Happy New Year, friends!

Just had a randomly refreshing chat with a fellow coffee shop goer, and as things tend to go we ventured into finances and the words that came out of his mouth were outstanding, lol… So much so I had to stop him mid-sentence a couple of times to make sure I got his phrases right!

Here were some of the highlights from our convo, in *his own words* as best as I can remember…

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“I would rather play chicken with my bills than with my savings”

Instead of spending on “wants” first like I’ve done all my life, I flipped it around and now SAVE first and pay bills second. Then if there happens to be anything left over, I use that to buy any “extras” I might want.

I went from not being able to save $1,000 and a credit score of 580, to having over $13,000 in the bank and a score of 730 within one year!

There were a handful of things that led to this, but it was mainly re-ordering my priorities and paying myself first that got me going in the right direction.

“I’ve gone to a more “spatial” system of managing my cash flow”

Another reason I was able to save so much this year was because I drastically changed my management system. Instead of having everything in 1-2 accounts, I’ve gone to a more “spatial” system.

What I mean by that is I spread my accounts across multiple banks that all serve a specific purpose:

1. I have one account for my short-term savings
2. One account for my long-term savings
3. One account for my bills
4. And then one account for my spending/wants.

My business banking looks similar: one account for savings, one account for bills, and another account for taxes (I pay quarterly). It’s a lot to manage, but it’s brought so much peace and savings.

“I threw away my debit cards”

The first thing I did when I started re-arranging everything was to move all my savings into a brick and mortar bank that had no online access. This way the only way I could access my money was by going there in person. I did get debit cards, but I immediately cut them up and threw them away.

This has immensely strengthened my discipline, and partly why I was able to go from $1,000 to $13,000 so fast. It took me over 30 years to save my first $10,000 and now the hardest part is over!

“I spend a lot of money looking for women”

Over the course of 3-4 years I’ve spent $40,000+ looking for love, or about $1,200/mo.

Part of that goes to dating apps like eHarmony (which I initially balked at as it cost me $300!), but most of it comes from just doing my best to be “visible.” So lots of eating out and hanging with friends, visiting bars/community events/etc. You have to put yourself out there if you truly want to meet people.

I initially felt bad about spending all this money with no savings in the bank, but later I realized I was prioritizing what I wanted and I became okay with it. Now I could have been more *efficient* with the way I went about it, but I am proud to say it worked out in the end and I will be getting married at the end of this month! Ironically, to a woman I found on eHarmony!!

(Editor’s Note: This was the most interesting part of the whole conversation, haha… As someone who met their partner years before online dating and apps came around, I’m always fascinated by the mixture of tech and love. And really how much dating seems to cost in general??! And I’ve surely never met anyone who has TRACKED IT ALL, lol… Probably exactly what I would do if ever back in that situation )

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So basically, yeah – most stuff we’ve heard before, but in much more entertaining ways ;)

1) Save first, spend later

2) Build a system that works for you!

3) Make yourself more “visible” when you want something. Whether it be love, business, career, you name it. If you’re not putting yourself into the position to *receive,* you’re limiting yourself! Nothing great has happened sitting on your couch – you have to put yourself out there and tell the world what you are looking for!

(This is exactly, btw, why I choose to do my projects out of coffee shops. I never know who I’ll run into or what type of magic might happen! And surely this blog post would have never been created, so who knows what you would be reading right now??! Lolol…)

At any rate, all good things to think about as we head into the new year here :)  Will you consciously place yourself in situations which allow you to get closer to your goals or farther away from them? Are your management systems still serving you okay, or is it time to blow them up and start from scratch? Where will you be putting that first dollar from your next paycheck? If it isn’t to YOU, you need to re-read this whole blog post! ;)

Your F.G.A. (Financial Guardian Angel),

[This post, I would rather play chicken with my bills than with my savings, was first published by J. Money on Elite Edge Money]

Got this note recently, and it reminded me what a difference adding a little color to things can make ;)

Hi Jay,

I just wanted to take the time to thank you for the free template that I found on YouTube.

I think this will get me to value money a lot more and I really like how you used “sexy income” because I think it’s a great mindset shift to make when valuing money and finance.

Thanks again. I’m really looking forward to using this everyday! I think I might add-on a daily log of my expenses and also even enter notes as to why I decided to take on that expense.

Take care.

David

Love it!

And as you can see from the snapshot up top the spreadsheet is nothing fancy, but boy – look at all that color!! Literally and figuratively! Lol..

I remember seeing a similar one 15 years ago before I even started this blog and wow did it make all the difference in the world to me. Again, not because it was set up differently or better or anything, but just because it was so bold and happy and *inspiring* looking! It taught me you don’t always have to stick with the tried and true (and boring!) with this stuff. It’s fine and it’ll work, but you’ll have a MUCH better chance sticking with it if you have some fun along the way :)

And how cool this guy wants to take it a step further and add in expense logs* to it?! It’s all about adapting it to your own needs for better motivation… In fact, this entire spreadsheet was built out of that same one I found all those years ago, just tweaked more to my liking with the colorful words and addition of a built-in net worth tracker! Which was the element that REALLY kept me going year after year, until I eventually just focused on that part only and got rid of my budget altogether

At any rate, you can check out this spreadsheet, and download it (for free), below if you’re looking for a new one… I always recommend *manually* tracking your finances for at least 3 months until you get a good sense of it all before moving to more automation:

J’s Financial Snapshot Spreadsheet

And be sure to tweak it away! There are no rules with this stuff – it’s your world, baby!! Do what you need to do to stay motivated

*The expense logging reminded me of another idea: adding notes to your net worth timeline! Here’s what mine looked like back in April of 2019 – it’s an interesting exercise to go down :)

And here some other juicy extras you can track in your spreadsheet as well:

• Your FI date
• Your credit score
• Your Debt-to-income ratio
• Your Lifetime Wealth Ratio (Net Worth ÷ Total Lifetime Income Earned!)
• Net Worth forecasts
• And my personal favorite –> the years left until your expected death ;)

Happy tracking!!

[This post, Sexy income., was first published by J. Money on Elite Edge Money]

Morning!

I hope you’re in search of some eye candy today as I’m serving it up hot! ;)

Stumbled across a bunch of ridiculously silly, yet somewhat helpful!, videos we created for All-Star Money last year, and thought you might enjoy the change from my novels here lately…

These came about from pouring over 200 articles a day in the space, and then plucking out my favorites and doing a little skit around them. Which looks like they may have only taken about 17 minutes to produce, but oh no! These puppies took around 10 hours total EACH by the time we concepted them, wrote out the script, set up the camera (aka phone), did all that glorious (ly bad) acting, and then finally edited and compiled everything together (shout out to Harry and Zach for taking on that role!).

My respect levels to all vloggers went up immensely after doing this, I’ll tell you what… And as you can imagine, it didn’t last long until we cut these from the schedule, haha… But not before we were left with a dozen or so gems to forever appreciate! Along with an insane amount of learning experience!

Here were some of the more nugget-rich skits we put together, each with its own fun spin to it:

• The 3 Budgets You Need to Create Today
• An Investment Tip That Could Get You Half a Million Dollars
• How to Lead an Intentional Life by “Opting Out”
• Saving Money and Space With the 4 Rs
• The Power of Writing Out Your Obituary
• Channeling Your IKIGAI – or Your “Reason For Being”

As silly as some of these are though, I really am pretty proud of them. Especially for this being my first real foray into making videos! I’m certainly under no illusion of becoming a YouTube star anytime soon, haha, but I’d def. give it another go if anyone ever wants to employ me ;)

But you check them out and let me know what you think…. And if you’re a fan, be sure to follow my YouTube channel so you get alerted of any new stuff I create down the line!

Oh, I’ll also drop some fun Q&As at the end too we did earlier this year. Where people from the community shot over questions for me and I answered them via video (which was a LOT faster and easier to do! I think that took me approximately 30 minutes total, lol…)

Some of these questions are also pretty random (like my go-to choice in nail polish, or if I’d rather go into war with one horse-sized Chihuahua or 100 Chihuahua-sized horses?!), but there were were some good life and money pondering Qs too. As well as a clip where I read off the best hate mail I’ve gotten over the years which I DIE laughing at every time cuz they’re so horrible!

Alright, let’s get to them… Bookmark for some good weekend watching if you don’t have the time now! I promise it’ll be worth it… (no I don’t).

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A Visual Representation of Financial Disasters [2020]

[Inspired by Wealthy Retirement: A Lesson From the Sinnemahoning Rattlesnake Hunt]

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The 3 Budgets You Need to Create Today

[Inspired by The Penny Hoarder: Good, Bad and in Between: Why You Should Have 3 Versions of Your Budget]

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An Investment Tip That Could Get You Half a Million Dollars

[Inspired by One Cent at a Time: How to Become Rich by Saving One Hour of Wage Per Day // Money Makers hat and Abundance shirt by Abundance Community.]

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How To Lead an Intentional Life by “Opting Out”

[Inspired by Cait Flanders: Adventures in Opting Out // Shirt by Accidental FIRE: Index And Chill (Amazon affiliate link)]

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A Football Analogy To Help You Manage Rejection

[Inspired by A Lawyer and Her Money: The Easy Hack I Use to Make Failure Fun]

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Save Money (and Space) with the 4Rs. Plus: A new FIRE song!

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A Slightly Morbid Exercise: Write Your Ideal Obituary!

[Inspired by Rich Habits: The Incredible Powers of the Human Mind // Shirt by: MadFientist.com]

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Dividend Investing: A Popular Way to Grow Wealth

[Inspired by Dividend Diplomats: Dividend Income from YOU the Bloggers]

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Find Your IKIGAI by Exploring These Four Quadrants

1. What you love
2. What you’re good at
3. What the world needs
4. What you can be paid for

Check out the video, and then try this method to find your own IKIGAI!

[Inspired by Physician on FIRE: Love Your Job? Why You Should Still Pursue Financial Independence]

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This 8-Year-Old Makes 2 Million a Month on YouTube (!)

[Inspired by: GrooveWallet.com (no longer online)]

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Forrest Fenn’s Treasure + The War Ratio

[Inspired by The Physician Philosopher: Saving Money. How Much is Enough? The 30% Rule // A Purple Life: P.S. I’m Bi]

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And lastly, here are some fun Q&As we did with the community… They’re batched into 3 videos and covers everything from my mohawk budget to creepy hate mail to why I’m called “The Miley Cyrus of Finance” and more. Check ’em out!

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Q&A with J. Money (Batch #1)

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Q&A with J. Money (Batch #2)

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Q&A with J. Money (Batch #3)

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And there you have it! My video producing debut!

Unless you count my famous music video that went viral 8 years ago – “Cash in A Box” – a cover of “D*ck in a Box”, lol… But I wouldn’t advise you watch that unless you have a strong stomach

XOXO,

PS: If you liked these, “follow” me on YouTube so you can catch future nonsense I create over the years ;)

PPS: Mad love to my bff and biz parner, Nate St. Pierre, for helping me with all these crazy skits, as well as to Zack Taylor and Harry Huncken for their fine editing skills. Highly recommend them if you ever need some video work yourself!

[This post, Ridiculous videos I made about money! (And some fun Q&As), was first published by J. Money on Elite Edge Money]

We got something exciting for you today if you love budgeting, or this blog, or just have damn fine taste in style!

“I’m Bringing Budgets Back.” t-shirts are now available after 10 years
of being sold out!! ZOMG!!!

Originally debuting in 2012, I had completely forgotten about them until I saw an old friend rocking one on a recent podcast and immediately knew we had to bring them back in celebration of literally bringing back the blog itself

[Lookin’ fly, Jericho!]

I quickly tapped Dave from Accidental FIRE known for his fine line of FIRE merch, and within days we had the original design uploaded to Amazon and ready to go, along with a couple of newer designs I just had to slip in to expand the fun :)

“I’m Bringing Budgets Back.”

“Mother Budgeter.”

“I Like Big Budgets And Cannot Lie.”

So 3 styles to choose from, in all different shapes and sizes and colors – all ready to please any fine appreciator of prudent financial management up in here ;)

And we’ve kept the prices as low as it can possibly go too, with only making a buck or two profit which I’ll be stashing into a Community Fund for later, so it all should relatively fit well within your *ahem* budget. Or even make for a nice gift to a fiscal friend of yours! (Or subtle nudge to them! Lol…)

Check ’em!

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They come in 8+ colors: black, white, gray, pink, blue, green, more…

*** CHECK THEM OUT! ***

Big thanks again to Dave for partnering up with me on these and getting ’em out the door in lightning speed… I get pretty particular with my ideas, so he also wins the Patience Award for putting up with me throughout the process too – thanks dude ;)

If you’d like to see any other designs or sayings we’ve said over the years here, or even any good ones of your own!, pass them over and we’ll add them to the Ideas List for the next run! Ironically I just realized we don’t even have a “Elite Edge Money” design in here yet (oops), so that will have to go to the top of the list for sure…

AND I WANT PICS OF YOU ROCKING THESE, PLEASE!

We’ll make a Hall of Fame page here or something so we can show off how sexy you are :) With bonus points for flashing them in public just to make sure everyone can see how important these sayings are!! Haha… Wear ’em loud and proud, baby!

Here’s the Amazon page again → Elite Edge Money Store

See you back soon! And thanks for all the kind words and wishes all week long! The best welcoming a blogger can get coming out of retirement ;) I appreciate each and everyone of you so much – thank you

Yours in (fashionable) finance,

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Wall of Honor:

[Christy Wilson showing off her inner nerdness]

[Mrs. 1500 rocking it on Good Morning America!!]

[This post, T-Shirts Are Back! 🔥, was first published by J. Money on Elite Edge Money]

I spotted a killer deal at the grocery store the other day… These Bitchin’ Chipotle Sauce things are usually $7-8 each at Costco… but I found them for only $1 at the 99c store! Woohoo!

After stacking about 15 into my shopping cart, I took a celebratory photo and sent it to my wife… She was very proud, having taught me most of the deal-hunting tricks I use today.

I don’t know about you, but I think being frugal is a cool thing. It’s something we should celebrate more and share more with the world.

Here’s some cool stuff you may not know about why being frugal is awesome…

Being Frugal Makes You More “Attractive”

According to this survey done by Slickdeals a couple years ago, 92% of Americans consider frugality an attractive quality in a partner or potential partner. 92%, yo!

Not only that, 79% of people think it’s “perfectly acceptable” to use a coupon on a first date! Woohoo! Keep on clippin’, you handsome couponers.

The survey also talks about the difference between being “frugal” and being “cheap”… While frugality is a turn-on, being cheap is a turn-off!

Being frugal: 

• Buying off-brand items
• Shopping at second-hand stores
• Seeking deals and using coupons
• Keeping & using old electronics
• Watching movies & drinking alcohol at home instead of going out

Being cheap:

• Not leaving a tip
• Not paying when it’s your turn
• Eating expired food
• Relying on others to pay
• Skimping on hygiene & self care

Frugal Habits = Comfortable (and Earlier) Retirement

Last month, Personal Capital released a survey to find out “Have Americans Become More Frugal”? The short answer is YES! And for good reason…

Here are the key survey takeaways:

• 90.4% of respondents claim to have “frugal habits”
• The No. 1 reason they adopt frugal habits is “to save for future investments”
• Of those who have adopted frugal habits, 50.7% are now considering early retirement!

Wow. “Early” retirement is one the rise! It’s not just a pipe dream – more and more people are getting their financial lives together, using frugality as a cornerstone.

Mindful Spending Means More Value For Dollars

Imagine Joe and Steve each have $100 to spend.

Joe buys tickets to a ball game ($50), hot dogs ($20) and some items at the stadium gift shop ($30) on the way out. In all, Joe spends $100 to experience a ball game.

Steve is more mindful with spending… He buys tickets to the same ball game ($50), but eats food at home beforehand ($0) and doesn’t buy souvenirs ($0). Then, the following weekend, Steve buys tickets to another entire ball game ($50).

Both friends spend the full $100, but Steve’s frugal habits allow him to experience 2 ball games where Joe can only experience 1.

Simply put, spending less on things that don’t provide long-lasting value means you can spend more on things that do provide you value.

Frugal Humans Help the Environment

When you buy less “stuff,” humans manufacture less “stuff.” When humans manufacture less, we use less of the Earth’s dwindling natural resources. Quite simply, really.

Did you know that humans use more natural resources each year than the Earth can actually generate within the year? Doesn’t take a genius to figure out that this is not sustainable, and one day, all the resources will be GONE.

Having a frugal mind-set and lifestyle can help reduce your environmental footprint. Living in excess and consuming more than you need is the opposite.

DIY Projects Increase Your Resourcefulness

If you can grow things yourself, make things yourself, and fix things yourself… you are less dependent on others. And isn’t that what we are all kind of shooting for — independence?

I’m not talking about doing everything yourself in life. There is a balance between DIY and outsourcing.

But frugal people understand that the more problems they can solve with their own two hands makes them more resourceful and gives them more options and control.

Frugality Improves Social Connections

Sometimes people are afraid to admit they are frugal… They’re worried others might shun them or cut them out of future invitations.

But I’ve experienced the opposite! The more open I am about my lifestyle, the more people I seem to connect with. 

It’s refreshing when other people admit they are trying to save money, get a good deal or waste less. Frugality actually brings people together.

A big part of being frugal is sharing, swapping, giving and receiving. All these activities improve social relationships. Think about Buy Nothing groups, co-op organizations, and even potluck meals. Sharing is caring!

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So, what do you reckon? Do you think being frugal is cool? Or is my vision warped? (Could also be the cheap sunglasses I’m wearing, which I got for a bargain. Just sayin’ )

Wishing you all an awesome Friday and great Super Bowl weekend!

Love, Joel

[This post, Let Your Frugal Flag Fly! 6 Reasons Being Frugal Is Cool 😎, was first published by 5am Joel on Elite Edge Money]

“A budget is simply telling your money where to go instead of wondering where it went.” – John Maxwell

Good morning, money friends! Hope you had an awesome Christmas weekend!!

Today I’m gonna run through a quick overview of my annual and monthly budgeting process. It’s super simple and doesn’t take me much time — about an hour at the start of every year and 20-30 mins each month. 

Maybe this will help some of you in your 2022 planning (or maybe you’ve already got a solid budget process nailed down? ). Either way, it never hurts to see how others do things and maybe borrow some tips/tricks to incorporate into your system.

At the end of this post, I’ve included a few budgeting tricks I use to save time, keep it fun, and make sure I stay consistent!

**And for those of you who really want to make budgeting SEXY… check out this old gem we published way back in the day… Introducing Strip Budgeting. As J. Money would say… “Hubba hubba!” **

Start With a High-Level Budgeting Process

I like to think about budgeting as 3 separate activities that happen throughout the year:

• PREVIEW: (annual, takes me about 1 hour) At the start of each year, I envision all my expenses and things I want to spend money on. The total $ is my annual budget.
• REVIEW: (happens monthly, takes about 20-30 mins/mo) At the end of each month, I review our spending, compare it to the budget, and check to see if  things are on track.
• COURSE CORRECTIONS: (as needed along the way) Throughout the year, life changes. So I make modifications to either my numbers or my spending habits.

If you don’t currently have a budget or are looking for a new template, here are a bunch of free budget templates and spreadsheets. Or, here is the simple one I use. Nothing fancy, I just created it in Google Docs.

OK, here are my annual and monthly activities broken down:

How to Set an Annual Budget (Your Year in Preview)

At the start of each year, I try to set an annual budget number. This is a forecast of approximately how much my wife and I plan to spend in the upcoming year.

We have about 20 spending categories, and each one gets its own assigned budget. My basic template looks like this:

First, I forecast all our fixed expenses. These are the things I already know the exact cost of… Like rent, insurance, car registration, internet and phone, etc.  Since I already know how much they’ll cost, I just stick those numbers straight into the budget. Easy.

Next, I look at all my variable expenses. These are things that can be high or low depending on the month. The best way I’ve found to forecast variable expenses is to look at how much I spent in total the prior year. Then, I adjust a bit for inflation, or upcoming life changes.

For example, in 2021, I spent $7,015 on groceries. Some months were low (in March we spent $331) and some were really high (July we spent $1,027). Since I can’t predict which will be the high and low months next year, I really only care about the average and total.

• As for inflation, if I were to buy the exact same groceries next year as I did last year, they might cost me ~5%+ more. So Instead of forecasting $7k for next year, maybe I want to make it $7,500 to be more realistic.
• As for life changes, my wife and I might have a kiddo or two next year… so maybe I want to add another $1k to cover them for food, too?

Anyway, you get the point… after thinking ahead a little bit, I assign an annual budget number for each category, and divide that by 12 for the monthly number.

Lasty, I try to plan for large, isolated expenses in the upcoming year. I assign numbers to these based on how much I think they might cost.

For example, here are some isolated events that I need to budget for in 2022…

• Weddings: I’m invited to 3 weddings next year, and in one I’ll be a groomsman. So, I’m going to add a $2,000 budget line item for “weddings” to cover gifts and travel. Since I won’t have this expense every year, I keep it separate from my regular annual travel/gifts categories.
• New (used) car: My wife and I might buy a minivan next year. Maybe I’ll add $20,000 as a budget placeholder. (Or maybe we’ll just make our kids suffer in the Prius – haven’t decided yet. )

Everyone’s numbers are different. Everybody’s life goals are different. It behooves you to make your budget as custom as possible to YOUR life, income level, and desires.

A successful budget is more about knowing yourself than it is about the actual numbers. If you build a budget based on what everyone else does, a) you won’t have any fun, and b) you’ll be living their life goals, not yours!

How to Do Budgeting Every Month (Month in Review)

After our annual budget is set, I do monthly check-ins.

My wife and I use Mint.com to track all transactions. (I highly recommend others check out Mint, Personal Capital, YNAB, or any automated software that tracks transactions.)

First, I download all our transactions from Mint and sort them by category. Then I total the categories and stick them in my budget spreadsheet. Each month has its own column in the sheet. Looks like this:

For the most part, I’m not really concerned about small variances in our spending vs. budget numbers. (We are not on a tight budget.) What does concern me, however, is a trend of overspending. 

That’s why I like having all of my numbers side by side in a budget spreadsheet. At a glance, I can quickly tell if we are slipping into bad spending habits that need correction.

How to Adjust Your Budget (Mid-Year Course Corrections)

It’s unrealistic to think that we’ll spend exactly what we budgeted for every month and year. Budgets aren’t exact. They need wiggle room.

Here are a few adjustments and things my wife and I do mid-year…

First, if we underspend consistently, this is AWESOME! It means we accidentally budgeted too much. Underspending in one category can sometimes cancel out overspending in another category.

When we notice consistent overspending in a category, before trying to correct it, we ask ourselves these 2 questions:

1. Is this spending in line with our values in life? (My wife and I are trying our best to do values based budgeting.)
2. If overspending continues, will it majorly derail our life goals or financial plans?

If we are overspending on stupid crap that doesn’t add value to our life, we try to cut it out ASAP. This requires being more mindful during the following months, checking in with each other more regularly, and perhaps even starting a savings challenge of some sort.

But, if we are overspending on things that DO provide us a lot of value (and it’s not majorly derailing our wealth-building journey) we allow it to continue.

For example, I mentioned we spent ~$7k in groceries this year (but we only budgeted for $6k). I realized we were going to blow this budget a few months ago, so my wife and I sat down to discuss it… We agreed that groceries and food is what we LOVE spending our money on. (We host a lot and enjoy buying premium ingredients for special occasions). In this case, we agreed overspending was OK to continue, instead of switching to beans and rice for the rest of the year to cut costs.

To compensate for overspending, we try these types of things:

• Reduce spending in a different category. For example, we might cut back on mid-week drinking for a month or two. This could save us a few hundred dollars, and we could put that toward the overspend on groceries.
• Pick up a temporary side hustle to cover some costs. This year when Cooper had ~$400 in vet bills, I was able to cover those unexpected costs with additional contract hours at work.
• As a last resort, we break into our emergency fund or pull from investments. We really haven’t ever had to do this, but it could happen if we hit large unplanned expenses (like our car completely dying or a medical emergency).

Automation, Saving Time, and Keeping Budgeting FUN

One of the main objections I hear about budgeting is, “I just don’t have the time!”…

Maybe some of these things will help:

• Automate your expense tracking! Sign up for Mint, Personal Capital or use your bank’s online app to categorize your transactions. It saves manual tracking.
• Limit your cash transactions. Since you have to track cash purchases manually, instead try Venmo or PayPal, which can be tracked via automation software.
• Round things to the nearest hundred dollars. Instead of calculating every single cent, try rounding numbers to save time.
• Limit how many categories you have. For example, I used to track hotels,flights, airport food, and Ubers all in separate categories… But that took too much time, so now I stuff all that type of spending into a single “travel” category. Much faster, and arguably the same thing!
• Budget consistently. The more you do it, the faster you’ll get at it!

All in all, you can make your budgeting process as complex or simple as you would like. Do yourself a favor and choose the latter.

As for keeping things FUN, try some of these hacks:

• Set up monthly rewards for when you beat your budget in certain categories. Having a reward system will keep things enjoyable and make you want to track progress.
• Budget over a date night (for couples). You don’t need to be hunched over a computer while budgeting… Get out of the house and have discussions while you walk, exercise, or over a delicious meal somewhere.
• Create colorful and engaging charts to attack debt, track savings goals and chart progress. Check out these free budget printables.
• You can woo your partner with a nerdy powerpoint presentation, like this guy does each year ;)
• Sometimes just calling it “budgeting” can set a negative tone. Sometimes when I want to talk about spending with my wife, I just say, “Babe!… I just reviewed our spending and let me tell you all the ways we kicked ass this past month!” This is how we have budgeting conversations without actually having budgeting conversations.
• Earlier I mentioned Strip Budgeting… I was kind of kidding… but maybe it’s worth trying anyway? Haha!

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Whelp, thanks for reading this long-ass post on my budgeting process. Hopefully you got something out of it.

Whatever your budget process is, I truly hope you are set up for success in 2022. Please let me know if you need any help, have any questions, or just want to geek out on spreadsheets. Personal finance isn’t just my job, I genuinely enjoy helping others save money, make money, and live more intentionally. Let’s chat!

Have a great last week of the year!!!!
Joel

[This post, My Annual Budgeting Process, was first published by 5am Joel on Elite Edge Money]

I received a sobering comment the other day…

“Joel, thanks for the nice stories and happy emails but please give us some content that’s actually worthwhile in terms of making and saving money.”

Ooops … I guess I’ve been a little sidetracked with random stories on the blog. I figured that most regular Budgets readers already know the basic “how to” stuff. But now that I think about it, maybe getting back to money basics is necessary sometimes.

So, here’s a quick-and-dirty brain dump of money advice all in one post. This is the stuff I wish I had been told when I was younger. (Actually, maybe I *was* told this stuff when I was younger – I just was too dumb to listen at the time. )

It’s split into three sections: making money, saving money, and investing money.

How to Make More Money

If you’re looking to increase your income, do some (or try all) of these things — presented in no particular order:

1. Start a side hustle. Here are 80+ side hustles listed in detail. Most require no money to start and little experience.
2. Ask for a raise. Careful here — you mostly deserve a raise if you are doing more work or providing more value than what you originally signed up for. If you’re giving your employer excess value, you are worth more. Create a win/win scenario. (Listen to these 2 ChooseFI podcast episodes: Ep.221 How to negotiate salary and Ep.147 Negotiating salary with Tori Dunlap
3. Change jobs or careers. If your current workplace doesn’t value you, another one might. NOW is a great time to explore opportunities! It’s never too late to change career paths and find a more lucrative industry.
4. Sell stuff around your house. OfferUp, Craigslist and Facebook Marketplace are good places to start. You can also find free stuff on these same apps and resell them for a 100% profit.
5. Rent out your stuff. People pay for the most random things to rent. List your unused equipment/space/car/stuff online to see who wants it. Here’s a list of about 40 websites to list and rent out stuff for quick cash.
6. Sign up for bank and credit card promotions. Finance companies will PAY YOU to try their services and meet certain transaction criteria. Some of these transactions you are doing anyway, so you may as well get paid for it. Personally I make about $2k per year from bank account churning. If you can handle credit and have excellent attention to detail, try credit card churning.
7. Start a business. My friend Alan Donegan co-founded the Rebel Business School. This is a FREE resource with on-demand videos, blogs and podcasts full of practical information to help get your business idea up and running.
8. Create art for the world. Build, draw, type, sing, photograph, cook, repair, perform, teach, or do whatever you can dream up. Chances are you have a talent that many others don’t have. Figure out what it is, pursue it with passion, and monetize it. Here are a 41 other ways to make money fast!

To build financial independence, your income MUST be higher than your spending. The more you earn, the faster you can achieve independence.

How to Save More Money

Saving money sometimes feels easier than increasing your income. But be careful not to reduce your expenses to the point where you’re not enjoying life!

Again, in no particular order, these things will reduce your cost of living:

1. Aggressively pay down consumer debts. Having high interest loans is like running up an escalator that is cycling downwards. You need to crush high interest debt ASAP, as it’s one of the biggest prohibitors in wealth-building.
2. Get rid of unused vehicles. Cars/motorbikes/boats are silent money thieves. Even when they’re not in use, they erode your savings. I’m not saying to never drive or own a car… Just saying that it’s most people’s No. 1 money pit, so it’s worthwhile evaluating your vehicle situation.
3. Track your spending and challenge EVERYTHING. For everything you buy, ask yourself these 2 questions:  a) Do I really need this?  b) If yes, where can I buy it cheaper?    (J. Money did this for years and wrote several posts about the money he saved. It’s all here on this page [Challenge Everything] as well as hundreds of reader comments and helpful examples. Tiny savings across many categories can add up to huge amounts.) One of the quickest ways to save money is getting a cheaper alternative to Cable TV and “cutting the cord”!
4. Use coupons, promotions, and bundled discounts where available. Most grocery stores have a mobile app that has digital coupons. Every time I go to Vons, I use the $5 OFF coupon, which gives me instant savings for 10 seconds of work.
5. Do chores yourself. Cut your own hair. Clean your own house. Wash your own clothes. If you have the skills and time to do something yourself, do it yourself and save the cash.
6. Learn to cook. Restaurants charge an average of ~300% markup for prepared food compared with the cost of ingredients. You can save money by purchasing groceries and cooking meals yourself. This includes packing your own lunches for work. It’s easier than you think, not to mention healthier.
7. Rent instead of buy. Remember those websites to rent your stuff out online? Well you can use them to rent other people’s things occasionally instead of buying stuff. Instead of buying a $400 snowboard that you only use twice, rent one for $30 each time you go.
8. Move homes. If you have a lengthy commute to your workplace, consider moving closer to where you work and reducing transport costs. If you work remotely full-time, you could move to a lower cost of living area without harming your job status.
   
9. Learn to negotiate. One of the most valuable skills in saving money is negotiation. Sometimes even just asking the awkward question “Do you have any discounts available?” opens negotiations you wouldn’t have known about otherwise.
10. Travel like a local. Vacationing in your own city/state can be just as fun as luxurious destinations. But if you do decide to travel to faraway places, try to spend money like a local person would. Eat where locals eat, use public transportation, avoid tourist traps, etc.

Reducing your cost of living not only increases your savings rate and shortens your FI timeline, it also lowers the amount of money you actually need to save for retirement.

OK… so you’re maximizing your income and reducing your costs… Now what do you do with the money you are saving?

How to Invest Your Money

Investing isn’t optional. It is necessary.

Your money will compound over time and ideally transform your retirement nest egg into a passive income stream.

Everyone invests differently because of their knowledge, experience, and opportunities. I’ll focus on the simplest and most proven investing methods most people can use to fast-track financial independence.

1. First, increase your knowledge. Learn about investing for beginners and the FIRE movement. Read these 3 books: The Simple Path To Wealth, The Little Book of Common Sense Investing, and Your Money or Your Life. Listen to every episode of these FIRE podcasts: BiggerPockets MONEY, ChooseFI, Mad FIentist and Afford Anything. (Yes, it might take a few years to get through all this information … That’s OK — learning takes time, and nobody is born an expert.)
2. Max out your 401(k). Or any employer-sponsored retirement programs you have available to you. If you are a contractor or business owner, consider opening a Solo 401k. It’s OK if you can’t contribute the maximum, just add as much as you can each year.
3. Open a Roth IRA. Add as much money as you can each year. If you’re not eligible for a Roth, open a regular IRA.
4. Open an HSA. If you have a high-deductible health plan, you’re eligible for an HSA account. Try to max it out each year. This is the most tax-efficient investment vehicle available to Americans.
5. Invest everything in broad, low-cost index funds. Inside each retirement account, choose highly diversified funds that have low management fees. The FIRE crowd’s favorite is VTI or VTSAX.
6. Open an after-tax brokerage account. After contributing the maximum to your pre-tax retirement accounts, put any excess money in a regular brokerage account.
7. Automate contributions. Set all of your contributions to automatically transfer and invest so you don’t have to worry about it every month. Out of sight, out of mind.
8. Dollar-cost average. Don’t try to time the market or “beat” the average. Even the smartest investors in the world can’t do this consistently. Don’t worry about how much stocks are going up or down each month, just keep investing on a regular basis regardless.
9. Limit your cash on hand. Apart from a small emergency fund, make sure all of your money is working for you, all of the time. (You could even opt to invest your emergency fund, like me .) The more cash you hoard, the more you lose value to inflation each year.
10. Invest in real estate, if you must. There are a TON of opportunities investing in real estate. My only recommendation here is to learn and network as much as you can before jumping into anything you’re unfamiliar with. Listen to every episode of the BiggerPockets Podcast and attend local meet-ups to network with successful investors. Avoid advice from people who don’t have a proven track record.
11. Lastly, don’t gamble, break the law, or cheat anyone. The long-term costs of being a fraud outweigh any short-term benefits. It’s never worth it.

So there you have it … my brain dump of advice for making, saving and investing money. You don’t have to do ALL of these to grow your wealth, doing just a handful is usually enough to ensure a comfortable retirement.

My guess is that most of y’all knew this stuff already. But it never hurts reading again.

What is this list missing? (Yeah yeah I know I didn’t mention cryptocurrency…)

Have a great day ahead!

– Joel

PS. *Attention anyone living in Los Angeles**  FIRE legends Katie and Alan Donegan are visiting LA and hosting a free 90 minute lunch ‘n’ learn finance course! November 15th at 11am at Pasadena Comedy → Register here!

[This post, My Cliffs Notes on How to Make, Save and Invest Money, was first published by 5am Joel on Elite Edge Money]

October 14, 2021 update: After this post was published, Joel made a personal investment in LifeGoal Investments.

Just got back from FinCon in Austin last week! For those of you who don’t know, FinCon began in 2011 as the Financial Blogger Conference, but now it’s a place for all types of digital content creators, money nerds and brands to get together and geek out on personal finance stuff.

This was my second time going to FinCon. I met 1000 cool bloggers there, learned 1000 new things, and drank 1000 beers. Very fun stuff.

Rather than doing a review of the event and name-dropping all the bloggy-celebs who were there, I wanted to share some of the neat brands and companies that surprised me. I love FinTech and want to spread the word about anything that can help people make/save money in smarter ways. Here are 3 cool FinTech companies and apps that I found interesting, and you might too…

**No, they didn’t pay me to write about them or sponsor this post. Just sharing stuff I think is good!**

LifeGoal Investments: ETFs for Various Life Goals

On the first day of the conference my friend said, “Have you checked out LifeGoal Investments yet? They are super interesting! They are a new company that created 5 different ETFs people can invest in.”

In my head I was thinking, “Who cares? The only ETF I am interested in is VTI. Why would I invest in anything else?”

But then later I learned what these ETFs were created for and their purpose. The more I spoke with LifeGoal Investments, the more impressed I was with their mission! They are helping people store less in cash positions.

Specifically, 2 of their ETFs really struck a chord with me…

The first ETF is called LifeGoal Homeowner ETF (NYSE: HOM). This ETF was specifically created for people who are saving up for a home down payment. It’s the first time I’ve ever seen an ETF address this problem (and they actually have a patent pending for this type of ETF).

Here is the problem it solves: One of the biggest hurdles for a homebuyer is saving up to make cash down payment. The average size of a down payment in America is ~$47,000, and the average time it takes to save is 6.5 years!!

The challenge is, most people save their down payment in cash. They save cash in a regular checking account (earning $0 interest) or a savings account (earning a few pennies interest). Meanwhile, from the time they start saving until the time they are ready to purchase a home 6 years later, housing prices continue to rise and inflation eats away the buying power of their cash savings.

The solution is to convince people to invest their housing down payment while they save up. BUT… What average person trusts the “stock market” and knows how to invest conservatively!? Investing in 100% stocks can be “risky” for potential homeowners because if there’s a crash, they could lose a chunk of the down payment.

Well, that’s what the HOM ETF was built for. It’s very conservative (~75% bonds, 25% stocks) and the biggest stock holdings are directly tied to the housing market. It holds stocks like Home Depot, Lowe’s, Zillow Group, etc. The idea is that as the housing market rises, a portion of the down payment savings also rises, helping people afford higher house prices when they’re ready to buy. REALLY innovative stuff! Read more about HOM here.

The other ETF that impressed me was General Conservative ETF (NYSE: SAVN). This is built to help people conservatively invest their savings or everyday emergency fund.

Most of you guys know that already I lowered my emergency fund significantly, investing most of it in VTI. And many people shook their heads at me, thinking it was very risky! (It kind of is.)

But, I still believe holding emergency fund cash in a checking/savings account hurts more than it helps in the long run. So this new ETF called SAVN is a different, very conservative way to invest emergency cash to make sure money is still working a little bit for you. Read more about SAVN here.

**This is probably a good time to remind you that I am not a financial advisor! Don’t invest in stuff just ‘cause I think it’s cool. Gotta do your own research. :)**

Qube Money: A Budgeting App with “Envelopes”

Budgeting with physical envelopes is pretty common. Many people love it. You take your paycheck, turn it into cash, divide all the dollars up into different envelopes and spend only what’s inside each month.

Qube is the digital version of cash envelope budgeting. The basic plan (free) lets you create 10 envelopes — called qubes — and spend money via a debit card. The big difference is that by default, the debit card holds a $0 balance. By this, I mean that the card can only be used after you assign it some money from one of the envelopes. All spending is controlled by the app, BEFORE a purchase is actually made on the debit card.

Here’s a quick video showing how it works: Qube Money Video

What I love about this budgeting process is it encourages more intentional buying habits. It helps people stop and think before making purchases. The app is designed to not allow you to overspend in a category (just like you can’t take out more money from a physical envelope than what’s actually inside of it). You are not capable of overdrafting.

I was also pretty impressed with the company’s product roadmap. Their paid versions offer more features, and family/children features are coming soon. This will allow you to give kids debit cards, and load them up with an exact amount of money, instantly, from the mobile app.

If this seems cool and you’re looking to replace your physical cash envelope budgeting, check out Qube. Like I said, the basic plan and sign-up is FREE! :)

**I also learned about a new app called Yotta, which has a similar “bucket” system for saving for money goals. They reward users with a lottery-like game and awards for meeting savings goals, encouraging good savings habits. Kind of cool!

RocketDollar: Self Directed IRAs

Lastly, I liked learning about RocketDollar. They’ve been out for a few years already so maybe I’m late to the game here, but this was my first time really looking at their offering.

RocketDollar makes it easy to invest in almost anything inside your IRA account. Instead of the common stocks/bonds/REITS, you can buy a physical rental property, invest in precious metals, cryptocurrencies, or even a private start-up business.

Alternative investments can sometimes be risky. But, with higher risk can come higher returns. Making higher profits inside a tax advantaged account can be a huge advantage over long holding periods as opposed to buying with after-tax funds.

It’s a little expensive ($15 per month with a $360 set-up fee), but all of the legal work and account structure is set up for you quickly, along with an LLC to hold investments. They also provide easy online tools to manage your stuff. Looking back, I wish I had used my IRA to invest in some of my real estate syndication deals. Instead, I used after-tax cash so I have to pay taxes on all gains the moment they are realized.

Now, before you get excited and gamble all your IRA funds away on crypto stuff… You’d better do your own due diligence on what you’re investing in. Just because you can do alternative investments with your IRA doesn’t mean it’s the best option for you.

Whelp, I’ll share more stuff about FinCon over time and maybe talk about some of the interesting peeps I met there. (A lot of TikTok, YouTube and Instagram influencers… they made me feel so OLD!)

Hope y’all have an awesome day ahead!

Cheers,

Joel

[This post, 3 FinTech Innovations I Want You to Know About, was first published by 5am Joel on Elite Edge Money]

You’ve probably heard the saying time is money. As weird as it sounds, it was one of my favorite concepts growing up.

As a teenager, my first jobs were hourly paid. The more hours I worked, the more money I made. If I didn’t work any hours, I didn’t get paid anything. Back then I took the phrase ‘time is money’ quite literally, and it motivated me to work harder and earn more.

Today however, I am learning that the flipside of this phrase can be equally motivating. Money is time! By this I mean that if you’ve saved a lot of money, you can potentially buy hours of free time in your life. (Not more time — we all get the same 24 hours a day — I’m talking about free time, as in freedom to choose how you live.)

“Remember That Time Is Money”

Apparently Ben Franklin said this first, way back in 1748 when he published a short essay called Advice to a Young Tradesman. Here’s a snip from the paper…

“Remember that Time is Money. He that can earn ten shillings a day by his labour, and goes abroad, or sits idle one half of that day, tho’ he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent or rather thrown away five shillings besides.”

I’ll admit I had to re-read that passage about 6 times to decipher Franklin’s old-school (and gender bias) writing style. But what I think he was trying to say is:

• If you earn $10 dollars for each day of work, but choose to take a day off, then that day just “cost” you $10. (Opportunity cost)
• Also, if you take the day off AND spend $5 buying something, in total, the day cost you $15. ($10 in opportunity cost + $5 in real cost)

So, basically, we should all work 365 days out of every year, right? Every second we’re not working, we are wasting money?

Well, probably not. Although it’s important to understand opportunity cost and make money while you can, it’s also important to find balance.

Taking the Concept Too Far

Back when I was 20, I worked as an hourly paid employee at a cellphone store. I can’t remember my exact wage, but it was probably like ~$16 per hour (this is Australian Dollars, so maybe like $12/hr USD). I worked 5 days a week, so my take-home pay was about $130 each day before taxes. That’s about $33k per year.

Since I was a money-hungry little bugger, this wasn’t good enough for me. And since I didn’t yet understand the concept of higher value labor, I decided to trade more of my time for money at a second job, after hours. My mindset was simply, more hours working = more money.

My after-hours job was at the Australian Post office, working 7pm to 12am sorting mail for $18 an hour. Daily, that was ~$90 before taxes, so $23k per year.

All in all, with both jobs that’s $56k before taxes, working ~60 hours per week. Decent coin for a 20-year-old! At first I was loving it! Knowing that I was maximizing my time and not missing out on any opportunity to work felt great. 

But, as you can imagine, it eventually led to burnout. Prioritizing money too much and giving all my time away was unhealthy. I learned a huge lesson during that time in my life → Although time is money, sometimes the money isn’t worth trading the time for.

Another cool thing I learned during that time…

“Remember That Credit Is Money”

This saying comes from Ben Franklin’s exact same essay, right after the “time is money” bit. He continues on to say:

“Remember that Credit is Money. If a man lets his money lie in my hands after it is due, he gives me the interest, or so much as I can make of it during that time. This amounts to a considerable sum… Remember that money is of a prolific generating nature. Money can beget money, and its offspring can beget more, and so on. Five shillings turn’d, is six: Turn’d again, ’tis seven and three pence; and so on ’til it becomes an hundred pound.”

Again, I had to re-read this a few times to decipher it… But I’m pretty sure that Franklin is talking about compound interest! His lessons here are:

• Money can make more money, compounding over time.
• The earlier in life you make money, the more compounding can happen.
• So if you miss work for your $10 of pay, it not only costs you $10… It also costs you the potential compounding over and over again throughout life.

Bottom line: Time is waaaay more money than most people think … because opportunity cost also has compounding value.

I was lucky to be exposed to investing at an early age. It took a good decade of saving and buying assets, but I was finally able to shift my mindset from trading time for money, to using my assets to generate money.

Money Can Buy Free Time

When I say you can “buy” time, what I really mean is that money can be used to remove regular obligations in life (work, chores, inconveniences), freeing up your time so it can be spent in more fulfilling ways.

My friend Christine Luken dropped a cool comment the other day on the blog. She said:

“One thing I will add is something I do called “Buying Back My Time.” It’s the rule I use to figure out if I should do something myself or pay someone else to do it. Essentially, I calculate how much time something takes me versus how much it costs me to pay someone else to do it. For example, my cleaning person takes 10 hours of work off my plate per month for the low, low cost of $160. (She only needs 6 hours to get it done because she’s that good.) All I need to do is sell an online course or to book one 60-minute corporate money wellness webinar to pay for my house cleaner. $160 to buy back 10 hours of my time is an amazing deal for me!”

Outsourcing work gives you more free time. But in order to do that, you have to have money to pay for it. In Christine’s case, she can pay for 10 hours of free time for $160. (And she also worked out that she can make $160 in 1 hour, or by selling a book.)

Achieving financial independence (especially at an early age) can give you HUGE amounts of free time in life. If you’ve saved up enough money to cover your bills and conveniences for the rest of your life, you’ve just “bought” free time for the rest of your life.

Time Is an Asset. And Money Is an Asset.

All in all, both time and money are assets. It’s up to you on how you want to use them in life.

I promise this is the last Ben Franklin quote I’ll use for a while! This is from the final paragraph in his essay…

“In short, the Way to Wealth, if you desire it, is as plain as the way to market. It depends chiefly on two words, Industry and Frugality; i.e. Waste neither Time nor Money, but make the best Use of both. He that gets all he can honestly, and saves all he gets (necessary expenses accepted) will certainly become Rich.”

Agree? Disagree?

Wishing you all a lovely week ahead, spending your time and money in awesome ways!

Love, Joel

[This post, Time Is Money. And Money Is Time., was first published by 5am Joel on Elite Edge Money]

About 3 years ago, my wife and I sat down to create a new type of budget.

We’d always been good about tracking our expenses and had a standard budgeting method for stuff, but since we discovered the FIRE movement we decided to change things up a bit.

Actually, around that same time we also read the book Smart Couples Finish Rich. It included a bunch of worksheets and questionnaires to help us identify our priorities in life, and then create specific actions to make sure we’re spending money intentionally on things we truly value.

We now refer to this as our “value based budget.”

What Is a Value Based Budget?

Value based budgeting is the simple process of right-sizing your budget categories so that they better align with your priorities and values in life. It can also be called value based spending.

This means spending more money on the things that make your life richer and happier, and spending less money on things that don’t add true value to your life. If you do it correctly, you’ll feel much better about your money situation, where your money is going, and the lifestyle that you are living.

For example, one of the things that brings me and my wife joy is giving to others. This is a priority for us in life. And one of the things that doesn’t really provide us joy is eating at dine-in restaurants…

Years ago when we did traditional budgeting, we might have allocated $50 for a date night at a restaurant. This would be about $40 of food, and a $10 tip.

But now that we’ve got a values based budget, we might still spend $50 on a date night out… But $20 would be for food (2 x $10 burritos at a street meat stand) and a $30 tip to the guy who makes it.

In both budget cases, we spend the same amount of money – $50…  But, working with a value based budget and having intentional spending, we walk away happier because we’ve fulfilled a higher priority activity for us → giving.

How to Figure Out Your Values

The biggest key to a values based budget is establishing your personal values and priorities in life. This is way harder than it sounds! It requires some deep questioning of yourself!

**Don’t be fooled into skipping this step… If your budget is based on someone else’s priorities (eg. what the Internet tells you to do, or tips from your extremely frugal friend) then you might be robbing yourself. The point is to match your spending habits to YOUR true joys in life.

Everyone has different values. To help figure out yours, answer some of these questions:

• Who do you admire most? Why?  Generally, when we admire a quality in others, it’s something we value ourselves.
• What are some of your proudest moments? Why were you so proud? The feelings you identify here uncover true values in life.
• Picture the 70-year-old YOU. What are the most important things in that person’s life? This helps you determine what is most meaningful to you in the long term.
• If you were given only 48 hours to live, how would you spend your last few days? This is not a money question, this is a time question. It reveals who/what/where is most important to you.
• Have a look at this Core Values list. Which ones stand out most to you? 

Now comes another hard part…

With your list of core values, try to prioritize them. Try and cut the list down to about 5 or 6 — the values that are absolutely most important to you. (Another thing you could do is group them into similar categories).

**A funny side note… My wife and I did this exercise separately and came out with slightly different lists. This is why it’s important to communicate and plan together as a couple. You need to make sure you are BOTH seeing value from your budget, so include what’s important to both of you.**

How to Merge Your Values With Your Budget

My wife and I went through every single category in our budget and questioned what we were getting the most value from vs. things we didn’t really feel great about. We allocated more money to some categories and shrunk the budget for others.

This is kind of like J$’s “challenge everything” he wrote about years ago. But, instead of focusing on money savings, the goal is to question the value you are getting from things.

For example, we increased our grocery budget from $500 per month to $600 per month. This was based on our personal value of community. My wife and I love to host parties and cook for large groups, and many of our best memories in the past 10 years have been centered around meals with others. We also increased our alcohol budget. 

Spending MORE on stuff like this feels great! It gives us room to spring for fancy or expensive meats once in a while, or perhaps send our guests home with delicious leftovers. We can do this without having to worry about “spending too much money on food” because there is extra room in our budget for it.

In other areas, we decreased spending or removed expenses completely. One example of this was dumping Amazon Prime. We realized the value we got from a Prime subscription was very low. (Free/fast shipping is available from many retailers without a prime membership. TV streaming is a low priority for us, and so is buying books compared with borrowing from the library). Deleting our Amazon membership has saved us money while having zero effect on our happiness in life.

Other categories we decreased our spending in were restaurants, car costs, clothing, and insurance. Our goal is to reduce costs down to our happiness tipping point. If we can get the same amount of happiness for fewer dollars, that’s a win for us.

Values Change Over Time, and So Should Budgets

As we grow older and our lifestyle changes, so do our priorities in life. For this reason, value based budgeting isn’t a once-off activity. It’s more of an evolution.

As a home renter, I’ve never really prioritized home improvement or having nice furniture or appliances. Back in my 20’s, I couldn’t fathom spending $20-50k remodeling a kitchen or landscaping a backyard… But, as I grow older I’m realizing that my kitchen and backyard is where I spend 90% of my time. I would happily allocate larger amounts of money into these areas today, because I would reap more value from them.

It’s the same with health care and family/child costs. These will most likely increase in time as my wife and I prioritize them more.

I think values change as your wealth grows, too… When I was younger I placed a high value on savings and investments. It was extremely important for me to build wealth early in life — I am reaping life-long value from dollars I saved 20 years ago. But today, I have reduced the importance of wealth building and would rather prioritize travel and experiences.

Every person does it differently. I encourage you to make budgeting unique and custom to your life. Make it fun. Make it $exy!

(And for those of you with no budget right now, here’s a bunch of free budget templates. Don’t forget to track all your spending via Mint or Personal Capital or YNAB!)

*****

I’m curious… What do you spend money on that makes you happy? What budgeting tips do you use to get more value out of your money?

Take care,
Joel

[This post, Value Based Budgeting = More Happiness for Your Dollars, was first published by 5am Joel on Elite Edge Money]