Hitting Your "Number." Top Three (Free) Tips for Anyone in Life's Dumpster Fire Still Striving to Hit Their Number.

Five years in one sentence:  A catastrophic flood, three hurricanes, two moves, a condo sale, a home purchase, a dream job assignment come true out of the blue, an engagement, a once in a lifetime freeze in the tropics, a parents' death, my first grandbaby, and a pandemic.  No wonder I didn't post any blog updates.   

But I've graduated from work-life again!  And I hit my number with a big safety margin this time.  

So what were the top three things I did, free of charge, that helped me survive those swings?  

#1)  LBYM. Living Below Your Means gives you a McGyver tool kit of skills to survive financially, no matter what.  

If you don't know where to start just look at how much you spent over the last three months. Was there more income than outgo?  If so, that's great!   Because that "spread" is how much you truly earned in the quarter.  

Let me repeat it -- if you spent $1,000 less last quarter, then that's the increase in your Net Worth.  Your Assets.  Your Capital.  Everything else went to somebody else's paycheck.  If you want to quibble about your house note, okay, a tiny bit of it went to equity.  Let's be real.  What, about $200 a month maybe?   

Your next, most glorious step toward freedom, is to increase your net worth as much as possible in the next quarter by reducing your expenses.  

Every quarter I check my net worth through Personal Capital's software.   It's free.  You can use a spreadsheet or even just a pencil and a notebook, which is what I did for many years.  If I haven't added to your net worth, then you are just a wage slave and need to do some major adjustments.  

#2)  Don't Buy a New Car.  Ever.

Out of all the big expenses in today's consumer economy, housing and transport usually come up as 1 and 2 unless you are older and healthcare gets on the list.  (Oh, let me rant about that on another post!) 

It takes time and effort and energy and yes, money, to downsize your home and its expenses.  It is much easier to keep your automobile expenses low. 

Buy a car that is at least one-year-old or more.  

Real Life Money example:  I own a 2011 Honda Insight with 140K miles, paid $12,000 cash for it in 2014.  

This website https://repairpal.com/cars/honda/insight/2011 estimates average maintenance costs of $341 for a 10 year old car! 

I've only paid about $250 a year for maintenance, other than tires and a AAA battery replacement that was all my fault.  That $250 per year was cash ($1,800) I paid in 2021 to a local mechanic to get it ready for another 7 years of use.  Preventative maintenance.  

No car note, just insurance and about $50 a month on gas, maximum.  Even with day trips.  

But but but!!!!  What about warranties and safety?!!!  

1.  The warranties from the manufacturers are still available on preowned and pre-cerftified slightly used cars, so don't throw that one at me.  :-}  

2.  If you are going on a long car trip and don't want to risk it with your older car?  Rent a Car!  Heck, you can even Air BnB a car now.  https://studentloanhero.com/featured/turo-review/

But but but!!!! What will the neighbors think? 

Buy a used Ford 150 and they will think you might be a millionaire next door. 

#3)  Get Your Side Hustle On - Carefully and Mindfully

Not all side hustles are worth it, I hear you!  If I get one more email about Ibotta grocery store coupons or online interviews that never pan out, AAAHHHHHH!!!  Tried them all and just ended up wasting my time. 

Solopreneurship and sole proprietorships are a step up.  And not only do you make extra cash, you also have tax write-offs like office space in the home, that help with housing costs.   

- No employees, ever.  

- You aren't trying to scale a business

- You can try and fail fast

- Hanging out with your favorite people can make it profitable.

As long as you make a legitimate effort to sell your skills to the marketplace, it's a legit business, as per the IRS.  

This is one of the better, easy to consume blog posts I've found about solopreneurship.  https://www.incfile.com/blog/post/difference-between-solopreneurship-and-sole-proprietorship

My Real Life example:  I operated as Stansbury Creative Consultants providing AdWords consulting and marketing support as a side hustle for many years.  It brought in between $2 - $10K per year and allowed me to write off 50% of my new computer supplies and a percentage of my housing costs.  

More importantly, it has allowed me to do fun projects with people who "get sh*t done" without worrying about corporate objectives.  And I can continue to use my new side hustle brand to work on whatever appeals to me throughout retirement.  

What say you?  Have you survived a life of one dumpster fire after another and have wisdoms to share? 

Money Screw Ups: And the Frugal Living Lessons that Will Save You - 1

2015 was quite a money ride.  Some of the progress toward financial freedom made following my own frugal living tips (outlined in this post "Can I make it on $3k per month?"  got tossed overboard.  
  

Cushion the Body Blow with Frugal Living 

I can recover because my frugal living ways helped me saved.  That and the personal finance software addiction and fascination with minimalism and aggressive downsizing. 

But my pride and confidence hit the surf and it felt like I slammed into concrete.   Worse, it may have derailed complete financial freedom by a year or more.  

And some of it I could have avoided by listening to those much wiser than myself.     

Surfing Lessons From the Sages

1.  Retirement really is a psychological journey and you might want to prepare for that.

The first time I retired was about 15 months ago.  

As the retirement sages on www.earlyretirement.org said might happen,  I experienced a sudden depression. 

I wasn’t ready psychologically or emotionally, which affected how I dealt with the other surprises to come (i.e., not great). 

Just like every one said -- a great deal of your self ­perception can be tied to your work identity and title.  

In the past party talk - "So, what do you do?"  

My answer  - "Oh, I am a marketer and public relations professional."  

Notice - I didn't say what I do.  I said "this is who I am."   

It took about a year to adjust.  Therapy helped.  So did part-time work and volunteering for professional associations.  

There are plenty of resources on the web about transitioning to a new life phase, even AARP has a coaching service available.    

2.  Sound financial planning is not an exact science.  

I asked all the wise ones on the early retirement forums for advice as to "don't I have enough to pull the plug on this job?"  

The answer wasn't as positive as I expected.  As much as I had saved, they still said, "you need more of a safety cushion, nobody gets this stuff right on the money.  Hold on!  Give yourself a 5-10% margin of error." 

What's Enough Money to Be Happy?

Some say that $50,000 per year and a paid up mortgage is the prime point of greatest happiness. 

Other writers like Wes Moss, host of Money Matters and author of the book "You Can Retire Sooner Than You Think," imply that you need around $65 - $75,000 per year to retire -- which is when you can be happiest.

Most of us seem to believe that more money means more happiness.

 

But according to the research described by the University of Texas & Indian Business School professor teaching the online Coursera course "A Lifetime of Happiness and Fulfillment," it just ain't so.   

Dr. Raghunathan and his visiting lecturers including such leading thinkers as  Dan Ariely (author of Predictably Irrational), Ed Diener (“Dr. Happiness”), and Mihaly Csikszentmihalyi (author of Flow), money is just a medium that people believe will lead them to happiness.  And our perceptions about that path are often wrong.   

But wait!  That's new age nonsense, I said. 

How happy can you be standing in a food stamp line?  Living in poverty? None of us want that future for ourselves or anyone that we know.  

The good news is that there are many other skills leading to happiness that are proven to bring meaning and fulfillment to your life.     

And you don't have to be a monk  to achieve these states, although it works for them as well.  And in fact, these skills might, paradoxically, make you more successful in the business world.

Finding flow, self-compassion, gratitude, physical exercise -- this is just the short list of what Raj Raghunathan is teaching in the course.  

Even better, you can get to learn about them and practice them for free.   

Favorite Frugal Indulge for this summer?  Coursera Courses!  Usually free, if you don't want or need the certificate.  And totally Juicy.  

We've Got to Start Talking About Money

You May Be More Financially Secure than This Successful Author, Script Writer - 

Who Can Never, Ever, Stop Working

This Atlantic Magazine story , the Secret Shame of Many Middle Americans, outlines the story of a prosperous looking author and script writer, who can't find $400 to cover an emergency and will have to work the rest of his life to cover his debts.  

It's also about the shame and realities embedded in our US middle class money mess.  As the author pointed out --  50% of Americans, can never stop working.
   
Neal Gabler isn't homeless, or a casino gambler or a criminal.  His life looks like a dream come true.  Gabler has written and published books. 

• Gabler has been paid to critique movies on television.
• He is a great Dad with successful children.  A great husband. 
• He is so well-known in his industry that he was paid to write a movie script. 

His reality-money-show reveals a different backstory, though.  

Because he made a series of understandable and common money mistakes that caused a great deal of debt, Gabler suspects he will be working every day of his life, Monday-Sunday, sun up to sun down, until he just can't work anymore.  

Some of the blame for this sad situation falls to our economy and our "head up the behind" (as they say in the south) denial of stagnating wages and other US economic realities.  

We are not recognizing, accepting or dealing with the bad news that the middle class is shrinking and the economic cards really are stacked to help those who live off dividends and investments.   

• Yes, the rich are getting richer.  
• Yes, our tax code is partly to blame. 
• Yes, your congressmen and women are not helping you, in most cases.

But some of the blame lies with Gabler's refusal to educate himself about money.  It's not always fun.

This blog is designed to help and inspire those who want to get educated and to show them how it can be a blast of achievement, pride and satisfaction.  But it's still tedious at times.   

You have to take your "head out of our behind" as we also say here and deal with some sobering news about money.  

Good for you for "dealing with it."

By getting a little more frugal in your habits, you are beating a system that is rigged in someone else's favor.

By consuming less, you are saving on sales taxes, you are building a safety valve for the inevitable bumps in the money road and you are beating a system that really is rigged against you. 

Unless you think you can lobby Congress, change the tax code and fight Wall Street's sometimes shameful practices of crazy financial product development (i.e., mortgage securities that go bust),  going at least a little more frugal is the best step you can take.     

Of course, there will be months when it sucks.  Or when you make mistakes.  (I'm pointing the finger at myself here) --  I spent an extra $1k on travel and gifts this last April.  Two weddings.  Pretty spring days.  There it went.

But I'll be back.  I caught it because I track every penny of spending, a la the advice in  "Your Money or Your Life."

And I follow the geniuses on this free resource, the Early Retirement Forum, among many, many others.  I'm even dragging my book club through a Review of "The 7 Money Mantras" (i.e., if it's on your ass, it's not an asset).  

Good luck to you, and I hope Neal finds a way out.

I'll be back next with a juicy, frugal fun blog post.  In the meantime, I'll be clipping a few coupons so that I can enjoy the things I love best -- like going out with my friends.

And maybe I'll set up a GoFundMe account for Neal.  His contribution to our money discussion in America has spurred an important conversation for all of us.

5 Best Guides to Beginning a Life Free of Financial Worry

It is beginning "the thing" or "the change" that can be the hardest, isn't it?

When I was at my lowest financial point of worry and anxiety, these five books lifted me up and over debt toward a life of fun frugal living and some financial security.  So I'm sharing the wealth.

Amazon has it on sale from time to time

 

1.  How to Get Out Of Debt, Stay Out Of Debt and Live Prosperously

This was the first book I read that took the shame out of debt and addressed some of the emotional issues.   It inspired me to take a second job as an adjunct professor.  This didn't pay much per hour but the extra $2K in a year helped lift my family out of debt.  I felt like a cork, bobbing above the water and suddenly seeing the shore.  What a relief that was! 

I found a copy of this one for .01 on Amazon!

2.   "The Only Investing Guide You Will Ever Need" 

This was the second financial self-help book I purchased and still have on my bookshelf.  Why?  Because it's so funny, lighthearted and real.  

Tobias is a Harvard graduate who helped me understand that when I avoided buying something, or saved $1.00 on something, I was actually saving $1.50.   A penny saved is a penny and a half earned! And understanding how our taxes affect your personal finance is mission critical. 

If you are being taxed at the 25% marginal tax rate for federal income tax, then add in state income tax, then add in sales tax -- well, you could say that you are being taxed at approximately 50% (for the ease of the example, even though it might be a little high).  

So, as Tobias gives as an example in the book, if you go out to eat on Thursday night and spend $40?  Well, to replace that $40 could mean that you have to earn $50-$60.  

Even though Tobias is a very wealthy guy, he still buys canned tuna "long" (i.e., on sale), and stores the extra cans under his bed.   He goes "short" on tuna when it's very expensive (i.e., he uses up his stores).  


Seriously people, this is how rich people act.  Just be careful you don't overbuy on tuna and never use it.

This is about $8 on Amazon

3.  I Will Teach You to Be Rich

So inspirational and easy to read.   

Ramit promised to show me how to make $1K a year in a side gig.  I didn't think I could do it.  But then I did.  And I still make $1k a year doing a side gig.   

I don't know how he does it, just call it "Ramit Magic"

Found this for .01 on Amazon too -- great deal! 

4.  Your Money or Your Life

Ground-breaking,loving and practical approach to understanding how you are trading your "precious" life for that new toaster, or pair of shoes, or kitchen blender, etc., etc.  -- is it really worth it?  Good practical guide to understanding how much your job is really paying you per hour.   

Think you are getting $30 per hour?  Add in all those hours to commute, the wardrobe costs, the unpaid CEU hours, the hours just unwinding from the stress...  hmmm...  maybe it's time to rethink that hourly rate down to about $5!   And the toaster really cost you four hours of your precious life.  Hmmm...

Definitely an eye opener for me and one of the inspirations for Breaking Free From the Corporate Cube.    Inspirational for living well on less.   

Still about $10+ on Amazon

5.  The Millionaire Next Door

Last, but certainly not least, the granddaddy of them all, "The Millionaire Next Door."  Reading about this scene from the book (page 27), with the Decamillionaires (worth $10 million or more) is the best take-away you can have this frugal Christmas.

The professors who wrote the book wanted to study millionaires, so they invited the subjects to a focus group.  Wanting to make the millionaires comfortable, they provided wine and caviar for the group.   Here's what happened next:   When one of the group members (who owned several pieces of downtown New York property) was offered a glass of 1970 Merlot, he said 

"I drink Scotch and two kinds of beer - free and BUDWEISER!"  

It's also where I first heard the phrase, "Big Hat - No Cattle," -- a term the millionaires saved for those who flashed fancy cars and clothes, but had no assets.  

Here are more millionaire tips.

That's my top five that will keep you busy learning through the cold winter nights ahead.  Do you have a favorite I missed?  Share It!


Disclaimer:  If you do decide to click on one of the photos and buy one of the books, I will receive a small commission from Amazon.  It didn't affect my list one whit -- I've had these books on the shelves for years.  And any proceeds will go back to making the blog better!