Reflecting On The Past And Envisioning The Future

Looking Back And Head FinanciallyToday is a great day. A year has just been wrapped up, but we have a brand new year that starts now.

Rather than talking about the common New Year’s resolution mumbo jumbo, I’ve decided to take a more serious look at both the past year and what is ahead in the future for myself and my family.

You can and should do the same, whether you decide to do it today or some other day. Here’s how we reflected on the past and envisioned our future financially.

You can do a similar exercise with the other parts of your life, but since we like to talk about finances here, that’s what I’m sticking to today.

Reflecting On The Past

The past year has been an amazing year for my family. We’ve thought back to where we were financially just one year ago and were surprised by how much things have changed.

Think about where you financially a year ago. If you keep track of your budget or net worth, look back to your old documents and see how you were doing versus how you’re doing today.

The changes might surprise you pleasantly or shock you in a negative way. Regardless of what has changed from a year ago to today, take a minute to reflect on what these changes mean for your family.

If the changes were good, plan to continue changing in a positive manner. If the changes were bad, try to figure out where things got off track and see how you can get back on track to a better financial position.

Personally, we’ve made some huge strides in this past year. When the year started, we were still fiercely battling my wife’s student loan debt. Today, that debt has thankfully been dead to us for many months. This year will be the first year that we’ll have no debt other than our mortgages, which we don’t plan on paying off ahead of schedule.

As far as our assets go, we were able to fully fund our emergency fund and fund an investment emergency fund as well. This emergency fund is based on our spending so keeping our spending low has really helped us tackle this goal quickly.

We’ve continued to keep our expenses low, even though we’ve finished paying off my wife’s student loans. For now, we’re trying to get ahead with our investments and retirement and catch up a bit after focusing on the student loans for so long.

Our income has remained pretty steady this year but my wife has made a pretty awesome change that will hopefully pay off big down the road. Tori has started her own photography side hustle. Even though she’s just getting started, her photographs are pretty awesome and we’re already starting to see some income come in, which is pretty sweet.

Envisioning Our Future Yet To Come

After reflecting on everything that has happened to us this past year through our assets, liabilities, expenses and income, it was only natural for us to look forward to our future. You should do the same for your family as well to see what opportunities and roadblocks may lay ahead in the year or years to come.

While no one can predict the future, good or bad, it makes sense to prepare for both the best and worst case scenarios. We looked at our plans should something awful happened such as job loss and we’re comfortable with our preparations at this time.

Rather than base our plans on the absolute best or worst that could happen, we decided to take the middle road while envisioning our future. We expect our assets to continue to grow as we invest more into our taxable and retirement accounts in the immediate and long term future. We don’t have any plans to move, so the future value of our home is irrelevant to us right now.

As I mentioned above, the only liabilities we have now are our mortgages on our home and rental property. We’re not planning on paying either off on an accelerated schedule, so the plan for the future is to pay these off according to our 30 year mortgage amortization schedules.

We expect our income will continue to grow in the years ahead. My wife’s photography side hustle should help. I hope to continue growing my freelance writing and blogging side hustles. Between these side hustles and our jobs we should continue to remain in decent shape as far as our income goes. (If you’re looking to hire a writer, check out my Hire Me page!)

Expenses are the one category that I think will change significantly in the near future. We have been waiting to make some larger purchases and we’ve started to loosen up our budget a bit to account for these one time expenses. Luckily, they aren’t expenses that will raise our future expenditures on a regular basis. Instead, they’re one time home improvements or purchases of furniture that will last us many years into the future. No new cars for us!

Time To Hear About Your Financial Past And Future

I’d love to hear about your 2014 and what you envision for your family’s future. Feel free to share as much or as little detail as you’d like either in the comments below, or you can email me directly if you’d like. Here are a few things to keep in mind when reviewing your past or future:

  • How have/will your assets change?
  • How have/will your liabilities change?
  • How has/will your income change?
  • How have/will your expenses change?
  • What intangible changes have happened/will happen?

Here’s to another financially successful year for us all and another great year of Money Manifesto!

Photo by: foxypar4 Text added by: Lance Cothern

My Goal To Keep My Downsized Life

Today’s post is by our regular Wednesday contributor, Catherine Alford!

For the past few years, I’ve been living in a tiny apartment on a tiny island with a tiny closet and not much personal space to speak of.

It was a lot to adjust to at first, but slowly over time, I’ve grown accustomed to my downsized life. I rarely acquire anything new, unless it’s food at the grocery store, and I’ve had to think hard about new things I want to bring inside.

Two years of living like this has totally changed me. I’m not really tempted by e-mails from my favorite stores anymore, and I’ll only buy something if I really, really want it.

The only thing is that being a minimalist is easy when you’re on an island far away from the developed and fast paced world of the U.S.

I know when I move home in just a few weeks, I’ll experience a bit of reverse culture shock, and I’ll have to really rein in the spending.

Here’s how I’m going to do it:

1. Only Shop When I Need Something

Before I moved to Grenada, I used to go shopping just for fun. It’s a great way to pass the time, if you can afford it, but it’s one of the things that contributed to my credit card debt (which I have since paid off.) So, I’m only going to shop when I need something, and I’m going to try to avoid the really serious temptations, like Target.

I know myself, and there’s no way I can go into Target and buy just one thing, so I just need to stay away – far away – until I absolutely have to go for something.

2. Continue to Online Shop

I’ve had to ship things to my parents for the past few years for them to ship to us, things like the soap that we use and the specific type of makeup that works for my sensitive skin. I’m going to keep this up because I know if I go into the store to look for my make-up, I will come out with a new lipgloss or two and who knows what else (just because of the sheer excitement of having a store like that to go to.)

So, by buying what we need online just like we have for the past two years, I can stick to purchasing the one item I need. There’s no reason to get anything extra.

3. Forget the Joneses

I have some pretty fabulous friends with amazing taste. Not that my friends in Grenada don’t have great taste, but we’ve all been living on an island where no one cares about the car your drive or the tags on your clothes.

The US is different, and when I interact with people or notice their belongings, I’m going to have to remind myself of how peaceful it was on my little island where materialism wasn’t on anyone’s radar. I know I’m going to want things, especially because I’ve gone so long without nice malls and access to so many high-end products. Yet, I’m even more committed to my savings goals, so I have to resist.

Ultimately, moving back to the U.S. will be a process just like anything else. I will have to figure out how to fit back in to American culture after living somewhere completely different for a very long time. I’m sure there’s going to be a lot of excitement moving back to the plentiful U.S.A., but there’s also going to be some challenges when it comes to spending and my budget that don’t exist in my life right now. I’m ready for it, but I’m sure it’ll be an interesting adjustment!

Do you currently have a downsized life? Or, do you want one?

How Much Money Is Enough Money?

Today’s article is by Catherine Alford, our regular Wednesday contributor.

I’ve thought about this question quite a bit, wondering how much money it would take for me to feel like I had enough. I know that over the past few years, I’ve developed a minimalist lifestyle, and I just don’t need much.

This wasn’t always true, but we have really altered the way we live since moving to the Caribbean, and I hope that we can maintain this way of life for a very long time, even after moving back to the States.

Essentially, our home is small. We don’t buy a lot of clothes. We don’t have a TV. Yet, I still get anxious every time my checking account dips below a certain number, and it makes me want to hustle more and more to get it high again.

When I think about how much we’ve grown and how much we’ve saved in the last few months, I can’t help but feel proud and a little more comfortable than usual. Still, I wonder if we have enough, especially when thinking about starting a family. Is the amount of income we currently bring in going to be at a level that can sustain us for the long run?

How Much Money Is Enough for Me?

I guess to me, having “enough money” means that I can comfortably pay my bills without worrying. It means I don’t have a panic attack every time I swipe my debit card. I know it’s going to work, and that I have a lot of room to spare. It wasn’t always that way for me, so I tend to appreciate those moments more.

At the same time, I do daydream about what it would be like to get a massive lottery payout and wipe out all of our student loan debt. I swear I would be one of those responsible lottery winners who would pay off all their debt, invest a ton of it, and stay quiet. I wouldn’t even move apartments, but I’d totally hire someone to help me clean the house every day!

It Varies From Person to Person

I suppose how much money all of us actually feel is “enough” will vary from person to person. Some people need huge savings accounts to feel comfortable. Some don’t worry about it at all. Some have so much money, they don’t care what they spend. Some spend their whole lives trying to become millionaires.

I feel like I personally don’t want the responsibility of being a multi-millionaire, high profile person. I’d rather just pursue my own goals, try to work for myself and bring in a reasonable income, save where I can, and try to become an “eventual millionaire,” that is, someone who can comfortably retire with that amount and spoil their grandkids with it.

So, enough about me. I want to hear from you. Do you have an amount in mind for how much money you think is enough money for you or your family? Let’s hear the number!

Three Splurges I’ve Made This Year

Today we welcome our regular Tuesday contributor, Catherine Alford.

Even though I’m typically a frugal gal, I do tend to splurge from time to time. Usually I splurge to make my life a little easier in some way or to do something enjoyable.  My splurges are usually something that I’ve saved up for or am able to do because of my side hustles. We don’t spend a lot of money on clothes or gadgets or anything like that, so I figure it definitely evens out in the end!

So, just for fun, here are some of the splurges I’ve made this year:

1.    Sending My Husband To India

This past summer, my husband went on an incredible three-week study abroad experience to India. It was definitely a splurge, at just over $4,500 for the whole trip + airfare. However, he had an amazing time, and it was something he always wanted to do. I was more than happy to hustle and work with him to trim our budget to save so that he could have such a memorable experience.

2.    Splitting My Best Friend’s Plane Ticket

While my husband was in India, I split an international plane ticket with my best friend so that she could come visit me in Grenada. We each ended up spending around $400, and it was so worth it. She was able to stay with me in my tiny apartment since my husband was gone, and we just made a ton of meals at home and did free activities like go to the beach.

We even used my bag of coins to buy two big burgers at the local pool. Luckily, paying for things in coins doesn’t embarrass my best friend, which is why I love her. Plus, she is a true introvert like me, so she just wanted to lounge by the pool and enjoy spending some time together. It was definitely well worth it!

3.    Renting a Car

Renting a car has been my biggest splurge all year, more than either #1 or #2. Prices are so marked up here in the Caribbean that it costs a whopping $500/month to rent our vehicle. I went an entire year and a half without a car here, and it was really challenging to spend two hours taking two buses to go to the grocery store.

As busy as I’ve been lately, I can’t afford to waste time like that and risk the buses not showing up because they are on island time. The car has given me an incredible amount of freedom, and it’s the only thing I did differently after getting a promotion last year.

Of course, I’m sure there will be more splurges in my future. One of my favorite things to spend money on is traveling, and I hope to visit someplace new next year in celebration of my 4-year anniversary. Until then, we’ll be as frugal as always, pinching our pennies and trying to save for our next fun adventure.

What are some things that you splurge on? Nice sheets? Organic Food? Fancy shoes? Spill it.

WARNING! Returning To Work From Disability Can Be Difficult!

After months of being on short-term disability for her second foot surgery, Tori was recently approved to head back to work with no restrictions. YAY! To say we were both excited would be a massive understatement.

Tori was excited to get back to work and the challenges that her work as a nurse provide her every day. After all, sitting around the house for months, many of which she couldn’t put any weight on her foot, is not as fun as many would think it would be. Unfortunately, she’d run into a challenge before she even made it back to work.

Naturally, we were both excited about the financial benefits of Tori returning to work, too. While Tori was on disability she only received 80% of her technical 0.83 Full Time Employee status (which equates to 26.56 hours pay per week)  despite the fact that she often worked 40+ hours in any given week. We were fine financially, but it will be nice to be able to pay more toward her student loans when her income gets back to normal. But that didn’t happen as planned either.

Now that Tori was cleared to go back to work, we thought she’d be making money and taking paychecks to the bank as soon as her back to work date arrived. That’s where we made our mistake and we’re going to share our story so that you won’t fall into the same trap.

The Red Flags We Missed

Tori met with her human resources department prior to her second foot surgery to see how it would affect her job. The meeting was successful in our opinion. Her HR department said that they would reemploy her at her place of work upon her return from surgery in a nursing position of some sort, but her current position wasn’t guaranteed.

Her HR department said to simply inform them 2 weeks before her return to work date and she’d be able to start on her return to work date. We didn’t get anything human resources said in writing and that was the first red flag we missed.

If you’re out on disability longer than FMLA leave allows (12 weeks), then your job is not guaranteed to be there for you when you return. Due to the nature of Tori’s foot surgery, she was out for longer than 12 weeks. In fact, she was out of work for nearly 5 months! That was the second HUGE red flag we missed.

Getting Your Job Back Isn’t Guaranteed

In case you didn’t get the drift, Tori didn’t get to go back to work on her return to work date. Tori was proactive and told her human resources department of her return to work date as soon as she found out, which was nearly a month and a half in advance.

Despite the generous amount of time Tori gave to her human resources department, her return to work date came and went and she was still at home on the couch with no position and no pay. She had to use a week of her paid vacation time in order to receive any money at all and she definitely wasn’t taking a vacation.

In fact, her human resources department was treating her like any other person interviewing for a job, rather than giving her the promised position. Tori had to take another drug test, pass another background check and actually interview for multiple positions within the hospital. They even made her interview for the same exact position she left. She wasn’t guaranteed to be picked for any of the positions, including her old position.

Another week went by, this time there was no more vacation time to take and there was no pay. Luckily, this was the last week Tori would have to go without pay because, at the end of the week, she was offered a couple of different positions which she gratefully accepted. Two full weeks after her back to work date, Tori was finally back to work.

Lessons To Learn From Our Experience

Lesson #1: Just because you’re cleared to go back to work doesn’t mean you’ll have a job waiting for you. We’re lucky that Tori was offered a position only two weeks later than we expected. If there were no open positions she could have had to wait even longer!

Lesson #2: Prepare for the worst and hope for the best. Once we knew that Tori wouldn’t be able to take any more vacation time, we knew her pay was no longer part of our income for the foreseeable future. We didn’t have a crystal ball and had no clue when she’d return to work.

Lesson #3: Have an emergency fund. We do have an emergency fund which would have covered us for quite a while, but we immediately cut back on any extra discretionary spending. We were preparing for the worst case that she might not work for months.

What would you have done if you were in our position? Would you have had some savings to get you through the time with no income?