urBetterFuture

My Weekend Ritual Part 2 – Weekly Financial Check

As I mentioned in the last post, money is one of those key resources that is very important to marshal.

Often budgeting and personal finance are usually sold in a cold rational terms, in terms of balance sheets and quantifiable wealth – it’s sold as a way to become rich (or at least get out of debt). David Ramsey and other famous gurus talk about budget as a key way of avoiding debt, reaching a life of wealth and physical comforts, being generous and doing good things.

Often they will observe how money issues spill over into other parts of peoples’ lives impacting relationships. This brings us to any important (and often overlook fact) about money:

Money is an emotion shaper and amplifier.

What a rush!
courtesy Eli Hodapp – https://creativecommons.org/licenses/by/2.0/

Emotions runs through money like rivers with eddies, rapids and unpredictable undercurrents imprinting everything.

For instance, a large part of the stock market is gauging “market sentiments” – basically, how investors feel – are they confident? Scared? Greedy? Fearful? Market movements (especially short-term movements) are often based on perception rather than actual change in circumstances. Another great example are lottery winners. Lottery winners often report major changes to their relationships as both they and their family and friends change because of the money.

So managing your money is just managing your financial life – it’s also a key part of managing your emotional life.

Fail to manage your money and you are letting a large of your emotional life blow in the wind at your own peril. And the consequences can quite severe. Money is a big source of tension in relationships. Heck, it leads to prolonged stress that can impact your health.

Tracking your money is like having key check in conversations with the important people in your life. So part of my weekend ritual is checking in on the money, not only for my financial goals but also for my mental health.

In last post, I discussed making your week’s worth of lunch on the weekend – a habit that helps your health (as well as many other benefits). Another benefit is that you feel settled and ready to take on the week. Peace of mind. This is also why I do my weekly financial check.

How I feel about my financial concerns when I forget to track my money
Courtesy Julian Carvajal – https://creativecommons.org/licenses/by/2.0/

Because for me, money can be really scary, especially the less I know. And that’s why I do a weekly financial check, it gets the monkey off my back and in front of me so I can evaluate it and get a balanced perspective.

Financial Check

First off, a weekly financial check is different than a budget. A budget is the process of allocating your money over a period (often a month). The financial check is an extension of your budget.

The goal of a financial check is a quick review of your banks, bills, last week’s spending and upcoming week’s spending. It is a quick snapshot so that you understand your financial position and that you have enough money for the next week.

Some other important benefits include:

routine review of your accounts to catch any strange financial events, such as scams, unintentional overcharging, unpaid bills
a frequent accurate reminder of expenses (which over time I underestimate) and surplus money (which over time I overestimate)
peace of mind that you understand your financial situation and can take appropriate actions

How to set up a Weekly Financial Check

A key set of concepts used in the weekly financial check are fixed and variable costs. Fixed costs are are difficult to change on short-notice – for instance rent or mortgage. Conversely, variable costs are easy to change on short notice – such as beers with friends. If you are short on money, you simple forgo beers with your friend (variable costs) rather than not paying rent (fixed costs).

You need to following items to set up a weekly financial check:

a completed budget with calculated allocations in the following variable expense groups – transportation, food, entertainment, clothes/gifts, everything else (if you haven’t completed one look here)
six small jars labelled transportation, food, entertainment, clothes/gifts, everything else, and credit
cash equal to your week’s worth of variable expenses
this weekly financial check template

I like to do my financial check on Friday nights as usually I spend a large bulk of the weekly money on groceries, entertainment and other things. So once you have the items above:

In the financial check template, update the items in the Money Coming In sections and Money Going Out according to your budget. Money Coming In consist of all income streams. Money Going Out consists of fixed expenses, variable expenses and money put aside for savings.
Fill in the values for Money Coming In, and Money Going Out.
If Left Over value is positive, congratulations, you have enough money for the week. If Left Over is negative, you don’t have enough money and need to adjust your variable expenses and savings.
Now distribute your cash into the six jars based on your allocation of variable expenses (see your budget). For instance, if you have budgeted $150 for your variable transportation expenses, put $150 into the transportation jar. Leave the credit jar empty.
Pay all your fixed costs for new bills, credit card balances, etc.
For the week, use the cash in the jars for your variable expenses (except the credit jar). Once the jars are empty of cash, you no longer have an money for the week and have used up your budget.
If you do use a credit card on any variable purchases, take the amount of money you charged on your credit card from the relevant jar and place that money in the credit jar. This money will be used to pay the credit card bills.
Any money left over in the jars (beside the credit jar) can be used as you wish.

Turning this into a regular habit has helped limit my money-related stress and definitely increased my confidence.

My Weekend Ritual Part 1

(Photo courtesy Peter Mooney https://creativecommons.org/licenses/by-sa/2.0/)

HUSTLE TALLY
-Sold 2 Microwave egg cookers $4

In my humble opinion, building a better future is a long term game, a marathon rather than a dash. Therefore, it helps to automate habits that reinforce and maintain your most important resources.

Three important resources are your money, health and time, especially your health and time because in most cases they are difficult, expensive or impossible to replace.

It therefore is important to marshal these resources and a great way to do it is with weekend rituals (however you define your weekends).

The weekend ritual is a set of key activities habits that reinforces a healthy lifestyle and provides the foundation for an ecology of healthy habits.

My weekend ritual consists of three habits: making weekly lunches (health), weekly financial check-in (money), and goals review (time).

There are many benefits to all of these including peace of mind. In this post, I will discuss my weekly lunch routine.

Making Weekly Lunches

This is a pretty simple habit – during the week I buy the lunch ingredients and on Sunday I spend about 30 minutes mass producing my lunch.

I think this habit is important because it makes it much easier to maintain an intentional and healthy diet. It removes sources of “friction” that get in the way. In my case it removes the following sources of friction:P

cleaning and cutting vegetables – usually I can’t be bothered to pull out the cutting board, cut the vegetables and clean up to eat one sitting of vegetables – however, it’s easier to talk my self into it when I am doing a week’s worth of vegetables – once I have done all the cutting in one big batch, no more cutting needed for the week
lack of time in morning to make lunch – I am not an early riser nor super punctual – often I would wake up late with no time to make my lunch – however, if my lunch is already made, I feel like the long difficult part is done and will quickly pack my lunch
wasting my whole lunch hour buying lunch – if I go out for lunch it takes up at least 2/3 of my lunch time going out, purchase the food and eating it – with a packed lunch a lot more of my hour becomes available to work out or do something productive

There are other benefits including substantial savings in money (conservatively
$200 CAD/month, $2400 CAD/year) and a peace of mind that comes with knowing your lunches are set for the week.

This applies to other meals and food based habits too. Want to eat more of a plant-based diet? Want to eat out less in the evening? Make a couple of batches of meals ahead of time – you will be a lot less likely to cheat on your new food goal if the meal is already made when you get home from a bad day craving your good old comfort food.

Making Wraps for the Week

For my lunch I usually prepare wraps with coldcuts, sweet peppers and lettuce. It provides me vegetables and I find wraps leave me less dozy after lunch than bread. So here is my ultra-complicated recipe (sarcasm alert!) for making my week’s worth of wraps.

First, I take my ingredients – cold cuts of choice, sweet peepers, tortillas and lettuce.

I start by laying down a tortilla…

…lay down the coldcuts….

….cut and put on sweet peppers…

…put on the lettuce….

…roll up the tortilla and cut the saran wrap….

And voila! A week’s worth of wraps is created!

Do you have a recipe or lunch ritual you would like to share? Feel free to share them in the comments.

What Grade 10 Math Taught Me

HUSTLE TALLY
-Sold Sippy cup $8
-Solld Extra Cellphone $175
-Sold Giftcard $40.50

Peter Rosbjerg
Courtesy https://creativecommons.org/licenses/by-nd/2.0/

The other day, I did guest lecture at my Alma mater university; it’s become a seasonal tradition. The professor invites me to her statistics course to give an industry lecture to a class of engineering students. I talk to them about statistics and how I apply it in my job.

Whenever I go to do these classes, I can’t help but be a bit bemused and puzzled. Here I am providing a lecture to an engineering class… it seems so unreal.

The reason it feels unreal is because I don’t consider myself exceptional at statistics, math or science. In fact, I used to have a quite negative self-image when it came to math and sciences, especially math. One event that contributed heavily to this was my grade 10 math class.

Back then, I wasn’t a serious student. I skipped class a lot. The main reason was really insecurity – I was scared to try and pretended to be a bad boy. And when it came to math, I was especially bad. I never studied. I barely passed grade 9 math.

However, in grade 10, I decided to actually try. Over a couple of weeks I started asking the teacher questions, trying to do homework and actually study for the upcoming test. I was quite optimistic when I took the test – I was thinking I would get a B.

Then came the day we got the test back – a D minus stared back at me.

I was shocked.

With hindsight, I was being a bit unrealistic about how quickly I could improve. It’s like I decided to do a 20-minute jog the night before and then somehow thought I would run a marathon really well the next day. It was the right direction, I just needed to be patient.

An uncanny resemblance to me as a student
Courtesy of Zac Zellers https://creativecommons.org/licenses/by/2.0/

Unfortunately, the teacher just made the situation worse. He got up to the front of the class to discuss the test and how everyone fared. And he singled me out.

I forgot exactly what he said, but it was something to the effect of:

“Most people did well or okay but there were some people who did poorly and made stupid mistakes like this…”

He then put up an incorrect answer I had made on the blackboard. I heard peals of laughter erupt in the class room. He continued:

“I guess some people weren’t as good as I thought.”

I was absolutely mortified. And all I can remember thinking was…

“Obviously I can’t do math.”

Why my math teacher did this, I was not sure. I don’t think he was necessarily a mean teacher. Maybe it was just an inappropriate attempt to motivate me. Regardless, the end result was I gave up trying in math. I passed grade 10 math but never bothered to do any other math or science courses. For the next 17 years I took it was gospel that I was not a math or science person and that I could never be.

Life has strange twists though.

In my late 20s and early 30s I went through a tough time – a long-term relationship broke up and I decided to transition from my career at the time. I was lost and unsure of what to do.

I decided to apply for architecture school and realized I needed to do those math courses I never did in high school. I was also kind of curious to learn about math again, since I knew so little. So I did all the maths and sciences by correspondence.

As a backup, I decided to also apply to engineering school, got accepted into engineering and then decided to attend engineering.

I was certainly not a phenom when it came to math and science, but with commitment, patience and lots of failure, I got my engineering degree and found a job as a data analyst.

So, you might be asking yourself, “what does this long-winded story have to do with my better future?”

Better futures can sometimes seem far away and remote. They can be so remote that we can’t even contemplate the possibility.

But they exist.

They don’t always come easy.

They don’t always come when we want.

But they come.

You may not be able to be anything you want or do everything. However, I truly believe that all of us have the capability to do what we think is impossible.

If you told that humiliated 15-year old kid in that grade math 10 class that day (or even 15 years later), that in the future he would have an engineer degree from an excellent university and be doing guest lectures at engineering classes, you might as well have told him that the moon was made of cheese – he would have believed it about as much.

And yet, here I am.

Maybe what you want seems really out of reach – maybe it seems futile to try and pay down the debt, change to a higher paying job, or learn that new language.

But I assure you, if you keep at it, no matter how small the steps, how insignificant the progess seems, you can still achieve results that you could not imagine (just don’t expect it to happen overnight).

It took 25 years to learn the lesson, but that’s what grade 10 math really taught me.

The Three Words of Financial Woe

I deserve it…

These words will jump out at me when I am driving or just mindless watching television and commercials and they are flogging whatever new shiny (and most likely unnecessary) toy. The commercial will be going on about the products unparalleled comfort, coolness or whatever and then end saying… “you deserve this”.

Man, this leaves a bad taste in my mouth like drinking old milk… it is just so blatantly manipulative.”

Oh, I see, so I should give you my money because you think I deserve to buy your good/service! Very convenient for your wallet.”

The words “you deserve it” are historically significant in the world of advertising and marketing and consistently used in marketing to convince people to buy things. The more I think about this concept of “I deserve it”, the less and less it makes any definitive sense.

“Do I deserve that?”

“By who’s standard? Is there some great being with a big book or agency staffed with a bunch of angels carefully keeping track of who deserves what?”

“What about people more in need than me? Doesn’t a homeless child deserve a meal more than I deserve a new car?”

Philosophical ruminations aside, it’s not practical to live your life according to “what you deserve”.

“Things that you deserve” is like “things you need”. There are a lot of them, they multiply like cockroaches and once crushed are usually just replaced by higher level needs and at some point extravagantly consuming will not even meet those needs.

Plus, most of us would probably go bankrupt before getting close to meeting our “needs” (or in more entitled terms – “deserved things”).

The key principle when handling needs is prioritizing. What do you need most?

Is your top priority really that luxury car? Or is it the peace of mind in having an emergency fund worth 3 months of expense?

Is your top need that expensive international vacation? Or is it being able to sleep at night because you are’t in crushing debt?

Do you deserve a bigger home with constricting mortgage payments and being home poor? Or do you deserve a life of mobility and financial resiliency with a manageable mortgage or even rented apartment?

My advice is that next time your hear the siren call of modern day marketing telling you that you deserve that new shiny, cool and absolutely unnecessary item, remind yourself of this…

Yes, that is nice and I do deserve that, but…. there are much more important things I deserve first like financial solvency and financial stability. I’ll take those first.

Welcome!

Hello, my name is Douglas and I am a regular dude. I am not a young financial genius who made $20 gazilion dollars by the time he was 13. In fact, I am not all that young.So why bother reading this? Well, maybe my journey will be interesting.Over the last few years I have been financially educating myself – learning to budget, learning the basics of investment and learning to be frugal. It’s been worth while so far, but I now realize I must face what I feel to be an even more daunting task. Learning to earn money outside of the standard 9 to 5 job.Why? I want to grow and diversify and also minimize my risk in what I feel is an increasingly turbulent and chaotic world. By learning to hustle I hope to increase my wealth but more important increase my adaptability.Now when I say risk, a lot of you think disruptive technology trends like AI, automation, the dying of retail and self-driving cars.I agree, I definitely think that is an issue – however, I think there is an important piece missing – the environmental crisis such as climate change, increasing amount of plastic in the water and crashing insect populations.Once we thought of this in a very disconnected, non-self interested manner – kind of like finding a $100 bill on the street – should I do the right thing and turn the money in? It’s an abstract discussion in some ways because we wouldn’t link it to our welfare in most cases.However, at this stage, the environmental crisis has progressed so far that it is actually impacting people now. People houses are flooding because of increasing extreme weather, increasing cost of water and food are eating up our budgets.We can no longer discuss the environment crisis and its impact as an abstract “doing the right thing” debate. It’s now become a “I’ve got to save my ass” kind of issue.And for that reason, I want to bring that into my discussion. So join me as I navigate the turbulent trends of tech, economy and environment to build a better future.