All posts by Elle

Money

How to Stop Living Paycheck to Paycheck

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Simplifying your finances can be an effective way to break the living paycheck to paycheck cycle.

One step that has been helpful for us is tracking our spending. With so many accounts, bills, and goals, it can be easy to not know where the money is going.

Easy Way to Track Your Money

Keeping tabs on where each of your dollars may seem overwhelming, but there are free tools that help you quickly see what's going on.

My favorites are Personal Capital and Mint; we've used them for years.

Let me show you how Personal Capital can help you get more control over your money without having to spend a ton of time on them.

Here's my guide on how to use Mint for patch up your money leaks.

When you look at your finances you really need to be able to see the big picture and the small details.

After all, you need context on your spending to see if something is truly a money leak a simply a short term/special expense.

Once you've linked your accounts to Personal Capital, you can do both.

Here's how the big picture cash flow view looks like:

Love how you can instantly see in your dashboard if you're spending less than you earn. Once you've

How to Find and Fix Your Biggest Money Leaks

If you have money leaks, you're going to see them in your transactions.

Joe Saul-Sehy, the host and founder of Stacking Benjamins, noted that some of the biggest money leaks for families were:

  • entertainment – hardly anyone has a budget for it
  • eating out – we can easily overestimate our spending

You may be different, but for us, this hit the nail on the head.

When we were first trying to get an idea of our budget, we had no idea how much we were really spending on dinners out. Sure we were getting some good deals, but that didn't offset that fact that we had budgeted less.

We decided to increase our spending to a more realistic number (taking that money from another area in the budget we weren't using much) and go out less overall.

Do you have a similar situation? My suggestion is to try and cut back incrementally. It's better to move in the right direction slowly, then make sudden changes and get frustarted enough to quit.

Simplifying Still Means Engaging

As much as automating can simplify the process,it doesn't mean you can just walk away from your budget.  Take a few minutes every weekly to review.

My husband I have little money dates where we can check-in with one another and see if our finances are working.

The Budget for People Who Hate Budgets

The reality is that most times we don't want to count the pennies. So what's the solution?If you're that group, then the 50/20/30 budget might be the perfect starting place for you.

You take your net income and divide it into three ‘buckets’.

  • 50% Essentials: This covers your ‘needs’ like rent/mortgage, food, utilities, and necessary transportation.
  • 20% Financial Priorities: This money is allocated for your future such as investing for retirement and taking care of important money goals now like having an emergency fund and paying off your debt.
  • 30% Wants: These are your lifestyle choices. What do you enjoy? Travel, shoes, tech – these all go in here.

While you may be working to simplify your life and will most likely reduce your wants, that doesn't mean they go away. (As that number decreases, you can redirect those to retire early.)

Having those expenses accounted for makes it more likely you'll keep to your spending plan – a huge win.

If you want to know more about 50/20/30 budgets, I did a podcast episode on easy and effective ways to budget.

Thoughts on Living Paycheck to Paycheck

Have you ever dealt with trying to find some wiggle room in your budget so you can get out of debt or just have some savings?

What helped you to break the paycheck to paycheck cycle?

Home, Life, Money

Adjust as Needed When Simplifying Your Life

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As we simplify our lives this year there is one thing I will be fighting to keep in mind – it's okay to adjust as needed.

The constant in life is change. Don’t feel bad if you have to rework things.

It's said the done though.

I think we can be so hard on ourselves for no getting things right on the first try that we miss the awesome fact that we made the effort to change and improve.

Why Simplifying Can Be Painful

We all like to think that simplifying our lives is a matter of shrugging off all the unnecessary parts, but it's usually not.

We get into certain habits, systems, lifestyles over time. It's going to take time to change those habits and our mind-set.

I know that one of the toughest areas for me is simplifying my work schedule.

I'm not only reducing my workload with freelance projects, but I'm also cutting back on writing for my own sites.

I'm planning on selling two of them by June and another one by the end of the year. I've had all of them for years, so it's a bit scary to let them go.

With those moves, I should be able to handle my two new big projects for the year – this site and an upcoming podcast.

That doesn't mean things are set in stone however. If needed, I'll hold off on a sale or push back the podcast launch.

It all depends on how things go – Will I be able to have enough time to enjoy with the girls and still have income to pay the bills?

While I'm confident it can be done, there are no guarantees. I'm writing and recording this in real time, so please don't be surprised if we make adjustments.

One Step, One Success at a Time

Instead of worrying if we have the best plan, we're going to keep focused on the present and see where it takes us.

If you're in the same boat, don't forget to celebrate those small wins and learn from your mistakes.

Please remember to take it as an accomplishment that you are working towards your goals.

Thoughts on Adjustments and Changes

Enough from me – I'd love to get your thoughts. What are you working towards?

 

Home, Life, Money

Build Around What You Value

One of my goals for this year is to keep my work schedule to no more than 25 hours per week.

With two little ones, it's not practical for me to devote more time. I'd rather spend time with my girls and do fantastic work for a few projects than try to squeeze everything in.

The reality is I still have an income to earn so I have to choose my projects wisely.

If you're the same boat, let me show how I freed up some time in my tight schedule.

Finding Time for What Matters

Going on a new schedule is not going to be easy for me, but it'll be well worth it.

To create a realistic one (gotta pay those bills!) I needed to see my current schedule.

You can go the pen and paper route and keep a journal to track your schedule.

Are you more of a tech person? Use apps like RescueTime to do the work for you.

Once you log in, you simply tell them what activities are productive and which ones are for fun.

Reviewing and Reflecting

At the end of the week, sit down and review the results.

Just like a budget, I was shocked at how I was spending. It wasn't what I thought. It wasn't a huge chunk, but rather it was a ton of small distractions – surfing the web, checking out Netflix, and trying to tame the inbox.

Knowing how I was spending my time help me cut out the unnecessary and made me think about what I really wanted to keep.

It was time to start brainstorming ideas on how to fix things and that meant answering questions.

The goal not to super optimize and make every moment about being productive.  We're looking for ways to make the most of our time in terms of impact with your quality of life.

Some questions that may help you sort things include:

  • Is there a way to be more efficient with my time? I found that blocking out time to catch up on reading allowed me to batch my social media shares. I also turned off notifications for certain tasks. It's made things less stressful.
  • Can I drop some things from my schedule? It is incredibly easy to fill up your day with a ton of tasks. Being busy can give us a false sense of productivity. Test things out by skipping out on stuff.
  • Can I delegate or hire someone to handle stuff? I totally understand wanting to keep tabs on everything, but sometimes you can do so much more by letting someone else handle it.

After some trail and error, I got my work schedule ready to go. It's not perfect, but I'm so happy to try it out.

Thoughts on Finding Time That Matters

Have you ever struggled with finding time to not only take care of your essentials, but to enjoy life?

Home, Life, Money

Achieving Big Changes with Small Wins

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As a new year approaches, many people you know may be making resolutions and goals. Some popular ones include:

  • Lose Weight
  • Exercise More
  • Eat Healthier
  • Spend More Time with Loved Ones
  • Get Out of Debt
  • Save More Money
  • Travel More

As wonderful and inspiring as these are, most people will fail.

Several factors come into play, but the root of the problem is that people are too vague and big when they create their goals.

Having a bird's-eye view of things is fine, but not enough people focus on the day-to-day changes that have to be made. This is a shame because small can be awesome, especially when it comes to wins.

Even if you have large goals, building up momentum with small wins can have a huge impact on your life.

Simplifying Your Life and Achieving Big Changes

When people make goals, they usually like to go big.

After the initial excitement and wears off, there are two common reactions to huge changes:

  • gazelle intense: Some people are wired to go all or nothing. You give them a goal to pay down debt and then will shut down EVERY purchase and make everyone in the house eat rice and beans. While a few can make headline grabbing results, most of us burn out.
  • paralyzed and overwhelmed: The other side of the coin is people who want to dip their toes into the water. Not knowing where to start, they shut down mentally.

We can overcome both of these hurdles with a combination of small wins and a big picture mentality.

Building Momentum with Small Wins

Let me show you how you can acheive a big goal – decluttering your home – using small wins.

It's a fanstic goal as you're not only freeing up space, but you be saving time since you don't have to maintain all your stuff.

The problem is when you look at your place and realize just how much work you have to do. Be honest – do you really want to clean the WHOLE house?

Start instead with one space – yours. Clean and declutter that one room or area in the house you like to relax in. Take a day off and enjoy your progress before starting up on the next space.

It sounds too simple, but it works. Breaking things down into manageable pieces helps us to follow through on our goals.

Thoughts on the Power of Small Wins

I'd love to hear from you. If you have a big goal or dream, what small wins are you shooting for? How are you planning to celebrate each milestone?

Home, Life, Money

Change Your Habits with Systems, Not Willpower

I learned through personal experience and from others that lasting change is less about willpower and more about creating systems. Once you figured a way to change your habits you can break out and achieve your goals.

We all have blind spots in our lives. When we’re stressed out we tend to get sloppy in a few areas, like our budget, house, or schedule.

We've discovered the hard way this past year where our weak areas are. Fortunately, once we identified the problems we created systems to hack our habits to make simplifying our finances and lives easier.

Understanding Habits and Triggers

Before we can change a habit, we have to understand how they work.

When Charles Duhigg, NY Times reporter and author of The Power of Habit, was researching the neuroscience and psychological finding of how we form habits, he found there are three basic components to habits – cues, routines, and rewards.

  • Cues – triggers for behavior
  • Routine – behavior that you want to change
  • Reward – why you’re doing this behavior

If you want to change the routine, you can adjust the cue or the reward.

Our increased spending was a relatively new, but powerful habit. To change into something more productive we first needed break down the habit.

Developing (and Changing) Your Habits 

One of our big goals this year was to sell our current place and move into a house that more manageable to our lives now.

We thought with the market conditions, our home's condition, and the popular location, it would be a fairly quick process.

Fast forward six months (and dozens and dozens of showings) later, we were drained.

If you're not familiar with the showing process, imagine having your place looking magazine worthy for strangers to examine. You are given some notice, but not a lot.

On top of that pressure, I work from home while taking care of two kids under the age of five. Something had to suffer and it was our finances.

Since my time was limited, I found myself slipping into purchases because they're convenient.

Eat out during an evening showing? Sure.

House needs to look good to make it more sellable? Buy it.

Making purchases here and there wasn't a problem on an individual level, but it began to develop into the default.

In terms of habit components, we had:

  • cue: stress
  • routine: make a purchase
  • reward: remove stress (for the time being)

The good news is we didn't break our budget, we missed one of our huge goals for the year – paying off the last of our non-mortgage debt.

It was a wake-up call to change.

The solution? Hack our habits with systems.

Creating Systems to Spend More Thoughtfully

While making any kind of lasting change takes discipline, relying on just sheer willpower is a recipe for disaster.

…new psychological research finally acknowledges that willpower is a limited resource. As Stanford psychologist BJ Fogg says, “In the long term, willpower alone won’t work for difficult behaviors. You need to take a different approach, such as changing your environment, removing triggers and taking baby steps.”

One of the best ways to break through is to create systems to make these changes automatic or to make your old habits harder to slip into. Changing habits can be tricky, but there are ways you can do it effectively.

By automating our finances we've cut out a lot of the tedious parts of budgeting. This gives us more time to focus on the kids and this upcoming move.

To remedy the extra spending I made this past year, my husband and I are now going back to chatting with one another before I make a purchase that is over a certain amount.

If I think we need to pick up something, I text, call, or if we're home, talk to him. It takes a few minutes, if that, but having to explain the why behind something has helped me. These check-ins force me to slow down, which relieves some of the pressure.

It's a win-win as our finances are getting back in shape and we're communicating with each other regularly.

Thoughts on How to Change Your Habits

I hope my example helps you conquer your weak points. I'd love to hear from you – when you're stressed, what habits do you slip into?

How have you broken through and changed your habits?

Home, Life, Money

Getting a Snapshot of Your Financial Life

The other day I wrote about knowing where you want to go in life and visualizing your dreams. 

As I describe in my book, Jumpstart Your Marriage and Your Money, think of your financial plan like preparing for an epic trip. You have to have a destination so you can start budgeting and figure out the best route.

Now we look at the other point on your ‘map' -where you are now.

You can't create a map for your goals without knowing where you starting from.

It sounds easy enough, but sometimes can be stressful to examine where you are now.

It can also liberating and empowering.

Being a personal finance writer, I'm going share a few of my favorite tools out there that can make it easier for you!

Getting a Snapshot of Your Life

Seeing your numbers can be powerful. You get to see exactly what your assets and debts are. The problem for many is that they have all this information scattered about that they only have a vague idea of how well/bad they're doing.

The great news is that you can get a snapshot of your finances pretty quickly. There are some free and powerful tools that can gather all of that data.

My favorites include Empower, Tiller, and Mint.

If you're just getting started with your finances, Mint's visuals and reminders can be handy. If you have a lot of accounts between the two of you, empower can make it simple to keep tabs on them all. Finally, Tiller hands down the best way to customize your financial snapshot plus they have an awesome and supportive community.

They're all great choices, so choose the one that works for your situation and style.

With about 20 minutes of effort you can get a big picture view of all your accounts and also drill down to the transaction level.

There's no excuse – you can get a financial snapshot without having to do a ton of work.

Dump the Blame Game, Embrace the Lesson 

This might the most difficult part – seeing the actual balances in your accounts.

When I did this as a part of our year end review, I was shocked when I realized just how much money was wasted. (Did I mention I'm a personal finance writer? Whomp, whomp)

Once I got over the initial disappointment I started brainstorming ideas on how to fix this.

Maybe you're in the same boat. You might've pulled the data and seen how big your debt is. And it looks almost impossible to fix with your current income.

If you're discouraged by the numbers, remember this – what you see now is temporary. Make a commitment to move closer to your dreams and goals.

Let go of the blame, but keep in mind the frustration you feel as it can be fuel to keep you motivated.

You can break free by getting rid of your debts and start building a financial cushion.

Knowing your can move away from your present situation can empower you to start simplifying your budget and using that extra cash to become debt free.

Thoughts on Getting a Snapshot of Your Life

Even though I used money for the example, you can apply the same principles. Don't forget – as awkward and stressful it can be to see where you are now, this is temporary. You can move past this situation.

I'd love to hear from you about your process. Where are you now? Where do you want to be by the end of next year?