids.

    These people have all the skills necessary to survive. But, those skills don’t matter when they start missing their kids. The emotion is too strong. The longing to be with their kids overcomes all else. They simply do not want to miss another day of their kids’ lives.

    I think about this lesson in the context of our daily lives. Like the professional in our example above working 80 hours per week, at what sacrifice do all those hours come? How many hours away from home is that? How much time away from our kids?

    When I think about those questions, I again think about what I would do with my time if I was financially free.

    I think about my Tiara Goals.

    Have you watched Alone?

    Do you agree with my observations?

    Let us know in the comments below!

  • Financial Freedom and Tiara Goals

    Financial Freedom and Tiara Goals

    A few months before we got married, my wife and I took a trip down to Florida. One afternoon, I headed out to the beach with a book, a notebook, and a few ice cold beverages.

    The weather was perfect. It was sunny but not too hot. Blue skies and just a slight breeze. The beach was quiet that afternoon. I set up my chair to face the ocean and started reading. This little break was exactly what I needed in the middle of “wedding planning.”

    I don’t recall the book I was reading that day. I’ve been meaning to look back at my journals to see if I can figure it out. Anyways, I’ll never forget what I learned about myself that afternoon.

    The author wrote about the power of financial freedom. We’ve discussed financial freedom in previous posts. The basic idea is that when you are financially free, you can choose how to live your life on your own terms. You can make important decisions based on what truly matters to you, as opposed to being forced down a certain path for money reasons.

    On the beach that day, the concept of financial freedom was not new to me. I had read about it for years. The concept really hit home that afternoon when the author asked a simple but powerful question:

    What would you do with financial freedom?

    Maybe the question really resonated with me because I was about to get married. It’s only natural to daydream about what life would be like after the wedding, even though my wife and I had been a couple for six years by that point.

    Over the years, we had talked a lot about what we wanted our lives together to look like. We knew long before the wedding how we each felt about major topics like starting a family and where we wanted to live.

    We were also on the same page when it came to money decisions. My wife and I met early on during my personal finance journey, not long after I had determined to get my money life sorted out. My wife still jokes that she was my first personal finance student.

    By the time we got married, I had been on my personal finance journey for about seven years. I was out of debt and was starting to think about the options that were now available to me. It was around this time that I learned one of the most powerful words in personal finance:

    DINK

    Back then, my wife and I were both working as lawyers in Chicago. We didn’t have any kids. I didn’t realize it until later on, but we were DINKs.

    DINK means “Dual Income No Kids.”

    When you’re in a relationship where you have two incomes coming in and are sharing financial responsibilities, you have the opportunity to supercharge your Later Money goals.

    If you are currently a DINK, or will soon be a DINK, please pay extra attention here.

    Don’t waste this powerful opportunity to supercharge your Later Money goals.

    This is what my wife and I were able to do, even if we didn’t know what a DINK was. We each had good incomes coming in and our monthly expenses were low. The two of us could comfortably share an apartment, instead of each paying for an apartment separately. That’s major savings each month.

    We didn’t have to worry about childcare. We were young so the odds of unexpected medical care were lower. All things considered, it was pretty easy to keep our Now Money to a minimum with plenty to spare for Life Money.

    This allowed us to fuel our Later Money goals, like having a nice wedding and saving up for a home or rental property. We had money in the bank and seemingly endless choices.

    And, I didn’t want to screw it up.

    Which brings us back to me sitting on the beach, thinking about what I would do with financial freedom, with maybe 1 or 2 less beverages in the cooler.

    What did I really want out of life?

    I put my book down and looked off into the ocean, thinking about what I wanted out of life. I started thinking about what my ideal life would look like. By this point, I was engaged in the type of deep thought where you don’t even realize what’s happening around you.

    It quickly occurred to me that I had never truly thought about what I wanted in life. Sure, I had thought about things like having a family and being able to take vacations.

    But, I never carved out time to purposefully think hard about what I actually wanted. I had never asked myself what truly motivates me.

    Without a doubt, I had never written down the answer to that powerful question: what would I do with financial freedom?

    I hadn’t ever allowed myself to dream about financial freedom.

    The truth is, I don’t think I had ever visualized a life that wasn’t dominated by a full-time job. Up to that point, my whole life had revolved around getting an education and then getting a job. I never pictured a world where I might not need a full-time job to provide for myself and eventually my family.

    I had read about the concept of being financially free, but it always seemed like a possibility for other people, not me. Writing this years later, I feel sad for that version of myself for having such limiting beliefs.

    That said, I completely understand why I felt that financial freedom was unattainable for someone like me. This was in the phase of my life where I had been preoccupied with eliminating debt. Because of that debt, I didn’t allow myself to dream about what life could look like if money wasn’t holding me back.

    This was also before my wife and I had rental properties. It was before we recognized the impact of side hustles and multiple streams of income. I had read about and understood these concepts in theory, but I hadn’t put what I learned into practice.

    That day on the beach, it was like a light went on in my head.

    After years of patience and discipline, I had climbed out of debt. I was now a DINK with Later Money in the bank waiting to be deployed. That meant I had created opportunities.

    I wasn’t financially free, but for the first time in my life, I allowed myself to accept that financial freedom was possible for me.

    This was one of the most powerful moments in my life.

    With that realization in my mind, I walked into the ocean to cool off and think some more.

    What would I do with financial freedom?

    There in the ocean, I wasn’t thinking about dollars or career goals. This was more important than that. I was thinking about what I wanted my life to look like if money was not an issue. I was thinking about what I would do with my time if I was in complete control.

    Floating there in the water, it was like I had an epiphany. Everything suddenly became clear to me. I ran out of the ocean to get back to my chair before I forgot what just popped into my head.

    I whipped out my top bound spiral notebook and started writing with a blue pen. Minutes later, I had written down seven answers to the question: what would I do with financial freedom?

    My “Tiara Goals” were born.

    Nearly eight years later, I still have that sheet of notebook paper. I keep it safe in a leather binder protected by a laminated page holder. It has those familiar tear marks on the top of the page where the paper connected to the spiral binding.

    Even though I have these seven goals memorized by now, I still look at this sheet of paper every month. Looking at this sheet is an incredible reminder of that day on the beach when everything became clear to me.

    A quick aside, I call my goals “Tiara Goals” because it’s a silly, but meaningful, description to me. Have some fun with what you name your goals. If you do it right, you’ll be thinking and talking about these goals a lot.

    What are my Tiara Goals?

    So, here are my original Tiara Goals from 2017, as scribbled on that sheet of paper and edited for clarity:

    1. Be with my wife and kids as much as I want. Dad never missed a game. Mom never missed a game. Nana never missed a game.
    2. Not be forced to commute to work on Friday or Tuesday or whatever day, if I need that day for myself.
    3. Choose how to spend my working hours (representing clients, teaching, volunteering, building a business, etc.).
    4. Continue to study and learn constantly.
    5. Take at least one big trip every year.
    6. Never turn down an exciting or smart opportunity because I can’t afford it.
    7. Work alongside people that value my contributions.

    Keep in mind that I wrote these goals before I had kids and before I was even married. This was also years before the pandemic when working from home was a foreign concept to most of us.

    I think it says a lot that I was thinking about these things way back then.

    Travelers couple look at the mountain lake. Adventure and travel in the mountains region in the Austria after thinking about what to do with financial freedom.

    In a future post, we’ll unpack each of these goals.

    While I haven’t reached financial freedom yet, I think I’m doing a pretty good job already living by these fundamental values.

    How do my Tiara Goals help me today?

    My Tiara Goals motivate me to continue striving for financial freedom. We’ve talked extensively about the importance of having strong money motivation in our lives. When we have these powerful motivations, we can stay on budget, get out of debt, and fuel our Later Money goals.

    We can obtain Parachute Money. We can choose to do meaningful work and choose to spend more time with people who are meaningful to us.

    No, it’s not easy to achieve financial freedom. But, it is a whole lot easier when you know what you are striving for in the first place.

    That’s why at the beginning of my financial wellness class, I ask my students to write down their own versions of Tiara Goals. I want to help them avoid the limiting beliefs that I had before that day on the beach.

    My favorite part of class is when my students share their Tiara Goals.

    Without a doubt, this is always my favorite part of class. When I say I’m on a mission to convince you that talking money is not taboo, I think of my students sharing their goals. I get so energized by hearing their goals. My students report the same sentiment after learning what drives their friends and peers.

    Over the years, my students have shared countless impactful stories. As unique as these goals can be, it’s remarkable how most of us want the same things in life. Year after year, I hear the same motivating forces:

    • Spend more time with my family.
    • Travel and enjoy experiences around the world.
    • Stay healthy and fit.
    • Provide for my children and my aging parents.
    • Work for a cause I believe in.
    • Have time to volunteer.

    I also regularly hear one thing that my students, and the rest of us, don’t want:

    • I don’t want to be stressed about money.

    Isn’t it telling that year after year, most of us want the same things in life? I’ve yet to hear anyone say that they dream about working endless hours and not taking their PTO.

    Be specific, but not too specific, when you think about financial freedom.

    When we talk about what we do with financial freedom in class, I encourage my students to get specific without being so precise that the goal becomes restrictive. When we’re thinking about goals related to financial freedom, the idea is to focus more on big-picture, core values.

    There will be a time and a place to strategize how to get there. The point here is to help define what you’re even trying to get in the first place.

    For example, instead of “spending more time with family,” I would suggest something like, “never miss my child’s soccer game or dance recital because of work.”

    Instead of “travel around the world,” I would suggest “at least one overseas trip of at least 2 weeks per year.”

    Adding that little bit of specificity will help you visualize what you’re striving for with your money decisions.

    Don’t get discouraged if you think you are not close to financial freedom.

    Even when you feel like financial freedom is only a distant dream for you, it’s important to actively think about what you want out of life. I’d even suggest that the further away you feel from financial freedom, the more important it is to think about what it would mean for you.

    When you’re at your lowest point, visualizing what you would do with financial freedom is a helpful escape.

    If you haven’t ever actively thought about what you would do with financial freedom, hopefully this post will encourage you to do so.

    Don’t forget to write down whatever you come up with.

    I suggest you share your version of Tiara Goals with your friends and loved ones. It’s OK to keep some of your goals private. By sharing, you will get the benefit of them cheering you on. You’ll also hopefully encourage them to share their goals with you, which can be very inspiring.

    Have you thought about what you would do with financial freedom?

    Have you ever written it down or shared your answers with others?

    What are your Tiara Goals?

    Let us know in the comments below!

  • Big Decisions are Easier with Parachute Money

    Big Decisions are Easier with Parachute Money

    Pretend your life is like flying on an airplane.

    Maybe you feel like your airplane is a fighter jet, moving too fast to enjoy the ride. Maybe your airplane is a small regional carrier, boringly flying back and forth between the same two airports.

    For whatever reason, you decide you need to get off this airplane. You decide to take control and make a change. You’re ready to jump.

    All you need is a parachute.

    You have a choice between the only two parachutes on the plane.

    The first parachute has only one string (or line) connecting the canopy to the harness . You think to yourself, “This doesn’t seem very safe. What if that one string breaks? That would end very badly for me.”

    Then, you look at the second parachute. This parachute has 10 strings. You say to yourself, “OK, this one looks much safer. If one string breaks, the parachute still has nine other strings to keep me safe. Even if something goes wrong with one or two strings, I would glide safely to the ground.”

    It’s obvious which one of these parachutes to choose.

    This situation illustrates what I believe is one of the most empowering concepts in personal finance.

    It’s what I call “Parachute Money.”

    Before we move on to our next core personal finance topic, credit and debt, let’s take a few minutes to discuss this powerful money concept.

    What is Parachute Money?

    The central idea of Parachute Money is to create multiple sources of income so you are not beholden to any one source.

    Parachute Money includes your primary job, any side hustles, any income generating assets, and your emergency savings account. It also includes the income of your significant other, if you share finances.

    With Parachute Money, if one of your sources of income dries up, you are more than covered with your other sources.

    Picture each source of income as a string on your parachute. The more strings on the parachute, the stronger it is. Likewise, the more sources of income you have, the stronger your personal finances are.

    Note that multiple sources of income does not have to mean multiple jobs. Even with one job, you can still pursue additional, or stronger, parachute strings.

    Let’s say you earn a salary and also could earn commissions or bonuses. Each one of those income streams could be another string in your parachute.

    Or, you could prioritize boosting your emergency savings even more than you normally would. You might even consider a separate savings bucket called “Parachute Money.” Besides boosting your savings, you could also focus on passive income streams, like investing in dividend stocks.

    The central idea remains the same. Protect yourself with as many income sources as you can.

    Think of Parachute Money as a way to visualize financial independence.

    Think of Parachute Money as a way to visualize what financial independence really means.

    Parachute Money empowers you to confidently make big life changes. When you have Parachute Money, you are financially free to control your life, not the other way around.

    Parachute Money is all about your intentional decisions. It’s for when you’ve decided, on your terms, that you’re ready to make that big change in your life. You’re excited to take matters into your own hands, but you don’t want to disrupt your entire life in the process.

    To return to our airplane analogy, you could stay on the plane if you wanted. Nobody is forcing you to jump. But, you’re ready for something different. And when you do jump, you want a parachute that will help you land as safely as possible.

    That’s what Parachute Money can do for your life. It allows you to make that leap while landing gracefully.

    You could say it out loud like this, “I have Parachute Money. I am financially independent because I am not beholden to any single source of income. If one source of income goes away, because I’ve decided it’s time for a change, my other sources of income will protect me.”

    Parachute Money is more than just emergency savings.

    Parachute Money is more than just a bank account. We’ve talked about how an emergency savings account is the first savings account that everyone needs.

    An emergency savings account is part of your Parachute Money, but there’s more to it.

    Recall that an emergency savings account is what you turn to when life dictates your choices. If you unexpectedly lose your job or have a large bill to pay, emergency savings will keep you afloat. You didn’t choose for these things to happen, but you still need to be prepared.

    So, emergency savings are for protecting yourself and your family from the unexpected. Like we talked about above, Parachute Money is about you dictating the course of events, not the other away around.

    What are my current parachute strings?

    My wife and I have worked hard to create multiple sources of income. We currently have the following strings in our parachute, in no particular order:

    • My primary job as a mesothelioma attorney
    • My wife’s primary job as an attorney
    • Rental Property 1
    • Rental Property 2
    • Rental Property 3
    • Rental Property 4
    • Law School Professor
    • Emergency Savings

    Combined, these sources of money provide a solid parachute for us.

    If you wanted to, you can break out some of these sources of income into further parachute strings.

    For example, Rental Property 1 consists of 4 apartments. Each apartment could be a separate string. I teach multiple law school courses; each course could be another string. Like we talked about above, your job may include a salary, commissions, and bonuses. Each could be a separate parachute string.

    What are some situations where Parachute Money can make big decisions easier?

    Let’s look at three possible situations where Parachute Money can empower you to make the best choices for you and your family.

    1. It’s time for a new job.

    After working for the same company for 10 years, life around the office looks different.

    Your direct supervisor left for a new job. You were passed up to take her place. New policies are rolling out, including a requirement to be in the office five days per week.

    You feel stuck in place. You still like your job and most of the people you work with. And, you could hang around for the steady paycheck.

    Or, you can take control and make a change. If you have Parachute Money, you can take your time looking for a new job that matches your priorities. Maybe you decide not to go back to full-time work at all.

    2. It’s time to move.

    You live with a roommate and have another 10 months on your lease. Things have gotten uncomfortable.

    He doesn’t clean up after himself. He stays up late watching movies so loud you can’t sleep. He eats your favorite leftover Thai food you had saved for lunch the next day.

    You could “tough it out.” He’s still a good friend of yours.

    Or, you can take control and make a change. If you have Parachute Money, you can handle the costs of breaking the lease and finding a new apartment.

    3. It’s time to stop depending on your parents.

    You’re a full-grown adult and are still financially dependent on your parents.

    Sure, the money is nice to have.

    The problem is your parents have let it be known, in so many words, that they are to be consulted on how you spend their money.

    You may think you are choosing where to live or where to send your kids to school. Deep down? You know your parents will have the final word.

    Elderly father lends money to his adult son. He helps his child deal with financial problems. His son is hoping to not be dependent on his father anymore thanks to Parachute Money learned on Think and Talk Money.

    You can continue letting your parents dictate your life.

    Or, you can take control and make a change. If you have Parachute Money, you can tell your parents, “Thanks, but no thanks.”

    Parachute Money gives you control.

    These are just a few examples of how Parachute Money allows you to regain control of your life.

    Notice that in each situation, you’re not dealing with a sudden emergency. Instead, you’ve reached a tipping point and decided it was time for a change. Without Parachute Money, your options would be limited.

    In our example above about wanting a new job, Parachute Money allows you to make that leap. You may temporarily be without your primary source of income- that string on the parachute broke.

    But, you’ll be more than fine because you have other parachute strings to land you safely, like an emergency savings account, a side hustle as a ghost writer for a blog, and a rental property.

    Parachute Money is one of my favorite personal finance concepts.

    Parachute Money is one of my favorite concepts in personal finance. I first learned about the general idea from J L Collins in his renowned book on investing, The Simple Path to Wealth: Your road map to financial independence and a rich, free life.

    The Simple Path to Wealth is a must read for anyone wanting to learn the power of investing on your own through index funds.

    We’ll have plenty more to say about how Collins has influenced my own decisions in our investing series. I credit him for teaching me that investing does not have to be hard. It’s actually pretty simple if you follow his tips.

    To learn more from J L Collins, check out his website here.

    In his book and blog, Collins describes what he calls “F-You Money.” He tells the story of getting in a shouting match with his boss one day at work, shortly before walking away from that company. As Collins explains, nobody deserved an “F-You” more than that guy.

    In Collins’ example, he had enough money saved up where he could say those choice words to his boss. His “F-You Money” empowered him to live on his own terms.

    On your way to financial independence, don’t ignore Parachute Money.

    The reason I love the idea of Parachute Money is because it encapsulates so many of the money wellness habits and goals we’re striving for with Think and Talk Money.

    Parachute Money gives you flexibility and control. When you have multiple sources of money, you are not beholden to any one source.

    Think back to the image of the parachute with only one string. What happens if that one string breaks?

    Likewise, what happens if your only source of money no longer fits into your best life?

    As you think about these questions, picture yourself jumping out of the airplane.

    What parachute are you reaching for?

    Disclosure: This page contains affiliate links, meaning I receive a commission if you decide to purchase using my links, but at no additional cost to you. Please read my Disclosure for more information.

    © 2025 Matthew Adair

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  • Great Talk: Money and Cheeseburgers

    Great Talk: Money and Cheeseburgers

    Talking money is not taboo.

    The only thing that’s taboo is avoiding your personal finances.

    To help flip the script and convince you that talking money is not taboo, I plan to regularly post about the current money conversations that I’m having. Through my examples, I hope to encourage you to have similar conversations.

    In our first “Great Talk” post, we’ll discuss what my wife and I decided to do with our Later Money throughout 2025. We’ll also talk about how really smart people I know have started budgeting. We’ll conclude with an empowering conversation I had with a friend about what you can do with your time if money wasn’t an obstacle.

    What I’m doing with my Later Money in 2025.

    Later Money is what you are saving, investing, or using to pay off debt. This bucket includes long term goals and investments, like retirement and college savings. It also includes emergency savings, paying off debt, or any other shorter term goals, like saving for a wedding or a downpayment for a house.

    Later Money is the key category that fuels your ultimate life goals, like financial independence.

    The more you fuel this category, the faster you can reach your goals.

    So, what are my wife and I doing with our Later Money in 2025?

    We recently had a great talk about our options and came up with a plan that will guide us throughout the year. Before we talk about our 2025 goals, it’s important to keep in mind that your Later Money goals will change over time. That’s perfectly fine.

    Our goals in 2025 are not the same as they were between 2016 and 2024. Prior to 2025, my wife and I were focused on expanding our real estate portfolio.

    We purchased our first rental property in 2018, a four-flat in an up-and-coming Chicago neighborhood. Less than a year later, we bought a three-flat in the same neighborhood.

    In 2021, we invested in a Colorado rental ski condo. In 2022, we purchased our fourth rental property, a three-flat, in the same (now booming) neighborhood in Chicago.

    After living in our rental properties since 2018, we purchased a single-family home just outside Chicago in 2024.

    During this timeframe, any spare dollar we earned went towards acquiring more real estate. We contributed towards other financial goals, like retirement and college, but our priority was investing in real estate.

    Knowing when enough is enough.

    Our goals have changed in 2025. We started talking about revamping our goals towards the end of 2024. I owe a lot of credit for our new goals to Chad “Coach” Carson and his excellent book, Small and Mighty Real Estate Investor: How to Reach Financial Freedom with Fewer Rental Properties.

    In his book, Coach Carson makes a compelling argument to think about when enough is enough. His message was about acquiring more and more real estate, to no end, but also applies to any pursuit in life. You can learn more about Coach Carson and his incredible journey on his website.

    Reading Small and Mighty Real Estate Investor helped my wife and I conclude that at this point in our lives, we have enough. If anything, we’re closer to having too much on our plate. We self-manage our 10 units in Chicago and work closely with a property manager in Colorado. With our full-time jobs and kids at home, we’ve bitten off as much as we can chew.

    Our portfolio generates enough income to help fuel our current goals. If we were to continue expanding, the headaches could end up outweighing the financial benefits.

    We want to build a life full of experiences and memories. That means we need more time, not more money. Acquiring and managing more properties right now would take up a lot of time. That tradeoff is not currently worth it to us.

    So, if we’re not pursuing additional properties in 2025, what are our goals?

    After talking it through together and weighing all our options, my wife and I came up with these three goals for 2025:

    1. Our first goal is to continuing paying down our mortgage debt. We used HELOCs (Home Equity Line of Credit) to help us acquire some of our properties. Now that we’ve determined that “enough is enough,” we’re focused on paying back these loans.
    2. Our second goal is to build up our emergency savings. We mostly ignored our emergency savings between 2017 and 2024. It was risky and led to some touch-and-go moments that we’d like to avoid moving forward.
    3. Our third goal is to boost our contributions to our kids’ college savings accounts. We use what’s called a “529 college savings plan.” 529 plans are state-sponsored, tax-advantaged investment accounts. We use Illinois’ 529 plan because we receive a tax break as Illinois residents. Just about every state offers a 529 plan. They are a great way to save for college.

    With our plan in place ahead of time, we now know where every dollar is going before we earn it. This takes the anxiety out of trying to figure it out after the money has already hit our bank account.

    At the end of each month, all we need to do is make our Later Money transfers to each account. We can rest easy knowing that we’re making progress towards our personal finance goals.

    How Budgeting is Helping Very Smart People.

    One of my favorite moments since launching Think and Talk Money occurred just last week. Walking down the hall in my office, one of my colleagues called me over. She was very excited to share that she started tracking her spending so she can create a Budget After Thinking.

    We chatted for ten minutes. She’s been reading the blog on her commute to work every Monday, Wednesday, and Friday. She used Think and Talk Money vocabulary, like “Now Money” and “Life Money.”

    She showed me the app she’s been using to track her spending, one I wasn’t familiar with and am now looking into. She shared that she’s been telling her friends about Think and Talk Money because she’s already learned so much.

    This is exactly why talking about money is not taboo. She taught me something new and helped me think about my own budgeting process. She gave me new ideas to think about.

    How could this type of conversation be bad?

    We didn’t need to talk numbers. We talked strategy and habits. That’s what talking money is all about.

    What would you do with your time if money was not an obstacle?

    I had lunch with an old friend last week at a downtown Chicago lunch spot that’s been serving up epic burgers since the 1970’s. My friend and I are both balancing careers as lawyers in Chicago with young families at home.

    In between bites of a massive BBQ-bacon-cheeseburger, I asked him a question I like asking smart people:

    “What would you do with your time if money wasn’t an obstacle?”

    Without hesitation, he answered that he would work with his hands. He likes working on projects around the house. He gets immediate satisfaction from completing a repair or making an improvement.

    Two men eating out in cafe or restaurant talking about financial independence as learned on Think and Talk Money.

    His answer was great and very relatable. My years as a landlord has taught me the same feeling of satisfaction in completing a project.

    What stood out to me the most was how quickly he answered the question. He knew exactly what he would do if money was not an obstacle.

    This simple question helps illustrate what I mean when we talk about financial independence. It’s not an easy goal to accomplish, but I can’t think of a better goal to strive for.

    You are financially independent when money is not an obstacle.

    When you are financially independent, you can spend more time doing what is meaningful to you. You can spend more time with people that are meaningful to you.

    Whether you want to work with your hands or represent clients or teach kids, the choice is yours when you’re financial independent.

    That seems like a goal worth striving for.

    What could ever be better than that?

    So, let me ask you:

    What would you do with your time if money was no obstacle?

    Please share below!

    And always remember, talking money is not taboo.

  • How to Best Optimize your Savings

    How to Best Optimize your Savings

    In our last post, we talked about the importance of fueling your savings and how savings differ from investments.

    Here, we’ll discuss how to best optimize your savings so you are protected in times of emergency and can achieve your short-term goals.

    We’ll also talk about whether you should automating your savings, and if it makes sense to start saving while you’re paying off debt.

    Let’s begin with the most important savings account we all need: an emergency savings account.

    The first savings account you need is an emergency savings account.

    The first savings account you need is commonly referred to as an emergency savings account. This is your ultimate security blanket for whatever life throws at you.

    For example, if you lose your source of income, your emergency savings will keep you afloat until you find a new source of income. The idea is to use your savings so you don’t have to pull from your long-term investments.

    Your emergency savings is not just for when you lose your job. Your emergency savings will also protect you in times of emergency (brilliant, huh?), like unexpected medical bills or expensive home repairs.

    The idea remains the same: instead of pulling from your investments, you will have cash available in your savings account to cover your needs.

    Aim for 3-6 months of Now Money saved for emergencies.

    Aim for building up 3-6 months of your Now Money saved in a dedicated emergency savings account.

    Why aim for saving enough Now Money instead of saving enough to cover your total Budget After Thinking?

    Because Now Money represents the consistent, reoccurring expenses that you need to pay every month to take care of yourself and your family. Since you will only be using this money in times of emergency, you can, and should, forego some of life’s luxuries until you get back on track.

    Man protected from the crisis because he has 3 to 6 months of emergency savings thanks to think and talk money.

    The same is true for fueling your Later Money goals. Take a pause until you sort out whatever it was that caused you to spend your emergency savings in the first place.

    Come on Matt, should I save 3 or 6 months of Now Money?

    It depends! Personal finance is personal.

    If you have no dependents, 3 months worth of savings is a good benchmark. In most circumstances, that should give you enough time to get back on your feet.

    If you have dependents, that means you are responsible for additional humans, sometimes tiny humans. These humans are counting on you for support. Targeting 6 months of savings is a good idea so you can continue to provide for them.

    You should also consider your source and consistency of income when deciding how much you’ll need saved for emergencies. If you are not paid regularly throughout the year, you should target a larger amount in your emergency savings to cover those longer gaps between pay.

    When you are part of a dual-income household, you may be able to get away with less emergency savings since two people are contributing to the monthly bills. If one of you suffers a sudden job loss, the other person’s income can still be used to keep the household afloat.

    One last thing: Building up to 3-6 months of emergency savings will take time. Don’t pressure yourself to accomplish this goal overnight. Each month, you can add to this account until you reach your target. Any and all progress is good progress.

    Do not rely on credit cards for emergencies.

    Unfortunately, many of us rely on credit cards to pay our bills. When we do this, our debt grows and cancels out any gains we’re making through our savings and investments.

    Just as you shouldn’t pull from your investments in times of emergency, you should not rely on credit cards to protect you.

    Savings is also for more fun, short-term goals.

    We just talked about the first savings account you need, an emergency savings account. I agree with you that thinking about emergency savings is not exactly fun. Job loss… medical treatment… car repairs. Yup, not fun.

    Let’s talk about more fun stuff. Savings is also for short-term goals, whatever those goals are for you. This is your Later Money in action fueling your life goals.

    Remember, we said emergency savings was your first account. Not your only account.

    Once you’ve identified your specific Later Money goals, it’s a good idea to create separate savings accounts, or buckets, for each goal. This will help you visualize the progress you’re making towards each goal. It will also help you not use your savings that was intended for one goal on something else.

    Happy wedding photography of bride and groom at wedding ceremony paid for with savings learned on Think and Talk Money

    What kind of savings buckets might you have? Before I got married, I had separate savings accounts for:

    • Engagement ring
    • Wedding
    • Down payment on a home
    • Travel
    • Cubs Season Tickets
    • Emergency Savings
    • Budget Busters

    I had a specific amount in mind for each category and would make transfers each month into those buckets. Not each account received an equal amount.

    For example, I knew how much I needed for Cubs tickets, usually payable at the end of the year, and divided that amount by 12 months.

    The amount needed to purchase something like an engagement ring was more… fluid.

    My students in recent years have suggested other savings buckets, as well. We’ve talked in class about saving for a car, saving for holiday presents, and saving for kids’ schooling.

    Whatever your savings goals are, using separate buckets will help you stay on track.

    Setting up separate savings accounts online is easy.

    It’s easy to set up separate savings accounts online with most major banks. Once you create your initial account, you can create sub-accounts that will appear on the same landing page as your primary account. Each account will have an individual account number, and you can label them however you like.

    When you do set up your savings accounts, it’s a good idea to have a different bank for your primary checking account and your savings accounts. This will help you resist the temptation to spend your savings. Out of sight, out of mind, and all that.

    I’ll soon have a post on my favorite online savings accounts. There are a number of them out there that offer good interest rates and a solid user experience.

    Automating your savings is a good idea, but I don’t personally automate.

    I automate a lot of my money tasks, like setting up automatic bill payment for every bill that comes to mind. This includes my mortgages. I also have automatic deductions taken from my paycheck for my 401k plan.

    Automating your money is a very good idea. In The Automatic Millionaire, David Bach explains how the single step of automating your finances can help you live rich and retire richer. You can learn more about Bach’s philosophy on his website.

    I don’t disagree with Bach and implement many of his strategies in my own life. The Automatic Millionaire is definitely worth a read.

    Still, I don’t automate my savings transfers.

    I automated my savings transfers in the past and learned that I prefer the emotional high of manually making savings transfers.

    Money is emotional. This is just one example.

    Happy young couple making savings transfer online in computer app and feeling an emotional high thanks to Think and Talk Money

    I like how it makes me feel to go into my checking account and transfer that month’s Later Money to my savings. It makes me feel good to see the pop up on my computer: “Your transfer is complete!”

    I like that feeling so much that I’m not worried about skipping a savings transfer. That moment gives me a lot of joy.

    Whether you choose to automate or manually transfer into your savings account, please make sure the dollars are not disappearing and are actually going towards your most important goals.

    If you have debt, should you still build up your emergency savings?

    During my money wellness class, I usually get a question like this:

    “Should I build up my savings while I’m paying off student loans or other debt?”

    My recommendation is different depending on the type of debt. That’s because interest rates are generally much lower for student loans or mortgages than for credit card debt.

    In a future post, we’ll talk about what is commonly referred to as “good debt” and “bad debt.” Student loans and mortgages, in my opinion, represent good debt. Credit card debt is almost universally considered bad debt.

    Typically, good debt has much lower interest rates than bad debt. You might be paying 20% or more on your credit cards and closer to 8% on your student loans (and probably even lower on your mortgage).

    If you have high interest credit card debt, pay that off first before you prioritize savings. It doesn’t make any sense to pay 20% interest to a credit card company just so you can earn 4% interest in a savings account.

    On the other hand, if you have student loan debt or mortgage debt, I recommend you start building your emergency savings account while you’re simultaneously paying down that debt.

    Yes, paying 8% interest is mathematically worse than earning 4% in savings account. If you are driven strictly by the math, you should pay off that 8% debt before you start saving in a 4% interest account.

    Never forget that money is emotional.

    But, money is emotional. I think it’s worth paying the interest on your good debt so you can experience your savings growing.

    Plus, if you do have an emergency that requires you to tap into your savings, you won’t have to rely on credit cards and pay the much higher penalty.

    Keep in mind that if you go this route, you still need to make your required debt payments. We are only talking about extra money that you have available that could go towards additional debt payments or to savings.

    The temptation to ignore your savings is real, especially when you have debt.

    The temptation will be there to pay off whatever debt you have as quickly as possible and forego saving altogether.

    I still feel this temptation every month. Should I contribute my next dollar to building up savings or paying down mortgages?

    For most of the past year, I was laser focused on paying down mortgage debt. More recently, I’ve reassessed and have been working to build up my savings.

    Having talked it over with my wife, we want to make sure we’re protected should something unexpected happen, even if that means temporarily slowing down our progress on our mortgages.

    This way, we won’t end up in a cycle of using credit cards to cover us in times of need.

    If you’re faced with a similar decision, know that you’re already ahead of the game by even thinking about how to use your Later Money to fuel your goals.

    Whether you are paying down debt or increasing your savings, you are heading in the right direction.

    Please drop a comment below if you have any additional tips to share!

    Do you prefer automatic savings or manual transfers?

    What are some of your favorite savings buckets you’ve used?

  • Why You Need to Fuel Your Savings

    Why You Need to Fuel Your Savings

    Would it surprise anyone to learn that most Americans are not satisfied with the amount they have saved?

    Let’s take look at some of the key findings in the recently published Yahoo Finance/Marist Poll 2025 National Survey on the State of Savings:

    • Only 10% of households are completely satisfied with the amount of money they have saved.
    • Only 20% reported saving more in 2024 than in 2023.

    These numbers are scary. You can read more here. The scariest part for me is that these results aren’t surprising at all. They closely mirror the stats I first showed my students back in 2021 when discussing savings.

    Why are these numbers so scary?

    In the abstract, I can understand why these stats may not seem too scary to you.

    Let’s look at another stat that illustrates what happens when we don’t have adequate savings:

    • About 33% of households would not be able to pay their bills or expenses for one month, if faced with a sudden loss of income.
    • This number rises to 38% of Gen Z and 41% of Millennials who report they could not pay their bills for even a month.

    What do these numbers mean?

    1 in 3 people currently reading this post, in the comfort of their homes they have worked so hard for, would not be able to afford those homes for even one month if they suddenly lost their jobs. It’s worse for Gen Z and Millennials.

    Maybe you’re on the train commuting to work while reading this. How many people are in the train car with you? 30 or so? Pick out 10 passengers, really look at their faces.

    Seats of a passenger car in a European train with 1 of 3 people sitting on it not able to pay their bills for one month if they lost their jobs.

    They’re just like you, typically good people, working a job to provide for themselves and their families. If these 10 people suddenly lost their jobs, they wouldn’t be able to pay their bills next month.

    Count me in the group of people not completely satisfied with their savings.

    If you read these stats and are honestly not worried about your savings, you are in the minority and are doing a tremendous job managing your personal finances.

    Keep up the good work and please let us know in the comments below what strategies are working for you.

    On the other hand, if you’re being honest with yourself, you’re most likely in the 90% of people that are not completely satisfied with their savings.

    Count me in this group.

    From 2017 to 2024, my wife and I prioritized using all of our available money to acquire real estate. The downside was limited funds available for savings.

    We now have work to do to build our savings back up. Instead of presently shopping for investment properties, we are now focused on paying down mortgage debt and increasing our savings.

    Most people attribute their low savings to rising cost of living.

    What is the most common explanation given by people that have so little saved? Rising cost of living across the nation:

    • Nearly 66% of Americans believe that the cost of living for the average family is not affordable in their area.

    Millennials and Gen X are the most worried about the cost of living, with more than 70% of each group feeling unprepared. 64% of Gen Z and 59% of Baby Boomers likewise feel unprepared.

    Cost of living includes necessary expenses like housing, food, transportation, and healthcare. In other words, Now Money.

    There are any number of reasons we can point to that are combining to drive up the cost of living, like limited housing inventory, higher interest rates, and more expensive groceries.

    Father and daughter buying apples in grocery store as part of rising cost of living nationally

    Whatever the reason for why costs are going up, I’m more interested in adapting and thriving in the current environment rather than making excuses.

    So, what exactly can we do to improve our savings?

    We can first eat Italian beef while working on our money mindset.

    Then, we can create a Budget After Thinking that fuels our goals.

    The next part, figuring out what to do with that money you generated for savings, is much easier. Before we talk about specific savings tips, let’s make sure we’re on the same page as to what we are trying to accomplish through saving.

    Savings are for short term protection and short term goals.

    When we talk about savings, what exactly are we talking about anyways?

    According to Merriam-Webster, saving means “the preservation from danger or destruction: deliverance.”

    Uhh, that’s intense.

    Scrolls down…

    Savings (pleural) means “the excess of income over consumption expenditures.” Much better.

    That’s about as simple as it gets. Savings is the money you have left over that you didn’t otherwise spend. In Think and Talk Money vocabulary, it’s your Later Money.

    In The Richest Man in Babylon, George Clason described savings with one of my favorite quotes in all of personal finance:

    “A part of all you earn is yours to keep.”

    Translation: you worked hard to earn that money. You should think about keeping some of it.

    Close up of baby girl wrapped in a security blanket symbolizing an emergency savings account learned on Think and Talk Money.

    Actively saving money to fuel your Later Money goals is a non-negotiable step towards financial independence.

    You can use your savings to protect yourself and your family in times of need. You can also use your savings for short-term goals, like paying for a wedding or a downpayment on a house.

    Think of it this way, your savings make it so all those hours you spend on the job- the time away from your family or your passions- was not for nothing.

    What is the difference between saving and investing?

    Keep in mind that savings is different from investments, although both count towards your Later Money.

    Savings is for (1) short term protection and (2) short term fuel for your life goals. Your savings is your security blanket for the here and now so you don’t have to take away from your wealth-generating investments at the wrong time.

    Keep this money in a dedicated savings account (or accounts) so the money is readily available when you need it.

    There is very little, if any risk, involved with saving money. That’s because reputable banks in most countries carry deposit insurance to protect your money. In the United States, deposits are protected up to $250,000 by The FDIC.

    So, how are savings different from investments?

    Investments are assets that you purchase with the goal of making a profit over time. That might be through the stock market, real estate, or any number of other options. Think of investing as the best way to supercharge your wealth over the long term.

    Investing is a major component of overall money wellness, but investing comes with risk. As the saying goes, “you don’t get something for nothing.”

    Because you can lose your money in any investment, it’s not a good idea to expect that money will immediately be there when you need it. That’s one reason why you should have savings distinct from your investments.

    One way to counteract investment risk is to invest for the long-term, so you don’t want to interrupt those investments for short-term goals. This is another reason why we need savings in the short term.

    One final point about saving vs. investing. There is a point when you will have enough saved in the bank that you can solely focus on growing your investments. This is a very comfortable place to be and where I am currently focused on returning.

    Saving is an essential part of overall money wellness.

    To recap, saving money to fuel our Later Money goals is crucial to overall money wellness. Sometimes, we’ll use our savings for protection, like in times of emergency. Other times, we’ll save with a clear goal in mind, like paying for a wedding or a house.

    Saving is not the same as investing, although both are important. The reason we save money, rather than invest it, is so that money is readily available when we need it.

    In our next post, we’ll discuss what to do with the money we are saving for maximum results. We’ll cover some key strategies for what to do with the money you have generated so your savings align with your overall money goals.

    Let me know in the comments below if you’re not completely satisfied with your savings, like me.

    Have you taken any steps to join the 10% of Americans who are completely satisfied?

  • Better at Making or Keeping Money?

    Better at Making or Keeping Money?

    When people learn that I’ve been teaching money wellness to law students, I usually get a reaction like, “I need that class! I know nothing about investments and the stock market.”

    It’s a fair reaction. Investing in the stock market can be complicated. Most of us never learn basic stock market principles, let alone how to manage an investment portfolio.

    It’s also a reaction that has always fascinated me. Yes, wanting to learn about investing is important. But, it’s not where money wellness begins.

    I often wonder, why do people automatically assume that money wellness means investing? There are so many things that we need to get right before we can focus on investing.

    Learning about the stock market wasn’t going to help me when I was struggling with debt. I needed to first figure out how to make better spending choices and get out of debt. I needed to play defense before I could go on offense.

    Yes, investing is important.

    No, it shouldn’t be the first thing we think of when we hear money wellness.

    We’ve hardly mentioned investing so far in this blog.

    Have you noticed that so far in the Think and Talk Money blog we have hardly even mentioned the word “invest”?

    That’s because in order to invest, we first need available money.

    To have available money, we need a budget that actually works.

    To have a budget that actually works, we need honest, powerful life goals.

    Are you starting to see why we first talk about money mindset? Then we moved on to budgeting?

    We will talk about investing once we have a plan to continuously generate money to invest.

    We will soon talk about investing. A lot. Don’t worry. In my money wellness class, we discuss in depth the importance of investing to create wealth.

    Here at Think and Talk Money, we will also talk extensively about investing, including in the stock market and in my preferred asset class, real estate.

    Investing is not as hard as generating money to invest.

    For now, our goal is to establish sound habits so we have real money to consistently invest over time. It doesn’t make sense to learn how to invest until we have a strong foundation in place.

    I think you’ll also find that investing is really not that hard. If learning how to do it on your own doesn’t sound like something you want to do, there are professionals that can do it for you. Whether it’s a good idea to go that route is something we’ll discuss so you can make an informed decision.

    If you do hire a professional to invest your money, you still need to know enough so you can talk to this person.

    Plus, this person will likely tell you that your ongoing mission is to generate more cash to fuel investments. That’s what we’re focusing on now.

    The fun part is once you’ve discovered your motivations and established strong habits, you will consistently have money available so you can invest month after month for the rest of your life.

    You could be a terrific investor. If you only have $1,000 to invest a single time, your upside will be limited. If you continuously generate $1,000/month of Later Money to invest, your options (and your wealth) will grow exponentially.

    My wife and I would not own five properties today if we didn’t first learn personal money wellness.

    My wife and I would not own five properties (11 rental units) today if we had not first learned money wellness fundamentals. I don’t just mean we wouldn’t have had money available to invest, although that is certainly true.

    I also mean we wouldn’t have the skills and knowledge to successfully run our real estate business. If you’ve ever wanted to be a business owner or investor, working on personal finance skills now is critical.

    Maybe that’s not your path. Still, these skills are critical whether you are a consultant, a writer, or a teacher. Would you agree that having money issues and stress at home can distract you from performing your job at the highest level?

    How many hours per year do you work to make money?

    Lately, when people ask me why I’m so passionate about money wellness, I respond with a question of my own that goes something like this:

    “Let’s say we work 2,000 hours per year to make money (40 hours per week, 50 weeks per year).

    We won’t even count all the hours we spend getting dressed and commuting to our jobs.

    We also will pretend we’re not looking at our emails in the evening and on weekends.

    We definitely won’t count the hours we’re staring at the ceiling fan because we can’t sleep.

    OK, so that’s 2,000 hours (plus) per year, to make money.

    How many hours per year do we think about what to do with that money?”

    Let that sink in for a moment.

    How many hours do you work every year to make money? 2,000? 3,000? I’m guessing a lot of those hours are stressful.

    Now, how many hours do you think about what to do with that money?

    Do you spend any hours at all talking about what to do with that money?

    This is why I am passionate about money wellness. Most people spend the vast majority of their lives worried about making money and practically no time at all thinking about what to do with that money.

    No, I’m not suggesting that you need to think about money for 2,000 hours per year.

    What I am suggesting is that even that little bit of time each week spent thinking and talking about money is just as important as the time you spent earning it.

    Think and Talk Money is about encouraging each other to make purposeful money choices.

    Robert Kiyosaki put it best in Rich Dad Poor Dad, “It’s not how much money you make. It’s how much money you keep.”

    If you knew someone that made $1,000,000 per year, and at the end of the year, had only invested $20,000, what would your reaction be?

    What if you knew someone who made $100,000 per year and invested $20,000? Did your reaction change?

    Multicultural group of women stacking hands together - Female community concept with different girls support each other - Girlfriends hugging outdoors encouraging each other to visit think and talk money.

    Think and Talk Money is all about actively thinking and talking about money so we can help each other make informed choices with our hard earned money.

    Whether you make a lot of money or a little money, it doesn’t matter. What you choose to do with that money is up to. It’s your life.

    All I want is for you to make those choices from a position of informed confidence.

    One response to “Better at Making or Keeping Money?”

    1. Kevin Avatar
      Kevin

      Great insight! The foundation is so important!

      Reply

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  • How to Stay on Budget with Two Simple Numbers

    How to Stay on Budget with Two Simple Numbers

    Most of us humans are pretty good at avoiding things we don’t like. The things I’ve done to avoid mayonnaise…

    Budgeting falls into this category of avoidance. Even though most of us can appreciate that budgeting is a crucial step in money wellness, we still avoid it.

    Some of us give it a shot, and usually quit before we notice meaningful improvements. Just as problematic, some of us obsess over our budgets in an unhealthy and unsustainable way. This was me for a while. My obsession was mint.com.

    I didn’t have a healthy relationship with budgeting apps.

    If you used mint.com like I did before it ended, do you also have nightmares about those red tracking bars? Mint.com users know exactly what I mean. Overspend $11 on groceries? Red bar. One too many lunches downtown? Red bar! A last minute Saturday morning yoga class? RED! BAR!

    It still pains me to think about how many hours of my life I wasted trying to recategorize expenditures so those red bars would turn green. If I just move this box of cereal from Groceries to Social Life, that Groceries bar will turn green. Oh wait, now Social Life is red. OK, move those movie tickets to Car Repairs.

    When my wife was still courting me, I introduced her to mint.com. You might be thinking, “Matt, why on earth would you introduce her to something that drove you crazy!?” Valid question.

    She was a good sport and gave it a shot for a little while. Thankfully, she was smart enough to realize tracking every penny wasn’t for her. The whole thing gave her more anxiety about money. Think about that. The idea was to create a plan for her next dollar so she didn’t have to worry about money. All I did was make it worse by introducing her to a budgeting app.

    There’s an alternative to tracking every penny for the rest of your life.

    That experience paved the way for my preferred budgeting method that my wife and I still use today. We discussed this method briefly in our recent Q&A post.

    Please keep in mind this method is for people who have already created a Budget After Thinking and are honestly dedicated to creating fuel for their Later Money. Only when you get to that point will you no longer need to track every penny. At that point, your money motivations will be so strong that you’ll stay on track without needing to track every expenditure.

    If you’re not there yet, don’t worry. You will be soon. Follow my top ten budgeting strategies until good habits become second nature. Then, move on to this simple plan.

    Part 3: How to Win the Budget Game

    My preferred tracking method is a version of zero-based budgeting.

    Zero-based budgeting was first introduced in the 1970s by Peter Pyhrr. (I don’t love the name, either.) The main idea is that every dollar has a job, something we already talked about in our conversation about eliminating disappearing dollars.

    In my version of zero-based budgeting, you don’t need to track every penny. You don’t need budgeting apps or complicated spreadsheets.

    You’ll only need to focus on two numbers each month to know whether you are on track or falling behind. I’ll show you those two numbers below.

    Before you get too excited, I need to reiterate this key point: if you want to succeed with zero-based budgeting, you still need to first create a Budget After Thinking. Otherwise, you won’t be able to figure out the key two numbers that you need to focus on.

    This step is for those people who have already tracked their spending for at least three months, made thoughtful adjustments so their spending is in line with their values, and now know exactly how much fuel they can generate for their Later Money every month.

    OK, so how does this all work?

    I mentioned there are only two key numbers you’ll need to focus on each month:

    1. Your checking account cushion.
    2. Your Later Money transfer amount.

    Let’s explore each number.

    1. Your checking account cushion is your safety net.

    A checking account cushion is the amount of money in your checking account that you don’t plan to spend. The purpose of the cushion is to give you a little breathing room so you can pay your bills, even if you overspend in one month.

    Without the cushion, if you have a tough spending month, you either need to skip paying certain bills or skip making your Later Money transfer. Neither option is acceptable. The first option leads you into debt. The second option halts progress on your most important life goals.

    The checking account cushion gives you protection.

    How much of a checking account cushion do you need?

    How much of a cushion do you need? It depends on whether you have consistent income (regular paychecks), or are paid inconsistently (commissions, freelance, contract, etc.)

    If you are paid with consistent paychecks, I recommend your checking account cushion equal the amount you’ve planned to spend in your Now Money category from your Budget After Thinking (don’t worry, example below). This amount should give you a comfortable safety net without leaving too much money in your checking account that could be better used elsewhere.

    If your pay is inconsistent, you’ll need a larger cushion to cover the larger gaps between pay days. I recommend you have double the amount of your Now Money. Note, you may have to tweak this amount based on your unique situation.

    In our really lost boy example, he received paychecks biweekly. A good checking account cushion was $3,600 (equal to his Now Money).

    This means that there should be $3,600 in his checking account to start each month. At the end of the month, after paying all of his bills and making his Later Money transfers, he should still have $3,600 left in his checking account. That’s his checking account cushion.

    It’s OK if your checking account cushion temporarily dips below the amount you started the month with. This could happen during the time of the month when you pay certain bills, like your rent or mortgage. Don’t worry. The amount in your account will climb back up once you receive your next paycheck.

    A final point: don’t spend this cushion. Fight the temptation to use your checking account cushion to pay off bills or debt. Without that safety net, zero-based budgeting does not work.

    2. Your Later Money transfer is the main reason you’re budgeting in the first place.

    This number reflects the whole purpose of budgeting in the first place: to create fuel for your ultimate goals in life. If you don’t know what your goals are, revisit our conversation on why you should want to be good with money. It all starts with what you truly want from your life and how you can use your money to get it.

    When you’ve created your Budget After Thinking, you’ll know exactly what this amount is. In our really lost boy example, the total Later Money transfers added up to $2,050. In future posts, we will discuss where to transfer and what to do with this Later Money. No matter what, the goal is to put this money to work for you to progress towards your goals.

    By focusing on just these two numbers, (1) your checking account cushion and (2) your Later Money transfer amount, you don’t have to track every penny. You’ll know if you are hitting your goals or falling behind just by looking at these numbers.

    Now that we know the two key numbers to focus on, let’s see how this all works.

    How to ensure you are on track with your money goals with just two numbers.

    Sticking with our really lost boy, he predetermined that his checking account cushion is $3,600 and his Later Money transfer amount is $2,050.

    At the start of the month, that means he had $3,600 in his checking account. Throughout the month, his checking account balance increased when he got paid (our really lost boy earned $7,500 per month). His checking account balance decreased whenever he paid for things like rent ($2,200) and any other bills.

    The checking account cushion ensured that he had enough to cover all of his expenditures throughout the month. For example, if his rent was due on Wednesday, and he wasn’t getting paid until Friday, his checking account cushion ensured that he had enough in his account to pay the rent on time. His cushion might fall temporarily below $3,600, but his next paycheck would soon replenish his account.

    As the month went on, various bills came due. Utilities may be due on the 7th of the month. Credit card bills on the 15th. These payments can all be automated so he didn’t have to actively worry about them. Again, his checking account cushion guaranteed he had enough in his checking account to pay them.

    Towards the end of the month, in a perfect world, our really lost boy would have exactly $5,650 left after paying all of his bills. He could then transfer the predetermined $2,050 of Later Money to his various Later Money accounts. He’s then left with a checking account cushion of $3,600 and is ready to begin the next month.

    This is not a “set it and forget it” budgeting method.

    This is not a “set it and forget it” budgeting method. Think and Talk Money is all about exerting a little bit of mental energy on your money every week. This budgeting method is a good illustration of what that means. You don’t need to track every penny, but you still need to pay attention to your money choices.

    To help you with that, I suggest that you glance at your banking or credit cards apps once a week to monitor your spending. If you use credit cards or electronic payments for most expenditures, it is quick and simple.

    The reason it’s a good idea to glance at your banking apps is to make sure you are relatively close to your spending targets. If you notice that you’re overspending in the first half of the month, you can make the appropriate adjustments before the month ends.

    This small amount of effort throughout the month is worth it. Every time you make that Later Money transfer at the end of the month, you’ll feel exactly what I mean.

    Don’t strive for perfection.

    I said above “in a perfect world” to highlight that we’re not striving for perfection. That’s an impossible standard. One month, our really lost boy might have only had $3,300 left after making his Later Money transfer. That’s fine. It’s a temporary blip that he could easily fix, if he’s honestly dedicated to his life goals. He had a couple of options.

    His first option was to course correct the next month by spending $300 less. That could mean temporary adjustments in his Now Money or Life Money, such as skipping a couple dinners out, doing yoga at home, and buying chicken instead of steak at the grocery store.

    His second option was to replenish his checking account cushion from his specific budget busters savings account. What is that, you ask? It’s a separate savings account to cover you if you have one of these higher-spending months so you can keep your money plan progressing.

    In some months, you will actually underspend.

    Where do you get the funds for such an account? Believe it or not, in some months, your spending will come in under budget. Let’s say our really lost boy had one of these good spending months in January. Maybe he did Dry January and ate all his meals at home for health reasons to compensate for all the holiday celebrations.

    In this example, the result was he spent $500 less in January than he had budgeted for. Instead of leaving that $500 in his checking account (bringing his cushion up to $4,100) where it turns into disappearing dollars, he transferred it to his budget busters savings account.

    Then, when he had a high spending month, he could make a transfer back into his checking account to keep his cushion at $3,600. All while continuing to make his Later Money transfers every month.

    If you constantly run out of money before making your Later Money transfers, this method is not for you, yet.

    Always remember the goal of your Budget After Thinking is to generate fuel for your life goals. If you’re not making these Later Money transfers, you’ve defeated the purpose of having a budget in the first place.

    Don’t feel embarrassed or sad if that happens to you. Take it as a sign that you need to explore your Now Money and Life Money spending to see what adjustments you can make. Once you’ve found those adjustments, you can come right back to my version of zero-based budgeting.

    If you want this plan to work, where you only need to focus on two numbers instead of tracking every penny, you need to be honest with yourself that you’re ready for this.

    Decide for yourself what budgeting method works best for you.

    If you’ve been successful tracking your spending in a spreadsheet or a budgeting app, and enjoy the process, you should continue to do so. If it ain’t broke, don’t fix it, right?

    On the other hand, if you’ve created a Budget After Thinking and consistently hit your Later Money goals, you’re probably ready to stop tracking every penny, if you’d like.

    To recap, my version of zero-based budgeting is for those people who want to continue to fuel their Later Money goals without the anxiety of the spreadsheet. Instead, focus on those two numbers: (1) your checking account cushion and (2) your Later Money transfers. This is what I’ve been doing for years and it has worked.

    Happy boy with a bundle of money dollars cash who has a checking account cushion and Later Money.

    If your cushion falls short one month, that’s OK. We are not striving for perfection. Make up for it the next month or use your budget buster savings account to replenish your checking account. And, keep making your Later Money transfers.

    Has anyone else experienced mint.com anxiety? Are you currently using a budgeting app? How do you like it? Has any tried zero-based budgeting?

    Let us know in the comments below.

  • How to Make a Budget After Thinking

    How to Make a Budget After Thinking

    In Part 1 of our series on budgeting, we’re going to learn that the art of budgeting is having a plan for your next dollar before you earn it. That way, you avoid having disappearing dollars.

    Here, we’ll learn how to create our baseline budget based off of our current personal situation. Wherever you currently are in life, you can then make adjustments to your spending based on what you truly want.

    In Part 2 of our series on budgeting, we’ll use a real life example to work through the budgeting process together. Through this example, you’ll see how even seemingly minor adjustments can make a big impact to your budget.

    In Part 3, we’ll take a deep dive into my top 10 strategies for making thoughtful adjustments to our budgets so we can add more fuel to our financial and life goals.

    In the end, I’ll show you how to use the information you’ve learned about yourself to create a lasting money plan that does not require you to track every penny. What I mean is that if you can practice these budgeting tips for just a little while, you actually won’t need to budget anymore. That’s when thinking and talking about money starts to be a lot of fun.

    Let’s start with a question:

    What would you do right now with $20,000.00?

    What would you do right now with a $20,000.00 bonus that was unexpectedly deposited into your checking account?

    No strings attached. It’s your money to do anything with.

    Answering this question should be fun. It’s a free $20,000.00!

    But, my guess is that if you thought seriously about it, you didn’t have much fun at all.

    Many of us likely struggled with what to do. We want to do the right thing, but we don’t know what that right thing is. Should we pay down debt? Should we invest? Take a vacation? Do nothing?

    Do you have a plan for where your next dollar is going?

    The reason we struggle with decisions like this is because most of us don’t have a plan for where our next dollar is going. What ends up happening is we do nothing. Our money hits our checking account, we spend it on this or that, and pretty soon that money has disappeared. We haven’t used the money to advance any of our priorities. It’s just gone.

    To me, this is one of the most important money mistakes that we need to fix right away. Having a plan for our money, before we earn it, is essential if we want to reach our goals. With a plan, we can eliminate the disappearing dollars with confidence that our money is being used to serve our purposes.

    Budgeting is about having a plan ahead of time where your next dollar is going.

    And, that leads us to budgeting. The word “budget” is synonymous with “plan”. The art of budgeting is to know what you want to do with your money before it hits your checking account. Otherwise, it’s too late. Those dollars will disappear.

    I teach my students that to create a budget, you need to first study your own personal situation to figure out where your dollars are currently going. Then, you can figure out a plan for how to use your next dollar before you earn it. This applies not just to bonuses or other unexpected dollars, it applies to every dollar you earn.

    When you put the time in to study your own habits, you can then create a realistic budget. When you have a realistic budget, you will have confidence that your dollars are working for you.

    Some dollars will be used to pay your ordinary life expenses, some dollars will be used for all the things in life you love, and some dollars will go to your financial goals.

    That’s all there is to it.

    Let’s take a look at three steps to take when first creating a budget.

    Step 1: Track your spending for at least 3 months.

    I recommend everyone, regardless of where you are in life, start with this first step of tracking your spending for at least three months. Without knowing where your money is currently going, you won’t be able to think about adjustments.

    I won’t lie to you. This step can be hard and you probably won’t like it. This is the step that makes people think budgeting is a nasty word. I get it and don’t blame you for having that reaction.

    Still, there’s no getting around this first step. Remember, you don’t have to budget forever, just long enough to learn your own behaviors towards money.

    Please know that many of us struggle with this first step. You might not like what you learn by tracking your spending. When I first started budgeting, I learned that I was $20,000.00 in debt and was spending way more than I earned. That wasn’t fun, but I’m happy that I put in the effort to find my blindspots and make adjustments.

    I often think to myself, “Where would I be today if I didn’t go through this process 15 years ago? How much further into debt would I have fallen?”

    Talk to your people as you go through the budgeting process.

    One last thing, budgeting is one of those areas where it can really help to talk with our people along the way for support and encouragement. You don’t have to budget in secret. We’re all in this together. Put the mental energy into this step, so you can stop wasting mental energy worrying about money and start getting energized thinking about money.

    In Part 2 of our budgeting series, we’ll talk about the different ways you can track your spending. I’ve used apps, spreadsheets, and even the notes function on my phone. The good news is, tracking your spending is easier today than it’s ever been.

    Regardless of how you track your spending, be honest with yourself. If you intentionally or mistakenly leave out certain expenditures, you won’t learn where your money is actually going. A budget, which is just a plan, is only as good as the data it’s built off of. Be honest about your data.

    One quick note: Budgets are usually done monthly, so you’ll want to create a separate accounting for each month you tracked. The reason we track three months of spending is so you’ll be able to identify any patterns or inconsistencies in your spending from month-to-month. This helps ensure you’re making decisions based off the best data possible.

    Step 2: Separate your spending into three three main categories.

    Great work completing the first step! That wasn’t easy, but you did it.

    Now that you have tracked your spending for three months, you can assign each expense into separate categories. Most personal finance experts agree, though we have different names for each category, that you should divide your money into three main buckets. I refer to these buckets as:

    1. Now Money
    2. Life Money
    3. Later Money

    1. Now Money

    Now Money is what you need to pay for basic life expenses. These expenses include housing, transportation, groceries, utilities (like internet and electricity), household goods (like toilet paper), and insurance. These are expenses that you can’t avoid and should be relatively fixed each month.

    2. Life Money

    Life Money is what you are going to spend every month on things and experiences in life that you love. This bucket includes dining out, concerts, vacations, subscriptions, gifts, and anything else that brings you joy.

    We can’t be afraid to spend this money. This bucket is usually what makes life fun and exciting. The key is to think and talk so you are spending this money consistently on things that matter to you.

    3. Later Money

    Later Money is what you are saving, investing, or using to pay off debt. This bucket includes long term goals, such as retirement plan contributions (like a 401k or Roth IRA), college savings for your kids (like a 529 plan), emergency savings and paying off student loan or credit card debt. This bucket also includes any shorter term goals, like saving for a wedding or a downpayment for a house.

    Most fun of all, this bucket includes any investments you make to more quickly grow your wealth, like investing in real estate or the stock market.

    You’ve probably guessed it already. Later Money is the key category that fuels your ultimate life goals, like financial independence. The more you fuel this category, the faster you can reach your goals.

    Don’t worry about assigning a percentage to each category.

    I have intentionally not recommended target amounts or percentages to allocate to each of your three categories. The reason is because of what I’ve learned from my students over the years. I’ll lay out my full reasoning in a separate post.

    The short version is that in my experience working with law students, assigning target percentages for each category is counterproductive. When I used to teach my students to aim for certain percentages in each category, I could tell that they would get discouraged as soon as I put the numbers on the slideshow. I completely understand why.

    Each of us is starting in a different place. If you are currently spending 80% of your monthly income on Now Money, it’s not helpful to have someone tell you to create a budget that automatically drops that level to 50%. My students would tune me out as soon as I put those numbers on the board.

    Now, I teach my students to think and talk about their current personal realities and aim for steady and lasting improvements. I want my students to create a plan that will last, not an unrealistic plan that they give up on after a few months.

    So, whatever amount you’re currently spending in each bucket, that’s what we’re going to work with as we move on to step 3.

    One other thing before you move on to step 3: don’t get hung up stressing about what type of expense goes into each category. Sometimes, it gets tricky. Do clothes you buy for work count as Now Money or Life Money? Don’t stress. It doesn’t really matter. It’s not worth the mental energy thinking about it. Just stay consistent and move on.

    If you still want a target, aim for 20% of your income added to your Later Money each month.

    All that said, I know that some of us operate better if we have a specific target in mind. If that’s you, the conventional wisdom is to aim for 20% of your income added to your Later Money each month.

    Targeting 20% savings each month was popularized in Elizabeth Warren’s book, All Your Worth: The Ultimate Lifetime Money Plan, first published in 2005 (before she was Senator Warren, she was a law professor and author). Senator Warren advocated for a 50-30-20 budget framework with 50% going to fixed costs (what I call “Now Money”), 30% going to wants (“Life Money”), and 20% going to financial goals (“Later Money”).

    Most personal finance experts agree that the 50-30-20 framework is a solid plan for your budget.

    In theory, I agree.

    In reality, I’ve become convinced through working with my law students that the 50-30-20 framework does not cut it in today’s environment. Like me, some experts have also recognized a 60-30-10 framework may be more appropriate today.

    While I agree the 60-30-10 framework is more realistic, my experience has taught me that assigning rigid percentages is just not a practical framework for most people at the beginning of budgeting process.

    Step 3: Make adjustments so your spending better aligns with your true motivations and desires in life.

    OK, so now that you have assigned your spending to each of the three categories, the next step is to think and talk about your current habits and whether you’re spending matches your true motivations and desires in life.

    If you decide that your spending does not match your life values, then it’s time to make some adjustments. What kind of adjustments?

    We’ll talk much more about how to make those adjustments in Part 2 of our budgeting series. In essence, my budgeting philosophy is to aim for steady and lasting improvements based on your current reality and your ultimate motivations. What does that mean?

    Your budget is really just about finding fuel for the best things in life.

    small tree growing with sunshine in garden like small money choices before big.

    This is where we circle back to the importance of having a clear understanding of what we want out of our money. Money is a tool. Ask yourself:

    “Is your current spending aligned with how you want to use your money to fuel your goals and ambitions?”

    If not, you can make incremental adjustments as you progress towards your ideal spending alignment.

    The idea will be to continuously add more fuel to our Life Money and Later Money, the buckets that represent the things we love the most (Life Money) and our most important life goals (Later Money).

    You can make small adjustments, which are usually easier and faster to put in place. These adjustments might include dining out a bit less, cutting out a concert, or cancelling a gym membership or subscription you don’t use.

    You can also make big adjustments, like moving to a cheaper part of town or getting rid of you car.

    Small or big, the key is that when you make these adjustments, you repurpose that money in a thoughtful and intentional way. You’re now starting to align your budget with your money motivations.

    With each thoughtful decision, you’re progressing towards your best money life. Most importantly, you’re learning about yourself and developing lasting habits. You won’t get discouraged and give up on budgeting.

    As we wrap up Part 1 in our budgeting series, keep the three initial steps in mind.

    • Step 1: Track your spending for at least 3 months.
    • Step 2: Separate your spending into 3 main categories.
    • Step 3: Make adjustments so your spending better aligns with your true motivations and desires in life.

    As you start to implement these steps, you’ll start to have a clearer picture of how your money can work for you.

    And, the next time you’re asked what you would do with $20,000.00, you’ll know the answer ahead of time because you have a plan in place.

    Answering the $20,000.00 question will be fun. No more anxiety-inducing, disappearing dollars.

  • You Should Want to be Good with Money

    You Should Want to be Good with Money

    So far, we’ve talked about why we need to think about money, why we need to talk about money, and Italian beef. Before we dive deep into budgeting, saving, paying off debt, and investing, we need to make sure our money mindset is locked in.

    I hope you’ve started thinking about why you want to be good with money. This will be personal for all of us and may change with time. The more you think and talk about why you want to be good with money, the clearer your motivations will become.

    Three powerful reasons why I want to be good with money:

    1. Money can give you choices.
    2. Money can give you personal power.
    3. Money can give you time.

    1. Money can give you choices.

    This may seem obvious, but when you have money, you have choices. You can choose where to live. You can choose who you work for, or can work for yourself. You can choose how you eat, exercise, relax, and travel.

    This holds true whether you make $50,000 or $250,000. Of course, your options may be different. The point is that when you’ve made good money choices, you’ll at least have options.

    2. Money can give you personal power.

    This is another way to say that money gives you control of your life situation. If you are in a bad relationship, a bad job, or just need a change, money gives you the personal power to do something about it.

    3. Money can give you time.

    When you have enough money to be truly financially independent, you have earned the freedom to do whatever you want with your time. You can spend your working hours at a job that is meaningful to you. You can spend more time with people who are meaningful to you.

    It’s been said many times, “time is our most precious resource.” When you have money, you can buy your time back.

    an hour glass running empty can be fixed because money gives you time back
    Photo by Aron Visuals on Unsplash

    The most important part of talking is listening.

    From the time we’re in diapers, we start learning by observing people older than us. As my family prepares to leave the house, my son has recently started chanting “Let’s roll! Let’s roll! Let’s roll!” Yup, that one’s on me.

    The same idea applies when it comes to life and money. I’ve mentioned before how much I’ve learned about life from listening to my clients suffering with mesothelioma. I’ve learned even more by listening to my family, friends, and mentors.

    When you listen to enough people with more years behind them than you, certain themes continue to surface, like the importance of family. You’ll hear about creating experiences and memories, usually involving vacations or time with friends.

    One thing I’ve never heard? Someone saying “I wish I spent less money on doing the things I loved.”

    You don’t have to agree with everything you hear, but the act of listening will start turning the wheels in your own mind. And when your wheels start turning, you can’t be afraid to spend money on the things that make you happy.

    Why do we need to actively think about the things that make us happy?

    A sneak peak of how I look at budgeting.

    I said we weren’t going to discuss budgeting yet, and we won’t. “Budgeting” is kind of a nasty word. Nobody likes to say it out loud, let alone aggressively do it each month. This is why we spend so much time in the beginning talking about our money mindset.

    A budget is worthless if you are not motivated to stick to it. Sure, you may stick to your budget plan for a month or two, but you’ll fall back into old habits if you haven’t prioritized what matters most to you.

    We’ll save the particulars for another day. A sneak peak at how I teach my students:

    Like it or not, everyone needs a budget… for a little while. Once we’ve identified what we spend money on and made some thoughtful choices, most of us don’t need a rigid budget.

    If you’ve thought and talked enough about your true motivations, you won’t need a budget either. Each month, you will take care of your obligations, grow your net worth, and use the rest of your money to buy things you love and to create experiences.

    Talking money should be emotional.

    If you’re being honest with yourself, talking money should be emotional. Remember, most of us exert mental energy pretending we’re not worried about money. My challenge to you is to exert that same energy into figuring out why we behave in certain ways when it comes to money.

    The reason it matters is because we’re soon going to be talking in detail about budgeting, which is just the process of making thoughtful choices about how we spend our money. If we don’t know why we choose to spend in certain ways, we won’t be able to make lasting adjustments to our budget.

    Have you ever thought about why you dine out?

    people sitting beside brown wooden table thinking and talking about if this was money well spent.
    Photo by Kevin Curtis on Unsplash

    Let’s look at an example to start prepping ourselves for the budgeting process. This is a good time to revisit one of the main principles when talking money with your people: no judgments allowed. We’re not looking to shame ourselves or each other. We are aiming for understanding so we can make thoughtful decisions.

    Say you’ve looked at your monthly spending and realize that you’re spending a lot of money dining out. The key to creating a budget you will actually stick to is actively thinking about why you spend so much money dining out. You might learn that dining out is an essential part of your best life. You might learn it’s really not.

    Ask yourself these questions:

    Is there an emotional reason you dine out frequently, like it makes you feel successful? Or, you like spending time with friends? Do you get joy out of trying new dishes?

    Maybe it’s something else entirely and unrelated to your emotions. Maybe you don’t have time to cook at home because of your work schedule? Maybe it’s just laziness?

    It might have nothing to do with how often you eat out, but where you choose to eat and what you choose to order. Do you order a bottle of wine with dinner? Could you have drinks at home beforehand instead?

    When you honestly think about and answer these questions for yourself, you can start to make thoughtful decisions on whether that spending matches your priorities. If it doesn’t, then it’s an area for adjustment.

    And, that’s really all that budgeting is. Not so nasty, right?